AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-3: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 5/6 · 31/10/2026
Moat38
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 1/4 · Reported AI data center adoption and new-product revenue establish commercially useful technology. Comparative efficiency is expressly management's belief, however, and no benchmark establishes protected superiority or structural cost leadership. Evidence for a structural advantage is therefore weak rather than proof that products are interchangeable.
durability · 2/4 · Longstanding relationships and multi-year commitments support persistence of commercial demand. Actual LTSA modifications and disclosed cancellation provisions make that persistence conditional. These contractual facts support a mixed assessment of durability, without establishing a lasting technological barrier or a guaranteed competitive advantage.
customer dependency · 2/4 · Customer capacity payments, multi-year commitments and fulfillment of prior-year contract liabilities provide indirect evidence of repeat demand and supply dependence. Standard-product cancellation rights and modifiable LTSAs limit lock-in. The passages do not quantify technical switching costs or establish that customers cannot use alternative suppliers.
erosion resilience · 1/4 · Actual equipment impairments, obsolete inventory and the 2025 revenue and margin decline demonstrate substantial vulnerability to changing demand and capacity needs. Q2 2026 revenue and gross-profit recovery provides counterevidence. Resilience remains fragile; these outcomes do not identify competitive displacement as their sole cause.
Pricing power—
Insufficient evidence for every rubric criterion; no category score is inferred.
realized pricing · — · The disclosed higher average selling prices arose from reallocating capacity toward different products. This establishes favorable mix, without isolating changes in prices for comparable products. Negotiated contract prices disclose the pricing framework but provide no observed price trajectory sufficient to grade realized pricing.
retention · 2/4 · Longstanding customer relationships, multi-year obligations and revenue recognized from prior-year contract liabilities support retention indirectly. Actual contract modifications and cancellation rights temper the evidence. This is a mixed assessment of repeat demand and contractual continuity; no retention rate or customer-level renewal outcome is inferred.
margin resilience · 1/4 · Annual GAAP gross margin fell from 45.4% in 2024 to 33.1% in 2025; non-GAAP margin also declined from 45.5% to 38.4%. Q2 2026 gross profit and revenue improved year over year. Recovery moderates the adverse evidence, but does not establish strong resilience or isolate pricing from mix, volume and costs.
contractual freedom · 1/4 · Prices and quantities generally become fixed at booking, while standard-product orders can be cancelled within disclosed windows. LTSAs permit modification or cancellation in certain circumstances, and actual modifications occurred. Non-cancellable capacity payments offer some protection. Together these establish constrained ongoing control, without proving weak bargaining power when contracts are initially negotiated.
Predictability69
5 consecutive published annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 25.00
- Revenue growth volatility (pp)
- 15.65
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 6.42
- observedAnnualPeriods
- 5.00
Financial strength46
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 84.27
- netDebtEbitGrade
- 0.00
- interestCoverageGrade
- 1.71
- currentRatioGrade
- 100.00
- Debt / FCF (x)
- 2.10
- Net debt / operating income (x)
- 9.89
- Interest coverage (x)
- 1.19
- Current ratio (x)
- 4.52
Capital allocation88
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or EBIT calculated from reported pretax profit plus reported gross interest expense; the issuer-reported EBIT is distinct from GAAP operating income and gross interest; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. ROIC remains undefined for nonpositive invested capital; the explicit asset-return alternative does not change the ROIC chart. Missing financial inputs alone never trigger an alternative. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 18.00
- 3-year average dilution (%)
- -1.73
- 3-year average SBC / revenue (%)
- 1.93
- cashConversionGrade
- 78.22
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Actual 2025 cash generation and roughly 2% capital-expenditure intensity in the latest disclosure support discipline. Equipment impairments, substantial repurchases and weaker Q1 cash generation offset this. The conditional stock acquisition introduces ownership dilution and unresolved target-debt treatment; its economic returns remain unproven.
incentive alignment · 3/4 · Below-target incentive outcomes, the CEO's actual bonus waiver and the relative-TSR reduction demonstrate performance consequences. Granted performance equity and disclosed compliance with vested-share ownership guidelines strengthen alignment. Compliance is dated to March 17, 2026; these arrangements do not establish exceptional long-term compensation effectiveness.
execution · 2/4 · New-product revenue above target, reported broader adoption, cash generation and Q2 growth demonstrate delivery. Missed annual revenue and operating-margin targets, equipment impairments and weaker Q1 cash generation make execution mixed. Operating recovery is indirect evidence of execution and cannot be attributed entirely to management actions.
governance · 3/4 · Proxy access, majority-based director removal rights, a conduct-based clawback and insider hedging restrictions support strong disclosed governance arrangements. Shareholders approved the simple-majority proposal in May 2026. That vote does not demonstrate implementation, and the passages do not establish exceptional effectiveness of board oversight.
Evidence
Through sensing integration, we believe our intelligent power solutions achieve increased efficiencies compared to our peers.
2025 Form 10-K, filed 2026-02-09: Business, claimed comparative efficiency · Filed 09/02/2026
Business Highlights:
•
AI data center revenue more than doubled year-over-year due to broader adoption across the power tree with multiple chip vendors and leading hyperscalers.
Q1 2026 results exhibit, filed 2026-05-04: Business Highlights, AI data center adoption · Filed 04/05/2026
•Company Results. With respect to our financial goals, the Company’s 2025 new product revenue was $1,323 million, which exceeded the target level but fell below stretch.
2026 proxy, filed 2026-04-02: 2025 LTI results, new product revenue · Filed 02/04/2026
Additionally, we recorded non-cash impairment charges of $496.0 million during the year ended December 31, 2025 related to previous investments in manufacturing equipment at certain manufacturing facilities pursuant to held-for-sale accounting guidance.
2025 Form 10-K, filed 2026-02-09: Manufacturing Realignment Program, equipment impairments · Filed 09/02/2026
We also recorded $268.2 million relating to excess and obsolete inventory charges, of which $37.9 million and $230.3 million related to inventory primarily considered work in progress within the PSG and ISG reportable segments, respectively.
2025 Form 10-K, filed 2026-02-09: Manufacturing Realignment Program, inventory charges · Filed 09/02/2026
Non-GAAP
Year Ended
Year Ended
(Revenue and Net Income in millions)
December 31, 2025
December 31, 2024
December 31, 2025
December 31, 2024
Revenue
$
5,995.4
$
7,082.3
$
5,995.4
$
7,082.3
Gross Margin
33.1
%
45.4
%
38.4
%
45.5
%
Operating Margin
1.4
%
25.0
%
18.6
%
27.9
%
Net Income attributable to ON Semiconductor Corporation
$
121.0
$
1,572.8
$
966.4
$
1,704.6
Diluted Earnings Per Share
$
0.29
$
3.63
$
2.35
$
3.98
Revenue Summary
($ in millions)
(Unaudited)
Three Months Ended
Business Segment
Q4 2025
Q3 2025
Q4 2024
Sequential Change
Year-over-Year Change
PSG
$
724.2
$
737.6
$
809.4
(2)%
(11)%
AMG
556.3
583.3
610.6
(5)%
(9)%
ISG
249.6
230.0
302.5
9%
(17)%
Total
$
1,530.1
$
1,550.9
$
1,722.5
(1)%
(11)%
Year Ended
Business Segment
December 31, 2025
December 31, 2024
Year-over-Year Change
PSG
$
2,805.1
$
3,348.2
(16)%
AMG
2,261.9
2,609.1
(13)%
ISG
928.4
1,125.0
(17)%
Total
$
5,995.4
$
7,082.3
(15)%
FIRST QUARTER 2026 OUTLOOK
The following table outlines onsemi's projected first quarter of 2026 GAAP and non-GAAP outlook.
2025 results exhibit, filed 2026-02-09: annual revenue and GAAP/non-GAAP profitability comparison · Filed 09/02/2026
In general, we have maintained long-term relationships with our key customers, and our sales agreements are renewable periodically and contain certain terms and conditions with respect to payment, delivery, warranty and supply.
2024 Form 10-K, filed 2025-02-10: customer relationships and renewable sales agreements · Filed 10/02/2025
Certain of the Company's customer contracts are multi-year agreements that include committed amounts ("Long-term Supply Agreements" or "LTSAs") for which the remaining performance obligations as of December 31, 2025 were approximately $7.1 billion (excluding the remaining performance obligations for contracts having a duration of one year or less).
2025 Form 10-K, filed 2026-02-09: Remaining Performance Obligations, multi-year commitments · Filed 09/02/2026
Certain LTSAs include non-cancellable capacity payments from the customer, which are generally due within 30 days of the agreement.
Q1 2026 Form 10-Q, filed 2026-05-04: non-cancellable customer capacity payments · Filed 04/05/2026
These payments reserve production availability or are prepayments for the same purpose and are not recognized as revenue until the performance obligations are satisfied.
Q1 2026 Form 10-Q, filed 2026-05-04: capacity-payment purpose and revenue recognition · Filed 04/05/2026
The Company fulfilled certain performance obligations and recognized revenue of $15.4 million and $24.0 million for each of the quarters ended April 3, 2026 and April 4, 2025, respectively, related to contract liabilities outstanding as of the end of each respective prior year.
Q1 2026 Form 10-Q, filed 2026-05-04: fulfillment of prior-year contract liabilities · Filed 04/05/2026
Unless otherwise agreed in writing, customers may cancel orders 45-120 days prior to shipment, depending on the product, for standard products without penalty and, for custom products, prior to shipment, provided they pay onsemi's actual costs incurred as of the date we receive the cancellation notice.
2025 Form 10-K, filed 2026-02-09: standard and custom product cancellation rights · Filed 09/02/2026
The timing, pricing or amounts of products delivered under LTSAs may be modified or canceled in certain circumstances, and the actual revenue recognized for the remaining performance obligations in future periods may significantly differ from current estimates.
Q1 2026 Form 10-Q, filed 2026-05-04: LTSA modification and cancellation qualifications · Filed 04/05/2026
During 2025, certain LTSAs were modified in response to changes in demand.
2025 Form 10-K, filed 2026-02-09: actual LTSA modifications during 2025 · Filed 09/02/2026
Revenue from ISG increased by $38.8 million, or approximately 3.0%, during 2023 compared to 2022, which was largely driven by an increase in revenue from our Automotive Sensing Division of $117.4 million primarily due to the reallocation of internal capacity to products yielding higher average selling prices.
2023 Form 10-K, filed 2024-02-05: ISG revenue, capacity reallocation and higher-ASP product mix · Filed 05/02/2024
Generally, prices and quantities are fixed at the time of booking.
2023 Form 10-K, filed 2024-02-05: prices and quantities fixed at booking · Filed 05/02/2024
Revenue and gross profit for the operating and reportable segments were as follows (in millions):
PSG
AMG
ISG
Total
For the quarter ended July 3, 2026:
Revenue from external customers
$
829.0
$
545.7
$
228.8
$
1,603.5
Cost of revenue
598.7
254.5
134.0
987.2
Segment gross profit
$
230.3
$
291.2
$
94.8
$
616.3
For the quarter ended July 4, 2025:
Revenue from external customers
$
698.2
$
555.9
$
214.6
$
1,468.7
Cost of revenue
517.4
274.1
125.3
916.8
Segment gross profit
$
180.8
$
281.8
$
89.3
$
551.9
For the six months ended July 3, 2026:
Revenue from external customers
$
1,565.6
$
1,086.1
$
465.1
$
3,116.8
Cost of revenue
1,134.9
505.3
277.2
1,917.4
Segment gross profit
$
430.7
$
580.8
$
187.9
$
1,199.4
For the six months ended July 4, 2025:
Revenue from external customers
$
1,343.3
$
1,122.3
$
448.8
$
2,914.4
Cost of revenue
1,039.3
539.6
489.8
2,068.7
Segment gross profit (loss)
$
304.0
$
582.7
$
(41.0)
$
845.7
The Company had one customer, a distributor, whose revenue accounted for approximately 14% and 12% of total revenue for the quarters ended July 3, 2026 and July 4, 2025, respectively, and approximately 13% and 11% of the total revenue for the six months ended July 3, 2026 and July 4, 2025, respectively, across all reportable segments.
Q2 2026 Form 10-Q, filed 2026-08-03: segment revenue and gross profit, comparative quarters and six-month periods · Filed 03/08/2026
SCOTTSDALE, Ariz., – Feb. 9, 2026 – onsemi (the “Company”) (Nasdaq: ON) today announced its fourth quarter and fiscal year 2025 results:
Results Highlights:
•
Fourth quarter revenue of $1,530 million
•
Fourth quarter GAAP gross margin and non-GAAP gross margin of 36.0% and 38.2%, respectively
•
Fourth quarter GAAP operating margin and non-GAAP operating margin of 13.1% and 19.8%, respectively
•
Fourth quarter GAAP diluted earnings per share and non-GAAP diluted earnings per share of $0.45 and $0.64, respectively
•
2025 cash from operations of $1.8 billion and free cash flow of $1.4 billion, achieving record high free cash flow margin of 24%
2025 results exhibit, filed 2026-02-09: annual operating cash flow and free cash flow · Filed 09/02/2026
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.
2025 results exhibit, filed 2026-02-09: free cash flow definition · Filed 09/02/2026
Share Repurchases
During the year ended December 31, 2025, we repurchased approximately 27.9 million shares of our common stock for an aggregate purchase price of approximately $1,375.0 million, excluding fees, commissions and excise taxes.
2025 Form 10-K, filed 2026-02-09: actual annual share repurchases · Filed 09/02/2026
Our capital expenditures as a percentage of revenue were approximately 2%, and we expect capital expenditures of less than 5% of revenue for the year ended December 31, 2026.
Q2 2026 Form 10-Q, filed 2026-08-03: actual capital-expenditure intensity and annual outlook · Filed 03/08/2026
Operating Activities
Our cash flows from operating activities were $239.1 million and $602.3 million for the quarters ended April 3, 2026 and April 4, 2025, respectively.
Q1 2026 Form 10-Q, filed 2026-05-04: comparative operating cash flows · Filed 04/05/2026
The decrease in operating cash flows by $363.2 millions was primarily driven by unfavorable changes in working capital, including the timing of cash receipts and payments.
Q1 2026 Form 10-Q, filed 2026-05-04: working-capital explanation of cash-flow decline · Filed 04/05/2026
Based on this exchange ratio, the Company expects Synaptics stockholders will own approximately 12% of the combined company on a pro forma basis upon the closing.
Q2 2026 Form 10-Q, filed 2026-08-03: expected Synaptics stockholder ownership after pending merger · Filed 03/08/2026
The transaction is expected to close in mid-2027, subject to approval by Synaptics stockholders, the receipt of required regulatory approvals and other customary conditions.
Q2 2026 Form 10-Q, filed 2026-08-03: conditional merger timing · Filed 03/08/2026
The ultimate treatment of Synaptics' existing indebtedness following the closing of the transaction is unknown at this time
Q2 2026 Form 10-Q, filed 2026-08-03: unresolved treatment of target indebtedness · Filed 03/08/2026
For 2025, we achieved revenue and non-GAAP operating margin of $5,995.4 million and 18.7%, respectively, both of which fell below their respective target levels that were tied to our Board-approved annual operating plan (AOP) for 2025, but above their respective threshold levels.
2026 proxy, filed 2026-04-02: 2025 revenue and non-GAAP operating-margin target shortfalls · Filed 02/04/2026
The final STI combined performance percentage (Corporate Multiplier x Individual Goals achieved) for our CEO was just below 59% of target (although his actual payout was 0% in accordance with his previous commitment to forgo any bonus payouts) and between 44-61% of target for each of our other NEOs.
2026 proxy, filed 2026-04-02: actual short-term incentive outcomes and CEO bonus waiver · Filed 02/04/2026
As noted above, 70% of Mr. El-Khoury’s 2025 LTI grant consisted of PBRSUs while, as in prior years, 60% of each other NEO’s annual LTI grant consisted of PBRSUs.
2026 proxy, filed 2026-04-02: performance-based portion of granted 2025 equity awards · Filed 02/04/2026
However, our one-year relative TSR decreased the first tranche percentage payout tied to financial metrics (proportionally, nearly 86% of the CEO’s target PBRSUs) by 50%.
2026 proxy, filed 2026-04-02: relative-TSR reduction to first-tranche financial-metric payout · Filed 02/04/2026
As a result, the combined payout percentage for the first tranche of our 2025 PBRSUs was 69% of target for our CEO and 73% of target for each of our other NEOs, in each case, compared to the maximum possible payout of approximately 221% of target.
2026 proxy, filed 2026-04-02: resulting first-tranche performance-equity payout percentages · Filed 02/04/2026
The minimum stock ownership guideline varies based on position, ranging from two times base salary (for anyone directly reporting to the CEO who holds the title of Senior Vice President) to six times base salary for our CEO.
2026 proxy, filed 2026-04-02: executive stock ownership thresholds · Filed 02/04/2026
For purposes of the guidelines, we count only fully-vested, unrestricted shares of our common stock (not any unvested equity awards).
2026 proxy, filed 2026-04-02: qualifying ownership excludes unvested awards · Filed 02/04/2026
As of the record date, all of our NEOs were in compliance with these guidelines.
2026 proxy, filed 2026-04-02: NEO ownership compliance as of record date · Filed 02/04/2026
Only stockholders of record as of the close of business on March 17, 2026 (the record date) are entitled to notice of, and to vote at, the annual meeting.
2026 proxy, filed 2026-04-02: March 17, 2026 record date · Filed 02/04/2026
ü
Stockholder Proxy Access: We permit a stockholder, or a group of up to 20 stockholders, owning at least 3% of the Company’s outstanding shares of common stock continuously for at least three years, to nominate and include in our annual meeting proxy materials director nominees constituting up to the greater of two nominees or 20% of the board, subject to the requirements specified in our bylaws.
2026 proxy, filed 2026-04-02: stockholder proxy access conditions · Filed 02/04/2026
☒
No Burdensome Director Removal Restrictions: Our stockholders have the authority to remove any director from office with or without cause by the affirmative vote of holders of a majority of the shares then entitled to vote in the election of directors.
2026 proxy, filed 2026-04-02: director removal rights · Filed 02/04/2026
ü
Conduct-based Clawback Policy: In addition to our Dodd-Frank clawback policy, we have a conduct-based clawback policy that allows us to recoup compensation awards paid to NEOs and other employees if the individual engages in intentional misconduct or certain acts detrimental to our interests.
2026 proxy, filed 2026-04-02: conduct-based compensation clawback · Filed 02/04/2026
☒
No Hedging or Pledging: Certain company insiders, including our NEOs and directors, are prohibited from engaging in hedging transactions with our stock and from pledging our stock as collateral for a loan.
2026 proxy, filed 2026-04-02: insider hedging and pledging restrictions · Filed 02/04/2026
4. The Company’s stockholders approved the stockholder proposal regarding simple majority voting, as set forth below:
Votes For
Votes Against
Abstentions
Broker Non-Votes
333,533,083
3,866,836
3,308,903
20,351,310
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Annual-meeting Form 8-K, filed 2026-05-18: approval of simple-majority stockholder proposal · Filed 18/05/2026
