AI Takeaway
ON Semiconductor (ON) reported a sharp FY2025 earnings decline, with revenue falling 15.3% to $6.0B and net income collapsing 92.3% to $121M, driven by rising costs and severe margin compression, even as the company maintained strong liquidity and aggressively returned capital via share buybacks.
Revenue
$6B
-15.35% YoY
EPS (Basic)
$0.29
-92.12% YoY
Gross Margin
33.1%
-12.32% YoY
Operating Income
$84.2M
-95.24% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
Total revenue fell 15.3% year-over-year to $5.995B in FY2025 from $7.082B in FY2024, reflecting broad-based demand weakness likely tied to inventory corrections in key end markets such as automotive and industrial.
Source: Source: 10-K Income Statement
Gross profit dropped 38.3% to $1.984B while cost of revenue actually rose 3.8% to $4.012B, causing gross margin to collapse from 45.4% to 33.1% — a 12.3 percentage point deterioration that signals significant underutilization of manufacturing capacity and pricing pressure.
Source: Source: 10-K Income Statement
Operating income plummeted 95.2% to just $84.2M in FY2025 from $1.768B in FY2024, with operating margin shrinking from 25.0% to just 1.4%, reflecting the combined impact of lower revenues and a fixed cost base that could not be reduced proportionally.
Source: Source: 10-K Income Statement & Key Ratios
2 more insights available
Upgrade to unlockCost of revenue rose 3.8% to $4.012B even as revenue fell 15.3%, indicating that ON's largely fixed semiconductor fabrication cost base creates severe earnings leverage on the downside. If revenue does not recover, sustained underutilization of fabs will continue to compress margins well below historical levels.
Source: Source: 10-K Income Statement
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $0.64 versus the $0.64 analyst consensus — a -0.2% miss for FY2025.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $6B | $7.08B | -15.35% |
Cost of Revenue | $4.01B | $3.87B | +3.76% |
Gross Profit | $1.98B | $3.22B | -38.31% |
Operating Income | $84.2M | $1.77B | -95.24% |
Net Income | $121M | $1.57B | -92.31% |
EPS (Basic) | $0.29 | $3.68 | -92.12% |
EPS (Diluted) | $0.29 | $3.63 | -92.01% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $12.52B | $14.09B | -11.11% |
Current Assets | $5.82B | $6.75B | -13.76% |
Total Liabilities | $4.83B | $5.28B | -8.40% |
Current Liabilities | $1.29B | $1.33B | -3.53% |
Stockholders' Equity | $7.67B | $8.8B | -12.77% |
Cash & Equivalents | $2.15B | $2.69B | -20.20% |
Long-Term Debt | $2.98B | $3.35B | -10.92% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $1.76B | $1.91B | -7.69% |
Investing Cash Flow | $-538.5M | $-1.01B | +46.67% |
Financing Cash Flow | $-1.76B | $-683.8M | -157.94% |
Share Buybacks | $1.38B | $654.1M | +110.61% |
D&A | $686M | $642.9M | +6.70% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 33.1% | 45.4% | -12.32% |
Operating Margin | 1.4% | 25.0% | -23.55% |
Net Margin | 2.0% | — | — |
ROE | 1.6% | — | — |
ROA | 1.0% | — | — |
Current Ratio | $4.522 | — | — |
Debt to Equity | $0.63 | — | — |
Other companies in Semiconductors
ON Semiconductor's FY2025 results were severely disappointing, with net income falling 92.3% to $121M from $1.573B in FY2024 and diluted EPS dropping from $3.63 to $0.29. The collapse was driven by a 15.3% revenue decline to $5.995B combined with rising cost of revenue, which caused gross margin to fall from 45.4% to 33.1%.
ON's revenue declined 15.3% to $5.995B in FY2025, likely due to inventory corrections and demand weakness in its key automotive and industrial end markets. Compounding the revenue drop, cost of revenue actually increased 3.8% to $4.012B, reflecting the fixed-cost nature of semiconductor manufacturing.
Despite the dramatic earnings decline, ON Semiconductor's financial position remains solid — the company holds $2.148B in cash, has a current ratio of 4.52, and generated $1.760B in operating cash flow in FY2025. Long-term debt of $2.981B is manageable relative to its $7.673B equity base and strong cash generation.
Yes, ON Semiconductor significantly accelerated its share repurchase program in FY2025, spending $1.378B on buybacks — more than double the $654.1M spent in FY2024, a 110.6% increase. This aggressive capital return occurred even as net income fell to just $121M, reflecting management's confidence in the company's long-term value.
The most significant risks include the inability to reduce fixed manufacturing costs fast enough if revenues remain depressed, continued exposure to cyclical automotive and industrial markets that drove the FY2025 downturn, and the financial flexibility trade-off created by spending $1.378B on buybacks while cash declined 20.2% to $2.148B. A sustained revenue recovery is critical to restoring the company's historically strong margins.