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What changed in NXP Semiconductors's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of NXP Semiconductors's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+316 added−297 removedSource: 10-K (2026-02-19) vs 10-K (2025-02-20)

Top changes in NXP Semiconductors's 2025 10-K

316 paragraphs added · 297 removed · 228 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

59 edited+35 added−31 removed60 unchanged
Biggest changeReporting Segment NXP has one reportable segment representing the entity as a whole, which reflects the way in which our chief operating decision maker, Kurt Sievers, executes operating decisions, allocates resources, and manages the growth and profitability of the Company. 3 End Market Exposure Our product groups are focused on four primary end markets that we believe are characterized by long-term, attractive growth opportunities and where we believe we enjoy sustained, competitive differentiation through our technology leadership.
Biggest changeEnd Market Exposure Our product groups are focused on four primary end markets that we believe are characterized by long-term, attractive growth opportunities and where we believe we enjoy sustained, competitive differentiation through our technology leadership. The four end markets are Automotive, Industrial & IoT, Mobile, and Communication Infrastructure & Other.
We provide leading solutions that leverage our combined portfolio of intellectual property, deep application knowledge, process technology and manufacturing expertise in the domains of cryptography-security, high-speed interface, radio frequency (RF), mixed-signal analog-digital (mixed A/D), power management, digital signal processing and embedded system design.
We provide leading solutions that leverage our combined portfolio of intellectual property, deep application knowledge, process technology and manufacturing expertise in the domains of embedded processing, mixed-signal analog-digital (mixed A/D), power management, digital signal processing, cryptography-security, high-speed interface, radio frequency (RF), and embedded system design.
We also engage, in certain instances, in licensing and selling of certain of our technology, patents and other intellectual property rights. Competition We compete with many different semiconductor companies on a global basis, including with both integrated device manufacturers (“IDMs”) as well as fabless companies.
In certain instances, we also engage in licensing and selling of certain of our technology, patents and other intellectual property rights. Competition We compete with many different semiconductor companies on a global basis, including with both integrated device manufacturers (“IDMs”) as well as fabless companies.
All SEC filings are also available at the SEC's website at www.sec.gov. The information contained on these websites as referenced is not incorporated by reference into this filing. Further, the Company’s references to website URLs are intended to be inactive textual references only.
All SEC filings are also available on the SEC's website at www.sec.gov. The information contained on these websites as referenced is not incorporated by reference into this filing. Further, the Company’s references to website URLs are intended to be inactive textual references only.
Our i.MX 8 family is a feature and performance scalable multi-core platform that includes single, dual and quad-core families based on the Arm Cortex architecture for advanced graphics, imaging, machine vision, audio, voice, video, and safety-critical applications. Together, these products provide a family of applications processors featuring software, power and pin compatibility across single, dual and quad core implementations.
Our i.MX 8 family is a feature and performance scalable multi-core platform that includes single, dual and quad-core families based on the Arm Cortex architecture for advanced graphics, imaging, machine vision, audio, voice, video, and safety-critical applications. Together, these products provide a family of applications processors featuring software, power and pin compatibility across single, dual and quad 6 core implementations.
Nearly all of our security products consist of multi-functional solutions comprised of passive RF connectivity devices facilitating information transfer from the user document to reader infrastructure; secure, tamper-proof microcontroller devices in which information is securely 7 encrypted (“secure element”); and secure real-time operating system software products to facilitate the encryption-decryption of data, and the interaction with the reader infrastructure systems.
Nearly all of our security products consist of multi-functional solutions comprised of passive RF connectivity devices facilitating information transfer from the user document to reader infrastructure; secure, tamper-proof microcontroller devices in which information is securely encrypted (“secure element”); and secure real-time operating system software products to facilitate the encryption-decryption of data, and the interaction with the reader infrastructure systems.
Wireless infrastructure applications and many general wireless applications are served with III-V technology LNAs. Advanced SiGe technology is utilized in LNAs designed for wireless communication, cellular, consumer, automotive and industrial applications. vii. Security Controllers NXP is the market leader in security controller ICs.
Wireless infrastructure applications and many general wireless applications are served with III-V technology LNAs. Advanced SiGe technology is utilized in LNAs designed for wireless communication, cellular, consumer, automotive and industrial applications. 7 vii. Security Controllers NXP is the market leader in security controller ICs.
Finally, with the growing number of connected devices and increasing data generation, latency, privacy and bandwidth have become critical limiting factors. Intelligent edge solutions solve this by bringing the intelligence closer to the source. Edge systems reduce the tendency on the cloud, lowering power consumption, strengthening data protection. They are, most of the time, autonomous and real-time.
Finally, with the growing number of connected devices and increasing data generation, latency, privacy and bandwidth have become critical limiting factors. Intelligent edge solutions solve this by bringing the intelligence closer to the source. Edge systems reduce the dependency on the cloud, lowering power consumption, strengthening data protection. They are, most of the time, autonomous and real-time.
We believe this strategy allows us to preserve the advantages of our products and technologies, and helps us to improve the return on our investment in research and development. We have a broad portfolio of approximately 9,600 patent families (each patent family includes all patents and patent applications originating from the same invention).
We believe this strategy allows us to preserve the advantages of our products and technologies, and helps us to improve the return on our investment in research and development. We have a broad portfolio of approximately 9,500 patent families (each patent family includes all patents and patent applications originating from the same invention).
We have also successfully engaged with leading OEMs to drive custom and semi-custom products which in turn allow us to refine and accelerate our innovation and product roadmaps. vi. Radio Frequency Devices NXP is the market leader in High-Performance Radio Frequency (HPRF) power amplifiers. We have an extensive portfolio of LDMOS, GaN and GaAs RF transistors.
We have also successfully engaged with leading global companies to drive custom and semi-custom products which in turn allow us to refine and accelerate our innovation and product roadmaps. vi. Radio Frequency Devices NXP is the market leader in High-Performance Radio Frequency (HPRF) power amplifiers. We have an extensive portfolio of LDMOS, GaN and GaAs RF transistors.
We have long-standing customer relationships with most of our customers. Our 10 largest OEM end customers, some of whom are supplied by distributors, in alphabetical order, are Apple, Aptiv, Bosch, Continental, Denso, Harman Auto, Hyundai, LGE Automotive, Samsung and Visteon.
We have long-standing customer relationships with most of our customers. Our 10 largest end customers, some of whom are supplied by distributors, in alphabetical order, are Apple, Aptiv, Aumovio, Bosch, Denso, Harman Auto, Hyundai, LGE Automotive, Samsung and Visteon.
Government Regulation, including Environmental Regulation The information set forth under the “Environmental remediation” caption of Note 15 of our notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report is incorporated herein by reference. For additional discussion of certain risks associated with government and environmental regulation, see Part I, Item 1A. Risk Factors .
Government Regulation, including Environmental Regulation The information set forth under the “Environmental remediation” caption of Note 16 of our notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report is incorporated herein by reference. For additional discussion of certain risks associated with government and environmental regulation, see Part I, Item 1A.
Automotive safety features are evolving from passive safety systems to active safety systems with Advanced Driving Assisted Systems (ADAS) such as radar and vision systems. Semiconductor content is also increasing in engine management and fuel economy applications, like Battery Management Systems (BMS).
Automotive safety features are evolving from passive safety systems to active safety systems with ADAS such as radar and vision systems. Semiconductor content is also increasing in engine management and fuel economy applications, like Battery Management Systems (BMS).
In automotive we are the market leader in most of the applications, with integrated 77Ghz Radar solution for ADAS, battery management products for Electrification, audio processing solutions and amplifiers for car entertainment, Controller Area Network (CAN), Local Interconnect Network (LIN), FlexRay and Ethernet solutions for in-vehicle networking and two-way secure products for secure car access.
In Automotive, we are the market leader in most of the applications, with integrated 77Ghz Radar solution for ADAS, battery management products for Electrification, audio processing solutions and amplifiers for car entertainment, Controller Area Network (CAN), Local Interconnect Network (LIN), FlexRay Ethernet and SerDes (from the Aviva Links acquisition) solutions for in-vehicle networking and two-way secure products for secure car access.
Item 1. Business Company Overview NXP Semiconductors N.V. is a global semiconductor company and a long-standing supplier in the industry, with over 70 years of innovation and operating history. For the year ended December 31, 2024, we generated revenue of $12,614 million, compared to $13,276 million for the year ended December 31, 2023.
Item 1. Business Company Overview NXP Semiconductors N.V. is a global semiconductor company and a long-standing supplier in the industry, with over 70 years of innovation and operating history. For the year ended December 31, 2025, we generated revenue of $12,269 million, compared to $12,614 million for the year ended December 31, 2024.
Last but not least, many consumers want their cars to be service oriented, hyper-connected, configurable and upgradeable, in the same way as they are used to with their smartphones. We expect such consumer demands will lead to new vehicle architectures and eventually to software defined vehicles (SDV).
Last but not least, many consumers want their cars to be service oriented, hyper-connected, configurable and upgradeable, in the same way as they are used to with their smartphones. We expect such consumer demands will lead to new vehicle architectures and eventually to SDVs.
In Automotive, our S32x Automotive Processing Platform offers scalability across products and multiple application domains based 6 on Arm Cortex-A, Cortex-R, and Cortex-M cores up to Automotive Safety Integrity Level (ASIL-D) capabilities with software compatibility from the MCU’s to SoC’s. iii.
In Automotive, our S32x Automotive Processing Platform offers scalability across products and multiple application domains based on Arm Cortex-A, Cortex-R, and Cortex-M cores up to Automotive Safety Integrity Level (ASIL-D) capabilities with software compatibility from the MCUs to SoCs. iii.
Our product solutions are used in a wide range of end market applications including: automotive, industrial & Internet of Things (IoT), mobile, and communication infrastructure. We engage with leading global original equipment manufacturers (OEMs) and sell products in all major geographic regions.
Our product solutions are used in a wide range of end market applications including: automotive, industrial & Internet of Things (IoT), mobile, and communication infrastructure. We engage with leading global companies and sell products in all major geographic regions.
Wireless Connectivity We offer a broad portfolio of connectivity solutions, including Near Field Communications (NFC), Ultra-wideband (UWB), Bluetooth low-energy (BLE), Zigbee, Thread as well as Wi-Fi and Wi-Fi/Bluetooth integrated SoCs.
Wireless Connectivity We offer a broad portfolio of connectivity solutions, including NFC, UWB, Bluetooth low-energy (BLE), Zigbee, Thread as well as Wi-Fi and Wi-Fi/Bluetooth integrated SoCs.
We target applications that require stringent overall system and subsystem performance. As new and challenging applications proliferate, we believe that many of these applications will benefit from our solutions. We have assembled a global team of highly skilled semiconductor and embedded software design engineers with expertise in RF, analog, power management, interface, security and digital processing.
As new and challenging applications proliferate, we believe that many of these applications will benefit from our solutions. We have assembled a global team of highly skilled semiconductor and embedded software design engineers with expertise in RF, analog, power management, interface, security, functional safety, and digital processing.
Products We offer customers a broad portfolio of semiconductor products, including microcontrollers, application processors, communication processors, connectivity chipsets, analog and interface devices, RF power amplifiers, security controllers and sensors.
Products We offer customers a broad portfolio of semiconductor products for building advanced systems, including microcontrollers, application processors, communication processors, connectivity chipsets, analog and interface devices, RF power amplifiers, security controllers, sensors and foundational system middleware.
Our dedicated R&D teams across the involved member states under the IPCEI ME/CT program seek to innovate in core technologies across automotive, industrial and cybersecurity. This includes 5nm, advanced driving assistance and battery management systems in automotive, 6G and Ultra-Wideband as well as artificial intelligence (AI), RISC-V and post-quantum cryptography.
Our dedicated R&D teams across the involved member states under the IPCEI ME/CT program seek to innovate in core technologies across automotive, industrial and cybersecurity. This includes 5nm, advanced driving assistance in automotive, 6G, Wireless Interface Technology and UWB as well as AI, RISC-V and post-quantum cryptography.
Research and Development We believe that our future success depends on our ability to both improve our existing products and to develop new products for both existing and new markets. We direct our research and development efforts largely to the development of new semiconductor solutions where we see significant opportunities for growth.
We believe that our future success depends on our ability to both improve our existing products and to develop new products for both existing and new markets. We direct our research and development efforts to the development of new semiconductor solutions where we see significant opportunities for growth. We target applications that require stringent overall system and subsystem performance.
We also have a strong position with our distribution partners, including our five largest in alphabetical order, Arrow, Avnet, Nexty, WT Micro and World Peace. Our revenue is primarily the sum of our direct sales to OEMs, EMSs plus our distributors’ resale of NXP products. Avnet accounted for 22% of our revenue in 2024 and 21% in 2023.
We also have a strong position with our distribution partners, including our five largest in alphabetical order, Arrow, Avnet, Nexty, WT Micro and World Peace. Our revenue is primarily the sum of our direct sales plus our sales to distributors. Avnet accounted for 23% of our revenue in 2025 and 22% in 2024.
In contrast to the highly complex front-end process, back-end processing is generally less complicated, and as a result we tend to determine the location of our back-end facilities based more on cost factors than on technical considerations.
Back-end processes involve the assembly, test and packaging of semiconductors in a form suitable for distribution. In contrast to the highly complex front-end process, back-end processing is generally less complicated, and as a result we tend to determine the location of our back-end facilities based more on cost factors than on technical considerations.
Our direct grants include those awarded under the European 2nd Important Project of Common European Interest on Microelectronics and Communication Technologies (“IPCEI ME/CT”). During 2023 and 2024, the Company was granted IPCEI ME/CT government assistance in multiple EU member states. The duration of the IPCEI ME/CT grants is planned to run until the end of 2029.
Our direct grants include those awarded under the European 2nd Important Project of Common European Interest on Microelectronics and Communication Technologies (“IPCEI ME/CT”) in multiple EU member states, the duration of which is planned to run until the end of 2029.
Most of our assembly and test activities are maintained in-house. 8 The following table shows selected key information with respect to our major operating front-end and back-end facilities: Site Ownership Wafer sized used Line widths used (vm) Technology/Products (Microns) Front-end Singapore (SSMC)¹⁾ 61.2 % 8” 0.14-0.25 CMOS, eNVM, Power, BCDMOS, RF Nijmegen, the Netherlands 100 % 8” 0.14-1.00 CMOS, BCDMOS, RF, Power MOSFET Chandler, United States 100 % 8” 0.18-0.50 CMOS, eNVM, BCDMOS Chandler RF, United States 100 % 6” 0.25-0.40 GaN Austin (Ed Bluestein), United States 100 % 8” 0.09-0.18 CMOS, eNVM, BCDMOS, Radar Back-end Kaohsiung, Taiwan 100 % — — NFC, Automotive Car-access, In-Vehicle Networking, Micro-controllers, ADAS (Radar), Analog, Mixed-Signal and Power Bangkok, Thailand 100 % — — Automotive In-Vehicle Networking and Sensors, Analog, RFID, Banking and e-Passport modules, Power Management Kuala Lumpur, Malaysia 100 % — — Micro-processors, ADAS/Radar, Micro-controllers, Advanced Audio Processor, Sensors, Power Management, Analog and Mixed Signal, RF devices Tianjin, China 100 % — — Micro-processors, Micro-controllers, Power Management, Battery Management, Analog and Mixed Signal 1) Joint venture with TSMC.
The following table shows selected key information with respect to our major operating front-end and back-end facilities: Site Ownership Wafer sized used Line widths used (vm) Technology/Products (Microns) Front-end Singapore (SSMC)¹⁾ 61.2 % 8” 0.14-0.25 CMOS, eNVM, Power, BCDMOS, RF Nijmegen, the Netherlands 100 % 8” 0.14-1.00 CMOS, BCDMOS, RF, Power MOSFET Chandler, United States 100 % 8” 0.18-0.50 CMOS, eNVM, BCDMOS Chandler RF, United States 100 % 6” 0.25-0.40 GaN Austin (Ed Bluestein), United States 100 % 8” 0.09-0.18 CMOS, eNVM, BCDMOS, Radar Back-end Kaohsiung, Taiwan 100 % — — NFC, Automotive Car-access, In-Vehicle Networking, Micro-controllers, ADAS (Radar), Analog, Mixed-Signal and Power Bangkok, Thailand 100 % — — Automotive In-Vehicle Networking and Sensors, Analog, RFID, Banking and e-Passport modules, Power Management Kuala Lumpur, Malaysia 100 % — — Micro-processors, ADAS/Radar, Micro-controllers, Advanced Audio Processor, Sensors, Power Management, Analog and Mixed Signal, RF devices Tianjin, China 100 % — — Micro-processors, Micro-controllers, Power Management, Battery Management, Analog and Mixed Signal 1 Joint venture with TSMC We use a large number of raw materials in our front- and back-end manufacturing processes, including silicon wafers, chemicals, gases, lead frames, substrates, molding compounds and various types of precious and other metals.
Included as well is the growing RFID market that uses wireless technology for identification and tracking of objects. Further digitalization of governmental services, the trend towards secure contactless payment and the need to improve tracking, traceability and authentication of products are driving demand across these applications. Most countries in the world have migrated their wireless infrastructure to 5G network technology.
Further digitalization of governmental services, the trend towards secure contactless payment and the need to improve tracking, traceability and authentication of products are driving demand across these applications. Most countries in the world have migrated their wireless infrastructure to 5G network technology.
Software support includes Linux and Android implementations. Our i.MX 9 series of application processors integrates hardware neural processing units across the entire series for acceleration of machine learning applications at the edge.
Software support includes Linux and Android implementations. Our i.MX 9 series of application processors integrates hardware neural processing units across the entire series for acceleration of machine learning applications at the edge. In 2025, NXP acquired Kinara to complement NXP’s existing range of processors.
The approval process for such funding may last up to several years. Certain specific contracts require compliance with extensive regulatory requirements and set forth certain conditions relating to the funded programs. There could be penalties if these objectives are not fulfilled.
Certain specific contracts require compliance with extensive regulatory requirements and set forth certain conditions relating to the funded programs. There could be penalties if these objectives are not fulfilled.
ESMC is 70% owned by TSMC, with Bosch, Infineon, and NXP each owning 10%. NXP is entitled to 10% of the fab facility capacity. Initial production at ESMC is currently targeted to begin in 2027. • VisionPower Semiconductor Manufacturing Company Pte. Ltd. (VSMC) will build and operate a new 300mm semiconductor wafer manufacturing facility in Singapore.
NXP is entitled to 10% of the fab facility capacity. Initial production at ESMC is currently targeted to begin in 2028. • VisionPower Semiconductor Manufacturing Company Pte. Ltd. (VSMC) will build and operate a new 300mm semiconductor wafer manufacturing facility in Singapore. VSMC is 60% owned by Vanguard International Semiconductor Corporation and 40% owned by NXP.
Information about our Executive Officers The names, ages and positions as of February 20, 2025, of our executive officers, including our Chief Executive Officer, Mr.
Risk Factors . 12 Information about our Executive Officers The names, ages and positions as of February 19, 2026, of our executive officers, including our Chief Executive Officer, Mr.
We typically source our other raw materials in a similar fashion as our wafers, although our portfolio of suppliers is more diverse. Some of our suppliers provide us with materials on a just-in-time basis, which permits us to reduce our procurement costs and the negative cash flow consequences of maintaining inventories, but exposes us to potential supply chain interruptions.
Some of our suppliers provide us with materials on a just-in-time basis, which permits us to reduce our procurement costs and the negative cash flow consequences of maintaining inventories, but exposes us to potential supply chain interruptions. We purchase most of our raw materials on the basis of fixed price contracts.
In addition to obtaining our own patents and other intellectual property rights, we have entered into licensing agreements and other arrangements authorizing us to use intellectual property rights, confidential technical 11 information, software and other technology owned by third parties.
We believe it is the combination of our proprietary technology, patents, know-how and other intellectual property rights and assets that creates an advantage for our business. 11 In addition to obtaining our own patents and other intellectual property rights, we have entered into licensing agreements and other arrangements authorizing us to use intellectual property rights, confidential technical information, software and other technology owned by third parties.
Due to the scalability of our portfolio we are able to help future-proof our customer’s products as their systems evolve, becoming more complex or requiring greater processing capabilities over time.
This enables our customers to design-in and deploy our MCU families, leveraging a consistent software development environment. Due to the scalability of our portfolio we are able to help future-proof our customer’s products as their systems evolve, becoming more complex or requiring greater processing capabilities over time.
Such funding is generally provided to encourage R&D activities, industrialization and local economic development and is generally available to all companies. The conditions for the receipt of government grants and subsidies may include eligibility restrictions, approval by relevant authorities, annual budget appropriations, compliance with relevant regulations or contingent return provisions, as well as specifications regarding objectives and results.
The conditions for the receipt of government grants and subsidies may include eligibility restrictions, approval by relevant authorities, annual budget appropriations, compliance with relevant regulations or contingent return provisions, as well as specifications regarding objectives and results. The approval process for such funding may last up to several years.
While our patents, trademarks, trade secrets and other intellectual property rights constitute valuable assets, we do not view any individual right or asset as material to our operations as a whole. We believe it is the combination of our proprietary technology, patents, know-how and other intellectual property rights and assets that creates an advantage for our business.
While our patents, trademarks, trade secrets and other intellectual property rights constitute valuable assets, we do not view any individual right or asset as material to our operations as a whole.
The increase of the average semiconductor content is being driven by the proliferation of electronic features throughout the vehicle, especially for driver assistance (ADAS), and by the increasing penetration of electrified vehicles, which have much higher semiconductors content. We believe three mega-trends will drive the semiconductor content increase in the future: Autonomous driving, electrification and the software defined vehicle.
The increase of the average semiconductor content is being driven by the proliferation of electronic features throughout the vehicle, especially for advanced driver assistance system (ADAS), and by the increasing penetration of electrified vehicles, which have much higher semiconductor content.
Our back-end manufacturing facilities test and package many different types of products using a wide variety of processes. To optimize flexibility, we use shared technology platforms for our back-end assembly operations.
NXP is entitled to 40% of the fab facility capacity. Initial production at VSMC is currently targeted to begin in 2027. Our back-end manufacturing facilities test and package many different types of products using a wide variety of processes. To optimize flexibility, we use shared technology platforms for our back-end assembly operations.
Our sales and marketing strategy focuses on key defined verticals in Automotive, Industrial & IoT, Communication Infrastructure, and Mobile deepening our relationship with our top OEMs and EMSs, expanding our reach to our mass market customers, startups and our distribution partners and becoming their preferred supplier, which we believe assists us in reducing sales volatility in challenging markets.
Our sales and marketing strategy focuses on key defined verticals in Automotive, Industrial & IoT, Communication Infrastructure, and Mobile. We aim to deepen relationships with our top direct customers, expand our reach to mass-market customers, startups and distribution partners, and become their preferred supplier. We believe that this approach helps reduce sales volatility in challenging markets.
We purchase these wafers, which must meet exacting specifications, from a limited number of suppliers in the geographic region in which our fabrication facilities are located. At our wholly owned fabrication plants, we use raw wafers ranging from 6 inches to 8 inches in size.
Our most important raw materials are the raw, or substrate, silicon wafers we use to make our semiconductors. We purchase these wafers, which must meet exacting specifications, from a limited number of suppliers in the geographic region in which our fabrication facilities are located.
The manufacturing of a semiconductor involves several phases of production, which can be broadly divided into “front-end” and “back-end” processes. Front-end processes take place at highly complex wafer manufacturing facilities (called fabrication plants or “wafer fabs”), and involve the imprinting of substrate silicon wafers with the precise circuitry required for semiconductors to function.
Front-end processes take place at highly complex wafer manufacturing facilities (called fabrication plants or “wafer fabs”), and involve the imprinting of substrate silicon wafers with the precise circuitry required for semiconductors to function. The front-end production cycle requires high levels of precision and involves as many as 300 process steps.
Our MCU product portfolio ranges from 8-bit products to higher performance 16-bit and 32-bit products with on-board flash memory. Our portfolio is highly scalable, and is coupled with our extensive software and design tools. This enables our customers to design-in and deploy our MCU families, leveraging a consistent software development environment.
We are a trusted, long-term supplier of MCUs to many of our customers, especially in the automotive, smartcards, industrial and consumer markets. Our MCU product portfolio ranges from 8-bit products to higher performance 16-bit and 32-bit products with on-board flash memory. Our portfolio is highly scalable, and is coupled with our extensive software and design tools.
Communication Infrastructure & Other The Communication Infrastructure & Other end market is a combination of three different application markets, namely secure edge identification, 5G radio power and digital network communication solutions. In secure edge identification solutions, NXP has extensive experience providing customers with solutions for applications demanding the highest security and reliability (ePassports, eID credentials, transportation & payment cards.
Communication Infrastructure & Other The Communication Infrastructure & Other end market is a combination of three different application markets, namely secure edge identification, 5G radio power and digital network communication solutions.
In addition, we invest a few percent of our total research and development expenditures in research activities that develop fundamental new technologies or product categories that could contribute significantly to our company's growth in the future. 10 We annually perform a fundamental review of our business portfolio and our related new product and technology development opportunities in order to decide on changes in the allocation of our research and development resources.
In addition, we invest a few percent of our total research and development expenditures in research activities that drive innovative products or technologies that could contribute significantly to our company's growth in the future.
With the intent to outpace market growth we invest in research and development to extend or create leading market positions, with an emphasis on fast growing sizable market segments, such as ADAS, in-vehicle networks and power management, as well as Edge computing to support the successful deployment in the IoT with our cross-over processing technology, but also in emerging markets, such as massive MIMO in RF Power and mmWave for 5G.
With the intent to outpace market growth, we invest in research and development to extend or create leading market 10 positions, with an emphasis on fast growing sizable market segments, such as Software-Defined Vehicle, Radar, Connected Edge Processing, Wired Networking and Energy Management Solutions to support the successful deployment of AI at the Edge.
These advances have resulted in growth of semiconductors and electronic content across a diverse array of products. The semiconductor market totaled $627.6 billion in 2024. Business Combinations On December 17, 2024, NXP entered into a definitive agreement to acquire Aviva Links for $242.5 million in cash.
These advances have resulted in growth of semiconductors and electronic content across a diverse array of products. The semiconductor market totaled $791.7 billion in 2025. Business Combinations On June 17, 2025, NXP announced the closing of the acquisition of 100% of TTTech Auto for $766 million in cash ($675 million net of cash acquired).
Manufacturing We manufacture semiconductors through a combination of wholly owned manufacturing facilities, a manufacturing facility operated jointly with another semiconductor company and third-party foundries and assembly and test subcontractors. We manage our manufacturing assets together through one centralized organization to ensure we realize scale benefits in asset utilization, purchasing volumes and overhead leverage across businesses.
Manufacturing We employ a hybrid manufacturing model where we manufacture semiconductors through a combination of wholly owned manufacturing facilities, a manufacturing facility operated jointly with another semiconductor company and third-party foundries and assembly and test subcontractors.
Overall, we allocate our research and development to maintain a healthy mix of emerging growth and mature businesses. Subsidies and Grants We receive subsidies and grants from governments in some countries in the form of direct grants as well as tax credits for R&D activities.
Subsidies and Grants We receive subsidies and grants from governments in some countries in the form of direct grants as well as tax credits for R&D activities. Such funding is generally provided to encourage R&D activities, industrialization and local economic development and is generally available to all companies.
Sievers, are as follows: Name Age Position Kurt Sievers 55 Executive director, president and chief executive officer Bill Betz 47 Executive vice president and chief financial officer Christopher Jensen 55 Executive vice president and chief people officer Andrew Hardy 48 Executive vice president and chief sales officer Andrew Micallef 60 Executive vice president and chief operations and manufacturing officer Jennifer Wuamett 59 Executive vice president, general counsel, corporate secretary and chief sustainability officer Human Capital At the heart of NXP's is our talented global employees, referred to as team members, whose creativity and dedication drive the innovation that sets our company apart.
Sotomayor, are as follows: Name Age Position Year appointed Rafael Sotomayor 56 Executive Director, President and Chief Executive Officer 2025 Bill Betz 48 Executive Vice President and Chief Financial Officer 2021 Christopher Jensen 56 Executive Vice President and Chief People Officer 2020 Andrew Hardy 49 Executive Vice President and Chief Sales Officer 2025 Andrew Micallef 61 Executive Vice President and Chief Operations and Manufacturing Officer 2021 Jennifer Wuamett 60 Executive Vice President, General Counsel, Corporate Secretary and Chief Sustainability Officer 2018 13 Human Capital NXP's workforce is a critical enabler of the company's strategy and operating performance.
We purchase most of our raw materials on the basis of fixed price contracts. In recent years, as a result of constraints in the semiconductor supply chains, there has been a tendency towards longer term supply contracts with suppliers in exchange for capacity.
In recent years, as a result of constraints in the semiconductor supply chains, there has been a tendency towards longer-term supply contracts with suppliers in exchange for capacity. From an operational perspective, all of our manufacturing facilities continue to operate around the world in accordance with guidance issued by local and national government authorities.
Typically, this includes a programmable processor core, memory, interface circuitry and other components. MCUs provide the digital logic, or intelligence, for electronic applications, controlling electronic equipment or analyzing sensor inputs. We are a trusted, long-term supplier of MCUs to many of our customers, especially in the automotive, smartcards, industrial and consumer markets.
Microcontrollers We have been a provider of MCU solutions for more than 40 years. MCUs integrate all of the major components of a computing system onto a single semiconductor device. Typically, this includes a programmable processor core, memory, interface circuitry and other components. MCUs provide the digital logic, or intelligence, for electronic applications, controlling electronic equipment or analyzing sensor inputs.
Our SSMC wafer fab facility, which produces 8 inch wafers, is jointly owned by TSMC and ourselves. Emerging fabrication technologies employ larger wafer sizes and, accordingly, we expect that our production requirements will in the future shift towards larger substrate wafers.
Emerging fabrication technologies employ larger wafer sizes and, accordingly, we expect that our production requirements will in the future shift towards larger substrate wafers. 9 We typically source our other raw materials in a similar fashion as our wafers, although our portfolio of suppliers is more diverse.
For products targeting established markets, we evaluate our research and development expenditures based on clear business need and risk assessments. For break-through technologies and new market opportunities, we look at the strategic fit and synergies with the rest of our portfolio and the size of the potential addressable market.
We annually perform a fundamental review of our business portfolio and our related new product and technology development opportunities to decide on changes in the allocation of our research and development resources. For products targeting established markets, we evaluate our research and development expenditures based on clear business need and risk assessments.
Using our strong Automotive & Industrial portfolios, we are enhancing our product offerings by providing solutions for the growing ecosystems in & around the vehicle, in smart factories and in homes and buildings. Enabling innovation at our customers as well as reducing complexity, integration efforts and shorten time to market is a key element of our strategy.
Using our strong Automotive & Industrial portfolios, we are enhancing our product offerings by providing system solution platforms including safety case enablement and software defined vehicle (SDV) middleware for the growing ecosystems in & around vehicles, smart factories, robotics, homes and buildings.
From an operational perspective, all of our manufacturing facilities continue to operate around the world in accordance with guidance issued by local and national government authorities. 9 NXP also has equity investments in the following joint venture manufacturing companies: • European Semiconductor Manufacturing Company (ESMC) GmbH will build and operate a new 300mm semiconductor wafer manufacturing facility in Dresden, Germany.
As part of this consolidation, we have made equity investments in the following joint venture manufacturing companies with the aim of facilitating this transition: • European Semiconductor Manufacturing Company (ESMC) GmbH will build and operate a new 300mm semiconductor wafer manufacturing facility in Dresden, Germany. ESMC is 70% owned by TSMC, with 8 Bosch, Infineon, and NXP each owning 10%.
No other distributor accounted for greater than 10% of our revenue. No OEM for which we had direct sales to accounted for more than 10% of our revenue in 2024 or 2023.
No other distributor accounted for greater than 10% of our revenue. No direct customer accounted for more than 10% of our revenue in 2025 or 2024. Research and Development We design purpose-built, rigorously tested technologies that enable devices to sense, think, connect and act intelligently to improve people's daily lives.
We believe we have the broadest Arm processor portfolio in the industry, from microcontrollers to crossover processors and from application processors to communication processors. i. Microcontrollers We have been a provider of MCU solutions for more than 40 years. MCUs integrate all of the major components of a computing system onto a single semiconductor device.
Enabling innovation at our customers as well as reducing complexity, integration efforts and shorten time to market is a key element of our strategy. We believe we have the broadest Arm processor portfolio in the industry, from microcontrollers to crossover processors and from application processors to communication processors. i.
In support of this, we set company-wide aspirational targets intended to optimize our use of resources, minimize waste and continuously improve. See Part I, Item 1A. Risk Factors for a discussion of potential global environmental risks that may adversely affect our business operations, such as climate change or natural disasters.
Climate and Environment We recognize the need to conserve the earth’s natural resources and reduce emissions. In support of this, we intend to be conscious of our use of resources, minimize waste and continuously improve. See Part I, Item 1A.
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Subject to customary closing conditions, including regulatory approvals, the transaction is expected to close in the first half of 2025. On January 7, 2025, NXP entered into a definitive agreement to acquire TTTech Auto for $625 million in cash.
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TTTech Auto is a leader in innovating unique safety-critical systems and middleware for software-defined vehicles (SDVs). The TTTech Auto acquisition complements and expands NXP’s system and software offerings in the Automotive and Industrial & IoT end markets.
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Subject to customary closing conditions, including regulatory approvals, the transaction is expected to close in the second half of 2025 with a possibility for an accelerated closing timeline. On February 10, 2025, NXP entered into a definitive agreement to acquire Kinara, Inc. for $307 million in cash.
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On October 24, 2025, NXP closed the previously announced acquisition of 100% of Aviva Links for $222 million in cash ($202 million net of cash acquired) and $26 million through the settlement of previously held investments in Aviva Links. Aviva Links is a provider of Automotive SerDes Alliance (ASA) compliant in-vehicle connectivity solutions.
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Subject to customary closing conditions, including regulatory approvals, the transaction is expected to close in the first half of 2025.
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The Aviva Links acquisition complements and expands NXP’s automotive networking solutions in the Automotive and Industrial & IoT end markets. On October 27, 2025, NXP closed the previously announced acquisition of 100% of Kinara, Inc. for $284 million in cash ($283 million net of cash acquired).
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The four end markets are Automotive, Industrial & IoT, Mobile, and Communication Infrastructure & Other.
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Kinara is an industry leader in high performance, energy-efficient and programmable discrete neural processing units (NPUs).
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The front-end production cycle requires high levels of precision and involves as many as 300 process steps. Back-end processes involve the assembly, test and packaging of semiconductors in a form suitable for distribution.
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The Kinara acquisition complements and expands NXP’s solutions for AI-powered edge systems in the Industrial & IoT and Automotive end markets. 3 Reporting Segment NXP has one reportable segment representing the entity as a whole, which reflects the way in which our chief operating decision maker, Rafael Sotomayor, executes operating decisions, allocates resources, and manages the growth and profitability of the Company.
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In addition, we increasingly focus our in-house manufacturing on our competitive 8-inch wafer facilities, which predominantly run manufacturing processes in the 140 nanometer, 180 nanometer and 250 nanometer process nodes. This focus increases our return on invested capital and reduces capital expenditures.
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Furthermore, the evolution into new vehicle architectures that allow the implementation of software defined vehicles (SDV) is expected to help contribute to the increase of the semiconductor content per vehicle. We believe three mega-trends will drive the semiconductor content increase in the future: Autonomous driving, electrification and SDVs.
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We use a large number of raw materials in our front- and back-end manufacturing processes, including silicon wafers, chemicals, gases, lead frames, substrates, molding compounds and various types of precious and other metals. Our most important raw materials are the raw, or substrate, silicon wafers we use to make our semiconductors.
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In secure edge identification solutions, NXP has extensive experience providing customers with solutions for applications demanding the highest security and reliability such as ePassports, eID credentials, transportation & payment cards. Included as well in this end market is the growing RFID market that uses wireless technology for identification and tracking of objects.
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VSMC is 60% owned by Vanguard International Semiconductor Corporation and 40% owned by NXP. NXP is entitled to 40% of the fab facility capacity. Initial production at VSMC is currently targeted to begin in 2027. Sales, Marketing and Customers We market our products and solutions worldwide to a variety of OEMs, Electronic Manufacturing Service customers (EMSs) and Distributors.
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Kinara brings high-performance, energy-efficient Discrete Neural Processing Units (NPUs), optimized specifically for generative artificial intelligence (AI) and large language models, to the NXP portfolio. Together with NXP’s existing processors, connectivity, and security solutions, these NPU's help form a scalable platform for AI-powered edge systems.
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Our purpose is to bring together bright minds to create breakthrough technologies that make the connected world better, safer, and more secure. Globally, we implement policies and programs designed to attract, engage and retain top talent.
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We manage our manufacturing assets together through one centralized organization to ensure we realize scale benefits in asset utilization, purchasing volumes and overhead leverage across businesses. The manufacturing of a semiconductor involves several phases of production, which can be broadly divided into “front-end” and “back-end” processes.
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These efforts center around key priorities including team member engagement, thought leadership, inclusion, compensation and benefits, development and growth, future talent, team member retention and community outreach. 12 NXP’s workforce includes direct labor (DL) and indirect labor (IDL).
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As part of executing our hybrid manufacturing model, we have initiated the consolidation of our internal wafer fabs to 300 millimeter factories. We believe this will enable economic and manufacturing efficiencies in the future.
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DL are those team members directly involved in manufacturing our products, while IDL consists of individual contributors, managers and executives in other functions such as research and development (R&D) and selling, general and administrative roles (SG&A). At December 31, 2024, we had approximately 33,100 employees, which includes approximately 1,400 employees in our joint venture.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe have from time to time received, and may in the future receive, communications alleging possible infringement of patents and other intellectual property rights of others. Further, we may become involved in costly litigation brought against us regarding patents, copyrights, trademarks, trade secrets or other intellectual property rights.
Biggest changeWe may become party to intellectual property claims or litigation that could cause us to incur substantial costs, pay substantial damages or prohibit us from selling our products. We have from time to time received, and may in the future receive, communications alleging possible infringement of patents and other intellectual property rights of others.
The semiconductor industry is highly competitive. If we fail to introduce new technologies and products in a timely manner, this could adversely affect our business. The semiconductor industry is highly competitive and characterized by constant and rapid technological change, short product lifecycles, significant price erosion and evolving standards.
If we fail to introduce new technologies and products in a timely manner, this could adversely affect our business. The semiconductor industry is highly competitive and characterized by constant and rapid technological change, short product lifecycles, significant price erosion and evolving standards.
For example, as part of the industry-wide shortage of semiconductors during 2022 we could not obtain sufficient silicon wafers from our foundry partners to meet the demand for our products, causing us to not fully supply the demand for our products, and negatively affecting our results of operations.
For example, as part of the industry-wide shortage of semiconductors during 2022 we could not obtain sufficient silicon wafers from our foundry partners to meet the demand for our products, causing us not to fully supply the demand for our products, and negatively affecting our results of operations.
Sustained geopolitical tensions, such as the current geopolitical tensions involving China and Taiwan, could lead to long-term changes in global trade and technology supply chains and decoupling of global trade networks; 17 • volatility in foreign currency exchange rates, in particular with respect to the U.S. dollar, and transfer restrictions, in particular in mainland China; and • threats that our operations or property could be subject to nationalization and expropriation.
Sustained geopolitical tensions, such as the current geopolitical tensions involving China and Taiwan, could lead to long-term changes in global trade and technology supply chains and decoupling of global trade networks; • volatility in foreign currency exchange rates, in particular with respect to the U.S. dollar, and transfer restrictions, in particular in mainland China; and • threats that our operations or property could be subject to nationalization and expropriation.
If flooding, heavy precipitation, a large earthquake, volcanic eruption or, extreme weather event or other natural disaster were to directly damage, destroy or disrupt our manufacturing facilities, it could disrupt our operations, delay new production and shipments of existing inventory or result in costly repairs, replacements or other costs, all of which would negatively impact our business.
If flooding, heavy precipitation, a large earthquake, volcanic eruption or, extreme weather event or other natural disaster were to 22 directly damage, destroy or disrupt our manufacturing facilities, it could disrupt our operations, delay new production and shipments of existing inventory or result in costly repairs, replacements or other costs, all of which would negatively impact our business.
If any of our strategic partners in alliances we currently engage with or may engage with in the future were to encounter financial difficulties or change their business strategies, they may no longer be able or willing to participate in these groups or alliances, which could have a material adverse effect on our business, financial condition and results of operations.
If any of our strategic partners in alliances we currently engage with or may engage with in the future were to encounter financial 23 difficulties or change their business strategies, they may no longer be able or willing to participate in these groups or alliances, which could have a material adverse effect on our business, financial condition and results of operations.
Any future determination of impairment of goodwill or other identifiable intangible assets could have a material adverse effect on our financial position, results of operations and stockholders’ equity. In difficult market conditions, our high fixed costs combined with low revenue may negatively affect our results of operations.
Any future determination of impairment of goodwill or other identifiable intangible assets could have a material adverse effect on our financial position, results of operations and stockholders’ equity. 19 In difficult market conditions, our high fixed costs combined with low revenue may negatively affect our results of operations.
Our working capital needs are difficult to predict. Our working capital needs are difficult to predict and may fluctuate. The comparatively long period between the time at which we commence development of a product and the time at which it may be delivered to a customer 18 leads to high inventory and work-in-progress levels.
Our working capital needs are difficult to predict. Our working capital needs are difficult to predict and may fluctuate. The comparatively long period between the time at which we commence development of a product and the time at which it may be delivered to a customer leads to high inventory and work-in-progress levels.
As a general matter, semiconductor companies are more likely to add capacity in periods when current or expected future demand is strong and margins are, or are expected to be, high. Investments in new capacity can result in overcapacity, which can lead to a reduction in prices and margins.
As a general matter, semiconductor companies are more likely to add capacity in periods when current or expected future demand is strong and margins are, or are expected to be, high. Investments in new capacity 16 can result in overcapacity, which can lead to a reduction in prices and margins.
The protection offered by intellectual property rights may be inadequate or weakened for reasons or circumstances that are out of our control. Further, our proprietary technology, designs and processes and other intellectual property may be vulnerable to disclosure or misappropriation by employees, contractors and other 24 persons.
The protection offered by intellectual property rights may be inadequate or weakened for reasons or circumstances that are out of our control. Further, our proprietary technology, designs and processes and other intellectual property may be vulnerable to disclosure or misappropriation by employees, contractors and other persons.
For example, the accounting for such plans requires determining discount rates, expected rates of compensation and expected returns on plan assets, and any changes in these variables can have a significant impact on the projected benefit obligations and net periodic pension costs.
For example, the accounting for such plans requires determining discount rates, expected rates of compensation and expected returns on plan assets, and any changes in these variables can have a significant impact 30 on the projected benefit obligations and net periodic pension costs.
Such difficulties may include rationing, or other forced disruption of utility supplies such as electricity, gas 19 or water by governments or regulators which could lead to disruptions of our operation resulting in high costs and global supply chain disruptions.
Such difficulties may include rationing, or other forced disruption of utility supplies such as electricity, gas or water by governments or regulators which could lead to disruptions of our operation resulting in high costs and global supply chain disruptions.
In addition, some of our competitors operate in narrow business areas relative to us, allowing them to concentrate their research and development efforts directly on products and services for those areas, which may give them a competitive advantage.
In addition, some of our competitors operate in narrow business areas relative to us, allowing them to concentrate their research and development efforts directly 17 on products and services for those areas, which may give them a competitive advantage.
There is no assurance that we will be able to protect our intellectual property rights or have adequate legal recourse in the event that we seek legal or judicial enforcement of our intellectual property rights under the laws of such countries.
There is no assurance that we will be able to protect our intellectual property rights or have adequate legal recourse in the event 26 that we seek legal or judicial enforcement of our intellectual property rights under the laws of such countries.
As the availability of government funding is outside our control, we cannot guarantee that 20 we will continue to benefit from government support or that sufficient alternative funding will be available if we lose such support.
As the availability of government funding is outside our control, we cannot guarantee that we will continue to benefit from government support or that sufficient alternative funding will be available if we lose such support.
In addition, AI and machine learning are still in early stages, and the introduction and incorporation of AI technologies may result in unintended consequences or other new or expanded risks and liabilities.
In addition, AI and machine learning are still in relatively early stages, and the introduction and incorporation of AI technologies may result in unintended consequences or other new or expanded risks and liabilities.
Our business, financial condition and results of operations could be harmed if we are unable to obtain adequate supplies of quality equipment or materials in a timely manner or if there are significant increases in the costs of equipment or materials due to current or expected inflation or other reasons and we are not able to increase the price of our products.
Our business, financial condition and results of operations could be harmed if we are unable to obtain adequate supplies of quality equipment or materials in a timely manner or if there are significant increases in the costs of equipment or materials due to current or expected inflation, trade restrictions or other reasons and we are not able to increase the price of our products.
As a result, it may be difficult for investors to effect service of process within the United States upon us or such other 25 persons residing outside the United States, or to enforce outside the United States judgments obtained against such persons in U.S. courts in any action.
As a result, it may be difficult for investors to effect service of process within the United States upon us or such other persons 27 residing outside the United States, or to enforce outside the United States judgments obtained against such persons in U.S. courts in any action.
Our substantial indebtedness could have a material adverse effect on our business by: • increasing our vulnerability to adverse economic, industry or competitive developments; • requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities; • exposing us to the risk of increased interest rates in the event we have borrowings under our $2,500 million revolving credit facility agreement (the “RCF Agreement”) because loans under the RCF Agreement may bear interest at a variable rate; 26 • making it more difficult for us to satisfy our obligations with respect to our indebtedness and any failure to comply with the obligations of any our debt instruments, including restrictive covenants and borrowing conditions, could result in an event default under the indentures governing our notes and agreements governing other indebtedness; • restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; • limiting our ability to obtain additional financial for working capital, capital expenditures, restructurings, product development, research and development, debt service requirements, investments, acquisitions and general corporate or other purposes; and • limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged and who therefore, may be able to take advantage of opportunities that our leverage prevents us from exploiting.
Our substantial indebtedness could have a material adverse effect on our business by: • increasing our vulnerability to adverse economic, industry or competitive developments; • requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities; • exposing us to the risk of increased interest rates in the event we have borrowings under our $2,500 million revolving credit facility agreement (the “RCF Agreement”), which was restated to $3,000 million as per February 6, 2026, because loans under the RCF Agreement may bear interest at a variable rate; 28 • making it more difficult for us to satisfy our obligations with respect to our indebtedness and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event default under the indentures governing our notes and agreements governing other indebtedness; • restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; • limiting our ability to obtain additional financial for working capital, capital expenditures, restructurings, product development, research and development, debt service requirements, investments, acquisitions and general corporate or other purposes; and • limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged and who, therefore, may be able to take advantage of opportunities that our leverage prevents us from exploiting.
For example, we are involved in legal proceedings claiming personal injuries to the children of former employees as a result of employees’ alleged exposure to chemicals used in semiconductor manufacturing clean room environments operated by us or our former parent companies, Philips and Motorola.
For example, in the past we have been involved in legal proceedings claiming personal injuries to the children of former employees as a result of employees’ alleged exposure to chemicals used in semiconductor manufacturing clean room environments operated by us or our former parent companies, Philips and Motorola.
If any of the following international business risks were to materialize or become worse, they could have a material adverse effect on our business, financial condition and results of operations: • negative economic developments in economies around the world and the instability of governments and international trade arrangements, such as the increase of barriers to international trade including the imposition of new or increased tariffs on imports by the United States and China, enhanced export controls on certain products and sanctions on certain industry sectors and parties; • social and political instability in a number of countries around the world, including continued hostilities in the Middle East and the armed conflict in Ukraine.
Our global business operations expose us to international business risks that could adversely affect our business. 18 If any of the following international business risks were to materialize or become worse, they could have a material adverse effect on our business, financial condition and results of operations: • negative economic developments in economies around the world and the instability of governments and international trade arrangements, such as the increase of barriers to international trade including the imposition of new or increased tariffs on imports by the United States and China and other countries, enhanced export controls on certain products and sanctions on certain industry sectors and parties; • social and political instability in a number of countries around the world, including continued hostilities in the Middle East and the armed conflict in Ukraine.
As of December 31, 2024, we had recognized a net accrued benefit liability of $360 million, representing the unfunded benefit obligations of our defined pension plans. The funding status and the liabilities and costs of maintaining these defined benefit pension plans may be impacted by financial market developments.
As of December 31, 2025, we had recognized a net accrued benefit liability of $342 million, representing the unfunded benefit obligations of our defined pension plans. The funding status and the liabilities and costs of maintaining these defined benefit pension plans may be impacted by financial market developments.
Due to the uncertainty inherent in litigation, it is difficult to predict the final outcome. An adverse outcome might affect our results of operations. We and certain of our businesses are involved as plaintiffs or defendants in legal proceedings in various matters.
Legal proceedings covering a range of matters are pending in various jurisdictions. Due to the uncertainty inherent in litigation, it is difficult to predict the final outcome. An adverse outcome might affect our results of operations. We and certain of our businesses are involved as plaintiffs or defendants in legal proceedings in various matters.
If we do not achieve the anticipated benefits of these joint ventures, or if newly established joint ventures are not able to begin production in the expected timing or achieve expected efficiency and quality, our business and results of operations may be adversely affected.
If we do not achieve the anticipated benefits of these joint ventures, or if newly established joint ventures are not able to begin production in the expected timing or achieve expected efficiency and quality, our business and results of operations may be adversely affected. Risks related to regulatory or legal challenges.
We are subject to many environmental, health and safety laws and regulations in each jurisdiction in which we operate, which govern, among other things, emissions of pollutants into the air, wastewater discharges, the use and handling of hazardous substances, waste disposal, the investigation and remediation of soil and ground water contamination and the health and safety of our employees.
Our manufacturing operations are subject to environmental laws and regulations and initiatives to address climate change. 24 We are subject to many environmental, health and safety laws and regulations in each jurisdiction in which we operate, which govern, among other things, emissions of pollutants into the air, wastewater discharges, the use and handling of hazardous substances, waste disposal, the investigation and remediation of soil and ground water contamination and the health and safety of our employees.
Risks related to our indebtedness Our debt obligations expose us to risks that could adversely affect our financial condition, which could adversely affect our results of operations. As of December 31, 2024, we had outstanding indebtedness with an aggregate principal amount of $10,920 million.
Risks related to our indebtedness Our debt obligations expose us to risks that could adversely affect our financial condition, which could adversely affect our results of operations. As of December 31, 2025, we had outstanding indebtedness with an aggregate principal amount of $12,290 million.
An explanation of the significance of such rating may be obtained from such rating agency. There can be no assurance that such credit ratings will remain in effect for any given period of time or that such ratings will not be lowered, suspended or withdrawn entirely by the rating agencies, if, in each rating agency’s judgment, circumstances so warrant.
There can be no assurance that such credit ratings will remain in effect for any given period of time or that such ratings will not be lowered, suspended or withdrawn entirely by the rating agencies, if, in each rating agency’s judgment, circumstances so warrant.
The instability and any resulting sanctions, export controls or other penalties, may have a negative effect on our business, financial condition and operations via our customers and global supply chain and volatility in energy prices and the financial markets or negatively impact demand for our products; • potential terrorist attacks; • epidemics and pandemics, such as the coronavirus outbreak, which may adversely affect our workforce, as well as our suppliers and customers; • geopolitical tension and disputes, as well as, resulting adverse changes in government policies, especially those affecting global trade and investment, including the imposition of new or increased tariffs.
The instability and any resulting sanctions, export controls or other penalties, may have a negative effect on our business, financial condition and operations via our customers and global supply chain and volatility in energy prices and the financial markets or negatively impact demand for our products; • potential terrorist attacks; • epidemics and pandemics, such as the coronavirus outbreak, which may adversely affect our workforce, as well as our suppliers and customers; • geopolitical tension and disputes, as well as resulting adverse changes in government policies, especially those affecting global trade and investment, including trade protection and national security policies or placing companies on restricted entity lists.
As part of the OECD framework to implement a minimum tax rate, the EU has adopted a directive on ensuring a global minimum level of taxation for multinational companies, also known as Pillar 2, to become effective in 2024. 28 The Dutch government has enacted new legislation in response to and based on such EU directive.
As part of the OECD framework to implement a minimum tax rate, the EU has adopted a directive on ensuring a global minimum level of taxation for multinational companies, also known as Pillar 2, which became effective in 2024. As from that year the Dutch government enacted legislation in response to and based on such EU directive.
Risks related to regulatory or legal challenges As our business is global, we need to comply with laws and regulations in countries across the world. We operate globally, with manufacturing, assembly and testing facilities in several continents, and we market our products globally.
As our business is global, we need to comply with laws and regulations in countries across the world. We operate globally, with manufacturing, assembly and testing facilities in several continents, and we market our products globally.
As a result of this cyclicality, the semiconductor industry has in the past experienced significant downturns, such as in 1997/1998, 2001/2002 and in 2008/2009, often in connection with, or in anticipation of, maturing life cycles of semiconductor companies’ products and declines in general economic conditions.
As a result of this cyclicality, the semiconductor industry has in the past experienced significant downturns, often in connection with, or in anticipation of, maturing life cycles of semiconductor companies’ products and declines in general economic conditions.
The RCF Agreement and the indentures governing our unsecured notes or any other debt arrangements that we may have require us to comply with various covenants.
The RCF Agreement, European Investment Bank (EIB) loan facilities and the indentures governing our unsecured notes or any other debt arrangements that we may have require us to comply with various covenants.
We make highly complex electronic components and, accordingly, there is a risk that defects may occur in any of our products. Such defects can give rise to significant costs, including expenses relating to recalling products, replacing defective items, writing down defective inventory and loss of potential sales.
We make highly complex electronic components which in many cases are enabled by software and, accordingly, there is a risk that defects may occur in any of our products. Such defects can give rise to significant costs, including expenses relating to recalling products, releasing new software versions, replacing defective items, writing down defective inventory and loss of potential sales.
Compliance with, or changes in the interpretation of, existing regulations, the adoption of new regulations, changes in the oversight of our activities by governments or standard bodies or rulings in court, regulatory, administrative or other proceedings relating to such regulations, among others, could have an adverse effect on our business and results of operations. 22 Legal proceedings covering a range of matters are pending in various jurisdictions.
Compliance with, or changes in the interpretation of, existing regulations, the adoption of new regulations, changes in the oversight of our activities by governments or standard bodies or rulings in court, regulatory, administrative or other proceedings relating to such regulations, among others, could have an adverse effect on our business and results of operations.
If we do not achieve the anticipated benefits of business acquisitions or other strategic activities, or if we are unable to consummate acquisitions or strategic investments that we consider important to the future of our business, our business and results of operations may be adversely affected and our growth strategy may not be successful. 21 We rely on joint ventures to meet our current and future manufacturing requirements.
If we do not achieve the anticipated benefits of business acquisitions or other strategic activities, or if we are unable to consummate acquisitions or strategic investments that we consider important to the future of our business, our business and results of operations may be adversely affected and our growth strategy may not be successful.
Any significant interruption in our business applications, systems or networks, including but not limited to new system implementations, computer viruses, cyberattacks, security breaches, facility issues or energy blackouts could have a material adverse impact on our business, financial condition and results of operations. 23 Our computer systems and networks are subject to attempted security breaches and other cybersecurity incidents, which, if successful, could adversely impact our business.
Any significant interruption in our business applications, systems or networks, including but not limited to new system implementations, computer viruses, cyberattacks, security breaches, facility issues or energy blackouts could have a material adverse impact on our business, financial condition and results of operations.
However, we often do not control these partnerships and joint ventures, and actions taken by any of our partners or the termination of these joint ventures could adversely affect our business.
We rely on joint ventures to meet our current and future manufacturing requirements. However, we often do not control these partnerships and joint ventures, and actions taken by any of our partners or the termination of these joint ventures could adversely affect our business.
Furthermore, because we continue to utilize these clean rooms, we may become subject to future claims alleging personal injury that may lead to additional liability. A judgment against us or material defense cost could harm our business, financial condition and results of operations. Our manufacturing operations are subject to environmental laws and regulations and initiatives to address climate change.
Furthermore, because we continue to utilize these clean rooms, we may become subject to future claims alleging personal injury that may lead to additional liability. A judgment against us in these or other legal proceedings or material defense cost could harm our business, financial condition and results of operations.
Such risks may include (i) adverse impacts from deficient, inaccurate, or biased AI recommendations, (ii) AI technologies the company develops and adopts may not meet market requirements or become obsolete earlier than planned, and there can be no assurance that the company will realize the desired or anticipated benefits, (iii) use of AI applications could increase the risk of cybersecurity incidents, such as through unintended or inadvertent transmission of proprietary or sensitive information, or (iv) any laws, regulations or industry standards adopted in response to the emergence of AI may be burdensome.
Such risks may include (i) adverse impacts from deficient, inaccurate, or biased AI recommendations, (ii) AI technologies the company develops and adopts may not meet market requirements or become obsolete earlier than planned, and there can be no assurance that the company will realize the desired or anticipated benefits, (iii) use of AI applications could increase the risk of cybersecurity incidents, such as security vulnerabilities, including unintended or inadvertent transmission of proprietary or sensitive information and unauthorized access, or (iv) there is uncertainty in the legal and regulatory landscape for AI, which is not fully developed, and any laws, regulations or industry standards adopted in response to the emergence of AI may be burdensome, could entail significant costs, and may restrict or impede our ability to successfully use AI technologies efficiently and effectively.
We review our goodwill and other intangible assets balance for impairment upon any indication of a potential impairment, and in the case of goodwill, at a minimum of once a year.
Goodwill and other identifiable intangible assets are recorded at fair value on the date of an acquisition. We review our goodwill and other intangible assets balance for impairment upon any indication of a potential impairment, and in the case of goodwill, at a minimum of once a year.
Components and Intellectual Property (IP) we purchase or license from third parties for use in our products, as well as industry-standard specifications we implement in our products, are also regularly subject to security vulnerabilities.
The same holds for the operating systems and workloads that run on them and the components that interact with them. Components and Intellectual Property (IP) we purchase or license from third parties for use in our products, as well as industry-standard specifications we implement in our products, are also regularly subject to security vulnerabilities.
In addition, any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations.
In addition, any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness.
As a result, we are subject to environmental, data privacy, export and sanctions, AI technologies, cybersecurity, disclosure and reporting (including reporting of ESG-related data), labor and health and safety laws and regulations in each jurisdiction in which we operate. We are also required to obtain environmental permits and other authorizations or licenses from governmental authorities for certain of our operations.
As a result, we are subject to environmental, data privacy, export controls and sanctions, AI technologies, cybersecurity, disclosure and reporting (including reporting of ESG-related data), labor and health and safety laws and regulations in each jurisdiction in which we operate.
Should reductions in our manufacturing costs fail to keep pace with reductions in market prices for the products we sell, this could have a material adverse effect on our business, financial condition and results of operations.
We cannot guarantee that competition in our core product markets will not lead to price erosion, lower revenue or lower margins in the future. Should reductions in our manufacturing costs fail to keep pace with reductions in market prices for the products we sell, this could have a material adverse effect on our business, financial condition and results of operations.
If customers do not purchase products made specifically for them, we may not be able to resell such products to other customers or may not be able to require the customers who have ordered these products to pay a cancellation fee.
If customers do not purchase products made specifically for them, we may not be able to resell such products to other customers or may not be able to require the customers who have ordered these products to pay a cancellation fee. The foregoing risks could have a material adverse effect on our business, financial condition and results of operations.
The foregoing risks could have a material adverse effect on our business. Risks related to our corporate structure United States civil liabilities may not be enforceable against us. We are incorporated under the laws of the Netherlands and substantial portions of our assets are located outside of the United States.
Risks related to our corporate structure United States civil liabilities may not be enforceable against us. We are incorporated under the laws of the Netherlands and substantial portions of our assets are located outside of the United States. In addition, certain members of our board and officers reside outside the United States.
As transfer pricing has a cross border effect, the focus of local tax authorities on implemented transfer pricing procedures in a country may have an impact on results in another country.
We have issued transfer-pricing directives in the areas of goods, services and financing, which are in accordance with OECD guidelines. As transfer pricing has a cross-border effect, the focus of local tax authorities on implemented transfer pricing procedures in a country may have an impact on results in another country.
We rely on the timely supply of equipment and materials and could suffer if suppliers fail to meet their delivery obligations or raise prices. Certain equipment and materials needed in our manufacturing operations are only available from a limited number of suppliers.
We rely on the timely supply of equipment and materials and could suffer if suppliers fail to meet their delivery obligations or raise prices.
We also face exposure to potential liability resulting from the fact that our customers typically integrate the semiconductors we sell into numerous consumer products, which are then sold into the marketplace. We are exposed to product liability claims if our semiconductors or the consumer products based on them malfunction and result in personal injury or death.
We also face exposure to potential liability resulting from the fact that our customers typically integrate the semiconductors and the corresponding software we sell into numerous consumer products, which are then sold into the marketplace.
However, we cannot always anticipate, detect, repel or implement fully effective preventative measures against all cybersecurity threats, particularly because the techniques used are increasingly sophisticated and constantly evolving. For example, as AI continues to evolve, cyber attackers could also use AI to develop malicious code and increasingly sophisticated phishing attempts.
However, we cannot always anticipate, detect, repel or implement fully effective preventative measures against all cybersecurity threats, particularly because the techniques used are increasingly sophisticated and constantly evolving.
In the first half of 2020, demand in the automotive market steeply declined as a result of manufacturing shutdowns by automotive OEMs due to the coronavirus pandemic, resulting in an unforeseen negative impact to our results of operations.
In 2008 and 2009, Europe, the United States and international markets experienced increased volatility and instability related to the global financial crisis. In the first half of 2020, demand in the automotive market steeply declined as a result of manufacturing shutdowns by automotive customers due to the coronavirus pandemic, resulting in an unforeseen negative impact to our results of operations.
Usually, this must be accomplished through improvements in process technology, production efficiencies and efficient procurement pricing. If we cannot advance our process technologies or improve our efficiencies to a degree sufficient to maintain required margins, we will no longer be able to make a profit from the sale of these products.
If we cannot advance our process technologies or improve our efficiencies to a degree sufficient to maintain required margins, the profit we make from the sale of these products will decline.
We are required to pay taxes in multiple jurisdictions. We determine the taxes we are required to pay based on our interpretation of the applicable tax laws and regulations in the jurisdictions in which we operate. We may be subject to unfavorable changes in the respective tax laws and regulations to which we are subject.
We are exposed to a number of different tax uncertainties, which could have an impact on our results. We are required to pay taxes in multiple jurisdictions. We determine the taxes we are required to pay based on our interpretation of the applicable tax laws and regulations in the jurisdictions in which we operate.
There can be no assurance that a breach or incident will not have a material impact on our operations and financial results in the future. We believe that we have a robust cybersecurity program that is aligned to international cybersecurity frameworks, and that we leverage industry best practices across people, processes and technologies in an attempt to mitigate cybersecurity threats.
We believe that we have a robust cybersecurity program that is aligned to international cybersecurity frameworks, and that we leverage industry best practices across people, processes and technologies in an attempt to mitigate cybersecurity threats.
Tax controls, audits, change in controls and changes in tax laws or regulations or the interpretation given to them may expose us to negative tax consequences, including interest payments and potentially penalties. We have issued transfer-pricing directives in the areas of goods, services and financing, which are in accordance with OECD guidelines.
We may be subject to unfavorable changes in the respective tax laws and regulations to which we are subject. Tax controls, audits, changes in controls and changes in tax laws or regulations or the interpretation given to them may expose us to negative tax consequences, including interest payments and potentially penalties.
Moreover, we may not be able to cease production of such products, either due to contractual obligations or for customer relationship reasons, and as a result may be required to bear a loss on such products. We cannot guarantee that competition in our core product markets will not lead to price erosion, lower revenue or lower margins in the future.
Moreover, we may not be able to cease production of such products, either due to contractual obligations or for customer relationship reasons, and as a result may be required to bear reduced profitability, or even a loss on such products.
If any such claims are asserted against us, we may seek to obtain a license under the third party’s intellectual property rights. We cannot assure you that we will be able to obtain any or all of the necessary licenses on satisfactory terms, if at all.
We cannot assure you that we will be able to obtain any or all of the necessary licenses on satisfactory terms, if at all.
In turn, historically demand for older technology falls, causing the price at which such products can be sold to drop, in some cases precipitously. If this trend continues, in order to continue profitably supplying these products, we must reduce our production and procurement costs in line with the lower revenue we can expect to generate per unit.
If this trend continues, in order to continue profitably supplying these products, we must reduce our production and procurement costs in line with the lower revenue we can expect to generate per unit. Usually, this must be accomplished through improvements in process technology, production efficiencies and efficient procurement pricing.
Beginning in the third quarter of 2020, demand rebounded across all end markets more quickly than anticipated and accelerated through the third quarter of 2022, resulting in our inability to fully satisfy customer demand. In 2008 and 2009, Europe, the United States and international markets experienced increased volatility and instability related to the global financial crisis.
Beginning in the third quarter of 2020, demand rebounded across all end markets more quickly than anticipated and accelerated through the third quarter of 2022, resulting in our inability to fully satisfy customer demand. In the course of 2023, 2024 and 2025, our end markets experienced softening demand and uncertainty due to macroeconomic factors and geopolitical uncertainty.
The rating of our debt by major rating agencies may further improve or deteriorate, which could affect our additional borrowing capacity and financing costs. The major debt rating agencies routinely evaluate our debt. These ratings are based on current information furnished to the ratings agencies by us and information obtained by the ratings agencies from other sources.
These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. 29 The rating of our debt by major rating agencies may further improve or deteriorate, which could affect our additional borrowing capacity and financing costs. The major debt rating agencies routinely evaluate our debt.
Any inability on our part to adequately protect our intellectual property may have a material adverse effect on our business, financial condition and results of operations. We may become party to intellectual property claims or litigation that could cause us to incur substantial costs, pay substantial damages or prohibit us from selling our products.
Any inability on our part to adequately protect our intellectual property may have a material adverse effect on our business, financial condition and results of operations.
In the jurisdictions where we operate, we need to comply with differing standards and varying practices of regulatory, tax, judicial and administrative bodies.
We are also required to obtain environmental permits and other authorizations or licenses from governmental authorities for certain of our operations. In the jurisdictions where we operate, we need to comply with differing standards and varying practices of regulatory, tax, customs, judicial and administrative bodies.
If such a recall or payment is caused by a defect in one of our products, our customers may seek to recover all or a portion of their losses from us. If any of these risks materialize, our reputation would be harmed and there could be a material adverse effect on our business, financial condition and results of operations.
If such a recall or payment is caused by a defect in one of our products, semiconductor parts or software, our customers may seek to recover all or a portion of their losses from us.
Supply disruptions may also occur due to shortages in critical materials, such as silicon wafers or specialized chemicals. Because the equipment that we purchase is complex, it is frequently difficult or impossible for us to substitute one piece of equipment for another or replace one type of material with another.
Because the equipment that we purchase is complex, it is frequently difficult or impossible for us to substitute one piece of equipment for another or replace one type of material with another. A failure by our suppliers to deliver our requirements could result in disruptions to our manufacturing operations.
In the event of a future decline in global 1 The contents of our website, our Corporate Sustainability Report, and our Sustainability Policy are referenced for general information only and are not incorporated by reference into, and do not form a part of, this Form 10-K. 15 economic conditions, our business, financial condition and results of operations could be materially adversely affected, and the resulting economic decline might disproportionately affect the markets in which we participate, further exacerbating a decline in our results of operations.
In the event of a future decline in global economic conditions, our business, financial condition and results of operations could be materially adversely affected, and the resulting economic decline might disproportionately affect the markets in which we participate, further exacerbating a decline in our results of operations. The semiconductor industry is highly competitive.
In the current environment, there are numerous and evolving risks to cybersecurity and privacy, including criminal hackers, state-sponsored intrusions, industrial espionage, employee malfeasance, and human or technological error. Computer hackers and others routinely attempt to breach the security of technology products, services, and systems, and those of customers, suppliers, and some of those attempts may be successful.
Computer hackers and others routinely attempt to breach the security of technology products, services, and systems, and those of customers, suppliers, and some of those attempts may be successful.
One of the results of the rapid innovation in the semiconductor industry is that pricing pressure, especially on products containing older technology, can be intense. Product life cycles are relatively short, and as a result, products tend to be replaced by more technologically advanced substitutes on a regular basis.
The semiconductor industry is historically characterized by continued price erosion, especially after a product has been on the market. One of the results of the rapid innovation in the semiconductor industry is that pricing pressure, especially on products containing older technology, can be intense.
The stock market in recent years has experienced significant price and volume fluctuations that have often been unrelated to the operating performance of companies.
The stock market in recent years has experienced significant price and volume fluctuations that have often been unrelated to the operating performance of companies. The market closing price for our common stock varied between a high of $245.86 on February 20, 2025, and a low of $153.50 on April 8, 2025, in the twelve-month period ending on December 31, 2025.
Goodwill and other identifiable intangible assets represent a significant portion of our total assets, and we may never realize the full value of our intangible assets. Goodwill and other identifiable intangible assets are recorded at fair value on the date of an acquisition.
Any of these impacts or changes could materially and adversely affect our business, financial condition and results of operations. Goodwill and other identifiable intangible assets represent a significant portion of our total assets, and we may never realize the full value of our intangible assets.
Our manufacturing operations depend on deliveries of equipment and materials in a timely manner and, in some cases, on a just-in-time basis. From time to time, suppliers may extend lead times, limit the amounts supplied to us or increase prices due to capacity constraints or other factors.
From time to time, suppliers may extend lead times, limit the amounts supplied to us or increase prices due to capacity constraints or other factors. Supply disruptions may also occur due to shortages in critical materials, such as silicon wafers or specialized chemicals.
We have, from time to time, experienced cyber-attacks attempting to obtain access to and misuse our computer systems and networks. Such incidents could result in the misappropriation of our proprietary information and technology, the compromise of personal and confidential information of our employees, customers or suppliers or interrupt our business.
Such incidents could result in the misappropriation of our proprietary information and technology, the compromise of personal and confidential information of our employees, customers or suppliers or interrupt our business. There can be no assurance that a breach or incident will not have a material impact on our operations and financial results in the future.
We face risks related to security vulnerabilities in our products. We and third parties regularly identify security vulnerabilities with respect to our products and services. The same holds for the operating systems and workloads that run on them and the components that interact with them.
If any of these risks materialize, our reputation would be harmed and there could be a material adverse effect on our business, financial condition and results of operations. We face risks related to security vulnerabilities in our products. We and third parties regularly identify security vulnerabilities with respect to our products and services.
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The foregoing risks could have a material adverse effect on our business, financial condition and results of operations. 16 The semiconductor industry is historically characterized by continued price erosion, especially after a product has been on the market.
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Recently announced and future tariffs and other trade restrictions could materially and adversely affect our business, financial condition and results of operations. In 2025, the U.S. government announced a series of tariffs, including tariffs targeting a broad range of imports and targeted tariffs on goods from specific countries and industries.
Removed
Our global business operations expose us to international business risks that could adversely affect our business.
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In response, many countries imposed reciprocal tariffs and other trade restrictions on the United States.
Removed
A failure by our suppliers to deliver our requirements could result in disruptions to our manufacturing operations.
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Although many of these tariffs, countermeasures and other trade restrictions have since been eased or paused, their initial announcements triggered considerable volatility in global markets and heightened economic uncertainty, and the global trade situation, particularly between the United States and China, continues to be highly dynamic.
Removed
In addition, certain members of our board and officers reside outside the United States.
Added
Further, throughout 2025 the U.S. government has initiated numerous investigations into products and industries under Section 232 of the Trade Expansion Act of 1962. For example, in April 2025, the Department of Commerce launched an investigation into the national security impacts of imported semiconductors and semiconductor manufacturing equipment.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

11 edited+2 added−1 removed5 unchanged
Biggest changeIn addition to SOC, the NXP IT Service Desk and NXP employees are trained to identify Cyber Security issues and to escalate them to correct owners. Furthermore, NXP has an Identify and Access Management System integrated with HR systems which helps manage employee life cycle processes, including both onboarding and offboarding NXP workers.
Biggest changeFurthermore, NXP has an Identify and Access Management System integrated with HR systems which helps manage employee life cycle processes, including both onboarding and offboarding NXP workers. These systems are audited by internal and external audit teams. On a strategic level, NXP’s information technology risk management program is a component of the ERM process described below.
Additionally, NXP has a supplier security framework that helps with monitoring and accessing the security of suppliers and third-party service providers. As part of the framework, we conduct due diligence which covers topics such as data protection, confidentiality, security, business continuity and incident management.
Additionally, NXP has a supplier security framework that helps with monitoring and accessing the security of suppliers and third-party service providers. As part of the framework, 31 we conduct due diligence which covers topics such as data protection, confidentiality, security, business continuity and incident management.
Item 1C. Cybersecurity Risk Management and Strategy NXP, similar to other semiconductor companies, operates in a complex and rapidly changing environment that involves many risks, including information and cybersecurity risks. As a leading technology company, we are committed to helping strengthen internet security and to implementing measures designed to protect our company against illicit activities, including cyberattacks and malware.
Item 1C. Cybersecurity Risk Management and Strategy NXP, similar to other semiconductor companies, operates in a complex and rapidly changing environment that involves many risks, including information and cybersecurity risks. As a leading technology company, we are committed to help strengthen internet security and to implementing measures designed to protect our company against illicit activities, including cyberattacks and malware.
The Audit Committee has oversight responsibility for reviewing the effectiveness of NXP’s governance and management of IT risks, including those relating to business continuity, cybersecurity, malware, regulatory compliance and data management. NXP senior leadership regularly briefs the Audit Committee on cybersecurity matters and briefs the full Board on these issues at least annually or as needed.
The Audit Committee has oversight responsibility for reviewing the effectiveness of NXP’s governance and management of IT risks, including those relating to business continuity, cybersecurity, malware, regulatory compliance and data management. Management regularly briefs the Audit Committee on cybersecurity matters and briefs the full Board on these issues at least annually or as needed.
While our Board generally has ultimate oversight responsibility of the Company’s risk management processes, it has delegated to its committees the responsibility to oversee risk management processes associated with their respective areas of responsibility and expertise.
The Board and, as appropriate, the relevant Board committees assess the material risks facing the Company and evaluate management’s plans for managing material risk exposures. 32 While our Board generally has ultimate oversight responsibility of the Company’s risk management processes, it has delegated to its committees the responsibility to oversee risk management processes associated with their respective areas of responsibility and expertise.
The Company conducts a formal annual risk assessment to identify, analyze and report on enterprise risks. The results of this risk assessment are reported to and discussed with the Board. Our Board performs this oversight function through periodic reports from management and Board committees.
Additionally, the Company conducts a formal annual risk assessment to identify, analyze and report on enterprise risks, the results of which are reported to and discussed with the Board.
Where appropriate, we use external service providers to assess, evaluate, test or otherwise assist with aspects of our security controls and processes. NXP’s program for Information Technology (IT) Risk Management is a component of NXP’s overall process for ERM.
We deliver a Cyber Security orientation to new employees and maintain a library of cyber security learning sessions available to our employees. Where appropriate, we use external service providers to assess, evaluate, test or otherwise assist with aspects of our security controls and processes.
The SOC reports to the Chief Information Security Officer (CISO), who can in case of an incident establish a Computer Security Incident Response Team (CSIRT). When needed, a task force containing Security, IT, Communications, Legal and Business representatives is established. This task force leads mitigation activities where the potential threat or risk is elevated.
When needed, a task force containing Security, IT, Communications, Legal and Business representatives is established. This task force leads mitigation activities where the potential threat or risk is elevated. In addition to SOC, the NXP IT Service Desk and NXP employees are trained to identify Cyber Security issues and to escalate them to correct owners.
These activities are covered by our process for cybersecurity risk management under our Enterprise Risk Management (“ERM”). NXP uses a multi-layer approach to identify and mitigate information security risks. On a tactical level, NXP maintains a 24x7 Security Operating Center (SOC) that actively monitors for and identifies cyber security threats and initiates appropriate mitigation processes.
From time to time, the company engages external cybersecurity assessor and advisors to support risk evaluation, control testing and program maturity benchmarking. These activities are covered by our process for cybersecurity risk management under our Enterprise Risk Management (“ERM”). NXP uses a multi-layer approach to identify and mitigate information security risks.
These systems are audited by internal and external audit teams. On a strategic level, NXP’s information technology risk management program is a component of the ERM process described below. NXP is certified and externally audited to ISO 27001 with certain additional certifications such as Common Criteria 6+, PCI DSS and GSMA Security for focused functions.
NXP is certified and externally audited to ISO 27001 with certain additional certifications such as Common Criteria 6+, PCI DSS and GSMA Security for focused functions. We have multiple cybersecurity training initiatives as part of our information security training and compliance program. We regularly deploy simulated attacks and related trainings.
“Risk Factors.” Governance Our management is directly responsible for executing the Company’s risk management processes. Our Board is responsible for overseeing these risk management processes. In exercising its oversight, the Board and, as appropriate, the relevant Board committees, assesses the material risks facing the Company and evaluate management’s plans for managing material risk exposures.
“Risk Factors.” Governance Our management is directly responsible for executing the Company’s risk management processes. Our Board, and appropriate Board committees, perform this oversight function through reports from management, which are delivered periodically or as needed.
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We have multiple cybersecurity training initiatives as part of our information security training and compliance program. We regularly deploy simulated attacks and 29 related trainings. We deliver a Cyber Security orientation to new employees and maintain a library of cyber security learning sessions available to our employees.
Added
On a tactical level, NXP maintains a 24x7 Security Operating Center (SOC) that actively monitors for and identifies cyber security threats and initiates appropriate mitigation processes. The SOC reports to the Chief Information Security Officer (CISO), who can in case of an incident establish a Computer Security Incident Response Team (CSIRT).
Added
NXP’s program for Information Technology (IT) Risk Management is a component of NXP’s overall process for ERM.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties The Company's headquarters are located in Eindhoven, the Netherlands. As of February 20, 2025, the Company operates owned manufacturing facilities primarily in the United States, Netherlands, Malaysia, China, Thailand and Taiwan, as well as in Singapore (SSMC) together with our joint venture partner TSMC.
Biggest changeItem 2. Properties The Company's headquarters are located in Eindhoven, the Netherlands. As of February 19, 2026, the Company operates owned manufacturing facilities primarily in the United States, Netherlands, Malaysia, China, Thailand and Taiwan, as well as in Singapore (SSMC) together with our joint venture partner TSMC.
Through investments in VSMC and ESMC, the Company holds capacity rights in external manufacturing facilities, presently under construction. The Company also owns or leases other properties in multiple countries for use as administrative, 30 sales or research and development facilities.
Through investments in VSMC and ESMC, the Company holds capacity rights in external manufacturing facilities, presently under construction. The Company also owns or leases other properties in multiple countries for use as administrative, sales or research and development facilities.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+0 added−0 removed0 unchanged
Biggest changeItem 3. Legal Proceedings The information set forth under the “Legal Proceedings” and “Environmental Remediation” captions of Note 15 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report is incorporated herein by reference. For additional discussion of certain risks associated with legal proceedings, see Part I, Item 1A. Risk Factors . Item 4.
Biggest changeItem 3. Legal Proceedings The information set forth under the “Legal Proceedings” and “Environmental Remediation” captions of Note 16 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report is incorporated herein by reference. For additional discussion of certain risks associated with legal proceedings, see Part I, Item 1A. Risk Factors . Item 4.
Mine Safety Disclosures Not applicable. 31 Part II
Mine Safety Disclosures Not applicable. 33 Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−1 removed1 unchanged
Biggest changeThe following table provides a summary of share repurchase activity during the three months ended December 31, 2024: Period Total Number of Shares Purchased Average Price Paid per Share Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares That May Yet Be Purchased Under the Plans or Program (1) Number of Shares Purchased as Trade for Tax (2) September 30, 2024 – November 3, 2024 874,964 $236.87 494,314 10,557,891 380,650 November 4, 2024 – December 1, 2024 675,877 $228.50 395,752 10,592,322 280,125 December 2, 2024 – December 31, 2024 425,589 $218.84 425,697 11,240,803 (108) Total 1,976,430 1,315,763 660,667 (1) Represents the number of shares that may be purchased under the remaining dollar repurchase authorizations noted above, calculated based on the share closing price at the end of the respective monthly period.
Biggest changeThe following table provides a summary of share repurchase activity during the three months ended December 31, 2025: Period Total Number of Shares Purchased Average Price Paid per Share Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares That May Yet Be Purchased Under the Plans or Program 1 Number of Shares Purchased as Trade for Tax September 29, 2025 – November 2, 2025 466,725 $220.95 466,177 8,055,445 548 November 3, 2025 – November 30, 2025 956,704 $204.05 287,670 8,349,052 669,034 December 1, 2025 – December 31, 2025 178,295 $224.34 178,267 7,300,155 28 Total 1,601,724 932,114 669,610 1 Represents the number of shares that may be purchased under the remaining dollar repurchase authorizations noted above, calculated based on the share closing price at the end of the respective monthly period. 2 Reflects shares surrendered by participants to satisfy tax withholding obligations in connection with the Company's equity programs. 34 Company Performance The following graph shows a comparison, from December 31, 2020, of cumulative total return for NXP, the Standard & Poor's 500 Index, and the Philadelphia Stock Exchange Semiconductor Index.
Dividends Per Common Share The following table presents the quarterly dividends on our common stock for the periods indicated: 2024 2023 First Quarter 1.014 1.014 Second Quarter 1.014 1.014 Third Quarter 1.014 1.014 Fourth Quarter 1.014 1.014 We currently expect to continue to pay dividends in the future.
Dividends Per Common Share The following table presents the quarterly dividends on our common stock for the periods indicated: 2025 2024 First Quarter 1.014 1.014 Second Quarter 1.014 1.014 Third Quarter 1.014 1.014 Fourth Quarter 1.014 1.014 We currently expect to continue to pay dividends in the future.
The graph assumes $100 (not in millions) invested on December 31, 2019 in our common stock and each of the indices. Item 6. [Reserved]
The graph assumes $100 (not in millions) invested on December 31, 2020, in our common stock and each of the indices. Item 6. [Reserved]
In August 2024, the Board approved the repurchase of shares up to a maximum of $2 billion (the "2024 Share Repurchase Program") in addition to the 2022 Share Repurchase Program. At December 31, 2024, there was approximately $336 million remaining under the 2022 Share Repurchase Program and another $2 billion under the 2024 Share Repurchase Program.
In August 2024, the Board approved the repurchase of shares up to a maximum of $2 billion (the "2024 Share Repurchase Program") in addition to the 2022 Share Repurchase Program. At December 31, 2025, there was no amount remaining under the 2022 Share Repurchase Program and $1,585 million under the 2024 Share Repurchase Program.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company's common stock is traded on the Nasdaq stock market under the symbol NXPI. On February 12, 2025 there were 16 shareholders of record and 949,354 beneficial shareholders of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company's common stock is traded on the Nasdaq stock market under the symbol NXPI. On January 16, 2026, there were 17 shareholders of record and 900,391 beneficial shareholders of our common stock.
Removed
(2) Reflects shares surrendered by participants to satisfy tax withholding obligations in connection with the Company's equity programs. 32 Company Performance The following graph shows a comparison, since December 31, 2019 of cumulative total return for NXP, the Standard & Poor's 500 Index, and the Philadelphia Stock Exchange Semiconductor Index.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

72 edited+32 added−29 removed59 unchanged
Biggest changeWe believe this measure provides investors with useful supplemental information about the financial performance of our business, enables comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect of calculating our net leverage. 48 The following are reconciliations of our most comparable US GAAP measures to our non-GAAP measures presented: ($ in millions) Three months ended Full-year December 31, 2024 September 29, 2024 December 31, 2023 2024 2023 GAAP gross profit $ 1,678 $ 1,866 $ 1,937 $ 7,119 $ 7,553 PPA effects (11) (12) (13) (47) (53) Restructuring (21) — (13) (28) (11) Share-based compensation (15) (14) (14) (59) (54) Other incidentals (64) — (33) (79) (91) Non-GAAP gross profit $ 1,789 $ 1,892 $ 2,010 $ 7,332 $ 7,762 GAAP Gross Margin 53.9 % 57.4 % 56.6 % 56.4 % 56.9 % Non-GAAP Gross Margin 57.5 % 58.2 % 58.7 % 58.1 % 58.5 % GAAP research and development $ (612) $ (577) $ (651) $ (2,347) $ (2,418) Restructuring (50) — (49) (57) (59) Share-based compensation (60) (58) (55) (234) (211) Other incidentals (5) — (1) (6) (5) Non-GAAP research and development $ (497) $ (519) $ (546) $ (2,050) $ (2,143) GAAP selling, general and administrative $ (323) $ (265) $ (311) $ (1,164) $ (1,159) PPA effects — (1) (1) (2) (3) Restructuring (41) — (22) (40) (28) Share-based compensation (42) (43) (38) (168) (146) Other incidentals (12) (2) (5) (45) (32) Non-GAAP selling, general and administrative $ (228) $ (219) $ (245) $ (909) $ (950) GAAP operating income (loss) $ 675 $ 990 $ 907 $ 3,417 $ 3,661 PPA effects (39) (42) (77) (185) (356) Restructuring (112) — (84) (125) (98) Share-based compensation (117) (115) (107) (461) (411) Other incidentals (122) (6) (44) (181) (136) Non-GAAP operating income (loss) $ 1,065 $ 1,153 $ 1,219 $ 4,369 $ 4,662 GAAP Operating Margin 21.7 % 30.5 % 26.5 % 27.1 % 27.6 % Non-GAAP Operating Margin 34.2 % 35.5 % 35.6 % 34.6 % 35.1 % GAAP Income tax benefit (provision) $ (77) $ (173) $ (124) $ (545) $ (523) Income tax effect 87 9 54 141 170 Non-GAAP Income tax benefit (provision) $ (164) $ (182) $ (178) $ (686) $ (693) ($ in millions) Three months ended Full-year December 31, 2024 September 29, 2024 December 31, 2023 2024 2023 Net cash provided by (used for) operating activities $ 391 $ 779 $ 1,137 $ 2,782 $ 3,513 Net capital expenditures on property, plant and equipment (99) (186) (175) (693) (826) Non-GAAP free cash flow $ 292 $ 593 $ 962 $ 2,089 $ 2,687 49 ($ in millions) Three months ended Full-year December 31, 2024 September 29, 2024 December 31, 2023 2024 2023 Long-term debt $ 10,354 $ 9,683 $ 10,175 $ 10,354 $ 10,175 Short-term debt 500 499 1,000 500 1,000 Total debt 10,854 10,182 11,175 10,854 11,175 Less: cash and cash equivalents (3,292) (2,748) (3,862) (3,292) (3,862) Less: short-term deposits — (400) (409) — (409) Net debt $ 7,562 $ 7,034 $ 6,904 $ 7,562 $ 6,904 Critical Accounting Estimates The preparation of financial statements and related disclosures in accordance with U.S.
Biggest changeWe believe this measure provides investors with useful supplemental information about the financial performance of our business, enables comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect of calculating our net leverage. 53 The following are reconciliations of our most comparable US GAAP measures to our non-GAAP measures presented: ($ in millions) Three months ended Full-year December 31, 2025 September 28, 2025 December 31, 2024 2025 2024 GAAP gross profit $ 1,807 $ 1,787 $ 1,678 $ 6,716 $ 7,119 PPA effects (7) (6) (11) (28) (47) Restructuring (14) — (21) (79) (28) Share-based compensation (14) (15) (15) (59) (59) Other incidentals (71) (2) (64) (84) (79) Non-GAAP gross profit $ 1,913 $ 1,810 $ 1,789 $ 6,966 $ 7,332 GAAP Gross Margin 54.2 % 56.3 % 53.9 % 54.7 % 56.4 % Non-GAAP Gross Margin 57.4 % 57.0 % 57.5 % 56.8 % 58.1 % GAAP research and development $ (665) $ (575) $ (612) $ (2,360) $ (2,347) Restructuring (89) (1) (50) (100) (57) Share-based compensation (58) (57) (60) (237) (234) Other incidentals (4) (2) (5) (14) (6) Non-GAAP research and development $ (514) $ (515) $ (497) $ (2,009) $ (2,050) GAAP selling, general and administrative $ (359) $ (286) $ (323) $ (1,204) $ (1,164) PPA effects — (1) — (1) (2) Restructuring (74) (2) (41) (82) (40) Share-based compensation (28) (46) (42) (166) (168) Other incidentals (15) (14) (12) (64) (45) Non-GAAP selling, general and administrative $ (242) $ (223) $ (228) $ (891) $ (909) GAAP operating income (loss) $ 744 $ 893 $ 675 $ 3,047 $ 3,417 PPA effects (41) (38) (39) (151) (185) Restructuring (177) (3) (112) (261) (125) Share-based compensation (100) (118) (117) (462) (461) Other incidentals (92) (19) (122) (143) (181) Non-GAAP operating income (loss) $ 1,154 $ 1,071 $ 1,065 $ 4,064 $ 4,369 GAAP Operating Margin 22.3 % 28.1 % 21.7 % 24.8 % 27.1 % Non-GAAP Operating Margin 34.6 % 33.8 % 34.2 % 33.1 % 34.6 % GAAP Income tax benefit (provision) $ (131) $ (148) $ (77) $ (525) $ (545) Income tax effect 59 25 87 129 141 Non-GAAP Income tax benefit (provision) $ (190) $ (173) $ (164) $ (654) $ (686) ($ in millions) Three months ended Full-year December 31, 2025 September 28, 2025 December 31, 2024 2025 2024 Net cash provided by (used for) operating activities $ 891 $ 585 $ 391 $ 2,820 $ 2,782 Net capital expenditures on property, plant and equipment (98) (76) (99) (395) (693) Non-GAAP free cash flow $ 793 $ 509 $ 292 $ 2,425 $ 2,089 54 ($ in millions) Three months ended Full-year December 31, 2025 September 28, 2025 December 31, 2024 2025 2024 Long-term debt $ 10,972 $ 10,971 $ 10,354 $ 10,972 $ 10,354 Short-term debt 1,250 1,264 500 1,250 500 Total debt 12,222 12,235 10,854 12,222 10,854 Less: cash and cash equivalents (3,267) (3,454) (3,292) (3,267) (3,292) Less: short-term deposits — (500) — — — Net debt $ 8,955 $ 8,281 $ 7,562 $ 8,955 $ 7,562 55
Our business may not generate sufficient cash flow from operations, or we may not have enough capacity under the RCF Agreement, EIB Facility Agreements, Commercial Paper Program, or from other sources in an amount sufficient to enable us to repay our indebtedness, including outstanding commercial paper notes, and borrowings under the EIB Facility and RCF Agreements, the unsecured notes or to fund our other liquidity needs, including working capital and capital expenditure requirements.
Our business may not generate sufficient cash flow from operations, or we may not have enough capacity under the RCF Agreement, EIB Facility Agreements, Commercial Paper Program, or from other sources in an amount sufficient to enable us to repay our indebtedness, including outstanding commercial paper notes, and borrowings under the EIB Facilities and RCF Agreements, the unsecured notes or to fund our other liquidity needs, including working capital and capital expenditure requirements.
The adjustments made to achieve these non-GAAP financial measures or the non-GAAP financial measures as specified are described below, including the usefulness to management and investors. 46 In managing NXP’s business on a consolidated basis, management develops an annual operating plan, which is approved by our Board of Directors, using non-GAAP financial measures.
The adjustments made to achieve these non-GAAP financial measures or the non-GAAP financial measures as specified are described below, including the usefulness to management and investors. In managing NXP’s business on a consolidated basis, management develops an annual operating plan, which is approved by our Board of Directors, using non-GAAP financial measures.
Impairment or disposal of identified long-lived assets We perform reviews of long-lived assets including property, plant and equipment, and intangible assets subject to amortization, whenever facts and circumstances indicate that the useful life is shorter than what we had originally estimated or that the carrying amount of assets may not be recoverable.
Impairment or disposal of identified long-lived assets We perform reviews of long-lived assets including property, plant and equipment, and intangible assets subject to amortization, whenever facts and circumstances indicate that the useful life is shorter than what we had originally 50 estimated or that the carrying amount of assets may not be recoverable.
Our segment represents groups of similar products that are combined on the basis of similar design and development requirements, product characteristics, manufacturing processes and distribution channels, and how management allocates resources and measures results. See Note 1 to the consolidated financial statements for more information regarding our segment.
Our segment represents groups of similar products that are combined on the basis of similar design and development requirements, product characteristics, manufacturing processes and distribution channels, and how management allocates resources and measures results. See Note 1 to the consolidated financial statements for more information regarding our segment reporting.
Use of Certain Non-GAAP Financial Measures Non-GAAP Financial Measures In addition to providing financial information on a basis consistent with U.S. generally accepted accounting principles (“US GAAP” or “GAAP”), NXP also provides selected financial measures on a non-GAAP basis which are adjusted for specified items.
Use of Certain Non-GAAP Financial Measures Non-GAAP Financial Measures In addition to providing financial information on a basis consistent with U.S. generally accepted accounting principles (“US GAAP” or “GAAP”), NXP also provides selected financial measures on a non-GAAP basis which 51 are adjusted for specified items.
MD&A is organized as follows: • Overview - Overall analysis of financial and other highlights to provide context for the MD&A • Results of Operations - An analysis of our financial results • Financial Condition, Liquidity and Capital Resources - An analysis of changes in our balance sheets and cash flows and a discussion of our financial condition and potential sources of liquidity • Critical Accounting Estimates - Accounting estimates that management believes are the most important to understanding the assumptions and judgments incorporated in our financial results and forecasts • Use of Certain Non-GAAP Financial Measures - A discussion of the presentation of non-GAAP financial measures 33 NXP has one reportable segment representing the entity as a whole.
MD&A is organized as follows: • Overview - Overall analysis of financial and other highlights to provide context for the MD&A • Results of Operations - An analysis of our financial results • Financial Condition, Liquidity and Capital Resources - An analysis of changes in our balance sheets and cash flows and a discussion of our financial condition and potential sources of liquidity • Critical Accounting Estimates - Accounting estimates that management believes are the most important to understanding the assumptions and judgments incorporated in our financial results and forecasts • Use of Certain Non-GAAP Financial Measures - A discussion of the presentation of non-GAAP financial measures 35 NXP has one reportable segment representing the entity as a whole.
The Company is therefore jointly and severally liable for the tax liabilities of the tax entity as a whole, and as such the income tax expense of the Dutch fiscal unity has been included in the Net income of the Obligor Group.
The Company is therefore jointly and severally liable for the tax 49 liabilities of the tax entity as a whole, and as such the income tax expense of the Dutch fiscal unity has been included in the net income of the Obligor Group.
Other than the Subsidiary Obligors, none of the Company’s subsidiaries (together the “Non-Guarantor Subsidiaries”) guarantee the Notes. The Company 45 consolidates the Subsidiary Obligors in its consolidated financial statements and each of the Subsidiary Obligors are wholly owned subsidiaries of the Company.
Other than the Subsidiary Obligors, none of the Company’s subsidiaries (together the “Non-Guarantor Subsidiaries”) guarantee the Notes. The Company consolidates the Subsidiary Obligors in its consolidated financial statements and each of the Subsidiary Obligors are wholly owned subsidiaries of the Company.
It is our standard practice to request our annual general meeting of shareholders (the “AGM”) every year to renew this authorization for a period of 18 months from the AGM.
It is our standard practice to request at our annual general meeting of shareholders (the “AGM”) every year to renew this authorization for a period of 18 months from the AGM.
Under the terms of our joint venture agreement with TSMC, a portion of this cash can be distributed by way of a dividend to us, but 38.8% of the dividend will be paid to our joint venture partner. During 2024 and 2023, no dividend was declared.
Under the terms of our joint venture agreement with TSMC, a portion of this cash can be distributed by way of a dividend to us, but 38.8% of the dividend will be paid to our joint venture partner. During 2025 and 2024, no dividend was declared.
Amounts available under the CP Program may be borrowed, repaid, and re-borrowed from time to time, with the aggregate principal amount of CP Notes outstanding under the CP Program at any time not to exceed $2,000 million. The net proceeds of issuances of the CP Notes are expected to be used for general corporate purposes.
Amounts available under the Commercial Paper Program may be borrowed, repaid, and re-borrowed from time to time, with the aggregate principal amount of commercial paper notes outstanding under the Commercial Paper Program at any time not to exceed $2,000 million. The net proceeds of issuances of the commercial paper notes are expected to be used for general corporate purposes.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 as filed with the SEC on February 22, 2024.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 as filed with the SEC on February 20, 2025.
This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023 .
This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
In addition, NXP has an agreed purchase commitment with VSMC that over the lifetime of the factory the minimal loading will be between 80% - 90%, resulting in a total purchase commitment of approximately $14,242 million that is expected to be purchased over 37 years once wafer production starts. • Amounts related to future lease payments for operating lease obligations at December 31, 2024 totaled $321 million, with $62 million expected to be paid within the next 12 months. • The Company enters into certain technology license arrangements which are used in conjunction with research and development activities for product development.
Furthermore, NXP has an agreed purchase commitment with VSMC that over the lifetime of the factory the minimal loading will be between 80% - 90%, resulting in a total purchase commitment of approximately $14,096 million that is expected to be purchased over 37 years once wafer production starts. • Amounts related to future lease payments for operating lease obligations at December 31, 2025, totaled $315 million, with $69 million expected to be paid within the next 12 months. • The Company enters into certain technology license arrangements which are used in conjunction with research and development activities for product development.
The financial information of the Obligor Group includes sales executed through a Non-Guarantor Subsidiary single-billing entity as a sales agent on behalf of an entity in the Obligor Group. The Obligor Group has sales to non-guarantors (2024: $699 million).
The financial information of the Obligor Group includes sales executed through a Non-Guarantor Subsidiary single-billing entity as a sales agent on behalf of an entity in the Obligor Group. The Obligor Group has sales to non-guarantors (2025: $723 million).
For repurchases of shares in 2023 and 2024, the board of directors made use of the authorizations renewed by the AGM on June 1, 2022, May 24, 2023 and May 29, 2024, respectively.
For repurchases of shares in 2024 and 2025, the board of directors made use of the authorizations renewed by the AGM on May 24, 2023, May 29, 2024, and June 11, 2025, respectively.
The Company’s policy is to estimate such price adjustments using the most likely method based on rolling historical experience rates, as well as a prospective view of products and pricing in the distribution channel for distributors who participate in our volume rebate incentive program.
The Company’s policy is to estimate such price adjustments using the most likely method based on rolling historical experience rates, as well as pricing in the distribution channel for distributors who participate in our volume rebate incentive program.
Other financial expenses increased due to adjustments in our investments as well as interest related to prior tax positions.
Other financial expenses decreased due to adjustments in our investments as well as lower interest related to prior tax positions.
During the fiscal year ended December 31, 2023, NXP repurchased 5.5 million shares, for a total of approximately $1 billion under the trade for tax, 2021 and 2022 Share Repurchase Programs and during the fiscal year ended December 31, 2024, NXP repurchased 5.7 million shares, for a total of approximately $1.4 billion under the trade for tax and 2022 Share Repurchase Program.
During the fiscal year ended December 31, 2024, NXP repurchased 5.7 million shares, for a total of approximately $1.4 billion under the trade for tax and 2022 Share Repurchase Programs and during the fiscal year ended December 31, 2025, NXP repurchased 4.4 million shares, for a total of approximately $0.9 billion under the trade for tax, 2022 and 2024 Share Repurchase Programs.
Payments for these technology licenses are made over varying time periods. Outstanding unpaid balances for technology licenses total $325 million as of December 31, 2024, of which $85 million is expected to be paid in the next 12 months. • Cash outflows for capital expenditures were $727 million in 2024, compared to $827 million in 2023.
Payments for these technology licenses are made over varying time periods. Outstanding unpaid balances for technology licenses total $270 million as of December 31, 2025, of which $135 million is expected to be paid in the next 12 months. • Cash outflows for capital expenditures were $397 million in 2025, compared to $727 million in 2024.
The Company had a net debt position (see section Use of Certain Non-GAAP Financial Measures) at December 31, 2024 of $7,562 million compared to $6,904 million as of December 31, 2023.
The Company had a net debt position (see section Use of Certain Non-GAAP Financial Measures) at December 31, 2025, of $8,955 million compared to $7,562 million as of December 31, 2024.
As of December 31, 2024, the Company had purchase commitments, other than commitments directly with our foundry joint ventures, of $3,046 million, of which $936 million is expected to be paid in the next 12 months.
As of December 31, 2025, the Company had purchase commitments, other than commitments directly with our foundry joint ventures, of $3,087 million, of which $1,423 million is expected to be paid in the next 12 months.
Future values include estimates of future cash flows and estimates of fair value. These assumptions and estimates can be affected by various factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy and our forecasts for specific product lines.
These assumptions and estimates can be affected by various factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy and our forecasts for specific product lines.
Financial Condition, Liquidity and Capital Resources We derive our liquidity and capital resources primarily from our cash flows from operations. We continue to generate strong positive operating cash flows, and we currently use cash to fund operations, meet working capital requirements, for capital expenditures and for potential common stock repurchases, dividends and strategic investments.
We continue to generate strong positive operating cash flows, and we currently use cash to fund operations, meet working capital requirements, for capital expenditures and for potential common stock repurchases, dividends and strategic investments.
As of December 31, 2024, the Company had outstanding fixed-rate notes with varying maturities for an aggregate principal amount of $10,250 million (collectively the “Notes”), with $500 million payable within 12 months. Future interest payments associated with the Notes total $2,711 million, with $371 million payable within 12 months.
As of December 31, 2025, the Company had outstanding fixed-rate notes with varying maturities for an aggregate principal amount of $11,250 million (collectively the “Notes”), with $1,250 million payable within 12 months. Future interest payments associated with the Notes total $2,874 million, with $409 million payable within 12 months.
Cash flows Our cash and cash equivalents in 2024 decreased by $566 million (excluding the effect of changes in exchange rates on our cash position of $(4) million) as follows: ($ in millions) Year ended December 31, 2024 2023 Net cash provided by (used for) operating activities 2,782 3,513 Net cash (used for) provided by investing activities (686) (1,508) Net cash provided by (used for) financing activities (2,662) (1,990) Increase (decrease) in cash and cash equivalents (566) 15 44 • Cash Flow from Operating Activities For the year ended December 31, 2024 our operating activities provided $2,782 million in cash.
Cash flows Our cash and cash equivalents in 2025 decreased by $31 million (excluding the effect of changes in exchange rates on our cash position of $6 million) as follows: 47 ($ in millions) Year ended December 31, 2025 2024 Net cash provided by (used for) operating activities 2,820 2,782 Net cash (used for) provided by investing activities (2,357) (686) Net cash provided by (used for) financing activities (494) (2,662) Increase (decrease) in cash and cash equivalents (31) (566) • Cash Flow from Operating Activities For the year ended December 31, 2025, our operating activities provided $2,820 million in cash.
For the year ended December 31, 2023 our operating activities provided $3,513 million in cash. This was primarily the result of net income of $2,822 million, adjustments to reconcile the net income of $1,265 million and changes in operating assets and liabilities of $(594) million.
For the year ended December 31, 2024, our operating activities provided $2,782 million in cash. This was primarily the result of net income of $2,542 million, adjustments to reconcile the net income of $1,151 million and changes in operating assets and liabilities of $(923) million.
The weighted-average interest rate of the Company's outstanding commercial paper notes is 4.60%. EIB Facilities Our facility agreements with the European Investment Bank, (“EIB") provide for an aggregate €1,000 million in unsecured senior loan facilities, the proceeds from which are expected to fund the research, development and innovation of semiconductor devices, technologies and solutions in five European countries.
As of December 31, 2025, the Company had no commercial paper notes outstanding. 44 EIB Facilities Our facility agreements with the European Investment Bank (EIB) provide for an aggregate €1,000 million in unsecured senior loan facilities, the proceeds from which are expected to fund the research, development and innovation of semiconductor devices, technologies and solutions in five European countries.
Under our Quarterly Dividend Program, interim dividends of $1.014 per ordinary share were paid on April 10, 2024 ($260 million), dividends of $1.014 per ordinary share were paid on July 10, 2024 ($259 million), dividends of $1.014 per ordinary share were paid on October 9, 2024 ($258 million) and dividends of $1.014 per ordinary share were paid on January 8, 2025 ($258 million). 2024 2023 Dividends declared (per share) 4.056 4.056 Dividends declared (in millions) 1,035 1,048 42 Debt Our total debt, inclusive of aggregate principal, unamortized discounts, premiums, debt issuance costs and fair value adjustments, amounted to $10,854 million as of December 31, 2024, a decrease of $321 million compared to December 31, 2023 ($11,175 million).
Under our Quarterly Dividend Program, interim dividends of $1.014 per ordinary share were paid on April 9, 2025 ($257 million), dividends of $1.014 per ordinary share were paid on July 9, 2025 ($256 million), dividends of $1.014 per ordinary share were paid on October 8, 2025 ($256 million) and dividends of $1.014 per ordinary share were paid on January 7, 2026 ($256 million). 2025 2024 Dividends declared (per share) 4.056 4.056 Dividends declared (in millions) 1,025 1,035 45 Debt Our total debt, inclusive of aggregate principal, unamortized discounts, premiums, debt issuance costs and fair value adjustments, amounted to $12,222 million as of December 31, 2025, an increase of $1,368 million compared to December 31, 2024 ($10,854 million).
Cash and short-term deposits As of December 31, 2024, our cash balance was $3,292 million, a decrease of $979 million compared to our cash balance and short-term deposits on December 31, 2023 ($4,271 million), of which $261 million (2023: $214 million) was held by SSMC, our consolidated joint venture company with TSMC.
Cash As of December 31, 2025, our cash balance was $3,267 million, a decrease of $25 million compared to our cash balance on December 31, 2024 ($3,292 million), of which $361 million (2024: $261 million) was held by SSMC, our consolidated joint venture company with TSMC.
The non-GAAP provision for income taxes is used to ascertain and present on a comparable basis NXP's provision for income tax after adjustments, the usefulness of which is described within this table.
The non-GAAP income tax benefit (provision) is used to ascertain and present on a comparable basis NXP's income tax benefit (provision) after adjustments, the usefulness of which is described within this table. Free cash flow Free cash flow represents operating cash flow adjusted for net additions to property, plant and equipment.
Changes in operating assets and liabilities were primarily driven by a $222 million increase in inventories in order to align inventory on hand with expected demand, $207 million increase in receivables and other current assets due to the related timing of cash collection (driven primarily by distributors), $188 million decrease in accounts payable and other liabilities as a result of timing related to payments and lower purchases, and $306 million increase in other non-current assets due to payments to secure production supply with multiple vendors (driven primarily by payments of $275 million to support the long-term capacity infrastructure of VSMC).
Changes in operating assets and liabilities were primarily driven by a $308 million increase in inventories in order to align inventory on hand with expected demand, $212 million increase in other non-current assets due to payments to secure production supply with multiple vendors (driven primarily to support the long-term capacity infrastructure of VSMC), and $50 million decrease in accounts payable and other liabilities due primarily from payments related to the settlement of clean room cases.
Overview Year in Focus • Revenue was $12.6 billion, down 5.0% year-on-year; • GAAP gross margin was 56.4%, and GAAP operating margin was 27.1%; • Non-GAAP gross margin was 58.1%, and non-GAAP operating margin was 34.6%; • Cash flow from operations was $2,782 million, with net capital expenditures on property, plant and equipment of $693 million, resulting in non-GAAP free cash flow of $2,089 million; and • During 2024, NXP returned capital to shareholders with the payment of $1,038 million in cash dividends and the repurchase of $1,373 million of its common shares, for a total capital return of $2,411 million.
Overview Year in Focus • Revenue was $12.3 billion, down 2.7% year-on-year; • GAAP gross margin was 54.7%, and GAAP operating margin was 24.8%; • Non-GAAP gross margin was 56.8%, and non-GAAP operating margin was 33.1%; • Cash flow from operations was $2,820 million, with net capital expenditures on property, plant and equipment of $395 million, resulting in non-GAAP free cash flow of $2,425 million; and • During 2025, NXP returned capital to shareholders with the payment of $1,025 million in cash dividends and the repurchase of $899 million of its common shares, for a total capital return of $1,924 million.
Revolving Credit Facility Our amended and restated Unsecured Revolving Credit Facility (“RCF”) provides for $2,500 million of senior unsecured revolving credit commitments. We may borrow under this RCF in the future and use the proceeds for general corporate purposes and any other purpose not prohibited by the Amended and Restated Revolving Credit Agreement and related documentation.
We may borrow under this RCF in the future and use the proceeds for general corporate purposes and any other purpose not prohibited by the Amended and Restated Revolving Credit Agreement and related documentation. As of December 31, 2025, we do not have any borrowings under the RCF.
($ in millions, unless otherwise stated) 2024 2023 % change Research and development 2,347 $ 2,418 (2.9) % As a percentage of revenue 18.6 % 18.2 % 0.4 ppt R&D costs for the year ended December 31, 2024 decreased by $71 million, or 2.9%, when compared to last year primarily driven by lower bonus of $85 million and higher received government assistance due to subsidies and R&D tax credits of $60 million, partly offset by higher engineer salaries and wages of $25 million, higher share-based compensation costs of $22 million and higher licensing fees of $12 million. • Selling, general and administrative Selling, general and administrative (SG&A) costs primarily consist of personnel salaries and wages (including share based compensation and other variable compensation), communication and IT related costs, fixed-asset related costs and sales and marketing costs (including travel expenses).
($ in millions, unless otherwise stated) 2025 2024 % change Research and development 2,360 2,347 0.6 % As a percentage of revenue 19.2 % 18.6 % 0.6 ppt R&D costs for the year ended December 31, 2025, increased by $13 million, or 0.6%, when compared to last year primarily driven by: + Increased restructuring expenses ($42 million) + Increased project spend ($10 million) - Lower variable compensation expenses ($37 million) • Selling, general and administrative Selling, general and administrative (SG&A) costs primarily consist of personnel salaries and wages (including share- based compensation and other variable compensation), communication and IT related costs, fixed-asset related costs and sales and marketing costs (including travel expenses).
Quarter in Focus • Revenue for the fourth quarter of 2024 was $3.1 billion, down 9.1% year-on-year; • GAAP gross margin was 53.9%, and GAAP operating margin was 21.7%; • Non-GAAP gross margin was 57.5%, and non-GAAP operating margin was 34.2%; • Cash flow from operations was $391 million, with net capital expenditures on property, plant and equipment of $99 million, resulting in non-GAAP free cash flow of $292 million; • During the fourth quarter of 2024, NXP returned capital to shareholders with the payment of $258 million in cash dividends and the repurchase of $455 million of its common shares, for a total capital return of $713 million. 35 Sequential Results Q4 2024 compared to Q3 2024 Revenue for the three months ended December 31, 2024 was $3,111 million compared to $3,250 million for the three months ended September 29, 2024, a decrease of $139 million or 4.3% quarter-on-quarter.
Quarter in Focus • Revenue for the fourth quarter of 2025 was $3.3 billion, up 7.2% year-on-year; • GAAP gross margin was 54.2%, and GAAP operating margin was 22.3%; • Non-GAAP gross margin was 57.4%, and non-GAAP operating margin was 34.6%; • Cash flow from operations was $891 million, with net capital expenditures on property, plant and equipment of $98 million, resulting in non-GAAP free cash flow of $793 million; • During the fourth quarter of 2025, NXP returned capital to shareholders with the payment of $254 million in cash dividends and the repurchase of $338 million of its common shares, for a total capital return of $592 million. 37 Sequential Results Q4 2025 compared to Q3 2025 Revenue for the three months ended December 31, 2025, was $3,335 million compared to $3,173 million for the three months ended September 28, 2025, an increase of $162 million or 5.1% quarter-on-quarter, in line with management's expectations.
Summarized Statements of Income ($ in millions) December 31, 2024 Revenue 7,207 Gross Profit 3,547 Operating income 1,129 Net income 310 Summarized Balance Sheets As of ($ in millions) December 31, 2024 Current assets 3,273 Non-current assets 12,191 Total assets 15,464 Current liabilities 1,244 Non-current liabilities 10,967 Total liabilities 12,211 Obligor's Group equity 3,253 Total liabilities and Obligor's Group equity 15,464 NXP Semiconductors N.V. is the head of a fiscal unity for the corporate income tax and VAT that contains the most significant Dutch wholly-owned group companies.
Summarized Statements of Income ($ in millions) December 31, 2025 Revenue 6,791 Gross Profit 3,137 Operating income 826 Net income 5 Summarized Balance Sheets As of ($ in millions) December 31, 2025 Current assets 3,182 Non-current assets 12,461 Total assets 15,643 Current liabilities 2,044 Non-current liabilities 11,348 Total liabilities 13,392 Obligor's Group equity 2,251 Total liabilities and Obligor's Group equity 15,643 NXP Semiconductors N.V. is the head of a fiscal unity for the corporate income tax and VAT that contains the most significant Dutch wholly owned group companies.
Changes in operating assets and liabilities were primarily driven by a $353 million increase in inventories due to improved supply capabilities, $138 million increase in receivables and other current assets from prepayments to secure production supply with multiple vendors, and $119 million decrease in accounts payable and other liabilities as a result of timing related to payments. • Cash Flow from Investing Activities Net cash used for investing activities amounted to $686 million for the year ended December 31, 2024 and principally consisted of the cash outflows for capital expenditures of $727 million, $149 million for the purchase of identified intangible assets, and $260 million for the purchase of investments (driven primarily by the capital contributions of approximately $80 million into ESMC and approximately $140 million into VSMC); partially offset by the $409 million for the proceeds of short-term deposits and $30 million for the advance payment from sale of property, plant and equipment.
Net cash used for investing activities amounted to $686 million for the year ended December 31, 2024 and principally consisted of the cash outflows for capital expenditures of $727 million, $149 million for the purchase of identified intangible assets, and $260 million for the purchase of investments (driven primarily by the capital contributions of approximately $80 million into ESMC and approximately $140 million into VSMC); partially offset by the $409 million for the proceeds of short-term deposits and $30 million for the advance payment from sale of property, plant and equipment. • Cash Flow from Financing Activities Net cash used for financing activities was $494 million for the year ended December 31, 2025.
On November 22, 2024, NXP B.V. entered into a facility agreement with the European Investment Bank, (“EIB Facility A”), which provides for a €640 million unsecured senior loan facility.
Risk Factors . 2025 Financing Activities On January 13, 2025, NXP B.V. entered into a facility agreement with the European Investment Bank (“EIB Facility B”), which provides for a €360 million unsecured senior loan facility.
Revenue in the Mobile end market was $1,497 million, an increase of $170 million or 12.8% versus the year ago period, with mobile wallet products contributing to the growth.
The increase was attributable to growth in mixed-signal products, partially offset by declines in processors. Revenue in the Mobile end market was $1,584 million, an increase of $87 million or 5.8% versus the year ago period, with processors and mixed-signal products contributing to the growth.
Gross Profit Gross profit for the year ended December 31, 2024 was $7,119 million, or 56.4% of revenue, compared to $7,553 million, or 56.9% of revenue, relatively consistent with revenue and costs, both of which had comparable decreases year on year, with 2024 experiencing a slightly lower year on year utilization. 38 Operating Expenses Operating expenses for the year ended December 31, 2024 totaled $3,647 million, or 28.9% of revenue, compared to $3,877 million, or 29.2% of revenue, for the year ended December 31, 2023. • Research and development Research and development (R&D) costs primarily consist of engineer salaries and wages (including share based compensation and other variable compensation), engineering related costs (including outside services, fixed-asset, IP and other licenses related costs), shared service center costs and other pre-production related expenses.
The decrease in gross margin was mainly driven by: - Lower selling prices (1.9%) - Mix /volume (1.5%) + Lower manufacturing costs (factory utilization and sourcing) (2.1%) Operating Expenses Operating expenses for the year ended December 31, 2025, totaled $3,681 million or 30.0% of revenue, compared to $3,647 million, or 28.9% of revenue, for the year ended December 31, 2024. • Research and development Research and development (R&D) costs primarily consist of engineer salaries and wages (including share-based compensation and other variable compensation), engineering related costs (including outside services, fixed-asset, IP and other licenses related costs), shared service center costs and other pre-production related expenses.
On February 11, 2025, we have provided notice to EIB that we will fully draw the remaining amounts under the EIB facility agreements, drawing on February 25, 2025, an additional total principal amount of $370 million with a fixed annual interest rate of 4.709% and a maturity of February 2031. 41 Capital return The common stock repurchase activity was as follows: ($ in millions, unless otherwise stated) 2024 2023 Shares repurchased 5,726,770 5,460,135 Cost of shares repurchased 1,373 1,049 Average price per share $239.74 $192.16 Under Dutch corporate law and our articles of association, NXP may acquire its own shares if the general meeting of shareholders has granted the board of directors the authority to effect such acquisitions.
Capital return The common stock repurchase activity was as follows: ($ in millions, unless otherwise stated) 2025 2024 Shares repurchased 4,357,898 5,726,770 Cost of shares repurchased 899 1,373 Average price per share $206.29 $239.74 Under Dutch corporate law and our articles of association, NXP may acquire its own shares if the general meeting of shareholders has granted the board of directors the authority to effect such acquisitions.
Any such transaction could require significant use of our cash and cash equivalents, or require us to arrange for new debt and equity financing to fund the transaction. Our ability to make scheduled payments or to refinance our debt obligations depends on our financial and operating performance, which is subject to prevailing economic and competitive conditions.
Our ability to make scheduled payments or to refinance our debt obligations depends on our financial and operating performance, which is subject to prevailing economic and competitive conditions.
We expect to reduce levels of capital expenditures as a percentage of revenue in 2025, given our focus on investments in foundry partners while still supporting current and future manufacturing and production capacity needs. • Our research and development expenditures were $2,347 million in 2024 and $2,418 million in 2023, and we expect to maintain similar levels of investment in research and development as a percentage of revenue in 2025. 43 • The Company has entered into definitive agreements to acquire in cash, Aviva Links ($242.5 million), TTTech Auto ($625 million) and Kinara, Inc.
We expect to maintain similar levels of capital expenditures as a percentage of revenue in 2026 consistent with our long-term financial model, given our focus on external investments in foundry partners while still supporting current and future manufacturing and production capacity needs. 46 • Our research and development expenditures were $2,360 million in 2025 and $2,347 million in 2024, and we expect to maintain similar levels of investment in research and development as a percentage of revenue in 2026.
Risk Factors . 2024 Financing Activities On November 21, 2024, NXP B.V., NXP Funding and NXP USA entered into definitive documentation to establish an unsecured Commercial Paper Program (the “CP Program”) under which, on a joint and several basis, short-term, unsecured commercial paper notes (the “CP Notes”) may be issued.
On August 19, 2025, NXP B.V., together with NXP Funding LLC and NXP USA, Inc., issued $500 million of 4.3% senior unsecured notes due August 19, 2028, $300 million of 4.85% senior unsecured notes due August 19, 2032, and $700 million of 5.25% senior unsecured notes due August 19, 2035. 2024 Financing activities On November 21, 2024, NXP B.V., NXP Funding LLC and NXP USA Inc. entered into definitive documentation to establish an unsecured Commercial Paper Program under which, on a joint and several basis, short-term, unsecured commercial paper notes may be issued.
Net cash used for financing activities was $1,990 million for the year ended December 31, 2023. This was primarily driven by the dividend payment to common stockholders of $1,006 million, and purchase of treasury shares and restricted stock unit holdings of $1,053 million; partially offset by the $71 million proceeds from the issuance of common stock through stock plans.
This was primarily driven by the dividend payment to common stockholders of $1,025 million, purchase of treasury shares and restricted stock unit holdings of $899 million, and repurchase of long-term debt of $500 million; partially offset by the $1,868 million proceeds from issuance of long-term debt and $83 million proceeds from the issuance of common stock through stock plans.
Included in 2024 is a $40 million charge for a vacated deposit on an exited technology. 39 Financial Income (Expense) ($ in millions) For the years ended December 31, 2024 2023 Interest income 160 187 Interest expense (398) (438) Total other financial income (expense) (80) (58) Total (318) (309) Financial income (expense) was an expense of $318 million in 2024, compared to an expense of $309 million in 2023.
Financial Income (Expense) ($ in millions) For the years ended December 31, 2025 2024 Interest income 145 160 Interest expense (466) (398) Total other financial income (expense) (63) (80) Total (384) (318) Financial income (expense) was an expense of $384 million in 2025, compared to an expense of $318 million in 2024.
Subject to Dutch corporate law and our articles of association, the board of directors of NXP may cancel shares acquired if authorized by the general meeting of shareholders.
Subject to Dutch corporate law and our articles of association, the board of directors of NXP may cancel shares acquired if authorized by the general meeting of shareholders. As with repurchases of our shares, it is our standard practice to request at our AGM every year to renew this authorization for a period of 18 months from the AGM.
As of December 31, 2024, the Company had an outstanding loan with the European Investment Bank (EIB) under the EIB Facility A, with a maturity date of December 9, 2030 for a principal amount of $670 million. Future interest payments associated with the EIB Facility A Loan total $179 million, with $30 million payable within 12 months.
As of December 31, 2025, the Company had outstanding loans with the EIB under the EIB Facilities with maturities in 2030 and 2031 for a principal amount of $1,040 million. Future interest payments associated with the EIB loans total $241 million, with $47 million payable within 12 months.
Long-lived assets to be disposed of by sale are reported at the lower of their carrying amounts or their estimated fair values less costs to sell and are not depreciated. 50 The assumptions and estimates used to determine future values and remaining useful lives of our intangible and other long-lived assets are complex and subjective.
Impairment losses, if any, are based on the excess of the carrying amount over the fair value of those assets. Long-lived assets to be disposed of by sale are reported at the lower of their carrying amounts or their estimated fair values less costs to sell and are not depreciated.
GILTI is recognized as a current period expense when incurred. 40 Results Relating to Equity-accounted Investees Results relating to equity-accounted investees amounted to a loss of $12 million in 2024, whereas in 2023 results relating to equity-accounted investees amounted to a loss of $7 million.
Results Relating to Equity-accounted Investees Results relating to equity-accounted investees amounted to a loss of $70 million in 2025, whereas in 2024 results relating to equity-accounted investees amounted to a loss of $12 million.
We believe these adjustments provide investors with a useful view, through the eyes of management, of our core business model, how management currently evaluates core operational performance, and additional means to evaluate expense trends.
We believe these adjustments provide investors with a useful view, through the eyes of management, of our core business model, how management currently evaluates core operational performance, and additional means to evaluate expense trends. 52 Non-GAAP Adjustment or Measure Definition Usefulness to Management and Investors Other incidentals Other incidentals consist of certain items which may be non-recurring, unusual, infrequent or directly related to an event that is distinct and non-reflective of the Company’s core operating performance.
Adjustments to net income include offsetting non-cash items, such as depreciation and amortization of $1,106 million, share-based compensation of $411 million, a gain on equity securities of $1 million, results relating to equity-accounted investees of $7 million and changes in deferred taxes of $(267) million.
This was primarily the result of net income of $2,068 million, adjustments to reconcile the net income of $1,339 million and changes in operating assets and liabilities of $(613) million. Adjustments to net income include offsetting non-cash items, such as depreciation and amortization of $832 million, share-based compensation of $462 million, and results relating to equity-accounted investees of $70 million.
($ in millions, unless otherwise stated) 2024 % of Revenue 2023 % of Revenue Revenue 12,614 13,276 % nominal growth (5.0) 0.5 Gross profit 7,119 7,553 Gross margin 56.4 % 56.9 % Research and development (2,347) 18.6 % (2,418) 18.2 % Selling, general and administrative (1,164) 9.2 % (1,159) 8.7 % Amortization of acquisition-related intangible assets (136) 1.1 % (300) 2.3 % Other income (expense) (55) 0.4 % (15) 0.1 % Operating income (loss) 3,417 27.1 % 3,661 27.6 % Financial income (expense) (318) 2.5 % (309) 2.3 % Benefit (provision) for income taxes (545) 4.3 % (523) 3.9 % Results relating to equity-accounted investees (12) 0.1 % (7) 0.1 % Net income (loss) 2,542 20.2 % 2,822 21.3 % Less: Net income (loss) attributable to non-controlling interests 32 0.3 % 25 0.2 % Net income (loss) attributable to stockholders 2,510 19.9 % 2,797 21.1 % Diluted earnings per share 9.73 10.70 Revenue Revenue for the year ended December 31, 2024 was $12,614 million compared to $13,276 million for the year ended December 31, 2023, a decrease of $662 million or 5.0% year-on-year. 37 Revenue by end market was as follows: ($ in millions, unless otherwise stated) 2024 2023 Increase/(decrease) % Automotive 7,151 7,484 (333) (4.4) % Industrial & IoT 2,269 2,351 (82) (3.5) % Mobile 1,497 1,327 170 12.8 % Communication Infrastructure & Other 1,697 2,114 (417) (19.7) % Revenue 12,614 13,276 (662) (5.0) % Revenue by sales channel was as follows: ($ in millions, unless otherwise stated) 2024 2023 Increase/(decrease) % Distributors 7,203 7,195 8 0.1 % OEM/EMS 5,291 5,963 (672) (11.3) % Other 120 118 2 1.7 % Revenue 12,614 13,276 (662) (5.0) % Revenue by geographic region, which is based on the customer’s shipped-to location, was as follows: ($ in millions, unless otherwise stated) 2024 2023 Increase/(decrease) % China 1) 4,556 4,366 190 4.4 % APAC, excluding China 3,541 3,741 (200) (5.3) % EMEA (Europe, the Middle East and Africa) 2,719 3,096 (377) (12.2) % Americas 1,798 2,073 (275) (13.3) % Revenue 12,614 13,276 (662) (5.0) % 1) China includes Mainland China and Hong Kong From an end market perspective, NXP experienced growth in its Mobile end market, which was offset by declines in the Communication Infrastructure & Other, Automotive and Industrial & IoT end markets versus the year ago period.
($ in millions, unless otherwise stated) 2025 % of Revenue 2024 % of Revenue Revenue 12,269 12,614 % nominal growth (2.7) (5.0) Gross profit 6,716 7,119 Gross margin 54.7 % 56.4 % Research and development (2,360) 19.2 % (2,347) 18.6 % Selling, general and administrative (1,204) 9.8 % (1,164) 9.2 % Amortization of acquisition-related intangible assets (117) 1.0 % (136) 1.1 % Other income (expense) 12 0.1 % (55) 0.4 % Operating income (loss) 3,047 24.8 % 3,417 27.1 % Financial income (expense) (384) 3.1 % (318) 2.5 % Benefit (provision) for income taxes (525) 4.3 % (545) 4.3 % Results relating to equity-accounted investees (70) 0.6 % (12) 0.1 % Net income (loss) 2,068 16.9 % 2,542 20.2 % Less: Net income (loss) attributable to non-controlling interests 47 0.4 % 32 0.3 % Net income (loss) attributable to stockholders 2,021 16.5 % 2,510 19.9 % Diluted earnings per share 7.95 9.73 Revenue Revenue for the year ended December 31, 2025, was $12,269 million compared to $12,614 million for the year ended December 31, 2024, a decrease of $345 million or 2.7% year-on-year. 39 Revenue by end market was as follows: ($ in millions, unless otherwise stated) 2025 2024 Increase/(decrease) % Automotive 7,116 7,151 (35) (0.5) % Industrial & IoT 2,273 2,269 4 0.2 % Mobile 1,584 1,497 87 5.8 % Communication Infrastructure & Other 1,296 1,697 (401) (23.6) % Revenue 12,269 12,614 (345) (2.7) % Revenue by sales channel was as follows: ($ in millions, unless otherwise stated) 2025 2024 Increase/(decrease) % Distributors 7,051 7,203 (152) (2.1) % Direct 5,084 5,291 (207) (3.9) % Other 134 120 14 11.7 % Revenue 12,269 12,614 (345) (2.7) % Revenue by geographic region, which is based on the location where the sale originated, was as follows: 1) ($ in millions, unless otherwise stated) 2025 2024 Increase/(decrease) % APAC, excluding China 3,581 3,794 (213) (5.6) % Americas 3,376 3,471 (95) (2.7) % EMEA 3,276 3,428 (152) (4.4) % China 2) 2,036 1,921 115 6.0 % Revenue 12,269 12,614 (345) (2.7) % 1) As of December 31, 2025, and applied retrospectively for all the periods presented, the Company revised its methodology for attributing revenue to geographic areas to reflect the location where sales originate, which represents where critical commercial decisions are made.
($ in millions, unless otherwise stated) 2024 2023 % change Selling, general and administrative 1,164 $ 1,159 0.4 % As a percentage of revenue 9.2 % 8.7 % 0.5 ppt SG&A costs for the year ended December 31, 2024 remained relatively flat, an increase of $5 million, or 0.4%, when compared to last year primarily driven by higher personnel salaries and wages, including social securities of $32 million, higher share-based compensation costs of $23 million and higher restructuring costs for specific targeted actions under global restructuring programs of $11 million, offset by lower bonus of $43 million and lower legal expenses of $26 million. • Amortization of acquisition-related intangible assets ($ in millions, unless otherwise stated) 2024 2023 % change Amortization of acquisition-related intangible assets 136 300 (54.7) % As a percentage of revenue 1.1 % 2.3 % (1.2) ppt Amortization of acquisition-related intangible assets decreased by $164 million, or 54.7%, when compared to last year mainly from the effect of certain acquisition-related intangibles becoming fully amortized (with regard to the previous Marvell and Freescale acquisitions).
($ in millions, unless otherwise stated) 2025 2024 % change Selling, general and administrative 1,204 1,164 3.4 % As a percentage of revenue 9.8 % 9.2 % 0.6 ppt SG&A costs for the year ended December 31, 2025, increased by $40 million, or 3.4%, when compared to last year primarily driven by: + Increased restructuring expenses ($43 million) + Increased expenses driven by personnel and integration related costs of our acquisitions ($37 million) - Lower legal fees ($26 million) - Lower variable compensation costs ($14 million) • Amortization of acquisition-related intangible assets ($ in millions, unless otherwise stated) 2025 2024 % change Amortization of acquisition-related intangible assets 117 136 (14.0) % As a percentage of revenue 1.0 % 1.1 % (0.1) ppt Amortization of acquisition-related intangible assets decreased by $19 million, or 14.0%, when compared to last year, mainly from the effect of certain acquisition-related intangibles becoming fully amortized (with regard to the previous Marvell acquisition) partly offset by amortization related to the recent acquisitions of TTTech Auto and Kinara. 42 Other Income (Expense) Other income (expense) includes results from manufacturing service arrangements (MSA) and transitional service arrangements (TSA) that are put into place when we divest a business or activity, as well as other activities.
Borrowings on these facilities may be denominated in Euro or U.S. Dollar. See Financing Activities further below. As of December 31, 2024, the Company had a principal amount of $670 million outstanding under the EIB loan facilities with a maturity of December 2030 and a fixed annual interest rate of 4.45%.
As of December 31, 2025, the Company had a principal amount of $670 million outstanding under the EIB loan Facility A with a maturity of December 2030 and a fixed annual interest rate of 4.45% and a principal amount of $370 million outstanding under the EIB loan Facility B with a maturity of February 2031 and a fixed annual interest rate of 4.709%.
The Obligor Group has amounts due from equity financing (2024: $5,749 million) and due to debt financing (2024: $2,283 million) with non-guarantor subsidiaries.
The Obligor Group has amounts due from equity financing (2025: $5,520 million) and due to debt financing (2025: $2,695 million) with non-guarantor subsidiaries. Critical Accounting Estimates The preparation of financial statements and related disclosures in accordance with U.S.
The proceeds from borrowings under the EIB Facility A are expected to be used, together with proceeds from a second €360 million facility agreement (“EIB Facility B”) concluded in January 2025, to fund the research, development and innovation of semiconductor devices, technologies and solutions in five European countries. Borrowings on these facilities may be denominated in Euro or U.S.
On November 22, 2024, NXP B.V. entered into a facility agreement with the European Investment Bank, (“EIB Facility A”), which provides for a €640 million unsecured senior loan facility. The proceeds from borrowings under the EIB Facility A are expected to be used to fund the research, development and innovation of semiconductor devices, technologies and solutions in five European countries.
NXP has also committed to contribute an additional $925 million to support the long-term capacity infrastructure that is expected to be paid through 2026, of which $634 million is expected to be paid in the next 12 months.
The remaining $969 million is expected to be invested over the coming two years, of which approximately $512 million is expected to be paid in the next 12 months. In addition, NXP has committed to contribute an additional $1,200 million to support the long-term capacity infrastructure. As per the end of the reporting date, NXP has contributed $855 million.
NXP experienced declines in the Industrial & IoT end market of $47 million or 8.3%, Communication Infrastructure & Other end market of $42 million or 9.3%, Automotive end market of $39 million or 2.1%, and Mobile end market of $11 million or 2.7%.
Within our end markets, the Industrial & IoT end market increased $61 million or 10.5%, the Mobile end market increased $55 million or 12.8%, the Automotive end market increased $39 million or 2.1%, and the Communication Infrastructure & Other end market increased $7 million or 2.1%.
Operating cash flows for the three months ended December 31, 2024 was $391 million compared to $779 million for the three months ended September 29, 2024, a decrease of $388 million or 50.2% quarter-on-quarter. 36 Results of Operations The following table presents the composition of operating income for the years ended December 31, 2024 and December 31, 2023.
Operating cash flows for the fourth quarter of 2025 was $891 million compared to $585 million for the third quarter of 2025, an increase of $306 million or 52.3% quarter-on-quarter. 38 Results of Operations The following table presents the operating results for the years ended December 31, 2025, and December 31, 2024.
These adjustments facilitate a useful evaluation of our core operating performance and comparisons to past operating results and provide investors with additional means to evaluate expense trends. 47 Non-GAAP Adjustment or Measure Definition Usefulness to Management and Investors Non-GAAP Provision for income taxes Non-GAAP provision for income taxes is NXP's GAAP provision for income taxes adjusted for the income tax effects of the adjustments to our GAAP measure, including the effects of purchase price accounting (“PPA”), restructuring costs, share-based compensation, other incidental items and certain other adjustments to financial income (expense) items.
Income tax effect Non-GAAP income tax benefit (provision) is NXP's GAAP income tax benefit (provision) adjusted for the income tax effects of the adjustments to our GAAP measure, including the effects of PPA, restructuring costs, share-based compensation, other incidental items and certain other adjustments to financial income (expense) items.
Our gross profit percentage for 2024 of 56.4% decreased when compared to 2023 (56.9%), reflecting a lower decline of cost of revenue compared with the decreased revenue. We continue to generate strong operating cash flows, with $2,782 million in cash flows from operations for 2024.
Our gross profit percentage for 2025 of 54.7% decreased when compared to 2024 (56.4%), mainly driven by price and unfavorable product mix. We continue to generate strong operating cash flows, with $2,820 million in cash flows from operations for 2025. We returned $1,924 million to our shareholders during the year in dividends and repurchases of common stock.
Revenue in the Industrial & IoT end market was $2,269 million, a decrease of $82 million or 3.5% versus the year ago period, with processor products contributing to the decline partly offset with growth in advanced analog and connectivity products.
Revenue in the Automotive end market was $7,116 million, a decrease of $35 million or 0.5% versus the year ago period. The decline was driven by processors, partially offset by growth in mixed-signal products. Revenue in the Industrial & IoT end market was $2,273 million, an increase of $4 million or 0.2% versus the year ago period.
Non-controlling Interests Non-controlling interests are related to the third-party share in the results of consolidated companies, predominantly SSMC. Their share of non-controlling interests amounted to a profit of $32 million for the year ended December 31, 2024, compared to a profit of $25 million for the year ended December 31, 2023.
For the year ended December 31, 2025, results relating to equity-accounted investees include the impairment of our equity method investment SigmaSense and the loss on the sale of our equity method investment Smart Growth Fund. Non-controlling Interests Non-controlling interests are related to the third-party share in the results of consolidated companies, predominantly SSMC.
When aggregating all end markets together and reviewing sales channel performance, revenue through NXP’s third party distribution partners was $1,763 million, a decrease of $134 million or 7.1% compared to the previous period. Revenue through NXP’s third party direct OEM and EMS customers was $1,321 million, consistent with the previous period.
When aggregating all end markets together and reviewing sales channel performance, revenue from distributors was $2,025 million, an increase of $159 million or 8.5% compared to the previous period. Revenue from direct customers was $1,274 million, an increase of $5 million or 0.4% compared to the previous period. From a geographic perspective, revenue increased across all regions.
We expect operating cash outflows to remain elevated as we make payments under these purchase agreements. • The Company has committed to invest approximately $442 million in the newly founded ESMC GmbH, over the coming four years, of which approximately $102 million is expected to be paid in the next 12 months. • Driven by our investment in VSMC, NXP has committed to invest an additional $1,460 million in equity through 2026, of which $1,072 million is expected to be paid in the next 12 months.
We expect operating cash outflows to remain elevated as we make payments under these purchase agreements. • The Company has committed to invest €500 million, which translated to $587 million, in the equity of the recently founded company ESMC. As per the end of the reporting date, NXP has invested $183 million.
($307 million), which are respectively expected to be paid within the next 12 months. From time to time, we engage in discussions with third parties regarding potential acquisitions of, or investments in, businesses, technologies and product lines.
From time to time, we engage in discussions with third parties regarding potential acquisitions of, or investments in, businesses, technologies and product lines. Any such transaction could require significant use of our cash and cash equivalents or require us to arrange for new debt and equity financing to fund the transaction.
The change in financial income (expense) is attributable to a decrease in interest income of $27 million as a result of lower cash level in 2024, partially offset by higher interest rates. Interest expense decreased by $40 million as a result of redemption of debt.
The change in financial income (expense) is attributable to an increase in interest expense of $68 million as a result of the issuance of new bonds, EIB loans and commercial paper notes. Interest income decreased by $15 million as a result of lower cash levels in 2025.
Revenue in the Communication Infrastructure & Other end market was $1,697 million, a decrease of $417 million or 19.7% versus the year ago period, with the entire product portfolio contributing the decline.
Revenue in the Communication Infrastructure & Other end market was $1,296 million, a decrease of $401 million or 23.6% versus the year ago period. The decline was primarily due to processors. When aggregating all end markets and reviewing sales channel performance, revenue from distributors was $7,051 million, a decrease of $152 million or 2.1% versus the year ago period.
We returned $2,411 million to our shareholders during the year in dividends and repurchases of common stock. Our cash position at the end of 2024 was $3,292 million.
Our cash position at the end of 2025 was $3,267 million.
Removed
On January 9, 2024, NXP acquired shares in the newly founded European Semiconductor Manufacturing Company GmbH (ESMC), which will build and operate a new 300mm semiconductor wafer manufacturing facility in Dresden, Germany. ESMC is 70% owned by TSMC, with Bosch, Infineon, and NXP each owning 10%.
Added
Kurt Sievers, our former CEO, voluntarily retired as CEO and executive director of the Company, effective October 28, 2025. The Company's Board of Directors unanimously appointed Rafael Sotomayor to succeed Mr. Sievers as President and CEO and temporary executive director of the Company, effective as of October 28, 2025.
Removed
NXP will invest approximately $550 million (€500 million) for our equity position, of which $80 million has been invested in the year ended December 31, 2024. On September 4, 2024, NXP acquired shares in the newly founded VisionPower Semiconductor Manufacturing Company Pte. Ltd. (VSMC), which will build and operate a new 300mm semiconductor wafer manufacturing facility in Singapore.
Added
On June 17, 2025, NXP announced the closing of the acquisition of 100% of TTTech Auto for $766 million in cash ($675 million net of cash acquired). TTTech Auto is a leader in innovating unique safety-critical systems and middleware for software-defined vehicles (SDVs).
Removed
VSMC is 60% owned by Vanguard International Semiconductor Corporation and 40% owned by NXP. NXP will invest $1,600 million for our equity position, of which $140 million has been invested in the year ended December 31, 2024.
Added
The TTTech Auto acquisition complements and expands NXP’s system and software offerings in the Automotive and Industrial & IoT end markets. On October 24, 2025, NXP closed the previously announced acquisition of 100% of Aviva Links for $222 million in cash ($202 million net of cash acquired) and $26 million through the settlement of previously held investments in Aviva Links.
Removed
NXP has committed to contribute an additional $1,200 million to support the long-term capacity infrastructure that is expected to be paid through 2026, of which $275 million has been contributed in the year ended December 31, 2024. On December 17, 2024, NXP entered into a definitive agreement to acquire Aviva Links for $242.5 million in cash.
Added
Aviva Links is a provider of Automotive SerDes Alliance (ASA) compliant in-vehicle connectivity solutions. The Aviva Links acquisition complements and expands NXP’s automotive networking solutions in the Automotive and Industrial & IoT end markets. On October 27, 2025, NXP closed the previously announced acquisition of 100% of Kinara, Inc. for $284 million in cash ($283 million net of cash acquired).

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−0 removed13 unchanged
Biggest changeAdditional information regarding our notes is provided in Note 2 - Significant Accounting Policies, and Note 13 - Debt, of our notes to the Consolidated Financial Statements included in Item 8. of this Annual Report and is incorporated herein by reference.
Biggest changeAdditional information is provided in Note 2 - Significant Accounting Policies, and Note 14 - Debt, of our notes to the Consolidated Financial Statements included in Item 8. of this Annual Report and is incorporated herein by reference.
When the fair value of a derivative contract is positive, the counterparty owes us, thus creating a receivable risk for us. We are exposed to counterparty 51 credit risk in the event of non-performance by counterparties to our derivative agreements. We minimize counterparty credit (or repayment) risk by entering into transactions with major financial institutions of investment grade credit rating.
When the fair value of a derivative contract is positive, the counterparty owes us, thus creating a receivable risk for us. We are exposed to counterparty credit risk in the event of non-performance by counterparties to our derivative agreements. We minimize counterparty credit (or repayment) risk by entering into transactions with major financial institutions of investment grade credit rating.
We may hedge currency exposures associated with certain assets and liabilities denominated in nonfunctional currencies and certain anticipated nonfunctional currency transactions. As a result, we could experience unanticipated gains or losses on anticipated foreign currency cash flows, as well as economic loss with respect to the recoverability of investments.
We may hedge currency exposures associated with certain assets and liabilities denominated in nonfunctional currencies and certain 56 anticipated nonfunctional currency transactions. As a result, we could experience unanticipated gains or losses on anticipated foreign currency cash flows, as well as economic loss with respect to the recoverability of investments.
Our primary foreign currency exposure relates to the U.S. dollar to euro exchange rate. However, our foreign currency exposures also relate, but are not limited, to the Chinese Yuan, the India Rupee, the Japanese Yen, the Malaysian Ringgit, the Romanian Leu, the Singapore Dollar, the New Taiwan Dollar, the Thai Baht and the Swiss Franc. 52
Our primary foreign currency exposure relates to the U.S. dollar to Euro exchange rate. However, our foreign currency exposures also relate, but are not limited, to the Chinese Yuan, the India Rupee, the Japanese Yen, the Malaysian Ringgit, the Romanian Leu, the Singapore Dollar, the New Taiwan Dollar, the Thai Baht and the Swiss Franc. 57
At December 31, 2024 our net asset related to foreign currency forward contracts designated as hedges of foreign currency risk on certain operating expenditure transactions was $3 million.
At December 31, 2025, our net liability related to foreign currency forward contracts designated as hedges of foreign currency risk on certain operating expenditure transactions was $6 million.

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