Onsemi Q4 2024 Net Income Falls 32.5%, Stock Drops 8.21%

On February 11, 2025, onsemi, a leading provider of power semiconductors and image sensors, released its financial results for Q4 of fiscal year 2024. The company reported a decline in both revenue and profit compared to the same period last year. Moreover, its forecast for Q1 2025 performance remains less optimistic. onsemi also highlighted plans to "simplify operations" in 2025, although no further details were provided. As a result, onsemi's stock price dropped by 8.21% during trading on February 10, 2025.

For Q4 2024, onsemi posted revenue of $1.722 billion, reflecting a 14.6% year-over-year decline. GAAP net income stood at $379 million, down 32.5%, while Non-GAAP net income was $404 million, a 25.3% decrease. GAAP diluted earnings per share (EPS) was $0.88, with Non-GAAP diluted EPS at $0.95. Gross margin, based on GAAP and Non-GAAP, was 45.2% and 45.3%, respectively, while operating margin was 23.7% for GAAP and 26.7% for Non-GAAP.

Breaking down the company's business segments, the Power Solutions Group saw a 16% drop in sales, totaling $809 million. The Analog and Mixed Signal Group experienced an 18% decrease, with sales of $610 million. The Smart Sensing Group had a modest decline of less than 2%, with revenue reaching $302 million.

For the full fiscal year 2024, onsemi reported total revenue of $7.082 billion, down 14.2% year-over-year. GAAP net income was $1.573 billion, a decrease of 32.5%, while Non-GAAP net income totaled $1.704 billion, down 24.4%. The full-year GAAP diluted EPS was $0.88, and Non-GAAP diluted EPS was $0.95. Gross margin remained stable at 45.2% for GAAP and 45.3% for Non-GAAP, with operating margin at 23.7% (GAAP) and 26.7% (Non-GAAP). Free cash flow for the year reached $1.2 billion, tripling compared to the previous year.

The decline in performance was primarily driven by weaker demand in global automotive and industrial markets, with no clear signs of recovery. onsemi’s CEO, Hassane El-Khoury, stated that the company is prepared to "navigate long-term volatility" and acknowledged that the market remains subdued. He also mentioned that the company's outlook for 2025 remains uncertain. Despite the challenges, onsemi remains committed to maintaining financial discipline, simplifying operations, and continuing to provide high-value, differentiated smart power and sensing solutions to strengthen its position in the market.

Looking ahead to Q1 2025, onsemi expects revenue to further decline to between $1.35 billion and $1.45 billion. This represents a 24.8% year-over-year decrease compared to Q1 2024. The forecasted revenue is also below analysts' expectations of $1.68 billion. onsemi anticipates adjusted earnings per share (EPS) for Q1 2025 to range from $0.45 to $0.55, well below the consensus estimate of $0.88.