Teradyne Reports Third Quarter 2025 Results

NORTH READING, Mass.--( BUSINESS WIRE)--Teradyne, Inc. (NASDAQ: TER):

Q3'25

Q3'24

Q2'25

Revenue (mil)

769

737

652

GAAP EPS

0.75

0.89

0.49

Non-GAAP EPS

0.85

0.90

0.57

Teradyne, Inc. (NASDAQ: TER) reported revenue of $769 million for the third quarter of 2025 of which $606 million was in Semiconductor Test, $88 million in Product Test, and $75 million in Robotics. GAAP net income for the third quarter of 2025 was $119.6 million, or $0.75 per diluted share. On a non-GAAP basis, Teradyne’s net income for the third quarter of 2025 was $135.9 million, or $0.85 per diluted share, which excluded acquired intangible asset amortization, restructuring and other charges, pension mark-to-market adjustment, and included the related tax impact on non-GAAP adjustment.

“Our Semiconductor Test Group delivered third quarter sales that exceeded expectations, driving company sales and profit to the high end of our Q3 guidance range,” said Teradyne CEO, Greg Smith. “Growth was driven primarily by System-on-a-Chip (SOC) solutions for artificial intelligence applications and strong performance in memory. As we look ahead to Q4, AI-related test demand remains robust across compute, networking and memory segments. Q4'25 sales are expected to increase 25% sequentially and 27% from Q4'24."

Guidance for the fourth quarter of 2025 is revenue of $920 million to $1,000 million, with GAAP net income of $1.12 to $1.39 per diluted share and non-GAAP net income of $1.20 to $1.46 per diluted share. Non-GAAP guidance excludes acquired intangible asset amortization and amortization on our investment in Technoprobe, as well as the related tax impact on non-GAAP adjustments.

Webcast

A conference call to discuss the third quarter results, along with management’s business outlook, will follow at 8:30 a.m. ET, October 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 7:30 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 acquired intangible assets amortization, restructuring and other, ERP related expenses, inventory step-up, pension mark-to-market adjustment, pension actuarial gains and losses, 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 THIRD FISCAL QUARTER OF 2025

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Quarter Ended

Nine Months Ended

September 28,

2025

June 29,

2025

September 29,

2024

September 28,

2025

September 29,

2024

Net revenues

769,210

651,797

737,298

2,106,687

2,066,996

Cost of revenues (exclusive of acquired intangible assets amortization shown separately below) (1)

319,904

278,785

300,784

869,032

865,357

Gross profit

449,306

373,012

436,514

1,237,655

1,201,639

Operating expenses:

Selling and administrative (2)

169,144

157,782

157,649

484,182

461,307

Engineering and development

124,760

118,382

117,474

361,331

332,489

Acquired intangible assets amortization

3,514

3,733

4,748

11,820

14,108

Restructuring and other (3)

6,585

2,372

4,578

23,472

11,018

Loss (gain) on sale of business (4)

—

(57,486

)

Operating expenses

304,003

282,269

284,449

880,805

761,436

Income from operations

145,303

90,743

152,065

356,850

440,203

Interest and other (income) expense (5)

(2,797

)

(5,816

)

(6,919

)

(6,834

)

(11,086

)

Income before income taxes

148,100

96,559

158,984

363,684

451,289

Income tax provision

23,344

12,260

50,148

54,095

Income before equity in net earnings of affiliate

124,756

84,299

146,724

313,536

397,194

Equity in net earnings of affiliate

(5,198

)

(5,927

)

(1,075

)

(16,709

)

(1,075

)

Net income

119,558

78,372

145,649

296,827

396,119

Net income per common share:

Basic

0.75

0.49

0.89

1.85

2.51

Diluted

0.75

0.49

0.89

1.85

2.42

Weighted average common shares - basic

158,595

159,967

163,002

160,021

157,951

Weighted average common shares - diluted (6)

159,097

160,135

164,253

160,409

163,357

Cash dividend declared per common share

0.12

0.36

(1)

Cost of revenues includes:

Quarter Ended

Nine Months Ended

September 28,

2025

June 29,

2025

September 29,

2024

September 28,

2025

September 29,

2024

Provision for excess and obsolete inventory

6,829

7,402

6,078

19,175

15,515

Inventory step-up

351

343

—

910

—

Legal Settlement

—

3,600

—

3,600

Sale of previously written down inventory

(1,726

)

(1,105

)

(472

)

(3,155

)

(1,787

)

5,454

6,640

9,206

16,930

17,328

(2)

(3)

Quarter Ended

Nine Months Ended

September 28,

2025

June 29,

2025

September 29,

2024

September 28,

2025

September 29,

2024

4,786

2,320

1,280

18,501

5,319

328

—

1,542

—

173

(422

)

—

2,043

2,214

1,298

402

3,298

1,386

3,485

6,585

2,372

4,578

23,472

11,018

(a)

For the nine months ended September 28, 2025, employee severance relates primarily to Robotics restructuring which impacted approximately 150 employees.

(4)

On May 27, 2024, Teradyne sold Teradyne's Device Interface Solution ("DIS") business, a component of the Semiconductor Test segment, to Technoprobe S.p.A. ("Technoprobe"), for $85.0 million, net of cash and cash equivalents sold and a working capital adjustment.

(5)

Interest and other includes:

Quarter Ended

Nine Months Ended

September 28,

2025

June 29,

2025

September 29,

2024

September 28,

2025

September 29,

2024

Pension settlement loss (gain)

(800

)

—

(800

)

—

Pension actuarial losses (gains)

—

127

(2,262

)

127

(2,513

)

Loss (gain) on foreign exchange contract

—

(561

)

9,765

(6)

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 September 29, 2024, diluted shares included 0.5 million shares from the convertible note hedge transaction. For the nine months ended September 29, 2024, diluted shares included 4.8 million shares from the convertible note hedge transaction.

CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)

September 28,

2025

December 31,

2024

Assets

Cash and cash equivalents

272,700

553,354

Marketable securities

25,017

46,312

Accounts receivable, net

593,800

471,426

Inventories, net

366,752

298,492

Prepayments

469,240

429,086

Other current assets

22,649

17,727

Total current assets

1,750,158

1,816,397

Property, plant and equipment, net

569,939

508,171

Operating lease right-of-use assets, net

62,442

70,185

Marketable securities

129,658

124,121

Deferred tax assets

253,455

222,438

Retirement plans assets

12,702

11,994

Equity method investment

538,001

494,494

Other assets

73,118

49,620

Acquired intangible assets, net

54,708

15,927

Goodwill

519,550

395,367

Total assets

3,963,731

3,708,714

Liabilities

Accounts payable

227,850

134,792

Accrued employees’ compensation and withholdings

203,850

204,991

Deferred revenue and customer advances

133,050

107,710

Other accrued liabilities

138,717

90,777

Operating lease liabilities

19,026

18,699

Short-term debt

200,000

—

Income taxes payable

72,496

67,610

Total current liabilities

994,989

624,579

Retirement plans liabilities

142,680

133,338

Long-term deferred revenue and customer advances

43,887

40,505

Deferred tax liabilities

6,890

1,038

Long-term other accrued liabilities

8,285

7,442

Long-term operating lease liabilities

49,725

57,922

Long-term income taxes payable

—

24,596

Total liabilities

1,246,456

889,420

Shareholders’ equity

2,717,275

2,819,294

Total liabilities and shareholders’ equity

3,963,731

3,708,714

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)

Quarter Ended

Nine Months Ended

September 28,

2025

September 29,

2024

September 28,

2025

September 29,

2024

Cash flows from operating activities:

Net income

119,558

145,649

296,827

396,119

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

26,649

25,553

79,484

74,480

Stock-based compensation

15,531

14,574

47,561

45,267

Equity in net earnings of affiliate

5,198

1,075

16,709

1,075

Amortization

3,867

4,736

12,723

14,133

Provision for excess and obsolete inventory

6,829

6,078

19,175

15,516

Losses (gains) on investments

(3,644

)

(2,951

)

(4,722

)

10,139

Loss (gain) on sale of business

—

(57,486

)

Deferred taxes

(14,101

)

(9,431

)

(29,100

)

(26,261

)

Retirement plan actuarial losses (gains)

(800

)

(2,262

)

(673

)

(2,512

)

Other

175

(6,282

)

3,344

(5,041

)

Changes in operating assets and liabilities, net of businesses acquired:

Accounts receivable

(161,283

)

(11,055

)

(111,787

)

(65,266

)

Inventories

(10,911

)

(5,974

)

(34,618

)

11,127

Prepayments and other assets

(53,478

)

39,248

(22,599

)

61,438

Accounts payable and other liabilities

104,311

(10,657

)

121,447

(63,666

)

Deferred revenue and customer advances

12,596

885

25,652

3,624

Retirement plans contributions

(1,410

)

(1,395

)

(6,986

)

(4,169

)

Income taxes

(36

)

(21,520

)

(19,661

)

(18,898

)

Net cash provided by operating activities

49,051

166,271

392,776

389,619

Cash flows from investing activities:

Purchases of property, plant and equipment

(46,692

)

(51,841

)

(161,121

)

(140,710

)

Investments in businesses

(20,151

)

(2,407

)

(25,519

)

(527,060

)

Purchases of marketable securities

(10,315

)

(7,340

)

(27,465

)

(35,097

)

Acquisitions of businesses, net of cash and cash equivalents

—

(144,380

)

—

Proceeds from the sale of a business, net of cash and cash equivalents sold

—

3,176

—

90,348

Proceeds from maturities of marketable securities

9,018

6,305

41,621

33,163

Proceeds from sales of marketable securities

684

2,311

9,172

23,600

Proceeds from life insurance

—

873

Net cash used for investing activities

(67,456

)

(49,796

)

(307,692

)

(554,883

)

Cash flows from financing activities:

Proceeds from borrowings on revolving credit facility

200,000

—

200,000

185,000

Payments of borrowings on revolving credit facility

—

(185,000

)

Dividend payments

(18,990

)

(19,566

)

(57,574

)

(56,936

)

Repurchase of common stock

(243,785

)

(24,747

)

(518,658

)

(55,053

)

Payments related to net settlement of employee stock compensation awards

(300

)

(399

)

(15,254

)

(13,833

)

Issuance of common stock under stock purchase and stock option plans

15,284

15,429

30,076

37,265

Net cash used for financing activities

(47,791

)

(29,283

)

(361,410

)

(88,557

)

Effects of exchange rate changes on cash and cash equivalents

(356

)

940

(4,328

)

6,286

(Decrease) increase in cash and cash equivalents

(66,552

)

88,132

(280,654

)

(247,535

)

Cash and cash equivalents at beginning of period

339,252

421,904

553,354

757,571

Cash and cash equivalents at end of period

272,700

510,036

272,700

510,036

GAAP to Non-GAAP Earnings Reconciliation

(In millions, except per share amounts)

Quarter Ended

September 28,

2025

% of Net Revenues

June 29,

2025

% of Net Revenues

September 29,

2024

% of Net Revenues

Net revenues

769.2

651.8

737.3

Gross profit GAAP

449.3

58.4

373.0

57.2

436.5

59.2

Inventory step-up

0.4

0.1

0.3

0.0

—

Legal settlement (1)

—

3.6

0.5

Gross profit non-GAAP

449.7

58.5

373.3

57.3

440.1

59.7

Income from operations - GAAP

145.3

18.9

90.7

13.9

152.1

20.6

Restructuring and other (2)

6.6

0.9

2.4

0.4

4.6

0.6

Acquired intangible assets amortization

3.5

0.5

3.7

0.6

4.7

0.6

ERP related expenses (3)

1.1

0.1

1.1

0.2

—

Inventory step-up

0.4

0.1

0.3

0.0

—

Legal settlement (1)

—

3.6

0.5

Income from operations - non-GAAP

156.9

20.4

98.2

15.1

165.0

22.4

Net Income

per Common Share

Net Income

per Common Share

Net Income

per Common Share

September 28,

2025

% of Net

Revenues

Basic

Diluted

June 29,

2025

% of Net

Revenues

Basic

Diluted

September 29,

2024

% of Net

Revenues

Basic

Diluted

Net income - GAAP

119.6

15.5

0.75

78.4

12.0

0.49

145.6

19.7

0.89

Amortization of equity method investment

7.7

1.0

0.05

7.4

1.1

0.05

2.4

0.3

0.01

Restructuring and other (2)

6.6

0.9

0.04

2.4

0.4

0.02

0.01

4.6

0.6

0.03

Acquired intangible assets amortization

3.5

0.5

0.02

3.7

0.6

0.02

4.7

0.6

0.03

ERP related expenses (3)

1.1

0.1

0.01

1.1

0.2

0.01

—

Inventory step-up

0.4

0.1

0.00

0.3

0.0

0.00

—

0.0

—

Pension settlement loss (gain)

(0.8

)

-0.1

(0.01

)

(0.01

)

—

Pension mark-to-market adjustment (4)

—

0.1

0.0

0.00

(2.3

)

-0.3

(0.01

)

(0.01

)

Legal settlement (1)

—

3.6

0.5

0.02

Exclude discrete tax adjustments

(0.6

)

-0.1

(0.00

)

(0.00

)

0.0

0.00

(8.9

)

-1.2

(0.05

)

(0.05

)

Non-GAAP tax adjustments

(1.6

)

-0.2

(0.01

)

(0.01

)

(1.8

)

-0.3

(0.01

)

(0.01

)

(2.1

)

-0.3

(0.01

)

(0.01

)

Net income - non-GAAP

135.9

17.7

0.86

0.85

91.6

14.1

0.57

147.6

20.0

0.91

0.90

GAAP and non-GAAP weighted average common shares - basic

158.6

160.0

163.0

GAAP and non-GAAP weighted average common shares - diluted (5)

159.1

160.1

164.3

(1)

For the three months ended September 29, 2024, legal settlement includes charges for a settlement following a judgment against the Company for infringement of expired patents.

(2)

Restructuring and other consists of:

Quarter Ended

September 28,

2025

June 29,

2025

September 29,

2024

Employee severance

4.8

2.3

1.3

Lease terminations

0.3

0.1

—

Acquisition and divestiture related expenses

0.2

(0.4

)

—

Other

1.3

0.4

3.3

6.6

2.4

4.6

(3)

For the quarters ended September 28, 2025, and June 29, 2025, selling and administrative expenses included costs directly related to a planned ERP system implementation.

(4)

For the quarters ended June 29, 2025, and September 29, 2024, adjustments to exclude actuarial gains and losses, respectively, recognized under GAAP in accordance with Teradyne’s mark-to-market pension accounting.

(5)

For the quarter ended September 29, 2024, non-GAAP weighted average diluted common shares included 0.5 million shares from the convertible note hedge transaction.

Nine Months Ended

September 28,

2025

% of Net Revenues

September 29,

2024

% of Net Revenues

Net Revenues

2,106.7

2,067.0

Gross profit GAAP

1,237.7

58.8

1,201.6

58.1

Inventory step-up

0.9

0.0

—

Legal settlement (1)

—

3.6

0.2

Gross profit non-GAAP

1,238.6

58.8

1,205.2

58.3

Income from operations - GAAP

356.9

16.9

440.2

21.3

Restructuring and other (2)

23.5

1.1

11.0

0.5

Acquired intangible assets amortization

11.8

0.6

14.1

0.7

ERP related expenses (3)

2.9

0.1

—

Inventory step-up

0.9

0.0

—

Legal settlement (1)

—

3.6

0.2

Equity modification charge (4)

—

1.7

0.1

Loss (gain) on sale of business (5)

—

(57.5

)

-2.8

Income from operations - non-GAAP

396.0

18.8

413.1

20.0

Net Income

per Common Share

Net Income

per Common Share

September 28,

2025

% of Net Revenues

Basic

Diluted

September 29,

2024

% of Net Revenues

Basic

Diluted

Net income - GAAP

296.8

14.1

1.86

1.85

396.1

19.2

2.51

2.42

Restructuring and other (2)

23.5

1.1

0.15

11.0

0.5

0.07

Amortization of equity method investment

22.5

1.1

0.14

2.4

0.1

0.02

0.01

Acquired intangible assets amortization

11.8

0.6

0.07

14.1

0.7

0.09

ERP related expenses (3)

2.9

0.1

0.02

—

Inventory step-up

0.9

0.0

0.01

—

Pension mark-to-market adjustment (6)

0.1

0.0

0.00

(2.5

)

-0.1

(0.02

)

(0.02

)

Loss (gain) on foreign exchange contract

(0.6

)

0.0

(0.00

)

(0.00

)

9.8

0.5

0.06

Pension settlement loss (gain)

(0.8

)

0.0

(0.01

)

(0.00

)

—

Legal settlement (1)

—

3.6

0.2

0.02

Equity modification charge (4)

—

1.7

0.1

0.01

Loss (gain) on sale of business (5)

—

(57.5

)

-2.8

(0.36

)

(0.35

)

Exclude discrete tax adjustments

0.4

0.0

0.00

(0.7

)

0.0

(0.00

)

(0.00

)

Non-GAAP tax adjustments

(8.4

)

-0.4

(0.05

)

(0.05

)

(7.9

)

-0.4

(0.05

)

(0.05

)

Net income - non-GAAP

349.1

16.6

2.18

370.1

17.9

2.34

2.26

GAAP and non-GAAP weighted average common shares - basic

160.0

158.0

GAAP and non-GAAP weighted average common shares - diluted (7)

160.4

163.4

(1)

For the nine months ended September 29, 2024, legal settlement includes charges for a settlement following a judgment against the Company for infringement of expired patents.

(2)

Restructuring and other consists of:

Nine Months Ended

September 28,

2025

September 29,

2024

Employee severance (a)

18.5

5.3

Acquisition and divestiture related expenses

2.0

2.2

Lease terminations

1.5

—

Other

1.4

3.5

23.4

11.0

(a)

For the nine months ended September 28, 2025, employee severance relates primarily to Robotics restructuring which impacted approximately 150 employees.

(3)

(4)

(5)

(6)

(7)

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

GAAP and non-GAAP fourth quarter revenue guidance:

$920 million

$1,000 million

GAAP net income per diluted share

1.12

1.39

Exclude acquired intangible assets amortization

0.03

Exclude equity method investment amortization

0.05

Non-GAAP tax adjustments

(0.01

)

(0.01

)

Non-GAAP net income per diluted share

1.20

1.46

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