管理層發言
Welcome to the Texas Instruments Second Quarter 2026 Earnings Conference Call. I'm Mike Beckman, Head of Investor Relations. For any of you who missed the release, you can find it on our website at ti.com/ir. This call is being broadcast live over the web and can be accessed through our website. In addition, today's call is being recorded and will be available via replay on our website. This call will include forward-looking statements that involve risks and uncertainties that could cause TI's results to differ materially from management's current expectations. We encourage you to review the notice regarding forward-looking statements contained in the earnings release published today as well as TI's most recent SEC filings for a more complete description. Today, I'm joined by our Chief Executive Officer, Haviv Ilan; and our Chief Financial Officer, Rafael Lizardi. Also with us today is Julie Knecht, who will become our Chief Financial Officer on August 1. Julie has been with TI for more than 25 years and has held a number of finance and accounting roles, most recently serving as Chief Accounting Officer since 2021. As you know, Rafael, who has been our CFO for nearly a decade, plans to retire at the end of August. Rafael's focus on disciplined capital allocation, including our investments in 300-millimeter manufacturing capacity and commitment to return all free cash flow to shareholders have positioned TI for continued long-term growth and value creation. As this is Rafael's final earnings call, I want to thank him personally for all of his contributions to TI. I'm sure you will join me in congratulating both Rafael and Julie. With that, today, we'll provide the following updates. First, Haviv will start with a quick overview of the quarter. Next, he will provide insight into second quarter revenue results with some details on what we're seeing with respect to our end markets. Lastly, Rafael will cover the financial results and give an update on capital management as well as share the guidance for third quarter 2026. With that, let me turn it over to Haviv.
Thanks, Mike. Let me start with a quick overview of the second quarter. Revenue was $5.5 billion, an increase of 13% sequentially and an increase of 23% year-over-year. Analog and Embedded Processing both grew sequentially and year-on-year. Analog revenue grew 26% year-on-year and Embedded Processing grew 16%. Our Other segment declined 2% from the year ago quarter. Let me provide a few comments about the current market environment. In the second quarter, revenue came in above the range as we saw continued growth in industrial and data center in addition to accelerated growth in automotive. Our investments in inventory and capacity are serving us well, which allows us to support our customers during this time of increased demand. We are prepared with capacity and have clean room space available and are well positioned to support continued growth. Now I'll share some additional insights into second quarter revenue by end market. First, industrial increased around 30% year-on-year and was up about 10% sequentially, growing broadly across sectors and regions. Automotive increased mid-teens year-on-year and increased upper single digits sequentially. Data center doubled year-on-year and grew around 20% sequentially. Personal electronics was flat year-over-year and grew upper single digits sequentially. And lastly, communications equipment grew both year-over-year and sequentially. With that, let me turn it over to Rafael to review profitability and capital management.
Thanks, Haviv, and good afternoon, everyone. As Haviv mentioned, second quarter revenue was $5.5 billion. Gross profit in the quarter was $3.4 billion or 61% of revenue. Sequentially, gross profit margin increased 340 basis points. Operating expenses in the quarter were $1 billion, about as expected. On a trailing 12-month basis, operating expenses were $3.9 billion or 20% of revenue. Operating profit was $2.3 billion in the quarter or 42% of revenue, and it was up 48% from the year ago quarter. Net income in the quarter was $2 billion or $2.14 per share. Earnings per share included a $0.05 benefit not in our original guidance due to discrete tax benefits. Let me now comment on our capital management results, starting with our cash generation. Cash flow from operations was $2.7 billion in the quarter and $8.7 billion on a trailing 12-month basis. Capital expenditures were $514 million in the quarter and $3.3 billion over the last 12 months. Free cash flow on a trailing 12-month basis was $6.5 billion, up from $1.8 billion in the second quarter of 2025 and continuing to trend up as growth returns. Free cash flow in the trailing 12 months includes $1.6 billion of CHIPS Act incentives, which includes both the investment tax credit and direct funding. In second quarter, we received $549 million of ITC-related payments for qualifying capital expenditures. In the quarter, we paid $1.3 billion in dividends. In total, we returned $5.8 billion to our owners in the past 12 months. Our balance sheet remains strong with $7 billion of cash and short-term investments at the end of the second quarter. Total debt outstanding is $14 billion with a weighted average coupon of 4%. Inventory at the end of the quarter was $4.6 billion, down $90 million from the prior quarter, and days were 196, down 13 days sequentially. Turning to our outlook for the third quarter. We expect TI's revenue in the range of $5.65 billion to $6.15 billion and earnings per share to be in the range of $2.23 to $2.57. We expect our effective tax rate to be about 13% in the third quarter. In closing, we will stay focused in the areas that add value in the long term. We continue to invest in our competitive advantages, which are manufacturing and technology, a broad product portfolio, reach of our channels and diverse and long-lived positions. We will continue to strengthen these advantages through disciplined capital allocation and by focusing on the best opportunities, which we believe will enable us to continue to deliver free cash flow per share growth over the long term. Before I turn it over to Mike to start Q&A, I want to say that it has been an honor to work at Texas Instruments for the last 25 years and to have been CFO during the last decade. I have thoroughly enjoyed working with so many wonderful people. Over that time, we have made TI stronger and positioned it for continued success. I feel confident about the future at TI, and I'm looking forward to what's ahead for the company.
Thanks, Rafael. Operator, you can now open the line for questions. Operator?
分析師問答
Our first question comes from the line of Harlan Sur with JPMorgan.
Julie, congrats on the promotion. And Rafael, thanks for all of the great support and execution. Haviv, last call, there was some concern stepping into the second half that we might see some slight deceleration kind of similar to last year, right? But given your above seasonal guidance for Q3, it seems like the strength in the first half is continuing into the second half. You also are now starting to see the acceleration in automotive. Do you expect this profile of strength to continue end market-wise into Q3 and maybe second half? And then what's driving the inflection in automotive?
Thanks, Harlan. I think you characterized what you're seeing well. Right now, as we stand in July, we see a setup of stronger demand, and it's broader. It's not only in the last couple of quarters, which was really an industrial and data center play. Right now, we are seeing demand growing in the automotive market. When you think about the above seasonal guide for Q3, I think the contribution will come from all markets — the three markets that drove the Q2 growth: industrial, data center and automotive. But Q3 is traditionally a quarter of personal electronics strength, so I expect strong demand across the board. Regarding automotive, we saw a combination of a couple of things. The uptick developed throughout the quarter. When we came to the call in April, we didn't have the same visibility; it built up as we went through the quarter, led by China. I think it's really led by EVs and hybrids — cost of fuel drove that, I believe. In addition, our automotive customers have taken their inventory to very low levels, and now as there is a little more demand, they find themselves in a situation that is not sustainable. That also drove part of the demand. I think we are at the start of a cycle that is very broad. That's my prediction.
Harlan, do you have a follow-up?
Yes, I do. So input costs are moving higher. Demand remains strong. I assume that the TI team is still seeing expanding short lead time orders not anticipated in your customers' initial forecast coming into the quarter. You put all of this together — you guys had talked about potential for pricing increases in the second half of the year on the last earnings call. Are you executing positive pricing initiatives with customers? When do these go into effect? And is the breadth of these increases across both your Analog and Embedded segments?
Yes. Let me recap what we said in the previous call regarding the first half of the year. We now have the full six months behind us. As we predicted, pricing was stable in the first half of the year, remaining flat. That's an above-average year for us; typically, prices do go down a couple of points every year, and this time, they held. We have started executing price increases. Because we go to market direct, we have the discussions customer by customer. So it will be dependent on the customer. Some of it will start to play in Q3, but I expect that to continue into the fourth quarter. Also, some of our customers decide pricing once a year during our annual price discussions, and that happens at the end of Q4, so that can continue into next year. Regarding the segments, the pressure and lead time escalations were mainly on the Analog side earlier in the year, but Embedded is joining the trend. So we have an opportunity across all markets and across both segments. Pricing discussions for Embedded will be more centered toward next year.
Our next question comes from the line of James Schneider with Goldman Sachs.
I was wondering if you could maybe comment on where your factory loadings stand today? How much you plan to increase them in the next couple of quarters? And then maybe just sort of comment on your desired inventory position — it went down slightly this quarter. Do you expect that to stabilize in absolute dollars or go down?
Thank you, Jim. Let me frame it at a very high level, and then I'll let Julie comment on this one. First, as I said, we saw the demand developing through the quarter. It was very dynamic. As we also mentioned in the last call, the best way to support short-term demand or demand that materializes very quickly is through inventory, and that helped in the quarter. But of course, we also have to prepare for the future, and that's where loadings come into play. Julie, maybe you can give some color on this.
Sure. Our loadings did increase from first to second quarter, and throughout the second quarter, it continued to increase. For third quarter, it will really depend on what demand looks like, but we do have clean room space available that we can equip and ramp so we can support a wide range of scenarios from a customer demand standpoint.
Jim, do you have a follow-up?
Yes. Given the free cash flow strength that you reported in Q2, can you maybe comment on whether you're on pace to exceed the range of free cash flow outcomes you provided back at your Capital Management Day earlier?
Let me remind everyone that we gave a framework of revenue and free cash flow. I believe the case for revenue at $20 billion was $8 billion to $9 billion in free cash flow, and at $22 billion it was $9 billion to $10 billion. That framework is still valid; you can use it as you model the company moving forward.
Our next question comes from the line of Stacy Rasgon with Bernstein Research.
I wanted to first ask about OpEx. Usually, it's typically down seasonally a few points into Q3. Are you still anticipating that? Or are there some differences in your spending plans given the growth profile that we're seeing now?
Stacy, this is Rafael. I'll take that one. On OpEx, net other income and expense and acquisition charges, you should expect all of those to be flat, second quarter to third quarter. That should help you with modeling the company and modeling gross margins.
Got it. That's super helpful. For my follow-up, I just wanted to ask about personal electronics. Haviv, I kind of got from your comments that it sounded like you were almost expecting strength into Q3 in personal electronics. I'm just wondering what you're seeing in that market given the current memory dynamics.
Let me clarify that. If you look at our personal electronics business, typically in Q3 it grows nicely, sometimes mid-teens. I expect this business to be growing sequentially, but maybe at a lower level. You saw our results in Q2 year-over-year: personal electronics was flat. We are seeing challenges in that market as some shortages are putting pressure on our customers. So I think that the growth is typically driven by personal electronics in Q3, but this time it's more broad across all markets. Personal electronics will be a participant because we see the demand breadth is very high.
So is it flat year-over-year or down in Q3?
Sorry, can you repeat the question?
Sorry. So do you think it's down year-over-year in Q3, given it was flat in Q2 and given it's sort of weaker versus normal trends in Q3? I'm just trying to dial in the model.
I don't have a by-end-market guide for each of the end markets. But I think Haviv's characterization of what we saw in the second quarter is a good starting point.
Our next question comes from the line of Atif Malik with Citi.
Welcome, Julie. I have a question on the data center sales that doubled year-over-year. Can you talk about your full year outlook? And then as the industry transitions to 800 volts, how do you see your competitive position versus incumbents?
We continue to see strong demand in the data center market, and I don't expect that to change in the foreseeable future. When you think about future architectures like 800 volts, it will be phased into the market. You can envision at the beginning maybe AC to DC, maybe AC to 800 volts and then 800 to 48, 48 to 12, for example. That's how you bring in the technology. To me, that means a higher growth TAM and more conversion stages, which helps our market on the Analog and Embedded side, given the different Analog parts participating in every conversion stage as well as the Embedded controllers and signal chain parts. In the longer term, once 800 volts is established, data center input will be at DC voltage of 800 volts, and you may see direct conversion from 800 to 12 or 6 volts, but that's coming later. The higher voltage creates more opportunity for us.
I think that layers on top of the foundational position that we have in data center, which has been growing very nicely as well. We are looking forward to both types of chips contributing in the future.
On the gross margins for the data center business, as this business grows, are your expectations that the profitability of the data center business will be in line with the corporate average over time?
Up to where we are now, it's been pretty similar to the overall corporate average. I wouldn't skew you in either direction far on that. We'll have to see as it ramps what that means. The good news is that as we ramp in any end market, including data center, it's going to be on 300-millimeter on newer assets that have excellent ability to fall through for us. So we are looking forward to that.
Our next question comes from the line of Vivek Arya with Bank of America.
Best wishes to both Rafael and to Julie. Haviv, my first question is for you: where are we in the industrial recovery cycle? How many more above seasonal quarters should one expect? And I think you mentioned pricing as a lever for Q3. Can you help us quantify how much pricing is contributing to this, I think, roughly 8% or so sequential growth in Q3? And can prices go up again in Q4?
Let me start with the industrial market and say a few words about pricing. We have a lot of opportunity in front of us. Even with the nice growth in Q2, we are still lower than the 2022 peak, maybe 5 or 6 points lower than that peak. If you think about the trend line of the industrial market, a mid- to high-single-digit growth TAM, and given we're four years later, you can argue we still have room to grow. On top of that, the data center market provides tailwinds into industrial, for sectors like energy infrastructure and test and measurement, which were our fastest-growing segments in the first half. I think customers are early and are not yet building inventory, so the setup is positive. Regarding pricing, for Q3 the vast majority of the improvement is unit growth and maybe a little contribution from pricing, but almost insignificant.
Do you have a follow-up, Vivek?
Yes. If we try to think about TI's opportunity in data center beyond 2026 — for 2027, 2028 and beyond — what is the right kind of growth rate one should think about? Is it 40%? 50%? And as part of that, do you think achieving that growth rate exposes you to winning or losing specific sockets at GPU or ASIC vendors? How should we think about TI's long-term growth rate in the data center business?
I don't think I can put a specific long-term percentage on it here, but our opportunity in data center is growing because of our R&D investment and our ability to supply. As the market becomes a more substantial part of the Analog and Embedded market, the ability to supply from geopolitically dependable capacity like we have is an advantage. As long as we continue to invest and support data center demand with CapEx, TI can do very well there. Our objective is to outgrow the market; we believe we will do that in 2026 and plan to continue into 2027.
I would add that a lot of our chips are used in the power tree involved in data centers, and there are signal chain parts as well. As there is more power dedicated to data centers and more build-out, we'll benefit from the number of chips in those systems. We are in an excellent position given our portfolio and the opportunities we are working on at the ASSP side as well.
Our next question comes from the line of Timothy Arcuri with UBS.
I wanted to ask about CapEx and the ITC. Rafael, you look like you're running at the lower end of the $2 billion to $3 billion gross CapEx guidance for the year. Is it right to think we'll be at the low end for the year? And also, net CapEx has basically been about zero during the first half because of the ITC. Is it right to think that the ITC will continue to contribute about the same amount per quarter as it did during the first half?
A couple of things. First, on CapEx expectation for 2026, it continues to be $2 billion to $3 billion. I would not skew it to the lower end at this point. If anything, it could be on the higher end of that range given demand and how we want to support that for subsequent years. On your ITC question, ITC can be choppy because it's for equipment that was placed in service the prior year. You saw that this quarter we had more ITC than CapEx, but you shouldn't expect that every quarter. Going forward, a lot of CapEx will be disproportionately placed in assembly test operations, which are not in the United States, and that portion does not get ITC. We'll continue to file and get 35% ITC on U.S. manufacturing front end and expect that benefit, but it can be a little choppy over the years.
Tim, do you have a follow-up?
I do. Haviv, I also had a question on data center. I think you're qualified for some new designs on Phase 2. Given your high catalog business, you should be able to take advantage of hotspots more so than some peers. Are you gaining share because you have inventory available? Is that more the exception or the rule?
We like the complexity of a rack because of the diversity of sockets. We like complex sockets with higher AUP that are competitive ASSPs, and we also like catalog parts where you have several options. When you have inventory and capacity, you can benefit. We are seeing real-time examples where customers are lined down and ask for help, and every time we solve a problem that's an opportunity because it leads to more bets on us for the future. That's part of why our business has doubled year-to-date, and we plan to continue to have capacity and clean room inventory ahead of demand to respond to these opportunities.
Our next question comes from the line of Joshua Buchalter with TD Cowen.
Let me echo congrats to both Rafael and Julie. Maybe to start, following up on some earlier ones: if we plug in flat OpEx, it implies flattish gross margins for the third quarter despite an increase in volume. Can you walk through the puts and takes into gross margins for Q3 across pricing, increased loadings and also 300-millimeter mix? Is it basically that tailwinds are being offset by depreciation? Anything else to be aware of?
As a reminder, Rafael said earlier on the call that OpEx, acquisition charges and the net between OIE and interest should be flat for second quarter to third quarter. If you play that in, then you have fall-through of 70% to 85%, excluding depreciation, which should get you in the right ZIP code. There are always some puts and takes, and loadings will depend on what revenue looks like, but that model should get you close.
But it shouldn't be flat; it should be a little higher.
Sorry, I'm on the road and I might have mixed something up. Maybe bigger picture: how are you thinking about capacity and CapEx coming out of this year? With Richardson and Lehi shells built out, you're at the point where you can be more nimble, but there's still probably a year runway from spending to capacity output. How comfortable are you with the runway and the amount of capacity you have online now? Any early indications on how we should think about 2027 CapEx as we are a couple of quarters into this up cycle?
We are excited about where we are because we have clean room space. The clean room was our biggest headache in the previous cycle because it takes two to three years to equip a clean room, and that's behind us. Between Richardson and Sherman 1 and the shell in Sherman 2 and Lehi 1 and 2, we are in great shape to grow into the brick-and-mortar we have. For Lehi, we need to execute on Lehi 2 because Lehi 1 benefits from transfers of external manufacturing. Lehi 2 will come in just in time at the end of this year; we'll have the shell and can grow into it seamlessly. We do need to equip the fabs, and we are prepared for a wide range of scenarios. Uniquely, we've done the hard work ahead of time and have capacity to build into. Regarding exact numbers, we'll provide more detail at the capital management call in February, but we are already making decisions thinking about 2027 and 2028 and beyond.
High level, you can use our framework of 1.2x the growth to calculate capital intensity, and that's a reasonable rule of thumb to get a ballpark figure of where CapEx could go based on expectations for top-line growth.
Our next question comes from the line of Tom O'Malley with Barclays.
Occasionally, you give color on the out quarter by segment. It sounded like you broadly said you saw strength across the board. Anything you can offer in terms of vectors of growth, particularly with auto acting better in Q2? Do you think that continues into Q3? And do you think the mentality of just-in-time to just-in-case continues to spur above seasonal growth in the near term?
Typically I don't provide too much color on the future, but this time it's easy: it's everywhere. Demand signal is very strong and broad. We need to execute — inventory helped, we are ramping factories, and we are going after it. We'll meet again in October to review how it went. The team executed in Q2, and I expect them to do the same in Q3.
Tom, do you have a follow-up?
Just in terms of capacity expansion, you have discussed increasing utilization and clean rooms. Is there a way to think about when you'll decide to expand footprint versus turning up existing facilities? Any metric or market dynamic or revenue targets that could help understand when you decide to put more capacity in place versus increasing utilization?
Regarding clean rooms, we'll give more color during the 2027 capital management call. In general, we are good for the next three years based on our planned facilities in Richardson, Sherman 1 and 2, and Lehi 1 and 2. For now, we are in Phase 2: we can modulate equipment and execute on our plans. We are prepared for a wide range of scenarios and will provide more detail during the capital management call.
Our next question comes from the line of William Stein with Truist Securities.
Great. Congrats to Rafael and Julie. Can you offer any update on timing or terms and approvals regarding the Silicon Labs transaction and potential close?
Regulatory approvals are moving as planned. We still expect to close in the first half of next year. There are no changes to how we're planning to finance the transaction; we still expect to fund it with cash on hand and debt.
Do you have a follow-up, Will?
Yes. I'm hoping you can talk about backlog and the duration of backlog. Are you seeing any extension in that that might, for example, result in a change in lead time quotes?
We have seen backlog build throughout the quarter, both in orders for immediate shipment and for backlog further out in time. It's reflected in the guide. As Haviv discussed, we are seeing strength across our core markets.
Let me add a point on lead times. Lead times are still very competitive; they were below 13 weeks in Q2, but we've seen a little uptick, maybe a couple of weeks higher, simply because demand is growing. When I talk with customers, I believe our lead times are the most competitive in the market.
Our last question comes from the line of Tore Svanberg with Stifel.
Congrats to Rafael and Julie. Are you starting to see more customers come to you in this environment with long lead times? Is this leading to share gains, especially in Analog?
Share in our market moves slowly and should be measured over time, but we are seeing examples where we solve real-time problems and become the answer. In this up cycle, our plan is not to be the problem but the solution. Competitors quoting lead times of 52 weeks is an opportunity for TI because customers may start new designs or look for alternative suppliers. We are seeing more opportunities, and we believe this cycle will provide more chances to gain share. We'll measure it over time.
Tore, do you have a follow-up?
I wanted to ask about the industrial market. You mentioned pricing, customer inventory levels, and indirect impact from AI. For your specific products, is there an element of higher prices due to newer products with higher value that carry higher ASPs? That could be part of the reason this market continues to be so strong.
What we saw in Q2 was broad strength across sectors and regions. Secular content growth over the last four years has added content to industrial automation. Aerospace and defense, energy infrastructure, and robotics grew at higher rates. Every sector in industrial grew both sequentially and year-over-year and every region grew as well, so it's pretty broad. I would chalk it up more to secular content growth than pricing, and first half pricing was stable at about flat for us. If we see pricing benefit, it would likely be in Q3 and beyond as those discussions happen.
To add to Mike's point, this is driven by secular growth. Customers overbuilt in the previous cycle and had to deplete inventory. Once depletion is done, new systems designed in the last four to five years start to ship. Design cycles in industrial are long, and we're seeing no more inventory depletion. You're seeing new generation systems with higher secular content. I also believe we've grown share on the larger content opportunity, and time will tell how we did in 2026. But I think industrial's strong growth will continue.
And we'll go ahead and close the call. I'm going to move it to Haviv and let him wrap us up.
Thanks, Mike. Let me wrap up with what we've said previously. At our core, we are engineers and technology is the foundation of our company. But ultimately, our objective and best metric to measure progress and generate value for owners is the long-term growth of free cash flow per share. Thank you, and have a good evening.
Thank you. And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.