Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
ON Semiconductor Corp., profitability ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The financial data reflects a clear upward trend in profitability and returns over the five-year period from 2019 to 2023. Significant improvements are observed across all key margins and return ratios, indicating enhanced operational efficiency and financial performance.
- Gross Profit Margin
- The gross profit margin declined from 35.77% in 2019 to 32.65% in 2020, suggesting some margin pressure during this period. However, it rebounded substantially in 2021 to 40.27% and continued to increase to a peak of 48.97% in 2022 before slightly declining to 47.06% in 2023. This overall growth indicates improved cost management or pricing power.
- Operating Profit Margin
- The operating profit margin exhibited consistent growth each year. Starting at 7.84% in 2019 and decreasing slightly to 6.64% in 2020, it surged to 19.10% in 2021. The margin expanded further to 28.34% in 2022 and reached 30.76% in 2023. This trajectory highlights effective control over operating expenses and enhanced operational leverage.
- Net Profit Margin
- Net profitability showed steady improvement, rising from 3.84% in 2019 to 4.46% in 2020. The margin then significantly increased to 14.98% in 2021 and continued upward to 22.85% in 2022 and 26.46% in 2023. This reflects the company's ability to enhance bottom-line profitability amid improving gross and operating profit margins.
- Return on Equity (ROE)
- The return on equity remained relatively stable in 2019 and 2020 at around 6.4-6.6%, but experienced a marked increase to 22.02% in 2021. ROE peaked at 30.74% in 2022 before a slight dip to 28.06% in 2023. This pattern suggests more efficient utilization of shareholders’ equity to generate profits over the observed period.
- Return on Assets (ROA)
- The return on assets improved gradually from 2.51% in 2019 and 2.7% in 2020 to a significant increase of 10.49% in 2021. Further gains were made in 2022 and 2023, reaching 15.88% and 16.52%, respectively. These enhancements indicate better asset utilization and profitability generation from the company's asset base.
Overall, the data demonstrates a strong improvement in financial performance metrics, with particularly robust growth in profitability margins and returns on equity and assets since 2020. The trends suggest effective cost control, improved pricing strategies, and more efficient use of capital and assets, supporting sustainable profitability growth.
Return on Sales
Return on Investment
Gross Profit Margin
ON Semiconductor Corp., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Gross profit | 3,883,500) | 4,077,200) | 2,714,300) | 1,715,800) | 1,973,600) | |
| Revenue | 8,253,000) | 8,326,200) | 6,739,800) | 5,255,000) | 5,517,900) | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 47.06% | 48.97% | 40.27% | 32.65% | 35.77% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 46.12% | 44.93% | 48.25% | 44.53% | — | |
| Analog Devices Inc. | 64.01% | 62.70% | 61.83% | 65.87% | 67.00% | |
| Applied Materials Inc. | 46.70% | 46.51% | 47.32% | 44.72% | 43.72% | |
| Broadcom Inc. | 68.93% | 66.55% | 61.36% | 56.58% | 55.24% | |
| Intel Corp. | 40.04% | 42.61% | 55.45% | 56.01% | — | |
| KLA Corp. | 59.81% | 61.00% | 59.93% | 57.81% | 59.08% | |
| Lam Research Corp. | 44.62% | 45.69% | 46.53% | 45.88% | 45.15% | |
| Micron Technology Inc. | -9.11% | 45.18% | 37.62% | 30.57% | 45.72% | |
| NVIDIA Corp. | 56.93% | 64.93% | 62.34% | 61.99% | — | |
| Qualcomm Inc. | 55.70% | 57.84% | 57.51% | 60.67% | 64.57% | |
| Texas Instruments Inc. | 62.90% | 68.76% | 67.47% | 64.10% | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenue
= 100 × 3,883,500 ÷ 8,253,000 = 47.06%
2 Click competitor name to see calculations.
- Revenue Trends
- The revenue demonstrated a fluctuating pattern over the five-year period. It decreased from 5,517,900 thousand USD in 2019 to 5,255,000 thousand USD in 2020, indicating a decline. This was followed by a sharp increase to 6,739,800 thousand USD in 2021 and continued growth to a peak of 8,326,200 thousand USD in 2022. In 2023, revenue slightly decreased to 8,253,000 thousand USD, showing a minor setback after significant growth.
- Gross Profit Analysis
- Gross profit exhibited a similar pattern to revenue but with a more pronounced increase over time. It initially declined from 1,973,600 thousand USD in 2019 to 1,715,800 thousand USD in 2020. Subsequently, there was a substantial increase in gross profit to 2,714,300 thousand USD in 2021, then to 4,077,200 thousand USD in 2022. The following year, 2023, saw a slight decline to 3,883,500 thousand USD, mirroring the revenue drop.
- Gross Profit Margin Insights
- The gross profit margin provides insight into profitability trends relative to revenue. After a decrease from 35.77% in 2019 to 32.65% in 2020, the margin improved significantly to 40.27% in 2021. This improvement accelerated, reaching 48.97% in 2022, representing nearly half of the revenue as gross profit. In 2023, the margin dipped slightly to 47.06%, but remained high, indicating an overall increase in operational efficiency or cost management over time.
- Overall Summary
- The data reveals that despite a setback in 2020, both revenue and gross profit recovered strongly and grew substantially through 2022, with a small decrease in 2023. Importantly, the gross profit margin improved steadily after 2020, indicating enhanced profitability. The decline in 2023 in both revenue and gross profit alongside a slight reduction in margin suggests a cautious outlook but overall positive operational performance compared to 2019 and 2020 levels.
Operating Profit Margin
ON Semiconductor Corp., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Operating income | 2,538,700) | 2,360,000) | 1,287,600) | 348,700) | 432,700) | |
| Revenue | 8,253,000) | 8,326,200) | 6,739,800) | 5,255,000) | 5,517,900) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 30.76% | 28.34% | 19.10% | 6.64% | 7.84% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 1.77% | 5.36% | 22.20% | 14.02% | — | |
| Analog Devices Inc. | 31.07% | 27.29% | 23.12% | 26.74% | 28.55% | |
| Applied Materials Inc. | 28.86% | 30.20% | 29.87% | 25.37% | 22.93% | |
| Broadcom Inc. | 45.25% | 42.84% | 31.03% | 16.80% | 15.24% | |
| Intel Corp. | 0.17% | 3.70% | 24.62% | 30.41% | — | |
| KLA Corp. | 38.06% | 39.67% | 35.97% | 25.87% | 30.41% | |
| Lam Research Corp. | 29.69% | 31.24% | 30.64% | 26.62% | 25.53% | |
| Micron Technology Inc. | -36.97% | 31.54% | 22.68% | 14.01% | 31.51% | |
| NVIDIA Corp. | 15.66% | 37.31% | 27.18% | 26.07% | — | |
| Qualcomm Inc. | 21.74% | 35.88% | 29.16% | 26.58% | 31.59% | |
| Texas Instruments Inc. | 41.85% | 50.63% | 48.84% | 40.76% | — | |
| Operating Profit Margin, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 18.50% | 27.34% | 28.30% | 25.89% | — | |
| Operating Profit Margin, Industry | ||||||
| Information Technology | 24.49% | 26.43% | 26.73% | 22.69% | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Operating profit margin = 100 × Operating income ÷ Revenue
= 100 × 2,538,700 ÷ 8,253,000 = 30.76%
2 Click competitor name to see calculations.
- Operating Income
- The operating income exhibits a significant upward trend over the five-year period. Starting at $432.7 million in 2019, it faced a decline in 2020 to $348.7 million. However, there was a strong recovery and growth in the subsequent years, with operating income reaching $1.287 billion in 2021, followed by a further increase to $2.36 billion in 2022, and ultimately achieving $2.539 billion in 2023. This indicates effective management of operating expenses or enhanced operational efficiencies resulting in higher income generation.
- Revenue
- Revenue values show moderate fluctuation across the observed years. There was a decrease from $5.518 billion in 2019 to $5.255 billion in 2020, likely reflective of external market factors or company-specific challenges. Revenue rebounded strongly in 2021 to $6.74 billion and continued to increase in 2022 to $8.326 billion. However, a slight decline occurred in 2023 to $8.253 billion. Despite the minor dip in the most recent year, overall revenue exhibited considerable growth from the starting point.
- Operating Profit Margin
- The operating profit margin illustrates a notable improvement over the period. After a decrease from 7.84% in 2019 to 6.64% in 2020, the margin increased substantially to 19.1% in 2021. This upward trend continued with the margin reaching 28.34% in 2022 and further to 30.76% in 2023. The progression reflects enhanced profitability efficiency, possibly due to better cost controls, higher value product sales, or improved operational leverage.
- Summary
- The data indicates a recovery and strong growth in operating income following a dip in 2020. Revenue trends generally move upward with a minor contraction in the last year. The most remarkable change is in the operating profit margin, which displays consistent and significant improvement, suggesting strengthening profitability and operational performance over the observed period.
Net Profit Margin
ON Semiconductor Corp., net profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to ON Semiconductor Corporation | 2,183,700) | 1,902,200) | 1,009,600) | 234,200) | 211,700) | |
| Revenue | 8,253,000) | 8,326,200) | 6,739,800) | 5,255,000) | 5,517,900) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 26.46% | 22.85% | 14.98% | 4.46% | 3.84% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 3.77% | 5.59% | 19.24% | 25.50% | — | |
| Analog Devices Inc. | 26.94% | 22.88% | 19.00% | 21.79% | 22.75% | |
| Applied Materials Inc. | 25.86% | 25.31% | 25.53% | 21.04% | 18.52% | |
| Broadcom Inc. | 39.31% | 34.62% | 24.54% | 12.39% | 12.05% | |
| Intel Corp. | 3.11% | 12.71% | 25.14% | 26.84% | — | |
| KLA Corp. | 32.27% | 36.06% | 30.04% | 20.96% | 25.73% | |
| Lam Research Corp. | 25.88% | 26.73% | 26.72% | 22.42% | 22.70% | |
| Micron Technology Inc. | -37.54% | 28.24% | 21.16% | 12.54% | 26.97% | |
| NVIDIA Corp. | 16.19% | 36.23% | 25.98% | 25.61% | — | |
| Qualcomm Inc. | 20.19% | 29.27% | 26.94% | 22.09% | 18.07% | |
| Texas Instruments Inc. | 37.16% | 43.68% | 42.35% | 38.69% | — | |
| Net Profit Margin, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 17.06% | 25.54% | 25.83% | 23.10% | — | |
| Net Profit Margin, Industry | ||||||
| Information Technology | 20.39% | 22.45% | 23.62% | 19.67% | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Net profit margin = 100 × Net income attributable to ON Semiconductor Corporation ÷ Revenue
= 100 × 2,183,700 ÷ 8,253,000 = 26.46%
2 Click competitor name to see calculations.
- Revenue
- The revenue experienced fluctuations over the observed periods. It decreased slightly from approximately $5.52 billion in 2019 to $5.26 billion in 2020. Subsequently, there was a significant increase, reaching around $6.74 billion in 2021 and continuing upward to about $8.33 billion in 2022. However, in 2023, revenue slightly declined to approximately $8.25 billion. Overall, the trend from 2019 to 2023 shows substantial growth despite the minor setback in the final year.
- Net Income Attributable to the Corporation
- Net income exhibited a robust upward trend throughout the period. Starting at approximately $212 million in 2019, it rose modestly to about $234 million in 2020. A marked increase followed with net income more than quadrupling to nearly $1.01 billion in 2021. This positive trajectory continued, reaching around $1.90 billion in 2022 and further increasing to approximately $2.18 billion in 2023. The data indicates strong profitability growth over the five-year span.
- Net Profit Margin
- The net profit margin improved significantly over the period. Initially at 3.84% in 2019, it rose to 4.46% in 2020, indicating improved profitability despite the modest revenue decline. The margin then improved dramatically, reaching 14.98% in 2021, and continuing upward to 22.85% in 2022. In 2023, the net profit margin further increased, achieving 26.46%. This consistent increase reflects enhanced operational efficiency or favorable cost management contributing to higher profitability relative to revenue.
Return on Equity (ROE)
ON Semiconductor Corp., ROE calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to ON Semiconductor Corporation | 2,183,700) | 1,902,200) | 1,009,600) | 234,200) | 211,700) | |
| Total ON Semiconductor Corporation stockholders’ equity | 7,782,600) | 6,188,500) | 4,585,400) | 3,538,500) | 3,301,700) | |
| Profitability Ratio | ||||||
| ROE1 | 28.06% | 30.74% | 22.02% | 6.62% | 6.41% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 1.53% | 2.41% | 42.18% | 42.66% | — | |
| Analog Devices Inc. | 9.32% | 7.54% | 3.66% | 10.17% | 11.64% | |
| Applied Materials Inc. | 41.94% | 53.51% | 48.08% | 34.21% | 32.94% | |
| Broadcom Inc. | 58.70% | 50.62% | 26.99% | 12.40% | 10.92% | |
| Intel Corp. | 1.60% | 7.90% | 20.83% | 25.79% | — | |
| KLA Corp. | 116.01% | 237.04% | 61.53% | 45.65% | 44.21% | |
| Lam Research Corp. | 54.94% | 73.35% | 64.85% | 43.53% | 46.89% | |
| Micron Technology Inc. | -13.22% | 17.41% | 13.34% | 6.89% | 17.59% | |
| NVIDIA Corp. | 19.76% | 36.65% | 25.64% | 22.91% | — | |
| Qualcomm Inc. | 33.51% | 71.81% | 90.88% | 85.54% | 89.35% | |
| Texas Instruments Inc. | 38.53% | 60.02% | 58.27% | 60.90% | — | |
| ROE, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 13.30% | 22.70% | 25.79% | 24.53% | — | |
| ROE, Industry | ||||||
| Information Technology | 32.00% | 39.15% | 42.48% | 35.75% | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
ROE = 100 × Net income attributable to ON Semiconductor Corporation ÷ Total ON Semiconductor Corporation stockholders’ equity
= 100 × 2,183,700 ÷ 7,782,600 = 28.06%
2 Click competitor name to see calculations.
- Net Income Trends
- The net income attributable to the company exhibited a positive and robust growth trajectory from 2019 through 2023. Starting at $211.7 million in 2019, the net income increased modestly to $234.2 million in 2020. A significant jump occurred in 2021 with net income reaching approximately $1.01 billion, followed by continued substantial growth to $1.90 billion in 2022 and further to $2.18 billion in 2023. This indicates a strong operational performance improvement and higher profitability over the five-year period.
- Stockholders’ Equity Development
- Stockholders’ equity steadily increased year over year, reflecting strengthening of the company's financial base. The equity rose from $3.30 billion in 2019 to $3.54 billion in 2020, which is a moderate increase. This was followed by more pronounced growth to $4.59 billion in 2021, $6.19 billion in 2022, and reaching $7.78 billion in 2023. This consistent expansion suggests retained earnings accumulation and potentially successful capital management strategies.
- Return on Equity (ROE) Analysis
- ROE displayed a notable rise over the years considered. Initially, the ROE was modest at 6.41% in 2019 and slightly increased to 6.62% in 2020. A sharp improvement occurred in 2021, with ROE increasing to 22.02%, followed by further enhancement to 30.74% in 2022. In 2023, the ROE slightly decreased but remained high at 28.06%. This metric indicates improved efficiency in generating profit from equity, highlighting enhanced operational effectiveness and capital utilization efficiency.
- Overall Financial Performance Insight
- The analyzed data reflects a company that has considerably improved both profitability and shareholder value over the five-year span. The substantial growth in net income alongside expanding equity capital and a strong increase in ROE points toward a solid financial position, effective management strategies, and sustainable growth momentum. Despite a minor downturn in ROE in the last year, the level remained significantly elevated compared to the earlier period, indicating continued robust performance.
Return on Assets (ROA)
ON Semiconductor Corp., ROA calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to ON Semiconductor Corporation | 2,183,700) | 1,902,200) | 1,009,600) | 234,200) | 211,700) | |
| Total assets | 13,215,200) | 11,978,500) | 9,626,000) | 8,668,000) | 8,425,500) | |
| Profitability Ratio | ||||||
| ROA1 | 16.52% | 15.88% | 10.49% | 2.70% | 2.51% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 1.26% | 1.95% | 25.46% | 27.78% | — | |
| Analog Devices Inc. | 6.79% | 5.46% | 2.66% | 5.69% | 6.37% | |
| Applied Materials Inc. | 22.31% | 24.41% | 22.80% | 16.19% | 14.22% | |
| Broadcom Inc. | 19.33% | 15.69% | 8.91% | 3.90% | 4.04% | |
| Intel Corp. | 0.88% | 4.40% | 11.80% | 13.65% | — | |
| KLA Corp. | 24.07% | 26.37% | 20.23% | 13.11% | 13.05% | |
| Lam Research Corp. | 24.02% | 26.78% | 24.59% | 15.47% | 18.26% | |
| Micron Technology Inc. | -9.08% | 13.11% | 9.96% | 5.01% | 12.91% | |
| NVIDIA Corp. | 10.61% | 22.07% | 15.05% | 16.15% | — | |
| Qualcomm Inc. | 14.17% | 26.39% | 21.93% | 14.60% | 13.31% | |
| Texas Instruments Inc. | 20.12% | 32.16% | 31.48% | 28.91% | — | |
| ROA, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 7.41% | 12.68% | 13.62% | 11.80% | — | |
| ROA, Industry | ||||||
| Information Technology | 12.52% | 14.57% | 14.67% | 11.45% | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
ROA = 100 × Net income attributable to ON Semiconductor Corporation ÷ Total assets
= 100 × 2,183,700 ÷ 13,215,200 = 16.52%
2 Click competitor name to see calculations.
- Net income attributable to ON Semiconductor Corporation
- The net income showed a strong upward trend over the five-year period, increasing from $211.7 million in 2019 to $2.18 billion in 2023. Notably, there was a significant jump between 2020 and 2021, where net income more than quadrupled, and this positive momentum continued in the subsequent years, albeit at a slower pace.
- Total assets
- Total assets steadily increased each year from $8.43 billion in 2019 to $13.22 billion in 2023. The growth was consistent, with a marked acceleration in asset accumulation after 2021, reflecting potential investment in capacity expansion or acquisition activity supporting future growth.
- Return on Assets (ROA)
- The ROA metric exhibited significant improvement over the period, starting at 2.51% in 2019 and rising to 16.52% in 2023. The sharp increase after 2020 indicates enhanced efficiency in generating earnings relative to the asset base, with the most dramatic growth between 2020 and 2022. This trend suggests improved profitability and asset utilization efficiency within the business.