Current Assets [USD, Millions]

Cash and Cash Equivalents [USD, Millions]

Accounts Receivable [USD, Millions]

Inventory [USD, Millions]

Non-Current Assets [USD, Millions]

PP&E [USD, Millions]

Goodwill [USD, Millions]

Intangible Assets [USD, Millions]

Current Liabilities [USD, Millions]

Accounts Payable [USD, Millions]

Short-term Debt [USD, Millions]

Accrued Expenses [USD, Millions]

Non-Current Liabilities [USD, Millions]

Long-term Debt [USD, Millions]

Deferred Tax Liabilities [USD, Millions]

Shareholders' Equity [USD, Millions]

Retained Earnings [USD, Millions]

Common Stock [USD, Millions]

Additional Paid-in Capital [USD, Millions]

4333632fed886da757c6d3589b3d5b6093d99e0579fb53807f31104e0e7d8e88

Adjustments for Non-Cash Items

Stock-Based Compensation

Changes in Working Capital

Capital Expenditures (CapEx)

Proceeds from / Repayments of Debt

Share Repurchases

Dividend Payments

Net Change in Cash

d0a32092ab7541e856938bfc7fcc21c15611eeef7a172c4e93dcabec59e14306

- Total Revenue: $3.111B (−9% YoY)  **[0001413447-25-000009_nxp4q24exhibit991.htm:10]** **[0001413447-25-000009_nxp4q24exhibit991.htm:2]** **[0001413447-24-000013_nxpi-20231231.htm:89]** **[0001413447-24-000013_nxpi-20231231.htm:86]** **[0001413447-24-000013_nxpi-20231231.htm:85]**   
- Operating Income: $675M (−26% YoY)  **[0001413447-25-000009_nxp4q24exhibit991.htm:10]** **[0001413447-24-000013_nxpi-20231231.htm:89]** **[0001413447-24-000013_nxpi-20231231.htm:86]** **[0001413447-24-000013_nxpi-20231231.htm:85]**   
- Net Income: $505M (−28% YoY)  **[0001413447-25-000009_nxp4q24exhibit991.htm:10]** **[0001413447-24-000013_nxpi-20231231.htm:89]** **[0001413447-24-000013_nxpi-20231231.htm:86]** **[0001413447-24-000013_nxpi-20231231.htm:85]**   
- Diluted EPS: $1.93 (−28% YoY)  **[0001413447-25-000009_nxp4q24exhibit991.htm:10]** **[0001413447-24-000013_nxpi-20231231.htm:89]** **[0001413447-24-000013_nxpi-20231231.htm:86]** **[0001413447-24-000013_nxpi-20231231.htm:85]**   
- Net Change in Cash: +$544M vs. −$18M in Q4’23  **[0001413447-25-000009_nxp4q24exhibit991.htm:12]** **[0001413447-24-000013_nxpi-20231231.htm:88]**   

d821664d4c5c9117206022f01f2b6c691c4c1690c42954ca6107559b7376ccac

| Geographical Segment | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **China** ($ million) | **947**  **[0001413447-23-000020_nxpi-20230402.htm:15]**  | **1,031**  **[0001413447-23-000059_nxpi-20230702.htm:16]**  | **1,150**  **[0001413447-23-000107_nxpi-20231001.htm:16]**  | N/A | **1,014**  **[0001413447-24-000038_nxpi-20240331.htm:17]**  | **1,098**  **[0001413447-24-000072_nxpi-20240630.htm:17]**  | **1,203**  **[0001413447-24-000089_nxpi-20240929.htm:19]**  | N/A |
| **APAC (excluding China)** ($ million) | **975**  **[0001413447-23-000020_nxpi-20230402.htm:15]**  | **958**  **[0001413447-23-000059_nxpi-20230702.htm:16]**  | **906**  **[0001413447-23-000107_nxpi-20231001.htm:16]**  | N/A | **910**  **[0001413447-24-000038_nxpi-20240331.htm:17]**  | **898**  **[0001413447-24-000072_nxpi-20240630.htm:17]**  | **845**  **[0001413447-24-000089_nxpi-20240929.htm:19]**  | N/A |
| **EMEA** ($ million) | **725**  **[0001413447-23-000020_nxpi-20230402.htm:15]**  | **797**  **[0001413447-23-000059_nxpi-20230702.htm:16]**  | **866**  **[0001413447-23-000107_nxpi-20231001.htm:16]**  | N/A | **743**  **[0001413447-24-000038_nxpi-20240331.htm:17]**  | **676**  **[0001413447-24-000072_nxpi-20240630.htm:17]**  | **719**  **[0001413447-24-000089_nxpi-20240929.htm:19]**  | N/A |
| **Americas** ($ million) | **474**  **[0001413447-23-000020_nxpi-20230402.htm:15]**  | **513**  **[0001413447-23-000059_nxpi-20230702.htm:16]**  | **512**  **[0001413447-23-000107_nxpi-20231001.htm:16]**  | N/A | **459**  **[0001413447-24-000038_nxpi-20240331.htm:17]**  | **455**  **[0001413447-24-000072_nxpi-20240630.htm:17]**  | **483**  **[0001413447-24-000089_nxpi-20240929.htm:19]**  | N/A |

e4c2b1c9dcda8bff9dbe628a1fa7fb50fa847068a0e1de1a918eb2b33c4d2a5a

Non-GAAP free cash flow (USD millions)

Net debt (USD millions)

765ee74ab72768eb8a6e92bb85060956c41d4f639def00c8a5de1d2ddfc8a443

NXP Semiconductors N.V. is a global semiconductor company with over 70 years of innovation, specializing in providing solutions that leverage its extensive portfolio of intellectual property, application knowledge, process technology, and manufacturing expertise **[0001413447-24-000034_a2023annual_report.htm:5]** **[0001413447-24-000013_nxpi-20231231.htm:4]**. The company offers products used in a wide range of applications across four primary end markets: automotive, industrial & Internet of Things (IoT), mobile, and communication infrastructure **[0001413447-24-000034_a2023annual_report.htm:5]** **[0001413447-24-000013_nxpi-20231231.htm:4]**. NXP markets its products worldwide to original equipment manufacturers (OEMs), contract manufacturers, and distributors, with a significant portion of its revenue derived from these sectors **[0001413447-24-000013_nxpi-20231231.htm:13]** **[0001413447-24-000013_nxpi-20231231.htm:26]**.

1. **Automotive** - Develops semiconductor solutions for automotive applications, enhancing vehicle safety, connectivity, and efficiency.
2. **Industrial & Internet of Things (IoT)** - Provides semiconductor products for industrial automation and IoT devices, enabling smart and connected environments.
3. **Mobile** - Offers semiconductor solutions for mobile devices, focusing on enhancing connectivity and user experience.
4. **Communication Infrastructure** - Supplies semiconductor products for communication networks, supporting high-speed data transfer and connectivity.

edb46712b4f4a97a9973fc8ad07ac489354a15258273dc323b948105cd33440d

| Segment                          | Q4 2022  **[0001413447-23-000002_nxp4q22exhibit991.htm:2]**  | Q1 2023  **[0001413447-23-000020_nxpi-20230402.htm:16]** **[0001413447-23-000020_nxpi-20230402.htm:15]**  | Q2 2023  **[NXPI_3384718_1]** **[NXPI_3255340_0]** **[0001413447-23-000059_nxpi-20230702.htm:16]**  | Q3 2023  **[NXPI_3364851_1]** **[0001413447-23-000107_nxpi-20231001.htm:16]** **[0001413447-23-000107_nxpi-20231001.htm:15]**  | Q4 2023  **[NXPI_3372051_1]** **[0001413447-24-000008_nxp4q23exhibit991.htm:2]**  | Q1 2024  **[0001413447-24-000038_nxpi-20240331.htm:17]**  | Q2 2024  **[0001413447-24-000072_nxpi-20240630.htm:17]**  | Q3 2024  **[0001413447-24-000089_nxpi-20240929.htm:19]** **[0001413447-24-000087_nxp3q24exhibit991.htm:1]**  |
|----------------------------------|---------------|--------------------|-------------------------|-------------------------|-------------------|---------------|---------------|---------------------|
| **Automotive** ($ million)       | **1,805**     | **1,828**          | **1,870**               | **1,891**               | **1,899**         | **1,804**     | **1,728**     | **1,829**           |
| **Industrial & IoT** ($ million) | **605**       | **504**            | **578**                 | **607**                 | **662**           | **574**       | **616**       | **563**             |
| **Mobile** ($ million)           | **408**       | **260**            | **284**                 | **377**                 | **406**           | **349**       | **345**       | **407**             |
| **Communication Infrastructure & Other** ($ million) | **494** | **529** | **571** | **559** | **455** | **399** | **438** | **451** |

9fd9adb38cec4a90c0ff9cbc43b1fb467af0b948b03635ba174a6dfd452f1922

1. With the anticipated low single-digit ASP erosion next year and increased pricing pressure, particularly in the automotive sector, how will you maintain your gross margins without sacrificing market share, and would you consider exiting certain product lines if price becomes the only competitive lever?  **[NXPI_3405726_15]** **[NXPI_3405726_16]** 

2. Given the broader macro weakness in Europe and North America leading to both lower production numbers and reduced inventory targets at your Tier 1 customers, how significantly do you expect this "double whammy" to impact your revenue growth, and what strategies are you implementing to mitigate this effect?  **[NXPI_3405726_2]** **[NXPI_3405726_19]** 

3. Despite investing $400 million in capacity access fees and $172 million in equity investments into the BSMC and ESMC foundry joint ventures under construction, how do you balance these significant capital expenditures with your commitment to return excess cash to shareholders through buybacks and dividends?  **[NXPI_3405726_4]** 

4. Your channel inventory increased from 1.7 to 1.9 months due to late-quarter weakness reducing sell-through more than anticipated; how are you adjusting your inventory management practices to better align with the uncertain demand environment and prevent unintended inventory build-up?  **[NXPI_3405726_7]** **[NXPI_3405726_1]** **[NXPI_3405726_8]** 

5. Considering that the majority of your Industrial and IoT business is concentrated in China and that strength in China cannot offset the weakness in Europe and the U.S., how do you plan to diversify your geographic exposure to mitigate risks associated with regional demand fluctuations?  **[NXPI_3405726_21]** **[NXPI_3405726_1]** 

5c7f92381f25b3cb992e5451301990db974322bec5fa83fc9b044517d90ecbbe

China

APAC, excluding China

EMEA

Americas

- United States

- Germany

- Japan

- Singapore

- South Korea

- Mexico

- Netherlands

- Taiwan

- Other countries

Greater China and Asia Pacific

Total Revenue

9a4aeda038c7f3ec6588cdec4b467c862c1c422694e06b7b0d84cbedc1b333da

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: Q4 2024
- **Guidance**:
  1. **Revenue**: **$3.1 billion**, down about **9%** year-on-year and down about **5%** sequentially  **[NXPI_3405726_1]** **[NXPI_3405726_3]** .
  2. **Non-GAAP Gross Margin**: **57.5%**, plus or minus 50 basis points  **[NXPI_3405726_3]** .
  3. **Non-GAAP Operating Expenses**: **$725 million**, plus or minus $10 million  **[NXPI_3405726_4]** .
  4. **Non-GAAP Operating Margin**: **34.1%** at the midpoint  **[NXPI_3405726_4]** .
  5. **Non-GAAP Financial Expenses**: **$77 million**  **[NXPI_3405726_4]** .
  6. **Non-GAAP Tax Rate**: **16.8%** of profit before tax at the midpoint  **[NXPI_3405726_4]** .
  7. **Noncontrolling Interest and Other**: **$9 million**  **[NXPI_3405726_4]** .
  8. **Equity Accounted Boundary Joint Ventures**: **$2 million** loss  **[NXPI_3405726_4]** .
  9. **Average Share Count for Modeling**: **257 million** shares  **[NXPI_3405726_4]** .
  10. **Non-GAAP Earnings Per Share**: **$3.13** at the midpoint  **[NXPI_3405726_4]** .
  11. **Stock-Based Compensation**: **$118 million**  **[NXPI_3405726_4]** .
  12. **Capital Expenditures**: Around **5%** of revenue  **[NXPI_3405726_4]** .
  13. **Capital Returns**: Above **$700 million** for Q4  **[NXPI_3405726_4]** .
  14. **Channel Inventory**: Approximately **1.9 months** or about **8 weeks**  **[NXPI_3405726_1]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: Q3 2024
- **Guidance**:
  1. **Revenue**: **$3.25 billion**, plus or minus about **$100 million**; **5% decrease year-on-year**, **4% increase sequentially**  **[NXPI_3394041_3]** **[NXPI_3394041_1]** .
  2. **Non-GAAP Gross Margin**: **58.5%**, plus or minus **50 basis points**  **[NXPI_3394041_3]** .
  3. **Operating Expenses**: **$760 million**, plus or minus **$10 million**  **[NXPI_3394041_3]** .
  4. **Non-GAAP Operating Margin**: **35.1%** at the midpoint  **[NXPI_3394041_3]** .
  5. **Non-GAAP Financial Expense**: **$67 million**  **[NXPI_3394041_4]** .
  6. **Non-GAAP Tax Rate**: **16.8%** of profit before tax  **[NXPI_3394041_4]** .
  7. **Noncontrolling Interest and Other**: **$9 million**  **[NXPI_3394041_4]** .
  8. **Average Share Count**: **258.5 million shares**  **[NXPI_3394041_4]** .
  9. **Stock-Based Compensation**: **$116 million**  **[NXPI_3394041_4]** .
  10. **Capital Expenditures**: Around **6%** of revenue  **[NXPI_3394041_4]** .
  11. **Non-GAAP Earnings Per Share**: **$3.42** at the midpoint  **[NXPI_3394041_4]** .
  12. **Distribution Channel Inventory**: Approximately **1.8 months** exiting Q3  **[NXPI_3394041_3]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: Q2 2024
- **Guidance**:
  1. **Revenue**: **$3.125 billion**, plus or minus about **$100 million**; **5% decrease year-on-year**, flat sequentially  **[NXPI_3381714_4]** **[NXPI_3381714_1]** .
  2. **Non-GAAP Gross Margin**: **58.5%**, plus or minus **50 basis points**  **[NXPI_3381714_4]** .
  3. **Operating Expenses**: **$765 million**, plus or minus **$10 million**  **[NXPI_3381714_4]** .
  4. **Non-GAAP Operating Margin**: **34%** at the midpoint  **[NXPI_3381714_4]** .
  5. **Non-GAAP Financial Expense**: **$63 million**  **[NXPI_3381714_4]** .
  6. **Non-GAAP Tax Rate**: **16.8%** of profit before tax  **[NXPI_3381714_4]** .
  7. **Noncontrolling Interest and Other**: **$5 million**  **[NXPI_3381714_4]** .
  8. **Average Share Count**: **258.5 million shares**  **[NXPI_3381714_4]** .
  9. **Stock-Based Compensation**: **$115 million**  **[NXPI_3381714_4]** .
  10. **Capital Expenditures**: Around **6%** of revenue  **[NXPI_3381714_4]** .
  11. **Non-GAAP Earnings Per Share**: **$3.20** at the midpoint  **[NXPI_3381714_4]** .
  12. **Distribution Channel Inventory**: Approximately **1.7 months** exiting Q2  **[NXPI_3381714_4]** **[NXPI_3381714_1]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: Q1 2024
- **Guidance**:
  1. **Revenue**: **$3.125 billion**, plus or minus about **$100 million**; flat year-on-year, down **9%** sequentially  **[NXPI_3372051_5]** .
  2. **Non-GAAP Gross Margin**: **58%**, plus or minus 50 basis points  **[NXPI_3372051_5]** .
  3. **Operating Expenses**: **$755 million**, plus or minus **$10 million**  **[NXPI_3372051_5]** .
  4. **Non-GAAP Operating Margin**: **33.9%** at the midpoint  **[NXPI_3372051_5]** .
  5. **Non-GAAP Financial Expense**: **$66 million**  **[NXPI_3372051_5]** .
  6. **Non-GAAP Tax Rate**: **16.9%** of profit before tax  **[NXPI_3372051_5]** .
  7. **Noncontrolling Interest and Other**: **$3 million**  **[NXPI_3372051_5]** .
  8. **Average Share Count for Modeling Purposes**: **259 million shares**  **[NXPI_3372051_5]** .
  9. **Stock-Based Compensation**: **$127 million**  **[NXPI_3372051_5]** .
  10. **Capital Expenditures**: Around **7%** of revenue  **[NXPI_3372051_5]** .
  11. **Non-GAAP Earnings Per Share**: **$3.17** at the midpoint  **[NXPI_3372051_5]** .

6e2ea6fc0371167c4bda7b197be12c35a6e9035accd88699456c619561099706

| Program Details          | Program 1      | Program 2      |
|--------------------------|----------------|----------------|
| Approval Date            | January 2022  **[0001413447-24-000089_nxpi-20240929.htm:38]**  | August 2024  **[0001413447-24-000089_nxpi-20240929.htm:38]**  |
| End Date/Duration        | N/A            | N/A            |
| Total Additional Amount  | **$2 billion**  **[0001413447-24-000089_nxpi-20240929.htm:38]**  | **$2 billion**  **[0001413447-24-000089_nxpi-20240929.htm:38]**  |
| Remaining Authorization  | **$0.6 billion**  **[0001413447-24-000089_nxpi-20240929.htm:38]**  | **$2 billion**  **[0001413447-24-000089_nxpi-20240929.htm:38]**  |
| Details                  | Authorization remains in effect until terminated by the Board  **[0001413447-24-000089_nxpi-20240929.htm:38]**  | Authorization remains in effect until terminated by the Board  **[0001413447-24-000089_nxpi-20240929.htm:38]**  |

a8c90127078e8ef5ce81dbe55673567a95dd05806614899f641cce8bc9f7ff64

- Analog Devices Inc. - A primary key public competitor.
- Broadcom Inc. - A primary key public competitor.
- Infineon Technologies AG - A primary key public competitor.
- Microchip Technology Inc. - A primary key public competitor.
- Qualcomm Inc. - A primary key public competitor.
- Renesas Electronics Corp. - A primary key public competitor.
- STMicroelectronics NV - A primary key public competitor.
- Texas Instruments Inc. - A primary key public competitor.  **[0001413447-24-000013_nxpi-20231231.htm:16]** 

d45490685666cc416fdceec19f409423814b183a3cbeb6c9c266a3d9bc5b1e36

Minimal Loading (%) - Lower Bound

Minimal Loading (%) - Upper Bound

Duration (Years)

dd2726afaab0405ab2d85aa0103a04e510116389cbfdfab521762b3cf2e9a0b9

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

Automotive

Industrial & IoT

Mobile

Communication Infrastructure & Other

Distributors

OEM/EMS

Other

c2672d5c4073567ecace56f940e588d5af52f04e78f4006a3b10d58af4c449be

| Name             | Position                                                                 | Start Date   | Short Bio                                                                                                                                                                                                                                                                                                                                 |
|------------------|--------------------------------------------------------------------------|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Kurt Sievers     | Executive Director, President, and Chief Executive Officer               | May 2020     | Kurt Sievers, born in 1969, has been serving as the Executive Director, President, and CEO of NXP Semiconductors since May 2020. He joined NXP in 1995 and has held various leadership positions. He played a key role in the merger of NXP and Freescale Semiconductor in 2015  **[0001413447-24-000033_nxpi-20240411.htm:55]** **[0001413447-24-000031_nxpi-20240404.htm:55]** **[0001413447-24-000033_nxpi-20240411.htm:21]** **[0001413447-23-000014_nxpi-20230407.htm:58]** **[0001413447-23-000011_nxpi-20230331.htm:56]** .                                          |
| William Betz     | Executive Vice President and Chief Financial Officer                     | October 2021 | William Betz is the Executive Vice President and CFO at NXP Semiconductors. He has been with NXP since 2013 and was appointed as CFO in October 2021. He has over 20 years of finance experience in the semiconductor industry  **[0001413447-24-000031_nxpi-20240404.htm:56]** **[0001413447-24-000033_nxpi-20240411.htm:56]** **[0001413447-23-000014_nxpi-20230407.htm:58]** .                                                                                                 |
| Christopher Jensen| Executive Vice President and Chief Human Resources Officer              | June 2020    | Christopher Jensen, born in 1969, is the Executive Vice President and CHRO at NXP Semiconductors since June 2020. He joined NXP following the merger with Freescale in 2015 and played a key role in the cultural integration of the two companies  **[0001413447-24-000031_nxpi-20240404.htm:56]** **[0001413447-24-000033_nxpi-20240411.htm:56]** **[0001413447-23-000014_nxpi-20230407.htm:58]** **[0001413447-23-000011_nxpi-20230331.htm:56]** .                                                                           |
| Ron Martino      | Executive Vice President and Chief Sales Officer                         | N/A          | Ron Martino is the Executive Vice President and Chief Sales Officer at NXP Semiconductors. He joined Freescale (now NXP) in February 2008 from IBM, where he worked for 20 years. He has over 30 years of experience in the microelectronics business  **[0001413447-24-000031_nxpi-20240404.htm:56]** **[0001413447-24-000033_nxpi-20240411.htm:56]** **[0001413447-23-000011_nxpi-20230331.htm:57]** **[0001413447-23-000014_nxpi-20230407.htm:59]** .                                                                        |
| Andrew Micallef  | Executive Vice President and Chief Operations and Manufacturing Officer  | May 2021     | Andrew Micallef is the Executive Vice President and Chief Operations and Manufacturing Officer at NXP Semiconductors. He joined the company in May 2021 and is responsible for creating and executing NXP's end-to-end manufacturing, quality, and supply chain strategies  **[0001413447-24-000031_nxpi-20240404.htm:56]** **[0001413447-24-000033_nxpi-20240411.htm:56]** **[0001413447-23-000014_nxpi-20230407.htm:59]** **[0001413447-23-000011_nxpi-20230331.htm:57]** .                                                   |
| Jennifer Wuamett | Executive Vice President, General Counsel, Corporate Secretary, and Chief Sustainability Officer | 2018         | Jennifer Wuamett, born in 1965, has been serving as the Executive Vice President, General Counsel, Corporate Secretary, and Chief Sustainability Officer at NXP Semiconductors since 2018. She is responsible for worldwide legal, governance, compliance, and intellectual property matters  **[0001413447-24-000033_nxpi-20240411.htm:57]** **[0001413447-24-000031_nxpi-20240404.htm:57]** **[0001413447-23-000014_nxpi-20230407.htm:59]** **[0001413447-23-000011_nxpi-20230331.htm:57]** . |

84b0ddf6e45469f006c8fc47f3a7f7adb9a867ae2456a6ca8e2f87ff6acb93f2

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

Selling, General, and Administrative Expenses (SG&A) [USD, Millions]

Research and Development (R&D) [USD, Millions]

Depreciation and Amortization (D&A) [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

Earnings Per Share (EPS) - Basic [USD, Units]

Earnings Per Share (EPS) - Diluted [USD, Units]

13ddc6ee8752bc24203e1e9f3141c6e293b46e7007c58c19982c7572790024c7

**Quarterly guidance for Q4 2024:**
- **Revenue**: $3.1 billion  **[NXPI_3405726_1]** **[NXPI_3405726_3]**  (lowered from $3.25 billion ± $100 million  **[NXPI_3394041_3]** **[NXPI_3394041_1]** )  
- **Non-GAAP Gross Margin**: 57.5% ± 50 bps  **[NXPI_3405726_3]**  (lowered from 58.5% ± 50 bps  **[NXPI_3394041_3]** )  
- **Non-GAAP Operating Expenses**: $725 million ± $10 million  **[NXPI_3405726_4]**  (lowered from $760 million ± $10 million  **[NXPI_3394041_3]** )  
- **Non-GAAP Operating Margin**: 34.1%  **[NXPI_3405726_4]**  (lowered from 35.1%  **[NXPI_3394041_3]** )  
- **Non-GAAP Financial Expenses**: $77 million  **[NXPI_3405726_4]**  (raised from $67 million  **[NXPI_3394041_4]** )  
- **Non-GAAP Tax Rate**: 16.8%  **[NXPI_3405726_4]**  (no change from 16.8%  **[NXPI_3394041_4]** )  
- **Noncontrolling Interest and Other**: $9 million  **[NXPI_3405726_4]**  (no change from $9 million  **[NXPI_3394041_4]** )  
- **Equity Accounted Boundary Joint Ventures**: $2 million loss  **[NXPI_3405726_4]**  (no prior guidance)  
- **Average Share Count for Modeling**: 257 million  **[NXPI_3405726_4]**  (lowered from 258.5 million  **[NXPI_3394041_4]** )  
- **Non-GAAP Earnings Per Share**: $3.13  **[NXPI_3405726_4]**  (lowered from $3.42  **[NXPI_3394041_4]** )  
- **Stock-Based Compensation**: $118 million  **[NXPI_3405726_4]**  (raised from $116 million  **[NXPI_3394041_4]** )  
- **Capital Expenditures**: Around 5% of revenue  **[NXPI_3405726_4]**  (lowered from ~6%  **[NXPI_3394041_4]** )  
- **Capital Returns**: Above $700 million for Q4  **[NXPI_3405726_4]**  (no prior guidance)  
- **Channel Inventory**: ~1.9 months  **[NXPI_3405726_1]**  (raised from 1.8 months  **[NXPI_3394041_3]** )  

eb3c51d3a2893a4de6b5772b4bcc79971055557eeae3d565de25319c321b117a

| Name                          | Start Date   | End Date   | Reason for Change                                                                 |
|-------------------------------|--------------|------------|----------------------------------------------------------------------------------|
| Ernst & Young Accountants LLP | 2020  **[0001413447-19-000073_a8-knovember222019.htm:1] [0001413447-21-000011_nxpi-20201231.htm:86]**   | Present    | Current auditor.                                                                |
| KPMG Accountants N.V.         | 2009  **[0001413447-20-000009_nxp10-k.htm:90]**      | 2019  **[0001413447-19-000073_a8-knovember222019.htm:1]**    | Not recommended for re-appointment after a competitive selection process.  **[0001413447-19-000073_a8-knovember222019.htm:1]**    |

7e54fb46a959bf3d5ffc8efc12b3da63ba45d7933cc06dd7b0e5c807dfb2dcce

7afe6c84f599e8e43ea0a21612994f46ab68896e8406560edca683e83e33d1e1

- Total Revenue: $3,250 million (-5% YoY)  **[0001413447-23-000107_nxpi-20231001.htm:15]** **[0001413447-24-000089_nxpi-20240929.htm:19]**   
- Industrial & IoT: $563 million (**-7%** YoY)  **[0001413447-23-000107_nxpi-20231001.htm:15]** **[0001413447-24-000089_nxpi-20240929.htm:19]**   
- Mobile: $407 million (**+8%** YoY)  **[0001413447-23-000107_nxpi-20231001.htm:15]** **[0001413447-24-000089_nxpi-20240929.htm:19]**   
- Communication Infrastructure & Other: $451 million (**-19%** YoY)  **[0001413447-23-000107_nxpi-20231001.htm:15]** **[0001413447-24-000089_nxpi-20240929.htm:19]**   
- APAC (ex. China): $845 million (**-7%** YoY)  **[0001413447-24-000089_nxpi-20240929.htm:19]** **[0001413447-23-000107_nxpi-20231001.htm:16]**   
- EMEA: $719 million (**-17%** YoY)  **[0001413447-24-000089_nxpi-20240929.htm:19]** **[0001413447-23-000107_nxpi-20231001.htm:16]**   
- Americas: $483 million (**-6%** YoY)  **[0001413447-24-000089_nxpi-20240929.htm:19]** **[0001413447-23-000107_nxpi-20231001.htm:16]**   
- Operating Income: $99 million (**-90%** YoY)  **[0001413447-23-000107_nxpi-20231001.htm:1]** **[0001413447-24-000089_nxpi-20240929.htm:3]** **[0001413447-24-000089_nxpi-20240929.htm:8]** **[0001413447-24-000089_nxpi-20240929.htm:5]** **[0001413447-24-000089_nxpi-20240929.htm:9]**   
- Net Income: $729 million (**-8%** YoY)  **[0001413447-23-000107_nxpi-20231001.htm:1]** **[0001413447-24-000089_nxpi-20240929.htm:3]** **[0001413447-24-000089_nxpi-20240929.htm:8]** **[0001413447-24-000089_nxpi-20240929.htm:5]** **[0001413447-24-000089_nxpi-20240929.htm:9]**   

d0a31cefbd5cae5e56814fddb5d3ee0b35579523d4f9ad5f786e2b133b839516

a6394a28523907dfb2cade06d93be535fc23b6c76de2e2811218e216c92c8dcc

5fc491afee19aad79b67463f59d8a4620519e398e0f4e3b5b67af318662127ef

| Year | Amount Due ($ in millions) | Debt Type                             | Interest Rate (%) | % of Total Debt |
|------|----------------------------|---------------------------------------|-------------------|-----------------|
| 2025 | 500 **[0001413447-24-000089_nxpi-20240929.htm:12]**                | Fixed-rate 2.7% senior unsecured notes| 2.70 **[0001413447-24-000089_nxpi-20240929.htm:12]**      | 4.9% = (500 / 10,182) * 100 **[0001413447-24-000089_nxpi-20240929.htm:12]** |
| 2026 | 1,250 **[0001413447-24-000089_nxpi-20240929.htm:12]**              | Fixed-rate 5.35% senior unsecured notes| 5.35 **[0001413447-24-000089_nxpi-20240929.htm:12]**     | 12.3% = (1,250 / 10,182) * 100 **[0001413447-24-000089_nxpi-20240929.htm:12]** |
| 2026 | 1,250 **[0001413447-24-000089_nxpi-20240929.htm:12]**              | Fixed-rate 3.875% senior unsecured notes| 3.875 **[0001413447-24-000089_nxpi-20240929.htm:12]**   | 12.3% = (1,250 / 10,182) * 100 **[0001413447-24-000089_nxpi-20240929.htm:12]** |
| 2027 | 1,000 **[0001413447-24-000089_nxpi-20240929.htm:12]**              | Fixed-rate 3.15% senior unsecured notes| 3.15 **[0001413447-24-000089_nxpi-20240929.htm:12]**     | 9.8% = (1,000 / 10,182) * 100 **[0001413447-24-000089_nxpi-20240929.htm:12]** |
| 2027 | 1,000 **[0001413447-24-000089_nxpi-20240929.htm:12]**              | Fixed-rate 4.40% senior unsecured notes| 4.40 **[0001413447-24-000089_nxpi-20240929.htm:12]**     | 9.8% = (1,000 / 10,182) * 100 **[0001413447-24-000089_nxpi-20240929.htm:12]** |
| 2028 | 500 **[0001413447-24-000089_nxpi-20240929.htm:12]**                | Fixed-rate 5.55% senior unsecured notes| 5.55 **[0001413447-24-000089_nxpi-20240929.htm:12]**     | 4.9% = (500 / 10,182) * 100 **[0001413447-24-000089_nxpi-20240929.htm:12]** |
| 2029 | 1,000 **[0001413447-24-000089_nxpi-20240929.htm:12]**              | Fixed-rate 4.3% senior unsecured notes | 4.30 **[0001413447-24-000089_nxpi-20240929.htm:12]**     | 9.8% = (1,000 / 10,182) * 100 **[0001413447-24-000089_nxpi-20240929.htm:12]** |
| 2030 | 1,000 **[0001413447-24-000089_nxpi-20240929.htm:12]**              | Fixed-rate 3.4% senior unsecured notes | 3.40 **[0001413447-24-000089_nxpi-20240929.htm:12]**     | 9.8% = (1,000 / 10,182) * 100 **[0001413447-24-000089_nxpi-20240929.htm:12]** |
| 2031 | 1,000 **[0001413447-24-000089_nxpi-20240929.htm:12]**              | Fixed-rate 2.5% senior unsecured notes | 2.50 **[0001413447-24-000089_nxpi-20240929.htm:12]**     | 9.8% = (1,000 / 10,182) * 100 **[0001413447-24-000089_nxpi-20240929.htm:12]** |
| 2032 | 1,000 **[0001413447-24-000089_nxpi-20240929.htm:12]**              | Fixed-rate 2.65% senior unsecured notes| 2.65 **[0001413447-24-000089_nxpi-20240929.htm:12]**     | 9.8% = (1,000 / 10,182) * 100 **[0001413447-24-000089_nxpi-20240929.htm:12]** |
| 2033 | 1,000 **[0001413447-24-000089_nxpi-20240929.htm:12]**              | Fixed-rate 5.0% senior unsecured notes | 5.00 **[0001413447-24-000089_nxpi-20240929.htm:12]**     | 9.8% = (1,000 / 10,182) * 100 **[0001413447-24-000089_nxpi-20240929.htm:12]** |
| 2041 | 1,000 **[0001413447-24-000089_nxpi-20240929.htm:12]**              | Fixed-rate 3.25% senior unsecured notes| 3.25 **[0001413447-24-000089_nxpi-20240929.htm:12]**     | 9.8% = (1,000 / 10,182) * 100 **[0001413447-24-000089_nxpi-20240929.htm:12]** |
| 2042 | 500 **[0001413447-24-000089_nxpi-20240929.htm:12]**                | Fixed-rate 3.125% senior unsecured notes| 3.125 **[0001413447-24-000089_nxpi-20240929.htm:12]**   | 4.9% = (500 / 10,182) * 100 **[0001413447-24-000089_nxpi-20240929.htm:12]** |
| 2051 | 500 **[0001413447-24-000089_nxpi-20240929.htm:12]**                | Fixed-rate 3.25% senior unsecured notes| 3.25 **[0001413447-24-000089_nxpi-20240929.htm:12]**     | 4.9% = (500 / 10,182) * 100 **[0001413447-24-000089_nxpi-20240929.htm:12]** |

d02c7f203266f1bd1f229e48173f89c1834b21aa9f4941c13db309617fe8b867

9408b27e783980e9aa4586182165fea526ed86df02c60a45e0b6e01b7eb5fb4d

- NXP is experiencing a prolonged inventory correction in the automotive sector, despite having started under-shipping last year, indicating weaker than expected demand or a slow recovery. (Document  **[NXPI_3381714_17]** )
- **Flat SAAR growth** in the automotive market this year compared to **10% growth last year** makes the macro environment less positive for NXP's key market segment. (Document  **[NXPI_3381714_18]** )
- Uncertainty about second-half recovery, with the company unable to provide specifics on likely Q3 seasonality or growth, suggests potential weakness in upcoming quarters. (Document  **[NXPI_3381714_16]** )

4b3ea0e504b281a670fb485ce070b4d89484e89983834b00a1136300b74a1522

1. **Automotive Outlook vs Prior Expectations**  
   **Q:** Are your Auto expectations better or worse than 3 months ago?  
   **A:** Our Automotive expectations for the second half are similar to three months ago, with company-specific growth balancing longer inventory digestion at Tier 1 customers.  **[NXPI_3394041_13]** 

2. **Inventory Levels and Implications**  
   **Q:** Where is inventory increasing, and plans for channel inventory?  
   **A:** Inventory is building across products, not specific to any segment or geography.  **[NXPI_3394041_14]**  Our long-term channel inventory target remains at **2.5 months**, but we now expect to reach it in **2025**, not by the end of this year.  **[NXPI_3394041_14]** 

3. **Industrial & IoT Demand Issues**  
   **Q:** Is Industrial & IoT decline due to demand or inventory?  
   **A:** The decline is driven by weaker demand in the U.S. and Europe due to macroeconomic factors, not over-inventory.  **[NXPI_3394041_9]**  Growth is anticipated from China, led by consumer IoT.  **[NXPI_3394041_9]** 

4. **Gross Margin and Pricing**  
   **Q:** Why is gross margin guidance lower despite higher revenue?  
   **A:** Gross margin is slightly lower due to unfavorable product mix offsetting the benefits of higher revenue; pricing remains flat with no increases or decreases.  **[NXPI_3394041_12]**  Multiple tailwinds are expected to improve margins in the medium and long term.  **[NXPI_3394041_12]** 

5. **Capital Allocation and Free Cash Flow**  
   **Q:** Any changes to CapEx or free cash flow plans?  
   **A:** There are no changes to our capital allocation; we will continue stock buybacks and maintain dividends at **25%** of cash flow from operations.  **[NXPI_3394041_10]**  VSMC CapEx will peak over the next three years, with investments spread out.  **[NXPI_3394041_10]** 

6. **Automotive Trends by Geography**  
   **Q:** Which geographies are stronger in Automotive?  
   **A:** China is performing better due to the success of electric vehicles, with an expected **21%** unit growth in 2024 over 2023.  **[NXPI_3394041_19]** 

7. **Share in Auto Processors in China**  
   **Q:** How is your position in auto processors in China?  
   **A:** We are the **#1** in auto processors worldwide and maintain a strong position in China.  **[NXPI_3394041_17]**  We focus on high-performance processors like 16-nanometer devices and are enabling local manufacturing through TSMC's Nanjing facility.  **[NXPI_3394041_17]** 

c18686d8408eb2a99267882d59b494d9386a8a5a1f1d1bbfed7af7e36ddd8f31

1. **Automotive Growth Prospects**  
   **Q:** What's NXP's long-term Automotive growth outlook?  
   **A:** NXP expects its Automotive segment to hit the **9% to 14% growth target** this year, benefiting from ADAS, electrification trends, and software-defined vehicles. Pricing is expected to remain sustainable, with possible low single-digit ASP erosion in coming years. No massive changes are anticipated.  **[NXPI_3381714_6]** 

2. **Inventory Correction in Automotive**  
   **Q:** Why is NXP still in an Automotive inventory correction?  
   **A:** NXP spread out its inventory correction over several quarters as part of a soft landing strategy, starting from Q3 last year. They are digesting inventory with direct Automotive Tier 1 customers, expecting normalization in the second half. Distribution Automotive business, **40%** of total Automotive revenue, has remained stable at **1.6 months** inventory.  **[NXPI_3381714_7]** **[NXPI_3381714_17]** 

3. **Second Half Growth Confidence**  
   **Q:** What's driving confidence in second half growth?  
   **A:** NXP anticipates solid growth in the second half due to company-specific ramps like Automotive RADAR platforms, RFID tagging uplift from the Impinj settlement, and normalization of Automotive Tier 1 inventories. They are intentionally increasing channel inventory to **1.7 months** by Q2 end to prepare for anticipated demand.  **[NXPI_3381714_8]** 

4. **Gross Margin Trajectory**  
   **Q:** How should we think about gross margins ahead?  
   **A:** Adjusting for accounting changes, NXP is guiding gross margins to flat. They expect to run at or above their long-term model, with tailwinds from factory utilization below **70%**, higher revenue fall-through, and channel replenishment. They aim to get back to margins of around **58%** or higher.  **[NXPI_3381714_10]** 

5. **Impact of Ending NCNR Programs**  
   **Q:** How did ending NCNR programs affect customer relationships?  
   **A:** Ending NCNR programs helped NXP learn about over-inventory build earlier, fostering closer customer relationships. However, some direct customers are now reducing inventories too aggressively, which may pose supply risks during demand upticks. OEMs show good learning, but with direct customers, it's a mixed picture.  **[NXPI_3381714_11]** 

6. **China Manufacturing Strategy**  
   **Q:** How does NXP's China manufacturing strategy protect its business?  
   **A:** NXP is localizing manufacturing in China to meet customer demands, using TSMC's Nanjing fab for 16-nanometer technology and working with SMIC and another foundry. This helps match local competitors' cost bases without impacting margins, keeping NXP competitive.  **[NXPI_3381714_21]** 

7. **Capital Allocation Plans**  
   **Q:** What's NXP's approach to capital returns and balance sheet?  
   **A:** NXP continues to return excess free cash flow to shareholders, with **$8.4 billion** returned over the last 3 years. They maintain a healthy dividend and actively buy back shares, with approximately **$1.1 billion** left on the buyback authorization for this year. No change to their capital allocation strategy.  **[NXPI_3381714_20]** 

8. **Chinese Competition Threats**  
   **Q:** Is competition from Chinese players a concern?  
   **A:** NXP is always vigilant about competition. China is advancing in power discretes and lower-end microcontrollers, but NXP doesn't currently see a significant threat in their space. They remain competitive through local manufacturing and cost strategies.  **[NXPI_3381714_22]** 

9. **Impinj Settlement and OpEx Impact**  
   **Q:** Is the Impinj payment a one-time deal, and what's the OpEx outlook?  
   **A:** The Impinj agreement is an annual cross-license impacting NXP by **$15 million** in Q2, possibly stopping once a workaround is complete. OpEx is higher in Q2 due to this and annual merit increases, but NXP aims to return to around **23%** of revenue in the second half through expense controls.  **[NXPI_3381714_9]** 

10. **EVs vs. Hybrids Growth**  
    **Q:** How do hybrids and EVs impact NXP?  
    **A:** xEVs continue to grow, especially in China. BEVs grow **25%**, hybrids **17%**. NXP's products play in both segments; only a small part is strictly BEV-specific. Overall, the distinction doesn't significantly affect NXP's revenue.  **[NXPI_3381714_12]** 

11. **Software-Defined Vehicles**  
    **Q:** Are software-defined vehicles linked to EVs?  
    **A:** No, the concept is independent of powertrain type. NXP sees software-defined vehicles in both ICE and electric vehicles. All OEMs are developing electric vehicles, but software-defined architectures apply broadly.  **[NXPI_3381714_19]** 

12. **Second Half Ramp Timing**  
    **Q:** Does the second half ramp start in Q3?  
    **A:** NXP doesn't provide specific quarterly guidance beyond the second quarter but indicates that growth in the second half will result from both company-specific factors and inventory normalization.  **[NXPI_3381714_16]** 

13. **Channel Inventory Levels**  
    **Q:** Will channel inventory increase significantly?  
    **A:** NXP plans to increase channel inventory to **1.7 months** by Q2 end, with possible slight increases thereafter. They don't foresee raising it to **2.5 months**; growth is expected from demand, not just channel fill.  **[NXPI_3381714_14]** 

14. **Catalysts for Higher Utilization Rates**  
    **Q:** What would drive higher factory utilization?  
    **A:** Higher utilization would result from a combination of demand improvement and inventory levels. If growth exceeds current expectations, NXP can increase factory utilization accordingly.  **[NXPI_3381714_13]** 

15. **CapEx Spending Level**  
    **Q:** What's the outlook for CapEx spending?  
    **A:** NXP expects no change in capital intensity, maintaining CapEx spending at **6% to 8%** of revenue. The change in depreciation accounting doesn't affect CapEx plans.  **[NXPI_3381714_15]** 

a904cbb00042fb2de7e48c565e9c3ab3345fbcb4328febbd063fb5a6b18999da

- **Extended inventory digestion at Automotive Tier 1 customers is taking longer than expected**, stretching into the second half of 2024, causing NXP to ship below end demand and leading to a **lower annual revenue outlook of a low single-digit decline** for 2024.  **[NXPI_3394041_20]** **[NXPI_3394041_5]** **[NXPI_3394041_13]** **[NXPI_3394041_6]**
- **The Automotive macro environment has deteriorated**, with S&P forecasting a **2% decline in global auto production for 2024**, which, combined with prolonged inventory adjustments, poses risks to NXP's automotive revenue growth.  **[NXPI_3394041_6]**
- In the **Communications Infrastructure & Other** segment, the only structurally growing part is RFID, which is **less than 50% of the total segment**, and its growth is **offset by declines in legacy Digital Networking and RF power businesses**, leading to an expected **year-on-year decline of mid-20%** in Q3 2024.  **[NXPI_3394041_5]** **[NXPI_3394041_15]**

6a8bb34d0a9bca4a0d315e95a44122e20d07d360460bd1a0cb839e1253a5d62f

- NXP expects incrementally improving demand signals across all end markets for the second half of 2024, leading to cautious optimism and plans to slightly increase channel inventory to support anticipated growth.  **[NXPI_3381714_8]** ,  **[NXPI_3381714_14]**
- The company anticipates growth in Automotive due to new platform ramps in the second half, including company-specific platforms, as well as positive developments in the RFID tagging business following a settlement with Impinj, which is expected to drive growth in the Communication Infrastructure & Other segment.  **[NXPI_3381714_8]** ,  **[NXPI_3381714_14]**
- NXP is successfully managing margins, maintaining gross margins at or above the high end of their long-term model even during the cyclical downturn, and continues to return excess free cash flow to shareholders through share buybacks and dividends, demonstrating strong financial discipline.  **[NXPI_3381714_10]** ,  **[NXPI_3381714_20]**

ae01ad39c93a4b55f01f335c500ab1246345effc2431ed0e697cc9b250b8dfd4

- **Increasing macroeconomic weakness** in the **automotive and industrial markets** in **Europe and North America** is leading to unexpected declines in demand and revenue.  **[NXPI_3405726_7]** **[NXPI_3405726_23]** **[NXPI_3405726_8]** **[NXPI_3405726_1]** **[NXPI_3405726_19]**
- **Tier 1 customers are aggressively reducing inventory levels**, causing a "double whammy" effect with both **lower production orders and reduced inventory replenishment**, resulting in elevated internal inventory levels for NXP.  **[NXPI_3405726_7]** **[NXPI_3405726_8]** **[NXPI_3405726_1]** **[NXPI_3405726_19]**
- **Management is uncertain about the timing of market recovery**, indicating potential prolonged weakness in key markets and unable to provide clear guidance on when conditions might improve.  **[NXPI_3405726_23]** **[NXPI_3405726_8]** **[NXPI_3405726_15]** **[NXPI_3405726_1]** **[NXPI_3405726_19]**

5dc7657f8377c4608f3a9550ec7205f695e5ba95bce20bc5e6ff2b808e62e227

- **NXP expects revenue in the first half of 2024 to decline versus the first half of 2023**, due to longer-than-anticipated inventory digestion at direct automotive customers and a deteriorating macro environment.  **[NXPI_3372051_3]** **[NXPI_3372051_16]**
- **The Automotive and Core Industrial segments are undergoing a multi-quarter inventory correction**, which will continue through the first half of 2024, affecting revenues in key markets.  **[NXPI_3372051_3]**
- **Revenue from the Communication Infrastructure & Other business is expected to decline in 2024 compared to 2023**, indicating ongoing weakness in this segment.  **[NXPI_3372051_3]** **[NXPI_3372051_2]**

9e35ba23f463ad157756b84f772234ff7543a41fe01b31c494784582bc2c1d04

- **Resumption of Growth in Automotive and Industrial & IoT Segments**: NXP has navigated the industry downcycle successfully and sees the trough behind them. The company is resuming growth, most importantly in the **Automotive segment, turning from a mid-single-digit decline to a mid-single-digit growth sequentially**, and **Industrial & IoT remains in a positive growth regime both year-on-year and sequentially**.  **[NXPI_3394041_20]**
- **Strong Performance in China's Automotive Market Driven by EV Growth**: NXP highlights that **China's Automotive market is performing better than other geographies**, largely due to the **continued success of electric vehicles**, with **21% unit growth in xEVs in China in '24 over '23**, which positively reflects on NXP's business.  **[NXPI_3394041_19]**
- **Company-Specific Drivers Leading to Confidence in Sequential Growth**: NXP expects continued sequential growth in the second half, driven by **company-specific factors such as the ramp-up of radar platforms and RFID secured tagging**, as well as **less inventory digestion at Tier 1 Automotive customers**. The growth is not reliant on channel inventory refill, indicating underlying demand strength.  **[NXPI_3394041_5]**

5b92106a804be4326af453575e9141197da65285c56768113857c5aafbba452c

- **NXP is well-positioned to benefit from the growth in China's automotive market**, which is expected to grow by **2%**, while the global SAAR is declining by **2%**. With **EV penetration in China reaching 46%** in September, NXP's content per vehicle is similar to that in Western markets. Chinese OEMs develop new platforms faster, allowing NXP to tap into higher content opportunities more quickly.  **[NXPI_3405726_22]** **[NXPI_3405726_9]**
- **Disciplined inventory management**, maintaining **channel inventory at 8 weeks**, positions NXP well for future recovery, enabling efficient capture of growth when the macro environment improves. The company is proactively managing internal inventory and reducing foundry purchases to align with demand.  **[NXPI_3405726_7]** **[NXPI_3405726_8]**
- **Strong pricing power and focus on differentiated products**, avoiding competing solely on price. NXP expects **only low single-digit ASP erosion** in 2025, returning to typical levels before the supply crisis. The emphasis on cost competitiveness and innovation contributes to resilient profitability even in uncertain demand environments.  **[NXPI_3405726_15]** **[NXPI_3405726_16]**

a0d5d08a850e84dd95408390584ac22bf686a204b5b8a7a01917271d5d022492

- **NXP has managed inventory effectively**, maintaining tight control over distribution channels since mid-2022, which has allowed the company to avoid overstock issues faced by peers and positions it to capitalize on cyclical improvements as they materialize.  **[NXPI_3372051_9]**
- **NXP's consumer-oriented segments, including Industrial & IoT and Mobile, have already experienced their trough in Q1 2023 and are expected to continue growing throughout 2024**, contributing positively to overall revenue.  **[NXPI_3372051_8]**
- **Despite industry headwinds, NXP expects to maintain strong gross margins (~58%)**, driven by effective cost management, favorable product mix, and the potential for increased utilization, underpinning strong profitability.  **[NXPI_3372051_13]**

ae92f536cd36a6a754ba08a5b375029d7dc0a639df8a117c31cb2cfc73e521cf

1. **Weakness in Industrial and Auto Markets**  
   **Q:** Why did NXP lower guidance amid market weakness?  
   **A:** NXP was surprised by a broadening weakness in the industrial and IoT markets in August, which extended into the automotive sector, particularly in Western regions. Customers reduced inventory levels due to end-market weakness, leading to a more cautious stance. China, however, remains strong and is leading growth.  **[NXPI_3405726_5]** 

2. **Gross Margin Outlook**  
   **Q:** How will revenue declines impact gross margins?  
   **A:** Gross margins are expected to decline due to lower revenues and unfavorable mix. Utilization rates are in the **low 70%** range and will continue at this level into the first half of 2025. NXP plans structural changes to improve gross margins in the long term, which will be discussed at the upcoming Analyst Day.  **[NXPI_3405726_6]** **[NXPI_3405726_14]** **[NXPI_3405726_17]** 

3. **Inventory Levels and Customer Reductions**  
   **Q:** How are inventory levels affecting NXP's outlook?  
   **A:** Customers, especially in Western automotive and industrial segments, are reducing their inventory levels, which, combined with declining production numbers, is impacting NXP's revenues. NXP's own channel inventory increased slightly due to late-quarter weakness but remains low at about **8 weeks**. They plan to hold inventory levels until the environment normalizes.  **[NXPI_3405726_5]** **[NXPI_3405726_7]** **[NXPI_3405726_19]** 

4. **China Strength and Opportunity**  
   **Q:** What is the impact of China's automotive growth on NXP?  
   **A:** China's automotive market is growing, with strong EV penetration and competitive local OEMs. NXP's content per vehicle in China is similar to that in Western premium cars, and the faster innovation cycles in China lead to quicker adoption of NXP's new products. This growth in China is seen as sustainable and beneficial for NXP.  **[NXPI_3405726_5]** **[NXPI_3405726_9]** **[NXPI_3405726_22]** 

5. **Guidance for Q1 and Potential Recovery**  
   **Q:** Is NXP near the bottom, and what is the outlook for Q1?  
   **A:** Due to macro uncertainties, NXP cannot call the trough but expects Q1 to follow normal seasonal patterns, typically a **high single-digit sequential decline**. Inventory levels at customers are low, which could set up for good growth when recovery occurs, but timing remains uncertain.  **[NXPI_3405726_8]** 

6. **Pricing Strategy and ASP Outlook**  
   **Q:** How is NXP approaching pricing amid market pressures?  
   **A:** NXP maintained flat pricing this year and expects a normal **low single-digit ASP erosion** next year. With a differentiated product portfolio, NXP does not plan to compete on price alone and will not sacrifice gross margins for short-term market share gains.  **[NXPI_3405726_15]** **[NXPI_3405726_16]** 

7. **Impact of EV and Hybrid Mix**  
   **Q:** How does the shift towards hybrids affect NXP's content?  
   **A:** NXP sees little difference in content between hybrids and full EVs, as their main product, battery management systems, is similar in both. While EV adoption has slowed, XEVs (electrified vehicles) still show **14% growth** this year, representing **37%** of total vehicle production. NXP expects continued growth, targeting **75%** global XEV penetration by 2030.  **[NXPI_3405726_20]** 

8. **Company-Specific Growth vs. Macro Weakness**  
   **Q:** Are NXP's growth drivers offset by market conditions?  
   **A:** Company-specific growth areas, such as radar and S32 product ramps, are occurring but are being offset by broader macroeconomic weakness, particularly in the automotive sector. While these initiatives contribute positively, they are not sufficient to overcome the overall market declines.  **[NXPI_3405726_13]** 

9. **Recovery Potential Relative to Peers**  
   **Q:** Will NXP recover less strongly than peers?  
   **A:** NXP believes it is well-positioned for recovery, having managed inventory levels cautiously. The company declined less this year by **5%** compared to peers due to earlier actions and expects to start from the same point as others when the market recovers. Channel inventory is low, providing upside when demand improves.  **[NXPI_3405726_12]** 

10. **Industrial and IoT Market Dynamics**  
    **Q:** Where is NXP seeing weakness in industrial and IoT?  
    **A:** Weakness is pronounced in Europe and the U.S., particularly in factory automation. NXP's strength in China, especially in consumer IoT, cannot fully offset this weakness. The industrial and IoT segment is heavily serviced through distribution channels, making it sensitive to end-market demand fluctuations.  **[NXPI_3405726_11]** **[NXPI_3405726_21]** 

11. **Inventory Days and Future Targets**  
    **Q:** What are NXP's goals for inventory days?  
    **A:** Inventory levels are expected to remain elevated over the next couple of quarters until demand improves. NXP is holding about **three weeks** of finished goods internally and plans to update inventory targets to service customer needs, which will be discussed at the upcoming Analyst Day.  **[NXPI_3405726_23]** 

12. **Gross Margin Stability Factors**  
    **Q:** Why are gross margins starting to decline now?  
    **A:** The decline in gross margins is primarily due to lower revenue levels over a fixed cost structure and unfavorable mix. While margins have been stable over the past quarters, current revenue declines and mix shifts are impacting margins. NXP anticipates margins will improve once the macro environment recovers.  **[NXPI_3405726_17]** 

13. **Software-Defined Vehicle and Content Confidence**  
    **Q:** Is NXP confident in software-defined vehicle content growth?  
    **A:** NXP remains confident in its content assumptions and growth in software-defined vehicles. The S32 platform has outperformed targets, and the company continues to see strong traction, particularly in China, where OEMs are adopting new technologies more rapidly.  **[NXPI_3405726_18]** 

14. **Mix Shift Impact on Gross Margins**  
    **Q:** How does mix affect gross margins?  
    **A:** In Q3, gross margins were impacted by weaker industrial IoT revenues and stronger mobile revenues, which are slightly dilutive. Going into Q4, industrial IoT revenues are expected to step down again, posing a mix headwind. Mix plays a role alongside lower revenues in gross margin outcomes.  **[NXPI_3405726_6]** 

15. **Exposure to China in Industrial and IoT**  
    **Q:** Is NXP's industrial and IoT segment heavily China-focused?  
    **A:** While a majority of the industrial and IoT business is in China, weakness in Europe and the U.S. is significant and cannot be fully offset by China's strength. The segment is sensitive to distribution channel dynamics, with **80%** of revenues serviced through distribution.  **[NXPI_3405726_21]** 

16. **Anticipated Seasonal Declines**  
    **Q:** Why is Q1 expected to decline more than historical averages?  
    **A:** NXP expects total company revenues to be seasonally down into Q1, potentially a **high single-digit sequential decline**, which may differ from historical averages due to current macroeconomic uncertainties. The company did not provide specific guidance by segment.  **[NXPI_3405726_10]** 

17. **Impact of Western OEM Competitiveness**  
    **Q:** How does the competitiveness of Western OEMs affect NXP?  
    **A:** Western OEMs are becoming less competitive compared to Chinese OEMs, potentially leading to fewer cars built in Europe and the U.S. NXP is focused on maintaining strong relationships with Chinese OEMs to capitalize on the greater opportunities in that market.  **[NXPI_3405726_18]** 

18. **Channel Inventory Management**  
    **Q:** Why did channel inventory increase slightly?  
    **A:** NXP aimed to increase channel inventory from **1.7 to 1.8 months** to ensure competitiveness, but late-quarter weakness reduced sell-through more than anticipated, resulting in a slight overage. The company maintains a disciplined approach, keeping inventory at about **8 weeks**.  **[NXPI_3405726_7]** 

19. **Long-Term Gross Margin Goals**  
    **Q:** What are NXP's long-term gross margin plans?  
    **A:** NXP plans to discuss its long-term gross margin journey and structural changes at the upcoming Analyst Day, emphasizing that the current gross margin of **58%** is not the final destination, and they aim to surpass the high end of the current model in the future.  **[NXPI_3405726_6]** **[NXPI_3405726_17]** **[NXPI_3405726_23]** 

20. **Potential Product Exits**  
    **Q:** Would NXP exit products due to prolonged oversupply?  
    **A:** NXP does not intend to compete on price alone. If they must rely solely on price competition, they may exit certain product categories—as they have in the past with powertrain microcontrollers and the banking card business—to focus on differentiated products that maintain strong margins.  **[NXPI_3405726_16]** 

20980d88e35a9efec42a620765af285b0400594db59030b36a6344bcb6a73917

1. **Inventory Normalization Plans**  
   **Q:** What's the plan for excess inventory normalization?  
   **A:** NXP intends to maintain channel inventory levels at **1.5 to 1.6 months** in Q1 2024, with no plans to increase general inventory. Replenishment will begin only when market momentum justifies it, and there's no guarantee of reaching the **2.5 months** long-term target by year-end. Excess inventory at direct customers, mainly in Automotive, is expected to normalize by mid-2024, transitioning from under-shipping to shipping to end demand in the second half of the year.  **[NXPI_3372051_6]** 

2. **2024 Growth Outlook**  
   **Q:** How do you see growth shaping up for 2024?  
   **A:** NXP anticipates flat to slightly positive revenue growth for 2024. Consumer-oriented businesses, such as IoT and Mobile, have moved past their trough and are expected to grow throughout the year. However, the **Comms Infrastructure & Other** segment is projected to decline year-over-year. The turning point for Automotive and Core Industrial is expected around mid-2024, after excess inventory is digested, leading to stronger performance in the second half.  **[NXPI_3372051_8]** 

3. **Automotive Under-shipping**  
   **Q:** Can you quantify your under-shipping in Automotive?  
   **A:** In 2023, NXP's Automotive revenue grew by **9%**, with pricing increasing by **8%**, implying nearly **0%** supply growth in units. This contrasts with a **9%** increase in global car production and a **45%** year-over-year growth in electric vehicles. This significant under-shipment reflects efforts to control oversupply, and NXP expects to normalize inventory levels by mid-2024.  **[NXPI_3372051_14]** 

4. **Gross Margin Resilience**  
   **Q:** How are you maintaining gross margins despite headwinds?  
   **A:** NXP expects a gross margin of **58%** for fiscal 2024, down only **50 basis points** from the prior year. This resilience is due to managing distribution mix, maintaining utilization rates in the low **70%** range, and focusing on productivity gains. Potential tailwinds include higher revenues, improved utilization, and expanding distribution reach, which are expected to offset headwinds like lower pricing and underutilization.  **[NXPI_3372051_13]** 

5. **Industrial Trends vs. Peers**  
   **Q:** Why are your industrial trends outperforming peers?  
   **A:** The contrast stems from NXP's early action in controlling channel inventory starting in Q2 2022, maintaining levels at **1.5 to 1.6 months**. While peers are now correcting overshipment and experiencing significant declines, NXP's disciplined approach has led to a gradual improvement and steadier performance in its Industrial & IoT segment.  **[NXPI_3372051_9]** 

6. **Pricing and Input Costs**  
   **Q:** How are input costs affecting pricing trends?  
   **A:** Pricing for 2024 is expected to remain flat, primarily driven by stable input costs. While some input costs like electricity and silicon wafers are decreasing, Tier 1 foundries, which supply the majority of NXP's inputs for Automotive and Core Industrial, have not significantly reduced costs. Over the mid to long term, NXP anticipates a return to low single-digit annual ASP erosion, but does not expect prices to regress to pre-COVID levels.  **[NXPI_3372051_15]** 

7. **Demand vs. Inventory Impact**  
   **Q:** Is weakening demand or excess inventory a bigger issue?  
   **A:** Both factors contribute, but the more significant impact is from better understanding the remaining excess inventory with Tier 1 Automotive customers. End demand in Automotive has weakened slightly, with SAAR down almost **1%** year-over-year and slowing growth in electric vehicle penetration. NXP is working to reduce excess inventory through the first half of 2024.  **[NXPI_3372051_16]** 

8. **Recovery in IoT and Industrial**  
   **Q:** How are IoT and Core Industrial segments recovering?  
   **A:** The IoT segment, about **40%** of Industrial & IoT, has gradually improved since bottoming out in Q1 2023, particularly in China. It is still below peak levels but continues to recover. Core Industrial, however, is facing over-inventory and end market weakness, making its recovery more akin to the Automotive segment.  **[NXPI_3372051_10]** 

9. **Lead Times and Pricing Relationship**  
   **Q:** Have normalized lead times impacted pricing?  
   **A:** Lead times have returned to pre-COVID norms, enhancing visibility and reducing the need for measures like non-cancelable, non-returnable orders. However, there's no direct correlation between normalized lead times and pricing. Flat pricing for 2024 is mainly a result of stable input costs rather than changes in lead times.  **[NXPI_3372051_11]** 

10. **Capital Allocation Strategy**  
    **Q:** Will share repurchases increase after debt repayment?  
    **A:** NXP's capital allocation policy remains unchanged, focusing on returning **100%** of free cash flow to shareholders over time. The company has returned **$8.8 billion** or **113%** over the past three years. While recent repurchases have been below **100%**, funds have been allocated to debt reduction to deleverage the company, which is considered a good use of cash. NXP will continue to balance dividends, buybacks, debt repayment, and small acquisitions.  **[NXPI_3372051_20]** 

58d423614d6dc6c4d9c738c37c6143fad16162c0822ede4a82957dd74c0ffdc3

NXP Semiconductors NV (NXPI)

Financials