On Semiconductor (ON) reported second-quarter revenue of $1,603.5 million, up 9% from a year earlier, after a 5% year-over-year increase in the first quarter. Sequential sales rose 6%, reversing a 1% sequential decline in the prior quarter.

The company delivered revenue, gross margin and earnings per share above the midpoint of guidance, citing strengthening demand, particularly across AI-driven applications, and growing customer adoption of Treo and high-voltage power solutions. President and CEO Hassane El-Khoury said AI data center remains the fastest-growing business and that onsemi now expects that revenue to more than double in 2026.

GAAP diluted earnings were $0.56 a share, versus a $0.08 loss in the first quarter. Non-GAAP diluted earnings were $0.74 a share. GAAP operating margin recovered to 16.1% from (3.5)% in the first quarter. Non-GAAP operating margin was 20.8%. GAAP gross margin was 38.4% and non-GAAP gross margin 39.3%. Chief Financial Officer Thad Trent said year-over-year earnings per share grew four times faster than revenue, driven by gross margin expansion and disciplined cost management.

Power Solutions Group, the largest reportable segment, generated $829.0 million of revenue, up 19% from a year earlier after 14% year-over-year growth in the first quarter. Sequential PSG growth accelerated to 13% from 2%. Automotive Group revenue was $545.7 million, down 2% from a year earlier after a 5% year-over-year decline in the first quarter. Industrial Solutions Group revenue was $228.8 million, up 7% from a year earlier after 1% year-over-year growth in the first quarter. Sequential ISG revenue declined 3%.

Cash from operations was $459.7 million, up 150% from $184.3 million a year earlier. Free cash flow was $425.4 million, quadrupling from $106.1 million. Free cash flow margin expanded from approximately 7% to 27% year-over-year. Share repurchases were $332 million in the quarter, bringing year-to-date shareholder returns to approximately 105% of free cash flow. Cash and cash equivalents were $3,514.5 million at July 3, 2026.

The company announced a planned acquisition of Synaptics, which would expand capabilities in connected compute at accretive gross margins while complementing leadership in power and sensing. It expanded its role in the NVIDIA MGX ecosystem, secured AI data center platform wins with Great Wall, launched GaNEXUS gallium nitride power products spanning 40V to 650V, and extended automotive zonal-architecture and on-board-charging content with Rivian’s R2 platform.

Onsemi projects third-quarter 2026 revenue of $1,650 million to $1,750 million, above the $1,535 million to $1,635 million range it had given for the second quarter. Non-GAAP gross margin is expected at 40.0% to 42.0%, versus a 38.0% to 40.0% prior guide. Non-GAAP diluted earnings are projected at $0.81 to $0.93 a share, versus a $0.65 to $0.77 prior guide. GAAP diluted earnings are projected at $0.79 to $0.91 a share. GAAP gross margin is projected at 39.9% to 41.9%. Operating expenses are projected at $318 million to $333 million on a GAAP basis, including $15 million of special items, or $303 million to $318 million on a non-GAAP basis.

Trent said that as demand continues to improve, the company is increasingly confident in its ability to drive profitable growth and long-term shareholder value.