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NXP Semiconductors beat Q2 earnings and revenue estimates on broad-based growth across end markets.
NXPI saw AI and data center momentum, expecting 2026 data center revenues to exceed $500 million.
NXP Semiconductors forecast Q3 revenues of $3.65-$3.85B and non-GAAP EPS of $4.11 at midpoint.
NXP Semiconductors N.V. (NXPI - Free Report) reported better-than-expected second-quarter 2026 results, driven by broad-based strength across its end markets, accelerating adoption of software-defined vehicles, industrial processing solutions and growing demand from AI data center infrastructure.
The company’s second-quarter non-GAAP earnings of $3.61 per share increased 32.7% year over year and surpassed the Zacks Consensus Estimate of $3.54 by 1.98%.
Revenues increased 19.5% year over year to $3.50 billion, topping the consensus estimate by 0.8%.
NXPI's End Markets Deliver Broad-Based Growth
Automotive remained NXPI's largest business, generating $1.94 billion in revenues, up 12% year over year. Growth was fueled by continued momentum in software-defined vehicles, electrification and connectivity, with accelerating design wins for the S32 processor family and next-generation Ethernet switches.
NXP Semiconductors N.V. Price, Consensus and EPS Surprise
Industrial & IoT revenues rose 38% year over year to $755 million, benefiting from strong adoption of i.MX, RT and MCX processing platforms across factory automation and industrial applications.
Communication Infrastructure & Other revenues climbed 41% year over year to $452 million, supported by increasing data center networking demand and continued ramp-ups of UCODE RFID products.
Mobile revenues totaled $351 million, up 6% year over year, reflecting stable demand for secure mobile transaction solutions despite normal seasonal trends.
NXPI’s AI, Data Center Businesses Gain Momentum
Management highlighted AI as an increasingly important long-term growth driver, noting that AI workloads are moving beyond cloud infrastructure into vehicles, factories and robotics markets where NXP already maintains leadership positions.
The company reiterated that its 2026 data center revenues are expected to exceed $500 million compared with roughly $200 million in 2025. Growth is being driven by demand for control-plane processors, networking, rack management, cooling, power management and security applications used in hyperscale AI infrastructure.
NXPI’s Profitability Improves
Non-GAAP gross profit increased to $2.03 billion, while non-GAAP gross margin expanded 150 basis points year over year to 58.0%. Non-GAAP operating income rose 31% year over year to $1.23 billion, with operating margin improving 310 basis points to 35.1%, reflecting favorable product mix and higher operating leverage.
NXP generated $860 million in operating cash flow during the quarter. Net capital expenditures totaled $69 million, resulting in non-GAAP free cash flow of $791 million, representing 22.6% of revenues.
The company returned $360 million to shareholders during the quarter through $256 million in dividends and $104 million in share repurchases. Following quarter-end, NXP repurchased an additional $32 million of shares under its 10b5-1 program. The company also repaid $750 million of senior unsecured notes using available cash.
NXPI Guides Strong Third Quarter
For the third quarter of 2026, NXP expects revenues between $3.65 billion and $3.85 billion. At the midpoint, revenues of $3.75 billion imply 7% sequential growth and 18% year-over-year growth.
The company projects non-GAAP gross margin of 58.5% at the midpoint, and non-GAAP earnings per share of $4.11, indicating continued operating leverage as demand strengthens across its key markets.
Shares of Analog Devices have rallied 37.1% year to date. The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings is pegged at $12.42 per share, up by 10 cents over the past 30 days, indicating an increase of 59.4% year over year.
Shares of Applied Materials have skyrocketed 101.1% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $12.14 per share, up by 4 cents over the past 30 days, indicating a rise of 28.9% year over year.
Cisco Systems shares have surged 48.7% year to date. The Zacks Consensus Estimate for CSCO’s fiscal 2026 earnings is pegged at $4.28 per share, unchanged over the past 30 days, indicating an increase of 12.3% year over year.
View the Zacks #1 Rank List
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NXP Semiconductors Q2 Earnings Beat Estimates, Revenues Rise Y/Y
Key Takeaways
NXP Semiconductors N.V. (NXPI - Free Report) reported better-than-expected second-quarter 2026 results, driven by broad-based strength across its end markets, accelerating adoption of software-defined vehicles, industrial processing solutions and growing demand from AI data center infrastructure.
The company’s second-quarter non-GAAP earnings of $3.61 per share increased 32.7% year over year and surpassed the Zacks Consensus Estimate of $3.54 by 1.98%.
Revenues increased 19.5% year over year to $3.50 billion, topping the consensus estimate by 0.8%.
NXPI's End Markets Deliver Broad-Based Growth
Automotive remained NXPI's largest business, generating $1.94 billion in revenues, up 12% year over year. Growth was fueled by continued momentum in software-defined vehicles, electrification and connectivity, with accelerating design wins for the S32 processor family and next-generation Ethernet switches.
NXP Semiconductors N.V. Price, Consensus and EPS Surprise
NXP Semiconductors N.V. price-consensus-eps-surprise-chart | NXP Semiconductors N.V. Quote
Industrial & IoT revenues rose 38% year over year to $755 million, benefiting from strong adoption of i.MX, RT and MCX processing platforms across factory automation and industrial applications.
Communication Infrastructure & Other revenues climbed 41% year over year to $452 million, supported by increasing data center networking demand and continued ramp-ups of UCODE RFID products.
Mobile revenues totaled $351 million, up 6% year over year, reflecting stable demand for secure mobile transaction solutions despite normal seasonal trends.
NXPI’s AI, Data Center Businesses Gain Momentum
Management highlighted AI as an increasingly important long-term growth driver, noting that AI workloads are moving beyond cloud infrastructure into vehicles, factories and robotics markets where NXP already maintains leadership positions.
The company reiterated that its 2026 data center revenues are expected to exceed $500 million compared with roughly $200 million in 2025. Growth is being driven by demand for control-plane processors, networking, rack management, cooling, power management and security applications used in hyperscale AI infrastructure.
NXPI’s Profitability Improves
Non-GAAP gross profit increased to $2.03 billion, while non-GAAP gross margin expanded 150 basis points year over year to 58.0%. Non-GAAP operating income rose 31% year over year to $1.23 billion, with operating margin improving 310 basis points to 35.1%, reflecting favorable product mix and higher operating leverage.
NXPI’s Strong Cash Generation Supports Shareholder Returns
NXP generated $860 million in operating cash flow during the quarter. Net capital expenditures totaled $69 million, resulting in non-GAAP free cash flow of $791 million, representing 22.6% of revenues.
The company returned $360 million to shareholders during the quarter through $256 million in dividends and $104 million in share repurchases. Following quarter-end, NXP repurchased an additional $32 million of shares under its 10b5-1 program. The company also repaid $750 million of senior unsecured notes using available cash.
NXPI Guides Strong Third Quarter
For the third quarter of 2026, NXP expects revenues between $3.65 billion and $3.85 billion. At the midpoint, revenues of $3.75 billion imply 7% sequential growth and 18% year-over-year growth.
The company projects non-GAAP gross margin of 58.5% at the midpoint, and non-GAAP earnings per share of $4.11, indicating continued operating leverage as demand strengthens across its key markets.
Zacks Rank & Other Stocks to Consider
NXPI currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader Zacks Computer and Technology sector are Analog Devices (ADI - Free Report) , Applied Materials (AMAT - Free Report) and Cisco Systems (CSCO - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Analog Devices have rallied 37.1% year to date. The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings is pegged at $12.42 per share, up by 10 cents over the past 30 days, indicating an increase of 59.4% year over year.
Shares of Applied Materials have skyrocketed 101.1% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $12.14 per share, up by 4 cents over the past 30 days, indicating a rise of 28.9% year over year.
Cisco Systems shares have surged 48.7% year to date. The Zacks Consensus Estimate for CSCO’s fiscal 2026 earnings is pegged at $4.28 per share, unchanged over the past 30 days, indicating an increase of 12.3% year over year.