Analysis of Reportable Segments
Texas Instruments Inc. operates in 2 segments: Analog and Embedded Processing.
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- Balance Sheet: Assets
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Price to Operating Profit (P/OP) since 2005
- Analysis of Revenues
- Aggregate Accruals
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Segment Profit Margin
Texas Instruments Inc., profit margin by reportable segment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Analog | |||||
| Embedded Processing |
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).
- Trend Analysis of Analog Segment Profit Margin
- The profit margin in the Analog segment exhibited an initial upward trend from 45.12% in 2020 to a peak of 54.42% in 2022. However, this was followed by a marked decline, reaching 44.64% in 2023 and further dropping to 37.89% in 2024. This indicates that after a period of growth, the segment faced profitability challenges in the latter years.
- Trend Analysis of Embedded Processing Segment Profit Margin
- The Embedded Processing segment showed a similar pattern of growth followed by decline. Starting at 28.91% in 2020, the margin increased substantially to 38.5% in 2021 and slightly decreased to 38.42% in 2022. Subsequently, the margin fell sharply to 29.93% in 2023 and experienced a steep decline to 13.9% in 2024, indicating significant profitability pressure in recent periods.
- Comparison and Insights
- Both segments experienced growth in profit margins until around 2021-2022, succeeded by notable decreases in 2023 and 2024. The decline is more pronounced in the Embedded Processing segment, which saw its margin drop by nearly two-thirds from the peak of 38.5% in 2021 to 13.9% in 2024. The Analog segment also showed a significant decrease, although less severe than Embedded Processing, suggesting that the company may be facing sector-specific challenges, market pressures, or increased costs impacting both segments' profitability.
Segment Profit Margin: Analog
Texas Instruments Inc.; Analog; segment profit margin calculation
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating profit | |||||
| Revenue | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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
Segment profit margin = 100 × Operating profit ÷ Revenue
= 100 × ÷ =
The annual financial data for the analog segment demonstrates notable fluctuations in revenue, operating profit, and segment profit margin over the five-year period ending in 2024.
- Revenue
- Revenue increased steadily from 10,886 million US dollars in 2020 to a peak of 15,359 million in 2022. Following this peak, revenue declined, reaching 13,040 million in 2023 and further decreasing to 12,161 million in 2024. Overall, there was growth in the first three years, followed by a consistent downturn in the last two years.
- Operating Profit
- Operating profit followed a similar trajectory to revenue, increasing sharply from 4,912 million US dollars in 2020 to a high of 8,359 million in 2022. However, it experienced a significant drop in 2023 to 5,821 million and declined further to 4,608 million in 2024, which is even below the 2020 level.
- Segment Profit Margin
- The segment profit margin showed improvement from 45.12% in 2020 to 54.42% in 2022, indicating increased profitability efficiency during this period. Subsequently, the margin decreased substantially, falling to 44.64% in 2023 and further to 37.89% in 2024, marking the lowest margin in the five years reviewed.
In summary, the segment experienced a strong growth phase followed by a downturn starting in 2023. The decline in both revenue and operating profit during the last two years is accompanied by a contraction in profit margins, suggesting increased cost pressures or lower pricing power. These trends reflect a shift from a period of expansion and improved profitability to one of contraction and reduced operational efficiency within the segment.
Segment Profit Margin: Embedded Processing
Texas Instruments Inc.; Embedded Processing; segment profit margin calculation
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating profit | |||||
| Revenue | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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
Segment profit margin = 100 × Operating profit ÷ Revenue
= 100 × ÷ =
- Operating Profit
- The operating profit experienced steady growth from 2020 through 2022, increasing from 743 million US dollars to a peak of 1,253 million in 2022. However, there was a decline in 2023 to 1,008 million, followed by a significant drop to 352 million in 2024. This pattern indicates initial expansion and subsequent contraction in profitability.
- Revenue
- Revenue showed an upward trend from 2,570 million US dollars in 2020 to a high of 3,368 million in 2023, representing consistent growth over four years. In 2024, revenue decreased notably to 2,533 million, marking a reversal after several years of expansion.
- Segment Profit Margin
- The segment profit margin improved significantly from 28.91% in 2020 to a peak of 38.5% in 2021, maintaining similar levels at 38.42% in 2022. In 2023, the margin decreased to 29.93% and declined further to 13.9% in 2024. This trend suggests that profitability relative to revenue weakened substantially in the last two years.
- Overall Trend Analysis
- The data reflects a period of growth and enhanced profitability from 2020 through 2022, followed by a downturn in both revenue and operating profit, evident from 2023 onwards. The sharp decline in segment profit margin in 2024 indicates challenges in maintaining cost efficiency or pricing power within the segment. The convergence of decreasing revenue and profit margin points toward underlying pressures that have impacted the profitability of the embedded processing segment significantly in the latest period.
Revenue
Texas Instruments Inc., revenue by reportable segment
US$ in millions
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Analog | |||||
| Embedded Processing | |||||
| Other | |||||
| Total |
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).
- Overview of Revenue Trends
- The overall total revenue exhibited an initial upward trend from 14,461 million USD in 2020 to a peak of 20,028 million USD in 2022. Subsequently, a decline is observed, with the total revenue decreasing to 17,519 million USD in 2023 and further to 15,641 million USD in 2024.
- Analog Segment
- The Analog segment generated the largest share of revenue throughout the entire period. Revenue increased substantially from 10,886 million USD in 2020 to a high of 15,359 million USD in 2022. However, after this peak, it declined notably to 13,040 million USD in 2023 and then further to 12,161 million USD in 2024, indicating a reduction in this core segment's performance during the latter years.
- Embedded Processing Segment
- This segment exhibited steady revenue growth from 2,570 million USD in 2020 to 3,368 million USD in 2023. However, in 2024, it experienced a marked decline to 2,533 million USD, which represents the lowest value in the five-year span. This reversal could suggest challenges or market contractions affecting this segment.
- Other Segment
- The Other segment showed growth from 1,005 million USD in 2020 to 1,408 million USD in 2022, followed by a contraction to 1,111 million USD in 2023 and further down to 947 million USD in 2024. This pattern aligns with the overall downward trend in total revenue in the final two years.
- Summary of Patterns and Insights
- The data reflects a period of growth in total revenue and across all segments through 2022, followed by a consistent decline in 2023 and 2024. The Analog segment, while dominant, has experienced a noticeable downturn after its 2022 peak. The Embedded Processing segment also faced a reversal after steady growth. The Other segment's fluctuations mirror the overall revenue trend. The decline in the last two years may indicate external pressures such as market saturation, competitive dynamics, or economic conditions affecting all segments.
Operating profit
Texas Instruments Inc., operating profit by reportable segment
US$ in millions
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Analog | |||||
| Embedded Processing | |||||
| Other | |||||
| Total |
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).
The operating profit data over the five-year period reveals significant fluctuations across the various reportable segments.
- Analog Segment
- The Analog segment exhibited strong growth from 2020 to 2022, increasing from $4,912 million to a peak of $8,359 million. However, after 2022, there was a marked decline, with profits falling to $5,821 million in 2023 and further decreasing to $4,608 million in 2024. This decline suggests potential challenges or reduced demand in this segment in the latter years.
- Embedded Processing Segment
- This segment also showed initial growth, rising from $743 million in 2020 to $1,253 million in 2022. Similar to the Analog segment, there was a downturn thereafter, with operating profit decreasing to $1,008 million in 2023 and sharply dropping to $352 million in 2024. The pronounced decline in 2024 is notable and may indicate a significant shift in market dynamics or internal operational factors affecting this segment.
- Other Segment
- The Other segment demonstrated consistent growth over the period, moving from $239 million in 2020 to $528 million in 2022. Although there was a minor decrease to $502 million in 2023, the figure stabilized, reaching $505 million in 2024. This relative stability contrasts with the more volatile trends seen in the Analog and Embedded Processing segments.
- Total Operating Profit
- The aggregate operating profit across all segments mirrors the trends in the primary segments. Total operating profit rose significantly from $5,894 million in 2020 to a peak of $10,140 million in 2022. Following this, the total profit decreased to $7,331 million in 2023 and declined further to $5,465 million in 2024, approaching the levels observed at the beginning of the period. This overall pattern highlights a peak in performance in 2022, followed by a notable reduction in the subsequent years.
In summary, the data indicates a period of growth culminating in 2022, succeeded by a contraction in operating profits through 2023 and 2024. The Analog and Embedded Processing segments strongly influenced these trends, with the former segment showing the largest absolute changes. The Other segment remained relatively stable, providing some balance to overall performance. These patterns may reflect shifts in market conditions, competitive pressures, or internal company factors impacting profitability.