Texas Instruments (TXN) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $3.82B, up 4% sequentially but down 16% year-over-year; net income was $1.13B and EPS was $1.22, including a $0.05 benefit from non-recurring items.

• Industrial and automotive segments continued to decline sequentially, while personal electronics and China showed strong sequential growth.

• Free cash flow for the trailing 12 months was $1.5B, with $4.9B returned to shareholders over the same period.

• China rebounded with all five markets growing 15%-20% sequentially after seven quarters of decline.

• $3.7B invested in R&D and SG&A, $5.0B in capital expenditures over the past year.

Financial highlights

• Gross profit was $2.21B (57.8% margin), with margin up 60 bps sequentially but down year-over-year.

• Operating profit was $1.25B (32.7% margin), down 37% year-over-year.

• Net income for Q2 2024 was $1.13B, or $1.22 per share, down from $1.72B and $1.87 per share year-over-year.

• Free cash flow (TTM) was $1.5B, including $312M CHIPS Act tax credit in Q2.

• Cash flow from operations for the trailing 12 months was $6.4B, 40.1% of revenue.

Outlook and guidance

• Q3 2024 revenue expected between $3.94B-$4.26B; EPS guidance $1.24-$1.48.

• Effective tax rate expected to remain at 13%.

• CapEx for 2024 guided at $5B; depreciation narrowed to $1.5B-$1.6B for 2024 and $2B-$2.3B for 2025.

• Management remains focused on long-term free cash flow per share growth and continued investment in manufacturing and technology.

• Capital expenditures are expected to remain elevated as part of long-term capacity planning.