NXP Q2 Earnings: Profit and Revenue Rise
NXP Q2 earnings showed revenue and margin strength and management raised Q3 guidance, supporting trader positioning in chips and software-defined vehicles.
KEY TAKEAWAYS
- Reported revenue of $3.5 billion, up 19.0% year-over-year and 10.0% sequentially.
- Non-GAAP EPS was $3.61, exceeding the guidance midpoint and consensus.
- Management raised Q3 revenue guidance to $3.65 to $3.85 billion, citing SDV and physical AI.
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NXP Semiconductors N.V. (NXPI) reported on July 28, 2026, that its Q2 earnings reflected broad-based growth across end markets and regions. This performance led management to raise Q3 guidance and highlight strength in software-defined vehicles and physical AI.
Quarter Results and Margins
For the quarter ended June 28, 2026, NXP reported revenue of $3.5 billion, up 19% year-over-year and 10% sequentially. GAAP net income attributable to stockholders was $767 million, with diluted earnings per share of $3.02, compared with $1.75 a year earlier. GAAP gross profit reached $2.0 billion, yielding a gross margin of 57.3%. Operating income was $1.1 billion, with an operating margin of 30.6%. On a non-GAAP basis, gross margin was 58.0%, operating margin 35.1%, and diluted EPS $3.61, exceeding both the midpoint of guidance and consensus estimates.
Cash Flow and Capital Returns
NXP generated $860 million in cash from operations and spent $69 million on capital expenditures, resulting in non-GAAP free cash flow of $791 million, equal to 22.6% of revenue. The company returned $360 million to shareholders during the quarter, representing 45.5% of that free cash flow. Management said the payout reflects ongoing cash-generation capacity alongside longer-term financial commitments.
End Markets and Guidance
Automotive was the largest end market, contributing $1.9 billion in revenue, followed by industrial and IoT at $755 million, mobile at $351 million, and communications infrastructure and other at $452 million. Management attributed growth across all end markets and regions to vehicle platforms, industrial-edge AI deployments, and emerging data-center demand.
For Q3 2026, the company set revenue guidance between $3.65 billion and $3.85 billion and GAAP diluted EPS guidance from $3.21 to $3.64 per share. Non-GAAP EPS guidance ranges from $3.89 to $4.32, implying continued double-digit year-over-year growth and supporting confidence in long-term targets. The CEO said, “AI is moving from the cloud into the physical world — into vehicles, factories, and robots,” a shift underpinning the company’s focus on edge processing, connectivity, and security.
