onsemi Revenue Rises 11% to $1.7223 Billion as Data Center Sales Jump 175%
Key Facts
onsemi reported on November 2 results for the third quarter ended October 2, with revenue of $1.7223 billion, up 11% year over year and 7% from the previous quarter, in a performance boosted by a jump in AI data center sales. Revenue was $1.6035 billion in the second quarter and $1.5509 billion in the same period of 2025. Diluted earnings per share were $0.79 on a GAAP basis and $0.90 on a non-GAAP basis, compared with $0.56 and $0.74, respectively, in the previous quarter. The CEO said rising power requirements are accelerating demand in AI and industrial markets. Data center revenue rose 39% quarter over quarter and 175% year over year, according to the company’s statement.
Revenue and adjusted earnings per share came in above the midpoint of the previous guidance ranges, which set revenue at between $1.65 and $1.75 billion and earnings per share at between $0.81 and $0.93. The company also said revenue, gross margin and earnings per share exceeded the midpoint of their respective ranges for the quarter. Gross margin was 41.4% on a GAAP basis and 41.2% on a non-GAAP basis. Adjusted gross margin widened by 190 basis points from the previous quarter, marking improvement for the fifth consecutive quarter. On a year-over-year basis, earnings per share were $0.63 in the third quarter of 2025 under both measures, putting the latest quarter’s results above the year-earlier levels.
The Power Solutions Group (PSG) led growth among the company’s segments, with revenue of $889.9 million, up 21% year over year. The Analog and Power Management Group (AMG) posted revenue of $597.3 million, up 2% from the same period. The Intelligent Sensing Group (ISG) had revenue of $235.1 million, up 2%. The figures reflect differing growth rates, with PSG’s increase far outpacing the gains in the other two segments. The segment results align with the company’s focus on demand tied to rising power needs in data center and industrial applications, its CEO said.
The company had described AI data center activity in the second quarter as its fastest-growing business and said at the time that it expected its revenue to more than double during 2026. In a separate announcement on November 2, onsemi raised its 2030 revenue target for the business by $500 million to more than $3 billion. The company linked the expansion to its planned acquisition of Ferric, which it described as an innovator in integrated voltage regulator (IVR) technology, with technology that enhances power delivery to AI processors. onsemi said the integrated technology can reduce board area by between 50% and 70% compared with traditional discrete voltage regulation solutions. Ferric has a portfolio of more than 40 patents, and the company expects about 50 of its employees, most of them in New York and Silicon Valley, to join.
The Ferric deal includes $600 million in cash at closing, plus up to $175 million in cash tied to the achievement of revenue milestones. onsemi said it would fund the deal from available cash and expected to complete it before the end of 2026. It also expects the acquisition to have no material near-term financial impact. The value of the contingent additional consideration ties part of the deal price to the achievement of specified revenue targets. The increase in the 2030 target follows strong annual and quarterly growth in data center activity in the third quarter, according to the company’s reported figures.
Cash generated from operations was $516 million in the third quarter, up 23% from the same period a year earlier. Free cash flow reached $489 million, up 31% year over year and representing 28% of revenue. In a related development, onsemi amended the terms of its planned acquisition of Synaptics to about $5.7 billion in cash, compared with a previous $7 billion stock deal. The company said the revised structure should be immediately accretive to non-GAAP earnings per share. The results announcement thus combines improved cash generation with a change in the consideration structure for the Synaptics deal, without linking the quarterly cash flows alone to funding the transaction.
For the fourth quarter, onsemi expects revenue of between $1.715 billion and $1.815 billion, non-GAAP gross margin of between 41.5% and 43.5%, and diluted earnings per share on the same basis of between $0.95 and $1.07. The revenue range is around the third-quarter level of $1.7223 billion, while the expected earnings-per-share range is above the third-quarter result of $0.90 on a non-GAAP basis. The company had scheduled its results call for November 2 at 5 p.m. Eastern Time. Its stock closed at $71.67 on October 30, one trading day before the results announcement. That price does not include the stock’s movement after the results were released.