ON Semiconductor (NASDAQ:ON) has just delivered a solid Q3 performance, pulling in $1.76 billion in revenue and boosting free cash flow by 41% sequentially. Their margins are holding strong too, with gross margin hitting 45.4% and operating margin at 25.3% on a GAAP basis. CEO Hassane El-Khoury isn't just focused on hitting numbershe's strategically driving the company to meet surging power demands across high-impact markets like automotive, industrial, and AI data centers. onsemi's momentum is all about capitalizing on power efficiency, setting them up to claim more market share where it matters.

• Warning! GuruFocus has detected 3 Warning Sign with ON.

The company's shareholder-focused approach stands out, having returned 75% of free cash flow to shareholders over the past year via stock buybacks. This quarter saw the Power Solutions Group (PSG) and Advanced Mobility Group (AMG) making significant revenue contributions, despite year-over-year decreases, while the Intelligent Sensing Group (ISG) showed 11% sequential growth. onsemi's focus on targeted investments and solid execution are paying off, helping them keep revenue steady even when the broader industry faces headwinds.

For Q4, onsemi's forecast stays cautiously optimistic with projected revenue between $1.71 and $1.81 billion, and gross margins expected to remain strong. GAAP EPS is set to come in between $0.88 and $1.00. The message to investors is clear: onsemi is doubling down on high-growth sectors to keep riding this wave, with El-Khoury signaling that their investments in the power spectrum are primed to deliver results.

This article first appeared on GuruFocus.