NXP Revenue Rises 19% to $3.79 Billion on Auto and Data Center Chips; Shares Fall After Hours Despite Beat

NXP Semiconductors reported third-quarter results after the market close on Tuesday, October 27, 2026, that beat analysts' forecasts for revenue and earnings, driven by its automotive, industrial and data center businesses. The Netherlands-based chipmaker also authorized a new $5 billion share repurchase program. Revenue for the quarter ended September 27 rose 19% from a year earlier and 8% from the prior quarter to $3.79 billion, the company said.

The shares nonetheless fell in extended trading. CNBC reported a decline of about 9% after hours and said fourth-quarter revenue projections came roughly in line with expectations, while Investing.com reported that the stock fell 7.6% to $234.25 from a regular-session close of $253.50, which had been up 3.12% on the day. In early premarket trading on Wednesday, the stock was down 6.5%, Stocktwits reported.

Results against expectations

Non-GAAP earnings were $4.20 per share, up from $3.11 a year earlier. Analysts had expected $4.12 per share on revenue of $3.76 billion, according to FactSet figures cited by Stocktwits; Investing.com put the earnings consensus at $4.11. On a GAAP basis, NXP earned $884 million, or $3.48 per diluted share, compared with $631 million, or $2.48 per share, a year earlier.

GAAP gross margin was 57.8% and GAAP operating margin was 32.4%. On a non-GAAP basis, gross margin was 58.6% and operating margin 37.1%, up from 57.0% and 33.8% a year earlier. Cash flow from operations was $1.26 billion and non-GAAP free cash flow was $1.21 billion, or 31.9% of revenue.

Segment performance

• Automotive: revenue of $2.07 billion, up 13% year on year and 7% sequentially.
• Industrial and IoT: $802 million, up 39% year on year.
• Communications infrastructure and other: $503 million, up 54%.
• Mobile: $411 million, down 4% year on year but up 17% from the second quarter.

On the earnings call, Chief Executive Rafael Sotomayor said automotive revenue crossed $2 billion for the first time and that revenue from the company's software-defined vehicle portfolio was running above $1.5 billion annualized, on track for a $2 billion target in 2027, according to the call transcript published by Investing.com. He said RV Tech, the joint venture of Volkswagen and Rivian, had standardized its zonal platform on NXP's S32K5 processors. He also said NXP now expects its data center revenue to exceed the $500 million outlook it had given for 2026 and to reach more than $1 billion "in a couple of years."

"Our performance was driven by accelerating contributions from our company-specific growth drivers in automotive and industrial as well as continued momentum in data center infrastructure," Sotomayor said in the earnings release.

Fourth-quarter guidance

For the fourth quarter, NXP forecast revenue of $3.75 billion to $3.95 billion, or $3.85 billion at the midpoint, which would be up 15% from a year earlier. It projected non-GAAP operating income of $1.374 billion to $1.511 billion, with a midpoint of $1.442 billion, and non-GAAP earnings of $4.14 to $4.58 per share. The LSEG consensus for revenue was $3.86 billion, and the FactSet consensus for adjusted operating income was $1.44 billion, according to CNBC.

Chief Financial Officer Bill Betz said on the call that NXP expects non-GAAP gross margin of 59% in the fourth quarter and plans to expand it to 60% during 2027. He said the company expects double-digit revenue growth in 2027 and capital spending of about 5% of revenue that year, compared with roughly 2% in 2026, as it adds back-end capacity and prepares a new assembly and test facility in Malaysia for production in 2028. Betz said about 80% of NXP's product lead times are now above 16 weeks, compared with 25% a year ago.

Capital returns

The board authorized the $5 billion repurchase program in October, in addition to $1.3 billion remaining under the prior authorization. During the third quarter, NXP returned $359 million to shareholders, including $256 million in dividends and $103 million in buybacks. Betz said the company plans to accelerate repurchases in the fourth quarter and in 2027.

NXP ended the quarter with $3.94 billion in cash and equivalents and about $10.98 billion in total debt, for net leverage of 1.3 times trailing adjusted EBITDA. The company said it will hold an investor day on March 3 in Boston, according to the call transcript.