Texas Instruments’ first quarter results were marked by a notable recovery in its core industrial end market and resilient demand across all regions, leading to financial performance above Wall Street’s expectations. Management credited broad-based industrial strength, particularly after several quarters of decline, as a major contributor to growth. CEO Haviv Ilan emphasized, “We continue to see recovery across our end markets, with industrial showing broad recovery across sectors and geographies.” Additionally, low customer inventory levels and an uptick in short-term orders played a significant role in boosting sales, especially as customers replenished depleted stock. Management maintained a cautious view, noting the uncertain macroeconomic environment shaped by tariffs and shifting global supply chains.
Is now the time to buy TXN? Find out in our full research report (it’s free).
Texas Instruments (TXN) Q1 CY2025 Highlights:
- Revenue: $4.07 billion vs analyst estimates of $3.91 billion (11.1% year-on-year growth, 4.1% beat)
- EPS (GAAP): $1.28 vs analyst estimates of $1.06 (20.2% beat)
- Revenue Guidance for Q2 CY2025 is $4.35 billion at the midpoint, above analyst estimates of $4.14 billion
- EPS (GAAP) guidance for Q2 CY2025 is $1.34 at the midpoint, beating analyst estimates by 11.7%
- Operating Margin: 32.5%, down from 35.1% in the same quarter last year
- Inventory Days Outstanding: 243, in line with the previous quarter
- Market Capitalization: $179.6 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Texas Instruments’s Q1 Earnings Call
- Timothy Arcuri (UBS) asked how much of the strong guidance could be attributed to customer pull-ins ahead of tariffs. CEO Haviv Ilan responded that first-quarter demand appeared driven by genuine industrial recovery rather than pull-forward behavior, though some customers may be building inventory as a precaution.
- Vivek Arya (Bank of America Securities) questioned the impact of inventory and factory loading on gross margins. CFO Rafael Lizardi clarified that higher loadings, due to stronger demand, benefited margins and that factory utilization is expected to rise slightly in the coming quarter.
- Stacy Rasgon (Bernstein Research) pressed management on whether customers were truly replenishing inventory or pulling in orders due to uncertainty. Ilan reiterated that order patterns reflected typical cyclical recovery, with no clear evidence of panic buying or outsized pull-forwards so far.
- Tore Svanberg (Stifel) asked about regional disparities in demand and the company’s ability to navigate varying tariff impacts. Ilan detailed Texas Instruments’ flexible manufacturing and logistics, emphasizing the company’s preparedness to adapt to changing regional requirements.
- Thomas O’Malley (Barclays) sought clarity on how much Chinese demand could be met by local manufacturing. Ilan explained that while the company’s China facility is robust, overall strategy focuses on providing “dependable capacity” globally, adapting as customer needs evolve.
Catalysts in Upcoming Quarters
In the quarters ahead, the StockStory team will be monitoring (1) the sustainability of industrial sector recovery and whether demand persists beyond short-term inventory replenishment, (2) Texas Instruments’ ability to adapt its manufacturing and logistics operations amid ongoing tariff and geopolitical shifts, and (3) any signs of margin stabilization or improvement as factory utilization changes. Additionally, we will watch for evolving competitive dynamics in China and responses to potential trade regulation changes.
Texas Instruments currently trades at $199.04, up from $151.86 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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