ON Semiconductor (ON) Q2 2026 Earnings Report

The call conveyed strong operational and financial momentum: revenue growth, meaningful margin expansion, robust free cash flow, upgraded AI data center outlook (now expected to more than double in 2026), and multiple product and design wins (silicon carbide, high-voltage, ESS, Treo). Management provided constructive Q3 guidance (revenue $1.65B–$1.75B, non-GAAP gross margin 40%–42%, non-GAAP EPS $0.81–$0.93) and highlighted strategic moves (Synaptics acquisition, Fab Right divestitures) that support long-term profitability. Headwinds include input cost inflation, extended lead times and selective supply constraints that required short-term prioritization of AI shipments over automotive/industrial, along with ongoing restructuring impacts. Overall, positives are numerous and sizable, and the company appears positioned to sustain margin and cash-flow improvements while managing near-term supply and cost pressures.

Onsemi guided Q3 non‑GAAP revenue of $1.65–$1.75 billion, non‑GAAP gross margin of 40%–42% (includes $8M of share‑based compensation), non‑GAAP operating expenses of $303–$318M (includes $33M SBC), non‑GAAP other income of about $18M, a non‑GAAP tax rate of ~15%, a non‑GAAP share count of ~395M and non‑GAAP EPS of $0.81–$0.93 (midpoint implying EPS growth nearly 3x revenue growth); they expect capex of $40–$50M in Q3 and now expect full‑year capex below 5% of revenue, anticipate sequential gross‑margin expansion through the year, see Q3 utilization flat to up from Q2’s ~83%, and reiterated medium‑term end‑market pacing (AI data center now expected to more than double in 2026, ESS revenue ~+40% YoY, and China automotive SiC revenue +60–70% YoY).