ON Semiconductor Beats Expectations with Record First-Quarter Results, Projects Robust Growth

Onsemi (NASDAQ: ON) reports robust financial performance in its first quarter of 2024, exceeding market expectations. With revenues of $1,862.7 million, the company showcased revenue and earnings per share growth, driven by its Power Solutions Group. Despite challenges in other segments, onsemi maintained strong gross and operating margins, demonstrating strategic business adjustments and focus on long-term growth. Looking ahead, the company projects strong revenue in the second quarter and continues to prioritize shareholder value through stock repurchases.

ON Semiconductor Outperforms Expectations with Record First-Quarter Results and Robust Growth Outlook

In a testament to its unwavering commitment to innovation and delivering exceptional financial performance, ON Semiconductor (NASDAQ: ON) has released its impressive first-quarter results for 2024, showcasing remarkable achievements that solidify its position as a global semiconductor powerhouse.

Boasting a robust revenue of $1,862.7 million, ON Semiconductor has surpassed market expectations, defying the headwinds faced by the semiconductor industry. Notably, the company's unwavering focus on operational efficiency has yielded substantial results, with both GAAP and non-GAAP gross margins remaining strong at 45.8% and 45.9%, respectively.

Reflecting the company's operational prowess, operating margins have also performed exceptionally well, reaching 28.2% on a GAAP basis and an impressive 29.0% on a non-GAAP basis. This remarkable financial performance underscores ON Semiconductor's prudent strategic adjustments and unwavering commitment to long-term growth.

Hassane El-Khoury, the visionary president and CEO of ON Semiconductor, attributed the company's resilience and success to its ability to maintain gross margin through strategic business transformations implemented over the past three years. Emphasizing the critical role of power efficiency in addressing global energy demands, El-Khoury expressed confidence in the company's continued market share growth, driven by its cutting-edge power and sensing technologies.

ON Semiconductor's exceptional performance is further underscored by its ability to consistently exceed market expectations. Analysts had projected an EPS of $1.04 and a revenue of $1.85 billion for the quarter, estimates that ON Semiconductor not only met but also surpassed, with an EPS of $1.08 and revenue reaching an impressive $1,862.7 million. This outperformance is a testament to the company's robust operational execution and strategic investments in key growth areas.

The company's ongoing commitment to shareholder value is evident in its significant increase in free cash flow, which has nearly tripled year-over-year. Recognizing the importance of returning value to its investors, ON Semiconductor has allocated approximately 100% of its free cash flow to stock repurchases within the past twelve months, demonstrating its unwavering dedication to shareholder returns.

While the Power Solutions Group (PSG) reported a modest 2% year-over-year revenue increase despite a sequential decline, the Automotive, Industrial, and Multi-Market Group (AMG) and Intelligent Sensing Group (ISG) experienced declines both sequentially and year-over-year. These fluctuations reflect the ongoing adjustments within the semiconductor industry and the specific challenges faced by these segments.

Looking ahead to the second quarter of 2024, ON Semiconductor has provided guidance that reflects its continued optimism about the future. The company anticipates revenue between $1,680 million and $1,780 million, with an anticipated gross margin ranging from 44.1% to 46.1% on a GAAP basis and 44.2% to 46.2% on a non-GAAP basis. Operating expenses are projected to fall within the range of $327 million to $342 million on a GAAP basis, with adjustments for special items resulting in a non-GAAP operating expense outlook of $313 million to $328 million. The company also forecasts diluted EPS to be between $0.82 and $0.94 on a GAAP basis and $0.86 and $0.98 on a non-GAAP basis.

In conclusion, ON Semiconductor's first-quarter results are a resounding testament to its exceptional financial performance, operational resilience, and unwavering commitment to delivering long-term value to its investors. The company's unwavering focus on innovation, operational efficiency, and strategic investments are the cornerstones of its success. As ON Semiconductor continues to navigate the dynamic semiconductor industry, its robust financial foundation, talented team, and innovative solutions position it for continued success and market leadership.