TI reports Q4 2024 and 2024 financial results and shareholder returns

Published: 2025-01-23 16:02:08 ET TXN

DALLAS, Jan. 23, 2025 /PRNewswire/ -- Texas Instruments Incorporated (TI) (Nasdaq: TXN) today reported fourth quarter revenue of $4.01 billion, net income of $1.21 billion and earnings per share of $1.30. Earnings per share included a 2-cent benefit that was not in the company's original guidance.

Regarding the company's performance and returns to shareholders, Haviv Ilan, TI's president and CEO, made the following comments:

Free cash flow, a non-GAAP financial measure, is cash flow from operations less capital expenditures.

Earnings summary

(In millions, except per-share amounts)

Q4 2024

Q4 2023

Change

Revenue

4,007

4,077

(2) %

Operating profit

1,377

1,533

(10) %

Net income

1,205

1,371

(12) %

Earnings per share

1.30

1.49

(13) %

Cash generation

Trailing 12 Months

(In millions)

Q4 2024

Q4 2023

Change

Cash flow from operations

1,998

6,318

6,420

(2) %

Capital expenditures

1,192

4,820

5,071

(5) %

Free cash flow

806

1,498

1,349

11 %

Free cash flow % of revenue

9.6 %

7.7 %

Cash return

Trailing 12 Months

(In millions)

Q4 2024

Q4 2023

Change

Dividends paid

1,240

4,795

4,557

5 %

Stock repurchases

537

929

293

217 %

Total cash returned

1,777

5,724

4,850

18 %

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Income

For Three Months Ended

December 31,

For Years Ended

December 31,

(In millions, except per-share amounts)

2024

2023

2024

2023

Revenue

4,007

4,077

15,641

17,519

Cost of revenue (COR)

1,693

1,646

6,547

6,500

Gross profit

2,314

2,431

9,094

11,019

Research and development (R&D)

491

460

1,959

1,863

Selling, general and administrative (SG&A)

446

438

1,794

1,825

Restructuring charges/other

—

(124)

—

Operating profit

1,377

1,533

5,465

7,331

Other income (expense), net (OI&E)

112

113

496

440

Interest and debt expense

130

508

353

Income before income taxes

1,359

1,548

5,453

7,418

Provision for income taxes

154

177

654

908

Net income

1,205

1,371

4,799

6,510

Diluted earnings per common share

1.30

1.49

5.20

7.07

Average shares outstanding:

Basic

912

908

912

908

Diluted

919

915

919

916

Cash dividends declared per common share

1.36

1.30

5.26

5.02

Supplemental Information

Provision for income taxes is based on the following:

Operating taxes (calculated using the estimated annual effective tax rate)

170

180

743

974

Discrete tax items

(16)

(3)

(89)

(66)

Provision for income taxes (effective taxes)

154

177

654

908

A portion of net income is allocated to unvested restricted stock units (RSUs) on which we pay dividend equivalents. Diluted EPS

is calculated using the following:

Net income

1,205

1,371

4,799

6,510

Income allocated to RSUs

(7)

(24)

(33)

Income allocated to common stock for diluted EPS

1,198

1,364

4,775

6,477

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheets

December 31,

(In millions, except par value)

2024

2023

Assets

Current assets:

Cash and cash equivalents

3,200

2,964

Short-term investments

4,380

5,611

Accounts receivable, net of allowances of ($21) and ($16)

1,719

1,787

Raw materials

395

420

Work in process

2,214

2,109

Finished goods

1,918

1,470

Inventories

4,527

3,999

Prepaid expenses and other current assets

1,200

761

Total current assets

15,026

15,122

Property, plant and equipment at cost

15,254

13,268

Accumulated depreciation

(3,907)

(3,269)

Property, plant and equipment

11,347

9,999

Goodwill

4,362

Deferred tax assets

936

757

Capitalized software licenses

257

223

Overfunded retirement plans

233

173

Other long-term assets

3,348

1,712

Total assets

35,509

32,348

Liabilities and stockholders' equity

Current liabilities:

Current portion of long-term debt

750

599

Accounts payable

820

802

Accrued compensation

839

836

Income taxes payable

159

172

Accrued expenses and other liabilities

1,075

911

Total current liabilities

3,643

3,320

Long-term debt

12,846

10,624

Underfunded retirement plans

110

108

Deferred tax liabilities

Other long-term liabilities

1,954

1,336

Total liabilities

18,606

15,451

Stockholders' equity:

Preferred stock, $25 par value. Shares authorized – 10; none issued

—

Common stock, $1 par value. Shares authorized – 2,400; shares issued – 1,741

1,741

Paid-in capital

3,935

3,362

Retained earnings

52,262

52,283

Treasury common stock at cost

Shares: 2024 – 830; 2023 – 832

(40,895)

(40,284)

Accumulated other comprehensive income (loss), net of taxes (AOCI)

(140)

(205)

Total stockholders' equity

16,903

16,897

Total liabilities and stockholders' equity

35,509

32,348

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For Three Months Ended

December 31,

For Years Ended

December 31,

(In millions)

2024

2023

2024

2023

Cash flows from operating activities

Net income

1,205

1,371

4,799

6,510

Adjustments to net income:

Depreciation

416

322

1,508

1,175

Amortization of capitalized software

Stock compensation

387

362

(Gains) losses on sales of assets

(1)

(127)

—

Deferred taxes

(21)

(140)

(210)

(299)

Increase (decrease) from changes in:

Accounts receivable

143

189

108

Inventories

(231)

(91)

(528)

(1,242)

Prepaid expenses and other current assets

Accounts payable and accrued expenses

(10)

125

(33)

Accrued compensation

115

126

(12)

Income taxes payable

110

597

(7)

Changes in funded status of retirement plans

(4)

Other

(29)

(401)

(337)

Cash flows from operating activities

1,998

1,924

6,318

6,420

Cash flows from investing activities

Capital expenditures

(1,192)

(1,148)

(4,820)

(5,071)

Proceeds from asset sales

—

195

Purchases of short-term investments

(909)

(2,565)

(9,716)

(12,705)

Proceeds from short-term investments

2,726

3,411

11,187

13,387

Other

(12)

(9)

(48)

Cash flows from investing activities

614

(311)

(3,202)

(4,362)

Cash flows from financing activities

Proceeds from issuance of long-term debt

—

2,980

3,000

Repayment of debt

(300)

—

(600)

(500)

Dividends paid

(1,240)

(1,181)

(4,795)

(4,557)

Stock repurchases

(537)

(65)

(929)

(293)

Proceeds from common stock transactions

517

263

Other

(11)

(14)

(53)

(57)

Cash flows from financing activities

(2,001)

(1,215)

(2,880)

(2,144)

Net change in cash and cash equivalents

611

398

236

(86)

Cash and cash equivalents at beginning of period

2,589

2,566

2,964

3,050

Cash and cash equivalents at end of period

3,200

2,964

3,200

2,964

Supplemental cash flow information

Investment tax credit (ITC) used to reduce income taxes payable

—

588

—

Total cash benefit related to the U.S. CHIPS and Science Act

—

588

—

Quarterly segment results

(In millions)

Q4 2024

Q4 2023

Change

Analog:

Revenue

3,174

3,120

2 %

Operating profit

1,237

1,280

(3) %

Embedded Processing:

Revenue

613

752

(18) %

Operating profit

195

(70) %

Other:

Revenue

220

205

7 %

Operating profit*

41 %

* Includes restructuring charges/other.

Annual segment results

(In millions)

2024

2023

Change

Analog:

Revenue

12,161

13,040

(7) %

Operating profit

4,608

5,821

(21) %

Embedded Processing:

Revenue

2,533

3,368

(25) %

Operating profit

352

1,008

(65) %

Other:

Revenue

947

1,111

(15) %

Operating profit*

505

502

1 %

* Includes restructuring charges/other.

Non-GAAP financial information

This release includes references to free cash flow and ratios based on that measure. These are financial measures that were not prepared in accordance with GAAP. Free cash flow was calculated by subtracting capital expenditures from the most directly comparable GAAP measure, cash flows from operating activities (also referred to as cash flow from operations).

We believe that free cash flow and the associated ratios provide insight into our liquidity, our cash-generating capability and the amount of cash potentially available to return to shareholders, as well as insight into our financial performance. These non-GAAP measures are supplemental to the comparable GAAP measures.

Reconciliation to the most directly comparable GAAP measures is provided in the table below.

For Years Ended

December 31,

(In millions)

2024

2023

Change

Cash flow from operations (GAAP)*

6,318

6,420

(2) %

Capital expenditures

(4,820)

(5,071)

Free cash flow (non-GAAP)

1,498

1,349

11 %

Revenue

15,641

17,519

Cash flow from operations as a percentage of revenue (GAAP)

40.4 %

36.6 %

Free cash flow as a percentage of revenue (non-GAAP)

9.6 %

7.7 %

* Includes a cash benefit of $588 million from the U.S. CHIPS and Science Act ITC used to reduce income taxes

payable for 2024.

This release also includes references to operating taxes, a non-GAAP term we use to describe taxes calculated using the estimated annual effective tax rate, a GAAP measure that by definition does not include discrete tax items. We believe the term operating taxes helps to differentiate from effective taxes, which include discrete tax items.

Notice regarding forward-looking statements

This release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as TI or its management "believes," "expects," "anticipates," "foresees," "forecasts," "estimates" or other words or phrases of similar import. Similarly, statements herein that describe TI's business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements.

We urge you to carefully consider the following important factors that could cause actual results to differ materially from the expectations of TI or our management:

For a more detailed discussion of these factors, see the Risk factors discussion in Item 1A of TI's most recent Form 10-K. The forward-looking statements included in this release are made only as of the date of this release, and we undertake no obligation to update the forward-looking statements to reflect subsequent events or circumstances. If we do update any forward-looking statement, you should not infer that we will make additional updates with respect to that statement or any other forward-looking statement.

About Texas Instruments

Texas Instruments Incorporated (Nasdaq: TXN) is a global semiconductor company that designs, manufactures and sells analog and embedded processing chips for markets such as industrial, automotive, personal electronics, communications equipment and enterprise systems. At our core, we have a passion to create a better world by making electronics more affordable through semiconductors. This passion is alive today as each generation of innovation builds upon the last to make our technology more reliable, more affordable and lower power, making it possible for semiconductors to go into electronics everywhere. Learn more at TI.com.

TXN-G

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SOURCE Texas Instruments Incorporated