Texas Instruments Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 22 July 2026: press release. Guidance figures: 2 new. The quarter’s numbers.

Key takeaways

Revenue up 23% year on year: Revenue was $5,463 million, up 23% from $4,448 million a year earlier and up 13% from the first quarter's $4,825 million. Source
Diluted EPS of $2.14: Diluted EPS was $2.14 against $1.41, up 52%; it included a 5-cent benefit that was not in the company's original guidance. Source
Analog revenue and profit up: Analog revenue was $4,365 million, up 26%, and operating profit was $1,992 million, up 50%, the largest share of the quarter's results. Source
Operating cash flow up 35%: Trailing 12-month cash flow from operations was $8,667 million, up 35% from $6,439 million; the quarter's cash flow from operations was $2,703 million. Source
Free cash flow up 271% over 12 months: Trailing 12-month free cash flow was $6,534 million against $1,763 million; free cash flow was 33.6% of revenue against 10.6%. Source
Buybacks down 61% over 12 months: Stock repurchases were $27 million in the quarter and $707 million over 12 months, down 61% from $1,810 million; total cash returned over 12 months was $5,819 million. Source

“Revenue increased 13% sequentially and 23% from the same quarter a year ago with broad growth led by industrial, data center and automotive.”
Haviv Ilan, TI's chairman, president and CEO

Guidance

Area	Period	Figure	Against last quarter
Revenue Source	third quarter 2026	$5.65 billion to $6.15 billion	New
Diluted EPS Source	third quarter 2026	between $2.23 and $2.57	New

What changed from last quarter

New guidance: Third quarter 2026 revenue and EPS ranges appear in this release, replacing the second quarter ranges given in the prior release. Source

Results and growth drivers

Revenue up 23% year on year: Revenue was $5,463 million, up 23% from $4,448 million a year earlier and up 13% from the first quarter's $4,825 million. Source
Operating profit and net income rose: Operating profit was $2,310 million, up 48%, and net income was $1,980 million, up 53% from $1,295 million a year earlier. Source
Diluted EPS of $2.14: Diluted EPS was $2.14 against $1.41, up 52%; it included a 5-cent benefit that was not in the company's original guidance. Source

Segment results

Analog revenue and profit up: Analog revenue was $4,365 million, up 26%, and operating profit was $1,992 million, up 50%, the largest share of the quarter's results. Source
Embedded Processing profit up 98%: Embedded Processing revenue was $788 million, up 16%, and operating profit was $168 million, up 98% from $85 million. Source
Other segment revenue slightly lower: Other revenue was $310 million, down 2%, and operating profit was $150 million, down 2%; the Other operating profit figure includes acquisition charges. Source

“Our cash flow from operations of $8.7 billion for the trailing 12 months again underscored the strength of our business model, the quality of our product portfolio and the benefit of 300mm production.”
Haviv Ilan, TI's chairman, president and CEO

Costs and margins

Gross profit rose with revenue: Cost of revenue was $2,111 million against $1,873 million; gross profit was $3,352 million against $2,575 million, about 61.4% of revenue (computed). Source
R&D, SG&A and acquisition charges: R&D was $535 million against $527 million, SG&A was $490 million against $485 million, and acquisition charges were $17 million, with none a year earlier. Source
Other income and interest expense: Other income was $69 million against $48 million; interest and debt expense was $141 million against $133 million; the tax provision was $258 million against $183 million. Source

Balance sheet and liquidity

Cash and investments higher: Cash and cash equivalents were $3,660 million and short-term investments $3,341 million at June 30, 2026, against $3,044 million and $2,315 million a year earlier. Source
Total debt about $14.1 billion: Current debt was $1,149 million and long-term debt was $12,903 million at June 30, 2026, a total of about $14.1 billion (computed); a year earlier long-term debt was $14,043 million. Source
Inventories lower than a year earlier: Inventories were $4,605 million at June 30, 2026, against $4,812 million a year earlier, split into raw materials, work in process and finished goods. Source
Receivables higher than a year earlier: Accounts receivable, net of allowances, were $2,520 million at June 30, 2026, against $1,934 million a year earlier. Source

“Over the past 12 months we invested $3.9 billion in R&D and SG&A, invested $3.3 billion in capital expenditures and returned $5.8 billion to owners.”
Haviv Ilan, TI's chairman, president and CEO

Cash generation and free cash flow

Operating cash flow up 35%: Trailing 12-month cash flow from operations was $8,667 million, up 35% from $6,439 million; the quarter's cash flow from operations was $2,703 million. Source
Free cash flow up 271% over 12 months: Trailing 12-month free cash flow was $6,534 million against $1,763 million; free cash flow was 33.6% of revenue against 10.6%. Source
Capital spending down, CHIPS proceeds in: Capital expenditures were $514 million in the quarter against $1,305 million, and proceeds from CHIPS Act incentives were $549 million. Source
Investment tax credit cash benefit: Investment tax credit used to reduce income taxes payable was $301 million in the quarter against $203 million; the total CHIPS Act cash benefit was $850 million. Source

Capital returns to shareholders

Dividends paid up 4%: Trailing 12-month dividends paid were $5,112 million, up 4% from $4,900 million. Source
Buybacks down 61% over 12 months: Stock repurchases were $27 million in the quarter and $707 million over 12 months, down 61% from $1,810 million; total cash returned over 12 months was $5,819 million. Source
Diluted share count slightly higher: Average diluted shares were 920 million in the quarter against 912 million a year earlier; average basic shares were 912 million against 908 million. Source

Coming up, as management said on 22 July 2026

Third quarter ranges are next guidance: The next period management gave figures for is the third quarter of 2026, with revenue and EPS ranges stated in this release. Source

Figures management reported

Figure	Reported
Gross margin Source	61.4%, computed from reported gross profit of $3,352 million on revenue of $5,463 million
End-market revenue Source	growth led by industrial, data center and automotive; no dollar split given

Earlier plans management reported on

Not stated: The first quarter release gave these second quarter ranges; this release does not state how second quarter results compared with them.

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

TI reports second quarter 2026 financial results and shareholder returns

Conference call at 3:30 p.m. Central time today on ti.com/ir

DALLAS (July 22, 2026) - Texas Instruments Incorporated (TI) (Nasdaq: TXN) today reported second quarter revenue of $5.46 billion, net income of $1.98 billion and earnings per share of $2.14. Earnings per share included a 5-cent benefit that was not in the company's original guidance.

Regarding the company's performance and returns to shareholders, Haviv Ilan, TI's chairman, president and CEO, made the following comments:

"Revenue increased 13% sequentially and 23% from the same quarter a year ago with broad growth led by industrial, data center and automotive.
"Our cash flow from operations of $8.7 billion for the trailing 12 months again underscored the strength of our business model, the quality of our product portfolio and the benefit of 300mm production. Free cash flow for the same period was $6.5 billion.
"Over the past 12 months we invested $3.9 billion in R&D and SG&A, invested $3.3 billion in capital expenditures and returned $5.8 billion to owners.
"TI's third quarter outlook is for revenue in the range of $5.65 billion to $6.15 billion and earnings per share between $2.23 and $2.57."

Free cash flow, a non-GAAP financial measure, is cash flow from operations less capital expenditures, plus proceeds from U.S. CHIPS and Science Act (CHIPS Act) incentives.

Earnings summary

(In millions, except per-share amounts)	Q2 2026	Q2 2025	Change
Revenue	$5,463	$4,448	23%
Operating profit	$2,310	$1,563	48%
Net income	$1,980	$1,295	53%
Earnings per share	$2.14	$1.41	52%

Cash generation

		Trailing 12 Months
(In millions)	Q2 2026	Q2 2026	Q2 2025	Change
Cash flow from operations	$2,703	$8,667	$6,439	35%
Free cash flow	$2,738	$6,534	$1,763	271%
Free cash flow % of revenue		33.6%	10.6%

Cash return

		Trailing 12 Months
(In millions)	Q2 2026	Q2 2026	Q2 2025	Change
Dividends paid	$1,295	$5,112	$4,900	4%
Stock repurchases	$27	$707	$1,810	(61)%
Total cash returned	$1,322	$5,819	$6,710	(13)%

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Income	For Three Months Ended June 30,
(In millions, except per-share amounts)		2026		2025
Revenue	$5,463		$4,448
Cost of revenue (COR)	2,111		1,873
Gross profit	3,352		2,575
Research and development (R&D)	535		527
Selling, general and administrative (SG&A)	490		485
Acquisition charges	17		-
Operating profit	2,310		1,563
Other income (expense), net (OI&E)	69		48
Interest and debt expense	141		133
Income before income taxes	2,238		1,478
Provision for income taxes	258		183
Net income	$1,980		$1,295
Diluted earnings per common share	$2.14		$1.41
Average shares outstanding:
Basic	912		908
Diluted	920		912
Cash dividends declared per common share	$1.42		$1.36
Supplemental Information (Quarterly, except as noted)
Provision for income taxes is based on the following:
Operating taxes (calculated using the estimated annual effective tax rate)	$309		$199
Discrete tax items	(51)		(16)
Provision for income taxes (effective taxes)	$258		$183
A portion of net income is allocated to unvested restricted stock units (RSUs) on which we pay dividend equivalents. Diluted EPS is calculated using the following:
Net income	$1,980		$1,295
Income allocated to RSUs	(11)		(7)
Income allocated to common stock for diluted EPS	$1,969		$1,288

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheets	June 30,
(In millions, except par value)		2026		2025
Assets
Current assets:
Cash and cash equivalents	$3,660		$3,044
Short-term investments	3,341		2,315
Accounts receivable, net of allowances of ($22) and ($24)	2,520		1,934
Raw materials	467		402
Work in process	2,407		2,429
Finished goods	1,731		1,981
Inventories	4,605		4,812
Prepaid expenses and other current assets	1,631		2,379
Total current assets	15,757		14,484
Property, plant and equipment at cost	17,856		16,878
Accumulated depreciation	(5,945)		(4,557)
Property, plant and equipment	11,911		12,321
Goodwill	4,330		4,362
Deferred tax assets	1,017		1,096
Capitalized software licenses	314		248
Overfunded retirement plans	316		253
Other long-term assets	2,237		2,169
Total assets	$35,882		$34,933
Liabilities and stockholders' equity
Current liabilities:
Current portion of long-term debt	$1,149		$ -
Accounts payable	680		881
Accrued compensation	536		595
Income taxes payable	70		53
Accrued expenses and other liabilities	809		963
Total current liabilities	3,244		2,492
Long-term debt	12,903		14,043
Underfunded retirement plans	123		122
Deferred tax liabilities	55		63
Other long-term liabilities	1,550		1,810
Total liabilities	17,875		18,530
Stockholders' equity:
Preferred stock, $25 par value. Shares authorized - 10; none issued	-		-
Common stock, $1 par value. Shares authorized - 2,400; shares issued - 1,741	1,741		1,741
Paid-in capital	5,129		4,245
Retained earnings	53,161		52,249
Treasury common stock at cost
Shares: June 30, 2026 - 828; June 30, 2025 - 832	(41,941)		(41,676)
Accumulated other comprehensive income (loss), net of taxes (AOCI)	(83)		(156)
Total stockholders' equity	18,007		16,403
Total liabilities and stockholders' equity	$35,882		$34,933

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Cash Flows	For Three Months Ended June 30,
(In millions)		2026		2025
Cash flows from operating activities
Net income	$1,980		$1,295
Adjustments to net income:
Depreciation	547		460
Amortization of capitalized software	21		21
Stock compensation	127		129
Gains on sales of assets	(8)		-
Deferred taxes	(62)		(50)
Increase (decrease) from changes in:
Accounts receivable	(275)		(74)
Inventories	90		(125)
Prepaid expenses and other current assets	2		(9)
Accounts payable and accrued expenses	101		92
Accrued compensation	142		172
Income taxes payable	(14)		(71)
Changes in funded status of retirement plans	3		(18)
Other	49		38
Cash flows from operating activities	2,703		1,860
Cash flows from investing activities
Capital expenditures	(514)		(1,305)
Proceeds from CHIPS Act incentives	549		-
Proceeds from asset sales	32		-
Purchases of short-term investments	(2,407)		(1,192)
Proceeds from short-term investments	636		1,131
Other	2		31
Cash flows from investing activities	(1,702)		(1,335)
Cash flows from financing activities
Proceeds from issuance of long-term debt	-		1,199
Dividends paid	(1,295)		(1,235)
Stock repurchases	(27)		(302)
Proceeds from common stock transactions	445		115
Other	(13)		(21)
Cash flows from financing activities	(890)		(244)
Net change in cash and cash equivalents	111		281
Cash and cash equivalents at beginning of period	3,549		2,763
Cash and cash equivalents at end of period	$3,660		$3,044
Supplemental cash flow information
Investment tax credit (ITC) used to reduce income taxes payable	$301		$203
Proceeds from CHIPS Act incentives	549		-
Total cash benefit related to the CHIPS Act	$850		$203

Segment results

(In millions)	Q2 2026	Q2 2025	Change
Analog:
Revenue	$4,365	$3,452	26%
Operating profit	$1,992	$1,325	50%
Embedded Processing:
Revenue	$788	$679	16%
Operating profit	$168	$85	98%
Other:
Revenue	$310	$317	(2)%
Operating profit *	$150	$153	(2)%

* Includes Acquisition charges

Non-GAAP financial information

This release includes references to free cash flow and ratios based on that measure. These are financial measures that were not prepared in accordance with GAAP. Free cash flow is calculated as cash flows from operating activities (also referred to as cash flow from operations) less capital expenditures, plus proceeds from CHIPS Act incentives.

We believe that free cash flow and the associated ratios provide insight into our liquidity, our cash-generating capability and the amount of cash potentially available to return to shareholders, as well as insight into our financial performance. These non-GAAP measures are supplemental to the comparable GAAP measures.

Reconciliation to the most directly comparable GAAP measures is provided in the table below.

	For Three Months Ended June 30,		For 12 Months Ended June 30,
(In millions)		2026		2026		2025	Change
Cash flow from operations (GAAP) *	$2,703		$8,667		$6,439		35%
Capital expenditures	(514)		(3,312)		(4,936)
Proceeds from CHIPS Act incentives	549		1,179		260
Free cash flow (non-GAAP)	$2,738		$6,534		$1,763		271%
Revenue			$19,453		$16,675
Cash flow from operations as a percentage of revenue (GAAP)			44.6%		38.6%
Free cash flow as a percentage of revenue (non-GAAP)			33.6%		10.6%

* Includes cash benefits of $301 million, $433 million and $479 million from the CHIPS Act ITC used to reduce income taxes payable for the three months ended June 30, 2026, and the twelve months ended June 30, 2026 and 2025, respectively.

This release also includes references to operating taxes, a non-GAAP term we use to describe taxes calculated using the estimated annual effective tax rate, a GAAP measure that by definition does not include discrete tax items. We believe the term operating taxes helps to differentiate from effective taxes, which include discrete tax items.

Notice regarding forward-looking statements

This release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as TI or its management "believes," "expects," "anticipates," "foresees," "forecasts," "estimates" or other words or phrases of similar import. Similarly, statements herein that describe TI's business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements.

We urge you to carefully consider the following important factors that could cause actual results to differ materially from the expectations of TI or our management:

Economic, social and political conditions, and natural events in the countries in which we, our customers or our suppliers operate, including global trade policies;
Our ability to compete in products and prices in an intensely competitive industry;
Market demand for semiconductors, particularly in the industrial and automotive markets, and customer demand that differs from forecasts;
Losses or curtailments of purchases from key customers or the timing and amount of customer inventory adjustments;
Evolving cybersecurity and other threats relating to our information technology systems or those of our customers, suppliers and other third parties;
Our ability to successfully implement and realize opportunities from strategic, business and organizational changes, or our ability to realize our expectations regarding the amount and timing of associated restructuring charges and cost savings;
Our ability to develop, manufacture and market innovative products in a rapidly changing technological environment, our timely implementation of new manufacturing technologies and installation of manufacturing equipment, and our ability to realize expected returns on significant investments in manufacturing capacity;
Availability and cost of key materials, utilities, manufacturing equipment, third-party manufacturing services and manufacturing technology;
Our ability to retain, train and recruit skilled personnel and effectively manage key employee succession;
Product liability, warranty or other claims relating to our products, software, manufacturing, delivery, services, design or communications, or recalls by our customers for a product containing one of our parts;
Financial difficulties of our distributors or semiconductor distributors' promotion of competing product lines to our detriment; or disputes with current or former distributors;
Our ability to maintain or improve profit margins, including our ability to utilize our manufacturing facilities at sufficient levels to cover our fixed operating costs, in an intensely competitive and cyclical industry and changing regulatory environment;
Compliance with or changes in the complex laws, rules and regulations to which we are or may become subject, or actions of enforcement authorities, that restrict our ability to operate our business or subject us to fines, penalties or other legal liability;
Changes in tax law and accounting standards that impact the tax rate applicable to us, the jurisdictions in which profits are determined to be earned and taxed, adverse resolution of tax audits, increases in tariff rates, and the ability to realize deferred tax assets;
Our ability to maintain and enforce a strong intellectual property portfolio and maintain freedom of operation in all jurisdictions where we conduct business; or our exposure to infringement claims;
Our ability to make principal and interest payments on our debt when due;
Instability in the global credit and financial markets; and
Impairments of our non-financial assets.

For a more detailed discussion of these factors, see the Risk factors discussion in Item 1A of TI's most recent Form 10-K. The forward-looking statements included in this release are made only as of the date of this release, and we undertake no obligation to update the forward-looking statements to reflect subsequent events or circumstances. If we do update any forward-looking statement, you should not infer that we will make additional updates with respect to that statement or any other forward-looking statement.

About Texas Instruments

Texas Instruments Incorporated (Nasdaq: TXN) is a global semiconductor company that designs, manufactures and sells analog and embedded processing chips for markets such as industrial, automotive, data center, personal electronics and communications equipment. At our core, we have a passion to create a better world by making electronics more affordable through semiconductors. This passion is alive today as each generation of innovation builds upon the last to make our technology more reliable, more affordable and lower power, making it possible for semiconductors to go into electronics everywhere. Learn more at TI.com.