TEXAS INSTRUMENTS INCORPORATED

Red flags

• Gross margin declined 110 basis points to 57.0% despite 13.0% revenue growth, reflecting higher manufacturing costs from planned capacity expansions.
• Free cash flow was $2.94 billion, or 16.6% of revenue, versus $4.55 billion of capital expenditures; the investment cycle is consuming substantial cash relative to current returns.
• Long-term debt, including the current portion, rose to $14.05 billion from $13.70 billion, while interest and debt expense increased to $543 million from $508 million.
• One end customer accounted for 12% of revenue in both 2025 and 2024, creating a material customer concentration despite the broader customer base.
• Revenue from products shipped into China was about 50% of 2025 revenue, exposing results to tariffs, export restrictions, sanctions and customer sourcing changes.
• A $117 million restructuring and other charge included a non-cash goodwill impairment related to custom ASIC products and costs associated with closing the remaining 150mm factories.