Oct 21, 2026 earnings call — Broad demand lifts revenue and margins
Revenue was $6.1 billion, up 11% sequentially and 28% year over year.
Revenue $6.1B (est $5.9B) · EPS $2.62 (est $2.44) · Next-quarter revenue outlook $5.8B–$6.3B
Key quotes
"During the quarter, we saw broad demand with revenue growth across all end markets and regions."
"We are executing to our long term manufacturing plan and our investments have positioned us to ramp our factories to support revenue growth."
"In September, we announced we would increase our dividend by 7% to $1.52 per share, marking our 23rd consecutive year of dividend increases."
Analyst Q&A 9
Why gross margins were so high
Q (Joe Moore · Morgan Stanley): Analyst asked why incremental gross margins were about 90% on incremental revenue and whether that level is sustainable.
A: Management said the quarter's margin strength was mainly from higher revenue, with some help from pricing loadings and product/end-market mix. For long-term modeling they said to use "75 to 85% x depreciation fall through." They also said Q4 OpEx should be flat to slightly up and acquisition charges similar to Q3.
"I think over the long term, the way to model continues to be looking at 75 to 85% x depreciation fall through." — Julie C. Knecht (CFO)
pricing talks for next year
Q (Harlan Sur · JPMorgan): Analyst asked if TI had another quarter of positive book-to-bill and whether order activity was broad based, then asked for an update on annual pricing negotiations for 2027 across analog and embedded.
A: Management said demand is broad across industrial, automotive and data center, and lead times ticked a bit higher. They said they saw some price movement mainly on analog in the second half of 26 after flat pricing in the first half. For 2027 they are engaged in customer discussions on demand and guaranteed supply and will report more in the January call.
"So I think we will report more of it when we provide our results, mainly our guidance during the January call." — Haviv Ilan (CEO)
what drives Q4 guide; CapEx plans
Q (Stacy Rasgon · Bernstein): Analyst asked why Q4 guidance is flattish despite typical seasonal down patterns and which end markets are stronger. Follow-up asked about CapEx for the rest of the year and implications for 2027.
A: Management said they would not guide by market but noted data center is strong secular growth and was about 13% of revenue in Q3, and that industrial and automotive momentum also help the Q4 guide. On CapEx they said they are aiming to invest "somewhere between 2 and 3" for 2026, want to lean in, face longer tool lead times, and will give more color in the February capital-management call; they will modulate future tool installs based on demand.
"I think it was about 13% of revenue in Q3 or so." — Haviv Ilan (CEO)
why industrial recovered; Lehi fabs plans
Q (Chris Caso · Wolfe): Analyst asked how much of the industrial recovery is cyclical versus secular, and then asked about deploying Lehi II for embedded next year and any margin impact.
A: Management said industrial hit a new peak versus Q3 22 and much of the recovery reflects more content per system and wins from TI's expanded portfolio. On embedded they said Lehi I had absorbed foundry business and Lehi II will let them grow embedded with more tool installs; the Silicon Labs acquisition adds another clean room. They also said gross margins in embedded are improving and have moved roughly "10 points year-over-year."
"So on the embedded side, I am we are seeing that our Lehigh 1 and Lehigh 2 is extremely beneficial." — Haviv Ilan (CEO)
auto demand breadth and inventory
Q (Joseph Quatrochi · Wells Fargo and Company): Analyst asked for more color on automotive demand breadth, whether customers are adding inventory, and whether this is concentrated in analog or embedded. Follow-up asked about shifting back-end capacity internal given tool lead times.
A: Management said automotive demand was strong with sequential growth and "mid teens year over year growth," but customers generally did not keep much inventory so TI is supporting ramping production and using inventory they built ahead. They said EV-related sectors (hybrid electric and powertrain) "grew about 2x as fast as the overall." On capacity they are ramping a new large site in Malaysia and can increase capacity each quarter as they add tools and qualify parts.
"I think customers have not had not kept a lot of inventory on their side." — Haviv Ilan (CEO)
data center opportunity and parts count
Q (Tore Svanberg · Stifel): Analyst asked how to think about the near-doubling year-over-year data center growth given TI's building-block role, and how much data center buildout affects industrial revenue.
A: Management said data center offers a broad, growing opportunity and they are investing in new solutions and application-specific sockets; they said they sell about "10 thousand different GPNs or generic part numbers" into data center and that count grows every quarter. On industrial overlap they said industrial has about 9 or 10 sectors and two (energy infrastructure and test & measurement) are closely tied to data center activity.
"We reviewed it earlier this week, and we have about 10 thousand different GPNs or generic part numbers that we are selling into this market, and it is growing every quarter." — Haviv Ilan (CEO)
customer kit inventory and lead times
Q (William Stein · Truist): Analyst asked whether customer inventory shortages and kit completion problems are reappearing and how TI can help, and then asked how lead times and backlog duration changed in the quarter.
A: Management said this cycle is not yet like the COVID upcycle and TI is better prepared, having built inventory during the down cycle and helped customers many times; they can commit capacity and growth into 2027 and beyond. They said backlog is consistent with the demand environment and lead times have upticked, but TI is competitive and can continue to invest in clean room and assembly/test to support growth.
"And many times, we had the inventory and could also commit capacity or growth into 2027 and beyond." — Haviv Ilan (CEO)
market share and tool bottlenecks
Q (Rothschild and Company): Analyst asked whether TI has seen incremental market share gains and whether back-end tool availability could bottleneck growth in coming quarters.
A: Management said they do not measure market share publicly and that any share gains would need to be seen through the cycle if TI remains better positioned to support demand. On tools they said the true gating item is lack of clean room, which they do not have, and current risks are equipment delivery and supplier chains; they plan capacity slotting for 2027 and beyond to support scenarios.
"I do not want to talk about gating items because the gate is when you do not have the clean room." — Haviv Ilan (CEO)
data center growth and China EV exposure
Q (Mizuho): Analyst asked if data center growth will continue into 2027 and whether it could double, and then asked how TI sees EV strength across regions and exposure to China EV market.
A: Management said they are not seeing any slowdown in data center CapEx and are seeing "continuing demand, actually growing demand," and that they are expanding their portfolio and sockets to gain share. On EVs they said China is leading in EVs, the China business is growing faster with higher content and share for TI, and Q3 automotive was driven by China and the US.
"We are seeing continuing demand, actually growing demand." — Haviv Ilan (CEO)