Latest news with #HassaneEl-Khoury
Yahoo
04-08-2025
- Business
- Yahoo
onsemi (NASDAQ:ON) Q2: Beats On Revenue But Stock Drops
Analog chips maker onsemi (NASDAQ:ON) reported Q2 CY2025 results exceeding the market's revenue expectations , but sales fell by 15.4% year on year to $1.47 billion. Guidance for next quarter's revenue was better than expected at $1.52 billion at the midpoint, 1.3% above analysts' estimates. Its non-GAAP profit of $0.53 per share was in line with analysts' consensus estimates. Is now the time to buy onsemi? Find out in our full research report. onsemi (ON) Q2 CY2025 Highlights: Revenue: $1.47 billion vs analyst estimates of $1.45 billion (15.4% year-on-year decline, 1.2% beat) Adjusted EPS: $0.53 vs analyst estimates of $0.53 (in line) Adjusted Operating Income: $254.8 million vs analyst estimates of $254.4 million (17.3% margin, in line) Revenue Guidance for Q3 CY2025 is $1.52 billion at the midpoint, above analyst estimates of $1.50 billion Adjusted EPS guidance for Q3 CY2025 is $0.59 at the midpoint, above analyst estimates of $0.58 Operating Margin: 13.2%, down from 22.4% in the same quarter last year Free Cash Flow Margin: 7.2%, down from 12% in the same quarter last year Inventory Days Outstanding: 207, up from 164 in the previous quarter Market Capitalization: $23.74 billion 'Our ongoing transformation is resulting in a more predictable business model, reflecting the strength of our strategy and our commitment to long-term value creation. We are beginning to see signs of stabilization across our end markets, and we remain well-positioned to benefit from a market recovery,' said Hassane El-Khoury, president and CEO, onsemi. Company Overview Spun out of Motorola in 1999 and built through a series of acquisitions, onsemi (NASDAQ:ON) is a global provider of analog chips specializing in autos, industrial applications, and power management in cloud data centers. Revenue Growth Examining a company's long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, onsemi's 3.9% annualized revenue growth over the last five years was sluggish. This fell short of our benchmark for the semiconductor sector and is a tough starting point for our analysis. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions. Long-term growth is the most important, but short-term results matter for semiconductors because the rapid pace of technological innovation (Moore's Law) could make yesterday's hit product obsolete today. onsemi's performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 12.5% annually. This quarter, onsemi's revenue fell by 15.4% year on year to $1.47 billion but beat Wall Street's estimates by 1.2%. Despite the beat, the drop in sales could mean that the current downcycle is deepening. Company management is currently guiding for a 14% year-on-year decline in sales next quarter. Looking further ahead, sell-side analysts expect revenue to decline by 3.6% over the next 12 months. While this projection is better than its two-year trend, it's tough to feel optimistic about a company facing demand difficulties. Software is eating the world and there is virtually no industry left that has been untouched by it. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. Click here to access a free report on our 3 favorite stocks to play this generational megatrend. Product Demand & Outstanding Inventory Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business' capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production. This quarter, onsemi's DIO came in at 207, which is 50 days above its five-year average, suggesting that the company's inventory has grown to higher levels than we've seen in the past. Key Takeaways from onsemi's Q2 Results It was good to see onsemi provide revenue guidance for next quarter that slightly beat analysts' expectations. We were also happy its revenue narrowly outperformed Wall Street's estimates. On the other hand, its inventory levels materially increased and its EPS was in line with Wall Street's estimates. Overall, this quarter was mixed. The stock traded down 5.6% to $53.63 immediately after reporting. Is onsemi an attractive investment opportunity at the current price? If you're making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it's free.
CNBC
25-07-2025
- Business
- CNBC
ON Semi CEO on President Trump's AI plan
Hassane El-Khoury, CEO of ON Semiconductor, joins CNBC's Money Movers to discuss President Trump's AI plan unveiled on Wednesday, what the plan means for the semiconductor industry, and more.
Yahoo
03-06-2025
- Business
- Yahoo
S&P 500 Gains & Losses Today: Dollar General Stock Soars as Discount Retailer Posts Solid Results
The S&P 500 advanced 0.6% on Tuesday, June 3, 2025, as a report showing a surprise increase in job openings last month signaled labor-market resilience. Dollar General shares skyrocketed after the discount retailer beat quarterly estimates, raised its outlook, and expressed confidence in its capacity to mitigate tariff impacts. Shares of Kenvue lost ground as the consumer health supplier's CEO discussed softness in seasonal U.S. equities indexes finished higher after data from the Bureau of Labor Statistics showed an unexpected uptick in job openings in April, although several economists cautioned that tariffs could weigh on jobs growth as the year advances. The S&P 500 ended Tuesday's session 0.6% higher. The Dow added 0.5%. Strength among semiconductor firms and the rest of the tech sector helped lift the Nasdaq 0.8%. Read Investopedia's full daily markets roundup here. Dollar General (DG) shares surged 16%, chalking up the S&P 500's top daily performance after the discount retailer topped quarterly sales and profit estimates and boosted its full-year outlook. The company anticipated that it should be able to mitigate most tariff-related cost pressure but expressed uncertainty around the possible impact on consumer spending trends. Analysts have said that dollar stores could be poised to benefit as consumers trade down in the current environment. Shares of Dollar Tree (DLTR), set to report its own results Wednesday morning, were up 6%. Shares of ON Semiconductor (ON) jumped 11% after the company's top executive discussed expectations for a recovery in demand. In a presentation at the Bank of America Technology Conference, Onsemi CEO Hassane El-Khoury pointed to signs of recovery in the company's industrials market, its second largest, as well as indications that the automotive market could see a bottom in the second quarter. First Solar (FSLR) stock bounced 6.5% higher on Tuesday, reversing losses posted in the prior session. Shares of companies in the renewable energy space have come under pressure since the House passed a reconciliation bill that calls for the elimination of numerous clean energy initiatives and the Department of Energy cancelled an array of related grants. Mizuho analysts boosted their price target on the stock. Crude oil futures prices extended their recent string of gains, bolstered by increasing geopolitical tensions, including an escalation of the war in Ukraine and an uncertain outlook for a U.S.-Iran nuclear deal. The price uptick helped lift oil and gas stocks, with shares of exploration and production firm APA Corp. (APA) gaining 5.4%. Shares of Kenvue (KVUE), the consumer health company that spun off from Johnson & Johnson (JNJ) in 2023, dropped 6.2%, the furthest of any S&P 500 stock. Kenvue CEO Thibaut Mongon suggested that a lagging transition from spring into winter had contributed to soft seasonal demand for allergy and sun protection products. FactSet Research Systems (FDS) shares sank 4.8% after the financial data and software provider announced that Sanoke Viswanathan, formerly an executive at JPMorgan Chase (JPM), would take the reins as CEO starting in September. Current CEO Phil Snow is set to retire and exit his position on FactSet's board of directors at that time. Read the original article on Investopedia Sign in to access your portfolio
Yahoo
05-05-2025
- Business
- Yahoo
onsemi (NASDAQ:ON) Reports Strong Q1, Provides Encouraging Quarterly Revenue Guidance
Analog chips maker onsemi (NASDAQ:ON) reported revenue ahead of Wall Street's expectations in Q1 CY2025, but sales fell by 22.4% year on year to $1.45 billion. Guidance for next quarter's revenue was optimistic at $1.45 billion at the midpoint, 2.5% above analysts' estimates. Its non-GAAP profit of $0.55 per share was 9.6% above analysts' consensus estimates. Is now the time to buy onsemi? Find out in our full research report. Revenue: $1.45 billion vs analyst estimates of $1.40 billion (22.4% year-on-year decline, 3.1% beat) Adjusted EPS: $0.55 vs analyst estimates of $0.50 (9.6% beat) Adjusted Operating Income: $264 million vs analyst estimates of $242.5 million (18.3% margin, 8.9% beat) Revenue Guidance for Q2 CY2025 is $1.45 billion at the midpoint, above analyst estimates of $1.41 billion Adjusted EPS guidance for Q2 CY2025 is $0.53 at the midpoint, above analyst estimates of $0.51 Operating Margin: -39.7%, down from 28.2% in the same quarter last year Free Cash Flow Margin: 31.5%, up from 14.8% in the same quarter last year Inventory Days Outstanding: 164, down from 216 in the previous quarter Market Capitalization: $17.69 billion 'Our results in the first quarter reflect the disciplined approach we have maintained through this downturn – managing our cost structure, right-sizing our manufacturing footprint, and rationalizing our portfolio – enabling us to generate increased free cash flow. We are committed to long-term value creation and we are accelerating our capital return to shareholders while investing in our future growth,' said Hassane El-Khoury, president and CEO, onsemi. Spun out of Motorola in 1999 and built through a series of acquisitions, onsemi (NASDAQ:ON) is a global provider of analog chips specializing in autos, industrial applications, and power management in cloud data centers. A company's long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Unfortunately, onsemi's 4.3% annualized revenue growth over the last five years was sluggish. This fell short of our benchmark for the semiconductor sector and is a rough starting point for our analysis. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions. Long-term growth is the most important, but short-term results matter for semiconductors because the rapid pace of technological innovation (Moore's Law) could make yesterday's hit product obsolete today. onsemi's performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 10.6% annually. This quarter, onsemi's revenue fell by 22.4% year on year to $1.45 billion but beat Wall Street's estimates by 3.1%. Despite the beat, the drop in sales could mean that the current downcycle is deepening. Company management is currently guiding for a 16.4% year-on-year decline in sales next quarter. Looking further ahead, sell-side analysts expect revenue to decline by 9.8% over the next 12 months, similar to its two-year rate. This projection doesn't excite us and implies its newer products and services will not lead to better top-line performance yet. Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories. Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business' capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production. This quarter, onsemi's DIO came in at 164, which is 10 days above its five-year average. These numbers suggest that despite the recent decrease, the company's inventory levels are higher than what we've seen in the past. We were impressed by onsemi's strong improvement in inventory levels. We were also excited it beat Wall Street's estimates and outlook expectations across the board. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 3.2% to $43.25 immediately following the results. onsemi had an encouraging quarter, but one earnings result doesn't necessarily make the stock a buy. Let's see if this is a good investment. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free. Sign in to access your portfolio
Business Wire
05-05-2025
- Business
- Business Wire
onsemi Reports First Quarter 2025 Results
SCOTTSDALE, Ariz.--(BUSINESS WIRE)--onsemi (the 'Company') (Nasdaq: ON) today announced its first quarter 2025 results with the following highlights: Revenue of $1,445.7 million GAAP gross margin and non-GAAP gross margin of 20.3% and 40.0%, respectively GAAP operating margin and non-GAAP operating margin of (39.7)% and 18.3%, respectively GAAP diluted loss per share and non-GAAP diluted earnings per share of $(1.15) and $0.55, respectively Cash from operations of $602 million with free cash flow of $455 million, increasing 72% year-over-year to 31% of revenue 'Our results in the first quarter reflect the disciplined approach we have maintained through this downturn – managing our cost structure, right-sizing our manufacturing footprint, and rationalizing our portfolio – enabling us to generate increased free cash flow. We are committed to long-term value creation and we are accelerating our capital return to shareholders while investing in our future growth,' said Hassane El-Khoury, president and CEO, onsemi. 'We continue to see strong design win momentum, driven by the industry-leading performance of our products and have secured key wins with major global customers across all end-markets.' Selected financial results for the quarter are shown below with comparable periods (unaudited): SECOND QUARTER 2025 OUTLOOK The following table outlines onsemi's projected second quarter of 2025 GAAP and non-GAAP outlook. * Diluted shares outstanding can vary as a result of, among other things, the vesting of restricted stock units, the incremental dilutive shares from the convertible notes, and the repurchase or the issuance of stock or convertible notes or the sale of treasury shares. In periods when the quarterly average stock price per share exceeds $52.97 for the 0% Notes, and $103.87 for the 0.50% Notes, the non-GAAP diluted share count and non-GAAP net income per share include the anti-dilutive impact of the hedge transactions entered concurrently with the 0% Notes, and the 0.50% Notes, respectively. At an average stock price per share between $52.97 and $74.34 for the 0% Notes, and $103.87 and $156.78 for the 0.50% Notes, the hedging activity offsets the potentially dilutive effect of the 0% Notes, and the 0.50% Notes, respectively. In periods when the quarterly average stock price exceeds $74.34 for the 0% Notes, and $156.78 for the 0.50% Notes, the dilutive impact of the warrants issued concurrently with such notes is included in the diluted shares outstanding. GAAP and non-GAAP diluted share counts are based on either the previous quarter's average stock price or the stock price as of the last day of the previous quarter, whichever is higher. ** Special items may include: amortization of acquisition-related intangibles; expensing of appraised inventory fair market value step-up; restructuring-related cost of revenue charges; non-recurring facility costs; in-process research and development expenses; restructuring, asset impairments and other, net; goodwill impairment charges; gains and losses on debt prepayment; actuarial (gains) losses on pension plans and other pension benefits; and certain other special items, as necessary. These special items are out of our control and could change significantly from period to period. As a result, we are not able to reasonably estimate and separately present the individual impact or probable significance of these special items, and we are similarly unable to provide a reconciliation of the non-GAAP measures. The reconciliation that is unavailable would include a forward-looking income statement, balance sheet and statement of cash flows in accordance with GAAP. For this reason, we use a projected range of the aggregate amount of special items in order to calculate our projected non-GAAP operating expense outlook. *** We believe these non-GAAP measures provide important supplemental information to investors. We use these measures, together with GAAP measures, for internal managerial purposes and as a means to evaluate period-to-period comparisons. However, we do not, and you should not, rely on non-GAAP financial measures alone as measures of our performance. We believe that non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when taken together with GAAP results and the reconciliations to corresponding GAAP financial measures that we also provide in our releases, provide a more complete understanding of factors and trends affecting our business. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures, even if they have similar names. Expand TELECONFERENCE onsemi will host a conference call for the financial community at 9 a.m. Eastern Time (ET) on May 5, 2025 to discuss this announcement and onsemi's 2025 first quarter results. The Company will also provide a real-time audio webcast of the teleconference on the Investor Relations page of its website at The webcast replay will be available at this site approximately one hour following the live broadcast and will continue to be available for approximately 30 days following the conference call. Investors and interested parties can also access the conference call by pre-registering here. About onsemi onsemi (Nasdaq: ON) is driving disruptive innovations to help build a better future. With a focus on automotive and industrial end-markets, the company is accelerating change in megatrends such as vehicle electrification and safety, sustainable energy grids, industrial automation, and 5G and cloud infrastructure. onsemi offers a highly differentiated and innovative product portfolio, delivering intelligent power and sensing technologies that solve the world's most complex challenges and leads the way to creating a safer, cleaner, and smarter world. onsemi is recognized as a Fortune 500 ® company and included in the Nasdaq-100 Index ® and S&P 500 ® index. Learn more about onsemi at onsemi and the onsemi logo are trademarks of Semiconductor Components Industries, LLC. All other brand and product names appearing in this document are registered trademarks or trademarks of their respective holders. Although the Company references its website in this news release, information on the website is not to be incorporated herein. This document includes 'forward-looking statements,' as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included or incorporated in this document could be deemed forward-looking statements, particularly statements about the future financial performance of onsemi, including financial guidance for the second quarter of 2025. Forward-looking statements are often characterized by the use of words such as 'believes,' 'estimates,' 'expects,' 'projects,' 'may,' 'will,' 'intends,' 'plans,' 'anticipates,' 'should' or similar expressions or by discussions of strategy, plans or intentions. All forward-looking statements in this document are made based on our current expectations, forecasts, estimates and assumptions and involve risks, uncertainties and other factors that could cause results or events to differ materially from those expressed in the forward-looking statements. Certain factors that could affect our future results or events are described under Part I, Item 1A 'Risk Factors' in the 2024 Annual Report on Form 10-K filed with the Securities and Exchange Commission ('SEC') on February 10, 2025 (the '2024 Form 10-K') and from time to time in our other SEC reports. Readers are cautioned not to place undue reliance on forward-looking statements. We assume no obligation to update such information, which speaks only as of the date made, except as may be required by law. Investing in our securities involves a high degree of risk and uncertainty, and you should carefully consider the trends, risks and uncertainties described in this document, our 2024 Form 10-K and other reports filed with or furnished to the SEC before making any investment decision with respect to our securities. If any of these trends, risks or uncertainties actually occurs or continues, our business, financial condition or operating results could be materially adversely affected, the trading prices of our securities could decline, and you could lose all or part of your investment. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement. ON SEMICONDUCTOR CORPORATION UNAUDITED CONSOLIDATED BALANCE SHEETS (in millions) April 4, 2025 December 31, 2024 March 29, 2024 Assets Cash and cash equivalents $ 2,762.5 $ 2,691.3 $ 2,614.4 Short-term investments 250.0 300.0 — Receivables, net 825.0 1,160.1 873.3 Inventories 2,078.2 2,242.0 2,147.1 Assets held-for-sale 45.7 5.3 3.9 Other current assets 365.1 353.3 510.2 Total current assets 6,326.5 6,752.0 6,148.9 Property, plant and equipment, net 3,840.5 4,361.4 4,384.3 Goodwill 1,641.6 1,587.9 1,577.6 Intangible assets, net 309.2 257.9 289.4 Deferred tax assets 745.5 729.9 648.4 ROU financing lease assets 39.9 40.5 41.8 Other assets 350.7 360.2 392.5 Total assets $ 13,253.9 $ 14,089.8 $ 13,482.9 Liabilities and Stockholders' Equity Accounts payable $ 496.6 $ 574.5 $ 665.8 Accrued expenses and other current liabilities 781.3 760.0 678.1 Current portion of financing lease liabilities 0.4 0.3 0.3 Current portion of long-term debt — — 794.8 Total current liabilities 1,278.3 1,334.8 2,139.0 Long-term debt 3,348.3 3,345.9 2,544.1 Deferred tax liabilities 45.6 37.6 37.3 Long-term financing lease liabilities 21.6 20.7 21.3 Other long-term liabilities 511.2 536.3 598.6 Total liabilities 5,205.0 5,275.3 5,340.3 ON Semiconductor Corporation stockholders' equity: Common stock 6.2 6.2 6.2 Additional paid-in capital 5,411.4 5,372.2 5,243.9 Accumulated other comprehensive loss (56.5 ) (62.4 ) (52.2 ) Accumulated earnings 7,634.8 8,120.9 7,001.1 Less: Treasury stock, at cost (4,966.0 ) (4,640.5 ) (4,075.1 ) Total ON Semiconductor Corporation stockholders' equity 8,029.9 8,796.4 8,123.9 Non-controlling interest 19.0 18.1 18.7 Total stockholders' equity 8,048.9 8,814.5 8,142.6 Total liabilities and stockholders' equity $ 13,253.9 $ 14,089.8 $ 13,482.9 Expand ON SEMICONDUCTOR CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Quarters Ended April 4, 2025 December 31, 2024 March 29, 2024 Cash flows from operating activities: Net income (loss) $ (485.2 ) $ 379.8 $ 453.7 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 168.2 166.6 154.9 Amortization of debt discount and issuance costs 2.9 1.9 2.7 Share-based compensation 33.9 38.1 33.0 Non-cash asset impairment charges 431.5 22.1 — Change in deferred tax balances (13.7 ) (7.5 ) (48.6 ) Other 1.8 3.4 1.9 Changes in assets and liabilities 462.9 (24.7 ) (98.9 ) Net cash provided by operating activities 602.3 579.7 498.7 Cash flows from investing activities: Payments for acquisition of property, plant, and equipment (147.6 ) (157.3 ) (233.9 ) Purchase of short-term investments (250.0 ) (300.0 ) — Proceeds from the maturity of short-term investments 300.0 300.0 — Purchase of a business, net of cash acquired (117.5 ) — — Other 0.2 5.6 (1.4 ) Net cash used in investing activities (214.9 ) (151.7 ) (235.3 ) Cash flows from financing activities: Proceeds for the issuance of common stock under the ESPP 5.3 5.6 7.6 Payment of tax withholding for RSUs (22.4 ) (2.7 ) (37.5 ) Repurchase of common stock (300.1 ) (204.1 ) (100.0 ) Payment of finance lease obligations (0.4 ) (0.4 ) (0.9 ) Other — (1.7 ) — Net cash used in financing activities (317.6 ) (203.3 ) (130.8 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 2.0 (3.7 ) (0.9 ) Net increase in cash, cash equivalents and restricted cash 71.8 221.0 131.7 Beginning cash, cash equivalents and restricted cash 2,693.4 2,472.4 2,485.0 Ending cash, cash equivalents and restricted cash $ 2,765.2 $ 2,693.4 $ 2,616.7 Expand ON SEMICONDUCTOR CORPORATION (in millions, except per share and percentage data) Quarters Ended April 4, 2025 December 31, 2024 March 29, 2024 Reconciliation of GAAP to non-GAAP gross profit: GAAP gross profit $ 293.8 $ 779.1 $ 853.6 Special items: a) Restructuring-related inventory and other charges 283.4 — — b) Amortization of acquisition-related intangible assets 1.3 1.6 1.5 Total special items 284.7 1.6 1.5 Non-GAAP gross profit $ 578.5 $ 780.7 $ 855.1 Reconciliation of GAAP to non-GAAP gross margin: GAAP gross margin 20.3 % 45.2 % 45.8 % Special items: a) Restructuring-related inventory and other charges 19.6 % — % — % b) Amortization of acquisition-related intangible assets 0.1 % 0.1 % 0.1 % Total special items 19.7 % 0.1 % 0.1 % Non-GAAP gross margin 40.0 % 45.3 % 45.9 % Reconciliation of GAAP to non-GAAP operating expenses: GAAP operating expenses $ 867.5 $ 370.5 $ 328.4 Special items: a) Amortization of acquisition-related intangible assets (11.4 ) (13.5 ) (12.6 ) b) Restructuring, asset impairments and other charges, net (539.3 ) (30.9 ) (1.4 ) c) Third-party acquisition and divestiture-related costs (2.3 ) (4.8 ) (0.1 ) Total special items (553.0 ) (49.2 ) (14.1 ) Non-GAAP operating expenses $ 314.5 $ 321.3 $ 314.3 Reconciliation of GAAP to non-GAAP operating income: GAAP operating income (loss) $ (573.7 ) $ 408.6 $ 525.2 Special items: a) Restructuring-related inventory and other charges 283.4 — — b) Amortization of acquisition-related intangible assets 12.7 15.1 14.1 c) Restructuring, asset impairments and other charges, net 539.3 30.9 1.4 d) Third-party acquisition and divestiture-related costs 2.3 4.8 0.1 Total special items 837.7 50.8 15.6 Non-GAAP operating income $ 264.0 $ 459.4 $ 540.8 Reconciliation of GAAP to non-GAAP operating margin (operating income / revenue): GAAP operating margin (39.7 )% 23.7 % 28.2 % Special items: a) Restructuring related inventory and other charges 19.6 % — % — % b) Amortization of acquisition-related intangible assets 0.9 % 0.9 % 0.8 % c) Restructuring, asset impairments and other charges, net 37.3 % 1.8 % 0.1 % d) Third-party acquisition and divestiture-related costs 0.2 % 0.3 % — % Total special items 58.0 % 3.0 % 0.8 % Non-GAAP operating margin 18.3 % 26.7 % 29.0 % Reconciliation of GAAP to non-GAAP income before income taxes: GAAP income (loss) before income taxes $ (561.0 ) $ 442.5 $ 538.2 Special items: a) Restructuring-related inventory and other charges 283.4 — — b) Amortization of acquisition-related intangible assets 12.7 15.1 14.1 c) Restructuring, asset impairments and other charges, net 539.3 30.9 1.4 d) Third-party acquisition and divestiture-related costs 2.3 4.8 0.1 e) Actuarial gains on pension plans and other pension benefits — (12.2 ) — Total special items 837.7 38.6 15.6 Non-GAAP income before income taxes $ 276.7 $ 481.1 $ 553.8 Reconciliation of GAAP to non-GAAP net income attributable to ON Semiconductor Corporation: GAAP net income (loss) attributable to ON Semiconductor Corporation $ (486.1 ) $ 379.9 $ 453.0 Special items: a) Restructuring-related inventory and other charges 283.4 — — b) Amortization of acquisition-related intangible assets 12.7 15.1 14.1 c) Restructuring, asset impairments and other charges, net 539.3 30.9 1.4 d) Third-party acquisition and divestiture-related costs 2.3 4.8 0.1 e) Actuarial gains on pension plans and other pension benefits — (12.2 ) — f) Adjustment to Income taxes (120.0 ) (14.3 ) (4.1 ) Total special items 717.7 24.3 11.5 Non-GAAP net income attributable to ON Semiconductor Corporation $ 231.6 $ 404.2 $ 464.5 GAAP net income (loss) for diluted earnings per share $ (486.1 ) $ 379.9 $ 453.0 Non-GAAP net income for diluted earnings per share $ 231.6 $ 404.2 $ 464.5 Reconciliation of GAAP to non-GAAP diluted shares outstanding: GAAP diluted shares outstanding 421.3 429.6 436.5 Special items: a) Less: dilutive shares attributable to convertible notes — (3.5 ) (4.7 ) b) Add: dilutive shares attributable to share-based awards 0.4 — — Total special items 0.4 (3.5 ) (4.7 ) Non-GAAP diluted shares outstanding 421.7 426.1 431.8 Non-GAAP diluted earnings per share: Non-GAAP net income for diluted earnings per share $ 231.6 $ 404.2 $ 464.5 Non-GAAP diluted shares outstanding 421.7 426.1 431.8 Non-GAAP diluted earnings per share $ 0.55 $ 0.95 $ 1.08 Reconciliation of net cash provided by operating activities to free cash flow: Net cash provided by operating activities $ 602.3 $ 579.7 $ 498.7 Special items: a) Payments for acquisition of property, plant and equipment (147.6 ) (157.3 ) (233.9 ) Total special items (147.6 ) (157.3 ) (233.9 ) Free cash flow $ 454.7 $ 422.4 $ 264.8 Certain of the amounts in the above tables may not total due to rounding of individual amounts. Expand ON SEMICONDUCTOR CORPORATION RECONCILIATION OF GAAP VERSUS NON-GAAP DISCLOSURES (Continued) (in millions, except per share and percentage data) SHARE-BASED COMPENSATION Total share-based compensation related to restricted stock units, stock grant awards and the employee stock purchase plan was as follows: Quarters Ended April 4, 2025 December 31, 2024 March 29, 2024 Cost of revenue $ 6.0 $ 6.5 $ 5.4 Research and development 6.3 6.5 5.7 Selling and marketing 4.7 5.9 5.2 General and administrative 16.9 19.2 16.7 Total share-based compensation $ 33.9 $ 38.1 $ 33.0 Expand SUPPLEMENTAL FINANCIAL DATA NON-GAAP MEASURES To supplement the consolidated financial results prepared in accordance with GAAP, onsemi uses certain non-GAAP measures, which are adjusted from the most directly comparable GAAP measures to exclude items related to the amortization of acquisition-related intangibles, expensing of appraised inventory fair market value step-up, inventory valuation adjustments, in-process research and development expenses, restructuring, asset impairments and other, net, goodwill impairment charges, gains and losses on debt prepayment, non-cash interest expense, actuarial (gains) losses on pension plans and other pension benefits, third party acquisition and divestiture-related costs, tax impact of these items and certain other non-recurring items, as necessary. Management does not consider the effects of these items in evaluating the core operational activities of onsemi. Management uses these non-GAAP measures internally to make strategic decisions, forecast future results and evaluate onsemi's current performance. In addition, the Company believes that most analysts covering onsemi use the non-GAAP measures to evaluate onsemi's performance. Given management's and other relevant parties' use of these non-GAAP measures, onsemi believes these measures are important to investors in understanding onsemi's current and future operating results as seen through the eyes of management. In addition, management believes these non-GAAP measures are useful to investors in enabling them to better assess changes in onsemi's core business across different time periods. These non-GAAP measures are not prepared in accordance with, and should not be considered alternatives or necessarily superior to, GAAP financial data and may be different from non-GAAP measures used by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures, even if they have similar names. Non-GAAP Revenue The use of non-GAAP revenue allows management to evaluate, among other things, the revenue from the Company's core businesses and trends across different reporting periods on a consistent basis, independent of special items. In addition, non- GAAP revenue is an important component of management's internal performance measurement and incentive and reward process as it is used to assess the current and historical financial results of the business and for strategic decision making, preparing budgets, obtaining targets and forecasting future results. Management presents this non-GAAP financial measure to enable investors and analysts to evaluate the Company's revenue generation performance relative to the direct costs of operations of onsemi's core businesses. Non-GAAP Gross Profit and Gross Margin The use of non-GAAP gross profit and gross margin allows management to evaluate, among other things, the gross profit and gross margin of the Company's core businesses and trends across different reporting periods on a consistent basis, independent of non-cash and non-recurring items including, generally speaking, restructuring related cost of revenue charges, expensing of appraised inventory fair market value step-up, impact of business wind down and non-recurring facility costs. In addition, it is an important component of management's internal performance measurement and incentive and reward process as it is used to assess the current and historical financial results of the business and for strategic decision making, preparing budgets, obtaining targets and forecasting future results. Management presents this non-GAAP financial measure to enable investors and analysts to evaluate our operating performance independent of certain non-cash items and the effects of certain variables unrelated to our overall operating performance. Non-GAAP Operating Income and Operating Margin The use of non-GAAP operating income and operating margin allows management to evaluate, among other things, the operating income and operating margin of the Company's core businesses and trends across different reporting periods on a consistent basis, independent of non-cash and non-recurring items including, generally speaking, restructuring related cost of revenue charges, expensing of appraised inventory fair market value step-up, impact of business wind down, non-recurring facility costs, amortization and impairments of intangible assets, third party acquisition and divestiture-related costs, restructuring charges, asset impairments and certain other special items as necessary. In addition, it is an important component of management's internal performance measurement and incentive and reward process as it is used to assess the current and historical financial results of the business and for strategic decision making, preparing budgets, obtaining targets and forecasting future results. Management presents this non-GAAP financial measure to enable investors and analysts to evaluate our operating performance independent of certain non-cash items and the effects of certain variables unrelated to our overall operating performance. Non-GAAP Net Income Attributable to ON Semiconductor Corporation and Non-GAAP Diluted Earnings Per Share The use of non-GAAP net income attributable to onsemi and non-GAAP diluted earnings per share allows management to evaluate the operating results of onsemi's core businesses and trends across different reporting periods on a consistent basis, independent of non-cash and non-recurring items including, generally, the restructuring related cost of revenue charges, amortization and impairments of intangible assets, expensing of appraised inventory fair market value step-up, impact of business wind down, non-recurring facility costs, restructuring, asset impairments, gains and losses on debt prepayment, actuarial (gains) losses on pension plans and other pension benefits, third party acquisition and divestiture-related costs, discrete tax items and other non-GAAP tax adjustments and certain other special items, as necessary. In addition, these measures are important components of management's internal performance measurement and incentive and reward process, as they are used to assess the current and historical financial results of the business and for strategic decision making, preparing budgets, setting targets and forecasting future results. For our non-GAAP reporting, we are utilizing a projected and normalized non-GAAP effective tax rate of 16%. We calculate this non-GAAP effective tax rate on an annual basis. We expect to use this normalized non-GAAP effective tax rate of 16% through 2025, however, we may update this non-GAAP effective tax rate at any time for a variety of reasons, including, but not limited to, the rapidly evolving global tax environment, significant changes in our geographic earnings mix or changes to our strategy or business operations. Management presents these non-GAAP financial measures to enable investors and analysts to understand the results of operations of onsemi's core businesses and, to the extent comparable, to compare our results of operations on a more consistent basis against those of other companies in our industry. Free Cash Flow The use of free cash flow allows management to evaluate, among other things, the ability of the Company to make interest or principal payments on its debt. Free cash flow is defined as the difference between cash flow from operating activities and capital expenditures disclosed under investing activities in the consolidated statement of cash flows. Free cash flow is not an alternative to cash flow from operating activities as a measure of liquidity. It is an important component of management's internal performance measurement and incentive and reward process as it is used to assess the current and historical financial results of the business and for strategic decision making, preparing budgets, obtaining targets and forecasting future results. Management presents this non-GAAP financial measure to enable investors and analysts to evaluate our financial performance independent of the cash capital expenditures. Non-GAAP Diluted Share Count The use of non-GAAP diluted share count allows management to evaluate, among other things, the potential dilution due to the outstanding restricted stock units excluding the dilution from the convertible notes that is covered by hedging activity up to a certain threshold. In periods when the quarterly average stock price per share exceeds $52.97 for the 0% Notes and $103.87 for the 0.50% Notes, the non-GAAP diluted share count includes the anti-dilutive impact of the Company's hedge transactions issued concurrently with the 0% Notes and the 0.50% Notes, respectively. At an average stock price per share between $52.97 and $74.34 for the 0% Notes and $103.87 and $156.78 for the 0.50% Notes, the hedging activity offsets the potentially dilutive effect of the 0% Notes and the 0.50% Notes, respectively. In periods when the quarterly average stock price exceeds $74.34 for the 0% Notes and $156.78 for the 0.50% Notes, the dilutive impact of the warrants issued concurrently with such notes are included in the diluted shares outstanding.
