01—Abstract
Summary
Summary of the 8-K filed July 22, 2026. Cited figures are marked; the original filing is the authoritative source.
Texas Instruments reported second-quarter 2026 revenue of $5.46 billiona, up 23% year over year and 13% sequentially, with net income of $1.98 billion (up 53%) and diluted EPS of $2.14 (up 52%).
Growth was broad, led by industrial, data center, and automotive, and the Analog segment drove most of it with revenue up 26%b and operating profit up 50%. Gross margin rose to roughly 61.4% from about 57.9% a year earlier, and operating margin to roughly 42.3% from about 35.1%. EPS included a 5-cent benefit that was not in the original guidance.
Management guided third-quarter revenue to $5.65 billion to $6.15 billionc and EPS to $2.23 to $2.57. Cash generation was strong on a trailing-twelve-month basis, with cash flow from operations of $8.67 billion and free cash flow of $6.53 billion, up from $1.76 billion a year earlier. Investors should note that the company's free cash flow definition adds back CHIPS Act incentive proceeds, which contributed $1.18 billion over the trailing twelve months and $549 million in the quarter.
Excluding those proceeds, trailing free cash flow is about $5.36 billiond. Operating cash flow also includes CHIPS-related tax benefits of $301 million in the quarter. Capital expenditures fell sharply to $514 million in Q2 from $1.31 billion a year earlier, which is a major driver of the free cash flow improvement.
Shareholder returns were tilted toward dividends. The quarterly dividend was raised to $1.42 per share from $1.36, and dividends paid rose 4% on a trailing basis. Stock repurchases dropped to $27 million in the quarter from $302 million a year earlier, and trailing repurchases fell 61%.
Total debt was about $14.05 billion at quarter end against cash and short-term investments of about $7.0 billion. Accounts receivable grew 30% year over year, faster than revenue, which is worth monitoring.
02—Key points
Key Highlights
- Q2 2026 revenue of $5.46B rose 23% YoY and 13% sequentially, led by Analog (+26% YoY) and broad growth across industrial, data center, and automotive.
- Gross margin expanded to about 61.4% from 57.9%, and operating profit rose 48% to $2.31B, reflecting strong pricing and volume leverage on a largely fixed cost base.
- Net income of $1.98B (+53%) and diluted EPS of $2.14 (+52%); EPS included a 5-cent benefit not in original guidance.
- Trailing-twelve-month free cash flow of $6.53B (33.6% of revenue in Q2) rose sharply from $1.76B, but it includes $1.18B of CHIPS Act proceeds; ex-CHIPS, it is about $5.36B.
- Capital expenditures fell to $514M in Q2 from $1.31B a year earlier, while trailing capex was $3.31B versus $4.94B.
- Q3 2026 guidance calls for revenue of $5.65B to $6.15B and EPS of $2.23 to $2.57, implying continued sequential growth.
- Dividend raised to $1.42 per share from $1.36 (+4%), while buybacks slowed sharply to $27M in Q2 from $302M a year earlier.
03—Questions
Frequently Asked Questions
How strong is Texas Instruments' underlying free cash flow after the CHIPS Act benefits?
Reported trailing free cash flow of $6.53B includes $1.18B of CHIPS Act incentive proceeds. Excluding those, trailing free cash flow is roughly $5.36B, still a large increase from the prior year's comparable base. Q2 operating cash flow also includes $301M of CHIPS-related tax benefits, so investors should treat the reported figures as flattered by government incentives.
Why did share repurchases fall so sharply, and what does it signal?
Stock repurchases were $27M in Q2 2026 versus $302M in Q2 2025, and trailing repurchases fell 61% to about $707M. The filing does not explain the reduction. With cash and short-term investments of about $7.0B against roughly $14.05B of debt, and capital spending declining, the company appears to be prioritizing dividends and balance-sheet flexibility. Investors may want to watch management commentary for signals on the buyback program.
Is the Q2 earnings beat sustainable given the Q3 guidance?
Q3 guidance of $5.65B to $6.15B in revenue and $2.23 to $2.57 in EPS implies further growth from Q2's $5.46B and $2.14. The midpoint of the revenue range is about $5.9B, roughly 8% above Q2. Because EPS included a one-time 5-cent benefit not in original guidance, underlying earnings momentum depends on the company delivering within the new range, which the filing does not guarantee.
Are there any balance sheet or working capital concerns?
Accounts receivable rose to $2.52B from $1.93B, a 30% increase that outpaced the 23% revenue growth. Inventories declined to $4.61B from $4.81B, which is constructive. Total debt is about $14.05B, including a $1.15B current portion, and cash plus short-term investments total about $7.0B. The filing does not disclose receivable aging, so the cause of the receivables increase is unclear.
04—Continue