01—Abstract
Summary
Summary of the 10-Q filed July 23, 2024. Cited figures are marked; the original filing is the authoritative source.
NXP Semiconductors N.V.
(NXPI) reported its second-quarter 2024 financial results, showing a year-over-year revenue decrease of 5.2% to $3.13 billiona, impacted by lower sales in the Automotive and Communication Infrastructure & Other segments, partially offset by growth in Mobile and Industrial & IoT. Despite the revenue dip, NXP maintained a strong gross margin of 57.3% and demonstrated solid operating income of $896 million. The company continues to generate robust cash flow from operations ($1.61 billion year-to-date), supporting its capital allocation strategy.
NXP returned $1.13 billionb to shareholders in the first half of 2024 through dividends and share repurchases, including the retirement of a $1 billion note. The company ended the quarter with $2.86 billion in cash and cash equivalents, and ample liquidity, positioning it to navigate current market conditions and invest in future growth.
02—Key points
Key Highlights
- Revenue for Q2 2024 was $3.13 billion, a decrease of 5.2% year-over-year, primarily driven by a decline in the Automotive and Communication Infrastructure & Other segments.
- Despite lower revenue, NXP maintained a healthy gross margin of 57.3% for the quarter.
- Operating income stood at $896 million, with an operating margin of 28.7% on a GAAP basis.
- Year-to-date cash flow from operations was strong at $1.61 billion.
- NXP returned significant capital to shareholders, with $521 million in dividends and $613 million in share repurchases in the first half of 2024.
- The company successfully retired its $1 billion in 4.875% senior unsecured notes due March 2024.
- Total debt decreased by $995 million to $10.18 billion as of June 30, 2024, compared to December 31, 2023.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, NXP Semiconductors N.V. kept $0.21.
- Revenue$3.13B100.0%
- Cost of revenue−$1.33B42.7%
- Gross profit$1.79B57.3%
- Operating costs−$896.0M28.7%
- Operating income$896.0M28.7%
- Interest, other & tax−$232.0M7.4%
- Net income$664.0M21.2%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed July 23, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $3.13B$3.12B | +0.2% |
| Cost of Revenue | $1.33B$1.35B | −1.2% |
| Gross Profit | $1.79B$1.77B | +1.2% |
| R&D Expenses | $594.00M$577.00M | +2.9% |
| SG&A Expenses | $270.00M$280.00M | −3.6% |
| Operating Expenses | $892.00M$942.00M | −5.3% |
| Operating Income | $896.00M$825.00M | +8.6% |
| Interest Expense | $97.00M$111.00M | −12.6% |
| Net Income | $664.00M$623.00M | +6.6% |
| EPS (Basic) | $2.58$2.37 | +8.9% |
| EPS (Diluted) | $2.54$2.35 | +8.1% |
| Shares Outstanding (Basic) | 255.48M259.58M | −1.6% |
| Shares Outstanding (Diluted) | 258.73M261.21M | −0.9% |
05—Questions
Frequently Asked Questions
What is the primary driver of the year-over-year revenue decline?
The primary driver of the year-over-year revenue decline was a decrease in the Automotive end market (-7.4%) and the Communication Infrastructure & Other end market (-23.3%), which were partially offset by growth in the Mobile end market (+21.5%) and Industrial & IoT end market (+6.6%).
How is NXP managing its debt obligations?
NXP has actively managed its debt, retiring its $1 billion 4.875% senior unsecured notes due March 2024. Total debt decreased by $995 million to $10.18 billion as of June 30, 2024, compared to the end of 2023. The company maintains sufficient liquidity to meet its obligations.
What is NXP's strategy for returning capital to shareholders?
NXP demonstrates a commitment to returning capital to shareholders through its quarterly dividend program and share repurchase activities. In the first six months of 2024, the company paid $521 million in dividends and repurchased approximately $613 million of its shares, indicating a continued focus on shareholder returns.
How did NXP's revenue performance vary across sales channels?
Revenue through NXP's third-party distribution partners increased by 7.4% year-over-year to $1.80 billion in Q2 2024. Conversely, revenue through direct OEM and EMS customers decreased by 18.9% to $1.29 billion in the same period.
06—Continue