Onsemi Q3 EPS Rises 25.4% as AI Data Center Revenue Jumps 175%
Onsemi's third-quarter earnings per share jumped 25.4% on an 11.1% rise in revenue, as surging demand for power chips in AI data centers lifted margins for a fifth straight quarter.
Revenue rose to $1.72 billion from $1.55 billion a year earlier and gained 7.4% from the second quarter, according to the earnings release onsemi filed with an 8-K on Monday. GAAP net income increased to $313.9 million, or $0.79 per diluted share, from $255.0 million, or $0.63. Non-GAAP EPS climbed 42.9% to $0.90 from $0.63.
GAAP gross margin widened to 41.4% from 37.9%, and non-GAAP gross margin rose to 41.2% from 38.0%. GAAP operating margin was 22.0%, and non-GAAP operating margin was 23.2%.
AI data centers drive the gains
"Increasing power requirements are driving accelerated demand in our AI data center and industrial end markets, as customers adopt and ramp our differentiated products," President and CEO Hassane El-Khoury said in the release. He said AI data center revenue grew 39% from the prior quarter and 175% from a year earlier.
The Power Solutions Group led the segments, with revenue up 20.6% to $889.9 million. The Analog & Mixed-Signal Group grew 2.4% to $597.3 million, and the Intelligent Sensing Group rose 2.2% to $235.1 million.
CFO Thad Trent said gross margin expanded for the fifth consecutive quarter, rising 190 basis points from the second quarter.
Cash and deals
Cash from operations rose 23% to $516 million, and free cash flow grew 31% to $489 million, or 28% of revenue. Onsemi spent $19.9 million on share repurchases in the quarter.
The company also announced an agreement to buy Ferric, a deal it said establishes onsemi as a leader in next-generation AI processor power delivery, and raised its 2030 AI data center revenue target by $500 million to more than $3 billion. Separately, it revised the terms of its planned acquisition of Synaptics to an estimated $5.7 billion in cash, the company said, compared with $7 billion in stock under the prior agreement. Onsemi said the new terms should make that deal immediately accretive to non-GAAP EPS.
Other highlights included a technology engagement giving Subaru early access to onsemi's Embedded Power Platform and Sungrow's adoption of its EliteSiC silicon carbide hybrid power modules.
Fourth-quarter outlook
Onsemi expects fourth-quarter revenue of $1.715 billion to $1.815 billion. It forecast GAAP gross margin of 41.4% to 43.4% and non-GAAP gross margin of 41.5% to 43.5%. It expects GAAP EPS of $0.88 to $1.00 and non-GAAP EPS of $0.95 to $1.07.
By the numbers
- Revenue: $1.72 billion, up 11.1%
- GAAP EPS: $0.79, up 25.4%
- Non-GAAP EPS: $0.90, up 42.9%
- AI data center revenue: up 175% from a year earlier
- Free cash flow: $489 million, up 31%
- Q4 revenue outlook: $1.715 billion to $1.815 billion
Sources
- ON Semiconductor Form 8-K with third-quarter 2026 earnings release, filed Nov. 2, 2026 (accession 0001140361-26-041580)
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