TXN earnings analysis
What we found in TXN's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Texas Instruments reported a strong Q2, with $5.46 billion of revenue (+13% sequentially, +23% year over year), $2.14 of EPS, and substantial gross and operating-margin expansion to 61.4% and 42.3%, respectively. Analog was the primary driver, while Embedded Processing delivered outsized operating-profit growth; Other remained modestly down. Liquidity improved to $7.00 billion of cash and short-term investments, but the planned $7.5 billion Silicon Labs acquisition and ongoing $2 billion-$3 billion capital-spending plan are key capital-allocation considerations.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue accelerated sequentially and year over year
- Q2 revenue was $5.46 billion, up 13% sequentially from $4.83 billion and up 23% year over year from $4.45 billion. Management attributed growth to broad demand led by industrial, data center and automotive markets.
- Margins expanded sharply
- Gross margin expanded to 61.4% from 58.0% in Q1 2026 and 57.9% in Q2 2025. Operating margin rose to 42.3%, versus 37.5% sequentially and 35.1% a year ago.
- EPS increased 27% sequentially
- Diluted EPS was $2.14, up from $1.68 in Q1 2026 and $1.41 in Q2 2025. Net income increased to $1.98 billion from $1.30 billion a year earlier.
- Analog drove profit growth
- Analog revenue grew 26% year over year to $4.365 billion, while segment operating profit increased 50% to $1.992 billion and margin expanded to 45.6% from 38.4%.
- Embedded margin recovery continued
- Embedded Processing revenue increased 16% to $788 million and operating profit rose 98% to $168 million; segment margin reached 21.3%, up from 12.5%.
- Cash generation strengthened materially
- Trailing-12-month operating cash flow was $8.667 billion, up 35%, and free cash flow was $6.534 billion, up 271%. Free-cash-flow margin increased to 33.6% from 10.6%.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Silicon Labs deal adds execution and funding risk
- The planned Silicon Labs transaction carries an approximately $7.5 billion enterprise value and is not expected to close until the first half of 2027. TI recorded $17 million of Q2 acquisition charges and expects to use cash plus debt financing.
- Other segment remained in decline
- Other segment revenue declined 2% year over year to $310 million, while operating profit declined 2% to $150 million. This contrasts with 26% Analog growth and 16% Embedded Processing growth.
- Receivables and DSO increased
- Accounts receivable increased $557 million to $2.52 billion and DSO increased to 42 days from 40 days at year-end 2025, creating some working-capital exposure despite stronger sales.
- Capital intensity remains elevated
- TI expects $2 billion to $3 billion of 2026 capital expenditures, following $1.19 billion in the first six months. Management says spending beyond 2026 depends on revenue and growth expectations, leaving cash conversion sensitive to the demand cycle.
- No risk-factor update in the 10-Q
- No new or revised Item 1A risk factors were disclosed: the filing incorporates by reference the risk factors in the Form 10-K for the year ended December 31, 2025. The 10-Q separately uses a $1 million threshold for governmental environmental proceedings.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $2.14
- Gross margin
- 61.4%
- Operating margin
- 42.3%
- Segment
- Analog revenue: $4.365 billion (+26% YoY); operating profit: $1.992 billion (+50% YoY); operating margin: 45.6%.
- Segment
- Embedded Processing revenue: $788 million (+16% YoY); operating profit: $168 million (+98% YoY); operating margin: 21.3%.
- Segment
- Other revenue: $310 million (-2% YoY); operating profit: $150 million (-2% YoY); operating margin: 48.4%.
What they said about what is next.
The 10-Q provides no quarterly revenue or EPS outlook. It does state expected 2026 capital expenditures of $2 billion to $3 billion; beyond 2026, capital spending depends on revenue and growth expectations.
The filing reads better than the one before it.
What came before.
- 10-Q · April 24, 2026
- Texas Instruments reported Q1 2026 revenue of $4.83 billion (up 19% YoY, 9% sequentially) and EPS of $1.68 (vs. $1.28 a year ago). Margins expanded (gross margin 58.0%, operating margin 37.5%) and trailing-12-month cash…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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