Texas Instruments Inc. (NASDAQ:TXN)

Overall, the company demonstrates generally positive operating cash flow throughout the observed period, though net income exhibits a declining trend from 2021 to 2023 before a slight recovery. Investing activities consistently represent a cash outflow, with significant fluctuations in short-term investment activity. Financing activities are also consistently negative, driven primarily by substantial dividend payments and stock repurchases. The net change in cash and cash equivalents is volatile, showing an initial increase followed by declines, then a modest recovery.

Operating Activities

Cash flows from operating activities remain positive across all years, ranging from US$6.318 billion to US$8.756 billion. However, a noticeable decline is observed from US$8.720 billion in 2022 to US$6.318 billion in 2024, followed by a slight increase to US$7.153 billion in 2025. Net income contributes significantly to these flows, but is offset by changes in working capital. Specifically, increases in inventories and decreases in accounts receivable have a negative impact on cash flow, particularly in 2022 and 2023. Adjustments to net income, including depreciation and stock compensation, consistently add to the operating cash flow.

Investing Activities

Investing activities consistently consume cash. Capital expenditures represent a major outflow, increasing from US$2.462 billion in 2021 to US$5.071 billion in 2023 before decreasing slightly in subsequent years. Significant fluctuations are present in purchases and proceeds from short-term investments, with large outflows in 2021, 2022, and 2023, and corresponding inflows. The company began receiving proceeds from the U.S. CHIPS and Science Act in 2025, contributing US$335 million to cash flow.

Financing Activities

Financing activities consistently result in cash outflows. Dividends paid represent the largest component of these outflows, remaining relatively stable around US$4.5 billion to US$5.0 billion annually. Stock repurchases also contribute significantly, with a substantial increase in 2022 before decreasing in later years. Proceeds from the issuance of long-term debt provide some cash inflow, but are consistently offset by debt repayment and other financing outflows.

Key Trends & Observations

Depreciation and amortization consistently increase throughout the period, suggesting ongoing investment in assets. Deferred taxes show significant volatility, with large negative adjustments in 2022 and 2023, potentially related to changes in tax regulations or valuation allowances. The substantial decrease in net income from 2022 to 2023 is a key observation, impacting overall cash flow. The company’s cash and cash equivalents fluctuate, but remain above US$2.9 billion throughout the period.

The company’s ability to generate positive cash flow from operations, despite declining net income, is noteworthy. However, the consistent reliance on financing activities to fund dividends and stock repurchases suggests a potential need to balance shareholder returns with reinvestment in the business.