ON Semiconductor Reports 22% Revenue Decline

By Bobby Samwell • Monday, May 05 15:24 • Permanent Link

ON Semiconductor recently released its 10-Q report, providing a detailed account of its financial performance for the quarter ended April 4, 2025. The company, headquartered in Scottsdale, Arizona, operates through three segments: Power Solutions Group, Analog and Mixed-Signal Group, and Intelligent Sensing Group. ON Semiconductor aims to provide intelligent power and intelligent sensing solutions primarily focused on the automotive and industrial markets.

In the latest quarter, ON Semiconductor reported a 22% decrease in revenue, amounting to $1.45 billion compared to $1.86 billion in the same period last year. The company's gross profit also decreased significantly by approximately 66%, totaling $293.8 million, down from $853.6 million in the previous year. The decrease in gross profit was primarily attributed to excess and obsolete inventory charges, which amounted to $237.7 million.

The company's operating expenses also saw notable changes. Research and development expenses increased by approximately 9%, reaching $164.1 million, while selling and marketing expenses decreased by about 1% to $68.3 million. General and administrative expenses witnessed a more significant decline of approximately 11%, totaling $84.4 million.

ON Semiconductor's revenue by segment showed declines across all three segments. The Power Solutions Group (PSG) revenue decreased by approximately 26%, the Analog and Mixed-Signal Group (AMG) revenue dropped by about 19%, and the Intelligent Sensing Group (ISG) revenue saw a decline of around 20%.

The company also undertook a significant restructuring and cost reduction program during the quarter, leading to total severance costs and related benefit expenses of $63 million. Additionally, ON Semiconductor repurchased approximately 6.1 million shares of common stock for an aggregate purchase price of $302.6 million during the quarter.

ON Semiconductor's effective tax rate for the quarter ended April 4, 2025, was 13.5%, compared to 15.7% for the same period in 2024. This decrease was primarily due to unfavorable discrete adjustments.

The market has reacted to these announcements by moving the company's shares -8.1% to a price of $38.51. If you want to know more, read the company's complete 10-Q report here.

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