Third Quarter 2026
Filed Oct 27, 2026NXP Semiconductors Reports Third Quarter 2026 Results Announces $5 Billion Increase in Share Repurchase Authorization
Third-quarter revenue rose 19% year-on-year and 8% sequentially, while GAAP operating income rose 38% year-on-year and non-GAAP free cash flow reached $1,206 million. Growth was broad across automotive, Industrial & IoT, and Comm. Infra. & Other, and the company authorized a $5 billion share repurchase program in addition to $1.3 billion remaining under the prior authorization.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total RevenueGAAP | $3.79B | 8% | 19% |
| Gross ProfitGAAP | $2.19B | 9% | 22% |
| Gross Profitnon-GAAP | $2.22B | 9% | 22% |
| Gross MarginGAAP | 57.8% | – | – |
| Gross Marginnon-GAAP | 58.6% | – | – |
| Research and development expenseGAAP | $615M | – | – |
| Research and development expensenon-GAAP | $557M | – | – |
| Selling, general and administrative expenseGAAP | $313M | – | – |
| Selling, general and administrative expensenon-GAAP | $253M | – | – |
| Total operating expensesGAAP | $958M | – | – |
| Operating IncomeGAAP | $1.23B | 15% | 38% |
| Operating Incomenon-GAAP | $1.41B | 14% | 31% |
| Operating MarginGAAP | 32.4% | – | – |
| Operating Marginnon-GAAP | 37.1% | – | – |
| Net incomeGAAP | $899M | – | – |
| Net income attributable to stockholdersGAAP | $884M | 15% | 40% |
| Net income attributable to stockholdersnon-GAAP | $1.06B | 16% | 35% |
| Basic earnings per shareGAAP | $3.51 | – | – |
| Diluted net income per shareGAAP | $3.48 | 15% | 40% |
| Diluted net income per sharenon-GAAP | $4.20 | 16% | 35% |
| Adjusted EBITDAnon-GAAP | $1.55B | – | – |
| Trailing twelve month adjusted EBITDAnon-GAAP | $5.42B | – | – |
| Net cash provided by operating activitiesGAAP | $1.26B | – | – |
| Net capital expenditures on property, plant and equipmentother | −$50M | – | – |
| Free cash flownon-GAAP | $1.21B | – | – |
| Trailing twelve month non-GAAP free cash flownon-GAAP | $3.50B | – | – |
| Trailing twelve month non-GAAP free cash flow as percent of Revenuenon-GAAP | 25% | – | – |
| Cash and cash equivalentsGAAP | $3.94B | – | – |
| Short-term debtGAAP | $999M | – | – |
| Long-term debtGAAP | $9.98B | – | – |
| Gross Financial Leverageother | 2.0x | – | – |
| Net Financial Leverageother | 1.3x | – | – |
| Days inventory outstandingother | 148 | – | – |
| Days payable outstandingother | 62 | – | – |
| Days sales outstandingother | 30 | – | – |
| Cash Conversion Cycleother | 116 | – | – |
| Channel Inventoryother | 11 weeks | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| AutomotiveThe company cited accelerating contributions from company-specific growth drivers in automotive. | $2.07B | 7% | 13% |
| Industrial & IoTThe company cited accelerating contributions from company-specific growth drivers in industrial. | $802M | 6% | 39% |
| MobileNo specific segment driver was quantified in the release. | $411M | 17% | -4% |
| Comm. Infra. & OtherThe company cited continued momentum in data center infrastructure. | $503M | 11% | 54% |
Fourth Quarter 2026 outlook
- Revenue$3,750 million to $3,950 million; midpoint $3,850 million; Q-Q -1% to 4%, midpoint 2%; Y-Y 12% to 18%, midpoint 15%
- Gross marginGAAP 57.6% to 58.7%, midpoint 58.1%; non-GAAP 58.5% to 59.5%, midpoint 59.0%
- Tax rateGAAP 18.6%-19.6%; non-GAAP 17.0%-18.0%
- NoteGAAP Gross Profit: $2,160 million to $2,317 million, midpoint $2,238 million.
- NoteNon-GAAP Gross Profit: $2,195 million to $2,352 million, midpoint $2,273 million.
- NoteGAAP Operating Income (loss): $1,167 million to $1,304 million, midpoint $1,235 million.
- NoteNon-GAAP Operating Income (loss): $1,374 million to $1,511 million, midpoint $1,442 million.
- NoteGAAP Operating Margin: 31.1% to 33.0%, midpoint 32.1%.
- NoteNon-GAAP Operating Margin: 36.6% to 38.3%, midpoint 37.5%.
- NoteGAAP Financial Income (expense): $(89) million at low, midpoint, and high.
- NoteNon-GAAP Financial Income (expense): $(79) million at low, midpoint, and high.
- NoteGAAP Equity-accounted investees: $(6) million at low, midpoint, and high.
- NoteNon-GAAP Equity-accounted investees: $(5) million at low, midpoint, and high.
- NoteNon-controlling interests: $(14) million at low, midpoint, and high.
- NoteShares - diluted: 253.8 at low, midpoint, and high.
- NoteGAAP Earnings Per Share - diluted: $3.36 to $3.79, midpoint $3.57.
- NoteNon-GAAP Earnings Per Share - diluted: $4.14 to $4.58, midpoint $4.36.
Capital returns
- Capital return during the quarter was $359 million, representing 29.8 percent of third quarter non-GAAP free cash flow.
- Dividends paid during the quarter were $256 million.
- Share buybacks were $103 million.
- The Board authorized a $5 billion share repurchase program in October after quarter end, in addition to the $1.3 billion remaining under the prior authorization.
What drove it
- Revenue growth was driven by accelerating contributions from company-specific growth drivers in automotive and industrial and continued momentum in data center infrastructure.
- Automotive revenue was $2,070 million, Industrial & IoT revenue was $802 million, and Comm. Infra. & Other revenue was $503 million.
- The company stated that software-defined vehicles, data center infrastructure, and Trusted Physical AI applications create vectors for long-term growth.
- On September 28, 2026, VSMC marked the grand opening of its first 300mm fab in Singapore.
- On August 12, 2026, NXP broke ground on its assembly and test site expansion in Malaysia.
Concerns
- Mobile revenue was $411 million, down 4% year-on-year despite increasing 17% sequentially.
- Channel Inventory was 11 weeks, compared with 9 weeks in the prior-year quarter.
- The company identified market demand and semiconductor industry conditions, trade policy and tariffs, export restrictions, supply-chain disruptions, production capacity, and global hostilities among forward-looking risks.
- Fourth-quarter revenue guidance implies Q-Q growth of -1% to 4%, with a midpoint of 2%, following 8% Q-Q growth in the third quarter.
What to watch
- Fourth-quarter revenue delivery against the $3,750 million to $3,950 million guidance range.
- Fourth-quarter non-GAAP gross-margin guidance of 58.5% to 59.5% and non-GAAP operating-margin guidance of 36.6% to 38.3%.
- Mobile revenue trends after the segment's 4% year-on-year decline.
- Channel inventory, which was 11 weeks at quarter end.
- Execution of the $5 billion additional share repurchase authorization and the $1.3 billion remaining under the prior authorization.
- Progress of the Malaysia assembly and test expansion and the VSMC 300mm fab in Singapore.
Balance sheet and cash flow
- Cash and cash equivalents were $3,943 million as of September 27, 2026, compared with $3,222 million as of June 28, 2026 and $3,454 million as of September 28, 2025.
- Short-term debt was $999 million and long-term debt was $9,979 million as of September 27, 2026.
- Net cash provided by operating activities was $1,256 million, compared with $860 million in the preceding quarter and $585 million in the prior-year quarter.
- Capital expenditures on property, plant and equipment were $(51) million; net capital expenditures on property, plant and equipment were $(50) million.
- Cash and cash equivalents increased by $721 million during the quarter.
- Inventories, net were $2,596 million as of September 27, 2026, compared with $2,557 million as of June 28, 2026 and $2,452 million as of September 28, 2025.
Analysis
NXP reported third-quarter revenue of $3,786 million, up 19% year-on-year and 8% sequentially. Growth was broad outside mobile: Automotive revenue rose 13% year-on-year to $2,070 million, Industrial & IoT rose 39% to $802 million, and Comm. Infra. & Other rose 54% to $503 million. Mobile revenue was $411 million, up 17% sequentially but down 4% year-on-year.
Profitability improved across reported measures. GAAP gross margin was 57.8%, compared with 56.3% in the prior-year quarter and 57.3% in the preceding quarter. Non-GAAP gross margin was 58.6%, compared with 57.0% and 58.0%, respectively. GAAP operating income was $1,228 million, up 38% year-on-year, while non-GAAP operating income was $1,406 million, up 31% year-on-year. GAAP diluted EPS was $3.48 and non-GAAP diluted EPS was $4.20.
Cash generation strengthened. Operating cash flow was $1,256 million and non-GAAP free cash flow was $1,206 million, compared with $585 million and $509 million, respectively, in the prior-year quarter. The company returned $359 million during the quarter through $256 million of dividends and $103 million of share buybacks. The Board then authorized an additional $5 billion repurchase program, alongside $1.3 billion remaining under the prior authorization.
The balance sheet showed $3,943 million of cash and cash equivalents, $999 million of short-term debt, and $9,979 million of long-term debt as of September 27, 2026. Gross Financial Leverage was 2.0x and Net Financial Leverage was 1.3x. Inventory indicators improved versus the prior-year quarter, with DIO at 148 versus 161 and the cash conversion cycle at 116 versus 134, although channel inventory was 11 weeks compared with 9 weeks a year earlier.
For the fourth quarter, NXP guided revenue to $3,750 million to $3,950 million, with a $3,850 million midpoint, representing Q-Q growth of -1% to 4% and a 2% midpoint. It guided non-GAAP gross margin to 58.5% to 59.5%, non-GAAP operating margin to 36.6% to 38.3%, and non-GAAP diluted EPS to $4.14 to $4.58. The outlook maintains elevated profitability while indicating a slower sequential revenue growth range than the third quarter's reported 8%.
Management, verbatim
NXP delivered third-quarter revenue of $3.8 billion, up 19 percent year-on-year and 8 percent sequentially. Our performance was driven by accelerating contributions from our company-specific growth drivers in automotive and industrial as well as continued momentum in data center infrastructure.
Rafael Sotomayor, NXP President and Chief Executive Officer
Strong profitability leading to free cash flow generation enables NXP to invest in innovative solutions and expand manufacturing capabilities that support our long-term growth objectives, while continuing to return capital to shareholders through our newly announced $5 billion share repurchase authorization.
Rafael Sotomayor, NXP President and Chief Executive Officer
Looking ahead, we see significant opportunities as software-defined vehicles drive increasing demand for our next-generation solutions, while data center infrastructure and Trusted Physical AI applications create new vectors for long-term growth.
Rafael Sotomayor, NXP President and Chief Executive Officer
Not in the filing
stated, not guessed- Previous-release outlook was not provided; therefore, no comparison of third-quarter actual results with prior guidance is available.
- Fourth-quarter operating-expense guidance was not reported as a standalone line item.
- The filing does not provide separately quantified drivers for each reported segment.
- No CFO commentary was provided.
- No GAAP or non-GAAP forward free-cash-flow guidance was reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.