NXP Semiconductors (NXPI) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $3.127 billion, down 5% year-over-year and flat sequentially, in line with guidance.

• Non-GAAP gross margin was 58.6% and non-GAAP operating margin was 34.3%; GAAP gross margin was 57.3% and operating margin 28.7%.

• Non-GAAP net income attributable to stockholders was $829 million, with non-GAAP diluted EPS of $3.20; GAAP net income was $658 million, with diluted EPS of $2.54.

• Automotive and communications infrastructure revenues declined year-over-year, while industrial/IoT and mobile grew.

• Distribution channel inventory remained lean at 1.7 months, below the long-term target.

Financial highlights

• Q2 2024 non-GAAP free cash flow was $577 million (18% of revenue); trailing 12-month non-GAAP FCF was $2.95 billion (23% of revenue).

• Adjusted EBITDA for Q2 was $1.24 billion; trailing 12-month adjusted EBITDA was $5.3 billion.

• Net debt at June 30, 2024 was $6.92 billion; net debt to trailing 12-month adjusted EBITDA was 1.3x.

• Q2 2024 working capital ratios: DSO 26–27 days, DPO 64 days, DIO 148 days, cash conversion cycle 111 days.

• $570 million was returned to shareholders in Q2 2024 via dividends and share repurchases.

Outlook and guidance

• Q3 2024 revenue guidance: $3.15–$3.35 billion, up 1–7% sequentially but down 2–8% year-over-year.

• Non-GAAP gross margin expected at 58.0–59.0%; non-GAAP operating margin at 34.2–36.0%.

• Non-GAAP diluted EPS guidance for Q3 is $3.21–$3.63.

• Full-year 2024 revenue expected to decline in the low single-digit range, at the low end of prior expectations.