ON Semiconductor's Q2 Earnings Lag Estimates, Revenues Fall Y/Y

ON Semiconductor ON reported second-quarter 2025 non-GAAP earnings of 53 cents per share, which missed the Zacks Consensus Estimate by 1.85% and plunged 44.8% year over year.

Revenues of $1.47 billion beat the Zacks Consensus Estimate by 1.5% but declined 15.4% on a year-over-year basis. The reported figure was above the mid-point of the company’s guidance range of $1.4 to $1.5 billion.

In terms of end markets, Automotive (50% of revenues) revenues were $733.2 million, down 19.2% year over year. Industrial (27.7% of revenues) end-market (including military, aerospace, and medical) revenues declined 13.2% year over year to $406.2 million. Others (2.4% of revenues) end-market revenues declined 8.6% year over year to $329.3 million.

ON’s Quarter Details

Power Solutions Group revenues of $698.2 million (contributed 47.5% to revenues) fell 16.4% year over year. Analog & Mixed Group revenues of $555.9 million (37.8% of revenues) declined 14.2% on a year-over-year basis. Intelligent Sensing Group revenues of $214.6 million (14.6% of revenues) fell 14.9% year over year. 

Non-GAAP gross margin contracted 770 basis points (bps) year over year to 37.6% but was slightly above the mid-point of management’s guidance range of 36.5% to 38.5%.

Non-GAAP operating expenses decreased 3.5% year over year to $297.7 million and were above the mid-point of ON Semiconductor’s guidance of $285-$300 million. As a percentage of revenues, operating expenses increased 250 bps year over year.

Non-GAAP operating margin was 17.3% compared with 27.5% reported in the year-ago quarter.

ON’s Balance Sheet & Cash Flow

As of July 4, 2025, ON had cash and cash equivalents of $2.83 billion compared with $3.01 billion as of April 4, 2025. 

Long-term debt, as of July 4, 2025, was $3.35 billion, unchanged sequentially.

Second-quarter 2025 cash flow from operations amounted to $465.8 million compared with the previous quarter’s reported figure of $602.3 million.

Free cash flow amounted to $304.1 million compared with free cash flow of $454.7 million in the previous quarter.

ON Offers Q3 Guidance

For the third quarter of 2025, onsemi expects revenues between $1.465 billion and $1.565 billion.

Non-GAAP gross margin is projected to be in the range of 36.5-38.5%. 

Non-GAAP operating expenses are expected to be in the range of $280-$295 million.

Non-GAAP earnings are expected to be between 54 cents per share and 64 cents per share.

ON’s Zacks Rank & Stocks to Consider

On Semiconductor currently has a Zacks Rank #2 (Buy).

MKS Inc. MKSI, DoorDash DASH and Lumentum LITE are better-ranked stocks in the broader Zacks Computer and Technology sector. Each of the three stocks currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

MKS shares have declined 11.2% year to date. MKS is set to report its second-quarter 2025 results on Aug. 6.

DoorDash shares have appreciated 48% year to date. DASH is set to report its second-quarter 2025 results on Aug. 6.

Lumentum shares are up 27% year to date. Lumentum is set to report its fourth-quarter fiscal 2025 results on Aug. 12.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research