ON Semiconductor reported a Q4 2025 top-line in line with guidance and provided a Q1 2026 outlook that signals the beginning of a recovery in its core automotive and industrial markets. Management's tone was increasingly optimistic, citing stronger order trends, an end to inventory digestion, and a rapidly growing AI data center business, while highlighting disciplined execution on cost and margin initiatives. Q4 2025 revenue of $1.53B, non-GAAP EPS of $0.64, both at or above guidance midpoints, with non-GAAP gross margin at 38.2%.
ON Semiconductor reported a Q4 2025 top-line in line with guidance and provided a Q1 2026 outlook that signals the beginning of a recovery in its core automotive and industrial markets. Management's tone was increasingly optimistic, citing stronger order trends, an end to inventory digestion, and a rapidly growing AI data center business, while highlighting disciplined execution on cost and margin initiatives. Q4 2025 revenue of $1.53B, non-GAAP EPS of $0.64, both at or above guidance midpoints, with non-GAAP gross margin at 38.2%.
AI data center revenue exceeded $250 million in 2025, is expected to grow high teens in Q1 2026, and management sees it as a fast-scaling opportunity with expanding content per rack. They are targeting high-voltage rails and vCore (TLVR) designs, with a broadening portfolio.
Guidance · revenue to $1.49B
Management signals improved visibility and stabilization, with 'more expedites than 90 days ago' and Q1 marking the first year-over-year revenue growth since the downturn, but they remain guarded about a full recovery.
Reported gross margin was 34.92%, reinforcing the quarter's better-than-guided profitability.
AI data center revenue exceeded $250 million in 2025, is expected to grow high teens in Q1 2026, and management sees it as a fast-scaling opportunity with expanding content per rack. They are targeting high-voltage rails and vCore (TLVR) designs, with a broadening portfolio.
Automotive inventory digestion is largely behind them. Management signals improved visibility and stabilization, with 'more expedites than 90 days ago' and Q1 marking the first year-over-year revenue growth since the downturn, but they remain guarded about a full recovery.
Capex is expected to be $35-45 million in Q1 2026, down from $69 million in Q4 2025, reflecting that large capacity investments are behind them. Continued FabRite factory rationalization will lower depreciation by $45-50 million in 2026 and drive margin expansion.
Management signals improved visibility and stabilization, with 'more expedites than 90 days ago' and Q1 marking the first year-over-year revenue growth since the downturn, but they remain guarded about a full recovery.
“Expedites, we're seeing more expedites than we did 90 days ago. So all of the metrics that you mentioned are exactly what is giving us that confidence in the outlook.”
“we're not seeing the replenishment yet. But this is strong signals for stabilization in the market.”
“At the UPS stage, we want a high-end design with a leading US power supplier that cuts their system footprint by about 50% using our SICK power module”
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| Capex | FY2026 Q1 | $35–$45 | $40 | GUIDED |
| EPS | FY2026 Q1 | $0.56–$0.66 | $0.61 | GUIDED |
| Gross margin | FY2026 Q1 | 37.5%–39.5% | 38.5% | GUIDED |
| Revenue | FY2026 Q1 | $1.44B–$1.54B | $1.49B | GUIDED |
| Issued | Metric | Target | Guide | Actual | Outcome |
|---|---|---|---|---|---|
| FY2026 Q1 | EPS | FY2026 Q2 | $0.65–$0.77 | $0.74 | Met / beat |
| FY2026 Q1 | Gross margin | FY2026 Q2 | 38%–40% | 38.43% | Met / beat |
| FY2026 Q1 | Revenue | FY2026 Q2 | $1.535B–$1.635B | $1.6035B | Met / beat |
| FY2025 Q3 | EPS | FY2025 Q4 | $0.57–$0.67 | $0.64 | Met / beat |
| FY2025 Q3 | Gross margin | FY2025 Q4 | 37%–39% | 34.92% | Missed |
| FY2025 Q3 | Revenue | FY2025 Q4 | $1.48B–$1.58B | $1.5301B | Met / beat |
Dexcom has selected ON's low-power analog front end for its CGMs, indicating a direct supply relationship and design win in a high-value medical application.
“with customers like Dexcom, who designed our low-power analog front end and their continuous glucose monitors, or CGM.”
… year-over-year, reinforcing Treo as a key contributor to our long-term mixed shift towards high-margin product revenue and supporting our new design funnel, which is now over a billion dollars. TREO is already being designed into a broad set of automotive applications, including zonal architectural, ultrasonic sensors, and LED drivers, and we are proliferating into industrial applications like HVAC, energy storage systems, or ESS, and medical, with customers like Dexcom, who designed our low-power analog front end and their continuous glucose monitors, or CGM. We broaden our leadership in wide bandgap technologies by introducing our lateral and vertical GAN or VGAN strategy with a differentiated product roadmap, solving our customers' problems at favorable margins. This year, we are preparing to sample more than 30 new GAN devices spanning 40 to 1,200 volts, including both discrete devices and integrated driver plus GAN solutions. To deliver lateral GAN to the market, we announced new foundry partnership to broaden regional supply options, giving us the product breadth and manufacturing flexibility to serve high-growth applications with revenue beginning in 2026. For VGAN, …
GM is partnering with ON on vertical GaN based electric drive systems, signaling a long-term design win that could lead to significant content growth in GM's EVs.
“For VGAN, we are already collaborating with GM on the development of electric drive systems.”
… solving our customers' problems at favorable margins. This year, we are preparing to sample more than 30 new GAN devices spanning 40 to 1,200 volts, including both discrete devices and integrated driver plus GAN solutions. To deliver lateral GAN to the market, we announced new foundry partnership to broaden regional supply options, giving us the product breadth and manufacturing flexibility to serve high-growth applications with revenue beginning in 2026. For VGAN, we are already collaborating with GM on the development of electric drive systems. As a reminder, VGAN is built on proprietary GAN-on-GAN technology, is manufactured in our fab in the U.S., and positions us for multi-year competitive advantage in high voltage and high power density applications spanning AI data centers, EVs, renewables, and aerospace defense and security. We expect first vegan revenue in 2027. Turning to the demand environment, we are seeing seasonal patterns and are encouraged by improving order trends across our core markets contributing to fourth quarter revenue of $1.53 billion, non-GAAP gross margin of 38.2%, and earnings per share of 64 cents, both exceeding the midpoint of our guidance. …
Sungrow is adopting ON's next-gen hybrid power modules for its global platform, a meaningful AI data center and energy infrastructure design win.
“with a first win at SunGrow in their global platform.”
… positioned to deliver the power efficiency requirements our customers need. Going through the power tree, starting outside the data center, we lead the utility string ESS market with more than 50% worldwide share. We are ramping our IGBT hybrid power module to multiple global customers and seeing strong interest in our next generation SICK MOSFET hybrid power module, delivering even higher power efficiency, nearing 99.5%, and the highest power density at 430 kilowatts, with a first win at SunGrow in their global platform. We are already sampling our 1,200-volt ultra-low RDS-6 JFET for AI data center platforms, and our AI data center funnel is increasing as AI workloads scale and more platforms move to higher voltage bus architectures, expanding opportunities from power supplies to battery backup disconnect and hot swaps. At the UPS stage, we want a high-end design with a leading US power supplier that cuts their system footprint by about 50% using our SICK power module to increase power density and improve thermal performance. We expect production volumes to begin this quarter. At the rack level, we have secured designs for our SICK and Silicon MOSFET and our SICK JFET in …
Delta has secured designs using ON's power devices in its BBU and PSU systems, highlighting ON's role in Delta's AI data center power offerings.
… scale and more platforms move to higher voltage bus architectures, expanding opportunities from power supplies to battery backup disconnect and hot swaps. At the UPS stage, we want a high-end design with a leading US power supplier that cuts their system footprint by about 50% using our SICK power module to increase power density and improve thermal performance. We expect production volumes to begin this quarter. At the rack level, we have secured designs for our SICK and Silicon MOSFET and our SICK JFET in both the BBU and PSU systems with Delta, LightOn and Great Wall to serve both their Western and China customers as the AI ecosystem continues to build out. At the XPU board level, we extended our reach by securing several next-gen design wins with our multi-phase controllers, smart power stages and point-of-load devices. We began sampling our dual 5x5 vCore solutions, as well as two-phase power modules using a next-generation regulator architecture that dramatically improves transient response for AI and server processors, referred to as TLVR for trans-inductor voltage regulator. As we integrate our recently acquired vCore assets, we are strengthening our portfolio and …
ON is partnering with Innoscience and GlobalFoundries for GaN switching devices, broadening its regional supply options and product breadth.
Yes, thank you. The first question I wanted to ask a bit more about GAN and specifically the manufacturing strategy. I think what you said there is that the TRIO product you would do in-house, but what about the GAN switches? What's the manufacturing strategy there? And, you know, where do you think you are from a competitive standpoint in that technology?
Yeah, so if I understood correct, so from the GAN switches, this is what we have two sources. we have an engagement or a partnership with InnoScience and a partnership with Global Foundries. So we'll be doing the switches or the switching element with those partners and then combining it with, call it the control and drive on the Trejo side of it, combined in a smart switch. So the customer only sees a smart switch as far as the market from a OnSami product. So We'll be going to market with 100% on semi-product with a, call it a foundry model, bringing the switches from third-party global and inno science. So that's our go-to-market today. And with that, we have a full coverage of what the GAN market needs and what customers are expecting.
ON's AI data center revenue is guiding to ~high teens sequential growth in Q1 2026, a strong signal for AI power chain demand. — This indicates that the AI power build-out is accelerating, contradicting any signs of a slowdown in AI infrastructure investment.
Sorry, it's Blaine Curtis. Thanks for taking the question. I just want to ask on the AI data center, obviously a huge focus. You did throw out a kind of target for the year that you exceeded. I was just curious thoughts about growth in that segment for 2026.
We do expect that our AI data center revenue in Q1 will grow high teens percentage-wise. to give you an indication of our trajectory here.
ON is experiencing an increase in expedite requests and better book-to-bill, signaling a firming demand environment across the semiconductor supply chain. — An increase in expedites is a leading indicator of a turn in the inventory cycle, possibly ahead of an industry-wide restock.
Despite signs of stabilization, ON is not seeing automotive restocking, which could lead to a sharp demand spike and constraints later in 2026. — Lean inventory in the automotive channel could lead to a sudden surge in orders, benefiting suppliers with flexible capacity, but also risks panic buying.
Hey, guys. Thanks for taking my question. You're clearly signaling better revenue visibility, albeit met with some seasonal headwind and some business exits in the first quarter. But maybe if you can share with us a few more specifics on the forward-looking revenue KPIs like you know, beginning of quarter starting backlog or, you know, any sort of customer expedites or just any sort of revenue visibility change that you've seen in just the last three months?
Yeah, yeah, this is Sanj. So like you said, visibility or kind of the outlook is better sitting here than we were 90 days ago. And this is across all the KPIs. Book-to-bill is trending up. We are walking into the quarter with less turns needed than the prior quarter. Expedites, we're seeing more expedites than we did 90 days ago. So all of the metrics that you mentioned are exactly what is giving us that confidence in the outlook or improved visibility in the outlook. What we're talking about, for example, is we're not seeing the replenishment yet. But this is strong signals for stabilization in the market. And you've seen going back to seasonality, inclusive of the exit, highlights the strength of our base business, which is what we've been investing in.
ON's silicon carbide JFET wins for AI data center power designs are ramping production at key customers like Delta, indicating a significant supply chain shift toward high-voltage power distribution.
… power efficiency, nearing 99.5%, and the highest power density at 430 kilowatts, with a first win at SunGrow in their global platform. We are already sampling our 1,200-volt ultra-low RDS-6 JFET for AI data center platforms, and our AI data center funnel is increasing as AI workloads scale and more platforms move to higher voltage bus architectures, expanding opportunities from power supplies to battery backup disconnect and hot swaps. At the UPS stage, we want a high-end design with a leading US power supplier that cuts their system footprint by about 50% using our SICK power module to increase power density and improve thermal performance. We expect production volumes to begin this quarter. At the rack level, we have secured designs for our SICK and Silicon MOSFET and our SICK JFET in both the BBU and PSU systems with Delta, LightOn and Great Wall to serve both their Western and China customers as the AI ecosystem continues to build out. At the XPU board level, we extended our reach by securing several next-gen design wins with our multi-phase controllers, smart power stages and point-of-load devices. We began sampling our dual 5x5 vCore solutions, as well as two-phase power …