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Texas Instruments

TXN · Nasdaq

Operating profit grew 2.6 times as fast as revenue

Revenue rose 27.7% but cost of revenue rose only 7.4%, so operating profit jumped 72.8% and the operating margin reached 47.5% from 35.1%.

Q3 FY2026, the quarter to Sep 30, 2026 · 10-Q filed Oct 23, 2026

Q3 FY2026 · revenue
$6.1B+27.7% on the year
Operating margin
47.5%
Net income
$2.4B
Free cash flow, quarter
$3.0B

Largest source of revenue: Analog, 81.1% of the total.

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Key insights · Q3 FY2026
  1. 01

    Operating profit grew 2.6 times as fast as revenue

    Revenue rose 27.7% but cost of revenue rose only 7.4%, so operating profit jumped 72.8% and the operating margin reached 47.5% from 35.1%.

    Why it matters

    Revenue was $6.06B against $4.74B a year earlier, up 27.7%. Cost of revenue rose 7.4% to $2.17B, so gross profit rose 42.8% to $3.89B and gross margin moved to 64.2% from 57.4%. R&D rose 2.3% to $530M and SG&A 4.2% to $476M, bringing them to 8.75% and 7.86% of revenue. Operating profit rose 72.8% to $2.87B, 47.5% of revenue against 35.1% a year earlier.1

    The filing names the mechanism: 'Because we own much of our manufacturing capacity, a significant portion of our operating cost is fixed.' It continues: 'as factory loadings increase, our fixed costs are spread over increased output and, absent other circumstances, our profit margins increase.' It attributes the change in operating profit primarily to higher revenue and associated gross profit.1

    The comparison is slightly flattered. The year-ago quarter carried an $85M restructuring charge tied to closing the company's last production on its oldest wafer size, while this quarter carried $7M of acquisition charges for the planned purchase of Silicon Labs. Below operating profit little changed: interest and debt expense was $141M in both quarters, and net income rose 77.8% to $2.43B.1

    AnalysisAnalysis: in this business the margin is largely a reading of how full the factories are. A quarter like this one shows the upside of that structure. It says less about where margins settle than how they behave across a full cycle.

  2. 02

    Analog earns 87% of profit on 81% of sales

    Analog brought in 81.1% of revenue but 87.2% of operating profit, at a 51.0% segment margin, about twice Embedded Processing's 26.5%.

    Why it matters

    Analog revenue was $4.91B, 81.1% of the $6.06B total, and it earned $2,505 million of the $2,874 million operating profit, 87.2%. Its segment margin was 51.0% of its revenue. Analog revenue rose 31.7% and its share of revenue rose 2.47 points; the filing says both product lines grew, 'led by Signal Chain'.1

    Embedded Processing, the microcontrollers and processors, brought in $858M, 14.2% of revenue, but earned $227M, 7.9% of operating profit, a 26.5% margin. Its revenue rose 21.0%. Other, mainly DLP products and calculators, earned $142M on $286M of revenue, a figure that includes the company's acquisition and restructuring charges.1

    The filing expects the gap to be shaped by one factory: 'Our LFAB facility, which primarily supports our Embedded Processing business, was purchased as an operating fab and is continuing to ramp production, so we expect factory loadings to increase over time.' It adds: 'As LFAB ramps, we expect Embedded to carry manufacturing costs that disproportionately benefit Embedded Processing operating profit as compared to Analog.'1

    AnalysisAnalysis: the company's results are, in practice, Analog's results, and Analog's share of profit grew this quarter. Embedded Processing is the line where the filing itself points to margin change, because its newest factory is not yet full. How far the gap narrows depends on loadings the filing does not quantify.

  3. 03

    Factory spending now takes 13.5% of operating cash

    Capital spending took 13.5% of operating cash flow, against 54.7% a year earlier and 79.0% in FY2023: the factory build is now returning cash.

    Why it matters

    Operating cash flow was $3.42B in the third quarter and capital expenditures were $463M, 13.5% of it, against $1.20B of spending on $2.19B of operating cash flow a year earlier, 54.7%. In FY2023 the company spent $5.07B on factories against $6.42B of operating cash flow, 79.0%, and free cash flow fell to $1.35B from $5.92B in FY2022.1

    Free cash flow, operating cash flow less capital expenditures, was $2.96B against $993M a year earlier. That is 48.8% of revenue and more than net income of $2.43B; a year earlier it was less than net income of $1.36B. Capital spending fell to 7.6% of revenue.1

    The filing describes the earlier spending as deliberate: 'We have invested in manufacturing capacity to support customer demand, enable external foundry transfers and prepare new factories to have cleanroom space available to support future growth.' It says spending beyond the current year will depend on revenue and growth expectations. The company's own free cash flow measure also adds proceeds from CHIPS Act incentives, so its reported figures differ from the one used here.1

    AnalysisAnalysis: once cleanroom space exists, more output mostly means buying equipment, which costs less than putting up buildings. That is how spending can fall while revenue rises. The low ratio lasts only while growth can be served from shells already built.

  4. 04

    Margins still trail the FY2022 peak

    Operating margin of 47.5% trails FY2022's 50.6%: the factory base the margin must cover has grown, a cost the filing ties to capacity expansions.

    Why it matters

    FY2022 revenue was $20.03B, gross profit $13.77B and operating income $10.14B: a 50.6% operating margin. This quarter's gross margin was 64.2% and its operating margin 47.5%. In FY2025 cost of revenue was $7.60B, up from FY2022's $6.26B, on revenue of $17.68B, 88.3% of FY2022's.1

    For the first nine months, the filing says gross profit rose 'primarily due to higher revenue, partially offset by higher manufacturing costs associated with our planned capacity expansions.'1

    AnalysisCaveat: this sets a single quarter against a full year, and the filing notes that sequential revenue growth is historically stronger in the second and third quarters than in the first and fourth. The gap is indicative, not exact.

    AnalysisAnalysis: the comparison changes how this quarter's margin reads. The company added factory capacity ahead of filling it, so today's margin carries a larger cost base still being absorbed rather than a lever already at full stretch. How much room remains depends on loadings the filing does not disclose.

Sources

  1. 1.Texas Instruments 10-Q for the period to 2026-09-30 (the filing), Oct 23, 2026, read Nov 2, 2026

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Business performance

Growth, profit and margin

Revenue went from $13.8B in FY2007 to $17.7B in FY2025, the operating margin from 25.3% to 34.1%, over 18 years.

  • Revenue$17.7B
  • Operating income$6.0B
  • Operating margin34.1%
Period
Q3 FY2026
Revenue
$6.1B
Operating income
$2.9B
Operating margin
47.5%
Net income
$2.4B
Free cash flow
$3.0B
Business performance

Does the profit turn into cash?

Q3 FY2026: free cash flow of $3.0B against net income of $2.4B in the quarter.

  • Operating cash flow$7.2B
  • Capital expenditure$4.6B
  • Free cash flow$2.6B
  • Net income$5.0B

Capital expenditure is drawn below the axis as cash out. Cash conversion is operating cash flow over net income, shown in the tooltip for years with a profit.

Financial data and sources

How the revenue mix has shifted

Each breakdown the filing reports, as shares of revenue, for every period it restates.

Segments

Description of business, including segment and geographic area information - Segment Information (Details). The filing restates this breakdown for 1 period.

Click a member to isolate it across the years shown.

The figures

Margins, cash and growth for the period, each with what it was computed from.

Gross margin
64.2%
Source10-Q, Derived from Gross profit and Revenue in the 10-Q filed 2026-10-23
Operating margin
47.5%
Source10-Q, Derived from Operating profit and Revenue in the 10-Q filed 2026-10-23
Net margin
40.0%
Source10-Q, Derived from Net income and Revenue in the 10-Q filed 2026-10-23
Free cash flow, quarter
$3.0B
Source10-Q, Derived from the prior period in the history in the 10-Q filed 2026-10-23
Free cash flow margin, quarter
48.8%
Source10-Q, Derived from the prior period in the history in the 10-Q filed 2026-10-23
Cash conversion, quarter
1.41x
Source10-Q, Derived from the prior period in the history in the 10-Q filed 2026-10-23
Capital spending, quarter
7.6%
Source10-Q, Derived from the prior period in the history in the 10-Q filed 2026-10-23
Revenue growth
+27.7%
From the record's own history, against the prior year.

Where revenue comes from

Every breakdown the filing reports for the period, with each item's share.

Segments

Analog$4.9B81.1%
Embedded Processing$858.0M14.2%
Other$286.0M4.7%

Source10-Q, us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, as reported in the 10-Q filed 2026-10-23

What it costs

The cost lines beneath operating income, each as a share of revenue, then the operating result.

Costs are reported by function: what it cost to make what was sold, then the expenses of selling, developing and administering.

Cost lineQ3 FY2026Of revenueSource
Cost of revenue (COR)$2.2B35.8%Source10-Q, us-gaap:CostOfGoodsAndServicesSold, as reported in the 10-Q filed 2026-10-23
Operating profit$2.9B47.5%Source10-Q, us-gaap:OperatingIncomeLoss, as reported in the 10-Q filed 2026-10-23

Operating income by segment

Where the operating profit is earned, as the filing reports it.

Segments

Analog$2.5B87.2%
Embedded Processing$227.0M7.9%
Other$142.0M4.9%

Shares of operating income. Source10-Q, us-gaap:OperatingIncomeLoss, as reported in the 10-Q filed 2026-10-23

Operating figures the company states

From the text of the filing rather than its statements, each with the sentence that states it.

Days of inventory
194 days
As of Sep 30, 2026
View source
Days of inventory for the third quarter of 2026 were 194 compared with 222 at the end of 2025, which reflects the continued execution of our inventory strategy.
Item 2. Management’s discussion and analysis of financial condition and results of operations, 10-Q filed Oct 23, 2026
Days sales outstanding
39 days
As of Sep 30, 2026
View source
Days sales outstanding in the third quarter of 2026 were 39 compared with 40 at the end of 2025.
Item 2. Management’s discussion and analysis of financial condition and results of operations, 10-Q filed Oct 23, 2026

The statements, as filed

The income statement, cash flow statement and balance sheet in the company's own order and words. Every line links to the filing.

Income statement20 lines, as presented in the 10-Q
LineQ3 FY2026A year earlierChangeOf revenueSource
Income Statement
Revenue$6.06B$4.74B+28%100%Source10-Q, us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, as reported in the 10-Q filed 2026-10-23
Cost of revenue (COR)$2.17B$2.02B+7.4%35.8%Source10-Q, us-gaap:CostOfGoodsAndServicesSold, as reported in the 10-Q filed 2026-10-23
Gross profit$3.89B$2.72B+43%64.2%Source10-Q, us-gaap:GrossProfit, as reported in the 10-Q filed 2026-10-23
Research and development (R&D)$530.0M$518.0M+2.3%8.8%Source10-Q, us-gaap:ResearchAndDevelopmentExpense, as reported in the 10-Q filed 2026-10-23
Selling, general and administrative (SG&A)$476.0M$457.0M+4.2%7.9%Source10-Q, us-gaap:SellingGeneralAndAdministrativeExpense, as reported in the 10-Q filed 2026-10-23
Restructuring charges/other$0$85.0M0.0%Source10-Q, txn:RestructuringChargesAndOtherNet, as reported in the 10-Q filed 2026-10-23
Acquisition charges$7.0M$00.1%Source10-Q, us-gaap:BusinessCombinationAcquisitionRelatedCosts, as reported in the 10-Q filed 2026-10-23
Operating profit$2.87B$1.66B+73%47.5%Source10-Q, us-gaap:OperatingIncomeLoss, as reported in the 10-Q filed 2026-10-23
Other income (expense), net (OI&E)$72.0M$62.0M+16%1.2%Source10-Q, us-gaap:OtherNonoperatingIncomeExpense, as reported in the 10-Q filed 2026-10-23
Interest and debt expense$141.0M$141.0M0.0%2.3%Source10-Q, us-gaap:InterestAndDebtExpense, as reported in the 10-Q filed 2026-10-23
Income before income taxes$2.81B$1.58B+77%46.3%Source10-Q, us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest, as reported in the 10-Q filed 2026-10-23
Provision for income taxes$380.0M$220.0M+73%6.3%Source10-Q, us-gaap:IncomeTaxExpenseBenefit, as reported in the 10-Q filed 2026-10-23
Net income$2.43B$1.36B+78%40.0%Source10-Q, us-gaap:NetIncomeLoss, as reported in the 10-Q filed 2026-10-23
Earnings per common share (EPS):
Basic (in dollars per share)$3$1+77%0.0%Source10-Q, us-gaap:EarningsPerShareBasic, as reported in the 10-Q filed 2026-10-23
Diluted (in dollars per share)$3$1+77%0.0%Source10-Q, us-gaap:EarningsPerShareDiluted, as reported in the 10-Q filed 2026-10-23
Average shares outstanding:
Basic (in shares)914,000,000909,000,000+0.6%Source10-Q, us-gaap:WeightedAverageNumberOfSharesOutstandingBasic, as reported in the 10-Q filed 2026-10-23
Diluted (in shares)921,000,000914,000,000+0.8%Source10-Q, us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding, as reported in the 10-Q filed 2026-10-23
Diluted EPS:
Net income$2.43B$1.36B+78%40.0%Source10-Q, us-gaap:NetIncomeLoss, as reported in the 10-Q filed 2026-10-23
Income allocated to RSUs (shown as a deduction)($14.0M)$8.0M+75%0.2%Source10-Q, us-gaap:UndistributedEarningsLossAllocatedToParticipatingSecuritiesDiluted, as reported in the 10-Q filed 2026-10-23
Income allocated to common stock for diluted EPS$2.41B$1.36B+78%39.8%Source10-Q, us-gaap:NetIncomeLossAvailableToCommonStockholdersDiluted, as reported in the 10-Q filed 2026-10-23
Cash flow statement2 lines, as presented in the 10-Q

Year to date, as a quarterly filing reports it.

LineQ3 FY2026A year earlierChangeSource
Cash flows from operating activities
Net income$2.43B$1.36B+78%Source10-Q, us-gaap:NetIncomeLoss, as reported in the 10-Q filed 2026-10-23
Statement of Cash Flows
Cash and cash equivalents at end of period$4.21B$3.31B+27%Source10-Q, us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsIncludingDisposalGroupAndDiscontinuedOperations, as reported in the 10-Q filed 2026-10-23
Balance sheet37 lines, as presented in the 10-Q
LineQ3 FY2026A year earlierChangeSource
Current assets:
Cash and cash equivalents$4.21BSource10-Q, us-gaap:CashAndCashEquivalentsAtCarryingValue, as reported in the 10-Q filed 2026-10-23
Short-term investments$3.93BSource10-Q, us-gaap:ShortTermInvestments, as reported in the 10-Q filed 2026-10-23
Accounts receivable, net of allowances of ($27) and ($22)$2.62BSource10-Q, us-gaap:AccountsReceivableNetCurrent, as reported in the 10-Q filed 2026-10-23
Raw materials$497.0MSource10-Q, us-gaap:InventoryRawMaterialsNetOfReserves, as reported in the 10-Q filed 2026-10-23
Work in process$2.48BSource10-Q, us-gaap:InventoryWorkInProcessNetOfReserves, as reported in the 10-Q filed 2026-10-23
Finished goods$1.69BSource10-Q, us-gaap:InventoryFinishedGoodsNetOfReserves, as reported in the 10-Q filed 2026-10-23
Inventories$4.67BSource10-Q, us-gaap:InventoryNet, as reported in the 10-Q filed 2026-10-23
Prepaid expenses and other current assets$1.45BSource10-Q, us-gaap:PrepaidExpenseAndOtherAssetsCurrent, as reported in the 10-Q filed 2026-10-23
Total current assets$16.88BSource10-Q, us-gaap:AssetsCurrent, as reported in the 10-Q filed 2026-10-23
Assets
Property, plant and equipment at cost$18.07BSource10-Q, us-gaap:PropertyPlantAndEquipmentGross, as reported in the 10-Q filed 2026-10-23
Accumulated depreciation (shown as a deduction)($6.24B)Source10-Q, us-gaap:AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment, as reported in the 10-Q filed 2026-10-23
Property, plant and equipment$11.83BSource10-Q, us-gaap:PropertyPlantAndEquipmentNet, as reported in the 10-Q filed 2026-10-23
Goodwill$4.33BSource10-Q, us-gaap:Goodwill, as reported in the 10-Q filed 2026-10-23
Deferred tax assets$1.05BSource10-Q, us-gaap:DeferredIncomeTaxAssetsNet, as reported in the 10-Q filed 2026-10-23
Capitalized software licenses$301.0MSource10-Q, us-gaap:FiniteLivedIntangibleAssetsNet, as reported in the 10-Q filed 2026-10-23
Overfunded retirement plans$320.0MSource10-Q, us-gaap:DefinedBenefitPlanAssetsForPlanBenefitsNoncurrent, as reported in the 10-Q filed 2026-10-23
Other long-term assets$2.12BSource10-Q, us-gaap:OtherAssetsNoncurrent, as reported in the 10-Q filed 2026-10-23
Total assets$36.84BSource10-Q, us-gaap:Assets, as reported in the 10-Q filed 2026-10-23
Current liabilities:
Current portion of long-term debt$650.0MSource10-Q, us-gaap:LongTermDebtCurrent, as reported in the 10-Q filed 2026-10-23
Accounts payable$837.0MSource10-Q, us-gaap:AccountsPayableCurrent, as reported in the 10-Q filed 2026-10-23
Accrued compensation$675.0MSource10-Q, us-gaap:EmployeeRelatedLiabilitiesCurrent, as reported in the 10-Q filed 2026-10-23
Income taxes payable$60.0MSource10-Q, us-gaap:AccruedIncomeTaxesCurrent, as reported in the 10-Q filed 2026-10-23
Accrued expenses and other liabilities$795.0MSource10-Q, us-gaap:OtherLiabilitiesCurrent, as reported in the 10-Q filed 2026-10-23
Total current liabilities$3.02BSource10-Q, us-gaap:LiabilitiesCurrent, as reported in the 10-Q filed 2026-10-23
Liabilities and stockholders’ equity
Long-term debt$12.91BSource10-Q, us-gaap:LongTermDebtNoncurrent, as reported in the 10-Q filed 2026-10-23
Underfunded retirement plans$118.0MSource10-Q, us-gaap:PensionAndOtherPostretirementDefinedBenefitPlansLiabilitiesNoncurrent, as reported in the 10-Q filed 2026-10-23
Deferred tax liabilities$62.0MSource10-Q, us-gaap:DeferredIncomeTaxLiabilitiesNet, as reported in the 10-Q filed 2026-10-23
Other long-term liabilities$1.55BSource10-Q, us-gaap:OtherLiabilitiesNoncurrent, as reported in the 10-Q filed 2026-10-23
Total liabilities$17.65BSource10-Q, us-gaap:Liabilities, as reported in the 10-Q filed 2026-10-23
Stockholders’ equity:
Preferred stock, $25 par value. Shares authorized – 10; none issued$0Source10-Q, us-gaap:PreferredStockValue, as reported in the 10-Q filed 2026-10-23
Common stock, $1 par value. Shares authorized – 2,400; shares issued – 1,741$1.74BSource10-Q, us-gaap:CommonStockValue, as reported in the 10-Q filed 2026-10-23
Paid-in capital$5.20BSource10-Q, us-gaap:AdditionalPaidInCapitalCommonStock, as reported in the 10-Q filed 2026-10-23
Retained earnings$54.28BSource10-Q, us-gaap:RetainedEarningsAccumulatedDeficit, as reported in the 10-Q filed 2026-10-23
Treasury common stock at cost Shares: September 30, 2026 – 827; December 31, 2025 – 834 (shown as a deduction)($41.96B)Source10-Q, us-gaap:TreasuryStockValue, as reported in the 10-Q filed 2026-10-23
Accumulated other comprehensive income (loss), net of taxes (AOCI)-$85.0MSource10-Q, us-gaap:AccumulatedOtherComprehensiveIncomeLossNetOfTax, as reported in the 10-Q filed 2026-10-23
Total stockholders’ equity$19.19BSource10-Q, us-gaap:StockholdersEquity, as reported in the 10-Q filed 2026-10-23
Liabilities and stockholders’ equity
Total liabilities and stockholders’ equity$36.84BSource10-Q, us-gaap:LiabilitiesAndStockholdersEquity, as reported in the 10-Q filed 2026-10-23

About this data

Source
Texas Instruments 10-Q, accession 0000097476-26-000169, filed Oct 23, 2026, read on Nov 2, 2026.
History
From the SEC's XBRL company facts, the value from the latest filing that stated each period.
Reading
Paragraphs marked Analysis are CXProWealth's reading; everything else is the filing's own numbers and words, or a cited source.
Version
methodology business-lens-1.0 · schema 1.2.0 · run business-lens-2026-11-02
Edge and risks

What holds Texas Instruments's model up, and what could bend it

Competitive edge

  • Owned factories give a cost and supply edge

    Making most of its own chips held cost of revenue to 35.8% of sales and gives customers capacity the company itself controls.

    The detail

    '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.' Cost of revenue was $2.17B, 35.8% of revenue, leaving a 64.2% gross margin.1

    The filing says the company has focused on 'creating a competitive structural cost advantage' by investing in production on larger wafers, and expects its internal sourcing to keep increasing as planned capacity comes on.1

    AnalysisAnalysis: the edge holds because it is costly to copy. A rival would need years of capital spending of the kind that held this company's free cash flow to $1.35B in FY2023.

  • A wide catalog spreads research over years of sales

    R&D grew 2.3% while revenue grew 27.7%, falling to 8.75% of sales, and the filing says no single launch moves revenue much.

    The detail

    'New products do not tend to have a significant impact on our revenue in any given period because we sell such a large number of products.' R&D was $530M against $518M a year earlier, 8.75% of revenue, down 2.17 points.1

    Among its competitive advantages the filing lists 'Diversity and longevity of our products, markets and customer positions that provide less single point dependency and longer returns on our investments.' Demand this quarter was broad: 'revenue growth across all end markets and regions.'1

    AnalysisAnalysis: a part designed into a customer's product tends to sell for years, so each research dollar earns over a long tail of revenue. R&D is set for the long run rather than to the quarter's demand, which is why it barely moved in a surge.

  • Stock built ahead lets it serve the upturn

    Days of inventory fell to 194 from 222 at year-end as stock built in softer years met returning demand.

    The detail

    The 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.' Days of inventory were 194 against 222 at the end of last year, 'which reflects the continued execution of our inventory strategy.'1

    Collections kept pace as sales rose: days sales outstanding were 39 against 40 at the end of last year. One stated inventory objective is to 'maintain dependable and competitive lead times'.1

    AnalysisAnalysis: the buffer links the service promise to the factory economics. In soft years, building stock keeps factories loaded and fixed costs absorbed; in an upturn, it lets the company quote dependable lead times.

What to watch

  • The same fixed costs deepen a downturn

    When FY2024 revenue fell to 78.1% of FY2022's, operating income fell to 53.9% of it, as factory costs stayed while volume dropped.

    The detail

    From FY2022 to FY2024 revenue went from $20.03B to $15.64B while cost of revenue rose from $6.26B to $6.55B. Gross profit fell from $13.77B to $9.09B and operating income from $10.14B to $5,465M. Gross margin was 58.1% in FY2024.1

    'When factory loadings decrease, our fixed costs are spread over reduced output and, absent other circumstances, our profit margins decrease.'1

    AnalysisAnalysis: the filing describes this quarter as secular growth alongside 'a strong cyclical recovery'. Whatever part is cyclical would unwind through the same cost base that lifted the margin.

  • A cyclical upturn can turn back into stock

    The filing calls this a strong cyclical recovery; in a slowdown the build-ahead strategy would move cash back into inventory.

    The detail

    The filing describes the semiconductor cycle as periods of tight supply followed by surplus inventory as demand weakens or capacity overshoots. Revenue has risen every quarter this year, from $4.83B to $5.46B to $6.06B, and sequential growth is historically weaker in the first and fourth quarters.1

    'Inventory levels will vary based on market conditions and seasonality. We adjust factory loadings as needed to execute on this inventory strategy.' Days of inventory were 194 against 222 at the end of last year.1

    AnalysisAnalysis: cash moves faster than margins here. In the first quarter of FY2025, with heavy factory spending, free cash flow was negative $274M. A slowdown that refills inventory would weigh on cash before it shows in reported margins.

  • An all-cash acquisition still to close and fund

    The planned Silicon Labs purchase awaits regulatory approval, and the company expects to fund it partly with debt, on top of $141M of quarterly interest.

    The detail

    The deal is 'subject to receipt of regulatory approvals and other customary closing conditions', and 'We expect to fund the transaction with a combination of cash on hand and debt financing.' The quarter carried $7M of acquisition charges for it. A delayed draw term loan arranged for the deal was undrawn at quarter end.1

    Interest and debt expense was $141M in both the third quarter and the year-ago quarter, 4.9% of this quarter's $2.87B operating profit.1

    AnalysisAnalysis: the test is the one the company's model sets for itself, whether acquired products can move into its own factories and sales channels, which is how it turns revenue into free cash flow per share. Added interest and integration costs would show first in net income and cash flow.

Sources

  1. 1.Texas Instruments 10-Q for the period to 2026-09-30 (the filing), Oct 23, 2026, read Nov 2, 2026
Go deeper

Texas Instruments, further in

Member research, then your own questions on ChatGPT.

What could change the outlook

What Texas Instruments's numbers depend on from here, read from the filing: the conditions behind this period's margins and growth, and where a change would show first.

  • What this margin depends on when the cycle turns

    How much of the quarter's margin comes from full factories rather than structure, and which reported figures would show a shift first.

  • What Silicon Labs has to prove inside this model

    The conditions under which an acquired product line fits the owned-factory, broad-catalog model, and where the deal adds pressure on cash flow.

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Questions to start with
  • How far could Texas Instruments' operating margin fall if factory loadings dropped the way they did between FY2022 and FY2024?
  • Why does Embedded Processing earn about half of Analog's segment margin at Texas Instruments, and what would a fuller LFAB change?
  • Can Texas Instruments keep capital spending near 13.5% of operating cash flow if revenue keeps growing?

Business Lens describes Texas Instruments from its own filings with the SEC. It is not a view on its shares, a target, or advice to buy, sell or hold anything; figures are as filed and may be restated by the company later. The filing, the dates and the version are under the financial data above.