NXP Semiconductors closed the fourth quarter of 2025 with revenues of $3.34 billion. This means the company exceeded the midpoint of its previously issued guidance and achieved a clear sequential improvement across all end markets.
For 2025 as a whole, revenue totaled $12.27 billion, a 3 percent decline from the previous year.
According to CEO Rafael Sotomayor, NXP managed to hold its own in a difficult first half of the year through tight operational management, while continuing to invest in strategic priorities such as software-defined vehicles and physical AI. Targeted acquisitions have strengthened the portfolio and kept it a leader in intelligent edge systems for automotive, industrial, and IoT. With rising demand, the company sees room for profitable growth, supported by continued focus on cost control, margin improvement, and product portfolio optimization.
GAAP gross margin in the fourth quarter was 54.2 percent, with an operating margin of 22.3 percent and earnings per share of $1.79. On a non-GAAP basis, these figures were significantly higher, with a gross margin of 57.4 percent, an operating margin of 34.6 percent, and earnings per share of $3.35. Cash flow from operating activities was $891 million, resulting in free cash flow of $793 million after investments.
Automotive remained by far NXP’s largest market, with quarterly revenue of $1.876 billion. Industrial & IoT came in at $640 million, up 24 percent year-on-year. Mobile activities also showed strong growth. Only Communications Infrastructure & Other declined sharply. According to Reuters, this 18 percent decline indicates cautious investment by telecom operators, which is clearly putting pressure on the segment.
Industrial market has bottomed out
Reuters also places the figures in a broader market context. The improvement in Industrial & IoT is seen there as a possible sign that the industrial market has bottomed out. This is relevant because approximately 55 percent of NXP’s revenue comes from automotive and approximately 18 percent from the industrial market. These two segments are therefore largely determining the recovery.
In October, NXP took several strategic steps. For example, the Trimension SR150 UWB chip is being used in Jedsy X’s medical delivery drones for highly accurate positioning. Shortly thereafter, it introduced the i.MX 952 application processor, focused on AI-driven vision, human-machine interaction, and in-cabin sensors in vehicles. At the end of October, NXP also completed the acquisitions of Aviva Links and Kinara, which together were valued at more than half a billion dollars, further strengthening its position in connectivity and edge AI.
In early 2026, the company redeemed $500 million in bonds ahead of schedule. On February 2, it also completed the sale of its MEMS sensor business for $900 million, with potential additional proceeds depending on technical milestones.
Share price falls
For the first quarter of 2026, NXP expects revenue between $3.05 billion and $3.25 billion. According to Reuters, the midpoint of this forecast is above the analyst consensus. The expected adjusted earnings per share are also above market expectations. Nevertheless, the share price fell by around 5 percent in after-hours trading. Reuters reports that investors may be focusing primarily on weakness in the communications segment, despite a stronger outlook for automotive and industrial.