NXPI · Q2 2026 Earnings

Bullish

NXP Semiconductors

Reported July 28, 2026

30-second summary

Revenue of $3.496B (+19% YoY, +10% QoQ) beat consensus of $3.46B by 1.0% and landed in the upper-middle of the $3.35–3.55B guide, with non-GAAP EPS of $3.61 beating consensus of $3.53 by 2.3% and coming $0.11 above the $3.50 guide midpoint. The forward signal is what matters: Q3 guided to $3.65–3.85B (+15–21% YoY vs. the $3.17B prior-year base) with operating margin stepping up to 36.0–37.6% (midpoint 36.8%, +170bps QoQ). Industrial & IoT printed +38% YoY and Comm Infra +41% YoY — both above management's forward framing — while Auto delivered +12% YoY, clearing the high-teens implied trajectory ex-MEMS. The +14–21% Q2 YoY guide, called out as the most aggressive of the cycle last quarter, has now printed at +19% and Q3 extends it.

Headline numbers

EPS

Q2 FY2026

$3.61

+2.3% vs est.

Revenue

Q2 FY2026

$3.50B

+19.0% YoY

+1.0% vs est.

Gross margin

Q2 FY2026

58.0%

Free cash flow

Q2 FY2026

$0.79B

Operating margin

Q2 FY2026

35.1%

Key financials

Q2 FY2026

Metric	Q2 FY2026	Q2 FY2025	YoY	Q1 FY2026	QoQ
Revenue	$3.50B	$2.93B	+19.5%	$3.18B	+9.9%
EPS	$3.61	$2.72	+32.7%	$3.05	+18.4%
Gross margin	58.0%	56.5%	+150bps	57.1%	+90bps
Operating margin	35.1%	32.0%	+310bps	33.1%	+200bps
Free cash flow	$0.79B	$0.70B	+13.6%	$0.71B	+10.8%

Guidance

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

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q2 FY2026	$3.35B to $3.55B	$3.496B	+0.05B above midpoint; within upper half of range	Beat
EPS (non-GAAP)	Q2 FY2026	$3.29 to $3.72	$3.61	+0.11 above midpoint; +2.3% surprise vs consensus	Beat
Gross Margin (non-GAAP)	Q2 FY2026	57.5% to 58.5%	58.0%	in-line (at midpoint)	Met
Operating Margin (non-GAAP)	Q2 FY2026	33.8% to 35.6%	35.1%	+0.4pts above midpoint	Beat
Revenue YoY growth	Q2 FY2026	14% to 21%	19%	+1pt above midpoint	Beat

New guidance

Metric	Period	Guide	YoY
Revenue	Q3 FY2026	$3.65B to $3.85B	+15% to +21% YoY
EPS (non-GAAP)	Q3 FY2026	$3.89 to $4.32	—
Gross Margin (non-GAAP)	Q3 FY2026	58.0% to 59.0%	—
Operating Margin (non-GAAP)	Q3 FY2026	36.0% to 37.6%	—
Revenue YoY growth	Q3 FY2026	15% to 21%	—
Revenue sequential growth	Q3 FY2026	4% to 10%	—

Segment performance

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Automotive	$1.938B	$1.729B	+12.1%
Industrial & IoT	$0.755B	$0.546B	+38.3%
Mobile	$0.351B	$0.331B	+6.0%
Comm. Infra. & Other	$0.452B	$0.32B	+41.3%

Capacity & utilization

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Days Inventory Outstanding	156 days	—	—
Days Sales Outstanding	33 days	—	—
Days Payable Outstanding	60 days	—	—
Cash Conversion Cycle	129 days	131	—

Profitability

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Gross Margin (non-GAAP)	58.0%	—	—
Operating Margin (non-GAAP)	35.1%	—	—
Free Cash Flow Margin (non-GAAP)	22.6%	—	—
Net Financial Leverage	1.5x	1.8x	—

Management tone

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

Transcript not available for Q2/2026; tone analysis limited to press-release qualitative statements.

The press release framing shifted from Q1's forward-looking positioning ("auto accelerators heading to 50% of revenue") to Q2's confirmation posture: "our strong first-half results and third-quarter guidance reinforce our confidence in achieving our financial commitments." This is the first time in the cycle management has framed the print in terms of reinforcing commitments rather than reaffirming them — a subtle but real shift from defense to validation. The Q3 guide operationalizes it: +18.3% YoY midpoint sustains the +18% first-half framing Rafael gave in Q1, meaning management is not stepping down forward growth despite the aggressive Q2 base.

The new thematic anchor in the press release is edge AI: "AI is moving from the cloud into the physical world—into vehicles, factories, and robots." This is a step-up in framing from Q1's data-center-control-plane specificity. Where Q1 quantified data center at $200M → $500M, Q2 broadens the aperture to "processing, connectivity, and security solutions" enabling "next-generation edge intelligence" — a positioning shift that reads more like a strategic re-anchoring than a quarterly update. Whether this signals a broader capital-allocation pivot or is press-release scaffolding for the upcoming analyst day is the question worth holding.

Without a Q&A transcript, the operational commitments that have historically closed the "verbal vs. behavior" gap (channel inventory staging, accelerator share disclosure, data center dollar tracking) are not visible. The print itself does the talking: Industrial & IoT +38%, Comm Infra +41%, operating margin +40bps above guide, Q3 guide extending +18% YoY. Behavior is now clearly validating the stance.

Answers to last quarter's watch list

Auto accelerator share progression toward 50% by year-end — Auto revenue printed $1.938B (+12% YoY), a clean acceleration from Q1's $1.782B. Absent Q&A, the specific accelerator-share percentage was not disclosed in the press release, but the +12% total segment print (against a legacy-drag base) is consistent with accelerators sustaining above the 45% mark and tracking toward the ~50% year-end framing.

Continue monitoring

Data center revenue tracking against the >$500M 2026 framing — Comm Infra & Other printed $452M (+41% YoY), the strongest segment growth rate in the release. Q1 framed data center as split roughly evenly between I&IoT and Comm Infra; the +41% Comm Infra print combined with +38% I&IoT is directionally consistent with the >$500M 2026 framing, but no explicit dollar figure was disclosed on the print.

Continue monitoring

Q2 gross margin landing above 58.0% midpoint — Gross margin printed 58.0%, exactly at the midpoint of the 57.5–58.5% guide. This is neither validation nor invalidation of the 57–63% 2026 bracket — it's a clean middle-of-the-range outcome. Q3 guide of 58.0–59.0% (midpoint 58.5%) implies +50bps QoQ, which continues the trajectory toward the bracket midpoint.

Continue monitoring

Channel inventory holding at 11 weeks — Channel inventory figure was not disclosed in the press release. DIO of 156 days (down from 165 in Q1) and CCC of 129 days (down from 140) suggest inventory is being worked down at the balance-sheet level, but the channel-week metric requires Q&A.

Continue monitoring

Whether Q2 actuals validate the +14–21% YoY guide range — Revenue printed +19% YoY, +150bps above the midpoint and inside the upper half of the range. This is decisive validation of the most aggressive forward signal management had issued in the cycle.

Resolved positively

Auto growth sustaining above +6% YoY in Q2 — Auto printed +12% YoY, doubling the +6% Q1 print and clearing the +8% threshold with room to spare. The high-teens auto framing management implied in Q1 is directionally validated, and the +45% accelerator-growth narrative is intact.

Resolved positively

What to watch into next quarter

Q3 revenue landing above the $3.75B midpoint — the guide implies +18.3% YoY sustaining the first-half framing; a print above $3.80B would validate the cycle extending, while a print below $3.70B would be the first sequential deceleration signal since the inflection.

Q3 operating margin reaching the 36.8% midpoint — the +170bps QoQ implied step-up is the most aggressive margin expansion signal of the cycle; a print at 36.0% (low end) would suggest leverage is diluting from mix as ramping segments scale.

Whether accelerator share crosses 47% by Q3 — Q1 was 45% with a year-end target of ~50%; a Q3 disclosure at 47%+ confirms the trajectory, while anything at 45–46% implies a Q4 hockey stick.

Comm Infra sustaining above +30% YoY — segment printed +41% off an easy comp; a Q3 print above +30% YoY would confirm data center is the durable driver, while a deceleration below +20% would suggest comp effects were doing more work than disclosed.

Industrial & IoT deceleration cadence — segment printed +38% YoY off recovery comps; a Q3 print sustaining above +25% would confirm the structural interpretation, while a step-down to +15% would suggest the +24%/+24%/+38% run was recovery-driven.

Whether management provides a full-year 2026 revenue growth rate on the Q3 call — Rafael deferred through Q4 2025 and Q1 2026; with three quarters now printed inside the +18% first-half framing, an explicit annual commitment on the Q3 call would be the cleanest signal that management operates the 2027 long-term model as the reference.

Sources

NXP Semiconductors Q2 2026 press release / 8-K exhibit 99.1 — https://www.sec.gov/Archives/edgar/data/1413447/000141344726000044/nxp2q26exhibit991.htm

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