A month has gone by since the last earnings report for ON Semiconductor Corp. (ON). Shares have added about 6.6% 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 latest earnings report in order to get a better handle on the important drivers.
ON Semiconductor's Q3 Earnings Beat Estimates, Revenues Up Y/Y
ON Semiconductor reported third-quarter 2025 non-GAAP earnings of 63 cents per share, which beat the Zacks Consensus Estimate by 5% and plunged 36.4% year over year.
Revenues of $1.55 billion beat the Zacks Consensus Estimate by 2.6% and increased 5.6% on a year-over-year basis.
ON’s Quarter Details
Power Solutions Group revenues of $737.6 million (contributed 47.6% to revenues) increased 5.6% year over year. Analog & Mixed Group revenues of $583.3 million (37.6% of revenues) increased 4.9% on a year-over-year basis. Intelligent Sensing Group revenues of $230 million (14.8% of revenues) increased 7.2% year over year.
Non-GAAP gross margin was 38% compared with 54.5% reported in the year-ago quarter.
Non-GAAP operating expenses decreased 4.4% year over year to $291.2 million. As a percentage of revenues, operating expenses increased 200 bps year over year.
Non-GAAP operating margin was 19.2% compared with 33.8% reported in the year-ago quarter.
ON’s Balance Sheet & Cash Flow
As of Oct. 3, 2025, ON had cash and cash equivalents of $2.87 billion compared with $2.83 billion as of July 4, 2025.
Long-term debt, as of Oct. 3, 2025, was $3.35 billion, unchanged sequentially.
Third-quarter 2025 cash flow from operations amounted to $418.7 million compared with the previous quarter’s reported figure of $184.3 million.
Free cash flow amounted to $372.4 million compared with free cash flow of $106.1 million in the previous quarter.
ON Offers Q4 Guidance
For the fourth quarter of 2025, onsemi expects revenues between $1.48 billion and $1.58 billion.
Non-GAAP gross margin is projected to be in the range of 37-39%.
Non-GAAP operating expenses are expected to be in the range of $282-$297 million.
Non-GAAP earnings are expected to be between 57 cents per share and 67 cents per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, ON Semiconductor Corp. has a subpar Growth Score of D, a score with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, 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. belongs to the Zacks Semiconductor - Analog and Mixed industry. Another stock from the same industry, NXP Semiconductors (NXPI), has gained 5.4% over the past month. More than a month has passed since the company reported results for the quarter ended September 2025.
NXP reported revenues of $3.17 billion in the last reported quarter, representing a year-over-year change of -2.4%. EPS of $3.11 for the same period compares with $3.45 a year ago.
NXP is expected to post earnings of $3.30 per share for the current quarter, representing a year-over-year change of +3.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.5%.
NXP has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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ON Semiconductor Corporation (ON): Free Stock Analysis Report NXP Semiconductors N.V. (NXPI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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