'NXP delivered full-year 2023 revenue of
Key Highlights for the Fourth Quarter and Full-year 2023:
Fourth quarter revenue was
Fourth quarter GAAP gross margin was 56.6 percent, GAAP operating margin was 26.5 percent and GAAP diluted Net Income per Share was
Fourth quarter non-GAAP gross margin was 58.7 percent, non-GAAP operating margin was 35.6 percent, and non-GAAP diluted Net Income per Share was
Fourth quarter cash flow from operations was
During the fourth quarter of 2023, NXP continued to execute its capital return policy with the payment of
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Summary of Reported Fourth Quarter 2023 ($ millions, unaudited) (1)
Q4 2023 Q3 2023 Q4 2022 Q - Q Y - Y 2023 2022 Y - Y
Total Revenue$ 3,422 $ 3,434 $ 3,312 -% 3%$ 13,276 $ 13,205 1%
GAAP Gross Profit$ 1,937 $ 1,965 $ 1,891 -1% 2%$ 7,553 $ 7,517 -%
Gross Profit Adjustments (i)$ (73 ) $ (45 ) $ (31 ) $ (209 ) $ (126 )
Non-GAAP Gross Profit$ 2,010 $ 2,010 $ 1,922 -% 5%$ 7,762 $ 7,643 2%
GAAP Gross Margin 56.6 % 57.2 % 57.1 % 56.9 % 56.9 %
Non-GAAP Gross Margin 58.7 % 58.5 % 58.0 % 58.5 % 57.9 %
GAAP Operating Income (Loss)$ 907 $ 992 $ 980 -9% -7%$ 3,661 $ 3,797 -4%
Operating Income Adjustments (i)$ (312 ) $ (211 ) $ (228 ) $ (1,001 ) $ (994 )
Non-GAAP Operating Income$ 1,219 $ 1,203 $ 1,208 1% 1%$ 4,662 $ 4,791 -3%
GAAP Operating Margin 26.5 % 28.9 % 29.6 % 27.6 % 28.8 %
Non-GAAP Operating Margin 35.6 % 35.0 % 36.5 % 35.1 % 36.3 %
GAAP Net Income (Loss) attributable to Stockholders$ 697 $ 787 $ 2,797
Net Income Adjustments (i)$ (269 ) $ (178 ) $ (864 )
Non-GAAP Net Income (Loss) Attributable to Stockholders$ 966 $ 965 $ 3,661
GAAP diluted Net Income (Loss) per Share$ 2.68 $ 3.01 $ 10.70
Non-GAAP diluted Net Income (Loss) per Share$ 3.71 $ 3.70 $ 14.01
Additional information
Q4 2023 Q3 2023 Q4 2022 Q - Q Y - Y 2023 2022 Y - Y
Automotive$ 1,899 $ 1,891 $ 1,805 -% 5%$ 7,484 $ 6,879 9%
Industrial & IoT$ 662 $ 607 $ 605 9% 9%$ 2,351 $ 2,713 -13%
Mobile$ 406 $ 377 $ 408 8% -%$ 1,327 $ 1,607 -17%
Comm. Infra. & Other$ 455 $ 559 $ 494 -19% -8%$ 2,114 $ 2,006 5%
DIO 132 134 116
DPO (ii) 72 60 77
DSO 24 25 26
Cash Conversion Cycle 84 99 65
Channel Inventory (months) 1.5 1.5 1.6
Gross Financial Leverage (iii) 2.1x 2.1x 2.0x
Net Financial Leverage (iv) 1.3x 1.3x 1.3x
Additional Information for the Fourth Quarter 2023:
For an explanation of GAAP to non-GAAP adjustments, please see 'Non-GAAP Financial Measures'.
To align with current period presentation, DPO for Q4 2022 reflects the reclassification of liabilities related to customer programs previously presented in 'Accounts payable' to 'Other current liabilities'. The corresponding impact was 28 days on DPO (decreasing impact) and CCC (increasing impact).
Gross financial leverage is defined as gross debt divided by trailing twelve months adjusted EBITDA.
Net financial leverage is defined as net debt divided by trailing twelve months adjusted EBITDA.
Weighted average number of diluted shares for the three-month period ended
Guidance for the First Quarter 2024: ($ millions, except Per Share data) (1)
GAAP Reconciliation non-GAAP
Low Mid High Low Mid High
Total Revenue$3,025 $3,125 $3,225 $3,025 $3,125 $3,225
Q-Q -12% -9% -6% -12% -9% -6%
Y-Y -3% -% 3% -3% -% 3%
Gross Profit$1,698 $1,772 $1,846 $(41) $1,739 $1,813 $1,887
Gross Margin 56.1% 56.7% 57.2% 57.5% 58.0% 58.5%
Operating Income (loss)$775 $839 $903 $(219) $994 $1,058 $1,122
Operating Margin 25.6% 26.8% 28.0% 32.9% 33.9% 34.8%
Financial Income (expense)$(69) $(69) $(69) $(3) $(66) $(66) $(66)
Tax rate 17.4%-18.4% 16.4%-17.4%
NCI & Other$(7) $(7) $(7) $(4) $(3) $(3) $(3)
Shares - diluted 259.0 259.0 259.0 259.0 259.0 259.0
Earnings Per Share - diluted$2.21 $2.41 $2.62 $2.97 $3.17 $3.38
Note (1) Additional Information:
GAAP Gross Profit is expected to include Purchase Price Accounting ('PPA') effects,
GAAP Operating Income (loss) is expected to include PPA effects,
GAAP Financial Income (expense) is expected to include Other financial expense
GAAP Non-Controlling Interest (NCI) and Other includes non-controlling interest
GAAP diluted EPS is expected to include the adjustments noted above for PPA effects, Share-based Compensation, Restructuring and Other Incidentals in GAAP Operating Income (loss), the adjustment for Other financial expense, the adjustment for Non-controlling interest & Other and the adjustment on Tax due to the earlier mentioned adjustments.
NXP has based the guidance included in this release on judgments and estimates that management believes are reasonable given its assessment of historical trends and other information reasonably available as of the date of this release. Please note, the guidance included in this release consists of predictions 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 materially from 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 note regarding '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,
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. 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. Reconciliations of these non-GAAP measures to the most comparable measures calculated in accordance with GAAP are provided in the financial statements portion of this release in a schedule entitled 'Financial Reconciliation of GAAP to non-GAAP 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, as well 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 non-GAAP basis: (i) Gross profit, (ii) Gross margin, (iii) Research and development, (iv) Selling, general and administrative, (v) Amortization of acquisition-related intangible assets, (vi) Other income, (vii) Operating income (loss), (viii) Operating margin, (ix) Financial Income (expense), (x) Income tax benefit (provision), (xi) Results relating to equity-accounted investees, (xii) Net income (loss) attributable to stockholders, (xiii) Earnings per Share - Diluted, (xiv) EBITDA, adjusted EBITDA and trailing 12 month adjusted EBITDA, and (xv) free cash flow, trailing 12 month free cash flow and trailing 12 month free cash flow as a percent of Revenue. The non-GAAP information excludes, where applicable, the amortization of acquisition related intangible assets, the purchase accounting effect on inventory and property, plant and equipment, merger related costs (including integration costs), certain items related to divestitures, share-based compensation expense, restructuring and asset impairment charges, extinguishment of debt, foreign exchange gains and losses, income tax effect on adjustments described above and results from equity-accounted investments.
The difference in the benefit (provision) for income taxes between our GAAP and non-GAAP results relates to the income tax effects of the GAAP to non-GAAP adjustments that we make and 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.).
Conference Call and Webcast Information
The company will host a conference call with the financial community on
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
Forward-looking Statements
This document includes forward-looking statements which include statements regarding NXP's business strategy, financial condition, results of operations, market data, as well as any other statements which are not historical facts. By their nature, forward-looking statements are subject to numerous 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 new technologies and products; the demand for the goods into which NXP's products are incorporated; trade disputes between the
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