Texas Instruments (TXN) Q4 FY2025 Earnings Call

Bottom line

The sleeper story is data center becoming a real business at $1.5B annually - finally material enough to drive company-level growth as hyperscaler CapEx scales. The obvious headline of Q1 sequential growth (first in 15 years) masks the real issue: management admits they can't explain why orders improved beyond vague customer urgency. The binding constraint isn't capacity or inventory - it's industrial customer confidence, with factory CapEx frozen due to trade uncertainty. Haviv's candid admission: 'I can't tell you why. We'll have to see how it plays out' on Q1 strength. My view changes if Q1 results show this was real end-demand recovery rather than channel inventory restocking ahead of potential tariff changes.

The 30-second version

Data center is becoming real revenue (~$1.5B annually, up 64% YoY) - finally meaningful enough to be its own segment
Q1 guide implies first sequential growth in 15 years - but management can't explain why beyond 'orders improved'
Industrial recovery stalling despite 'easy compares' - still 25% below 2022 peaks with customer hesitancy on factory investments

What changed this quarter

Metric	Q3'25	Q4'25	Change
Revenue	$4.7B (+14% YoY)	$4.4B (+10% YoY)	Down 7% sequentially but beat expectations
EPS	$1.48	$1.27	Down 14% sequentially, includes 6¢ goodwill impairment hit
Gross Margin	57.5%	56%	Down 150bps on lower loadings/utilization
Industrial Revenue	Up 25% YoY, up low single digits sequentially	Up high teens YoY, down mid-single digits sequentially	Deceleration from Q3 momentum
Data Center Revenue	Part of Enterprise (~$35% YoY growth)	$1.5B annual (~70% YoY growth)	Now broken out as separate segment, accelerating
Automotive Revenue	Up upper single digits YoY, ~10% sequential	Up upper single digits YoY, down low single digits	Consistent growth rate, normal seasonality
Free Cash Flow (TTM)	$2.4B	$2.9B	Up 96% from 2024, 17% of revenue
Inventory	$4.8B, 215 days	$4.8B, 222 days	Flat dollars, 7 more days - positioned for demand
CapEx	$1.2B quarterly	$925M quarterly	Down as Sherman ramp completes ahead of schedule
Operating Expenses	$975M	$967M	Flat despite restructuring benefits not yet flowing through

Accountability tracked

8 new promises made4 narrative shifts flagged6 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