Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Texas Instruments Inc., profitability ratios
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Gross Profit Margin
- The gross profit margin exhibited an increasing trend from 64.1% in 2020 to a peak of 68.76% in 2022. However, it declined subsequently to 62.9% in 2023 and further to 58.14% in 2024, indicating a reduction in production efficiency or increased cost of goods sold in the latter years.
- Operating Profit Margin
- The operating profit margin followed a similar pattern, rising from 40.76% in 2020 to a high of 50.63% in 2022. It then decreased markedly to 41.85% in 2023 and further to 34.94% in 2024, suggesting that operating expenses increased or operational challenges emerged after 2022.
- Net Profit Margin
- Net profit margin improved from 38.69% in 2020 to a peak of 43.68% in 2022. Afterward, it declined to 37.16% in 2023 and decreased more sharply to 30.68% by 2024. This downward trend reflects pressures on the company's profitability at the bottom line over the recent years.
- Return on Equity (ROE)
- ROE maintained a very strong performance in 2020 through 2022, fluctuating around the 58-61% range. There was a notable dip in 2023 to 38.53%, followed by a more pronounced decline to 28.39% in 2024. This suggests a decreasing ability to generate earnings from shareholders’ equity in the most recent periods.
- Return on Assets (ROA)
- ROA increased steadily from 28.91% in 2020 to 32.16% in 2022, indicating efficient use of assets in generating profit. Subsequently, ROA fell significantly to 20.12% in 2023 and further to 13.51% in 2024, implying a weakening asset utilization and lower overall profitability relative to total assets.
Return on Sales
Return on Investment
Gross Profit Margin
Texas Instruments Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | 9,094) | 11,019) | 13,771) | 12,376) | 9,269) | |
| Revenue | 15,641) | 17,519) | 20,028) | 18,344) | 14,461) | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 58.14% | 62.90% | 68.76% | 67.47% | 64.10% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 49.35% | 46.12% | 44.93% | 48.25% | 44.53% | |
| Analog Devices Inc. | 57.08% | 64.01% | 62.70% | 61.83% | 65.87% | |
| Applied Materials Inc. | 47.46% | 46.70% | 46.51% | 47.32% | 44.72% | |
| Broadcom Inc. | 63.03% | 68.93% | 66.55% | 61.36% | 56.58% | |
| Intel Corp. | 32.66% | 40.04% | 42.61% | 55.45% | 56.01% | |
| KLA Corp. | 59.97% | 59.81% | 61.00% | 59.93% | 57.81% | |
| Lam Research Corp. | 47.32% | 44.62% | 45.69% | 46.53% | 45.88% | |
| Micron Technology Inc. | 22.35% | -9.11% | 45.18% | 37.62% | 30.57% | |
| NVIDIA Corp. | 72.72% | 56.93% | 64.93% | 62.34% | 61.99% | |
| Qualcomm Inc. | 56.21% | 55.70% | 57.84% | 57.51% | 60.67% | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenue
= 100 × 9,094 ÷ 15,641 = 58.14%
2 Click competitor name to see calculations.
- Revenue
- The revenue demonstrated a rising trend from 2020 through 2022, increasing from $14,461 million to $20,028 million. However, there is a noticeable decline in revenue in the subsequent years, falling to $17,519 million in 2023 and further to $15,641 million in 2024.
- Gross Profit
- Gross profit followed a similar pattern to revenue, showing growth from $9,269 million in 2020 to a peak of $13,771 million in 2022. Afterwards, gross profit decreased to $11,019 million in 2023 and continued its downward trajectory to $9,094 million in 2024.
- Gross Profit Margin
- The gross profit margin increased steadily from 64.1% in 2020 to a high of 68.76% in 2022, indicating improving profitability efficiency relative to revenue. However, from 2023 through 2024, the margin declined significantly to 62.9% and then to 58.14%, suggesting reduced profitability and potential cost pressures or pricing challenges despite the earlier improvements.
- Summary
- Overall, the data shows initial revenue and profitability growth up to 2022, followed by a reversal in trend with decreasing revenue and gross profit in 2023 and 2024. The gross profit margin mirrors this pattern, rising initially and then declining notably in the last two years. These shifts indicate the company experienced a period of expansion, followed by emerging challenges impacting both sales volume and profit efficiency.
Operating Profit Margin
Texas Instruments Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating profit | 5,465) | 7,331) | 10,140) | 8,960) | 5,894) | |
| Revenue | 15,641) | 17,519) | 20,028) | 18,344) | 14,461) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 34.94% | 41.85% | 50.63% | 48.84% | 40.76% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 7.37% | 1.77% | 5.36% | 22.20% | 14.02% | |
| Analog Devices Inc. | 21.56% | 31.07% | 27.29% | 23.12% | 26.74% | |
| Applied Materials Inc. | 28.95% | 28.86% | 30.20% | 29.87% | 25.37% | |
| Broadcom Inc. | 26.10% | 45.25% | 42.84% | 31.03% | 16.80% | |
| Intel Corp. | -21.99% | 0.17% | 3.70% | 24.62% | 30.41% | |
| KLA Corp. | 34.10% | 38.06% | 39.67% | 35.97% | 25.87% | |
| Lam Research Corp. | 28.61% | 29.69% | 31.24% | 30.64% | 26.62% | |
| Micron Technology Inc. | 5.19% | -36.97% | 31.54% | 22.68% | 14.01% | |
| NVIDIA Corp. | 54.12% | 15.66% | 37.31% | 27.18% | 26.07% | |
| Qualcomm Inc. | 25.85% | 21.74% | 35.88% | 29.16% | 26.58% | |
| Operating Profit Margin, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 21.36% | 18.50% | 27.34% | 28.30% | 25.89% | |
| Operating Profit Margin, Industry | ||||||
| Information Technology | 26.62% | 24.49% | 26.43% | 26.73% | 22.69% | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Operating profit margin = 100 × Operating profit ÷ Revenue
= 100 × 5,465 ÷ 15,641 = 34.94%
2 Click competitor name to see calculations.
- Revenue Trends
- Revenue demonstrated a rising trend from 2020 through 2022, increasing from 14,461 million US dollars in 2020 to 20,028 million US dollars in 2022. However, after peaking in 2022, revenue declined in the subsequent years, falling to 17,519 million US dollars in 2023 and further to 15,641 million US dollars in 2024.
- Operating Profit Trends
- Operating profit followed a similar pattern to revenue, increasing substantially from 5,894 million US dollars in 2020 to 10,140 million US dollars in 2022. Post-2022, operating profit decreased significantly to 7,331 million US dollars in 2023, and then to 5,465 million US dollars in 2024, nearing levels observed at the start of the period.
- Operating Profit Margin Analysis
- Operating profit margin, which measures operating profit as a percentage of revenue, rose from 40.76% in 2020 to a peak of 50.63% in 2022, indicating improving operational efficiency or profitability relative to revenue. This margin then contracted to 41.85% in 2023 and further to 34.94% in 2024, reflecting a decreased profitability rate relative to revenue during these years.
- Overall Financial Insights
- The period up to 2022 was characterized by growth in both top-line revenue and operating profitability, accompanied by an improving operating margin. The downturn beginning in 2023 suggests challenges that impacted both revenue generation and operational efficiency, leading to lower profitability margins and absolute operating profit values. This reversal indicates a period of contraction or increased cost pressures affecting the financial performance.
Net Profit Margin
Texas Instruments Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 4,799) | 6,510) | 8,749) | 7,769) | 5,595) | |
| Revenue | 15,641) | 17,519) | 20,028) | 18,344) | 14,461) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 30.68% | 37.16% | 43.68% | 42.35% | 38.69% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 6.36% | 3.77% | 5.59% | 19.24% | 25.50% | |
| Analog Devices Inc. | 17.35% | 26.94% | 22.88% | 19.00% | 21.79% | |
| Applied Materials Inc. | 26.41% | 25.86% | 25.31% | 25.53% | 21.04% | |
| Broadcom Inc. | 11.43% | 39.31% | 34.62% | 24.54% | 12.39% | |
| Intel Corp. | -35.32% | 3.11% | 12.71% | 25.14% | 26.84% | |
| KLA Corp. | 28.15% | 32.27% | 36.06% | 30.04% | 20.96% | |
| Lam Research Corp. | 25.68% | 25.88% | 26.73% | 26.72% | 22.42% | |
| Micron Technology Inc. | 3.10% | -37.54% | 28.24% | 21.16% | 12.54% | |
| NVIDIA Corp. | 48.85% | 16.19% | 36.23% | 25.98% | 25.61% | |
| Qualcomm Inc. | 26.03% | 20.19% | 29.27% | 26.94% | 22.09% | |
| Net Profit Margin, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 14.94% | 17.06% | 25.54% | 25.83% | 23.10% | |
| Net Profit Margin, Industry | ||||||
| Information Technology | 20.64% | 20.39% | 22.45% | 23.62% | 19.67% | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Net profit margin = 100 × Net income ÷ Revenue
= 100 × 4,799 ÷ 15,641 = 30.68%
2 Click competitor name to see calculations.
- Revenue Trends
- Revenue increased significantly from 14,461 million US dollars in 2020 to a peak of 20,028 million US dollars in 2022. Subsequently, there was a decline in revenue over the next two years, dropping to 17,519 million US dollars in 2023 and further to 15,641 million US dollars in 2024. This suggests a period of strong growth followed by a notable contraction in top-line performance.
- Net Income Patterns
- Net income rose consistently from 5,595 million US dollars in 2020 to a high of 8,749 million US dollars in 2022, paralleling the revenue growth trend. However, net income experienced a sharper decline in the following years, falling to 6,510 million US dollars in 2023 and 4,799 million US dollars in 2024. The reduction in net income was more pronounced than the decline in revenue, indicating potential margin pressures or increased costs.
- Net Profit Margin Analysis
- The net profit margin reached its highest level at 43.68% in 2022, reflecting strong profitability during that period. After this peak, the margin decreased to 37.16% in 2023 and further declined to 30.68% in 2024. The downward trend in net profit margin points to a reduction in operational efficiency or increased expenses relative to revenue, contributing to the sharper decline in net income despite a still relatively high revenue base.
- Overall Financial Performance Summary
- The data reveal a growth phase culminating in 2022, characterized by increasing revenue, net income, and profit margins. Following this peak, the company experienced a downturn marked by declining revenue and a more substantial drop in net income and profit margins. This indicates challenges in maintaining profitability levels, which may be due to market conditions, cost pressures, or other operational factors affecting earnings quality and sustainability.
Return on Equity (ROE)
Texas Instruments Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 4,799) | 6,510) | 8,749) | 7,769) | 5,595) | |
| Stockholders’ equity | 16,903) | 16,897) | 14,577) | 13,333) | 9,187) | |
| Profitability Ratio | ||||||
| ROE1 | 28.39% | 38.53% | 60.02% | 58.27% | 60.90% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 2.85% | 1.53% | 2.41% | 42.18% | 42.66% | |
| Analog Devices Inc. | 4.65% | 9.32% | 7.54% | 3.66% | 10.17% | |
| Applied Materials Inc. | 37.77% | 41.94% | 53.51% | 48.08% | 34.21% | |
| Broadcom Inc. | 8.71% | 58.70% | 50.62% | 26.99% | 12.40% | |
| Intel Corp. | -18.89% | 1.60% | 7.90% | 20.83% | 25.79% | |
| KLA Corp. | 82.00% | 116.01% | 237.04% | 61.53% | 45.65% | |
| Lam Research Corp. | 44.82% | 54.94% | 73.35% | 64.85% | 43.53% | |
| Micron Technology Inc. | 1.72% | -13.22% | 17.41% | 13.34% | 6.89% | |
| NVIDIA Corp. | 69.24% | 19.76% | 36.65% | 25.64% | 22.91% | |
| Qualcomm Inc. | 38.60% | 33.51% | 71.81% | 90.88% | 85.54% | |
| ROE, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 11.77% | 13.30% | 22.70% | 25.79% | 24.53% | |
| ROE, Industry | ||||||
| Information Technology | 29.37% | 32.00% | 39.15% | 42.48% | 35.75% | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 4,799 ÷ 16,903 = 28.39%
2 Click competitor name to see calculations.
The financial data indicates several notable trends in profitability and equity over the five-year period.
- Net Income
- Net income experienced a general upward trajectory from 5595 million USD in 2020 to a peak of 8749 million USD in 2022. However, this was followed by a decline in the subsequent years, reaching 6510 million USD in 2023 and further decreasing to 4799 million USD in 2024. This pattern suggests that while the company achieved strong earnings growth initially, recent years have seen a notable reduction in profitability.
- Stockholders’ Equity
- Stockholders’ equity consistently increased year over year, rising from 9187 million USD in 2020 to 16903 million USD in 2024. The steady growth in equity indicates an accumulation of retained earnings or additional capital that strengthens the company's financial foundation.
- Return on Equity (ROE)
- ROE was very high in 2020 at 60.9% and remained relatively stable through 2022 with values exceeding 58%. However, there was a marked decrease starting in 2023, where ROE dropped to 38.53%, and this decline continued into 2024 with a further reduction to 28.39%. Despite the growth in stockholders' equity, the declining ROE points to a less efficient use of equity to generate profits in recent years.
Overall, the data shows that while the company has built a stronger equity base over the period, profitability has weakened post-2022, as reflected in both decreasing net income and a significant decline in return on equity. This deterioration in profitability metrics warrants further investigation into operational or market factors that might have impacted earnings generation.
Return on Assets (ROA)
Texas Instruments Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 4,799) | 6,510) | 8,749) | 7,769) | 5,595) | |
| Total assets | 35,509) | 32,348) | 27,207) | 24,676) | 19,351) | |
| Profitability Ratio | ||||||
| ROA1 | 13.51% | 20.12% | 32.16% | 31.48% | 28.91% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 2.37% | 1.26% | 1.95% | 25.46% | 27.78% | |
| Analog Devices Inc. | 3.39% | 6.79% | 5.46% | 2.66% | 5.69% | |
| Applied Materials Inc. | 20.86% | 22.31% | 24.41% | 22.80% | 16.19% | |
| Broadcom Inc. | 3.56% | 19.33% | 15.69% | 8.91% | 3.90% | |
| Intel Corp. | -9.55% | 0.88% | 4.40% | 11.80% | 13.65% | |
| KLA Corp. | 17.90% | 24.07% | 26.37% | 20.23% | 13.11% | |
| Lam Research Corp. | 20.42% | 24.02% | 26.78% | 24.59% | 15.47% | |
| Micron Technology Inc. | 1.12% | -9.08% | 13.11% | 9.96% | 5.01% | |
| NVIDIA Corp. | 45.28% | 10.61% | 22.07% | 15.05% | 16.15% | |
| Qualcomm Inc. | 18.39% | 14.17% | 26.39% | 21.93% | 14.60% | |
| ROA, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 6.42% | 7.41% | 12.68% | 13.62% | 11.80% | |
| ROA, Industry | ||||||
| Information Technology | 11.95% | 12.52% | 14.57% | 14.67% | 11.45% | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 4,799 ÷ 35,509 = 13.51%
2 Click competitor name to see calculations.
The annual financial data reveals several significant trends regarding profitability and asset management over the five-year period.
- Net Income
- Net income exhibited a strong upward trend from 2020 through 2022, increasing from 5,595 million US dollars to 8,749 million US dollars. This represents a substantial growth phase. However, starting in 2023, net income declined sharply to 6,510 million US dollars, followed by a further decrease to 4,799 million US dollars in 2024. This notable downturn after 2022 suggests challenges in maintaining profitability levels.
- Total Assets
- Total assets displayed consistent growth across all years, increasing steadily from 19,351 million US dollars in 2020 to 35,509 million US dollars in 2024. This continuous expansion indicates ongoing investment or acquisition activity, suggesting efforts to grow the company's asset base despite the fluctuations in profitability.
- Return on Assets (ROA)
- ROA followed a similar trajectory to net income. It increased from 28.91% in 2020 to a peak of 32.16% in 2022, reflecting improved efficiency in asset utilization and profitability during that period. Subsequently, ROA decreased significantly to 20.12% in 2023 and further to 13.51% in 2024. The decline in ROA coinciding with increasing total assets implies that asset growth outpaced the generation of net income, leading to reduced asset efficiency and returns.
Overall, the data reflects a period of rising profitability up to 2022, followed by a pronounced decrease in the latter years, despite continuous expansion of total assets. This pattern may indicate that the company's recent investments or growth initiatives have not yet translated into proportional earnings, impacting overall returns on assets negatively.