The quarter modestly exceeded the market bar. Published estimates called for roughly $3.46 billion of revenue and $3.51 of adjusted EPS; NXP delivered $3.496 billion and $3.61, respectively.
| Metric | Q2 2026 | Q1 2026 | Q2 2025 | Versus expectation |
|---|---|---|---|---|
| Revenue | $3,496M (Financial Highlights) | $3,181M | $2,926M | ~$3,460M consensus |
| Non-GAAP diluted EPS | $3.61 (Financial Highlights) | $3.05 | $2.72 | ~$3.51 consensus |
| Non-GAAP gross margin | 58.0% (Financial Highlights) | 57.1% | 56.5% | — |
| Non-GAAP operating margin | 35.1% (Financial Highlights) | 33.1% | 32.0% | — |
| Non-GAAP free cash flow | $791M (Cash Flow statement) | $714M | $696M | — |
Underlying execution improved beyond the headline beat. Revenue rose 10% sequentially and 19% year over year, while non-GAAP gross margin expanded to 58.0% and operating margin to 35.1%. Automotive grew 9% sequentially, Industrial & IoT 20%, and Communications Infrastructure & Other 19%; Mobile was the lone weak spot, falling 10% sequentially. (Financial Highlights)
The outlook was better than merely reassuring. Q3 revenue guidance was $3.65 billion to $3.85 billion, with a $3.75 billion midpoint, and non-GAAP EPS guidance was $3.89 to $4.32, with a $4.11 midpoint. Those figures were above published estimates of approximately $3.71 billion and $4.03, respectively.
GAAP comparisons look volatile mainly because Q1 contained a one-time gain. GAAP operating income fell sequentially to $1.071 billion from $1.505 billion because Q1 included $621 million of other income; on the more comparable non-GAAP measure, operating income increased to $1.228 billion from $1.052 billion. (Income Statement; Financial Reconciliation of GAAP to non-GAAP Results)
Net read: a narrow beat with improving forward visibility, not a blowout. Cash generation strengthened to $791 million of free cash flow, trailing-twelve-month free-cash-flow conversion held at 21%, and net leverage improved to 1.5x. (Cash Flow statement; Financial Highlights) The result is better than consensus, but the size of the Q2 EPS beat was modest and the strong growth trajectory was already partly anticipated.
Read the original 8-K on SEC EDGAR ↗