Item 1. Financial Statements

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Item 1. Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

($ in millions, unless otherwise stated)


	For the three months ended		For the nine months ended
	September 28, 2025	September 29, 2024	September 28, 2025	September 29, 2024
Revenue	3,173	3,250	8,934	9,503
Cost of revenue	(1,386)	(1,384)	(4,025)	(4,062)
Gross profit	1,787	1,866	4,909	5,441
Research and development	(575)	(577)	(1,695)	(1,735)
Selling, general and administrative	(286)	(265)	(845)	(841)
Amortization of acquisition-related intangible assets	(31)	(29)	(83)	(108)
Total operating expenses	(892)	(871)	(2,623)	(2,684)
Other income (expense)	(2)	(5)	17	(15)
Operating income (loss)	893	990	2,303	2,742
Financial income (expense):

Other financial income (expense)	(98)	(82)	(276)	(227)
Income (loss) before income taxes	795	908	2,027	2,515
Benefit (provision) for income taxes	(148)	(173)	(394)	(468)
Results relating to equity-accounted investees	(1)	(6)	(33)	(10)
Net income (loss)	646	729	1,600	2,037
Less: Net income (loss) attributable to non-controlling interests	15	11	34	22
Net income (loss) attributable to stockholders	631	718	1,566	2,015

Earnings per share data:
Net income (loss) per common share attributable to stockholders in $
Basic	2.50	2.82	6.20	7.89
Diluted	2.48	2.79	6.16	7.80

Weighted average number of shares of common stock outstanding during the period (in thousands):
Basic	252,170	254,458	252,759	255,501
Diluted	254,310	257,717	254,401	258,426

See accompanying notes to the Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

($ in millions, unless otherwise stated)


	For the three months ended		For the nine months ended
	September 28, 2025	September 29, 2024	September 28, 2025	September 29, 2024
Net income (loss)	646	729	1,600	2,037
Other comprehensive income (loss), net of tax:
Change in fair value cash flow hedges	(4)	16	6	8
Change in foreign currency translation adjustment	—	59	179	5
Change in net actuarial gain (loss)	1	(1)	(1)	1

Total other comprehensive income (loss)	(3)	74	184	14
Total comprehensive income (loss)	643	803	1,784	2,051
Less: Comprehensive income (loss) attributable to non-controlling interests	15	11	34	22
Total comprehensive income (loss) attributable to stockholders	628	792	1,750	2,029

See accompanying notes to the Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

($ in millions, unless otherwise stated)


		September 28, 2025	December 31, 2024
ASSETS
Current assets:
	Cash and cash equivalents	3,454	3,292
	Short-term deposits	500	—
	Accounts receivable, net	1,095	1,032
	Assets held for sale	292	—
	Inventories, net	2,452	2,356
	Other current assets	716	625
Total current assets		8,509	7,305
Non-current assets:
	Deferred tax assets	1,313	1,251
	Other non-current assets	2,186	1,796
	Property, plant and equipment, net of accumulated depreciation of $6,434 and $6,145	3,086	3,267
	Identified intangible assets, net of accumulated amortization of $846 and $1,037	1,139	836
	Goodwill	10,121	9,930
	Total non-current assets	17,845	17,080
Total assets		26,354	24,385

LIABILITIES AND EQUITY
Current liabilities:
	Accounts payable	886	1,017

	Restructuring liabilities-current	49	147
	Other current liabilities	1,384	1,434
	Short-term debt	1,264	500
Total current liabilities		3,583	3,098
Non-current liabilities:
	Long-term debt	10,971	10,354
	Restructuring liabilities	60	10
	Other non-current liabilities	1,313	1,392
Total non-current liabilities		12,344	11,756
Total liabilities		15,927	14,854
Equity:
	Non-controlling interests	382	348

	Stockholders’ equity:
	Common stock, par value €0.20 per share:	56	56
	Capital in excess of par value	15,324	14,962
	Treasury shares, at cost:
	22,394,275 shares (2024: 20,195,011 shares)	(4,439)	(4,004)
	Accumulated other comprehensive income (loss)	167	(17)
	Accumulated deficit	(1,063)	(1,814)
	Total stockholders’ equity	10,045	9,183
Total equity		10,427	9,531
Total liabilities and equity		26,354	24,385

See accompanying notes to the Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

($ in millions, unless otherwise stated)


	For the nine months ended
	September 28, 2025	September 29, 2024
Cash flows from operating activities:
Net income (loss)	1,600	2,037
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization	617	666
Share-based compensation	362	344
Amortization of discount (premium) on debt, net	2	2
Amortization of debt issuance costs	5	5
Net (gain) loss on sale of assets	(29)	(2)
(Gain) loss on equity security, net	2	12

Results relating to equity-accounted investees	33	10
Deferred tax expense (benefit)	(32)	(127)
Changes in operating assets and liabilities:
(Increase) decrease in receivables and other current assets	(81)	(182)
(Increase) decrease in inventories	(180)	(100)
Increase (decrease) in accounts payable and other liabilities	(296)	(204)
Decrease (increase) in other non-current assets	(98)	(88)
Exchange differences	21	15
Other items	3	3
Net cash provided by (used for) operating activities	1,929	2,391
Cash flows from investing activities:
Purchase of identified intangible assets	(85)	(113)
Capital expenditures on property, plant and equipment	(299)	(597)

Insurance recoveries received for equipment damage	—	2
Proceeds from disposals of property, plant and equipment	2	3
Purchase of interests in businesses, net of cash acquired	(690)	—

Proceeds of short-term deposits	—	9
Investment in short-term deposits	(500)	—
Purchase of investments	(319)	(193)
Proceeds from sale of investments	—	5

Net cash provided by (used for) investing activities	(1,891)	(884)
Cash flows from financing activities:
Repurchase of long-term debt	(500)	(1,000)
Proceeds from the issuance of long-term debt	1,868	—
Cash paid for debt issuance costs	(8)	—
Proceeds from issuance of commercial paper notes	2,426	—
Repayment of commercial paper notes	(2,411)	—

Dividends paid to common stockholders	(771)	(780)
Proceeds from issuance of common stock through stock plans	77	79
Purchase of treasury shares and restricted stock unit withholdings	(561)	(918)
Other, net	(2)	(2)
Net cash provided by (used for) financing activities	118	(2,621)
Effect of changes in exchange rates on cash positions	6	—
Increase (decrease) in cash and cash equivalents	162	(1,114)
Cash and cash equivalents at beginning of period	3,292	3,862
Cash and cash equivalents at end of period	3,454	2,748


Supplemental disclosures to the Condensed Consolidated Cash flows
Net cash paid during the period for:
Interest	194	151
Income taxes, net of refunds	437	587
Net gain (loss) on sale of assets:
Cash proceeds from the sale of assets	38	3
Book value of these assets	(9)	(1)
Non-cash investing activities:
Non-cash capital expenditures	112	125

See accompanying notes to the Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)

($ in millions, unless otherwise stated)


	Outstanding number of shares (in thousands)	Common stock	Capital in excess of par value	Treasury shares at cost	Accumu- lated other compre- hensive income (loss)	Accumu- lated deficit	Total stock- holders’ equity	Non- con- trolling interests	Total equity
Balance as of December 31, 2024	254,324	56	14,962	(4,004)	(17)	(1,814)	9,183	348	9,531
Net income (loss)						490	490	7	497
Other comprehensive income (loss)					46		46		46
Share-based compensation plans			131				131		131
Shares issued pursuant to stock awards	238			54		(22)	32		32
Treasury shares repurchased and retired	(1,413)			(303)			(303)		(303)
Dividends common stock ($1.014 per share)						(257)	(257)		(257)
Balance as of March 30, 2025	253,149	56	15,093	(4,253)	29	(1,603)	9,322	355	9,677
Net income (loss)						445	445	12	457
Other comprehensive income (loss)					141		141		141
Share-based compensation plans			113				113		113
Shares issued pursuant to stock awards	70			16		(9)	7		7
Treasury shares repurchased and retired	(1,105)			(204)			(204)		(204)

Dividends common stock ($1.014 per share)						(255)	(255)		(255)
Balance as of June 29, 2025	252,114	56	15,206	(4,441)	170	(1,422)	9,569	367	9,936
Net income (loss)						631	631	15	646
Other comprehensive income					(3)		(3)		(3)
Share-based compensation plans			118				118		118
Shares issued pursuant to stock awards	249			56		(18)	38		38
Treasury shares repurchased and retired	(238)			(54)			(54)		(54)

Dividends common stock ($1.014 per share)						(254)	(254)		(254)
Balance as of September 28, 2025	252,125	56	15,324	(4,439)	167	(1,063)	10,045	382	10,427

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)

($ in millions, unless otherwise stated)


	Outstanding number of shares (in thousands)	Common stock	Capital in excess of par value	Treasury shares at cost	Accumu- lated other compre- hensive income (loss)	Accumu- lated deficit	Total stock- holders’ equity	Non- con- trolling interests	Total equity
Balance as of December 31, 2023	257,190	56	14,501	(3,210)	90	(2,793)	8,644	316	8,960
Net income (loss)						639	639	5	644
Other comprehensive income (loss)					(46)		(46)		(46)
Share-based compensation plans			118				118		118
Shares issued pursuant to stock awards	228			44		(7)	37		37
Treasury shares repurchased and retired	(1,323)			(303)			(303)		(303)
Dividends common stock ($1.014 per share)						(260)	(260)		(260)
Balance as of March 31, 2024	256,095	56	14,619	(3,469)	44	(2,421)	8,829	321	9,150
Net income (loss)						658	658	6	664
Other comprehensive income (loss)					(14)		(14)		(14)
Share-based compensation plans			111				111		111
Shares issued pursuant to stock awards	89			17		(14)	3		3
Treasury shares repurchased and retired	(1,208)			(310)			(310)		(310)

Dividends common stock ($1.014 per share)						(259)	(259)		(259)
Balance as of June 30, 2024	254,976	56	14,730	(3,762)	30	(2,036)	9,018	327	9,345
Net income (loss)						718	718	11	729
Other comprehensive income					74		74		74
Share-based compensation plans			119				119		119
Shares issued pursuant to stock awards	245			46		(7)	39		39
Treasury shares repurchased and retired	(1,219)			(305)			(305)		(305)
Dividends common stock ($1.014 per share)						(257)	(257)		(257)
Balance as of September 29, 2024	254,002	56	14,849	(4,021)	104	(1,582)	9,406	338	9,744

See accompanying notes to the Condensed Consolidated Financial Statements

NXP SEMICONDUCTORS N.V.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

All amounts in millions of $ unless otherwise stated

1 Basis of Presentation and Overview

We prepared our interim Condensed Consolidated Financial Statements that accompany these notes in conformity with U.S. generally accepted accounting principles, consistent in all material respects with those applied in our Annual Report on Form 10-K for the year ended December 31, 2024.

Use of estimates

We have made estimates and judgments affecting the amounts reported in our Condensed Consolidated Financial Statements and the accompanying notes. The actual results that we experience may differ materially from our estimates. The interim financial information is unaudited, but reflects all normal adjustments that are, in our opinion, necessary to provide a fair statement of results for the interim periods presented. This interim information should be read in conjunction with the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2024.

Segment reporting

NXP has one reportable segment representing the entity as a whole, aligning with our organizational structure and with the way our chief operating decision maker ("CODM"), the Chief Executive Officer, makes operating decisions, allocates resources, and manages the growth and profitability of the Company.

Our CODM regularly reviews income and expense items at the consolidated company (reporting segment) level and uses net income to evaluate income generated from total assets to evaluate whether and how to reinvest profits into the entity’s operations, shareholder return, acquisitions or otherwise. Net income is also used to monitor budget versus actual results, forecasted information and in competitive analysis. These interim income and expense items are as included on the Consolidated Statements of Operations and in our notes to the Consolidated Financial Statements.

Chief Executive Officer Succession

Following the previous announcement on April 28, 2025, Kurt Sievers has voluntarily retired as CEO and executive director of the Company effective October 28, 2025. The Company’s Board of Directors has 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.

2 Significant Accounting Policies and Recent Accounting Pronouncements

Significant Accounting Policies

For a discussion of our significant accounting policies, see Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – “Significant Accounting Policies” of our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no changes to our significant accounting policies since our Annual Report on Form 10-K for the year ended December 31, 2024.

Recent accounting standards

Accounting Standards Adopted in 2025

In December 2023, the FASB issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in ASU 2023-09 require greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes paid. In addition, the amendments require disclosure of income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign; and, disclosure of income tax expense (or benefit) from continuing operations disaggregated. We have adopted ASU 2023-09 and will implement the applicable disclosure for our fiscal year ending December 31, 2025.

Accounting standards not yet adopted

In November 2024, the FASB issued Accounting Standards Update (ASU) 2024-03, Disaggregation of Income Statement Expenses. The standard requires disaggregated disclosure of income statement expenses. It requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. We are currently evaluating the effect of this new guidance on our Consolidated Financial Statements.

No other new accounting pronouncements were issued or became effective in the period that had, or are expected to have, a material impact on our Consolidated Financial Statements.

3 Acquisitions and Divestments

On October 24, 2025, NXP closed the previously announced acquisition of 100% of Aviva Links for $243 million in cash, before closing adjustments. 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. We are currently evaluating the purchase price allocation for this transaction and expect to have our preliminary allocation completed in the fourth quarter of 2025.

On October 27, 2025, NXP closed the previously announced acquisition of 100% of Kinara, Inc. for $307 million in cash, before closing adjustments. Kinara is an industry leader in high performance, energy-efficient and programmable discrete neural processing units (NPUs). The Kinara acquisition complements and expands NXP’s solutions for AI-powered edge systems in the Industrial & IoT and Automotive end markets. We are currently evaluating the purchase price allocation for this transaction and expect to have our preliminary allocation completed in the fourth quarter of 2025.

2025

On June 17, 2025, NXP announced the closing of the acquisition of 100% of TTTech Auto for $766 million in cash ($679 million net of cash acquired). 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.

The preliminary fair values of the assets acquired and liabilities assumed in the TTTech Auto acquisition, by major class, were recognized as follows:


Cash			91
Other assets			75
Other liabilities			(52)
Identified intangible assets			345
Goodwill			307
Net assets acquired			766

The final determination of the fair values of certain assets and liabilities will be completed in the quarters subsequent to the acquisition date.

Goodwill arising from the TTTech Auto acquisition is attributed to the anticipated growth from new product sales, sales to new customers, the assembled workforce, and synergies expected from the combination. The goodwill recognized is non-deductible for income tax purposes.

The identified intangible assets assumed were recognized as follows:


	Fair value	Weighted Average Estimated Useful Life (in Years)
Software	267	11.5
Technology	25	11.5
Customer relationships	49	8.5
Order backlog	4	3.5
Total identified intangible assets	345

The income approach was applied to estimate the fair values of the intangible assets acquired. Software, technology, customer relationships, and order backlog were valued using the excess earnings method, which reflects the present values of the projected cash flows that are expected to be generated by the software, technology, customer relationships, and order backlog less charges representing the contribution of other assets to those cash flows.

There were no material divestments during the first nine months of 2025.

2024

There were no material acquisitions or divestments during the first nine months of 2024.

4 Assets Held for Sale

In the second quarter of 2025, NXP management, in reviewing its portfolio, concluded that certain activities related to our MEMS sensors business line no longer fit the NXP strategic portfolio and took actions that resulted in the business line meeting the criteria to be classified as held for sale. On July 24, 2025, NXP reached a definitive agreement with STMicroelectronics International N.V., under which NXP will sell the business for an amount up to $950 million in cash, including $900 million at closing and up to an additional $50 million subject to the achievement of technical milestones. Subject to customary closing conditions, the transaction is expected to close during 2026. The carrying value of these assets held for sale as of September 28, 2025, are comprised of current assets of $87 million and non-current assets of $205 million, which consists primarily of goodwill of $170 million.

5 Supplemental Financial Information

Statement of Operations Information:

Disaggregation of revenue

The following table presents revenue disaggregated by sales channel:


	For the three months ended		For the nine months ended
	September 28, 2025	September 29, 2024	September 28, 2025	September 29, 2024
Distributors	1,866	1,897	5,026	5,440
Original Equipment Manufacturers and Electronic Manufacturing Services	1,269	1,321	3,810	3,970
Other	38	32	98	93
Total Revenue	3,173	3,250	8,934	9,503

Depreciation, amortization and impairment


	For the three months ended		For the nine months ended
	September 28, 2025	September 29, 2024	September 28, 2025	September 29, 2024
Depreciation of property, plant and equipment	132	149	418	440
Amortization of internal use software	14	8	30	22
Amortization of other identified intangible assets	55	61	169	204
Total - Depreciation, amortization and impairment	201	218	617	666

Financial income and expense


	For the three months ended		For the nine months ended
	September 28, 2025	September 29, 2024	September 28, 2025	September 29, 2024
Interest income	37	36	111	125
Interest expense	(118)	(96)	(339)	(298)




Other financial income/ (expense)	(17)	(22)	(48)	(54)
Total	(98)	(82)	(276)	(227)

Earnings per share

The computation of earnings per share (EPS) is presented in the following table:


	For the three months ended		For the nine months ended
	September 28, 2025	September 29, 2024	September 28, 2025	September 29, 2024
Net income (loss)	646	729	1,600	2,037
Less: net income (loss) attributable to non-controlling interests	15	11	34	22
Net income (loss) attributable to stockholders	631	718	1,566	2,015

Weighted average number of shares outstanding (after deduction of treasury shares) during the year (in thousands)	252,170	254,458	252,759	255,501
Plus incremental shares from assumed conversion of:
Options 1)	74	134	83	155
Restricted Share Units, Performance Share Units and Equity Rights 2)	2,066	3,125	1,559	2,770
Dilutive potential common shares	2,140	3,259	1,642	2,925

Adjusted weighted average number of shares outstanding (after deduction of treasury shares) during the year (in thousands)	254,310	257,717	254,401	258,426

EPS attributable to stockholders in $:
Basic net income (loss)	2.50	2.82	6.20	7.89
Diluted net income (loss)	2.48	2.79	6.16	7.80

There were no stock options to purchase shares of NXP’s common stock that were outstanding in Q3 2025 and YTD 2025 (Q3 2024 and YTD 2024: no shares) that were anti-dilutive and were not included in the computation of diluted EPS because the exercise price was greater than the average fair market value of the common stock or the number of shares assumed to be repurchased using the proceeds of unrecognized compensation expense and exercise prices were greater than the weighted average number of shares underlying outstanding stock options.
There were 0.4 million unvested RSUs, PSUs and equity rights that were outstanding in Q3 2025 and YTD 2025 (Q3 2024: 0.4 million shares and YTD 2024: 0.2 shares) that were anti-dilutive and were not included in the computation of diluted EPS because the number of shares assumed to be repurchased using the proceeds of unrecognized compensation expense were greater than the weighted average number of outstanding unvested RSUs, PSUs and equity rights or the performance goal has not been met yet.

Balance Sheet Information

Cash and cash equivalents

At September 28, 2025, and December 31, 2024, our cash balance was $3,454 million and $3,292 million, respectively, of which $324 million and $261 million was held by SSMC, our consolidated joint venture company with TSMC. 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 both first nine months of 2025 and 2024, no dividends were declared by SSMC.

Inventories

Inventories are summarized as follows:


	September 28, 2025	December 31, 2024
Raw materials	108	109
Work in process	1,666	1,576
Finished goods	678	671
	2,452	2,356

The amounts recorded above are net of allowance for obsolescence of $115 million as of September 28, 2025 (December 31, 2024: $150 million).

Equity Investments

At September 28, 2025 and December 31, 2024, the total carrying value of investments in equity securities is summarized as follows:


	September 28, 2025	December 31, 2024
Marketable equity securities	1	1
Non-marketable equity securities	118	71
Equity-accounted investments	538	300
	657	372

The total carrying value of investments in equity-accounted investees is summarized as follows:


	September 28, 2025			December 31, 2024
	Shareholding %		Amount	Shareholding %		Amount
VisionPower Semiconductor Manufacturing Company Pte. Ltd. (VSMC)	40.00	%	342	40.00	%	134
European Semiconductor Manufacturing Company (ESMC) GmbH 1)	10.00	%	136	10.00	%	77
SMART Growth Fund, L.P.	8.41	%	38	8.41	%	39
SigmaSense, LLC	9.40	%	—	10.64	%	28
Others	—		22	—		22
			538			300
1) NXP accounts for its investment in ESMC under the equity method due to our ability to exercise significant influence over ESMC’s operations, primarily through representation on ESMC’s board of directors and other operational arrangements.

Results related to equity-accounted investees at the end of each period were as follows:


	For the three months ended		For the nine months ended
	September 28, 2025	September 29, 2024	September 28, 2025	September 29, 2024
Company's share in income (loss)	(1)	(6)	(7)	(11)
Other results 1)	—	—	(26)	1
	(1)	(6)	(33)	(10)
1) For the nine-month period ending September 28, 2025, other results includes the impairment of our equity method investment SigmaSense.

Other current liabilities

Other current liabilities at September 28, 2025 and December 31, 2024 consisted of the following:


	September 28, 2025	December 31, 2024
Accrued compensation and benefits	352	371
Customer programs	45	131
Income taxes payable	102	114
Dividend payable	255	258
Other	630	560
	1,384	1,434

Accumulated other comprehensive income (loss)

Total comprehensive income (loss) represents net income (loss) plus the results of certain equity changes not reflected in the Condensed Consolidated Statements of Operations. The after-tax components of accumulated other comprehensive income (loss) and their corresponding changes are shown below:


	Currency translation differences	Change in fair value cash flow hedges	Net actuarial gain/(losses)	Accumulated Other Comprehensive Income (loss)
As of December 31, 2024	66	(5)	(78)	(17)
Other comprehensive income (loss) before reclassifications	179	9	(1)	187
Amounts reclassified out of accumulated other comprehensive income (loss)	—	(1)	—	(1)
Tax effects	—	(2)	—	(2)
Other comprehensive income (loss)	179	6	(1)	184
As of September 28, 2025	245	1	(79)	167

Cash dividends

The following dividends were declared during the first nine months of 2025 and 2024 under NXP’s quarterly dividend program:


	Fiscal Year 2025		Fiscal Year 2024
	Dividend per share	Amount	Dividend per share	Amount
First quarter	1.014	257	1.014	260
Second quarter	1.014	256	1.014	259
Third quarter	1.014	255	1.014	258

The dividend declared in the third quarter (not yet paid) is classified in the Condensed Consolidated Balance Sheet in other current liabilities as of September 28, 2025 and was subsequently paid on October 8, 2025.

6 Restructuring

At each reporting date, we evaluate our restructuring liabilities, which consist primarily of termination benefits, to ensure that our accruals are still appropriate.

The following table presents the changes in restructuring liabilities in 2025:


			As of January 1, 2025						Additions						Utilized						Released						Other changes						As of September 28, 2025
Restructuring liabilities			157						89						(137)						(5)						5						109

The total restructuring liability as of September 28, 2025 of $109 million is classified in the Consolidated Balance Sheet under current liabilities ($49 million) and non-current liabilities ($60 million).

The restructuring charges for the nine-month period ending September 28, 2025 primarily consist of $89 million for personnel related costs for specific targeted actions, offset by a $5 million release for an earlier program. The restructuring charges for the nine-month period ending September 29, 2024 consist of $21 million for personnel related costs for specific targeted actions, offset by a $9 million release for an earlier program.

These restructuring charges recorded in operating income, for the periods indicated, are included in the following line items in the statement of operations:


	For the three months ended		For the nine months ended
	September 28, 2025	September 29, 2024	September 28, 2025	September 29, 2024
Cost of revenue	—	—	65	7
Research and development	1	—	11	7
Selling, general and administrative	2	—	8	(1)

Net restructuring charges	3	—	84	13

7 Income Tax

Each year NXP makes an estimate of its annual effective tax rate. This estimated annual effective tax rate ("EAETR") is then applied to the year-to-date Income (loss) before income taxes excluding discrete items, to determine the year-to-date benefit (provision) for income taxes. The income tax effects of any discrete items are recognized in the interim period in which they occur. As the year progresses, the Company continually refines the EAETR based upon actual events and the apportionment of our earnings (loss). This continual estimation process periodically may result in a change to our EAETR for the year. When this occurs, we adjust on an accumulated basis the benefit (provision) for income taxes during the quarter in which the change occurs.

Our provision for income taxes for 2025 is based on our EAETR of 18.7%, which is lower than the Netherlands statutory tax rate of 25.8%, primarily due to tax benefits from the Netherlands and foreign tax incentives.


	For the three months ended				For the nine months ended
	September 28, 2025		September 29, 2024		September 28, 2025		September 29, 2024
Tax benefit (provision) calculated at EAETR	(149)		(160)		(380)		(446)
Discrete tax benefit (provision) items	1		(13)		(14)		(22)
Benefit (provision) for income taxes	(148)		(173)		(394)		(468)

Effective tax rate	18.6	%	19.0	%	19.4	%	18.6	%

The effective tax rate of 18.6% for the third quarter of 2025 was lower than the EAETR due to the income tax benefit for discrete items of $1 million. The discrete items are primarily related to the impact of foreign currency on income tax related items, changes in estimates for previous years, and changes in the litigation accrual and related insurance reimbursements relating to the Motorola Personal Injury Lawsuits regarding previous years.

For the first nine months ended 2025, the effective tax rate of 19.4% was higher than 18.7% due to a net result of unfavorable discrete items of $14 million. These discrete items are primarily related to the impact of changes in estimates for previous years, and changes in the litigation accrual and related insurance reimbursements relating to the Motorola Personal Injury Lawsuits.

The effective tax rate of 19.4% for the first nine months of 2025 was higher compared to the rate for the first nine months ended 2024 of 18.6% due to a different mix of the benefit (provision) for income taxes in our operating locations and lower foreign tax incentives in the current period as a result of a decrease in qualifying income.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented as of 2026. We have assessed that there is effectively no material tax impact on our consolidated financial statements. We also note that there is still unclarity about what the G7 statement in relation to the US on global minimum taxes, as announced on June 28, 2025, could mean for the Company.

8 Identified Intangible Assets

Identified intangible assets as of September 28, 2025 and December 31, 2024, respectively, were composed of the following:


	September 28, 2025		December 31, 2024
	Gross carrying amount	Accumulated amortization	Gross carrying amount	Accumulated amortization
In-process R&D (IPR&D) 1)	24	—	24	—

Customer-related	845	(435)	790	(400)
Technology-based	1,116	(411)	1,059	(637)
Identified intangible assets	1,985	(846)	1,873	(1,037)

1) IPR&D is not subject to amortization until completion or abandonment of the associated research and development effort.

The estimated amortization expense for these identified intangible assets for each of the five succeeding years is:


2025 (remaining)			68
2026			234
2027			215
2028			132
2029			90
Thereafter			400

All intangible assets, excluding IPR&D and goodwill, are subject to amortization and have no assumed residual value.

The expected weighted average remaining life of identified intangibles is 6 years as of September 28, 2025 (December 31, 2024: 5 years).

9 Debt

Commercial Paper

We have a $2 billion Commercial Paper Program to support general corporate purposes. As of September 28, 2025, we had $15 million commercial paper notes outstanding with a duration of up to 98 days. The weighted-average interest rate of the Company's outstanding commercial paper notes is 4.62%.

Debt issuance and redemption

On August 19, 2025, NXP Semiconductors N.V., together with NXP B.V., NXP Funding LLC and NXP USA, Inc. issued $500 million of 4.30% senior unsecured notes due 2028, $300 million of 4.85% senior unsecured notes due 2032 and $700 million of 5.25% senior unsecured notes due 2035.

On May 1, 2025, we repaid the $500 million aggregate principal amount of outstanding 2.7% senior unsecured notes due 2025 at maturity using available cash.

Long-term debt

The following table summarizes the outstanding debt as of September 28, 2025 and December 31, 2024:


		September 28, 2025		December 31, 2024
	Maturities	Amount	Interest rate	Amount	Interest rate
Fixed-rate 2.7% senior unsecured notes	May, 2025	—	2.700	500	2.700
Fixed-rate 5.35% senior unsecured notes	Mar, 2026	500	5.350	500	5.350
Fixed-rate 3.875% senior unsecured notes	Jun, 2026	750	3.875	750	3.875
Fixed-rate 3.15% senior unsecured notes	May, 2027	500	3.150	500	3.150
Fixed-rate 4.40% senior unsecured notes	Jun, 2027	500	4.400	500	4.400
Fixed-rate 4.30% senior unsecured notes	Aug, 2028	500	4.300	—	—
Fixed-rate 5.55% senior unsecured notes	Dec, 2028	500	5.550	500	5.550
Fixed-rate 4.3% senior unsecured notes	Jun, 2029	1,000	4.300	1,000	4.300
Fixed-rate 3.4% senior unsecured notes	May, 2030	1,000	3.400	1,000	3.400
Fixed-rate 2.5% senior unsecured notes	May, 2031	1,000	2.500	1,000	2.500
Fixed-rate 2.65% senior unsecured notes	Feb, 2032	1,000	2.650	1,000	2.650
Fixed-rate 4.85% senior unsecured notes	Aug, 2032	300	4.850	—	—
Fixed-rate 5.0% senior unsecured notes	Jan, 2033	1,000	5.000	1,000	5.000
Fixed-rate 5.25% senior unsecured notes	Aug, 2035	700	5.250	—	—
Fixed-rate 3.25% senior unsecured notes	May, 2041	1,000	3.250	1,000	3.250
Fixed-rate 3.125% senior unsecured notes	Feb, 2042	500	3.125	500	3.125
Fixed-rate 3.25% senior unsecured notes	Nov, 2051	500	3.250	500	3.250
Floating-rate revolving credit facility (RCF)	Aug, 2027	—	—	—	—
Fixed-rate 4.45% EIB Facility Loan	Dec, 2030	670	4.450	670	4.450
Fixed-rate 4.709% EIB Facility Loan	Feb, 2031	370	4.709	—	—
Total principal		12,290		10,920

Unamortized discounts, premiums and debt issuance costs		(70)		(66)
Total debt, including unamortized discounts, premiums, debt issuance costs and fair value adjustments		12,220		10,854
Current portion of long-term debt		(1,249)		(500)
Long-term debt		10,971		10,354

10 Related-Party Transactions

The Company's related parties are the members of the board of directors of NXP Semiconductors N.V., the executive officers of NXP Semiconductors N.V. and equity-accounted investees.

The following table presents the amounts related to revenue and other income and purchase of goods and services incurred in transactions with these related parties:


	For the three months ended		For the nine months ended
	September 28, 2025	September 29, 2024	September 28, 2025	September 29, 2024
Revenue and other income	—	1	2	3
Purchase of goods and services	1	1	2	3

The following table presents the amounts related to receivable and payable balances with these related parties:


	September 28, 2025	December 31, 2024
Receivables	1	1
Payables	2	3

Driven by our investment in VSMC, NXP has committed to contribute $1,200 million to support the long-term capacity infrastructure, and in exchange NXP secures a capacity commitment over the lifetime of the factory. NXP has contributed $385 million during the nine months ended September 28, 2025 and $660 million to-date, which is recorded in other non-current assets.

Refer to Note 5 – Supplemental Financial Information for information on the total carrying value of investments in equity-accounted investees, and to Note 12 – Commitments and Contingencies for NXP’s related party commitments.

11 Fair Value Measurements

The following table summarizes the estimated fair value of our financial instruments which are measured at fair value on a recurring basis:


		Estimated fair value
	Fair value hierarchy	September 28, 2025	December 31, 2024
Assets:
Short-term deposits	1	500	—
Money market funds	1	2,373	2,398
Marketable equity securities	1	1	2
Derivative instruments-assets	2	4	2

Liabilities:



Derivative instruments-liabilities	2	(9)	(10)

The following methods and assumptions were used to estimate the fair value of financial instruments:

Assets and liabilities measured at fair value on a recurring basis

Investments in short-term deposits, representing liquid assets with original maturity beyond three months and having no significant risk of changes in fair value, are represented at carrying value as reasonable estimates of fair value due to the relatively short period of time between the origination of the instruments and their expected realization. Money market funds (as part of our cash and cash equivalents) and marketable equity securities (as part of other non-current assets) have fair value measurements which are all based on quoted prices in active markets for identical assets or liabilities. For derivatives (as part of other current assets or accrued liabilities) the fair value is based upon significant other observable inputs depending on the nature of the derivative.

Assets and liabilities recorded at fair value on a non-recurring basis

We measure and record our non-marketable equity securities, equity method investments and non-financial assets, such as intangible assets and property, plant and equipment, at fair value when an impairment charge is required.

Assets and liabilities not recorded at fair value on a recurring basis

Financial instruments not recorded at fair value on a recurring basis include non-marketable equity securities and equity method investments that have not been remeasured or impaired in the current period and debt.

As of September 28, 2025, the estimated fair value of current and non-current debt was $11.5 billion ($9.8 billion as of December 31, 2024). The fair value is estimated on the basis of broker-dealer quotes and other observable inputs, which are Level 2 inputs. Accrued interest is included under accrued liabilities and not within the carrying amount or estimated fair value of debt. Given the short tenure of the Company’s commercial paper notes, the carrying value of the outstanding commercial paper notes approximates the fair values, and therefore are excluded from the values above ($15 million as of September 28, 2025 and no outstanding commercial paper notes as of December 31, 2024).

12 Commitments and Contingencies

Purchase Commitments

The Company maintains purchase commitments with certain suppliers, primarily for raw materials, semi-finished goods and manufacturing services and for some non-production items. Purchase commitments for inventory materials are generally restricted to a forecasted time-horizon as mutually agreed upon between the parties. This forecasted time-horizon can vary for different suppliers. As of September 28, 2025, other than foundry joint venture commitments, the Company had purchase

commitments of $3,341 million, which are due through 2044.

Foundry Joint Venture Commitments

Driven by our investment in VSMC, NXP has committed to invest an additional $1,251 million in equity through 2026. NXP has committed to contribute an additional $540 million to support the long-term capacity infrastructure that is expected to be paid through 2026. 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 $14,096 million that is expected to be purchased over 37 years once wafer production starts.

Related to our investment in ESMC, NXP has committed to invest an additional $449 million in equity through 2028.

Lease Commitments

The Company has operating and finance lease arrangements related to buildings (corporate offices, research and development and manufacturing facilities and datacenters), land, machinery and installations and other equipment (vehicles and certain office equipment). As of September 28, 2025, amounts related to future lease payments for operating lease obligations totaled $531 million (December 31, 2024: $321 million), which are due through 2048. The increase in Q3 2025 resulted from a lease agreement for a new greenfield facility with office and lab areas, commencing in 2030 with a fixed 20-year term.

Legal Proceedings

We are regularly involved as plaintiffs or defendants in claims and litigation relating to a variety of matters such as contractual disputes, personal injury claims, employee grievances and intellectual property litigation. In addition, our acquisitions, divestments and financial transactions sometimes result in, or are followed by, claims or litigation. Some of these claims may possibly be recovered from insurance reimbursements. Although the ultimate disposition of asserted claims cannot be predicted with certainty, it is our belief that the outcome of any such claims, either individually or on a combined basis, will not have a material adverse effect on our Consolidated Financial Position. However, such outcomes may be material to our Condensed Consolidated Statement of Operations for a particular period. The Company records an accrual for any claim that arises whenever it considers that it is probable that it is exposed to a loss contingency and the amount of the loss contingency can be reasonably estimated. The Company does not record a gain contingency until the period in which all contingencies are resolved and the gain is realized or realizable. Legal fees are expensed when incurred.

Motorola Personal Injury Lawsuits

The Company is currently assisting Motorola in the defense of personal injury lawsuits due to indemnity obligations included in the agreement that separated Freescale from Motorola in 2004. The multi-plaintiff Motorola lawsuits are pending in the Circuit Court of Cook County, Illinois. These claims allege a link between working in semiconductor manufacturing clean room facilities and birth defects. The Company is in process of finalizing agreements to resolve 4 cases, and claims from 5 individuals remain pending in Cook County. The Motorola suits allege exposures between 1980 and 2005. Each claim seeks an unspecified amount of damages for the alleged injuries; however, legal counsel representing the plaintiffs has indicated they will seek substantial compensatory and punitive damages from Motorola for the entire inventory of claims which, if proven and recovered, the Company considers to be material. A portion of any indemnity due to Motorola will be reimbursed to NXP if Motorola receives an indemnification payment from its insurance coverage. Motorola has potential insurance coverage for many of the years indicated above, but with differing types and levels of coverage, self-insurance retention amounts and deductibles. We are in discussions with Motorola and their insurers regarding the availability of applicable insurance coverage for each of the individual cases. Motorola and NXP have denied liability for these alleged injuries based on numerous defenses.

Legal Proceedings Related Accruals and Insurance Coverage

The Company reevaluates at least on a quarterly basis the claims that have arisen to determine whether any new accruals need to be made or whether any accruals made need to be adjusted based on the most current information available to it and based on its best estimate. Based on the procedures described above, the Company has an aggregate amount of $116 million accrued for potential and current legal proceedings as of September 28, 2025, compared to $281 million accrued at December 31, 2024 (without reduction for any related insurance reimbursements). The accruals are included in “Other current liabilities” and in “Other non-current liabilities”. As of September 28, 2025, the Company’s related balance of insurance reimbursements was $92 million (December 31, 2024: $259 million) and is included in “Other non-current assets”.

The Company also estimates the aggregate range of reasonably possible losses in excess of the amount accrued based on currently available information for those cases for which such estimate can be made. The estimated aggregate range requires significant judgment, given the varying stages of the proceedings, the existence of multiple defendants (including the Company) in such claims whose share of liability has yet to be determined, the numerous yet-unresolved issues in many of the claims, and the attendant uncertainty of the various potential outcomes of such claims. Accordingly, the Company’s estimate will change from time to time, and actual losses may be more than the current estimate. As at September 28, 2025, the Company believes that for all litigation pending its potential aggregate exposure to loss in excess of the amount accrued (without reduction for any amounts that may possibly be recovered under insurance programs) could range between $0 and $116 million. Based upon our past experience with these matters, the Company would expect to receive additional insurance reimbursement of up to $92 million on certain of these claims that would partially offset the potential aggregate exposure to loss in excess of the amount accrued.

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