TEXAS INSTRUMENTS INC (TXN) · Material Event (8-K) SEC Filing

EX-99 2 q22026txnex99-eredgar.htm EX-99 DocumentExhibit 99TI reports second quarter 2026 financial results and shareholder returnsConference call at 3 30 p.m. Central time today on ti.com ir DALLAS (July 22, 2026) Texas Instruments Incorporated (TI) (Nasdaq TXN) today reported second quarter revenue of $5.46 billion, net income of $1.98 billion and earnings per share of $2.14. Earnings per share included a 5-cent benefit that was not in the company's original guidance.Regarding the company's performance and returns to shareholders, Haviv Ilan, TI's chairman, president and CEO, made the following comments Revenue increased 13% sequentially and 23% from the same quarter a year ago with broad growth led by industrial, data center and automotive. Our cash flow from operations of $8.7 billion for the trailing 12 months again underscored the strength of our business model, the quality of our product portfolio and the benefit of 300mm production. Free cash flow for the same period was $6.5 billion. Over the past 12 months we invested $3.9 billion in R D and SG A, invested $3.3 billion in capital expenditures and returned $5.8 billion to owners. TI's third quarter outlook is for revenue in the range of $5.65 billion to $6.15 billion and earnings per share between $2.23 and $2.57. 1 Free cash flow, a non-GAAP financial measure, is cash flow from operations less capital expenditures, plus proceeds from U.S. CHIPS and Science Act (CHIPS Act) incentives.Earnings summary (In millions, except per-share amounts) Q2 2026 Q2 2025 Change Revenue $ 5,463 $ 4,448 23 % Operating profit $ 2,310 $ 1,563 48 % Net income $ 1,980 $ 1,295 53 % Earnings per share $ 2.14 $ 1.41 52 % Cash generation Trailing 12 Months (In millions) Q2 2026 Q2 2026 Q2 2025 Change Cash flow from operations $ 2,703 $ 8,667 $ 6,439 35 % Free cash flow $ 2,738 $ 6,534 $ 1,763 271 % Free cash flow % of revenue 33.6 % 10.6 % Cash return Trailing 12 Months (In millions) Q2 2026 Q2 2026 Q2 2025 Change Dividends paid $ 1,295 $ 5,112 $ 4,900 4 % Stock repurchases $ 27 $ 707 $ 1,810 (61) % Total cash returned $ 1,322 $ 5,819 $ 6,710 (13) % 2 TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES Consolidated Statements of Income For Three Months EndedJune 30, (In millions, except per-share amounts) 2026 2025 Revenue $ 5,463 $ 4,448 Cost of revenue (COR) 2,111 1,873 Gross profit 3,352 2,575 Research and development (R D) 535 527 Selling, general and administrative (SG A) 490 485 Acquisition charges 17 Operating profit 2,310 1,563 Other income (expense), net (OI E) 69 48 Interest and debt expense 141 133 Income before income taxes 2,238 1,478 Provision for income taxes 258 183 Net income $ 1,980 $ 1,295 Diluted earnings per common share $ 2.14 $ 1.41 Average shares outstanding Basic 912 908 Diluted 920 912 Cash dividends declared per common share $ 1.42 $ 1.36 Supplemental Information(Quarterly, except as noted) Provision for income taxes is based on the following Operating taxes (calculated using the estimated annual effective tax rate) $ 309 $ 199 Discrete tax items (51) (16) Provision for income taxes (effective taxes) $ 258 $ 183 A portion of net income is allocated to unvested restricted stock units (RSUs) on which we pay dividend equivalents. Diluted EPS is calculated using the following Net income $ 1,980 $ 1,295 Income allocated to RSUs (11) (7) Income allocated to common stock for diluted EPS $ 1,969 $ 1,288 3 TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES Consolidated Balance Sheets June 30, (In millions, except par value) 2026 2025 Assets Current assets Cash and cash equivalents $ 3,660 $ 3,044 Short-term investments 3,341 2,315 Accounts receivable, net of allowances of ($22) and ($24) 2,520 1,934 Raw materials 467 402 Work in process 2,407 2,429 Finished goods 1,731 1,981 Inventories 4,605 4,812 Prepaid expenses and other current assets 1,631 2,379 Total current assets 15,757 14,484 Property, plant and equipment at cost 17,856 16,878 Accumulated depreciation (5,945) (4,557) Property, plant and equipment 11,911 12,321 Goodwill 4,330 4,362 Deferred tax assets 1,017 1,096 Capitalized software licenses 314 248 Overfunded retirement plans 316 253 Other long-term assets 2,237 2,169 Total assets $ 35,882 $ 34,933 Liabilities and stockholders' equity Current liabilities Current portion of long-term debt $ 1,149 $ Accounts payable 680 881 Accrued compensation 536 595 Income taxes payable 70 53 Accrued expenses and other liabilities 809 963 Total current liabilities 3,244 2,492 Long-term debt 12,903 14,043 Underfunded retirement plans 123 122 Deferred tax liabilities 55 63 Other long-term liabilities 1,550 1,810 Total liabilities 17,875 18,530 Stockholders' equity Preferred stock, $25 par value. Shares authorized 10 none issued Common stock, $1 par value. Shares authorized 2,400 shares issued 1,741 1,741 1,741 Paid-in capital 5,129 4,245 Retained earnings 53,161 52,249 Treasury common stock at cost Shares June 30, 2026 828 June 30, 2025 832 (41,941) (41,676) Accumulated other comprehensive income (loss), net of taxes (AOCI) (83) (156) Total stockholders' equity 18,007 16,403 Total liabilities and stockholders' equity $ 35,882 $ 34,933 4 TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES Consolidated Statements of Cash Flows For Three Months EndedJune 30, (In millions) 2026 2025 Cash flows from operating activities Net income $ 1,980 $ 1,295 Adjustments to net income Depreciation 547 460 Amortization of capitalized software 21 21 Stock compensation 127 129 Gains on sales of assets (8) Deferred taxes (62) (50) Increase (decrease) from changes in Accounts receivable (275) (74) Inventories 90 (125) Prepaid expenses and other current assets 2 (9) Accounts payable and accrued expenses 101 92 Accrued compensation 142 172 Income taxes payable (14) (71) Changes in funded status of retirement plans 3 (18) Other 49 38 Cash flows from operating activities 2,703 1,860 Cash flows from investing activities Capital expenditures (514) (1,305) Proceeds from CHIPS Act incentives 549 Proceeds from asset sales 32 Purchases of short-term investments (2,407) (1,192) Proceeds from short-term investments 636 1,131 Other 2 31 Cash flows from investing activities (1,702) (1,335) Cash flows from financing activities Proceeds from issuance of long-term debt 1,199 Dividends paid (1,295) (1,235) Stock repurchases (27) (302) Proceeds from common stock transactions 445 115 Other (13) (21) Cash flows from financing activities (890) (244) Net change in cash and cash equivalents 111 281 Cash and cash equivalents at beginning of period 3,549 2,763 Cash and cash equivalents at end of period $ 3,660 $ 3,044 Supplemental cash flow information Investment tax credit (ITC) used to reduce income taxes payable $ 301 $ 203 Proceeds from CHIPS Act incentives 549 Total cash benefit related to the CHIPS Act $ 850 $ 203 5 Segment results (In millions) Q2 2026 Q2 2025 Change Analog Revenue $ 4,365 $ 3,452 26 % Operating profit $ 1,992 $ 1,325 50 % Embedded Processing Revenue $ 788 $ 679 16 % Operating profit $ 168 $ 85 98 % Other Revenue $ 310 $ 317 (2) % Operating profit * $ 150 $ 153 (2) % * Includes Acquisition charges 6 Non-GAAP financial informationThis release includes references to free cash flow and ratios based on that measure. These are financial measures that were not prepared in accordance with GAAP. Free cash flow is calculated as cash flows from operating activities (also referred to as cash flow from operations) less capital expenditures, plus proceeds from CHIPS Act incentives.We believe that free cash flow and the associated ratios provide insight into our liquidity, our cash-generating capability and the amount of cash potentially available to return to shareholders, as well as insight into our financial performance. These non-GAAP measures are supplemental to the comparable GAAP measures.Reconciliation to the most directly comparable GAAP measures is provided in the table below. For Three Months EndedJune 30, For 12 MonthsEndedJune 30, (In millions) 2026 2026 2025 Change Cash flow from operations (GAAP) * $ 2,703 $ 8,667 $ 6,439 35 % Capital expenditures (514) (3,312) (4,936) Proceeds from CHIPS Act incentives 549 1,179 260 Free cash flow (non-GAAP) $ 2,738 $ 6,534 $ 1,763 271 % Revenue $ 19,453 $ 16,675 Cash flow from operations as a percentage of revenue (GAAP) 44.6 % 38.6 % Free cash flow as a percentage of revenue (non-GAAP) 33.6 % 10.6 % * Includes cash benefits of $301 million, $433 million and $479 million from the CHIPS Act ITC used to reduce income taxes payable for the three months ended June 30, 2026, and the twelve months ended June 30, 2026 and 2025, respectively.This release also includes references to operating taxes, a non-GAAP term we use to describe taxes calculated using the estimated annual effective tax rate, a GAAP measure that by definition does not include discrete tax items. We believe the term operating taxes helps to differentiate from effective taxes, which include discrete tax items. 7 Notice regarding forward-looking statementsThis release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as TI or its management believes, expects, anticipates, foresees, forecasts, estimates or other words or phrases of similar import. Similarly, statements herein that describe TI's business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements.We urge you to carefully consider the following important factors that could cause actual results to differ materially from the expectations of TI or our management Economic, social and political conditions, and natural events in the countries in which we, our customers or our suppliers operate, including global trade policies Our ability to compete in products and prices in an intensely competitive industry Market demand for semiconductors, particularly in the industrial and automotive markets, and customer demand that differs from forecasts Losses or curtailments of purchases from key customers or the timing and amount of customer inventory adjustments Evolving cybersecurity and other threats relating to our information technology systems or those of our customers, suppliers and other third parties Our ability to successfully implement and realize opportunities from strategic, business and organizational changes, or our ability to realize our expectations regarding the amount and timing of associated restructuring charges and cost savings Our ability to develop, manufacture and market innovative products in a rapidly changing technological environment, our timely implementation of new manufacturing technologies and installation of manufacturing equipment, and our ability to realize expected returns on significant investments in manufacturing capacity Availability and cost of key materials, utilities, manufacturing equipment, third-party manufacturing services and manufacturing technology Our ability to retain, train and recruit skilled personnel and effectively manage key employee succession Product liability, warranty or other claims relating to our products, software, manufacturing, delivery, services, design or communications, or recalls by our customers for a product containing one of our parts Financial difficulties of our distributors or semiconductor distributors' promotion of competing product lines to our detriment or disputes with current or former distributors Our ability to maintain or improve profit margins, including our ability to utilize our manufacturing facilities at sufficient levels to cover our fixed operating costs, in an intensely competitive and cyclical industry and changing regulatory environment Compliance with or changes in the complex laws, rules and regulations to which we are or may become subject, or actions of enforcement authorities, that restrict our ability to operate our business or subject us to fines, penalties or other legal liability Changes in tax law and accounting standards that impact the tax rate applicable to us, the jurisdictions in which profits are determined to be earned and taxed, adverse resolution of tax audits, increases in tariff rates, and the ability to realize deferred tax assets Our ability to maintain and enforce a strong intellectual property portfolio and maintain freedom of operation in all jurisdictions where we conduct business or our exposure to infringement claims Our ability to make principal and interest payments on our debt when due Instability in the global credit and financial markets and Impairments of our non-financial assets.For a more detailed discussion of these factors, see the Risk factors discussion in Item 1A of TI's most recent Form 10-K. The forward-looking statements included in this release are made only as of the date of this release, and we undertake no obligation to update the forward-looking statements to reflect subsequent events or circumstances. If we do update any forward-looking statement, you should not infer that we will make additional updates with respect to that statement or any other forward-looking statement. 8 About Texas InstrumentsTexas Instruments Incorporated (Nasdaq TXN) is a global semiconductor company that designs, manufactures and sells analog and embedded processing chips for markets such as industrial, automotive, data center, personal electronics and communications equipment. At our core, we have a passion to create a better world by making electronics more affordable through semiconductors. This passion is alive today as each generation of innovation builds upon the last to make our technology more reliable, more affordable and lower power, making it possible for semiconductors to go into electronics everywhere. Learn more at TI.com. 9