NXP Semiconductors NV (NASDAQ:NXPI) Q3 2016 Earnings Conference Call - Final Transcript
Oct 27, 2016 • 09:00 am ET
Good day, ladies and gentlemen, and welcome to the Third Quarter 2016 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. [Operator Instructions] As a reminder, this conference is being recorded.
I would now like to introduce your host for today's conference, Mr. Jeff Palmer, Vice President of Investor Relations. Sir, you may begin.
Great. Thank you, Skyler, and good morning to everyone. Welcome to the NXP Semiconductors' third quarter 2016 earnings call. With me on the call today is Rick Clemmer, NXP's President and CEO; and Dan Durn, our CFO.
If you've not obtained a copy of our third quarter 2016's earnings press release, it can be found on our company website under the Investor Relations section at nxp.com. As most of you've likely seen the Qualcomm and NXP press release this morning and we appreciate your patience in waiting for our earnings call to begin. Our earnings call today will keep to our prepared remarks to the key points so we can quickly get to your questions. This call is being recorded and will be available for replay from our corporate website.
Our call today will include forward-looking statements that involve risks and uncertainties that could cause NXP's results to differ materially from management's current expectations. Please bear in mind that NXP undertakes no obligations revise or update publicly any forward-looking statements. For a full disclosure on forward-looking statements, please refer to our press release.
Additionally, during the call today, we will refer to non-GAAP financial measures. Pursuant to Regulation G, NXP has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures in our third quarter 2016 press release, which will be furnished to the SEC on Form 6-K and is available on the NXP website.
I'd like to now turn the call over to Rick. Rick?
Thanks, Jeff, and welcome, everyone, to our earnings call today. As Jeff mentioned, we're very excited about the transaction we announced this morning. In lieu of time, we want to provide a summary of our Q3 results and provide you with guidance for Q4. We will keep our comments brief but we are prepared to address any questions you may have concerning this quarterly performance throughout the day.
NXP finished Q3 with very good performance. Revenue was up just over 4% sequentially with all business lines delivering results in line with our guidance. We drove strong non-GAAP operating margins due to a combination of solid execution by the business and operations teams, which drove better than planned non-GAAP gross margin, when combined with strong operating expense control. Taking together, this resulted in a very strong non-GAAP free cash flow.
Looking at the specifics, revenue in Q3 was $2.47 billion, an increase of just over 4% versus the prior quarter and up 62% versus the year-ago period.
Looking at the HPMS segment, revenue was $2.1 billion, an increase of just over