onsemi's buybacks fell 94%. Two cash deals are waiting.

onsemi spent $19.9 million buying back shares in its third quarter, down from $325 million a year earlier. That sharp slowdown came as free cash flow rose 31% to $488.6 million.

The chipmaker is building cash while pursuing two acquisitions. A newly announced agreement to buy Ferric adds a $600 million cash commitment to its planned purchase of Synaptics.

More cash is staying in the business

Research by Ticker Byline shows that share repurchases consumed about 4% of quarterly free cash flow, versus 87% in the same quarter last year. The calculation compares cash spent on buybacks with operating cash flow after capital spending.

Cash and cash equivalents reached $4.158 billion on October 2, up from $3.515 billion in July. Another $210 million was held in short-term investments.

The quarter's stronger cash generation came from both higher operating cash flow and lower capital spending. Over the first nine months, operating cash was almost unchanged from a year earlier; much of the improvement in free cash flow came from spending less on equipment and facilities.

Ferric adds another pending deal

onsemi announced the Ferric agreement on November 2. It plans to pay $600 million in cash, plus up to $175 million tied to revenue milestones through 2029. Closing is expected in Q4, funded with cash on hand.

Ferric's power-conversion technology is intended to strengthen onsemi's position in AI data centers. The company raised its 2030 AI data center revenue target by $500 million to more than $3 billion.

The larger Synaptics acquisition is also pending. onsemi changed its terms on October 1 to $123 a share in cash, valuing the deal at approximately $5.7 billion. It expects closing in mid-2027 and has a conditional $2.45 billion loan commitment to help fund the transaction.

Better earnings, within the earlier range

Revenue rose 11% to $1.722 billion. Adjusted earnings increased to $0.90 a share from $0.63 a year earlier, after selected restructuring, acquisition, accounting and tax adjustments.

Both revenue and adjusted EPS exceeded the midpoint of August's forecasts while remaining inside their ranges. GAAP EPS of $0.79 was at the bottom of its forecast range.

For Q4, onsemi expects revenue of $1.715 billion to $1.815 billion and adjusted EPS of $0.95 to $1.07.

The onsemi company profile tracks the forecasts, cash and debt, including the completed Silver Atena purchase and the pending Ferric and Synaptics transactions.