Common-Size Income Statement
Quarterly Data
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Texas Instruments Inc., common-size consolidated income statement (quarterly data)
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
The financial analysis reveals several key trends in the composition and profitability of the company over multiple quarters from March 2020 through March 2025.
- Cost of Revenue (COR)
- The cost of revenue as a percentage of total revenue exhibits a decreasing trend from early 2020 through the end of 2021, dropping from approximately 37.28% to around 30.67%. This indicates improved cost efficiency or better pricing power during this period. However, from 2022 onwards, there is a notable reversal with an increase in the cost of revenue ratio, peaking at about 43.16% by the first quarter of 2025. This suggests rising costs or pressures on gross margins in recent periods.
- Gross Profit
- Gross profit percentage mirrors the inverse pattern of the cost of revenue. It gradually increases from about 62.72% in March 2020, reaching a peak of approximately 70.17% in March 2022, reflecting enhanced profitability at the gross level. Thereafter, gross profit margin steadily declines, falling to around 56.84% by March 2025, indicating margin compression possibly due to higher costs or reduced pricing flexibility.
- Research and Development (R&D)
- R&D expenses as a fraction of revenue show an initial decrease from 11.32% in early 2020 to a low near 7.94% in mid-2021, implying relatively lower R&D intensity during that period. Subsequently, R&D spending rises consistently, reaching over 13% by mid-2024, before slightly moderating but remaining above 12% in early 2025. This upward trend suggests increased investment in innovation or product development in recent years.
- Selling, General and Administrative Expenses (SG&A)
- SG&A costs declined from 12.53% at the start of 2020 to about 8.36% by the end of 2021, indicating enhanced operational efficiencies or cost management. From 2022 onwards, there is a general increase in SG&A expenses, climbing above 11% by early 2025. This may reflect rising overhead costs or strategic investments in sales and administration.
- Acquisition Charges and Restructuring Charges
- Acquisition charges are reported consistently at a relatively low level around 1% through 2021 but cease to appear in later periods. Restructuring charges occur sporadically, with several quarters showing minor impacts, including some increases around 2021 and an unusual positive charge at 3.39% in mid-2024, possibly reflecting one-off items or reversals.
- Operating Profit
- Operating profit margin experiences growth from 37.37% in early 2020 to a peak above 52% in early 2022, demonstrating strong operational performance. Afterward, it follows a downward trajectory, decreasing to near 32.54% by the first quarter of 2025. This decline aligns with the increase in costs and expenses seen in the same period.
- Other Income (Expense), Net (OI&E)
- Other income fluctuates with small positive contributions over time, generally within a narrow band around 0.3% to 3.4%. Recent quarters show a mild decline but maintain positive net other income, providing a modest boost to overall profitability.
- Interest and Debt Expense
- Interest expense gradually increases as a percentage of revenue, rising from approximately 1.35% in 2020 to over 3% in later periods. This upward trend could indicate increased leverage or higher borrowing costs, negatively impacting net profitability.
- Income Before Income Taxes
- This margin grows from around 36.77% in early 2020 to a high near 51.5% in early 2022, showing strong earnings before tax. Similar to operating profit, it declines afterward to near 31.36% by early 2025, reflecting softer earnings driven by rising costs, higher interest expenses, and expense pressures.
- Provision for Income Taxes
- The income tax provision fluctuates considerably, alternating between positive and negative rates as percentages of revenue, implying variable tax impacts or one-time adjustments. In later periods the tax rate generally trends lower, falling below 3% by 2025, which benefits net income margins.
- Net Income
- Net income margin follows the overall profitability pattern, increasing from 35.27% in early 2020 to a peak around 44.87% during early 2022. Following this peak, net income margin declines to under 29% by early 2025. The decline arises despite lower effective tax rates, likely due to increased cost of revenue, SG&A, R&D, and higher interest expenses reducing net profitability.