NXPI 10-K & 10-Q changes, risk factors and insider trading

Risks related to the semiconductor industry and the markets in which we participateparticipate.

Historically, the relationship between supply and demand in the semiconductor industry has caused a high degree of cyclicality in the semiconductor market. Semiconductor supply is partly driven by manufacturing capacity, which in the past has demonstrated alternating periods of substantial capacity additions and periods in which no or limited capacity was added. As a general matter, semiconductor companies are more likely to add capacity in periods when current or expected future demand is strong and margins are, or are expected to be, high. Investments in new capacity can result in overcapacity, which can lead to a reduction in prices and margins. In response, companies typically limit further capacity additions, eventually causing the market to be relatively undersupplied. In addition, demand for semiconductors varies, which can exacerbate the effect of supply fluctuations. As a result of this cyclicality, the semiconductor industry has in the past experienced significant downturns, such as in 1997/1998, 2001/2002 and in 2008/2009, often in connection with, or in anticipation of, maturing life cycles of semiconductor companies’ products and declines in general economic conditions. These downturns have been characterized by diminishing demand for end-user products, high inventory levels, under-utilization of manufacturing capacity and accelerated erosion of average selling prices. The foregoing risks have historically had, and may continue to have, a material adverse effect on our business, financial condition and results of operations.

It is difficult for us, our customers and supplierssuppliers, to forecast demand trends. We may be unable to accurately predict the extent or duration of cycles or their effect on our financial condition or result of operations and can give no assurance as to the timing, extent or duration of the current or future business cycles generally, or specific to the markets in which we participate. In 2008 and 2009, Europe, the United States and international markets experienced increased volatility and instability related to the global financial crisis. In the first half of 2020, demand in the automotive market steeply declined as a result of manufacturing shutdowns by automotive OEMscustomers due to the coronavirus pandemic, resulting in an unforeseen negative impact to our results of operations. Beginning in the third quarter of 2020, demand rebounded across all end markets more quickly than anticipated and accelerated through the third quarter of 2022, resulting in our inability to fully satisfy customer demand. In 2008the course of 2023, 2024 and 2009,2025, Europe,our the United States and internationalend markets experienced increasedsoftening volatilitydemand and instabilityuncertainty relateddue to themacroeconomic globalfactors financialand crisis.geopolitical uncertainty. In the event of a future decline in global 1economic Theconditions, contentsour business, financial condition and results of ouroperations website,could be materially adversely affected, and the resulting economic decline might disproportionately affect the markets in which we participate, further exacerbating a decline in our Corporateresults Sustainabilityof Report, and our Sustainability Policy are referenced for general information only and are not incorporated by reference into, and do not form a part of, this Form 10-K.operations.

In addition, AI and machine learning are still in relatively early stages, and the introduction and incorporation of AI technologies may result in unintended consequences or other new or expanded risks and liabilities. Such risks may include (i) adverse impacts from deficient, inaccurate, or biased AI recommendations, (ii) AI technologies the company develops and adopts may not meet market requirements or become obsolete earlier than planned, and there can be no assurance that the company will realize the desired or anticipated benefits, (iii) use of AI applications could increase the risk of cybersecurity incidents, such as throughsecurity vulnerabilities, including unintended or inadvertent transmission of proprietary or sensitive information,information and unauthorized access, or (iv) there is uncertainty in the legal and regulatory landscape for AI, which is not fully developed, and any laws, regulations or industry standards adopted in response to the emergence of AI may be burdensome.burdensome, could entail significant costs, and may restrict or impede our ability to successfully use AI technologies efficiently and effectively.

The vast majority of our revenue is derived from sales to manufacturers in the automotive,Automotive, industrialIndustrial & IoT, mobile,Mobile, and communicationCommunication infrastructureInfrastructure end markets. Demand in these markets fluctuates significantly, driven by consumer spending, consumer preferences, the development of new technologies and prevailing economic conditions. In addition, the specific products in which our semiconductors are incorporated may not be successful,successful or may experience price erosion or other competitive factors that affect the price manufacturers are willing to pay us. Such customers have in the past, and may in the future, vary order levels significantly from period to period, request postponements to scheduled delivery dates, modify their orders or reduce lead times. This is particularly common during periods of low demand. This can make managing our business difficult, as it limits the predictability of future revenue. It can also affect the accuracy of our financial forecasts. Furthermore, developing industry trends, such as customers’ use of outsourcing and revised supply chain models, including the direct purchase of semiconductor products by end product manufacturers instead of component manufacturers, may affect our revenue, costs, customer relations and working capital requirements.

One of the results of the rapid innovation in the semiconductor industry is that pricing pressure, especially on products containing older technology, can be intense. Product life cycles are relatively short, and as a result, products tend to be replaced by more technologically advanced substitutes on a regular basis.

In turn, historically demand for older technology falls, causing the price at which such products can be sold to drop, in some cases precipitously. If this trend continues, in order to continue profitably supplying these products, we must reduce our production and procurement costs in line with the lower revenue we can expect to generate per unit. Usually, this must be accomplished through improvements in process technology, production efficiencies and efficient procurement pricing. If we cannot advance our process technologies or improve our efficiencies to a degree sufficient to maintain required margins, the profit we will no longer be able to make a profit from the sale of these products.products will decline. Moreover, we may not be able to cease production of such products, either due to contractual obligations or for customer relationship reasons, and as a result may be required to bear reduced profitability, or even a loss on such products. We cannot guarantee that competition in our core product markets will not lead to price erosion, lower revenue or lower margins in the future. Should reductions in our manufacturing costs fail to keep pace with reductions in market prices for the products we sell, this could have a material adverse effect on our business, financial condition and results of operations.

•negative economic developments in economies around the world and the instability of governments and international trade arrangements, such as the increase of barriers to international trade including the imposition of new or increased tariffs on imports by the United States and China,China and other countries, enhanced export controls on certain products and sanctions on certain industry sectors and parties;

•geopolitical tension and disputes, as well as,as resulting adverse changes in government policies, especially those affecting global trade and investment, including thetrade impositionprotection ofand newnational security policies or increasedplacing tariffs.companies on restricted entity lists. Sustained geopolitical tensions, such as the current geopolitical tensions involving China and Taiwan, could lead to long-term changes in global trade and technology supply chains and decoupling of global trade networks;

We may from time to time restructure parts of our organization. Any such restructuring may impact customer satisfactionsatisfaction, and the costs of implementation may be difficult to predict.

We make highly complex electronic components which in many cases are enabled by software and, accordingly, there is a risk that defects may occur in any of our products. Such defects can give rise to significant costs, including expenses relating to recalling products, releasing new software versions, replacing defective items, writing down defective inventory and loss of potential sales. In addition, the occurrence of such defects may give rise to product liability and warranty claims, including liability for damages caused by such defects. If we release defective products into the market, our reputation could suffer and we may lose sales opportunities and incur liability for damages. Moreover, since the cost of replacing defective semiconductor devices is often much higher than the value of the devices themselves, we may at times face damage claims from customers in excess of the amounts they pay us for our products, including consequential damages. We also face exposure to potential liability resulting from the fact that our customers typically integrate the semiconductors and the corresponding software we sell into numerous consumer products, which are then sold into the marketplace. We are exposed to product liability claims if our semiconductors or software, or the consumer products based on them malfunction and result in personal injury or death. We may be named in product liability claims even if there is no evidence that our products caused the damage in question, and such claims could result in significant costs and expenses relating to attorneys’ fees and damages. In addition, our customers may recall their products if they prove to be defective or make compensatory payments in accordance with industry or business practice or in order to maintain good customer relationships. If such a recall or payment is caused by a defect in one of our products, semiconductor parts or software, our customers may seek to recover all or a portion of their losses from us. If any of these risks materialize, our reputation would be harmed and there could be a material adverse effect on our business, financial condition and results of operations.

Our manufacturing operations depend on deliveries of equipment and materials in a timely manner and, in some cases, on a just-in-time basis. From time to time, suppliers may extend lead times, limit the amounts supplied to us or increase prices due to capacity constraints or other factors. Supply disruptions may also occur due to shortages in critical materials, such as silicon wafers or specialized chemicals. In addition, the imposition of tariffs or other trade restrictions may significantly increase the costs, and otherwise adversely impact the availability of certain raw materials and supplies needed for our manufacturing operations. Because the equipment that we purchase is complex, it is frequently difficult or impossible for us to substitute one piece of equipment for another or replace one type of material with another. A failure by our suppliers to deliver our requirements could result in disruptions to our manufacturing operations. Our business, financial condition and results of operations could be harmed if we are unable to obtain adequate supplies of quality equipment or materials in a timely manner or if there are significant increases in the costs of equipment or materials due to current or expected inflationinflation, trade restrictions or other reasons and we are not able to increase the price of our products.

We currently use outside suppliers for a portion of our manufacturing capacity. Outsourcing our production presents a number of risks. If our outside suppliers are unable to satisfy our demand, or experience manufacturing difficulties, delays or reduced yields, our results of operations and ability to satisfy customer demand could suffer. For example, as part of the industry-wide shortage of semiconductors during 2022 we could not obtain sufficient silicon wafers from our foundry partners to meet the demand for our products, causing us not to not fully supply the demand for our products, and negatively affecting our results of operations. In addition, purchasing rather than manufacturing these products may adversely affect our gross profit margin if the purchase costs of these products are higher than our own manufacturing costs would have been or if we are not able to increase the price of our products to reflect the higher input costs. Prices for foundry products also vary depending on capacity utilization rates at our suppliers, quantities demanded, product technology and geometry. Furthermore, these outsourcing costs can vary materially from quarter to quarter and, in cases of industry shortages like we experienced in 2022, they can increase significantly, which may negatively affect our gross profit if we are not able to increase the price of our products. In addition, we have entered into long termlong-term supply agreements with certain key manufacturing partners. The failure of these suppliers to perform under these agreements or an unexpected reduction in demand for these products could result in a material adverse effect on our business, financial condition and results of operations.

As is the case with other large semiconductor companies, we receive subsidies and grants from governments in some countries. These programs are subject to periodic review by the relevant governments, and if any of these programs are curtailed or discontinued, this could have a material adverse effect on our business, financial condition and results of operations. As the availability of government funding is outside our control, we cannot guarantee that we will continue to benefit from government support or that sufficient alternative funding will be available if we lose such support. Moreover, if we terminate any activities or operations, including strategic alliances or joint ventures, we may face adverse actions from the local governmental agencies providing such subsidies to us. In such event that we don't meet the subsidies grant conditions, such government agencies could seek to recover such subsidies from usus, and they could cancel or reduce other subsidies we receive from them. This could have a material adverse effect on our business, financial condition and results of operations.

We engage in acquisitions and other strategic transactions, including joint ventures, and make investments,investments which we believe are important to the future of our business. We routinely acquire businesses and other assets, including patents, technology and other intangible assets, enter into joint ventures or other strategic transactions, and purchase minority equity interests in or make loans to companies. Achieving the anticipated benefits of business acquisitions depends in part upon our ability to integrate the businesses in an efficient and effective manner and achieve anticipated synergies, and we may not be successful in these efforts. Such integration is complex and time consumingtime-consuming and involves significant challenges, including, among others: retaining key employees; integration of new employees, technology, products, operations, sales and distribution channels, business models, facilities and business systems; retaining customers and suppliers of the businesses; consolidating research and development operations; and consolidating corporate and administrative infrastructures. If we do not achieve the anticipated benefits of business acquisitions or other strategic activities, or if we are unable to consummate acquisitions or strategic investments that we consider important to the future of our business, our business and results of operations may be adversely affected and our growth strategy may not be successful.

As part of our hybrid manufacturing strategy, we have entered into a number of long-term strategic partnerships with other leading industry participants,participants and may do so again in the future. For example, we currently participate in a joint venture with Taiwan Semiconductor Manufacturing Company Limited (“TSMC”) called Systems on Silicon Manufacturing Company Pte. Ltd. (“SSMC”) and have recently formed a joint venture with Vanguard International Semiconductor Corporation called VisionPower Semiconductor Manufacturing Company Pte. Ltd. (“VSMC”), and a joint venture with TSMC, Robert Bosch Gmbh and Infineon Technologies AG called European Semiconductor Manufacturing Company (“ESMC”) to create capability for our future manufacturing requirements. If any of our strategic partners in alliances we currently engage with or may engage with in the future were to encounter financial difficulties or change their business strategies, they may no longer be able or willing to participate in these groups or alliances, which could have a material adverse effect on our business, financial condition and results of operations. Under the terms of current or future alliances, we may have certain obligations, including funding obligations or take or pay obligations. If we do not achieve the anticipated benefits of these joint ventures, or if newly established joint ventures are not able to begin production in the expected timing or achieve expected efficiency and quality, our business and results of operations may be adversely affected.

Risks related to regulatory or legal challengeschallenges.

As a result, we are subject to environmental, data privacy, export controls and sanctions, AI technologies, cybersecurity, disclosure and reporting (including reporting of ESG-related data), labor and health and safety laws and regulations in each jurisdiction in which we operate. We are also required to obtain environmental permits and other authorizations or licenses from governmental authorities for certain of our operations. In the jurisdictions where we operate, we need to comply with differing standards and varying practices of regulatory, tax, customs, judicial and administrative bodies.

We and certain of our businesses are involved as plaintiffs or defendants in legal proceedings in various matters. For example, in the past we arehave been involved in legal proceedings claiming personal injuries to the children of former employees as a result of employees’ alleged exposure to chemicals used in semiconductor manufacturing clean room environments operated by us or our former parent companies, Philips and Motorola. Furthermore, because we continue to utilize these clean rooms, we may become subject to future claims alleging personal injury that may lead to additional liability. A judgment against us in these or other legal proceedings or material defense cost could harm our business, financial condition and results of operations.

Risks related to cybersecurity and IT systemssystems.

In the current environment, there are numerous and evolving risks to cybersecurity and privacy, including criminal hackers, state-sponsored intrusions, industrial espionage, employee malfeasance, and human or technological error. Computer hackers and others routinely attempt to breach the security of technology products, services, and systems, and those of customers, suppliers, and some of those attempts may be successful. Such breaches could result in, for example, unauthorized access to, disclosure, misuse, loss, or destruction of our, our customer, or other third party data or systems, theft of sensitive or confidential data including personal information (including personal data about our employees, customers or other third parties) and intellectual property, system disruptions, and denial of service. In the event of such breaches, we, our customers or other third parties could be exposed to potential liability, litigation, and regulatory action, as well as the loss of existing or potential customers, damage to our reputation, and other financial loss. In addition, the cost and operational consequences of responding to breaches and implementing remediation measures could be significant. We have identified instances of employee misappropriation or theft of certain proprietary technology by individuals who are no longer employed by NXP. In some cases, such misappropriation may result in the violation of applicable export control regulations, which we report to relevant authorities as appropriate. As of the date of this filingfiling, we do not believe that any such misappropriation or theft known to us has resulted in a material adverse effect on our business or any material damage to us. However, there can be no assurance that these or other similar incidents will not have a material impact on our operations and financial results in the future. Accordingly, as these threats become increasingly sophisticated and continue to develop and grow, we are actively adapting our security measures and we continue to increase the amount we allocate to implement, maintain and/or update security systems to protect our infrastructure, intellectual property and data. As a global enterprise, we could also be impacted by existing and proposed laws and regulations, as well as government policies and practices related to cybersecurity, privacy and data protection. Additionally cyber-attacks or other catastrophic events resulting in disruptions to or failures in power, information technology, communication systems or other critical infrastructure could result in interruptions or delays to us, our customers, or other third party operations or services, financial loss, potential liability, and damage our reputation and affect our relationships with our customers and suppliers.

Our success and future revenue growth depends, in part, on our ability to protect our proprietary technology, our products, our proprietary designs and fabrication processes, and other intellectual property against misappropriation by others. We primarily rely on patent, copyright, trademark and trade secret laws, as well as nondisclosure agreements and other methods, to protect our intellectual property. We may have difficulty obtaining patents and other intellectual property rights to protect our proprietary products, technology and intellectual property, and the patents and other intellectual property rights we receive may be insufficient to provide us with meaningful protection or commercial advantage. We may not obtain patent protection or secure other intellectual property rights in all the countries in which we operate, and under the laws of such countries, patents and other intellectual property rights may be or become unavailable or limited in scope. Even if new patents are issued, the claims allowed may not be sufficiently broad to effectively protect our proprietary technology, processes and other intellectual property. In addition, any of our existing patents, and any future patents issued to us may be challenged, invalidated or circumvented. The protection offered by intellectual property rights may be inadequate or weakened for reasons or circumstances that are out of our control. Further, our proprietary technology, designs and processes and other intellectual property may be vulnerable to disclosure or misappropriation by employees, contractors and other persons. It is possible that competitors or other unauthorized third parties may obtain, copy, use or disclose our proprietary technologies, our products, designs, processes and other intellectual property despite our efforts to protect our intellectual property. While we hold a significant number of patents, there can be no assurances that additional patents will be issued or that any rights granted under our patents will provide meaningful protection against misappropriation of our intellectual property. Our competitors may also be able to develop similar technology independently or design around our patents. We may not have or pursue patents or pending applications in all the countries in which we operate corresponding to all of our primary patents and applications. Even if patents are granted, effective enforcement in some countries may not be available. In particular, intellectual property rights are difficult to enforce in countries where the application and enforcement of the laws governing such rights may not have reached the same level as compared to other jurisdictions where we operate. Consequently, operating in some countries may subject us to an increased risk that unauthorized parties may attempt to copy or otherwise use our intellectual property or the intellectual property of our suppliers or other parties with whom we engage. There is no assurance that we will be able to protect our intellectual property rights or have adequate legal recourse in the event that we seek legal or judicial enforcement of our intellectual property rights under the laws of such countries. Any inability on our part to adequately protect our intellectual property may have a material adverse effect on our business, financial condition and results of operations. Finally, the intellectual property ownership and license rights, including copyrights and patents, surrounding AI technologies, which we are and may in the future continue to build into our products, have not been fully addressed by U.S. or foreign courts, laws or regulations, and the use of AI in the development of our products and services could result in our loss of, or failure to obtain, intellectual property rights, as well as subject us to risks related to intellectual property infringement or misappropriation.

We have from time to time received, and may in the future receive, communications alleging possible infringement of patents and other intellectual property rights of others. Further, we may become involved in costly litigation brought against us regarding patents, copyrights, trademarks, trade secrets or other intellectual property rights. If any such claims are asserted against us, we may seek to obtain a license under the third party’s intellectual property rights. We cannot assure you that we will be able to obtain any or all of the necessary licenses on satisfactory terms, if at all. In the event that we cannot obtain or take the view that we don’t need a license, these parties may file lawsuits against us seeking damages (and potentially treble damages in the United States) or an injunction against the sale of our products that incorporate allegedly infringed intellectual property or against the operation of our business as presently conducted. Such lawsuits, if successful, could result in an increase in the costs of selling certain of our products, our having to partially or completely redesign our products or stop the sale of some of our products and could cause damage to our reputation. Any litigation could require significant financial and management resources regardless of the merits or outcome, and we cannot assure you that we would prevail in any litigation or that our intellectual property rights can be successfully asserted in the future or will not be invalidated, circumvented or challenged. Additionally, and in part due to ongoing uncertainties in the legal framework around AI, our use of AI technologies for productivity and in our products and services may expose us to copyright infringement or other intellectual property misappropriation claims. The award of damages, including material royalty payments, or the entry of an injunction against the manufacture and sale of some or all of our products, could affect our ability to compete or have a material adverse effect on our business, financial condition and results of operations.

•exposing us to the risk of increased interest rates in the event we have borrowings under our $2,500 million revolving credit facility agreement (the “RCF Agreement”), which was restated to $3,000 million as per February 6, 2026, because loans under the RCF Agreement may bear interest at a variable rate;

•making it more difficult for us to satisfy our obligations with respect to our indebtedness and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event default under the indentures governing our notes and agreements governing other indebtedness;

•limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged and whowho, therefore, may be able to take advantage of opportunities that our leverage prevents us from exploiting.

The RCF AgreementAgreement, European Investment Bank (EIB) loan facilities and the indentures governing our unsecured notes or any other debt arrangements that we may have require us to comply with various covenants. If there were an event of default under any of our debt instruments that was not cured or waived, the holders of the defaulted debt could terminate commitments to lend and cause all amounts outstanding with respect to the debt to be due and payable immediately, which in turn could result in cross defaults under our other debt instruments. Our assets and cash flow may not be sufficient to fully repay borrowings under all of our outstanding debt instruments if some or all of these instruments are accelerated upon an event of default.

The stock market in recent years has experienced significant price and volume fluctuations that have often been unrelated to the operating performance of companies. The market closing price for our common stock has varied between a high of $296.08$245.86 on JulyFebruary 17,20, 20242025, and a low of $204.72$153.50 on DecemberApril 20,8, 20242025, in the twelve-month period ending on December 31, 2024.2025. The market price of our common stock is likely to continue to be volatile and subject to significant price and volume fluctuations for many reasons, including in response to the risks described in this section, changes in our dividend or share repurchase policies, variations between our actual financial results or guidance and expectations of securities analysts or investors or for reasons unrelated to our operations, such as reports by industry analysts, investor perceptions or negative announcements by our customers, competitors, peer companies or suppliers regarding their own performance, or announcements by our competitors of significant contracts, strategic partnerships, joint ventures, joint marketing relationships or capital commitments, the passage of legislation or other regulatory developments affecting us or our industry, as well as industry conditions and general financial, economic and political instability. In the past, following periods of market volatility, shareholders have instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation.

Our board of directors has adopted a dividend policy pursuant to which we currently pay a cash dividend on our ordinary shares on a quarterly basis. The declaration and payment of any dividend is subject to the approval of our boardboard, and our dividend may be discontinued or reduced at any time. There can be no assurance that we will declare cash dividends in the future in any particular amounts, or at all.

We sponsor defined benefit pension plans in a number of countriescountries, and a significant number of our employees are covered by our defined benefit pension plans. As of December 31, 2024,2025, we had recognized a net accrued benefit liability of $360$342 million, representing the unfunded benefit obligations of our defined pension plans. The funding status and the liabilities and costs of maintaining these defined benefit pension plans may be impacted by financial market developments. For example, the accounting for such plans requires determining discount rates, expected rates of compensation and expected returns on plan assets, and any changes in these variables can have a significant impact on the projected benefit obligations and net periodic pension costs. Negative performance of the financial markets could also have a material impact on funding requirements and net periodic pension costs. Our defined benefit pension plans may also be subject to demographic trends. Accordingly, our costs to meet pension liabilities going forward may be significantly higher than they are today, which could have a material adverse impact on our financial condition.

Recent examples include the OECD’s initiatives to revise profit allocation and nexus rules to allocate more taxing rights to countries where companies have their markets and to establish a minimum tax rate on a global basis. As part of the OECD framework to implement a minimum tax rate, the EU has adopted a directive on ensuring a global minimum level of taxation for multinational companies, also known as Pillar 2, towhich becomebecame effective in 2024. As from that year the Dutch government enacted legislation in response to and based on such EU directive. However, this legislation could be amended as the OECD is considering a change in the Pillar 2 rules as in June 2025 G7 countries issued a statement setting out the principles for a side-by-side safe harbor, adding that they would pursue parallel workstreams to simplify the pillar 2 compliance framework and consider the favorable treatment of substance-based nonrefundable tax credits under the GLOBE rules.

We are required to pay taxes in multiple jurisdictions. We determine the taxes we are required to pay based on our interpretation of the applicable tax laws and regulations in the jurisdictions in which we operate. We may be subject to unfavorable changes in the respective tax laws and regulations to which we are subject. Tax controls, audits, changechanges in controls and changes in tax laws or regulations or the interpretation given to them may expose us to negative tax consequences, including interest payments and potentially penalties. We have issued transfer-pricing directives in the areas of goods, services and financing, which are in accordance with OECD guidelines. As transfer pricing has a cross bordercross-border effect, the focus of local tax authorities on implemented transfer pricing procedures in a country may have an impact on results in another country.

•Use of Certain Non-GAAP Financial Measures - A discussion of the presentation of non-GAAP financial measures NXP has one reportable segment representing the entity as a whole. Our segment represents groups of similar products that are combined on the basis of similar design and development requirements, product characteristics, manufacturing processes and distribution channels, and how management allocates resources and measures results. See Note 1 to the consolidated financial statements for more information regarding our segment.segment reporting.

Our gross profit percentage for 20242025 of 56.4%54.7% decreased when compared to 20232024 (56.9%56.4%), reflectingmainly adriven lowerby declineprice ofand costunfavorable ofproduct revenue compared with the decreased revenue.mix.

•Revenue for the fourth quarter of 20242025 was $3.1$3.3 billion, downup 9.1%7.2% year-on-year;

Revenue for the three months ended December 31, 20242025, was $3,111$3,335 million compared to $3,250$3,173 million for the three months ended September 29,28, 2024,2025, aan decreaseincrease of $139$162 million or 4.3%5.1% quarter-on-quarter. NXP experienced declinesquarter-on-quarter, in line with management's expectations. Within our end markets, the Industrial & IoT end market ofincreased $47$61 million or 8.3%,10.5%, the Mobile end market increased $55 million or 12.8%, the Automotive end market increased $39 million or 2.1%, and the Communication Infrastructure & Other end market ofincreased $42$7 million or 9.3%, Automotive end market of $39 million or 2.1%, and Mobile end market of $11 million or 2.7%.2.1%.

When aggregating all end markets together and reviewing sales channel performance, revenue throughfrom NXP’s third party distribution partnersdistributors was $1,763$2,025 million, aan decreaseincrease of $134$159 million or 7.1%8.5% compared to the previous period. Revenue through NXP’s third partyfrom direct OEM and EMS customers was $1,321$1,274 million, consistentan withincrease of $5 million or 0.4% compared to the previous period.

From a geographic perspective, revenue increased inacross the Asia Pacific and China regions, partly offset by declines in the EMEA and the Americasall regions.

The gross profit percentage for the fourth quarter of 20242025 decreased to 53.9%54.2% from 57.4%56.3% in the third quarter of 2024,2025, primarily due to animpairments impairmentrelated to the scaling down of capitala assetsnon-strategic andproduct higher restructuring costs for specific targeted actions under the new global restructuring programs in the fourth quarter of 2024.line.

Operating cash flows for the threefourth monthsquarter endedof December 31, 20242025 was $391$891 million compared to $779$585 million for the threethird months ended September 29, 2024, a decreasequarter of $3882025, an increase of $306 million or 50.2%52.3% quarter-on-quarter.

The following table presents the composition of operating incomeresults for the years ended December 31, 20242025, and December 31, 2023.2024.

Revenue by geographic region, which is based on the customer’slocation shipped-towhere location,the sale originated, was as follows: 1)

From an end market perspective, NXP experienced growth in its Mobile end market, which was offset by declines in the Communication Infrastructure & Other,Other and Automotive end markets, which was partially offset by growth in its Mobile and Industrial & IoT end markets versus the year ago period.

Revenue in the Automotive end market was $7,151$7,116 million, a decrease of $333$35 million or 4.4%0.5% versus the year ago period,period. with processor and connectivity products contributing to theThe decline partlywas driven by processors, partially offset withby growth in advanced analog and ADAS – Safetymixed-signal products.

Revenue in the MobileIndustrial & IoT end market was $1,497$2,273 million, an increase of $170$4 million or 12.8%0.2% versus the year ago period,period. withThe mobileincrease walletwas products contributingattributable to thegrowth growth.in mixed-signal products, partially offset by declines in processors.

Revenue in the Communication Infrastructure & OtherMobile end market was $1,697$1,584 million, aan decreaseincrease of $417$87 million or 19.7%5.8% versus the year ago period, with theprocessors entireand productmixed-signal portfolioproducts contributing to the decline.growth.

When aggregating all end markets and reviewing sales channel performance, revenue throughfrom NXP’s third party distribution partnersdistributors was $7,203 million, consistent with the year ago period with an increase of $8 million or 0.1%. Revenue through direct OEM and EMS customers was $5,291$7,051 million, a decrease of $672$152 million or 11.3%2.1% versus the year ago period. Revenue from direct customers was $5,084 million, a decrease of $207 million or 3.9% versus the year ago period.

From a geographic perspective, revenue increased year-on-year in the China region and declined in the APAC, EMEA, Americas, and AsiaAmericas Pacific regions versus the year ago period.regions.

Operating expenses for the year ended December 31, 20242025, totaled $3,647$3,681 million,million or 28.9%30.0% of revenue, compared to $3,877$3,647 million, or 29.2%28.9% of revenue, for the year ended December 31, 2023.2024.

Research and development (R&D) costs primarily consist of engineer salaries and wages (including share basedshare-based compensation and other variable compensation), engineering related costs (including outside services, fixed-asset, IP and other licenses related costs), shared service center costs and other pre-production related expenses.

Selling, general and administrative (SG&A) costs primarily consist of personnel salaries and wages (including shareshare- based compensation and other variable compensation), communication and IT related costs, fixed-asset related costs and sales and marketing costs (including travel expenses).

Amortization of acquisition-related intangible assets decreased by $164$19 million, or 54.7%,14.0%, when compared to last yearyear, mainly from the effect of certain acquisition-related intangibles becoming fully amortized (with regard to the previous Marvell acquisition) partly offset by amortization related to the recent acquisitions of TTTech Auto and Freescale acquisitions).Kinara.

Other income (expense) includes results from manufacturing service arrangements (“MSA”) and transitional service arrangements (“TSA”) that are put into place when we divest a business or activity, as well as other activity.activities. These arrangements are expected to decrease as the divested business or activity becomes more established. Other income (expense) reflects aan lossincome of $12 million for 2025, compared to an expense of $55 million forin 2024, comparedwhich to a loss of $15 million in 2023. Included in 2024 isincluded a $40 million charge for a vacated deposit on an exited technology.

Financial income (expense) was an expense of $318$384 million in 2024,2025, compared to an expense of $309$318 million in 2023.2024. The change in financial income (expense) is attributable to aan decreaseincrease in interest incomeexpense of $27$68 million as a result of the issuance of new bonds, EIB loans and commercial paper notes. Interest income decreased by $15 million as a result of lower cash levellevels in 2024, partially offset by higher interest rates. Interest expense decreased by $40 million as a result of redemption of debt.2025. Other financial expenses increaseddecreased due to adjustments in our investments as well as lower interest related to prior tax positions.

Results relating to equity-accounted investees amounted to a loss of $70 million in 2025, whereas in 2024 results relating to equity-accounted investees amounted to a loss of $12 millionmillion. inFor 2024,the whereasyear inended 2023December 31, 2025, results relating to equity-accounted investees amountedinclude tothe aimpairment of our equity method investment SigmaSense and the loss on the sale of $7our million.equity method investment Smart Growth Fund.

As of December 31, 2024,2025, our cash balance was $3,292$3,267 million, a decrease of $979$25 million compared to our cash balance and short-term deposits on December 31, 20232024 ($4,271$3,292 million), of which $261$361 million (20232024: $214$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 20242025 and 2023,2024, no dividend was declared. During the first quarter of 2026, SSMC declared a dividend of $150 million, of which $75 million is scheduled for distribution in the first quarter, with 38.8% being paid to our joint venture partner.

OurAs at December 31, 2025, our amended and restated Unsecured Revolving Credit Facility (“RCF”) provides for $2,500 million of senior unsecured revolving credit commitments. We may borrow under this RCF in the future and use the proceeds for general corporate purposes and any other purpose not prohibited by the Amended and Restated Revolving Credit Agreement and related documentation. As of December 31, 2024,2025, we do not have any borrowings under the RCF.

•During the firstsecond quarter of 2026, NXP returned capital to shareholders with the payment of $256 million in cash dividends and the repurchase of $102$104 million of its common shares, for a total capital return of $358$360 million.

Revenue for the three months ended June 28, 2026, was $3,496 million compared to $3,181 million for the three months ended March 29, 2026, wasan $3,181 million compared to $3,335 million for the three months ended December 31, 2025, a decreaseincrease of $154$315 million or 4.6%9.9% quarter-on-quarter, in line with management's expectations. Within our end markets, the Automotive end market increased $156 million or 8.8%, the Industrial & IoT end market increased $127 million or 20.2%, the Communication Infrastructure & Other end market increased $46$72 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%,18.9%, and the Mobile end market decreased $94$40 million or 19.4%.10.2%.

When aggregating all end markets together and reviewing sales channel performance, revenue from distributors was $1,862$2,072 million, aan decreaseincrease of $163$210 million or 8.0%11.3% compared to the previous period. Revenue from direct customers was $1,282$1,375 million, an increase of $8$93 million or 0.6%7.3% versus the previous period.

From a geographic perspective, therevenue decrease of revenueincreased quarter-on-quarter was driven byin the China region withby a31.5%, decline of 15.7% and byin the Asia Pacific region withby a11.2%, decreasein ofthe 6.6%.EMEA region by 4.0%, and in the Americas region by 3.2%.

Our gross profit percentage for the three months ended MarchJune 29,28, 2026, of 56.2%57.3% increased compared to 54.2%56.2% for the three months ended DecemberMarch 31,29, 2025,2026, driven mainly by impairmentshigher relatedsales tovolumes theand scaling down of a non-strategicfavorable product line in the fourth quarter of 2025.mix.

Operating income for the three months ended June 28, 2026, was $1,071 million compared to $1,505 million for the three months ended March 29, 2026, wasa $1,505 million compared to $744 million for the three months ended December 31, 2025, an increasedecrease of $761$434 million or 102.3%.28.8%. The sequential increasedecrease was mainly driven by the gain on sale of the MEMS Sensors business andin lowerthe restructuringfirst expenses.quarter of 2026.

The following table presents operating results for each of the three-monththree- and six-month periods ended MarchJune 29,28, 2026, and MarchJune 30,29, 2025, respectively:

Revenue for the three months ended MarchJune 29,28, 2026, was $3,181$3,496 million compared to $2,835$2,926 million for the three months ended MarchJune 30,29, 2025, an increase of $346$570 million or 12.2%,19.5%, in line with management’s expectations.

Revenue in the Automotive end market was $1,782$3,720 million, an increase of $108$317 million or 6.5%9.3% versus the year-ago period. The increase was attributablepredominantly due to growth in processors, with mixed-signal products andalso processors.growing.

Revenue in the Industrial & IoT end market was $628$1,383 million, an increase of $120$329 million or 23.6%31.2% versus the year-ago period. The increase was attributabledue to strong growth in processors and mixed-signal products.

Revenue in the Communication Infrastructure & Other end market was $380$832 million, an increase of $65$197 million or 20.6%31.0% versus the year-ago period. The increase was attributabledue to growth in processors, partially offset by declines in mixed-signal products.

When aggregating all end markets togethertogether, and reviewing sales channel performance, revenue from distributors was $1,862$3,934 million, an increase of 338$774 million or 22.2%24.5% versus the year-ago period. Revenue fromthrough direct customers was $1,282$2,657 million, consistentan withincrease of $116 million or 4.6% versus the year-ago period.

From a geographic perspective, revenue increased year-on-year in the Americas region by 27.9%,30.9%, in the EMEAChina region by 8.5%,14.6%, in the Asia Pacific region by 6.9%,10.3%, and in the ChinaEMEA region by 2.8%.8.7%.

Gross profit for the three months ended MarchJune 29,28, 2026, was $1,788$2,002 million, or 56.2%57.3% of revenue, compared to $1,560$1,562 million, or 55.0%53.4% of revenue for the three months ended MarchJune 30,29, 2025. The increase in gross marginprofit is primarily driven by higher sales volumes and lower manufacturing costs (sourcingresulting from improved factory utilization and costmanufacturing efficiencies).cost-efficiency initiatives.

Operating expenses for the three months ended MarchJune 29,28, 2026, totaled $904$926 million, or 28.4%26.5% of revenue, compared to $855$876 million, or 30.2%29.9% of revenue for the three months ended MarchJune 30,29, 2025.

R&D costs for the three months ended MarchJune 29,28, 2026, increased by $41$31 million, or 7.5%,5.4%, when compared to the three months ended MarchJune 30,29, 2025, primarily driven by:

+ Increased variable compensation expenses due to improved company performance ($65 million) + A net increase in personnel related costs relateddriven toby our acquisitionsclosed acquisitions, offset by certain ongoing cost-cutting initiatives ($19 million) - Lower share-based compensation costs due to restructuring activities ($7$11 million)

SG&A costs for the three months ended MarchJune 29,28, 2026, increased by $3$13 million, or 1.1%,4.7%, when compared to the three months ended MarchJune 30,29, 2025, primarily driven by:

+ Increased personnel and integration related costs of our acquisitions ($15 million) + Increased variable compensation expenses due to improved company performance ($13$34 million) - Lower legal feesexpenses ($23$27 million)

Amortization of acquisition-related intangible assets for the three months ended MarchJune 29,28, 2026, increased by $5$6 million, or 18.5%,24.0%, when compared to the three months ended MarchJune 30,29, 2025, primarily driven by amortization related to the recent acquisitions of TTTech Auto and Kinara.

Other income (expense) reflects an income of $621$616 million for the firstsix quartermonths ofended June 28, 2026, compared to an income of $18$19 million in the firstsix quartermonths ofended June 29, 2025. The increase was mainly driven by the gain on sale of $627 million related to the divestment of the MEMS Sensors business.business in the first quarter of 2026.

Financial income (expense) was an expense of $96$193 million for the threesix months ended MarchJune 29,28, 2026, compared to an expense of $92$178 million for the threesix months ended MarchJune 30,29, 2025. The change in financialInterest income (expense)decreased isby primarily attributable to in increase in interest expense of $8$14 million due to thelower issuancecash oflevels and lower interest rates. Interest expense increased by $5 million mainly due to interest on three new bonds andissued EIBin LoanAugust B,2025, offset by lower interest expenses due tofrom the redemption of notes.notes and decreased borrowing under our commercial paper program. Other financial expensesincome/(expense) decreased mainly due to the movement of 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.securities.

The effective tax rate for the first quartersix months of 2026 was 19.3% compared to 20.6%20.0% 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%19.7% 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 amounted to a loss of $4$3 million for both the three months ended MarchJune 29,28, 2026, andwhereas the three months ended MarchJune 30,29, 2025.2025, results relating to equity-accounted investees amounted to a loss of $28 million (which includes an impairment charge of $27 million related to our investment in Sigma Sense).

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$15 million for the three months ended MarchJune 29,28, 2026, compared to a profit of $7$12 million for the three months ended MarchJune 30,29, 2025.

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 firstsecond quarter of 2026, our cash balance was $3,708$3,222 million, ana increasedecrease of $441$45 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$6,222 million of liquidity as of MarchJune 29,28, 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.

At MarchJune 29,28, 2026, our cash balance was $3,708$3,222 million of which $326$359 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.

Our cash outflows for capital expenditures were $79$148 million in the first threesix months of 2026, compared to $139$222 million in the first threesix months of 2025.

In the first threesix months of 2026, we repurchased approximately $102$206 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$256 million) and dividends of $1.014 per ordinary share were paid on July 9, 2026 ($256 million).

Our total debt, inclusive of aggregate principal, unamortized discounts, premiums, debt issuance costs and fair value adjustments, amounted to $11,724$10,976 million as of MarchJune 29,28, 2026, a decrease of $498$1,246 million compared to December 31, 2025 ($12,222 million).

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

As of MarchJune 29,28, 2026, we had outstanding fixed-rate notes with varying maturities for an aggregate principal amount of $10,749$9,999 million (collectively the “Notes”), of which $750$999 million is payable within 12 months. Future interest payments associated with the Notes total $2,777$2,655 million, with $396$381 million payable within 12 months.

As of MarchJune 29,28, 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$217 million, with $47 million payable within 12 months.

As of MarchJune 29,28, 2026, we had no commercial paper notes outstanding.