01—Abstract
Summary
Summary of the 20-F filed March 1, 2019. Cited figures are marked; the original filing is the authoritative source.
NXP Semiconductors N.V. reported $9.41 billiona in revenue for 2018, a slight increase of 1.6% from 2017, driven by growth in their High Performance Mixed Signal (HPMS) segment, particularly in automotive and secure connected devices.
The company also received a significant $2 billionb termination compensation from Qualcomm following the termination of their acquisition agreement. Financially, NXP saw an increase in gross profit to $4.85 billion, with gross margin improving to 51.6% from 49.9% in the prior year, aided by lower depreciation related to the Freescale acquisition and the divestment of the Standard Products business. The company also initiated a quarterly dividend program.
However, NXP's debt increased to $7.35 billionc, while its cash and cash equivalents decreased to $2.79 billion, largely due to significant share repurchases totaling $5 billion authorized after the Qualcomm deal termination. The company faces industry-wide cyclicality and intense competition but is strategically positioned in growing markets like automotive and IoT.
02—Key points
Key Highlights
- Revenue for 2018 reached $9.41 billion, a 1.6% increase year-over-year, primarily driven by the HPMS segment.
- NXP received $2 billion in termination compensation from Qualcomm after the termination of their acquisition agreement.
- Gross profit increased to $4.85 billion, with gross margin improving to 51.6%, supported by operational improvements and the divestment of the Standard Products business.
- The company initiated a quarterly dividend program, signaling a commitment to returning capital to shareholders.
- Total debt rose to $7.35 billion, while cash reserves decreased to $2.79 billion, influenced by substantial share repurchases of $5 billion.
- NXP maintains a leading position in key markets such as automotive semiconductors, secure identification solutions, and secure connected devices.
- The company faced a slight slowdown in revenue trends in Q1 2019, with continued emphasis on strategic growth areas despite industry cyclicality.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2018, NXP Semiconductors N.V. kept $0.23.
- Revenue$9.41B100.0%
- Cost of revenue−$4.56B48.4%
- Gross profit$4.85B51.6%
- Operating costs−$2.14B22.8%
- Operating income$2.71B28.8%
- Interest, other & tax−$502.0M5.3%
- Net income$2.21B23.5%
04—Financials
Financial Highlights
Figures from 10-KFY2018filed March 1, 2019Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $9.41B$9.26B | +1.6% |
| Cost of Revenue | $4.56B$4.64B | −1.7% |
| Gross Profit | $4.85B$4.62B | +5.0% |
| R&D Expenses | $1.70B$1.55B | +9.4% |
| SG&A Expenses | $993.00M$1.09B | −8.9% |
| Operating Expenses | $4.14B$4.09B | +1.2% |
| Operating Income | $2.71B$2.10B | +28.9% |
| Interest Expense | $273.00M$310.00M | −11.9% |
| Net Income | $2.21B$2.21B | −0.3% |
| EPS (Basic) | $6.78$6.54 | +3.7% |
| EPS (Diluted) | $6.72$6.41 | +4.8% |
| Shares Outstanding (Basic) | 325.78M338.65M | −3.8% |
| Shares Outstanding (Diluted) | 328.61M345.80M | −5.0% |
05—Questions
Frequently Asked Questions
What was NXP's financial performance in 2018?
In 2018, NXP Semiconductors reported revenue of $9.41 billion, a 1.6% increase from 2017, primarily driven by its High Performance Mixed Signal (HPMS) segment. Gross profit increased to $4.85 billion, with a gross margin of 51.6%. The company also received $2 billion in termination compensation from Qualcomm.
How did NXP manage its debt and cash in 2018?
NXP's total debt increased to $7.35 billion by the end of 2018, while cash and cash equivalents decreased to $2.79 billion. This was largely due to significant share repurchases totaling $5 billion, authorized after the termination of the Qualcomm acquisition agreement.
What are NXP's key market focuses and strategic initiatives?
NXP is a leader in automotive semiconductors, secure identification solutions, and secure connected devices (IoT). The company is focusing on innovation in areas like autonomous and safe driving, end-to-end security, and smart connected solutions. They also initiated a quarterly dividend program, signaling a commitment to shareholder returns.
What was the impact of the Qualcomm acquisition termination?
Qualcomm terminated its acquisition agreement with NXP in July 2018 due to regulatory approval issues. NXP received a $2 billion termination fee from Qualcomm. Following this, NXP authorized substantial share repurchases of up to $5 billion.
06—Continue