10-QPeriod: Q3 FY2024

TEXAS INSTRUMENTS INC Quarterly Report for Q3 Ended Sep 30, 2024

Filed October 23, 2024For Securities:TXN

Summary

Texas Instruments Inc. (TXN) reported its third-quarter and year-to-date results for the period ending September 29, 2024. For the third quarter, revenue stood at $4.15 billion, a decrease of 8% year-over-year, while net income was $1.36 billion, translating to diluted EPS of $1.47. This marks a decline from the prior year's comparable period, primarily driven by lower revenues in the Embedded Processing segment, which saw a 27% decrease year-over-year, and a 4% decrease in the Analog segment. For the nine-month period, revenue declined 13% to $11.63 billion, with net income falling to $3.59 billion and diluted EPS at $3.89. The company highlights a strong cash flow from operations, demonstrating the resilience of its business model and manufacturing capabilities. Despite revenue headwinds, TXN continues to invest in its long-term competitive advantages, including significant capital expenditures for manufacturing capacity expansion and a commitment to returning capital to shareholders through dividends and share repurchases. The company also noted a positive impact from the U.S. CHIPS and Science Act, contributing to its financial position.

Financial Highlights

52 data points
Beta

Revenue

$4.15B

59.6% Gross Margin

Net Income

$1.36B

32.8% Net Margin

EPS (Diluted)

$1.47

Total Assets

$35.32B

Cash & Equivalents

$2.59B

Free Cash Flow

$416.00M

Financial Statements
Beta
Revenue$4.15B
Cost of Revenue$1.68B
Gross Profit$2.47B
R&D Expenses$492.00M
SG&A Expenses$428.00M
Operating Income$1.55B
Net Income$1.36B
EPS (Basic)$1.48
EPS (Diluted)$1.47
Shares Outstanding (Basic)913.00M
Shares Outstanding (Diluted)920.00M

Key Highlights

  • 1Third-quarter revenue was $4.15 billion, down 8% year-over-year, primarily due to declines in Embedded Processing (-27%) and Analog (-4%) segments.
  • 2Net income for the third quarter was $1.36 billion, resulting in diluted EPS of $1.47, compared to $1.85 in the prior year's quarter.
  • 3For the first nine months of 2024, revenue decreased by 13% to $11.63 billion, with net income falling to $3.59 billion.
  • 4The company reported strong cash flow from operations of $6.2 billion for the trailing twelve months, underscoring the strength of its business model.
  • 5Free cash flow for the trailing twelve months was $1.5 billion.
  • 6TXN continues significant capital expenditures, investing $3.63 billion in the first nine months of 2024, primarily for manufacturing capacity expansion.
  • 7The company announced a 5% dividend increase, marking 21 consecutive years of dividend increases, and continued its share repurchase program.

Frequently Asked Questions

The revenue decline in the third quarter was primarily driven by lower revenues in the Embedded Processing segment, which decreased by 27% year-over-year, and a 4% decrease in the Analog segment. Management attributes these declines to changes in customer demand and product mix.

Texas Instruments continues to make substantial investments in capital expenditures, totaling $3.63 billion in the first nine months of 2024, largely for expanding its semiconductor manufacturing capacity. The company also expects significant benefits from the U.S. CHIPS and Science Act, including direct funding and investment tax credits.

Texas Instruments remains committed to returning capital to shareholders. This includes a consistent increase in dividends, with a 5% increase announced for the current year, marking 21 consecutive years of dividend increases. The company also actively engages in share repurchases, having spent $392 million in the first nine months of 2024.

The U.S. CHIPS and Science Act is providing financial benefits to Texas Instruments. For the first nine months of 2024, the company received a cash benefit of $532 million from the investment tax credit and has signed a preliminary memorandum of terms for up to $1.6 billion in direct funding. These benefits support the company's investment in U.S. manufacturing.