onsemi (Nasdaq: ON) boosts Q2 2026 EPS and free cash flow on revenue growth
ON Semiconductor Corporation reported strong results for the quarter ended July 3, 2026. Revenue was $1,603.5 million, up 9% year-over-year and 6% sequential. GAAP gross margin was 38.4%, with GAAP operating margin of 16.1%. GAAP net income attributable to the company was $226.8 million, or $0.56 diluted EPS, compared with $0.41 a year earlier. Non-GAAP net income was $293.8 million, or $0.74 diluted EPS, versus $0.53 in Q2 2025, and management stated that earnings per share grew four times faster than revenue year-over-year.
Free cash flow was $425.4 million, compared with $106.1 million in the prior-year quarter; management highlighted free cash flow margin expansion from approximately 7% to 27% year-over-year. By segment, Q2 2026 revenue was $829.0 million for PSG (up 19% year-over-year), $545.7 million for AMG (down 2%), and $228.8 million for ISG (up 7%). Cash and cash equivalents were $3,514.5 million as of July 3, 2026, with total debt of $4,459.4 million. For Q3 2026, the company projected revenue of $1,650 to $1,750 million, GAAP gross margin of 39.9% to 41.9% (non-GAAP 40.0% to 42.0%), and GAAP diluted EPS of $0.79 to $0.91 (non-GAAP $0.81 to $0.93). Management said AI data center remains the fastest-growing business and they now expect that segment’s revenue to more than double in 2026.
Positive
- Q2 2026 non-GAAP diluted EPS rose to $0.74, with management noting earnings per share grew four times faster than revenue year-over-year.
- Quarterly free cash flow increased to $425.4 million, and management highlighted free cash flow margin expansion from approximately 7% to 27% year-over-year.
Negative
- None.
Filing Explained
The August 3 filing adds debt and warrants whose stated mechanics can increase dilution-adjusted share counts under specified stock-price conditions.
The August 3, 2026 Form 8-K furnishes the second-quarter results and outlook under Item 2.02; its earnings information is furnished, not filed for Exchange Act Section 18 purposes.
The financing disclosures also report debt issuance and borrowings, bond hedges, and warrant-issuance proceeds, creating debt obligations and a conditional equity-dilution mechanism for existing common holders.
For Q3 2026, the filing distinguishes
The filing explains that non-GAAP diluted share count excludes convertible-note dilution covered by hedging up to stated thresholds, while warrants may be included when average share prices exceed their stated thresholds.
The disclosure establishes financing and potential dilution mechanics, but does not establish that the warrants have been exercised or that additional common shares have been issued from them.
The next relevant check is the Q3 2026 results, because the outlook uses the share-count split and the warrant mechanics depend on average share-price thresholds.
8-K Event Classification
19 items: 0.2, 0.6, 0.9, 2.02, 4.7, 9.01, 14.6, 14.8, 51.0, 61.4, 67.0, 75.5, 285.3, 286.5, 343.0, 353.5, 418.5, 768.7, 899.1
19 items
Item 0.2
Item 0.2
Item 0.6
Item 0.6
Item 0.9
Item 0.9
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 4.7
Item 4.7
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Item 14.6
Item 14.6
Item 14.8
Item 14.8
Item 51.0
Item 51.0
Item 61.4
Item 61.4
Item 67.0
Item 67.0
Item 75.5
Item 75.5
Item 285.3
Item 285.3
Item 286.5
Item 286.5
Item 343.0
Item 343.0
Item 353.5
Item 353.5
Item 418.5
Item 418.5
Item 768.7
Item 768.7
Item 899.1
Item 899.1
Key Figures
Q2 2026 Revenue: $1,603.5 million
Q2 2026 GAAP diluted EPS: $0.56
Q2 2026 Non-GAAP diluted EPS: $0.74
+4 more
7 metrics
Q2 2026 Revenue
$1,603.5 million
Consolidated revenue for the quarter ended July 3, 2026
Q2 2026 GAAP diluted EPS
$0.56
GAAP diluted earnings per share for Q2 2026
Q2 2026 Non-GAAP diluted EPS
$0.74
Non-GAAP diluted earnings per share for Q2 2026
Q2 2026 Free cash flow
$425.4 million
Free cash flow in the quarter ended July 3, 2026
PSG segment revenue
$829.0 million
Power Solutions Group revenue in Q2 2026
Cash and cash equivalents
$3,514.5 million
Cash and cash equivalents as of July 3, 2026
Q3 2026 revenue guidance
$1,650 to $1,750 million
Projected revenue range for the third quarter of 2026
Key Terms
free cash flow, non-GAAP gross margin, restructuring, asset impairments and other, net, share-based compensation, +2 more
6 terms
free cash flow financial
"Free cash flow margin expanded from approximately 7% to 27% year-over-year"
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
non-GAAP gross margin financial
"Non-GAAP gross margin | 39.3 % | 38.5 % | 37.6 %"
Non-GAAP gross margin is a measure of a company's profitability that shows how much money it makes from sales after subtracting the direct costs of producing its products or services, but without applying certain accounting adjustments required by standard rules. It helps investors understand the company's core earning ability by excluding items like one-time expenses or accounting changes. This metric provides a clearer picture of ongoing business performance beyond official financial reports.
restructuring, asset impairments and other, net financial
"Restructuring, asset impairments and other, net | 41.2 | 329.3"
share-based compensation financial
"Total share-based compensation related to restricted stock units, stock grant awards"
Share-based compensation is when a company pays employees, executives or directors with its own stock or rights to buy stock instead of, or in addition to, cash. Think of it like receiving store gift cards instead of extra paycheck — it can motivate staff to boost the company’s value, but it also increases the number of shares outstanding and can shrink each existing owner’s slice of profits and voting power. Investors watch it because it affects reported earnings, share count and the alignment between management and shareholders.
Manufacturing Realignment Programs financial
"Accelerated depreciation and amortization related to the 2025 and 2026 Manufacturing Realignment Programs"
convertible notes financial
"dilution from the convertible notes that is covered by hedging activity"
Convertible notes are a type of short-term loan that a company receives from investors, which can later be turned into company shares instead of being paid back in cash. They matter to investors because they offer a way to support a company early on while giving the potential to own a stake in its success if the company grows and later raises more funding.
Earnings Snapshot
Revenue: $1,603.5 million · Guidance included
Quarter ended July 3, 2026
Revenue
$1,603.5 million
up 9% year-over-year
GAAP diluted EPS
$0.56
up from $0.41 in Q2 2025
Non-GAAP diluted EPS
$0.74
up from $0.53 in Q2 2025
Free cash flow
$425.4 million
up from $106.1 million in Q2 2025
Guidance
For Q3 2026, the company projected revenue of $1,650 to $1,750 million, GAAP gross margin of 39.9% to 41.9%, and GAAP diluted EPS of $0.79 to $0.91.
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FAQ
How did onsemi (ON) perform financially in Q2 2026?
onsemi reported Q2 2026 revenue of $1,603.5 million, up 9% year-over-year. GAAP diluted EPS was $0.56, while non-GAAP diluted EPS reached $0.74. Management said earnings per share grew four times faster than revenue year-over-year.
What is onsemi’s (ON) non-GAAP EPS and net income for Q2 2026?
For Q2 2026, onsemi reported non-GAAP net income of $293.8 million and non-GAAP diluted EPS of $0.74. In Q2 2025, non-GAAP net income was $221.3 million with non-GAAP diluted EPS of $0.53, indicating solid year-over-year earnings growth.
How did onsemi’s (ON) free cash flow change year-over-year in Q2 2026?
Q2 2026 free cash flow was $425.4 million, compared with $106.1 million in Q2 2025. Management stated that free cash flow margin expanded from approximately 7% to 27% year-over-year, reflecting stronger profitability and lower capital intensity relative to cash generation.
Which business segments drove onsemi’s (ON) Q2 2026 revenue?
In Q2 2026, onsemi’s PSG segment generated $829.0 million in revenue, up 19% year-over-year. AMG delivered $545.7 million (down 2%), and ISG contributed $228.8 million (up 7%). Management also said AI data center is the company’s fastest-growing business.
What guidance did onsemi (ON) provide for Q3 2026?
For Q3 2026, onsemi projected revenue of $1,650 to $1,750 million. GAAP gross margin is expected between 39.9% and 41.9%, with GAAP diluted EPS of $0.79 to $0.91 and non-GAAP diluted EPS of $0.81 to $0.93.
What is onsemi’s (ON) cash and debt position as of July 3, 2026?
As of July 3, 2026, onsemi held $3,514.5 million in cash and cash equivalents and $350.0 million in short-term investments. Total debt consisted of $802.1 million of current portion of long-term debt and $3,657.3 million of long-term debt, for total debt of $4,459.4 million.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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ON Semiconductor Corporation
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(Address of principal executive offices)
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(Zip Code)
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(602 ) 244-6600
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading
Symbol(s)
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Name of each exchange
on which registered
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the
Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. |
Results of Operation and Financial Condition.
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On August 3, 2026, ON Semiconductor Corporation announced in a news
release its financial performance for the second quarter ended July 3, 2026 and other related material information (the “Earnings Release”). A copy of the Earnings Release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished under Item 2.02 and shall not be deemed to
be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that
section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, except as shall be expressly set
forth by specific reference in such filing.
| Item 9.01. |
Financial Statements and Exhibits.
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(d)
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Exhibits
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The below exhibit is furnished as part of this Current Report on Form 8-K.
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Exhibit No.
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Description
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99.1
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News release for ON Semiconductor Corporation, dated August 3, 2026, announcing financial performance for the second quarter ended July 3, 2026
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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ON SEMICONDUCTOR CORPORATION
(Registrant)
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Date: August 3, 2026
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By:
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/s/ Thad Trent
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Thad Trent
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Executive Vice President and Chief Financial Officer
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Exhibit 99.1
onsemi Reports Second Quarter 2026 Results
Earnings per share increases four times faster than revenue year-over-year
SCOTTSDALE, Ariz., – August 3, 2026 – onsemi (the “Company”) (Nasdaq: ON)
today announced its second quarter 2026 results with the following highlights:
| • |
Revenue of $1,604 million, increasing 9% year-over-year
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GAAP gross margin of 38.4% and non-GAAP gross margin of 39.3%
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GAAP operating margin of 16.1% and non-GAAP operating margin 20.8%
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GAAP diluted earnings per share of $0.56 and non-GAAP diluted earnings per share $0.74
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Cash from operations increased by 150% and free cash flow of $425.4 million quadrupled year-over-year
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Share repurchases of $332 million, bringing year-to-date shareholder returns to approximately 105% of free cash flow
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“We delivered revenue, gross margin and earnings per share above the midpoint of guidance, reflecting strengthening demand, particularly across AI-driven
applications, and growing customer adoption of our differentiated solutions, including Treo and our high voltage power solutions,” said Hassane El-Khoury, President and CEO of onsemi. “AI data center remains our fastest-growing business, and we
now expect revenue to more than double in 2026, demonstrating the strength of our intelligent power portfolio and growing customer adoption across the power tree.”
“Our results demonstrate the operating leverage in our business model,” said Thad Trent, EVP and CFO of onsemi. “Year-over-year earnings per share grew four times
faster than revenue, driven by gross margin expansion and disciplined cost management. Free cash flow margin expanded from approximately 7% to 27% year-over-year, reflecting the strength of our operating model, and as demand continues to
improve, we are increasingly confident in our ability to drive profitable growth and long-term shareholder value.”
Business Highlights:
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Announced the planned acquisition of Synaptics, expanding capabilities in connected compute at accretive gross margins to support a market expansion while complementing leadership in
power and sensing
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Expanded role in NVIDIA MGX ecosystem as AI infrastructure power demands accelerate
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Secured strategic AI data center platform wins with Great Wall, a leading China cloud infrastructure power supplier, expanding EliteSiC and silicon MOSFETs and controller
content
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Launched GaNEXUS, onsemi's gallium nitride power portfolio spanning 40V to 650V, serving AI data centers, robotics, and industrial infrastructure applications
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Extended leadership in automotive zonal architecture and on-board charging with Rivian’s R2 platform with power solutions that enable efficient power distribution and
conversion
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Selected financial results for the quarter are shown below with comparable periods (unaudited):
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GAAP
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Non-GAAP
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|||||||||||||||||||||||
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(Revenue and Net Income in millions)
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Q2 2026
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Q1 2026
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Q2 2025
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Q2 2026
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Q1 2026
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Q2 2025
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Revenue
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$
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1,603.5
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$
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1,513.3
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$
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1,468.7
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$
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1,603.5
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$
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1,513.3
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$
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1,468.7
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Gross Margin
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38.4
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%
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38.5
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%
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37.6
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%
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39.3
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%
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38.5
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%
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37.6
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%
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Operating Margin
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16.1
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%
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(3.5
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)%
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13.2
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%
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20.8
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%
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19.1
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%
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17.3
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%
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Net Income (loss) attributable to ON Semiconductor Corporation
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$
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226.8
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$
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(33.4
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)
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$
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170.3
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$
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293.8
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$
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253.1
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$
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221.3
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Diluted Earnings (loss) Per Share
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$
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0.56
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$
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(0.08
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)
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$
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0.41
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$
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0.74
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$
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0.64
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$
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0.53
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Revenue Summary
(in millions)
(Unaudited)
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Quarters Ended
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Business Segment
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Q2 2026
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Q1 2026
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Q2 2025
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Sequential
Change
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Year-over-
Year Change
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PSG
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$
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829.0
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$
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736.6
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$
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698.2
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13
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%
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19
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%
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AMG
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545.7
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540.4
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555.9
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1
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%
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(2
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)%
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ISG
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228.8
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236.3
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214.6
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(3
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)%
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7
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%
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Total
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$
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1,603.5
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$
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1,513.3
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$
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1,468.7
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6
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%
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9
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%
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||||||||||
THIRD QUARTER 2026 OUTLOOK
The following table outlines onsemi’s projected third quarter of 2026 GAAP and non-GAAP
outlook.
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Total onsemi
GAAP
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Special
Items **
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Total onsemi
Non-GAAP***
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Revenue
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$1,650 to $1,750 million
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-
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$1,650 to $1,750 million
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Gross Margin
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39.9% to 41.9%
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0.1%
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40.0% to 42.0%
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Operating Expenses
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$318 to $333 million
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$15 million
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$303 to $318 million
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Other Income and Expense (including interest), net
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($18 million)
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-
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($18 million)
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Diluted Earnings Per Share
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$0.79 to $0.91
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$0.02
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$0.81 to $0.93
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Diluted Shares Outstanding *
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402 million
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7 million
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395 million
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| * |
Diluted shares outstanding can vary as a result of, among other things, the vesting of restricted stock units, the incremental dilutive shares from the convertible notes, and
the repurchase or the issuance of stock or convertible notes or the sale of treasury shares. In periods when the quarterly average stock price per share exceeds $52.97 for the 0% Notes, $103.87 for the 0.50% Notes, and $161.30 for the
2031 0% Notes, the non-GAAP diluted share count and non-GAAP net income per share include the anti-dilutive impact of the hedge transactions entered concurrently with the 0% Notes, the 0.50% Notes, and the 2031 0% Notes, respectively.
At an average stock price per share between $52.97 and $74.34 for the 0% Notes, $103.87 and $156.78 for the 0.50% Notes, and $161.30 and $211.54 for the 2031 0% Notes, the hedging activity offsets the potentially dilutive effect of the
0% Notes, the 0.50% Notes, and the 2031 0% Notes, respectively. In periods when the quarterly average stock price exceeds $74.34 for the 0% Notes, $156.78 for the 0.50% Notes, and $211.54 for the 2031 0% Notes, the dilutive impact of
the warrants issued concurrently with such notes is included in the diluted shares outstanding. GAAP and non-GAAP diluted share counts are based on either the previous quarter's average stock price or the stock price as of the last day
of the previous quarter, whichever is higher.
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| ** |
Special items may include: amortization of acquisition-related intangibles; expensing of appraised inventory fair market value step-up; restructuring-related cost of revenue
charges; non-recurring facility costs; in-process research and development expenses; restructuring, asset impairments and other, net; goodwill impairment charges; gains and losses on debt prepayment; actuarial (gains) losses on pension
plans and other pension benefits; and certain other special items, as necessary. These special items are out of our control and could change significantly from period to period. As a result, we are not able to reasonably estimate and
separately present the individual impact or probable significance of these special items, and we are similarly unable to provide a reconciliation of the non-GAAP measures. The reconciliation that is unavailable would include a
forward-looking income statement, balance sheet and statement of cash flows in accordance with GAAP. For this reason, we use a projected range of the aggregate amount of special items in order to calculate our projected non-GAAP
operating expense outlook.
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2
| *** |
We believe these non-GAAP measures provide important supplemental information to investors. We use these measures, together with GAAP measures, for internal managerial purposes
and as a means to evaluate period-to-period comparisons. However, we do not, and you should not, rely on non-GAAP financial measures alone as measures of our performance. We believe that non-GAAP financial measures reflect an additional
way of viewing aspects of our operations that, when taken together with GAAP results and the reconciliations to corresponding GAAP financial measures that we also provide in our releases, provide a more complete understanding of factors
and trends affecting our business. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures, even if they have similar names.
|
TELECONFERENCE
onsemi will host a conference call for the financial community at 5 p.m. Eastern Time (ET) on August
3, 2026 to discuss this announcement and onsemi’s second quarter 2026 results. The Company will also provide a real-time audio webcast of the teleconference on the Investor Relations page of its website at http://www.onsemi.com. The
webcast replay will be available at this site approximately one hour following the live broadcast and will continue to be available for approximately 30 days following the conference call. Investors and interested parties can also access the
conference call by pre-registering here.
3
About onsemi
onsemi (Nasdaq: ON) delivers intelligent power and sensing technologies
that enable electrification, energy efficiency, safety, and automation across automotive, industrial, and AI data center end-markets. With a highly differentiated and innovative product portfolio, onsemi helps customers solve complex challenges
to achieve higher efficiency, improved performance, and lower system cost, while supporting a safer, cleaner, and more energy-efficient world. onsemi is
part of the S&P 500® index. Learn more about onsemi at www.onsemi.com.
# # #
onsemi and the onsemi logo are trademarks of Semiconductor Components Industries, LLC. All other brand and product names appearing in this
document are registered trademarks or trademarks of their respective holders. Although the Company references its website in this news release, information on the website is not to be incorporated herein.
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Krystal Heaton
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Parag Agarwal
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Director, Head of Public Relations
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Vice President - Investor Relations & Corporate Development
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onsemi
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onsemi
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(480) 242-6943
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(602) 244-3437
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Krystal.Heaton@onsemi.com
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investor@onsemi.com
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This document includes “forward-looking statements,” as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included or incorporated in this document could be deemed forward-looking statements, particularly statements about the future financial
performance of onsemi, including financial guidance for the third quarter of 2026. Forward-looking statements are often characterized by the use of words such as “believes,” “estimates,” “expects,” “projects,” “may,” “will,” “intends,” “plans,”
“anticipates,” “should” or similar expressions or by discussions of strategy, plans or intentions. All forward-looking statements in this document are made based on our current expectations, forecasts, estimates and assumptions and involve
risks, uncertainties and other factors that could cause results or events to differ materially from those expressed in the forward-looking statements. Certain factors that could affect our future results or events are described under Part I,
Item 1A “Risk Factors” in the 2025 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 9, 2026 (the “2025 Form 10-K”) and from time to time in our other SEC reports. Readers are cautioned not to
place undue reliance on forward-looking statements. We assume no obligation to update such information, which speaks only as of the date made, except as may be required by law. Investing in our securities involves a high degree of risk and
uncertainty, and you should carefully consider the trends, risks and uncertainties described in this document, our 2025 Form 10-K and other reports filed with or furnished to the SEC before making any investment decision with respect to our
securities. If any of these trends, risks or uncertainties actually occurs or continues, our business, financial condition or operating results could be materially adversely affected, the trading prices of our securities could decline, and you
could lose all or part of your investment. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement.
4
ON SEMICONDUCTOR CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share and percentage data)
|
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Quarters Ended
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Six Months Ended
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||||||||||||||||||
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July 3, 2026
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April 3, 2026
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July 4, 2025
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July 3, 2026
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July 4, 2025
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|||||||||||||||
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Revenue
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$
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1,603.5
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$
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1,513.3
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$
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1,468.7
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$
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3,116.8
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$
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2,914.4
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||||||||||
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Cost of revenue
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987.2
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930.2
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916.8
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1,917.4
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2,068.7
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|||||||||||||||
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Gross profit
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616.3
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583.1
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551.9
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1,199.4
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845.7
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|||||||||||||||
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Gross margin
|
38.4
|
%
|
38.5
|
%
|
37.6
|
%
|
38.5
|
%
|
29.0
|
%
|
||||||||||
|
Operating expenses:
|
||||||||||||||||||||
|
Research and development
|
140.8
|
144.3
|
143.8
|
285.1
|
307.9
|
|||||||||||||||
|
Selling and marketing
|
63.3
|
63.0
|
63.3
|
126.3
|
131.6
|
|||||||||||||||
|
General and administrative
|
101.9
|
89.4
|
91.2
|
191.3
|
175.6
|
|||||||||||||||
|
Amortization of intangible assets
|
10.5
|
10.5
|
11.0
|
21.0
|
22.4
|
|||||||||||||||
|
Restructuring, asset impairments and other, net
|
41.2
|
329.3
|
49.2
|
370.5
|
588.5
|
|||||||||||||||
|
Total operating expenses
|
357.7
|
636.5
|
358.5
|
994.2
|
1,226.0
|
|||||||||||||||
|
Operating income (loss)
|
258.6
|
(53.4
|
)
|
193.4
|
205.2
|
(380.3
|
)
|
|||||||||||||
|
Other income (expense), net:
|
||||||||||||||||||||
|
Interest expense
|
(13.7
|
)
|
(12.7
|
)
|
(17.9
|
)
|
(26.4
|
)
|
(35.9
|
)
|
||||||||||
|
Interest income
|
17.4
|
17.7
|
25.2
|
35.1
|
51.8
|
|||||||||||||||
|
Other income
|
8.6
|
3.8
|
1.5
|
12.4
|
5.6
|
|||||||||||||||
|
Other income (expense), net
|
12.3
|
8.8
|
8.8
|
21.1
|
21.5
|
|||||||||||||||
|
Income (loss) before income taxes
|
270.9
|
(44.6
|
)
|
202.2
|
226.3
|
(358.8
|
)
|
|||||||||||||
|
Income tax (provision) benefit
|
(43.4
|
)
|
11.7
|
(30.5
|
)
|
(31.7
|
)
|
45.3
|
||||||||||||
|
Net income (loss)
|
227.5
|
(32.9
|
)
|
171.7
|
194.6
|
(313.5
|
)
|
|||||||||||||
|
Less: Net income attributable to non-controlling interest
|
(0.7
|
)
|
(0.5
|
)
|
(1.4
|
)
|
(1.2
|
)
|
(2.3
|
)
|
||||||||||
|
Net income (loss) attributable to ON Semiconductor Corporation
|
$
|
226.8
|
$
|
(33.4
|
)
|
$
|
170.3
|
$
|
193.4
|
$
|
(315.8
|
)
|
||||||||
|
|
||||||||||||||||||||
|
Net income (loss) per share of common stock attributable to ON Semiconductor Corporation:
|
||||||||||||||||||||
|
Basic
|
$
|
0.58
|
$
|
(0.08
|
)
|
$
|
0.41
|
$
|
0.49
|
$
|
(0.76
|
)
|
||||||||
|
Diluted
|
$
|
0.56
|
$
|
(0.08
|
)
|
$
|
0.41
|
$
|
0.48
|
$
|
(0.76
|
)
|
||||||||
|
Weighted average common shares outstanding:
|
||||||||||||||||||||
|
Basic
|
390.3
|
394.1
|
414.6
|
392.2
|
418.0
|
|||||||||||||||
|
Diluted
|
404.4
|
394.1
|
414.9
|
401.5
|
418.0
|
|||||||||||||||
5
ON SEMICONDUCTOR CORPORATION
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in millions)
|
July 3, 2026
|
April 3, 2026
|
December 31,
2025
|
||||||||||
|
Assets
|
||||||||||||
|
Cash and cash equivalents
|
$
|
3,514.5
|
$
|
2,003.6
|
$
|
2,147.6
|
||||||
|
Short-term investments
|
350.0
|
400.0
|
400.0
|
|||||||||
|
Receivables, net
|
897.2
|
862.8
|
908.0
|
|||||||||
|
Inventories
|
2,047.5
|
2,049.2
|
1,989.6
|
|||||||||
|
Assets held-for-sale
|
31.4
|
40.4
|
25.0
|
|||||||||
|
Other current assets
|
441.2
|
419.6
|
352.9
|
|||||||||
|
Total current assets
|
7,281.8
|
5,775.6
|
5,823.1
|
|||||||||
|
Property, plant and equipment, net
|
2,924.9
|
3,035.6
|
3,369.0
|
|||||||||
|
Goodwill
|
1,687.6
|
1,679.9
|
1,679.9
|
|||||||||
|
Intangible assets, net
|
329.4
|
332.2
|
343.9
|
|||||||||
|
Deferred tax assets
|
1,014.3
|
933.2
|
929.1
|
|||||||||
|
ROU financing lease assets
|
—
|
—
|
23.1
|
|||||||||
|
Other assets
|
247.1
|
254.3
|
356.0
|
|||||||||
|
Total assets
|
$
|
13,485.1
|
$
|
12,010.8
|
$
|
12,524.1
|
||||||
|
Liabilities and Stockholders’ Equity
|
||||||||||||
|
Accounts payable
|
$
|
498.3
|
$
|
486.1
|
$
|
572.3
|
||||||
|
Accrued expenses and other current liabilities
|
801.0
|
698.7
|
714.9
|
|||||||||
|
Current portion of financing lease liabilities
|
0.5
|
0.5
|
0.5
|
|||||||||
|
Current portion of long-term debt
|
802.1
|
—
|
—
|
|||||||||
|
Total current liabilities
|
2,101.9
|
1,185.3
|
1,287.7
|
|||||||||
|
Long-term debt
|
3,657.3
|
2,982.9
|
2,980.5
|
|||||||||
|
Deferred tax liabilities
|
46.8
|
46.5
|
41.7
|
|||||||||
|
Long-term financing lease liabilities
|
22.8
|
23.1
|
23.8
|
|||||||||
|
Other long-term liabilities
|
417.8
|
452.2
|
498.5
|
|||||||||
|
Total liabilities
|
6,246.6
|
4,690.0
|
4,832.2
|
|||||||||
|
ON Semiconductor Corporation stockholders’ equity:
|
||||||||||||
|
Common stock
|
6.3
|
6.3
|
6.2
|
|||||||||
|
Additional paid-in capital
|
5,632.8
|
5,582.5
|
5,538.6
|
|||||||||
|
Accumulated other comprehensive loss
|
(67.1
|
)
|
(61.7
|
)
|
(55.5
|
)
|
||||||
|
Accumulated earnings
|
8,435.3
|
8,208.5
|
8,241.9
|
|||||||||
|
Less: Treasury stock, at cost
|
(6,788.6
|
)
|
(6,433.9
|
)
|
(6,057.9
|
)
|
||||||
|
Total ON Semiconductor Corporation stockholders’ equity
|
7,218.7
|
7,301.7
|
7,673.3
|
|||||||||
|
Non-controlling interest
|
19.8
|
19.1
|
18.6
|
|||||||||
|
Total stockholders’ equity
|
7,238.5
|
7,320.8
|
7,691.9
|
|||||||||
|
Total liabilities and stockholders’ equity
|
$
|
13,485.1
|
$
|
12,010.8
|
$
|
12,524.1
|
||||||
6
ON SEMICONDUCTOR CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
|
|
Quarters Ended
|
Six Months Ended
|
||||||||||||||||||
|
|
July 3, 2026
|
April 3, 2026
|
July 4, 2025
|
July 3, 2026
|
July 4, 2025
|
|||||||||||||||
|
Cash flows from operating activities:
|
||||||||||||||||||||
|
Net income (loss)
|
$
|
227.5
|
$
|
(32.9
|
)
|
$
|
171.7
|
$
|
194.6
|
$
|
(313.5
|
)
|
||||||||
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||||||||||||||
|
Depreciation and amortization
|
141.3
|
286.7
|
156.4
|
428.0
|
324.6
|
|||||||||||||||
|
Gain on sale and disposal of fixed assets
|
(0.3
|
)
|
(1.1
|
)
|
(5.8
|
)
|
(1.4
|
)
|
(5.8
|
)
|
||||||||||
|
Amortization of debt discount and issuance costs
|
3.8
|
2.9
|
2.8
|
6.7
|
5.7
|
|||||||||||||||
|
Share-based compensation
|
37.4
|
37.3
|
34.4
|
74.7
|
68.3
|
|||||||||||||||
|
Non-cash asset impairment charges
|
16.3
|
147.0
|
40.6
|
163.3
|
472.1
|
|||||||||||||||
|
Change in deferred tax balances
|
(12.8
|
)
|
2.7
|
(18.5
|
)
|
(10.1
|
)
|
(32.2
|
)
|
|||||||||||
|
Other
|
1.9
|
(2.2
|
)
|
2.5
|
(0.3
|
)
|
4.3
|
|||||||||||||
|
Changes in assets and liabilities
|
44.6
|
(201.3
|
)
|
(199.8
|
)
|
(156.7
|
)
|
263.1
|
||||||||||||
|
Net cash provided by operating activities
|
459.7
|
239.1
|
184.3
|
698.8
|
786.6
|
|||||||||||||||
|
Cash flows from investing activities:
|
||||||||||||||||||||
|
Payments for acquisition of property, plant, and equipment
|
(34.3
|
)
|
(21.9
|
)
|
(78.2
|
)
|
(56.2
|
)
|
(225.8
|
)
|
||||||||||
|
Proceeds from sale of property, plant and equipment
|
7.6
|
1.0
|
6.5
|
8.6
|
6.7
|
|||||||||||||||
|
Purchase of short-term investments
|
(350.0
|
)
|
(300.0
|
)
|
(300.0
|
)
|
(650.0
|
)
|
(550.0
|
)
|
||||||||||
|
Proceeds from the maturity of short-term investments
|
400.0
|
300.0
|
250.0
|
700.0
|
550.0
|
|||||||||||||||
|
Payments for acquisition of a business, net of cash acquired
|
(13.0
|
)
|
—
|
—
|
(13.0
|
)
|
(117.5
|
)
|
||||||||||||
|
Other
|
(3.0
|
)
|
4.2
|
—
|
1.2
|
—
|
||||||||||||||
|
Net cash provided by (used in) investing activities
|
7.3
|
(16.7
|
)
|
(121.7
|
)
|
(9.4
|
)
|
(336.6
|
)
|
|||||||||||
|
Cash flows from financing activities:
|
||||||||||||||||||||
|
Proceeds for common stock issuance under the ESPP
|
5.3
|
6.7
|
5.3
|
12.0
|
10.6
|
|||||||||||||||
|
Payment of tax withholding for RSUs
|
(18.6
|
)
|
(26.9
|
)
|
(2.7
|
)
|
(45.5
|
)
|
(25.1
|
)
|
||||||||||
|
Repurchase of common stock
|
(344.8
|
)
|
(345.7
|
)
|
(302.3
|
)
|
(690.5
|
)
|
(602.4
|
)
|
||||||||||
|
Issuance and borrowings under debt agreements
|
1,473.7
|
—
|
—
|
1,473.7
|
—
|
|||||||||||||||
|
Reimbursement of debt issuance and other financing costs
|
3.4
|
—
|
—
|
3.4
|
—
|
|||||||||||||||
|
Payment of debt issuance and other financing costs
|
(4.2
|
)
|
—
|
—
|
(4.2
|
)
|
—
|
|||||||||||||
|
Payment for purchase of bond hedges
|
(351.6
|
)
|
—
|
—
|
(351.6
|
)
|
—
|
|||||||||||||
|
Proceeds from issuance of warrants
|
281.0
|
—
|
—
|
281.0
|
—
|
|||||||||||||||
|
Payment of finance lease obligations
|
(0.1
|
)
|
(0.1
|
)
|
(0.4
|
)
|
(0.2
|
)
|
(0.8
|
)
|
||||||||||
|
Net cash provided by (used in) financing activities
|
1,044.1
|
(366.0
|
)
|
(300.1
|
)
|
678.1
|
(617.7
|
)
|
||||||||||||
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(0.3
|
)
|
(0.3
|
)
|
1.9
|
(0.6
|
)
|
3.9
|
||||||||||||
|
Net increase (decrease) in cash, cash equivalents and restricted cash
|
1,510.8
|
(143.9
|
)
|
(235.6
|
)
|
1,366.9
|
(163.8
|
)
|
||||||||||||
|
Beginning cash, cash equivalents and restricted cash
|
2,005.1
|
2,149.0
|
2,765.2
|
2,149.0
|
2,693.4
|
|||||||||||||||
|
Ending cash, cash equivalents and restricted cash
|
$
|
3,515.9
|
$
|
2,005.1
|
$
|
2,529.6
|
$
|
3,515.9
|
$
|
2,529.6
|
||||||||||
7
ON SEMICONDUCTOR CORPORATION
RECONCILIATION OF GAAP VERSUS NON-GAAP DISCLOSURES (Continued)
(in millions, except per share and percentage data)
|
|
Quarters Ended
|
Six Months Ended
|
||||||||||||||||||||
|
|
July 3, 2026
|
April 3, 2026
|
July 4, 2025
|
July 3, 2026
|
July 4, 2025
|
|||||||||||||||||
|
Reconciliation of GAAP to non-GAAP gross profit:
|
||||||||||||||||||||||
|
GAAP gross profit
|
$
|
616.3
|
$
|
583.1
|
$
|
551.9
|
$
|
1,199.4
|
$
|
845.7
|
||||||||||||
|
Special items:
|
||||||||||||||||||||||
|
a)
|
|
Restructuring-related inventory and other charges
|
13.4
|
(1.0
|
)
|
(1.9
|
)
|
12.4
|
281.5
|
|||||||||||||
|
b)
|
Amortization of intangible assets
|
1.2
|
1.2
|
1.3
|
2.4
|
2.6
|
||||||||||||||||
|
c)
|
Amortization of fair market value step-up of inventory
|
—
|
—
|
1.2
|
—
|
1.2
|
||||||||||||||||
|
|
Total special items
|
14.6
|
0.2
|
0.6
|
14.8
|
285.3
|
||||||||||||||||
|
Non-GAAP gross profit
|
$
|
630.9
|
$
|
583.3
|
$
|
552.5
|
$
|
1,214.2
|
$
|
1,131.0
|
||||||||||||
|
Reconciliation of GAAP to non-GAAP gross margin:
|
||||||||||||||||||||||
|
GAAP gross margin
|
38.4
|
%
|
38.5
|
%
|
37.6
|
%
|
38.5
|
%
|
29.0
|
%
|
||||||||||||
|
Special items:
|
||||||||||||||||||||||
|
a)
|
Restructuring-related inventory and other charges
|
0.8
|
%
|
(0.1
|
)%
|
(0.1
|
)%
|
0.4
|
%
|
9.7
|
%
|
|||||||||||
|
b)
|
Amortization of intangible assets
|
0.1
|
%
|
0.1
|
%
|
0.1
|
%
|
0.1
|
%
|
0.1
|
%
|
|||||||||||
|
c)
|
|
Amortization of fair market value step-up of inventory
|
—
|
%
|
—
|
%
|
0.1
|
%
|
—
|
%
|
—
|
%
|
||||||||||
|
|
Total special items
|
0.9
|
%
|
—
|
%
|
0.1
|
%
|
0.5
|
%
|
9.8
|
%
|
|||||||||||
|
Non-GAAP gross margin
|
39.3
|
%
|
38.5
|
%
|
37.6
|
%
|
39.0
|
%
|
38.8
|
%
|
||||||||||||
|
Reconciliation of GAAP to non-GAAP operating expenses:
|
||||||||||||||||||||||
|
GAAP operating expenses
|
$
|
357.7
|
$
|
636.5
|
$
|
358.5
|
$
|
994.2
|
$
|
1,226.0
|
||||||||||||
|
Special items:
|
||||||||||||||||||||||
|
a)
|
|
Amortization of intangible assets
|
(10.5
|
)
|
(10.5
|
)
|
(11.0
|
)
|
(21.0
|
)
|
(22.4
|
)
|
||||||||||
|
b)
|
Restructuring, asset impairments and other charges, net
|
(41.2
|
)
|
(329.3
|
)
|
(49.2
|
)
|
(370.5
|
)
|
(588.5
|
)
|
|||||||||||
|
c)
|
|
Third-party acquisition and divestiture-related costs
|
(7.6
|
)
|
(1.4
|
)
|
(0.6
|
)
|
(9.0
|
)
|
(2.9
|
)
|
||||||||||
|
d)
|
Adjustments to contingent consideration
|
(1.6
|
)
|
(1.6
|
)
|
—
|
(3.2
|
)
|
—
|
|||||||||||||
|
|
Total special items
|
(60.9
|
)
|
(342.8
|
)
|
(60.8
|
)
|
(403.7
|
)
|
(613.8
|
)
|
|||||||||||
|
Non-GAAP operating expenses
|
$
|
296.8
|
$
|
293.7
|
$
|
297.7
|
$
|
590.5
|
$
|
612.2
|
||||||||||||
|
Reconciliation of GAAP to non-GAAP operating income:
|
||||||||||||||||||||||
|
GAAP operating income (loss)
|
$
|
258.6
|
$
|
(53.4
|
)
|
$
|
193.4
|
$
|
205.2
|
$
|
(380.3
|
)
|
||||||||||
|
Special items:
|
||||||||||||||||||||||
|
a)
|
|
Restructuring-related inventory and other charges
|
13.4
|
(1.0
|
)
|
(1.9
|
)
|
12.4
|
281.5
|
|||||||||||||
|
b)
|
Amortization of intangible assets
|
11.7
|
11.7
|
12.3
|
23.4
|
25.0
|
||||||||||||||||
|
c)
|
Restructuring, asset impairments and other charges, net
|
41.2
|
329.3
|
49.2
|
370.5
|
588.5
|
||||||||||||||||
|
d)
|
Third-party acquisition and divestiture-related costs
|
7.6
|
1.4
|
0.6
|
9.0
|
2.9
|
||||||||||||||||
|
e)
|
|
Amortization of fair market value step-up of inventory
|
—
|
—
|
1.2
|
—
|
1.2
|
|||||||||||||||
|
f)
|
Adjustments to contingent consideration
|
1.6
|
1.6
|
—
|
3.2
|
—
|
||||||||||||||||
|
|
Total special items
|
75.5
|
343.0
|
61.4
|
418.5
|
899.1
|
||||||||||||||||
|
Non-GAAP operating income
|
$
|
334.1
|
$
|
289.6
|
$
|
254.8
|
$
|
623.7
|
$
|
518.8
|
||||||||||||
|
Reconciliation of GAAP to non-GAAP operating margin (operating income / revenue):
|
||||||||||||||||||||||
|
GAAP operating margin
|
16.1
|
%
|
(3.5
|
)%
|
13.2
|
%
|
6.6
|
%
|
(13.0
|
)%
|
||||||||||||
|
Special items:
|
||||||||||||||||||||||
|
a)
|
|
Restructuring related inventory and other charges
|
0.8
|
%
|
(0.1
|
)%
|
(0.1
|
)%
|
0.4
|
%
|
9.7
|
%
|
||||||||||
|
b)
|
Amortization of intangible assets
|
0.7
|
%
|
0.8
|
%
|
0.8
|
%
|
0.8
|
%
|
0.9
|
%
|
|||||||||||
|
c)
|
|
Restructuring, asset impairments and other charges, net
|
2.6
|
%
|
21.8
|
%
|
3.3
|
%
|
11.9
|
%
|
20.2
|
%
|
||||||||||
|
d)
|
Third-party acquisition and divestiture-related costs
|
0.5
|
%
|
0.1
|
%
|
—
|
%
|
0.3
|
%
|
0.1
|
%
|
|||||||||||
|
e)
|
Amortization of fair market value step-up of inventory
|
—
|
%
|
—
|
%
|
0.1
|
%
|
—
|
%
|
—
|
%
|
|||||||||||
|
f)
|
|
Adjustments to contingent consideration
|
0.1
|
%
|
0.1
|
%
|
—
|
%
|
0.1
|
%
|
—
|
%
|
||||||||||
|
|
Total special items
|
4.7
|
%
|
22.7
|
%
|
4.1
|
%
|
13.5
|
%
|
30.9
|
%
|
|||||||||||
|
Non-GAAP operating margin
|
20.8
|
%
|
19.1
|
%
|
17.3
|
%
|
20.0
|
%
|
17.8
|
%
|
||||||||||||
|
Reconciliation of GAAP to non-GAAP income before income taxes:
|
||||||||||||||||||||||
8
ON SEMICONDUCTOR CORPORATION
RECONCILIATION OF GAAP VERSUS NON-GAAP DISCLOSURES
(in millions, except per share and percentage data)
|
|
Quarters Ended
|
Six Months Ended
|
||||||||||||||||||||
|
|
July 3, 2026
|
April 3, 2026
|
July 4, 2025
|
July 3, 2026
|
July 4, 2025
|
|||||||||||||||||
|
GAAP income (loss) before income taxes
|
$
|
270.9
|
$
|
(44.6
|
)
|
$
|
202.2
|
$
|
226.3
|
$
|
(358.8
|
)
|
||||||||||
|
Special items:
|
||||||||||||||||||||||
|
a)
|
|
Restructuring-related inventory and other charges
|
13.4
|
(1.0
|
)
|
(1.9
|
)
|
12.4
|
281.5
|
|||||||||||||
|
b)
|
Amortization of intangible assets
|
11.7
|
11.7
|
12.3
|
23.4
|
25.0
|
||||||||||||||||
|
c)
|
|
Restructuring, asset impairments and other charges, net
|
41.2
|
329.3
|
49.2
|
370.5
|
588.5
|
|||||||||||||||
|
d)
|
|
Third-party acquisition and divestiture-related costs
|
7.6
|
1.4
|
0.6
|
9.0
|
2.9
|
|||||||||||||||
|
e)
|
|
Amortization of fair market value step-up of inventory
|
—
|
—
|
1.2
|
—
|
1.2
|
|||||||||||||||
|
f)
|
|
Adjustments to contingent consideration
|
1.6
|
1.6
|
—
|
3.2
|
—
|
|||||||||||||||
|
|
Total special items
|
75.5
|
343.0
|
61.4
|
418.5
|
899.1
|
||||||||||||||||
|
Non-GAAP income before income taxes
|
$
|
346.4
|
$
|
298.4
|
$
|
263.6
|
$
|
644.8
|
$
|
540.3
|
||||||||||||
|
Reconciliation of GAAP to non-GAAP net income attributable to ON Semiconductor Corporation:
|
||||||||||||||||||||||
|
GAAP net income (loss) attributable to ON Semiconductor Corporation
|
$
|
226.8
|
$
|
(33.4
|
)
|
$
|
170.3
|
$
|
193.4
|
$
|
(315.8
|
)
|
||||||||||
|
Special items:
|
||||||||||||||||||||||
|
a)
|
|
Restructuring-related inventory and other charges
|
13.4
|
(1.0
|
)
|
(1.9
|
)
|
12.4
|
281.5
|
|||||||||||||
|
b)
|
|
Amortization of intangible assets
|
11.7
|
11.7
|
12.3
|
23.4
|
25.0
|
|||||||||||||||
|
c)
|
Restructuring, asset impairments and other charges, net
|
41.2
|
329.3
|
49.2
|
370.5
|
588.5
|
||||||||||||||||
|
d)
|
Third-party acquisition and divestiture-related costs
|
7.6
|
1.4
|
0.6
|
9.0
|
2.9
|
||||||||||||||||
|
e)
|
Amortization of fair market value step-up of inventory
|
—
|
—
|
1.2
|
—
|
1.2
|
||||||||||||||||
|
f)
|
Adjustments to contingent consideration
|
1.6
|
1.6
|
—
|
3.2
|
—
|
||||||||||||||||
|
g)
|
|
Adjustment to Income taxes
|
(8.5
|
)
|
(56.5
|
)
|
(10.4
|
)
|
(65.0
|
)
|
(130.4
|
)
|
||||||||||
|
|
Total special items
|
67.0
|
286.5
|
51.0
|
353.5
|
768.7
|
||||||||||||||||
|
Non-GAAP net income attributable to ON Semiconductor Corporation
|
$
|
293.8
|
$
|
253.1
|
$
|
221.3
|
$
|
546.9
|
$
|
452.9
|
||||||||||||
|
Reconciliation of GAAP to non-GAAP diluted shares outstanding:
|
||||||||||||||||||||||
|
GAAP diluted shares outstanding
|
404.4
|
394.1
|
414.9
|
401.5
|
418.0
|
|||||||||||||||||
|
Special items:
|
||||||||||||||||||||||
|
a)
|
|
Less: dilutive shares attributable to convertible notes
|
(7.4
|
)
|
—
|
—
|
(4.9
|
)
|
—
|
|||||||||||||
|
b)
|
Add: dilutive shares attributable to share-based awards
|
—
|
1.9
|
—
|
—
|
0.4
|
||||||||||||||||
|
|
Total special items
|
(7.4
|
)
|
1.9
|
—
|
(4.9
|
)
|
0.4
|
||||||||||||||
|
Non-GAAP diluted shares outstanding
|
397.0
|
396.0
|
414.9
|
396.6
|
418.4
|
|||||||||||||||||
|
Non-GAAP diluted earnings per share:
|
||||||||||||||||||||||
|
Non-GAAP net income attributable to ON Semiconductor Corporation
|
$
|
293.8
|
$
|
253.1
|
$
|
221.3
|
$
|
546.9
|
$
|
452.9
|
||||||||||||
|
Non-GAAP diluted shares outstanding
|
397.0
|
396.0
|
414.9
|
396.6
|
418.4
|
|||||||||||||||||
|
Non-GAAP diluted earnings per share
|
$
|
0.74
|
$
|
0.64
|
$
|
0.53
|
$
|
1.38
|
$
|
1.08
|
||||||||||||
|
Reconciliation of net cash provided by operating activities to free cash flow:
|
||||||||||||||||||||||
|
Net cash provided by operating activities
|
$
|
459.7
|
$
|
239.1
|
$
|
184.3
|
$
|
698.8
|
$
|
786.6
|
||||||||||||
|
Special items:
|
||||||||||||||||||||||
|
a)
|
|
Payments for acquisition of property, plant and equipment
|
(34.3
|
)
|
(21.9
|
)
|
(78.2
|
)
|
(56.2
|
)
|
(225.8
|
)
|
||||||||||
|
|
Total special items
|
(34.3
|
)
|
(21.9
|
)
|
(78.2
|
)
|
(56.2
|
)
|
(225.8
|
)
|
|||||||||||
|
Free cash flow
|
$
|
425.4
|
$
|
217.2
|
$
|
106.1
|
$
|
642.6
|
$
|
560.8
|
||||||||||||
Certain of the amounts in the above tables may not total due to rounding of individual amounts.
9
ON SEMICONDUCTOR CORPORATION
RECONCILIATION OF GAAP VERSUS NON-GAAP DISCLOSURES (Continued)
(in millions, except per share and percentage data)
FREE CASH FLOW
|
|
Quarters Ended
|
|||||||||||||||||||
|
|
October 3,
2025
|
December 31,
2025
|
April 3, 2026
|
July 3, 2026
|
Last Twelve
Months
|
|||||||||||||||
|
Net cash provided by operating activities
|
$
|
418.7
|
$
|
554.5
|
$
|
239.1
|
$
|
459.7
|
$
|
1,672.0
|
||||||||||
|
Payments for acquisition of property, plant and equipment
|
(46.3
|
)
|
(69.1
|
)
|
(21.9
|
)
|
(34.3
|
)
|
(171.6
|
)
|
||||||||||
|
Free cash flow
|
$
|
372.4
|
$
|
485.4
|
$
|
217.2
|
$
|
425.4
|
$
|
1,500.4
|
||||||||||
|
Revenue
|
$
|
1,550.9
|
$
|
1,530.1
|
$
|
1,513.3
|
$
|
1,603.5
|
$
|
6,197.8
|
||||||||||
SHARE-BASED COMPENSATION
Total share-based compensation related to restricted stock units, stock grant awards and the employee stock purchase plan was as follows:
|
|
Quarters Ended
|
Six Months Ended
|
||||||||||||||||||
|
|
July 3, 2026
|
April 3, 2026
|
July 4, 2025
|
July 3, 2026
|
July 4, 2025
|
|||||||||||||||
|
Cost of revenue
|
$
|
6.8
|
$
|
6.4
|
$
|
6.1
|
$
|
13.2
|
$
|
12.1
|
||||||||||
|
Research and development
|
6.0
|
7.3
|
6.3
|
13.3
|
12.6
|
|||||||||||||||
|
Selling and marketing
|
4.8
|
5.1
|
4.9
|
9.9
|
9.6
|
|||||||||||||||
|
General and administrative
|
19.8
|
18.5
|
17.1
|
38.3
|
34.0
|
|||||||||||||||
|
Total share-based compensation
|
$
|
37.4
|
$
|
37.3
|
$
|
34.4
|
$
|
74.7
|
$
|
68.3
|
||||||||||
SUPPLEMENTAL FINANCIAL DATA
|
Quarters Ended
|
Six Months Ended
|
|||||||||||||||||||
|
July 3, 2026
|
April 3, 2026
|
July 4, 2025
|
July 3, 2026
|
July 4, 2025
|
||||||||||||||||
|
Net cash provided by operating activities
|
$
|
459.7
|
$
|
239.1
|
$
|
184.3
|
$
|
698.8
|
$
|
786.6
|
||||||||||
|
Free cash flow
|
$
|
425.4
|
$
|
217.2
|
$
|
106.1
|
$
|
642.6
|
$
|
560.8
|
||||||||||
|
Cash paid for income taxes
|
$
|
50.8
|
$
|
46.6
|
$
|
65.0
|
$
|
97.4
|
$
|
86.5
|
||||||||||
|
|
||||||||||||||||||||
|
Depreciation and amortization (1)
|
$
|
141.3
|
$
|
286.7
|
$
|
156.4
|
$
|
428.0
|
$
|
324.6
|
||||||||||
|
Less: Amortization of intangible assets
|
11.7
|
11.7
|
12.3
|
23.4
|
25.0
|
|||||||||||||||
|
Depreciation and amortization (excl. amortization of intangible assets) (1)
|
$
|
129.6
|
$
|
275.0
|
$
|
144.1
|
$
|
404.6
|
$
|
299.6
|
||||||||||
|
|
||||||||||||||||||||
|
(1) Accelerated depreciation and amortization related to the 2025 and 2026 Manufacturing Realignment Programs
|
$
|
—
|
$
|
136.5
|
$
|
2.0
|
$
|
136.5
|
$
|
14.5
|
||||||||||
10
NON-GAAP MEASURES
To supplement the consolidated financial results prepared in accordance with GAAP, onsemi uses certain non-GAAP measures, which are adjusted from the most directly
comparable GAAP measures to exclude items related to the amortization of acquisition-related intangibles, restructuring-related cost of revenue charges, expensing of appraised inventory fair market value step-up, inventory valuation
adjustments, in-process research and development expenses, restructuring, asset impairments and other, net, goodwill impairment charges, gains and losses on debt prepayment, non-cash interest expense, actuarial (gains) losses on pension plans
and other pension benefits, third party acquisition and divestiture-related costs, tax impact of these items and certain other non-recurring items, as necessary. Management does not consider the effects of these items in evaluating the core
operational activities of onsemi. Management uses these non-GAAP measures internally to make strategic decisions, forecast future results and evaluate onsemi’s current performance. In addition, the Company believes that most analysts covering
onsemi use the non-GAAP measures to evaluate onsemi’s performance. Given management’s and other relevant parties’ use of these non-GAAP measures, onsemi believes these measures are important to investors in understanding onsemi’s current and
future operating results as seen through the eyes of management. In addition, management believes these non-GAAP measures are useful to investors in enabling them to better assess changes in onsemi’s core business across different time periods.
These non-GAAP measures are not prepared in accordance with, and should not be considered alternatives or necessarily superior to, GAAP financial data and may be different from non-GAAP measures used by other companies.
Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures, even if they have similar names.
Non-GAAP Gross Profit and Gross Margin
The use of non-GAAP gross profit and gross margin allows management to evaluate, among other things, the gross profit and gross margin of the Company’s core
businesses and trends across different reporting periods on a consistent basis, independent of non-cash and non-recurring items including, generally speaking, restructuring-related cost of revenue charges, amortization of intangible assets,
amortization of appraised inventory fair market value step-up, impact of business wind down and non-recurring facility costs. In addition, it is an important component of management’s internal performance measurement and incentive and reward
process as it is used to assess the current and historical financial results of the business and for strategic decision making, preparing budgets, obtaining targets and forecasting future results. Management presents this non-GAAP financial
measure to enable investors and analysts to evaluate our operating performance independent of certain non-cash items and the effects of certain variables unrelated to our overall operating performance.
Non-GAAP Operating Income and Operating Margin
The use of non-GAAP operating income and operating margin allows management to evaluate, among other things, the operating income and operating margin of the
Company’s core businesses and trends across different reporting periods on a consistent basis, independent of non-cash and non-recurring items including, generally speaking, restructuring-related cost of revenue charges, expensing of appraised
inventory fair market value step-up, impact of business wind down, non-recurring facility costs, amortization and impairments of intangible assets, third party acquisition and divestiture-related costs, restructuring charges, asset impairments
and certain other special items as necessary. In addition, it is an important component of management’s internal performance measurement and incentive and reward process as it is used to assess the current and historical financial results of
the business and for strategic decision making, preparing budgets, obtaining targets and forecasting future results. Management presents this non-GAAP financial measure to enable investors and analysts to evaluate our operating performance
independent of certain non-cash items and the effects of certain variables unrelated to our overall operating performance.
11
NON-GAAP MEASURES (Continued)
Non-GAAP Net Income Attributable to ON Semiconductor Corporation and Non-GAAP Diluted Earnings Per Share
The use of non-GAAP net income attributable to ON Semiconductor Corporation and non-GAAP diluted earnings per share allows management to evaluate the operating
results of onsemi’s core businesses and trends across different reporting periods on a consistent basis, independent of non-cash and non-recurring items including, generally, the restructuring related cost of revenue charges, amortization and
impairments of intangible assets, expensing of appraised inventory fair market value step-up, impact of business wind down, non-recurring facility costs, restructuring, asset impairments, gains and losses on debt prepayment, actuarial (gains)
losses on pension plans and other pension benefits, third party acquisition and divestiture-related costs, discrete tax items and other non-GAAP tax adjustments and certain other special items, as necessary. In addition, these measures are
important components of management’s internal performance measurement and incentive and reward process, as they are used to assess the current and historical financial results of the business and for strategic decision making, preparing
budgets, setting targets and forecasting future results. For our non-GAAP reporting we apply a projected, normalized non-GAAP effective tax rate of 15% for 2026 and 16% for 2025. We calculate this non-GAAP effective tax rate on an annual basis.
We may update this non-GAAP effective tax rate at any time for a variety of reasons, including, but not limited to, the rapidly evolving global tax environment, significant changes in our geographic earnings mix or changes to our strategy or
business operations. Management presents these non-GAAP financial measures to enable investors and analysts to understand the results of operations of onsemi’s core businesses and, to the extent comparable, to compare our results of operations
on a more consistent basis against those of other companies in our industry.
Free Cash Flow
The use of free cash flow allows management to evaluate, among other things, the ability of the Company to make interest or principal payments on its debt. Free
cash flow is defined as the difference between cash flow from operating activities and capital expenditures disclosed under investing activities in the consolidated statement of cash flows. Free cash flow is not an alternative to cash flow from operating activities as a measure of liquidity. It is an important component of management’s internal performance measurement and incentive and reward process as it is
used to assess the current and historical financial results of the business and for strategic decision making, preparing budgets, obtaining targets and forecasting future results. Management presents this non-GAAP financial measure to enable
investors and analysts to evaluate our financial performance independent of the cash capital expenditures.
Non-GAAP Diluted Share Count
The use of non-GAAP diluted share count allows management to evaluate, among other things, the potential dilution due to the outstanding restricted stock units
excluding the dilution from the convertible notes that is covered by hedging activity up to a certain threshold. In periods when the quarterly average stock price per share exceeds $52.97 for the 0% Notes, $103.87 for the 0.50% Notes, and
$161.30 for the 2031 0% Notes, the non-GAAP diluted share count includes the anti-dilutive impact of the Company’s hedge transactions issued concurrently with the 0% Notes, the 0.50% Notes, and the 2031 0% Notes, respectively. At an average
stock price per share between $52.97 and $74.34 for the 0% Notes, $103.87 and $156.78 for the 0.50% Notes, and $161.30 and $211.54 for the 2031 0% Notes, the hedging activity offsets the potentially dilutive effect of the 0% Notes, the 0.50%
Notes, and the 2031 0% Notes, respectively. In periods when the quarterly average stock price exceeds $74.34 for the 0% Notes, $156.78 for the 0.50% Notes, and $211.54 for the 2031 0% Notes, the dilutive impact of the warrants issued
concurrently with such notes is included in the diluted shares outstanding.
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