01—Abstract
Summary
Summary of the 10-Q filed April 27, 2021. Cited figures are marked; the original filing is the authoritative source.
NXP Semiconductors N.V.
(NXPI) reported a strong first quarter of 2021, demonstrating significant year-over-year growth across key strategic markets. Revenue surged by 27% to a record $2.57 billiona, driven by robust demand in Automotive, Industrial & IoT, and Mobile segments, with notable strength in Greater China and Asia Pacific. The company also saw an expansion in its gross profit margin to 52.8%, up from 49.3% in the prior year quarter, attributed to higher revenue, improved operational efficiencies, and cost reductions.
Despite increased R&D spending, overall operating expenses as a percentage of revenue decreased due to lower amortization of acquisition-related intangibles and a favorable year-over-year comparison. The company generated strong operating cash flow of $732 millionb, supporting significant capital returns to shareholders through dividends and substantial share repurchases. NXPI ended the quarter with a healthy cash position of $1.84 billion and access to an additional $1.5 billion credit facility, indicating a solid liquidity outlook.
02—Key points
Key Highlights
- Record quarterly revenue of $2.57 billion, up 27% year-over-year, driven by strong performance in Automotive, Industrial & IoT, and Mobile segments.
- Gross profit margin improved to 52.8% from 49.3% in the prior year quarter, reflecting higher volumes and operational efficiencies.
- Significant increase in operating income to $492 million from $68 million in Q1 2020.
- Diluted EPS turned positive at $1.25, compared to a loss of $0.08 in Q1 2020.
- Strong cash flow from operations of $732 million.
- Substantial share repurchases of $905 million during the quarter, alongside dividend payments of $105 million, reflecting commitment to shareholder returns.
- Company ended the quarter with $1.84 billion in cash and cash equivalents, and total liquidity of $3.34 billion including its revolving credit facility.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2021, NXP Semiconductors N.V. kept $0.14.
- Revenue$2.57B100.0%
- Cost of revenue−$1.21B47.2%
- Gross profit$1.35B52.8%
- Operating costs−$863.0M33.6%
- Operating income$492.0M19.2%
- Interest, other & tax−$139.0M5.4%
- Net income$353.0M13.8%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2021filed April 27, 2021Financial Statements
Q2 FY2021 against Q2 FY2020
| Line item | Q2 FY2021Q2 FY2020 | Change |
|---|---|---|
| Revenue | $2.57B$1.82B | +41.3% |
| Cost of Revenue | $1.21B$957.00M | +26.6% |
| Gross Profit | $1.35B$860.00M | +57.6% |
| R&D Expenses | $461.00M$402.00M | +14.7% |
| SG&A Expenses | $222.00M$222.00M | 0.0% |
| Operating Expenses | $863.00M$1.00B | −14.0% |
| Operating Income | $492.00M-$145.00M | +439.3% |
| Interest Expense | $87.00M$94.00M | −7.4% |
| Net Income | $353.00M-$214.00M | +265.0% |
| EPS (Basic) | $1.27$-0.77 | +264.9% |
| EPS (Diluted) | $1.25$-0.77 | +262.3% |
| Shares Outstanding (Basic) | 277.53M279.14M | −0.6% |
| Shares Outstanding (Diluted) | 283.26M279.14M | +1.5% |
05—Questions
Frequently Asked Questions
What was the primary driver of NXP's revenue growth in Q1 2021?
The primary driver was a broad-based increase in demand across NXP's key strategic markets, particularly Automotive, Industrial & IoT, and Mobile. This growth was further amplified by a rebound from the lower demand experienced in Q1 2020 due to the COVID-19 pandemic and surging demand for technology products enabling remote work and connectivity.
How did NXP's profitability change in Q1 2021 compared to Q1 2020?
NXP's profitability improved significantly. Gross profit margin increased from 49.3% to 52.8%, driven by higher revenue volumes, improved operational loading, cost reductions, and manufacturing efficiencies. Operating income rose substantially to $492 million from $68 million, and the company reported positive diluted EPS of $1.25 compared to a loss of $0.08 in the prior year period.
What is the company's liquidity position and how is it managing its cash?
NXP maintains a strong liquidity position, ending Q1 2021 with $1.84 billion in cash and cash equivalents. Including its undrawn revolving credit facility of $1.5 billion, the company had total liquidity of $3.34 billion. NXP generated $732 million in cash from operations and returned $1.01 billion to shareholders through dividends ($105 million) and share repurchases ($905 million), indicating active cash management and commitment to shareholder returns.
What are the significant changes in operating expenses?
Total operating expenses as a percentage of revenue decreased significantly due to a substantial reduction in the amortization of acquisition-related intangible assets, as certain intangibles were fully amortized in 2020. While Research and Development expenses increased, driven by higher personnel costs, Selling, General, and Administrative expenses saw a slight decrease, partly due to lower share-based compensation expenses related to a CEO transition in the prior year.
06—Continue