NXP Semiconductors Reports First Quarter 2025 Results

NXP Semiconductors, reported financial results for the first quarter, which ended March 30, 2025. “NXP delivered quarterly revenue of $2.84 billion, in-line with the midpoint of guidance. NXP’s first-quarter results and guidance for the second quarter underpin a cautious optimism that NXP continues to effectively navigate through a challenging set of market conditions. We are operating in a very uncertain environment influenced by tariffs with volatile direct and indirect effects. Considering these external factors, we are redoubling our efforts to manage what is in our direct control, enabling NXP to drive solid profitability and earnings,” said Kurt Sievers, NXP President and Chief Executive Officer.

The company announced that Mr. Sievers has informed the Board of Directors of his intention to retire from NXP at the end of 2025. “Kurt has been a dynamic, visionary, and highly effective CEO of NXP since May 2020,” said Julie Southern, NXP’s Chair of the Board of Directors. “He has been instrumental in leading the definition and implementation of NXP’s strategy to be the leader in intelligent systems at the edge within the Automotive and Industrial & IoT end markets. After a successful 30-year career with NXP, we are saddened to see Kurt retire. We and the entire NXP community thank him for his leadership and wish him the absolute best in his retirement.”

Following a comprehensive and thorough succession planning process, NXP’s Board of Directors announced that it has unanimously approved Mr. Rafael Sotomayor to succeed Mr. Sievers as President, effective April 28, 2025. Messrs. Sievers and Sotomayor will work closely to orchestrate a smooth leadership transition until October 28, 2025, when Mr. Sotomayor will assume the role of President and Chief Executive Officer. “Rafael has been an integral part of creating and shaping NXP’s strategy and enabling the company’s success. We are confident he is ideally suited to assume the role of President and CEO at NXP, and to execute the company’s vision for leadership in the intelligent systems at the edge within the Automotive and Industrial & IoT end markets,” said Ms. Southern.

Mr. Sievers’ departure is a purely personal decision and is not related to any disagreement with the Board of Directors, or any issues relating to the strategic or financial performance of the company.

Key Highlights for the First Quarter 2025:

• Revenue was $2.84 billion, down 9 percent year-on-year;
• GAAP gross margin was 55.0 percent, GAAP operating margin was 25.5 percent and GAAP diluted Net Income per Share was $1.92;
• Non-GAAP gross margin was 56.1 percent, non-GAAP operating margin was 31.9 percent, and non-GAAP diluted Net Income per Share was $2.64;
• Cash flow from operations was $565 million, with net capex investments of $138 million, resulting in non-GAAP free cash flow of $427 million;
• Capital return during the quarter was $561 million, representing 131 percent of first quarter non-GAAP free cash flow. Share buybacks were $303 million and dividends paid during the quarter were $258 million. After the end of the first quarter, between March 31, 2025, and April 25, 2025, NXP executed via a 10b5-1 program additional share repurchases totaling $90 million;
• On January 7, 2025, NXP announced the MCX L14x and MCX L25x, the first families in the ultra-low-power L Series of the MCX microcontroller portfolio. The MCX L series features a dual-core architecture with an independent ultra-low-power sense domain to enable challenging battery-limited applications, such as sensors for industrial monitoring, building management, and flow metering;
• On January 8, 2025, Honeywell and NXP announced an expansion of its partnership that will accelerate aviation product development and chart the path for autonomous flight. The Honeywell Anthem cockpit is powered by NXP’s i.MX 8 applications processors to help improve operational efficiency, safety and unlock value for pilots and operators. This builds on the companies’ existing relationship, which is focused on helping optimize how building management systems sense and securely control energy consumption;
• On January 15, 2025, NXP announced it has secured a €1 billion loan from the European Investment Bank (EIB) to advance the company’s RDI investments across its broad portfolio of semiconductor solutions. The €1 billion loan facility carries a weighted average interest rate of 4.54 percent when drawn in dollar denominated tranches, under the current market conditions and has a duration of six years;
• On February 10, 2025, NXP announced the agreement to acquire Kinara Inc., an industry leader in high performance, energy-efficient and programmable discrete neural processing units (NPUs) to enable intelligence at the edge solutions. The all-cash transaction was valued at $307 million and is expected to close in the first half of 2025, subject to customary closing conditions, including regulatory clearances;
• On March 11, 2025, NXP announced the new S32K5 family of automotive microcontrollers (MCU), the automotive industry’s first 16nm FinFET MCU with embedded magnetic RAM (MRAM). The S32K5 MCU family will extend the NXP CoreRide platform with pre-integrated zonal and electrification system solutions for scalable software-defined vehicle (SDV) architectures.

Summary of Reported First Quarter 2025 ($ millions, unaudited) ⁽¹⁾

	Q1 2025			Q4 2024			Q1 2024			Q – Q		Y – Y
Total Revenue	$	2,835		$	3,111		$	3,126		-9	%	-9	%
GAAP Gross Profit	$	1,560		$	1,678		$	1,783		-7	%	-13	%
Gross Profit Adjustments (i)	$	(31	)	$	(111	)	$	(35	)
Non-GAAP Gross Profit	$	1,591		$	1,789		$	1,818		-11	%	-12	%
GAAP Gross Margin		55.0	%		53.9	%		57.0	%
Non-GAAP Gross Margin		56.1	%		57.5	%		58.2	%
GAAP Operating Income (Loss)	$	723		$	675		$	856		7	%	-16	%
Operating Income Adjustments (i)	$	(181	)	$	(390	)	$	(224	)
Non-GAAP Operating Income	$	904		$	1,065		$	1,080		-15	%	-16	%
GAAP Operating Margin		25.5	%		21.7	%		27.4	%
Non-GAAP Operating Margin		31.9	%		34.2	%		34.5	%
GAAP Net Income (Loss) attributable to Stockholders	$	490		$	495		$	639		-1	%	-23	%
Net Income Adjustments (i)	$	(183	)	$	(322	)	$	(201	)
Non-GAAP Net Income (Loss) Attributable to Stockholders	$	673		$	817		$	840		-18	%	-20	%
GAAP diluted Net Income (Loss) per Share (ii)	$	1.92		$	1.93		$	2.47		—	%	-22	%
Non-GAAP diluted Net Income (Loss) per Share (ii)	$	2.64		$	3.18		$	3.24		-17	%	-19	%

Additional information
	Q1 2025		Q4 2024		Q1 2024		Q – Q		Y – Y
Automotive	$	1,674	$	1,790	$	1,804	-6	%	-7	%
Industrial & IoT	$	508	$	516	$	574	-2	%	-11	%
Mobile	$	338	$	396	$	349	-15	%	-3	%
Comm. Infra. & Other	$	315	$	409	$	399	-23	%	-21	%
DIO		169		151		144
DPO		62		65		65
DSO		34		30		26
Cash Conversion Cycle		141		116		105
Channel Inventory (weeks)		9		8		7
Gross Financial Leverage (iii)	2.4x		2.1x		1.9x
Net Financial Leverage (iv)	1.6x		1.5x		1.3x

Additional Information for the First Quarter 2025:

1. For an explanation of GAAP to non-GAAP adjustments, please see “Non-GAAP Financial Measures”.
2. Refer to Table 1 below for the weighted average number of diluted shares for the presented periods.
3. Gross financial leverage is defined as gross debt divided by trailing twelve months adjusted EBITDA.
4. Net financial leverage is defined as net debt divided by trailing twelve months adjusted EBITDA.
   

Guidance for the Second Quarter 2025: ($ millions, except Per Share data) ⁽¹⁾

	GAAP						Reconciliation			non-GAAP
	Low		Mid		High					Low		Mid		High
Total Revenue	$2,800		$2,900		$3,000					$2,800		$2,900		$3,000
Q-Q	-1%		2%		6%					-1%		2%		6%
Y-Y	-10%		-7%		-4%					-10%		-7%		-4%
Gross Profit	$1,533		$1,604		$1,675		$(29)			$1,562		$1,633		$1,704
Gross Margin	54.8%		55.3%		55.8%					55.8%		56.3%		56.8%
Operating Income (loss)	$680		$741		$802		$(182)			$862		$923		$984
Operating Margin	24.3%		25.6%		26.7%					30.8%		31.8%		32.8%
Financial Income (expense)	$(100)		$(100)		$(100)		$(12)			$(88)		$(88)		$(88)
Tax rate	18.5%-19.5%									17.0%-18.0%
Equity-accounted investees	$(8)		$(8)		$(8)		$(6)			$(2)		$(2)		$(2)
Non-controlling interests	$(9)		$(9)		$(9)					$(9)		$(9)		$(9)
Shares – diluted	255.0		255.0		255.0					255.0		255.0		255.0
Earnings Per Share – diluted	$1.78		$1.97		$2.16					$2.46		$2.66		$2.86

Note (1) Additional Information:

1. GAAP Gross Profit is expected to include Purchase Price Accounting (“PPA”) effects, $(7) million; Share-based Compensation, $(15) million; Other Incidentals, $(7) million;
2. GAAP Operating Income (loss) is expected to include PPA effects, $(33) million; Share-based Compensation, $(115) million; Restructuring and Other Incidentals, $(34) million;
3. GAAP Financial Income (expense) is expected to include Other financial expense $(12) million;
4. GAAP Results relating to equity-accounted investees is expected to include results relating to non-foundry equity-accounted investees $(6) million;
5. GAAP diluted EPS is expected to include the adjustments noted above for PPA effects, Share-based Compensation, Restructuring and Other Incidentals in GAAP Operating Income (loss), the adjustment for Other financial expense, the adjustment for results relating to non-foundry equity-accounted investees and the adjustment on Tax due to the earlier mentioned adjustments.

NXP has based the guidance included in this release on judgments and estimates that management believes are reasonable given its assessment of historical trends and other information reasonably available as of the date of this release. Please note, the guidance included in this release consists of predictions only, and is subject to a wide range of known and unknown risks and uncertainties, many of which are beyond NXP’s control. The guidance included in this release should not be regarded as representations by NXP that the estimated results will be achieved. Actual results may vary materially from the guidance we provide today. In relation to the use of non-GAAP financial information see the note regarding “Non-GAAP Financial Measures” below. For the factors, risks, and uncertainties to which judgments, estimates and forward-looking statements generally are subject see the note regarding “Forward-looking Statements.” We undertake no obligation to publicly update or revise any forward-looking statements, including the guidance set forth herein, to reflect future events or circumstances.

Non-GAAP Financial Measures

In managing NXP’s business on a consolidated basis, management develops an annual operating plan, which is approved by our Board of Directors, using non-GAAP financial measures, that are not in accordance with, nor an alternative to, U.S. generally accepted accounting principles (“GAAP”). In measuring performance against this plan, management considers the actual or potential impacts on these non-GAAP financial measures from actions taken to reduce costs with the goal of increasing our gross margin and operating margin and when assessing appropriate levels of research and development efforts. In addition, management relies upon these non-GAAP financial measures when making decisions about product spending, administrative budgets, and other operating expenses. We believe that these non-GAAP financial measures, when coupled with the GAAP results and the reconciliations to corresponding GAAP financial measures, provide a more complete understanding of the Company’s results of operations and the factors and trends affecting NXP’s business. We believe that they enable investors to perform additional comparisons of our operating results, to assess our liquidity and capital position and to analyze financial performance excluding the effect of expenses unrelated to core operating performance, certain non-cash expenses and share-based compensation expense, which may obscure trends in NXP’s underlying performance. This information also enables investors to compare financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management.

These non-GAAP financial measures are provided in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The presentation of these and other similar items in NXP’s non-GAAP financial results should not be interpreted as implying that these items are non-recurring, infrequent, or unusual. Reconciliations of these non-GAAP measures to the most comparable measures calculated in accordance with GAAP are provided in the financial statements portion of this release in a schedule entitled “Financial Reconciliation of GAAP to non-GAAP Results (unaudited).” Please refer to the NXP Historic Financial Model file found on the Financial Information page of the Investor Relations section.

In addition to providing financial information on a basis consistent with GAAP, NXP also provides the following selected financial measures on a non-GAAP basis: (i) Gross profit, (ii) Gross margin, (iii) Research and development, (iv) Selling, general and administrative, (v) Amortization of acquisition-related intangible assets, (vi) Other income, (vii) Operating income (loss), (viii) Operating margin, (ix) Financial Income (expense), (x) Income tax benefit (provision), (xi) Results relating to non-foundry equity-accounted investees, (xii) Net income (loss) attributable to stockholders, (xiii) Earnings per Share – Diluted, (xiv) EBITDA, adjusted EBITDA and trailing 12 month adjusted EBITDA, and (xv) free cash flow, trailing 12 month free cash flow and trailing 12 month free cash flow as a percent of Revenue. The non-GAAP information excludes, where applicable, the amortization of acquisition related intangible assets, the purchase accounting effect on inventory and property, plant and equipment, merger related costs (including integration costs), certain items related to divestitures, share-based compensation expense, restructuring and asset impairment charges, extinguishment of debt, foreign exchange gains and losses, income tax effect on adjustments described above and results from non-foundry equity-accounted investments.

The difference in the benefit (provision) for income taxes between our GAAP and non-GAAP results relates to the income tax effects of the GAAP to non-GAAP adjustments that we make and the income tax effect of any discrete items that occur in the interim period. Discrete items primarily relate to unexpected tax events that may occur as these amounts cannot be forecasted (e.g., the impact of changes in tax law and/or rates, changes in estimates or resolved tax audits relating to prior year tax provisions, the excess or deficit tax effects on share-based compensation, etc.).

Conference Call and Webcast Information

The company will host a conference call with the financial community on Tuesday, April 29, 2025 at 8:00 a.m. U.S. Eastern Daylight Time (EDT) to review the first quarter 2025 results in detail.