NXP(NXPI) - 2025 Q2 - Quarterly Results

NXP Semiconductors Reports Second Quarter 2025 Results Second Quarter 2025 Financial & Strategic Highlights NXP reported Q2 2025 revenue of $2.93 billion, a 6% YoY decrease, achieving a 32.0% non-GAAP operating margin and progressing strategic initiatives in autonomous driving and software-defined vehicles Q2 2025 Key Financial Metrics | Metric | Value | Change (YoY) | | :--- | :--- | :--- | | Revenue | $2.93 billion | -6% | | GAAP Gross Margin | 53.4% | | | Non-GAAP Gross Margin | 56.5% | | | GAAP Operating Margin | 23.5% | | | Non-GAAP Operating Margin | 32.0% | | | GAAP Diluted EPS | $1.75 | | | Non-GAAP Diluted EPS | $2.72 | | | Cash Flow from Operations | $779 million | | | Non-GAAP Free Cash Flow | $696 million | - Capital return to shareholders in Q2 2025 totaled $461 million, comprising $204 million in share buybacks and $257 million in dividends. This represents 66% of the quarter's non-GAAP free cash flow[2] - Strategic initiatives in the quarter included[2] - Autonomous Driving: Announced third-generation S32R47 imaging radar processors for Level 2+ to Level 4 autonomous driving - Software-Defined Vehicle (SDV): Partnered with Rimac Technology to co-develop an SDV architecture using NXP's S32E2 processors - Acquisition: Completed the acquisition of TTTech Auto, a leader in safety-critical systems for SDVs Second Quarter 2025 Performance Analysis Total revenue for Q2 2025 was $2.926 billion, up 3% sequentially but down 6% year-over-year, with the Automotive segment flat and other segments experiencing declines, resulting in a 32.0% non-GAAP operating margin Q2 2025 Financial Performance vs. Prior Periods ($ millions) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | Q-Q Change | Y-Y Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $2,926 | $2,835 | $3,127 | 3% | -6% | | GAAP Gross Profit | $1,562 | $1,560 | $1,792 | —% | -13% | | Non-GAAP Gross Profit | $1,652 | $1,591 | $1,833 | 4% | -10% | | GAAP Operating Income | $687 | $723 | $896 | -5% | -23% | | Non-GAAP Operating Income | $935 | $904 | $1,071 | 3% | -13% | | GAAP Net Income | $445 | $490 | $658 | -9% | -32% | | Non-GAAP Net Income | $690 | $673 | $829 | 3% | -17% | Q2 2025 Revenue by End-Market ($ millions) | End-Market | Q2 2025 | Q1 2025 | Q2 2024 | Q-Q Change | Y-Y Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Automotive | $1,729 | $1,674 | $1,728 | 3% | —% | | Industrial & IoT | $546 | $508 | $616 | 7% | -11% | | Mobile | $331 | $338 | $345 | -2% | -4% | | Comm. Infra. & Other | $320 | $315 | $438 | 2% | -27% | - Channel inventory remained stable quarter-over-quarter at 9 weeks, but this is higher than the 7 weeks reported in the same period last year[4] Third Quarter 2025 Guidance Q3 2025 Outlook NXP projects Q3 2025 revenue between $3.05 billion and $3.25 billion, reflecting an 8% sequential growth and a 3% year-over-year decline at the midpoint, with an anticipated non-GAAP operating margin of 33.7% Q3 2025 Guidance (Midpoint) | Metric | GAAP (Midpoint) | Non-GAAP (Midpoint) | | :--- | :--- | :--- | | Total Revenue | $3,150 M | $3,150 M | | Revenue Growth (QoQ) | 8% | 8% | | Revenue Growth (YoY) | -3% | -3% | | Gross Margin | 56.0% | 57.0% | | Operating Margin | 28.0% | 33.7% | | Diluted EPS | $2.42 | $3.10 | - The guidance for Q3 2025 reflects a combination of emerging cyclical improvement in core end markets and the performance of company-specific growth drivers[1] - Key expected adjustments from GAAP to non-GAAP in Q3 2025 include[11] - PPA effects: $(40) million impact on Operating Income - Share-based Compensation: $(116) million impact on Operating Income - Restructuring and Other Incidentals: $(24) million impact on Operating Income Consolidated Financial Statements (Unaudited) Condensed Consolidated Statement of Operations NXP reported Q2 2025 revenue of $2.926 billion, resulting in $687 million operating income and $445 million net income attributable to stockholders, or $1.75 per diluted share Q2 2025 Statement of Operations Highlights ($ millions) | Line Item | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Revenue | 2,926 | 2,835 | 3,127 | | Gross Profit | 1,562 | 1,560 | 1,792 | | Operating Income | 687 | 723 | 896 | | Net Income Attributable to Stockholders | 445 | 490 | 658 | | Diluted EPS ($) | 1.75 | 1.92 | 2.54 | Condensed Consolidated Balance Sheet As of June 29, 2025, NXP's total assets were $25.25 billion, with cash and equivalents at $3.17 billion, total liabilities at $15.31 billion, and stockholders' equity at $9.57 billion Balance Sheet Highlights as of June 29, 2025 ($ millions) | Account | June 29, 2025 | March 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 3,170 | 3,988 | 2,859 | | Total current assets | 7,686 | 8,025 | 6,880 | | Total assets | 25,250 | 25,180 | 23,196 | | Long-term debt | 9,479 | 10,226 | 9,681 | | Total liabilities | 15,314 | 15,503 | 13,851 | | Total stockholders' equity | 9,569 | 9,322 | 9,018 | Condensed Consolidated Statement of Cash Flows In Q2 2025, NXP generated $779 million in operating cash flow, while investing activities used $892 million and financing activities used $709 million, resulting in an $818 million decrease in cash Q2 2025 Cash Flow Summary ($ millions) | Cash Flow Activity | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net cash from operating activities | 779 | 565 | 761 | | Net cash from investing activities | (892) | (216) | (239) | | Net cash from financing activities | (709) | 345 | (567) | | Increase (decrease) in cash | (818) | 696 | (49) | Reconciliation of GAAP to Non-GAAP Results Key Metrics Reconciliation For Q2 2025, non-GAAP gross profit was $1.652 billion (56.5% margin) and non-GAAP operating income was $935 million (32.0% margin), with non-GAAP diluted EPS at $2.72, reflecting adjustments from GAAP figures Q2 2025 GAAP to Non-GAAP Reconciliation ($ millions) | Metric | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Gross Profit | $1,562 | $90 | $1,652 | | Operating Income | $687 | $248 | $935 | | Net Income Attributable to Stockholders | $445 | $245 | $690 | Q2 2025 GAAP to Non-GAAP Diluted EPS Reconciliation ($) | Metric | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Diluted EPS | $1.75 | $0.97 | $2.72 | Adjusted EBITDA and Free Cash Flow NXP reported Q2 2025 Adjusted EBITDA of $1.103 billion and strong non-GAAP free cash flow of $696 million, derived from $779 million in cash from operations Adjusted EBITDA Calculation for Q2 2025 ($ millions) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | GAAP Net income | 457 | 497 | 664 | | EBITDA (Non-GAAP) | 866 | 928 | 1,106 | | Adjusted EBITDA (Non-GAAP) | 1,103 | 1,073 | 1,243 | Free Cash Flow Calculation for Q2 2025 ($ millions) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net cash from operating activities | 779 | 565 | 761 | | Net capital expenditures | (83) | (138) | (184) | | Non-GAAP free cash flow | 696 | 427 | 577 |