On Semiconductor Corp. reported first‑quarter 2026 revenue of $1.51 billion, a 4.7% year‑over‑year increase from $1.4457 billion in Q1 2025, and adjusted earnings per share of $0.64, beating the consensus estimate of $0.61 by $0.03 (4.9%). The company’s fourth‑quarter 2025 revenue was $1.5301 billion and EPS was $0.64, indicating a slight sequential decline in top line but a strong earnings beat driven by higher margins and operational leverage.
On the segment level, the AI data‑center business grew 30% sequentially, reflecting robust demand for power‑conversion solutions in AI infrastructure. In contrast, the Analog & Mixed‑Signal Group (AMG) revenue fell 3% sequentially and 5% year‑over‑year, while the Intelligent Sensing Group (ISG) declined 5% sequentially, underscoring lingering weakness in legacy automotive and industrial applications.
Gross margin expanded to 38.5% on a Non‑GAAP basis, the third consecutive quarter of improvement, driven by a more favorable product mix and higher factory utilization. Operating income rose 10% year‑over‑year, reflecting the company’s ability to convert revenue growth into earnings through disciplined cost management.
Management guided Q2 2026 revenue to $1.535 billion–$1.635 billion and adjusted EPS to $0.65–$0.77, both above analyst consensus. The guidance signals confidence in sustained AI‑data‑center demand and a gradual rebound in automotive and industrial markets, reinforcing the company’s strategic shift toward high‑margin growth areas.
CEO Hassane El‑Khoury said, “We exceeded expectations as demand strengthened through the quarter and we have moved beyond the cyclical trough on a path to recovery. Our AI data center business accelerated, growing more than 30% sequentially.” CFO Thad Trent added, “With our operational improvements, we delivered strong operating leverage in our business with a 10% year‑over‑year increase in operating income, outpacing revenue growth by 2x. The strength of our portfolio and optimized cost structure position us to accelerate margins and earnings as market conditions continue to improve.”
Market reaction was mixed: investors highlighted the EPS beat and strong forward guidance as positive signals, while some weighed the mixed performance of legacy segments and the contested revenue beat, leading to a cautious overall sentiment.
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