TI reports Q4 2025 and 2025 financial results and shareholder returns

Conference call at 3:30 p.m. Central time today on ti.com/ir

Texas Instruments Incorporated (TI) (Nasdaq: TXN) today reported fourth quarter revenue of $4.42 billion, net income of $1.16 billion and earnings per share of $1.27. Earnings per share included a 6-cent reduction that was not in the company's original guidance.

Regarding the company's performance and returns to shareholders, Haviv Ilan, TI's chairman, president and CEO, made the following comments:

"Revenue decreased 7% sequentially and increased 10% from the same quarter a year ago.
"Our cash flow from operations of $7.2 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 $2.9 billion.
"Over the past 12 months we invested $3.9 billion in R&D and SG&A, invested $4.6 billion in capital expenditures and returned $6.5 billion to owners.
"TI's first quarter outlook is for revenue in the range of $4.32 billion to $4.68 billion and earnings per share between $1.22 and $1.48."

Free cash flow, a non-GAAP financial measure, is cash flow from operations less capital expenditures, plus proceeds from U.S. CHIPS and Science Act (CHIPS Act) incentives.

Earnings summary

(In millions, except per-share amounts)	Q4 2025		Q4 2024		Change
Revenue	$	4,423	$	4,007	10 %
Operating profit	$	1,473	$	1,377	7 %
Net income	$	1,163	$	1,205	(3) %
Earnings per share	$	1.27	$	1.30	(2) %

Cash generation

				Trailing 12 Months
(In millions)	Q4 2025		Q4 2025		Q4 2024		Change
Cash flow from operations	$	2,254	$	7,153	$	6,318	13 %
Free cash flow	$	1,329	$	2,938	$	1,498	96 %
Free cash flow % of revenue				16.6 %		9.6 %

Cash return

				Trailing 12 Months
(In millions)	Q4 2025		Q4 2025		Q4 2024		Change
Dividends paid	$	1,290	$	4,999	$	4,795	4 %
Stock repurchases	$	403	$	1,477	$	929	59 %
Total cash returned	$	1,693	$	6,476	$	5,724	13 %

Texas Instruments INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Income	For Three Months Ended December 31,				For Years Ended December 31,
(In millions, except per-share amounts)	2025		2024		2025		2024
Revenue	$	4,423	$	4,007	$	17,682	$	15,641
Cost of revenue (COR)		1,951		1,693		7,599		6,547
Gross profit		2,472		2,314		10,083		9,094
Research and development (R&D)		521		491		2,083		1,959
Selling, general and administrative (SG&A)		446		446		1,860		1,794
Restructuring charges/other		32		—		117		(124)
Operating profit		1,473		1,377		6,023		5,465
Other income (expense), net (OI&E)		40		112		230		496
Interest and debt expense		141		130		543		508
Income before income taxes		1,372		1,359		5,710		5,453
Provision for income taxes		209		154		709		654
Net income	$	1,163	$	1,205	$	5,001	$	4,799

Diluted earnings per common share	$	1.27	$	1.30	$	5.45	$	5.20

Average shares outstanding:
Basic		907		912		909		912
Diluted		911		919		913		919

Cash dividends declared per common share	$	1.42	$	1.36	$	5.50	$	5.26

Supplemental Information

Provision for income taxes is based on the following:
Operating taxes (calculated using the estimated annual effective tax rate)	$	221	$	170	$	835	$	743
Discrete tax items		(12)		(16)		(126)		(89)
Provision for income taxes (effective taxes)	$	209	$	154	$	709	$	654

A portion of net income is allocated to unvested restricted stock units (RSUs) on which we pay dividend equivalents. Diluted EPS is calculated using the following:
Net income	$	1,163	$	1,205	$	5,001	$	4,799
Income allocated to RSUs		(7)		(7)		(28)		(24)
Income allocated to common stock for diluted EPS	$	1,156	$	1,198	$	4,973	$	4,775

Texas Instruments INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheets	December 31,
(In millions, except par value)	2025		2024
Assets
Current assets:
Cash and cash equivalents	$	3,225	$	3,200
Short-term investments		1,656		4,380
Accounts receivable, net of allowances of ($22) and ($21)		1,963		1,719
Raw materials		465		395
Work in process		2,372		2,214
Finished goods		1,967		1,918
Inventories		4,804		4,527
Prepaid expenses and other current assets		2,102		1,200
Total current assets		13,750		15,026
Property, plant and equipment at cost		17,682		15,254
Accumulated depreciation		(5,362)		(3,907)
Property, plant and equipment		12,320		11,347
Goodwill		4,330		4,362
Deferred tax assets		967		936
Capitalized software licenses		238		257
Overfunded retirement plans		324		233
Other long-term assets		2,656		3,348
Total assets	$	34,585	$	35,509

Liabilities and stockholders' equity
Current liabilities:
Current portion of long-term debt	$	500	$	750
Accounts payable		756		820
Accrued compensation		829		839
Income taxes payable		67		159
Accrued expenses and other liabilities		1,007		1,075
Total current liabilities		3,159		3,643
Long-term debt		13,548		12,846
Underfunded retirement plans		124		110
Deferred tax liabilities		66		53
Other long-term liabilities		1,415		1,954
Total liabilities		18,312		18,606
Stockholders' equity:
Preferred stock, $25 par value. Shares authorized – 10; none issued		—		—
Common stock, $1 par value. Shares authorized – 2,400; shares issued – 1,741		1,741		1,741
Paid-in capital		4,511		3,935
Retained earnings		52,236		52,262
Treasury common stock at cost
Shares: 2025 – 834; 2024 – 830		(42,130)		(40,895)
Accumulated other comprehensive income (loss), net of taxes (AOCI)		(85)		(140)
Total stockholders' equity		16,273		16,903
Total liabilities and stockholders' equity	$	34,585	$	35,509

Texas Instruments INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Cash Flows	For Three Months Ended December 31,				For Years Ended December 31,
(In millions)	2025		2024		2025		2024
Cash flows from operating activities
Net income	$	1,163	$	1,205	$	5,001	$	4,799
Adjustments to net income:
Depreciation		537		416		1,918		1,508
Amortization of capitalized software		20		19		81		72
Stock compensation		81		78		419		387
(Gains) losses on sales of assets		2		(1)		2		(127)
Deferred taxes		115		(21)		(19)		(210)
Increase (decrease) from changes in:
Accounts receivable		99		143		(244)		68
Inventories		25		(231)		(277)		(528)
Prepaid expenses and other current assets		8		76		10		7
Accounts payable and accrued expenses		20		87		77		125
Accrued compensation		106		115		(28)		(12)
Income taxes payable		23		110		191		597
Changes in funded status of retirement plans		7		31		(7)		33
Other		48		(29)		29		(401)
Cash flows from operating activities		2,254		1,998		7,153		6,318

Cash flows from investing activities
Capital expenditures		(925)		(1,192)		(4,550)		(4,820)
Proceeds from CHIPS Act incentives		—		—		335		—
Proceeds from asset sales		—		1		1		195
Purchases of short-term investments		(880)		(909)		(3,524)		(9,716)
Proceeds from short-term investments		1,110		2,726		6,308		11,187
Other		19		(12)		(9)		(48)
Cash flows from investing activities		(676)		614		(1,439)		(3,202)

Cash flows from financing activities
Proceeds from issuance of long-term debt		—		—		1,199		2,980
Repayment of debt		—		(300)		(750)		(600)
Dividends paid		(1,290)		(1,240)		(4,999)		(4,795)
Stock repurchases		(403)		(537)		(1,477)		(929)
Proceeds from common stock transactions		42		87		400		517
Other		(13)		(11)		(62)		(53)
Cash flows from financing activities		(1,664)		(2,001)		(5,689)		(2,880)

Net change in cash and cash equivalents		(86)		611		25		236
Cash and cash equivalents at beginning of period		3,311		2,589		3,200		2,964
Cash and cash equivalents at end of period	$	3,225	$	3,200	$	3,225	$	3,200

Supplemental cash flow information
Investment tax credit (ITC) used to reduce income taxes payable	$	89	$	56	$	335	$	588
Proceeds from CHIPS Act incentives		—		—		335		—
Total cash benefit related to the CHIPS Act	$	89	$	56	$	670	$	588

Quarterly segment results

(In millions)	Q4 2025		Q4 2024		Change
Analog:
Revenue	$	3,615	$	3,174	14 %
Operating profit	$	1,395	$	1,237	13 %
Embedded Processing:
Revenue	$	662	$	613	8 %
Operating profit	$	71	$	58	22 %
Other:
Revenue	$	146	$	220	(34) %
Operating profit *	$	7	$	82	(91) %

* Includes Restructuring charges/other

Annual segment results

(In millions)	2025		2024		Change
Analog:
Revenue	$	14,006	$	12,161	15 %
Operating profit	$	5,412	$	4,608	17 %
Embedded Processing:
Revenue	$	2,697	$	2,533	6 %
Operating profit	$	304	$	352	(14) %
Other:
Revenue	$	979	$	947	3 %
Operating profit *	$	307	$	505	(39) %

* Includes Restructuring charges/other

Non-GAAP financial information

This release includes references to free cash flow and ratios based on that measure. These are financial measures that were not prepared in accordance with GAAP. Free cash flow is calculated as cash flows from operating activities (also referred to as cash flow from operations) less capital expenditures, plus proceeds from CHIPS Act incentives.

We believe that free cash flow and the associated ratios provide insight into our liquidity, our cash-generating capability and the amount of cash potentially available to return to shareholders, as well as insight into our financial performance. These non-GAAP measures are supplemental to the comparable GAAP measures.

Reconciliation to the most directly comparable GAAP measures is provided in the table below.

	For Three Months Ended December 31,		For 12 Months Ended December 31,
(In millions)	2025		2025		2024		Change
Cash flow from operations (GAAP) *	$	2,254	$	7,153	$	6,318	13 %
Capital expenditures		(925)		(4,550)		(4,820)
Proceeds from CHIPS Act incentives		—		335		—
Free cash flow (non-GAAP)	$	1,329	$	2,938	$	1,498	96 %

Revenue			$	17,682	$	15,641

Cash flow from operations as a percentage of revenue (GAAP)				40.5 %		40.4 %
Free cash flow as a percentage of revenue (non-GAAP)				16.6 %		9.6 %

* Includes cash benefits of $89 million, $335 million and $588 million from the CHIPS Act ITC used to reduce income taxes payable for the three months ended December 31, 2025, and the twelve months ended December 31, 2025 and 2024, respectively.

This release also includes references to operating taxes, a non-GAAP term we use to describe taxes calculated using the estimated annual effective tax rate, a GAAP measure that by definition does not include discrete tax items. We believe the term operating taxes helps to differentiate from effective taxes, which include discrete tax items.

Notice regarding forward-looking statements

This release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as TI or its management "believes," "expects," "anticipates," "foresees," "forecasts," "estimates" or other words or phrases of similar import. Similarly, statements herein that describe TI's business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements.

We urge you to carefully consider the following important factors that could cause actual results to differ materially from the expectations of TI or our management:

Economic, social and political conditions, and natural events in the countries in which we, our customers or our suppliers operate, including global trade policies;
Market demand for semiconductors, particularly in the industrial and automotive markets, and customer demand that differs from forecasts;
Our ability to compete in products and prices in an intensely competitive industry;
Evolving cybersecurity and other threats relating to our information technology systems or those of our customers, suppliers and other third parties;
Our ability to successfully implement and realize opportunities from strategic, business and organizational changes, or our ability to realize our expectations regarding the amount and timing of associated restructuring charges and cost savings;
Our ability to develop, manufacture and market innovative products in a rapidly changing technological environment, our timely implementation of new manufacturing technologies and installation of manufacturing equipment, and our ability to realize expected returns on significant investments in manufacturing capacity;
Availability and cost of key materials, utilities, manufacturing equipment, third-party manufacturing services and manufacturing technology;
Our ability to recruit and retain skilled personnel and effectively manage key employee succession;
Product liability, warranty or other claims relating to our products, software, manufacturing, delivery, services, design or communications, or recalls by our customers for a product containing one of our parts;
Compliance with or changes in the complex laws, rules and regulations to which we are or may become subject, or actions of enforcement authorities, that restrict our ability to operate our business or subject us to fines, penalties or other legal liability;
Changes in tax law and accounting standards that impact the tax rate applicable to us, the jurisdictions in which profits are determined to be earned and taxed, adverse resolution of tax audits, increases in tariff rates, and the ability to realize deferred tax assets;
Financial difficulties of our distributors or semiconductor distributors' promotion of competing product lines to our detriment; or disputes with current or former distributors;
Losses or curtailments of purchases from key customers or the timing and amount of customer inventory adjustments;
Our ability to maintain or improve profit margins, including our ability to utilize our manufacturing facilities at sufficient levels to cover our fixed operating costs, in an intensely competitive and cyclical industry and changing regulatory environment;
Our ability to maintain and enforce a strong intellectual property portfolio and maintain freedom of operation in all jurisdictions where we conduct business; or our exposure to infringement claims;
Instability in the global credit and financial markets; and
Impairments of our non-financial assets.

For a more detailed discussion of these factors, see the Risk factors discussion in Item 1A of TI's most recent Form 10-K. The forward-looking statements included in this release are made only as of the date of this release, and we undertake no obligation to update the forward-looking statements to reflect subsequent events or circumstances. If we do update any forward-looking statement, you should not infer that we will make additional updates with respect to that statement or any other forward-looking statement.

About Texas Instruments

Texas Instruments Incorporated (Nasdaq: TXN) is a global semiconductor company that designs, manufactures and sells analog and embedded processing chips for markets such as industrial, automotive, personal electronics, enterprise systems and communications equipment. At our core, we have a passion to create a better world by making electronics more affordable through semiconductors. This passion is alive today as each generation of innovation builds upon the last to make our technology more reliable, more affordable and lower power, making it possible for semiconductors to go into electronics everywhere. Learn more at TI.com.

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