ON Semiconductor Q2 2026 Earnings: AI Data-Center Demand Lifts Results, Stronger Quarter Ahead
ON Semiconductor's Q2 2026 results edged past estimates, powered by surging AI data-center demand, and it guided to further growth next quarter.
| Q2 2026 | Reported | Expected | Surprise |
|---|---|---|---|
| EPS | $0.74 | $0.74 | +0.5% |
| Revenue | $1.60B | $1.64B | -2.0% |
Key takeaways
- Both profit and sales came in just above what Wall Street was expecting, and management said results landed above the midpoint of its own guidance range — a sign the business is executing a bit better than planned after a rough stretch for the chip industry.
- The standout driver was demand from AI data centers: that category of sales jumped 34% versus the prior quarter, and the company said it now expects AI data-center revenue to more than double for the full year 2026 compared with 2025.
- Power Solutions, the unit that makes chips for managing electricity in cars, factories and data centers, grew 19% from a year earlier and was the biggest contributor to overall growth; automotive chip sales also rose from a year ago even as they dipped slightly from the prior quarter.
- CEO Hassane El-Khoury credited the results to ‘strengthening demand, particularly across AI-driven applications’ and growing customer adoption of the company’s newer Treo image-sensor and high-voltage power products.
- Free cash flow — the cash left over after running the business and funding equipment/investment — came in at about $425 million, roughly four times what it was a year ago, meaning the company converted more of its sales into spendable cash.
- The gross margin (the share of each sales dollar left after production costs) expanded from a year earlier, and the trailing-twelve-month profit margins in the data show the company is currently keeping about 10 cents of every revenue dollar as profit — modest but improving as AI-related demand mixes in higher-margin products.
- The trailing-twelve-month figures still show revenue down slightly and return on equity in the high single digits, a reminder that the broader chip market downturn of the past year hasn’t fully unwound even as the most recent quarter turned a corner.
- For the current quarter, the company guided to revenue of $1.65–$1.75 billion and adjusted earnings per share of $0.81–$0.93, both above Q2’s levels, pointing to continued sequential improvement.
Q2 2026 in context
| Metric | Jul 2026 | Jul 2025 | Change |
|---|---|---|---|
| Revenue | $1.6B | $1.5B | +9.2% |
| Net income | $227M | $170M | +33.2% |
| Free cash flow | $425M | $106M | +300.9% |
| Diluted EPS | $0.56 | $0.41 | +36.6% |
| Gross margin | 38.4% | 37.6% | +0.9 pts |
| Operating margin | 16.1% | 13.2% | +3.0 pts |
| Net margin | 14.1% | 11.6% | +2.5 pts |
Figures for the quarter ended Jul 2026 and the quarter ended Jul 2025, as reported to the SEC.
How the stock took it
ON Semiconductor Corp closed at $81.61 on Jul 31, 2026, the last session before the report, and at $80.78 on Aug 4, 2026, the first session after it — -1.0% across the report.
| Earlier report | Close before | Close after | Change |
|---|---|---|---|
| May 4, 2026 | $103.03 | $102.67 | -0.3% |
| Nov 3, 2025 | $50.08 | $48.28 | -3.6% |
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Fundamentals
| Metric | Value | Period |
|---|---|---|
| Gross margin | 37.7% | Trailing 12 months |
| Operating margin | 10.8% | Trailing 12 months |
| Net profit margin | 10.2% | Trailing 12 months |
| Pretax margin | 11.6% | Trailing 12 months |
| EPS | $1.55 | Trailing 12 months |
| Revenue growth (YoY) | -3.1% | Trailing 12 months |
| EPS growth (YoY) | 44.7% | Trailing 12 months |
| Return on equity | 8.4% | Trailing 12 months |
Sources: company report · earnings call