NXP Semiconductors (NXPI.US) released its third-quarter 2026 earnings report after the U.S. market close on October 27 (early morning Beijing time on October 28), according to Zhitong Finance APP.
Quarterly revenue came in at $3.786 billion, up 19% year-over-year and above the consensus estimate; non-GAAP diluted earnings per share were $4.20, up 35% year-over-year and also beating expectations. Non-GAAP gross margin was 58.6%, with an operating margin of 37.1%; free cash flow for the quarter was $1.21 billion, representing 31.9% of revenue.
By segment, automotive revenue reached $2.07 billion, up 13% year-over-year; industrial and IoT brought in $802 million, up 39% year-over-year; communications infrastructure and other totaled $503 million, up 54% year-over-year, with the company citing continued momentum in data center infrastructure; mobile revenue was $411 million, down 4% year-over-year.
Following the earnings release, NXP shares fell nearly 9% in after-hours trading. As of press time, the stock was down 7.87% at $234. The drag on the share price came from guidance. The company projected fourth-quarter revenue of $3.75 billion to $3.95 billion, with a midpoint of $3.85 billion (up about 15% year-over-year), below analysts' estimate of $3.87 billion; the midpoint for non-GAAP operating profit was $1.44 billion, also slightly below expectations.
CEO Rafael Sotomayor said that company-specific growth drivers in automotive and industrial are accelerating their contribution, and that software-defined vehicles and trusted physical AI open up long-term opportunities. The company also announced a new $5 billion share repurchase authorization.
It is worth noting that Texas Instruments, NXP's largest competitor, issued a strong revenue forecast last week, stating that "broad-based growth will be achieved across industrial, automotive, and data center sectors." Texas Instruments said it plans to expand capacity to meet growing order demand and may reach elevated levels in its budget for new plants and equipment in 2026. The divergence in the two companies' outlook statements, combined with market concerns about an AI bubble, amplified the selloff triggered by the guidance shortfall.
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