ON earnings

onsemi reported Q2 FY2026. EPS came in at $0.74 against a $0.71 consensus, beat by 3.5%. Revenue was $1.6B versus $1.6B expected, beat by 0.9%. Gross margin was 38.4%, down 10 bps from last quarter.

onsemi onsemi reported Q1 FY2026 results that beat both revenue and EPS estimates, driven by strong performance in the AI data center segment. Revenue of $1.51 billion and EPS of $0.64 exceeded the street estimates of $1.49 billion and $0.61, respectively. The company's guidance for Q2 FY2026 indicates continued momentum, with revenue expected in the range of $1.535 billion to $1.635 billion.

onsemi printed a small revenue miss, but the market risk is over-weighting the -0.4% top-line surprise and under-weighting the cash-return and depreciation setup that can protect earnings while end demand only stabilizes. The variant view is that this is less a cyclical recovery call than a capital-allocation reset: if Q1 revenue holds the $1.44 billion to $1.54 billion guide and gross margin lands in the 37.5% to 39.5% range, the equity should be judged on free cash flow durability rather than waiting for a clean automotive inflection.

onsemi cleared the low bar with a $1,550.9 million revenue print and $0.63 EPS, but the investable point is not the +2.2% top-line surprise. The market is likely treating this as another cyclical analog recovery trade, while the print argues for a narrower thesis: channel inventory is already inside target, internal inventory is falling, and AI power revenue is becoming material before automotive has truly recovered.

onsemi cleared a low bar on revenue, matched EPS, and guided Q3 to a range that says the recovery is still constrained by underloaded fabs rather than order strength. The market may be over-crediting the sequential revenue uptick while underpricing the 900 basis points of underutilization embedded in the guide, which makes margin normalization the real debate.