• Revenue: $4.1 billion, up 2% sequentially and 11% year-over-year.
• Analog Revenue: Increased 13% year-over-year.
• Embedded Processing Revenue: Approximately flat year-over-year.
• Other Segment Revenue: Grew 23% from the year-ago quarter.
• Gross Profit: $2.3 billion, representing 57% of revenue.
• Operating Expenses: $989 million, up 6% from a year ago.
• Operating Profit: $1.3 billion, or 33% of revenue, up 3% year-over-year.
• Net Income: $1.2 billion, or $1.28 per share.
• Cash Flow from Operations: $849 million for the quarter.
• Capital Expenditures: $1.1 billion for the quarter.
• Free Cash Flow: $1.7 billion on a trailing 12-month basis.
• Dividends Paid: $1.2 billion in the quarter.
• Stock Repurchases: $653 million in the quarter.
• Total Debt Outstanding: $12.95 billion with a weighted average coupon of 3.93%.
• Inventory: $4.7 billion, up $160 million from the prior quarter.
• Second Quarter Revenue Guidance: Expected to be in the range of $4.17 billion to $4.53 billion.
• Second Quarter EPS Guidance: Expected to be in the range of $1.21 to $1.47.

• Warning! GuruFocus has detected 9 Warning Signs with TXN.

Release Date: April 23, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Texas Instruments Inc (NASDAQ:TXN) reported a revenue increase of 11% year-over-year, reaching $4.1 billion in the first quarter of 2025.
• Analog revenue grew by 13% year-over-year, indicating strong performance in this segment.
• The industrial market showed a broad recovery, increasing in upper single digits after seven consecutive quarters of decline.
• Texas Instruments Inc (NASDAQ:TXN) returned $6.4 billion to shareholders over the past 12 months through dividends and stock repurchases.
• The company maintains a strong balance sheet with $5 billion in cash and short-term investments, providing financial stability.

Negative Points

• Gross profit margin decreased by 90 basis points sequentially, indicating some pressure on profitability.
• Operating expenses increased by 6% from the previous year, which could impact overall profitability.
• The personal electronics market declined by mid-teens, reflecting typical seasonal trends but also indicating potential weakness in this segment.
• There is high uncertainty in the global market due to tariffs and geopolitical tensions, which could impact future performance.
• Customer inventories are at low levels across all end markets, which could pose risks if demand does not recover as expected.

Q & A Highlights

Q: The guidance is up 7%, better than normal seasonal trends. Is there any indication of pull-ins ahead of tariffs? A: Haviv Ilan, CEO, explained that the recovery in the industrial market is a significant factor, with customer inventories at low levels. While there is uncertainty due to tariffs and geopolitical issues, the company is cautious but does not see an immediate near-term impact on the second quarter.

Q: Can you discuss the increase in inventory and its impact on gross margins? A: Rafael Lizardi, CFO, noted that gross margins benefited from higher revenue and a greater mix of industrial sales. Factory loadings were higher than expected due to strong demand, and gross margins are expected to increase slightly in the second quarter.

Q: How is Texas Instruments positioned to handle potential impacts from Chinese tariffs? A: Haviv Ilan, CEO, emphasized the company's geopolitically dependable capacity and flexibility in logistics and manufacturing. TI is working closely with customers to navigate the evolving supply chain dynamics and is well-prepared to support them.

Q: What is the competitive landscape in China, and how is TI responding? A: Haviv Ilan, CEO, acknowledged intensifying competition in China, particularly from local companies. TI leverages its broad product portfolio, quality, and supply chain capabilities to maintain a competitive edge and meet customer demands.

Q: Can you explain the strategy behind share repurchases and the use of debt? A: Rafael Lizardi, CFO, stated that the objective is to return all free cash flow via dividends and repurchases. TI is comfortable with its current cash levels and has room to take on more debt if necessary, as they approach the end of elevated CapEx investments.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.