NXP Semiconductors has released its 10-K report, providing an overview of its business operations and financial performance. The company offers various semiconductor products used in automotive, industrial and Internet of Things, mobile, and communication infrastructure applications. NXP markets its products worldwide to original equipment manufacturers, contract manufacturers, and distributors. In 2023, the company reported revenue of $13,276 million, a 0.5% increase from 2022. NXP's gross profit percentage remained flat at 56.9% for both years, impacted by inflationary effects of increased input costs passed along to end customers.
In Q4 2023, NXP reported revenue of $3,422 million, a 0.3% decrease from Q3 2023. The company experienced growth in the Industrial IoT, Mobile, and Automotive end markets, but declines in the Communications Infrastructure & Other end market. NXP's gross profit percentage for Q4 2023 decreased to 56.6% from 57.2% in Q3 2023, primarily due to higher restructuring costs. Operating cash flows for Q4 2023 increased by 15.1% quarter-on-quarter, reaching $1,137 million.
Comparing Q4 2023 to Q4 2022, NXP's revenue increased by 3.3%, reaching $3,422 million. The company experienced growth in its Automotive and Industrial IoT end markets, offset by declines in the Communication Infrastructure & Other and Mobile end markets. NXP's gross profit percentage for Q4 2023 decreased to 56.6% from 57.1% in Q4 2022, primarily due to higher restructuring costs. Operating cash flows for Q4 2023 increased by 5.7% year-on-year, reaching $1,137 million.
NXP's revenue by end market in 2023 showed growth in the Automotive and Communication Infrastructure & Other end markets, offset by declines in the Industrial IoT and Mobile end markets. Revenue through NXP’s third-party distribution partners decreased by 0.9%, while revenues through direct OEM and EMS customers increased by 3.3% in 2023. From a geographic perspective, revenue increased in the EMEA and Americas regions and declined in the China and Asia Pacific regions.
NXP's gross profit for 2023 was $7,553 million, representing 56.9% of revenue. Operating expenses for 2023 totaled $3,877 million, or 29.2% of revenue, with research and development costs increasing by 12.6%, selling, general and administrative costs increasing by 8.7%, and amortization of acquisition-related intangible assets decreasing by 41.1% compared to 2022.
The company recorded an income tax expense of $523 million for 2023, reflecting an effective tax rate of 15.6%, similar to the expense of $529 million (15.7%) for 2022.
The market has reacted to these announcements by moving the company's shares 1.9% to a price of $239.73. For more information, read the company's full 10-K submission here.
