Texas Instruments (TXN) Q3 FY2026 Earnings Call

Bottom line

The sleeper story here isn't the 95% YoY data center growth everyone will headline, it's that TI is quietly using an industry-wide four-year capacity drought in analog to negotiate 2027 price increases, something management confirmed is 'now engaged' but refuses to quantify before the January call. The obvious headline, $6.1B revenue up 28% YoY with a flattish Q4 guide well above seasonal norms, is real, but the binding constraint isn't demand, it's back-end packaging/test tool lead times extending and automotive customers running so lean on inventory that management said 'I wish they had a little bit more'. What should worry the desk: the specific sub-13-week lead-time figure from last quarter quietly vanished into 'ticked a little bit higher', and management has now gone three-plus quarters refusing to quantify market share, flatly stating 'we cannot measure it yet'. Haviv's own words capture the posture: management says it will 'report more of it when we provide our results, mainly our guidance during the January call'. My view changes if January delivers a hard pricing percentage and a real 2027 CapEx number instead of another time-shift; if it doesn't, this starts to look like a company riding cyclical tailwinds while keeping its actual margin lever deliberately opaque.

The 30-second version

TI is quietly setting up a 2027 pricing re-rate off analog capacity scarcity, not just a cyclical volume recovery
The 'broad demand' headline is real, but the real constraint is back-end tool availability and under-inventoried auto customers, not bookings
Two disclosure regressions nobody will flag: lead times and market share both went vaguer, not clearer

What changed this quarter

Metric	Q2'26	Q3'26	Change
Revenue	$5.5B, +13% seq, +23% YoY	$6.1B, +11% seq, +28% YoY	Accelerating YoY despite seq deceleration
EPS	$2.14	$2.62	+22% QoQ, beat guided high end of $2.57
Net Income	$2.0B	$2.4B	+20% QoQ
Operating Income	$2.3B, 42% margin	$2.9B, 47% margin	+500 bps margin expansion
Gross Margin	61%, +340 bps seq	64%, +280 bps seq	Incremental margin ~90% vs 75-85% long-term model
Data Center Revenue Growth	Doubled YoY, +20% seq	+95% YoY, +20% seq, now 13% of revenue	Growing off a much larger base, still accelerating in absolute dollars
Industrial Revenue Growth	+30% YoY, +10% seq	+40% YoY, +10% seq	Accelerating; just now reached Q3 2022 revenue level
Automotive Revenue Growth	Mid-teens YoY, upper-single-digit seq	Mid-teens YoY, +10% seq	Modest reacceleration, but customer inventory thin
Cash Flow from Operations	$2.7B qtr / $8.7B TTM	$3.4B qtr / $9.9B TTM	CFFO comfortably exceeds net income both quarters, clean
Free Cash Flow (TTM)	$6.5B, incl. $1.6B CHIPS	$8.4B, incl. $1.6B CHIPS	+29% TTM, still CHIPS-subsidized

Accountability tracked

4 new promises made5 narrative shifts flagged3 prior promises scored

Inside the full report

The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.

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Texas Instruments (TXN)

The 30-second version

What changed this quarter

Accountability tracked

Follow what management promises next