Texas Instruments Q2 Earnings Beat Estimates, Revenues Rise Y/Y

Texas Instruments TXN reported better-than-expected second-quarter 2025  results. The company reported second-quarter earnings per share of $1.41, which beat the Zacks Consensus Estimate by 6.82% and came above the midpoint of management’s guidance of $1.21 to $1.47. The quarterly earnings increased 15.6% year over year.

TXN’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 11.23%.

Texas Instruments reported revenues of $4.45 billion, which beat the Zacks Consensus Estimate by 3.23%. The figure came above the midpoint of management’s guidance of $4.17-$4.53 billion. The top line rose 16% year over year.

Texas Instruments Incorporated Price, Consensus and EPS Surprise

Texas Instruments Incorporated price-consensus-eps-surprise-chart | Texas Instruments Incorporated Quote

Texas Instruments’ Q2 Top-Line Details

Segment-wise, Texas Instruments operates under three business divisions: Analog, Embedded Processing and Other.

Analog: Revenues of $3.45 billion were generated from the segment (77.6% of total revenues), up 18% from the year-ago quarter’s level. The figure came above our model estimate of $3.34 billion.

Embedded Processing: Revenues amounted to $679 million (15.3% of total revenues), up 10.4% year over year. The figure surpassed our model estimate of $662.5 million.

Other: Revenues totaled $317 million (7.1% of total revenues), up 13.6% from the prior-year quarter’s level. The figure surpassed our model estimate of $280.9 million.

Texas Instruments’ Operating Details

Texas Instruments’ gross profit increased 16% year over year to $2.58 billion. Gross margin of 58% remained flat year over year.

Selling, general and administrative (SG&A) expenses grew 4.3% year over year to $485 million. As a percentage of revenues, SG&A expenses contracted 130 bps year over year to 10.9%.

Research and development (R&D) expenses grew 5.8% to $527 million. As a percentage of revenues, it decreased 160 basis points to 11.8%.

Operating profit rose 25.2% year over year to $1.56 billion. The operating margin was 35.1%, which expanded 250 bps from the prior-year quarter’s number.

TXN’s Balance Sheet & Cash Flow

As of June 30, 2025, the cash and short-term investment balance was $5.36 billion, up from $5 billion as of March 31, 2025.

At the end of the reported quarter, TXN’s long-term debt was $14.04 billion, up from $12.85 billion in the previous quarter.

Texas Instruments generated an operating cash flow of approximately $1.86 billion in the second quarter. During the second quarter, it repurchased stocks worth $302 million and paid $1.24 billion in dividends.

In the first half of 2025, the company generated an operating cash flow of $2.71 billion and returned approximately $3.44 billion through share repurchases and dividend payments.

TXN Initiates Guidance for Q3 2025

For the third quarter of 2025, TXN expects revenues between $4.45 billion and $4.80 billion. The Zacks Consensus Estimate for third-quarter revenues is currently pegged at $4.52 billion, indicating an increase of 8.93% from the year-ago quarter.

The company expects earnings per share between $1.36 and $1.60. The consensus mark for the same is pegged at $1.47 per share, remaining flat from the year-ago quarter.

The company expects the effective tax rate to be approximately 12-13%.

Zacks Rank and Stocks to Consider

Currently, TXN carries a Zacks Rank #3 (Hold).

ACI Worldwide ACIW, Adobe ADBE and Applied Materials AMAT are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. ACIW, ADBE and AMAT carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ACI Worldwide shares have lost 12.3% year to date. The Zacks Consensus Estimate for ACI Worldwide’s full-year 2025 earnings is pegged at $2.84 per share, up by a penny over the past 30 days, implying growth of 7.58% from the year-ago quarter’s reported figure.

Adobe shares have lost 16.1% year to date. The Zacks Consensus Estimate for Adobe’s full-year fiscal 2025 earnings has been revised upward to $20.63 per share in the past 30 days, indicating year-over-year growth of 12%.

Applied Materials shares have gained 15.1% year to date. The Zacks Consensus Estimate for Applied Materials ’ full-year 2025 earnings is pegged at $9.47 per share, up by a penny over the past 60 days, implying a rise of 9.48% from the year-ago quarter’s reported figure.

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