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Item 1. Financial Statements

2026-07-24 compared with 2026-04-24 · 115 added, 48 removed, 382 unchanged (30% of the section changed)

Financial statements

For Three Months Ended

Consolidated Statements of Income March 31,

For Three Months Ended For Six Months Ended

Consolidated Statements of Income June 30, June 30,

(In millions, except per-share amounts) 2026 2025 2026 2025

23 unchanged sentences

See accompanying notes.

For Three Months Ended

Consolidated Statements of Comprehensive Income March 31,

For Three Months Ended For Six Months Ended

Consolidated Statements of Comprehensive Income June 30, June 30,

(In millions) 2026 2025 2026 2025

12 unchanged sentences

See accompanying notes.

March 31, December 31,

June 30, December 31,

Consolidated Balance Sheets 2026 2025

41 unchanged sentences

Treasury common stock at cost

March 31, 2026 – 831 ;

June 30, 2026 – 828 ;

December 31, 2025 – 834

4 unchanged sentences

See accompanying notes.

For Three Months Ended

Consolidated Statements of Cash Flows March 31,

For Six Months Ended

Consolidated Statements of Cash Flows June 30,

(In millions) 2026 2025

27 unchanged sentences

Cash flows from financing activities

Proceeds from issuance of long-term debt — 1,199

Repayment of debt — ( 750 )

34 unchanged sentences

Segment information

For Three Months Ended March 31,

For Three Months Ended June 30,

Analog Embedded Processing Other Total Analog Embedded Processing Other Total

7 unchanged sentences

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

For Six Months Ended June 30,

Analog Embedded Processing Other Total Analog Embedded Processing Other Total

Revenue $ 8,289 $ 1,511 $ 488 $ 10,288 $ 6,662 $ 1,326 $ 529 $ 8,517

Cost of revenue 3,225 754 158 4,137 2,691 740 198 3,629

Gross profit 5,064 757 330 6,151 3,971 586 331 4,888

R&D 757 252 36 1,045 752 253 39 1,044

SG&A 677 215 62 954 688 208 61 957

Acquisition charges — — 34 34 — — — —

Operating profit $ 3,630 $ 290 $ 198 $ 4,118 $ 2,531 $ 125 $ 231 $ 2,887

Geographic area information

Our estimate for revenue based on the geographic location of our end customers’ headquarters, which represents where critical decisions are made, is as follows:

For Three Months Ended

For Three Months Ended For Six Months Ended

June 30, June 30,

2026 2025 2026 2025

United States $ 2,131 39 % $ 1,707 38 % $ 3,927 38 % $ 3,225 38 %

5 unchanged sentences

Total revenue $ 5,463 100 % $ 4,448 100 % $ 10,288 100 % $ 8,517 100 %

(a) Revenue from end customers headquartered in Germany was 10 % and 11 % in the first quarters of 2026 and 2025, respectively.

(a) Revenue from end customers headquartered in Germany was 9 % and 10 % in the second quarters of 2026 and 2025, respectively, and 10 % in the first six months of both 2026 and 2025.

Basis of presentation and significant accounting policies and practices

1 unchanged sentence

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) and on the same basis as the audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2025.

The Consolidated Statements of Income, Comprehensive Income and Cash Flows for the periods ended March 31, 2026 and 2025, and the Consolidated Balance Sheet as of March 31, 2026, are not audited but reflect all adjustments that are of a normal recurring nature and are necessary for a fair statement of the results of the periods shown.

The Consolidated Statements of Income, Comprehensive Income and Cash Flows for the periods ended June 30, 2026 and 2025, and the Consolidated Balance Sheet as of June 30, 2026, are not audited but reflect all adjustments that are of a normal recurring nature and are necessary for a fair statement of the results of the periods shown.

Certain information and note disclosures normally included in annual consolidated financial statements have been omitted pursuant to the rules and regulations of the U.S.

1 unchanged sentence

Because the consolidated interim financial statements do not include all of the information and notes required by GAAP for a complete set of financial statements, they should be read in conjunction with the audited consolidated financial statements and notes included in our annual report on Form 10-K for the year ended December 31, 2025.

The results for the three-month periods are not necessarily indicative of a full year’s results.

The results for the three- and six-month periods are not necessarily indicative of a full year’s results.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Significant accounting policies and practices

2 unchanged sentences

Under the two-class method, a portion of net income is allocated to RSUs and excluded from the calculation of income allocated to common stock.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Computation and reconciliation of earnings per common share are as follows:

For Three Months Ended March 31,

For Three Months Ended June 30,

Net Income Shares EPS Net Income Shares EPS

6 unchanged sentences

Income allocated to common stock $ 1,969 920 $ 2.14 $ 1,288 912 $ 1.41

Potentially dilutive securities representing 6 million and 10 million shares of common stock that were outstanding during the first quarters of 2026 and 2025, respectively, were excluded from the computation of diluted earnings per common share during these periods because their effect would have been anti-dilutive.

For Six Months Ended June 30,

Net Income Shares EPS Net Income Shares EPS

Net income $ 3,525 $ 2,474

Income allocated to RSUs ( 20 ) ( 13 )

Income allocated to common stock $ 3,505 911 $ 3.85 $ 2,461 909 $ 2.71

Dilutive effect of stock compensation plans 6 5

Net income $ 3,525 $ 2,474

Income allocated to RSUs ( 20 ) ( 13 )

Income allocated to common stock $ 3,505 917 $ 3.82 $ 2,461 914 $ 2.69

Potentially dilutive securities excluded from the computation of diluted earnings per common share during the second quarter of 2026 were not material.

Potentially dilutive securities representing 12 million shares of common stock that were outstanding during the second quarter of 2025, and 3 million and 12 million shares outstanding during the first six months of 2026 and 2025, respectively, were excluded from the computation of diluted earnings per common share during these periods because their effect would have been anti-dilutive.

Derivatives and hedging

4 unchanged sentences

We do not apply hedge accounting to our foreign currency derivative instruments.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

We are exposed to variability in compensation charges related to certain deferred compensation obligations to employees.

4 unchanged sentences

Fair values of financial instruments

The fair values of our derivative financial instruments were not material as of March 31, 2026.

The fair values of our derivative financial instruments were not material as of June 30, 2026.

Our investments in cash equivalents, short-term investments and certain long-term investments, as well as our deferred compensation liabilities, are carried at fair value.

The carrying values for other current financial assets and liabilities, such as accounts receivable and accounts payable, approximate fair value due to the short maturity of such instruments.

As of March 31, 2026, the carrying value of long-term debt, including the current portion, was $ 14.05 billion, and the estimated fair value was $ 13.05 billion.

As of June 30, 2026, the carrying value of long-term debt, including the current portion, was $ 14.05 billion, and the estimated fair value was $ 13.09 billion.

The estimated fair value is measured using broker-dealer quotes, which are Level 2 inputs.

See Note 4 for a description of fair value and the definition of Level 2 inputs.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Changes in accounting standards – standards not yet adopted

9 unchanged sentences

Provision for income taxes is based on the following:

For Three Months Ended

For Three Months Ended For Six Months Ended

June 30, June 30,

2026 2025 2026 2025

Taxes calculated using the estimated annual effective tax rate $ 309 $ 199 $ 538 $ 365

5 unchanged sentences

tax benefits.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Valuation of debt and equity investments and certain liabilities

2 unchanged sentences

We classify all debt investments as available-for-sale.

See Fair-value considerations .

Unrealized gains and losses are recorded as an increase or decrease, net of taxes, in AOCI on our Consolidated Balance Sheets, and any credit losses are recorded as an allowance for credit losses with an offset recognized in OI&E in our Consolidated Statements of Income.

7 unchanged sentences

Gains and losses on nonmarketable investments are recognized in OI&E.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Details of our investments are as follows:

March 31, 2026 December 31, 2025

Cash and Cash Equivalents Short-Term Investments Long-Term Investments Cash and Cash Equivalents Short-Term Investments Long-Term Investments

June 30, 2026 December 31, 2025

Cash and Cash Equivalents Short-Term Investments Other Long-Term Assets Cash and Cash Equivalents Short-Term Investments Other Long-Term Assets

Measured at fair value:

8 unchanged sentences

Total $ 3,660 $ 3,341 $ 15 $ 3,225 $ 1,656 $ 16

As of March 31, 2026, and December 31, 2025, unrealized gains and losses associated with our debt investments were not material.

We did no t recognize any credit losses related to debt investments for the first three months of 2026 and 2025.

The following table presents the aggregate maturities of our debt investments as of March 31, 2026:

As of June 30, 2026, and December 31, 2025, unrealized gains and losses associated with our debt investments were not material.

We did no t recognize any credit losses related to debt investments for the first six months of 2026 and 2025.

The following table presents the aggregate maturities of our debt investments as of June 30, 2026:

One year or less $ 5,202

One to two years 588

Proceeds from sales, redemptions and maturities of short-term debt investments were $ 1.04 billion and $ 2.81 billion for the first quarters of 2026 and 2025, respectively.

Proceeds from sales, redemptions and maturities of short-term debt investments were $ 636 million and $ 1.13 billion for the second quarters of 2026 and 2025, respectively, and $ 1.68 billion and $ 3.94 billion for the first six months of 2026 and 2025, respectively.

Gross realized gains and losses from these sales were not material.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Fair-value considerations

7 unchanged sentences

• Level 3 – Uses inputs that are unobservable, supported by little or no market activity and reflect the use of significant management judgment.

As of March 31, 2026, and December 31, 2025, we had no Level 3 assets or liabilities.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

As of June 30, 2026, and December 31, 2025, we had no Level 3 assets or liabilities.

The following are our assets and liabilities that were accounted for at fair value on a recurring basis.

These tables do not include cash on hand, assets held by our postretirement plans, or assets and liabilities that are measured at historical cost or any basis other than fair value.

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Level 1 Level 2 Total Level 1 Level 2 Total

7 unchanged sentences

Total liabilities $ 500 $ — $ 500 $ 492 $ — $ 492

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Postretirement benefit plans

3 unchanged sentences

Defined Benefit

For Three Months Ended March 31, 2026 2025 2026 2025 2026 2025

For Three Months Ended June 30, 2026 2025 2026 2025 2026 2025

Service cost $ 1 $ 2 $ — $ 1 $ 4 $ 3

4 unchanged sentences

Net periodic benefit costs (credits) 3 5 1 — 1 2

Settlement losses (gains) 2 3 — — ( 1 ) —

Total, including other postretirement losses (gains) $ 5 $ 8 $ 1 $ — $ — $ 2

Defined Benefit U.S.

Retiree Health Care Non-U.S.

Defined Benefit

For Six Months Ended June 30, 2026 2025 2026 2025 2026 2025

Service cost $ 3 $ 4 $ — $ 1 $ 8 $ 7

Interest cost 11 13 6 6 33 29

Expected return on plan assets ( 10 ) ( 10 ) ( 5 ) ( 6 ) ( 39 ) ( 35 )

Recognized net actuarial losses (gains) 2 4 — ( 1 ) ( 2 ) 2

Amortization of prior service cost (credit) — — — — 2 —

Net periodic benefit costs (credits) 6 11 1 — 2 3

Settlement losses (gains) 2 3 — — ( 1 ) —

Total, including other postretirement losses (gains) $ 8 $ 14 $ 1 $ — $ 1 $ 3

Debt and lines of credit

1 unchanged sentence

We maintain a line of credit to provide additional liquidity through bank loans and, if necessary, to support commercial paper borrowings.

As of March 31, 2026, the aforementioned line of credit was a variable-rate, revolving credit facility from a consortium of investment-grade banks that allows us to borrow up to $ 1 billion until March 2027.

As of June 30, 2026, the aforementioned line of credit was a variable-rate, revolving credit facility from a consortium of investment-grade banks that allows us to borrow up to $ 1 billion until March 2027.

The interest rate on borrowings under this credit facility, if drawn, is indexed to the applicable Term Secured Overnight Financing Rate (Term SOFR).

As of March 31, 2026, our credit facility was undrawn, and we had no commercial paper outstanding.

As of June 30, 2026, our credit facility was undrawn, and we had no commercial paper outstanding.

In June 2026, we entered into a 364-day delayed draw term loan credit facility for borrowings up to $ 5 billion to support the Silicon Labs acquisition consideration and related transaction expenses.

The availability of funding is conditioned on the consummation of the planned acquisition of Silicon Labs.

As of June 30, 2026, there were no outstanding borrowings on the delayed draw term loan credit facility.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Long-term debt outstanding is as follows:

March 31, December 31,

June 30, December 31,

Notes due 2026 at 1.125 %

23 unchanged sentences

Long-term debt $ 12,903 $ 13,548

Interest and debt expense was $ 141 million and $ 128 million for the first quarters of 2026 and 2025, respectively.

This was net of the amortized discounts, premiums and issuance and other related costs.

Capitalized interest was $ 3 million and $ 4 million for the first quarters of 2026 and 2025, respectively.

Interest and debt expense was $ 141 million and $ 133 million for the second quarters of 2026 and 2025, respectively, and $ 282 million and $ 261 million for the first six months of 2026 and 2025, respectively.

This is inclusive of amortized discounts, premiums and issuance and other related costs.

Capitalized interest was $ 3 million and $ 2 million for the second quarters of 2026 and 2025, respectively, and $ 6 million for the first six months of both 2026 and 2025.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

13 unchanged sentences

Balance, March 31, 2026 1,741 4,722 52,483 ( 42,084 ) ( 84 )

Net income — — 1,980 — —

Dividends declared and paid ($ 1.42 per share)

— — ( 1,295 ) — —

Common stock issued for stock-based awards — 279 — 166 —

Stock repurchases — — — ( 23 ) —

Stock compensation — 127 — — —

Other comprehensive income (loss), net of taxes — — — — 1

Dividend equivalents on RSUs — — ( 7 ) — —

Other — 1 — — —

Balance, June 30, 2026 $ 1,741 $ 5,129 $ 53,161 $ ( 41,941 ) $ ( 83 )

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Common Stock Paid-in Capital Retained Earnings Treasury Common Stock AOCI

10 unchanged sentences

Balance, March 31, 2025 1,741 4,058 52,196 ( 41,442 ) ( 147 )

Net income — — 1,295 — —

Dividends declared and paid ($ 1.36 per share)

— — ( 1,235 ) — —

Common stock issued for stock-based awards — 59 — 56 —

Stock repurchases — — — ( 290 ) —

Stock compensation — 129 — — —

Other comprehensive income (loss), net of taxes — — — — ( 9 )

Dividend equivalents on RSUs — — ( 7 ) — —

Other — ( 1 ) — — —

Balance, June 30, 2025 $ 1,741 $ 4,245 $ 52,249 $ ( 41,676 ) $ ( 156 )

Contingencies

10 unchanged sentences

During the periods presented, there have been no material accruals or payments regarding product warranty or product liability.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

We are subject to various legal and administrative proceedings.

Although it is not possible to predict the outcome of these matters, we believe that the results of these proceedings will not have a material adverse effect on our consolidated financial statements.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Supplemental financial information

1 unchanged sentence

As announced on February 4, 2026, we have entered into a definitive agreement to acquire Silicon Labs for $ 231.00 per share in an all-cash transaction, representing a total enterprise value of approximately $ 7.5 billion.

Under the terms of the agreement, Silicon Labs stockholders will receive $ 231.00 in cash for each share of Silicon Labs common stock they hold at the time of closing, which is currently expected in the first half of 2027, subject to receipt of regulatory approvals and other customary closing conditions, including approval by Silicon Labs stockholders.

We expect to fund the transaction with a combination of cash on hand and debt financing to be arranged prior to closing.

During the first quarter of 2026, we incurred $ 17 million of acquisition charges.

Under the terms of the agreement, Silicon Labs stockholders will receive $ 231.00 in cash for each share of Silicon Labs common stock they hold at the time of closing, which is expected in the first half of 2027, subject to receipt of regulatory approvals and other customary closing conditions.

We expect to fund the transaction with a combination of cash on hand and debt financing.

During the second quarter and first six months of 2026, we incurred $ 17 million and $ 34 million of acquisition charges, respectively.

Prepaid expenses and other current assets

March 31, December 31,

June 30, December 31,

CHIPS Act incentives $ 1,005 $ 1,709

2 unchanged sentences

Other long-term assets

March 31, December 31,

June 30, December 31,

CHIPS Act incentives $ 1,158 $ 1,639

1 unchanged sentence

Total $ 2,237 $ 2,656

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Details on amounts reclassified out of accumulated other comprehensive income (loss), net of taxes, to net income

Our Consolidated Statements of Comprehensive Income include items that have been recognized within net income during the first quarters of 2026 and 2025.

Our Consolidated Statements of Comprehensive Income include items that have been recognized within net income during the second quarters of 2026 and 2025.

The table below details where these transactions are recorded in our Consolidated Statements of Income.

For Three Months Ended Impact to Related Statement of Income Lines

For Three Months Ended For Six Months Ended Impact to Related Statement of Income Lines

June 30, June 30,

2026 2025 2026 2025

Net actuarial losses of defined benefit plans:

Recognized net actuarial losses (a) $ — $ 3 Decrease (increase) to OI&E

Recognized net actuarial losses and settlement losses (a) $ 1 $ 5 $ 1 $ 8 Decrease (increase) to OI&E

Tax effect — ( 1 ) — ( 2 ) (Decrease) increase to provision for income taxes

5 unchanged sentences

(a) Detailed in Note 5

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Effect on shares outstanding and treasury shares

4 unchanged sentences

Balance, March 31 831

Repurchases —

Shares issued for stock compensation ( 3 )

Balance, June 30 828

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements