NXP Semiconductors N.V. (NXPI)

CIK: 0001413447. SIC: 3674 Semiconductors & Related Devices. Latest 10-K as of: 2026-02-19.

SIC breadcrumb: Manufacturing > Electronic And Other Electrical Equipment And Components, Except Computer Equipment > SIC 3674 Semiconductors & Related Devices

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1413447. Latest filing source: 0001413447-26-000008.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-19. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001413447.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

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Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-19. Report date: 2025-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s discussion and analysis of financial condition and results of operations (MD&A) should be read in conjunction with the financial statements and the related notes that appear elsewhere in this document. This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 as filed with the SEC on February 20, 2025.

Our MD&A is provided in addition to the accompanying consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition and cash flows. MD&A is organized as follows:

•Overview - Overall analysis of financial and other highlights to provide context for the MD&A

•Results of Operations - An analysis of our financial results

•Financial Condition, Liquidity and Capital Resources - An analysis of changes in our balance sheets and cash flows and a discussion of our financial condition and potential sources of liquidity

•Critical Accounting Estimates - Accounting estimates that management believes are the most important to understanding the assumptions and judgments incorporated in our financial results and forecasts

•Use of Certain Non-GAAP Financial Measures - A discussion of the presentation of non-GAAP financial measures

35

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 reporting.

Overview

Year in Focus

•Revenue was $12.3 billion, down 2.7% year-on-year;

•GAAP gross margin was 54.7%, and GAAP operating margin was 24.8%;

•Non-GAAP gross margin was 56.8%, and non-GAAP operating margin was 33.1%;

•Cash flow from operations was $2,820 million, with net capital expenditures on property, plant and equipment of $395 million, resulting in non-GAAP free cash flow of $2,425 million; and

•During 2025, NXP returned capital to shareholders with the payment of $1,025 million in cash dividends and the repurchase of $899 million of its common shares, for a total capital return of $1,924 million.

Kurt Sievers, our former CEO, voluntarily retired as CEO and executive director of the Company, effective October 28, 2025. The Company's Board of Directors unanimously appointed Rafael Sotomayor to succeed Mr. Sievers as President and CEO and temporary executive director of the Company, effective as of October 28, 2025.

On June 17, 2025, NXP announced the closing of the acquisition of 100% of TTTech Auto for $766 million in cash ($675 million net of cash acquired). TTTech Auto is a leader in innovating unique safety-critical systems and middleware for software-defined vehicles (SDVs). The TTTech Auto acquisition complements and expands NXP’s system and software offerings in the Automotive and Industrial & IoT end markets.

On October 24, 2025, NXP closed the previously announced acquisition of 100% of Aviva Links for $222 million in cash ($202 million net of cash acquired) and $26 million through the settlement of previously held investments in Aviva Links. Aviva Links is a provider of Automotive SerDes Alliance (ASA) compliant in-vehicle connectivity solutions. The Aviva Links acquisition complements and expands NXP’s automotive networking solutions in the Automotive and Industrial & IoT end markets.

On October 27, 2025, NXP closed the previously announced acquisition of 100% of Kinara, Inc. for $284 million in cash ($283 million net of cash acquired). Kinara is an industry leader in high performance, energy-efficient and programmable discrete neural processing units (NPUs). The Kinara acquisition complements and expands NXP’s solutions for AI-powered edge systems in the Industrial & IoT and Automotive end markets.

See Note 3 to the consolidated financial statements for further information regarding NXP’s acquisition of TTTech Auto, Aviva Links, and Kinara, Inc.

On February 2, 2026, NXP completed the previously announced sale of our MEMS sensors business line for $900 million in cash before closing adjustments and up to an additional $50 million contingent upon the achievement of specified technical milestones.

36

Revenue for the year ended December 31, 2025, was $12,269 million compared to $12,614 million for the year ended December 31, 2024, a decrease of $345 million or 2.7% year-on-year.

Our gross profit percentage for 2025 of 54.7% decreased when compared to 2024 (56.4%), mainly driven by price and unfavorable product mix.

We continue to generate strong operating cash flows, with $2,820 million in cash flows from operations for 2025. We returned $1,924 million to our shareholders during the year in dividends and repurchases of common stock. Our cash position at the end of 2025 was $3,267 million.

Quarter in Focus

•Revenue for the fourth quarter of 2025 was $3.3 billion, up 7.2% year-on-year;

•GAAP gross margin was 54.2%, and GAAP operating margin was 22.3%;

•Non-GAAP gross margin was 57.4%, and non-GAAP operating margin was 34.6%;

•Cash flow from operations was $891 million, with net capital expenditures on property, plant and equipment of $98 million, resulting in non-GAAP free cash flow of $793 million;

•During the fourth quarter of 2025, NXP returned capital to shareholders with the payment of $254 million in cash dividends and the repurchase of $338 million of its common shares, for a total capital return of $592 million.

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Sequential Results

Q4 2025 compared to Q3 2025

Revenue for the three months ended December 31, 2025, was $3,335 million compared to $3,173 million for the three months ended September 28, 2025, an increase of $162 million or 5.1% quarter-on-quarter, in line with management's expectations. Within our end markets, the Industrial & IoT end market increased $61 million or 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 increased $7 million or 2.1%.

When aggregating all end markets together and reviewing sales channel performance, revenue from distributors was $2,025 million, an increase of $159 million or 8.5% compared to the previous period. Revenue from direct customers was $1,274 million, an increase of $5 million or 0.4% compared to the previous period.

From a geographic perspective, revenue increased across all regions.

The gross profit percentage for the fourth quarter of 2025 decreased to 54.2% from 56.3% in the third quarter of 2025, primarily due to impairments related to the scaling down of a non-strategic product line.

Operating income for the fourth quarter of 2025 was $744 million compared to $893 million for the third quarter of 2025, a decrease of $149 million or 16.7%. The sequential decrease was mainly due to higher restructuring costs for specific targeted actions under a new global restructuring program in the fourth quarter of 2025.

Operating cash flows for the fourth quarter of 2025 was $891 million compared to $585 million for the third quarter of 2025, an increase of $306 million or 52.3% quarter-on-quarter.

38

Results of Operations

The following table presents the operating results for the years ended December 31, 2025, and December 31, 2024.

($ in millions, unless otherwise stated)

2025

% of Revenue

2024

% of Revenue

Revenue

12,269 

12,614 

% nominal growth

(2.7)

(5.0)

Gross profit

6,716 

7,119 

Gross margin

54.7 

%

56.4 

%

Research and development

(2,360)

19.2 

%

(2,347)

18.6 

%

Selling, general and administrative

(1,204)

9.8 

%

(1,164)

9.2 

%

Amortization of acquisition-related intangible assets

(117)

1.0 

%

(136)

1.1 

%

Other income (expense)

12 

0.1 

%

(55)

0.4 

%

Operating income (loss)

3,047 

24.8 

%

3,417 

27.1 

%

Financial income (expense)

(384)

3.1 

%

(318)

2.5 

%

Benefit (provision) for income taxes

(525)

4.3 

%

(545)

4.3 

%

Results relating to equity-accounted investees

(70)

0.6 

%

(12)

0.1 

%

Net income (loss)

2,068 

16.9 

%

2,542 

20.2 

%

Less: Net income (loss) attributable to non-controlling interests

47 

0.4 

%

32 

0.3 

%

Net income (loss) attributable to stockholders

2,021 

16.5 

%

2,510 

19.9 

%

Diluted earnings per share

7.95 

9.73 

Revenue

Revenue for the year ended December 31, 2025, was $12,269 million compared to $12,614 million for the year ended December 31, 2024, a decrease of $345 million or 2.7% year-on-year.

39

Revenue by end market was as follows:

($ in millions, unless otherwise stated)

2025

2024

Increase/(decrease)

%

Automotive

7,116 

7,151 

(35)

(0.5)

%

Industrial & IoT

2,273 

2,269 

4 

0.2 

%

Mobile

1,584 

1,497 

87 

5.8 

%

Communication Infrastructure & Other

1,296 

1,697 

(401)

(23.6)

%

Revenue

12,269 

12,614 

(345)

(2.7)

%

Revenue by sales channel was as follows:

($ in millions, unless otherwise stated)

2025

2024

Increase/(decrease)

%

Distributors

7,051 

7,203 

(152)

(2.1)

%

Direct

5,084 

5,291 

(207)

(3.9)

%

Other

134 

120 

14 

11.7 

%

Revenue

12,269 

12,614 

(345)

(2.7)

%

Revenue by geographic region, which is based on the location where the sale originated, was as follows: 1)

($ in millions, unless otherwise stated)

2025

2024

Increase/(decrease)

%

APAC, excluding China

3,581 

3,794 

(213)

(5.6)

%

Americas

3,376 

3,471 

(95)

(2.7)

%

EMEA

3,276 

3,428 

(152)

(4.4)

%

China 2)

2,036 

1,921 

115 

6.0 

%

Revenue

12,269 

12,614 

(345)

(2.7)

%

1) As of December 31, 2025, and applied retrospectively for all the periods presented, the Company revised its methodology for attributing revenue to geographic areas to reflect the location where sales originate, which represents where critical commercial decisions are made. This may differ from the customer's shipped-to location. The change in reporting basis was made to more appropriately reflect how we manage our business. For 2025, the largest impacts from the change were to the Americas region and the China region, which reflected changes of approximately 104.9% and (57.0)%, respectively.

2) China includes Mainland China and Hong Kong

The year-to-date change in revenue was primarily driven by a lower selling mix of products, slightly offset by higher shipment volumes. The combination of these two effects resulted in a net decrease of $345 million revenue.

From an end market perspective, NXP experienced declines in the Communication Infrastructure & 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 $7,116 million, a decrease of $35 million or 0.5% versus the year ago period. The decline was driven by processors, partially offset by growth in mixed-signal products.

Revenue in the Industrial & IoT end market was $2,273 million, an increase of $4 million or 0.2% versus the year ago period. The increase was attributable to growth in mixed-signal products, partially offset by declines in processors.

Revenue in the Mobile end market was $1,584 million, an increase of $87 million or 5.8% versus the year ago period, with processors and mixed-signal products contributing to the growth.

Revenue in the Communication Infrastructure & Other end market was $1,296 million, a decrease of $401 million or 23.6% versus the year ago period. The decline was primarily due to processors.

When aggregating all end markets and reviewing sales channel performance, revenue from distributors was $7,051 million, a decrease of $152 million or 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, and Americas regions.

40

41

Gross Profit

Gross profit for the year ended December 31, 2025, was $6,716 million, or 54.7% of revenue, compared to $7,119 million, or 56.4% of revenue for the year ended December 31, 2024. The decrease in gross margin was mainly driven by:

- Lower selling prices (1.9%)

- Mix /volume (1.5%)

+ Lower manufacturing costs (factory utilization and sourcing) (2.1%)

Operating Expenses

Operating expenses for the year ended December 31, 2025, totaled $3,681 million or 30.0% of revenue, compared to $3,647 million, or 28.9% of revenue, for the year ended December 31, 2024.

•Research and development

Research and development (R&D) costs primarily consist of engineer salaries and wages (including share-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.

($ in millions, unless otherwise stated)

2025

2024

% change

Research and development

2,360 

2,347 

0.6 

%

As a percentage of revenue

19.2 

%

18.6 

%

0.6 

ppt

R&D costs for the year ended December 31, 2025, increased by $13 million, or 0.6%, when compared to last year primarily driven by:

+ Increased restructuring expenses ($42 million)

+ Increased project spend ($10 million)

- Lower variable compensation expenses ($37 million)

•Selling, general and administrative

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

($ in millions, unless otherwise stated)

2025

2024

% change

Selling, general and administrative

1,204 

1,164 

3.4 

%

As a percentage of revenue

9.8 

%

9.2 

%

0.6 

ppt

SG&A costs for the year ended December 31, 2025, increased by $40 million, or 3.4%, when compared to last year primarily driven by:

+ Increased restructuring expenses ($43 million)

+ Increased expenses driven by personnel and integration related costs of our acquisitions ($37 million)

- Lower legal fees ($26 million)

- Lower variable compensation costs ($14 million)

•Amortization of acquisition-related intangible assets

($ in millions, unless otherwise stated)

2025

2024

% change

Amortization of acquisition-related intangible assets

117 

136 

(14.0)

%

As a percentage of revenue

1.0 

%

1.1 

%

(0.1)

 ppt

Amortization of acquisition-related intangible assets decreased by $19 million, or 14.0%, when compared to last year, 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 Kinara.

42

Other Income (Expense)

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 activities. These arrangements are expected to decrease as the divested business or activity becomes more established. Other income (expense) reflects an income of $12 million for 2025, compared to an expense of $55 million in 2024, which included a $40 million charge for a vacated deposit on an exited technology.

Financial Income (Expense)

($ in millions)

For the years ended December 31,

2025

2024

Interest income

145 

160 

Interest expense

(466)

(398)

Total other financial income (expense)

(63)

(80)

Total

(384)

(318)

Financial income (expense) was an expense of $384 million in 2025, compared to an expense of $318 million in 2024. The change in financial income (expense) is attributable to an increase in interest expense of $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 levels in 2025. Other financial expenses decreased due to adjustments in our investments as well as lower interest related to prior tax positions.

Benefit (Provision) for Income Taxes

We recorded an income tax expense of $525 million for the year ended December 31, 2025, which reflects an effective tax rate of 19.7% compared to an expense of $545 million (17.6%) for the year ended December 31, 2024.

2025

2024

$

%

$

%

Statutory income tax rate in the Netherlands

687 

25.8 

800 

25.8 

Foreign tax effects

United States

Statutory tax rate difference between United States and the Netherlands

(34)

(1.3)

(52)

(1.7)

R&D tax credits

(47)

(1.8)

(59)

(1.9)

Foreign-derived intangible income

(67)

(2.5)

(127)

(4.1)

Other

20 

0.8 

10 

0.3 

Taiwan

25 

0.9 

*

*

Other foreign jurisdictions

16 

0.6 

27 

0.9 

Effect of Cross-border Tax Laws

16 

0.6 

23 

0.7 

Tax Credits

(8)

(0.3)

(8)

(0.3)

Changes in Valuation Allowances

1 

— 

(2)

(0.1)

Nontaxable or Nondeductible Items

Netherlands tax incentive

(99)

(3.7)

(113)

(3.6)

Other

13 

0.5 

19 

0.6 

Changes in Unrecognized Tax Benefits

7 

0.3 

28 

0.9 

Other Adjustments

(5)

(0.2)

(1)

— 

Effective Tax Rate

525 

19.7 

545 

17.6 

43

* The amount of the individual reconciling item during the year does not meet the 5% disaggregation threshold and is included in "Other foreign jurisdictions"

The effective income tax rate for 2025 was 19.7% compared to 17.6% for 2024. The increase was primarily driven by a different mix of income tax expense across our operating jurisdictions, as well as lower U.S. and NL tax incentives in 2025 due to a decrease in qualifying income and R&D expenses. In addition, the One Big Beautiful Bill Act was enacted in the U.S., which reduced the amount of claimable R&D tax credits. Taiwan also had higher tax expense in 2025 due to less undistributed earnings being considered indefinitely reinvested due to changes in the supply chain. These increases were partially offset by tax benefits from settlements with tax authorities.

Results Relating to Equity-accounted Investees

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 million. For the year ended December 31, 2025, results relating to equity-accounted investees include the impairment of our equity method investment SigmaSense and the loss on the sale of our equity method investment Smart Growth Fund.

Non-controlling Interests

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 $47 million for the year ended December 31, 2025, compared to a profit of $32 million for the year ended December 31, 2024.

Financial Condition, Liquidity and Capital Resources

We derive our liquidity and capital resources primarily from our cash flows from operations. We continue to generate strong positive operating cash flows, and 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 Agreement, Commercial Paper Program, EIB facilities, 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 year.

Cash

As of December 31, 2025, our cash balance was $3,267 million, a decrease of $25 million compared to our cash balance on December 31, 2024 ($3,292 million), of which $361 million (2024: $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 2025 and 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.

Revolving Credit Facility

As at December 31, 2025, our amended and restated Unsecured 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, 2025, we do not have any borrowings under the RCF.

Commercial Paper Program

Under our Commercial Paper Program, we may issue short-term, unsecured commercial paper notes in amounts up to a maximum aggregate face amount of $2,000 million outstanding at any time, with maturities of up to 397 days from the date of issuance and at a discount from par or at par and bear interest at rates determined at the time of issuance. We may issue notes in the future and use the net proceeds for general corporate purposes. As of December 31, 2025, the Company had no commercial paper notes outstanding.

44

EIB Facilities

Our facility agreements with the European Investment Bank (EIB) provide for an aggregate €1,000 million in unsecured senior loan facilities, the proceeds from which are expected to fund the research, development and innovation of semiconductor devices, technologies and solutions in five European countries. Borrowings on these facilities may be denominated in Euro or U.S. Dollar. See Financing Activities further below. As of December 31, 2025, the Company had a principal amount of $670 million outstanding under the EIB loan Facility A with a maturity of December 2030 and a fixed annual interest rate of 4.45% and a principal amount of $370 million outstanding under the EIB loan Facility B with a maturity of February 2031 and a fixed annual interest rate of 4.709%.

Capital return

The common stock repurchase activity was as follows:

($ in millions, unless otherwise stated)

2025

2024

Shares repurchased

4,357,898 

5,726,770 

Cost of shares repurchased

899 

1,373 

Average price per share

$206.29

$239.74

Under Dutch corporate law and our articles of association, NXP may acquire its own shares if the general meeting of shareholders has granted the board of directors the authority to effect such acquisitions. It is our standard practice to request at our annual general meeting of shareholders (the “AGM”) every year to renew this authorization for a period of 18 months from the AGM. For repurchases of shares in 2024 and 2025, the board of directors made use of the authorizations renewed by the AGM on May 24, 2023, May 29, 2024, and June 11, 2025, respectively. Our board of directors has approved the purchase of shares from participants in NXP's equity programs to satisfy participants' tax withholding obligations ("trade for tax") and this authorization will remain in effect until terminated by the board of directors. In January 2022, the board of directors approved the repurchase of additional shares up to a maximum of $2 billion (the "2022 Share Repurchase Program") and in August 2024, the Board approved the repurchase of additional shares up to a maximum of $2 billion (the "2024 Share Repurchase Program"). During the fiscal year ended December 31, 2024, NXP repurchased 5.7 million shares, for a total of approximately $1.4 billion under the trade for tax and 2022 Share Repurchase Programs and during the fiscal year ended December 31, 2025, NXP repurchased 4.4 million shares, for a total of approximately $0.9 billion under the trade for tax, 2022 and 2024 Share Repurchase Programs. Under Dutch tax law, the repurchase of a company’s shares by an entity domiciled in the Netherlands results in a taxable event (unless exemptions apply). The tax on the repurchased shares is attributed to the shareholders, with NXP making the payment on the shareholders’ behalf. As such, the tax on the repurchased shares is accounted for within stockholders’ equity.

Subject to Dutch corporate law and our articles of association, the board of directors of NXP may cancel shares acquired if authorized by the general meeting of shareholders. As with repurchases of our shares, it is our standard practice to request at our AGM every year to renew this authorization for a period of 18 months from the AGM. The board of directors did not make use of the authorization during the fiscal year ended December 31, 2025.

Under our Quarterly Dividend Program, interim dividends of $1.014 per ordinary share were paid on April 9, 2025 ($257 million), dividends of $1.014 per ordinary share were paid on July 9, 2025 ($256 million), dividends of $1.014 per ordinary share were paid on October 8, 2025 ($256 million) and dividends of $1.014 per ordinary share were paid on January 7, 2026 ($256 million).

2025

2024

Dividends declared (per share)

4.056 

4.056 

Dividends declared (in millions)

1,025 

1,035 

45

Debt

Our total debt, inclusive of aggregate principal, unamortized discounts, premiums, debt issuance costs and fair value adjustments, amounted to $12,222 million as of December 31, 2025, an increase of $1,368 million compared to December 31, 2024 ($10,854 million).

As of December 31, 2025, the Company had outstanding fixed-rate notes with varying maturities for an aggregate principal amount of $11,250 million (collectively the “Notes”), with $1,250 million payable within 12 months. Future interest payments associated with the Notes total $2,874 million, with $409 million payable within 12 months.

As of December 31, 2025, the Company had outstanding loans with the EIB under the EIB Facilities with maturities in 2030 and 2031 for a principal amount of $1,040 million. Future interest payments associated with the EIB loans total $241 million, with $47 million payable within 12 months.

The Company had a net debt position (see section Use of Certain Non-GAAP Financial Measures) at December 31, 2025, of $8,955 million compared to $7,562 million as of December 31, 2024.

We may from time to time continue to seek to retire or purchase our outstanding debt through cash purchases and/or exchanges, in open market purchases, privately negotiated transactions or otherwise.

Additional capital requirements

We believe our current positions in cash and cash equivalents, together with our expected cash flow generated from operations and our expected financing activities, will satisfy our working and other capital requirements for at least the next 12 months based on our current business plans. Recent and expected working and other capital requirements, in addition to the above matters, also include the items described below:

•The Company maintains purchase commitments with certain suppliers, primarily for raw materials, semi-finished goods and manufacturing services and for some non-production items. Purchase commitments for inventory materials are generally restricted to a forecasted time-horizon as mutually agreed upon between the parties. This forecasted time horizon can vary for different suppliers. As of December 31, 2025, the Company had purchase commitments, other than commitments directly with our foundry joint ventures, of $3,087 million, of which $1,423 million is expected to be paid in the next 12 months. We expect operating cash outflows to remain elevated as we make payments under these purchase agreements.

•The Company has committed to invest €500 million, which translated to $587 million, in the equity of the recently founded company ESMC. As per the end of the reporting date, NXP has invested $183 million. The remaining $404 million is expected to be invested over the coming four years, of which approximately $65 million is expected to be paid in the next 12 months.

•The Company has committed to invest approximately $1,600 million in equity of the recently founded company VSMC. As per the end of the reporting date, NXP has invested $631 million. The remaining $969 million is expected to be invested over the coming two years, of which approximately $512 million is expected to be paid in the next 12 months. In addition, NXP has committed to contribute an additional $1,200 million to support the long-term capacity infrastructure. As per the end of the reporting date, NXP has contributed $855 million. The remaining $345 million is expected to be contributed in the next 12 months. Furthermore, NXP has an agreed purchase commitment with VSMC that over the lifetime of the factory the minimal loading will be between 80% - 90%, resulting in a total purchase commitment of approximately $14,096 million that is expected to be purchased over 37 years once wafer production starts.

•Amounts related to future lease payments for operating lease obligations at December 31, 2025, totaled $315 million, with $69 million expected to be paid within the next 12 months.

•The Company enters into certain technology license arrangements which are used in conjunction with research and development activities for product development. Payments for these technology licenses are made over varying time periods. Outstanding unpaid balances for technology licenses total $270 million as of December 31, 2025, of which $135 million is expected to be paid in the next 12 months.

•Cash outflows for capital expenditures were $397 million in 2025, compared to $727 million in 2024. We expect to maintain similar levels of capital expenditures as a percentage of revenue in 2026 consistent with our long-term financial model, given our focus on external investments in foundry partners while still supporting current and future manufacturing and production capacity needs.

46

•Our research and development expenditures were $2,360 million in 2025 and $2,347 million in 2024, and we expect to maintain similar levels of investment in research and development as a percentage of revenue in 2026.

From time to time, we engage in discussions with third parties regarding potential acquisitions of, or investments in, businesses, technologies and product lines. Any such transaction could require significant use of our cash and cash equivalents or require us to arrange for new debt and equity financing to fund the transaction. Our ability to make scheduled payments or to refinance our debt obligations depends on our financial and operating performance, which is subject to prevailing economic and competitive conditions. In the future, we may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay principal, premium, if any, and interest on our indebtedness. Our business may not generate sufficient cash flow from operations, or we may not have enough capacity under the RCF Agreement, EIB Facility Agreements, Commercial Paper Program, or from other sources in an amount sufficient to enable us to repay our indebtedness, including outstanding commercial paper notes, and borrowings under the EIB Facilities and RCF Agreements, the unsecured notes or to fund our other liquidity needs, including working capital and capital expenditure requirements. In any such case, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional capital or restructure or refinance our indebtedness. See Part I, Item 1A. Risk Factors.

2025 Financing Activities

On January 13, 2025, NXP B.V. entered into a facility agreement with the European Investment Bank (“EIB Facility B”), which provides for a €360 million unsecured senior loan facility. The proceeds from borrowings under the EIB Facility B are expected to be used to fund the research, development and innovation of semiconductor devices, technologies and solutions in five European countries.

On May 1, 2025, we repaid the $500 million aggregate principal amount of outstanding 2.7% senior unsecured notes due 2025 at maturity using available cash.

On August 19, 2025, NXP B.V., together with NXP Funding LLC and NXP USA, Inc., issued $500 million of 4.3% senior unsecured notes due August 19, 2028, $300 million of 4.85% senior unsecured notes due August 19, 2032, and $700 million of 5.25% senior unsecured notes due August 19, 2035.

2024 Financing activities

On November 21, 2024, NXP B.V., NXP Funding LLC and NXP USA Inc. entered into definitive documentation to establish an unsecured Commercial Paper Program under which, on a joint and several basis, short-term, unsecured commercial paper notes may be issued. Amounts available under the Commercial Paper Program may be borrowed, repaid, and re-borrowed from time to time, with the aggregate principal amount of commercial paper notes outstanding under the Commercial Paper Program at any time not to exceed $2,000 million. The net proceeds of issuances of the commercial paper notes are expected to be used for general corporate purposes.

On November 22, 2024, NXP B.V. entered into a facility agreement with the European Investment Bank, (“EIB Facility A”), which provides for a €640 million unsecured senior loan facility. The proceeds from borrowings under the EIB Facility A are expected to be used to fund the research, development and innovation of semiconductor devices, technologies and solutions in five European countries.

Cash flows

Our cash and cash equivalents in 2025 decreased by $31 million (excluding the effect of changes in exchange rates on our cash position of $6 million) as follows:

47

($ in millions)

Year ended December 31,

2025

2024

Net cash provided by (used for) operating activities

2,820 

2,782 

Net cash (used for) provided by investing activities

(2,357)

(686)

Net cash provided by (used for) financing activities

(494)

(2,662)

Increase (decrease) in cash and cash equivalents

(31)

(566)

•Cash Flow from Operating Activities

For the year ended December 31, 2025, our operating activities provided $2,820 million in cash. This was primarily the result of net income of $2,068 million, adjustments to reconcile the net income of $1,339 million and changes in operating assets and liabilities of $(613) million. Adjustments to net income include offsetting non-cash items, such as depreciation and amortization of $832 million, share-based compensation of $462 million, and results relating to equity-accounted investees of $70 million. Changes in operating assets and liabilities were primarily driven by a $308 million increase in inventories in order to align inventory on hand with expected demand, $212 million increase in other non-current assets due to payments to secure production supply with multiple vendors (driven primarily to support the long-term capacity infrastructure of VSMC), and $50 million decrease in accounts payable and other liabilities due primarily from payments related to the settlement of clean room cases.

For the year ended December 31, 2024, our operating activities provided $2,782 million in cash. This was primarily the result of net income of $2,542 million, adjustments to reconcile the net income of $1,151 million and changes in operating assets and liabilities of $(923) million. Adjustments to net income include offsetting non-cash items, such as depreciation and amortization of $925 million, share-based compensation of $461 million, a loss on equity securities of $18 million, results relating to equity-accounted investees of $12 million and changes in deferred taxes of $(272) million. Changes in operating assets and liabilities were primarily driven by a $222 million increase in inventories in order to align inventory on hand with expected demand, $207 million increase in receivables and other current assets due to the related timing of cash collection (driven primarily by distributors), $188 million decrease in accounts payable and other liabilities as a result of timing related to payments and lower purchases, and $306 million increase in other non-current assets due to payments to secure production supply with multiple vendors (driven primarily by payments of $275 million to support the long-term capacity infrastructure of VSMC).

•Cash Flow from Investing Activities

Net cash used for investing activities amounted to $2,357 million for the year ended December 31, 2025 and principally consisted of the cash outflows from the purchase of interests in business (net of cash acquired) of $1,175 million (mainly driven by the acquisitions of TTTech Auto for $675 million, Kinara of $283 million, Aviva Links of $202 million), purchase of investments of $649 million (driven primarily by the capital contributions of $491 million into VSMC and approximately $92 million into ESMC), capital expenditures of $397 million, and $140 million for the purchase of identified intangible assets.

Net cash used for investing activities amounted to $686 million for the year ended December 31, 2024 and principally consisted of the cash outflows for capital expenditures of $727 million, $149 million for the purchase of identified intangible assets, and $260 million for the purchase of investments (driven primarily by the capital contributions of approximately $80 million into ESMC and approximately $140 million into VSMC); partially offset by the $409 million for the proceeds of short-term deposits and $30 million for the advance payment from sale of property, plant and equipment.

•Cash Flow from Financing Activities

Net cash used for financing activities was $494 million for the year ended December 31, 2025. This was primarily driven by the dividend payment to common stockholders of $1,025 million, purchase of treasury shares and restricted stock unit holdings of $899 million, and repurchase of long-term debt of $500 million; partially offset by the $1,868 million proceeds from issuance of long-term debt and $83 million proceeds from the issuance of common stock through stock plans. In addition, we issued commercial paper notes for $2,426 million during the year, which were fully repaid by December 31, 2025.

48

Net cash used for financing activities was $2,662 million for the year ended December 31, 2024. This was primarily driven by the repurchase of long-term debt of $1,000 million, the dividend payment to common stockholders of $1,038 million, and purchase of treasury shares and restricted stock unit holdings of $1,373 million; partially offset by the $670 million proceeds from issuance of long-term debt and $82 million proceeds from the issuance of common stock through stock plans.

Information Regarding Guarantors of NXP (unaudited)

Summarized Combined Financial Information for Guarantee of Securities of Subsidiaries

All debt instruments are guaranteed, fully and unconditionally, jointly and severally, by NXP Semiconductors N.V. and issued or guaranteed by NXP USA, Inc., NXP B.V. and NXP Funding LLC, (together, the “Subsidiary Obligors” and together with NXP Semiconductors N.V., the “Obligor Group”). Other than the Subsidiary Obligors, none of the Company’s subsidiaries (together the “Non-Guarantor Subsidiaries”) guarantee the Notes. The Company consolidates the Subsidiary Obligors in its consolidated financial statements and each of the Subsidiary Obligors are wholly owned subsidiaries of the Company.

All of the existing guarantees by the Company rank equally in right of payment with all of the existing and future senior indebtedness of the Obligor Group. There are no significant restrictions on the ability of the Obligor Group to obtain funds from respective subsidiaries by dividend or loan.

The following tables present summarized financial information of the Obligor Group on a combined basis, with intercompany balances and transactions between entities of the Obligor Group eliminated and investments and equity in the earnings of the Non-Guarantor Subsidiaries excluded. The Obligor Group’s amounts due from, amounts due to, and intercompany transactions with Non-Guarantor Subsidiaries have been disclosed below the table, when material.

Summarized Statements of Income

($ in millions)

December 31, 2025

Revenue

6,791 

Gross Profit

3,137 

Operating income

826 

Net income

5 

Summarized Balance Sheets

As of

($ in millions)

December 31, 2025

Current assets

3,182 

Non-current assets

12,461 

Total assets

15,643 

Current liabilities

2,044 

Non-current liabilities

11,348 

Total liabilities

13,392 

Obligor's Group equity

2,251 

Total liabilities and Obligor's Group equity

15,643 

NXP Semiconductors N.V. is the head of a fiscal unity for the corporate income tax and VAT that contains the most significant Dutch wholly owned group companies. The Company is therefore jointly and severally liable for the tax

49

liabilities of the tax entity as a whole, and as such the income tax expense of the Dutch fiscal unity has been included in the net income of the Obligor Group.

The financial information of the Obligor Group includes sales executed through a Non-Guarantor Subsidiary single-billing entity as a sales agent on behalf of an entity in the Obligor Group. The Obligor Group has sales to non-guarantors (2025: $723 million). The Obligor Group has amounts due from equity financing (2025: $5,520 million) and due to debt financing (2025: $2,695 million) with non-guarantor subsidiaries.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in accordance with U.S. GAAP requires our management to make judgments, assumptions and estimates that affect the amounts reported in our Consolidated Financial Statements and the accompanying notes. Our management bases its estimates and judgments on historical experience, current economic and industry conditions and on various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

The methods, estimates, and judgments that we use in applying our accounting policies have a significant impact on the results that we report in our Consolidated Financial Statements. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain and based on information available when the estimates were made. In the following section, we discuss our most critical accounting estimates and the judgments involved.

Business combinations

In accounting for acquisitions, we apply ASC 805, which requires identifying and measuring the fair value of acquired assets and liabilities, including intangible assets, as of the acquisition date. Determining these fair values involves significant estimates and assumptions, including discount rates, valuation models, and the expected future economic benefits of acquired technologies, in-process research and development and customer relationships. These judgments directly affect the valuation of intangible assets recognized in a business combination and therefore represent a critical accounting estimate. Assumptions such as projected future cash flows, economic and industry conditions, market segment growth rates and useful lives require significant judgment and are inherently uncertain. Changes in these assumptions may materially impact the amounts recognized. In periods following an acquisition, updates to assumptions may result in adjustments to provisional amounts during the measurement period.

Inventories

We regularly review our inventories and write down our inventories for estimated losses due to obsolescence. This allowance is determined for groups of products based on sales of our products in the recent past and/or projected future demand. Future demand is affected by market conditions, technological obsolescence, new products and strategic plans, each of which is subject to change with little or no forewarning.

Goodwill

Goodwill is required to be assessed for impairment at least once annually, or more frequently if indicators of potential impairment exist, which includes evaluating qualitative and quantitative factors to assess the likelihood of an impairment of a reporting unit’s goodwill. Such events or changes in circumstances can include significant changes in business climate, operating performance or competition, or upon the disposition of a significant portion of a reporting unit. A significant amount of judgment is involved in determining if an indicator of impairment has occurred between annual test dates. We perform impairment tests using a fair value approach when necessary. Determining the fair value of a reporting unit involves the use of significant estimates and assumptions, including projected future cash flows, discount rates based on weighted average cost of capital and future economic and market conditions. We base our fair-value estimates on assumptions we believe to be reasonable. Actual cash flow amounts for future periods may differ from estimates used in impairment testing.

Impairment or disposal of identified long-lived assets

We perform reviews of long-lived assets including property, plant and equipment, and intangible assets subject to amortization, whenever facts and circumstances indicate that the useful life is shorter than what we had originally

50

estimated or that the carrying amount of assets may not be recoverable. If such facts and circumstances exist, we assess the recoverability of the long-lived assets by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. In the event such cash flows are not expected to be sufficient to recover the recorded value of the assets, the assets are written down to their estimated fair values based on the expected discounted future cash flows attributable to the assets or based on appraisals. Impairment losses, if any, are based on the excess of the carrying amount over the fair value of those assets. Long-lived assets to be disposed of by sale are reported at the lower of their carrying amounts or their estimated fair values less costs to sell and are not depreciated.

The assumptions and estimates used to determine future values and remaining useful lives of our intangible and other long-lived assets are complex and subjective. Future values include estimates of future cash flows and estimates of fair value. These assumptions and estimates can be affected by various factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy and our forecasts for specific product lines.

Revenue recognition

In determining the transaction price of contracts with customers, the Company evaluates whether the price is subject to refund or adjustment to determine the consideration to which the Company expects to be entitled. Variable consideration is estimated and includes the impact of discounts, price protection, product returns and distributor incentive programs. The estimate of variable consideration is dependent on a variety of factors, including contractual terms, analysis of historical data, current economic conditions, industry demand and both the current and forecasted pricing environments.

For some sales to distributors, contractual arrangements are in place which allow these distributors to return products if certain conditions are met. These return rights are a form of variable consideration and are estimated using the most likely method based on historical return rates in order to reduce revenues recognized. However, long notice periods associated with these announcements prevent significant amounts of product from being returned. For sales where return rights exist, the Company has determined, based on historical data, that only a small percentage of the sales of this type to distributors is actually returned. Sales to most distributors are made under programs common in the semiconductor industry whereby distributors receive certain price adjustments to meet individual competitive opportunities. These programs may include credits granted to distributors, or allow distributors to return or scrap a limited amount of product in accordance with contractual terms agreed upon with the distributor, or receive price protection credits when our standard published prices are lowered from the price the distributor paid for product still in its inventory. In determining the transaction price, the Company considers the price adjustments from these programs to be variable consideration that reduce the amount of revenue recognized. The Company’s policy is to estimate such price adjustments using the most likely method based on rolling historical experience rates, as well as pricing in the distribution channel for distributors who participate in our volume rebate incentive program. We continually monitor the actual claimed allowances against our estimates, and we adjust our estimates as appropriate to reflect trends in pricing environments and inventory levels. The estimates are also adjusted when recent historical data does not represent anticipated future activity. Historically, actual price adjustments for these programs relative to those estimated have not materially differed.

Income taxes

The application of tax laws and regulations to calculate our tax liabilities is subject to legal and factual interpretation, judgment, and uncertainty in a multitude of jurisdictions. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations, and court rulings. For each jurisdiction, we recognize a tax liability and/or asset based on our best estimate of these technical merits.

Use of Certain Non-GAAP Financial Measures

Non-GAAP Financial Measures

In addition to providing financial information on a basis consistent with U.S. generally accepted accounting principles (“US GAAP” or “GAAP”), NXP also provides selected financial measures on a non-GAAP basis which

51

are adjusted for specified items. The adjustments made to achieve these non-GAAP financial measures or the non-GAAP financial measures as specified are described below, including the usefulness to management and investors.

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. 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 and development 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 and the reconciliations to corresponding GAAP financial measures, provide a more complete understanding of the Company’s results of operations and the factors 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 core operating performance, 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 greater transparency with respect to key metrics used by management.

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. 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.

Non-GAAP Adjustment or Measure

Definition

Usefulness to Management and Investors

Purchase price accounting effects

Purchase price accounting ("PPA") effects reflect the fair value adjustments impacting acquisition accounting and other acquisition adjustments charged to the Consolidated Statement of Operations. This typically relates to inventory, property, plant and equipment, as well as intangible assets, such as developed technology and marketing and customer relationships acquired. The PPA effects are recorded within both cost of revenue and operating expenses in our US GAAP financial statements. These charges are recorded over the estimated useful life of the related acquired asset, and thus are generally recorded over multiple years.

We believe that excluding these charges related to fair value adjustments for purposes of calculating certain non-GAAP measures allows the users of our financial statements to better understand the historic and current cost of our products, our gross margin, our operating costs, our operating margin, and also facilitates comparisons to peer companies.

Restructuring

Restructuring charges are costs associated with a restructuring plan and are primarily related to employee severance and benefit arrangements. Charges related to restructuring are recorded within both cost of revenue and operating expenses in our US GAAP financial statements

We exclude restructuring charges, including any adjustments to charges recorded in prior periods, for purposes of calculating certain non-GAAP measures because these costs do not reflect our core operating performance. These adjustments facilitate a useful evaluation of our core operating performance and comparisons to past operating results and provide investors with additional means to evaluate expense trends.

Share-based compensation

Share-based compensation consists of incentive expense granted to eligible employees in the form of equity based instruments. Charges related to share-based compensation are recorded within both cost of revenue and operating expenses in our US GAAP financial statements.

We exclude charges related to share-based compensation for purposes of calculating certain non-GAAP measures because we believe these charges, which are non-cash, are not representative of our core operating performance as they can fluctuate from period to period based on factors that are not within our control, such as our stock price on the dates share-based grants are issued. We believe these adjustments provide investors with a useful view, through the eyes of management, of our core business model, how management currently evaluates core operational performance, and additional means to evaluate expense trends.

52

Non-GAAP Adjustment or Measure

Definition

Usefulness to Management and Investors

Other incidentals

Other incidentals consist of certain items which may be non-recurring, unusual, infrequent or directly related to an event that is distinct and non-reflective of the Company’s core operating performance. These may include such items as process and product transfer costs, certain charges related to acquisitions and divestitures, litigation and legal settlements, costs associated with the exit of a product line, factory or facility, environmental or governmental settlements, and other items of similar nature.

We exclude these certain items which may be non-recurring, unusual, infrequent or directly related to an event that is distinct and non-reflective of the Company’s core operating performance for purposes of calculating certain non-GAAP measures. These adjustments facilitate a useful evaluation of our core operating performance and comparisons to past operating results and provide investors with additional means to evaluate expense trends.

Income tax effect

Non-GAAP income tax benefit (provision) is NXP's GAAP income tax benefit (provision) adjusted for the income tax effects of the adjustments to our GAAP measure, including the effects of PPA, restructuring costs, share-based compensation, other incidental items and certain other adjustments to financial income (expense) items. Additionally, adjustments are made for 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.).

The non-GAAP income tax benefit (provision) is used to ascertain and present on a comparable basis NXP's income tax benefit (provision) after adjustments, the usefulness of which is described within this table.

Free cash flow

Free cash flow represents operating cash flow adjusted for net additions to property, plant and equipment.

We believe that free cash flow provides insight into our cash-generating capability and our financial performance, and is an efficient means by which users of our financial statements can evaluate our cash flow after meeting our capital expenditure.

Net debt

Net debt represents total debt (short-term and long-term) after deduction of cash and cash equivalents and short-term deposits.

We believe this measure provides investors with useful supplemental information about the financial performance of our business, enables comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect of calculating our net leverage.

53

The following are reconciliations of our most comparable US GAAP measures to our non-GAAP measures presented:

($ in millions)

Three months ended

Full-year

December 31, 2025

September 28, 2025

December 31, 2024

2025

2024

GAAP gross profit

$

1,807 

$

1,787 

$

1,678 

$

6,716 

$

7,119 

PPA effects

(7)

(6)

(11)

(28)

(47)

Restructuring

(14)

— 

(21)

(79)

(28)

Share-based compensation

(14)

(15)

(15)

(59)

(59)

Other incidentals

(71)

(2)

(64)

(84)

(79)

Non-GAAP gross profit

$

1,913 

$

1,810 

$

1,789 

$

6,966 

$

7,332 

GAAP Gross Margin

54.2 

%

56.3 

%

53.9 

%

54.7 

%

56.4 

%

Non-GAAP Gross Margin

57.4 

%

57.0 

%

57.5 

%

56.8 

%

58.1 

%

GAAP research and development

$

(665)

$

(575)

$

(612)

$

(2,360)

$

(2,347)

Restructuring

(89)

(1)

(50)

(100)

(57)

Share-based compensation

(58)

(57)

(60)

(237)

(234)

Other incidentals

(4)

(2)

(5)

(14)

(6)

Non-GAAP research and development

$

(514)

$

(515)

$

(497)

$

(2,009)

$

(2,050)

GAAP selling, general and administrative

$

(359)

$

(286)

$

(323)

$

(1,204)

$

(1,164)

PPA effects

— 

(1)

— 

(1)

(2)

Restructuring

(74)

(2)

(41)

(82)

(40)

Share-based compensation

(28)

(46)

(42)

(166)

(168)

Other incidentals

(15)

(14)

(12)

(64)

(45)

Non-GAAP selling, general and administrative

$

(242)

$

(223)

$

(228)

$

(891)

$

(909)

GAAP operating income (loss)

$

744 

$

893 

$

675 

$

3,047 

$

3,417 

PPA effects

(41)

(38)

(39)

(151)

(185)

Restructuring

(177)

(3)

(112)

(261)

(125)

Share-based compensation

(100)

(118)

(117)

(462)

(461)

Other incidentals

(92)

(19)

(122)

(143)

(181)

Non-GAAP operating income (loss)

$

1,154 

$

1,071 

$

1,065 

$

4,064 

$

4,369 

GAAP Operating Margin

22.3 

%

28.1 

%

21.7 

%

24.8 

%

27.1 

%

Non-GAAP Operating Margin

34.6 

%

33.8 

%

34.2 

%

33.1 

%

34.6 

%

GAAP Income tax benefit (provision)

$

(131)

$

(148)

$

(77)

$

(525)

$

(545)

Income tax effect

59 

25 

87 

129 

141 

Non-GAAP Income tax benefit (provision)

$

(190)

$

(173)

$

(164)

$

(654)

$

(686)

($ in millions)

Three months ended

Full-year

December 31, 2025

September 28, 2025

December 31, 2024

2025

2024

Net cash provided by (used for) operating activities

$

891 

$

585 

$

391 

$

2,820 

$

2,782 

Net capital expenditures on property, plant and equipment

(98)

(76)

(99)

(395)

(693)

Non-GAAP free cash flow

$

793 

$

509 

$

292 

$

2,425 

$

2,089 

54

($ in millions)

Three months ended

Full-year

December 31, 2025

September 28, 2025

December 31, 2024

2025

2024

Long-term debt

$

10,972 

$

10,971 

$

10,354 

$

10,972 

$

10,354 

Short-term debt

1,250 

1,264 

500 

1,250 

500 

Total debt

12,222 

12,235 

10,854 

12,222 

10,854 

Less: cash and cash equivalents

(3,267)

(3,454)

(3,292)

(3,267)

(3,292)

Less: short-term deposits

— 

(500)

— 

— 

— 

Net debt

$

8,955 

$

8,281 

$

7,562 

$

8,955 

$

7,562 

55