On Semiconductor 2025 Q1 Earnings Misses Targets with Net Income 206.9% Decline

On Semiconductor (ON) reported its fiscal 2025 Q1 earnings on May 05th, 2025. The company reported a significant revenue decline, recording $1.45 billion, which fell short of the expected $1.4 billion. The guidance for Q2 anticipates revenue between $1.4 billion and $1.5 billion, surpassing analyst expectations with a midpoint above $1.42 billion. The projected non-GAAP earnings per share for Q2 range between $0.48 and $0.58, also exceeding expectations of $0.52. Overall, On Semiconductor's financial results reflect a challenging market environment, with revenue and profitability facing pressure.

Revenue

The total revenue of On Semiconductor decreased by 22.4% to $1.45 billion in 2025 Q1, down from $1.86 billion in 2024 Q1.

Earnings/Net Income

On Semiconductor swung to a loss of $1.15 per share in 2025 Q1 from a profit of $1.06 per share in 2024 Q1, reflecting a 208.5% negative change. Meanwhile, the company reported a net loss of $-485.20 million in 2025 Q1, reflecting a 206.9% deterioration from the net income of $453.70 million achieved in 2024 Q1. The EPS and net income report indicate a challenging quarter with negative performance.

Post-Earnings Price Action Review

The impact of earnings report metrics on ON Semiconductor stock price shows positive correlations with revenue, net income, and EPS. However, the correlation strength varies over different time frames. Revenue exhibits a strong correlation, especially in the long term, with a 30-day win rate of 66.67%, leading to significant price appreciation. Net income also positively impacts stock price, with similar 30-day win rates and returns observed over shorter periods. EPS has a strong correlation with stock price, demonstrating favorable performance in the immediate aftermath of releases. In conclusion, these metrics positively influence ON Semiconductor's stock price, offering potential for appreciation in the short to medium term. Investors may consider these factors when making investment decisions following earnings report releases.

CEO Commentary

Hassane El-Khoury, President and Chief Executive Officer, remarked that despite a challenging macroeconomic landscape, On Semiconductor achieved Q1 revenue of $1.45 billion and non-GAAP earnings per share of $0.55, exceeding guidance. He emphasized the focus on streamlining operations through the Fab Right approach and investing in R&D to enhance product differentiation. El-Khoury noted the establishment of a geographically diversified supply chain that mitigates risk exposure and positions the company to effectively address tariff-related concerns. While early signs of stabilization in the industrial market were observed, he acknowledged cautious customer behavior due to ongoing inventory digestion and market uncertainties.

Guidance

For Q2 2025, On Semiconductor anticipates revenue between $1.4 billion and $1.5 billion, with non-GAAP gross margin expected to range from 36.5% to 38.5%. The company projects non-GAAP earnings per share to be between $0.48 and $0.58. Capital expenditures are guided to be in the range of $70 million to $90 million.

Additional News

In recent corporate developments, On Semiconductor withdrew its proposal to acquire Allegro MicroSystems, citing Allegro's board's reluctance to fully engage with the offer. Despite this, On Semiconductor remains committed to enhancing shareholder value through alternative means, such as its ongoing share repurchase program. Additionally, On Semiconductor completed the acquisition of Qorvo's Silicon Carbide JFET technology portfolio for $115 million, expanding its market opportunity and strengthening its position in power semiconductors. The company also announced plans to lay off approximately 2,400 employees worldwide in 2025, as part of strategic restructuring efforts to optimize operational efficiency.