onsemi's Q4 Earnings Beat Estimates, Revenues Down Y/Y, Shares Drop

Core Insights - onsemi (ON) reported Q4 2025 non-GAAP earnings of 64 cents per share, exceeding Zacks Consensus Estimate by 3.23% but down 32.6% year over year [1] - Revenues of $1.53 billion fell short of Zacks Consensus Estimate by 0.19% and decreased 11.2% year over year [1] - ON shares declined by 4.92% at the time of reporting [1] Q4 Performance Details - Power Solutions Group revenues were $724.2 million, contributing 47.3% to total revenues, down 10.5% year over year [2] - Analog & Mixed Group revenues were $556.3 million, accounting for 36.4% of revenues, down 8.9% year over year [2] - Intelligent Sensing Group revenues were $249.6 million, making up 16.3% of revenues, down 17.5% year over year [2] Financial Metrics - Non-GAAP gross margin was 38.2%, compared to 45.3% in the same quarter last year [3] - Non-GAAP operating expenses decreased by 12.2% year over year to $282 million, representing a 20 basis points decrease as a percentage of revenues [3] - Non-GAAP operating margin was 19.8%, down from 26.7% in the year-ago quarter [3] Balance Sheet & Cash Flow - As of December 31, 2025, cash and cash equivalents were $2.55 billion, down from $2.87 billion as of October 3, 2025 [4] - Long-term debt was $2.98 billion, a decrease of 11.1% sequentially [4] - Q4 2025 cash flow from operations was $554.5 million, up from $418.7 million in the previous quarter [4] - Free cash flow was $485.4 million, compared to $372.4 million in the previous quarter [4] Q1 Guidance - For Q1 2026, onsemi expects revenues between $1.44 billion and $1.54 billion [5] - Non-GAAP gross margin is projected to be in the range of 37.5-39.5% [5] - Non-GAAP operating expenses are expected to be between $285 million and $300 million [5] - Non-GAAP earnings are anticipated to be between 56 cents and 66 cents per share [5] Market Position - ON currently holds a Zacks Rank 3 (Hold) [6] - Competitors such as Analog Devices (ADI), Applied Materials (AMAT), and MKS (MKSI) are noted as better-ranked stocks in the broader Zacks Computer and Technology sector [8][9]