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

Daily EarningsMonday, May 5, 2025 11:18 pm ET
27min read
ON Trend
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.

Ask Aime: What will be On Semiconductor's next move?

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Ecstatic_Book4786
05/06
Revenue down, but margins holding up. Streamlining ops is key. I'm holding ON for the long haul, despite the dips.
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_Ukey_
05/06
Diversifying supply chains is smart. Tariffs can hit hard, so ON's playing chess while others play checkers. 🧐
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LogicX64
05/06
ON Semi's EPS hit hard, but guidance looks solid. Might be a buy zone for Q2. Anyone else thinking that way?
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EightBitMemory
05/06
Layoffs painful, but operational efficiency crucial
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InevitableSwan7
05/06
R&D focus might save ON from further dips.
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liano
05/06
ON Semi's EPS hit hard, but guidance hopeful.
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Alert-Reveal5217
05/06
$ON needs to fix those EPS numbers, but the revenue guidance is encouraging. Not a bad bet for Q2.
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NoTearsNowOnlyDreams
05/06
ON's restructuring could be a game-changer if they can streamline costs without hurting innovation. Long-term play for me.
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alvisanovari
05/06
Gotta love the Fab Right approach. Smart moves on the supply chain and R&D will pay off. ON's got potential.
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TailungFu
05/06
Market's tough, but ON's non-GAAP earnings per share guidance looks promising. Maybe a short-term play? 🤔
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krogerCoffee
05/06
Supply chain diversification is clutch. Tariffs won't sink ON as easily. Smart moves for a volatile market.
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Loud_Ad_6880
05/06
Diversifying supply chain is smart, tariff shield.
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ZestycloseAd7528
05/06
Layoffs are never fun, but optimizing efficiency is smart. ON's trying to stay afloat while keeping some cash flow.
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_punter_
05/06
CEO's gotta pivot faster than a day trader on a rollercoaster. ON's got the tech, but market's a beast.
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Phuffu
05/06
$ON's EPS swing is wild. From profit to loss, talk about a whiplash. Gotta watch those macro trends closely.
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Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.
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