Texas Instruments (TXN) Q3 2025 earnings summary

Executive summary

• Third quarter revenue reached $4.74 billion, up 7% sequentially and 14% year-over-year, with growth across all major and end markets.

• Net income for Q3 was $1.36 billion, with EPS of $1.48, including a 10-cent reduction from restructuring charges.

• Free cash flow for the trailing 12 months was $2.4 billion, and $6.6 billion was returned to shareholders over the past year.

• The company is nearing completion of a six-year elevated capital expenditure cycle to expand 300mm wafer production.

• Leadership transition announced: Haviv Ilan to become Chairman in January 2026, succeeding Richard Templeton.

Financial highlights

• Q3 2025 revenue: $4.74 billion, up 14% year-over-year; gross profit was $2.72 billion (57% of revenue).

• Operating profit was $1.66 billion (35% of revenue), up 7% year-over-year.

• Net income was $1.36 billion, or $1.48 per share; EPS included a $0.10 reduction from restructuring charges.

• Free cash flow for the quarter was $1.07 billion, up 65% year-over-year.

• Cash flow from operations for the trailing 12 months was $6.9 billion; capital expenditures were $4.8 billion.

Outlook and guidance

• Q4 2025 revenue expected between $4.22–$4.58 billion; EPS guidance is $1.13–$1.39.

• Effective tax rate for Q4 and 2026 projected at 13–14%, with expectations for lower rates in 2026 and beyond due to U.S. tax law changes.

• CapEx for next year likely at the lower end of the $20–$26 billion framework due to moderate recovery; future levels under evaluation.

• The company anticipates continued benefits from the CHIPS Act, including increased investment tax credits and direct funding.