Executive Summary
Texas Instruments (TXN) reported Q1 2024 financial results showing a revenue decline of 16% year-over-year (YoY) to $3.66 billion, reflecting a challenging macroeconomic environment and ongoing inventory corrections among its customers. Notably, Analog and Embedded Processing segments witnessed declines of 14% and 22% YoY respectively. Despite the revenue dip, the company emphasized its strong cash generation capabilities, reporting a net income of $1.1 billion and robust free cash flow of approximately $940 million over the past twelve months.
Management highlighted an expectation for a sequential revenue increase in Q2 2024 between $3.65 billion and $3.95 billion, signaling confidence in seasonal recovery alongside strategic inventory management. As Texas Instruments navigates this challenging phase, investments in manufacturing capacity remain a priority, leveraging competitive advantages in technology and operational efficiency to enhance long-term shareholder value.
Key Performance Indicators
QoQ: -10.20% | YoY:-16.40%
QoQ: -13.82% | YoY:-26.83%
QoQ: -24.20% | YoY:-39.92%
QoQ: -19.40% | YoY:-35.30%
QoQ: -19.33% | YoY:-35.29%
Key Insights
**Revenue Performance**: Q1 2024 revenues of $3.66 billion, down 16% YoY and down 10% sequentially.
**Net Income**: Reported net income at $1.1 billion, translating to an EPS of $1.20.
**Gross Profit Margin**: Decreased to 57% from 64% YoY, impacted by lower revenue and higher manufacturing costs.
**Operating Income**: $1.3 billion, representing a 34% decline YoY.
**Free Cash Flow**: Stable at approximately $940 million over the trailing twelve months, demonstrating effective cash flow managem...
Financial Highlights
Revenue Performance: Q1 2024 revenues of $3.66 billion, down 16% YoY and down 10% sequentially.
Net Income: Reported net income at $1.1 billion, translating to an EPS of $1.20.
Gross Profit Margin: Decreased to 57% from 64% YoY, impacted by lower revenue and higher manufacturing costs.
Operating Income: $1.3 billion, representing a 34% decline YoY.
Free Cash Flow: Stable at approximately $940 million over the trailing twelve months, demonstrating effective cash flow management.
Debt and Cash Position: Total debt of $14.3 billion with $10.4 billion in cash and short-term investments, providing a strong liquidity position.
Total Current Assets reached $17.45 billion, supported by strong working capital management. The company maintains a current ratio of 4.91, indicating solid short-term financial health.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
3.66B |
-16.40% |
-10.20% |
| Gross Profit |
2.10B |
-26.83% |
-13.82% |
| Operating Income |
1.16B |
-39.92% |
-24.20% |
| Net Income |
1.11B |
-35.30% |
-19.40% |
| EPS |
1.21 |
-35.29% |
-19.33% |
Key Financial Ratios
operatingProfitMargin
31.7%
operatingCashFlowPerShare
$1.12
freeCashFlowPerShare
$-0.25
dividendPayoutRatio
107.1%
Management Commentary
Q1 Overview: "Revenue in the quarter came in about as expected at $3.7 billion, a decrease of 10% sequentially and 16% year-over-year." - Dave Pahl, Head of Investor Relations.
Profitability Insights: "Gross profit margin decreased 820 basis points due to lower revenue and higher manufacturing costs associated with reduced factory loadings." - Rafael Lizardi, CFO.
Future Guidance: "For the second quarter, we expect TI revenue in the range of $3.65 billion to $3.95 billion and earnings per share to be in the range of $1.05 to $1.25." - Rafael Lizardi, CFO.
"We continue to invest in our competitive advantages, which are manufacturing and technology, a broad-product portfolio, reach of our channels, and diverse and long-lived positions." - Rafael Lizardi, CFO
â Rafael Lizardi
"At our core, we are engineers and technology is the foundation of our company. Our objective and the best metric to measure progress and generate value for owners is the long-term growth of free cash flow per share." - Rafael Lizardi, CFO
â Rafael Lizardi
Forward Guidance
Management's guidance for Q2 2024 indicates an anticipated revenue range of $3.65 billion to $3.95 billion, suggesting a potential sequential growth driven by seasonal demand recovery across end markets. The effective tax rate is expected to stabilize around 13%. With ongoing uncertainties within the semiconductor industry due to inventory destocking, investors should closely monitor customer inventory levels and sector-specific recovery trends, particularly in automotive and industrial segments.