AI Takeaway
TXN delivered strong Q2 FY2026 results with revenue up 22.8% to $5.46B, net income up 52.9% to $1.98B and EPS of $2.14, driven by broad-based demand growth in Analog and Embedded Processing, while announcing a pending $7.5B acquisition of Silicon Labs.
Revenue
$5.46B
++22.82% YoY
EPS (Basic)
$2.16
++52.11% YoY
Gross Margin
61.4%
++3.47% YoY
Operating Income
$2.31B
++47.79% YoY
Filed · Source: SEC EDGAR 10-Q filing
Texas Instruments (TXN) reported Q2 FY2026 revenue of $5.46B, up 22.8% year over year. The company posted net income of $1.98B, up 52.9% from a year earlier, with diluted EPS of $2.14. Gross margin was 61.4%.
Q2 2026 revenue of $5.46 billion increased 23% year-over-year and 13% sequentially, with growth led by industrial, data center and automotive end markets. Analog segment revenue grew 26% to $4.365 billion with operating margin expanding to 45.6% from 38.4%, while Embedded Processing revenue rose 16% to $788 million with operating margin nearly doubling to 21.3% from 12.5%.
Source: 10-Q Item 2 MD&A, p.19-20
TXN entered a definitive agreement announced February 4, 2026 to acquire Silicon Labs for $231.00 per share in an all-cash transaction, representing approximately $7.5 billion enterprise value, expected to close in the first half of 2027. In June 2026, the company entered a 364-day $5 billion delayed draw term loan facility to help fund the acquisition, with no borrowings outstanding as of June 30, 2026.
Source: 10-Q Item 2 MD&A, p.20
Trailing-12-month cash flow from operations was $8.67 billion (44.6% of revenue) and free cash flow was $6.53 billion (33.6% of revenue), up sharply from $1.76 billion (10.6% of revenue) a year ago. Over the same period, TI invested $3.9 billion in R&D/SG&A, $3.3 billion in capital expenditures, and returned $5.8 billion to shareholders.
Source: 10-Q Item 2 MD&A (Non-GAAP financial information), p.24
Gross profit rose 30% to $3.35 billion, with gross margin increasing to 61.4% from 57.9%, driven primarily by higher revenue, partially offset by higher manufacturing costs associated with planned capacity expansions including the ramping LFAB facility supporting Embedded Processing.
Source: 10-Q Item 2 MD&A, p.20
Inventory decreased $199 million from year-end 2025 to $4.61 billion, with days of inventory improving to 196 from 222, reflecting continued execution of the company's inventory strategy. First-half 2026 operating cash flow benefited from $301 million in CHIPS Act investment tax credits, and investing activities received $1.10 billion in CHIPS Act incentive proceeds compared with $260 million a year ago.
Source: 10-Q Item 2 MD&A (Financial condition/Liquidity), p.22-23
TXN's pending $7.5 billion all-cash acquisition of Silicon Labs, expected to close in H1 2027, is subject to regulatory approvals and other customary closing conditions, and the company plans to fund it with cash on hand and debt financing including a new $5 billion delayed draw term loan facility. Any delays, regulatory hurdles, or unfavorable financing terms could impact the company's capital structure and financial flexibility.
Source: 10-Q Item 2 MD&A, p.20
Gross profit growth was partially offset by higher manufacturing costs associated with planned capacity expansions, and because TI owns much of its manufacturing capacity, a significant portion of operating cost is fixed, meaning reduced factory loadings could compress margins in a downturn. The LFAB facility is still ramping production, creating near-term cost inefficiencies within Embedded Processing.
Source: 10-Q Item 2 MD&A, p.18-19
The company explicitly describes its exposure to the semiconductor cycle, characterized by alternating periods of tight supply/strong demand and surplus inventory/weak demand, which can be affected by the significant time and money required to build and maintain manufacturing facilities. This cyclicality could reverse the current period's strong 22.8% revenue growth in future periods.
Source: 10-Q Item 2 MD&A, p.18
Current liabilities rose 30.2% year-over-year to $3.24 billion, and the company carries $14.05 billion in long-term debt with a debt-to-equity ratio near 0.99, which combined with the planned debt financing for the Silicon Labs acquisition, could increase financial leverage further.
Source: 10-Q Balance Sheet (XBRL)
Reported EPS of $2.14 versus the $1.95 analyst consensus — a +9.6% beat for Q2 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $5.46B | $4.45B | +22.82% |
Cost of Revenue | $2.11B | $1.87B | +12.71% |
Gross Profit | $3.35B | $2.58B | +30.17% |
Operating Income | $2.31B | $1.56B | +47.79% |
Net Income | $1.98B | $1.29B | +52.90% |
EPS (Basic) | $2.16 | $1.42 | +52.11% |
EPS (Diluted) | $2.14 | $1.41 | +51.77% |
R&D Expense | $535M | $527M | +1.52% |
SG&A Expense | $490M | $485M | +1.03% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $35.88B | $34.93B | +2.72% |
Current Assets | $15.76B | $14.48B | +8.79% |
Total Liabilities | $17.88B | $18.53B | -3.53% |
Current Liabilities | $3.24B | $2.49B | +30.18% |
Stockholders' Equity | $18.01B | $16.4B | +9.78% |
Cash & Equivalents | $3.66B | $3.04B | +20.24% |
Long-Term Debt | $14.05B | $14.04B | +0.06% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash FlowYTD | $4.22B | $2.71B | +55.89% |
Investing Cash FlowYTD | $-1.75B | $-82M | -2032.93% |
Financing Cash FlowYTD | $-2.04B | $-2.78B | +26.73% |
Dividends PaidYTD | $2.59B | $2.47B | +4.57% |
Share BuybacksYTD | $185M | $955M | -80.63% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 61.4% | 57.9% | +3.47% |
Operating Margin | 42.3% | 35.1% | +7.15% |
Net Margin | 36.2% | — | — |
ROE | 11.0% | — | — |
ROA | 5.5% | — | — |
Current Ratio | $4.857 | — | — |
Debt to Equity | $0.993 | — | — |
Expected release date, analyst estimates & what to watch
Texas Instruments delivered a strong Q1 2026 with revenue of $4.83B (+18.6% YoY), operating income surging 36.6% to $1.81B, and operating cash flow nearly doubling to $1.52B, reflecting broad-based demand recovery across its analog and embedded processing segments.
Texas Instruments delivered strong FY2025 results with revenue rising 13.0% to $17.68B and operating cash flow surging 13.2% to $7.15B, though net income growth lagged at 4.2% due to higher costs and increased capital returns to shareholders.
Other companies in Semiconductors
The filing does not disclose analyst consensus estimates, so a formal beat/miss cannot be confirmed from this 10-Q. However, TXN reported strong growth with revenue up 22.8% YoY to $5.46 billion and EPS of $2.14 versus $1.41 a year ago, indicating a robust quarter.
TXN posted revenue of $5.46 billion (+22.8% YoY), net income of $1.98 billion (+52.9% YoY), and gross margin expansion to 61.4% from 57.9%, driven by broad-based growth in industrial, data center and automotive end markets. The company also announced a pending $7.5 billion acquisition of Silicon Labs expected to close in H1 2027.
Revenue grew 22.8% year-over-year to $5.46 billion, driven primarily by a 26% increase in the Analog segment to $4.365 billion and a 16% increase in Embedded Processing to $788 million, per the MD&A.
TXN highlighted risks related to its pending $7.5 billion Silicon Labs acquisition, including financing via a new $5 billion delayed draw term loan and regulatory approval requirements, as well as exposure to the cyclical semiconductor market and rising manufacturing costs from capacity expansions like the ramping LFAB facility.
TXN shows strong liquidity with a current ratio of 4.86 and $7.00 billion in total cash and short-term investments, alongside trailing-twelve-month free cash flow of $6.53 billion. Debt-to-equity stands at approximately 0.99, and the company continues to return significant cash to shareholders through dividends ($2.59 billion paid in H1 2026) and buybacks.