NXP Semiconductors Reports Third Quarter 2022 Results
EINDHOVEN, The Netherlands, October 31, 2022 – NXP Semiconductors N.V. (NASDAQ: NXPI) today reported
financial results for the third quarter, ended October 2, 2022.
“NXP delivered quarterly revenue of $3.45 billion, an increase of 20 percent year-on-year and above the mid-point of ourguidance range. Overall in the third quarter, we performed very well; however, we were impacted by the weakening
macro-environment in our consumer-exposed IoT business. At the same time, demand in both the automotive andindustrial markets continues to be resilient, driven by secular and company-specific drivers, along with incrementally
improved supply. Looking ahead, while we continue to be supply constrained, we are cautious in the intermediate term,
due to the uncertainties in the macro environment," said Kurt Sievers, NXP President and Chief Executive Officer.
Key Highlights for the Third Quarter 2022:• Revenue was $3.45 billion, up 20.4 percent year-on-year;• GAAP gross margin was 57.1 percent, and GAAP operating margin was 29.1 percent;• Non-GAAP gross margin was 58.0 percent, and non-GAAP operating margin was 36.9 percent;• Cash flow from operations was $1,144 million, with net capex investments of $281 million, resulting in non-GAAP
free cash flow of $863 million;• During the third quarter of 2022, NXP repurchased 2.50 million shares for a total cost of $400 million and paid
cash dividends of $223 million, returning $623 million to shareholders. On a trailing twelve month basis capital
return to shareholders represented $2,448 billion or 98 percent of non-GAAP free cash flow.
• Between October 3, 2022 and October 28, 2022, NXP repurchased via a 10b5-1 program an additional 1.77
million shares for a total cost of $260 million;• On August 5, 2022, the NXP Board of Directors approved the payment of an interim dividend for the third quarter
2022 of $0.845 per ordinary share. The interim dividend was paid in cash on October 6, 2022 to shareholders ofrecord as of September 15, 2022;• On August 26, 2022, NXP B.V., together with NXP Funding LLC, amended and restated its revolving credit
agreement entered into on June 11, 2019. The amended and restated revolving credit agreement provides for$2,500 million of senior unsecured revolving credit commitments and is scheduled to mature on August 26, 2027;• On August 24, 2022 NXP announced expanded and strong customer engagements for its entire S32 family of
domain and zonal automotive processors. This includes several recent awards with leading automotive OEMs in
Europe, the Americas, Asia and China and highlights the appeal and traction of the S32 platform. This includes amajor automotive OEM’s selection of NXP’s S32 family of automotive processors and microcontrollers to be used
across its fleet of future vehicles, beginning mid-decade. The resulting multi-year supply agreement spans theS32 family, including the upcoming 5nm ASIL-D processors;• On September 14, 2022 NXP announced its new higher power BTS7202 RX Front End Modules (FEM) and
BTS6403/6305 pre-drivers for 5G massive multiple-input multiple-output (MIMO) going up to 20 W per channel.
Developed and implemented in NXP’s silicon germanium (SiGe) process, the devices operate with modest current
consumption to reduce operational costs for mobile network operators (MNOs);• On September 28, 2022 NXP released its 2nd generation RFCMOS radar transceiver family to production. The
TEF82xx is the successor to the market-proven TEF810x, which has already shipped tens of millions of units.
Optimized for fast chirp modulation, the device supports short-, medium- and long-range radar applications,
including cascaded high-resolution imaging radar. It enables 360-degree sensing for critical safety applications,
including automated emergency braking, adaptive cruise control, blind-spot monitoring, cross-traffic alert andautomated parking.
1

Summary of Reported Third Quarter 2022 ($ millions, unaudited) (1)Total Revenue
GAAP Gross Profit
Gross Profit Adjustments (i)Non-GAAP Gross Profit
GAAP Gross Margin
Non-GAAP Gross Margin
GAAP Operating Income / (Loss)
Operating Income Adjustments (i)Non-GAAP Operating Income
GAAP Operating Margin
Non-GAAP Operating Margin

Q3 2022
Q2 2022
Q3 2021
$
3,445
$
3,312
$
2,861
$
1,967
$
1,882
$
1,583
$
(32) $(33) $
(34)
$
1,999
$
1,915
$
1,617
57.1 %
56.8 %
55.3 %
58.0 %
57.8 %
56.5 %
$
1,001
$
943
$
711
$
(270) $
(250) $
(248)
$
1,271
$
1,193
$
959
29.1 %
28.5 %
24.9 %
36.9 %
36.0 %
33.5 %

Q-Q
4%
5%

Y-Y
20%
24%

4%

24%

6%

41%

7%

33%

Q3 2022
Q2 2022
Q3 20211,804 $
1,713 $
1,455
713 $
713 $
607
410 $
388 $
345
518 $
498 $
454
99
94
85
96
94
83
27
27
31
30
27
33
1.6
1.6
1.6
1.4x
1.5x
1.9x

Q-Q
5%
—%
6%
4%

Y-Y
24%
17%
19%
14%

Additional information
Automotive
Industrial & IoT
MobileComm. Infra. & Other
DIO
DPO
DSO
Cash Conversion Cycle
Channel Inventory (months)
Financial Leverage (ii)

$
$
$
$

1. Additional Information for the Third Quarter 2022:
i. For an explanation of GAAP to non-GAAP adjustments, please see “Non-GAAP Financial Measures”.
ii. Financial leverage is defined as net debt divided by trailing twelve months adjusted EBITDA.
• Net cash paid for income taxes related to on-going operations was $160 million; and• Weighted average number of diluted shares for the three-month period ended October 2, 2022 was 264.7
million.

2

Guidance for the Fourth Quarter 2022: ($ millions) (1)Total Revenue
Q-Q
Y-Y
Gross Profit
Gross Margin
Operating Income (loss)
Operating Margin
Financial Income (expense)

Low$3,200-7%
5%$1,802
56.3%
$894
27.9%
$(84)

GAAP
Mid
$3,300-4%
9%$1,876
56.8%
$958
29.0%
$(84)

Guidance Range
ReconciliationHigh$3,400-1%
12%$1,95057.4%$1,022
30.1%
$(84)

$(32)
$(230)$(3)Low$3,200-7%
5%$1,83457.3%$1,124
35.1%$(81)

non-GAAP
Mid
High$3,300$3,400
-4%
-1%
9%
12%
$1,908$1,982
57.8%
58.3%$1,188$1,252
36.0%
36.8%
$(81)
$(81)

Note (1) Additional Information:
1.
2.
3.
4.
5.
6.

GAAP Gross Profit is expected to include Purchase Price Accounting (“PPA”) effects, $(15) million; Stock Based Compensation, $(13) million;
Other Incidentals, $(4) million;
GAAP Operating Income (loss) is expected to include PPA effects, $(125) million; Stock Based Compensation, $(96) million; Restructuring andOther Incidentals, $(9) million;
GAAP Financial Income (expense) is expected to include Other financial expense $(3) million;
Net cash paid for income taxes related to on-going operations is expected to be approximately $(140) million;
Non-controlling interest is expected to be approximately $(12) million;
Weighted average diluted share count is expected to be approximately 262 million.

NXP has based the guidance included in this release on judgments and estimates that management believes are reasonable given its assessment ofhistorical trends and other information reasonably available as of the date of this release. Please note, the guidance included in this release consists ofpredictions only, and is subject to a wide range of known and unknown risks and uncertainties, many of which are beyond NXP's control. The guidance
included in this release should not be regarded as representations by NXP that the estimated results will be achieved. Actual results may vary materiallyfrom the guidance we provide today. In relation to the use of non-GAAP financial information see the note regarding "Non-GAAP Financial Measures"
below. For the factors, risks, and uncertainties to which judgments, estimates and forward-looking statements generally are subject see the noteregarding "Forward-looking Statements." We undertake no obligation to publicly update or revise any forward-looking statements, including the guidance
set forth herein, to reflect future events or circumstances.
Non-GAAP Financial Measures
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, that are not in accordance with, nor an alternative to, U.S. generally accepted accounting principles (“GAAP”). In
measuring performance against this plan, management considers the actual or potential impacts on these non-GAAP financial measures from actions
taken to reduce costs with the goal of increasing our gross margin and operating margin and when assessing appropriate levels of research anddevelopment 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 andthe reconciliations to corresponding GAAP financial measures, provide a more complete understanding of the Company’s results of operations and thefactors and trends affecting NXP’s business. We believe that they enable investors to perform 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 operations, 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 greatertransparency with respect to key metrics used by management.
These non-GAAP financial measures are provided in addition to, and not as a substitute for, or superior to, measures of financial performance preparedin accordance with GAAP. The presentation of these and other similar items in NXP’s non-GAAP financial results should not be interpreted as implyingthat these items are non-recurring, infrequent, or unusual. Reconciliations of these non-GAAP measures to the most comparable measures calculated inaccordance with GAAP are provided in the financial statements portion of this release in a schedule entitled “Financial Reconciliation of GAAP to nonGAAP Results (unaudited).” Please refer to the NXP Historic Financial Model file found on the Financial Information page of the Investor Relations
section of our website at https://investors.nxp.com for additional information related to our rationale for using these non-GAAP financial measures, aswell as the impact of these measures on the presentation of NXP's operations.
In addition to providing financial information on a basis consistent with GAAP, NXP also provides the following selected financial measures on a nonGAAP basis: (i) Gross profit, (ii) Gross margin, (iii) Research and development, (iv) Selling, general and administrative, (v) Amortization of acquisitionrelated intangible assets, (vi) Other income, (vii) Operating income (loss), (viii) Operating margin, (ix) Financial Income (expense), (x) adjusted net
income, adjusted EBITDA and trailing 12 month adjusted EBITDA, and (xi) free cash flow and free cash flow as a percent of Revenue. The non-GAAP
information excludes the amortization of acquisition related intangible assets, the purchase accounting effect on inventory and property, plant andequipment, merger related costs (including integration costs), certain items related to divestitures, share-based compensation expense, restructuring andasset impairment charges, non-cash interest expense on convertible notes, extinguishment of debt, and foreign exchange gains and losses.

3Conference Call and Webcast Information
The company will host a conference call with the financial community on Tuesday, November 1, 2022 at 8:00 a.m. U.S. Eastern Daylight Time (EDT) toreview the third quarter 2022 results in detail.
Interested parties may preregister to obtain a user-specific access code for the call here.
The call will be webcast and can be accessed from the NXP Investor Relations website at www.nxp.com. A replay of the call will be available on the NXP
Investor Relations website within 24 hours of the actual call.
About NXP Semiconductors
NXP Semiconductors N.V. (NASDAQ: NXPI) enables a smarter, safer and more sustainable world through innovation. As a world leader in secureconnectivity solutions for embedded applications, NXP is pushing boundaries in the automotive, industrial & IoT, mobile, and communication
infrastructure markets. Built on more than 60 years of combined experience and expertise, the company has approximately 31,000 employees in morethan 30 countries and posted revenue of $11.06 billion in 2021. Find out more at www.nxp.com.
Forward-looking Statements
This document includes forward-looking statements which include statements regarding NXP’s business strategy, financial condition, results ofoperations, the expected material weakness in our internal control over financial reporting, including the timeline to remediate the expected material
weakness, market data, as well as any other statements which are not historical facts. By their nature, forward-looking statements are subject tonumerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. These factors,
risks and uncertainties include the following: market demand and semiconductor industry conditions; our ability to successfully introduce newtechnologies and products; the demand for the goods into which NXP’s products are incorporated; potential impacts of the COVID-19 pandemic; tradedisputes between the U.S. and China, potential increase of barriers to international trade and resulting disruptions to NXP's established supply chains;the impact of government actions and regulations, including restrictions on the export of US-regulated products and technology; the ability to generatesufficient cash, raise sufficient capital or refinance corporate debt at or before maturity to meet both NXP's debt service and research and development
and capital investment requirements; our ability to accurately estimate demand and match our production capacity accordingly or obtain supplies fromthird-party producers to meet demand; our access to production capacity from third-party outsourcing partners, and any events that might affect theirbusiness or NXP’s relationship with them; our ability to secure adequate and timely supply of equipment and materials from suppliers; our ability to avoid
operational problems and product defects and, if such issues were to arise, to correct them quickly; our ability to form strategic partnerships and joint
ventures and to successfully cooperate with our alliance partners; our ability to win competitive bid selection processes; our ability to develop products
for use in customers’ equipment and products; the ability to successfully hire and retain key management and senior product engineers; the invasion of
Ukraine by Russia and resulting regional instability, sanctions and any other retaliatory measures taken against Russia, which could adversely impact the
global supply chain, disrupt our operations or negatively impact the demand for our products in our primary end markets; and, the ability to maintain good
relationships with NXP's suppliers. In addition, this document contains information concerning the semiconductor industry and NXP’s market andbusiness segments generally, which is forward-looking in nature and is based on a variety of assumptions regarding the ways in which thesemiconductor industry and NXP's market and business segments may develop. NXP has based these assumptions on information currently available, if
any one or more of these assumptions turn out to be incorrect, actual results may differ from those predicted. While NXP does not know what impact any
such differences may have on its business, if there are such differences, its future results of operations and its financial condition could be materiallyadversely affected. There can be no assurances that a pandemic, epidemic or outbreak of a contagious diseases, such as COVID-19, will not have amaterial and adverse impact on our business, operating results and financial condition in the future. Readers are cautioned not to place undue relianceon these forward-looking statements, which speak to results only as of the date the statements were made. Except for any ongoing obligation to disclosematerial information as required by the United States federal securities laws, NXP does not have any intention or obligation to publicly update or revise
any forward-looking statements after we distribute this document, whether to reflect any future events or circumstances or otherwise. For a discussion ofpotential risks and uncertainties, please refer to the risk factors listed in our SEC filings. Copies of our SEC filings are available on our Investor Relations
website, www.nxp.com/investor or from the SEC website, www.sec.gov.

For further information, please contact:
Investors:
Jeff Palmer
jeff.palmer@nxp.com+1 408 518 5411

Media:
Jacey Zuniga
jacey.zuniga@nxp.com+1 512 895 7398

NXP-CORP

4

NXP Semiconductors
Table 1: Condensed consolidated statement of operations (unaudited)($ in millions except share data)

Three months ended
October 2,
2022$

Revenue
Cost of revenue
Gross profit
Research and development
Selling, general and administrative
Amortization of acquisition-related intangible assets
Total operating expenses
Other income (expense)
Operating income (loss)
Financial income (expense):
Extinguishment of debt
Other financial income (expense)
Income (loss) before income taxes
Benefit (provision) for income taxes
Results relating to equity-accounted investees
Net income (loss)
Less: Net income (loss) attributable to non-controlling interests
Net income (loss) attributable to stockholders

October 3,
2021

July 3, 2022

3,445 $
(1,478)
1,967
(548)
(289)
(131)
(968)
2
1,001

3,312 $
(1,430)
1,882
(542)
(265)
(134)
(941)
2
943

2,861
(1,278)
1,583
(492)
(243)
(137)
(872)
—
711

—
(98)
903
(149)
(4)
750
12
738

(18)
(110)
815
(129)
(3)
683
13
670

—
(93)
618
(95)
3
526
7
519

Earnings per share data:
Net income (loss) per common share attributable to stockholders in $Basic
Diluted

$
$

2.81
2.79

$
$

2.55
2.53

$
$

1.95
1.91

Weighted average number of shares of common stock outstanding during the period (in thousands):
262,180
264,705

Basic
Diluted5

262,579
264,692

266,557
271,359

NXP Semiconductors
Table 2: Condensed consolidated balance sheet (unaudited)($ in millions)

As of
October 2, 2022

July 3, 2022

October 3, 2021

ASSETS
Current assets:
Cash and cash equivalents
Accounts receivable, net
Inventories, net
Other current assets
Total current assets

$

3,759
1,012
1,581
351
6,703

$

3,545
996
1,462
317
6,320

$

2,303
979
1,173
266
4,721

Non-current assets:
Other non-current assets
Property, plant and equipment, net
Identified intangible assets, net
Goodwill
Total non-current assets

1,940
2,971
1,417
9,909
16,237

1,848
2,914
1,527
9,930
16,219

1,070
2,510
1,741
9,968
15,289Total assets

22,94022,53920,010

LIABILITIES AND EQUITYCurrent liabilities:
Accounts payable
Restructuring liabilities-current
Other current liabilities
Short-term debt
Total current liabilities

1,534
8
1,677
—
3,219

1,462
12
1,467
—
2,941

1,140
30
1,269
999
3,438

Non-current liabilities:
Long-term debt
Restructuring liabilities
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities

11,1621239
1,123
12,336

11,1601241
1,159
12,372

8,594
13
84
909
9,600

Non-controlling interests
Stockholders’ equity
Total equity

279
7,106
7,385

264
6,962
7,226

234
6,738
6,972

Total liabilities and equity

22,94022,53920,0106

NXP Semiconductors
Table 3: Condensed consolidated statement of cash flows (unaudited)Three months ended($ in millions)
October 2,
2022
Cash flows from operating activities:
Net income (loss)$

750

October 3,
2021

July 3, 2022
$

683

$

526

Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:

Depreciation and amortization
Stock-based compensation
Amortization of discount (premium) on debt, net
Amortization of debt issuance costs
Net (gain) loss on sale of assets(Gain) loss on extinguishment of debt
Results relating to equity-accounted investees(Gain) loss on equity securities, net
Deferred tax expense (benefit)
Changes in operating assets and liabilities:(Increase) decrease in receivables and other current assets(Increase) decrease in inventories
Increase (decrease) in accounts payable and other liabilities(Increase) decrease in other non-current assets
Exchange differences
Other items
Net cash provided by (used for) operating activities

321
89
1
2
(1)
—
4
2
(98)

317
89
—
1
—
18
3
8
(65)

306
81
—
2
—
—
(3)
(4)
(6)

(54)
(119)
275
(37)
1
8
1,144

(50)
(151)
4
(41)
(3)
6
819

16
(57)
118
(46)
(3)
(6)
924

Cash flows from investing activities:
Purchase of identified intangible assets
Capital expenditures on property, plant and equipment
Purchase of equipment leased to others
Insurance recoveries received for equipment damage
Proceeds from the disposals of property, plant and equipment
Purchase of interests in businesses, net of cash acquired
Purchase of investments
Proceeds from the sale of investments
Proceeds from return of equity investments
Net cash provided by (used for) investing activities

(50)
(282)
—
—
1
(22)
(7)
—
—
(360)

(29)
(268)
—
—
—
(1)
(2)
12
—
(288)

(27)
(201)
(14)
7
1
(16)
—
—
2
(248)

Cash flows from financing activities:
Repurchase of long-term debt
Proceeds from the issuance of long-term debt
Cash paid for debt issuance costs
Dividends paid to common stockholders
Proceeds from issuance of common stock through stock plans
Purchase of treasury shares and restricted stock unit withholdings
Other, net
Net cash provided by (used for) financing activities

—
—
—
(223)
30
(366) 1)
—
(559)

(917)
1,496
(12)
(222)
—
(2)
(1)
342

—
—
—
(152)
29
(1,157)—(1,280)Effect of changes in exchange rates on cash positions
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

(11)
214
3,545
3,759

(11)
862
2,683
3,545

(3)
(607)
2,910
2,303

39
160

133
150

56
89

1
—

—
—

—
—

176

243

224

Net cash paid during the period for:
Interest
Income taxes, net of refunds
Net gain (loss) on sale of assets:
Cash proceeds from the sale of assets
Book value of these assets
Non-cash investing activities:
Non-cash capital expenditures
1)

Represents cash paid during the quarter, excluding $34 million unsettled repurchase transactions with a trade date plus two days settlement.

7

NXP Semiconductors
Table 4: Financial Reconciliation of GAAP to non-GAAP Results (unaudited)($ in millions)Three months ended
October 2,
2022

Revenue
GAAP Gross Profit
PPA Effects
Restructuring
Stock Based Compensation
Other incidentals
Non-GAAP Gross Profit
GAAP Gross margin
Non-GAAP Gross margin
GAAP Research and development
Restructuring
Stock based compensation
Other incidentals
Non-GAAP Research and development
GAAP Selling, general and administrative
PPA effects
Stock based compensation
Other incidentals
Non-GAAP Selling, general and administrative
GAAP amortization of acquisition-related intangible assets
PPA effects$$

Non-GAAP amortization of acquisition-related intangible assets
GAAP Other income (expense)
Non-GAAP Other income (expense)
GAAP Operating income (loss)
PPA effects
Restructuring
Stock based compensation
Other incidentals
Non-GAAP Operating income (loss)
GAAP Operating margin
Non-GAAP Operating margin
GAAP Financial income (expense)
Foreign exchange gain (loss)
Gain (loss) on extinguishment of long-term debt
Other financial income (expense)
Non-GAAP Financial income (expense)

$
$
$
$

$

$

$
$

$
$

$

$

$

8

October 3,
2021

July 3, 2022

3,445
1,967
(15)
—
(12)
(5)
1,999
57.1 %
58.0 %
(548)
—
(45)
(1)
(502)
(289)
(2)
(32)
(27)
(228)
(131)
(131)

$
$

—
2
2
1,001
(148)
—
(89)
(33)
1,271
29.1 %
36.9 %
(98)
(2)
—
(5)
(91)

$
$
$
$

$

$

$
$

$
$

$

$

$

3,312
1,882
(14)
3
(12)
(10)
1,915
56.8 %
57.8 %
(542)
1
(45)
(3)
(495)
(265)
(1)
(32)
(3)
(229)
(134)
(134)

$
$

—
2
2
943
(149)
4
(89)
(16)
1,193
28.5 %
36.0 %
(128)
(2)
(18)
(11)
(97)

$
$
$
$

$

$

$
$

$
$

$

$

$

2,861
1,583
(20)
—
(10)
(4)
1,617
55.3 %
56.5 %
(492)
—
(40)
(2)
(450)
(243)
(2)
(31)
(3)
(207)
(137)
(137)
—
—
(1)
711
(159)
—
(81)
(8)
959
24.9 %
33.5 %
(93)
1
—
—
(94)

NXP Semiconductors
Table 5: Adjusted EBITDA and Free Cash Flow (unaudited)($ in millions)Three months ended
October 2,
2022

Net income (loss)
Reconciling items to adjusted net income
Financial (income) expense(Benefit) provision for income taxes
Depreciation
Amortization
Adjusted net income
Reconciling items to adjusted EBITDA
Results of equity-accounted investees
Restructuring
Stock based costs
Other incidental items
Adjusted EBITDA
Trailing twelve month adjusted EBITDA

$

750

$

98
149
156
165
1,318

$
$

4
—
89
33
1,444
5,299

October 3,
2021

July 3, 2022

$

683

$

128
129
149
168
1,257

$
$

3
(4)
89
16
1,361
4,961

$

526

$

93
95
139
167
1,020

$
$

(3)
—
81
8
1,106
3,924

Three months ended($ in millions)
October 2,
2022

Net cash provided by (used for) operating activities
Net capital expenditures on property, plant and equipment
Non-GAAP free cash flow
Trailing twelve month non-GAAP free cash flow
Trailing twelve month non-GAAP free cash flow as percent of Revenue

9

$
$
$

1,144
$
(281)
863
$
2,510
$
19 %

July 3, 2022

819
$
(268)
551
$
2,371
$
19 %

October 3,
2021

924
(200)
724
2,718
26 %