Texas Instruments Q4 Earnings Miss Estimates, Revenues Rise Y/Y

Texas Instruments TXN reported fourth-quarter 2025 earnings per share of $1.27, which missed the Zacks Consensus Estimate by 2.3% and came above the midpoint of management’s guidance of $1.13 to $1.39. The bottom line decreased 2% year over year.

TXN’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, while missing once, with an average surprise of 6.5%.

Texas Instruments reported revenues of $4.42 billion, which missed the Zacks Consensus Estimate by 0.3%. The figure came above the midpoint of management’s guidance of $4.22-$4.58 billion. The top line rose 10% 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’ Q4 Top-Line Details

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

Analog: Revenues of $3.62 billion were generated from the segment (81.7% of total revenues), up 14% from the year-ago quarter’s level. The figure came above our model estimate of $3.53 billion.

Embedded Processing: Revenues amounted to $662 million (15% of total revenues), up 8% year over year. The figure surpassed our model estimate of $618.7 million.

Other: Revenues totalled $146 million (3.3% of total revenues), down 34% from the prior-year quarter’s level. The figure missed our model estimate of $276.1 million.

Texas Instruments’ Operating Details

Texas Instruments’ gross profit increased 7% year over year to $2.47 billion. Gross margin of 55.9% contracted 190 bps year over year.

Selling, general and administrative (SG&A) expenses remained flat year over year at $446 million. As a percentage of revenues, SG&A expenses contracted 100 basis points (bps) year over year to 10.1%.

Research and development expenses grew 6.1% to $521 million. As a percentage of revenues, it decreased 160 bps to 11.8%.

Operating profit rose 7% year over year to $1.47 billion. The operating margin was 33.3%, which contracted 110 bps from the prior-year quarter’s number.

TXN’s Balance Sheet & Cash Flow

As of Dec. 31, 2025, the cash and short-term investment balance was $4.88 billion, down from $5.19 billion as of Sept. 30, 2025.

At the end of the reported quarter, TXN’s long-term debt was $13.548 billion, up marginally from $13.546 billion in the previous quarter.

Texas Instruments generated an operating cash flow of approximately $2.25 billion in the fourth quarter. During the fourth quarter, it repurchased stocks worth $403 million and paid $1.29 billion in dividends.

In 2025, the company generated an operating cash flow of $7.15 billion and returned approximately $6.48 billion through share repurchases and dividend payments.

TXN Initiates Guidance for Q1 2026

For the first quarter of 2026, TXN expects revenues between $4.32 billion and $4.68 billion. The Zacks Consensus Estimate for first-quarter revenues is currently pegged at $4.39 billion, indicating an increase of 7.9% from the year-ago quarter.

The company expects earnings per share between $1.22 and $1.48. The consensus mark for the same is pegged at $1.30 per share, indicating an increase of 1.6% from the year-ago quarter.

The company expects the effective tax rate to be in the band of 13-14%.

Zacks Rank and Other Stocks to Consider

Currently, TXN carries a Zacks Rank #2 (Buy).

Amphenol APH, Micron Technology MU and Lam Research LRCX are some other top-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. Amphenol, Micron Technology and Lam Research sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Amphenol’s 2025 earnings has been revised upward by 2 cents to $3.31 per share over the past 30 days and suggests a year-over-year increase of 75.1%. Amphenol shares have jumped 58.4% in the past six months.

The Zacks Consensus Estimate for Micron Technology’s fiscal 2026 earnings has moved downwards by 7 cents to $33.01 per share in the past seven days, calling for a year-over-year surge of 298.2%. Micron Technology shares have skyrocketed 267.4% in the past six months.

The Zacks Consensus Estimate for Lam Research’s fiscal 2026 earnings has been revised upward by 2 cents to $4.85 per share over the past seven days, suggesting a year-over-year increase of 17.2%. Lam Research shares have surged 141.9% in the past six months.

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This article originally published on Zacks Investment Research (zacks.com).

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