TEXAS INSTRUMENTS INC
For the period ended Jun 30, 2025. Filed Jul 29, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Jul 29, 2025
TXN$277.36-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-04-24.
0000097476-25-000027
Item 2. Management’s discussion and analysis of financial condition and results of operationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-07-29.
0000097476-25-000036
Item 2. Management’s discussion and analysis of financial condition and results of operationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 60 previous paragraphs and 94 current paragraphs.
33 unchanged; 21 reworded; 39 added; 6 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (39)
Current report
Market and business characteristics
Current report
Markets for our products
Current report
The major markets for our products are industrial, automotive, personal electronics, enterprise systems, communications equipment and other. See our 2024 Form 10-K for more information.
Current report
Market cycle
Current report
The “semiconductor cycle” refers to the ebb and flow of supply and demand and the building and depleting of inventories. The semiconductor market historically has been characterized by periods of tight supply caused by strengthening demand and/or insufficient manufacturing capacity, followed by periods of surplus inventory caused by weakening demand and/or excess manufacturing capacity. These are typically referred to as upturns and downturns in the semiconductor cycle. Semiconductor cycles are affected by the significant time and money required to build and maintain semiconductor manufacturing facilities.
Current report
Seasonality
Current report
Our revenue is subject to some seasonal variation. Historically, our sequential revenue growth rate tends to be weaker in the first and fourth quarters when compared with the second and third quarters.
Current report
Manufacturing
Current report
We invest to make manufacturing and technology a core competitive advantage. The strategic decision to own our manufacturing, process and packaging technology provides us with tangible benefits of lower manufacturing costs and greater control of our supply chain and provides our customers with geopolitically dependable capacity. We own and operate both wafer fabrication and assembly/test facilities in North America, Asia, Japan and Europe. We have focused on creating a competitive structural cost advantage by investing in our 300mm wafer production, which describes the diameter of the wafer on which our chips are produced, and costs about 40% less than a chip built on a 200mm wafer. In addition, we selectively use capacity of outside suppliers, commonly known as foundries and subcontractors.
Current report
We continue to invest to strengthen our competitive advantage in manufacturing and technology as part of our long-term capacity plan. We are now mostly through a six-year elevated capital expenditures cycle that, when completed, will uniquely position TI to deliver dependable, low-cost 300mm capacity, scalability of capital expenditures, including capacity modularity, and free cash flow per share growth across a range of market conditions.
Current report
With our planned capacity expansions to support demand over time, we expect our internal sourcing to continue to increase. As our Lehi, Utah, manufacturing facility is in the early ramping stages, Embedded Processing is disproportionately impacted by costs associated with the site’s capacity expansion. We expect to continue to maintain sufficient internal manufacturing capacity to meet the majority of our production needs and to obtain manufacturing equipment to support new technology developments and revenue growth.
Current report
Inventory
Current report
Our objectives for inventory are to maintain high levels of customer service, maintain dependable and competitive lead times, minimize inventory obsolescence and improve manufacturing asset utilization. To meet these objectives and to allow greater flexibility in periods of high demand, our strategy is to build ahead of demand our broad-based products that are used across a diverse set of applications and customers and have low risk of obsolescence. Inventory levels will vary based on market conditions and seasonality.
Current report
Results of operations
Current report
Revenue increased 9% sequentially, led by continued broad recovery in industrial, and 16% from the same quarter a year ago.
Current report
Macroeconomic factors
Current report
We believe tariffs and geopolitics are disrupting and reshaping global supply chains and affecting customer order behavior. Our global manufacturing capabilities enable us to support our customers’ needs. We also believe the semiconductor cycle recovery is continuing, while customer inventories remain at low levels.
Current report
U.S. legislative update
Current report
On July 4, 2025, the U.S. government enacted the One Big Beautiful Bill Act (OBBBA). The OBBBA provides changes to U.S. federal tax law, including expensing of U.S. research expenditures and eligible capital expenditures, increasing the U.S. CHIPS and Science Act (CHIPS Act) investment tax credit (ITC) and changing other tax provisions. The new law did not impact our financial condition and results of operations during the second quarter. We are currently evaluating the impact of the legislation on future periods. Based on our initial assessment, the changes are expected to result in a higher effective tax rate in the third quarter and full year 2025. For 2026 and beyond, we expect the effective tax rate to be lower than it would have been under prior tax law. Additionally, we expect tax-related cash payments to be lower for the next several years as a result of the changes.
Current report
Revenue of $4.45 billion increased $626 million, or 16%, due to higher revenue from increased demand in our Analog segment and, to a lesser extent, in our Embedded Processing segment, which were both impacted by the macroeconomic factors discussed above.
Current report
Gross profit of $2.58 billion was up $364 million, or 16%, due to higher revenue. Our gross profit also benefited from reduced manufacturing costs related to increased factory loadings, offset by costs associated with our planned capacity expansions. As a percentage of revenue, gross profit increased to 57.9% from 57.8%.
Current report
Our provision for income taxes was $183 million compared with $120 million. This increase was due to higher income before income taxes and lower discrete tax benefits of $34 million, due to stock-based compensation. Our effective tax rate, which includes discrete tax items, was 12% compared with 10%.
Current report
Net income was $1.30 billion compared with $1.13 billion. EPS was $1.41 compared with $1.22.
Current report
Second quarter 2025 segment results
Current report
Embedded Processing revenue increased due to higher demand, which was impacted by the macroeconomic factors discussed above. Operating profit increased primarily due to higher revenue, partially offset by increased manufacturing costs and R&D expenses.
Current report
Other revenue increased $38 million, and operating profit increased $32 million.
Current report
Details of financial results – first six months of 2025 compared with first six months of 2024
Current report
Revenue of $8.52 billion increased $1.03 billion, or 14%, due to higher revenue from increased demand in our Analog segment and, to a lesser extent, in our Embedded Processing segment, which were both impacted by the macroeconomic factors discussed above.
Current report
Operating expenses were $2.00 billion compared with $1.90 billion.
Current report
Operating profit was $2.89 billion, or 33.9% of revenue, compared with $2.53 billion, or 33.9% of revenue. This increase was primarily due to higher revenue and associated gross profit.
Current report
OI&E was $128 million of income compared with $253 million of income. This decrease was due to lower interest income.
Current report
Interest and debt expense of $261 million increased $14 million.
Current report
Our provision for income taxes was $280 million compared with $308 million. This decrease was due to higher discrete tax benefits of $47 million, primarily related to our non-U.S. operations, partially offset by higher income before income taxes. Our effective tax rate, which includes discrete tax items, was 10% compared with 12%.
Current report
Net income was $2.47 billion compared with $2.23 billion. EPS was $2.69 compared with $2.42.
Current report
Year-to-date segment results
Current report
Analog
Current report
Analog revenue increased in Power and, to a lesser extent, Signal Chain, due to higher demand, which was impacted by the macroeconomic factors discussed above. Operating profit increased primarily due to higher revenue and associated gross profit.
Current report
Embedded Processing
Removed paragraphs (6)
Previous report
We are monitoring the geopolitical environment. Any implication to our customers, suppliers or TI’s business, including customer demand and our supply chain, is uncertain and will likely evolve. We currently do not see impact to second-quarter results.
Previous report
Revenue increased 11% from the same quarter a year ago and increased 2% sequentially. All of our markets grew sequentially with the exception of a seasonal decline in personal electronics.
Previous report
Revenue of $4.07 billion increased $408 million, or 11%, primarily due to higher revenue from Analog.
Previous report
Our provision for income taxes was $97 million compared with $188 million. This decrease was primarily due to discrete tax benefits.
Previous report
Net income was $1.18 billion compared with $1.11 billion. EPS was $1.28 compared with $1.20.
Previous report
First quarter 2025 segment results
Reworded paragraphs (21)
Previous wording
Our first quarter revenue was $4.07 billion, net income was $1.18 billion and earnings per share (EPS) were $1.28.
Current wording
Our second quarter revenue was $4.45 billion, net income was $1.30 billion and earnings per share (EPS) were $1.41.
Previous wording
Our cash flow from operations of $6.2 billion for the trailing 12 months again underscored the strength of our business model, the quality of our product portfolio and the benefit of 300mm production. Free cash flow for the same period was $1.7 billion.
Current wording
Our cash flow from operations of $6.4 billion for the trailing 12 months again underscored the strength of our business model, the quality of our product portfolio and the benefit of 300mm production. Free cash flow for the same period was $1.8 billion.
Previous wording
Over the past 12 months we invested $3.8 billion in R&D and SG&A, invested $4.7 billion in capital expenditures and returned $6.4 billion to shareholders.
Current wording
Over the past 12 months we invested $3.9 billion in R&D and SG&A, invested $4.9 billion in capital expenditures and returned $6.7 billion to shareholders.
Previous wording
Results of operations – first quarter 2025 compared with first quarter 2024
Current wording
Details of financial results – second quarter 2025 compared with second quarter 2024
Previous wording
Operating expenses (R&D and SG&A) were $989 million compared with $933 million.
Current wording
Operating expenses (R&D and SG&A) were $1.01 billion compared with $963 million.
Previous wording
Operating profit was $1.32 billion, or 32.5% of revenue, compared with $1.29 billion, or 35.1% of revenue.
Current wording
Operating profit was $1.56 billion, or 35.1% of revenue, compared with $1.25 billion, or 32.7% of revenue. This increase was primarily due to higher revenue and associated gross profit.
Previous wording
OI&E was $80 million of income compared with $123 million of income.
Current wording
OI&E was $48 million of income compared with $130 million of income. This decrease was due to lower interest income.
Previous wording
Interest and debt expense of $128 million increased $12 million. See Note 6 to the financial statements.
Current wording
Interest and debt expense of $133 million increased $2 million. See Note 6 to the financial statements.
Previous wording
Analog revenue increased in both product lines, led by Power. Operating profit increased primarily due to higher revenue and associated gross profit.
Current wording
Analog revenue increased in Power and, to a lesser extent, Signal Chain, due to higher demand, which was impacted by the macroeconomic factors discussed above. Operating profit increased primarily due to higher revenue and associated gross profit.
Previous wording
Gross profit of $2.31 billion was up $218 million, or 10%, primarily due to higher revenue, partially offset by higher manufacturing costs associated with our planned capacity expansions. As a percentage of revenue, gross profit decreased to 56.8% from 57.2%.
Current wording
Gross profit of $4.89 billion was up $582 million, or 14%, due to higher revenue. Our gross profit also benefited from reduced manufacturing costs related to increased factory loadings, partially offset by costs associated with our planned capacity expansions. As a percentage of revenue, gross profit decreased to 57.4% from 57.5%.
Previous wording
Embedded Processing revenue was about even due to the mix of products shipped. Operating profit decreased due to higher manufacturing costs and R&D expenses.
Current wording
Embedded Processing revenue increased due to higher demand, which was impacted by the macroeconomic factors discussed above. Operating profit decreased primarily due to higher manufacturing costs and R&D expenses, partially offset by higher revenue.
Previous wording
Other revenue increased $39 million, and operating profit decreased $95 million.
Current wording
Other revenue increased $77 million, and operating profit decreased $63 million.
Previous wording
At the end of the first quarter of 2025, total cash (cash and cash equivalents plus short-term investments) was $5.01 billion, a decrease of $2.58 billion from the end of 2024.
Current wording
At the end of the second quarter of 2025, total cash (cash and cash equivalents plus short-term investments) was $5.36 billion, a decrease of $2.22 billion from the end of 2024.
Previous wording
Accounts receivable were $1.86 billion, an increase of $141 million compared with the end of 2024. Days sales outstanding for the first quarter of 2025 were 41 compared with 39 at the end of 2024.
Current wording
Accounts receivable were $1.93 billion, an increase of $215 million compared with the end of 2024. Days sales outstanding were 39 for both the second quarter of 2025 and at the end of 2024.
Previous wording
Inventory was $4.69 billion, an increase of $160 million from the end of 2024. Days of inventory for the first quarter of 2025 were 240 compared with 241 at the end of 2024.
Current wording
Inventory was $4.81 billion, an increase of $285 million from the end of 2024. Days of inventory for the second quarter of 2025 were 231 compared with 241 at the end of 2024, which reflects the continued execution of our inventory strategy.
Previous wording
Our primary source of liquidity is cash flow from operations. Additional sources of liquidity are cash and cash equivalents, short-term investments and access to debt markets. We also have a variable-rate, revolving credit facility. As of March 31, 2025, our credit facility was undrawn, and we had no commercial paper outstanding. Cash flows from operating activities for the first three months of 2025 were $849 million, a decrease of $168 million from the year-ago period primarily due to higher cash used for working capital, partially offset by higher net income.
Current wording
Our primary source of liquidity is cash flow from operations. Additional sources of liquidity are cash and cash equivalents, short-term investments and access to debt markets. We also have a variable-rate, revolving credit facility. As of June 30, 2025, our credit facility was undrawn, and we had no commercial paper outstanding. Cash flows from operating activities for the first six months of 2025 were $2.71 billion, an increase of $121 million from the year-ago period primarily due to higher net income and non-cash items, partially offset by higher cash used for working capital. Cash flows from operating activities for the first six months of 2025 and 2024 includes cash benefits of $203 million and $312 million, respectively, from the CHIPS Act ITC used to reduce income taxes payable.
Previous wording
Investing activities for the first three months of 2025 provided $1.25 billion compared with $3.33 billion of cash used in the year-ago period. Capital expenditures were $1.12 billion compared with $1.25 billion in the year-ago period and were primarily for semiconductor manufacturing equipment and facilities in both periods. In 2025, we received proceeds of $260 million from U.S. CHIPS and Science Act (CHIPS Act) incentives. Short-term investments provided cash of $2.16 billion compared with $2.23 billion of cash used in the year-ago period.
Current wording
Investing activities for the first six months of 2025 used $82 million compared with $3.33 billion in the year-ago period. Capital expenditures were $2.43 billion compared with $2.31 billion in the year-ago period and were primarily for semiconductor manufacturing equipment and facilities in both periods. In 2025, we received proceeds of $260 million from CHIPS Act incentives. Short-term investments provided cash of $2.10 billion compared with $1.20 billion of cash used in the year-ago period.
Previous wording
As we continue to invest to strengthen our competitive advantages in manufacturing and technology, as part of our long-term capacity planning, our capital expenditures are expected to remain at elevated levels. For qualifying manufacturing investments, we expect to benefit from the 25% investment tax credit (ITC) established by the CHIPS Act, as well as direct funding of up to $1.6 billion for our three large-scale 300mm wafer fabs currently under construction in Sherman, Texas, and Lehi, Utah.
Current wording
We are now mostly through a six-year elevated capital expenditures cycle, and consistent with our capital management strategy, we are currently evaluating our capital expenditure levels to determine if they will remain at elevated levels in 2026 and beyond, dependent on revenue and growth expectations. For qualifying manufacturing investments, we expect to benefit from the 25% ITC established by the CHIPS Act, as well as direct funding of up to $1.6 billion for our three large-scale 300mm wafer fabs currently under construction in Sherman, Texas, and Lehi, Utah. The U.S. tax law changes within the OBBBA included an increase to the CHIPS Act ITC from 25% to 35% for qualifying manufacturing investments placed in service after December 31, 2025.
Previous wording
Financing activities for the first three months of 2025 used $2.54 billion compared with $1.83 billion of cash provided in the year-ago period. In 2025, we retired maturing debt of $750 million. In the year-ago period, we received net proceeds of $2.98 billion from the issuance of fixed-rate, long-term debt. Dividends paid were $1.24 billion compared with $1.18 billion in the year-ago period, reflecting an increased dividend rate. We used $653 million to repurchase 3.5 million shares of our common stock compared with $3 million in the year-ago period. Employee exercises of stock options provided cash proceeds of $118 million compared with $65 million in the year-ago period.
Current wording
Financing activities for the first six months of 2025 used $2.78 billion compared with $517 million of cash provided in the year-ago period. In 2025, we received net proceeds of $1.20 billion from the issuance of fixed-rate, long-term debt and retired maturing debt of $750 million. In the year-ago period, we received net proceeds of $2.98 billion from the issuance of fixed-rate, long-term debt and retired maturing debt of $300 million. Dividends paid were $2.47 billion compared with $2.37 billion in the year-ago period, reflecting an increased dividend rate. We used $955 million to repurchase 5.4 million shares of our common stock compared with $74 million to repurchase 0.4 million shares in the year-ago period. Employee exercises of stock options provided cash proceeds of $233 million compared with $313 million in the year-ago period.
Previous wording
We had $2.76 billion of cash and cash equivalents and $2.24 billion of short-term investments as of March 31, 2025. We believe we have the necessary financial resources and operating plans to fund our working capital needs, capital expenditures, dividend and debt-related payments, and other business requirements for at least the next 12 months.
Current wording
We had $3.04 billion of cash and cash equivalents and $2.32 billion of short-term investments as of June 30, 2025. We believe we have the necessary financial resources and operating plans to fund our working capital needs, capital expenditures, dividend and debt-related payments, and other business requirements for at least the next 12 months.
Previous wording
Includes a cash benefit of $588 million from the CHIPS Act ITC used to reduce income taxes payable for the twelve months ended March 31, 2025
Current wording
Includes cash benefits of $479 million and $312 million from the CHIPS Act ITC used to reduce income taxes payable for the twelve months ended June 30, 2025 and 2024, respectively
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Our segment results compared with the year-ago period are as follows: