Texas Instruments Earnings Lift Guidance

Texas Instruments (TXN) reported stronger-than-expected second-quarter results on July 22, 2026, and raised third-quarter guidance after management cited broad demand across industrial, data-center, and automotive markets. Shares fell in extended trading after the call.

Second-Quarter Financials

Texas Instruments said in a press release on July 22 that second-quarter revenue reached $5.46 billion, up 23% year over year, with net income of $1.98 billion and diluted earnings per share (EPS) of $2.14. Operating profit rose 48% to $2.31 billion. Management noted the EPS included a $0.05 benefit not in original guidance, representing a semiconductor earnings beat of $0.23 versus the consensus estimate.

Analog revenue led gains at $4.37 billion, up 26% year over year, with operating profit rising about 50%. Embedded Processing revenue increased 16% to $788 million, nearly doubling operating profit. The Other segment declined slightly.

The quarter followed a first quarter with revenue of $4.83 billion, net income of $1.55 billion, and diluted EPS of $1.68. Prior guidance for the second quarter had forecast revenue between $5.00 billion and $5.40 billion and EPS of $1.77 to $2.05. The actual results exceeded the top end of that range.

Guidance and Capital Allocation

Texas Instruments raised its third-quarter outlook, forecasting revenue between $5.65 billion and $6.15 billion and EPS of $2.23 to $2.57 for the period ending September 30, 2026. Management attributed the stronger outlook to broadening demand across industrial, data-center, and automotive markets, along with benefits from earlier investments in inventory and manufacturing capacity. That guidance midpoint sits above analysts’ averages, signaling expectations for continued momentum.

On a trailing 12-month basis through the quarter, Texas Instruments generated $8.7 billion in cash from operations and $6.5 billion in non-GAAP free cash flow, equal to 33.6% of $19.5 billion in revenue. Capital expenditures totaled $3.3 billion, while research and development plus selling, general, and administrative expenses reached $3.9 billion. The company returned $5.8 billion to shareholders through dividends and share repurchases, highlighting strong cash generation supporting capital allocation.

The combination of a beat-and-raise and heavy cash returns centers the near-term story on Texas Instruments’ capacity and inventory investments. The after-hours share decline tests whether the company’s cited end-market momentum will sustain into the third quarter.