01—Abstract
Summary
Summary of the 10-Q filed August 3, 2026. Cited figures are marked; the original filing is the authoritative source.
ON Semiconductor Corporation (onsemi) reported second-quarter 2026 revenue of $1,603.5 milliona, up from $1,468.7 million a year earlier, an increase the filing attributes to increased demand across all end-markets.
Gross margin rose to 38.4% from 37.6%, and net income attributable to the company was $226.8 millionb, or $0.56 per diluted share, compared with $170.3 million in the prior-year quarter. For the six months, revenue was $3,116.8 million and operating income was $205.2 million, compared with an operating loss of $380.3 million in the prior-year period, which included large inventory and restructuring charges. Restructuring, asset impairments and other charges remained significant at $370.5 million for the six months under the 2026 Manufacturing Realignment Program.
Balance sheet and capital allocation changed meaningfully. The company issued $1.5 billionc of 0% Convertible Senior Notes due 2031 in May 2026, used $331.9 million of proceeds to repurchase 3.1 million shares, and reported cash, cash equivalents and short-term investments of approximately $3.9 billion. Operating cash flow was $698.8 million for the six months, down from $786.6 million, which the filing attributes mainly to unfavorable working capital changes.
Total long-term debt, including current maturities, was $4,459.4 milliond. The pending all-stock acquisition of Synaptics Incorporated is the most significant event in the filing. Synaptics stockholders would receive 1.350 onsemi shares per Synaptics share and own approximately 12% of the combined company, with closing expected in mid-2027.
The HSR waiting period is scheduled to expire on August 17, 2026, unless extended or terminated earlier. Termination fees of $235.0 million and $320.0 million are specified in the merger agreement.
02—Key points
Key Highlights
- Quarterly revenue rose to $1,603.5 million from $1,468.7 million, an increase of $134.8 million, or approximately 9%, with PSG revenue up $130.8 million year over year.
- Gross margin improved to 38.4% from 37.6%, driven by improved manufacturing utilization and favorable segment mix.
- Net income attributable to onsemi was $226.8 million for the quarter ($0.56 diluted EPS), versus $170.3 million a year earlier; for the six months, the company reported net income of $193.4 million versus a net loss of $315.8 million.
- Restructuring, asset impairments and other, net totaled $370.5 million for the six months, including $163.3 million of asset impairment charges tied to held-for-sale manufacturing equipment in South Korea and the Czech Republic.
- The company issued $1.5 billion of 2031 0% Convertible Senior Notes and repurchased $334.7 million of common stock in the quarter; about $5.3 billion remains authorized under the New Share Repurchase Program.
- Operating cash flow fell to $698.8 million for the six months from $786.6 million, which the filing attributes primarily to working capital timing.
- The pending all-stock Synaptics merger is expected to close in mid-2027 and would give Synaptics stockholders about 12% of the combined company; a $25.0 million severance program covers about 650 employees.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2026, On Semiconductor kept $0.14.
- Revenue$1.60B100.0%
- Cost of revenue−$987.2M61.6%
- Gross profit$616.3M38.4%
- Operating costs−$357.7M22.3%
- Operating income$258.6M16.1%
- Interest, other & tax−$31.8M2.0%
- Net income$226.8M14.1%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed August 3, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $1.60B$1.47B | +9.2% |
| Cost of Revenue | $987.20M$916.80M | +7.7% |
| Gross Profit | $616.30M$551.90M | +11.7% |
| Operating Expenses | $357.70M$358.50M | −0.2% |
| Operating Income | $258.60M$193.40M | +33.7% |
| Net Income | $226.80M$170.30M | +33.2% |
| EPS (Basic) | $0.58$0.41 | +41.5% |
| EPS (Diluted) | $0.56$0.41 | +36.6% |
| Shares Outstanding (Basic) | 390.30M414.60M | −5.9% |
| Shares Outstanding (Diluted) | 404.40M414.90M | −2.5% |
05—Questions
Frequently Asked Questions
What is driving the year-over-year revenue growth?
The filing attributes the quarterly revenue increase of $134.8 million to increased demand across all end-markets. PSG grew by $130.8 million, ISG grew by $14.2 million, and AMG declined by $10.2 million, mainly due to lower industrial demand.
What are the terms of the proposed Synaptics acquisition?
Each Synaptics share would convert into the right to receive 1.350 onsemi shares, and Synaptics stockholders would own approximately 12% of the combined company on a pro forma basis. The deal is subject to Synaptics stockholder approval, HSR and other regulatory approvals, and other conditions, with closing expected in mid-2027. Synaptics could owe a $235.0 million termination fee in certain circumstances, and onsemi could owe a $320.0 million regulatory termination fee in others.
Why did the company issue convertible notes, and how is dilution addressed?
The company issued $1.5 billion of 0% Convertible Senior Notes due 2031 and used $331.9 million of net proceeds to repurchase 3.1 million shares. It paid $351.6 million for convertible note hedges and received $281.0 million from warrant sales, which were intended to reduce potential dilution. The warrants have a strike price of $211.54 per share and could result in up to approximately 18.6 million shares being issued. The conversion price of the 2031 notes is approximately $161.30 per share.
What is the status of the restructuring program and its near-term costs?
Under the 2026 Manufacturing Realignment Program, the company recorded $370.5 million of restructuring, asset impairment and other charges for the six months, including $163.3 million of impairments on manufacturing equipment held for sale. The company expects total severance of about $25 million in 2026 for a workforce reduction of approximately 650 employees, with $22.7 million recognized in the six months. The filing states that additional impairment charges may be incurred in future periods.
How strong is the company's liquidity position and what debt maturities are upcoming?
Cash, cash equivalents and short-term investments were approximately $3.9 billion as of July 3, 2026, and the revolving credit facility had approximately $1.5 billion available. The 0% Notes due 2027, with $804.9 million outstanding, are classified as current, and holders may convert them during the quarter ending September 30, 2026, because the stock price condition was met. The company stated it was in compliance with its debt covenants.
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