Texas Instruments Incorporated · TXN · FY2026 Q2 · Calendar Q3 2026

TXN Q2 2026: Revenue and EPS Beat, Pricing Hikes Begin, Guidance Reaffirmed

Texas Instruments posted a second consecutive quarter of accelerating growth, with Q2 revenue up 23% YoY to $5.46 billion and EPS of $2.14 beating consensus by 12%. Gross margin expanded 340 bps to 61% as industrial, automotive, and data-center demand all gained. Management reaffirmed Q3 guidance and announced pricing increases beginning in Q3, signaling confidence in demand sustainability. The stock traded modestly lower post-earnings despite the beat, with analyst attention focused on whether H2 momentum can persist.

Reported After market closeNASDAQTechnology $254.29B market cap
100quality score

Company context

Snapshot as of publication

Texas Instruments Incorporated (TI) specializes in the global design, production, and sale of semiconductors to electronics engineers and manufacturers. Its operations are structured into two core segments: Analog and Embedded Processing. The Analog division provides a comprehensive suite of power management products, such as battery-management solutions, various DC/DC and AC/DC switching regulators and controllers, power switches, linear regulators, voltage supervisors, references, and lighting components, all critical for managing diverse power needs. This segment also delivers signal chain products designed to sense, condition, and measure electrical signals, facilitating information transfer or conversion for further processing and control, encompassing items like amplifiers, data converters, interface devices, motor drives, clocks, and sensing…

Earnings scorecard

Reported versus consensus
Reported EPS $2.14 Consensus $2
EPS surprise +12.0% Reported versus consensus
Reported revenue $5.46B Consensus $5.26B
Revenue surprise +3.9% Reported versus consensus

Market reaction

event-close to next-session close
Stock move -3.1% Event window
SPY move -1.2% Same window
Abnormal move -1.9% Stock minus SPY
Volume 1.3× Versus trailing sessions
Subsequent drift -2.0% Up to 20 sessions
TXNSPY benchmark

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Transcript intelligence

What changed

Revenue growth accelerated from 19% YoY in Q1 to 23% YoY in Q2. Gross margin expanded from 58% to 61%, with the rate of improvement widening from 210 bps to 340 bps sequentially. Automotive demand accelerated to mid-teens YoY growth, supported by low customer inventory levels and EV/hybrid adoption. Data-center growth roughly doubled YoY, building on the 90% growth seen in Q1. Management introduced a new element not present last quarter: pricing increases beginning in Q3 and continuing into Q4, a shift from the prior quarter's emphasis on pricing stability. The Silicon Labs acquisition timeline was refined from a broad 2027 close to the first half of next year. CHIPS Act and ITC incentive contributions to free cash flow grew, with $1.6 billion in cumulative contributions and $549 million in ITC payments received this quarter. Free cash flow reached $6.5 billion on a trailing 12-month basis, enabling $5.8 billion in shareholder returns.

Guidance delta

Q3 guidance was reaffirmed at $5.65-$6.15 billion in revenue and $2.23-$2.57 in EPS. Q2 actuals exceeded the company's prior guidance range of $5.0-$5.4 billion revenue and $1.77-$2.05 EPS, with revenue of $5.46 billion and EPS of $2.14 both coming in above the high end of the guided range. The most notable new guidance element is the pricing increase initiative starting in Q3 and continuing into Q4, which was not part of the prior quarter's outlook. Capex outlook remains increasing. Guidance sentiment is maintained.

Key takeaways

  • Revenue grew 23% YoY to $5.46 billion, beating consensus estimates by 3.9%.
  • EPS of $2.14 exceeded the consensus estimate of $1.91 by 12%, and topped the high end of prior guidance.
  • Gross margin expanded 340 bps to 61% of revenue, accelerating from 210 bps of improvement in Q1.
  • Q3 guidance reaffirmed at $5.65-$6.15 billion revenue and $2.23-$2.57 EPS.
  • Pricing increases are being rolled out in Q3, with further hikes expected into Q4 and beyond.
  • Free cash flow reached $6.5 billion trailing 12 months, supporting $5.8 billion in shareholder returns.

Management priorities

  • Implement pricing actions across Analog and Embedded segments starting in Q3 and continuing into Q4.
  • Leverage increased 300-mm fab loadings and available clean-room space to meet rising demand.
  • Complete the Silicon Labs acquisition in the first half of next year to broaden embedded wireless connectivity.
  • Develop and launch 800-volt data-center solutions as the market matures.
  • Maintain disciplined capital allocation while targeting free-cash-flow-per-share growth.

Related earnings events

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Sources

  1. Earnings call transcript and parsed analysis · 2026-07-23T01:05:57.578162+00:00
  2. FN2 earnings calendar · 2026-07-28T01:23:15.070317+00:00
  3. Polygon adjusted daily market bars · 2026-07-28T12:01:44.614376+00:00
  4. Financial Modeling Prep analyst price-target consensus and quote snapshot · 2026-07-28T12:01:44.611713+00:00

Methodology

Reported and consensus figures come from FN2's earnings event records. Market reaction and volume are calculated from daily adjusted bars around the event; abnormal move subtracts the SPY move over the same window.

Transcript intelligence is a structured synthesis of the current and prior earnings-call analyses. Missing values stay missing and are never estimated.

By FN2 Research · Updated . For educational purposes only; not investment advice.