01—Abstract
Summary
Summary of the 10-K filed February 3, 2023. Cited figures are marked; the original filing is the authoritative source.
Texas Instruments Inc. (TXN) reported robust performance in its 2022 10-K filing, driven by its core Analog and Embedded Processing segments.
The company generated $20.03 billiona in revenue, marking a 9.2% increase year-over-year, largely attributed to higher prices and a favorable product mix. Management's strategy remains focused on maximizing long-term free cash flow per share growth through a strong business model with four competitive advantages, disciplined capital allocation, and operational efficiency. Despite facing a market correction in 2022 and anticipating continued weakness into 2023, TI demonstrated strong profitability with a gross margin of 68.8% and operating profit of 50.6% of revenue.
The company returned significant capital to shareholders through dividends and stock repurchases, totaling $7.91 billionb. Investments in manufacturing capacity, particularly in 300-mm wafer fabrication, are ongoing to support anticipated long-term growth in industrial and automotive markets.
02—Key points
Key Highlights
- Total revenue for 2022 reached $20.03 billion, an increase of 9.2% from 2021, driven by Analog and Embedded Processing segments.
- Gross profit margin improved to 68.8% in 2022 from 67.5% in 2021, reflecting strong pricing and product mix.
- Operating profit margin was strong at 50.6% of revenue in 2022.
- Free cash flow was $5.92 billion, representing 29.6% of revenue, demonstrating robust cash generation.
- The company returned $7.91 billion to shareholders in 2022 through dividends ($4.30 billion) and stock repurchases ($3.62 billion).
- Significant investments in manufacturing capacity are underway, including new 300-mm wafer fabrication facilities, to support long-term growth, particularly in industrial and automotive markets.
- Despite a market correction in 2022 and expected continued weakness in 2023, the company's strategic focus on analog and embedded processing and its competitive advantages provide a strong foundation.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Texas Instruments kept $0.44.
- Revenue$20.03B100.0%
- Cost of revenue−$6.26B31.2%
- Gross profit$13.77B68.8%
- Operating costs−$3.63B18.1%
- Operating income$10.14B50.6%
- Interest, other & tax−$1.39B6.9%
- Net income$8.75B43.7%
Where FY2022 revenue went
$20.03B- Net income: $8.75B, 44% of revenue
- Cost of revenue: $6.26B, 31% of revenue
- R&D: $1.67B, 8.3% of revenue
- SG&A: $1.70B, 8.5% of revenue
- Other operating costs: $257.0M, 1.3% of revenue
- Interest, other & tax: $1.39B, 6.9% of revenue
Kept 44% as net incomeOther operating costs $257.0M · 1.3%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 3, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $20.03B$18.34B | +9.2% |
| Cost of Revenue | $6.26B$5.97B | +4.8% |
| Gross Profit | $13.77B$12.38B | +11.3% |
| R&D Expenses | $1.67B$1.55B | +7.5% |
| SG&A Expenses | $1.70B$1.67B | +2.3% |
| Operating Income | $10.14B$8.96B | +13.2% |
| Net Income | $8.75B$7.77B | +12.6% |
| EPS (Basic) | $9.51$8.38 | +13.5% |
| EPS (Diluted) | $9.41$8.26 | +13.9% |
| Shares Outstanding (Basic) | 916.00M923.00M | −0.8% |
| Shares Outstanding (Diluted) | 926.00M936.00M | −1.1% |
05—Questions
Frequently Asked Questions
What are Texas Instruments' primary business segments and their performance in 2022?
Texas Instruments' primary business segments are Analog and Embedded Processing. In 2022, the Analog segment generated $15.36 billion in revenue (77% of total), showing a 9% increase, while the Embedded Processing segment generated $3.26 billion (16% of total), an increase of 7%.
How is Texas Instruments returning capital to shareholders?
Texas Instruments returned $7.91 billion to shareholders in 2022, comprised of $4.30 billion in dividends and $3.62 billion in stock repurchases. The company's strategy includes returning significant amounts of cash to owners through these means.
What is Texas Instruments' strategy for long-term value creation?
TI's strategy focuses on maximizing long-term free cash flow per share growth. This is achieved through a business model built on four competitive advantages (manufacturing/technology, broad product portfolio, market channel reach, product/market/customer diversity), disciplined capital allocation for R&D, capacity expansion, and returning cash to shareholders, and a continuous pursuit of efficiency.
What are the key end markets for Texas Instruments' products?
TI's products serve six main end markets: industrial (40% of revenue), automotive (25% of revenue), personal electronics (20% of revenue), communications equipment (7% of revenue), enterprise systems (6% of revenue), and other (2% of revenue). The company places additional strategic emphasis on the industrial and automotive markets for long-term growth opportunities.
06—Continue