NXP Semiconductors (NXPI) Q4 2025 earnings summary

Executive summary

• Q4 2025 revenue reached $3.34 billion, up 7% year-over-year, with sequential improvement across all end markets and all regions up year-on-year.

• Full-year 2025 revenue was $12.27 billion, down 3% year-over-year, reflecting a challenging first half but improved execution and accelerating demand in the second half.

• Achieved strong growth in automotive and industrial/IoT segments, with strategic acquisitions and divestitures strengthening the portfolio.

• Focused on innovation at the intelligent edge, software-defined vehicles, physical AI, and sustainability, targeting carbon neutrality by 2035.

• Returned 95% of non-GAAP free cash flow to shareholders from 2016–2025.

Financial highlights

• Q4 non-GAAP gross margin was 57.4% and operating margin 34.6%; non-GAAP EPS was $3.35, $0.07 above guidance.

• Full-year non-GAAP gross margin was 56.8%, operating margin 33.1%, and diluted EPS $11.81.

• Q4 cash flow from operations was $891 million; non-GAAP free cash flow was $793 million (23.8% of revenue); full-year free cash flow was $2.43 billion (19.8% of revenue).

• Ended Q4 with $12.2 billion in debt, $3.3 billion in cash, and net debt to Adjusted EBITDA at 1.9x.

• Returned $338 million via buybacks and $254 million in dividends in Q4; full-year capital return was $1.92 billion (79.3% of non-GAAP free cash flow).

Outlook and guidance

• Q1 2026 revenue guidance: $3.05–$3.25 billion, representing a sequential decline of 6–9% but year-over-year growth of 8–15%.

• Q1 2026 non-GAAP gross margin expected at 56.5–57.5%; operating margin at 31.7–33.6%; diluted EPS $2.77–$3.17.

• Automotive revenue expected up mid-single digits year-on-year; industrial and IoT up low-20% year-on-year.

• Targeting high single-digit organic revenue growth and gross margin expansion above 60% long-term.

• Guidance reflects improved demand but acknowledges significant risks and uncertainties.