ON Semiconductor(ON) - 2025 Q2 - Quarterly Results

Financial Performance - Revenue for Q2 2025 was $1,468.7 million, a 2% increase from Q1 2025 and a 15% decrease from Q2 2024[2] - GAAP gross margin was 37.6%, compared to 20.3% in Q1 2025 and 45.2% in Q2 2024[3] - GAAP operating margin improved to 13.2% from (39.7)% in Q1 2025, but decreased from 22.4% in Q2 2024[2] - Net income attributable to ON Semiconductor Corporation was $170.3 million, a significant recovery from a loss of $486.1 million in Q1 2025[2] - Diluted earnings per share for Q2 2025 was $0.41, compared to a loss of $1.15 in Q1 2025 and earnings of $0.78 in Q2 2024[3] - Operating income for the quarter was $193.4 million, a significant recovery from an operating loss of $(573.7) million in the same quarter of 2024[16] - Net income for the quarter ended July 4, 2025, was $171.7 million, a significant improvement compared to a net loss of $485.2 million in the same quarter of 2024[20] - GAAP income before income taxes was $202.2 million, a significant recovery from a loss of $561.0 million in the previous year[23] - Non-GAAP income before income taxes reached $263.6 million, slightly down from $276.7 million year-over-year[25] Cash Flow and Investments - Cash from operations was $184.3 million, with free cash flow of $106.1 million year-to-date[3] - Operating cash flow for the six months ended June 28, 2025, was $786.6 million, down from $860.9 million in the same period of 2024[20] - The company reported a net cash used in investing activities of $121.7 million for the quarter, compared to $214.9 million in the previous year[20] - Free cash flow for the latest quarter was $106.1 million, a decrease from $454.7 million in the previous quarter[26] - Net cash provided by operating activities for the quarter ended July 4, 2025, was $184.3 million, compared to $602.3 million for the same quarter in 2024, reflecting a decrease of approximately 69%[28] - Free cash flow for the quarter ended July 4, 2025, was $106.1 million, down from $454.7 million in the same quarter of 2024, indicating a decline of about 77%[28] Segment Performance - The PSG segment generated $698.2 million in revenue, an 8% increase sequentially but a 16% decrease year-over-year[5] - Total revenue for the last twelve months was $6,398.8 million, with the latest quarter revenue at $1,468.7 million[26] Guidance and Projections - The company projects Q3 2025 revenue to be between $1,465 million and $1,565 million, with a gross margin of 36.4% to 38.4%[6] - Diluted earnings per share guidance for Q3 2025 is expected to be between $0.51 and $0.61[6] Assets and Liabilities - Total current assets increased slightly to $6,351.4 million from $6,326.5 million in December 2024[18] - Total liabilities decreased to $5,165.0 million from $5,205.0 million in December 2024[18] - Cash and cash equivalents were reported at $2,526.7 million, down from $2,762.5 million in December 2024[18] - The company reported total stockholders' equity of $7,961.2 million, a decrease from $8,048.9 million in December 2024[18] Expenses - Research and development expenses for the quarter were $143.8 million, compared to $164.1 million in the same quarter of 2024[16] - The company reported a significant increase in depreciation and amortization expenses, totaling $156.4 million for the quarter, compared to $168.2 million in the previous year[20] - Cash paid for income taxes increased to $65.0 million for the quarter ended July 4, 2025, compared to $21.5 million in the same quarter of 2024, representing an increase of approximately 202%[28] Non-GAAP Measures - Non-GAAP gross profit reached $552.5 million, with a non-GAAP gross margin of 37.6%, reflecting a strong performance in operational efficiency[22] - Non-GAAP operating income for the quarter was $254.8 million, compared to $264.0 million in the same quarter of 2024[22] - Non-GAAP diluted earnings per share were $0.53, compared to $0.55 in the previous quarter[25] - Non-GAAP measures are utilized by management to evaluate core operational activities and make strategic decisions, providing insights into the company's performance independent of non-recurring items[30] - Management emphasizes the importance of non-GAAP measures for investors to understand the company's current and future operating results[30] - The non-GAAP diluted share count allows management to evaluate potential dilution from outstanding restricted stock units, excluding certain convertible notes[37] Special Items - Total special items affecting GAAP operating income included restructuring-related charges of $1.9 million and amortization of acquisition-related intangible assets of $12.3 million[22] - Special items impacted GAAP net income, with total special items amounting to 51.0 million in the latest quarter[25]