NEW YORK, July 22, 2026, 16:48 EDT – Texas Instruments NASDAQ:TXN reported its highest-ever second-quarter revenue, with a significant increase in cash conversion.
- Revenue climbed 23% to an all-time high of $5.46 billion. EPS was up 52% to $2.14.
- Midpoint figures for the third quarter surpassed consensus by almost 5% for revenue and 10% for EPS.
- The stock dropped about 3% in after-hours trading, following the close of the regular U.S. session.
Texas Instruments NASDAQ:TXN reported its highest-ever second-quarter revenue and issued guidance ahead of analyst expectations on Wednesday. Despite this, shares dropped about 3% in after-hours trading.
Headline numbers exceeded expectations. Revenue increased by 23% to $5.46 billion, topping the consensus estimate of $5.26 billion. Earnings per share grew 52% to $2.14, ahead of the $1.94 forecast. The figures include a five-cent gain not covered in initial guidance.
The earnings report indicated rising demand outside of data centers. CEO Haviv Ilan stated revenue reflected “broad growth led by industrial, data center and automotive.” PR Newswire
A stronger indicator for investors was found in cash conversion. Operating cash flow increased by 45%, as capital expenditures declined by 61%.
TI posted $2.74 billion in free cash flow for the quarter. The company’s metric includes CHIPS Act grants alongside operating cash, minus capital expenditures.
Excluding $850 million in CHIPS incentives, the increase remained significant. Cash after capital expenditures totaled $1.89 billion, up from $352 million a year earlier.
That matched 95% of reported net income, an increase from 27% in the previous year. The figure is based on TI’s publicly released cash-flow statement. This is not a figure reported by the company.
| Measure | Q2 2026 | Q2 2025 | Change |
|---|---|---|---|
| Revenue | $5.463 billion | $4.448 billion | +23% |
| Operating margin | 42.3% | 35.1% | +7.1 points |
| Operating cash flow | $2.703 billion | $1.860 billion | +45% |
| Capital spending | $514 million | $1.305 billion | -61% |
| TI-defined free cash flow | $2.738 billion | $555 million | 4.9 times |
| Ex-CHIPS cash after capex | $1.888 billion | $352 million | 5.4 times |
| Ex-CHIPS cash/net income | 95% | 27% | +68 points |
Operating margins, the 2025 quarterly free-cash-flow number and both ex-CHIPS metrics are derived from company information. TI considers free cash flow to be operating cash flow less capex, with the addition of CHIPS grant proceeds. The ex-CHIPS metric further excludes benefits from the cash tax-credit.
Operating leverage mirrored the rise in cash. Operating margin increased by 7.1 percentage points, reaching 42.3%.
Analog sales climbed 26% to reach $4.37 billion, with operating profit surging 50%. Embedded-processing revenue grew 16% to $788 million.
Texas Instruments expects third-quarter revenue between $5.65 billion and $6.15 billion, with the midpoint almost 5% higher than the consensus estimate of $5.63 billion.
The company projected EPS between $2.23 and $2.57, with a midpoint of $2.40, roughly 10% higher than the $2.18 forecast.
The stock finished up 1% at $294.19 before the announcement. Normal U.S. trading had concluded, but after-hours trading was still underway.
Investors anticipated strong results ahead of the report. The stock climbed roughly 68% in 2026.
Markets saw a significant shift last week. TI declined 8.8% in the week to July 17. The Philadelphia semiconductor index closed 20% under its record high from June 22.
Upcoming peer reviews are on the agenda. STMicroelectronics NYSE:STM is set to release results on July 23. NXP Semiconductors NASDAQ:NXPI will report after the U.S. close on July 28.
Risks persist. Industrial and automotive orders could decline, and low factory utilization would weigh on margins. The timing of CHIPS payments may also skew quarterly cash results.
The cash benchmark is now established. Investors are set to gauge if ex-CHIPS conversion remains close to earnings while grants fluctuate.
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