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ON Semiconductor Corporation
S&P 500
$30.5B
Market Cap
186.7
P/E
4.09
PEG
0.9%
ROCE
1.5%
ROE
0.39
D/E
1.4%
OPM
-45.3%
% from 52W High
69
α RS
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Currency-adjusted total returns for ON including FX impact
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About

ON Semiconductor Corporation provides intelligent sensing and power solutions in Hong Kong, Singapore, the United Kingdom, the United States, and internationally.

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Good quarter Investor Presentation One-Pager? Q2 2026
Revenue
$1.60B
+9% YoY
Non-GAAP Gross Margin
39.3%
+170 bps YoY
Non-GAAP Operating Margin
20.8%
+350 bps YoY
GAAP Net Income
$226.8M
+33% YoY
Non-GAAP EPS
$0.74
+40% YoY
What Went Right
  • AI data center revenue expected to more than double in 2026; 'other' segment revenue rose 34% QoQ to $400M, anchored by AI data center.
  • Non-GAAP gross margin expanded 80 bps QoQ to 39.3%, with utilization up to 83% from 77%.
  • China automotive SiC revenue is now expected to grow 60%-70% YoY; China auto revenue grew 13% in H1 2026.
  • Free cash flow grew to $425M in Q2 and shareholder returns were ~105% of year-to-date free cash flow.
What to Watch
  • AI data center demand is being prioritised over automotive and industrial shipments; management expects rebalancing as manufacturing catches up.
  • Input costs are rising in raw materials and external manufacturing, requiring a second round of price increases, with no relief expected in 2027.
  • Average lead times stretched from ~27 to ~32 weeks, with constraints in specific power lanes and customer escalations.
Management Guidance
  • Q3 revenue: $1.65B-$1.75B.
  • Q3 non-GAAP gross margin: 40%-42%; non-GAAP operating expenses: $303M-$318M.
  • Q3 non-GAAP EPS: $0.81-$0.93, with EPS growth outpacing revenue by nearly 3x at the midpoint.
  • Q3 capex: $40M-$50M; FY2026 capex expected below 5% of revenue.
  • Q3 non-GAAP tax rate ~15%; share count ~395M.
Investor Lens
The investment thesis looks stronger after this call: ON Semi beat the midpoint, AI data center is now expected to more than double in 2026, and gross margin has expanded for four straight quarters. New wins across Nvidia MGX, Great Wall, AWS, and Rivian R2 add content across the full power tree. The main risks are short-term supply prioritisation away from auto/industrial and rising input costs that require further pricing actions. Overall, the AI/halo demand, FabRight savings, and Synaptics acquisition support the multiyear margin expansion story.
From investor presentation · AI-generated analysis · Not investment advice
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📈 STRONG Strong beat: $1.60B revenue, EPS $0.74, AI DC more than doubling
Revenue
Q2 revenue was $1.60B, up 6% sequentially and 9% YoY, including the final $35M of planned non-core revenue exits. Automotive was $781M (-2% QoQ, +7% YoY), industrial was $423M (+1% QoQ, +4% YoY), and the 'other' category jumped to $400M (+34% QoQ), led by AI data center.
Profitability
GAAP net income attributable to ON Semi was $226.8M, or $0.56 per share, versus $170.3M in Q2 2025. Non-GAAP EPS rose to $0.74, up from $0.53 YoY and $0.64 QoQ, with EPS growth roughly four times the pace of revenue growth.
Margins
Non-GAAP gross margin expanded 80 bps sequentially to 39.3% (GAAP 38.4%), helped by better manufacturing performance and mix, with utilization up to 83% from 77%. Non-GAAP operating margin was 20.8% versus 19.1% QoQ and 17.3% YoY (GAAP operating margin 16.1%).
Balance Sheet
Cash and short-term investments were ~$3.9B, with total liquidity of $5.4B. Operating cash flow was $460M and free cash flow was $425M, a record LTM FCF margin of 24%; capex was $34M (2.1% of revenue). Inventory declined 9 days to 192 days, and $332M was returned via buybacks.
Key Risks
Management flagged rising raw material and external manufacturing costs, requiring a second round of price increases, and does not expect input costs to decline in 2027. AI data center demand is being prioritised over auto/industrial in the short term, causing allocation constraints until capacity catches up. Lead times extended to ~32 weeks, with capacity tight in several power lanes.
Outlook
Q3 revenue is guided to $1.65B-$1.75B, non-GAAP gross margin to 40%-42%, and non-GAAP EPS to $0.81-$0.93. Management expects gross margin to expand sequentially through the rest of the year and expects FY2026 capex below 5% of revenue.
Generated by AI · Q2 2026 results · Not investment advice
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✓ 📞 Earnings Call Transcripts (5 quarters) submit a missing quarter
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📞 Earnings Call Transcripts (5)
Q2 2026 Q2 2026 2026-08-03
Q2 2026 results surpassed guidance with strong AI data center, automotive, and energy infrastructure growth. Gross margin and EPS expanded, supply constraints prioritized AI shipments, and Synaptics acquisition was announced. AI and EV TAMs were significantly raised.
Q1 2026 Q1 2026 2026-05-04
Revenue and gross margin exceeded guidance, driven by AI data center and automotive strength. Sequential margin expansion is expected through 2026, with robust growth in Treo, GaN, and energy storage. Shareholder returns remain a priority, supported by strong cash flow.
Q4 2025 Q4 2025 2026-02-09
Revenue reached $6B in 2025 with strong free cash flow and margin expansion, driven by AI data center growth, new product launches, and disciplined capital allocation. Guidance for Q1 2026 anticipates YoY growth, continued margin improvement, and further exits from non-core businesses.
Q3 2025 Q3 2025 2025-11-03
Q3 revenue and margins exceeded guidance, driven by stabilization in automotive and industrial markets and strong AI growth. Strategic investments and acquisitions are expanding the product portfolio, while disciplined capital allocation continues. Free cash flow and share repurchases remain robust.
Q2 2025 Q2 2025 2025-08-04
Q2 revenue exceeded guidance at $1.47B, with strong growth in China and AI data center segments. Portfolio rationalization and manufacturing optimization continue, with all end markets expected to grow in Q3 and a focus on margin expansion and capital returns.
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Financial Model
Projections are built from each company's audited annual financials (Income Statement, Balance Sheet, Cash Flow) over the last 5 fiscal years. Forward assumptions — revenue growth %, EBITDA margin, D&A (USD millions), interest expense, tax rate, and capex — are AI-generated using historical context and refreshed twice a year: after the December results season and after the September/Q4 results season.

DCF Valuation
Fair Value = Σ(FCFt / (1+WACC)t) + Terminal Value. Terminal Value uses the Gordon Growth Model: FCF5 × (1+g) / (WACC−g). Default WACC: 10% (US risk-free ~4.5%, equity risk premium ~5.5%). Default terminal growth: 3% (long-run US nominal GDP proxy).

CAGR Tracker
Expected 5-year CAGR = (DCF Fair Value / Current Price)1/5 − 1. Assumes fair value is reached in exactly 5 years — a mechanical estimate only.

Data Sources & Limitations
Financial statements sourced from public filings. Prices updated daily. Forward assumptions are AI-generated. All monetary values in USD millions. Non-US ADR companies may have currency conversion inaccuracies. Models are point-in-time and do not update intra-quarter or account for M&A, macro shocks, or extraordinary items.

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Investment Risk:
Investing in securities, including US equities and ETFs, involves inherent risks including the potential loss of principal. All investments are subject to market fluctuations, economic conditions, regulatory changes, and other factors that may affect their value. Past performance is not indicative of future results. This analysis is provided for informational and educational purposes only and should not be construed as investment advice under any circumstances.

No Investment Recommendation:
This analysis does not constitute, nor should it be interpreted as, an offer, solicitation, or recommendation to buy, sell, or hold any securities or financial products. Investors are strongly advised to conduct their own independent research and due diligence and to consult with a licensed financial advisor or an SEC-registered investment adviser before making any investment decisions, taking into account their individual financial situation, risk tolerance, and investment objectives.

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Conflict of Interest Disclosure:
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Information Sources:
The analysis is based on publicly available information including SEC filings (10-K, 10-Q), annual reports, management commentary, and publicly available financial data. Information is believed to be accurate as of the date of publication but may be subject to change without notice. Readers are encouraged to independently verify all information before acting upon it.

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