Texas Instruments Incorporated

Third quarter revenue was $6.1 billion, up 11% sequentially and 28% year over year. Gross profit was $3.9 billion, or 64% of revenue, with gross margin up 280 basis points sequentially. Operating profit was $2.9 billion, or 47% of revenue, up 73% from the year-ago quarter. Net income was $2.4 billion, or $2.62 per share; EPS included a $0.01 reduction from discrete tax items. Cash flow from operations was $3.4 billion, capital expenditures were $463 million, and free cash flow was $8.4 billion on a trailing 12-month basis, including $1.6 billion of CHIPS Act incentives. For Q4, TI expects revenue of $5.8 billion to $6.3 billion, EPS of $2.45 to $2.79, and an effective tax rate of about 13%.

Haviv Ilan described the quarter as evidence of broad demand recovery plus secular content growth, emphasizing that TI’s investments position it to ramp factories and support customers. He highlighted particularly strong momentum in industrial, automotive, and data center, and said industrial has now reached a new revenue peak above its prior 2022 level. His tone was confident and constructive, with repeated emphasis on TI’s manufacturing footprint, portfolio breadth, and ability to serve geopolitically dependable supply needs.

Julie Knecht focused on the quarter’s profitability, cash generation, and capital returns. She cited $3.9 billion of gross profit, 64% gross margin, $2.9 billion of operating profit, $3.4 billion of operating cash flow, $463 million of capex, and $8.4 billion of trailing-12-month free cash flow, plus $1.6 billion of CHIPS Act incentives. She also noted $1.3 billion in quarterly dividends, a 7% dividend increase to $1.52 per share, $500 million of debt repayment, $8.1 billion of cash and short-term investments, $13.65 billion of total debt, and inventory of $4.7 billion with days down to 194.

Analysts pressed on whether the strong incremental gross margin was sustainable, and management said the Q3 margin benefit was mostly higher revenue, with some help from pricing loadings and mix; they pointed to a longer-term model of 75% to 85% incremental gross margin ex-depreciation. Questions also focused on lead times, backlog, and whether supply constraints could become a bottleneck; management said lead times have ticked higher and backlog matches demand, but TI is still competitive and has room to expand capacity. On pricing, Haviv said second-half 2026 pricing moved up modestly, mainly in analog, and that 2027 pricing discussions are underway, with more detail expected on the January call.