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, especially in automotive and industrial/IoT.

• Strategic acquisitions of Aviva Links and Kinara, and divestiture of the MEMS sensors business, strengthened the portfolio, with a $900 million sale and up to $50 million in milestones.

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

Financial highlights

• Q4 non-GAAP gross margin was 57.4%, operating margin 34.6%, and diluted EPS $3.35; GAAP gross margin was 54.2%, operating margin 22.3%, and diluted EPS $1.79.

• Full-year non-GAAP gross margin was 56.8%, operating margin 33.1%, and diluted EPS $11.81; GAAP gross margin was 54.7%, operating margin 24.8%, and diluted EPS $7.95.

• 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).

• Q4 capital return was $592 million (74.7% of non-GAAP free cash flow), including $338 million in buybacks and $254 million in dividends; full-year capital return was $1.92 billion (79.3% of non-GAAP free cash flow).

Outlook and guidance

• Q1 2026 revenue guidance is $3.05–$3.25 billion, down 6–9% sequentially but up 8–15% year-over-year.

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

• Guidance reflects improved demand but is subject to significant risks and uncertainties, including market demand, supply chain, and geopolitical factors.