ON Semiconductor (ON) Q1 2026 earnings summary

Executive summary

• Revenue reached $1.513 billion in Q1 2026, up 5% year-over-year and above guidance midpoint, driven by strong AI data center and automotive demand.

• AI data center revenue grew over 30% sequentially and more than doubled year-over-year.

• Non-GAAP EPS was $0.64, with gross margin expanding for the third consecutive quarter to 38.5%.

• Share repurchases totaled $346 million, about 160% of free cash flow, under a $6.0 billion authorization.

• Net loss narrowed significantly to $33.4 million, reflecting lower restructuring and impairment charges.

Financial highlights

• Q1 2026 revenue: $1.513 billion, down 1% sequentially, up 5% year-over-year.

• Non-GAAP gross margin: 38.5%, up sequentially and year-over-year.

• Non-GAAP operating margin: 19.1%; GAAP operating margin: -3.5% (includes $329 million restructuring expenses).

• Free cash flow: $217 million; capital expenditures: $16.7 million.

• Net cash provided by operating activities was $239.1 million.

Outlook and guidance

• Q2 2026 revenue expected between $1.535 billion and $1.635 billion.

• Non-GAAP gross margin guidance: 38%-40%; non-GAAP EPS: $0.65-$0.77.

• Capital expenditures projected at $25 million-$35 million for Q2; full year expected at approximately 5% of revenue.

• Sequential gross and operating margin expansion expected throughout 2026.

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