01—Abstract
Summary
Summary of the 10-Q filed July 24, 2026. Cited figures are marked; the original filing is the authoritative source.
Texas Instruments Inc. (TXN) reported a strong second quarter for 2026, demonstrating significant year-over-year growth in revenue and net income.
Revenue reached $5.46 billiona, a 23% increase compared to the prior year, driven by robust demand in its core Analog and Embedded Processing segments, with notable strength in industrial, data center, and automotive markets. Profitability also saw substantial improvement, with gross profit rising 30% and operating profit growing by 50% year-over-year in the Analog segment and a remarkable 98% in Embedded Processing.
The company's strategic focus on manufacturing efficiency and its competitive advantages continue to support strong financial performance. TXN also provided an update on its pending acquisition of Silicon Labs, reaffirming the deal size and expected closing timeline, while also detailing significant investments in capital expenditures and capital returns to shareholders.
02—Key points
Key Highlights
- Revenue increased by 23% year-over-year to $5.46 billion, driven by broad market demand, particularly in industrial, data center, and automotive sectors.
- Gross profit margin improved to 61.4% from 57.9% year-over-year, reflecting increased revenue and manufacturing efficiencies.
- Operating profit margin expanded to 42.3% from 35.1%, showcasing strong operational leverage.
- The Analog segment reported a 26% revenue increase and a 50% rise in operating profit, while Embedded Processing saw a 16% revenue increase and a 98% surge in operating profit.
- The company maintained a strong liquidity position with $7.00 billion in total cash and short-term investments as of June 30, 2026.
- Free cash flow for the trailing twelve months was $6.53 billion, demonstrating robust cash generation capabilities.
- Texas Instruments continues to advance its pending acquisition of Silicon Labs, incurring $17 million in acquisition charges during the quarter and confirming the deal is on track for expected closing in the first half of 2027.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Texas Instruments kept $0.36.
- Revenue$5.46B100.0%
- Cost of revenue−$2.11B38.6%
- Gross profit$3.35B61.4%
- Operating costs−$1.04B19.1%
- Operating income$2.31B42.3%
- Interest, other & tax−$330.0M6.0%
- Net income$1.98B36.2%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed July 24, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $5.46B$4.45B | +22.8% |
| Cost of Revenue | $2.11B$1.87B | +12.7% |
| Gross Profit | $3.35B$2.58B | +30.2% |
| R&D Expenses | $535.00M$527.00M | +1.5% |
| SG&A Expenses | $490.00M$485.00M | +1.0% |
| Operating Income | $2.31B$1.56B | +47.8% |
| Net Income | $1.98B$1.29B | +52.9% |
| EPS (Basic) | $2.16$1.42 | +52.1% |
| EPS (Diluted) | $2.14$1.41 | +51.8% |
| Shares Outstanding (Basic) | 912.00M908.00M | +0.4% |
| Shares Outstanding (Diluted) | 920.00M912.00M | +0.9% |
05—Questions
Frequently Asked Questions
What were the main drivers of revenue growth in the second quarter of 2026?
Revenue growth was primarily driven by increased customer demand across key end markets, including industrial, data center, and automotive sectors. Both the Analog and Embedded Processing segments experienced significant demand increases, contributing to the overall 23% year-over-year revenue growth.
How did the company's profitability metrics perform compared to the previous year?
Profitability saw significant improvement. Gross profit increased by 30% year-over-year, with the gross profit margin expanding to 61.4% from 57.9%. Operating profit also surged, with the overall operating profit margin increasing to 42.3% from 35.1%, reflecting strong operational leverage and efficient cost management.
What is the status of the acquisition of Silicon Labs?
Texas Instruments is on track with its definitive agreement to acquire Silicon Labs for approximately $7.5 billion in an all-cash transaction. The company incurred $17 million in acquisition charges during the quarter and anticipates the closing of the transaction in the first half of 2027, subject to regulatory approvals and customary closing conditions.
How is the company managing its liquidity and capital resources?
The company maintains a strong liquidity position with $7.00 billion in total cash and short-term investments as of June 30, 2026. Cash flow from operations was robust, reaching $4.22 billion in the first six months of 2026. The company also continues to benefit from the U.S. CHIPS and Science Act, which provides significant incentives. Free cash flow for the trailing twelve months was $6.53 billion.
06—Continue