Investor Insights | Texas Instruments Inc | FY2025Q1

Revenue: $4.1 billion (11% YoY increase, 2% sequential increase)
- Analog Revenue: 13% YoY increase
- Embedded Processing Revenue: Flat YoY
- Other Segment Revenue: 23% YoY increase
Net Income: $1.2 billion
Earnings Per Share (EPS): $1.28 (included a 5-cent benefit)
Operating Income: $1.3 billion (33% of revenue)
Gross Margin: 57% (down 90 basis points sequentially)
Operating Margin: 33%
Cash Flow from Operations: $849 million (trailing 12-month basis: $6.2 billion)
Capital Expenditures: $1.1 billion in Q1 2025 (On Time)
Debt and Liquidity Position: Total debt of $12.95 billion; $5 billion in cash and short-term investments; $750 million debt repayment in the quarter.
Other Key Financial Metrics: Free cash flow on a trailing 12-month basis: $1.7 billion.

Market Recovery: Notable recovery in the industrial market after seven consecutive quarters of decline.
End Market Performance:
- Industrial: Upper-single digits increase
- Automotive: Low-single digits increase
- Personal Electronics: Mid-teens decline (seasonal)
- Enterprise Systems: Mid-single digits growth
- Communications Equipment: 10% growth
Geopolitical Strategy: Emphasis on providing geopolitically dependable capacity to customers amidst tariff and supply chain uncertainties.

Sector-Wide Trends: Recovery signals across various end markets; industrial market showing strong signs of growth.
Macroeconomic Factors: High uncertainty due to tariffs and geopolitics affecting global supply chains.
Competitive Landscape: TI maintains competitive advantages with breadth of product offerings and strong relationships with customers.

Export Revenue & Growth: Not explicitly detailed, but TI is positioned to navigate export challenges due to geopolitical dynamics.
International Market Challenges: Focus on flexible logistics to adapt to changing supply chain needs, especially in China.
Regulatory or Trade Policy Impacts: Continuous monitoring of tariff implications on operations and customer relations.

Domestic Market Risks: Competition and potential shifts in consumer demand due to macroeconomic conditions.
International Market Risks: Foreign regulations and geopolitical tensions, particularly concerning tariffs.
Operational Risks: Supply chain disruptions, cost inflation, and labor issues.
Economic & Macroeconomic Risks: Potential global slowdowns and inflation pressures.

Q2 Revenue Guidance: Expected revenue range of $4.17 billion to $4.53 billion.
Q2 EPS Guidance: Expected earnings per share range of $1.21 to $1.47.
Management's Confidence Level: Cautiously optimistic, with readiness to adapt to changing market conditions.

Geopolitical Dependability: Commitment to maintain a robust supply chain and inventory levels to support customer needs.

Ongoing Commitments: Continued focus on maintaining capacity and inventory to meet demand.
Fulfilled Commitments: Successful navigation of supply chain disruptions in Q1.
Delayed or Missed Commitments: None explicitly mentioned.

Planned vs. Actual Execution: CapEx in line with expectations; $1.1 billion spent in Q1.
Major Investment Areas: Focus on manufacturing capabilities and technology enhancements.
CapEx Trends Compared to Prior Periods: Elevated CapEx phase nearing completion.

Margin Expansion or Contraction: Gross margin decreased due to cost dynamics but remains healthy.
Cost Management Measures: Focus on operational efficiency and strategic capital allocation to enhance margins.

Key Questions Asked by Analysts:
- Impact of tariffs on demand and pricing.
- Recovery signals in various markets.
- Competitive landscape in China.
Management's Responses & Clarifications:
- Emphasized strong demand recovery and cautious optimism about future performance.
- Discussed flexibility and adaptability in logistics and supply chains.
Unanswered or Avoided Questions: None noted during the call.

Texas Instruments Inc (TXN)