Texas Instruments Q1 Earnings Beat Estimates, Revenues Rise Y/Y
Texas InstrumentsTXN reported first-quarter 2026 earnings of $1.68 per share, which increased 31.3% year over year. The bottom line beat the Zacks Consensus Estimate by 22.6%.
TXN’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, while missing once, with an average surprise of 6.9%.
TXN posted revenues of $4.83 billion, which rose 18.6% from the year-ago quarter. The top line surpassed the consensus mark by 6.8%, driven by strength in industrial and data center demand.
Texas Instruments Incorporated Price, Consensus and EPS Surprise
Texas Instruments Incorporated price-consensus-eps-surprise-chart | Texas Instruments Incorporated Quote
TXN’s Segment Mix Highlights Broad-Based Growth
Texas Instruments’ first-quarter results reflected strength across its two core operating segments.
Analog revenues came in at $3.92 billion (81.3% of total revenues), which grew 22% from the year-ago quarter, underscoring improving demand conditions across key end markets. The figure came above our model estimate of $3.57 billion.
Embedded Processing revenues totaled $723 million (15% of total revenues), reflecting 12% year-over-year growth. The figure surpassed our model estimate of $682.9 million.
The Other segment generated $178 million of revenues (3.7% of total revenues), which declined 16% from the prior-year period. The figure missed our model estimate of $278.6 million.
Texas Instruments Expands Operating Leverage
Texas Instruments’ gross profit increased 21% year over year to $2.80 billion. Gross margin of 58% expanded 120 basis points (bps) year over year.
Selling, general and administrative (SG&A) expenses decreased 1.7% year over year to $464 million. As a percentage of revenues, SG&A expenses contracted 200 bps year over year to 9.6%.
Research and development expenses declined 1.4% year over year to $510 million. As a percentage of revenues, it decreased 160 bps year over year to 10.6%.
Operating profit rose 36.6% year over year to $1.81 billion. The operating margin was 37.5%, which expanded 490 bps from the prior-year quarter’s number.
TXN Cash Generation Supports Shareholder Returns
As of March 31, 2026, the cash and short-term investment balance was $5.1 billion, up from $4.88 billion as of Dec. 31, 2025.
At the end of the reported quarter, TXN’s long-term debt was $12.9 billion, down from $13.55 billion in the previous quarter.
Texas Instruments generated an operating cash flow of approximately $1.52 billion in the first quarter. During the first quarter, it repurchased stocks worth $158 million and paid $1.29 billion in dividends.
Texas Instruments Initiates Guidance for Q2 2026
Management’s outlook calls for second-quarter 2026 revenues in the range of $5.00-$5.40 billion. The Zacks Consensus Estimate for second-quarter revenues is currently pegged at $4.80 billion, indicating an increase of 7.9% from the year-ago quarter.
The company expects earnings per share between $1.77 and $2.05. The consensus mark for the same is pegged at $1.55 per share, indicating an increase of 9.9% from the year-ago quarter.
The company expects an effective tax rate of about 13% in the second quarter.
On the second-quarter earnings call, management pointed to continued acceleration in industrial and data center, noting industrial growth of more than 30% year over year and data center growth of about 90%. The company also highlighted its agreement to acquire Silicon Labs, a deal it expects to close in the first half of 2027, subject to approvals.
Zacks Rank and Other Stocks to Consider
Currently, TXN carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader Zacks Computer and Technology sector are Arista NetworksANET, Advanced EnergyAEIS and Applied MaterialsAMAT, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Arista Networks have gained 35.6% year to date. The Zacks Consensus Estimate for ANET’s 2026 earnings is pegged at $3.54 per share, up by a penny over the past seven days, indicating an increase of 18.8% year over year.
Shares of Advanced Energy have gained 80.2% year to date. The Zacks Consensus Estimate for AEIS’ 2026 earnings is pegged at $8.32 per share, up by 12 cents over the past 60 days, indicating a rise of 29.8% year over year.
Applied Materials shares have surged 57% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $11.10 per share, down by a penny over the past 30 days, indicating an increase of 17.8% year over year.
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