onsemi’s third quarter results reflected stabilization in its core Automotive and Industrial markets, as well as continued expansion in AI-related products. Management attributed sequential growth in these segments to new design wins and customer diversification, with CEO Hassane El-Khoury highlighting progress in high-efficiency power delivery and intelligent sensing. The company also made strategic portfolio enhancements through acquisitions and technology launches. El-Khoury noted, “We are seeing stabilization in Automotive and Industrial while continuing to grow in AI.”
Is now the time to buy ON? Find out in our full research report (it’s free for active Edge members).
onsemi (ON) Q3 CY2025 Highlights:
- Revenue: $1.55 billion vs analyst estimates of $1.52 billion (12% year-on-year decline, 2.2% beat)
- Adjusted EPS: $0.63 vs analyst estimates of $0.59 (6.6% beat)
- Adjusted EBITDA: $444.3 million vs analyst estimates of $432.9 million (28.6% margin, 2.6% beat)
- Revenue Guidance for Q4 CY2025 is $1.53 billion at the midpoint, roughly in line with what analysts were expecting
- Adjusted EPS guidance for Q4 CY2025 is $0.62 at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 17%, down from 25.3% in the same quarter last year
- Inventory Days Outstanding: 193, down from 207 in the previous quarter
- Market Capitalization: $19.25 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From onsemi’s Q3 Earnings Call
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Ross Seymore (Deutsche Bank) questioned the sustainability of automotive growth and whether recent trends signal a true recovery. CEO Hassane El-Khoury replied that stabilization is evident, but restocking cycles have not yet begun, and quarter-to-quarter changes are largely seasonal.
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Vivek Arya (Bank of America) asked about utilization rates and potential margin impacts. CFO Thad Trent explained that utilization is expected to normalize in coming quarters, with gross margins following seasonal patterns and benefiting from higher utilization over time.
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Quinn Bolton (Needham & Company) probed the integration of Vcore Power and long-term benefits. El-Khoury described the acquisition as providing both short-term market access and long-term architectural advantages once integrated into the Treo platform.
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Christopher Danely (Citi) inquired about the impact of industry events at competitors like Nexperia. El-Khoury stated onsemi continues to support shared customers but has not made portfolio changes in response, focusing instead on its broad product range.
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Gary Mobley (Loop Capital) asked about the ongoing exit from noncore businesses and its revenue impact. Trent confirmed the strategy is proceeding as planned, with no changes to the previously communicated headwind projections.
Catalysts in Upcoming Quarters
In upcoming quarters, key catalysts to watch include: (1) the pace of adoption and revenue contribution from onsemi’s new vertical GaN and advanced analog products; (2) signs of a broader restocking cycle in Automotive and Industrial markets; (3) the impact of recent acquisitions like Vcore on the company’s ability to deliver comprehensive solutions for AI data centers; and (4) execution in China and continued progress on margin expansion initiatives.
onsemi currently trades at $48, down from $50.04 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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