10-Q · May 4, 2026
ON Semiconductor reported better-than-expected Q1 2026 results, with revenue rising 5% year-over-year to $1.51 billion and EPS at $0.64, exceeding consensus estimates. Significant improvements in gross margin to 38.5%…
Earnings analysis · 10-Q
ON earnings analysis
Filed August 3, 2026 · Our reading of the company's report
The latest report
ON delivered a stronger Q2, with revenue up 9% year over year and 6.2% sequentially to $1.6035 billion, while GAAP EPS improved to $0.56 from $0.41 a year earlier and a Q1 loss. Gross margin increased 0.8 percentage…
Read full summary
ON delivered a stronger Q2, with revenue up 9% year over year and 6.2% sequentially to $1.6035 billion, while GAAP EPS improved to $0.56 from $0.41 a year earlier and a Q1 loss. Gross margin increased 0.8 percentage points year over year to 38.4%, and operating margin improved to 16.1%, led by PSG growth and better utilization. The principal new overhang is the proposed Synaptics acquisition: it is expected to close in mid-2027 but introduces regulatory, integration, debt-treatment and dilution risks, including a potential $320.0 million regulatory termination fee.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.56
What stood out
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Revenue growth and EPS recovery
Q2 revenue was $1.6035 billion, up $134.8 million (+9%) year over year and approximately $93.5 million (+6.2%) sequentially from $1.510 billion in Q1 2026. GAAP diluted EPS was $0.56, versus $0.41 in Q2 2025 and a $0.08 loss in Q1 2026.
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Margins and operating profit improved
Gross margin reached 38.4%, up 0.8 percentage points from 37.6% a year earlier, driven by improved manufacturing utilization and favorable mix. Operating income rose $65.2 million to $258.6 million, producing a 16.1% operating margin versus 13.2% in Q2 2025 and -3.5% in Q1 2026.
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PSG drives top-line expansion
PSG was the primary growth engine: revenue increased $130.8 million to $829.0 million, including increases of $44.5 million in automotive, $22.4 million in industrial and $63.9 million in other end markets.
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Liquidity remains ample
Liquidity was substantial at approximately $3.9 billion of cash, cash equivalents and short-term investments, with approximately $1.5 billion available under the revolving credit facility. Management believes these resources are adequate for at least the next 12 months.
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Lower capital spending supports cash profile
Capital intensity is falling: cash used in investing activities declined to $9.4 million in the first six months from $336.6 million a year earlier, while capital expenditures were approximately 2% of revenue. Management expects full-year capex below 5% of revenue.
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Significant buyback capacity remains
The company repurchased 3.1 million shares for $334.7 million in Q2 at an average $105.77 per share; approximately $5.3 billion remained under the repurchase authorization at July 3, 2026.
What to watch
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Synaptics closing and regulatory risk
New Synaptics transaction risks include potential regulatory delay or failure to close; the merger is anticipated to close in mid-2027, while ON may owe Synaptics a $320.0 million regulatory termination fee in specified circumstances.
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Merger dilution and integration exposure
The all-stock deal would issue 1.350 ON shares per Synaptics share, with Synaptics holders expected to own approximately 12% of the combined company. Future conversion of Synaptics' 0.75% convertible notes due 2031 could further dilute existing ON shareholders.
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Restructuring and transaction costs persist
Merger-related costs and realignment charges remain material: Q2 included $41.2 million of restructuring, asset impairments and other charges plus $13.4 million of restructuring-related cost of revenue. The 2026 program expects $25.0 million of severance and related benefits for approximately 650 employees.
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AMG industrial softness and customer concentration
AMG revenue declined $10.2 million (-2%) to $545.7 million in Q2, led by an $11.5 million industrial-market decline. The company also had one distributor representing approximately 14% of quarterly revenue.
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Working-capital pressure reduced operating cash flow
First-half operating cash flow fell $87.8 million year over year to $698.8 million despite improved earnings, primarily because of unfavorable working-capital timing. Cash generation remains sensitive to collections, supplier payments and inventory management.
Management's outlook
The 10-Q does not provide numeric revenue or EPS guidance; management states that 2026 capital expenditures are expected to be less than 5% of revenue, versus approximately 2% of revenue in the first six months.
Earlier filings 4
10-K · February 10, 2025
ON Semiconductor positions itself as a focused automotive and industrial semiconductor supplier prioritizing revenue growth while defending gross margin through product differentiation and a 'Fab Right' manufacturing…
10-K · February 5, 2024
ON Semiconductor positions itself to capture automotive and industrial electrification trends, emphasizing SiC capacity expansion (EFK, Hudson, Rožnov, Bucheon) and differentiated intelligent power and sensing products.…
10-Q · October 30, 2023
On Semiconductor reported Q3 revenue of $2,180.8M, essentially flat versus Q3 2022 ($2,192.6M, -$11.8M, ~-0.5%) while gross profit declined to $1,030.7M from $1,058.3M. Operating income and diluted EPS improved…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.