Texas Instruments (TXN) Beats Revenue Expectations in Q2

Shares down in After hours 199.65 −15.27 (7.10%)

Financial Results (GAAP)

• Revenue: $4.45B
  ↳ Beat consensus ($4.32B), +16% YoY, +9% QoQ
• EPS: $1.41
  ↳ Includes $0.02 benefit not in guidance; +16% YoY
• Net Income: $1.30B
• Operating Margin: 35.1% (+240bps YoY)

Segment Performance (YoY)

• Analog: $3.45B (+18%) | Op. profit: $1.33B (+27%)
• Embedded Processing: $679M (+10%) | Op. profit: $85M (+6%)
• Other: $317M (+14%) | Op. profit: $153M (+26%)

Cash Flow & Capital Return (TTM)

• Operating Cash Flow: $6.4B
• Free Cash Flow: $1.76B (+18% YoY)
• CapEx: $4.94B
• Cash Returned to Shareholders: $6.71B
  • Dividends: $4.9B
  • Buybacks: $1.81B

Q3 2025 Outlook

• Revenue: $4.45B–$4.80B
• EPS: $1.36–$1.60
• Guide excludes effects from new U.S. tax law changes

Key Observations:

• Growth driven by continued industrial demand recovery.
• Margins expanded despite higher CapEx; operational leverage kicking in.
• However, the flat sequential revenue guide midpoint ($4.63B) and limited EPS upside weighed on sentiment.

Peer & Context:

• TXN’s +16% YoY revenue compares favorably to analog peers like $ADI and $MCHP, which saw more modest growth.
• Investor focus remains on long-term industrial trends and ability to monetize heavy CapEx investments.

TI delivered strong Q2 growth, but investors are looking for more confidence in forward demand.