Analyst(s): Brendan Burke
Publication Date: July 24, 2026
Texas Instruments returned to broad growth in Q2 FY 2026 as industrial demand recovered, data center revenue doubled, and automotive re-accelerated. Above-seasonal third-quarter guidance and the first price increases in years point to the start of a broad upcycle, though the stock’s strong run left little room for upside.
What is Covered in This Article:
- Texas Instruments’ Q2 FY 2026 financial results
- Broad recovery led by industrial demand
- Data center growth and analog content
- Automotive re-acceleration and firmer pricing
- Guidance and Final Thoughts
The News: Texas Instruments (Nasdaq: TXN) reported second-quarter results for the period ended June 30, 2026. Revenue was $5.46 billion, up 23% year on year (YoY) and 13% sequentially, versus the consensus of $5.24 billion. By segment, Analog revenue was $4.37 billion (up 26% YoY), Embedded Processing revenue was $788 million (up 16% YoY), and Other revenue was $310 million (down 2% YoY). Operating profit was $2.31 billion, up 48% YoY, for an operating margin of 42%, and gross margin was 61%. Net income was $1.98 billion, up 53% YoY, and earnings per share (EPS) was $2.14, up 52% YoY and above the high end of guidance. By segment, industrial rose about 30% YoY, automotive grew in the mid-teens, data center roughly doubled, personal electronics was flat, and communications equipment increased.
“Revenue increased 13% sequentially and 23% from the same quarter a year ago, with broad growth led by industrial, data center, and automotive,” said Haviv Ilan, Chairman, President, and CEO of Texas Instruments.
Texas Instruments Q2 FY 2026 Earnings Climb on Industrial, Data Center
Analyst Take: Texas Instruments spent the past two years absorbing a cyclical downturn while building capacity ahead of demand, and Q2 FY26 is the quarter that bet started to pay off. Growth broadened across industrial, data center, and automotive as inventory-depleted customers returned to the market. The company is converting that demand into margin, with gross margin up 340 basis points sequentially as 300mm production and higher factory loadings work in its favor. Pricing, flat through the first half, is beginning to firm, adding a second lever on top of unit growth. The setup looks like the front end of a broad upcycle, which is why an above-seasonal guide still drew a cool market reaction after the stock’s run this year.
Industrial Recovery Turns Broad Across Sectors and Regions
Industrial revenue grew about 30% YoY and roughly 10% sequentially, with strength spread across sectors and geographies rather than concentrated in a few pockets. Industrial is TI’s largest and most diverse end market, and wide participation points to a cyclical recovery rather than a single vertical spike. Customers remain early in the cycle and have not yet rebuilt their inventory, leaving room for demand to run before restocking distorts the signal. TI’s decision to hold capacity and cleanroom space through the downturn now allows it to fill short lead-time orders that supply-constrained rivals may not. That availability, paired with 300mm cost economics, turns recovering demand into share and margin at the same time. The risk worth watching is that some of this strength reflects customers catching up after cutting inventory too deep, so not every point of growth will prove durable.
Data Center Emerges as a Structural Analog Growth Driver
Data center revenue roughly doubled YoY and grew about 20% sequentially, moving from a secondary line to one of TI’s fastest-growing markets. The pull comes from power tree and signal chain content that sits alongside accelerators, so TI gains from the buildout without competing for the GPU or ASIC socket itself. As racks shift toward 800V DC power architectures, analog content per system rises, opening more sockets as designs scale. Management framed geopolitically dependable capacity as a growing advantage for customers deciding where to source that content, a point that lands as supply security climbs buyers’ priority lists. Rather than commit to a fixed growth rate, TI guided towards outgrowing the market in 2026 and 2027. Data center is turning into a durable analog franchise for TI, not a single-cycle beneficiary of AI spending.
Automotive Re-Acceleration and Firmer Pricing Add Levers
Automotive returned to mid-teens YoY growth and upper single-digit sequential growth, an inflection that built throughout the quarter and was led by China EV and hybrid demand. Part of the lift came from automakers that had drawn inventory to unsustainable levels and were pulled back into the market as end demand firmed. Pricing supplies the second lever after holding flat through the first half, an outcome TI called better than its usual annual decline, as the company began executing customer-by-customer price increases. Those increases begin in Q3 and will extend into Q4 and into next year, concentrated in Analog with Embedded Processing following. Because TI sells direct rather than through distribution for much of its book, it controls the timing and breadth of those conversations. Unit growth still does most of the work, but firmer pricing on a recovering mix raises the quality of the next quarter’s revenue.
Guidance and Final Thoughts
TI guided Q3 revenue to a range of $5.65 billion to $6.15 billion, above consensus of $5.62 billion and above normal seasonality, with EPS of $2.23 to $2.57 and an effective tax rate near 13%. Capital spending stays framed at $2 billion to $3 billion for 2026, with management leaning toward the higher end to support later-year demand, while CHIPS Act incentives held net capital spending near zero in the first half. Free cash flow reached $6.5 billion on a trailing 12-month basis, up from $1.8 billion a year earlier, and TI returned $5.8 billion in buybacks over the same period. A leadership change accompanies the quarter, with Rafael Lizardi retiring after nearly a decade as CFO and Julie Knecht taking the role on August 1. The muted share reaction reflects a stock that had already risen roughly 70% this year rather than any weakness in the print. Analog supply from a scaled, US-anchored manufacturer is loosening even as demand broadens, which should ease component planning into 2027.
See the full press release on Texas Instruments’ Q2 FY 2026 financial results on the Company website.
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Texas Instruments Q4 FY 2025 Earnings Highlight Industrial, Auto, DC Traction
Author Information
Brendan is Research Director, Semiconductors, Supply Chain, and Emerging Tech. He advises clients on strategic initiatives and leads the Futurum Semiconductors Practice. He is an experienced tech industry analyst who has guided tech leaders in identifying market opportunities spanning edge processors, generative AI applications, and hyperscale data centers.
Before joining Futurum, Brendan consulted with global AI leaders and served as a Senior Analyst in Emerging Technology Research at PitchBook. At PitchBook, he developed market intelligence tools for AI, highlighted by one of the industry’s most comprehensive AI semiconductor market landscapes encompassing both public and private companies. He has advised Fortune 100 tech giants, growth-stage innovators, global investors, and leading market research firms. Before PitchBook, he led research teams in tech investment banking and market research.
Brendan is based in Seattle, Washington. He has a Bachelor of Arts Degree from Amherst College.
