Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 22, 2026 · Beat 5 of last 7 quarters
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TI's data center revenue doubled YoY, reinforcing that the AI infrastructure buildout is driving broad analog and embedded content growth beyond just GPUs. Management's commentary on 800V architectures and multiple power conversion stages suggests expanding TAM for power management and signal chain in AI racks. TI's capacity readiness (clean rooms, 300mm) positions it to capture incremental demand as AI infrastructure scales.
Q2 revenue was $5.5B, up 13% sequentially and 23% YoY, driven by broad-based growth across industrial, data center, and an acceleration in automotive (led by China EVs/hybrids). Gross margin improved 340 bps sequentially to 61%, and operating margin was 42%. EPS of $2.14 included a $0.05 discrete tax benefit. Free cash flow (TTM) rose to $6.5B, helped by $1.6B of CHIPS Act incentives, and inventory days fell 13 days to 196.
Management guided Q3 revenue to $5.65B–$6.15B (midpoint $5.9B, +7% QoQ) and EPS to $2.23–$2.57, above seasonal trends. They expect strength across all end markets, with industrial, data center, and automotive leading, and personal electronics contributing seasonally. Pricing increases have begun and will phase in through Q3, Q4, and into next year, mainly on the Analog side initially. OpEx, net other income/expense, and acquisition charges are expected to be flat sequentially. Management reiterated a 2026 CapEx range of $2B–$3B, noting it could land at the higher end given demand, and confirmed they have clean room space available to support growth without new footprint. They did not mention any acquisition.
“I think we are in the start of a cycle that is very, very broad.”
on Demand cycle
“We are seeing examples, real-time examples of, hey, we are lined down, please help us. And every time that happens, that's an opportunity because it's a discussion with the customer, and it's -- when you solve a problem, I think they make more bets on you for the future.”
on Data center share gains
“I think we have done the hard work ahead of time. And we have capacity to build into.”
on Capacity readiness
Given above-seasonal Q3 guidance, do you expect strength to continue into H2? What's driving the automotive inflection?
Haviv said the setup is stronger and broader, with demand growing in automotive, led by China EVs/hybrids and low customer inventory. He expects Q3 strength across all markets, with industrial, data center, and automotive leading, plus typical personal electronics seasonality.
Where do factory loadings stand and how much will you increase them? Will inventory stabilize?
Julie said loadings increased from Q1 to Q2 and continued to rise through the quarter. For Q3, loadings will depend on demand, but clean room space is available to equip and ramp to support a wide range of scenarios.
Is OpEx expected to decline seasonally into Q3?
Rafael said OpEx, net other income/expense, and acquisition charges should all be flat sequentially from Q2 to Q3.