ON Semiconductor (ON) Q4 2025 earnings summary

Executive summary

• 2025 revenue reached $6 billion with a non-GAAP gross margin of 38.4% and record free cash flow margin of 24%, despite a 15% year-over-year revenue decline.

• Q4 2025 revenue was $1.53 billion, with non-GAAP gross margin at 38.2% and EPS of $0.64, both above guidance midpoint.

• AI data center revenue exceeded $250 million, with the Treo Platform doubling product count and design-win funnel surpassing $1 billion.

• Returned $1.4 billion of free cash flow to shareholders via share repurchases and announced a new $6 billion buyback program.

• Advanced technology leadership with new product launches, including vertical GaN semiconductors and expanded partnerships with Innoscience and GlobalFoundries.

Financial highlights

• Q4 2025 revenue was $1.53 billion; Automotive $798 million (+1% QoQ), Industrial $442 million (+4% QoQ), ISG $250 million (+9% QoQ).

• Q4 2025 non-GAAP gross margin was 38.2%, operating margin 19.8%, and EPS $0.64.

• FY2025 free cash flow reached $1.4 billion, with a margin of 24%.

• Cash and short-term investments at $2.15 billion at year-end; total liquidity $4 billion.

• FY2025 net income attributable to shareholders was $1.57 billion.

Outlook and guidance

• Q1 2026 revenue expected between $1.44B–$1.54B; non-GAAP gross margin guidance: 37.5%–39.5%; non-GAAP EPS: $0.56–$0.66.

• Capital expenditures for Q1 2026 expected at $35M–$45M.

• Exiting $50M of non-core revenue in Q1; $300M in exits expected for 2026.

• Long-term targets: 10–12% revenue CAGR, gross margin 53%, operating margin 40%, free cash flow margin 25–30%.

• FabRight actions and operational improvements to drive margin expansion through 2026.