Onsemi achieved its highest-ever free cash flow margin on an annual basis in 2025, maintaining both profitability and financial stability. The company's performance is assessed to have been defensive, driven by cost management and cash generation, even amidst a correction in key markets.

Onsemi announced its fourth quarter and fiscal year 2025 earnings on February 11th, reporting fourth-quarter revenue of $1.53 billion. For the same period, the company achieved gross margin of 36% on a GAAP basis and 38.2% on a non-GAAP basis. Operating profit margin was 13.1% on a GAAP basis and 19.8% on a non-GAAP basis.

Diluted earnings per share (EPS) for the fourth quarter were $0.45 on a GAAP basis and $0.64 on a non-GAAP basis. For the full year, operating cash flow was $1.8 billion and free cash flow was $1.4 billion, with a free cash flow margin of 24%, the highest since the company's founding.

Management cited signs of market stabilization and cost control as the driving force behind the performance. CEO Hassan El Khoury explained that the company is continuing to invest in key power and sensing technologies, with automotive, industrial, and AI data center power as key growth areas. In the long term, the strategy is to secure competitiveness in the technological transition phase and build a stable profit structure.

On the financial side, shareholder return policies were emphasized. Chief Financial Officer (CFO) Tad Trent announced that all free cash flow through 2025 would be used to repurchase treasury shares. The company also approved a new treasury share repurchase program worth up to $6 billion over the next three years.

On the business front, collaborations focused on next-generation power semiconductors continued to expand. ON Semiconductor unveiled vertical gallium nitride (vGaN) power semiconductors and plans to expand production and development of GaN power devices through a Memorandum of Understanding (MoU) with Innoscience and a collaboration with GlobalFoundries.

Onsemi focuses on improving operational efficiency and margin structure rather than short-term market volatility, and maintains the foundation for performance recovery should the market environment improve in the future.