ON Semiconductor (NASDAQ:ON) reported a decline in second-quarter earnings and revenue on Monday as margin compression and slower growth pressured results, although management noted early signs of demand stabilization.

Revenue declined year-over-year to $1.47 billion. Non-GAAP earnings per share fell to $0.53, compared to $1.33 in the year-ago period.

Gross margin narrowed to 37.6% from 45.3%, and operating margin contracted to 17.3% from 34.1%. Free cash flow dropped to $106.1 million from $349.7 million a year earlier.

ON Semiconductor CEO Hassane El-Khoury said the company is beginning to see stabilization in demand across its end markets and remains committed to long-term growth through innovation in next-generation technologies.