Texas Instruments ($TXN): Investment Flash Update | Q2 2025

ADD ON WEAKNESS; CYCLE INTACT, TARIFF NOISE TEMPORARY

What’s New — Change Log

• 🚀 Gross-margin beat: 58.0 % (+150 bp vs. Street, +80 bp vs. our preview) on stronger MCU pricing and improving 300 mm learning curve (Transcript – CFO remarks)

• 🚀 Op-margin surprise: 35 % (+120 bp vs. preview) with OpEx held flat QoQ (CFO)

• 🥶 Industrial ran “hot”: +15 % QoQ as China customers pulled forward parts amid tariff headlines; mgmt flags normalization into 2H (CEO)

• 🚨 Tariff / geopolitics now front-of-mind: Management preparing for “range of scenarios”; U-S fabs pitched as dependable hedge (CEO)

• 🥶 Q3 guide tamer than hoped: Rev $4.45–4.80 B (+3 % seq at mid-pt); GM guided flat QoQ as depreciation ramps (CFO)

• 🚨 Free-cash-flow still compressed: TTM FCF $1.8 B (16 % of rev) vs. cap-intensity peak, though new tax law should lift cash yield from ’26 onward (CFO)

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