tapebrief
NXPI · Q4 2025

NXPI · Q1 2026 Earnings

Bullish

NXP Semiconductors

Reported April 28, 2026

30-second summary

Revenue of $3.181B (+12% YoY, -4.6% QoQ) beat the $3.15B guide midpoint by $31M and landed inside the +8–15% YoY guided range at +12%, while non-GAAP EPS of $3.05 came in $0.08 above the $2.97 midpoint and both margins printed above their respective midpoints — a clean beat across all four guided metrics. The substantive signal is forward: Q2 guidance of $3.35–3.55B implies +14–21% YoY growth (midpoint +17.8% vs. the $2.93B Q2 FY2025 base), with gross margin guided to 57.5–58.5% and operating margin to 33.8–35.6% — the cleanest acceleration NXP has guided in the cycle, anchored by auto accelerator content (now 45% of revenue, heading to ~50% by year-end) and a data center vertical management framed as >$500M in 2026 versus $200M in 2025.

Headline numbers

EPS

Q1 FY2026

$3.05

Revenue

Q1 FY2026

$3.18B

+12.0% YoY

Gross margin

Q1 FY2026

57.1%

Free cash flow

Q1 FY2026

$0.71B

Operating margin

Q1 FY2026

33.1%

Key financials

Q1 FY2026
MetricQ1 FY2026YoYQ4 FY2025QoQ
Revenue$3.18B+12.0%$3.33B-4.6%
EPS$3.05—$3.35-9.0%
Gross margin57.1%—57.4%-30bps
Operating margin33.1%—34.6%-150bps
Free cash flow$0.71B—$0.79B-10.0%

Guidance

Q1 FY2026 revenue missed guidance despite meeting margin targets; company guides Q2 FY2026 with accelerating revenue growth (14–21% YoY) and notable margin expansion.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
RevenueQ1 FY2026$3.05B to $3.25B$3.181B-$0.07B below guide (bottom of range)Missed
EPS (Non-GAAP)Q1 FY2026$2.77 to $3.17$3.05-$0.12B below guide (low end)Missed
Gross Margin (Non-GAAP)Q1 FY202656.5% to 57.5%57.1%in-line (within range)Met
Operating Margin (Non-GAAP)Q1 FY202631.7% to 33.6%33.1%in-line (within range)Met
Revenue YoY growthQ1 FY20268% to 15%12%in-line (within range)Met
Revenue QoQ growthQ1 FY2026-9% to -3%-4.6%in-line (within range)Missed

New guidance

MetricPeriodGuideYoY
RevenueQ2 FY2026$3.35B to $3.55B+14% to +21% YoY
EPS (Non-GAAP)Q2 FY2026$3.29 to $3.72—
Gross Margin (Non-GAAP)Q2 FY202657.5% to 58.5%—
Operating Margin (Non-GAAP)Q2 FY202633.8% to 35.6%—

Segment performance

Q1 FY2026
SegmentQ1 FY2026YoY
Automotive$1.782B+6.0%
Industrial & IoT$0.628B+24.0%
Mobile$0.391B+16.0%
Comm. Infra. & Other$0.38B+21.0%

Capacity & utilization

Q1 FY2026
SegmentQ1 FY2026
Days Inventory Outstanding (DIO)165
Days Payable Outstanding (DPO)59
Days Sales Outstanding (DSO)34
Cash Conversion Cycle140
Channel Inventory11 weeks

Profitability

Q1 FY2026
SegmentQ1 FY2026
Gross Financial Leverage2.4x
Net Financial Leverage1.7x
FCF Margin22.4%

Management tone

Q1/2025 cyclical caution → Q2 "clearly better" → Q3 "soft upcycle" → Q4 inflection confirmed → Q1/2026 acceleration and structural reframe

The "soft upcycle" hedging that defined Q3 and the "commit to direction, not magnitude" posture that persisted through Q4 are gone this quarter. Two quarters ago Rafael refused to commit to channel staging above 9 weeks; last quarter he committed to 11 weeks "in 2026"; this quarter channel inventory hit 11 weeks in Q1 — the operational behavior now matches the verbal stance, and the next move is forward growth, not inventory normalization.

The auto narrative completed its multi-quarter pivot from "Western Tier 1 inventory burn ending" (Q2/2025) to "content growth, not unit growth" (Q3/2025) to "accelerated drivers grew ~10% in 2025" (Q4/2025) to "auto accelerators are 45% of revenue, growing north of 45% YoY, heading to 50% by year-end" (Q1/2026). The thesis is now quantified at the segment-composition level. Rafael's Q1 framing — "every region in automotive is growing YoY despite SAR weakness, accelerators contributing 90%+ of segment growth" — completes the decoupling from SAAR that began two quarters ago.

Data center emerged this quarter as a discrete forward vector — not mentioned in prior briefs at this level of specificity. Management quantified it at $200M in 2025 going to >$500M in 2026, with explicit positioning in control plane (power, cooling, board management, control plane switching) rather than data plane. This is a new growth pillar, not a reframe of existing business — Ross Seymour's exchange confirmed Layerscape, IMX, and MCUs are the ramping products. The combination of auto accelerator content compounding and data center emerging is what underpins the Q2 acceleration to +14–21% YoY.

Management's confidence on 2027 long-term targets stepped up rather than softened. Jim Schneider asked directly whether the 2027 analyst day targets are still achievable; Rafael's response — that auto accelerators are expected above the high end in Q2, Industrial IoT accelerators above the high end of guidance, and 2027 is now framed as a "milestone, not destination" — is the strongest forward commitment management has made since the November 2024 framework was set.

Q&A highlights

Vivek Arya · Bank of America Securities

What is driving automotive growth in China vs. outside China, and how much pricing benefit is NXP seeing from supply shortages?

Growth is architecture-led content growth, not unit growth. SDV transformation and electrification are structural drivers growing double-digits since Q4. Every region in automotive is growing year-over-year despite SAR weakness. Pricing benefits are minimal; growth is company-specific.

Auto growth 10% YoY after MEMS adjustment in Q1Guidance implies high-teens growth in Q2Accelerators contributing 90%+ of segment growthAll automotive regions growing YoY in Q1 and Q2

Ross Seymour · Deutsche Bank

What drives confidence in accelerating momentum through 2026? Is it cyclical or secular? On data center, are these new products and what is NXP's differentiation?

Direct order book and distribution backlog improving. Data center exposure is in control plane (power, cooling, board management), not data plane. Products ramping now include Layerscape, IMX, MCUs. Growth is from high-reliability, long-life-cycle applications.

First-half 2026 growth ~18% YoY (adjusted for sensors)Data center revenue $200M in 2025, expected >$500M in 2026NXP plays in system cooling, power supply, board management, control plane switchingData center exposure split evenly between Industrial IoT and Communications Infrastructure in 2025

Jim Schneider · Goldman Sachs

Are 2027 analyst day targets still achievable given idiosyncratic growth drivers in 2026 and 2027?

Yes, confident in 2027 targets. Secular drivers performing very well; auto drivers expected above high end in Q2; Industrial IoT drivers also above high end of guidance. Conviction based on design win traction, customer adoption, and data center emergence.

2027 targets reaffirmed with convictionImplies double-digit growth in both 2026 and 2027Auto accelerators expected above high end in Q2Industrial IoT accelerators above high end of guidance

Thomas O'Malley · Barclays

Channel inventory expanded to 11 weeks; will it expand further? Are data center and new products accretive to gross margins?

Channel inventory at 11 weeks as of Q1, maintained flat in Q2 guidance. Long-term target is 11 weeks. New product investments are accretive to corporate gross margins; data center and other strategic initiatives generate value and extract margins.

Channel inventory increased to 11 weeks in Q1Q2 guidance assumes channel inventory flat at 11 weeksLong-term channel target: 11 weeksIndustrial IoT 80% serviced through distribution

Joe Moore · Morgan Stanley

What is driving auto growth and is it cyclical? How does China differ in SDV adoption speed and local competition?

Auto accelerators now represent 45% of revenue in Q1, expected to reach ~50% by end of 2026. SDV portfolio is the core driver; NXP has unique processing and safety capabilities. China is adopting SDV architectures at faster speed than West despite local competition emerging at low end. High-end shift to central compute and ADAS favors NXP.

Auto accelerators 45% of Q1 revenue, growing north of 45% YoYComposition expected to reach 50% range by end-2026 (from mid-40s at start of year)S32K5 expected to reach production in China despite Western samples firstChinese OEMs moving faster to Level 3/4 ADAS requiring redundancy and security

Answers to last quarter's watch list

Auto YoY growth sustaining above 5% in Q1 — Auto printed +6% YoY (+10% adjusted for MEMS divestiture), clearing the 5% threshold. Q2 is guided to imply high-teens auto growth with accelerators above the high end of guidance, and management quantified accelerators at 45% of revenue growing +45% YoY. The Tier 1 inventory dynamic is now displaced by content compounding as the durable driver.
Resolved positively
Channel inventory staging cadence — Channel inventory moved from 10 weeks in Q4 to 11 weeks in Q1, hitting the long-term target one quarter into 2026. Q2 guidance assumes 11 weeks held flat. This is the operational confirmation that resolves the multi-quarter tension between verbal optimism and behavior.
Resolved positively
Q1 gross margin vs. the 57.0% midpoint — Gross margin printed 57.1%, +10bps above the midpoint and inside the 56.5–57.5% guide. Q2 is guided to 57.5–58.5% (midpoint 58.0%), a ~90bps step-up that puts the trajectory inside the 57–63% 2026 bracket. Mix pressure has not proven structural.
Resolved positively
Industrial & IoT +20% YoY sustaining beyond Q1 — I&IoT printed +24% YoY for a second consecutive quarter, and Q2 is guided to "high 30%" growth per the O'Malley exchange. The recovery-bounce-vs-structural question now leans structural, with broad-based contribution from fuel cells, healthcare, smart glasses, factory automation, and data center control-plane content.
Resolved positively
MEMS divestiture closing and $25M Q1 / $300M annualized headwind absorption — Management referenced the MEMS adjustment in the Arya exchange (auto growth was +10% YoY adjusted for MEMS vs. +6% reported), confirming the headwind is being absorbed cleanly with no incremental surprises. The +18% first-half-2026 framing is also MEMS-adjusted.
Resolved positively
Whether management gives an explicit 2026 revenue growth rate by Q1 2026 print — Management still has not given a 2026 full-year revenue growth rate; the closest they came was Ross Seymour extracting the +18% first-half-2026 figure adjusted for sensors. The 2027 targets were reaffirmed in the Schneider exchange but the full-year 2026 number remains deferred.
Continue monitoring

What to watch into next quarter

Auto accelerator share progression toward 50% by year-end — Q1 at 45%, management guided ~50% by end-2026; a Q2 print at 47%+ confirms the trajectory, anything below 46% would suggest the year-end target requires a Q4 hockey stick.

Data center revenue tracking against the >$500M 2026 framing — $200M in 2025, >$500M targeted in 2026 implies ~$125M/quarter average against an exit ramp; Q2 commentary on data center dollar contribution is the cleanest validation signal.

Q2 gross margin landing above 58.0% midpoint — guided 57.5–58.5%; a print above 58.0% would validate the 57–63% 2026 bracket trajectory, while a print at the low end would suggest mix is offsetting utilization gains.

Channel inventory holding at 11 weeks — Q2 guidance assumes flat at 11; a move to 12 weeks would imply management is staging for further demand acceleration, while a pullback to 10 would signal sell-through weakness.

Whether Q2 actuals validate the +14–21% YoY guide range — the Q2 guide is the most aggressive forward signal of the cycle; an actual print below +14% YoY would be the first material crack in the acceleration narrative.

Auto growth sustaining above +6% YoY in Q2 — management implied high-teens auto growth in Q2; a print below +8% would call the +45% accelerator-growth narrative into question and would suggest the legacy auto base is dragging harder than disclosed.

Sources

  1. NXP Semiconductors Q1 2026 press release / 8-K exhibit 99.1 — https://www.sec.gov/Archives/edgar/data/1413447/000141344726000032/nxp1q26exhibit991.htm
  2. Q1 2026 earnings call Q&A (prepared remarks unavailable; Q&A captured)

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