nxpi-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 001-34841

NXP Semiconductors N.V.

(Exact name of registrant as specified in its charter)


Netherlands						98-1144352
(State or other jurisdiction of incorporation or organization)						(I.R.S. employer identification number)

60 High Tech Campus						5656 AG
Eindhoven
Netherlands
(Address of principal executive offices)						(Zip code)


	+31	40	2729999
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common shares, EUR 0.20 par value	NXPI	The Nasdaq Global Select Market

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of April 26, 2024, there were 255,683,781 shares of our common stock, €0.20 par value per share, issued and outstanding.

NXP Semiconductors N.V.

Form 10-Q

For the Fiscal Quarter Ended March 31, 2024

TABLE OF CONTENTS


		Page
Part I
	Introduction and Forward Looking Statements	1
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28

Part II
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 5.	Other Information	29
Item 6.	Exhibits	30

Introduction and Forward Looking Statements

This Form 10-Q and certain information incorporated herein by reference contains forward-looking statements, which are provided under the “safe harbor” protection of the Private Securities Litigation Reform Act of 1995. When used in this Form 10-Q, the words “anticipate”, “believe”, “estimate”, “forecast”, “expect”, “intend”, “plan” and “project” and similar expressions, as they relate to us, our management or third parties, identify forward-looking statements. Forward-looking statements include statements regarding our business strategy, financial condition, results of operations, market data as well as any other statements that are not historical facts. These statements reflect beliefs of our management, as well as assumptions made by our management and information currently available to us. Although we believe that these beliefs and assumptions are reasonable, these statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. These factors, risks and uncertainties expressly qualify all subsequent oral and written forward-looking statements attributable to us or persons acting on our behalf and include, in addition to those listed in our Annual Report on Form 10-K for the year ended December 31, 2023 under Part I, Item 1A. Risk Factors and elsewhere in this Form 10-Q, the following:

•market demand and semiconductor industry conditions;

•our ability to successfully introduce new technologies and products;

•the demand for the goods into which our products are incorporated;

•trade disputes between the U.S. and China, potential increase of barriers to international trade and resulting disruptions to our established supply chains;

•the impact of government actions and regulations, including restrictions on the export of US-regulated products and technology;

•increasing and evolving cybersecurity threats and privacy risks, including theft of sensitive or confidential data;

•our ability to generate sufficient cash, raise sufficient capital or refinance our debt at or before maturity to meet our debt service, research and development and capital investment requirements;

•our ability to accurately estimate demand and match our production capacity accordingly or obtain supplies from third-party producers;

•our access to production from third-party outsourcing partners, and any events that might affect their business or our relationship with them;

•our ability to secure adequate and timely supply of equipment and materials from suppliers;

•our ability to avoid operational problems and product defects and, if such issues were to arise, to correct them quickly;

•our ability to form strategic partnerships and joint ventures and successfully cooperate with our strategic alliance partners;

•our ability to win competitive bid selection processes;

•our ability to develop products for use in our customers’ equipment and products;

•our ability to successfully hire and retain key management and senior product engineers;

•global hostilities, including the invasion of Ukraine by Russia and resulting regional instability, sanctions and any other retaliatory measures taken against Russia, and the continued hostilities and armed conflict in the Middle East, which could adversely impact the global supply chain, disrupt our operations or negatively impact the demand for our products in our primary end markets;

•our ability to maintain good relationships with our suppliers; and

•a change in tax laws could have an effect on our estimated effective tax rates.

We do not assume any obligation to update any forward-looking statements and disclaim any obligation to update our view of any risks or uncertainties described herein or to publicly announce the result of any revisions to the forward-looking statements made in this Form 10-Q, except as required by law.

In addition, this Form 10-Q contains information concerning the semiconductor industry, our end markets and business generally, which is forward-looking in nature and is based on a variety of assumptions regarding the ways in which the semiconductor industry, our end markets and business will develop. We have based these assumptions on information currently available to us, including through the market research and industry reports referred to in this Form 10-Q. If any one or more of these assumptions turn out to be incorrect, actual market results may differ from those predicted. While we do not know what impact any such differences may have on our business, if there are such differences, they could have a material adverse effect on our future results of operations and financial condition, and the trading price of our common stock. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak to results only as of the date the statements were made. Except for any ongoing obligation to disclose material information as required by the United States federal securities laws, NXP does not have any intention or obligation to publicly update or revise any forward-looking statements after we distribute this document, whether to reflect any future events or circumstances or otherwise.

The financial information included in this Form 10-Q is based on United States Generally Accepted Accounting Principles (U.S. GAAP), unless otherwise indicated.

In presenting and discussing our financial position, operating results and cash flows, management uses certain non-U.S. GAAP financial measures. These non-U.S. GAAP financial measures should not be viewed in isolation or as alternatives to the equivalent U.S. GAAP measures and should be used in conjunction with the most directly comparable U.S. GAAP measures. A discussion of non-U.S. GAAP measures included in this Form 10-Q and a reconciliation of such measures to the most directly comparable U.S. GAAP measures are set forth under “Use of Certain Non-U.S. GAAP Financial Measures” contained in this Form 10-Q under Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Unless otherwise required, all references herein to “we”, “our”, “us”, “NXP” and the “Company” are to NXP Semiconductors N.V. and its consolidated subsidiaries.

This Form 10-Q includes market data and certain other statistical information and estimates that are based on reports and other publications from industry analysts, market research firms, and other independent sources, as well as management’s own good faith estimates and analyses. NXP believes these third-party reports to be reputable, but has not independently verified the underlying data sources, methodologies or assumptions. The reports and other publications referenced are generally available to the public and were not commissioned by NXP. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information.

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

($ in millions, unless otherwise stated)


	For the three months ended
	March 31, 2024	April 2, 2023
Revenue	3,126	3,121
Cost of revenue	(1,343)	(1,351)
Gross profit	1,783	1,770
Research and development	(564)	(577)
Selling, general and administrative	(306)	(280)
Amortization of acquisition-related intangible assets	(51)	(85)
Total operating expenses	(921)	(942)
Other income (expense)	(6)	(3)
Operating income (loss)	856	825
Financial income (expense):
Extinguishment of debt	—	—
Other financial income (expense)	(70)	(82)
Income (loss) before income taxes	786	743
Benefit (provision) for income taxes	(141)	(118)
Results relating to equity-accounted investees	(1)	(2)
Net income (loss)	644	623
Less: Net income (loss) attributable to non-controlling interests	5	8
Net income (loss) attributable to stockholders	639	615

Earnings per share data:
Net income (loss) per common share attributable to stockholders in $
Basic	2.49	2.37
Diluted	2.47	2.35

Weighted average number of shares of common stock outstanding during the period (in thousands):
Basic	256,567	259,576
Diluted	258,954	261,210

See accompanying notes to the Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

($ in millions, unless otherwise stated)


	For the three months ended
	March 31, 2024	April 2, 2023
Net income (loss)	644	623
Other comprehensive income (loss), net of tax:
Change in fair value cash flow hedges	(8)	3
Change in foreign currency translation adjustment	(38)	19


Total other comprehensive income (loss)	(46)	22
Total comprehensive income (loss)	598	645
Less: Comprehensive income (loss) attributable to non-controlling interests	5	8
Total comprehensive income (loss) attributable to stockholders	593	637

See accompanying notes to the Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

($ in millions, unless otherwise stated)


		March 31, 2024	December 31, 2023
ASSETS
Current assets:
	Cash and cash equivalents	2,908	3,862
	Short-term deposits	400	409
	Accounts receivable, net	881	894

	Inventories, net	2,102	2,134
	Other current assets	603	565
Total current assets		6,894	7,864
Non-current assets:
	Other non-current assets	2,338	2,289
	Property, plant and equipment, net of accumulated depreciation of $5,783 and $5,660	3,304	3,323
	Identified intangible assets, net of accumulated amortization of $1,326 and $1,342	839	922
	Goodwill	9,945	9,955
	Total non-current assets	16,426	16,489
Total assets		23,320	24,353

LIABILITIES AND EQUITY
Current liabilities:
	Accounts payable	954	1,164

	Restructuring liabilities-current	68	92
	Other current liabilities	1,906	1,855
	Short-term debt	—	1,000
Total current liabilities		2,928	4,111
Non-current liabilities:
	Long-term debt	10,178	10,175
	Restructuring liabilities	9	9
	Deferred tax liabilities	46	44
	Other non-current liabilities	1,009	1,054
Total non-current liabilities		11,242	11,282
Total liabilities		14,170	15,393
Equity:
	Non-controlling interests	321	316

	Stockholders’ equity:
	Common stock, par value €0.20 per share:	56	56
	Capital in excess of par value	14,619	14,501
	Treasury shares, at cost:
	18,424,194 shares (2023: 17,329,585 shares)	(3,469)	(3,210)
	Accumulated other comprehensive income (loss)	44	90
	Accumulated deficit	(2,421)	(2,793)
	Total stockholders’ equity	8,829	8,644
Total equity		9,150	8,960
Total liabilities and equity		23,320	24,353

See accompanying notes to the Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

($ in millions, unless otherwise stated)


	For the three months ended
	March 31, 2024	April 2, 2023
Cash flows from operating activities:
Net income (loss)	644	623
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization	235	283
Share-based compensation	115	99
Amortization of discount (premium) on debt, net	1	1
Amortization of debt issuance costs	2	2
Net (gain) loss on sale of assets	(2)	—
(Gain) loss on equity security, net	2	1

Results relating to equity-accounted investees	1	2
Deferred tax expense (benefit)	(64)	(62)
Changes in operating assets and liabilities:
(Increase) decrease in receivables and other current assets	(25)	(138)
(Increase) decrease in inventories	32	(196)
Increase (decrease) in accounts payable and other liabilities	(102)	52
Decrease (increase) in other non-current assets	6	(33)
Exchange differences	3	5
Other items	3	(7)
Net cash provided by (used for) operating activities	851	632
Cash flows from investing activities:
Purchase of identified intangible assets	(32)	(42)
Capital expenditures on property, plant and equipment	(226)	(251)

Insurance recoveries received for equipment damage	2	—
Proceeds from disposals of property, plant and equipment	2	—


Proceeds of short-term deposits	9	—

Purchase of investments	(34)	(58)
Proceeds from sale of investments	5	—

Net cash provided by (used for) investing activities	(274)	(351)
Cash flows from financing activities:
Repurchase of long-term debt	(1,000)	—




Dividends paid to common stockholders	(261)	(219)
Proceeds from issuance of common stock through stock plans	37	33
Purchase of treasury shares and restricted stock unit withholdings	(303)	(11)
Other, net	(1)	(1)
Net cash provided by (used for) financing activities	(1,528)	(198)
Effect of changes in exchange rates on cash positions	(3)	2
Increase (decrease) in cash and cash equivalents	(954)	85
Cash and cash equivalents at beginning of period	3,862	3,845
Cash and cash equivalents at end of period	2,908	3,930


Supplemental disclosures to the condensed consolidated cash flows
Net cash paid during the period for:
Interest	38	54
Income taxes, net of refunds	198	294
Net gain (loss) on sale of assets:
Cash proceeds from the sale of assets	2	—
Book value of these assets	—	—
Non-cash investing activities:
Non-cash capital expenditures	223	176

See accompanying notes to the Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)

($ in millions, unless otherwise stated)


	Outstanding number of shares (in thousands)	Common stock	Capital in excess of par value	Treasury shares at cost	Accumu- lated other compre- hensive income (loss)	Accumu- lated deficit	Total stock- holders’ equity	Non- con- trolling interests	Total equity
Balance as of December 31, 2023	257,190	56	14,501	(3,210)	90	(2,793)	8,644	316	8,960
Net income (loss)						639	639	5	644
Other comprehensive income (loss)					(46)		(46)		(46)
Share-based compensation plans			118				118		118
Shares issued pursuant to stock awards	228			44		(7)	37		37
Treasury shares repurchased and retired	(1,323)			(303)			(303)		(303)
Dividends common stock ($1.014 per share)						(260)	(260)		(260)
Balance as of March 31, 2024	256,095	56	14,619	(3,469)	44	(2,421)	8,829	321	9,150


	Outstanding number of shares (in thousands)	Common stock	Capital in excess of par value	Treasury shares at cost	Accumu- lated other compre- hensive income (loss)	Accumu- lated deficit	Total stock- holders’ equity	Non- con- trolling interests	Total equity
Balance as of December 31, 2022	259,463	56	14,091	(2,799)	76	(3,975)	7,449	291	7,740
Net income (loss)						615	615	8	623
Other comprehensive income (loss)					22		22		22
Share-based compensation plans			101				101		101
Shares issued pursuant to stock awards	309			61		(28)	33		33
Treasury shares repurchased and retired	(37)			(7)			(7)		(7)
Dividends common stock ($1.014 per share)						(264)	(264)		(264)
Balance as of April 2, 2023	259,735	56	14,192	(2,745)	98	(3,652)	7,949	299	8,248

See accompanying notes to the Condensed Consolidated Financial Statements

NXP SEMICONDUCTORS N.V.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

All amounts in millions of $ unless otherwise stated

1 Basis of Presentation and Overview

We prepared our interim condensed consolidated financial statements that accompany these notes in conformity with U.S. generally accepted accounting principles, consistent in all material respects with those applied in our Annual Report on Form 10-K for the year ended December 31, 2023.

We have made estimates and judgments affecting the amounts reported in our condensed consolidated financial statements and the accompanying notes. The actual results that we experience may differ materially from our estimates. The interim financial information is unaudited, but reflects all normal adjustments that are, in our opinion, necessary to provide a fair statement of results for the interim periods presented. This interim information should be read in conjunction with the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023.

2 Significant Accounting Policies and Recent Accounting Pronouncements

Significant Accounting Policies

For a discussion of our significant accounting policies see, “Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – “Significant Accounting Policies” of our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no changes to our significant accounting policies since our Annual Report on Form 10-K for the year ended December 31, 2023.

Recent accounting standards

Accounting standards not yet adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, requiring disclosure of certain incremental segment information on an annual and interim basis, including (among other items) additional disclosure about significant segment expenses and that a public entity that has a single reportable segment provide all the disclosures required by this ASU. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We will adopt ASU 2023-07 for our annual periods starting in fiscal year 2024 (and interim periods thereafter) on a retrospective basis and continue to evaluate the impact on our disclosures.

In December 2023, the FASB issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, requiring to disclose annually certain additional disaggregated income tax information related to the effective tax rate reconciliation and income taxes paid, among other items. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We will adopt the new requirements starting for our annual period starting in 2025 and continue to evaluate the basis of adoption and impact on our disclosures.

No other new accounting pronouncements were issued or became effective in the period that had, or are expected to have, a material impact on our Consolidated Financial Statements.

3 Acquisitions and Divestments

2024

There were no material acquisitions or divestments during the first three months of 2024.

2023

There were no material acquisitions or divestments during the first three months of 2023.

4 Supplemental Financial Information

Statement of Operations Information:

Disaggregation of revenue

The following table presents revenue disaggregated by sales channel:


	For the three months ended
	March 31, 2024	April 2, 2023
Distributors	1,739	1,491
Original Equipment Manufacturers and Electronic Manufacturing Services	1,355	1,594
Other	32	36
Total Revenue	3,126	3,121

SEC Form 10-Q filed by NXP Semiconductors N.V.