01—Abstract
Summary
Summary of the 10-Q filed July 29, 2025. Cited figures are marked; the original filing is the authoritative source.
Texas Instruments Inc. (TXN) reported a strong second quarter for 2025, with revenue reaching $4.45 billiona, an increase of 16% year-over-year.
This growth was primarily driven by robust demand in the Analog segment, which saw an 18% increase in revenue, and a more modest 10% increase in the Embedded Processing segment. Net income rose by 14% to $1.30 billionb, translating to a diluted Earnings Per Share (EPS) of $1.41, up from $1.22 in the prior year's second quarter. The company highlighted continued broad recovery across its key markets, particularly in industrial sectors.
Management noted that customer inventories remain at low levels, suggesting ongoing demand. Texas Instruments also benefited from increased factory loadings and improved manufacturing cost efficiencies, which helped gross profit margins expand slightly to 57.9%c. The company is navigating a dynamic macroeconomic environment, including supply chain disruptions and geopolitical factors, but its diversified portfolio and strong manufacturing base are positioning it well.
Cash flow from operations remained strong, and the company is actively managing its capital, returning significant amounts to shareholders through dividends and share repurchases. A notable development is the recent enactment of the One Big Beautiful Bill Act (OBBBA), which is expected to impact future tax rates and cash tax payments, with an initial assessment suggesting a higher effective tax rate in the near term but lower rates and cash payments in the longer term. Texas Instruments continues to invest in its manufacturing capabilities, particularly its 300mm wafer production, to support long-term free cash flow per share growth.
02—Key points
Key Highlights
- Revenue increased by 16% year-over-year to $4.45 billion, driven by strong performance in the Analog segment (+18%) and Embedded Processing segment (+10%).
- Net income grew by 14% to $1.30 billion, with diluted EPS rising to $1.41 from $1.22 in Q2 2024.
- Gross profit margin improved slightly to 57.9% from 57.8% year-over-year, benefiting from higher revenue and improved manufacturing efficiencies.
- The company generated $2.71 billion in cash flow from operating activities for the first six months of 2025, an increase from the prior year.
- Texas Instruments is primarily through an elevated capital expenditure cycle, with significant investments in 300mm wafer production facilities.
- The company returned $6.7 billion to shareholders through dividends and share repurchases over the trailing twelve months.
- The recent enactment of the One Big Beautiful Bill Act (OBBBA) is expected to impact future tax rates and cash tax payments, with ongoing evaluation by the company.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2025, Texas Instruments kept $0.29.
- Revenue$4.45B100.0%
- Cost of revenue−$1.87B42.1%
- Gross profit$2.58B57.9%
- Operating costs−$1.01B22.8%
- Operating income$1.56B35.1%
- Interest, other & tax−$268.0M6.0%
- Net income$1.29B29.1%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed July 29, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $4.45B$3.82B | +16.4% |
| Cost of Revenue | $1.87B$1.61B | +16.3% |
| Gross Profit | $2.58B$2.21B | +16.5% |
| R&D Expenses | $527.00M$498.00M | +5.8% |
| SG&A Expenses | $485.00M$465.00M | +4.3% |
| Operating Income | $1.56B$1.25B | +25.2% |
| Net Income | $1.29B$1.13B | +14.9% |
| EPS (Basic) | $1.42$1.23 | +15.4% |
| EPS (Diluted) | $1.41$1.22 | +15.6% |
| Shares Outstanding (Basic) | 908.00M912.00M | −0.4% |
| Shares Outstanding (Diluted) | 912.00M919.00M | −0.8% |
05—Questions
Frequently Asked Questions
What is the revenue and profit performance for Texas Instruments in Q2 2025?
In the second quarter of 2025, Texas Instruments reported revenue of $4.45 billion, a 16% increase compared to $3.82 billion in the same period of 2024. Net income rose by 14% to $1.30 billion from $1.13 billion a year ago, resulting in diluted Earnings Per Share (EPS) of $1.41, up from $1.22 in Q2 2024.
How did the different business segments perform?
The Analog segment was a key driver of growth, with revenue increasing by 18% to $3.45 billion. The Embedded Processing segment also saw revenue growth, up 10% to $679 million. The 'Other' segment, which includes DLP products and calculators, grew revenue by 14% to $317 million.
What is the company's outlook on capital expenditures and free cash flow?
Texas Instruments is nearing the end of a six-year elevated capital expenditure cycle focused on expanding its 300mm wafer manufacturing capacity. The company expects to benefit from the CHIPS Act incentives, including an increased investment tax credit (ITC) under the new OBBBA legislation. For the trailing twelve months ending June 30, 2025, free cash flow was $1.76 billion, an 18% increase year-over-year, reflecting the strength of its business model.
How is the new OBBBA legislation expected to impact the company?
The One Big Beautiful Bill Act (OBBBA), enacted in July 2025, introduces changes to U.S. federal tax law, including expensing for certain expenditures and an increased CHIPS Act ITC. While not impacting Q2 results, the company is evaluating its effects. Initial assessments suggest a higher effective tax rate in Q3 and full-year 2025, but a lower effective tax rate and reduced cash tax payments for 2026 and beyond. The increase in the CHIPS Act ITC to 35% is also a notable benefit for future manufacturing investments.
06—Continue