Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis (MD&A) should be read in conjunction with our Consolidated Financial Statements and Notes and the MD&A in our Annual Report on Form 10-K for the year ended December 31, 2025*, and the Financial Statements and the related Notes that appear elsewhere in this document.*

Overview

Quarterly Financial Highlights

• Revenue was $3,181 million, up 12.2% year-on-year;

• GAAP gross margin was 56.2%, and GAAP operating margin was 47.3%;

• Non-GAAP gross margin was 57.1%, and non-GAAP operating margin was 33.1%;

• Cash flow from operations was $793 million, with net capital expenditures on property, plant and equipment of $79 million, resulting in non-GAAP free cash flow of $714 million;

• During the first quarter of 2026, NXP returned capital to shareholders with the payment of $256 million in cash dividends and the repurchase of $102 million of its common shares, for a total capital return of $358 million.

On February 2, 2026, we completed the sale of our MEMS Sensors business, resulting in cash proceeds of $878 million at closing and a gain on sale of $627 million recorded in Other income (expense). See Note 3 to the Consolidated Financial Statements for further information regarding NXP’s sale of the MEMS Sensors business.

Sequential Results

Q1 2026 compared to Q4 2025

Revenue for the three months ended March 29, 2026, was $3,181 million compared to $3,335 million for the three months ended December 31, 2025, a decrease of $154 million or 4.6% quarter-on-quarter, in line with management's expectations. Within our end markets, the Communication Infrastructure & Other end market increased $46 million or 13.8%, the Industrial & IoT end market decreased $12 million or 1.9%, the Automotive end market decreased $94 million or 5.0%, and the Mobile end market decreased $94 million or 19.4%.

When aggregating all end markets together and reviewing sales channel performance, revenue from distributors was $1,862 million, a decrease of $163 million or 8.0% compared to the previous period. Revenue from direct customers was $1,282 million, an increase of $8 million or 0.6% versus the previous period.

From a geographic perspective, the decrease of revenue quarter-on-quarter was driven by the China region with a decline of 15.7% and by the Asia Pacific region with a decrease of 6.6%.

Our gross profit percentage for the three months ended March 29, 2026, of 56.2% increased compared to 54.2% for the three months ended December 31, 2025, driven mainly by impairments related to the scaling down of a non-strategic product line in the fourth quarter of 2025.

Operating income for the three months ended March 29, 2026, was $1,505 million compared to $744 million for the three months ended December 31, 2025, an increase of $761 million or 102.3%. The sequential increase was mainly driven by the gain on sale of the MEMS Sensors business and lower restructuring expenses.

Results of operations

The following table presents operating results for each of the three-month periods ended March 29, 2026, and March 30, 2025, respectively:

($ in millions, unless otherwise stated)			Q1 2026						% of Revenue						Q1 2025						% of Revenue
Revenue			3,181												2,835
% nominal growth			12.2												(9.3)
Gross profit			1,788												1,560
Gross margin			56.2		%										55.0		%
Research and development			(588)						18.5		%				(547)						19.3		%
Selling, general and administrative			(284)						8.9		%				(281)						9.9		%
Amortization of acquisition-related intangible assets			(32)						1.0		%				(27)						1.0		%
Other income (expense)			621						19.5		%				18						0.6		%
Operating income (loss)			1,505						47.3		%				723						25.5		%
Financial income (expense)			(96)						3.0		%				(92)						3.2		%
Benefit (provision) for income taxes			(272)						8.6		%				(130)						4.6		%
Results relating to equity-accounted investees			(4)						0.1		%				(4)						0.1		%
Net income (loss)			1,133						35.6		%				497						17.5		%
Less: Net income (loss) attributable to non-controlling interests			11						0.3		%				7						0.2		%
Net income (loss) attributable to stockholders			1,122						35.3		%				490						17.3		%
Diluted earnings per share			4.43												1.92

Revenue

Q1 2026 Overview

Q1 2026 compared to Q1 2025

Revenue for the three months ended March 29, 2026, was $3,181 million compared to $2,835 million for the three months ended March 30, 2025, an increase of $346 million or 12.2%, in line with management’s expectations.

Revenue by end market was as follows:

($ in millions, unless otherwise stated)			Q1 2026						Q1 2025						% change
Automotive			1,782						1,674						6.5		%
Industrial & IoT			628						508						23.6		%
Mobile			391						338						15.7		%
Communication Infrastructure & Other			380						315						20.6		%
Total Revenue			3,181						2,835						12.2		%

Revenue by sales channel was as follows:

($ in millions, unless otherwise stated)			Q1 2026						Q1 2025						% change
Distributors			1,862						1,524						22.2		%
Direct			1,282						1,284						(0.2)		%
Other			37						27						37.0		%
Total Revenue			3,181						2,835						12.2		%

Revenue by geographic region, which is based on the location where the sale originated and where critical commercial decisions are made, was as follows:

($ in millions, unless otherwise stated)			Q1 2026						Q1 2025						% change
Americas			958						749						27.9		%
APAC, excluding China			885						828						6.9		%
EMEA (Europe, the Middle East and Africa)			859						792						8.5		%
China 1)			479						466						2.8		%
Total Revenue			3,181						2,835						12.2		%
1) China includes Mainland China and Hong Kong

Q1 2026 compared to Q1 2025

From an end market perspective, NXP experienced growth across all end markets versus the year-ago period.

Revenue in the Automotive end market was $1,782 million, an increase of $108 million or 6.5% versus the year-ago period. The increase was attributable to growth in mixed-signal products and processors.

Revenue in the Industrial & IoT end market was $628 million, an increase of $120 million or 23.6% versus the year-ago period. The increase was attributable to growth in processors and mixed-signal products.

Revenue in the Mobile end market was $391 million, an increase of $53 million or 15.7% versus the year-ago period. The increase was attributable to growth in mixed-signal products and processors.

Revenue in the Communication Infrastructure & Other end market was $380 million, an increase of $65 million or 20.6% versus the year-ago period. The increase was attributable to growth in processors, partially offset by declines in mixed-signal products.

When aggregating all end markets together and reviewing sales channel performance, revenue from distributors was $1,862 million, an increase of 338 million or 22.2% versus the year-ago period. Revenue from direct customers was $1,282 million, consistent with the year-ago period.

From a geographic perspective, revenue increased year-on-year in the Americas region by 27.9%, in the EMEA region by 8.5%, in the Asia Pacific region by 6.9%, and in the China region by 2.8%.

Gross profit

Q1 2026 compared to Q1 2025

Gross profit for the three months ended March 29, 2026, was $1,788 million, or 56.2% of revenue, compared to $1,560 million, or 55.0% of revenue for the three months ended March 30, 2025. The increase in gross margin is primarily driven by lower manufacturing costs (sourcing and cost efficiencies).

Operating expenses

Q1 2026 compared to Q1 2025

Operating expenses for the three months ended March 29, 2026, totaled $904 million, or 28.4% of revenue, compared to $855 million, or 30.2% of revenue for the three months ended March 30, 2025.

• Research and development**

($ in millions, unless otherwise stated)			Q1 2026						Q1 2025						% change
Research and development			588						547						7.5		%
As a percentage of revenue			18.5		%				19.3		%				(0.8)		ppt

Q1 2026 compared to Q1 2025

R&D costs for the three months ended March 29, 2026, increased by $41 million, or 7.5%, when compared to the three months ended March 30, 2025, primarily driven by:

+ Increased variable compensation expenses ($28 million)

+ Increased personnel costs related to our acquisitions ($19 million)

- Lower share-based compensation costs ($7 million)

• Selling, general and administrative

($ in millions, unless otherwise stated)			Q1 2026						Q1 2025						% change
Selling, general and administrative			284						281						1.1		%
As a percentage of revenue			8.9		%				9.9		%				(1.0)		ppt

Q1 2026 compared to Q1 2025

SG&A costs for the three months ended March 29, 2026, increased by $3 million, or 1.1%, when compared to the three months ended March 30, 2025, primarily driven by:

+ Increased personnel and integration related costs of our acquisitions ($15 million)

+ Increased variable compensation expenses ($13 million)

- Lower legal fees ($23 million)

• Amortization of acquisition-related intangible assets

($ in millions, unless otherwise stated)			Q1 2026						Q1 2025						% change
Amortization of acquisition-related intangible assets			32						27						18.5		%
As a percentage of revenue			1.0		%				1.0		%				—		ppt

Q1 2026 compared to Q1 2025

Amortization of acquisition-related intangible assets for the three months ended March 29, 2026, increased by $5 million, or 18.5%, when compared to the three months ended March 30, 2025, primarily driven by amortization related to the recent acquisitions of TTTech Auto and Kinara.

Other Income (Expense)

Other income (expense) reflects an income of $621 million for the first quarter of 2026, compared to an income of $18 million in the first quarter of 2025. The increase was mainly driven by the gain on sale of $627 million related to the divestment of the MEMS Sensors business.

Financial income (expense)

The following table presents the details of financial income and expenses:

($ in millions, unless otherwise stated)			Q1 2026						Q1 2025
Interest income			31						35
Interest expense			(114)						(106)
Other financial income/ (expense)			(13)						(21)
Total			(96)						(92)

Q1 2026 compared to Q1 2025

Financial income (expense) was an expense of $96 million for the three months ended March 29, 2026, compared to an expense of $92 million for the three months ended March 30, 2025. The change in financial income (expense) is primarily attributable to in increase in interest expense of $8 million due to the issuance of new bonds and EIB Loan B, offset by lower expenses due to the redemption of notes. Other financial expenses decreased mainly due to fair value adjustments in equity securities resulting in a gain of $1 million for the three months ended March 29, 2026, versus a loss of $6 million for the three months ended March 30, 2025.

Benefit (provision) for income taxes

Our provision for income taxes for 2026 is based on our EAETR of 19.9%, which is lower than the Netherlands statutory tax rate of 25.8%, primarily due to tax benefits from the Netherlands and foreign tax incentives.

			Q1 2026						Q1 2025
Tax benefit (provision) calculated at EAETR			(280)						(119)
Discrete tax benefit (provision) items			8						(11)
Benefit (provision) for income taxes			(272)						(130)
Effective tax rate			19.3		%				20.6		%

Q1 2026 compared to Q1 2025

The effective tax rate of 19.3% for the first quarter of 2026 was lower than the EAETR due to the income tax benefit for discrete items of $8 million. The discrete items are primarily related to the impact of foreign currency on income tax related items and changes in estimates for previous years.

The effective tax rate for the first quarter of 2026 was 19.3% compared to 20.6% for the same period in 2025, with discrete items in the respective periods impacting the rates accordingly. Excluding discrete items, the EAETR increased to 19.9% in 2026 from 18.8% in 2025, mainly as a result of a taxable capital gain and non-deductible goodwill associated with the divestiture of the MEMS Sensors business in the first quarter of 2026.

Results Relating to Equity-accounted Investees

Q1 2026 compared to Q1 2025

Results relating to equity-accounted investees amounted to a loss of $4 million for both the three months ended March 29, 2026, and the three months ended March 30, 2025.

Non-controlling Interests

Q1 2026 compared to Q1 2025

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 $11 million for the three months ended March 29, 2026, compared to a profit of $7 million for the three months ended March 30, 2025.

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. At the end of the first quarter of 2026, our cash balance was $3,708 million, an increase of $441 million compared to December 31, 2025. Taking into account the available amount of the unsecured revolving credit facility of $3,000 million ("RCF"), we had access to $6,708 million of liquidity as of March 29, 2026. We currently use cash to fund operations, meet working capital requirements, for capital expenditures and for potential common stock repurchases, dividends and strategic investments. Based on past performance and current expectations, we believe that our current available sources of funds (including cash and cash equivalents, RCF of $3,000 million, plus anticipated cash generated from operations) will be adequate to finance our operations, working capital requirements, capital expenditures and potential dividends for at least the next twelve months.

($ in millions, unless otherwise stated)			Q1 2026						Q1 2025
Cash from operations			793						565
Capital expenditures			79						139
Cash to shareholders			358						561

Cash

At March 29, 2026, our cash balance was $3,708 million of which $326 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 the first quarter of 2026, SSMC declared a dividend of $150 million, of which $75 million was paid in the first quarter, with 38.8% being paid to our joint venture partner.

Capital expenditures

Our cash outflows for capital expenditures were $79 million in the first three months of 2026, compared to $139 million in the first three months of 2025.

Capital return

In the first three months of 2026, we repurchased approximately $102 million of shares.

Under our Quarterly Dividend Program, interim dividends of $1.014 per ordinary share were paid on January 7, 2026 ($256 million) and dividends of $1.014 per ordinary share were paid on April 9, 2026 ($257 million).

Debt

Our total debt, inclusive of aggregate principal, unamortized discounts, premiums, debt issuance costs and fair value adjustments, amounted to $11,724 million as of March 29, 2026, a decrease of $498 million compared to December 31, 2025 ($12,222 million).

On January 5, 2026, we repaid the $500 million aggregate principal amount of outstanding 5.35% senior unsecured notes due March 1, 2026, at par using available cash.

On April 20, 2026, we repaid $750 million aggregate principal amount of outstanding 3.875% senior unsecured notes due June 18, 2026, at par using available cash.

As of March 29, 2026, we had outstanding fixed-rate notes with varying maturities for an aggregate principal amount of $10,749

million (collectively the “Notes”), of which $750 million is payable within 12 months. Future interest payments associated with the Notes total $2,777 million, with $396 million payable within 12 months.

As of March 29, 2026, the Company had outstanding loans with the European Investment Bank (EIB) with maturities in 2030 and 2031 for an aggregated principal amount of $1,040 million. Future interest payments associated with the EIB loans total $229 million, with $47 million payable within 12 months.

As of March 29, 2026, we had no commercial paper notes outstanding.

Our net debt position (see section Use of Certain Non-GAAP Financial Measures) at March 29, 2026, amounted to $8,016 million, compared to $8,955 million as of December 31, 2025.

Additional Capital Requirements

Expected working and other capital requirements are described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. At March 29, 2026, other than for changes disclosed in the “Notes to Condensed Consolidated Financial Statements” and “Liquidity and Capital Resources” in this Quarterly Report, there have been no other material changes to our expected working and other capital requirements described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Cash flows

Our cash and cash equivalents during the first three months of 2026 increased by $445 million (excluding the effect of changes in exchange rates on our cash position of $(4) million) as follows:

($ in millions, unless otherwise stated)			Q1 2026						Q1 2025
Net cash provided by operating activities			793						565
Net cash provided by (used for) investing activities			508						(216)
Net cash (used for) provided by financing activities			(856)						345
Increase in cash and cash equivalents			445						694

Cash Flow from Operating Activities

For the first three months of 2026, our operating activities provided $793 million in cash. This was primarily the result of net income of $1,133 million, adjustments to reconcile the net income of $361 million and changes in operating assets and liabilities of $21 million. Adjustments to net income (loss) include non-cash items, such as gain on sale of assets of $(627 million), depreciation and amortization of $179 million, share-based compensation of $109 million and changes in deferred taxes (benefit) of $(28 million). Changes in operating assets and liabilities were primarily driven by a $115 million increase in receivables and other current assets due to the related timing of cash collection, $87 million decrease in inventories driven by lower external purchases, $182 million increase in other non-current assets due to payments to secure production supply (driven primarily by payments of $189 million to support the long-term capacity infrastructure of VSMC) and $231 million increase in accounts payable and other liabilities primarily due to a higher corporate tax accrual ($178 million) mainly driven by the capital gains tax on the divestiture of the MEMS Sensors business.

For the first three months of 2025 our operating activities provided $565 million in cash. This was primarily the result of net income of $497 million, adjustments to reconcile the net income of $299 million and changes in operating assets and liabilities of $(239 million). Adjustments to net income (loss) include non-cash items, such as depreciation and amortization of $209 million, share-based compensation of $127 million and changes in deferred taxes of $(27 million). Changes in operating assets and liabilities were primarily driven by a $110 million decrease in accounts payable and other liabilities as a result of lower purchase volumes and timing related to payments, $29 million increase in receivables and other current assets due to customer mix, and the related timing of cash collection and $106 million increase in other non-current assets due to payments to secure production supply with multiple vendors (driven primarily by payments of $125 million to support the long-term capacity infrastructure of VSMC).

Cash Flow from Investing Activities

Net cash proceeds from investing activities of $508 million for the first three months of 2026 was primarily driven by the proceeds of $878 million (net of adjustments) from the sale of our MEMS Sensors business, partially offset by $249 million for the purchase of investments (driven primarily by the capital contributions of $196 million into VSMC), capital expenditures of $79 million, and $42 million for the purchase of identified intangible assets.

Net cash used for investing activities amounted to $216 million for the first three months of 2025 and principally consisted of the cash outflows for capital expenditures of $139 million, $53 million for the purchase of investments (driven primarily by the capital contributions of approximately $20 million into VSMC and approximately $16 million into ESMC) and $25 million for the purchase of identified intangible assets, including EDA (electronic design automation).

Cash Flow from Financing Activities

Net cash used for financing activities of $856 million for the first three months of 2026 was primarily driven by the repurchase of long-term debt of $501 million, dividend payments to common stockholders of $256 million, and purchase of treasury shares and restricted stock unit holdings of $102 million.

Net cash proceeds from financing activities of $345 million for the first three months of 2025 was primarily driven by the proceeds from the issuance of commercial paper notes of $646 million, proceeds from issuance of long-term debt of $370 million, and the proceeds from the issuance of common stock through stock plans of $37 million, partially offset by the repayment of commercial paper notes of $146 million, dividend payments to common stockholders of $258 million and purchase of treasury shares and restricted stock unit holdings of $303 million.

Information Regarding Guarantors of NXP (unaudited)

Summarized Combined Financial Information for Guarantee of Securities of Subsidiaries

All debt instruments are guaranteed, fully and unconditionally, jointly and severally, by NXP Semiconductors N.V. and issued or guaranteed by NXP USA, Inc., NXP B.V. and NXP LLC, (together, the “Subsidiary Obligors” and together with NXP Semiconductors N.V., the “Obligor Group”). 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.

All of the existing guarantees by the Company rank equally in right of payment with all of the existing and future senior indebtedness of the Obligor Group. There are no significant restrictions on the ability of the Obligor Group to obtain funds from respective subsidiaries by dividend or loan.

The following tables present summarized financial information of the Obligor Group on a combined basis, with intercompany balances and transactions between entities of the Obligor Group eliminated and investments and equity in the earnings of the Non-Guarantor Subsidiaries excluded. The Obligor Group’s amounts due from, amounts due to, and intercompany transactions with Non-Guarantor Subsidiaries have been disclosed below the table, when material.

Summarized Statements of Income

			For the three months ended
($ in millions)			March 29, 2026
Revenue			1,742
Gross Profit			808
Operating income			762
Net income			436

Summarized Balance Sheets

			As of
($ in millions)			March 29, 2026						December 31, 2025
Current assets			3,643						3,182
Non-current assets			12,404						12,461
Total assets			16,047						15,643
Current liabilities			1,667						2,044
Non-current liabilities			11,374						11,348
Total liabilities			13,041						13,392
Obligor's Group equity			3,006						2,251
Total liabilities and Obligor's Group equity			16,047						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. 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 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 (for the three months ended March 29, 2026: $168 million). The Obligor Group has amounts due from equity financing (March 29, 2026: $7,670 million; December 31, 2025: $5,520 million) and due to debt financing (March 29, 2026: $3,484 million; December 31, 2025: $2,695 million) with non-guarantor subsidiaries.

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. 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. When measuring performance against this plan, management considers the actual or potential impacts on these non-GAAP financial measures from cost‑reduction actions with the goal of increasing our gross margin and operating margin, as well as in assessing appropriate levels of research and development efforts. In addition, management relies upon these non-GAAP financial measures when making decisions about product spending, administrative budgets, and other operating expenses. We believe that these non-GAAP financial measures, when coupled with the GAAP results and the reconciliations to corresponding GAAP financial measures, provide a more complete understanding of the Company’s results of operations and the factors and trends affecting NXP’s business. We believe that they enable investors to make additional comparisons of our operating results, to assess our liquidity and capital position and to analyze financial performance excluding the effect of expenses unrelated to core operating performance, certain non-cash expenses and share-based compensation expense, which may obscure trends in NXP’s underlying performance. This information also enables investors to compare financial results between periods where certain items may vary independent of business performance and allow for greater transparency with respect to key metrics used by management.

The presentation of these and other similar items in NXP’s non-GAAP financial results should not be interpreted as implying that these items are non-recurring, infrequent, or unusual. These non-GAAP financial measures are provided in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

Non-GAAP Adjustment or Measure						Definition						Usefulness to Management and Investors
Purchase price accounting effects						Purchase price accounting ("PPA") effects reflect the fair value adjustments impacting acquisition accounting and other acquisition adjustments charged to the Consolidated Statement of Operations. This typically relates to inventory, property, plant and equipment, as well as intangible assets, such as developed technology and marketing and customer relationships acquired. The PPA effects are recorded within both cost of revenue and operating expenses in our US GAAP financial statements. These charges are recorded over the estimated useful life of the related acquired asset and thus are generally recorded over multiple years.						We believe that excluding these charges related to fair value adjustments for purposes of calculating certain non-GAAP measures allows the users of our financial statements to better understand the historic and current cost of our products, our gross margin, our operating costs, our operating margin, and also facilitates comparisons to peer companies.
Restructuring						Restructuring charges are costs associated with a restructuring plan and are primarily related to employee severance and benefit arrangements. Charges related to restructuring are recorded within both cost of revenue and operating expenses in our US GAAP financial statements						We exclude restructuring charges, including any adjustments to charges recorded in prior periods, for purposes of calculating certain non-GAAP measures because these costs do not reflect our core operating performance. 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.
Share-based compensation						Share-based compensation consists of incentive expense granted to eligible employees in the form of equity-based instruments. Charges related to share-based compensation are recorded within both cost of revenue and operating expenses in our US GAAP financial statements.						We exclude charges related to share-based compensation for purposes of calculating certain non-GAAP measures because we believe these charges, which are non-cash, are not representative of our core operating performance as they can fluctuate from period to period based on factors that are not within our control, such as our stock price on the dates share-based grants are issued. 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.
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. These may include such items as process and product transfer costs, certain charges related to acquisitions and divestitures, litigation and legal settlements, costs associated with the exit of a product line, factory or facility, environmental or governmental settlements, and other items of similar nature.						We exclude these 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 for purposes of calculating certain non-GAAP measures. 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.

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 PPA effects, restructuring costs, share-based compensation, other incidental items and certain other adjustments to financial income (expense) items. Additionally, adjustments are made for the income tax effect of any discrete items that occur in the interim period. Discrete items primarily relate to unexpected tax events that may occur as these amounts cannot be forecasted (e.g., the impact of changes in tax law and/or rates, changes in estimates or resolved tax audits relating to prior year tax provisions, the excess or deficit tax effects on share-based compensation, etc.).						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. Additionally, the income tax effects of the adjustments to achieve the noted non-GAAP measures are used to determine NXP's non-GAAP net income (loss) attributable to stockholders and accordingly, our diluted non-GAAP earnings per share attributable to stockholders.
Free Cash Flow						Free Cash Flow represents operating cash flow adjusted for net additions to property, plant and equipment.						We believe that free cash flow provides insight into our cash-generating capability and our financial performance and is an efficient means by which users of our financial statements can evaluate our cash flow after meeting our capital expenditure.
Net debt						Net debt represents total debt (short-term and long-term) after deduction of cash and cash equivalents and short-term deposits.						We 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.

The following are reconciliations of our most comparable US GAAP measures to our non-GAAP measures presented:

($ in millions)			For the three months ended
			March 29, 2026						December 31, 2025						March 30, 2025
GAAP gross profit			$	1,788					$	1,807					$	1,560
PPA effects			(6)						(7)						(8)
Restructuring			1						(14)						(4)
Share-based compensation			(13)						(14)						(16)
Other incidentals			(9)						(71)						(3)
Non-GAAP gross profit			$	1,815					$	1,913					$	1,591
GAAP Gross Margin			56.2		%				54.2		%				55.0		%
Non-GAAP Gross Margin			57.1		%				57.4		%				56.1		%
GAAP research and development			$	(588)					$	(665)					$	(547)
Restructuring			(2)						(89)						(7)
Share-based compensation			(57)						(58)						(64)
Other incidentals			(11)						(4)						(1)
Non-GAAP research and development			$	(518)					$	(514)					$	(475)
GAAP selling, general and administrative			$	(284)					$	(359)					$	(281)
PPA effects			—						—						—
Restructuring			(1)						(74)						(3)
Share-based compensation			(39)						(28)						(47)
Other incidentals			(4)						(15)						(20)
Non-GAAP selling, general and administrative			$	(240)					$	(242)					$	(211)
GAAP operating income (loss)			$	1,505					$	744					$	723

($ in millions)			For the three months ended
			March 29, 2026						December 31, 2025						March 30, 2025
GAAP operating income (loss)			$	1,505					$	744					$	723
PPA effects			(38)						(41)						(40)
Restructuring			(2)						(177)						(14)
Share-based compensation			(109)						(100)						(127)
Other incidentals (i)			602						(92)						—
Non-GAAP operating income (loss)			$	1,052					$	1,154					$	904
GAAP Operating Margin			47.3		%				22.3		%				25.5		%
Non-GAAP Operating Margin			33.1		%				34.6		%				31.9		%
GAAP Income tax benefit (provision)			$	(272)					$	(131)					$	(130)
Income tax effect			(99)						59						13
Non-GAAP Income tax benefit (provision)			$	(173)					$	(190)					$	(143)
(i) For the three months ended March 29, 2026, Other Incidentals includes the gain on sale of the MEMS Sensors business

($ in millions)			For the three months ended
			March 29, 2026						December 31, 2025						March 30, 2025
Net cash provided by (used for) operating activities			$	793					$	891					$	565
Net capital expenditures on property, plant and equipment			(79)						(98)						(138)
Non-GAAP free cash flow			$	714					$	793					$	427

($ in millions)			For the three months ended
			March 29, 2026						December 31, 2025						March 30, 2025
Long-term debt			$	10,974					$	10,972					$	10,226
Short-term debt			750						1,250						1,499
Total debt			11,724						12,222						11,725
Less: cash and cash equivalents			(3,708)						(3,267)						(3,988)
Net debt			$	8,016					$	8,955					$	7,737