Texas Instruments Incorporated Q1 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Q1 revenue was $4.4 billion, down 6% sequentially and down 11% year-over-year. This matched internal expectations.
  • Demand remained weak across all markets except automotive.
  • Analog revenue declined 14% year-over-year, Embedded Processing grew 6%, and Other segments fell 16%.

End Market Performance (Sequential)

  • Industrial: Flat (compared to down 10% in Q4 2022, marking stabilization).
  • Automotive: Up mid-single digits (continued strength; same trend as prior quarter).
  • Personal Electronics: Down ~30% (fourth consecutive quarter of decline; continued broad-based weakness).
  • Communications Equipment: Down mid-teens.
  • Enterprise Systems: Down ~30%.

Profitability and Financials

  • Gross profit: $2.9 billion (65% margin), down 480 bps year-over-year.
  • Operating expenses: $929 million, up 14% year-over-year.
  • Operating profit: $1.9 billion (44% margin), down 25% year-over-year.
  • Net income: $1.7 billion; EPS: $1.85, including a $0.03 benefit from non-guided items.

Capital Management

  • Cash flow from operations: $1.2 billion for the quarter; $7.7 billion trailing 12 months.

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Dave Pahl: Welcome to the Texas Instruments' First Quarter 2023 Earnings Conference Call. I'm Dave Pahl, Head of Investor Relations, and I'm joined by our Chief Financial Officer, Rafael Lizardi. For any of you who missed the release, you can find it on our website at ti.com/ir. This call is being broadcast live over the web and can be accessed through our website. In addition, today's call is being recorded and will be available via replay on our website. This call will include forward-looking statements that involve risks and uncertainties that could cause TI's results to differ materially from management's current expectations. We encourage you to review the notice regarding forward-looking statements contained in the earnings release published today, as well as TI's most recent SEC filings for a more complete description. Today, we'll provide the following updates. First, I'll start with a quick overview of the quarter. Next, I'll provide some insight into first quarter's revenue results with some details of what we're seeing with respect to our end markets. Lastly, Rafael will cover the financial results and our guidance for the second quarter of 2023. Starting with a quick overview of the first quarter. Revenue in the quarter came in about as expected at $4.4 billion, a decrease of 6% sequentially and 11% year-over-year. Analog revenue declined, 14%, embedded processing grew 6% and our other segment declined 16% from the year ago quarter. As expected, our results reflec

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