NXP Semiconductors (NXPI) Tops Expectations, Guidance Disappoints

by MarketNewsData

Headline Results (Quarter Ended June 29, 2025)

  • Revenue: $2.93B (▲3% QoQ / ▼6% YoY) vs. est. $2.90B ✅
  • Non-GAAP EPS: $2.72 (▲3% QoQ / ▼15% YoY) vs. est. $2.66 ✅
  • GAAP EPS: $1.75 (▼9% QoQ / ▼31% YoY)

Stock Reaction

  • After-hours: $217.79 (−$10.48, ▼4.59%)
  • Initial selloff reflects disappointment in Q3 guidance despite Q2 beat.

Segment Breakdown

  • Automotive: $1.73B (Flat YoY, +3% QoQ)
  • Industrial & IoT: $546M (▼11% YoY, +7% QoQ)
  • Mobile: $331M (▼4% YoY, ▼2% QoQ)
  • Communication Infra & Other: $320M (▼27% YoY, +2% QoQ)

Margins & Cash Flow

  • Non-GAAP Gross Margin: 56.5%
  • Non-GAAP Operating Margin: 32.0%
  • Free Cash Flow: $696M
  • Capital Return: $461M (66% of FCF via $204M buybacks + $257M dividends)

Q3 2025 Guidance (Midpoint)

  • Revenue: $3.15B (▲8% QoQ / ▼3% YoY)
  • Non-GAAP EPS: $3.10
  • Gross Margin: ~57%
  • Operating Margin: ~33.7%

Notable Updates

  • Announced next-gen radar processors for autonomous driving.
  • Closed TTTech Auto acquisition to advance software-defined vehicle strategy.
  • Partnered with Rimac on zonal vehicle architecture using S32E2 processors.

Investor Takeaway
While NXP beat on Q2 revenue and EPS, the muted Q3 guidance — though implying sequential growth — failed to excite. This marks the fifth straight quarter where earnings beats weren’t rewarded, reflecting concerns about macro softness and China. Until demand visibility improves in auto and industrial, short-term upside may remain capped.

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