Teradyne Reports First Quarter 2025 Results

Business Wire

Mon, Apr 28, 2025, 3:10 PM 12 min read

Teradyne, Inc. (NASDAQ: TER) reported revenue of $686 million for the first quarter of 2025 of which $543 million was in Semiconductor Test, $69 million in Robotics, and $74 million in Product Test. GAAP net income for the first quarter was $98.9 million or $0.61 per diluted share. On a non-GAAP basis, Teradyne’s net income in the first quarter was $121.5 million, or $0.75 per diluted share, which excluded acquired intangible asset amortization, restructuring and other charges, and included the related tax impact on non-GAAP adjustments.

"Teradyne delivered 14% year-over-year growth in the first quarter driven by strong results in Semiconductor Test. System-on-a-Chip (SOC), primarily for Mobile, was the strongest growth driver," said Teradyne CEO, Greg Smith. "Visibility in the second half is limited and the impact of trade policy on end market demand is still in flux. Despite the current market uncertainty, Teradyne is well positioned for the long-term demand drivers of AI, electrification, and verticalization."

Guidance for the second quarter of 2025 is revenue of $610 million to $680 million, with GAAP net income of $0.35 to $0.58 per diluted share and non-GAAP net income of $0.41 to $0.64 per diluted share. Non-GAAP guidance excludes acquired intangible asset amortization, as well as the related tax impact on non-GAAP adjustments.

Teradyne announced that it is increasing the magnitude of the share repurchase program from a target of $400M in 2025 to up to $1B, to be completed by the end of 2026.

Webcast

A conference call to discuss the first quarter results, along with management’s business outlook, will follow at 8:30 a.m. ET, Tuesday, April 29, 2025. Interested investors should access the webcast at www.teradyne.com and click on "Investors" at least five minutes before the call begins. Presentation materials will be available starting at 8:30 a.m. ET. A replay will be available on the Teradyne website at www.teradyne.com/investors.

Non-GAAP Results

In addition to disclosing results that are determined in accordance with GAAP, Teradyne also discloses non-GAAP results of operations that exclude certain income items and charges. These results are provided as a complement to results provided in accordance with GAAP. Non-GAAP income from operations and non-GAAP net income exclude restructuring and other, acquired intangible assets amortization, ERP related expenses, inventory step-up, discrete income tax adjustments, and includes the related tax impact on non-GAAP adjustments. GAAP requires that these items be included in determining income from operations and net income. Non-GAAP income from operations, non-GAAP net income, non-GAAP income from operations as a percentage of revenue, non-GAAP net income as a percentage of revenue, and non-GAAP net income per share are non-GAAP performance measures presented to provide meaningful supplemental information regarding Teradyne’s baseline performance before gains, losses or other charges that may not be indicative of Teradyne’s current core business or future outlook. These non-GAAP performance measures are used to make operational decisions, to determine employee compensation, to forecast future operational results, and for comparison with Teradyne’s business plan, historical operating results and the operating results of Teradyne’s competitors. Non-GAAP diluted shares include the impact of Teradyne’s call option on its shares. Management believes each of these non-GAAP performance measures provides useful supplemental information for investors, allowing greater transparency to the information used by management in its operational decision making and in the review of Teradyne’s financial and operational performance, as well as facilitating meaningful comparisons of Teradyne’s results in the current period compared with those in prior and future periods. A reconciliation of each available GAAP to non-GAAP financial measure discussed in this press release is contained in the attached exhibits and on the Teradyne website at www.teradyne.com by clicking on "Investor Relations" and then selecting "Financials" and the "GAAP to Non-GAAP Reconciliation" link. The non-GAAP performance measures discussed in this press release may not be comparable to similarly titled measures used by other companies. The presentation of non-GAAP measures is not meant to be considered in isolation, as a substitute for, or superior to, financial measures or information provided in accordance with GAAP.

About Teradyne

Teradyne (NASDAQ:TER) designs, develops, and manufactures automated test equipment and advanced robotics systems. Its test solutions for semiconductors and electronics products enable Teradyne's customers to consistently deliver on their quality standards. Its advanced robotics business includes collaborative robots and mobile robots that support manufacturing and warehouse operations for companies of all sizes. For more information, visit teradyne.com. Teradyne^®is a registered trademark of Teradyne, Inc., in the U.S. and other countries.

Safe Harbor Statement

This release contains forward-looking statements including statements regarding Teradyne’s future business prospects, financial performance or position and results of operations. You can identify forward-looking statements by their use of forward-looking words such as "anticipate," "expect," "plan," "could," "may," "will," "believe," "estimate," "goal" or other comparable terms. Forward-looking statements in this press release address various matters, including statements regarding Teradyne’s financial guidance. Investors are cautioned that such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements due to known and unknown risks, uncertainties, assumptions, and other factors. Such factors include, but are not limited to, macroeconomic factors and slowdowns or downturns in economic conditions generally and in the markets in which Teradyne operates; decreased or delayed product demand from one or more significant customers; a slowdown or inability in the development, delivery and acceptance of new products; the ability to grow the Robotics business; the impact of increased research and development spending; the impact of epidemics or pandemics such as COVID-19; the impact of a supply shortage on our supply chain and contract manufacturers; the consummation and success of any mergers or acquisitions; unexpected cash needs; the business judgment of the board of directors that a declaration of a dividend or the repurchase of common stock is not in Teradyne’s best interests; changes to U.S. or global tax regulations or guidance; the impact of any tariffs or export controls imposed by the U.S. or China; the impact of U.S. Department of Commerce or other government agency regulations relating to Huawei, HiSilicon and other customers or potential customers; the impact of U.S. Department Commerce export control regulations for certain U.S. products and technology sold to military end users or for military end-use in China; the impact of the current conflicts in Israel; the impact of regulations published by the U.S. Department of Commerce relating to semiconductors and semiconductor manufacturing equipment destined for certain end uses in China.

The risks included above are not exhaustive. For a more detailed description of the risk factors associated with Teradyne, please refer to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024. Many of these factors are macroeconomic in nature and are, therefore, beyond Teradyne’s control. We caution readers not to place undue reliance on any forward-looking statements included in this press release which speak only as to the date of this press release. Teradyne specifically disclaims any obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.

TERADYNE, INC. REPORT FOR FIRST FISCAL QUARTER OF 2025

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Quarter Ended

	March 30, 2025			December 31, 2024			March 31, 2024
Net revenues	$	685,680		$	752,884		$	599,819
Cost of revenues (exclusive of acquired intangible assets amortization shown separately below) (1)		270,344			305,597			260,537
Gross profit		415,336			447,287			339,282
Operating expenses:
Selling and administrative (2)		157,257			155,739			149,188
Engineering and development		118,188			128,387			103,199
Acquired intangible assets amortization		4,573			4,656			4,697
Restructuring and other (3)		14,515			4,554			4,427
Loss (gain) on sale of business		—			367			—
Operating expenses		294,533			293,703			261,511
Income from operations		120,803			153,584			77,771
Interest and other (income) expense (4)		1,779			(4,213	)		4,869
Income before income taxes		119,024			157,797			72,902
Income tax provision		14,544			5,408			8,705
Income before equity in net earnings of affiliate		104,480			152,389			64,197
Equity in net earnings of affiliate		(5,584	)		(6,136	)		—
Net income	$	98,896		$	146,253		$	64,197

Net income per common share:
Basic	$	0.61		$	0.90		$	0.42
Diluted	$	0.61		$	0.90		$	0.40
Weighted average common shares - basic		161,501			162,478			153,047
Weighted average common shares - diluted (5)		161,996			163,184			162,348

Cash dividend declared per common share	$	0.12		$	0.12		$	0.12

(1)	Cost of revenues includes:

		Quarter Ended
		March 30, 2025			December 31, 2024			March 31, 2024
	Provision for excess and obsolete inventory	$	4,945		$	3,406		$	6,177
	Inventory step-up		216			—			—
	Sale of previously written down inventory		(324	)		(441	)		(722	)
		$	4,837		$	2,965		$	5,455

(2)	For the quarter ended March 30, 2025, selling and administrative expenses included $0.7 million of expenses directly related to a planned ERP system implementation. For the quarter ended March 31, 2024, selling and administrative expenses included an equity charge of $1.7 million for the modification of Teradyne executives' retirement agreements.

(3)	Restructuring and other consists of:

		Quarter Ended
		March 30, 2025		December 31, 2024		March 31, 2024
	Employee severance (a)	$	11,395	$	378	$	2,026
	Acquisition and divestiture related expenses		1,972		—		2,214
	Lease terminations		1,142		1,284		—
	Other		6		2,892		187
		$	14,515	$	4,554	$	4,427

	(a) For the quarter ended March 30, 2025, employee severance relates primarily to Robotics restructuring which impacted approximately 150 employees.

(4)	Interest and other includes:

		Quarter Ended
		March 30, 2025			December 31, 2024			March 31, 2024
	Loss (gain) on foreign exchange contract	$	(561	)	$	—		$	13,918
	Pension actuarial losses (gains)		—			(1,842	)		—

(5)	Under GAAP, when calculating diluted earnings per share, convertible debt must be assumed to have converted if the effect on EPS would be dilutive. Diluted shares assume the conversion of the convertible debt as the effect would be dilutive. Accordingly, for the quarter ended March 31, 2024, diluted shares included 8.9 million shares from the convertible note hedge transaction.

CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)

	March 30, 2025		December 31, 2024
Assets
Cash and cash equivalents	$	475,632	$	553,354
Marketable securities		32,145		46,312
Accounts receivable, net		460,397		471,426
Inventories, net		345,063		298,492
Prepayments		423,729		429,086
Other current assets		18,635		17,727
Total current assets		1,755,601		1,816,397
Property, plant and equipment, net		541,520		508,171
Operating lease right-of-use assets, net		63,090		70,185
Marketable securities		113,754		124,121
Deferred tax assets		230,937		222,438
Retirement plans assets		12,193		11,994
Equity method investment		509,626		494,494
Other assets		51,832		49,620
Acquired intangible assets, net		17,971		15,927
Goodwill		409,313		395,367
Total assets	$	3,705,837	$	3,708,714
Liabilities
Accounts payable	$	187,034	$	134,792
Accrued employees’ compensation and withholdings		143,019		204,991
Deferred revenue and customer advances		119,886		107,710
Other accrued liabilities		100,058		90,777
Operating lease liabilities		18,340		18,699
Income taxes payable		80,729		67,610
Total current liabilities		649,066		624,579
Retirement plans liabilities		136,228		133,338
Long-term deferred revenue and customer advances		39,438		40,505
Deferred tax liabilities		869		1,038
Long-term other accrued liabilities		7,718		7,442
Long-term operating lease liabilities		50,423		57,922
Long-term income taxes payable		24,596		24,596
Total liabilities		908,338		889,420
Shareholders’ equity		2,797,499		2,819,294
Total liabilities and shareholders’ equity	$	3,705,837	$	3,708,714

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)

	Quarter Ended
	March 30, 2025			March 31, 2024
Cash flows from operating activities:
Net income	$	98,896		$	64,197
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		25,523			23,354
Stock-based compensation		15,204			15,758
Equity in net earnings of affiliate		5,584			—
Provision for excess and obsolete inventory		4,945			6,177
Amortization		4,779			4,766
Losses (gains) on investments		3,372			10,466
Deferred taxes		(7,811	)		(9,669	)
Other		3,483			787
Changes in operating assets and liabilities, net of businesses acquired:
Accounts receivable		13,053			(8,055	)
Inventories		(31,049	)		(6,932	)
Prepayments and other assets		13,650			11,089
Accounts payable and other liabilities		(9,950	)		(105,548	)
Deferred revenue and customer advances		10,200			(1,444	)
Retirement plans contributions		(1,282	)		(1,421	)
Income taxes		13,040			3,754
Net cash provided by operating activities		161,637			7,279
Cash flows from investing activities:
Purchases of property, plant and equipment		(64,021	)		(44,023	)
Investments in businesses		(20,013	)		—
Purchases of marketable securities		(10,753	)		(16,042	)
Proceeds from maturities of marketable securities		27,381			14,438
Proceeds from sales of marketable securities		5,633			20,734
Proceeds from life insurance		—			873
Net cash used for investing activities		(61,773	)		(24,020	)
Cash flows from financing activities:
Repurchase of common stock		(157,475	)		(22,117	)
Dividend payments		(19,406	)		(18,370	)
Payments related to net settlement of employee stock compensation awards		(14,726	)		(13,115	)
Issuance of common stock under stock purchase and stock option plans		14,792			16,934
Net cash used for financing activities		(176,815	)		(36,668	)
Effects of exchange rate changes on cash and cash equivalents		(771	)		3,241
Decrease in cash and cash equivalents		(77,722	)		(50,168	)
Cash and cash equivalents at beginning of period		553,354			757,571
Cash and cash equivalents at end of period	$	475,632		$	707,403

GAAP to Non-GAAP Earnings Reconciliation
(In millions, except per share amounts)

	Quarter Ended
	March 30, 2025		% of Net Revenues			December 31, 2024		% of Net Revenues			March 31, 2024		% of Net Revenues
Net revenues	$	685.7				$	752.9				$	599.8
Gross profit GAAP		415.3		60.6	%		447.3		59.4	%		339.3		56.6	%
Inventory step-up		0.2		0.0	%		—		—			—		—
Gross profit non-GAAP		415.5		60.6	%		447.3		59.4	%		339.3		56.6	%
Income from operations - GAAP		120.8		17.6	%		153.6		20.4	%		77.8		13.0	%
Restructuring and other (1)		14.5		2.1	%		4.6		0.6	%		4.4		0.7	%
Acquired intangible assets amortization		4.6		0.7	%		4.7		0.6	%		4.7		0.8	%
ERP related expenses (2)		0.7		0.1	%		—		—			—		—
Inventory step-up		0.2		0.0	%		—		—			—		—
Loss (gain) on sale of business		—		—			0.4		0.1	%		—		—
Equity modification charge (3)		—		—			—		—			1.7		0.3	%
Income from operations - non-GAAP	$	140.8		20.5	%	$	163.3		21.7	%	$	88.6		14.8	%

						Net Income per Common Share											Net Income per Common Share											Net Income per Common Share
	March 30, 2025			% of Net Revenues		Basic			Diluted			December 31, 2024			% of Net Revenues		Basic			Diluted			March 31, 2024			% of Net Revenues		Basic			Diluted
Net income - GAAP	$	98.9		14.4	%	$	0.61		$	0.61		$	146.3		19.4	%	$	0.90		$	0.90		$	64.2		10.7	%	$	0.42		$	0.40
Restructuring and other (1)		14.5		2.1	%		0.09			0.09			4.6		0.6	%		0.03			0.03			4.4		0.7	%		0.03			0.03
Amortization of equity method investment		7.4		1.1	%		0.05			0.05			8.0		1.1	%		0.05			0.05			—		—			—			—
Acquired intangible assets amortization		4.6		0.7	%		0.03			0.03			4.7		0.6	%		0.03			0.03			4.7		0.8	%		0.03			0.03
ERP related expenses (2)		0.7		0.1	%		0.00			0.00			—		—			—			—			—		—			—			—
Inventory step-up		0.2		0.0	%		0.00			0.00			—		—			—			—			—		—			—			—
Loss (gain) on sale of business		—		—			—			—			0.4		0.1	%		0.00			0.00			—		—			—			—
Equity modification charge (3)		—		—			—			—			—		—			—			—			1.7		0.3	%		0.01			0.01
Pension mark-to-market adjustment (4)		—		—			—			—			(1.8	)	-0.2	%		(0.01	)		(0.01	)		—		—			—			—
Loss (gain) of foreign exchange contract		(0.6	)	-0.1	%		(0.00	)		(0.00	)		—		—			—			—			13.9		2.3	%		0.09			0.09
Exclude discrete tax adjustments		0.9		0.1	%		0.01			0.01			(8.0	)	-1.1	%		(0.05	)		(0.05	)		(2.2	)	-0.4	%		(0.01	)		(0.01	)
Non-GAAP tax adjustments		(5.1	)	-0.7	%		(0.03	)		(0.03	)		0.9		0.1	%		0.01			0.01			(4.2	)	-0.7	%		(0.03	)		(0.03	)
Net income - non-GAAP	$	121.5		17.7	%	$	0.75		$	0.75		$	155.0		20.6	%	$	0.95		$	0.95		$	82.5		13.8	%	$	0.54		$	0.51

GAAP and non-GAAP weighted average common shares - basic		161.5											162.5											153.0
GAAP and non-GAAP weighted average common shares - diluted (5)		162.0											163.2											162.3

(1)	Restructuring and other consists of:

		Quarter Ended
		March 30, 2025		December 31, 2024		March 31, 2024
	Employee severance (a)	$	11.4	$	0.4	$	2.0
	Acquisition and divestiture related expenses		2.0		—		2.2
	Lease terminations		1.1		1.3		—
	Other		—		2.9		0.2
		$	14.5	$	4.6	$	4.4

	(a) For the quarter ended March 30, 2025, employee severance relates primarily to Robotics restructuring which impacted approximately 150 employees.

(2)	For the quarter ended March 30, 2025, selling and administrative expenses included costs directly related to a planned ERP system implementation.

(3)	For the quarter ended March 31, 2024, selling and administrative expenses included an equity charge of $1.7 million for the modification of Teradyne’s executives' retirement agreements.

(4)	For the quarter ended December 31, 2024, adjustment to exclude actuarial loss recognized under GAAP in accordance with Teradyne’s mark-to-market pension accounting.

(5)	For the quarter ended March 31, 2024, non-GAAP weighted average diluted common shares includes 8.9 million shares from the convertible note hedge transaction.

GAAP to Non-GAAP Reconciliation of Second Quarter 2025 guidance:

	GAAP and non-GAAP second quarter revenue guidance:	$610 million			to	$680 million
	GAAP net income per diluted share	$	0.35			$	0.58
	Exclude equity method investment amortization		0.05				0.05
	Exclude acquired intangible assets amortization		0.02				0.02
	Non-GAAP tax adjustments		(0.01	)			(0.01	)
	Non-GAAP net income per diluted share	$	0.41			$	0.64