TEXAS INSTRUMENTS INC Q3 FY2024 earnings call

Revenue Overview: Revenue in the quarter was $4.2 billion, up 9% sequentially and down 8% year-over-year. ### End-Market Insights: Asynchronous market behavior continued; industrial down low-single digits, automotive up high-single digits (China-driven), personal electronics, enterprise systems, and communication equipment showed growth. ### Profitability: Gross profit was $2.5 billion (60% of revenue), gross profit margin increased 180 basis points sequentially. Operating expenses were $920 million, operating profit was $1.6 billion (37% of revenue), net income was $1.4 billion ($1.47 per share). ### Capital Management: Cash flow from operations was $1.7 billion, capital expenditures $1.3 billion, free cash flow on trailing 12-month basis $1.5 billion. Paid $1.2 billion in dividends and repurchased $318 million of stock. Balance sheet strong with $8.8 billion in cash and short-term investments. ### Investment in Competitive Advantages: Continue to invest in manufacturing, technology, broad product portfolio, channels, and diverse positions through disciplined capital allocation.

Revenue in the third quarter was $4.2 billion. Analog revenue declined 4% year-over-year, embedded processing declined 27%, and the other segment declined 5% year-over-year. By end-market: Industrial was down low-single digits, Automotive increased high single digits (driven by China), Personal Electronics grew about 30%, Enterprise Systems was up about 20%, and Communication Equipment was up about 25%.

Fourth Quarter: Expect revenue in the range of $3.7 billion to $4 billion and EPS in the range of $1.07 to $1.29. Effective tax rate expected to be about 13% in Q4. ### 2025: Based on current tax law, effective tax rate expected to remain about the same.

Q: Autos grew, especially in China. Any commentary on December outlook and if orders weakened late in the quarter?

A: Automotive grew high-single digits, driven by China. China automotive revenue at all-time high, expect momentum to continue. Rest of automotive market still weak.

Q: Broader end-market commentary, especially personal electronics strength vs. PC/phone demand?

A: Personal electronics revenue peaked in 2021 Q3, still 20% lower than peak. Coming off low trough, with shorter design cycles, able to win back sockets.

Q: Thoughts on above-seasonal quarters to reach above-trend growth by 2026?

A: Three cyclically recovering markets (personal electronics, enterprise, communication) showing momentum but not done yet. Industrial and automotive markets have different recovery dynamics.

Q: Utilization rates and inventory in Q4 and 2025?

A: Expect to grow inventory in Q4, factory loadings to go slightly down, but inventory is low-risk.

Q: China strength in auto and broader markets?

A: China automotive growth driven by EV momentum, customer base good. Other markets in China still have inventory correction.

Q: OpEx structure in 2025?

A: R&D investments to grow, SG&A focus on efficiency, both to grow but at lower pace than revenue.

Q: Industrial market sell-through and stabilization?

A: Most industrial sectors hovering, some sectors stabilized, but factory automation and motor drive still weak.

Q: Embedded market sequential weakness?

A: Embedded is progressing, more focused with higher AUPs, seen four quarters of momentum, but still in cyclical process.