NXP Q3 Results Beat Market Expectations

On October 27, NXP Semiconductors, a leading European automotive chipmaker, announced its financial results for the third quarter of 2025 (ending September 28). Thanks to the rebound in automotive chip demand, both its Q3 performance and Q4 outlook exceeded market expectations.

NXP reported Q3 revenue of $3.17 billion, down 2% year-on-year but slightly above estimates of $3.16 billion. GAAP gross margin stood at 56.3%, with an operating margin of 28.1%, and diluted EPS of $2.48. On a non-GAAP basis, the gross margin was 57.0% and EPS reached $3.11, in line with analyst forecasts.

By segment, the automotive division saw revenue flat year-on-year but up 6% quarter-on-quarter; the industrial IoT division rose 3% YoY and 6% QoQ; and the mobile division increased 6% YoY and surged 30% QoQ.

The growth momentum was mainly driven by the U.S. tariff hikes on autos and components, prompting carmakers to expand production in the U.S. and boosting demand for automotive chips.

Incoming CEO Rafael Sotomayor commented: "We delivered Q3 revenue of $3.17 billion, exceeding our midpoint guidance. Broad-based sequential improvement across regions and end markets reflects both our strong company-specific drivers and signs of cyclical recovery. We remain focused on disciplined investment and portfolio optimization to sustain profitable growth."

For Q4 2025, NXP expects revenue between $3.2 billion and $3.4 billion, above the consensus midpoint of $3.24 billion.

In strategic moves, NXP agreed on July 24, 2025, to sell its MEMS sensor business to STMicroelectronics for $950 million in cash, with an additional $50 million contingent on milestone achievements. The deal is expected to close in the first half of 2026.

Earlier this year, NXP completed two acquisitions to strengthen its automotive software and networking capabilities—TTTech Auto for $625 million in June and Aviva Links for $243 million this month.