10-KPeriod: FY2021

NXP Semiconductors N.V. Annual Report, Year Ended Dec 31, 2021

Filed February 24, 2022For Securities:NXPI

Summary

NXP Semiconductors N.V. (NXPI) reported strong revenue growth of 28.5% to $11,063 million for the fiscal year ended December 31, 2021, driven by robust demand across its key automotive and industrial & IoT segments. This performance reflects a significant rebound from the COVID-19 impacts in 2020 and the successful adoption of the company's innovative product portfolio. Gross profit increased substantially, with margins improving to 54.8% from 49.2% in the prior year, benefiting from higher volumes and improved pricing. The company also generated strong operating cash flows of $3,077 million and returned $4,577 million to shareholders through dividends and share repurchases. Despite the positive financial results, investors should note the identification of a material weakness in internal controls related to information technology general controls (ITGCs). While remediation plans are in place and expected to be completed in fiscal year 2022, this remains a point of vigilance. The company's outlook for 2022 remains positive, anticipating continued demand to outpace supply, although managing supply chain constraints remains a key operational focus.

Financial Highlights

55 data points
Beta

Revenue

$11.06B

54.8% Gross Margin

Net Income

$1.87B

16.9% Net Margin

EPS (Diluted)

$6.79

Total Assets

$20.86B

Cash & Equivalents

$2.83B

Free Cash Flow

$2.31B

Financial Statements
Beta
Revenue$11.06B
Cost of Revenue$5.00B
Gross Profit$6.07B
R&D Expenses$1.94B
SG&A Expenses$956.00M
Operating Expenses$3.48B
Operating Income$2.58B
Interest Expense$369.00M
Net Income$1.87B
EPS (Basic)$6.91
EPS (Diluted)$6.79
Shares Outstanding (Basic)270.69M
Shares Outstanding (Diluted)275.65M

Key Highlights

  • 1Revenue surged by 28.5% to $11,063 million in 2021, driven by strong performance in Automotive and Industrial & IoT segments.
  • 2Gross profit margin improved significantly to 54.8% from 49.2% in 2020, reflecting higher volumes and improved pricing.
  • 3Operating income saw a substantial increase, reaching $2,583 million in 2021 compared to $418 million in 2020.
  • 4The company generated strong operating cash flow of $3,077 million in 2021.
  • 5NXP returned $4,577 million to shareholders through dividends and share repurchases in 2021.
  • 6A material weakness in internal IT general controls was identified, impacting financial reporting; remediation is underway.
  • 7Total debt increased to $10,572 million by year-end 2021, primarily due to new senior unsecured note issuances.

Frequently Asked Questions

NXP Semiconductors N.V. reported a significant increase in revenue, reaching $11,063 million for the year ended December 31, 2021, a 28.5% increase compared to $8,612 million in 2020. This growth was attributed to strong demand across its automotive, industrial & IoT, mobile, and communication infrastructure end markets, with particular strength in Automotive and Industrial & IoT.

NXP generated robust operating cash flow of $3,077 million in 2021. However, total debt increased to $10,572 million as of December 31, 2021, mainly due to the issuance of new senior unsecured notes. The company's cash position increased to $2,830 million, providing substantial liquidity.

A primary concern highlighted is the material weakness identified in the company's internal control over financial reporting, specifically related to information technology general controls (ITGCs). While NXP is implementing remediation plans, this indicates a potential risk to the accuracy and reliability of financial reporting. The company also faces risks inherent to the semiconductor industry, such as cyclicality, intense competition, and supply chain disruptions.

In 2021, NXP returned approximately $4,577 million to shareholders through a combination of dividends ($606 million) and share repurchases ($4,015 million). The company also increased its quarterly cash dividend by 50% in January 2022.