ON Semiconductor (ON) Q4 2023 earnings summary

Executive summary

• FY23 revenue was $8.253B; record automotive revenue reached $4.3B, up 29% YoY, while SiC revenue grew 4x YoY.

• Strategy centers on intelligent power and sensing, with growth focused on automotive and industrial markets; an upcoming analog and mixed-signal platform is intended to extend these solutions.

Financial highlights

• Q4'23 non-GAAP revenue was $2,018.1M, gross margin 46.7%, operating margin 31.6%, and diluted EPS $1.25.

• FY23 non-GAAP revenue was $8,253.0M, gross margin 47.1%, operating margin 32.3%, and diluted EPS $5.16.

• Q4 gross margin and EPS were at the high end of guidance; 2023 OpEx was 14.8% of revenue.

Outlook and guidance

• Q1'24 revenue guidance is $1.8B–$1.9B; non-GAAP gross margin is 44.5%–46.5% and GAAP gross margin is 44.4%–46.4%.

• Q1'24 non-GAAP diluted EPS guidance is $0.98–$1.10; GAAP diluted EPS guidance is $0.94–$1.06.

• Q1'24 OpEx guidance is $305M–$320M non-GAAP and $320M–$335M GAAP; other income and expense, including interest, is expected at $(8)M.

• 2027 targets include 10%–12% revenue CAGR, 53% gross margin, 40% operating margin, 25%–30% FCF margin, and $3.5B–$4.0B FCF.