Texas Instruments (TXN) Q2 2026 earnings summary

Executive summary

• Second quarter revenue reached $5.46 billion, up 13% sequentially and 23% year-over-year, driven by broad-based growth in industrial, automotive, and data center sectors.

• Net income for Q2 2026 was $1.98 billion, with diluted EPS of $2.14, including a $0.05 benefit above guidance.

• Free cash flow for the trailing 12 months was $6.5 billion, with $5.8 billion returned to shareholders over the past year.

• Announced a definitive agreement to acquire Silicon Labs for $7.5 billion, expected to close in the first half of 2027.

• Demand strength is broad-based, with inventory and capacity investments supporting customer needs.

Financial highlights

• Gross profit was $3.35 billion (61.4% of revenue), with gross margin up 340 basis points sequentially.

• Operating profit reached $2.31 billion (42.3% of revenue), up 48% year-over-year.

• Free cash flow for Q2 2026 was $2.74 billion, a 271% increase year-over-year.

• Cash and short-term investments at quarter-end were $7 billion; cash and cash equivalents were $3.66 billion.

• $1.3 billion in dividends paid in the quarter; $5.8 billion returned to owners over the past 12 months.

Outlook and guidance

• Q3 2026 revenue expected between $5.65 billion and $6.15 billion; EPS guidance is $2.23–$2.57.

• Effective tax rate for Q3 projected at 13%.

• Capital expenditures for 2026 expected between $2 billion and $3 billion, with continued benefit from CHIPS Act incentives.

• Strong demand anticipated across all markets, especially industrial, data center, and automotive.