onsemi Reports Third Quarter 2026 Results Earnings growth outpaces revenue
onsemi Reports Third Quarter 2026 Results Earnings growth outpaces revenue growth by 4x year-over-year SCOTTSDALE, Ariz., – November 2, 2026 – onsemi (the “Company”) (Nasdaq: ON) today announced its third quarter 2026 results with the following highlights:
• GAAP diluted earnings per share of $0.79 and non-GAAP diluted earnings per share $0.90
“Increasing power requirements are driving accelerated demand in our AI data center and industrial end markets, as customers adopt and ramp our differentiated products,” said Hassane El-Khoury, President and CEO of onsemi. “Our third quarter revenue, gross margin and earnings per share exceeded the midpoint of our guidance, while AI data center revenue grew 39% sequentially and 175% year-over-year.” “Gross margin expanded for the fifth consecutive quarter, increasing 190 basis points sequentially. Our results continue to demonstrate the operating leverage in our model, with earnings per share growing more than 40% year-over-year on 11% revenue growth,” said Thad Trent, EVP and CFO of onsemi. “As we execute our ongoing fab right initiatives and ramp new differentiated products, we are driving further margin and earnings expansion, positioning onsemi for durable, profitable growth.” Business Highlights:
Announced anagreement to acquire Ferric,establishing onsemi as a leader • in next generation AI processor power delivery and raising the AI data center 2030 revenue target by $500 million to greater than $3 billion
Announced revised terms for plannedacquisition of Synaptics,for • approximately $5.7 billion in cash compared to $7 billion in stock for the prior agreement, which should make the transaction immediately accretive to non-GAAP EPS
Entered into a strategic technology engagement withSubarufor early access • to the newly introducedEmbedded Power Platform (EPP),a breakthrough power architecture integrating heterogeneous technologies
Sungrowadopted onsemi’s latest EliteSiC silicon carbide (SiC) hybrid • power module technology which helps energy providers meet growing electricity demand from AI, renewable energy and electrification
Selected financial results for the quarter are shown below with comparable periods (unaudited):
FOURTH QUARTER 2026OUTLOOK The following table outlines onsemi’s projected fourth quarter of 2026GAAP and non-GAAP outlook.
Total onsemi Special Total onsemi GAAP Items ** Non-GAAP*** Revenue $1,715 to $1,815 - $1,715 to $1,815 million million Gross Margin 41.4% to 43.4% 0.1% 41.5% to 43.5% Operating $331 to $346 $29 million $303 to $318 Expenses million million Other Income and Expense -$27 million - -$27 million (including interest), net Diluted Earnings $0.88 to $1.00 $0.07 $0.95 to $1.07 Per Share Diluted Shares 397 million 5 million 392 million Outstanding *
Diluted shares outstanding can vary as a result of, among other things, the vesting of restricted stock units, the incremental dilutive shares from the convertible notes, and the repurchase or the issuance of stock or convertible notes or the sale of treasury shares. In periods when the quarterly average stock price per share exceeds $52.97 for the 0% Convertible Senior Notes due 2027 (the “0% Notes”), $103.87 for the 0.50% Convertible Senior Notes due 2029 (the “0.50% Notes”), and $161.30 for the 0% Convertible Senior Notes due 2031 (the “2031 0% Notes”), the non-GAAP diluted share count and non-GAAP net income per share include the anti-dilutive impact of the hedge transactions entered concurrently with the 0% Notes, the 0.50% * Notes, and the 2031 0% Notes, respectively. At an average stock price per share between $52.97 and $74.34 for the 0% Notes, $103.87 and $156.78 for the 0.50% Notes, and $161.30 and $211.54 for the 2031 0% Notes, the hedging activity offsets the potentially dilutive effect of the 0% Notes, the 0.50% Notes, and the 2031 0% Notes, respectively. In periods when the quarterly average stock price exceeds $74.34 for the 0% Notes, $156.78 for the 0.50% Notes, and $211.54 for the 2031 0% Notes, the dilutive impact of the warrants issued concurrently with such notes is included in the diluted shares outstanding. GAAP and non-GAAP diluted share counts are based on either the previous quarter's average stock price or the stock price as of the last day of the previous quarter, whichever is higher.
Special items may include: amortization of acquisition-related intangibles; expensing of appraised inventory fair market value step-up; restructuring-related cost of revenue charges; non-recurring facility costs; in-process research and development expenses; restructuring, asset impairments and other, net; goodwill impairment charges; gains and losses on debt prepayment; actuarial (gains) losses on pension plans and other pension benefits; and certain other special items, as necessary. These special items are out of our control and could change significantly from period ** to period. As a result, we are not able to reasonably estimate and separately present the individual impact or probable significance of these special items, and we are similarly unable to provide a reconciliation of the non-GAAP measures. The reconciliation that is unavailable would include a forward-looking income statement, balance sheet and statement of cash flows in accordance with GAAP. For this reason, we use a projected range of the aggregate amount of special items in order to calculate our projected non-GAAP operating expense outlook.
We believe these non-GAAP measures provide important supplemental information to investors. We use these measures, together with GAAP measures, for internal managerial purposes and as a means to evaluate period-to-period comparisons. However, we do not, and you should not, rely on non-GAAP financial measures alone as measures of our performance. We believe that non-GAAP financial measures reflect an additional way of viewing *** aspects of our operations that, when taken together with GAAP results and the reconciliations to corresponding GAAP financial measures that we also provide in our releases, provide a more complete understanding of factors and trends affecting our business. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures, even if they have similar names.
TELECONFERENCE onsemi will host a conference call for the financial community at 5 p.m. Eastern Time (ET) on November 2, 2026 to discuss this announcement and onsemi’s third quarter 2026 results. The Company will also provide a real-time audio webcast of the teleconference on the Investor Relations page of its website at http://www.onsemi.com. The webcast replay will be available at this site approximately one hour following the live broadcast and will continue to be available for approximately 30 days following the conference call. Investors and interested parties can also access the conference call by pre-registering here . 3 About onsemi onsemi (Nasdaq: ON) delivers intelligent power and sensing technologies that enable electrification, energy efficiency, safety, and automation across automotive, industrial, and AI data center end-markets. With a highly differentiated and innovative product portfolio, onsemi helps customers solve complex challenges to achieve higher efficiency, improved performance, and lower system cost, while supporting a safer, cleaner, and more energy-efficient world. onsemiis part of the S&P 500 ®index. Learn more about onsemiat www.onsemi.com. # # # onsemi and the onsemi logo are trademarks of Semiconductor Components Industries, LLC. All other brand and product names appearing in this document are registered trademarks or trademarks of their respective holders. Although the Company references its website in this news release, information on the website is not to be incorporated herein.
Krystal Heaton Parag Agarwal Director, Head of Public Relations Vice President - Investor Relations & Corporate Development onsemi onsemi (480) 242-6943 (602) 244-3437 Krystal.Heaton@onsemi.com investor@onsemi.com
This document includes “forward-looking statements,” as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included or incorporated in this document could be deemed forward-looking statements, particularly statements about the future financial performance of onsemi, including financial guidance for the fourth quarter of 2026. Forward-looking statements are often characterized by the use of words such as “believes,” “estimates,” “expects,” “projects,” “may,” “will,” “intends,” “plans,” “anticipates,” “should” or similar expressions or by discussions of strategy, plans or intentions. All forward-looking statements in this document are made based on our current expectations, forecasts, estimates and assumptions and involve risks, uncertainties and other factors that could cause results or events to differ materially from those expressed in the forward-looking statements. Certain factors that could affect our future results or events are described under Part I, Item 1A “Risk Factors” in the 2025 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 9, 2026 (the “2025 Form 10-K”) and from time to time in our other SEC reports. Readers are cautioned not to place undue reliance on forward-looking statements. We assume no obligation to update such information, which speaks only as of the date made, except as may be required by law. Investing in our securities involves a high degree of risk and uncertainty, and you should carefully consider the trends, risks and uncertainties described in this document, our 2025 Form 10-K and other reports filed with or furnished to the SEC before making any investment decision with respect to our securities. If any of these trends, risks or uncertainties actually occurs or continues, our business, financial condition or operating results could be materially adversely affected, the trading prices of our securities could decline, and you could lose all or part of your investment. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement. 4 ON SEMICONDUCTOR CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share and percentage data)
5 ON SEMICONDUCTOR CORPORATION UNAUDITED CONSOLIDATED BALANCE SHEETS (in millions)
6 ON SEMICONDUCTOR CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions)
7 ON SEMICONDUCTOR CORPORATION RECONCILIATION OF GAAP VERSUS NON-GAAP DISCLOSURES (in millions, except per share and percentage data)
8 ON SEMICONDUCTOR CORPORATION RECONCILIATION OF GAAP VERSUS NON-GAAP DISCLOSURES (Continued) (in millions, except per share and percentage data)
Certain of the amounts in the above tables may not total due to rounding of individual amounts. 9 ON SEMICONDUCTOR CORPORATION RECONCILIATION OF GAAP VERSUS NON-GAAP DISCLOSURES (Continued) (in millions, except per share and percentage data)
SHARE-BASED COMPENSATION Total share-based compensation related to restricted stock units, stock grant awards and the employee stock purchase plan was as follows:
10 NON-GAAP MEASURES To supplement the consolidated financial results prepared in accordance with GAAP, onsemi uses certain non-GAAP measures, which are adjusted from the most directly comparable GAAP measures to exclude items related to the amortization of acquisition-related intangibles, restructuring- related cost of revenue charges, expensing of appraised inventory fair market value step-up, inventory valuation adjustments, in-process research and development expenses, restructuring, asset impairments and other, net, goodwill impairment charges, gains and losses on debt prepayment, non-cash interest expense, actuarial (gains) losses on pension plans and other pension benefits, third party acquisition and divestiture-related costs, tax impact of these items and certain other non-recurring items, as necessary. Management does not consider the effects of these items in evaluating the core operational activities of onsemi. Management uses these non-GAAP measures internally to make strategic decisions, forecast future results and evaluate onsemi’s current performance. In addition, the Company believes that most analysts covering onsemi use the non-GAAP measures to evaluate onsemi’s performance. Given management’s and other relevant parties’ use of these non-GAAP measures, onsemi believes these measures are important to investors in understanding onsemi’s current and future operating results as seen through the eyes of management. In addition, management believes these non-GAAP measures are useful to investors in enabling them to better assess changes in onsemi’s core business across different time periods. These non-GAAP measures are not prepared in accordance with, and should not be considered alternatives or necessarily superior to, GAAP financial data and may be different from non-GAAP measures used by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures, even if they have similar names. Non-GAAP Gross Profit and Gross Margin The use of non-GAAP gross profit and gross margin allows management to evaluate, among other things, the gross profit and gross margin of the Company’s core businesses and trends across different reporting periods on a consistent basis, independent of non-cash and non-recurring items including, generally speaking, restructuring-related cost of revenue charges, amortization of intangible assets, amortization of appraised inventory fair market value step-up, impact of business wind down and non-recurring facility costs. In addition, it is an important component of management’s internal performance measurement and incentive and reward process as it is used to assess the current and historical financial results of the business and for strategic decision making, preparing budgets, obtaining targets and forecasting future results. Management presents this non-GAAP financial measure to enable investors and analysts to evaluate our operating performance independent of certain non-cash items and the effects of certain variables unrelated to our overall operating performance. Non-GAAP Operating Income and Operating Margin The use of non-GAAP operating income and operating margin allows management to evaluate, among other things, the operating income and operating margin of the Company’s core businesses and trends across different reporting periods on a consistent basis, independent of non-cash and non-recurring items including, generally speaking, restructuring-related cost of revenue charges, expensing of appraised inventory fair market value step-up, impact of business wind down, non-recurring facility costs, amortization and impairments of intangible assets, third party acquisition and divestiture-related costs, restructuring charges, asset impairments and certain other special items as necessary. In addition, it is an important component of management’s internal performance measurement and incentive and reward process as it is used to assess the current and historical financial results of the business and for strategic decision making, preparing budgets, obtaining targets and forecasting future results. Management presents this non-GAAP financial measure to enable investors and analysts to evaluate our operating performance independent of certain non-cash items and the effects of certain variables unrelated to our overall operating performance. Non-GAAP Net Income Attributable to ON Semiconductor Corporation and Non-GAAP Diluted Earnings Per Share The use of non-GAAP net income attributable to ON Semiconductor Corporation and non-GAAP diluted earnings per share allows management to evaluate the operating results of onsemi’s core businesses and trends across different reporting periods on a consistent basis, independent of non-cash and non-recurring items including, generally, the restructuring related cost of revenue charges, amortization and impairments of intangible assets, expensing of appraised inventory fair market value step-up, impact of business wind down, non-recurring facility costs, restructuring, asset impairments, gains and losses on debt prepayment, actuarial (gains) losses on pension plans and other pension benefits, third party acquisition and divestiture-related costs, discrete tax items and other non-GAAP tax adjustments and certain other special items, as necessary. In addition, these measures are important components of management’s internal performance measurement and incentive and reward process, as they are used to assess the current and historical financial results of the business and for strategic decision making, preparing budgets, setting targets and forecasting future results. For our non-GAAP reporting we apply a projected, normalized non-GAAP effective tax rate of 15% for 2026 and 16% for 2025. We calculate this non-GAAP effective tax rate on an annual basis. We may update this non-GAAP effective tax rate at any time for a variety of reasons, including, but not limited to, the rapidly evolving global tax environment, significant changes in our geographic earnings mix or changes to our strategy or business operations. Management presents these non-GAAP financial measures to enable investors and analysts to understand the results of operations of onsemi’s core businesses and, to the extent comparable, to compare our results of operations on a more consistent basis against those of other companies in our industry. 11 NON-GAAP MEASURES (Continued) Free Cash Flow The use of free cash flow allows management to evaluate, among other things, the ability of the Company to make interest or principal payments on its debt. Free cash flow is defined as the difference between cash flow from operating activities and capital expenditures disclosed under investing activities in the consolidated statement of cash flows.Free cash flow is not an alternative to cash flow from operating activities as a measure of liquidity. It is an important component of management’s internal performance measurement and incentive and reward process as it is used to assess the current and historical financial results of the business and for strategic decision making, preparing budgets, obtaining targets and forecasting future results. Management presents this non-GAAP financial measure to enable investors and analysts to evaluate our financial performance independent of the cash capital expenditures. Non-GAAP Diluted Share Count The use of non-GAAP diluted share count allows management to evaluate, among other things, the potential dilution due to the outstanding restricted stock units excluding the dilution from the convertible notes that is covered by hedging activity up to a certain threshold. In periods when the quarterly average stock price per share exceeds $52.97 for the 0% Notes, $103.87 for the 0.50% Notes, and $161.30 for the 2031 0% Notes, the non-GAAP diluted share count includes the anti-dilutive impact of the Company’s hedge transactions issued concurrently with the 0% Notes, the 0.50% Notes, and the 2031 0% Notes, respectively. At an average stock price per share between $52.97 and $74.34 for the 0% Notes, $103.87 and $156.78 for the 0.50% Notes, and $161.30 and $211.54 for the 2031 0% Notes, the hedging activity offsets the potentially dilutive effect of the 0% Notes, the 0.50% Notes, and the 2031 0% Notes, respectively. In periods when the quarterly average stock price exceeds $74.34 for the 0% Notes, $156.78 for the 0.50% Notes, and $211.54 for the 2031 0% Notes, the dilutive impact of the warrants issued concurrently with such notes is included in the diluted shares outstanding. 12
Full text with the tables
Exhibit 99.1
onsemi Reports Third Quarter 2026 Results Earnings growth outpaces revenue
growth by 4x year-over-year SCOTTSDALE, Ariz., – November 2, 2026 – onsemi (the
“Company”) (Nasdaq: ON) today announced its third quarter 2026 results with the
following highlights:
• Revenue of $1,722 million, increased 11% year-over-year
• GAAP gross margin of 41.4% and non-GAAP gross margin of 41.2%
• GAAP operating margin of 22.0% and non-GAAP operating margin 23.2%
• GAAP diluted earnings per share of $0.79 and non-GAAP diluted earnings
per share $0.90
• Cash from operations increased by 23% year-over-year to $516 million
• Free cash flow of $489 million, grew 31% year-over-year to 28% of revenue
“Increasing power requirements are driving accelerated demand in our AI data
center and industrial end markets, as customers adopt and ramp our
differentiated products,” said Hassane El-Khoury, President and CEO of onsemi.
“Our third quarter revenue, gross margin and earnings per share exceeded the
midpoint of our guidance, while AI data center revenue grew 39% sequentially and
175% year-over-year.” “Gross margin expanded for the fifth consecutive quarter,
increasing 190 basis points sequentially. Our results continue to demonstrate
the operating leverage in our model, with earnings per share growing more than
40% year-over-year on 11% revenue growth,” said Thad Trent, EVP and CFO of
onsemi. “As we execute our ongoing fab right initiatives and ramp new
differentiated products, we are driving further margin and earnings expansion,
positioning onsemi for durable, profitable growth.” Business Highlights:
Announced anagreement to acquire Ferric,establishing onsemi as a leader
• in next generation AI processor power delivery and raising the AI data
center 2030 revenue target
by $500 million to greater than $3 billion
Announced revised terms for plannedacquisition of Synaptics,for
• approximately $5.7 billion in cash compared to $7 billion in stock for
the prior agreement, which should
make the transaction immediately accretive to non-GAAP EPS
Entered into a strategic technology engagement withSubarufor early access
• to the newly introducedEmbedded Power Platform (EPP),a breakthrough power
architecture integrating heterogeneous
technologies
Sungrowadopted onsemi’s latest EliteSiC silicon carbide (SiC) hybrid
• power module technology which helps energy providers meet
growing electricity demand from AI, renewable energy and electrification
Selected financial results for the quarter are shown below with comparable
periods (unaudited):
(R…
and
Net
In…
in Q3 Q2 Q3 Q3 Q2 Q3
mi… GAAP 2026 2026 2025 Non… 2026 2026 2025
──────────────────────────────────────────────────────────────────────────────
Re… $ 1,7… $ 1,6… $ 1,5… $ 1,7… $ 1,60… $ 1,5…
Gr… 41.… 38.… 37.… 41.… 39.3% 38.…
Ma…
Op… 22.… 16.… 17.… 23.… 20.8% 19.…
Ma…
Net
In…
at…
to $ 313… $ 226… $ 255… $ 354… $ 293.8 $ 256…
ON
Se…
Co…
Di…
Ea… $ 0.79 $ 0.56 $ 0.63 $ 0.90 $ 0.74 $ 0.63
Per
Sh…
1 Revenue Summary (in millions) (Unaudited)
Year-…
Busi… Quart… Q3 Q2 Q3 Sequ… Year
Segm… Ended 2026 2026 2025 Chan… Change
──────────────────────────────────────────────────────────────────────────────
PSG $ 889.9 $ 829.0 $ 737.6 7% 21%
AMG 597.3 545.7 583.3 9% 2%
ISG 235.1 228.8 230.0 3% 2%
Total $ 1,722… $ 1,60… $ 1,550… 7% 11%
FOURTH QUARTER 2026OUTLOOK The following table outlines onsemi’s projected
fourth quarter of 2026GAAP and non-GAAP outlook.
Total onsemi Special Total onsemi
GAAP Items ** Non-GAAP***
Revenue $1,715 to $1,815 - $1,715 to $1,815
million million
Gross Margin 41.4% to 43.4% 0.1% 41.5% to 43.5%
Operating $331 to $346 $29 million $303 to $318
Expenses million million
Other Income and
Expense -$27 million - -$27 million
(including
interest), net
Diluted Earnings $0.88 to $1.00 $0.07 $0.95 to $1.07
Per Share
Diluted Shares 397 million 5 million 392 million
Outstanding *
Diluted shares outstanding can vary as a result of, among other things,
the vesting of restricted stock units, the incremental dilutive shares
from the convertible notes, and the repurchase or the
issuance of stock or convertible notes or the sale of treasury shares. In
periods when the quarterly average stock price per share exceeds $52.97
for the 0% Convertible Senior Notes due 2027 (the “0% Notes”), $103.87
for the 0.50%
Convertible Senior Notes due 2029 (the “0.50% Notes”), and $161.30 for
the 0% Convertible Senior Notes due 2031 (the “2031 0% Notes”), the
non-GAAP diluted share count and non-GAAP net income per share include
the anti-dilutive impact of
the hedge transactions entered concurrently with the 0% Notes, the 0.50%
* Notes, and the 2031 0% Notes, respectively. At an average stock price per
share between $52.97 and $74.34 for the 0% Notes, $103.87 and $156.78 for
the 0.50% Notes,
and $161.30 and $211.54 for the 2031 0% Notes, the hedging activity
offsets the potentially dilutive effect of the 0% Notes, the 0.50% Notes,
and the 2031 0% Notes, respectively. In periods when the quarterly
average stock price exceeds
$74.34 for the 0% Notes, $156.78 for the 0.50% Notes, and $211.54 for the
2031 0% Notes, the dilutive impact of the warrants issued concurrently
with such notes is included in the diluted shares outstanding. GAAP and
non-GAAP diluted share
counts are based on either the previous quarter's average stock price or
the stock price as of the last day of the previous quarter, whichever is
higher.
Special items may include: amortization of acquisition-related
intangibles; expensing of appraised inventory fair market value step-up;
restructuring-related cost of revenue charges; non-recurring
facility costs; in-process research and development expenses;
restructuring, asset impairments and other, net; goodwill impairment
charges; gains and losses on debt prepayment; actuarial (gains) losses
on pension plans and other pension
benefits; and certain other special items, as necessary. These special
items are out of our control and could change significantly from period
** to period. As a result, we are not able to reasonably estimate and
separately present the
individual impact or probable significance of these special items, and
we are similarly unable to provide a reconciliation of the non-GAAP
measures. The reconciliation that is unavailable would include a
forward-looking income statement,
balance sheet and statement of cash flows in accordance with GAAP. For
this reason, we use a projected range of the aggregate amount of special
items in order to calculate our projected non-GAAP operating expense
outlook.
2
We believe these non-GAAP measures provide important supplemental
information to investors. We use these measures, together with GAAP
measures, for internal managerial purposes and as a means to
evaluate period-to-period comparisons. However, we do not, and you
should not, rely on non-GAAP financial measures alone as measures of
our performance. We believe that non-GAAP financial measures reflect an
additional way of viewing
*** aspects of our operations that, when taken together with GAAP results
and the reconciliations to corresponding GAAP financial measures that
we also provide in our releases, provide a more complete understanding
of factors and trends
affecting our business. Because non-GAAP financial measures are not
standardized, it may not be possible to compare these financial
measures with other companies’ non-GAAP financial measures, even if
they have similar names.
TELECONFERENCE onsemi will host a conference call for the financial community at
5 p.m. Eastern Time (ET) on November 2, 2026 to discuss this announcement and
onsemi’s third quarter 2026 results. The Company will also provide a real-time
audio webcast of the teleconference on the Investor Relations page of its
website at http://www.onsemi.com. The webcast replay will be available at this
site approximately one hour following the live broadcast and will continue to be
available for approximately 30 days following the conference call. Investors and
interested parties can also access the conference call by pre-registering here .
3 About onsemi onsemi (Nasdaq: ON) delivers intelligent power and sensing
technologies that enable electrification, energy efficiency, safety, and
automation across automotive, industrial, and AI data center end-markets. With a
highly differentiated and innovative product portfolio, onsemi helps customers
solve complex challenges to achieve higher efficiency, improved performance, and
lower system cost, while supporting a safer, cleaner, and more energy-efficient
world. onsemiis part of the S&P 500 ®index. Learn more about onsemiat
www.onsemi.com. # # # onsemi and the onsemi logo are trademarks of Semiconductor
Components Industries, LLC. All other brand and product names appearing in this
document are registered trademarks or trademarks of their respective holders.
Although the Company references its website in this news release, information on
the website is not to be incorporated herein.
Krystal Heaton Parag Agarwal
Director, Head of Public Relations Vice President - Investor Relations &
Corporate Development
onsemi onsemi
(480) 242-6943 (602) 244-3437
Krystal.Heaton@onsemi.com investor@onsemi.com
This document includes “forward-looking statements,” as that term is defined in
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical facts, included or incorporated in this document could
be deemed forward-looking statements, particularly statements about the future
financial performance of onsemi, including financial guidance for the fourth
quarter of 2026. Forward-looking statements are often characterized by the use
of words such as “believes,” “estimates,” “expects,” “projects,” “may,” “will,”
“intends,” “plans,” “anticipates,” “should” or similar expressions or by
discussions of strategy, plans or intentions. All forward-looking statements in
this document are made based on our current expectations, forecasts, estimates
and assumptions and involve risks, uncertainties and other factors that could
cause results or events to differ materially from those expressed in the
forward-looking statements. Certain factors that could affect our future results
or events are described under Part I, Item 1A “Risk Factors” in the 2025 Annual
Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on
February 9, 2026 (the “2025 Form 10-K”) and from time to time in our other SEC
reports. Readers are cautioned not to place undue reliance on forward-looking
statements. We assume no obligation to update such information, which speaks
only as of the date made, except as may be required by law. Investing in our
securities involves a high degree of risk and uncertainty, and you should
carefully consider the trends, risks and uncertainties described in this
document, our 2025 Form 10-K and other reports filed with or furnished to the
SEC before making any investment decision with respect to our securities. If any
of these trends, risks or uncertainties actually occurs or continues, our
business, financial condition or operating results could be materially adversely
affected, the trading prices of our securities could decline, and you could lose
all or part of your investment. All forward-looking statements attributable to
us or persons acting on our behalf are expressly qualified in their entirety by
this cautionary statement. 4 ON SEMICONDUCTOR CORPORATION UNAUDITED CONSOLIDATED
STATEMENTS OF OPERATIONS (in millions, except per share and percentage data)
Oct… Ju… Oct… Ni… Oct… Oc…
Qua… 2, 3, 3, Mo… 2, 3,
End… 2026 20… 2025 En… 2026 20…
──────────────────────────────────────────────────────────────────────────────
Re… $ 1,7… $ 1,… $ 1,5… $ 4,8… $ 4,…
Co…
of 1,0… 98… 963… 2,9… 3,…
re…
Gr… 713… 61… 587… 1,9… 1,…
pr…
Gr… 41.… 38… 37.… 39.… 32…
ma…
Op…
ex…
Re…
and 145… 14… 141… 430… 44…
de…
Se…
and 66.8 63… 62.8 193… 19…
ma…
Ge…
and 107… 10… 87.3 299… 26…
ad…
Am…
of 10.5 10… 11.2 31.5 33…
in…
as…
Re…
as…
im… 4.6 41… 19.6 375… 60…
and
ot…
net
To…
op… 334… 35… 322… 1,3… 1,…
ex…
Op…
in… 378… 25… 264… 583… (1… )
(l…
Ot…
in…
(e…
ne…
In… (13… ) (1… ) (17… ) (40… ) (5… )
ex…
In… 17.3 17… 22.7 52.4 74…
in…
Ot… 17.6 8.6 3.6 30.0 9.2
in…
Ot…
in… 21.0 12… 8.6 42.1 30…
(e…
net
In…
(l…
be… 399… 27… 273… 625… (8… )
in…
ta…
In…
tax (84… ) (4… ) (17… ) (11… ) 27…
(p…
be…
Net
in… 314… 22… 255… 509… (5… )
(l…
Le…
Net
in…
at… (0.5 ) (0… ) (0.3 ) (1.7 ) (2… )
to
no…
in…
Net
in…
(l…
at… $ 313… $ 22… $ 255… $ 507… $ (6… )
to
ON
Se…
Co…
Net
in…
(l…
per
sh…
of
co…
st…
at…
to
ON
Se…
Co…
Ba… $ 0.81 $ 0.… $ 0.63 $ 1.30 $ (0… )
Di… $ 0.79 $ 0.… $ 0.63 $ 1.27 $ (0… )
We…
av…
co…
sh…
ou…
Ba… 389… 39… 406… 391… 41…
Di… 397… 40… 408… 400… 41…
5 ON SEMICONDUCTOR CORPORATION UNAUDITED CONSOLIDATED BALANCE SHEETS (in
millions)
December
October 2, 31,
2026 July 3, 2026 2025
──────────────────────────────────────────────────────────────────────────────
Assets
Cash and
cash $ 4,157.7 $ 3,514.5 $ 2,147.6
equivalents
Short-term 210.0 350.0 400.0
investments
Receivable… 917.4 897.2 908.0
net
Inventories 2,069.7 2,047.5 1,989.6
Assets 26.2 31.4 25.0
held-for-s…
Other
current 464.3 441.2 352.9
assets
Total
current 7,845.3 7,281.8 5,823.1
assets
Property,
plant and 2,823.7 2,924.9 3,369.0
equipment,
net
Goodwill 1,686.5 1,687.6 1,679.9
Intangible 317.7 329.4 343.9
assets, net
Deferred 1,018.1 1,014.3 929.1
tax assets
ROU
financing — — 23.1
lease
assets
Other 240.0 247.1 356.0
assets
Total $ 13,931.3 $ 13,485.1 $ 12,524.1
assets
Liabilities
and
Stockholde…
Equity
Accounts $ 549.5 $ 498.3 $ 572.3
payable
Accrued
expenses
and other 858.3 801.0 714.9
current
liabilities
Current
portion of
financing 0.6 0.5 0.5
lease
liabilities
Current
portion of 802.8 802.1 —
long-term
debt
Total
current 2,211.2 2,101.9 1,287.7
liabilities
Long-term 3,660.2 3,657.3 2,980.5
debt
Deferred
tax 46.4 46.8 41.7
liabilities
Long-term
financing 22.3 22.8 23.8
lease
liabilities
Other
long-term 409.8 417.8 498.5
liabilities
Total 6,349.9 6,246.6 4,832.2
liabilities
ON
Semiconduc…
Corporation
stockholde…
equity:
Common 6.3 6.3 6.2
stock
Additional
paid-in 5,676.5 5,632.8 5,538.6
capital
Accumulated
other (57.6 ) (67.1 ) (55.5 )
comprehens…
loss
Accumulated 8,749.2 8,435.3 8,241.9
earnings
Less:
Treasury (6,813.3 ) (6,788.6 ) (6,057.9 )
stock, at
cost
Total ON
Semiconduc…
Corporation 7,561.1 7,218.7 7,673.3
stockholde…
equity
Non-contro… 20.3 19.8 18.6
interest
Total
stockholde… 7,581.4 7,238.5 7,691.9
equity
Total
liabilities
and $ 13,931.3 $ 13,485.1 $ 12,524.1
stockholde…
equity
6 ON SEMICONDUCTOR CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
Ni…
Qu… Mo…
En… En…
Oc… Ju… Oc… Oc… Oc…
2, 3, 3, 2, 3,
20… 20… 20… 20… 20…
──────────────────────────────────────────────────────────────────────────────
C…
f…
f…
o…
a…
N…
i… $ 31… $ 22… $ 25… $ 50… $ (… )
(…
A…
to
r…
n…
i…
(…
to
n…
c…
p…
by
o…
a…
D…
a… 13… 14… 14… 56… 4…
a…
G…
on
s…
a… (2… ) (0… ) (1… ) (4… ) (… )
d…
of
f…
a…
G…
on
d… (3… ) — — (3… ) —
of
a
b…
A…
of
d…
d… 4.3 3.8 2.9 11… 8…
a…
i…
c…
S… 37… 37… 38… 11… 1…
c…
N…
a… 3.3 16… 15… 16… 4…
i…
c…
C…
in
d… (7… ) (1… ) (8… ) (1… ) (… )
t…
b…
O… (3… ) 1.9 (3… ) (3… ) 1…
C…
in
a… 38… 44… 45… (1… ) 3…
a…
l…
N…
c…
p… 51… 45… 41… 1,… 1…
by
o…
a…
C…
f…
f…
i…
a…
P…
f…
a…
of (2… ) (3… ) (4… ) (8… ) (… )
p…
p…
a…
e…
P…
f…
s…
of 8.5 7.6 0.1 17… 6…
p…
p…
a…
e…
P…
r…
to
d…
of 31… — — 31… —
b…
n…
of
c…
t…
P…
of (1… ) (3… ) (2… ) (7… ) (… )
s…
i…
P…
f…
t…
m… 25… 40… 15… 95… 7…
of
s…
i…
P…
f…
a…
of
a — (1… ) — (1… ) (… )
b…
n…
of
c…
a…
O… 1.7 (3… ) (5… ) 2.9 (… )
N…
c…
p…
by 15… 7.3 (1… ) 14… (… )
(…
i…
i…
a…
C…
f…
f…
f…
a…
P…
f…
c…
s… 6.6 5.3 6.0 18… 1…
i…
u…
t…
E…
P…
of
t… (6… ) (1… ) (2… ) (5… ) (… )
w…
f…
R…
R…
of (1… ) (3… ) (3… ) (7… ) (… )
c…
s…
I…
a…
b… — 1,… — 1,… —
u…
d…
a…
R…
of
d…
i… — 3.4 — 3.4 —
a…
o…
f…
c…
P…
of
d…
i… — (4… ) — (4… ) —
a…
o…
f…
c…
R…
of
b… (0… ) — — (0… ) —
u…
d…
a…
P…
f…
p… — (3… ) — (3… ) —
of
b…
h…
P…
f…
i… — 28… — 28… —
of
w…
P…
of
f… (0… ) (0… ) (0… ) (0… ) (… )
l…
o…
P…
r…
to (7… ) — (0… ) (7… ) (… )
p…
b…
a…
N…
c…
p…
by (2… ) 1,… (3… ) 65… (… )
(…
i…
f…
a…
E…
of
e…
r…
c…
on 0.3 (0… ) (0… ) (0… ) 3…
c…
c…
e…
a…
r…
c…
N…
i…
(…
in
c… 64… 1,… (5… ) 2,… (… )
c…
e…
a…
r…
c…
B…
c…
c…
e… 3,… 2,… 2,… 2,… 2…
a…
r…
c…
E…
c…
c…
e… $ 4,… $ 3,… $ 2,… $ 4,… $ 2…
a…
r…
c…
7 ON SEMICONDUCTOR CORPORATION RECONCILIATION OF GAAP VERSUS NON-GAAP
DISCLOSURES (in millions, except per share and percentage data)
O… Ju… O… Ni… O… Oc…
Qu… 2, 3, 3, Mo… 2, 3,
En… 2… 20… 2… En… 2… 20…
──────────────────────────────────────────────────────────────────────────────
R…
of
G…
to
n…
g…
p…
G…
g… $ 7… $ 61… $ 5… $ 1… $ 1,…
p…
S…
i…
R…
i…
a) a… (… ) 13… — 7… 28…
o…
c…
A…
b) of 1… 1.2 1… 3… 3.8
i…
a…
A…
of
f…
c) m… — — 0… — 1.8
v…
s…
of
i…
T…
s… (… ) 14… 1… 1… 28…
i…
N…
g… $ 7… $ 63… $ 5… $ 1… $ 1,…
p…
R…
of
G…
to
n…
g…
m…
G…
g… 4… 38… 3… 3… 32…
m…
S…
i…
R…
i…
a) a… (… 0.… —% 0… 6.…
o…
c…
A…
b) of 0… 0.… 0… 0… 0.…
i…
a…
A…
of
f…
c) m… —% —% —% —% —%
v…
s…
of
i…
T…
s… (… 0.… 0… 0… 6.…
i…
N…
g… 4… 39… 3… 3… 38…
m…
R…
of
G…
to
n…
o…
e…
G…
o… $ 3… $ 35… $ 3… $ 1… $ 1,…
e…
S…
i…
A…
a) of (… ) (1… ) (… ) (… ) (3… )
i…
a…
R…
a…
b) i… (… ) (4… ) (… ) (… ) (6… )
a…
o…
n…
T…
a…
c) a… (… ) (7… ) (… ) (… ) (3… )
d…
c…
A…
r…
d) to (… ) (1… ) — (… ) —
c…
c…
T…
s… (… ) (6… ) (… ) (… ) (6… )
i…
N…
o… $ 3… $ 29… $ 2… $ 9… $ 90…
e…
R…
of
G…
to
n…
o…
i…
G…
o… $ 3… $ 25… $ 2… $ 5… $ (1… )
i…
(…
S…
i…
R…
i…
a) a… (… ) 13… — 7… 28…
o…
c…
A…
b) of 1… 11… 1… 3… 37…
i…
a…
R…
a…
c) i… 4… 41… 1… 3… 60…
a…
o…
n…
T…
a…
d) a… 7… 7.6 0… 1… 3.7
d…
c…
A…
of
f…
e) m… — — 0… — 1.8
v…
s…
of
i…
A…
r…
f) to 2… 1.6 — 5… —
c…
c…
T…
s… 2… 75… 3… 4… 93…
i…
N…
o… $ 3… $ 33… $ 2… $ 1… $ 81…
i…
R…
of
G…
to
n…
o…
m…
(…
i…
/
r…
G…
o… 2… 16… 1… 1… (2…
m…
S…
i…
R…
r…
a) i… (… 0.… —% 0… 6.…
a…
o…
c…
A…
b) of 0… 0.… 0… 0… 0.…
i…
a…
R…
a…
c) i… 0… 2.… 1… 7… 13…
a…
o…
n…
T…
a…
d) a… 0… 0.… 0… 0… 0.…
d…
c…
A…
of
f…
e) m… —% —% —% —% —%
v…
s…
of
i…
A…
r…
f) to 0… 0.… —% 0… —%
c…
c…
T…
s… 1… 4.… 2… 9… 20…
i…
N…
o… 2… 20… 1… 2… 18…
m…
R…
of
G…
to
n…
i…
b…
i…
t…
8 ON SEMICONDUCTOR CORPORATION RECONCILIATION OF GAAP VERSUS NON-GAAP
DISCLOSURES (Continued) (in millions, except per share and percentage data)
O… Ju… O… Ni… O… Oc…
Qu… 2, 3, 3, Mo… 2, 3,
En… 2… 20… 2… En… 2… 20…
──────────────────────────────────────────────────────────────────────────────
G…
i…
(… $ 3… $ 27… $ 2… $ 6… $ (8… )
b…
i…
t…
S…
i…
R…
i…
a) a… (… ) 13… — 7… 28…
o…
c…
A…
b) of 1… 11… 1… 3… 37…
i…
a…
R…
a…
c) i… 4… 41… 1… 3… 60…
a…
o…
n…
T…
a…
d) a… 7… 7.6 0… 1… 3.7
d…
c…
A…
of
f…
e) m… — — 0… — 1.8
v…
s…
of
i…
A…
r…
f) to 2… 1.6 — 5… —
c…
c…
A…
g…
on
p…
g) p… (… ) — — (… ) —
a…
o…
p…
b…
G…
of
h) d… (… ) — — (… ) —
of
a
b…
T…
s… 1… 75… 3… 4… 93…
i…
N…
i…
b… $ 4… $ 34… $ 3… $ 1… $ 84…
i…
t…
R…
of
G…
to
n…
n…
i…
a…
to
ON
S…
C…
G…
n…
i…
(…
a… $ 3… $ 22… $ 2… $ 5… $ (6… )
to
ON
S…
C…
S…
i…
R…
i…
a) a… (… ) 13… — 7… 28…
o…
c…
A…
b) of 1… 11… 1… 3… 37…
i…
a…
R…
a…
c) i… 4… 41… 1… 3… 60…
a…
o…
n…
T…
a…
d) a… 7… 7.6 0… 1… 3.7
d…
c…
A…
of
f…
e) m… — — 0… — 1.8
v…
s…
of
i…
A…
r…
f) to 2… 1.6 — 5… —
c…
c…
A…
g…
on
p…
g) p… (… ) — — (… ) —
a…
o…
p…
b…
G…
of
h) d… (… ) — — (… ) —
of
a
b…
A…
i) to 2… (8… ) (… ) (… ) (1… )
i…
t…
T…
s… 4… 67… 1… 3… 77…
i…
N…
n…
i…
a… $ 3… $ 29… $ 2… $ 9… $ 70…
to
ON
S…
C…
R…
of
G…
to
n…
d…
s…
o…
G…
d… 3… 40… 4… 4… 41…
s…
o…
S…
i…
L…
d…
s…
a) a… (… ) (7… ) — (… ) —
to
c…
n…
A…
d…
s…
b) a… — — — — 0.6
to
s…
a…
T…
s… (… ) (7… ) — (… ) 0.6
i…
N…
d… 3… 39… 4… 3… 41…
s…
o…
N…
d…
e…
p…
s…
N…
n…
i…
a… $ 3… $ 29… $ 2… $ 9… $ 70…
to
ON
S…
C…
N…
d… 3… 39… 4… 3… 41…
s…
o…
N…
d…
e… $ 0… $ 0.… $ 0… $ 2… $ 1.…
p…
s…
R…
of
n…
c…
p…
by
o…
a…
to
f…
c…
f…
N…
c…
p… $ 5… $ 45… $ 4… $ 1… $ 1,…
by
o…
a…
S…
i…
P…
f…
a…
a) of (… ) (3… ) (… ) (… ) (2… )
p…
p…
a…
e…
T…
s… (… ) (3… ) (… ) (… ) (2… )
i…
F…
c… $ 4… $ 42… $ 3… $ 1… $ 93…
f…
Certain of the amounts in the above tables may not total due to rounding of
individual amounts. 9 ON SEMICONDUCTOR CORPORATION RECONCILIATION OF GAAP VERSUS
NON-GAAP DISCLOSURES (Continued) (in millions, except per share and percentage
data)
FR… Dec… Apr… July Oct… Last
CA… Qua… 31, 3, 3, 2, Twe…
FL… End… 2025 2026 2026 2026 Mon…
──────────────────────────────────────────────────────────────────────────────
Net
ca…
pr… $ 554… $ 239… $ 459… $ 516… $ 1,7…
by
op…
ac…
Pa…
for
ac…
of (69… ) (21… ) (34… ) (27… ) (15… )
pr…
pl…
and
eq…
Fr…
ca… $ 485… $ 217… $ 425… $ 488… $ 1,6…
fl…
Re… $ 1,5… $ 1,5… $ 1,6… $ 1,7… $ 6,3…
SHARE-BASED COMPENSATION Total share-based compensation related to restricted
stock units, stock grant awards and the employee stock purchase plan was as
follows:
Octob… July Octob… Nine Octob… Octo…
Quar… 2, 3, 3, Mont… 2, 3,
Ended 2026 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Cost
of $ 7.2 $ 6.8 $ 7.8 $ 20.4 $ 19.9
reve…
Rese…
and 7.2 6.0 7.3 20.5 19.9
deve…
Sell…
and 4.8 4.8 5.7 14.7 15.3
mark…
Gene…
and 17.9 19.8 17.4 56.2 51.4
admi…
Total
shar… $ 37.1 $ 37.4 $ 38.2 $ 111.8 $ 106.5
comp…
SUPPLEMENTAL FINANCIAL DATA
Octob… July Octob… Nine Octob… Octo…
Quar… 2, 3, 3, Mont… 2, 3,
Ended 2026 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net
cash
prov… $ 516.4 $ 459.7 $ 418.7 $ 1,215… $ 1,20…
by
oper…
acti…
Free
cash $ 488.6 $ 425.4 $ 372.4 $ 1,131… $ 933.2
flow
Cash
paid
for $ 46.1 $ 50.8 $ 17.4 $ 143.5 $ 103.9
inco…
taxes
Depr…
and $ 135.0 $ 141.3 $ 146.5 $ 563.0 $ 471.1
amor…
Less:
Amor…
of 11.7 11.7 12.4 35.1 37.4
inta…
asse…
Depr…
and
amor…
(exc… $ 123.3 $ 129.6 $ 134.1 $ 527.9 $ 433.7
amor…
of
inta…
asse…
(1)A…
depr…
and
amor…
rela…
to
the $ — $ — $ 0.8 $ 136.5 $ 15.3
2025
and
2026
Manu…
Real…
Prog…
10 NON-GAAP MEASURES To supplement the consolidated financial results prepared
in accordance with GAAP, onsemi uses certain non-GAAP measures, which are
adjusted from the most directly comparable GAAP measures to exclude items
related to the amortization of acquisition-related intangibles, restructuring-
related cost of revenue charges, expensing of appraised inventory fair market
value step-up, inventory valuation adjustments, in-process research and
development expenses, restructuring, asset impairments and other, net, goodwill
impairment charges, gains and losses on debt prepayment, non-cash interest
expense, actuarial (gains) losses on pension plans and other pension benefits,
third party acquisition and divestiture-related costs, tax impact of these items
and certain other non-recurring items, as necessary. Management does not
consider the effects of these items in evaluating the core operational
activities of onsemi. Management uses these non-GAAP measures internally to make
strategic decisions, forecast future results and evaluate onsemi’s current
performance. In addition, the Company believes that most analysts covering
onsemi use the non-GAAP measures to evaluate onsemi’s performance. Given
management’s and other relevant parties’ use of these non-GAAP measures, onsemi
believes these measures are important to investors in understanding onsemi’s
current and future operating results as seen through the eyes of management. In
addition, management believes these non-GAAP measures are useful to investors in
enabling them to better assess changes in onsemi’s core business across
different time periods. These non-GAAP measures are not prepared in accordance
with, and should not be considered alternatives or necessarily superior to, GAAP
financial data and may be different from non-GAAP measures used by other
companies. Because non-GAAP financial measures are not standardized, it may not
be possible to compare these financial measures with other companies’ non-GAAP
financial measures, even if they have similar names. Non-GAAP Gross Profit and
Gross Margin The use of non-GAAP gross profit and gross margin allows management
to evaluate, among other things, the gross profit and gross margin of the
Company’s core businesses and trends across different reporting periods on a
consistent basis, independent of non-cash and non-recurring items including,
generally speaking, restructuring-related cost of revenue charges, amortization
of intangible assets, amortization of appraised inventory fair market value
step-up, impact of business wind down and non-recurring facility costs. In
addition, it is an important component of management’s internal performance
measurement and incentive and reward process as it is used to assess the current
and historical financial results of the business and for strategic decision
making, preparing budgets, obtaining targets and forecasting future results.
Management presents this non-GAAP financial measure to enable investors and
analysts to evaluate our operating performance independent of certain non-cash
items and the effects of certain variables unrelated to our overall operating
performance. Non-GAAP Operating Income and Operating Margin The use of non-GAAP
operating income and operating margin allows management to evaluate, among other
things, the operating income and operating margin of the Company’s core
businesses and trends across different reporting periods on a consistent basis,
independent of non-cash and non-recurring items including, generally speaking,
restructuring-related cost of revenue charges, expensing of appraised inventory
fair market value step-up, impact of business wind down, non-recurring facility
costs, amortization and impairments of intangible assets, third party
acquisition and divestiture-related costs, restructuring charges, asset
impairments and certain other special items as necessary. In addition, it is an
important component of management’s internal performance measurement and
incentive and reward process as it is used to assess the current and historical
financial results of the business and for strategic decision making, preparing
budgets, obtaining targets and forecasting future results. Management presents
this non-GAAP financial measure to enable investors and analysts to evaluate our
operating performance independent of certain non-cash items and the effects of
certain variables unrelated to our overall operating performance. Non-GAAP Net
Income Attributable to ON Semiconductor Corporation and Non-GAAP Diluted
Earnings Per Share The use of non-GAAP net income attributable to ON
Semiconductor Corporation and non-GAAP diluted earnings per share allows
management to evaluate the operating results of onsemi’s core businesses and
trends across different reporting periods on a consistent basis, independent of
non-cash and non-recurring items including, generally, the restructuring related
cost of revenue charges, amortization and impairments of intangible assets,
expensing of appraised inventory fair market value step-up, impact of business
wind down, non-recurring facility costs, restructuring, asset impairments, gains
and losses on debt prepayment, actuarial (gains) losses on pension plans and
other pension benefits, third party acquisition and divestiture-related costs,
discrete tax items and other non-GAAP tax adjustments and certain other special
items, as necessary. In addition, these measures are important components of
management’s internal performance measurement and incentive and reward process,
as they are used to assess the current and historical financial results of the
business and for strategic decision making, preparing budgets, setting targets
and forecasting future results. For our non-GAAP reporting we apply a projected,
normalized non-GAAP effective tax rate of 15% for 2026 and 16% for 2025. We
calculate this non-GAAP effective tax rate on an annual basis. We may update
this non-GAAP effective tax rate at any time for a variety of reasons,
including, but not limited to, the rapidly evolving global tax environment,
significant changes in our geographic earnings mix or changes to our strategy or
business operations. Management presents these non-GAAP financial measures to
enable investors and analysts to understand the results of operations of
onsemi’s core businesses and, to the extent comparable, to compare our results
of operations on a more consistent basis against those of other companies in our
industry. 11 NON-GAAP MEASURES (Continued) Free Cash Flow The use of free cash
flow allows management to evaluate, among other things, the ability of the
Company to make interest or principal payments on its debt. Free cash flow is
defined as the difference between cash flow from operating activities and
capital expenditures disclosed under investing activities in the consolidated
statement of cash flows.Free cash flow is not an alternative to cash flow from
operating activities as a measure of liquidity. It is an important component of
management’s internal performance measurement and incentive and reward process
as it is used to assess the current and historical financial results of the
business and for strategic decision making, preparing budgets, obtaining targets
and forecasting future results. Management presents this non-GAAP financial
measure to enable investors and analysts to evaluate our financial performance
independent of the cash capital expenditures. Non-GAAP Diluted Share Count The
use of non-GAAP diluted share count allows management to evaluate, among other
things, the potential dilution due to the outstanding restricted stock units
excluding the dilution from the convertible notes that is covered by hedging
activity up to a certain threshold. In periods when the quarterly average stock
price per share exceeds $52.97 for the 0% Notes, $103.87 for the 0.50% Notes,
and $161.30 for the 2031 0% Notes, the non-GAAP diluted share count includes the
anti-dilutive impact of the Company’s hedge transactions issued concurrently
with the 0% Notes, the 0.50% Notes, and the 2031 0% Notes, respectively. At an
average stock price per share between $52.97 and $74.34 for the 0% Notes,
$103.87 and $156.78 for the 0.50% Notes, and $161.30 and $211.54 for the 2031 0%
Notes, the hedging activity offsets the potentially dilutive effect of the 0%
Notes, the 0.50% Notes, and the 2031 0% Notes, respectively. In periods when the
quarterly average stock price exceeds $74.34 for the 0% Notes, $156.78 for the
0.50% Notes, and $211.54 for the 2031 0% Notes, the dilutive impact of the
warrants issued concurrently with such notes is included in the diluted shares
outstanding. 12