ONHIGH SIGNALFINANCIAL10-K

ON Semiconductor experienced a severe deterioration in profitability with operating income and net income collapsing to minimal levels despite maintaining substantial revenue base.

The dramatic collapse in profitability metrics while gross profit declined by a more moderate 38% suggests ON faced severe margin compression and operational challenges during this period. This represents a fundamental shift in the company's financial performance that likely reflects either significant market headwinds in the semiconductor industry or company-specific execution issues.

Comparing 2026-02-09 vs 2025-02-10View on EDGAR →
FINANCIAL ANALYSIS

ON's financial performance deteriorated substantially with operating income and net income falling to fractional levels of the prior year, while gross profit declined meaningfully by 38%. The company reduced capital expenditures by roughly half and maintained a solid balance sheet with modest declines in cash, debt, and equity positions. Despite the severe profitability challenges, the balance sheet remains relatively stable, suggesting the company retained financial flexibility during this difficult operating period.

FINANCIAL STATEMENT CHANGES
Operating Income
P&L
-95.2%
$1.8B→$84.2M

Operating income deteriorated sharply — investigate whether driven by one-time charges or structural cost issues.

Net Income
P&L
-92.3%
$1.6B→$121.0M

Net income declined 92.3% — review whether driven by operations, interest costs, or non-recurring items.

Capital Expenditure
Cash Flow
-50.8%
$694.0M→$341.2M

Capex reduced 50.8% — investment cycle winding down or capital discipline; may improve near-term free cash flow.

Gross Profit
P&L
-38.3%
$3.2B→$2.0B

Gross margin compression — rising input costs, pricing pressure, or unfavorable product mix shift.

Interest Expense
P&L
-21.2%
$94.9M→$74.8M

Interest expense declined — debt repayment or refinancing at lower rates improving earnings quality.

Cash & Equivalents
Balance Sheet
-20.2%
$2.7B→$2.1B

Cash decreased 20.2% — monitor burn rate and upcoming capital needs.

Current Assets
Balance Sheet
-13.8%
$6.8B→$5.8B

Current assets declined 13.8% — monitor working capital adequacy and short-term liquidity.

Stockholders Equity
Balance Sheet
-12.8%
$8.8B→$7.7B

Equity decreased 12.8% — buybacks or losses reducing book value, monitor solvency ratios.

Total Debt
Balance Sheet
-11.8%
$3.4B→$3.0B

Debt reduced 11.8% — deleveraging strengthens balance sheet and reduces financial risk.

Inventory
Balance Sheet
-11.3%
$2.2B→$2.0B

Inventory reduced 11.3% — lean inventory management or demand outpacing supply.

LANGUAGE CHANGES
NEW — 2026-02-09
PRIOR — 2025-02-10
ADDED
Business 6 Overview 6 Revenue - Generating Activities 7 Markets 9 Resources 11 Seasonality 13 Government Regulation 13 Corporate Responsibilities 14 Human Capital Resources 14 Information about Our Executive Officers 15 Available Information 16 Item 1A.
Management's Discussion and Analysis of Financial Condition and Results of Operations 36 Item 7A.
We offer intelligent power and intelligent sensing solutions that drive electrification, energy efficiency, safety, and automation in automotive, industrial, and other end-markets, including AI data center.
Our intelligent power technologies enable the electrification of drivetrain in the automotive industry to allow for lighter and longer-range electric vehicles and empower efficient fast-charging systems.
Our intelligent sensing technologies enable advanced safety applications in automotive through industry leading performance and reliability.
In the industrial market, our intelligent power technologies propel sustainable energy for the highest efficiency solar strings and industrial power.
In the medical field, our intelligent power technologies extend the life of personal diagnostic devices, such as continuous glucose monitors.
Our intelligent sensing technologies support the next generation industry through automation, allowing for smarter factories and buildings.
In addition, our intelligent sensing technologies are enabling robotics and humanoids.
In our other market which includes AI data center products, our intelligent power technologies enable energy efficiency in a market in which energy needs are growing at an exponential rate, and AI data center operators are focused on reducing energy consumption.
REMOVED
Business 5 Overview 5 Revenue Generating Activities 7 Markets 8 Resources 10 Seasonality 12 Government Regulation 12 Environmental, Social and Governance Initiatives 13 Human Capital Resources 13 Information about Our Executive Officers 14 Available Information 15 Item 1A.
Management's Discussion and Analysis of Financial Condition and Results of Operations 33 Item 7A.
We provide intelligent power and intelligent sensing solutions with a primary focus towards automotive and industrial markets to help our customers solve challenging problems and create cutting-edge products for a better future.
We are utilizing our extensive range of power technologies to help address the growing power demands of AI and data centers.
Our intelligent power technologies enable the electrification of the automotive industry that allows for lighter and longer-range electric vehicles, empowers efficient fast-charging systems and propels sustainable energy for the highest efficiency solar strings and industrial power.
Our intelligent power solutions for the automotive industry allow our customers to exceed range targets with lower weight and reduce system cost through efficiency.
Our intelligent sensing technologies support the next generation industry, allowing for smarter factories and buildings while also enhancing the automotive mobility experience with imaging and depth sensing that make advanced vehicle safety and automated driving systems possible.
During the first quarter of 2024, we reorganized the existing divisions within certain of our operating and reportable segments and renamed the Advanced Solutions Group ("ASG") reportable segment to AMG.
See Note 3: ''Segments and Revenue'' in the notes to our audited consolidated financial statements included elsewhere in this Form 10-K for additional information regarding the segment reorganization.
Business Strategy Developments Our primary focus continues to be on revenue growth with stable gross margin by capturing high-growth megatrends in our focused end-markets of automotive and industrial infrastructure.
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