Onsemi Adjusted EPS Climbs To $0.90 From $0.63 As AI Data Center Revenue Grows 175%
The chipmaker's third-quarter revenue rose 11% to $1,722 million, and it guided fourth-quarter revenue to $1,715 million to $1,815 million.
Onsemi, which makes power and sensing chips for cars, factories and AI data centers, said Monday that third-quarter revenue rose 11% to $1,722 million from a year earlier. Adjusted earnings per share reached $0.90, against $0.63 a year ago, and the company says AI data center revenue grew 175% year over year.
Earnings outrun sales
On standard accounting, diluted earnings per share were $0.79, compared with $0.56 in the second quarter and $0.63 a year earlier. Net income attributable to the company was $313.9 million, against $226.8 million in the second quarter and $255.0 million a year ago.
The adjusted figure, which excludes items such as restructuring charges and amortization of acquired intangibles, rose from $0.74 in the second quarter. CFO Thad Trent said earnings per share grew more than 40% year over year on 11% revenue growth, which he called evidence of "operating leverage in our model." That 40% refers to the adjusted measure.
Gross margin, the share of sales left after production costs, was 41.4% on standard accounting and 41.2% adjusted, up from 38.4% and 39.3% in the second quarter. Trent said it expanded for the fifth consecutive quarter, by 190 basis points sequentially.
Operating cash flow rose 23% from a year earlier to $516 million. Free cash flow was $489 million, up 31%, or 28% of revenue.
AI power demand and two deals
CEO Hassane El-Khoury said AI data center revenue grew 39% from the second quarter. By segment, Power Solutions revenue rose 21% year over year to $889.9 million, while Analog and Mixed-Signal rose 2% to $597.3 million and Intelligent Sensing rose 2% to $235.1 million. Automotive made up about 51% of 2025 revenue, according to the company's annual report.
Onsemi also announced an agreement to buy Ferric, which it says establishes it as a leader in power delivery for next-generation AI processors. It raised its 2030 AI data center revenue target by $500 million, to more than $3 billion. The Ferric deal is $600 million in cash plus up to $175 million in contingent payments tied to revenue milestones.
The company also revised terms of its planned Synaptics purchase to about $5.7 billion in cash, from $7 billion in stock under the prior agreement. Onsemi says the change should make the deal immediately accretive to adjusted earnings per share, meaning it adds to them.
Fourth-quarter outlook and cash
For the fourth quarter, onsemi guided to revenue of $1,715 million to $1,815 million and adjusted earnings per share of $0.95 to $1.07. Gross margin is guided to 41.5% to 43.5% on an adjusted basis.
Cash and equivalents ended the quarter at $4,157.7 million, up from $3,514.5 million at the end of the second quarter. In the quarter it repurchased $19.9 million of stock, versus $344.8 million in the second quarter.
Management hosts its earnings call at 5 p.m. ET Monday.
Management hosts its earnings call at 5 p.m. ET Monday, where it will discuss the quarter and the revised Synaptics terms.
Sources
- 8-K Filing — ON SEMICONDUCTOR CORP (ON) — SEC EDGAR
- Exhibit ef20084671_ex99-1.htm — ON SEMICONDUCTOR CORP 8-K exhibit — SEC EDGAR
- Onsemi to Report Q3 Earnings: What's in Store for the Stock? — Yahoo Finance
- onsemi Reports Third Quarter 2026 Results — globenewswire.com
- onsemi to Acquire Ferric, Establishing Leadership in Power — globenewswire.com
