TXN · Q1 2026 Earnings
BullishTexas Instruments
Reported April 22, 2026
30-second summary
Revenue of $4.825B (+19% YoY, +9% QoQ) cleared the high end of the prior $4.32–4.68B guide by $145M, GAAP EPS of $1.68 came in $0.20 above the high end, and gross margin recovered to 58.0% from Q4's 55.9%. The Q2 guide — revenue $5.00–5.40B (mid $5.20B, implying +12–21% YoY against the Q2 FY2025 base of $4.45B) and EPS $1.77–2.05 — is well above typical Q2-up-mid-single-digits seasonality and resolves the Q4 watch question on whether the Q1 up-guide was pull-in: it wasn't. Industrial grew ~30% YoY (eighth straight sequential up quarter, still 15% below 2022 peak), data center +90% YoY, and management announced an agreement to acquire Silicon Labs.
Headline numbers
EPS
Q1 FY2026
$1.68
Revenue
Q1 FY2026
$4.83B
+19.0% YoY
Gross margin
Q1 FY2026
58.0%
Free cash flow
Q1 FY2026
$1.40B
Operating margin
Q1 FY2026
37.4%
Key financials
Q1 FY2026| Metric | Q1 FY2026 | YoY | Q4 FY2025 | QoQ |
|---|---|---|---|---|
| Revenue | $4.83B | +19.0% | $4.42B | +9.1% |
| EPS | $1.68 | — | $1.27 | +32.3% |
| Gross margin | 58.0% | — | 55.9% | +206bps |
| Operating margin | 37.4% | — | 33.3% | +413bps |
| Free cash flow | $1.40B | — | $1.33B | +5.3% |
Guidance
TI raised guidance following strong Q1 FY2026 beats on both revenue and EPS; Q2 FY2026 outlook implies accelerating sequential growth into mid-single-digit YoY comparisons.
Guidance is issued for both next quarter and the full year. Both may appear below.
Actuals vs prior guidance
| Metric | Period | Prior guide | Actual | Δ | Result |
|---|---|---|---|---|---|
| Revenue | Q1 FY2026 | $4.32B – $4.68B | $4.825B | +$0.145B above high end of guide | Beat |
| EPS (GAAP) | Q1 FY2026 | $1.22 – $1.48 | $1.68 | +$0.20 above high end of guide | Beat |
New guidance
| Metric | Period | Guide | YoY |
|---|---|---|---|
| Revenue | Q2 FY2026 | $5.00B – $5.40B | +12.4–21.3% YoY |
| EPS (GAAP) | Q2 FY2026 | $1.77 – $2.05 | — |
| Effective Tax Rate | Q2 FY2026 | about 13% | — |
Segment performance
Q1 FY2026| Segment | Q1 FY2026 | YoY |
|---|---|---|
| Analog | $3.924B | +22.0% |
| Embedded Processing | $0.723B | +12.0% |
| Other | $0.178B | -16.0% |
| Analog Segment Operating Margin | 41.7% | — |
| Embedded Processing Operating Margin | 16.9% | — |
Profitability
Q1 FY2026| Segment | Q1 FY2026 |
|---|---|
| Operating Margin | 37.4% |
| Free Cash Flow Margin | 29.0% |
| Trailing 12-Month Free Cash Flow | $4.351 billion |
| Cash Flow from Operations (TTM) | $7.824 billion |
| Capital Expenditures (Quarter) | $676 million |
| CHIPS Act Incentives Received (Quarter) | $555 million |
Management tone
Cycle confidence → tariff caution (Q2) → explicit deceleration (Q3) → "recovery is continuing" (Q4) → "continued acceleration in industrial and data center" (Q1).
Three quarters ago management was hedging the recovery as "slower than prior upturns"; two quarters ago it was "recovery is continuing"; this quarter the language is "revenue came in above the top of the range as we saw continued acceleration in industrial and data center." The qualifier verbs are gone. The Q2 guide — implying YoY growth that accelerates to as high as +21% — is the financial expression: management is no longer hedging cycle reads, they are guiding to acceleration.
The inventory story completed its inversion. Q2 framing: "low customer inventory is a defensive asset." Q3 framing: "depletion appears to be behind us." Q1 framing: "we remain well positioned with inventory and capacity that allows us to support our customers with competitive lead times through the cycle." The phrase "through the cycle" reframes what was a managed-build risk one year ago as a structural competitive moat. In the Bank of America exchange, management explicitly dismissed inventory hoarding concerns and noted broad-based demand across customer sizes — "tail customers" awakening is the signal that the recovery has breadth, not just data-center concentration.
The capex narrative completed the transition from build to harvest. TTM FCF of $4.351B vs $1.7B a year ago (+156%) on $676M of Q1 capex offset by $555M of CHIPS Act receipts. Management's framing: "trending up as growth returns and CapEx begins to moderate." The capex-intensity overhang that defined 2023–2025 commentary is now described as a recovery thesis input rather than a margin headwind. This is the cleanest articulation yet of the FCF/share story TI has been signaling for four quarters.
Strategic posture shifted from end-market portfolio defense to active M&A. The Silicon Labs acquisition announcement — closing H1 2027, subject to approvals — is the first deal of this scale in years and reframes embedded as a growth vector rather than a margin laggard. Q4's framing was "we place additional strategic emphasis on industrial automotive and data center"; this quarter that emphasis is being operationalized through inorganic expansion into embedded wireless connectivity.
The one place management hedged was H2 risk. In the Bank of America exchange, management pointedly cautioned that "last year had a strong start that did not accelerate in H2" and attributed potential repeat risk to macro/geopolitical uncertainty. That's the only callable downside in an otherwise unambiguously bullish read.
Recurring themes management leaned on this quarter:
Risks management surfaced:
Q&A highlights
Tim Arcuri · UBS
Commentary on customer behavior, seasonal trends, and breakdown of growth drivers by segment (industrial vs. data center) for Q2 guidance given strength in March and concerns about automotive choppiness in China.
Management confirmed Q1 was continuation of Q4 trends with growth led by industrial and data center. Industrial showed eighth quarter of sequential growth with broader signal across all sectors/geographies. Automotive in China was flat sequentially in Q1 with rest of world up; management notes automotive historically peaks later and is holding at elevated levels near previous peaks. No segment breakdown provided in guidance but both industrial and data center expected to drive growth in Q2.
Vivek Arya · Bank of America
Dissection of 30% industrial year-over-year growth - whether it represents inventory replenishment, pricing, share gains, or hoarding; followed by comparison to last year's first-half strength and second-half deceleration, asking about sustainability and fab loading strategy.
Management emphasized industrial growth of ~30% YoY is still 15% below 2022 peak and attributed to broad-based recovery across all sectors, customers, and regions - first quarter where 'tail' customers awakened after hibernation. Cautioned against last year's pattern where strong H1 was followed by H2 deceleration; attributed to macro/geopolitical uncertainty. No evidence of inventory hoarding or double-ordering. Noted capacity and inventory positioning allows handling wide range of scenarios. Rafael confirmed capacity and inventory well-positioned.
Joe Moore · Morgan Stanley
FAB loading and inventory strategy through Q2; expectation for incremental gross margins - whether normal, better, or worse than typical given rapid Q1 growth and inventory deployment.
Management stated well-positioned on inventory and loadings to maintain customer service with short, stable lead times. Q1 rapid growth supported by inventory depletion serving real-time customer demand. Gross margin fall-through expected in 75%-85% range (excluding depreciation) on long-term basis; Q2 should follow guided assumptions when calculating from EPS/revenue midpoints with OPEX and other line items. May make incremental AT investments due to external tightness in assembly/test capacity.
Stacy Raskin · Bernstein Research
Gross margin drivers in Q2 - specifically whether incremental margins appear lower than expected given strong revenue growth; followed by question on how company will report post-acquisition (GAAP vs. pro forma) and accrual charges impact.
Management clarified that OPEX growth assumptions should be considered alongside continued acquisition-related charges (ongoing until close, then higher at close, then steady for years). Once charges accounted for, gross margin assumptions align with guidance. Post-acquisition, company will report GAAP with detailed breakout of all adjustments (acquisition charges, inventory write-ups, etc.) to allow analysts to build non-GAAP themselves, similar to approach after Nat Semi acquisition.
Ross Seymour · Deutsche Bank
What was the biggest surprise vs. Q1 midpoint guidance and was pricing part of the strength; followed by question on whether consumer-oriented segment weakness from higher memory costs is evident in results.
Pricing was slightly better than modeled - expected low single-digit decline YoY and sequential, but Q1 was actually flat both ways due to price agreements kicking in early and broader demand offsetting typical Q1 weakness. Management noted market-wide pricing pressure emerging (several months of price increases in analog), but unlikely to help growth until H2 if demand sustains. Surprise was breadth of demand across sectors, regions, and customer sizes; no evidence of consumer-driven demand destruction from memory costs - customers aware but preparing well. Personal electronics segment was slightly better than seasonal, not weak.
Answers to last quarter's watch list
What to watch into next quarter
Whether Q2 actual revenue hits the $5.20B midpoint or pushes toward $5.40B — guide implies +12–21% YoY; an actual print above the high end (say $5.45B+) would confirm management is now sandbagging into accelerating demand; a print below midpoint would validate the Bank of America-flagged H2 risk.
Industrial sequential trajectory in Q2 — ninth consecutive up-quarter or first plateau — industrial is still 15% below 2022 peak with room to recover; a ninth straight sequential gain would extend the cleanest cycle signal in the print; a plateau would echo the 2025 H1→H2 reversal management explicitly warned about.
Gross margin progression on Q2's higher revenue base — at 58.0% on $4.825B and 75–85% fall-through (ex-depreciation), Q2 at $5.20B midpoint should mechanically lift gross margin toward 59%+. A print below 58.5% would suggest acquisition-related charges and AT investment are eating the fall-through.
Pricing inflection in H2 — management flagged market-wide analog price increases building "over several months" but said pricing won't contribute to growth until H2 if demand sustains. Watch whether Q3 commentary quantifies actual price realization vs. the prior 2025 guidance of -2% to -3% annual decline.
Data center run-rate dollars disclosed explicitly — +90% YoY is the strongest secular signal in the print, but the absolute quarterly figure is missing. Watch whether the Q2 print discloses a specific run rate; a $700M+ quarter would put TI's data center business at a $2.8B+ annualized run rate vs. ~$1.8B exiting 2025.
Silicon Labs deal — financing structure and accretion framework at the next print — TI has not yet disclosed deal size, financing, or pro-forma capital return implications. The first detail disclosures will determine whether the deal compresses the FCF/share story or extends it.
Sources
- TXN Q1 2026 press release (8-K exhibit 99-ER), filed with SEC: https://www.sec.gov/Archives/edgar/data/97476/000009747626000097/q12026txnex99-eredgar.htm
- TXN Q1 2026 earnings call Q&A (as provided in extraction inputs; no full transcript URL on file).
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