Earnings growth outpaces revenue growth by 4x year-over-year
SCOTTSDALE, Ariz., – November 2, 2026 – onsemi (the “Company”) (Nasdaq: ON) today announced its third quarter 2026 results with the following highlights:
- Revenue of $1,722 million, increased 11% year-over-year
- GAAP gross margin of 41.4% and non-GAAP gross margin of 41.2%
- GAAP operating margin of 22.0% and non-GAAP operating margin 23.2%
- GAAP diluted earnings per share of $0.79 and non-GAAP diluted earnings per share $0.90
- Cash from operations increased by 23% year-over-year to $516 million
- Free cash flow of $489 million, grew 31% year-over-year to 28% of revenue
“Increasing power requirements are driving accelerated demand in our AI data center and industrial end markets, as customers adopt and ramp our differentiated products,” said Hassane El-Khoury, President and CEO of onsemi. “Our third quarter revenue, gross margin and earnings per share exceeded the midpoint of our guidance, while AI data center revenue grew 39% sequentially and 175% year-over-year.”
“Gross margin expanded for the fifth consecutive quarter, increasing 190 basis points sequentially. Our results continue to demonstrate the operating leverage in our model, with earnings per share growing more than 40% year-over-year on 11% revenue growth,” said Thad Trent, EVP and CFO of onsemi. “As we execute our ongoing fab right initiatives and ramp new differentiated products, we are driving further margin and earnings expansion, positioning onsemi for durable, profitable growth.”
Business Highlights:
- Announced an agreement to acquire Ferric, establishing onsemi as a leader in next generation AI processor power delivery and raising the AI data center 2030 revenue target by $500 million to greater than $3 billion
- Announced revised terms for planned acquisition of Synaptics, for approximately $5.7 billion in cash compared to $7 billion in stock for the prior agreement, which should make the transaction immediately accretive to non-GAAP EPS
- Entered into a strategic technology engagement with Subaru for early access to the newly introduced Embedded Power Platform (EPP),a breakthrough power architecture integrating heterogeneous technologies
- Sungrow adopted onsemi’s latest EliteSiC silicon carbide (SiC) hybrid power module technology which helps energy providers meet growing electricity demand from AI, renewable energy and electrification
* 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% Convertible Senior Notes due 2027 (the “0% Notes”), $103.87 for the 0.50% Convertible Senior Notes due 2029 (the “0.50% Notes”), and $161.30 for the 0% Convertible Senior Notes due 2031 (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.
** 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.
*** 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 November 2, 2026 to discuss this announcement and onsemi’s third 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.
FINANCIALS
