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TI reports second quarter 2024 financial results and shareholder returns

Conference call on TI website at 3:30 p.m. Central time today

DALLAS, July 23, 2024 — (PRNewswire) — Texas Instruments Incorporated (TI) (Nasdaq: TXN) today reported second quarter revenue of $3.82 billion, net income of $1.13 billion and earnings per share of $1.22. Earnings per share included a 5-cent benefit for items that were not in the company's original guidance.

Regarding the company's performance and returns to shareholders, Haviv Ilan, TI's president and CEO, made the following comments:

Free cash flow, a non-GAAP financial measure, is cash flow from operations less capital expenditures.

Earnings summary

(In millions, except per-share amounts)


Q2 2024


Q2 2023


Change 

Revenue


$

3,822


$

4,531


(16) %

Operating profit


$

1,248


$

1,972


(37) %

Net income


$

1,127


$

1,722


(35) %

Earnings per share


$

1.22


$

1.87


(35) %

 

Cash generation






Trailing 12 Months

(In millions)


Q2 2024


Q2 2024


Q2 2023


Change 

Cash flow from operations


$

1,571


$

6,449


$

7,367


(12) %

Capital expenditures


$

1,064


$

4,955


$

4,185


18 %

Free cash flow


$

507


$

1,494


$

3,182


(53) %

Free cash flow % of revenue






9.3 %



16.9 %



 

Cash return






Trailing 12 Months

(In millions)


Q2 2024


Q2 2024


Q2 2023


Change 

Dividends paid


$

1,185


$

4,675


$

4,424


6 %

Stock repurchases


$

71


$

185


$

2,026


(91) %

Total cash returned


$

1,256


$

4,860


$

6,450


(25) %

 

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES


Consolidated Statements of Income


For Three Months Ended

June 30,

(In millions, except per-share amounts)


2024


2023

Revenue


$

3,822


$

4,531

Cost of revenue (COR)



1,611



1,621

Gross profit



2,211



2,910

Research and development (R&D)



498



477

Selling, general and administrative (SG&A)



465



461

Operating profit



1,248



1,972

Other income (expense), net (OI&E)



130



119

Interest and debt expense



131



89

Income before income taxes



1,247



2,002

Provision for income taxes



120



280

Net income


$

1,127


$

1,722








Diluted earnings per common share


$

1.22


$

1.87








Average shares outstanding:







   Basic



912



908

   Diluted



919



916








Cash dividends declared per common share


$

1.30


$

1.24








Supplemental Information

(Quarterly, except as noted)








Provision for income taxes is based on the following:




Operating taxes (calculated using the estimated annual effective tax rate)


$

170


$

289

Discrete tax items



(50)



(9)

Provision for income taxes (effective taxes)


$

120


$

280








A portion of net income is allocated to unvested restricted stock units (RSUs) on which we pay dividend

equivalents. Diluted EPS is calculated using the following:

Net income


$

1,127


$

1,722

Income allocated to RSUs



(6)



(8)

Income allocated to common stock for diluted EPS


$

1,121


$

1,714

 

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES


Consolidated Balance Sheets


June 30,

(In millions, except par value)


2024


2023

Assets







Current assets:







   Cash and cash equivalents


$

2,740


$

3,439

   Short-term investments



6,948



6,113

   Accounts receivable, net of allowances of ($28) and ($16)



1,711



1,956

   Raw materials



405



388

   Work in process



2,072



2,110

   Finished goods



1,629



1,231

   Inventories



4,106



3,729

   Prepaid expenses and other current assets



1,284



277

   Total current assets



16,789



15,514

Property, plant and equipment at cost



14,622



11,664

   Accumulated depreciation



(3,448)



(3,139)

   Property, plant and equipment



11,174



8,525

Goodwill



4,362



4,362

Deferred tax assets



905



537

Capitalized software licenses



230



143

Overfunded retirement plans



167



183

Other long-term assets



1,421



1,675

Total assets


$

35,048


$

30,939








Liabilities and stockholders' equity







Current liabilities:







   Current portion of long-term debt


$

1,049


$

299

   Accounts payable



858



923

   Accrued compensation



569



561

   Income taxes payable



178



121

   Accrued expenses and other liabilities



983



807

   Total current liabilities



3,637



2,711

Long-term debt



12,842



10,920

Underfunded retirement plans



113



127

Deferred tax liabilities



55



69

Other long-term liabilities



1,187



1,172

Total liabilities



17,834



14,999

Stockholders' equity:







   Preferred stock, $25 par value. Shares authorized – 10; none issued





   Common stock, $1 par value. Shares authorized – 2,400; shares issued – 1,741



1,741



1,741

   Paid-in capital



3,666



3,163

   Retained earnings



52,135



51,522

   Treasury common stock at cost







   Shares: June 30, 2024 – 828; June 30, 2023 – 833



(40,128)



(40,240)

   Accumulated other comprehensive income (loss), net of taxes (AOCI)



(200)



(246)

Total stockholders' equity



17,214



15,940

Total liabilities and stockholders' equity


$

35,048


$

30,939

 

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES


Consolidated Statements of Cash Flows


For Three Months Ended

June 30,

(In millions)


2024


2023

Cash flows from operating activities







   Net income


$

1,127


$

1,722

   Adjustments to net income:







   Depreciation



363



285

   Amortization of capitalized software



18



15

   Stock compensation



116



111

   (Gains) losses on sales of assets



3



(1)

   Deferred taxes



(85)



(52)

   Increase (decrease) from changes in:







   Accounts receivable



(40)



(79)

   Inventories



(23)



(441)

   Prepaid expenses and other current assets



(22)



14

   Accounts payable and accrued expenses



102



74

   Accrued compensation



168



165

   Income taxes payable



120



(243)

   Changes in funded status of retirement plans



9



17

   Other



(285)



(188)

Cash flows from operating activities



1,571



1,399








Cash flows from investing activities







   Capital expenditures



(1,064)



(1,446)

   Proceeds from asset sales



2



1

   Purchases of short-term investments



(2,098)



(4,047)

   Proceeds from short-term investments



3,130



3,065

   Other



30



42

Cash flows from investing activities





(2,385)








Cash flows from financing activities







   Proceeds from issuance of long-term debt





1,603

   Repayment of debt



(300)



(500)

   Dividends paid



(1,185)



(1,125)

   Stock repurchases



(71)



(79)

   Proceeds from common stock transactions



248



65

   Other



(6)



(16)

Cash flows from financing activities



(1,314)



(52)








Net change in cash and cash equivalents



257



(1,038)

Cash and cash equivalents at beginning of period



2,483



4,477

Cash and cash equivalents at end of period


$

2,740


$

3,439








Supplemental cash flow information







   Investment tax credit (ITC) used to reduce income taxes payable


$

312


$

Total cash benefit related to the U.S. CHIPS and Science Act


$

312


$

 

Segment results 

(In millions)


Q2 2024


Q2 2023


Change 

Analog:









   Revenue


$

2,928


$

3,278


(11) %

   Operating profit


$

1,047


$

1,463


(28) %

Embedded Processing:









   Revenue


$

615


$

894


(31) %

   Operating profit


$

80


$

318


(75) %

Other:









   Revenue


$

279


$

359


(22) %

   Operating profit*


$

121


$

191


(37) %


     * Includes restructuring charges/other.

 

Non-GAAP financial information

This release includes references to free cash flow and ratios based on that measure. These are financial measures that were not prepared in accordance with GAAP. Free cash flow was calculated by subtracting capital expenditures from the most directly comparable GAAP measure, cash flows from operating activities (also referred to as cash flow from operations).

We believe that free cash flow and the associated ratios provide insight into our liquidity, our cash-generating capability and the amount of cash potentially available to return to shareholders, as well as insight into our financial performance. These non-GAAP measures are supplemental to the comparable GAAP measures.

Reconciliation to the most directly comparable GAAP measures is provided in the table below.



For 12 Months Ended

June 30,



(In millions)


2024


2023


Change 

Cash flow from operations (GAAP)*


$

6,449


$

7,367


(12) %

Capital expenditures



(4,955)



(4,185)



Free cash flow (non-GAAP)


$

1,494


$

3,182


(53) %










Revenue


$

16,092


$

18,821












Cash flow from operations as a percentage of revenue (GAAP)



40.1 %



39.1 %



Free cash flow as a percentage of revenue (non-GAAP)



9.3 %



16.9 %












 * Includes a cash benefit of $312 million from the U.S. CHIPS and Science Act ITC used to reduce income taxes

 payable for the twelve months ended June 30, 2024.

This release also includes references to operating taxes, a non-GAAP term we use to describe taxes calculated using the estimated annual effective tax rate, a GAAP measure that by definition does not include discrete tax items. We believe the term operating taxes helps to differentiate from effective taxes, which include discrete tax items.

Notice regarding forward-looking statements

This release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as TI or its management "believes," "expects," "anticipates," "foresees," "forecasts," "estimates" or other words or phrases of similar import. Similarly, statements herein that describe TI's business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements.

We urge you to carefully consider the following important factors that could cause actual results to differ materially from the expectations of TI or our management:

For a more detailed discussion of these factors, see the Risk factors discussion in Item 1A of TI's most recent Form 10-K. The forward-looking statements included in this release are made only as of the date of this release, and we undertake no obligation to update the forward-looking statements to reflect subsequent events or circumstances. If we do update any forward-looking statement, you should not infer that we will make additional updates with respect to that statement or any other forward-looking statement.

About Texas Instruments

Texas Instruments Incorporated (Nasdaq: TXN) is a global semiconductor company that designs, manufactures, tests and sells analog and embedded processing chips for markets such as industrial, automotive, personal electronics, communications equipment and enterprise systems. At our core, we have a passion to create a better world by making electronics more affordable through semiconductors. This passion is alive today as each generation of innovation builds upon the last to make our technology more reliable, more affordable and lower power, making it possible for semiconductors to go into electronics everywhere. Learn more at TI.com.

TXN-G

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