Texas Instruments reported third-quarter 2026 revenue of $6.055 billion on 21 October, up 28 percent from $4.742 billion a year earlier and 11 percent from the second quarter. Operating profit rose 73 percent to $2.874 billion, net income rose 78 percent to $2.425 billion, and earnings per share were $2.62, against $1.48. The company said that growth was broad across industrial, automotive and data center markets. For the fourth quarter it guided revenue to between $5.80 billion and $6.30 billion and earnings per share to between $2.45 and $2.79. It declared a quarterly dividend of $1.42 per share, up from $1.36.
The case that the recovery is real rests on the size of the gains and on cash. Revenue growth of 28 percent in a year, and 11 percent in a single quarter, is fast for an analog chipmaker. Gross profit rose to $3.887 billion from $2.723 billion, and operating profit margin was about 47 percent, compared with 35 percent a year earlier, a calculation from the income statement. Cash flow from operations over the trailing twelve months was $9.896 billion, up 43 percent, and free cash flow over the same period was $8.422 billion, compared with $2.415 billion a year earlier, a rise of 249 percent. In the quarter alone free cash flow was $2.956 billion. TI also said that its 300-millimetre production is helping its model.
The counter-argument is that the outlook points to a pause, and that investment is still heavy. The midpoint of the fourth-quarter revenue range is $6.05 billion, essentially the same as the third quarter’s $6.055 billion, and the range of $5.80 billion to $6.30 billion allows for a decline of 4 percent or growth of 4 percent. Over the past twelve months TI invested $4.0 billion in research and administration and $2.6 billion in capital expenditures, and its free cash flow includes proceeds from the CHIPS Act incentives, which the company says in its definition. Stock repurchases over the twelve months fell 61 percent to $636 million, and total cash returned fell 11 percent to $5.81 billion. EPS also included a one-cent reduction that was not in the original guidance, and acquisition charges of $7 million appeared in the quarter.
The report matters because Texas Instruments sells components that go into almost every electronic product, so its revenue is a broad indicator of demand for factories, cars and data centers. A 28 percent annual rise suggests that demand for its chips has recovered strongly. The effective tax rate was about 14 percent, a calculation from the $380 million tax provision and $2.805 billion pre-tax income. Cash returned to shareholders over twelve months included $5.174 billion in dividends, up 5 percent. Cash and equivalents were $4.211 billion and short-term investments $3.931 billion at the end of September, against $3.311 billion and $1.875 billion a year earlier, and research and development spending was $530 million, against $518 million.
Texas Instruments reported a strong quarter and a cautious outlook. The fourth-quarter range shows that management does not expect another jump of the same size.