Bill Betz
Executive Vice President and Chief Financial Officer at NXP Semiconductors
Thank you, Kurt, and good morning to everyone on today's call. As Kurt has already covered the drivers of the revenue during Q4 and provided our revenue outlook for Q1, I will move to the financial highlights.
Overall, our Q4 financial performance was very good. Revenue was above the midpoint of our guidance range, and both non-GAAP gross profit and non-GAAP operating profit were above the high end of our guidance. I will first provide full-year highlights and then move to the Q4 results. Full-year revenue for 2021 was $11.06 billion, up 28% year-on-year. We generated $6.21 billion in non-GAAP gross profit and reported a non-GAAP gross margin of 56.1%, up 500 basis points year-on-year as a result of increased internal factory utilization, higher revenue levels, and product mix. Total non-GAAP operating expenses were $2.56 billion or 23.2% of the revenue, in line with our long-term model.
Total non-GAAP operating profit was $3.64 billion, up 63% year-on-year. This reflects a non-GAAP operating margin of 32.9%, up 700 basis points year-on-year and consistent with our long-term financial model. Non-GAAP interest expense was $365 million, cash taxes for ongoing operations were $276 million, non-controlling interests of $35 million and stock-based compensation, which is not included in our non-GAAP earnings was $353 million. Full-year cash flow highlights include $3.08 billion in cash flow from operations, $766 million in net capex investments, resulting in $2.31 billion of non-GAAP free cash flow or a solid 21% of revenue. During 2021, we repurchased 20.6 million shares for a total of $4.02 billion and paid cash dividends of $562 million. In total, we returned $4.58 billion to our owners, which was nearly 200% of the total non-GAAP free cash flow generated during the year.
Now moving to the details of Q4. Total revenue was $3.04 billion, up 21% year-on-year and above the midpoint of our guidance range. We generated $1.74 billion in non-GAAP gross profit and reported a non-GAAP gross margin of 57.3%, up 440 basis points year-on-year and above the upper end of our guidance range, driven by improved utilization, higher revenue and product mix. Total non-GAAP operating expenses were $681 million or 22.4%, up $118 [Phonetic] million year-on-year and up $24 million from Q3, in line with the midpoint of our guidance, and again, consistent with our long-term model.
From a total operating profit perspective, non-GAAP operating profit was $1.06 billion and non-GAAP operating margin was 34.9%, up 440 basis points year-on-year, which is above the high-end of our guidance, reflecting solid fall-through in operating leverage on the increased revenue level. Non-GAAP interest expense was $93 million with cash taxes for ongoing operations of $100 million and non-controlling interest was $8 million. Stock-based compensation which is not included in our non-GAAP earnings was $88 million.
Now I would like to turn to the changes in our cash and debt. Our total debt at the end of Q4 was $10.57 billion, up $979 million sequentially as we issued $2 billion of new notes at very attractive rates with longer durations and retired early the 2022 $1 billion notes with a rate of 3.875%. Our ending cash position was $2.83 billion, up $527 million sequentially due to the cumulative effect of the previous note debt repayment, capital returns, increased capex investments and cash generation during Q4. The resulting net debt was $7.74 billion and we exited the quarter with a trailing month adjusted EBITDA of $4.23 billion. Our ratio of net debt to trailing 12-month adjusted EBITDA at the end of Q4 was 1.8 times, and our 12-month adjusted EBITDA interest coverage was 11.6 times.
Cash flow generation of the business continues to be excellent and our balance sheet continues to be very strong. During Q4, we paid $150 million in cash dividends and repurchased $750 [Phonetic] million of our shares. Subsequent to the end of Q4, between January 1st and January 31 of 2022, we repurchased an additional $400 million of our shares via 10b5-1 program. Additionally, the NXP Board of Directors has authorized an incremental $2 billion in the company's repurchase capacity, bringing the total new authorization and remaining authorization to $3.35 billion [Phonetic]. Further, the Board has approved a 50% increase in the quarterly cash dividend, bringing the quarterly cash dividend to $84.5 per share. These actions are all aligned with our capital allocation strategy that we continue to execute to.
Turning to working capital metrics. Days of inventory was 83 days, a decrease of two days sequentially, which is below our long-term target. We continue to closely manage our distribution channel with inventory in the channel at 1.5 months, also below our long-term targets. Both metrics reflect the continuation of customer shipments at a robust pace, combined with supply challenges we continue to experience. We anticipate the coming year will be very similar to 2021, where customer demand is in excess of available supply.
Days receivable were 28 days, down three sequentially, and days payable were 87, an increase of four days versus the prior quarter as we continue to increase orders with our suppliers. Taken together, our cash conversion cycle was 24 days, an improvement of nine days versus the prior quarter, reflecting strong customer demand, solid receivables collections and positioning for customer deliveries in future periods. Cash flow from operations was $785 million and net capex was $266 million, resulting in a non-GAAP free cash flow of $519 million.
Turning now to our expectations in the first quarter. As Kurt mentioned, we anticipate Q1 revenue to be about $3.1 billion, plus or minus about $75 million. At the midpoint, this is up 21% year-on-year and 2% sequentially. We expect non-GAAP gross margin to be about 57.3%, plus or minus 50 basis points. Operating expenses are expected to be about $693 million, plus or minus about $10 million. Taken together, we see non-GAAP operating margin to be about 35% at the midpoint. We estimate non-GAAP financial expense to be about $105 million and anticipate cash tax related to ongoing operations to be about $125 million. Non-controlling interest will be about $9 million. For Q1, we suggest for modeling purposes you use an average share count of 266 million shares.
Finally, I have a few closing comments I'd like to make. First, as a housekeeping reminder, we anticipate our cash tax payments will trend towards 15% in 2022 based on the current U.S. tax legislation and laws. As can be seen in our Q1 guidance, we are expecting a slightly lower tax rate in the short-term and anticipate it will increase as we progress through the year.
Secondly, we are investing to support our profitable long-term growth. We currently have about 4 billion of long-term material supply obligations as discussed at the Investor Day. Our capex investments for 2022 will be above the high-end of our long-term capex model. These investments are focused on the combination of assured external foundry wafer supply, expansion of our internal back end capacity and a modest expansion of our internal front-end capabilities. While significant, the investments we are committed to are more than balanced by the robust level of non-cancellable, non-returnable orders from our customers.
In closing, we are very confident in our profitable growth over the intermediate to long-term, especially in the key areas of the accelerate growth drivers as we highlighted during Investor Day. Our gross profit will continue to expand and we have demonstrated solid control over our operating expenses, while consistently investing in those areas, which will enable our long-term growth. Together, this resulted in solid operating profit leverage and robust cash flow generation, and lastly, we have a proven track record of returning all excess free cash flow to our owners via our clear capital return policy.
With that, I'd like to turn it back to the operator for questions.
