ON Semiconductor · Earnings release

News Release

onsemi Reports Fourth Quarter and Full Year 2024 Results

Returned 54% of 2024 Free Cash Flow through share repurchases

SCOTTSDALE, Ariz. – Feb. 10, 2025 – onsemi (the “Company”) (Nasdaq: ON) today announced its fourth quarter and fiscal year

2024 results with the following highlights:

•

Fourth quarter revenue of $1,722.5 million

•

Fourth quarter GAAP gross margin and non-GAAP gross margin of 45.2% and

•

Fourth quarter GAAP operating margin and non-GAAP operating margin of

•

Fourth quarter GAAP diluted earnings per share of $0.88 and non-GAAPdiluted earnings per share of $0.95, respectively

•

Full year 2024 free cash flow of $1.2 billion, a 3X increase year-over-year

“As we continue to navigate this market downturn, our actions over the last four years have proven we are a structurally different

company that is well-equipped to navigate prolonged volatility,” said Hassane El-Khoury, president and CEO, onsemi. “While 2025 remains uncertain, we remain committed to our long-term strategy. We

will maintain our financial discipline, streamline our operations and continue to deliver high-value, differentiated intelligent power and sensing solutions that position onsemi to emerge even stronger.”

Selected financial results for the quarter are shown below with comparable periods:

GAAP

Non-GAAP

Three Months Ended

Three Months Ended

(Revenue and Net Income in millions)

Revenue

Gross Margin

Operating Margin

Net Income attributable to onsemi

Diluted Earnings Per Share

Selected financial results for 2024 and 2023 are shown below:

GAAP

Non-GAAP

Year Ended

Year Ended

(Revenue and Net Income in millions)

Revenue

Gross Margin

Operating Margin

Net Income attributable to onsemi

Diluted Earnings Per Share

Revenue Summary

($ in millions)

(Unaudited)

Three Months Ended

Business Segment (1)

Sequential

Change

Year-over-

Year Change

PSG

$

$

$

(2)%

AMG

(7)%

ISG

9%

(2)%

Total

$

$

$

(2)%

Year Ended

Business Segment (1)

Year-over-

Year Change

PSG

$

$

AMG

ISG

Total

$

$

(1)

During the first quarter of 2024, the Company reorganized certain reporting units and its segment reporting

structure. As a result of the reorganization of divisions within PSG and AMG, the prior-period amounts have been reclassified to conform to current-period presentation.

The following table outlines

onsemi’s projected first quarter of 2025 GAAP and non-GAAP outlook.

Total onsemi

GAAP

Special

Items **

Total onsemi

Non-GAAP ***

G1Revenue

—

G2Gross Margin

G3Operating Expenses

G4Other Income and Expense (including interest expense), net

—

G5Diluted Earnings Per Share

Diluted Shares Outstanding *

1 million

*

Diluted shares outstanding can vary as a result of, among other things, the vesting of restricted stock

units, the incremental dilutive shares from the Company’s convertible senior subordinated notes, and the repurchase or the issuance of stock or convertible notes or the sale of treasury shares. In periods when the quarterly average stock price

per share exceeds $52.97 for the 0% Notes, and $103.87 for the 0.50% Notes, the non-GAAP diluted share count and non-GAAP net income per share include the anti-dilutive

impact of the Company’s hedge transactions issued concurrently with the 0% Notes and the 0.50% Notes, respectively. At an average stock price per share between $52.97 and $74.34 for the 0% Notes and $103.87 and $156.78 for the 0.50% Notes, the

hedging activity offsets the potentially dilutive effect of the 0% Notes and 0.50% Notes, respectively. In periods when the quarterly average stock price exceeds $74.34 for the 0% Notes, and $156.78 for the 0.50% Notes, the dilutive impact of the

warrants issued concurrently with such notes are included in the diluted shares outstanding. GAAP and non-GAAP diluted share counts are based on the average stock price for the month subsequent to the end of

the previous quarter.

2

**

Special items may include: amortization of acquisition-related intangibles; expensing of appraised inventory

fair market value step-up; purchased in-process research and development expenses; restructuring, asset impairments and other, net; goodwill and intangible asset

impairment charges; gains and losses on debt prepayment; non-cash interest expense; actuarial (gains) losses on pension plans and other pension benefits; and certain other special items, as necessary. These

special items are out of our control and could change significantly from period to period. As a result, we are not able to reasonably estimate and separately present the individual impact or probable significance of these special items, and we are

similarly unable to provide a reconciliation of the non-GAAP measures. The reconciliation that is unavailable would include a forward-looking income statement, balance sheet and statement of cash flows in

accordance with GAAP. For this reason, we use a projected range of the aggregate amount of special items in order to calculate our projected non-GAAP operating expense outlook.

***

We believe these non-GAAP measures provide important supplemental

information to investors. We use these measures, together with GAAP measures, for internal managerial purposes and as a means to evaluate period-to-period comparisons.

However, we do not, and you should not, rely on non-GAAP financial measures alone as measures of our performance. We believe that non-GAAP financial measures reflect an

additional way of viewing aspects of our operations that, when taken together with GAAP results and the reconciliations to corresponding GAAP financial measures that we also provide in our releases, provide a more complete understanding of factors

and trends affecting our business. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’non-GAAP financial measures, even if they have similar names.

TELECONFERENCE

onsemi will host a conference call for the financial community at 9 a.m. Eastern Time (EST) on Feb. 10, 2025 to discuss this announcement and onsemi’s

results for the fourth quarter of 2024 and fiscal year 2024. The Company will also provide a real-time audio webcast of the teleconference on the Investor Relations page of its website at http://www.onsemi.com. The webcast replay will be available at this site approximately one hour following the live broadcast

and will continue to be available for approximately 30 days following the conference call. Investors and interested parties can also access the conference call by pre-registering here.

About onsemi

onsemi (Nasdaq: ON) is driving disruptive innovations to help build a better future. With a focus on automotive and industrial end-markets, the company is accelerating change in megatrends such as vehicle electrification and safety, sustainable energy grids, industrial automation, and 5G and cloud infrastructure. onsemi offers a

highly differentiated and innovative product portfolio, delivering intelligent power and sensing technologies that solve the world’s most complex challenges and leads the way to creating a safer, cleaner, and smarter world. onsemi is

recognized as a Fortune 500® company and included in the Nasdaq-100 Index® and S&P 500® index. Learn more about onsemi at www.onsemi.com.

# # #

onsemi and the onsemi

logo are trademarks of Semiconductor Components Industries, LLC. All other brand and product names appearing in this document are registered trademarks or trademarks of their respective holders. Although the Company references its website in this

news release, information on the website is not to be incorporated herein.

3

Krystal Heaton

Parag Agarwal

Director, Head of Public Relations

Vice President - Investor Relations & Corporate Development

onsemi

onsemi

Krystal.Heaton@onsemi.com

investor@onsemi.com

This document includes “forward-looking statements,” as that term is defined in Section 27A of the Securities

Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included or incorporated in this document could be deemed forward-looking statements,

particularly statements about the future financial performance of onsemi, including financial guidance for the first fiscal quarter of 2025. Forward-looking statements are often characterized by the use of words such as “believes,”

“estimates,” “expects,” “projects,” “may,” “will,” “intends,” “plans,” “anticipates,” “should” or similar expressions or by discussions of strategy, plans or

intentions. All forward-looking statements in this document are made based on our current expectations, forecasts, estimates and assumptions and involve risks, uncertainties, and other factors that could cause results or events to differ materially

from those expressed in the forward-looking statements. Certain factors that could affect our future results or events are described under Part I, Item 1A “Risk Factors” in our 2024 Annual Report on Form10-K filed with the Securities and Exchange Commission (“SEC”) on February 10, 2025 (our “2024 Form 10-K”), and from time-to-time in our other SEC reports (including in our 2024 Form 10-K). Readers are cautioned not to place undue reliance on

forward-looking statements. We assume no obligation to update such information, except as may be required by law. Investing in our securities involves a high degree of risk and uncertainty, and you should carefully consider the trends, risks, and

uncertainties described in this document, our 2024 Form 10-K and other reports filed with or furnished to the SEC before making any investment decision with respect to our securities. If any of these trends,

risks, or uncertainties actually occurs or continues, our business, financial condition or operating results could be materially adversely affected, the trading prices of our securities could decline, and you could lose all or part of your

investment. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement.

4

ON SEMICONDUCTOR CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share and percentage data)

Quarter Ended

Year Ended

Revenue

$

$

$

$

$

Cost of revenue

Gross profit

Gross margin

%

%

%

%

%

Operating expenses:

Research and development

Selling and marketing

General and administrative

Amortization of acquisition-related intangible assets

Restructuring, asset impairments and other charges, net

Total operating expenses

Operating income

Other income (expense), net:

Interest expense

)

)

)

)

)

Interest income

Loss on debt refinancing and prepayment

—

—

—

—

)

Loss on divestiture of business

—

—

—

—

)

Other income (expense)

)

)

)

Other income (expense), net

)

Income before income taxes

Income tax provision

)

)

)

)

)

Net income

Less: Net (income) loss attributable to non-controlling interest

)

)

)

)

Net income attributable to ON Semiconductor Corporation

$

$

$

$

$

Net income for diluted earnings per share of common stock

$

$

$

$

$

Net income per share of common stock attributable to ON Semiconductor Corporation:

Basic

$

$

$

$

$

Diluted

$

$

$

$

$

Weighted average common shares outstanding:

Basic

Diluted

5

ON SEMICONDUCTOR CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in millions)

Assets

Cash and cash equivalents

$

$

$

Short-term investments

—

Receivables, net

Inventories

Other current assets

Total current assets

Property, plant and equipment, net

Goodwill

Intangible assets, net

Deferred tax assets

ROU financing lease assets

Other assets

Total assets

$

$

$

Liabilities, Non-Controlling Interest and

Stockholders’ Equity

Accounts payable

$

$

$

Accrued expenses and other current liabilities

Current portion of financing lease liabilities

Current portion of long-term debt

—

Total current liabilities

Long-term debt

Deferred tax liabilities

Long-term financing lease liabilities

Other long-term liabilities

Total liabilities

ON Semiconductor Corporation stockholders’ equity:

Common stock

Additional paid-in capital

Accumulated other comprehensive loss

)

)

)

Accumulated earnings

Less: Treasury stock, at cost

)

)

)

Total ON Semiconductor Corporation stockholders’ equity

Non-controlling interest

Total stockholders’ equity

Total liabilities and stockholders’ equity

$

$

$

6

ON SEMICONDUCTOR CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

Quarter Ended

Year Ended

Cash flows from operating activities:

Net income

$

$

$

$

$

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

Loss on sale or disposal of fixed assets

Loss on divestiture of businesses

—

—

—

—

Loss on debt refinancing and prepayment

—

—

—

—

Amortization of debt discount and issuance costs

Share-based compensation

Non-cash asset impairment

charges

—

Change in deferred tax balances

Other

Changes in assets and liabilities

Net cash provided by operating activities

Cash flows from investing activities:

Payments for acquisition of property, plant and equipment

Proceeds from sale of property, plant and equipment

Payments related to acquisition of business

—

—

Purchase of short-term investments

—

—

Proceeds from maturity of short-term investments and available-for-sale securities

—

Other

—

—

—

—

Net cash used in investing activities

Cash flows from financing activities:

Proceeds for the issuance of common stock under the ESPP

Payment of tax withholding for RSUs

Repurchase of common stock

Issuance and borrowings under debt agreements

—

—

—

—

Repayment of borrowings under debt agreements

—

—

—

Payment on principal portion of finance lease obligations

Payment for purchase of bond hedges

—

—

—

—

Proceeds from issuance of warrants

—

—

—

—

Other

—

Net cash used in financing activities

Effect of exchange rate changes on cash, cash equivalents and

restricted cash

Net increase (decrease) in cash, cash equivalents and restricted

cash

Beginning cash, cash equivalents and restricted cash

Ending cash, cash equivalents and restricted cash

$

$

$

$

$

7

ON SEMICONDUCTOR CORPORATION

RECONCILIATION OF GAAP VERSUS NON-GAAP DISCLOSURES

(in millions, except per share and percentage data)

Quarter Ended

Year Ended

Reconciliation of GAAP tonon-GAAP gross profit:

GAAP gross profit

$

$

$

$

$

Special items:

a) Impact of business wind down

—

—

—

—

b) Amortization of acquisition-related intangible

assets

Total special items

Non-GAAP gross profit

$

$

$

$

$

Reconciliation of GAAP tonon-GAAP gross margin:

GAAP gross margin

Special items:

a) Impact of business wind down

— %

— %

— %

— %

— %

b) Amortization of acquisition-related intangible

assets

Total special items

— %

Non-GAAP gross margin

Reconciliation of GAAP tonon-GAAP operating expenses:

GAAP operating expenses

$

$

$

$

$

Special items:

a) Amortization of acquisition-related intangible

assets

b) Restructuring, asset impairments and other,

net

c) Third party acquisition and divestiture related

costs

Total special items

Non-GAAP operating

expenses

$

$

$

$

$

Reconciliation of GAAP tonon-GAAP operating income:

GAAP operating income

$

$

$

$

$

Special items:

a) Amortization of acquisition-related intangible

assets

b) Restructuring, asset impairments and other,

net

c) Third party acquisition and divestiture related

costs

d) Impact of business wind down

—

—

—

—

Total special items

Non-GAAP operating

income

$

$

$

$

$

Reconciliation of GAAP to non-GAAP operating margin

(operating income / revenue):

GAAP operating margin

Special items:

a) Amortization of acquisition-related intangible

assets

b) Restructuring, asset impairments and other,

net

c) Third party acquisition and divestiture related

costs

— %

— %

d) Impact of business wind down

— %

— %

— %

— %

— %

Total special items

Non-GAAP operating

margin

Reconciliation of GAAP to non-GAAP income before income taxes:

GAAP income before income taxes

$

$

$

$

$

Special items:

a) Amortization of acquisition-related intangible

assets

b) Restructuring, asset impairments and other,

net

c) Third party acquisition and divestiture related

costs

8

ON SEMICONDUCTOR CORPORATION

RECONCILIATION OF GAAP VERSUS NON-GAAP DISCLOSURES (Continued)

(in millions, except per share and percentage data)

Quarter Ended

Year Ended

d) Impact of business wind down

—

—

—

—

e) Actuarial (gains) losses on pension plans and other

pension benefits

—

f) Loss on debt refinancing and

prepayment

—

—

—

—

g) Loss on divestiture of businesses

—

—

—

—

Total special items

Non-GAAP income before income

taxes

$

$

$

$

$

Reconciliation of GAAP to non-GAAP net income attributable to ON Semiconductor Corporation:

GAAP net income attributable to ON Semiconductor Corporation

$

$

$

$

$

Special items:

a) Amortization of acquisition-related intangible

assets

b) Restructuring, asset impairments and other,

net

c) Third party acquisition and divestiture related

costs

d) Impact of business wind down

—

—

—

—

e) Actuarial (gains) losses on pension plans and other

pension benefits

—

f) Loss on debt refinancing and

prepayment

—

—

—

—

g) Loss on divestiture of businesses

—

—

—

—

h) Income taxes

Total special items

Non-GAAP net income

attributable to ON Semiconductor Corporation

$

$

$

$

$

GAAP net income for diluted earnings per share

$

$

$

$

$

Non-GAAP net income for

diluted earnings per share

$

$

$

$

$

Reconciliation of GAAP tonon-GAAP diluted shares outstanding:

GAAP diluted shares outstanding

Special items:

a) Less: dilutive shares attributable to convertible

notes

Total special items

Non-GAAP diluted shares

outstanding

Non-GAAP diluted earnings

per share:

Non-GAAP net income

attributable to ON Semiconductor Corporation

$

$

$

$

$

Non-GAAP diluted shares

outstanding

Non-GAAP diluted earnings per

share

$

$

$

$

$

Reconciliation of net cash provided by operating activities to free

cash flow:

Net cash provided by operating activities

$

$

$

$

$

Special items:

a) Payments for acquisition of property, plant and

equipment

Total special items

Free cash flow

$

$

$

$

$

Certain of the amounts in the above tables may not total due to rounding of individual amounts.

9

ON SEMICONDUCTOR CORPORATION

RECONCILIATION OF GAAP VERSUS NON-GAAP DISCLOSURES (Continued)

(in millions, except per share and percentage data)

FREE CASH FLOW

Quarter Ended

Last Twelve

Months

Net cash provided by operating activities

$

$

$

$

$

Payments for acquisition of property, plant and equipment

Free cash flow

$

$

$

$

$

Revenue

$

$

$

$

$

SHARE-BASED COMPENSATION

Total share-based compensation related to restricted stock units, stock grant awards and the employee stock purchase plan was as follows:

Quarter Ended

Year Ended

Cost of revenue

$

$

$

$

$

Research and development

Selling and marketing

General and administrative

Total share-based compensation

$

$

$

$

$

SUPPLEMENTAL FINANCIAL DATA

Quarter Ended

Year Ended

Net cash provided by operating activities

$

$

$

$

$

Free cash flow

$

$

$

$

$

Cash paid for income taxes

$

$

$

$

$

Depreciation and amortization

$

$

$

$

$

Less: Amortization of acquisition-related intangible assets

Depreciation and amortization (excl. amortization of acquisition-related intangible assets)

$

$

$

$

$

NON-GAAP MEASURES

To supplement the consolidated financial results prepared in accordance with GAAP, onsemi

uses certain non-GAAP measures, which are adjusted from the most directly comparable GAAP measures to exclude items related to the amortization of acquisition-related intangibles, expensing of appraised

inventory fair market value step-up, inventory valuation adjustments, in-process research and development expenses, restructuring, asset impairments and other, net,

goodwill and intangible asset impairment charges, gains and losses on debt prepayment, non-cash interest expense, actuarial (gains) losses on pension plans and other pension benefits, third party acquisition

and divestiture-related costs, tax impact of these items, and certain other non-recurring items, as necessary. Management does not consider the effects of these items in evaluating the core operational

activities of onsemi. Management uses these non-GAAP measures internally to make strategic decisions, forecast future results, and evaluate onsemi’s current performance. In addition, the Company believes

that most analysts covering onsemi use the non-GAAP measures to evaluate onsemi’s performance. Given management’s and other relevant parties’ use of thesenon-GAAP measures, onsemi believes these measures are important to investors in understanding onsemi’s current and future operating results as seen through the eyes of management. In addition, management

believes these non-GAAP measures are useful to investors in enabling them to better assess changes in onsemi’s core business across different time periods. Thesenon-GAAP measures are not prepared in accordance with, and should not be considered alternatives or necessarily superior to, GAAP financial data and may be different fromnon-GAAP measures used by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with

other companies’ non-GAAP financial measures, even if they have similar names.

Non-GAAP Revenue

The use of non-GAAP revenue allows

management to evaluate, among other things, the revenue from the Company’s core businesses and trends across different reporting periods on a consistent basis, independent of special items. In addition,non-GAAP revenue is an important component of management’s internal performance measurement and incentive and reward process as it is used to assess the current and historical financial results of the

business and for strategic decision making, preparing budgets, obtaining targets and forecasting future results. Management presents this non-GAAP financial measure to enable investors and analysts to evaluate

the Company’s revenue generation performance relative to the direct costs of operations of onsemi’s core businesses.

Non-GAAP Gross Profit and Gross Margin

The use of non-GAAPgross profit and gross margin allows management to evaluate, among other things, the gross margin and gross profit of the Company’s core businesses and trends across different reporting periods on a consistent basis, independent of non-cash items including, generally speaking, amortization of acquisition-related intangible assets, expensing of appraised inventory fair market value step-up, impact of

business wind-down and non-recurring facility costs. In addition, it is an important component of management’s internal performance measurement and incentive and reward process as it is used to assess the

current and historical financial results of the business and for strategic decision making, preparing budgets, obtaining targets, and forecasting future results. Management presents this non-GAAP financial

measure to enable investors and analysts to evaluate our operating performance independent of certain non-cash items and the effects of certain variables unrelated to our overall operating performance.

Non-GAAP Operating Income and Operating Margin

The use of non-GAAP operating income and operating margin allows management to evaluate, among other

things, the operating margin and operating income of the Company’s core businesses and trends across different reporting periods on a consistent basis, independent of non-cash items including, generally

speaking, expensing of appraised inventory fair market value step-up, impact of business wind-down, non-recurring facility costs, amortization and impairments of

intangible assets, goodwill and intangible asset impairment charges, third party acquisition and divestiture related costs, restructuring charges and certain other special items as necessary. In addition, it is an important component of

management’s internal performance measurement and incentive and reward process as it is used to assess the current and historical financial results of the business and for strategic decision making, preparing budgets, obtaining targets, and

forecasting future results. Management presents this non-GAAP financial measure to enable investors and analysts to evaluate our operating performance independent of certainnon-cash items and the effects of certain variables unrelated to our overall operating performance.

Non-GAAP Net Income Attributable to onsemi and Non-GAAP Diluted Earnings Per Share

The use of non-GAAP net income attributable to onsemi andnon-GAAP diluted earnings per share allows management to evaluate the operating results of onsemi’s core businesses and trends across different reporting periods on a consistent basis, independent of non-cash items including, generally, the amortization and impairments of intangible assets, goodwill and intangible asset impairment charges, expensing of appraised inventory fair market value step-up, impact of business wind down, non-recurring facility costs, restructuring, gains and losses on debt prepayment, non-cashinterest expense, actuarial (gains) losses on pension plans and other pension benefits, third party acquisition and divestiture-related costs, discrete tax items and other non-GAAP tax adjustments and certain

other special items, as necessary. In addition, these items are important components of management’s internal performance measurement and incentive and reward process, as they are used to assess the current and historical financial results of

the business and for strategic decision making, preparing budgets, setting targets, and forecasting future results. Management presents these non-GAAP financial measures to enable investors and analysts to

understand the results of operations of onsemi’s core businesses and, to the extent comparable, to compare our results of operations on a more consistent basis against those of other companies in our industry.

NON-GAAP MEASURES (Continued)

Free Cash Flow

The use of free cash flow allows management to evaluate, among other things, the ability of the Company to make interest or principal payments

on its debt. Free cash flow is defined as the difference between cash flow from operating activities and capital expenditures disclosed under investing activities in the consolidated statement of cash flows. Free cash flow is not an alternative to

cash flow from operating activities as a measure of liquidity. It is an important component of management’s internal performance measurement and incentive and reward process as it is used to assess the current and historical financial results

of the business and for strategic decision making, preparing budgets, obtaining targets, and forecasting future results. Management presents this non-GAAP financial measure to enable investors and analysts to

evaluate our financial performance independent of the cash capital expenditures.

Non-GAAP Diluted Share Count

The use of non-GAAP diluted share count allows management to evaluate, among other things,

the potential dilution due to the outstanding restricted stock units excluding the dilution from the convertible notes that is covered by hedging activity up to a certain threshold. In periods when the quarterly average stock price per share exceeds

$52.97 for the 0% Notes and $103.87 for the 0.50% Notes, the non-GAAP diluted share count includes the anti-dilutive impact of the Company’s hedge transactions issued concurrently with the 0% Notes and

the 0.50% Notes, respectively. At an average stock price per share between $52.97 and $74.34 for the 0% Notes and $103.87 and $156.78 for the 0.50% Notes, the hedging activity offsets the potentially dilutive effect of the 0% Notes and the 0.50%

Notes, respectively. In periods when the quarterly average stock price per share exceeds $74.34 for the 0% Notes and $156.78 for the 0.50% Notes, the dilutive impact of the warrants issued concurrently with such notes are included in the diluted

shares outstanding.