ON Semiconductor: Q4 Revenue Drops 15%, Weak Demand In Auto, Industrial Sectors, Low Utilization Hits Margins, CEO Warns Of 2025 Challenges

ON Semiconductor Corp (NASDAQ: ON) stock reported a fiscal fourth-quarter 2024 revenue decline of 15% year-on-year to $1.72 billion, missing the analyst consensus estimate of $1.76 billion.

The adjusted EPS of $0.95 missed the analyst consensus estimate of $0.97. The stock price declined after the print.

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Revenue from Power Solutions Group (PSG) declined 16% year over year to $809.4 million, Analog and Mixed-Signal Group (AMG) decreased 18% year over year to $610.6 million and Intelligent Sensing Group (ISG) fell 2% year over year to $302.5 million.

The adjusted gross margin declined by 140 bps to 45.3% while the adjusted operating margin decreased by 490 bps to 26.7%, implying semiconductor industry pricing pressures.

ON Semiconductor generated $422.4 million in free cash flow and held $2.99 billion in cash and equivalents as of December 31, 2024.

CEO Hassane El-Khoury said the company is continuing to navigate this market downturn, something it has been doing for the last four years. He also flagged uncertainty regarding 2025.

Outlook: ON Semiconductor expects first-quarter adjusted revenue of $1.35 billion—$1.45 billion, below the consensus of $1.69 billion.

The company expects adjusted EPS of $0.45–$0.55 below the consensus of $0.89 and an adjusted gross margin of 39.0%-41.0%.

ON Semiconductor stock lost 37% in stock value in the last 12 months. At least seven Wall Street firms reduced their price target on the stock in 2025, including a rating downgrade from Truist Securities.

In January, Needham’s N. Quinn Bolton noted end demand conditions remain softened across the company’s critical industrial and automotive end markets and inventory digestion continues. The analyst expects management to further reduce fab utilization rates below the 65% level at which utilization ran for most of 2024, leading to lower adjusted gross margins in the first half of 2025. However, he noted ON Semiconductor as a promising semiconductor cycle recovery play.

Price Action: ON stock is down 4.39% at $48.92 premarket at the last check on Monday.

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