Key Highlights

  • NXPI shares are indicated down 7.59% at $234.26 in premarket, against a prior close of $253.50.
  • Q3 revenue rose 19% to $3.79 billion, and adjusted EPS of $4.20 topped estimates.
  • Q4 revenue guidance of $3.85 billion at the midpoint was in line, but adjusted operating income guidance came in slightly below consensus.
  • The board added a $5 billion share repurchase authorization.
  • Free cash flow was $1.21 billion, or 31.9% of revenue.

NXP Semiconductors (NASDAQ:NXPI) shares are indicated down 7.59% at $234.26 in premarket after a fourth-quarter outlook that disappointed despite a clean third-quarter beat. Revenue rose 19% from a year earlier and 8% from the prior quarter to $3.79 billion, and adjusted EPS of $4.20 topped estimates. The stock closed Tuesday at $253.50, up 3.12%.

NXP, headquartered in Eindhoven, the Netherlands, designs microcontrollers, i.MX application processors, analog and interface devices, sensors and wireless connectivity products. Automotive is its largest market, at about 58% of fiscal 2025 revenue of roughly $12.3 billion. It is led by CEO Rafael Sotomayor.

Q4 Guide Lands Slightly Light

Fourth-quarter revenue guidance is $3.75 billion to $3.95 billion, a $3.85 billion midpoint and about 15% growth. Non-GAAP operating income is guided to $1.374 billion to $1.511 billion, with a midpoint of $1.442 billion that came in slightly below consensus. Adjusted EPS is guided to $4.14 to $4.58.

Management also flagged capex rising to about 5% of revenue in 2027, which added to investor caution.

Industrial and Data Center Lead the Growth

Automotive revenue rose 13% to $2.07 billion. Industrial and IoT grew 39% to $802 million, and communications infrastructure and other grew 54% to $503 million. Mobile fell 4% to $411 million. The non-GAAP operating margin widened to 37.1% from 33.8%, and non-GAAP gross margin was 58.6%.

NXP said its Trimension ultra-wideband and radar solutions will be deployed across BMW's fleet, and the VSMC joint venture opened its first 300mm fab in Singapore. Management pointed to software-defined vehicles, data center infrastructure and physical AI as long-term drivers.

Cash Return and Analyst Reaction

Cash flow from operations was $1.26 billion, and capital return was $359 million, split between $256 million of dividends and $103 million of buybacks. The new $5 billion authorization sits on top of $1.3 billion remaining under the prior plan.

Analysts trimmed targets, with Morgan Stanley to $313 from $338, Citi to $250 from $260 and BofA to $280 from $300 with a Neutral rating, citing muted auto growth and longer-dated design wins. Cantor at $400 and Needham at $300 reiterated bullish ratings. The 52-week range runs from $183.00 to $339.95.