$ON · ON SEMICONDUCTOR CORP
ON Semiconductor filed its Q3 FY2026 10-Q, reporting revenue of $1.722B (+11.1% YoY), GAAP diluted EPS of $0.79, and net income of $313.9M. The standout was the Power Solutions Group (PSG), where gross margin nearly doubled to 38.2% from 28.5% a year ago on $889.9M in revenue. Operating income reached $378.3M versus $264.4M in the prior-year quarter.
- Q3 revenue $1.722B, +11.1% YoY, driven by PSG segment up $152.3M (+20.6%)
- PSG gross margin expanded to 38.2% from 28.5% YoY, adding $129.5M in gross profit
- Q3 GAAP diluted EPS $0.79 vs $0.63 YoY; net income $313.9M vs $255.0M
- Nine-month restructuring/impairment charges fell to $375.1M from $608.1M YoY
- Cash and equivalents surged to $4.16B from $2.15B at year-end; $703.2M in buybacks YTD
Extended-hours trading shows shares at $67.00, down 4.44% from the $70.11 regular close, despite strong YoY revenue and margin gains — suggesting the market may have priced in even higher expectations or is reacting to the sharp Q3 tax provision increase ($84.9M vs $17.7M YoY).
PSG's gross margin nearly doubled YoY on AI data center and automotive demand, but the after-hours selloff suggests the market is spooked by the tax-rate normalization.
PSG's AI data center revenue contributed meaningfully to the 18% nine-month segment growth, aligning ON with the broader analog/power semiconductor recovery driven by AI infrastructure buildout. AMG also saw $80.6M in AI data center revenue growth over nine months.
The effective tax rate jumped to 21.3% in Q3 FY2026 from 6.5% a year ago, compressing net income growth. One distributor customer accounted for ~14% of nine-month revenue, representing significant customer concentration risk.