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%, achieved through disciplined execution, technology investments, and strategic growth in AI data center and automotive markets.

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

• Returned $1.4 billion of 2025 free cash flow to shareholders via share repurchases and authorized a new $6 billion repurchase program.

• Transformation to a product-centric company enabled operating leverage and set the foundation for long-term growth and margin expansion.

• Advanced technology leadership with the Treo Platform, expanded AI data center revenue to over $250 million, and strengthened automotive and industrial portfolios.

Financial highlights

• Q4 2025 revenue was $1.53 billion; non-GAAP gross margin 38.2%; non-GAAP EPS $0.64; GAAP gross margin 36%; GAAP operating margin 13.1%; non-GAAP operating margin 19.8%.

• FY2025 revenue totaled $6.0 billion; non-GAAP EPS $2.35; free cash flow margin 24%; free cash flow $1.4 billion.

• Q4 2025 net income attributable to shareholders was $181.8 million; FY2025 net income was $1,572.8 million.

• Cash and short-term investments at $2.5 billion; total liquidity $4 billion.

• Inventory reduced to 192 days, with strategic inventory at 76 days.

Outlook and guidance

• Q1 2026 revenue expected between $1.44–$1.54 billion, with non-GAAP gross margin guidance of 37.5%–39.5% and non-GAAP EPS of $0.56–$0.66.

• Capital expenditures projected at $35–$45 million for Q1 2026.

• Exiting $50 million of non-core revenue in Q1; full-year non-core exits expected to total $300 million.

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