Key Highlights

  • ON reported third-quarter 2026 Revenue of $1.72 billion, up 11% from $1.55 billion and up 7% from the prior quarter.
  • GAAP diluted Earnings were $0.79 per share versus $0.63, and non-GAAP earnings were $0.90 per share.
  • AI Data Center revenue rose 175% from a year earlier to $180 million, and 2026 sales are now expected near $620 million.
  • Free Cash Flow was $489 million, or 28% of revenue, and cash and short-term investments were about $4.4 billion.
  • Fourth-quarter revenue guidance is $1.715 billion to $1.815 billion, with non-GAAP earnings of $0.95 to $1.07 per share.

Revenue Climbs 11% to $1.72 Billion as AI Data Center Sales Reach $180 Million

ON Semiconductor (NASDAQ:ON) reported results for the third quarter ended Oct 2, 2026, on Nov 2, 2026. Revenue was $1.722 billion, up from $1.551 billion a year earlier and about $22 million above the midpoint of the company's guidance. GAAP Net Income attributable to the company was $313.9 million, or $0.79 per diluted share, compared with $255.0 million, or $0.63.

The company makes power and sensing semiconductors for automotive, industrial and data center customers. It now reports AI data center as a separate end market. That market produced $180 million, up 39% sequentially and 175% from a year ago.

Industrial revenue rose 9% year over year to $467 million, helped by energy infrastructure and factory automation. Automotive revenue slipped 1% to $777 million as management reallocated limited Supply to higher-demand markets. By Business unit, Power Solutions revenue grew 21% to $890 million, Analog and Mixed Signal rose 2% to $597 million, and Intelligent Sensing rose 2% to $235 million.

Non-GAAP Gross Margin Expands for a Fifth Straight Quarter to 41.2%

Non-GAAP gross margin was 41.2%, up 190 basis points from the second quarter, on better utilization and a favorable mix of newer products. GAAP gross margin was 41.4%. Factory utilization held at 83%.

Non-GAAP Operating Income was about $400 million, or 23% of revenue, and non-GAAP net income was about $354 million. Management said earnings growth is outpacing revenue growth as heavy Investment spending recedes.

Cash from operations was $516 million and free cash flow was $489 million. Total Liquidity stood at $5.9 billion, including a $1.5 billion undrawn revolver. The company repurchased $20 million of shares, limited by trading restrictions tied to a pending cash Acquisition of a US-listed technology company.

Ferric Acquisition Lifts the 2030 AI Data Center Revenue Target Above $3 Billion

The company agreed to acquire Ferric, a private maker of integrated voltage regulators, for $600 million plus up to $175 million in earn-outs tied to revenue milestones. It expects the deal to close in the fourth quarter, with no meaningful near-term financial impact and earnings accretion at scale. The company raised its 2030 AI data center revenue target by $500 million to more than $3 billion.

For 2026, AI data center revenue is expected near $620 million, up 140%, and management still expects it to double in 2027.

Fourth-Quarter Outlook Calls for Gross Margin of 41.5% to 43.5% and Lower Auto Sales

For the fourth quarter, the company guided revenue to $1.715 billion to $1.815 billion, non-GAAP gross margin of 41.5% to 43.5% and non-GAAP earnings of $0.95 to $1.07 per share. Automotive revenue is expected to fall by high single-digit percentages on supply reallocation, while industrial is expected to rise by a low double-digit percentage. Management expects automotive to normalize in the first quarter of 2027 and return to Long-term Growth targets next year.