Texas Instruments Q2 2026 Earnings Call Transcript

On Wednesday, Texas Instruments (NASDAQ: TXN ) discussed second-quarter financial results during its earnings call. The full transcript is provided below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

5 billion, a 13% sequential and 23% year-over-year increase, driven by growth in Analog and Embedded Processing. Significant growth was observed in industrial (30% YoY), automotive (mid-teens YoY), and data center (doubled YoY) sectors. 3 billion. 6 billion of this from CHIPS Act incentives.

57. The company is executing price increases due to strong demand and anticipates continued strength across all markets, including automotive and data center. Operational highlights include an ongoing focus on expanding 300mm manufacturing capacity and disciplined capital allocation. Management transition noted with Julie Knecht taking over as CFO from Rafael Lizardi, who is retiring.

Full Transcript Mike Beckman, Head of Investor Relations Welcome to the Texas Instruments second quarter 2026 earnings conference call. I'm Mike Beckman, Head of Investor Relations. com/ir. This call is being broadcast live over the web and can be accessed through our website.

In addition, today's call is being recorded and will be available via replay on our website. This call will include forward-looking statements that involve risks and uncertainties that could cause TI's results to differ materially from management's current expectations. We encourage you to review the notice regarding forward-looking statements contained in the earnings release published today, as well as TI's most recent SEC filings, for a more complete description. Today I'm joined by our Chief Executive Officer, Haviv Ilan, and our Chief Financial Officer, Rafael Lizardi.

Also with us today is Julie Knecht, who will become our Chief Financial Officer on August 1st. Julie has been with TI for more than 25 years and has held a number of finance and accounting roles, most recently serving as Chief Accounting Officer since 2021. As you know, Rafael, who has been our CFO for nearly a decade, plans to retire at the end of August. Rafael's focus on disciplined capital allocation, including our investments in 300-millimeter manufacturing capacity and commitment to return all free cash flow to shareholders, have positioned TI for continued long-term growth and value creation.

As this is Rafael's final earnings call, I want to thank him personally for all of his contributions to TI. I'm sure you will join me in congratulating both Rafael and Julie. With that, today we'll provide the following updates. First, Haviv will start with a quick overview of the quarter.

Next, he will provide insight into second quarter revenue results with some details on what we're seeing with respect to our end markets. Lastly, Rafael will cover the financial results and give an update on capital management, as well as share the guidance for third quarter 2026. With that, let me turn it over to Haviv. Haviv Ilan, CEO Thanks, Mike.

Let me start with a quick overview of the second quarter. 5 billion, an increase of 13% sequentially and an increase of 23% year over year. Analog and Embedded Processing both grew sequentially and year on year. Analog revenue grew 26% year on year and Embedded Processing grew 16%.

Our Other segment declined 2% from the year-ago quarter. Let me provide a few comments about the current market environment. In the second quarter, revenue came in above the range as we saw continued growth in industrial and data center in addition to accelerated growth in automotive. Our investments in inventory and capacity are serving us well, which allows us to support our customers during this time of increased demand.

We are prepared with capacity and have clean room space available and are well positioned to support continued growth. Now I'll share some additional insights into second quarter revenue by end market. First, industrial increased around 30% year on year and was up about 10% sequentially, growing broadly across sectors and regions. Automotive increased mid-teens year on year and increased upper single digits sequentially.

Data center doubled year on year and grew around 20% sequentially. Personal electronics was flat year on year and grew upper single digits sequentially. And lastly, communications equipment grew both year on year and sequentially. With that, let me turn it over to Rafael to review profitability and capital management.

Rafael Lizardi, CFO Thanks, Haviv, and good afternoon everyone. 5 billion. 4 billion, or 61% of revenue. Sequentially, gross profit margin increased 340 basis points.

Operating expenses in the quarter were $1 billion, about as expected. 9 billion, or 20% of revenue. 3 billion in the quarter, or 42% of revenue, and it was up 48% from the year-ago quarter. 14 per share.

Earnings per share included a 5-cent benefit not in our original guidance due to discrete tax benefits. Let me now comment on our capital management results, starting with our cash generation. 7 billion on a trailing twelve-month basis. Capital expenditures w