Texas Instruments Inc. (NASDAQ:TXN)

The financial performance indicators demonstrate a fluctuating pattern over the five-year period. While initial years show growth, a subsequent decline is observed, followed by a partial recovery in the most recent year presented.

Overall Earnings Trend

A general upward trend is evident from 2021 to 2022 across all reported earnings metrics. However, 2023 marks a significant downturn in net income, earnings before tax, earnings before interest and tax, and earnings before interest, tax, depreciation and amortization. This downward trend continues into 2024, albeit at a slower pace. A modest recovery is then seen in 2025, though levels remain below those achieved in 2022.

EBITDA Performance

Earnings before interest, tax, depreciation and amortization increased from US$10,057 million in 2021 to US$11,225 million in 2022, representing a growth of approximately 11.6%. A substantial decrease is then recorded in 2023, with EBITDA falling to US$9,009 million. This represents a decline of approximately 19.7% from the prior year. The decline persists in 2024, with EBITDA reaching US$7,541 million. A subsequent increase to US$8,252 million is observed in 2025, indicating a partial recovery, but still remaining below the 2021 and 2022 levels.

Relationship Between Earnings Metrics

The difference between net income and earnings before tax remains relatively consistent across the period, suggesting a stable tax rate. The gap between earnings before tax and earnings before interest and tax is minimal, indicating limited interest expense. The difference between earnings before interest and tax and earnings before interest, tax, depreciation and amortization represents depreciation and amortization expense, which remains relatively stable as a proportion of EBIT throughout the period.

The observed fluctuations suggest potential impacts from macroeconomic factors, industry-specific challenges, or company-specific operational changes. The recovery in 2025, while positive, is not sufficient to restore earnings to their previous peak, warranting further investigation into the underlying drivers of these trends.

The Enterprise Value to EBITDA ratio exhibits a fluctuating pattern over the five-year period. Initial values demonstrate a decrease, followed by increases in subsequent years.

Enterprise Value to EBITDA Trend

In 2021, the EV/EBITDA ratio stood at 15.54. A decline was observed in 2022, with the ratio decreasing to 14.69. The ratio then increased to 16.36 in 2023. A significant increase is noted in 2024, reaching 22.89, and continues to rise in 2025, culminating in a ratio of 25.46.

The observed trend suggests a growing disparity between enterprise value and EBITDA over the latter part of the analyzed period. While enterprise value increased overall, EBITDA experienced fluctuations and did not consistently rise at the same pace. This suggests that the market valuation of the company, as reflected in the enterprise value, is increasing at a faster rate than its operational earnings as measured by EBITDA.

Enterprise Value

Enterprise Value increased from US$156,316 million in 2021 to US$210,135 million in 2025, with an interim decrease to US$147,407 million in 2023. This indicates overall growth in the company’s total value, considering both equity and debt.

EBITDA

EBITDA peaked at US$11,225 million in 2022, decreasing to US$9,009 million in 2023 and further to US$7,541 million in 2024. A modest recovery to US$8,252 million is seen in 2025. This suggests potential challenges in maintaining consistent operational profitability during the period.

The increasing EV/EBITDA ratio from 2023 onwards warrants further investigation. Potential contributing factors could include shifts in market sentiment, changes in growth expectations, or alterations in the company’s capital structure. The divergence between enterprise value and EBITDA suggests a potential re-evaluation of the company’s valuation multiples by investors.