It has been about a month since the last earnings report for ON Semiconductor Corp. (ON). Shares have added about 3.6% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is ON Semiconductor Corp. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
ON Semiconductor’s Q2 Earnings Lag Estimates, Revenues Fall Y/Y
ON Semiconductor 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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates revision.
VGM Scores
At this time, ON Semiconductor Corp. has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a score of B on the value side, putting it in the top 40% for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, ON Semiconductor Corp. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
ON Semiconductor Corp. is part of the Zacks Semiconductor - Analog and Mixed industry. Over the past month, Monolithic Power (MPWR), a stock from the same industry, has gained 2.6%. The company reported its results for the quarter ended June 2025 more than a month ago.
Monolithic reported revenues of $664.57 million in the last reported quarter, representing a year-over-year change of +31%. EPS of $4.21 for the same period compares with $3.17 a year ago.
For the current quarter, Monolithic is expected to post earnings of $4.62 per share, indicating a change of +13.8% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.1% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Monolithic. Also, the stock has a VGM Score of D.
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
ON Semiconductor Corporation (ON): Free Stock Analysis Report Monolithic Power Systems, Inc. (MPWR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
