Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Fortune 500

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

America's Most Innovative Companies

Leaders in all industries rely more than ever on Big Tech—and appreciate the giants that deliver, at scale, without drama.

World's Most Admired Companies

Industries included in the sector are computers, internet services, IT services, semiconductors, and software companies.

Fortune Sector Leaders: Technology

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

After a year in which humanity leaned more heavily than ever on tech giants, see which companies topped Fortune's ranking of corporate reputation.

This year’s Fortune 500 marks the 67th running of the list.

F500 2021-210-Texas Instruments

Headquartered in Dallas, Texas, the semiconductor company designs, manufactures, and sells analog and embedded processors for various markets.

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-222-Texas-Instruments

Headquartered in its namesake state, the electronics company makes chips that go in more than 80,000 products, including cars, personal electronics, and appliances.

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 65th running of the list.

Here are the World's Most Admired Companies for 2018 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 64th running of the list.

Here are the World's Most Admired Companies for 2017 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 63rd running of the list.

Here are the World's Most Admired Companies for 2016 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 62nd running of the list.

Business insiders have spoken: Asked which companies they most admire, more than 4,100 executives, directors, and analysts chose these top 50 All-Stars.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Fortune Global 500

Sector

Industry

Current All-Star Rank

Previous All-Star Rank

Industry Rank

Previous Industry Rank

Overall Score

Innovation

People Management

Use of Corporate Assets

Social Responsibility

Quality of Management

Financial Soundness

Long-Term Investment Value

Quality of Products/Services

Global Competitiveness

Culture rank

Process rank

Product rank

Years on list

Previous rank

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

EPS % Change (5 year annual rate)

EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

Texas Instruments helped bring about the modern electronics age with the 1958 invention of the integrated circuit by one of its engineers. The resulting microchips made possible all manner of compact gadgets, including handheld calculators, which the company continues to sell under its brand name. The vast majority of TI’s business today is building and selling semiconductors. With more than a dozen chip-manufacturing facilities throughout the world, Texas Instruments is a leading provider of analog and embedded processors. The chip company’s vast portfolio of more than 80,000 products serves customers in a range of industries, such as automotive, defense, aerospace, computing, and communications.

Q2 2025

Q1 2025

Q4 2024

Texas Instruments (TXN): Company Profile, Stock Price, News, Rankings

legacy

Texas Instruments

texas instruments

Welcome to the Texas Instruments 4th Quarter 2024 Earnings Conference Call. I'm Dave Paul, Head of Investor Relations, and I'm joined by our Chief Executive Officer, Aviv Alain and 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. I would like to provide some information that's important to your calendars. On Tuesday, February 4, at 10 am Central Time, we will have our capital management call. Similar to what we've done in the past, Aviv, Raphael and I will share our approach to capital allocation and summarize our progress as we prepare for the opportunity ahead.

Moving on, today we'll provide the following updates. First, Aviv will start with a quick overview of the quarter. Next, he'll provide insight into 4th quarter revenue results with some details of what we're seeing with respect to our end markets. Aviv will then provide the annual summary of revenue breakout by end market. And lastly, Rafael will cover the financial results and our guidance for the Q1 of 2025.

Thanks, Dave. Let me start with a quick overview of the 4th quarter. Revenue was $4,000,000,000 a decrease of 3% sequentially and 2% from the same quarter a year ago. Analog revenue grew 2% year over year after 8 quarters of decline. Embedded Processing declined 18% and our other segment grew from the year ago quarter.

Now I'll provide some insight into our 4th quarter revenue by end market. Our overall results reflect the performance from our 2 largest markets, industrial and automotive, which saw modest sequential declines. Similar to last quarter, I'll focus on sequential performance as it is more informative at this time. First, the industrial market was down low single digits. The automotive market was down mid single digits.

Personal Electronics grew mid single digits, Next Enterprise Systems declined low single digits, and lastly, Communication Equipment grew upper single digits. In addition, as we do at the end of each calendar year, I'll describe our revenue by end market. As a percentage of revenue for 2024, Industrial was 34%, automotive 35%, personal electronics 20%, enterprise systems 5%, communication equipment 4% and other was 2%. In 2024, industrial and automotive combined made up about 70% of TI's revenue, up from 42% in 2013. We see good opportunities in all of our markets, but we place additional strategic emphasis on industrial and automotive.

Our customers across all regions are increasingly turning to analog and embedded technology to make their end products more reliable, more affordable and lower in power. This drives growing cheap content per application or secular content growth, which will likely continue to drive faster growth in Industrial and Automotive. Rafael will now review profitability, capital management and our outlook.

Thanks, Aviv, and good afternoon, everyone. As Aviv mentioned, 4th quarter revenue was $4,000,000,000 Gross profit in the quarter was $2,300,000,000 or 58 percent of revenue. Sequentially, gross profit decreased primarily due to lower revenue, higher depreciation and reduced factory loadings. Gross profit margin decreased 190 basis points. Operating expenses in the quarter were $937,000,000 up 4% from a year ago and about as expected.

On a trailing 12 month basis, operating expenses were $3,800,000,000 or 24 percent of revenue. Operating profit was $1,400,000,000 in the quarter or 34 percent of revenue and profit was down 10% from a year ago quarter. Net income in the 4th quarter was $1,200,000,000 or $1.30 per share. Earnings per share included a $0.02 benefit for items that were not in our original guidance. Let me now comment on our capital management results, starting with our cash generation.

Cash flow from operations was $2,000,000,000 in the quarter. Capital expenditures were $1,200,000,000 in the quarter. In the quarter, we paid $1,200,000,000 in dividends and repurchased $537,000,000 of our stock. We also increased our dividend per share by 5% in the 4th quarter, marking our 21st consecutive year of dividend increases. In total, we have returned $5,700,000,000 in the past 12 months to owners.

Our balance sheet remains strong with $7,600,000,000 of cash and short term investments at the end of the 4th quarter. Total debt outstanding was $13,700,000,000 with a weighted average coupon of 3.79%. Inventory at the end of the quarter was $4,500,000,000 up $231,000,000 from the prior quarter and days were 241, up 10 days sequentially. Now let's look at some of these results for the year. In 2024, cash flow from operations was $6,300,000,000 and capital expenditures were $4,800,000,000 as expected.

We're nearly 70% through a 6 year elevated CapEx cycle that once complete will uniquely position TI to deliver dependable low cost 300 millimeter capacity at scale to meet customer demand. Free cash flow for 2024 was $1,500,000,000 or 10 percent of revenue. Our free cash flow reflects the strength of our business model as well as our decisions to invest in 300 millimeter manufacturing assets and inventory to support our overall objective to maximize long term free cash flow per share, which we believe is the primary driver of long term value. Turning to our outlook for the Q1, we expect TI revenue in the range of $3,740,000,000 to $4,060,000,000 and earnings per share to be in the range of $0.94 to 1 $0.16 Based on current tax law, we now expect our effective tax rate for 2025 to be about 12%. In closing, we will stay focused in the areas that add value in the long term.

We continue to invest in our competitive advantages, which are manufacturing and technology, a broad product portfolio, reach of our channels and diverse and long lived positions. We will continue to strengthen these advantages through disciplined capital allocation and by focusing on the best opportunities, which we believe will enable us to continue to deliver free cash flow per share growth over the long term. With that, let me turn it back to Dave.

Thanks, Rafael. Operator, you can now open the lines for questions. In order to provide as many of you as possible an opportunity to ask your questions, please limit yourself to a single question. After our response, we'll provide you an opportunity for an additional follow-up. Operator?

Our first question comes from the line of Toshiya Hari with Goldman Sachs. Please proceed with your question.

Hi, good afternoon. Thank you so much for taking the question. First one for Haviv. You're guiding Q1 revenue down, I think, 2% to 3% sequentially. I was hoping you could maybe provide some color by end market, what you're seeing on a sequential basis.

You guys were quite helpful last quarter diving deep into automotive, what you're seeing in China, etcetera, etcetera. So any color, any standouts to the upside or downside relative to what's typical seasonality would be very helpful. Thank you.

Okay. Thanks, Ashish. So again, for Q1, as you said, about 3% I think sequential, which is I would describe it as a seasonal decline for Q1. I will say that typically in Q1, what we do see is the personal electronics market would usually show quite a significant decline, just seasonality. And we did have a pretty decent Q4 for PE.

So I think that's what we expect there. And typically also, if you look at the markets like automotive, industrial, the decline should be less pronounced there. So that's kind of my expectation. Nothing specific that I would add on markets. I will provide a little bit more color on Q4, especially in our 2 main markets, industrial and automotive.

I think again, they behave similarly, like the overall company in Q4 and also similar to what we've seen in Q3, but maybe with some little bit small changes. So if I start with the industrial market, as I described, I think during the last call, most of the sectors that are kind of hovering at the bottom, maybe found the bottom. And then there are a couple of sectors that are still showing larger declines, especially industrial automation and the energy infrastructure market that still not found it, I believe, at the bottom, we'll have to see what the first half of twenty twenty five has planned for that. And on the automotive market, similar to Q3, we did see kind of a pretty significant weakness, maybe with the maybe outside of China. So it declined about mid single digit, about 5% sequentially.

But China did grow, but not enough to offset the declines in Europe, the U. S. And Japan, which is very it was kind of similar to what we've seen in Q3, but maybe the growth in China was less pronounced and decline outside of China was more pronounced. That would be my high level summary for Q4 and a little bit for Q1.

I do, Dave. Thanks so much. The earnings outlook for Q1, Haviv, there's a pretty significant drop off on a sequential basis for a 2% to 3% decline in revenue. I was hoping you could kind of provide some context there. Is it primarily gross margin?

And behind that, is it continued under loadings, increase in depreciation, some of the same dynamics we saw over the past 12 months? Or is it higher OpEx? Anything below the line? Any sort of additional color on sort of the drop off in EPS for Q4 to Q1, that would be helpful. Thank you.

Sure. I think I covered revenue, Rafael, maybe you covered the other part there. Yes, happy to.

Okay. So maybe let me start with GPM and then I'll go to OpEx and then I'll go to the other income line, which is relevant this time. So on gross margins, keep in mind that depreciation is increasing, 1st of all. 2nd, well, revenue is decreasing. That has an impact.

Then depreciation is increasing. And then we are in order to manage inventory, we are reducing factory loadings. We've reduced some of that in Q4, but we're going to reduce those further in Q1. So I do expect GPM percent to decrease probably a few 100 basis points Q4 to Q1. Then let me comment on OpEx.

OpEx will increase 3% to 5% 4th to 1st, and that's kind of normal seasonal increases that happened in Q1 on OpEx in addition to the overall increases in investments that we're making. Beyond that, this time it's relevant that interest income is decreasing by about $50,000,000 The reason that is happening is short term interest rates are decreasing and that's where we invest our cash and our cash on the balance sheet, cash levels are also decreasing. So a combination of lower interest rates and lower cash gives you a significant drop in other income. So that's in this case, about $50,000,000 less 4th going to Q1.

Great. Thank you, Toshiya. Yes, we'll go to the next caller, please.

Thank you. Our next question comes from the line of Chris Caso with Wolfe Research. Please proceed with your question.

Yes. Thank you. I guess first question will be with regard to the embedded business. And we're seeing a sharp divergence there between those two businesses, particularly on the margin side. Can you give some explanation of what's going on between the analog and the embedded businesses?

And is the reason for the decline in the embedded margins?

Okay. Let me just say a few words on the revenue side and I'll let Rafael talk about the margins over there. So again, embedded and analog a little bit are like many of the phenomena we see regarding market geographies, we are seeing a synchronous behavior between these two markets. As you remember embedded our embedded business grew in 2023, while our analog business in 2023 declined double digits. So they we saw a later peak about a year later on embedded.

That's the reason we see a sharper decline in embedded right now while analog in Q4 actually grew. So I think analog is about a year maybe ahead on embedded in terms of the cyclical behavior. Regarding profitability, Rafael, I'm sure it's related to Elfa, but you go That's absolutely right.

Yes. So the profitability embedded first is revenue. As revenue drops, that clearly has an impact on profitability. But the second part that is different than analog is that embedded is taking a disproportionate impact due to L FAB, the Lehigh factory in Utah, because that factory, while it's going to serve both embedded and it's serving both embedded and analog, but it disproportionately serves embedded. And since it's underutilized right now, it takes that hit from that underutilization, the factory loading affects embedded disproportionately.

Yes, got it. That's helpful. I guess the follow-up question would be some update on what's going on in China right now. You had spoken about, I guess, the auto business again is stronger there. Perhaps you could talk about the rest of the business that you're seeing in China, the industrial business, for example.

And we know that you've been taking some actions to kind of take back some of the share that you may have lost when your lead times were longer. Could you give us an update on that and how that may be affecting some numbers in the near term?

Sure. So first, high level, our China business in Q4 did grow both sequentially, but also year over year. I think it was mid teens or in that area for the entire China business. I think the automotive, Frank, we talked about it last quarter. We're seeing the same phenomena, meaning customers are continuing to do well.

And there is a bigger share for the EV vehicle types in China, which has higher content. So secular growth is helping us in China on the automotive side. But you also see and I think we mentioned it also in the previous calls that we had some supply limitations during the up cycle in China and the personal electronics market was one of the main markets that suffered when we were short. We are seeing this market growing in China. It grew sequentially again nicely in the Q3, but also year over year that market grew significantly in China and also in the U.

S. These are the main markets that we have our personal electronics businesses. So overall again, overall business in China right now is healthy. You asked about industrial. We haven't seen yet the start of the cyclical growth again in industrial across all of our geographies.

So China here is not an outlier. The strength is coming mainly from, I would say, automotive and from personal electronics.

Yes. And let me just add a little color. The U. S, China and the rest of Asia, it's really more flat. Describe it sequentially.

Europe and Japan were down low double digits. As Habib mentioned, if you look year on year, you see the U. S. And China up kind of 12%, 14% in that range and that growth was offset overall by declines in the other regions. Yes.

Thank you. Our next question comes from the line of Ross Seymore with Deutsche Bank. Please proceed with your question.

Hi, guys. Thanks for letting me ask a question. I wanted to ask about the pricing environment in general. You didn't mention that Rafael or Aviv in any of your discussions about gross margin or competitive environment or any of the sequential weakness. But just wondered if that has changed in any meaningful way, either analog versus embedded or in certain geographies.

Just any update on that front will be helpful.

Yes. In high level, the pricing environment does not we've not seen any change in Q4 versus what we've seen in 2024. I think we've expected I think we said in the beginning of 2024 that pricing will go back to previous behavior pre COVID, where pricing will decline low single digits, like for like parts per year and that's more or less what it did in 2024 as the year ended. Of course, as I think I did provide some color on revenue by market, the mix has changed, right? So the selling price, if you will, has changed because industrial in 2023 was 40% of revenue, it declined to 34% in 2024 and the PE market grew from 15% in 2023 to 20% in 2024 and that is a big change of mix, if you will.

And that's what we have seen. But the like for like parts has behaved as expected and I'm not expecting that to be different in 2025 and that's a comment across all geographies.

a longer term question, maybe for Haviv. Historically, the company has talked about share gains and losses in your markets being measured in basis points, I think, 15, 20, 25 basis points a year, given the fragmented nature of it was kind of what you would aspire to. It can, of course, go down or up, I guess, for kind of IDEO reasons, supply shocks, those sorts of things. But now that you have the supply, it seems like the world has plenty of supply. Is there any reason that that historical share gain pace would be any different going forward?

Ken, when we talk about share down or up, I think the only way to really measure it is over the long term. That's always been our approach. That's the way we run the company. That's the way we behave, right? So TI, yes, there was a lot of, I would say, a shock wave almost during COVID.

It was not only supply demand mismatch, but behavior of customers and almost anxiety of needing parts. So I think inventory was built and I think it's still playing out. I wouldn't say that this asynchron behavior across markets is done. We see it still across sectors in industrial. We see it differently between geographies.

We even see it internally between our embedded business and analog business. So the it's one of these things that and I kind of hate to say it, but time will tell where we are. I am excited about the fact that now we have the right inventory level, the right supply to support growth. I'm encouraged about our progress in the analog market. As I mentioned in our prepared remarks, we did grow the analog business after about 8 quarters of decline.

And I think we I look forward to continue to grow that business, especially when you think about this longer term. And most importantly, the secular growth in the market that we've mentioned, industrial and automotive, I'm convinced that it's there. I'm convinced that our product portfolio is improving and strengthening, and we will have the right level of capacity and inventory to support our customers. So obviously, expectation that I have for the team is that TI will continue to compete for market share and grow it.

Thank you, Ross. We'll go to next caller, please.

the line of Chris Danely with Citi. Please proceed with your question.

Hey, thanks guys. Hey, Aviv, I guess, just a little bit of a drill down on the end markets. How would you expect things to sort of play out this year? Maybe talk about where you would expect relative strength or not strength by the end markets? And have you seen would you say you've seen any change in business conditions over the last 3 months like better, worse or not really?

Yes. Chris, as I think I told you last time we met, we call it when we see it, meaning I can tell you what happened. It's very hard for us to tell you exactly what will happen even for this quarter. I think I mentioned even during the last call, lead times are short, customers are coming real time for demand when our turn business or what we call aging is running high right now simply because customers are always waiting for the last second before they make the order and we fulfill it because we do have the right level of inventory and of course capacity to support further growth. I will say that I think that some of the markets and we've seen it through 2024, they are already on the cyclical upturn, I.

E. We saw it in PE then enterprise, really driven by data center joint and we are seeing nice growth over there. And even the communication business, I would say that I think it found the bottom. We saw it somewhere in, I think, in Q1 of 24% and grew sequentially since then and even returned to year over year growth in Q4. So these three markets, I think they are on the upturn.

And I don't think that I expect at least that if nothing major changes to continue into 2025. The big question for us is also 75% of our business or 70% of our business in 2024 is industrial and automotive. And here, we haven't seen the bottom yet. Let's be very clear about that. We're seeing points of strength.

I've given China as an example, but we'll have to see how the year play out. I do believe that this on the industrial side that there is kind of, as I said last time, kind of this hovering at the low level is a great position to grow from. But we'll just have to wait and see when it wants to do it, Chris. And of course, when we see it, we'll save.

Sure. Just quickly on embedded. So it looks like you guys have the lowest margins there in I think over a decade or something like that. Does something need to be changed or restructured there to get embedded back to an adequate level of margins or maybe talk about what needs to be done to get it to some sort of an appreciable level of margin?

Yes. Let me take a quick high level answer, Chris, and Rafael will give a little bit more what's going on there. I think I think a business in transition, Chris. I am I'm getting I'm growing more excited about embedded every quarter. I think our portfolio is strengthening and we are winning business.

We are going through a transition, especially on the manufacturing side and that puts pressure on the margins. But we are convinced that strategically embedded is going to be a great contributor to free cash flow per share. And so the short answer to your question about restructuring or anything, the answer is no. Rafael, maybe you can provide some more color of what's going on there.

Yes. No, I'll just add similar to what I said in a few calls a few questions ago. One is the revenue is the main factor. As we talked about earlier in the call, embedded has seen a sharp decline because it took longer to get into the downturn than analog did. But if you look at peak to trough, they're about the same place analog and embedded.

And then the other reason is L fab, right? So embedded is taking disproportionate amount of the impact from having L fab underutilized. But let me stress, just like that takes away, it gives it to you on the other end. So when we ramp out as we ramp L Fab and as we move from external to internal, you're really going to like the falls through both to GPM, but even better to free cash flow as we do that. So embedded is that, as we said, is in transition and when we're on the other side, we're going to like the results.

Thank you, Chris. And go to the next caller, please.

from the line of Harlan Sur with JPMorgan. Please proceed with your question.

Good afternoon. Thanks for taking my question. One of the metrics we look at to gauge the health of the cycle is the number of customer push outs, cancellations, rescheduling of the backlog relative to prior quarters or maybe big changes, right, on customer forecast inside of the quarter. Has this level activity remained at kind of normalized levels? And then maybe on another metric we look at is turns orders.

And I know, Haviv, you said it's at high levels, but is that coming in about as expected as well?

Yes. Let me start with the second part of the question. I'll let Dave comment about the first part. So look, we came in Q4 at the higher side of the range, close to the top of the range. That's all came from what we call the Terence business.

So we didn't see that clog in the beginning of the quarter and it came in real time. So we'll need to see that that continues into the beginning of next year of this year. Of For the Chinese New Year right now and we just have to see that it's not that it's a trend rather than anything that is a 1 quarter phenomena. But the terms business looked very, very good in Q4.

Yes. And when you look at those other indicators like you brought up cancellations, we had seen those drop several quarters ago and they continue to be at very low levels. If you look at things like revenue linearity, revenue increase each and through the quarter, that's very typical for us to see that. And Haeveep mentioned earlier, lead times are remain short. We have availability of essentially all of our products that we sell via the web available for immediate shipment.

So customers can behave and have that confidence that they can get the product that we've got. Do you have a follow on?

Yes. Thank you. So right before the capital management update back in August, I remember you had just received your preliminary CHF SAT grant allocation $1,600,000,000 That number was solidified, I think in December and this was not contemplated in your free cash flow per share calculation. In the CHIPS Act press release, you guys articulated some of the milestones attached to those grant dollars. And it looks like actually many of those milestones are going to be executed in or before 2026 and that's $1,600,000,000 in grant dollars that drives an incremental $1.75 of free cash flow per share versus sort of what you potentially laid out in your 2026 scenario analysis.

So have you mapped out that $1,600,000,000 in CHIPS Act grants over 2025, 2026 and maybe have an updated view on the potential better free cash flow per share profile for Texas Instruments?

So let me try to answer that question. First, kind of bigger picture, as you alluded to, the Department of Commerce awarded us up to $1,600,000,000 in ChIP Stack Funding. This will help support 3 of our new 300 millimeter wafer fabs under construction in Texas and Utah. This direct funding, coupled with the ITC, will help us provide a geopolitically dependable supply of analog and embedded processing chips for years to come. Over the life of the maybe the most important point is over the life of the program between the ITC and the direct funding, we expect to receive $7,500,000,000 to $9,500,000,000 in total.

We've received some of that already in 2024 and expect 2025 and beyond to continue. We don't have any specific details to share at this point on the cash payments related to the direct funding. But as those happens, we will share those.

I would just add that the math is not incorrect, but the timing is the problem, right? So I think, as you said, there is and we talked about free cash flow, so it also depends when we get the cash. We just don't have that visibility. The milestones are related, as we, I think, mentioned to clean room construction and 2 installations in Shell Mine 1, which we are in the we started installing tools in the summer of 2024 and that moved well. And the construction of SM2, the shell, which it's not done yet, but it's moving well.

The other part is Moin Utah, it's L5-two. This is where we talk about cleanroom construction and tool installation for L5-two. But we are now only now starting the groundwork over there, right? So there is still quite a bit of execution in Lsub2 and we will see how that timing works as we continue to move forward on that execution.

Let me add one more thing. Just given that we have been officially awarded that $1,600,000,000 we already booked that on our balance sheet. So we have a $1,600,000,000 receivable. You can see that on the balance sheet. The other side of that, dollars 1,000,000,000 of that decreased our net PP and E and because that's related to a factory that's already built.

$0.06 of that is actually deferred liability because it's related to a factory that's not built. But the bottom line where I'm going is that this is already going to decrease our expected depreciation. So with that, let me give you an update to depreciation. Depreciation for 2025, now you should expect $1,800,000,000 to $2,000,000,000 that's slightly down from the previous expectation. And for 2026, we're keeping the range the same, dollars 2,300,000,000 to $2,700,000,000 But I'll tell you that we expect to be on the lower half of that range.

That's a 2026 depreciation expectation, 2.3 to 2.7 to be at the lower end of that range.

Great. Thank you, Arlen. We'll go to the next caller, please.

Thank you. Our next question comes from the line of C. J. Muse with Cantor Fitzgerald. Please proceed with your question.

J. Muse:] Yes, good afternoon. Thank you for taking the question. I know you guys are both to talk out beyond the quarter, but I was hoping you could give us a framework for thinking about gross margins beyond the March quarter. You just gave us the depreciation.

That's very helpful. Would love to hear kind of your thoughts on what's optimal inventory and therefore planned utilization beyond March? And is March quarter kind of the low for gross margin that we should start tracking higher? Any thoughts there would be very helpful.

Yes. No, happy to do that. It's going to be very similar to what I've said before, but it all starts with revenue. So revenue is the number one driver of gross margin, both dollars and percent going forward. You model your revenue, then you fold that through at 75% to 85%.

Texas Instruments Q4 2024 Earnings Call Transcript | Fortune

Companies

John Kell

e.l.f. Beauty’s CDIO says she’s responsible for AI’s foundation, but that these tools aren’t an IT mandate

/2025/09/10/e-l-f-beautys-cdio-says-shes-responsible-for-ais-foundation-but-that-these-tools-arent-an-it-mandate/

Phil Wahba

Why Walmart’s U.S. CEO says staffing levels will remain steady even as A.I. becomes a bigger part of work

/2025/09/09/walmart-ai-jobs-brainstorm-tech/

Jessica Mathews

DoorDash CEO Tony Xu says path to autonomous deliveries filled with ‘lots of pain and suffering’ but company is nearing first inning of commercial progress

/2025/09/08/doordash-ceo-tony-xu-interview-brainstorm-tech-autonomous-drone-deliveries/

Indrani Sen

Fortune Archives: Warren Buffett’s biggest blunder

/2025/09/07/fortune-archives-warren-buffetts-biggest-blunder/

Fortune Editors

Fortune 500 Power Moves: Which executives gained and lost power, Aug. 23-Sept. 5, 2025

/2025/09/05/fortune-500-power-moves-aug-23-sept-5/

Nino Paoli

Davenport, Florida, Starbucks Coffee, outside exterior drive thru through.

Texas Instruments (TXN) Q4 2024 Earnings Call Transcript

Company Participants