ON Semiconductor(US:ON)2025-11-03 13:05Financial Performance - Revenue for Q3 2025 was $1,550.9 million, a 6% increase from Q2 2025 but a 12% decrease year-over-year from Q3 2024[2] - Net income attributable to ON Semiconductor Corporation was $255.0 million, compared to $170.3 million in Q2 2025 and $401.7 million in Q3 2024[2] - Diluted earnings per share for Q3 2025 was $0.63, up from $0.41 in Q2 2025 but down from $0.93 in Q3 2024[2] - Operating income for the quarter was $264.4 million, up from $193.4 million in the previous quarter, indicating a significant improvement in operational efficiency[16] - GAAP net income attributable to ON Semiconductor Corporation for Q3 2025 was $255.0 million, compared to $170.3 million in Q3 2024, an increase of 49.7%[24] - Non-GAAP diluted earnings per share for Q3 2025 was $0.63, compared to $0.53 in Q3 2024, representing a growth of 18.9%[24] Margins and Profitability - GAAP gross margin was 37.9% and non-GAAP gross margin was 38.0%, showing slight improvement from Q2 2025[3] - GAAP operating margin increased to 17.0% from 13.2% in Q2 2025, while non-GAAP operating margin rose to 19.2%[3] - Gross profit for the quarter was $587.2 million, with a gross margin of 37.9%, compared to a gross margin of 37.6% in the previous quarter[16] - GAAP gross profit for Q3 2025 was $587.2 million, compared to $551.9 million in Q3 2024, representing a year-over-year increase of 6.3%[22] - Non-GAAP operating income for the nine months ended October 3, 2025, was $816.6 million, compared to $1,514.5 million in the same period of 2024, a decline of 46.0%[22] Cash Flow and Operations - Cash from operations reached $418.7 million, with free cash flow growing 22% year-over-year to $372.4 million, representing 24% of revenue[3] - Cash flows from operating activities for the quarter were $418.7 million, a substantial increase from $184.3 million in the previous quarter[20] - Free cash flow for the quarter ended October 3, 2025, was $372.4 million, compared to $106.1 million for the same quarter last year, representing a significant increase of 250%[25] - Net cash provided by operating activities for Q3 2025 was $418.7 million, significantly higher than $184.3 million in Q3 2024, an increase of 127.5%[24] Future Projections - The company projects Q4 2025 revenue to be between $1,480 million and $1,580 million, with diluted earnings per share expected to be between $0.56 and $0.66[7] - The company expects to maintain a normalized non-GAAP effective tax rate of 16% through 2025, with a potential adjustment to 15% starting in 2026[34] Research and Development - Research and development expenses for the quarter were $141.9 million, slightly down from $143.8 million in the previous quarter, indicating a focus on cost management[16] Shareholder Returns - Year-to-date share repurchases totaled $925 million, approximately 100% of free cash flow[3] - Total share-based compensation for the quarter ended October 3, 2025, was $38.2 million, compared to $34.4 million in the same quarter last year, showing an increase of 11%[27] Financial Position - Total assets as of October 3, 2025, were $13,010.2 million, a slight decrease from $13,126.2 million in the previous quarter[18] - Total liabilities decreased to $5,084.1 million from $5,165.0 million in the previous quarter, indicating improved financial stability[18] - The company had cash and cash equivalents of $2,472.5 million as of October 3, 2025, down from $2,526.7 million in the previous quarter[18] Special Items and Adjustments - Total special items impacting GAAP operating income for Q3 2025 amounted to $33.4 million, compared to $61.4 million in Q3 2024[22] - Management emphasizes the importance of non-GAAP measures for assessing operational performance and making strategic decisions[30]