NXP Semiconductors (NXPI) Q4 2025 earnings summary

Executive summary

• Q4 2025 revenue reached $3.34 billion, up 7% year-over-year and 5% sequentially, exceeding guidance by $35 million, with all end markets and regions up year-on-year.

• Full-year 2025 revenue was $12.3 billion, with a 5-year CAGR of 7%, strong growth in automotive and industrial segments, and a challenging first half offset by improved execution in the second half.

• Non-GAAP EPS for Q4 was $3.35, $0.07 above guidance; non-GAAP operating margin was about 35%.

• Strategic acquisitions (Aviva Links, Kinara) and divestitures (MEMS sensors business) strengthened the portfolio and focus on intelligent edge, automotive, and AI.

• Focused on innovation at the intelligent edge, hybrid manufacturing, and sustainability, targeting carbon neutrality by 2035.

Financial highlights

• Q4 non-GAAP gross profit was $1.91 billion with a 57.4% gross margin; non-GAAP operating profit was $1.15 billion.

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

• Full-year 2025 non-GAAP gross profit: $6.97 billion; non-GAAP operating profit: $4.06 billion.

• Full-year non-GAAP free cash flow: $2.43 billion (19.8% of revenue).

• 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 6–9% sequential decline but 8–15% year-over-year growth.

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

• Automotive expected up mid-single digits year-on-year, down mid-single digits sequentially; industrial/IoT up low-20% year-on-year, down mid-single digits sequentially.

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

• Guidance reflects improved demand but acknowledges ongoing market risks and uncertainties.