Texas Instruments (TXN) Earnings Date & Reports

Key Takeaways

• Texas Instruments reported third quarter 2026 revenue of $6.06 billion, up 28% year over year and 11% sequentially.
• Diluted earnings per share (EPS) reached $2.62, up 77% from $1.48 a year ago and ahead of consensus estimates near $2.40.
• Growth was broad-based, with industrial revenue up more than 40%, automotive up mid-teens, and data center up roughly 95% year over year.
• Gross margin climbed to 64%, while operating profit rose 73% year over year to $2.87 billion, or 47% of revenue.
• Fourth quarter guidance of $5.80 billion to $6.30 billion in revenue and $2.45 to $2.79 in EPS came in above Street expectations.
• The company raised its dividend by 7% to $1.52 per share, marking its 23rd consecutive year of dividend increases.

Earnings Context and Why It Matters

Texas Instruments is one of the world's largest analog semiconductor makers, and its results are closely watched as a bellwether for industrial, automotive, and broader chip demand. After a prolonged cyclical downturn, the company's third quarter 2026 report signaled a clear inflection, with double-digit growth across nearly every end market and region. Because Texas Instruments sells a vast range of foundational chips into diverse industries, its performance offers investors an early read on the health of the global economy. Strong results, combined with above-seasonal forward guidance, reinforce confidence that the semiconductor recovery is broadening beyond AI-driven data centers into more traditional markets.

Reported Results

Texas Instruments reported third quarter 2026 revenue of $6.06 billion, up 28% from $4.74 billion in the prior-year period and up 11% sequentially. Diluted EPS was $2.62, a 77% increase from $1.48 a year earlier, and included a $0.01 reduction from discrete tax items that was not in the company's original guidance. Net income rose 78% to $2.43 billion.

By segment, analog revenue grew 32% to $4.91 billion, while embedded processing grew 21% to $858 million. Gross profit was $3.9 billion, or 64% of revenue, up 280 basis points sequentially. Operating profit reached $2.87 billion, up 73% year over year. On a trailing 12-month basis, cash flow from operations totaled $9.9 billion, and free cash flow reached $8.4 billion, aided by $1.6 billion in CHIPS Act incentives.

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Market Reaction and Investor Sentiment

Texas Instruments' results beat expectations across both revenue and EPS, and its fourth quarter guidance came in comfortably above analyst projections. Despite the strong report, the stock traded roughly flat in the immediate aftermath, reflecting a share price that had already risen substantially in the months leading into earnings. Investors broadly interpreted the results as confirmation of a durable cyclical recovery, with particular enthusiasm around the record industrial performance and the near-doubling of data center revenue. The company's ability to expand margins sharply on higher revenue and to signal above-seasonal demand into year-end reinforced a constructive, though already well-positioned, investor sentiment.

Forward Outlook and Key Factors to Monitor

Texas Instruments guided fourth quarter 2026 revenue to a range of $5.80 billion to $6.30 billion and EPS to $2.45 to $2.79, above consensus and reflecting above-seasonal demand expectations. Management attributed the strength to ongoing momentum in industrial, automotive, and data center markets, with data center now representing about 13% of revenue and less exposed to seasonal swings.

Investors should monitor several factors in the quarters ahead. Gross margin sustainability will be a focus, given that incremental margins reached roughly 90% in the third quarter, well above the company's longer-term 75% to 85% target. Pricing dynamics also bear watching, as management noted an uptick in analog pricing during the second half of 2026 after a flat first half, with annual negotiations for 2027 still underway.

Capital expenditure and capacity expansion remain key themes, with full-year 2026 spending expected in the $2 billion to $3 billion range and lead times on manufacturing equipment beginning to extend. Finally, inventory levels, which stood at 194 days, and the pace of the company's 300mm wafer production ramp will help determine how efficiently Texas Instruments can convert rising demand into cash flow over the coming year.

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