onsemi Reports $1.7223 Billion in Revenue and Agrees to Acquire Ferric
Key Facts
On November 2, onsemi reported third-quarter 2026 results, with revenue of $1.7223 billion, up 11% year over year and 7% from the previous quarter. Diluted earnings per share rose to $0.79 on a GAAP basis and $0.90 on an adjusted basis, compared with $0.63 on both measures in the third quarter of 2025. Net income attributable to the company was $313.9 million on a GAAP basis and $354 million on an adjusted basis. A year earlier, the figures were $255 million and $256.3 million, respectively. The CFO said earnings per share grew by more than 40% year over year, compared with 11% revenue growth, attributing the gap to operating leverage. The company also agreed to acquire Ferric, expanding its business supplying power to AI chips.
The company’s margins improved alongside revenue growth, with gross margin at 41.4% on a GAAP basis and 41.2% on an adjusted basis. The CFO said gross margin rose 190 basis points from the previous quarter, marking its fifth consecutive quarter of expansion. Cash generated from operations increased 23% year over year to $516 million. Free cash flow was $489 million, up 31% from the year-earlier period and equal to 28% of revenue. The figures show improved earnings and margins alongside the company’s ability to generate cash during the quarter. CEO Hassane El-Khoury said revenue, gross margin and earnings per share exceeded the midpoint of the company’s guidance range.
AI data centers emerged as a growth driver, with El-Khoury saying revenue from the business rose 39% from the previous quarter and 175% year over year. The company said rising power requirements are accelerating demand in AI data center and industrial markets as customers adopt and increase their use of its products. By business group, revenue for the Power Solutions Group rose 21% year over year. Revenue for the Automotive and Industrial Power Solutions Group grew 2%, while revenue for the Industrial Solutions Group also increased 2% over the same period. The differing rates reflect the clearest annual growth in the Power Solutions Group, while the other two groups posted slower growth. The company links expanding demand to rising power needs in AI and industrial applications.
onsemi linked the Ferric agreement to expanding its opportunities in the market for power needed by AI data centers, and raised its 2030 revenue target for the business by $500 million to more than $3 billion. Ferric specializes in integrated voltage-regulator chips that help power AI processors efficiently. The company had discussed buying Ferric for close to $1 billion, according to a report published by The Information on October 27, which attributed the information to people familiar with the matter. But onsemi’s statement confirming the agreement on November 2 did not disclose a price. The agreement comes as the company is also working on its Synaptics deal, which was amended on October 1 to $123 in cash per share, for a total value of about $5.7 billion. The previous agreement valued the Synaptics deal at about $7 billion.
The stock’s moves before the results announcement do not reflect a response to these figures: ON shares closed at $75.24 on October 29 and then at $71.67 on October 30. The October 30 close came before the announcement of third-quarter results and the Ferric agreement on November 2. In the October 30 session, the Nasdaq fell 2.86%, amid broad weakness in U.S. technology stocks. The index’s move provides market context for the stock’s decline that day, but the closing prices cited do not establish what caused the change. onsemi’s results conference call was scheduled for November 2 at 5 p.m. Eastern time. For the fourth quarter of 2026, the company forecast revenue of between $1.715 billion and $1.815 billion and adjusted diluted earnings per share of between $0.95 and $1.07.