Onsemi Q2 Revenue Forecast Tops Estimates
onsemi Q2 revenue guidance signals resilient auto demand and AI-driven margin gains, lifting EPS outlook and prompting buy-side positioning.
KEY TAKEAWAYS
- Q2 revenue guide $1.5-$1.6B above estimates with midpoint implying roughly 7% sequential core growth.
- Q1 revenue $1.5B and gross margin 38.5% improved on AI data center and auto demand.
- Repurchases totaled $346M, equal to 160% of free cash flow, highlighting capital returns.
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onsemi (Nasdaq: ON) projected second-quarter revenue above Wall Street estimates on May 4, 2026, as resilient auto demand and AI data center strength lifted margins, supported sequential core growth, and boosted the earnings-per-share outlook.
Q1 Results and Q2 Guidance
The company reported first-quarter 2026 revenue of $1.5 billion, up 5.0% year over year and above the midpoint of its prior guidance, according to a May 4 press release. GAAP gross margin expanded to 38.5% from 20.3% a year earlier, reflecting strength in AI data center and automotive demand.
The Form 8-K showed a GAAP net loss of $33 million, or ($0.08) per share, driven by $329 million in restructuring and impairment charges. The filing and earnings call reported a non-GAAP operating margin of 19.1%, or $290 million in operating income, and non-GAAP diluted earnings per share of $0.64.
Management projected second-quarter revenue between $1.5 billion and $1.6 billion, with non-GAAP diluted EPS of $0.65 to $0.77 and GAAP EPS of $0.60 to $0.72, saying the outlook exceeded consensus. At the midpoint, core revenue was expected to rise roughly 7.0% sequentially, excluding $30 million to $40 million of non-core exits. The company also forecast sequential gross-margin expansion through the year.
Auto Demand and Capital Returns
onsemi repurchased $346 million of stock in the quarter, equal to 160% of free cash flow, highlighting an aggressive capital return program despite restructuring costs. Remaining performance obligations under supply agreements totaled $6.5 billion, with about 35.0% scheduled over the next 12 months, providing near-term revenue visibility.
Management attributed demand growth in the quarter partly to its Power Solutions Group. The results, buybacks, and backlog reinforce management’s guidance and its view that the business is moving into sequential recovery.
"We exceeded expectations as demand strengthened through the quarter," the company said in its press release.
