ON Semiconductor (ON) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue reached $1.604 billion, up 9% year-over-year, with gross margin and EPS exceeding guidance midpoints, driven by strong demand in AI data center, automotive, and energy infrastructure.

• Non-GAAP EPS grew four times faster than revenue year-over-year, and free cash flow quadrupled to $425.4 million.

• Announced acquisition of Synaptics in an all-stock transaction to enhance connected compute capabilities, expected to close mid-2027.

• Returned 105% of year-to-date free cash flow to shareholders via share repurchases.

• Continued execution of manufacturing realignment, including workforce reductions and asset divestitures.

Financial highlights

• Q2 revenue was $1.6 billion, up 9% year-over-year and 6% sequentially.

• Non-GAAP gross margin reached 39.3%, up 80 bps sequentially; GAAP gross margin was 38.4%.

• Non-GAAP EPS was $0.74, up 16% quarter-over-quarter; GAAP diluted EPS was $0.56.

• Free cash flow was $425 million; LTM free cash flow margin was 24%.

• Cash and short-term investments totaled $3.9 billion at quarter end.

Outlook and guidance

• Q3 2026 revenue expected between $1.65B–$1.75B; non-GAAP gross margin 40%–42%.

• Non-GAAP EPS guidance: $0.81–$0.93; operating expenses to rise slower than revenue.

• AI data center revenue projected to more than double in 2026; ESS revenue to grow ~40% year-over-year.

• Automotive silicon carbide revenue in China expected to grow 60%–70% year-over-year.

• CapEx for 2026 expected below 5% of revenue.