NXP Semiconductors NV at Barclays Global Technology Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Thomas O'Malley - Barclays Services Corp - Analyst : That's no problem at all. So why don't we start with just a broader topic. So a thematic for the conference here is AI. How are you intersecting that spending trend? Where are you on that journey today? And maybe talk about your portfolio and where you're focused on bringing those big amounts of dollars into kind of the NXP?

Question: Thomas O'Malley - Barclays Services Corp - Analyst : So it's already intersected. You feel like you can always bring technology to the market today. But in terms of like the crossover in terms of revenue contribution over the next several years, it's kind of early days wait and see.

Question: Thomas O'Malley - Barclays Services Corp - Analyst : Got you. All right. So that's the macro side. Let's dive in a little bit more to the company-specific side. So we've heard your comments on NXP's performance in the broader macro environment over the last couple of weeks, both in industrial and auto. Can you talk about what you're seeing in the market today. It sounded from your recent comments like things were stable to maybe slightly improving. Maybe give us an update on how things are trending as we get to today. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 4:05PM, NXPI.OQ - NXP Semiconductors NV at Barclays Global Technology Conference

Question: Thomas O'Malley - Barclays Services Corp - Analyst : Got you. And then --

Question: Thomas O'Malley - Barclays Services Corp - Analyst : So marrying that with what you're doing with the channel, you've talked about moving from 9 weeks to 11 weeks. When you got to the call last quarter, you got a lot of questions on why hasn't the channel increased, it was kind of a shot to either way, right? If you don't increase the channel, then the demand profile isn't good, if you do increase channel like no one else is seeing that, right? But you talked about a

Question: Thomas O'Malley - Barclays Services Corp - Analyst : So as sales -- do often, you'll take some information you give us and we'll try to extrapolate it into the next quarter, right? So on the call as well, you offered out normal seasonality kind of down high single digits into Q1. And that wasn't guidance. You were just offering up. This is what normal seasonality is. We marry that with the idea that you're moving from 9 weeks to 11 weeks and we think, well, isn't the natural reaction here that they're doing a bit better than that because the channel helps them out. Could you talk about seasonal trends into Q1? Why this year may be a little different than other years? Or you can just leave it at what you --

Question: Thomas O'Malley - Barclays Services Corp - Analyst : Perfect. So why don't we talk about the things that you talk about more generally in the long-term guidance that you guys kind of give out. So you've talked about more and more of your business moving to higher-value solutions with your customers. As we move into 2026, could you talk about certain areas that you're really excited about and where you think you may see some growth drivers, particularly in the auto space. We've talked as the year has gone along about areas where there may be a little bit faster growth than the general for market so -- LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 4:05PM, NXPI.OQ - NXP Semiconductors NV at Barclays Global Technology Conference

Question: Thomas O'Malley - Barclays Services Corp - Analyst : Okay. And then maybe talking on the industrial side, you just laid out the auto drivers. I think Industrial is a little more difficult just because it's just much more broad facing, maybe talk about your differentiation there and also products you're excited about for the next --

Question: Thomas O'Malley - Barclays Services Corp - Analyst : So a question that I get a lot, and I think one that is yet to be fully answered in the stock is -- how have you guys managed to do a bit better in terms of your auto business over the cycle, at least from a channel perspective. And if you plot out long-term growth trajectories, it does look like you guys have hung in a little bit better than peers. People ask, is that channel management? Are you going to see some sort of cliff over the next several quarters? I feel like you guys feel that question well as well. So I guess looking into the out year, I think that the general outlook for auto is modest to maybe slightly better than modest growth, right? So nothing heroic. When you guys look at your business and how that compares to the broader SAAR environment, what are your kind of initial takes, why would you be better than that? And why has your strategy that you've kind of deployed so far, which has looked pretty good, going to work again here in this out year.

Question: Thomas O'Malley - Barclays Services Corp - Analyst : So 2, I would say, non-NXP specific items that could come up in 2026 are on China, which people asked about a lot. How much does China impact your business? Do you have domestic supply coming online? Do you get concerned about that? And then the second, which is talked about a lot, is memory, which is a newer one where you're seeing global memory shortages, auto and industrial tends to be much more specific. So it doesn't impact us much, but I would love to get your opinion kind of on both the --

Question: Thomas O'Malley - Barclays Services Corp - Analyst : So 6% of your business give or take. Yes. Okay. So we went into auto. We talked about China -- how about Industrial and IoT. I asked after China because you do have a bit of a unique exposure in our industrial IoT business is not as much broad facing. You have a higher concentration of IoT than I'd say most -- could you talk into next year, I look at the PMI data, it still is contractionary. Is there a way that you can offset maybe dampened global trends into next year because of some higher growth areas in that IoT business in particular?

Question: Thomas O'Malley - Barclays Services Corp - Analyst : Got you. Maybe pivoting a little bit to the operating model so you laid out, I think, a very clear gross margin trajectory. Could you remind us what you said about the revenue dollars to get to the target model? And then the incremental dollars that come in, what does that mean for gross margins and that progression --

Question: Thomas O'Malley - Barclays Services Corp - Analyst : Helpful. Why don't we pivot to capital allocation? So you talked about the acquisitions that you just made. Clearly, times right now are a bit turbulent in just the broader macro. You're saying things are improving off the bottom. How do you feel about stock buybacks? How do you feel about capital returns? Maybe remind us on your strategy and where you would direct capital from?

Question: Thomas O'Malley - Barclays Services Corp - Analyst : Very simple.

Question: Thomas O'Malley - Barclays Services Corp - Analyst : Yes. In terms of future acquisitions as well, I think you've done a good job of kind of both addressing the software needs as well as the hardware needs. If you look at that portfolio today, I think you're probably always looking for ways to get better. But where do you see an area in which you could probably tack on future acquisitions? Or is there a certain which you would wish you could do an acquisition, but you can't. How about M&A in general.

Question: Thomas O'Malley - Barclays Services Corp - Analyst : Perfect. Well, we've covered a lot. I really appreciate you both being here and enjoy the next couple of days.