second quarter 2026
Filed Aug 3, 2026onsemi Reports Second Quarter 2026 Results; Earnings per share increases four times faster than revenue year-over-year
Revenue increased 9% year-over-year, GAAP and non-GAAP margins expanded from the prior-year quarter, GAAP diluted EPS rose to $0.56 from $0.41, and third-quarter revenue guidance is $1,650 to $1,750 million.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $1,603.5 million | 6% | 9% |
| Cost of revenueGAAP | $987.2 million | – | – |
| Gross profitGAAP | $616.3 million | – | – |
| Gross marginGAAP | 38.4% | – | – |
| Gross marginnon-GAAP | 39.3% | – | – |
| Operating marginGAAP | 16.1% | – | – |
| Operating marginnon-GAAP | 20.8% | – | – |
| Net Income (loss) attributable to ON Semiconductor CorporationGAAP | $226.8 million | – | – |
| Net Income (loss) attributable to ON Semiconductor Corporationnon-GAAP | $293.8 million | – | – |
| Diluted Earnings (loss) Per ShareGAAP | $0.56 | – | – |
| Diluted Earnings (loss) Per Sharenon-GAAP | $0.74 | – | – |
| Free cash flowother | $425.4 million | – | quadrupled year-over-year |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| PSGNo segment-specific driver disclosed. | $829.0 million | 13% | 19% |
| AMGNo segment-specific driver disclosed. | 545.7 | 1% | (2)% |
| ISGNo segment-specific driver disclosed. | 228.8 | (3)% | 7% |
third quarter of 2026 outlook
- Revenue$1,650 to $1,750 million
- Gross marginGAAP: 39.9% to 41.9%; non-GAAP: 40.0% to 42.0%
- Operating expensesGAAP: $318 to $333 million; non-GAAP: $303 to $318 million
- NoteGAAP other income and expense (including interest), net: ($18 million)
- NoteNon-GAAP other income and expense (including interest), net: ($18 million)
- NoteGAAP diluted earnings per share: $0.79 to $0.91
- NoteNon-GAAP diluted earnings per share: $0.81 to $0.93
- NoteGAAP diluted shares outstanding: 402 million
- NoteGAAP special items: 7 million
- NoteNon-GAAP diluted shares outstanding: 395 million
- NoteGAAP special items for gross margin: 0.1%
- NoteGAAP special items for operating expenses: $15 million
- NoteGAAP special items for diluted earnings per share: $0.02
Capital returns
- Share repurchases of $332 million
- Year-to-date shareholder returns of approximately 105% of free cash flow
What drove it
- Strengthening demand, particularly across AI-driven applications
- Growing customer adoption of differentiated solutions, including Treo and high voltage power solutions
- AI data center remains the fastest-growing business
- Gross margin expansion and disciplined cost management
- Strategic AI data center platform wins with Great Wall, expanding EliteSiC and silicon MOSFETs and controller content
- Launched GaNEXUS, a gallium nitride power portfolio spanning 40V to 650V
- Extended automotive zonal architecture and on-board charging work with Rivian’s R2 platform
Concerns
- AMG revenue declined (2)% year-over-year.
- ISG revenue declined (3)% sequentially.
- The planned acquisition of Synaptics remains a planned transaction.
- Special items are described as out of the Company's control and could change significantly from period to period.
What to watch
- Third-quarter revenue outlook of $1,650 to $1,750 million.
- Third-quarter GAAP gross margin outlook of 39.9% to 41.9% and non-GAAP gross margin outlook of 40.0% to 42.0%.
- The Company's expectation that AI data center revenue will more than double in 2026.
- Execution of the planned Synaptics acquisition.
- Whether PSG growth and AI data center platform wins offset the year-over-year AMG decline and sequential ISG decline.
Balance sheet and cash flow
- Cash from operations increased by 150%
- Free cash flow of $425.4 million quadrupled year-over-year
- Free cash flow margin expanded from approximately 7% to 27% year-over-year
Analysis
onsemi reported second-quarter 2026 revenue of $1,603.5 million, up 9% year-over-year and 6% sequentially. The Company said revenue, gross margin and earnings per share were above the midpoint of guidance. PSG was the principal growth segment, with revenue of $829.0 million, up 19% year-over-year and 13% sequentially. AMG revenue was 545.7, down (2)% year-over-year, while ISG revenue was 228.8, up 7% year-over-year but down (3)% sequentially.
Profitability improved materially from the prior-year quarter. GAAP gross margin was 38.4% versus 37.6%, while non-GAAP gross margin was 39.3% versus 37.6%. GAAP operating margin reached 16.1%, compared with 13.2% in Q2 2025 and (3.5)% in Q1 2026. Non-GAAP operating margin was 20.8%, versus 17.3% a year earlier and 19.1% sequentially. GAAP net income attributable to ON Semiconductor Corporation was $226.8 million, compared with $170.3 million a year earlier and a $(33.4) million loss in Q1 2026.
GAAP diluted earnings per share was $0.56, compared with $0.41 in Q2 2025 and a $(0.08) loss in Q1 2026. Non-GAAP diluted earnings per share was $0.74, versus $0.53 a year earlier and $0.64 sequentially. Management attributed earnings growth to gross margin expansion and disciplined cost management. Cash from operations increased by 150%, and free cash flow was $425.4 million, which the Company said quadrupled year-over-year. The Company also repurchased $332 million of shares and said year-to-date shareholder returns were approximately 105% of free cash flow.
The third-quarter outlook calls for revenue of $1,650 to $1,750 million, GAAP gross margin of 39.9% to 41.9%, and non-GAAP gross margin of 40.0% to 42.0%. GAAP diluted earnings per share is guided to $0.79 to $0.91, while non-GAAP diluted earnings per share is guided to $0.81 to $0.93. Management identified AI data center as its fastest-growing business and now expects its revenue to more than double in 2026. Reported business activity included AI data center platform wins, the GaNEXUS portfolio launch, Rivian R2 platform work, and a planned acquisition of Synaptics.
Management, verbatim
We delivered revenue, gross margin and earnings per share above the midpoint of guidance, reflecting strengthening demand, particularly across AI-driven applications, and growing customer adoption of our differentiated solutions, including Treo and our high voltage power solutions.
Hassane El-Khoury, President and CEO of onsemi
AI data center remains our fastest-growing business, and we now expect revenue to more than double in 2026, demonstrating the strength of our intelligent power portfolio and growing customer adoption across the power tree.
Hassane El-Khoury, President and CEO of onsemi
Year-over-year earnings per share grew four times faster than revenue, driven by gross margin expansion and disciplined cost management.
Thad Trent, EVP and CFO of onsemi
Not in the filing
stated, not guessed- Complete GAAP gross profit prior-year figure, as the consolidated statements excerpt is truncated after the prior-quarter gross profit figure.
- GAAP and non-GAAP operating income amounts.
- Operating cash flow amount.
- Cash balance.
- Debt balance.
- Dividend amount or dividend declaration.
- Tax rate guidance.
- Segment revenue units for AMG and ISG, as the segment table prints the figures without repeating the dollar symbol on those rows.
- Gross profit year-over-year change and sequential change.
- Cost of revenue year-over-year change and sequential change.
- Explicit year-over-year and sequential percentage changes for gross margin, operating margin, net income, and diluted earnings per share.
- Prior-quarter free cash flow.
- Prior-year free cash flow amount.
- Previous-quarter outlook needed to compare actual results with prior guidance.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.