ON SEMICONDUCTOR CORP
For the period ended Oct 3, 2025. Filed Nov 3, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Oct 3, 2025 · Filed Nov 3, 2025
ON$63.31+0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-07-04; filed 2025-08-04.
0001097864-25-000013
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-10-03; filed 2025-11-03.
0001097864-25-000019
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 114 previous paragraphs and 115 current paragraphs.
66 unchanged; 39 reworded; 9 added; 9 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
Amortization of Intangible Assets
Current report
Amortization of intangible assets was $11.2 million for the quarter ended October 3, 2025, as compared to $13.0 million for the quarter ended September 27, 2024, representing a decrease of $1.8 million, or approximately 14%.
Current report
Other Income (Expense)
Current report
Nine Months Ended October 3, 2025 compared to the Nine Months Ended September 27, 2024
Current report
Research and development expenses were$449.8 million for the nine months ended October 3, 2025, as compared to$457.5 million for the nine months ended September 27, 2024, representing a decrease of $7.7 million, or approximately 1.7%. The decrease was primarily attributable to a decrease in production supplies, outside services and payroll-related expenses.
Current report
Generaland administrative expenses were $262.9 million for the nine months ended October 3, 2025, as compared to $275.8 million for the nine months ended September 27, 2024, representing a decrease of $12.9 million, or approximately 5%. The decrease was primarily attributable to decreased third-party acquisition-related costs.
Current report
Amortization of Intangible Assets
Current report
Amortization of intangible assets was$33.6 million and$38.5 million for the nine months ended October 3, 2025 and September 27, 2024, respectively, representing a decrease of $4.9 million, or approximately 13%.
Current report
Other Income (Expense)
Removed paragraphs (9)
Previous report
Amortization of Acquisition-Related Intangible Assets
Previous report
Amortization of acquisition-related intangible assets was $11.0 million for the quarter ended July 4, 2025, as compared to $12.9 million for the quarter ended June 28, 2024, representing a decrease of $1.9 million, or approximately 15%.
Previous report
Other Income
Previous report
Six Months Ended July 4, 2025 compared to the Six Months Ended June 28, 2024
Previous report
Research and development expenses were $307.9 million for the six months ended July 4, 2025, as compared to $306.5 million for the six months ended June 28, 2024, representing an increase of $1.4 million, or approximately 0.5%. The increase was primarily attributable to an increase in production supplies, partially offset by a decrease in payroll-related expenses.
Previous report
Generaland administrative expenses were $175.6 million for the six months ended July 4, 2025, as compared to $180.3 million for the six months ended June 28, 2024, representing a decrease of $4.7 million, or approximately 3%. The decrease was primarily attributable to payroll-related expenses, partially offset by an increase in the bad debt provision for a specific customer.
Previous report
Amortization of Acquisition-Related Intangible Assets
Previous report
Amortization of acquisition-related intangible assets was $22.4 million and $25.5 million for the six months ended July 4, 2025 and June 28, 2024, respectively, representing a decrease of $3.1 million, or approximately 12%. The decrease was due to a reduction in amortization expense as certain intangible assets became fully amortized.
Reworded paragraphs (39)
Previous wording
We provide intelligent power and intelligent sensing solutions with a primary focus towards automotive and industrial markets to help our customers solve challenging problems and create cutting-edge products for a better future. Our intelligent power technologies enable the electrification of the automotive industry that allows for lighter and longer-range electric vehicles, empowers efficient fast-charging systems and propels sustainable energy for the highest efficiency solar strings and industrial power. Our intelligent power solutions for the automotive industry allow our customers to exceed range targets with lower weight and reduce system cost through efficiency. We are also utilizing our extensive range of power technologies to address the growing power demands of AI and data centers. Our intelligent sensing technologies support the next generation industry, allowing for smarter factories and buildings while also enhancing the automotive mobility experience with imaging and depth sensing that make advanced vehicle safety and automated driving systems possible.
Current wording
We offer intelligent power and intelligent sensing solutions that drive the transformation of automotive and industrial markets, while also meeting the increasing needs of AI and data centers. Our intelligent power technologies enable the electrification of the automotive industry that allows for lighter and longer-range electric vehicles, empowers efficient fast-charging systems and propels sustainable energy for the highest efficiency solar strings and industrial power. Our intelligent power solutions for the automotive industry allow our customers to exceed range targets with lower weight and reduce system cost through efficiency. Our intelligent sensing technologies support the next generation industry, allowing for smarter factories and buildings while also enhancing the automotive mobility experience with imaging and depth sensing that make advanced vehicle safety and automated driving systems possible.
Previous wording
We are focused on generating operating cash and returning capital to our shareholders through our Share Repurchase Program. Our goal is to achieve revenue growth with stable gross margins by capitalizing on high-growth megatrends in our primary end-markets of automotive and industrial infrastructure. Despite the current challenges posed by geopolitical and macroeconomic factors, we continue to optimize and right-size our manufacturing footprint to align our capacity with anticipated long-term growth, while maintaining gross margins through generating efficiencies. We design products for differentiated markets, focusing on addressing customer needs. We aim to achieve efficiencies in our operating and capital expenditures and invest in research and development initiatives to accelerate growth in high-margin products.
Current wording
We are focused on generating operating cash and returning capital to our shareholders through our Share Repurchase Program. Our goal is to achieve revenue growth with stable gross margins by capitalizing on high-growth megatrends in our primary end-markets of automotive and industrial infrastructure. Despite the current challenges posed by geopolitical and macroeconomic factors, we continue to optimize and right-size our manufacturing footprint to align our capacity with anticipated long-term growth, while focused on generating efficiencies to manage these headwinds. We design products for differentiated markets, focusing on addressing customer needs. We aim to achieve efficiencies in our operating and capital expenditures and invest in research and development initiatives to accelerate growth in high-margin products.
Previous wording
We expect to incur total severance costs and related benefit expenses of $64 million related to the termination of approximately 2,400 employees. Of this, approximately $2.9 million and $63.1 million was recognized during the quarter and six months ended July 4, 2025, respectively. Additionally, we recorded non-cash impairment charges of $40.6 million and $472.1 million during the quarter and six months ended July 4, 2025, respectively, related to previous investments in manufacturing equipment at certain manufacturing facilities pursuant to held-for-sale accounting guidance. Other charges of $5.6 million and $50.5 million for the quarter and six months ended July 4, 2025, respectively, comprised of estimated costs associated with selling the equipment and contract termination costs, were incurred as a result of the above initiatives. The total of the aforementioned costs was included within Restructuring, Asset Impairments and Other, Net in the Consolidated Statement of Operations.
Current wording
We expect to incur total severance costs and related benefit expenses of $67 million related to the termination of approximately 2,400 employees. Of this, approximately $2.8 million and $65.9 million was recognized during the quarter and nine months ended October 3, 2025, respectively. Additionally, we recorded non-cash impairment charges of $15.8 million and $487.9 million during the quarter and nine months ended October 3, 2025, respectively, related to previous investments in manufacturing equipment at certain manufacturing facilities pursuant to held-for-sale accounting guidance. Other charges of $1.0 million and $51.5 million for the quarter and nine months ended October 3, 2025, respectively, comprised of estimated costs associated with selling the equipment and contract termination costs, were incurred as a result of the above initiatives. The total of the aforementioned costs was included within Restructuring, Asset Impairments and Other, Net in the Consolidated Statement of Operations.
Previous wording
Additionally, during the six months ended July 4, 2025, we recorded $235.8 million relating to excess and obsolete inventory charges, of which $230.3 million related to inventory primarily considered work in progress within the ISG reportable segment, as well as $45.7 million related to write-off of consumables, manufacturing supplies and obligations for certain unfulfilled purchase commitments due to the manufacturing capacity reduction actions associated with the 2025 Manufacturing Realignment Program. These charges were recorded within Cost of revenue in the Consolidated Statement of Operations.
Current wording
Additionally, during the nine months ended October 3, 2025, we recorded $235.8 million relating to excess and obsolete inventory charges, of which $230.3 million related to inventory primarily considered work in progress within the ISG reportable segment, as well as $45.7 million related to write-off of consumables, manufacturing supplies and obligations for certain unfulfilled purchase commitments due to the manufacturing capacity reduction actions associated with the 2025
Previous wording
During the quarter ended July 4, 2025, we repurchased approximately 6.9 million shares of common stock for an aggregate purchase price of $303.0 million. During the first quarter of 2025, we had repurchased approximately 6.1 million shares of common stock for an aggregate purchase price of $302.6 million. For additional information, see Note 8: ''Earnings Per Share and Equity'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q.
Current wording
During the quarter ended October 3, 2025, we repurchased approximately 6.1 million shares of common stock for an aggregate purchase price of $328.2 million. During the nine months ended October 3, 2025, we repurchased approximately 19.1 million shares of common stock for an aggregate purchase price of $933.8 million. For additional information, see Note 8: ''Earnings Per Share and Equity'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q.
Previous wording
Revenue was $1,468.7 million and $1,735.2 million for the quarters ended July 4, 2025 and June 28, 2024, respectively, representing a decrease of $266.5 million, or approximately 15%, year over year. We had one customer, a distributor, whose revenue accounted for approximately 12% of our total revenue for the quarters ended July 4, 2025 and June 28, 2024 across all reportable segments.
Current wording
Revenue was $1,550.9 million and $1,761.9 million for the quarters ended October 3, 2025 and September 27, 2024, respectively, representing a decrease of $211.0 million, or approximately 12%, year over year. We had one customer, a distributor, whose revenue accounted for approximately 12% of our total revenue for the quarters ended October 3, 2025 and September 27, 2024 across all reportable segments.
Previous wording
Revenue from PSG decreased by $137.0 million, or approximately 16%, for the quarter ended July 4, 2025 compared to the quarter ended June 28, 2024. Revenue from our Automotive Power Division, Multi-Market Power Division and Industrial Power Division decreased by $93.4 million, $40.4 million and $3.2 million, respectively, primarily due to the continued decrease in demand in the automotive and industrial end-markets.
Current wording
Revenue from PSG decreased by $91.8 million, or approximately 11%, for the quarter ended October 3, 2025 compared to the quarter ended September 27, 2024. Revenue from our Automotive Power Division, Multi-Market Power Division and Industrial Power Division decreased by $69.6 million, $19.6 million and $2.6 million, respectively, primarily due to the continued decrease in demand in the automotive and industrial end-markets.
Previous wording
Revenue from AMG decreased by $91.9 million, or approximately 14%, for the quarter ended July 4, 2025 compared to the quarter ended June 28, 2024. Revenue from our Sensor Interface Division, Power Management Division and Integrated Circuit Division decreased by $31.5 million, $57.3 million and $3.1 million, respectively, primarily due to the continued decrease in demand in the automotive and industrial end-markets.
Current wording
Revenue from AMG decreased by $70.4 million, or approximately 11%, for the quarter ended October 3, 2025 compared to the quarter ended September 27, 2024. Revenue from our Sensor Interface Division increased by $25.3 million primarily due to an increase in industrial demand offset by decreases within our Power Management Division and Integrated Circuit Division of $71.2 million and $24.5 million, respectively, primarily due to the continued decrease in demand in the automotive and other end-markets.
Previous wording
Revenue from ISG decreased by $37.6 million, or approximately 15%, for the quarter ended July 4, 2025 compared to the quarter ended June 28, 2024. Revenue from our Industrial and Consumer Solutions Division and Automotive Sensing Division decreased by $4.1 million and $33.5 million, respectively, primarily due to the continued decrease in demand in the automotive and industrial end-markets.
Current wording
Revenue from ISG decreased by $48.8 million, or approximately 18%, for the quarter ended October 3, 2025 compared to the quarter ended September 27, 2024. Revenue from our Industrial and Consumer Solutions Division and Automotive Sensing Division decreased by $0.7 million and $48.1 million, respectively, primarily due to the continued decrease in demand in the automotive and industrial end-markets.
Previous wording
Gross profit decreased by $232.1 million, or approximately 30%, to $551.9 million for the quarter ended July 4, 2025 compared to $784.0 million for the quarter ended June 28, 2024 primarily attributable to a continued decrease in sales volume from existing products and new products that negatively impacted gross profit by approximately $220.1 million and $12.0 million, respectively.
Current wording
Gross profit decreased by $212.2 million, or approximately 27%, to $587.2 million for the quarter ended October 3, 2025 compared to $799.4 million for the quarter ended September 27, 2024 primarily attributable to a continued decrease in sales volume from existing products and new products that negatively impacted gross profit by approximately $188.2 million and $24.0 million, respectively.
Previous wording
PSG gross profit decreased by $168.0 million, primarily driven by the decline in sales volume from existing products and new products which negatively impacted gross profit by approximately $156.0 million and $12.0 million, respectively. PSG gross margin decreased by 15.9 percentage points to 25.9% from 41.8% as a result of significant underutilization, decline in sales volume, impact of unfavorable product mix and market pressures.
Current wording
PSG gross profit decreased by $134.7 million, primarily driven by the decline in sales volume from existing products and new products, which negatively impacted gross profit by approximately $110.7 million and $24.0 million, respectively. PSG gross margin decreased by 13.1 percentage points to 28.5% from 41.6% as a result of significant underutilization, decline in sales volume, impact of unfavorable product mix and market pressures.
Previous wording
AMG gross profit decreased by $40.1 million, primarily driven by the decline in sales volume from existing products. AMG gross margin increased by 1.0 percentage point to 50.7% from 49.7%, primarily due to the reduction in lower-margin manufacturing services revenue at our EFK location.
Current wording
AMG gross profit decreased by $29.2 million, primarily driven by the decline in sales volume from existing products. AMG gross margin increased by 1.0 percentage point to 50.8% from 49.8%, primarily due to the reduction in lower-margin manufacturing services revenue at our EFK location.
Previous wording
ISG gross profit decreased by $24.0 million, primarily driven by the decline in sales volume from existing products. ISG gross margin decreased to 41.6% from 44.9%, primarily due to unfavorable product mix.
Current wording
ISG gross profit decreased by $48.3 million, primarily driven by the decline in sales volume from existing products. ISG gross margin decreased to 35.2% from 46.3%, primarily due to unfavorable product mix and market pressures as well as the result of certain strategy changes in connection with the 2025 Manufacturing Realignment Program.
Previous wording
Research and development expenses were $143.8 million for the quarter ended July 4, 2025, as compared to $156.5 million for the quarter ended June 28, 2024, representing a decrease of $12.7 million, or approximately 8%. The decrease was primarily attributable to a decrease in production supplies and payroll-related expenses.
Current wording
Research and development expenses were $141.9 million for the quarter ended October 3, 2025, as compared to $151.0 million for the quarter ended September 27, 2024, representing a decrease of $9.1 million, or approximately 6%. The decrease was primarily attributable to a decrease in production supplies and outside services.
Previous wording
Selling and marketing expenses were $63.3 million for the quarter ended July 4, 2025, as compared to $68.6 million for the quarter ended June 28, 2024, representing a decrease of $5.3 million, or approximately 8%. The decrease was primarily attributable to a decrease in payroll-related expenses.
Current wording
Selling and marketing expenses were $62.8 million for the quarter ended October 3, 2025, as compared to $65.4 million for the quarter ended September 27, 2024, representing a decrease of $2.6 million, or approximately 4%. The decrease was primarily attributable to a decrease in payroll-related expenses.
Previous wording
General and administrative expenses were $91.2 million for the quarter ended July 4, 2025, as compared to $85.0 million for the quarter ended June 28, 2024, representing an increase of $6.2 million, or approximately 7%. The increase was primarily attributable to an increase in the bad debt provision for a specific customer and an increase in outside services.
Current wording
General and administrative expenses were $87.3 million for the quarter ended October 3, 2025, as compared to $95.5 million for the quarter ended September 27, 2024, representing a decrease of $8.2 million, or approximately 9%. The decrease was primarily attributable to an increase in payroll-related expenses offset by lower third-party acquisition-related costs.
Previous wording
Restructuring, asset impairments and other, net was $49.2 million for the quarter ended July 4, 2025, as compared to $72.5 million for the quarter ended June 28, 2024. Charges incurred for the quarter ended July 4, 2025 primarily relate to restructuring actions during the period. See Note 5: ''Restructuring, Asset Impairments and Other, Net'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q for additional information.
Current wording
Restructuring, asset impairments and other, net was $19.6 million for the quarter ended October 3, 2025, as compared to $29.1 million for the quarter ended September 27, 2024. Charges incurred for the quarter ended October 3, 2025 primarily relate to restructuring actions during the period. See Note 5: ''Restructuring, Asset Impairments and Other, Net'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q for additional information.
Previous wording
Interest expense increased by $2.2 million to $17.9 million during the quarter ended July 4, 2025, as compared to $15.7 million during the quarter ended June 28, 2024. Our average gross long-term debt for the quarter ended July 4, 2025 was $3,379.9 million at a weighted-average interest rate of 2.1%, as compared to $3,379.9 million at a weighted-average interest rate of 1.9% for the quarter ended June 28, 2024.
Current wording
Interest expense increased by $2.0 million to $17.7 million during the quarter ended October 3, 2025, as compared to $15.7 million during the quarter ended September 27, 2024. Our average gross long-term debt for the quarter ended October 3, 2025 was $3,379.9 million at a weighted-average interest rate of 2.1%, as compared to $3,379.9 million at a weighted-average interest rate of 1.9% for the quarter ended September 27, 2024.
Previous wording
Interest income decreased by $2.2 million, or approximately 8%, to $25.2 million during the quarter ended July 4, 2025 compared to $27.4 million during the quarter ended June 28, 2024.
Current wording
Interest income decreased by $5.9 million, or approximately 21%, to $22.7 million during the quarter ended October 3, 2025 compared to $28.6 million during the quarter ended September 27, 2024 primarily related to lower interest rates on short-term investments.
Previous wording
During the quarter ended July 4, 2025, other income was $1.5 million compared to $1.9 million during the quarter ended June 28, 2024.
Current wording
During the quarter ended October 3, 2025, other income was $3.6 million compared to other expense of $3.7 million during the quarter ended September 27, 2024, primarily driven by higher dividend income.
Previous wording
We recorded an income tax provision of $30.5 million and $63.7 million for the quarters ended July 4, 2025 and June 28, 2024, respectively, representing effective tax rates of 15.1% and 15.8%, respectively.
Current wording
We recorded an income tax provision of $17.7 million and $51.9 million for the quarters ended October 3, 2025 and September 27, 2024, respectively, representing effective tax rates of 6.5% and 11.4%, respectively. The change in the effective tax rate for the quarter was primarily driven by a return-to-provision adjustment recorded upon finalizing the U.S. federal income tax return, which resulted in a discrete tax benefit.
Previous wording
Revenue was $2,914.4 million and $3,597.9 million for the six months ended July 4, 2025 and June 28, 2024, respectively, representing a decrease of $683.5 million, or approximately 19%, year over year. We had one customer, a distributor, whose revenue accounted for approximately 11% of our total revenue for the six months ended July 4, 2025 and June 28, 2024.
Current wording
Revenue was $4,465.3 million and $5,359.8 million for the nine months ended October 3, 2025 and September 27, 2024, respectively, representing a decrease of $894.5 million, or approximately 17%, year over year. We had one customer, a distributor, whose revenue accounted for approximately 13% and 11% of our total revenue for the nine months ended October 3, 2025 and September 27, 2024, respectively.
Previous wording
Revenue from PSG decreased by $366.2 million, or approximately 21%, for the six months ended July 4, 2025 compared to the six months ended June 28, 2024. Revenue from our Automotive Power Division, Multi-Market Power Division and Industrial Power Division decreased by $259.1 million, $94.9 million and $12.2 million, respectively, primarily due to the continued decrease in demand in the automotive and industrial end-markets.
Current wording
Revenue from PSG decreased by $457.9 million, or approximately 18%, for the nine months ended October 3, 2025 compared to the nine months ended September 27, 2024. Revenue from our Automotive Power Division, Multi-Market Power Division and Industrial Power Division decreased by $328.8 million, $114.4 million and $14.7 million, respectively, primarily due to the continued decrease in demand in the automotive and industrial end-markets.
Previous wording
Revenue from AMG decreased by $222.5 million, or approximately 17%, for the six months ended July 4, 2025 compared to the six months ended June 28, 2024. Revenue from our Sensor Interface Division, Power Management Division and Integrated Circuit Division decreased by $89.0 million, $130.2 million and $3.3 million, respectively, primarily due to the continued decrease in demand in the automotive and industrial end-markets.
Current wording
Revenue from AMG decreased by $292.9 million, or approximately 15%, for the nine months ended October 3, 2025 compared to the nine months ended September 27, 2024. Revenue from our Sensor Interface Division, Power Management Division and Integrated Circuit Division decreased by $63.6 million, $201.3 million and $28.0 million, respectively, primarily due to the continued decrease in demand in the automotive and industrial end-markets.
Previous wording
Revenue from ISG decreased by $94.8 million, or approximately 17%, for the six months ended July 4, 2025 compared to the six months ended June 28, 2024, largely driven by a decrease in revenue from our Industrial and Consumer Solutions Division and Automotive Sensing Division of $23.1 million and $71.7 million, respectively, primarily due to the continued decrease in demand in the automotive and industrial end-markets.
Current wording
Revenue from ISG decreased by $143.7 million, or approximately 17%, for the nine months ended October 3, 2025 compared to the nine months ended September 27, 2024, largely driven by a decrease in revenue from our Industrial and Consumer Solutions Division and Automotive Sensing Division of $23.8 million and $119.9 million, respectively, primarily due to the continued decrease in demand in the automotive and industrial end-markets as well as the result of certain strategy changes in connection with the 2025 Manufacturing Realignment Program.
Previous wording
Gross profit decreased by $791.9 million, or approximately 48%, to $845.7 million for the six months ended July 4, 2025 compared to $1,637.6 million for the six months ended June 28, 2024. We recorded excess and obsolete inventory charges of $235.8 million, of which $230.3 million related to inventory primarily considered work in progress within the ISG reportable segment as a result of changes in business strategy due to the 2025 Manufacturing Realignment Program. See Note 5: ''Restructuring, Asset Impairments and Other, Net'' for additional information. We also continued to experience a decrease in sales volume from existing products and new products that negatively impacted gross profit by approximately $423.3 million and $132.8 million, respectively.
Current wording
Gross profit decreased by $1,004.1 million, or approximately 41%, to $1,432.9 million for the nine months ended October 3, 2025 compared to $2,437.0 million for the nine months ended September 27, 2024. We recorded excess and obsolete inventory charges of $235.8 million, of which $230.3 million related to inventory primarily considered work in progress within the ISG reportable segment, as a result of changes in business strategy due to the 2025 Manufacturing Realignment Program. See Note 5: ''Restructuring, Asset Impairments and Other, Net'' for additional information. We also continued to experience a significant decrease in sales volume from existing products and new products that negatively impacted gross profit by approximately $635.5 million and $132.8 million, respectively.
Previous wording
PSG gross profit decreased by $410.2 million, primarily driven by the decline in sales volume from existing products and new products which negatively impacted gross profit by approximately $277.4 million and $132.8 million, respectively. Also included in the gross profit decrease was the $43.9 million write-off of consumables and manufacturing supplies associated with the manufacturing capacity reduction actions taken under the 2025 Manufacturing Realignment Program. PSG gross margin decreased by 19.2 percentage points to 22.6% from 41.8% as a result of the decline in sales volume, significant underutilization, the related impact of unfavorable product mix and the impact of the consumables and manufacturing supplies write-off discussed above.
Current wording
PSG gross profit decreased by $544.9 million, primarily driven by the decline in sales volume from existing products and new products, which negatively impacted gross profit by approximately $412.1 million and $132.8 million, respectively. Also included in the gross profit decrease was the $43.9 million write-off of consumables and manufacturing supplies associated with the manufacturing capacity reduction actions taken under the 2025 Manufacturing Realignment Program. PSG gross margin decreased by 17.0 percentage points to 24.7% from 41.7% as a result of the decline in sales volume, significant underutilization, the related impact of unfavorable product mix and the impact of the consumables and manufacturing supplies write-off discussed above.
Previous wording
AMG gross profit decreased by $78.0 million, primarily driven by the decline in sales volume from existing products. AMG gross margin increased by 2.8% percentage points to 51.9% from 49.1%, primarily due to improved product mix and the reduction in lower-margin manufacturing services revenue at our EFK location.
Current wording
AMG gross profit decreased by $107.2 million, primarily driven by the decline in sales volume from existing products. AMG gross margin increased by 2.2% percentage points to 51.5% from 49.3%, primarily due to the reduction in lower-margin manufacturing services revenue at our EFK location.
Previous wording
ISG gross profit decreased by $303.7 million, primarily driven by the excess and obsolete inventory charges discussed above. Additionally, the decline in sales volume from existing products added to the decrease. ISG gross margin decreased to (9.1)% from 48.3%, primarily due to the excess and obsolete inventory charges.
Current wording
ISG gross profit decreased by $352.0 million, primarily driven by the excess and obsolete inventory charges discussed above. Additionally, the decline in sales volume from existing products added to the decrease. ISG gross margin decreased to 5.9% from 47.6%, primarily due to the excess and obsolete inventory charges as a result of certain strategy changes in connection with the 2025 Manufacturing Realignment Program.
Previous wording
Selling and marketing expenses were $131.6 million for the six months ended July 4, 2025, as compared to $137.7 million for the six months ended June 28, 2024, representing a decrease of $6.1 million, or approximately 4%. The decrease was primarily attributable to a decrease in payroll-related expenses.
Current wording
Selling and marketing expenses were$194.4 million for the nine months ended October 3, 2025, as compared to$203.1 million for the nine months ended September 27, 2024, representing a decrease of $8.7 million, or approximately 4%. The decrease was primarily attributable to a decrease in payroll-related expenses.
Previous wording
Restructuring, asset impairments and other, net was $588.5 million for the six months ended July 4, 2025, as compared to $73.9 million for the six months ended June 28, 2024, representing an increase of $514.6 million. Charges incurred for the six months ended July 4, 2025 primarily relate to restructuring actions during the period. See Note 5: ''Restructuring, Asset Impairments and Other, Net'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q for additional information.
Current wording
Restructuring, asset impairments and other, net was$608.1 million for the nine months ended October 3, 2025, as compared to$103.0 million for the nine months ended September 27, 2024, representing an increase of $505.1 million. Charges incurred for the nine months ended October 3, 2025 primarily relate to restructuring actions during the period. See Note 5: ''Restructuring, Asset Impairments and Other, Net'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q for additional information.
Previous wording
Interest expense increased by $4.6 million to $35.9 million during the six months ended July 4, 2025, as compared to $31.3 million during the six months ended June 28, 2024. Our average gross long-term debt balance for the six months ended July 4, 2025 was $3,379.9 million at a weighted-average interest rate of 2.12%, as compared to $3,379.9 million at a weighted-average interest rate of 1.9% for the six months ended June 28, 2024.
Current wording
Interest expense increased by $6.6 million to$53.6 million during the nine months ended October 3, 2025, as compared to$47.0 million during the nine months ended September 27, 2024. Our average gross long-term debt balance for the nine months ended October 3, 2025 was $3,379.9 million at a weighted-average interest rate of 2.1%, as compared to $3,379.9 million at a weighted-average interest rate of 1.9% for the nine months ended September 27, 2024.
Previous wording
Interest income decreased by $3.2 million, or approximately 6%, to $51.8 million during the six months ended July 4, 2025 compared to $55.0 million during the six months ended June 28, 2024.
Current wording
Interest income decreased by $9.1 million, or approximately 11%, to$74.5 million during the nine months ended October 3, 2025 compared to$83.6 million during the nine months ended September 27, 2024 primarily attributable to lower interest rates on short-term investments.
Previous wording
Other income was $5.6 million for the six months ended July 4, 2025 as compared to $2.9 million for the six months ended June 28, 2024, primarily driven by higher dividend income.
Current wording
Other income was$9.2 million for the nine months ended October 3, 2025 as compared to other expense of$0.8 million for the nine months ended September 27, 2024, primarily driven by higher dividend income.
Previous wording
We recorded an income tax benefit of $45.3 million and income tax provision of $148.2 million during the six months ended July 4, 2025 and June 28, 2024, respectively, representing effective tax rates of 12.6% and 15.8%, respectively. The decrease in the effective tax rate in 2025 was due to unfavorable discrete adjustments.
Current wording
We recorded an income tax benefit of$27.6 million and income tax provision of$200.1 million during the nine months ended October 3, 2025 and September 27, 2024, respectively, representing effective tax rates of 32.2% and 14.3%, respectively. The change in the effective tax rate for the quarter was primarily driven by a return-to-provision adjustment recorded upon finalizing the U.S. federal income tax return, which resulted in a discrete tax benefit.
Previous wording
Our principal sources of liquidity are cash on hand, cash generated from operations, available borrowings under our Revolving Credit Facility as well as new debt and/or equity issuances. In the near term, we expect to fund our cash requirements by utilizing any or a combination of these principal sources. Our cash and cash equivalents and short-term investments were approximately $2.8 billion as of July 4, 2025, and the Revolving Credit Facility has approximately $1.1 billion available for future borrowings.
Current wording
Our principal sources of liquidity are cash on hand, short-term investments, cash generated from operations, available borrowings under our Revolving Credit Facility as well as new debt and/or equity issuances. In the near term, we expect to fund our cash requirements by utilizing any or a combination of these principal sources. Our cash and cash equivalents and short-term investments were approximately $2.9 billion as of October 3, 2025, and the Revolving Credit Facility has approximately $1.1 billion available for future borrowings.
Previous wording
Our cash flows from operating activities were $786.6 million and $860.9 million for the six months ended July 4, 2025 and June 28, 2024, respectively. The decrease in net income was driven by lower end-market demand for our products and by the non-cash asset impairment and other restructuring-related charges incurred during the six months ended July 4, 2025. The decrease in cash flow from operating activities of $74.3 million was driven by the timing of cash receipts and payments related to working capital balances.
Current wording
Our cash flows from operating activities were $1,205.3 million and $1,326.7 million for the nine months ended October 3, 2025 and September 27, 2024, respectively. The decrease in net income was driven by lower end-market demand for our products and by the non-cash asset impairment and other restructuring-related charges incurred during the nine months ended October 3, 2025. The decrease in cash flows from operating activities of $121.4 million was driven by the timing of cash receipts and payments related to working capital balances.
Previous wording
Our cash flows used in investing activities were $336.6 million and $826.2 million for the six months ended July 4, 2025 and June 28, 2024, respectively. The decrease of $489.6 million was primarily attributable to a decrease in capital expenditures partially offset by the acquisition of a business during the six months ended July 4, 2025. Our capital expenditures as a percentage of revenue were approximately 8%, and we expect capital expenditures to be approximately 5% of revenue for 2025.
Current wording
Our cash flows used in investing activities were $487.8 million and $858.1 million for the nine months ended October 3, 2025 and September 27, 2024, respectively. The decrease of $370.3 million was primarily attributable to a decrease in capital expenditures partially offset by the payments for acquisition of a business during the nine months ended October 3, 2025. Our capital expenditures as a percentage of revenue through Q3 were approximately 6%, and we expect capital expenditures in the range of 5- 6% of revenue for 2025.
Previous wording
Our cash flows used in financing activities were $617.7 million and $283.5 million for the six months ended July 4, 2025 and June 28, 2024, respectively. The increase of $334.2 million was primarily attributable to increased share repurchases during the six months ended July 4, 2025 compared to the same period in 2024.
Current wording
Our cash flows used in financing activities were $939.9 million and $480.5 million for the nine months ended October 3, 2025 and September 27, 2024, respectively. The increase of $459.4 million was primarily attributable to increased share repurchases during the nine months ended October 3, 2025.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Manufacturing Realignment Program. These charges were recorded within Cost of revenue in the Consolidated Statement of Operations.