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On Semiconductor 8-K Report, Financial Results (Jul 29, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed July 29, 2024
Period End
July 29, 2024
Security
ON
In the record · 2016–202610-K1110-Q338-K162

ON filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 162 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Oct ’18Oct ’18
  2. Leadership change8-K · Oct ’20Oct ’20
  3. Impairment8-K · Sep ’22Sep ’22
  4. Material agreement8-K · Nov ’26Nov ’26

01—Abstract

Summary

Summary of the 8-K filed July 29, 2024. Cited figures are marked; the original filing is the authoritative source.

onsemi (Nasdaq: ON), filing under the name ON Semiconductor Corporation, reported second quarter 2024 results in a news release furnished as Exhibit 99.1 to this Form 8-K.

Revenue was $1,735.2 milliona, down from $1,862.7 million in the first quarter of 2024 and $2,094.4 million in the second quarter of 2023. GAAP gross margin was 45.2% and non-GAAP gross margin was 45.3%. GAAP operating margin was 22.4% versus 27.5% on a non-GAAP basis, and GAAP diluted earnings per share was $0.78 compared with non-GAAP diluted EPS of $0.96.

GAAP operating income of $388.5 millionb included $72.5 million of restructuring, asset impairments and other charges, net, in the quarter. Cash generation improved relative to the prior quarter and year-ago period. Net cash provided by operating activities was $362.2 million, and free cash flow was $207.7 million, compared with negative free cash flow of $(39.8) million in the second quarter of 2023.

The company repurchased $150.0 millionc of common stock in the quarter and stated it returned approximately $650 million of free cash flow over the last twelve months to shareholders through stock repurchases. Cash and cash equivalents were $2,231.0 million at June 28, 2024, and short-term investments were $450.0 million.

For the third quarter of 2024, the company guided to revenue of $1,700 million to $1,800 milliond, a non-GAAP gross margin of 44.4% to 46.4%, non-GAAP operating expenses of $305 million to $320 million, and non-GAAP diluted EPS of $0.91 to $1.03. Management highlighted the recent supply agreement with Volkswagen Group and continued ramp of silicon carbide production with automotive OEMs.

02—Key points

Key Highlights

  1. Second quarter 2024 revenue was $1,735.2 million, down from $1,862.7 million in Q1 2024 and $2,094.4 million in Q2 2023.
  2. GAAP diluted EPS was $0.78 and non-GAAP diluted EPS was $0.96, compared with $1.04 GAAP and $1.08 non-GAAP in Q1 2024.
  3. GAAP operating margin was 22.4% versus 27.5% non-GAAP, with the gap driven by $72.5 million of restructuring, asset impairments and other charges, net.
  4. Free cash flow was $207.7 million in Q2 2024, compared with $(39.8) million in Q2 2023, and net cash from operations was $362.2 million.
  5. The company repurchased $150.0 million of common stock in the quarter, and the release states about $650 million of free cash flow over the last twelve months was returned to shareholders through buybacks.
  6. Third quarter 2024 guidance calls for revenue of $1,700 million to $1,800 million and non-GAAP diluted EPS of $0.91 to $1.03.
  7. Segment revenue declined sequentially in all three segments: PSG $835.2 million, AMG $647.8 million, and ISG $252.2 million.

03—Questions

Frequently Asked Questions

  1. How did onsemi perform in the second quarter of 2024?

    Revenue was $1,735.2 million, with GAAP gross margin of 45.2% and GAAP operating margin of 22.4%. GAAP diluted EPS was $0.78, and non-GAAP diluted EPS was $0.96. Revenue declined 7% sequentially and 17% year over year, as stated in the filing's revenue summary.

  2. What drove the gap between GAAP and non-GAAP results?

    The filing's reconciliation shows $72.5 million of restructuring, asset impairments and other charges, net, plus $14.5 million of amortization of acquisition-related intangible assets, in operating income for the quarter. These items are excluded from the non-GAAP measures.

  3. How much cash did the business generate and return to shareholders?

    Net cash provided by operating activities was $362.2 million and free cash flow was $207.7 million in the quarter. The company repurchased $150.0 million of common stock, and the release states about $650 million of free cash flow was returned through repurchases over the last twelve months.

  4. What is the outlook for the third quarter of 2024?

    Management guided to revenue of $1,700 million to $1,800 million, a GAAP gross margin of 44.3% to 46.3% (44.4% to 46.4% non-GAAP), and GAAP diluted EPS of $0.85 to $0.97 (non-GAAP $0.91 to $1.03).

  5. What did management highlight as strategic developments?

    The CEO cited market share gains, investments in strategic markets, and expansion of the analog and mixed-signal portfolio. He also referenced a recent supply agreement with Volkswagen Group and the ramp of silicon carbide production with automotive OEMs in Europe, North America and China.

04—Continue

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