Texas Instruments Incorporated

Texas Instruments reported Q2 revenue of $5.5 billion, up 13% sequentially and 23% year over year. Gross profit was $3.4 billion, gross margin was 61%, operating profit was $2.3 billion or 42% of revenue, and net income was $2 billion, or $2.14 per share; EPS included a $0.05 benefit from discrete tax items. Cash flow from operations was $2.7 billion, capital expenditures were $514 million, and trailing-12-month free cash flow was $6.5 billion. For Q3, TI guided revenue to $5.65 billion to $6.15 billion, EPS to $2.23 to $2.57, and an effective tax rate of about 13%.

Haviv Ilan said demand strengthened and broadened in Q2, with industrial, data center, and automotive all contributing and automotive accelerating more clearly by the end of the quarter. He emphasized that TI’s inventory and capacity investments are helping the company respond quickly, and said the setup into Q3 looks stronger than expected, with broad demand across markets. He also framed data center and industrial as multi-year opportunities supported by content growth and TI’s ability to supply from its installed manufacturing base.

Rafael Lizardi highlighted Q2 gross profit of $3.4 billion, 61% gross margin, operating expenses of $1 billion, operating profit of $2.3 billion, and EPS of $2.14. He said operating cash flow was $2.7 billion, capex was $514 million, and trailing-12-month free cash flow was $6.5 billion, including $1.6 billion of CHIPS Act incentives; TI received $549 million of ITC-related payments in the quarter. He also noted $7 billion of cash and short-term investments, $14 billion of debt at a 4% weighted-average coupon, and inventory of $4.6 billion with days down to 196. For Q3, he guided revenue to $5.65 billion to $6.15 billion, EPS to $2.23 to $2.57, and tax rate to about 13%, and said CapEx remains guided at $2 billion to $3 billion for 2026.

Analysts focused on whether the second-half outlook implies continued strength rather than the usual seasonal slowdown, and management said yes: demand is broader, not just industrial and data center, and Q3 should benefit from industrial, data center, automotive, and normal personal electronics seasonality. Questions also centered on pricing, with management saying first-half pricing was flat but increases have begun and will flow through customer-by-customer over time. On capacity and inventories, TI said loadings rose through Q2, backlog built, lead times ticked up a bit but remain competitive, and the company has clean room space and manufacturing room to support growth. Analysts also asked about data center, industrial recovery, and the Silicon Labs deal; TI said data center demand remains strong, industrial still has room to run versus 2022 peaks, and the Silicon Labs regulatory process is moving as planned for a first-half-next-year close.