ON Semiconductor Corporation reported its financial results for the first quarter of 2026, revealing a revenue of $1.513 billion, a 5% increase from $1.446 billion in the same quarter of the previous year. The company achieved a gross profit of $583.1 million, significantly up from $293.8 million year-over-year, primarily due to the absence of prior-year excess inventory charges. The net loss for the quarter was $33.4 million, a substantial improvement from a net loss of $486.1 million in the first quarter of 2025.
The financial performance reflects notable changes compared to the previous fiscal period. Operating expenses decreased to $636.5 million from $867.5 million, driven by lower restructuring and impairment charges, which fell from $539.3 million to $329.3 million. The company also reported a gross margin increase of 18.2 percentage points, rising to 38.5% from 20.3%, attributed to improved manufacturing utilization and a favorable product mix.
Strategically, ON Semiconductor has been focusing on its 2026 Manufacturing Realignment Program, which includes workforce reductions and restructuring initiatives aimed at aligning manufacturing capacity with long-term needs. The company expects to incur total severance costs of approximately $24 million related to the termination of about 650 employees. Additionally, the company recorded non-cash impairment charges of $147 million related to manufacturing equipment deemed no longer necessary.
Operationally, ON Semiconductor's revenue from its Power Solutions Group (PSG) increased by 14% to $736.6 million, driven by demand in automotive and industrial markets. However, revenue from the Analog and Mixed-Signal Group (AMG) decreased by 5% to $540.4 million, reflecting lower demand in certain end-markets. The company also repurchased approximately 5.7 million shares of its common stock for $348.6 million during the quarter, as part of its ongoing share repurchase program.
Looking ahead, ON Semiconductor anticipates continued demand growth across its end-markets, particularly in automotive and industrial sectors. The company remains focused on optimizing its manufacturing footprint and investing in research and development to drive future growth. The management believes that its current cash position, along with cash generated from operations, will be sufficient to meet its working capital needs and support strategic initiatives over the next 12 months.
About ON SEMICONDUCTOR CORP
onsemi is a semiconductor company providing intelligent power and sensing solutions primarily for automotive and industrial markets. Its core offerings include power management, image sensors, and advanced sensing technologies supporting electric vehicles, autonomous driving, industrial automation, and data centers. The company leverages innovation, manufacturing efficiency, and a global footprint to deliver high-performance, differentiated products for high-growth applications.
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