01—Abstract
Summary
Summary of the 10-Q filed October 23, 2025. Cited figures are marked; the original filing is the authoritative source.
Texas Instruments (TXN) reported a solid third quarter of 2025 with revenue reaching $4.74 billiona, a 14% increase year-over-year, driven by strong demand in its Analog segment and, to a lesser extent, its Embedded Processing segment.
Net income remained stable at $1.36 billionb, resulting in diluted EPS of $1.48. The company's operational efficiency is highlighted by a 10% increase in gross profit to $2.72 billion, despite higher manufacturing costs associated with capacity expansions. Management emphasizes its strategy of maximizing long-term free cash flow per share through a strong business model, disciplined capital allocation, and efficiency.
Key financial developments include a significant increase in operating cash flow to $6.9 billionc over the trailing twelve months and $2.4 billion in free cash flow. TXN also announced a 4% increase in its quarterly cash dividend to $1.42 per share, marking 22 consecutive years of dividend increases, demonstrating a commitment to returning value to shareholders. The company is navigating a recovering semiconductor market, influenced by global macroeconomic factors and geopolitical events, while continuing to invest in its 300mm wafer production and capacity expansions.
02—Key points
Key Highlights
- Revenue grew 14% year-over-year to $4.74 billion in Q3 2025, driven by strong demand in the Analog segment.
- Net income remained steady at $1.36 billion, with diluted EPS of $1.48, slightly up from $1.47 in Q3 2024.
- Gross profit increased by 10% to $2.72 billion, though gross margin slightly decreased to 57.4% from 59.6% due to higher manufacturing costs.
- The company reported strong operating cash flow of $6.9 billion for the trailing twelve months and $2.4 billion in free cash flow.
- TXN announced a 4% increase in its quarterly dividend to $1.42 per share, continuing its track record of consecutive dividend increases.
- Restructuring charges of $85 million were recognized in Q3 2025 related to operational efficiencies and factory closures.
- The company's balance sheet shows $3.31 billion in cash and cash equivalents and $1.88 billion in short-term investments as of September 30, 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2025, Texas Instruments kept $0.29.
- Revenue$4.74B100.0%
- Cost of revenue−$2.02B42.6%
- Gross profit$2.72B57.4%
- Operating costs−$1.06B22.4%
- Operating income$1.66B35.1%
- Interest, other & tax−$299.0M6.3%
- Net income$1.36B28.8%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed October 23, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $4.74B$4.15B | +14.2% |
| Cost of Revenue | $2.02B$1.68B | +20.4% |
| Gross Profit | $2.72B$2.47B | +10.1% |
| R&D Expenses | $518.00M$492.00M | +5.3% |
| SG&A Expenses | $457.00M$428.00M | +6.8% |
| Operating Income | $1.66B$1.55B | +7.0% |
| Net Income | $1.36B$1.36B | +0.1% |
| EPS (Basic) | $1.49$1.48 | +0.7% |
| EPS (Diluted) | $1.48$1.47 | +0.7% |
| Shares Outstanding (Basic) | 909.00M913.00M | −0.4% |
| Shares Outstanding (Diluted) | 914.00M920.00M | −0.7% |
05—Questions
Frequently Asked Questions
What was the primary driver of Texas Instruments' revenue growth in Q3 2025?
The primary driver of Texas Instruments' revenue growth in Q3 2025 was increased demand in its Analog segment, which experienced a 16% year-over-year increase in revenue. The Embedded Processing segment also contributed with a 9% increase.
How did the company's profitability fare in the quarter, and what factors impacted it?
Gross profit increased by 10% to $2.72 billion, but gross margin as a percentage of revenue slightly decreased to 57.4% from 59.6% in the prior year. This was due to higher manufacturing costs associated with planned capacity expansions, partially offset by higher revenue.
What is the company's outlook on free cash flow and shareholder returns?
Texas Instruments reported strong free cash flow of $2.4 billion for the trailing twelve months and emphasized its strategy to maximize long-term free cash flow per share. The company also announced a 4% increase in its quarterly cash dividend to $1.42 per share, demonstrating a continued commitment to returning capital to shareholders.
What are the implications of the "One Big Beautiful Bill Act" (OBBBA) on the company's tax situation?
The OBBBA, enacted in July 2025, is expected to result in a higher effective tax rate in the third quarter and full year 2025. However, for 2026 and beyond, the company anticipates a lower effective tax rate than previously expected, and lower tax-related cash payments for the next several years.
06—Continue