TI reports second quarter 2026 financial results and shareholder returns

Transcript

1. #1prepared remarks

   EX-99 2 q22026txnex99-eredgar.htm EX-99

2. #2Our cash flow from

   Revenue increased 13% sequentially and 23% from the same quarter a year ago with broad growth led by industrial, data center and automotive. •

3. #3prepared remarks

   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 | % |

4. #4prepared remarks

   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 | % | | |

5. #5prepared remarks

   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) | % |

6. #6prepared remarks

   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 …

7. #7prepared remarks

   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 stock…

8. #8prepared remarks

   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 incentiv…

9. #9prepared remarks

   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) | % |

10. #10prepared remarks

    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 | | | | 1,1…

11. #11prepared remarks

    * 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. 7

12. #12prepared remarks

    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; • Marke…

13. #13prepared remarks

    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 . 9