Texas Instruments Incorporated (TXN) 2024 10-K Earnings Analysis
Texas Instruments Incorporated2024 Earnings Analysis
80/100
Texas Instruments' FY2024 10-K shows $15.6B revenue, $4.8B net income, 58.1% gross margin, and 34.9% operating margin across Analog and Embedded Processing segments — industry-leading profitability for a diversified analog IDM per publicly-comparable 10-K disclosures. The 30% capex intensity (~$4.8B on $15.6B revenue) reflects the multi-year 300mm internal-fab buildout (Sherman TX RFAB1/RFAB2, Lehi, Richardson expansions per investor-day capital-plan materials) — a deliberate long-cycle investment thesis. Haviv Ilan has served as CEO since April 2023.
Filing analysis
Texas Instruments Incorporated 2024 10-K Analysis
This page reads Texas Instruments Incorporated's 2024 10-K annual report through the EarningsMoat framework: earnings quality, economic moat strength, capital allocation, and key risks. The current overall score is 80/100, or grade B.
TXN Earnings Quality
The earnings-quality module scores 85/100, with Gross Margin: 58.1%, Operating Margin: 34.9%. The core question is whether reported profit is backed by operating cash flow and recurring business economics. See the earnings quality analysis guide.
TXN Economic Moat Analysis
The moat-strength module scores 86/100, with Product Catalog: 80,000+ products, 300mm Internal Fabs: Cost structural. The test is whether the advantage can protect returns after competitors react. Read the economic moat analysis guide.
TXN Free Cash Flow vs Net Income
CF/Net Income: 1.32x is the fastest read on whether accounting earnings turn into cash. The capital-allocation module scores 78/100. For the diagnostic, start with cash flow vs net income.
TXN Key Risks from the Annual Report
The risk module scores 70/100, with Industrial/Auto Cycle: Down-cycle, Fab Ramp Execution: Multi-year. The goal is to separate ordinary disclosure from risks that can change margins, cash flow, leverage, or the moat itself.
Is TXN a High Quality Earnings Stock?
Based on this 2024 filing, TXN passes the first screen for high-quality earnings: the overall grade is B, and the earnings-quality score is 85/100. This is a research screen, not investment advice.
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Evaluating competitive strength across earnings quality, moat strength, and risk sustainability
Overall Score Trend
Earnings Quality
Per the FY2024 10-K income statement, gross margin of 58.1% is at the high end of the analog-semiconductor peer range observable from public filings. The margin reflects the long-lived product cycles of analog catalog parts (many products sold for 10+ years) plus internal-manufacturing cost advantages.
Per the FY2024 10-K income statement, operating margin of 34.9% reflects the structural cost advantage of the 300mm internal-fab strategy over time — even as current-period earnings absorb ongoing fab-buildout depreciation and ramp costs disclosed in MD&A.
Per the FY2024 cash flow statement, OCF of $6.3B is 1.32x net income of $4.8B — the spread driven by heavy depreciation on the 300mm fab base disclosed in the property-and-equipment footnote.
Per the FY2024 10-K end-market disclosures, TI's revenue is distributed across Industrial, Automotive, Personal Electronics, Communications Equipment, and Enterprise Systems. Industrial and Automotive have been the strategic growth priorities disclosed in investor-day capital-allocation materials.
Earnings quality scores 85/100. Per the FY2024 10-K, TI's $15.6B revenue produces a 58.1% gross margin and 34.9% operating margin — at the high end of the analog-semiconductor peer range per publicly-comparable filings. The 1.32x CF/NI ratio reflects fab-base depreciation. End-market diversification across Industrial, Automotive, Personal Electronics, Communications Equipment, and Enterprise Systems dampens any single-segment cycle.
Moat Strength
Per the FY2024 10-K business description, TI offers tens of thousands of analog and embedded-processing products, many with multi-decade product-life cycles. The breadth-and-depth catalog serves hundreds of thousands of customer accounts per investor-day materials — a structural barrier to consolidated displacement.
Per the FY2024 10-K capital-investment disclosures, TI's 300mm internal-fab strategy (RFAB1/RFAB2 Sherman TX, LFAB Lehi UT, DMOS6 Dallas expansion) provides structurally lower per-die cost versus 200mm fabs once utilization is achieved. The multi-year capital cycle is disclosed in investor-day capital-plan materials.
Per the FY2024 10-K go-to-market disclosures, TI sells a meaningful portion of revenue direct to customers (vs. distribution) — a strategic shift described in multi-year investor-day materials that improves end-customer visibility and margin realization.
Goodwill of $4.4B on $36B assets equals 12.3% per the FY2024 balance sheet — reflecting primarily the 2011 National Semiconductor acquisition per historical 10-K disclosures. No recent major acquisitions.
Moat strength scores 86/100. Per the FY2024 10-K, TI's competitive position rests on (1) the breadth-and-depth analog-plus-embedded-processing product catalog (tens of thousands of parts per the business description, many with multi-decade life cycles), (2) the 300mm internal-fab cost structure disclosed in investor-day capital-plan materials, (3) the direct-sales-channel orientation that improves customer-level visibility and margin capture, and (4) decades-long customer relationships across Industrial and Automotive end markets per the strategic-priority disclosures. The 12.3% goodwill ratio reflects the 2011 National Semiconductor acquisition.
Capital Allocation
Per the FY2024 cash flow statement, FCF of $1.5B (OCF $6.3B minus capex $4.8B) is compressed by the elevated fab-buildout capex cycle. Management has publicly framed this as a multi-year investment cycle ahead of the 300mm-capacity-payoff window per investor-day materials.
$4.8B capex on $15.6B revenue equals 30.9% capital intensity — an unusually high level for an analog semiconductor reflecting the multi-year 300mm-fab buildout. Investor-day materials frame the capex cycle as front-loaded investment that normalizes over the coming years.
Per the FY2024 dividend-history disclosure and TI's quarterly-dividend announcement press releases, the company has increased its dividend for more than 20 consecutive years. Management publicly frames dividend growth as a long-run capital-return commitment in investor-day communications.
Per investor-day capital-allocation materials, TI prioritizes manufacturing capacity, R&D, and dividend growth. Share repurchases have been measured relative to the elevated capex cycle. The capital-allocation waterfall is publicly communicated as a multi-year framework.
Capital allocation scores 78/100. Per the FY2024 10-K, TI is in the peak-deployment phase of the multi-year 300mm-fab-buildout cycle — capex at 30.9% of revenue compresses near-term FCF to $1.5B. The dividend-increase streak has continued through the investment cycle per the dividend-history disclosure. Management's publicly-stated capital-allocation waterfall — manufacturing capacity, R&D, dividend growth, then buybacks with residual — is a multi-year framework.
Key Risks
Per the FY2024 end-market MD&A, both Industrial and Automotive revenue have faced cyclical softness through the period, tracking inventory-digestion dynamics in both channels. Management has publicly framed this as a normal inventory cycle in investor-day communications.
Per the FY2024 10-K capital-investment disclosures, the return on the 300mm fab cycle depends on utilization ramp timing relative to end-market demand recovery. Depreciation runs independently of utilization; a prolonged demand trough extends the payback period.
Per the FY2024 Risk Factors and industry trade-press coverage, Chinese analog-semiconductor suppliers (including Will Semi, SG Micro, 3Peak, and others identified in industry-analyst coverage) have been expanding capacity. China-sourced analog competition is the principal longer-term competitive vector disclosed in the Risk Factors.
Per the FY2024 Risk Factors, semiconductor trade is subject to US and allied-country export-control regimes and China's reciprocal measures. Export controls on specific product categories disclosed through BIS public communications affect the customer-mix trajectory.
Risk profile scores 70/100 (higher = safer). Per the FY2024 10-K, the principal watch-items are (1) Industrial and Automotive end-market cyclical softness that management has framed as inventory digestion in investor communications, (2) fab-ramp-execution risk given that depreciation runs independently of utilization during the peak-buildout phase, (3) competition from Chinese analog-semiconductor suppliers identified in industry-analyst coverage, and (4) US-China semiconductor trade-policy dynamics per the BIS and Risk-Factors disclosures.
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This analysis is for educational purposes only and does not constitute investment advice.