Analog chips maker onsemi (NASDAQ: ON) reported Q2 CY2026 results exceeding the market’s revenue expectations, with sales up 9.2% year on year to $1.60 billion. Guidance for next quarter’s revenue was better than expected at $1.7 billion at the midpoint, 1.6% above analysts’ estimates. Its non-GAAP profit of $0.74 per share was 3.5% above analysts’ consensus estimates.
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onsemi (ON) Q2 CY2026 Highlights:
- Revenue: $1.60 billion vs analyst estimates of $1.59 billion (9.2% year-on-year growth, 0.9% beat)
- Adjusted EPS: $0.74 vs analyst estimates of $0.72 (3.5% beat)
- Adjusted Operating Income: $334.1 million vs analyst estimates of $326.9 million (20.8% margin, 2.2% beat)
- Revenue Guidance for Q3 CY2026 is $1.7 billion at the midpoint, above analyst estimates of $1.67 billion
- Adjusted EPS guidance for Q3 CY2026 is $0.87 at the midpoint, above analyst estimates of $0.84
- Operating Margin: 16.1%, up from 13.2% in the same quarter last year
- Free Cash Flow Margin: 26.5%, up from 7.2% in the same quarter last year
- Inventory Days Outstanding: 189, down from 200 in the previous quarter
- Market Capitalization: $31.76 billion
Company Overview
Spun out of Motorola in 1999 and built through a series of acquisitions, onsemi (NASDAQ: ON) is a global provider of analog chips specializing in autos, industrial applications, and power management in cloud data centers.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, onsemi struggled to consistently increase demand as its $6.20 billion of sales for the trailing 12 months was close to its revenue five years ago. This was below our standards and is a sign of poor business quality. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.
Long-term growth is the most important, but short-term results matter for semiconductors because the rapid pace of technological innovation (Moore’s Law) could make yesterday’s hit product obsolete today. onsemi’s recent performance shows its demand remained suppressed as its revenue has declined by 10.8% annually over the last two years. 
This quarter, onsemi reported year-on-year revenue growth of 9.2%, and its $1.60 billion of revenue exceeded Wall Street’s estimates by 0.9%. Company management is currently guiding for a 9.6% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 10.7% over the next 12 months. While this projection implies its newer products and services will catalyze better top-line performance, it is still below the sector average.
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Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’s capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, onsemi’s DIO came in at 189, which is 18 days above its five-year average. These numbers suggest that despite the recent decrease, the company’s inventory levels are higher than what we’ve seen in the past.
Key Takeaways from onsemi’s Q2 Results
It was great to see a material improvement in onsemi’s inventory levels. We were also glad its EPS outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock traded up 2.9% to $83.48 immediately after reporting.
onsemi put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
