Analog chip manufacturer Texas Instruments (NASDAQ: TXN) reported Q2 CY2026 results beating Wall Street’s revenue expectations, with sales up 22.8% year on year to $5.46 billion. On top of that, next quarter’s revenue guidance ($5.9 billion at the midpoint) was surprisingly good and 4.9% above what analysts were expecting. Its GAAP profit of $2.14 per share was 10.4% above analysts’ consensus estimates.
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Texas Instruments (TXN) Q2 CY2026 Highlights:
- Revenue: $5.46 billion vs analyst estimates of $5.26 billion (22.8% year-on-year growth, 3.8% beat)
- EPS (GAAP): $2.14 vs analyst estimates of $1.94 (10.4% beat)
- Revenue Guidance for Q3 CY2026 is $5.9 billion at the midpoint, above analyst estimates of $5.63 billion
- EPS (GAAP) guidance for Q3 CY2026 is $2.40 at the midpoint, beating analyst estimates by 11%
- Operating Margin: 42.3%, up from 35.1% in the same quarter last year
- Free Cash Flow Margin: 50.1%, up from 12.5% in the same quarter last year
- Inventory Days Outstanding: 199, down from 211 in the previous quarter
- Market Capitalization: $265.1 billion
Company Overview
Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ: TXN) is the world’s largest producer of analog semiconductors.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Unfortunately, Texas Instruments’s 3% annualized revenue growth over the last five years was mediocre. This fell short of our benchmark for the semiconductor sector and is a poor baseline for our analysis. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.
We at StockStory place the most emphasis on long-term growth, but within semiconductors, a half-decade historical view may miss new demand cycles or industry trends like AI. Texas Instruments’s annualized revenue growth of 9.9% over the last two years is above its five-year trend, suggesting some bright spots. 
This quarter, Texas Instruments reported robust year-on-year revenue growth of 22.8%, and its $5.46 billion of revenue topped Wall Street estimates by 3.8%. Beyond the beat, this marks 6 straight quarters of growth, showing that the current upcycle has had a good run - a typical upcycle usually lasts 8-10 quarters. Company management is currently guiding for a 24.4% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 15.2% over the next 12 months. Although this projection indicates its newer products and services will catalyze better top-line performance, it is still below the sector average.
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Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’s capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, Texas Instruments’s DIO came in at 199, which is 4 days above its five-year average. These numbers suggest that despite the recent decrease, the company’s inventory levels are higher than what we’ve seen in the past.
Key Takeaways from Texas Instruments’s Q2 Results
It was good to see Texas Instruments beat analysts’ revenue and EPS expectations this quarter. We were also excited its forward guidance for those two metrics outperformed Wall Street’s estimates. Zooming out, we think this was a good print with some key areas of upside. With recent volatility in semis, it seems that investors were hoping for more, and shares traded down 3.7% to $284.14 immediately after reporting.
Should you buy the stock or not? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
