Management’s Discussion and Analysis (MD&A) should be read in conjunction with our Consolidated Financial Statements and Notes and the MD&A in our Annual Report on Form 10-K for the year ended December 31, 2025, and the Financial Statements and the related Notes that appear elsewhere in this document. 20 Overview Quarterly Financial Highlights •Revenue was $3,496 million, up 19.5% year-on-year; •GAAP gross margin was 57.3%, and GAAP operating margin was 30.6%; •Non-GAAP gross margin was 58.0%, and non-GAAP operating margin was 35.1%; •Cash flow from operations was $860 million, with net capital expenditures on property, plant and equipment of $69 million, resulting in non-GAAP free cash flow of $791 million; •During the second quarter of 2026, NXP returned capital to shareholders with the payment of $256 million in cash dividends and the repurchase of $104 million of its common shares, for a total capital return of $360 million. 21 Sequential Results Q2 2026 compared to Q1 2026 Revenue for the three months ended June 28, 2026, was $3,496 million compared to $3,181 million for the three months ended March 29, 2026, an increase of $315 million or 9.9% quarter-on-quarter, in line with management's expectations. Within our end markets, the Automotive end market increased $156 million or 8.8%, the Industrial & IoT end market increased $127 million or 20.2%, the Communication Infrastructure & Other end market increased $72 million or 18.9%, and the Mobile end market decreased $40 million or 10.2%. When aggregating all end markets together and reviewing sales channel performance, revenue from distributors was $2,072 million, an increase of $210 million or 11.3% compared to the previous period. Revenue from direct customers was $1,375 million, an increase of $93 million or 7.3% versus the previous period. From a geographic perspective, revenue increased quarter-on-quarter in the China region by 31.5%, in the Asia Pacific region by 11.2%, in the EMEA region by 4.0%, and in the Americas region by 3.2%. Our gross profit percentage for the three months ended June 28, 2026, of 57.3% increased compared to 56.2% for the three months ended March 29, 2026, driven mainly by higher sales volumes and favorable product mix. Operating income for the three months ended June 28, 2026, was $1,071 million compared to $1,505 million for the three months ended March 29, 2026, a decrease of $434 million or 28.8%. The decrease was mainly driven by the gain on sale of the MEMS Sensors business in the first quarter of 2026. 22 Results of operations The following table presents operating results for each of the three- and six-month periods ended June 28, 2026, and June 29, 2025, respectively: ($ in millions, unless otherwise stated) Q2 2026 % of Revenue Q2 2025 % of Revenue YTD 2026 % of Revenue YTD 2025 % of Revenue Revenue 3,496 2,926 6,677 5,761 % nominal growth 19.5 (6.4) 15.9 (7.9) Gross profit 2,002 1,562 3,790 3,122 Gross margin 57.3 % 53.4 % 56.8 % 54.2 % Research and development (604) 17.3 % (573) 19.6 % (1,192) 17.9 % (1,120) 19.4 % Selling, general and administrative (291) 8.3 % (278) 9.5 % (575) 8.6 % (559) 9.7 % Amortization of acquisition-related intangible assets (31) 0.9 % (25) 0.9 % (63) 0.9 % (52) 0.9 % Other income (expense) (5) 0.1 % 1 — % 616 9.2 % 19 0.3 % Operating income (loss) 1,071 30.6 % 687 23.5 % 2,576 38.6 % 1,410 24.5 % Financial income (expense) (97) 2.8 % (86) 2.9 % (193) 2.9 % (178) 3.1 % Benefit (provision) for income taxes (189) 5.4 % (116) 4.0 % (461) 6.9 % (246) 4.3 % Results relating to equity-accounted investees (3) 0.1 % (28) 1.0 % (7) 0.1 % (32) 0.6 % Net income (loss) 782 22.4 % 457 15.6 % 1,915 28.7 % 954 16.6 % Less: Net income (loss) attributable to non-controlling interests 15 0.4 % 12 0.4 % 26 0.4 % 19 0.3 % Net income (loss) attributable to stockholders 767 21.9 % 445 15.2 % 1,889 28.3 % 935 16.2 % Diluted earnings per share 3.02 1.75 7.44 3.67 23 Revenue Q2 2026 Overview Q2 2026 compared to Q2 2025 Revenue for the three months ended June 28, 2026, was $3,496 million compared to $2,926 million for the three months ended June 29, 2025, an increase of $570 million or 19.5%, in line with management’s expectations. YTD 2026 Overview YTD 2026 compared to YTD 2026 Revenue for the six months ended June 28, 2026, was $6,677 million compared to $5,761 million for the six months ended June 29, 2025, an increase of $916 million or 15.9%. 24 Revenue by end market was as follows: ($ in millions, unless otherwise stated) Q2 2026 Q2 2025 % change YTD 2026 YTD 2025 % change Automotive 1,938 1,729 12.1 % 3,720 3,403 9.3 % Industrial & IoT 755 546 38.3 % 1,383 1,054 31.2 % Mobile 351 331 6.0 % 742 669 10.9 % Communication Infrastructure & Other 452 320 41.3 % 832 635 31.0 % Total Revenue 3,496 2,926 19.5 % 6,677 5,761 15.9 % Revenue by sales channel was as follows: ($ in millions, unless otherwise stated) Q2 2026 Q2 2025 % change YTD 2026 YTD 2025 % change Distributors 2,072 1,636 26.7 % 3,934 3,160 24.5 % Direct 1,375 1,257 9.4 % 2,657 2,541 4.6 % Other 49 33 48.5 % 86 60 43.3 % Total Revenue 3,496 2,926 19.5 % 6,677 5,761 15.9 % Revenue by geographic region, which is based on the location where the sale originated and where critical commercial decisions are made, was as follows: ($ in millions, unless otherwise stated) Q2 2026 Q2 2025 % change YTD 2026 YTD 2025 % change Americas 989 738 34.0 % 1,947 1,487 30.9 % APAC, excluding China 984 866 13.6 % 1,869 1,694 10.3 % EMEA (Europe, the Middle East and Africa) 893 820 8.9 % 1,752 1,612 8.7 % China 1) 630 502 25.5 % 1,109 968 14.6 % Total Revenue 3,496 2,926 19.5 % 6,677 5,761 15.9 % 1) China includes Mainland China and Hong Kong Q2 2026 compared to Q2 2025 From an end market perspective, NXP experienced growth across all end markets versus the year-ago quarter. Revenue in the Automotive end market was $1,938 million, an increase of $209 million or 12.1% versus the year-ago quarter. The increase was predominantly due to growth in processors, with mixed-signal products also growing. Revenue in the Industrial & IoT end market was $755 million, an increase of $209 million or 38.3% versus the year-ago quarter. The increase was due to strong growth in processors and mixed-signal products. Revenue in the Communication Infrastructure & Other end market was $452 million, an increase of $132 million or 41.3% versus the year-ago quarter. The increase was predominantly due to growth in processors. Revenue in the Mobile end market was $351 million, an increase of $20 million or 6.0% versus the year-ago quarter. The increase was due to growth in mixed-signal products, partially offset by declines in processors. When aggregating all end markets together and reviewing sales channel performance, revenue from distributors was $2,072 million, an increase of $436 million or 26.7% versus the year-ago quarter. Revenue from direct customers was $1,375 million, an increase of $118 million or 9.4% versus the year-ago quarter. From a geographic perspective, revenue increased year-on-year in the Americas region by 34.0%, in the China region by 25.5%, in the Asia Pacific region by 13.6%, and in the EMEA region by 8.9%. YTD 2026 compared to YTD 2025 From an end market perspective, NXP experienced growth across all end markets versus the year-ago period. Revenue in the Automotive end market was $3,720 million, an increase of $317 million or 9.3% versus the year-ago period. The increase was predominantly due to growth in processors, with mixed-signal products also growing. Revenue in the Industrial & IoT end market was $1,383 million, an increase of $329 million or 31.2% versus the year-ago period. The increase was due to strong growth in processors and mixed-signal products. Revenue in the Communication Infrastructure & Other end market was $832 million, an increase of $197 million or 31.0% versus the year-ago period. The increase was due to growth in processors, partially offset by declines in mixed-signal products. 25 Revenue in the Mobile end market was $742 million, an increase of $73 million or 10.9% versus the year-ago period. The increase was due to growth in mixed-signal products, partially offset by declines in processors. When aggregating all end markets together, and reviewing sales channel performance, revenue from distributors was $3,934 million, an increase of $774 million or 24.5% versus the year-ago period. Revenue through direct customers was $2,657 million, an increase of $116 million or 4.6% versus the year-ago period. From a geographic perspective, revenue increased year-on-year in the Americas region by 30.9%, in the China region by 14.6%, in the Asia Pacific region by 10.3%, and in the EMEA region by 8.7%. Gross profit Q2 2026 compared to Q2 2025 Gross profit for the three months ended June 28, 2026, was $2,002 million, or 57.3% of revenue, compared to $1,562 million, or 53.4% of revenue for the three months ended June 29, 2025. The increase in gross profit is primarily driven by higher sales volumes and lower manufacturing costs resulting from improved factory utilization and manufacturing cost-efficiency initiatives. YTD 2026 compared to YTD 2025 Gross profit for the six months ended June 28, 2026, was $3,790 million, or 56.8% of revenue, compared to $3,122 million, or 54.2% of revenue for the six months ended June 29, 2025. The increase in gross profit was primarily driven by higher sales volumes and lower manufacturing costs resulting from improved factory utilization, manufacturing cost-efficiency initiatives and sourcing savings. Operating expenses Q2 2026 compared to Q2 2025 Operating expenses for the three months ended June 28, 2026, totaled $926 million, or 26.5% of revenue, compared to $876 million, or 29.9% of revenue for the three months ended June 29, 2025. YTD 2026 compared to YTD 2025 Operating expenses for the six months ended June 28, 2026, totaled $1,830 million, or 27.4% of revenue, compared to $1,731 million, or 30.0% of revenue for the six months ended June 29, 2025. •Research and development ($ in millions, unless otherwise stated) Q2 2026 Q2 2025 % change YTD 2026 YTD 2025 % change Research and development 604 573 5.4 % 1,192 1,120 6.4 % As a percentage of revenue 17.3 % 19.6 % (2.3) ppt 17.9 % 19.4 % (1.5) ppt Q2 2026 compared to Q2 2025 R&D costs for the three months ended June 28, 2026, increased by $31 million, or 5.4%, when compared to the three months ended June 29, 2025, primarily driven by: + Increased variable compensation expenses due to improved company performance ($38 million) + A net increase in personnel related costs driven by our closed acquisitions, offset by certain ongoing cost-cutting initiatives ($3 million) - An adjustment to our estimate of the restructuring provision related to programs initiated in prior periods ($8 million) YTD 2026 compared to YTD 2025 R&D costs for the six months ended June 28, 2026, increased by $72 million, or 6.4%, when compared to the six months ended June 29, 2025, driven by: + Increased variable compensation expenses due to improved company performance ($65 million) + A net increase in personnel related costs driven by our closed acquisitions, offset by certain ongoing cost-cutting initiatives ($19 million) - Lower share-based compensation costs due to restructuring activities ($11 million) 26 •Selling, general and administrative ($ in millions, unless otherwise stated) Q2 2026 Q2 2025 % change YTD 2026 YTD 2025 % change Selling, general and administrative 291 278 4.7 % 575 559 2.9 % As a percentage of revenue 8.3 % 9.5 % (1.2) ppt 8.6 % 9.7 % (1.1) ppt Q2 2026 compared to Q2 2025 SG&A costs for the three months ended June 28, 2026, increased by $13 million, or 4.7%, when compared to the three months ended June 29, 2025, primarily driven by: + Increased variable compensation expenses due to improved company performance ($24 million) - A net decrease in personnel related costs due to certain ongoing cost-cutting initiatives, offset by higher costs driven by our closed acquisitions ($4 million) YTD 2026 compared to YTD 2025 SG&A costs for the six months ended June 28, 2026, increased by $16 million, or 2.9%, when compared to the six months ended June 29, 2025, primarily driven by: + Increased variable compensation expenses due to improved company performance ($34 million) - Lower legal expenses ($27 million) •Amortization of acquisition-related intangible assets ($ in millions, unless otherwise stated) Q2 2026 Q2 2025 % change YTD 2026 YTD 2025 % change Amortization of acquisition-related intangible assets 31 25 24.0 % 63 52 21.2 % As a percentage of revenue 0.9 % 0.9 % — ppt 0.9 % 0.9 % — ppt Q2 2026 compared to Q2 2025 Amortization of acquisition-related intangible assets for the three months ended June 28, 2026, increased by $6 million, or 24.0%, when compared to the three months ended June 29, 2025, primarily driven by amortization related to the acquisitions of TTTech Auto and Kinara. YTD 2026 compared to YTD 2025 Amortization of acquisition-related intangible assets for the six months ended June 28, 2026, increased by $11 million, or 21.2%, when compared to the six months ended June 29, 2025, primarily driven by amortization related to the acquisitions of TTTech Auto and Kinara. Other Income (Expense) YTD 2026 compared to YTD 2025 Other income (expense) reflects an income of $616 million for the six months ended June 28, 2026, compared to an income of $19 million in the six months ended June 29, 2025. The increase was mainly driven by the gain on sale of $627 million related to the divestment of the MEMS Sensors business in the first quarter of 2026. Financial income (expense) The following table presents the details of financial income and expenses: ($ in millions, unless otherwise stated) Q2 2026 Q2 2025 YTD 2026 YTD 2025 Interest income 29 39 60 74 Interest expense (112) (115) (226) (221) Other financial income/ (expense) (14) (10) (27) (31) Total (97) (86) (193) (178) 27 Q2 2026 compared to Q2 2025 Financial income (expense) was an expense of $97 million for the three months ended June 28, 2026, compared to an expense of $86 million for the three months ended June 29, 2025. The change in financial income (expense) is primarily attributable to a decrease in interest income of $10 million due to lower interest rates and lower cash levels. The decrease in interest expense is mainly driven by lower interest expenses from the redemption of notes and decreased borrowing under our commercial paper program, offset by the interest on three new bonds issued in August 2025. Other financial expenses increased year-over-year primarily due to favorable prior-year tax-related interest adjustments, partially offset by improved foreign exchange hedge results. YTD 2026 compared to YTD 2025 Financial income (expense) was an expense of $193 million for the six months ended June 28, 2026, compared to an expense of $178 million for the six months ended June 29, 2025. Interest income decreased by $14 million due to lower cash levels and lower interest rates. Interest expense increased by $5 million mainly due to interest on three new bonds issued in August 2025, offset by lower interest expenses from the redemption of notes and decreased borrowing under our commercial paper program. Other financial income/(expense) decreased mainly due to the movement of fair value adjustments in equity securities. Benefit (provision) for income taxes Our provision for income taxes for 2026 is based on our EAETR of 19.7%, which is lower than the Netherlands statutory tax rate of 25.8%, primarily due to tax benefits from the Netherlands and foreign tax incentives. Q2 2026 Q2 2025 YTD 2026 YTD 2025 Tax benefit (provision) calculated at EAETR (189) (112) (469) (231) Discrete tax benefit (provision) items — (4) 8 (15) Benefit (provision) for income taxes (189) (116) (461) (246) Effective tax rate 19.4 % 19.3 % 19.3 % 20.0 % Q2 2026 compared to Q2 2025 The effective tax rate of 19.4% for the second quarter of 2026 was lower than the EAETR due to a recapture tax benefit effect as the initial EAETR was 19.9% as recorded in the first quarter of 2026. YTD 2026 compared to YTD 2025 The effective tax rate for the first six months of 2026 was 19.3% compared to 20.0% for the same period in 2025, with discrete items in the respective periods impacting the rates accordingly. Excluding discrete items, the EAETR increased to 19.7% in 2026 from 18.8% in 2025, mainly as a result of a taxable capital gain and non-deductible goodwill associated with the divestiture of the MEMS Sensors business in the first quarter of 2026. Results Relating to Equity-accounted Investees Q2 2026 compared to Q2 2025 Results relating to equity-accounted investees amounted to a loss of $3 million for the three months ended June 28, 2026, whereas the three months ended June 29, 2025, results relating to equity-accounted investees amounted to a loss of $28 million (which includes an impairment charge of $27 million related to our investment in Sigma Sense). YTD 2026 compared to YTD 2025 Results relating to equity-accounted investees amounted to a loss of $7 million for the six months ended June 28, 2026, whereas the six months ended June 29, 2025, results relating to equity-accounted investees amounted to a loss of $32 million (which includes an impairment charge of $27 million related to our investment in Sigma Sense). Non-controlling Interests Q2 2026 compared to Q2 2025 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 $15 million for the three months ended June 28, 2026, compared to a profit of $12 million for the three months ended June 29, 2025. YTD 2026 compared to YTD 2025 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 $26 million for the six months ended June 28, 2026, compared to a profit of $19 million for the six months ended June 29, 2025. 28 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. At the end of the second quarter of 2026, our cash balance was $3,222 million, a decrease of $45 million compared to December 31, 2025. Taking into account the available amount of the unsecured revolving credit facility of $3,000 million ("RCF"), we had access to $6,222 million of liquidity as of June 28, 2026. 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 of $3,000 million, plus anticipated cash generated from operations) will be adequate to finance our operations, working capital requirements, capital expenditures and potential dividends for at least the next twelve months. ($ in millions, unless otherwise stated) YTD 2026 YTD 2025 Cash from operations 1,653 1,344 Capital expenditures 148 222 Cash to shareholders 718 1,022 Cash At June 28, 2026, our cash balance was $3,222 million of which $359 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 the first quarter of 2026, SSMC declared a dividend of $150 million, of which $75 million was paid in the first quarter, with 38.8% being paid to our joint venture partner. Capital expenditures Our cash outflows for capital expenditures were $148 million in the first six months of 2026, compared to $222 million in the first six months of 2025. Capital return In the first six months of 2026, we repurchased approximately $206 million of shares. Under our Quarterly Dividend Program, interim dividends of $1.014 per ordinary share were paid on January 7, 2026 ($256 million) and dividends of $1.014 per ordinary share were paid on April 9, 2026 ($256 million) and dividends of $1.014 per ordinary share were paid on July 9, 2026 ($256 million). Debt Our total debt, inclusive of aggregate principal, unamortized discounts, premiums, debt issuance costs and fair value adjustments, amounted to $10,976 million as of June 28, 2026, a decrease of $1,246 million compared to December 31, 2025 ($12,222 million). On April 20, 2026, we repaid the $750 million aggregate principal amount of outstanding 3.875% senior unsecured notes due June 18, 2026, at par using available cash. As of June 28, 2026, we had outstanding fixed-rate notes with varying maturities for an aggregate principal amount of $9,999 million (collectively the “Notes”), of which $999 million is payable within 12 months. Future interest payments associated with the Notes total $2,655 million, with $381 million payable within 12 months. As of June 28, 2026, the Company had outstanding loans with the European Investment Bank (EIB) with maturities in 2030 and 2031 for an aggregated principal amount of $1,040 million. Future interest payments associated with the EIB loans total $217 million, with $47 million payable within 12 months. As of June 28, 2026, we had no commercial paper notes outstanding. Our net debt position (see section Use of Certain Non-GAAP Financial Measures) at June 28, 2026, amounted to $7,754 million, compared to $8,955 million as of December 31, 2025. 29 Additional Capital Requirements Expected working and other capital requirements are described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. At June 28, 2026, other than for changes disclosed in the “Notes to Condensed Consolidated Financial Statements” and “Liquidity and Capital Resources” in this Quarterly Report, there have been no other material changes to our expected working and other capital requirements described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Cash flows Our cash and cash equivalents during the first six months of 2026 decreased by $41 million (excluding the effect of changes in exchange rates on our cash position of $4 million) as follows: ($ in millions, unless otherwise stated) YTD 2026 YTD 2025 Net cash provided by (used for) operating activities 1,653 1,344 Net cash provided by (used for) investing activities 271 (1,108) Net cash provided by (used for) financing activities (1,965) (364) Increase (decrease) in cash and cash equivalents (41) (128) Cash Flow from Operating Activities For the first six months of 2026, our operating activities provided $1,653 million in cash. This was primarily the result of net income of $1,915 million, adjustments to reconcile the net income of $(79) million and changes in operating assets and liabilities of $(183) million. Adjustments to net income (loss) include non-cash items, such as gain on sale of assets of $(627 million), depreciation and amortization of $363 million, share-based compensation of $214 million and changes in deferred taxes (benefit) of $(41 million). Changes in operating assets and liabilities were primarily driven by: - Increase in other non-current assets of $230 million due to payments to secure production supply (driven primarily by payments of $243 million to support the long-term capacity infrastructure of VSMC) - Increase in receivables and other current assets of $101 million due to the related timing of cash collection + Increase in accounts payable and other liabilities of $95 million primarily due to a higher corporate tax accrual ($91 million) mainly driven by the capital gains tax on the divestiture of the MEMS Sensors business + Decrease in inventories of $53 million due to higher sales volumes For the first six months of 2025 our operating activities provided $1,344 million in cash. This was primarily the result of net income of $954 million, adjustments to reconcile the net income of $647 million and changes in operating assets and liabilities of $(271) million. Adjustments to net income (loss) include non-cash items, such as depreciation and amortization of $416 million, share-based compensation of $244 million and changes in deferred taxes of $(24) million. Changes in operating assets and liabilities were primarily driven by: - Increase in receivables and other current assets of $135 million driven by the change in the insurance reimbursements relating to the Motorola Personal Injury Lawsuits - Increase in inventories of $84 million in order to align inventory on hand with expected demand - Decrease in accounts payable and other liabilities of $77 million as a result of lower purchase volumes and timing related to payments Cash Flow from Investing Activities Net cash proceeds from investing activities of $271 million for the first six months of 2026 was primarily driven by: + Proceeds of $878 million (net of adjustments) from the sale of our MEMS Sensors business - Purchase of investments of $381 million (driven primarily by the capital contributions of $316 million into VSMC) - Capital expenditures of $148 million - Purchase of identified intangible assets of $79 million, including EDA (electronic design automation) Net cash used for investing activities amounted to $1,108 million for the first six months of 2025 was primarily driven by: - Purchase of interests in business (net of cash acquired) of $679 million (acquisition of TTTech Auto) - Capital expenditures of $222 million - Purchase of investments of $146 million for the (driven primarily by the capital contributions of $70 million into VSMC and approximately $32 million into ESMC) - Purchase of identified intangible assets of $62 million, including EDA (electronic design automation) 30 Cash Flow from Financing Activities Net cash used for financing activities of $1,965 million for the first six months of 2026 was primarily driven by: - Repayment of long-term debt of $1,251 million - Dividend payments to common stockholders of $512 million - Purchase of treasury shares and restricted stock unit holdings of $206 million Net cash used for financing activities of $364 million for the first six months of 2025 was primarily driven by: - Repayment of commercial paper notes of $1,461 million - Dividend payments to common stockholders of $515 million - Purchase of treasury shares and restricted stock unit holdings of $507 million - Repayment of long-term debt of $500 million, partially offset by + Proceeds from the issuance of commercial paper notes of $2,211 million + Proceeds from issuance of long-term debt of $370 million + Proceeds from the issuance of common stock through stock plans of $39 million 31 Information Regarding Guarantors of NXP (unaudited) Summarized Combined Financial Information for Guarantee of Securities of Subsidiaries All debt instruments are guaranteed, fully and unconditionally, jointly and severally, by NXP Semiconductors N.V. and issued or guaranteed by NXP USA, Inc., NXP B.V. and NXP LLC, (together, the “Subsidiary Obligors” and together with NXP Semiconductors N.V., the “Obligor Group”). Other than the Subsidiary Obligors, none of the Company’s subsidiaries (together the “Non-Guarantor Subsidiaries”) guarantee the Notes. The Company consolidates the Subsidiary Obligors in its Consolidated Financial Statements and each of the Subsidiary Obligors are wholly owned subsidiaries of the Company. All of the existing guarantees by the Company rank equally in right of payment with all of the existing and future senior indebtedness of the Obligor Group. There are no significant restrictions on the ability of the Obligor Group to obtain funds from respective subsidiaries by dividend or loan. The following tables present summarized financial information of the Obligor Group on a combined basis, with intercompany balances and transactions between entities of the Obligor Group eliminated and investments and equity in the earnings of the Non-Guarantor Subsidiaries excluded. The Obligor Group’s amounts due from, amounts due to, and intercompany transactions with Non-Guarantor Subsidiaries have been disclosed below the table, when material. Summarized Statements of Income For the six months ended ($ in millions) June 28, 2026 Revenue 3,724 Gross Profit 1,798 Operating income 1,129 Net income 530 Summarized Balance Sheets As of ($ in millions) June 28, 2026 December 31, 2025 Current assets 3,011 3,182 Non-current assets 12,345 12,461 Total assets 15,356 15,643 Current liabilities 1,797 2,044 Non-current liabilities 10,351 11,348 Total liabilities 12,148 13,392 Obligor's Group equity 3,208 2,251 Total liabilities and Obligor's Group equity 15,356 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 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 (for the six months ended June 28, 2026: $347 million). The Obligor Group has amounts due from equity financing (June 28, 2026: $7,380 million; December 31, 2025: $5,520 million) and due to debt financing (June 28, 2026: $3,960 million; December 31, 2025: $2,695 million) with non-guarantor subsidiaries. 32 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 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. When measuring performance against this plan, management considers the actual or potential impacts on these non-GAAP financial measures from cost‑reduction actions with the goal of increasing our gross margin and operating margin, as well as in 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 make 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. 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. 33 Non-GAAP Adjustment or Measure Definition Usefulness to Management and Investors Non-GAAP Provision for income taxes Non-GAAP provision for income taxes is NXP's GAAP provision for income taxes adjusted for the income tax effects of the adjustments to our GAAP measure, including PPA effects, 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 provision for income taxes is used to ascertain and present on a comparable basis NXP's provision for income tax after adjustments, the usefulness of which is described within this table. Additionally, the income tax effects of the adjustments to achieve the noted non-GAAP measures are used to determine NXP's non-GAAP net income (loss) attributable to stockholders and accordingly, our diluted non-GAAP earnings per share attributable to stockholders. 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. The following are reconciliations of our most comparable US GAAP measures to our non-GAAP measures presented: ($ in millions) For the three months ended June 28, 2026 March 29, 2026 June 29, 2025 GAAP gross profit $ 2,002 $ 1,788 $ 1,562 PPA effects (5) (6) (7) Restructuring — 1 (61) Share-based compensation (12) (13) (14) Other incidentals (9) (9) (8) Non-GAAP gross profit $ 2,028 $ 1,815 $ 1,652 GAAP Gross Margin 57.3 % 56.2 % 53.4 % Non-GAAP Gross Margin 58.0 % 57.1 % 56.5 % GAAP research and development $ (604) $ (588) $ (573) Restructuring 4 (2) (3) Share-based compensation (54) (57) (58) Other incidentals (4) (11) (7) Non-GAAP research and development $ (550) $ (518) $ (505) GAAP selling, general and administrative $ (291) $ (284) $ (278) Restructuring 4 (1) (3) Share-based compensation (39) (39) (45) Other incidentals (12) (4) (15) Non-GAAP selling, general and administrative $ (244) $ (240) $ (215) GAAP operating income (loss) $ 1,071 $ 1,505 $ 687 34 ($ in millions) For the three months ended June 28, 2026 March 29, 2026 June 29, 2025 GAAP operating income (loss) $ 1,071 $ 1,505 $ 687 PPA effects (36) (38) (32) Restructuring 8 (2) (67) Share-based compensation (105) (109) (117) Other incidentals (i) (24) 602 (32) Non-GAAP operating income (loss) $ 1,228 $ 1,052 $ 935 GAAP Operating Margin 30.6 % 47.3 % 23.5 % Non-GAAP Operating Margin 35.1 % 33.1 % 32.0 % GAAP Income tax benefit (provision) $ (189) $ (272) $ (116) Income tax effect 16 (99) 32 Non-GAAP Income tax benefit (provision) $ (205) $ (173) $ (148) (i) For the three months ended March 29, 2026, Other Incidentals includes the gain on sale of the MEMS Sensors business ($ in millions) For the three months ended June 28, 2026 March 29, 2026 June 29, 2025 Net cash provided by (used for) operating activities $ 860 $ 793 $ 779 Net capital expenditures on property, plant and equipment (69) (79) (83) Non-GAAP free cash flow $ 791 $ 714 $ 696 ($ in millions) For the three months ended June 28, 2026 March 29, 2026 June 29, 2025 Long-term debt $ 9,977 $ 10,974 $ 9,479 Short-term debt 999 750 1,999 Total debt 10,976 11,724 11,478 Less: cash and cash equivalents (3,222) (3,708) (3,170) Net debt $ 7,754 $ 8,016 $ 8,308 35