Texas Instruments (TXN) Earnings Date & Reports

Key Takeaways

• Revenue reached $5.46 billion, up 23% year over year and 13% sequentially.
• Diluted earnings per share (EPS) came in at $2.14, beating the consensus estimate of roughly $1.92.
• Analog revenue grew 26% year over year, while Embedded Processing rose 16%.
• Gross margin expanded to 61% of revenue, up 340 basis points sequentially.
• Third-quarter guidance calls for revenue of $5.65 billion to $6.15 billion and EPS of $2.23 to $2.57.

Earnings Context and Why It Matters

Texas Instruments (TXN) is one of the world's largest analog semiconductor makers, and its results are widely read as a barometer for the broader chip cycle and industrial demand. The company entered 2026 in the middle of a recovery, with revenue reaccelerating as customers rebuilt inventories and end-market demand improved. This report mattered because it tested whether that momentum could continue across industrial, automotive, and data-center markets. Investors also watched closely for signs on pricing, gross-margin recovery, free cash flow, and the integration path for the planned acquisition of Silicon Labs, all of which shape the company's long-term cash-return story.

Reported Results

For its fiscal second quarter of 2026, Texas Instruments reported revenue of $5.46 billion, a 23% increase from the prior-year period and a 13% sequential gain. Diluted EPS of $2.14 exceeded the consensus estimate of about $1.92, extending a streak of beats earlier in the year.

Segment results reflected broad-based strength. Analog revenue grew 26% year over year, while Embedded Processing revenue increased 16%. By end market, industrial revenue rose roughly 30% year over year, data-center revenue roughly doubled, and automotive revenue grew in the mid-teens. Gross profit reached $3.4 billion, or 61% of revenue, with gross margin up 340 basis points sequentially. Operating profit rose 48% year over year to $2.3 billion, and net income reached $2.0 billion.

Cash generation improved sharply. Cash flow from operations was $2.7 billion for the quarter, and trailing-12-month free cash flow climbed to $6.5 billion, up from $1.8 billion a year earlier. Management guided third-quarter revenue to $5.65 billion to $6.15 billion and EPS to $2.23 to $2.57, above the prior consensus midpoint at the time.

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Market Reaction and Investor Sentiment

Despite the strong headline beat, TXN shares slipped roughly 2% to 3% in after-hours trading following the July 22, 2026 report. The muted reaction reflected a market that had already priced in a robust recovery after a substantial run-up, with attention shifting from the reported quarter to the durability of guidance, pricing execution, and the pending Silicon Labs deal. Sentiment remained generally constructive, with several analysts raising price targets after the print, though the stock continued to consolidate in the following weeks. Investors appeared focused on whether the above-seasonal third-quarter guide could translate into sustained free-cash-flow growth rather than a single-quarter rebound.

Forward Outlook and Key Factors to Monitor

The outlook hinges on whether the current recovery broadens beyond the pockets that have led it so far. Industrial and data-center demand have been the primary growth drivers, and any softening in those areas would quickly test the sustainability of the reacceleration. Management has also begun executing customer-by-customer price increases, with the full effect expected to build into the fourth quarter and next year, making pricing a key lever for margin progression.

Investors should watch inventory trends closely. Inventory days declined to 196 in the second quarter, and management signaled confidence in its clean-room and capacity readiness. As the company nears the end of a six-year elevated capital-expenditure cycle, capital spending is expected to remain between $2 billion and $3 billion in 2026, which supports improving free-cash-flow conversion.

The planned acquisition of Silicon Labs, expected to close in the first half of 2027, is another important catalyst to monitor, given its implications for embedded processing and wireless connectivity as well as for the balance sheet. Gross-margin trajectory, tax-rate assumptions, and the pace of the analog recovery will all be central to how the stock absorbs upcoming quarters.

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