SEC EDGAR · 10-Q
10-Q – 2025-10-30 – ter-20250928.htm

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Omsättning
Unregistered Sales of Equity Securities and Use of Proceeds
Deferred revenue and customer advances
Long-term deferred revenue and customer advances
Proceeds from sales of marketable securities
Quantifi Photonics | On May 31, 2025 , Teradyne acquired all of the issued and outstanding shares of Quantifi Photonics ("Quantifi"), a privately held company in New Zealand and a leader in photonic integrated circuit ("PIC") test solutions for a total purchase price of approximately $ 127.2 million , subject to customary working capital adjustments. The acquisition of Quantifi enables Teradyne to deliver scalable PIC test solutions. Teradyne's allocation of the purchase price was goodwill of $ 83.1 million , which | Based upon a preliminary valuation, the total purchase price was allocated as follows:
Teradyne has not separately disclosed Quantifi's standalone contribution to total company revenue or income from operations before income taxes or pro forma financial information because the impact of the acquisition on the condensed consolidated financial statements is not material. | Automated Test Equipment Technology
E. REVENUE | Disaggregation of Revenue
E. REVENUE | Disaggregation of Revenue | The following table provides information about disaggregated revenue by timing of revenue recognition, primary geographical market, and major product lines.
Periodens resultat
Net income
Net income per common share:
Less: Reclassification adjustment for (gains) losses included in net income, net of tax of $ 0 , | $( 2 ), $ 27 , $ 24 , respectively
Less: Reclassification adjustment for losses (gains) included in | net income, net of tax of $ 0 , $ 0 , $( 100 ), and $( 500 ), respectively
Adjustments to reconcile net income from operations to net cash provided by operating activities:
Teradyne's equity method basis difference was calculated as the difference between the investment and the amount of underlying equity in net assets acquired. The basis differences, net of tax, will be amortized over the estimated useful lives. | Teradyne made an accounting policy election to report its share of Technoprobe's results on a 3-month lag, which is applied consistently from period to period. Teradyne records its share of Technoprobe's net income or loss and the amortization of equity method basis difference, as 'Equity in net earnings of affiliate' in the condensed consolidated statements of operations. Teradyne includes its share of Technoprobe's other comprehensive income and a cumulative translation adjustment in the conde
P. NET INCOME PER COMMON SHARE | The following table sets forth the computation of basic and diluted net income per common share:
Net income for basic and diluted net income per share
Kassaflöde
Cash flow hedges:
To minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities denominated in foreign currencies, Teradyne enters into foreign currency forward contracts. The change in fair value of these derivatives is recorded directly in earnings and is used to offset the change in value of monetary assets and liabilities denominated in foreign currencies. | Teradyne also enters into foreign currency forward and option contracts designated as cash flow hedges to hedge the risk of changes in its cash inflows attributable to changes in foreign currency exchange rates. The cash flow hedges have maturities of less than six months and mature in the period of revenue recognition for certain products and services in backlog and forecasted to be recognized in a future period. Teradyne evaluates cash flow hedges for effectiveness at inception based on the cr | Teradyne does not use derivative financial instruments for speculative purposes.
Unrealized gains and losses on foreign currency forward contracts and foreign currency remeasurement gains and losses on monetary assets and liabilities are included in 'Other (income) expense, net' in the condensed consolidated statement of operations. | At September 28, 2025, and December 31, 2024, Teradyne had the following cash flow hedge contracts to buy and sell non-U.S. currencies for U.S. dollars with the following notional amounts:
The fair value of the outstanding cash flow hedge contracts was a gain of $ 0.9 million at December 31, 2024. | Unrealized gains and losses on foreign currency cash flow hedge contracts are included in accumulated other comprehensive income (loss). At maturity, the gains or losses associated with cash flow hedge contracts are recorded to revenue.
The fair value of the outstanding cash flow hedge contracts was a gain of $ 0.9 million at December 31, 2024. | Unrealized gains and losses on foreign currency cash flow hedge contracts are included in accumulated other comprehensive income (loss). At maturity, the gains or losses associated with cash flow hedge contracts are recorded to revenue. | On November 7, 2023, in connection with Teradyne's agreement to acquire a 10 % investment in Technoprobe, Teradyne purchased a call option to buy 481.0 million Euros. The expiration date of the option was April 26, 2024 . On April 12, 2024, Teradyne entered into a forward to buy 481.0 million Euros which expired on May 23, 2024 . For the nine months ended September 29, 2024 , a realized loss of $ 9.8 million was recorded in 'Other (income) expense, net' in the condensed consolidated statement of
Unrealized (Losses) Gains on Cash Flow Hedges
Likvida medel
Cash and cash equivalents
Proceeds from the sale of a business, net of cash and cash equivalents sold
Effects of exchange rate changes on cash and cash equivalents
Decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
G. DISPOSITIONS | On May 27, 2024, Teradyne completed the sale of the Device Interface Solutions ("DIS") business, a component of the Semiconductor Test segment, to Technoprobe for $ 85.0 million in cash, net of cash and cash equivalents sold, and a customary working capital adjustment. The sale resulted in a pre-tax gain of $ 57.1 million recorded as 'Gain on sale of business' in the condensed consolidated statement of operations. The transaction did not meet the criteria to be classified as a discontinued opera
(3) Total assets are attributable to each segment. Corporate assets consist of cash and cash equivalents, marketable securities, and certain other assets.
Nettoskuld
Adjustments to reconcile net income from operations to net cash provided by operating activities:
Net cash provided by operating activities
Net cash used for investing activities
Net cash used for financing activities
Eget kapital
Condensed Statements of Shareholders’ Equity for the Three and Nine Months Ended September 28, 2025, and September 29, 2024
SHAREHOLDERS’ EQUITY
Total shareholders’ equity
Total liabilities and shareholders’ equity
TERADYNE, INC. | CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY | (Unaudited)
Shareholders' Equity
V. SHAREHOLDERS’ EQUITY | Stock Repurchase Program
(2) As of January 1, 2023, share repurchases net of share issuances are subject to a 1% excise tax under the Inflation Reduction Act. Excise tax incurred is included as part of the cost basis of shares repurchased in the Condensed Consolidated Statements of Convertible Common Shares and Stockholders’ Equity.
Antal aktier
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ | The number of shares outstanding of the registrant’s only class of Common Stock as of October 27, 2025, was 156,608,303 sh ares.
On December 12, 2016, Teradyne completed a private offering of $ 460.0 million aggregate principal amount of 1.25 % convertible senior unsecured notes (the “Notes”). The Notes matured on December 15, 2023. | Concurrent with the offering of the Notes, Teradyne entered into convertible note hedge transactions (the “Note Hedge Transactions”) with the initial purchasers or their affiliates (the “Option Counterparties”). The Note Hedge Transactions covered, subject to customary anti-dilution adjustments, the number of shares of the common stock that underlie the Notes. Separately and concurrent with the pricing of the Notes, Teradyne entered into warrant transactions with the Option Counterparties (the “ | Revolving Credit Facility
We satisfy U.S. federal and state minimum withholding tax obligations due upon the vesting and the conversion of restricted stock units into shares of our common stock, by automatically withholding from the shares being issued, a number of shares with an aggregate fair market value on the date of such vesting and conversion that would satisfy the minimum withholding amount due. | Item 4: Mine Safety Disclosures
Antal anställda
Accrued employees’ compensation and withholdings
M. STOCK-BASED COMPENSATION | Under Teradyne’s stock compensation plans, Teradyne grants time-based restricted stock units, performance-based restricted stock units and stock options, and employees are eligible to purchase Teradyne’s common stock through its Employee Stock Purchase Plan (“ESPP”). | Service-based restricted stock unit awards granted to employees vest in equal annual installments over four years . Restricted stock unit awards granted to non-employee directors vest after a one-year period, with 100 % of the award vesting on the earlier of (a) the first anniversary of the grant date or (b) the date of the following year’s Annual Meeting of Shareholders. Teradyne expenses the cost of the restricted stock unit awards subject to time-based vesting, which is determined to be the f
Under Teradyne’s stock compensation plans, Teradyne grants time-based restricted stock units, performance-based restricted stock units and stock options, and employees are eligible to purchase Teradyne’s common stock through its Employee Stock Purchase Plan (“ESPP”). | Service-based restricted stock unit awards granted to employees vest in equal annual installments over four years . Restricted stock unit awards granted to non-employee directors vest after a one-year period, with 100 % of the award vesting on the earlier of (a) the first anniversary of the grant date or (b) the date of the following year’s Annual Meeting of Shareholders. Teradyne expenses the cost of the restricted stock unit awards subject to time-based vesting, which is determined to be the f | Performance-based restricted stock units (“PRSUs”) granted to Teradyne’s executive officers may have a performance metric based on relative total shareholder return (“TSR”). Teradyne’s three-year TSR performance is measured against the New York Stock Exchange (“NYSE”) Composite Index. The final number of TSR PRSUs that vest will vary based upon the level of performance achieved from 0 % to 200 % of the target shares. The TSR PRSUs will vest upon the three-year anniversary of the grant date. The
On January 22, 2024, the Board enacted the Executive Retirement Policy for Restricted Stock Unit and Option Vesting (the "Retirement Policy"). Under the Retirem ent Policy, an executive officer that is over the age of 65 and has 10 or more years of service as of the effective date of his or her retirement will be eligible for continued vesting of his or her unvested time-based restricted stock units and stock options granted prior to his or her retirement date. | During the nine months ended September 28, 2025, and September 29, 2024, Teradyne granted 0.6 million and 0.6 million of service-based restricted stock unit awards to employees at a weighted average grant date fair value of $ 111.72 and $ 95.98 , respectively, and less than 0.1 million and 0.1 million of service-based restricted stock unit awards to non-employee directors at a weighted average grant date fair value of $ 79.78 and $ 120.38 , respectively. | During the nine months ended September 28, 2025, and September 29, 2024, Teradyne granted 0.1 million and 0.1 million of PBIT PRSUs with a weighted average grant date fair value of $ 106.44 and $ 94.51 , respectively.
During the three months ended September 29, 2024 , Teradyne recorded restructuring and other charges primarily related to $ 1.3 million of severance charges related to headcount reductions principally in Robotics. | During the nine months ended September 28, 2025, Teradyne recorded $ 18.5 million of severance charges, $ 13.5 million of which is related to the Robotics restructuring which impacted approximately 150 employees, $ 2.2 million of which is related to Product Test and $ 1.4 million of which is related to Semiconductor Test . During the nine months ended September 28, 2025, Teradyne made $ 9.2 million of Robotics severance payments. Teradyne expects all Robotics severance payments to be made prior | During the nine months ended September 29, 2024, Teradyne recorded restructuring and other charges primarily related to $ 5.3 million of severance and other charges, related to headcount reductions of 87 people primarily in Robotics and Semiconductor Test, which included charges related to a voluntary early retirement program for employees meeting certain conditions, and $ 2.2 million of acquisition and divestiture expenses related to the Technoprobe transactions.
During the nine months ended September 28, 2025, Teradyne recorded $ 18.5 million of severance charges, $ 13.5 million of which is related to the Robotics restructuring which impacted approximately 150 employees, $ 2.2 million of which is related to Product Test and $ 1.4 million of which is related to Semiconductor Test . During the nine months ended September 28, 2025, Teradyne made $ 9.2 million of Robotics severance payments. Teradyne expects all Robotics severance payments to be made prior | During the nine months ended September 29, 2024, Teradyne recorded restructuring and other charges primarily related to $ 5.3 million of severance and other charges, related to headcount reductions of 87 people primarily in Robotics and Semiconductor Test, which included charges related to a voluntary early retirement program for employees meeting certain conditions, and $ 2.2 million of acquisition and divestiture expenses related to the Technoprobe transactions.
Defined Benefit Pension Plans | Teradyne has defined benefit pension plans covering a portion of domestic employees and employees of certain non-U.S. subsidiaries. Benefits under these plans are based on employees’ years of service and compensation. Teradyne’s funding policy is to make contributions to these plans in accordance with local laws and to the extent that such contributions are tax deductible. The assets of the U.S. qualified pension plan consist primarily of fixed income and equity securities. In addition, Teradyne | During the three months ended September 28, 2025, Teradyne recognized a non-cash settlement gain of $ 0.8 million related to lump sum distributions paid to retired or terminated employees. The charge is the result of the aggregate of the cumulative lump sum distributions exceeded the total annual service and interest costs. Due to the remeasurement, the reduction in pension benefit obligation and pension assets was $ 4.7 million.
Teradyne has defined benefit pension plans covering a portion of domestic employees and employees of certain non-U.S. subsidiaries. Benefits under these plans are based on employees’ years of service and compensation. Teradyne’s funding policy is to make contributions to these plans in accordance with local laws and to the extent that such contributions are tax deductible. The assets of the U.S. qualified pension plan consist primarily of fixed income and equity securities. In addition, Teradyne | During the three months ended September 28, 2025, Teradyne recognized a non-cash settlement gain of $ 0.8 million related to lump sum distributions paid to retired or terminated employees. The charge is the result of the aggregate of the cumulative lump sum distributions exceeded the total annual service and interest costs. Due to the remeasurement, the reduction in pension benefit obligation and pension assets was $ 4.7 million. | During the three months ended September 29, 2024 , Teradyne purchased a group annuity contract for its retiree participants in the U.S. qualified pension plan. Under the group annuity, the accrued pension obligation for 132 retiree participants were transferred to an insurance company. The reduction in the pension benefit obligation and pension assets was $ 23.4 million. During the three and nine months ended September 29, 2024, Teradyne recorded settlement expense of $ 0.4 million related to th
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10-Q

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 10-Q
 
 
(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 
For the quarterly period ended September 28, 2025
OR

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 
For the transition period from ________ to ________
Commission File No. 001-06462
 
 
TERADYNE, INC.
(Exact name of registrant as specified in its charter)
 
 

Massachusetts

04-2272148

(State or Other Jurisdiction of
Incorporation or Organization)

(I.R.S. Employer
Identification No.)

 

600 Riverpark Drive , North Reading ,
Massachusetts

01864

(Address of Principal Executive Offices)

(Zip Code)

978 - 370-2700
(Registrant’s Telephone Number, Including Area Code)
 
 
Securities registered pursuant to Section 12(b) of the Act:
 

Title of each class

 

Trading
Symbol(s)

 

Name of each exchange
on which registered

Common Stock , par value $0.125
per share

 

TER

 

Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files) Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act (check one):
 

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Emerging growth company

☐

 

Smaller reporting company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares outstanding of the registrant’s only class of Common Stock as of October 27, 2025, was 156,608,303 sh ares.
 
 

 

TERADYNE, INC.
INDEX

Page No.

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements (Unaudited):

1

 

Condensed Consolidated Balance Sheets as of September 28, 2025, and December 31, 2024

1

 f

 

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 28, 2025, and September 29, 2024

2

 

Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 28, 2025, and September 29, 2024

3

 

Condensed Statements of Shareholders’ Equity for the Three and Nine Months Ended September 28, 2025, and September 29, 2024

4

d

 

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 28, 2025, and September 29, 2024

5

 

Notes to Condensed Consolidated Financial Statements

6

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

31

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

41

 

Item 4.

Controls and Procedures

41

 

PART II. OTHER INFORMATION

 

 

Item 1.

Legal Proceedings

42

 

Item 1A.

Risk Factors

42

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

43

 

Item 4.

Mine Safety Disclosures

43

 

Item 5.

Other Information

44

 

Item 6.

Exhibits

45

 

 

PART I
Item 1: Financial Statements
TERADYNE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 

 

 

September 28,
2025

 

 

December 31,
2024

 

 

 

(in thousands,
except per share amount)

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

272,700

 

 

$

553,354

 

Marketable securities

 

 

25,017

 

 

 

46,312

 

Accounts receivable, less allowance for credit losses of $ 1,886  and $ 2,111  at September 28, 2025
   and December 31, 2024, respectively

 

 

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

 

 

 

 

 

 

Current 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 incomes taxes payable

 

 

—

 

 

 

24,596

 

Total liabilities

 

 

1,246,456

 

 

 

889,420

 

Commitments and contingencies (Note S)

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

Common stock, $ 0.125  par value, 1,000,000  shares authorized; 157,245  and 161,722  shares issued
   and outstanding at September 28, 2025, and December 31, 2024, respectively

 

 

19,656

 

 

 

20,215

 

Additional paid-in capital

 

 

1,973,415

 

 

 

1,909,538

 

Accumulated other comprehensive loss (gain)

 

 

37,422

 

 

 

( 81,220

)

Retained earnings

 

 

686,782

 

 

 

970,761

 

Total shareholders’ equity

 

 

2,717,275

 

 

 

2,819,294

 

Total liabilities and shareholders’ equity

 

$

3,963,731

 

 

$

3,708,714

 

 
The accompanying notes, together with the Notes to Consolidated Financial Statements included in Teradyne’s Annual Report on Form 10-K for the year ended December 31, 2024, are an integral part of the condensed consolidated financial statements.

1

TERADYNE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 

 

 

For the Three Months
 Ended

 

 

For the Nine Months
 Ended

 

 

 

September 28,
2025

 

 

September 29,
2024

 

 

September 28,
2025

 

 

September 29,
2024

 

 

 

(in thousands, except per share amount)

 

 

(in thousands, except per share amount)

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

632,104

 

 

$

612,871

 

 

$

1,716,718

 

 

$

1,668,181

 

Services

 

 

137,106

 

 

 

124,427

 

 

 

389,969

 

 

 

398,815

 

Total revenues

 

 

769,210

 

 

 

737,298

 

 

 

2,106,687

 

 

 

2,066,996

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of products

 

 

270,634

 

 

 

253,129

 

 

 

727,198

 

 

 

704,129

 

Cost of services

 

 

49,270

 

 

 

47,655

 

 

 

141,834

 

 

 

161,228

 

Total cost of revenues (exclusive of acquired intangible
   assets amortization shown separately below)

 

 

319,904

 

 

 

300,784

 

 

 

869,032

 

 

 

865,357

 

Gross profit

 

 

449,306

 

 

 

436,514

 

 

 

1,237,655

 

 

 

1,201,639

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling and administrative

 

 

169,144

 

 

 

157,649

 

 

 

484,182

 

 

 

461,307

 

Engineering and development

 

 

124,760

 

 

 

117,474

 

 

 

361,331

 

 

 

332,489

 

Acquired intangible assets amortization

 

 

3,514

 

 

 

4,748

 

 

 

11,820

 

 

 

14,108

 

Restructuring and other

 

 

6,585

 

 

 

4,578

 

 

 

23,472

 

 

 

11,018

 

Gain on sale of business

 

 

—

 

 

 

—

 

 

 

—

 

 

 

( 57,486

)

Total operating expenses

 

 

304,003

 

 

 

284,449

 

 

 

880,805

 

 

 

761,436

 

Income from operations

 

 

145,303

 

 

 

152,065

 

 

 

356,850

 

 

 

440,203

 

Non-operating (income) expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

( 3,191

)

 

 

( 5,076

)

 

 

( 12,618

)

 

 

( 19,658

)

Interest expense

 

 

1,309

 

 

 

808

 

 

 

2,909

 

 

 

2,998

 

Other (income) expense, net

 

 

( 915

)

 

 

( 2,651

)

 

 

2,875

 

 

 

5,574

 

Income before income taxes and equity in net earnings of affiliate

 

 

148,100

 

 

 

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

 

 

 

146,724

 

 

 

313,536

 

 

 

397,194

 

Equity in net earnings of affiliate

 

 

( 5,198

)

 

 

( 1,075

)

 

 

( 16,709

)

 

 

( 1,075

)

Net income

 

$

119,558

 

 

$

145,649

 

 

$

296,827

 

 

$

396,119

 

Net income per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.75

 

 

$

0.89

 

 

$

1.85

 

 

$

2.51

 

Diluted

 

$

0.75

 

 

$

0.89

 

 

$

1.85

 

 

$

2.42

 

Weighted average common shares—basic

 

 

158,595

 

 

 

163,002

 

 

 

160,021

 

 

 

157,951

 

Weighted average common shares—diluted

 

 

159,097

 

 

 

164,253

 

 

 

160,409

 

 

 

163,357

 

 
The accompanying notes, together with the Notes to Consolidated Financial Statements included in Teradyne’s Annual Report on Form 10-K for the year ended December 31, 2024, are an integral part of the condensed consolidated financial statements.

2

TERADYNE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 

 

 

For the Three Months
 Ended

 

 

For the Nine Months
 Ended

 

 

 

September 28,
2025

 

 

September 29,
2024

 

 

September 28,
2025

 

 

September 29,
2024

 

 

 

(in thousands)

 

 

(in thousands)

 

Net income

 

$

119,558

 

 

$

145,649

 

 

$

296,827

 

 

$

396,119

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment, net of tax of $ 0 , $ 0 , $ 0 , and
   $ 0 , respectively

 

 

( 4,351

)

 

 

37,838

 

 

 

117,966

 

 

 

22,751

 

Available-for-sale marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (losses) gains on marketable securities arising during
   period, net of tax of $ 201 , $ 609 , $ 316 , and $ 205 , respectively

 

 

739

 

 

 

2,507

 

 

 

1,324

 

 

 

885

 

Less: Reclassification adjustment for (gains) losses included in net income, net of tax of $ 0 ,
   $( 2 ), $ 27 , $ 24 , respectively

 

 

—

 

 

 

( 7

)

 

 

89

 

 

 

86

 

 

 

739

 

 

 

2,500

 

 

 

1,413

 

 

 

971

 

Cash flow hedges:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (losses) gains arising during period, net of tax of $ 0 , $( 73 ), $( 109 ), and $ 285 , respectively

 

 

—

 

 

 

( 260

)

 

 

( 381

)

 

 

1,014

 

Less: Reclassification adjustment for losses (gains) included in
   net income, net of tax of $ 0 , $ 0 , $( 100 ), and $( 500 ), respectively

 

 

—

 

 

 

—

 

 

 

( 350

)

 

 

( 1,780

)

 

 

—

 

 

 

( 260

)

 

 

( 731

)

 

 

( 766

)

Defined benefit post-retirement plan:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of prior service credit, net of tax of $ 0 , $ 0 , $( 1 ), and
   $( 1 ), respectively

 

 

( 2

)

 

 

( 2

)

 

 

( 6

)

 

 

( 6

)

Other comprehensive income (loss)

 

 

( 3,614

)

 

 

40,076

 

 

 

118,642

 

 

 

22,950

 

Comprehensive income

 

$

115,944

 

 

$

185,725

 

 

$

415,469

 

 

$

419,069

 

 
The accompanying notes, together with the Notes to Consolidated Financial Statements included in Teradyne’s Annual Report on Form 10-K for the year ended December 31, 2024, are an integral part of the condensed consolidated financial statements.

3

TERADYNE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)
 

 

 

Shareholders' Equity

 

 

 

Common
Stock
Shares

 

 

Common
Stock
Par Value

 

 

Additional
Paid-in
Capital

 

 

Accumulated
Other
Comprehensive
Income (Loss)

 

 

Retained
Earnings

 

 

Total
Shareholders’
Equity

 

 

 

(in thousands)

 

For the Three Months Ended September 28, 2025

 

Balance, June 29, 2025

 

 

159,210

 

 

$

19,901

 

 

$

1,941,501

 

 

$

41,036

 

 

$

834,863

 

 

$

2,837,301

 

Net issuance of common stock under stock-based plans

 

 

206

 

 

 

26

 

 

 

14,958

 

 

 

 

 

 

 

 

 

14,984

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

16,956

 

 

 

 

 

 

 

 

 

16,956

 

Repurchase of common stock

 

 

( 2,171

)

 

 

( 271

)

 

 

 

 

 

 

 

 

( 248,640

)

 

 

( 248,911

)

Cash dividends ($ 0.12  per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

( 18,999

)

 

 

( 18,999

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

119,558

 

 

 

119,558

 

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

( 3,614

)

 

 

 

 

 

( 3,614

)

Balance, September 28, 2025

 

 

157,245

 

 

$

19,656

 

 

$

1,973,415

 

 

$

37,422

 

 

$

686,782

 

 

$

2,717,275

 

For the Three Months Ended September 29, 2024

 

Balance, June 30, 2024

 

 

161,802

 

 

$

20,225

 

 

$

1,865,351

 

 

$

( 44,104

)

 

$

889,340

 

 

$

2,730,812

 

Net issuance of common stock under stock-based plans

 

 

130

 

 

 

17

 

 

 

14,966

 

 

 

 

 

 

 

 

 

14,983

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

15,999

 

 

 

 

 

 

 

 

 

15,999

 

Warrant exercises

 

 

1,223

 

 

 

153

 

 

 

( 155

)

 

 

 

 

 

 

 

 

( 2

)

Repurchase of common stock

 

 

( 196

)

 

 

( 25

)

 

 

 

 

 

 

 

 

( 25,376

)

 

 

( 25,401

)

Cash dividends ($ 0.12  per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

( 19,574

)

 

 

( 19,574

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

145,649

 

 

 

145,649

 

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

40,076

 

 

 

 

 

 

40,076

 

Balance, September 29, 2024

 

 

162,959

 

 

$

20,370

 

 

$

1,896,161

 

 

$

( 4,028

)

 

$

990,039

 

 

$

2,902,542

 

 

 

 

Shareholders' Equity

 

 

 

Common
Stock
Shares

 

 

Common
Stock
Par Value

 

 

Additional
Paid-in
Capital

 

 

Accumulated
Other
Comprehensive
Income (Loss)

 

 

Retained
Earnings

 

 

Total
Shareholders’
Equity

 

 

 

(in thousands)

 

For the Nine Months Ended September 28, 2025

 

Balance, December 31, 2024

 

 

161,722

 

 

$

20,215

 

 

$

1,909,538

 

 

$

( 81,220

)

 

$

970,761

 

 

$

2,819,294

 

Net issuance of common stock under stock-based plans

 

 

655

 

 

 

82

 

 

 

14,741

 

 

 

 

 

 

 

 

 

14,823

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

49,136

 

 

 

 

 

 

 

 

 

49,136

 

Repurchase of common stock

 

 

( 5,132

)

 

 

( 641

)

 

 

 

 

 

 

 

 

( 523,208

)

 

 

( 523,849

)

Cash dividends ($ 0.36  per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

( 57,598

)

 

 

( 57,598

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

296,827

 

 

 

296,827

 

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

118,642

 

 

 

 

 

 

118,642

 

Balance, September 28, 2025

 

 

157,245

 

 

$

19,656

 

 

$

1,973,415

 

 

$

37,422

 

 

$

686,782

 

 

$

2,717,275

 

For the Nine Months Ended September 29, 2024

 

Balance, December 31, 2023

 

 

152,698

 

 

$

19,087

 

 

$

1,827,274

 

 

$

( 26,978

)

 

$

706,514

 

 

$

2,525,897

 

Net issuance of common stock under stock-based plans

 

 

720

 

 

 

91

 

 

 

23,340

 

 

 

 

 

 

 

 

 

23,431

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

46,817

 

 

 

 

 

 

 

 

 

46,817

 

Warrant exercises

 

 

10,036

 

 

 

1,254

 

 

 

( 1,270

)

 

 

 

 

 

 

 

 

( 16

)

Repurchase of common stock

 

 

( 495

)

 

 

( 62

)

 

 

 

 

 

 

 

 

( 55,630

)

 

 

( 55,692

)

Cash dividends ($ 0.36  per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

( 56,964

)

 

 

( 56,964

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

396,119

 

 

 

396,119

 

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

22,950

 

 

 

 

 

 

22,950

 

Balance, September 29, 2024

 

 

162,959

 

 

$

20,370

 

 

$

1,896,161

 

 

$

( 4,028

)

 

$

990,039

 

 

$

2,902,542

 

 
The accompanying notes, together with the Notes to Consolidated Financial Statements included in Teradyne’s Annual Report on Form 10-K for the year ended December 31, 2024, are an integral part of the condensed consolidated financial statements.

4

TERADYNE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 

 

 

For the Nine Months
 Ended

 

 

 

September 28,
2025

 

 

September 29,
2024

 

 

 

(in thousands)

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

296,827

 

 

$

396,119

 

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

 

 

 

 

 

 

Depreciation

 

 

79,484

 

 

 

74,480

 

Stock-based compensation

 

 

47,561

 

 

 

45,267

 

Equity in net earnings of affiliate

 

 

16,709

 

 

 

1,075

 

Losses (gains) on investments

 

 

( 4,722

)

 

 

10,139

 

Provision for excess and obsolete inventory

 

 

19,175

 

 

 

15,516

 

Amortization

 

 

12,723

 

 

 

14,133

 

Gain on sale of business

 

 

—

 

 

 

( 57,486

)

Deferred taxes

 

 

( 29,100

)

 

 

( 26,261

)

Retirement plan losses (gains)

 

 

( 673

)

 

 

( 2,512

)

Other

 

 

3,344

 

 

 

( 5,041

)

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

 

 

 

 

 

 

Accounts receivable

 

 

( 111,787

)

 

 

( 65,266

)

Inventories

 

 

( 34,618

)

 

 

11,127

 

Prepayments and other assets

 

 

( 22,599

)

 

 

61,438

 

Accounts payable and other liabilities

 

 

121,447

 

 

 

( 63,666

)

Deferred revenue and customer advances

 

 

25,652

 

 

 

3,624

 

Retirement plans contributions

 

 

( 6,986

)

 

 

( 4,169

)

Income taxes

 

 

( 19,661

)

 

 

( 18,898

)

Net cash provided by operating activities

 

 

392,776

 

 

 

389,619

 

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

( 161,121

)

 

 

( 140,710

)

Acquisition of businesses, net of cash acquired

 

 

( 144,380

)

 

 

—

 

Purchase of investment in a business

 

 

( 25,519

)

 

 

( 527,060

)

Purchases of marketable securities

 

 

( 27,465

)

 

 

( 35,097

)

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

 

 

—

 

 

 

90,348

 

Proceeds from maturities of marketable securities

 

 

41,621

 

 

 

33,163

 

Proceeds from sales of marketable securities

 

 

9,172

 

 

 

23,600

 

Proceeds from insurance

 

 

—

 

 

 

873

 

Net cash used for investing activities

 

 

( 307,692

)

 

 

( 554,883

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from borrowings on revolving credit facility

 

 

200,000

 

 

 

185,000

 

Repayments of borrowings on revolving credit facility

 

 

—

 

 

 

( 185,000

)

Dividend payments

 

 

( 57,574

)

 

 

( 56,936

)

Repurchase of common stock

 

 

( 518,658

)

 

 

( 55,053

)

Payments related to net settlement of employee stock compensation awards

 

 

( 15,254

)

 

 

( 13,833

)

Issuance of common stock under stock purchase and stock option plans

 

 

30,076

 

 

 

37,265

 

Net cash used for financing activities

 

 

( 361,410

)

 

 

( 88,557

)

Effects of exchange rate changes on cash and cash equivalents

 

 

( 4,328

)

 

 

6,286

 

Decrease in cash and cash equivalents

 

 

( 280,654

)

 

 

( 247,535

)

Cash and cash equivalents at beginning of period

 

 

553,354

 

 

 

757,571

 

Cash and cash equivalents at end of period

 

$

272,700

 

 

$

510,036

 

Non-cash investing activities:

 

 

 

 

 

 

Capital expenditures incurred but not yet paid:

 

$

7,821

 

 

$

3,679

 

 
The accompanying notes, together with the Notes to Consolidated Financial Statements included in Teradyne’s Annual Report on Form 10-K for the year ended December 31, 2024, are an integral part of the condensed consolidated financial statements.

5

TERADYNE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
A. THE COMPANY
Teradyne, Inc. (“Teradyne”) is a leading global provider of automated test equipment and robotics solutions. Teradyne’s automated test systems are used to test semiconductors, wireless products, data storage, silicon photonics, and complex electronics systems in many industries including consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries. Teradyne’s robotics product offerings consist primarily of collaborative robotic arms and autonomous mobile robots used by global manufacturing, logistics and industrial customers to improve quality and increase manufacturing and material handling efficiency while reducing costs. In the first quarter of 2025, Teradyne identified opportunities for operational synergies amongst our production board test, defense and aerospace, and wireless test businesses leading to the creation of the Product Test division as a new segment effective March 2025. Teradyne’s automated test equipment and robotics products and services include:
• semiconductor test (“Semiconductor Test”) systems;

• robotics (“Robotics”) products; and

• product test ("Product Test") systems, which include defense/aerospace ("Defense/Aerospace") test instrumentation and systems, circuit-board test and inspection ("Production Board Test") systems, wireless test systems ("Wireless Test"), and photonic integrated circuit ("PIC") test solutions.

B. ACCOUNTING POLICIES
Basis of Presentation
The condensed consolidated interim financial statements include the accounts of Teradyne and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. These condensed consolidated interim financial statements are unaudited and reflect all normal recurring adjustments that are, in the opinion of management, necessary for the fair statement of such condensed consolidated interim financial statements. The December 31, 2024, condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by United States of America generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. The accompanying financial information should be read in conjunction with the consolidated financial statements and notes thereto contained in Teradyne’s Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on February 20, 2025, for the year ended December 31, 2024 .

Preparation of Financial Statements and Use of Estimates
The preparation of consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an on-going basis, management evaluates its estimates, including those related to inventories, investments, goodwill, intangible and other long-lived assets, accounts receivable, income taxes, deferred tax assets and liabilities, pensions, warranties, and loss contingencies. Management bases its estimates on historical experience and on appropriate and customary assumptions that are believed to be reasonable under the circumstances, which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change, as new events occur and additional information is obtained. Actual results may differ significantly from these estimates under different assumptions or conditions.

C. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2023-09 – “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” , which requires expanded disclosures relating to the tax rate reconciliation, income taxes paid, income (loss) before income tax expense (benefit) and income tax expense (benefit), requiring a greater disaggregation of information for each. The provisions of ASU 2023-09 are effective for fiscal years beginning after December 15, 2024. Teradyne will apply the amendments in this update on a prospective basis. This ASU will have no impact on results of operations, cash flows or financial condition.

6

In November 2024, the FASB issued ASU 2024-03- "Income Statement - Reporting Comprehensive Income -Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" , which requires disclosure of additional expense information on an annual and interim basis, including the amounts of inventory purchases, employee compensation, depreciation and intangible amortization included within each income statement expense caption. This standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. Teradyne is currently evaluating the impact of this new standard.
In July 2025, the FASB issued ASU 2025-05 - "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets" , which introduces a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. The practical expedient permits all entities to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. This standard is effective for fiscal years beginning after December 15, 2025, with early adoption permitted. Teradyne is currently evaluating the impact of this new standard and does not expect a material impact on its financial statements and related disclosures .

D. ACQUISITIONS
Quantifi Photonics
On May 31, 2025 , Teradyne acquired all of the issued and outstanding shares of Quantifi Photonics ("Quantifi"), a privately held company in New Zealand and a leader in photonic integrated circuit ("PIC") test solutions for a total purchase price of approximately $ 127.2 million , subject to customary working capital adjustments. The acquisition of Quantifi enables Teradyne to deliver scalable PIC test solutions. Teradyne's allocation of the purchase price was goodwill of $ 83.1 million , which is not deductible for tax purposes, acquired intangible assets of $ 43.6 million with a weighted average estimated useful life of 10.0 years, and $ 0.6 million of net tangible assets. The goodwill is attributable to cost synergies, assembled workforce and anticipated incremental revenue streams. Teradyne's estimates and assumptions used in determining the estimated fair values of certain assets and liabilities are subject to change within the measurement period (up to one year from the acquisition date) as a result of additional information obtained with regards to facts and circumstances that existed as of the acquisition date. The results of Quantifi have been included in Teradyne's Product Test segment from the date of acquisition.
Based upon a preliminary valuation, the total purchase price was allocated as follows:
 

 

 

Purchase Price Allocation

 

 

 

(in thousands)

 

Goodwill

 

$

83,068

 

Intangible Assets

 

 

43,600

 

Tangible assets acquired and liabilities assumed:

 

 

 

Current assets

 

 

6,148

 

Long-term deferred tax assets

 

 

6,271

 

Other non-current assets

 

 

2,516

 

Accounts payable and current liabilities

 

 

( 1,609

)

Long-term deferred tax liabilities

 

 

( 12,208

)

Other long-term liabilities

 

 

( 548

)

Total purchase price

 

$

127,238

 

Teradyne estimated the fair value of intangible assets using the income and cost approaches. The fair value of Developed technology was estimated using the Multi-Period Excess Earnings Method. Acquired intangible assets are amortized on a straight-line basis over their estimated useful lives. Components of these intangible assets and their estimated useful lives at the acquisition date are as follows:
 

 

 

Fair Value

 

 

Estimated Useful Life

 

 

 

(in thousands)

 

 

(in years)

 

Developed technology

 

$

38,600

 

 

 

10.0

 

Trademarks and tradenames

 

 

4,400

 

 

 

10.0

 

Customer relationships

 

 

600

 

 

 

8.0

 

Total Intangible Assets

 

$

43,600

 

 

 

10.0

 

 

7

Teradyne has not separately disclosed Quantifi's standalone contribution to total company revenue or income from operations before income taxes or pro forma financial information because the impact of the acquisition on the condensed consolidated financial statements is not material.
Automated Test Equipment Technology
On January 31, 2025 , Teradyne acquired from Infineon Technologies AG ("Infineon") its automated test equipment technology and associated development team ("AET") based in Regensburg, Germany for a total purchase price of 17.6 million Euros, equivalent to $ 18.3 million, subject to customary adjustments. AET adds resources and expertise to Teradyne and strengthens the relationship between Teradyne and Infineon. The AET acquisition was accounted for as a business combination and, accordingly, the results have been included in Teradyne's Semiconductor Test segment from the date of acquisition. As of the acquisition date, Teradyne's purchase price allocation was goodwill of $ 1.3 million for expected synergies from combining operations, acquired intangible assets of $ 6.4 million, consisting of developed technology and customer relationships, with a weighted average estimated useful life of 4.6 years, and $ 10.7 million of net tangible assets, including $ 11.7 million of inventory. The fair values of the tangible and identifiable intangible assets acquired and liabilities assumed are based on management's estimates and assumptions. The acquisition was not material to Teradyne's condensed consolidated financial statements.

8

E. REVENUE
Disaggregation of Revenue
The following table provides information about disaggregated revenue by timing of revenue recognition, primary geographical market, and major product lines.
 

 

 

Semiconductor Test

 

 

Robotics

 

 

Product Test

 

 

Total

 

 

 

System
on-a-Chip

 

 

Memory

 

 

IST

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

For the Three Months Ended September 28, 2025

 

Timing of Revenue Recognition

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Point in Time

 

$

367,404

 

 

$

118,878

 

 

$

33,575

 

 

$

73,213

 

 

$

69,579

 

 

$

662,649

 

Over Time

 

 

72,812

 

 

 

9,184

 

 

 

4,014

 

 

 

1,874

 

 

 

18,677

 

 

 

106,561

 

Total

 

$

440,216

 

 

$

128,062

 

 

$

37,589

 

 

$

75,087

 

 

$

88,256

 

 

$

769,210

 

Geographical Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asia Pacific

 

$

409,959

 

 

$

126,534

 

 

$

37,298

 

 

$

13,852

 

 

$

25,136

 

 

$

612,779

 

Americas

 

 

14,432

 

 

 

1,029

 

 

 

291

 

 

 

28,455

 

 

 

55,225

 

 

 

99,432

 

Europe, Middle East and Africa

 

 

15,825

 

 

 

499

 

 

 

—

 

 

 

32,780

 

 

 

7,895

 

 

 

56,999

 

Total

 

$

440,216

 

 

$

128,062

 

 

$

37,589

 

 

$

75,087

 

 

$

88,256

 

 

$

769,210

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 29, 2024

 

Timing of Revenue Recognition

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Point in Time

 

$

323,507

 

 

$

143,581

 

 

$

20,771

 

 

$

86,672

 

 

$

64,305

 

 

$

638,836

 

Over Time

 

 

68,848

 

 

 

6,798

 

 

 

5,013

 

 

 

1,979

 

 

 

15,824

 

 

 

98,462

 

Total

 

$

392,355

 

 

$

150,379

 

 

$

25,784

 

 

$

88,651

 

 

$

80,129

 

 

$

737,298

 

Geographical Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asia Pacific

 

$

364,476

 

 

$

137,890

 

 

$

23,844

 

 

$

13,833

 

 

$

29,775

 

 

$

569,818

 

Americas

 

 

17,150

 

 

 

1,325

 

 

 

1,940

 

 

 

40,775

 

 

 

43,494

 

 

 

104,684

 

Europe, Middle East and Africa

 

 

10,729

 

 

 

11,164

 

 

 

—

 

 

 

34,043

 

 

 

6,860

 

 

 

62,796

 

Total

 

$

392,355

 

 

$

150,379

 

 

$

25,784

 

 

$

88,651

 

 

$

80,129

 

 

$

737,298

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 28, 2025

 

Timing of Revenue Recognition

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Point in Time

 

$

1,030,682

 

 

$

272,534

 

 

$

85,294

 

 

$

213,083

 

 

$

192,296

 

 

$

1,793,889

 

Over Time

 

 

212,512

 

 

 

25,879

 

 

 

13,348

 

 

 

5,857

 

 

 

55,202

 

 

 

312,798

 

Total

 

$

1,243,194

 

 

$

298,413

 

 

$

98,642

 

 

$

218,940

 

 

$

247,498

 

 

$

2,106,687

 

Geographical Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asia Pacific

 

$

1,132,944

 

 

$

292,683

 

 

$

95,782

 

 

$

44,853

 

 

$

85,583

 

 

$

1,651,845

 

Americas

 

 

65,404

 

 

 

4,023

 

 

 

2,860

 

 

 

88,086

 

 

 

138,239

 

 

 

298,612

 

Europe, Middle East and Africa

 

 

44,846

 

 

 

1,707

 

 

 

—

 

 

 

86,001

 

 

 

23,676

 

 

 

156,230

 

Total

 

$

1,243,194

 

 

$

298,413

 

 

$

98,642

 

 

$

218,940

 

 

$

247,498

 

 

$

2,106,687

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 29, 2024

 

Timing of Revenue Recognition

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Point in Time

 

$

896,635

 

 

$

367,679

 

 

$

49,868

 

 

$

260,072

 

 

$

189,987

 

 

$

1,764,241

 

Over Time

 

 

211,612

 

 

 

21,626

 

 

 

15,784

 

 

 

6,480

 

 

 

47,253

 

 

 

302,755

 

Total

 

$

1,108,247

 

 

$

389,305

 

 

$

65,652

 

 

$

266,552

 

 

$

237,240

 

 

$

2,066,996

 

Geographical Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asia Pacific

 

$

1,016,674

 

 

$

357,993

 

 

$

61,014

 

 

$

48,615

 

 

$

86,079

 

 

$

1,570,375

 

Americas

 

 

59,912

 

 

 

13,631

 

 

 

4,638

 

 

 

110,415

 

 

 

116,799

 

 

 

305,395

 

Europe, Middle East and Africa

 

 

31,661

 

 

 

17,681

 

 

 

—

 

 

 

107,522

 

 

 

34,362

 

 

 

191,226

 

Total

 

$

1,108,247

 

 

$

389,305

 

 

$

65,652

 

 

$

266,552

 

 

$

237,240

 

 

$

2,066,996

 

Contract Balances
During the three and nine months ended September 28, 2025, Teradyne recognized $ 14.2 million and $ 64.8 million, respectively, that was included within the deferred revenue and customer advances balances at the beginning of the period. During the three and nine months ended September 29, 2024, Teradyne recognized $ 13.4 million and $ 60.2 million, respectively, that was included within the deferred revenue and customer advances balances at the beginning of the period. This revenue primarily relates to undelivered hardware, extended warranties, training, application support, and post contract support. Each of these represents a distinct performance obligation. As of September 28, 2025, Teradyne had $ 1,744.4 million of unsatisfied performance obligations. Teradyne expects to recognize approximately 89 % of the remaining performance obligations in the next 12 months and the remainder in 1 - 3 years.

9

Deferred revenue and customer advances consist of the following and are included in short and long-term deferred revenue and customer advances on the balance sheet:
 

 

 

September 28,
2025

 

 

December 31,
2024

 

 

 

(in thousands)

 

Maintenance, service and training

 

$

57,606

 

 

$

58,473

 

Customer advances, undelivered elements and other

 

 

68,316

 

 

 

48,118

 

Extended warranty

 

 

51,015

 

 

 

41,624

 

Total deferred revenue and customer advances

 

$

176,937

 

 

$

148,215

 

Accounts Receivable
During the three and nine months ended September 28, 2025, and September 29, 2024, Teradyne sold certain trade accounts receivables on a non-recourse basis to third-party financial institutions pursuant to factoring agreements. During the three months ended September 28, 2025, and September 29, 2024, total trade accounts receivable sold under the factoring agreements were $ 14.4 million and $ 36.1 million, respectively. During the nine months ended September 28, 2025, and September 29, 2024, total trade accounts receivable sold under the factoring agreements were $ 37.5 million and $ 116.8 million, respectively. Factoring fees for the sales of receivables were recorded in interest expense and were not material. Teradyne accounted for these transactions as sales of receivables and presented cash proceeds as cash provided by operating activities in the condensed consolidated statements of cash flows.

F. EQUITY METHOD INVESTMENT
On May 27, 2024, Teradyne paid 483.1 million Euros, equivalent to $ 524.1 million, to purchase a combination of previously issued and outstanding shares and shares newly issued by Technoprobe, S.p.A. ("Technoprobe"). The shares purchased represent 10 % of the issued and outstanding shares of Technoprobe. Teradyne also received a board seat as part of the purchase. Teradyne accounts for this investment using the equity method as a result of being able to exercise significant influence over the operating and financial decisions of Technoprobe.
The carrying value of this equity method investment as of September 28, 2025, was $ 538.0 million and $ 494.5 million as of December 31, 2024 in the condensed consolidated balance sheets. For the three months ended September 28, 2025, Teradyne recorded a $ 5.2 million loss related to equity in net earnings of affiliate and a $ 2.2 million loss in other comprehensive income (loss) related to investment. For the nine months ended September 28, 2025, Teradyne recorded a $ 16.7 million loss related to equity in net earnings of affiliate and an income of $ 60.2 million of other comprehensive income (loss) related to the equity method investment. For the three and nine months ended September 29, 2024, Teradyne recorded a loss of $ 1.1 million of equity in net earnings of affiliate and income of $ 15.4 million in other comprehensive income (loss) related this investment.
Based on the quoted closing price of Technoprobe stock as of September 28, 2025, the fair value of the publicly traded investment was $ 638.2 million.
Teradyne's equity method basis difference was calculated as the difference between the investment and the amount of underlying equity in net assets acquired. The basis differences, net of tax, will be amortized over the estimated useful lives.
Teradyne made an accounting policy election to report its share of Technoprobe's results on a 3-month lag, which is applied consistently from period to period. Teradyne records its share of Technoprobe's net income or loss and the amortization of equity method basis difference, as 'Equity in net earnings of affiliate' in the condensed consolidated statements of operations. Teradyne includes its share of Technoprobe's other comprehensive income and a cumulative translation adjustment in the condensed consolidated statements of comprehensive income .

G. DISPOSITIONS
On May 27, 2024, Teradyne completed the sale of the Device Interface Solutions ("DIS") business, a component of the Semiconductor Test segment, to Technoprobe for $ 85.0 million in cash, net of cash and cash equivalents sold, and a customary working capital adjustment. The sale resulted in a pre-tax gain of $ 57.1 million recorded as 'Gain on sale of business' in the condensed consolidated statement of operations. The transaction did not meet the criteria to be classified as a discontinued operation, as it did not represent a strategic shift that will have a major effect on operations and financial results.

10

H. INVENTORIES
Inventories, net consisted of the following at September 28, 2025, and December 31, 2024:
 

 

 

September 28,
2025

 

 

December 31,
2024

 

 

 

(in thousands)

 

Raw material

 

$

267,105

 

 

$

225,915

 

Work-in-process

 

 

57,050

 

 

 

41,964

 

Finished goods

 

 

42,597

 

 

 

30,613

 

Total inventories, net

 

$

366,752

 

 

$

298,492

 

Inventory reserves at September 28, 2025, and December 31, 2024, were $ 146.0 million and $ 141.4 million, respectively.

I. FINANCIAL INSTRUMENTS
Cash Equivalents
Teradyne considers all highly liquid investments with original maturities of three months or less at the date of acquisition to be cash equivalents.
Marketable Securities
Teradyne’s equity and debt mutual funds are classified as Level 1 and available-for-sale debt securities are classified as Level 2. The vast majority of Level 2 securities are fixed income securities priced by second party pricing vendors. These pricing vendors utilize the most recent observable market information in pricing these securities or, if specific prices are not available, use other observable inputs like market transactions involving identical or comparable securities.
During the three and nine months ended September 28, 2025, and September 29, 2024, there were no transfers in or out of Level 1, Level 2, or Level 3 financial instruments.
 

 

 

For the Three Months
 Ended

 

 

For the Nine Months
 Ended

 

 

 

September 28,
2025

 

 

September 29,
2024

 

 

September 28,
2025

 

 

September 29,
2024

 

 

 

(in millions)

 

 

(in millions)

 

Realized gains and losses included in 'Other (income) expense, net' in the condensed consolidated statement of operations

 

 

 

 

 

 

 

 

 

 

 

 

Realized gains

 

$

0.7

 

 

$

0.8

 

 

$

1.8

 

 

$

2.1

 

Realized losses

 

 

—

 

 

 

—

 

 

 

1.3

 

 

 

0.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains and losses on equity securities included in 'Other (income) expense, net' in the condensed consolidated statement of operations

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains on equity securities

 

 

3.1

 

 

 

2.2

 

 

 

7.4

 

 

 

5.4

 

Unrealized losses on equity securities

 

 

0.1

 

 

 

—

 

 

 

3.2

 

 

 

—

 

Unrealized gains and losses on available-for-sale debt securities are included in 'Accumulated other comprehensive income (loss)' in the condensed consolidated balance sheet.
The cost of securities sold is based on average cost.

11

The following tables set forth by fair value hierarchy Teradyne’s financial assets and liabilities that were measured at fair value on a recurring basis as of September 28, 2025, and December 31, 2024.
 

 

 

September 28, 2025

 

 

 

Quoted Prices
in Active
Markets for
Identical
Instruments
(Level 1)

 

 

Significant
Other
Observable
Inputs
(Level 2)

 

 

Significant
Unobservable
Inputs
(Level 3)

 

 

Total

 

 

 

(in thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$

180,730

 

 

$

—

 

 

$

—

 

 

$

180,730

 

Cash equivalents

 

 

91,970

 

 

 

—

 

 

 

—

 

 

 

91,970

 

Available-for-sale securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

 

—

 

 

 

44,759

 

 

 

—

 

 

 

44,759

 

Corporate debt securities

 

 

—

 

 

 

36,748

 

 

 

—

 

 

 

36,748

 

Debt mutual funds

 

 

14,766

 

 

 

—

 

 

 

—

 

 

 

14,766

 

Certificates of deposit and time deposits

 

 

—

 

 

 

1,613

 

 

 

—

 

 

 

1,613

 

U.S. government agency securities

 

 

—

 

 

 

1,098

 

 

 

—

 

 

 

1,098

 

Non-U.S. government securities

 

 

—

 

 

 

937

 

 

 

—

 

 

 

937

 

Equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

Mutual funds

 

 

54,754

 

 

 

—

 

 

 

—

 

 

 

54,754

 

 

$

342,220

 

 

$

85,155

 

 

$

—

 

 

$

427,375

 

Derivative assets

 

 

—

 

 

 

310

 

 

 

—

 

 

 

310

 

Total

 

$

342,220

 

 

$

85,465

 

 

$

—

 

 

$

427,685

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

 

—

 

 

 

1,129

 

 

 

—

 

 

$

1,129

 

Total

 

$

—

 

 

$

1,129

 

 

$

—

 

 

$

1,129

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

Total

 

 

 

(in thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

272,700

 

 

$

—

 

 

$

—

 

 

$

272,700

 

       Long-term marketable securities

 

 

69,520

 

 

 

60,138

 

 

 

-

 

 

 

129,658

 

Marketable securities

 

 

—

 

 

 

25,017

 

 

 

—

 

 

 

25,017

 

Prepayments

 

 

—

 

 

 

310

 

 

 

—

 

 

 

310

 

Total

 

$

342,220

 

 

$

85,465

 

 

$

—

 

 

$

427,685

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Other current liabilities

 

$

—

 

 

$

1,129

 

 

$

—

 

 

$

1,129

 

     Total

 

$

—

 

 

$

1,129

 

 

$

—

 

 

$

1,129

 

 

12

 

 

 

December 31, 2024

 

 

 

Quoted Prices
in Active
Markets for
Identical
Instruments
(Level 1)

 

 

Significant
Other
Observable
Inputs
(Level 2)

 

 

Significant
Unobservable
Inputs
(Level 3)

 

 

Total

 

 

 

(in thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$

261,176

 

 

$

—

 

 

$

—

 

 

$

261,176

 

Cash equivalents

 

 

283,037

 

 

 

9,141

 

 

 

—

 

 

 

292,178

 

Available-for-sale securities:

 

 

 

 

 

 

 

 

 

 

 

 

            U.S. Treasury securities

 

 

—

 

 

 

44,942

 

 

 

—

 

 

 

44,942

 

Corporate debt securities

 

 

—

 

 

 

35,696

 

 

 

—

 

 

 

35,696

 

Certificates of deposit and time deposits

 

 

—

 

 

 

21,689

 

 

 

—

 

 

 

21,689

 

Debt mutual funds

 

 

8,951

 

 

 

—

 

 

 

—

 

 

 

8,951

 

U.S. government agency securities

 

 

—

 

 

 

3,970

 

 

 

—

 

 

 

3,970

 

Non-U.S. government securities

 

 

—

 

 

 

773

 

 

 

—

 

 

 

773

 

Equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

Mutual Funds

 

 

54,412

 

 

 

—

 

 

 

—

 

 

 

54,412

 

 

$

607,576

 

 

$

116,211

 

 

$

—

 

 

$

723,787

 

Derivative assets

 

 

—

 

 

 

1,665

 

 

 

—

 

 

 

1,665

 

Total

 

$

607,576

 

 

$

117,876

 

 

$

—

 

 

$

725,452

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

 

—

 

 

 

1,324

 

 

 

—

 

 

 

1,324

 

Total

 

$

—

 

 

$

1,324

 

 

$

—

 

 

$

1,324

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

Total

 

 

 

(in thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

544,213

 

 

$

9,141

 

 

$

—

 

 

$

553,354

 

Marketable securities

 

 

—

 

 

 

46,312

 

 

 

—

 

 

 

46,312

 

Long-term marketable securities

 

 

63,363

 

 

 

60,758

 

 

 

—

 

 

 

124,121

 

Prepayments

 

 

—

 

 

 

1,665

 

 

 

—

 

 

 

1,665

 

Total

 

$

607,576

 

 

$

117,876

 

 

$

—

 

 

$

725,452

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Other current liabilities

 

$

—

 

 

$

1,324

 

 

$

—

 

 

$

1,324

 

Total

 

$

—

 

 

$

1,324

 

 

$

—

 

 

$

1,324

 

 
The carrying amounts and fair values of Teradyne’s financial instruments at September 28, 2025, and December 31, 2024, were as follows:
 

 

 

September 28, 2025

 

 

December 31, 2024

 

 

 

Carrying Value

 

 

Fair Value

 

 

Carrying Value

 

 

Fair Value

 

 

 

(in thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

272,700

 

 

$

272,700

 

 

$

553,354

 

 

$

553,354

 

Marketable securities

 

 

154,675

 

 

 

154,675

 

 

 

170,433

 

 

 

170,433

 

Derivative assets

 

 

310

 

 

 

310

 

 

 

1,665

 

 

 

1,665

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

 

1,129

 

 

 

1,129

 

 

 

1,324

 

 

 

1,324

 

 
The fair values of accounts receivable, net and accounts payable approximate the carrying value due to the short-term nature of these instruments.

13

The following table summarizes the composition of available-for-sale marketable securities at September 28, 2025:
 

 

 

September 28, 2025

 

 

 

Available-for-Sale

 

 

 

Cost

 

 

Unrealized
Gain

 

 

Unrealized
(Loss)

 

 

Fair
Market
Value

 

 

Fair Market
Value of
Investments
with Unrealized
Losses

 

 

 

(in thousands)

 

U.S. Treasury securities

 

$

49,271

 

 

$

63

 

 

$

( 4,575

)

 

$

44,759

 

 

$

21,338

 

Corporate debt securities

 

 

40,281

 

 

 

280

 

 

 

( 3,813

)

 

 

36,748

 

 

 

24,216

 

Debt mutual funds

 

 

14,945

 

 

 

—

 

 

 

( 179

)

 

 

14,766

 

 

 

2,972

 

Certificates of deposit and time deposits

 

 

1,613

 

 

 

—

 

 

 

—

 

 

 

1,613

 

 

 

—

 

U.S. government agency securities

 

 

1,098

 

 

 

—

 

 

 

—

 

 

 

1,098

 

 

 

1,098

 

Non-U.S. government securities

 

 

937

 

 

 

—

 

 

 

—

 

 

 

937

 

 

 

—

 

 

$

108,145

 

 

$

343

 

 

$

( 8,567

)

 

$

99,921

 

 

$

49,624

 

 
Reported as follows:
 

 

 

Cost

 

 

Unrealized
Gain

 

 

Unrealized
(Loss)

 

 

Fair
Market
Value

 

 

Fair Market
Value of
Investments
with Unrealized
Losses

 

 

 

(in thousands)

 

Marketable securities

 

$

25,012

 

 

$

25

 

 

$

( 20

)

 

$

25,017

 

 

$

6,517

 

Long-term marketable securities

 

 

83,133

 

 

 

318

 

 

 

( 8,547

)

 

 

74,904

 

 

 

43,107

 

 

$

108,145

 

 

$

343

 

 

$

( 8,567

)

 

$

99,921

 

 

$

49,624

 

 
The following table summarizes the composition of available-for-sale marketable securities at December 31, 2024:
 

 

 

December 31, 2024

 

 

 

Available-for-Sale

 

 

 

Cost

 

 

Unrealized
Gain

 

 

Unrealized
(Loss)

 

 

Fair
Market
Value

 

 

Fair Market
Value of
Investments
with Unrealized
Losses

 

 

 

(in thousands)

 

U.S. Treasury securities

 

$

49,879

 

 

$

14

 

 

$

( 4,951

)

 

$

44,942

 

 

$

30,530

 

Corporate debt securities

 

 

40,395

 

 

 

79

 

 

 

( 4,778

)

 

 

35,696

 

 

 

27,824

 

Certificates of deposit and time deposits

 

 

21,689

 

 

 

—

 

 

 

—

 

 

 

21,689

 

 

 

—

 

Debt mutual funds

 

 

9,299

 

 

 

—

 

 

 

( 348

)

 

 

8,951

 

 

 

3,238

 

U.S. government agency securities

 

 

3,966

 

 

 

5

 

 

 

( 1

)

 

 

3,970

 

 

 

1,946

 

Non-U.S. government securities

 

 

773

 

 

 

—

 

 

 

—

 

 

 

773

 

 

 

—

 

 

$

126,001

 

 

$

98

 

 

$

( 10,078

)

 

$

116,021

 

 

$

63,538

 

 
Reported as follows:
 

 

 

Cost

 

 

Unrealized
Gain

 

 

Unrealized
(Loss)

 

 

Fair
Market
Value

 

 

Fair Market
Value of
Investments
with Unrealized
Losses

 

 

 

(in thousands)

 

Marketable securities

 

$

46,349

 

 

$

16

 

 

$

( 53

)

 

$

46,312

 

 

$

10,454

 

Long-term marketable securities

 

 

79,652

 

 

 

82

 

 

 

( 10,025

)

 

 

69,709

 

 

 

53,084

 

 

$

126,001

 

 

$

98

 

 

$

( 10,078

)

 

$

116,021

 

 

$

63,538

 

 

14

 
As of September 28, 2025, the fair market value of investments with unrealized losses less than one year and greater than one year totaled $ 11.8 million and $ 37.8 million, respectively. As of December 31, 2024, the fair market value of investments with unrealized losses for less than one year and greater than one year totaled $ 22.6 million and $ 40.9 million, respectively.
Teradyne reviews its investments to identify and evaluate investments that have an indication of possible impairment. Based on this review, Teradyne determined that the unrealized losses related to these investments at September 28, 2025, and December 31, 2024, were not other than temporary.
The contractual maturities of investments in available-for-sale securities held at September 28, 2025, were as follows:
 

 

 

September 28, 2025

 

 

 

Cost

 

 

Fair Market
Value

 

 

 

(in thousands)

 

Due within one year

 

$

25,012

 

 

$

25,017

 

Due after 1 year through 5 years

 

 

24,346

 

 

 

24,202

 

Due after 5 years through 10 years

 

 

8,575

 

 

 

8,683

 

Due after 10 years

 

 

35,267

 

 

 

27,253

 

Total

 

$

93,200

 

 

$

85,155

 

 
Contractual maturities of investments in available-for-sale securities held at September 28, 2025, exclude debt mutual funds with a fair market value of $ 14.8 million as they do not have a contractual maturity date.
Derivatives
Teradyne conducts business in various foreign countries, with certain transactions denominated in local currencies. As a result, Teradyne is exposed to risks relating to changes in foreign currency exchange rates. Teradyne’s foreign currency risk management objective is to minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities denominated in foreign currencies, and changes in its cash inflows attributable to the forecasted cash flows from certain foreign currency denominated revenues.
To minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities denominated in foreign currencies, Teradyne enters into foreign currency forward contracts. The change in fair value of these derivatives is recorded directly in earnings and is used to offset the change in value of monetary assets and liabilities denominated in foreign currencies.
Teradyne also enters into foreign currency forward and option contracts designated as cash flow hedges to hedge the risk of changes in its cash inflows attributable to changes in foreign currency exchange rates. The cash flow hedges have maturities of less than six months and mature in the period of revenue recognition for certain products and services in backlog and forecasted to be recognized in a future period. Teradyne evaluates cash flow hedges for effectiveness at inception based on the critical terms match method. The hedges are not expected to incur any ineffectiveness however a quarterly qualitative assessment of effectiveness is done to determine if the critical terms match method remains appropriate to use. The change in fair value of the contracts is recorded in accumulated other comprehensive income (loss) and reclassified to earnings at maturity date.
Teradyne does not use derivative financial instruments for speculative purposes.

15

At September 28, 2025, and December 31, 2024, Teradyne had the following contracts to buy and sell non-U.S. currencies for U.S. dollars and other non-U.S. currencies with the following notional amounts:
 

 

 

Gross Notional Value

 

 

 

September 28,
2025

 

 

December 31,
2024

 

 

 

(in millions)

 

Currency Hedged (Buy/Sell)

 

 

 

 

 

 

U.S. dollar/Taiwan dollar

 

 

24.9

 

 

 

14.5

 

U.S. dollar/Japanese yen

 

 

8.7

 

 

 

12.6

 

U.S. dollar/Danish krone

 

 

7.0

 

 

 

—

 

U.S. dollar/Korean won

 

 

4.0

 

 

 

4.2

 

U.S. dollar/British pound sterling

 

 

1.8

 

 

 

1.2

 

Singapore dollar/U.S. dollar

 

 

48.1

 

 

 

28.9

 

Euro/U.S. dollar

 

 

16.9

 

 

 

22.3

 

Danish krone/Chinese yuan

 

 

10.3

 

 

 

10.5

 

Philippine peso/U.S. dollar

 

 

1.8

 

 

 

9.4

 

Chinese yuan/U.S. dollar

 

 

0.9

 

 

 

1.6

 

Danish krone/U.S. dollar

 

 

0.8

 

 

 

16.9

 

Total

 

$

125.2

 

 

$

122.1

 

 
The fair value of the outstanding contracts was a net loss of $ 0.8 million and a net loss of $ 0.6 million at September 28, 2025, and December 31, 2024, respectively.
Unrealized gains and losses on foreign currency forward contracts and foreign currency remeasurement gains and losses on monetary assets and liabilities are included in 'Other (income) expense, net' in the condensed consolidated statement of operations.
At September 28, 2025, and December 31, 2024, Teradyne had the following cash flow hedge contracts to buy and sell non-U.S. currencies for U.S. dollars with the following notional amounts:
 

 

 

Gross Notional Value

 

 

 

September 28,
2025

 

 

December 31,
2024

 

 

 

(in millions)

 

Currency Hedged (Buy/Sell)

 

 

 

 

 

 

U.S. dollar/Japanese yen

 

$

—

 

 

$

15.6

 

Total

 

$

—

 

 

$

15.6

 

 
The fair value of the outstanding cash flow hedge contracts was a gain of $ 0.9 million at December 31, 2024.
Unrealized gains and losses on foreign currency cash flow hedge contracts are included in accumulated other comprehensive income (loss). At maturity, the gains or losses associated with cash flow hedge contracts are recorded to revenue.
On November 7, 2023, in connection with Teradyne's agreement to acquire a 10 % investment in Technoprobe, Teradyne purchased a call option to buy 481.0 million Euros. The expiration date of the option was April 26, 2024 . On April 12, 2024, Teradyne entered into a forward to buy 481.0 million Euros which expired on May 23, 2024 . For the nine months ended September 29, 2024 , a realized loss of $ 9.8 million was recorded in 'Other (income) expense, net' in the condensed consolidated statement of operations.

16

The following table summarizes the fair value of derivative instruments as of September 28, 2025, and December 31, 2024:
 

 

 

Balance Sheet Location

 

September 28,
2025

 

 

December 31,
2024

 

 

 

 

 

(in thousands)

 

Derivatives not designated as hedging instruments:

 

Foreign exchange forward contracts

 

Other current assets

 

 

310

 

 

 

725

 

Foreign exchange forward contracts

 

Other current liabilities

 

 

( 1,129

)

 

 

( 1,324

)

Derivatives designated as hedging instruments:

 

Foreign exchange forward contracts

 

Other current assets

 

 

—

 

 

 

940

 

Total derivatives

 

 

 

$

( 819

)

 

$

341

 

 
The following table summarizes the effect of derivative instruments recognized in the statement of operations for the three and nine months ended September 28, 2025, and September 29, 2024:
 

 

 

 

 

For the Three Months
 Ended

 

 

For the Nine Months
 Ended

 

 

 

Location of (Gains) Losses
Recognized in Statement
of Operations

 

September 28,
2025

 

 

September 29,
2024

 

 

September 28,
2025

 

 

September 29,
2024

 

 

 

 

 

(in thousands)

 

 

(in thousands)

 

Derivatives not designated as hedging instruments:

 

Foreign exchange forward contracts (1)

 

Other (income) expense, net

 

$

218

 

 

$

4,829

 

 

$

174

 

 

$

686

 

Foreign exchange option contracts

 

Other (income) expense, net

 

 

—

 

 

 

—

 

 

 

—

 

 

 

9,764

 

Derivatives designated as hedging instruments:

 

 

 

 

 

 

 

Foreign exchange forward and option contracts

 

Revenue

 

 

—

 

 

 

—

 

 

 

( 449

)

 

 

( 2,280

)

Total Derivatives

 

 

 

$

218

 

 

$

4,829

 

 

$

( 275

)

 

$

8,170

 

 
(1) The table does not reflect the corresponding gains and losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies. For the three and nine months ended September 28, 2025, net losses from remeasurement of monetary assets and liabilities denominated in foreign currencies were $ 2.8 million and $ 6.2 million, respectively. For the three and nine months ended September 29, 2024, net losses (gains) from remeasurement of monetary assets and liabilities denominated in foreign currencies were $ ( 2.9 ) million and $ 3.1 million, respectively.

See Note J: “Debt” regarding derivatives related to the convertible senior notes.

J. DEBT
Convertible Senior Notes
On December 12, 2016, Teradyne completed a private offering of $ 460.0 million aggregate principal amount of 1.25 % convertible senior unsecured notes (the “Notes”). The Notes matured on December 15, 2023.
Concurrent with the offering of the Notes, Teradyne entered into convertible note hedge transactions (the “Note Hedge Transactions”) with the initial purchasers or their affiliates (the “Option Counterparties”). The Note Hedge Transactions covered, subject to customary anti-dilution adjustments, the number of shares of the common stock that underlie the Notes. Separately and concurrent with the pricing of the Notes, Teradyne entered into warrant transactions with the Option Counterparties (the “Warrant Transactions”) in which it sold net-share-settled (or, at its election subject to certain conditions, cash-settled) warrants to the Option Counterparties. The Warrant Transactions, which began expiring on March 18, 2024 , and continued to expire through July 10, 2024 , covered, subject to customary anti-dilution adjustments, ap proximately 1.3 million shares of common stock. During the three and nine months ended September 29, 2024, 1.3 million and 14.7 million warrants expired, resulting in the issuance of 1.2 million and 10.0 million shares of Teradyne common stock, respectively.
Revolving Credit Facility
On May 1, 2020, Teradyne entered into a credit agreement (the “Credit Agreement”) with Truist Bank, as administrative agent and collateral agent, and the lenders party thereto. The Credit Agreement provided for a three-year , senior secured revolving credit facility of $ 400.0 million (the “Credit Facility”).

17

On December 10, 2021, the Credit Agreement was amended to extend the maturity date of the Credit Facility to December 10, 2026. On October 5, 2022, the Credit Agreement was amended to increase the amount of the Credit Facility to $ 750.0 million from $ 400.0 million. On November 7, 2023, the Credit Agreement was amended to allow for the purchase of the shares of Technoprobe.
The Credit Agreement provides that, subject to customary conditions, Teradyne may seek to obtain from existing or new lenders the available incremental amount under the Credit Facility, not to exceed the greater of $ 200.0 million or 15 % of consolidated EBIDTA. The interest rate applicable to loans under the Credit Facility are, at Teradyne’s option, equal to either a base rate plus a margin ranging from 0.00 % to 0.75 % per annum or SOFR plus a margin ranging from 1.10 % to 1.85 % per annum, based on the consolidated leverage ratio of Teradyne. In addition, Teradyne will pay a commitment fee on the unused portion of the commitments under the Credit Facility ranging from 0.15 % to 0.25 % per annum, based on the then applicable consolidated leverage ratio.
Teradyne is not required to repay any loans under the Credit Facility prior to maturity, subject to certain customary exceptions. Teradyne is permitted to prepay all or any portion of the loans under the Credit Facility prior to maturity without premium or penalty, other than customary SOFR breakage costs.
The Credit Agreement contains customary events of default, representations, warranties and affirmative and negative covenants that, among other things, limit Teradyne’s ability to sell assets, grant liens on assets, incur other secured indebtedness and make certain investments and restricted payments, all subject to exceptions set forth in the Credit Agreement. The Credit Agreement also requires Teradyne to satisfy two financial ratios measured as of the end of each fiscal quarter: a consolidated leverage ratio and an interest coverage ratio.
The Credit Facility is guaranteed by certain of Teradyne’s domestic subsidiaries and collateralized by assets of Teradyne and such subsidiaries, including a pledge of 65 % of the capital stock of certain foreign subsidiaries.
On May 16, 2024, Teradyne borrowed $ 185.0 million under the Credit Agreement to support the acquisition of 10 % of the issued and outstanding shares of Technoprobe. Teradyne fully repaid its borrowings on the revolving credit facility during the second quarter of 2024.
On September 4, 2025, and September 19, 2025, Teradyne borrowed a combined $ 200.0 million under the Credit Agreement to support the upcoming ramp for Semiconductor Test and the strategy to return cash to shareholders through share repurchases, dividends, and inorganic growth opportunities. The average interest rate on the borrowings is 5.29 %. As of September 28, 2025, Teradyne has not paid any interest on its outstanding balance from the Credit Facility.
The company accounts for this arrangement under ASC 470 Debt. All borrowings are recorded as short-term or long-term debt in the condensed consolidated balance sheet in accordance with Teradyne's ability and intent to repay the debt, as well as the contractual due date. When amounts are drawn on the revolver, interest is accrued and recognized within other accrued liabilities in the condensed consolidated balance sheet and expensed within Other (income) expense, net within the condensed consolidated statement of operations.
As of October 30, 2025, Teradyne has $ 250.0 million outstanding from the Credit Facility, and Teradyne was in compliance with all covenants under the Credit Agreement.

K. PREPAYMENTS
Prepayments consist of the following:
 

 

 

September 28,
2025

 

 

December 31,
2024

 

 

 

(in thousands)

 

Contract manufacturer and supplier prepayments

 

$

404,485

 

 

$

365,875

 

Prepaid maintenance and other services

 

 

18,324

 

 

 

22,176

 

Prepaid taxes

 

 

14,595

 

 

 

22,211

 

Other prepayments

 

 

31,836

 

 

 

18,824

 

Total prepayments

 

$

469,240

 

 

$

429,086

 

 

18

L. PRODUCT WARRANTY
Teradyne generally provides a one-year warranty on its products, commencing upon installation, acceptance or shipment. A provision is recorded upon revenue recognition to cost of revenues for estimated warranty expense based on historical experience. Related costs are charged to the warranty accrual as incurred. The balance below is included in other accrued liabilities.
 

 

 

For the Three Months
 Ended

 

 

For the Nine Months
 Ended

 

 

 

September 28,
2025

 

 

September 29,
2024

 

 

September 28,
2025

 

 

September 29,
2024

 

 

 

(in thousands)

 

 

(in thousands)

 

Balance at beginning of period

 

$

12,238

 

 

$

15,244

 

 

$

12,962

 

 

$

15,698

 

Accruals for warranties issued during the period

 

 

5,038

 

 

 

2,149

 

 

 

15,194

 

 

 

8,331

 

Accruals related to pre-existing warranties

 

 

( 255

)

 

 

( 545

)

 

 

( 1,177

)

 

 

( 1,513

)

Settlements made during the period

 

 

( 3,881

)

 

 

( 2,990

)

 

 

( 13,839

)

 

 

( 8,658

)

Balance at end of period

 

$

13,140

 

 

$

13,858

 

 

$

13,140

 

 

$

13,858

 

 
When Teradyne receives revenue for extended warranties, beyond one year, it is deferred and recognized on a straight-line basis over the contract period. Related costs are expensed as incurred. The balance below is included in short and long-term deferred revenue and customer advances.
 

 

 

For the Three Months
 Ended

 

 

For the Nine Months
 Ended

 

 

 

September 28,
2025

 

 

September 29,
2024

 

 

September 28,
2025

 

 

September 29,
2024

 

 

 

(in thousands)

 

 

(in thousands)

 

Balance at beginning of period

 

$

46,751

 

 

$

33,512

 

 

$

41,624

 

 

$

34,897

 

Deferral of new extended warranty revenue

 

 

10,573

 

 

 

9,714

 

 

 

28,216

 

 

 

22,316

 

Recognition of extended warranty deferred revenue

 

 

( 6,309

)

 

 

( 4,297

)

 

 

( 18,825

)

 

 

( 18,284

)

Balance at end of period

 

$

51,015

 

 

$

38,929

 

 

$

51,015

 

 

$

38,929

 

 
M. STOCK-BASED COMPENSATION
Under Teradyne’s stock compensation plans, Teradyne grants time-based restricted stock units, performance-based restricted stock units and stock options, and employees are eligible to purchase Teradyne’s common stock through its Employee Stock Purchase Plan (“ESPP”).
Service-based restricted stock unit awards granted to employees vest in equal annual installments over four years . Restricted stock unit awards granted to non-employee directors vest after a one-year period, with 100 % of the award vesting on the earlier of (a) the first anniversary of the grant date or (b) the date of the following year’s Annual Meeting of Shareholders. Teradyne expenses the cost of the restricted stock unit awards subject to time-based vesting, which is determined to be the fair market value of the shares at the date of grant, ratably over the period during which the restrictions lapse.
Performance-based restricted stock units (“PRSUs”) granted to Teradyne’s executive officers may have a performance metric based on relative total shareholder return (“TSR”). Teradyne’s three-year TSR performance is measured against the New York Stock Exchange (“NYSE”) Composite Index. The final number of TSR PRSUs that vest will vary based upon the level of performance achieved from 0 % to 200 % of the target shares. The TSR PRSUs will vest upon the three-year anniversary of the grant date. The TSR PRSUs are valued using a Monte Carlo simulation model. The number of units expected to be earned, based upon the achievement of the TSR market condition, is factored into the grant date Monte Carlo valuation. Compensation expense is recognized on a straight-line basis over the shorter of the three-year service period or the period from the grant to the date described in the retirement provisions below.
PRSUs granted to Teradyne’s executive officers may also have a performance metric based on three-year cumulative non-GAAP profit before interest and tax (“PBIT”) as a percent of Teradyne’s revenue. Non-GAAP PBIT is a financial measure equal to GAAP income from operations less restructuring and other, net; amortization of acquired intangible assets; acquisition and divestiture related charges or credits; pension actuarial gains and losses; non-cash convertible debt interest expense; and other non-recurring gains and charges such as ERP implementation related costs and equity modification charges. The final number of PBIT PRSUs that vest will vary based upon the level of performance achieved from 0 % to 200 % of the target shares. The PBIT PRSUs will vest upon the three-year anniversary of the grant date. Compensation expense is recognized on a straight-line basis over the shorter of the three-year

19

service period or the period from the grant date to the date described in the retirement provisions below. Compensation expense for executive officers meeting the retirement provisions prior to the grant date is recognized during the year following the grant. Compensation expense is recognized based on the number of units that are earned based upon the three-year Teradyne PBIT as a percent of Teradyne’s revenue, provided the executive officer remains an employee at the end of the three-year period subject to the retirement and termination eligibility provisions noted below.
If a PRSU recipient’s employment ends prior to the determination of the performance percentage due to (1) permanent disability or death or (2) retirement or termination other than for cause, after attaining both at least age 60 and at least 10 years of service, then all or a portion of the recipient’s PRSUs (based on the actual performance percentage achieved on the determination date) will vest on the date the performance percentage is determined. Except as set forth in the preceding sentence, no PRSUs will vest if the executive officer is no longer an employee at the end of the three-year period. Stock options to purchase Teradyne’s common stock at 100 % of the fair market value on the grant date vest in equal annual installments over four years from the grant date and have a maximum term of seven years .
On January 22, 2024, the Board enacted the Executive Retirement Policy for Restricted Stock Unit and Option Vesting (the "Retirement Policy"). Under the Retirem ent Policy, an executive officer that is over the age of 65 and has 10 or more years of service as of the effective date of his or her retirement will be eligible for continued vesting of his or her unvested time-based restricted stock units and stock options granted prior to his or her retirement date.
During the nine months ended September 28, 2025, and September 29, 2024, Teradyne granted 0.6 million and 0.6 million of service-based restricted stock unit awards to employees at a weighted average grant date fair value of $ 111.72 and $ 95.98 , respectively, and less than 0.1 million and 0.1 million of service-based restricted stock unit awards to non-employee directors at a weighted average grant date fair value of $ 79.78 and $ 120.38 , respectively.
During the nine months ended September 28, 2025, and September 29, 2024, Teradyne granted 0.1 million and 0.1 million of PBIT PRSUs with a weighted average grant date fair value of $ 106.44 and $ 94.51 , respectively.
During the nine months ended September 28, 2025, and September 29, 2024, Teradyne granted 0.1 million and 0.1 million of TSR PRSUs, with a weighted average grant date fair value of $ 107.44 and $ 102.51 , respectively. The grant date fair value was estimated using the Monte Carlo simulation model with the following assumptions:
 

 

 

For the Nine Months
 Ended

 

 

 

September 28,
2025

 

 

September 29,
2024

 

Risk-free interest rate

 

 

4.1

%

 

 

3.9

%

Teradyne volatility-historical

 

 

41.8

%

 

 

42.4

%

NYSE Composite Index volatility-historical

 

 

14.6

%

 

 

15.6

%

Dividend yield

 

 

0.4

%

 

 

0.5

%

 
Expected volatility was based on the historical volatility of Teradyne’s stock and the NYSE Composite Index over the most recent three-year period. The risk-free interest rate was determined using the U.S. Treasury yield curve in effect at the time of the applicable grant. Dividend yield was based upon an estimated annual dividend amount of $ 0.48 per share divided by Teradyne’s stock price on the grant dates, which have a weighted average grant date stock price of $ 108.67 for the 2025 grants, and an estimated annual dividend amount of $ 0.48 per share divided by Teradyne’s stock price on the grant date of $ 95.83 for the 2024 grant.
During the nine months ended September 28, 2025, and September 29, 2024, Teradyne granted 0.1 million and 0.1 million of service-based stock options to executive officers at a weighted average grant date fair value of $ 41.93 and $ 37.50 , respectively.
The fair value of stock options was estimated using the Black-Scholes option-pricing model with the following assumptions:
 

 

 

For the Nine Months
 Ended

 

 

 

September 28,
2025

 

 

September 29,
2024

 

Expected life (years)

 

 

4.0

 

 

 

4.0

 

Risk-free interest rate

 

 

4.2

%

 

 

4.0

%

Volatility-historical

 

 

43.9

%

 

 

46.3

%

Dividend yield

 

 

0.4

%

 

 

0.5

%

 

20

 
Teradyne determined the stock options’ expected life based upon historical exercise data for executive officers, the age of the executive officers and the terms of the stock option grant. Volatility was determined using historical volatility for a period equal to the expected life. The risk-free interest rate was determined using the U.S. Treasury yield curve in effect at the time of grant. Dividend yield was based upon an estimated annual dividend amount of $ 0.48 per share divided by Teradyne’s stock price on the grant date, which have a weighted average grant date stock price of $ 109.29 for the 2025 grant and an estimated annual dividend amount of $ 0.48 per share divided by Teradyne’s stock price on the grant date of $ 95.14 for the 2024 grant.

N. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Changes in accumulated other comprehensive income (loss), which are presented net of tax, consist of the following:
 

 

 

Foreign
Currency
Translation
Adjustment

 

 

Unrealized
(Losses) Gains on
Marketable
Securities

 

 

Unrealized (Losses) Gains on Cash Flow Hedges

 

 

Retirement
Plans Prior
Service
Credit

 

 

Total

 

 

 

(in thousands)

 

Nine Months Ended September 28, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2024, net of tax of $ 0 , $( 2,174 ),
   $ 209 , $( 1,134 ), respectively

 

$

( 75,289

)

 

$

( 7,807

)

 

$

731

 

 

$

1,145

 

 

$

( 81,220

)

Other comprehensive (loss) gain before reclassifications,
   net of tax of $ 0 , $ 316 , $( 109 ), $ 0 , respectively

 

 

117,966

 

 

 

1,324

 

 

 

( 381

)

 

 

—

 

 

 

118,909

 

Amounts reclassified from accumulated other comprehensive
   income (loss), net of tax of $ 0 , $ 27 , $( 100 ), $( 1 ), respectively

 

 

—

 

 

 

89

 

 

 

( 350

)

 

 

( 6

)

 

 

( 267

)

Net current period other comprehensive loss, net of tax
   of $ 0 , $ 343 , $( 209 ), $( 1 ), respectively

 

 

117,966

 

 

 

1,413

 

 

 

( 731

)

 

 

( 6

)

 

 

118,642

 

Balance at September 28, 2025, net of tax of $ 0 , $( 1,831 ),
   $ 0 , $( 1,135 ), respectively

 

$

42,677

 

 

$

( 6,394

)

 

$

—

 

 

$

1,139

 

 

$

37,422

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 29, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2023, net of tax of $ 0 , $( 1,728 ),
   $ 142 , $( 1132 ), respectively

 

$

( 22,442

)

 

$

( 6,194

)

 

$

506

 

 

$

1,152

 

 

$

( 26,978

)

Other comprehensive (loss) gain before reclassifications,
   net of tax of $ 0 , $ 205 , $ 285 , $ 0 , respectively

 

 

22,751

 

 

 

885

 

 

 

1,014

 

 

 

—

 

 

 

24,650

 

Amounts reclassified from accumulated other comprehensive
   income (loss), net of tax of $ 0 , $ 24 , $( 500 ), $( 1 ), respectively

 

 

—

 

 

 

86

 

 

 

( 1,780

)

 

 

( 6

)

 

 

( 1,700

)

Net current period other comprehensive loss, net of tax
   of $ 0 , $ 229 , $( 215 ), $( 1 ), respectively

 

 

22,751

 

 

 

971

 

 

 

( 766

)

 

 

( 6

)

 

 

22,950

 

Balance at September 29, 2024, net of tax of $ 0 , $( 1,499 ),
   $( 73 ), $( 1,133 ), respectively

 

$

309

 

 

$

( 5,223

)

 

$

( 260

)

 

$

1,146

 

 

$

( 4,028

)

 
Reclassifications out of accumulated other comprehensive income (loss) to the statement of operations for the three and nine months ended September 28, 2025, and September 29, 2024, were as follows:
 

Details about Accumulated Other Comprehensive Income (Loss) Components

 

For the Three Months
 Ended

 

 

For the Nine Months
 Ended

 

 

Affected Line Item
in the Statements
of Operations

 

 

September 28,
2025

 

 

September 29,
2024

 

 

September 28,
2025

 

 

September 29,
2024

 

 

 

 

 

(in thousands)

 

 

(in thousands)

 

 

 

Available-for-sale marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (losses) gains, net of tax of $ 0 , 2 , $( 27 ), $( 24 ), respectively

 

$

—

 

 

$

7

 

 

$

( 89

)

 

$

( 86

)

 

Other (income) expense, net

Cash flow hedges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (losses) gains, net of tax of $ 0 , $ 0 , $ 100 , $ 500 , respectively

 

 

—

 

 

 

—

 

 

 

350

 

 

 

1,780

 

 

Revenue

Defined benefit pension and postretirement plans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of prior service credit, net of tax of $ 0 , $ 0 , $ 1 , $ 1 , respectively

 

 

2

 

 

 

2

 

 

 

6

 

 

 

6

 

 

(a)

Total reclassifications, net of tax of $ 0 , $ 2 , $ 74 , $ 477 , respectively

 

$

2

 

 

$

9

 

 

$

267

 

 

$

1,700

 

 

Net income

(a) The amortization of prior service credit is included in the computation of net periodic postretirement benefit cost. See Note R: “Retirement Plans.”

21

O. GOODWILL AND ACQUIRED INTANGIBLE ASSETS
Goodwill
Goodwill is considered impaired when the carrying value of a reporting unit exceeds its estimated fair value. Teradyne performs its annual goodwill impairment test as required under the provisions of Accounting Standards Codification ("ASC") 350-10, “Intangibles—Goodwill and Other” on December 31 of each fiscal year unless there are negative qualitative factors relating to macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, and other relevant events and changes during an interim period. The presence of such factors could, under certain circumstances, be a triggering event that causes us to perform a goodwill impairment test.
At June 29, 2025, the Company identified a triggering event for the Robotics reporting unit and performed an interim impairment test of the related goodwill and long-lived assets, including intangible assets. Based on the analysis performed, Teradyne did not record an impairment.
At September 28, 2025, Teradyne assessed the above factors for all reporting units, including the Robotics reporting unit, and performed a triggering event assessment, concluding that no events or circumstances occurred that indicated it was more likely than not that the fair value was below its carrying amount. Accordingly, the Company did not identify a triggering event and no quantitative impairment test of goodwill was required.
The changes in the carrying amount of goodwill by reportable segments for the nine months ended September 28, 2025, were as follows:
 

 

 

Robotics

 

 

Semiconductor
Test

 

 

Product
Test

 

 

Total

 

 

 

(in thousands)

 

Balance at December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

$

375,298

 

 

$

262,117

 

 

$

520,518

 

 

$

1,157,933

 

Accumulated impairment losses

 

 

—

 

 

 

( 260,540

)

 

 

( 502,026

)

 

 

( 762,566

)

Total Goodwill

 

 

375,298

 

 

 

1,577

 

 

 

18,492

 

 

 

395,367

 

AET acquisition

 

 

—

 

 

 

1,257

 

 

 

—

 

 

 

1,257

 

Quantifi acquisition

 

 

—

 

 

 

—

 

 

 

83,068

 

 

 

83,068

 

Foreign currency translation adjustment

 

 

39,648

 

 

 

210

 

 

 

—

 

 

 

39,858

 

Balance at September 28, 2025

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

$

414,946

 

 

$

263,584

 

 

$

603,586

 

 

$

1,282,116

 

Accumulated impairment losses

 

 

—

 

 

 

( 260,540

)

 

 

( 502,026

)

 

 

( 762,566

)

Total Goodwill

 

$

414,946

 

 

$

3,044

 

 

$

101,560

 

 

$

519,550

 

 
Intangible Assets
Teradyne reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate.
Amortizable intangible assets consist of the following and are included in intangible assets, net on the balance sheet:
 

 

 

Gross
Carrying
Amount (1)

 

 

Accumulated
Amortization (1)

 

 

Foreign
Currency
Translation
Adjustment

 

 

Net
Carrying
Amount

 

 

 

(in thousands)

 

Balance at September 28, 2025

 

 

 

 

 

 

 

 

 

 

 

 

Developed technology

 

$

250,025

 

 

$

( 208,314

)

 

$

60

 

 

$

41,771

 

Customer relationships

 

 

56,480

 

 

 

( 51,335

)

 

 

204

 

 

 

5,349

 

Tradenames and trademarks

 

 

40,487

 

 

 

( 31,853

)

 

 

( 1,046

)

 

 

7,588

 

Total intangible assets

 

$

346,992

 

 

$

( 291,502

)

 

$

( 782

)

 

$

54,708

 

Balance at December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

Developed technology

 

$

267,706

 

 

$

( 255,448

)

 

$

( 5,820

)

 

$

6,438

 

Customer relationships

 

 

52,109

 

 

 

( 49,562

)

 

 

204

 

 

 

2,751

 

Tradenames and trademarks

 

 

59,007

 

 

 

( 50,805

)

 

 

( 1,464

)

 

 

6,738

 

Total intangible assets

 

$

378,822

 

 

$

( 355,815

)

 

$

( 7,080

)

 

$

15,927

 

 

22

 
(1) In the nine months ended September 2 8, 2025 , $ 81.8 million of a mortizable intangible assets became fully amortized and have been eliminated from the gross carrying amount and accumulated amortization.

Aggregate intangible asset amortization expense was $ 3.5 million and $ 11.8 million , respectively, for the three and nine months ended September 28, 2025, and $ 4.7 million and $ 14.1 million , respectively, for the three and nine months ended September 29, 2024.
Estimated intangible asset amortization expense for each of the five succeeding fiscal years and thereafter is as follows:
 

Year

 

Amortization
Expense

 

 

 

(in thousands)

 

2025

 

$

3,409

 

2026

 

 

8,215

 

2027

 

 

6,999

 

2028

 

 

6,918

 

2029

 

 

5,557

 

Thereafter

 

 

23,610

 

 
P. NET INCOME PER COMMON SHARE
The following table sets forth the computation of basic and diluted net income per common share:
 

 

 

For the Three Months
 Ended

 

 

For the Nine Months
 Ended

 

 

 

September 28,
2025

 

 

September 29,
2024

 

 

September 28,
2025

 

 

September 29,
2024

 

 

 

(in thousands, except per share amounts)

 

 

(in thousands, except per share amounts)

 

Net income for basic and diluted net income per share

 

$

119,558

 

 

$

145,649

 

 

$

296,827

 

 

$

396,119

 

Weighted average common shares-basic

 

 

158,595

 

 

 

163,002

 

 

 

160,021

 

 

 

157,951

 

Effect of dilutive potential common shares:

 

 

 

 

 

 

 

 

 

 

 

 

Restricted stock units

 

 

495

 

 

 

768

 

 

 

366

 

 

 

637

 

Stock options

 

 

4

 

 

 

13

 

 

 

3

 

 

 

13

 

Employee stock purchase plan

 

 

3

 

 

 

10

 

 

 

19

 

 

 

5

 

Convertible note hedge warrant shares (1)

 

 

—

 

 

 

460

 

 

 

—

 

 

 

4,751

 

Dilutive potential common shares

 

 

502

 

 

 

1,251

 

 

 

388

 

 

 

5,406

 

Weighted average common shares-diluted

 

 

159,097

 

 

 

164,253

 

 

 

160,409

 

 

 

163,357

 

Net income per common share-basic

 

$

0.75

 

 

$

0.89

 

 

$

1.85

 

 

$

2.51

 

Net income per common share-diluted

 

$

0.75

 

 

$

0.89

 

 

$

1.85

 

 

$

2.42

 

(1) Convertible notes hedge warrant shares were calculated using the difference between the average Teradyne stock price for the period and the warrant price, multiplied by the number of warrant shares. The result of this calculation, representing the total intrinsic value of the warrant, was divided by the average Teradyne stock price for the period.

The computation of diluted net income per common share for the three and nine months ended September 28, 2025, excludes the effect of the potential vesting of 0.2 million and 0.7 million, respectively, of restricted stock units because the effect would have been anti-dilutive.
The computation of diluted net income per common share for the three and nine months ended September 29, 2024, excludes the effect of the potential vesting of 0.1 million and 0.5 million, respectively, of restricted stock units because the effect would have been anti-dilutive.

Q. RESTRUCTURING AND OTHER
During the three months ended September 28, 2025, Teradyne recorded $ 4.8 million of severance charges, $ 3.6 million of which is related to headcount reductions in Robotics . During the three months ended September 28, 2025 , Teradyne made $ 1.1 million

23

of Robotics severance payments. Teradyne expects all Robotics severance payments to be made prior to the end of the third quarter of 2026.
During the three months ended September 29, 2024 , Teradyne recorded restructuring and other charges primarily related to $ 1.3 million of severance charges related to headcount reductions principally in Robotics.
During the nine months ended September 28, 2025, Teradyne recorded $ 18.5 million of severance charges, $ 13.5 million of which is related to the Robotics restructuring which impacted approximately 150 employees, $ 2.2 million of which is related to Product Test and $ 1.4 million of which is related to Semiconductor Test . During the nine months ended September 28, 2025, Teradyne made $ 9.2 million of Robotics severance payments. Teradyne expects all Robotics severance payments to be made prior to the end of the third quarter of 2026. Additionally, Teradyne recorded $ 2.0 million of acquisition and divestiture expenses related primarily to the Quantifi Acquisition and $ 1.5 million of charges related to lease terminations .
During the nine months ended September 29, 2024, Teradyne recorded restructuring and other charges primarily related to $ 5.3 million of severance and other charges, related to headcount reductions of 87 people primarily in Robotics and Semiconductor Test, which included charges related to a voluntary early retirement program for employees meeting certain conditions, and $ 2.2 million of acquisition and divestiture expenses related to the Technoprobe transactions.

R. RETIREMENT PLANS
ASC 715, “Compensation—Retirement Benefits,” requires an employer with defined benefit plans or other postretirement benefit plans to recognize an asset or a liability on its balance sheet for the overfunded or underfunded status of the plans as defined by ASC 715. The pension asset or liability represents a difference between the fair value of the pension plan’s assets and the projected benefit obligation at December 31. Teradyne uses a December 31 measurement date for all its plans.
Defined Benefit Pension Plans
Teradyne has defined benefit pension plans covering a portion of domestic employees and employees of certain non-U.S. subsidiaries. Benefits under these plans are based on employees’ years of service and compensation. Teradyne’s funding policy is to make contributions to these plans in accordance with local laws and to the extent that such contributions are tax deductible. The assets of the U.S. qualified pension plan consist primarily of fixed income and equity securities. In addition, Teradyne has an unfunded supplemental executive defined benefit plan in the United States to provide retirement benefits in excess of levels allowed by the Employment Retirement Income Security Act (“ERISA”) and the Internal Revenue Code (the “IRC”), as well as unfunded qualified foreign plans.
During the three months ended September 28, 2025, Teradyne recognized a non-cash settlement gain of $ 0.8 million related to lump sum distributions paid to retired or terminated employees. The charge is the result of the aggregate of the cumulative lump sum distributions exceeded the total annual service and interest costs. Due to the remeasurement, the reduction in pension benefit obligation and pension assets was $ 4.7 million.
During the three months ended September 29, 2024 , Teradyne purchased a group annuity contract for its retiree participants in the U.S. qualified pension plan. Under the group annuity, the accrued pension obligation for 132 retiree participants were transferred to an insurance company. The reduction in the pension benefit obligation and pension assets was $ 23.4 million. During the three and nine months ended September 29, 2024, Teradyne recorded settlement expense of $ 0.4 million related to the retiree group annuity transaction.
In the nine months ended September 28, 2025, and September 29, 2024, Teradyne contributed $ 2.4 million and $ 2.3 million, respectively, to the U.S. supplemental executive defined benefit pension plan, and $ 3.6 million and $ 0.8 million, respectively, to certain qualified pension plans for non-U.S. subsidiaries.

24

For the three and nine months ended September 28, 2025, and September 29, 2024, Teradyne’s net periodic pension cost was comprised of the following:
 

 

 

For the Three Months Ended

 

 

 

September 28, 2025

 

 

September 29, 2024

 

 

 

United
States

 

 

Foreign

 

 

United
States

 

 

Foreign

 

 

 

(in thousands)

 

Service cost

 

$

153

 

 

$

149

 

 

$

216

 

 

$

119

 

Interest cost

 

 

1,426

 

 

 

300

 

 

 

1,590

 

 

 

256

 

Expected return on plan assets

 

 

( 989

)

 

 

( 24

)

 

 

( 1,204

)

 

 

( 23

)

Net actuarial loss (gain)

 

 

—

 

 

 

—

 

 

 

( 2,262

)

 

 

—

 

Settlement loss (gain)

 

 

( 800

)

 

 

—

 

 

 

—

 

 

 

—

 

Settlement expense

 

 

—

 

 

 

—

 

 

 

394

 

 

 

—

 

Total net periodic pension cost

 

$

( 210

)

 

$

425

 

 

$

( 1,266

)

 

$

352

 

 

 

 

For the Nine Months Ended

 

 

 

September 28, 2025

 

 

September 29, 2024

 

 

 

United
States

 

 

Foreign

 

 

United
States

 

 

Foreign

 

 

 

(in thousands)

 

Service cost

 

$

462

 

 

$

437

 

 

$

665

 

 

$

360

 

Interest cost

 

 

4,299

 

 

 

892

 

 

 

4,883

 

 

 

766

 

Expected return on plan assets

 

 

( 2,970

)

 

 

( 71

)

 

 

( 3,737

)

 

 

( 58

)

Net actuarial loss (gain)

 

 

41

 

 

 

—

 

 

 

( 2,151

)

 

 

( 242

)

Settlement loss (gain)

 

 

( 800

)

 

 

—

 

 

 

—

 

 

 

—

 

Settlement expense

 

 

—

 

 

 

—

 

 

 

394

 

 

 

( 24

)

Total net periodic pension cost

 

$

1,032

 

 

$

1,258

 

 

$

54

 

 

$

802

 

 
Postretirement Benefit Plan
In addition to receiving pension benefits, Teradyne employees in the United States who meet early retirement eligibility requirements as of their termination dates may participate in Teradyne’s Welfare Plan, which includes medical and dental benefits up to age 65. Death benefits provide a fixed sum to retirees’ survivors and are available to all retirees. Substantially all of Teradyne’s current U.S. employees could become eligible for these benefits and the existing benefit obligation relates primarily to those employees. During the nine months ended September 28, 2025, Teradyne recorded special termination benefit charges associated with a voluntary early retirement program.
For the three and nine months ended September 28, 2025, and September 29, 2024, Teradyne’s net periodic postretirement benefit cost was comprised of the following:
 

 

 

For the Three Months
 Ended

 

 

For the Nine Months
 Ended

 

 

 

September 28,
2025

 

 

September 29,
2024

 

 

September 28,
2025

 

 

September 29,
2024

 

 

 

(in thousands)

 

 

(in thousands)

 

Service cost

 

$

9

 

 

$

9

 

 

$

27

 

 

$

28

 

Interest cost

 

 

76

 

 

 

72

 

 

 

229

 

 

 

217

 

Amortization of prior service credit

 

 

( 2

)

 

 

( 2

)

 

 

( 7

)

 

 

( 7

)

Special termination benefits

 

 

—

 

 

 

—

 

 

 

684

 

 

 

462

 

Net actuarial loss (gain)

 

 

—

 

 

 

—

 

 

 

87

 

 

 

( 94

)

Total net periodic postretirement benefit cost

 

$

83

 

 

$

79

 

 

$

1,020

 

 

$

606

 

 

25

 
S. COMMITMENTS AND CONTINGENCIES
Purchase Commitments
As of September 28, 2025 , Teradyne had entered into purchase commitments for certain components and materials. The purchase commitments covered by the agreements aggregate to approximately $ 730.0 million, of which $ 715.7 million is for less than one year.
Legal Claims
Teradyne is subject to various legal proceedings and claims which have arisen in the ordinary course of business such as, but not limited to, patent, employment, commercial and environmental matters. Teradyne believes that it has meritorious defenses against all pending claims and intends to vigorously contest them. While it is not possible to predict or determine the outcomes of any pending claims or to provide possible ranges of losses that may arise, Teradyne believes the potential losses associated with all of these actions are unlikely to have a material adverse effect on its business, financial position or results of operations.
Guarantees and Indemnification Obligations
Teradyne provides indemnification, to the extent permitted by law, to its officers, directors, employees and agents for liabilities arising from certain events or occurrences, while the officer, director, employee, or agent, is or was serving, at Teradyne’s request in such capacity. Teradyne may enter into indemnification agreements with certain of its officers and directors. With respect to acquisitions, Teradyne provides indemnifications to or assumes indemnification obligations for the current and former directors, officers and employees of the acquired companies in accordance with the acquired companies’ by-laws and charter. As a matter of practice, Teradyne has maintained directors’ and officers’ liability insurance coverage including coverage for directors and officers of acquired companies.
Teradyne enters into agreements in the ordinary course of business with customers, resellers, distributors, integrators and suppliers. Most of these agreements require Teradyne to defend and/or indemnify the other party against intellectual property infringement claims brought by a third party with respect to Teradyne’s products. From time to time, Teradyne also indemnifies customers and business partners for damages, losses and liabilities they may suffer or incur relating to personal injury, personal property damage, product liability, breach of confidentiality obligations and environmental claims relating to the use of Teradyne’s products and services or resulting from the acts or omissions of Teradyne, its employees, authorized agents or subcontractors. On occasion, Teradyne has also provided guarantees to customers regarding the delivery and performance of its products in addition to the warranty described below.
As a matter of ordinary course of business, Teradyne warrants that its products will substantially perform in accordance with its standard published specifications in effect at the time of delivery. Most warranties have a one-year duration commencing from installation. A provision is recorded upon revenue recognition to cost of revenues for estimated warranty expense based upon historical experience. When Teradyne receives revenue for extended warranties beyond the standard duration, the revenue is deferred and recognized on a straight-line basis over the contract period. Related costs are expensed as incurred. As of September 28, 2025, and December 31, 2024, Teradyne had a product warranty accrual of $ 13.1 million and $ 13.0 million, respectively, included in other accrued liabilities and revenue deferrals related to extended warranties of $ 51.0 million and $ 41.6 million, respectively, included in short and long-term deferred revenue and customer advances.
In addition, in the ordinary course of business, Teradyne provides minimum purchase guarantees to certain vendors to ensure continuity of supply against the market demand. Although some of these guarantees provide penalties for cancellations and/or modifications to the purchase commitments as the market demand decreases, most of the guarantees do not. Therefore, as the market demand decreases, Teradyne re-evaluates these guarantees and determines what charges, if any, should be recorded.
With respect to its agreements covering product, business or entity divestitures and acquisitions, Teradyne provides certain representations, warranties and covenants to purchasers and agrees to indemnify and hold such purchasers harmless against breaches of such representations, warranties and covenants. Many of the indemnification claims have a definite expiration date while some remain in force indefinitely. With respect to its acquisitions, Teradyne may, from time to time, assume the liability for certain events or occurrences that took place prior to the date of acquisition.

26

As a matter of ordinary course of business, Teradyne occasionally guarantees certain indebtedness obligations of its subsidiary companies, limited to the borrowings from financial institutions, purchase commitments to certain vendors and lease commitments to landlords.
Based on historical experience and information known as of September 28, 2025, and December 31, 2024 , except for product warranty, Teradyne has not recorded any liabilities for these guarantees and obligations because the amount would be immaterial.

T. INCOME TAXES
The effective tax rate for the three months ended September 28, 2025, and September 29, 2024, was 15.8 % and 7.8 % , respectively. The increase in the effective tax rate from the three months ended September 29, 2024, to the three months ended September 28, 2025, is primarily attributable to decreases in benefits related to reserves for uncertain tax positions, tax credits and the international provision of the U.S. Tax Cuts and Jobs Act of 2017. These were partially offset by an increase in benefit from a projected shift in the geographic distribution of income.
The effective tax rate for the nine months ended September 28, 2025, and September 29, 2024, was 13.8 % and 12.0 % , respectively. The increase in the effective tax rate from the nine months ended September 29, 2024, to the nine months ended September 28, 2025, is primarily attributable to decreases in benefits related to reserves for uncertain tax positions and tax credits partially offset by an increase in benefit from a projected shift in the geographic distribution of income.
On a quarterly basis, Teradyne evaluates the realizability of the deferred tax assets by jurisdiction and assesses the need for a valuation allowance. As of September 28, 2025, Teradyne believes that it will ultimately realize the deferred tax assets recorded on the condensed consolidated balance sheet. However, should Teradyne believe that it is more-likely-than-not that the deferred tax assets would not be realized, the tax provision would increase in the period in which Teradyne determined that the realizability was not likely. Teradyne considers the probability of future taxable income and historical profitability, among other factors, in assessing the realizability of the deferred tax assets.
As of both September 28, 2025, and December 31, 2024, Teradyne had $ 6.8 million of reserves for uncertain tax positions.
As of September 28, 2025, Teradyne estimates that it is reasonably possible that the balance of unrecognized tax benefits may decrease approximately $ 0.7 million in the next twelve months because of a lapse of statutes of limitation. The estimated decrease relates to U.S. federal research and development credits.
Teradyne recognizes interest and penalties related to income tax matters in income tax expense. As of September 28, 2025, and December 31, 2024, $ 0.3 million and $ 0.3 million, respectively, of interest and penalties were accrued for uncertain tax positions. For the nine months ended September 28, 2025, and September 29, 2024, an expense of $ 0.0 million and a benefit of $ 1.0 million, respectively, was recorded for interest and penalties related to income tax items.
Teradyne qualifies for a tax holiday in Singapore by fulfilling the requirements of an agreement with the Singapore Economic Development Board under which certain headcount and spending requirements must be met, which is scheduled to expire on December 31, 2025. The tax savings due to the tax holiday for the nine months ended September 28, 2025, were $ 7.4 million, or $ 0.05 per diluted share. The tax savings due to the tax holiday for the nine months ended September 29, 2024, were $ 10.2 million, or $ 0.06 per diluted share. Teradyne is working with the Singapore Economic Development Board on a new tax holiday with substantially similar terms to the current agreement.
The Organization for Economic Cooperation and Development (the “OECD”) has introduced a framework to implement a global minimum tax of 15 % for certain multinational companies, referred to as Pillar Two. While it is uncertain whether the United States will enact legislation to adopt Pillar Two, certain countries in which Teradyne operates have enacted Pillar Two legislation, and other countries are in the process of introducing draft Pillar Two legislation. Teradyne is closely monitoring these developments and evaluating the potential future impact on its effective tax rate.
On July 4, 2025, H.R. 1, commonly referred to as the "One Big Beautiful Bill Act" (“OBBBA”), was signed into law, enacting significant changes to U.S. corporate tax law. As of September 28, 2025, the condensed consolidated financial statements were not materially impacted by the OBBBA. Teradyne continues to evaluate the provisions of the OBBBA and will incorporate any necessary adjustments as further guidance becomes available.

27

U. SEGMENT INFORMATION
As of December 31, 2024, Teradyne had two reportable segments (Semiconductor Test and Robotics) and four operating segments (Semiconductor Test, System Test, Wireless Test, and Robotics). E ffective March 2025, Teradyne's Chief Operating Decision Maker ("CODM") (Teradyne's Chief Executive Officer ) place d Regan Mills as President, Product Test, which as of that date included Production Board Test, Defense/Aerospace, and Wireless Test. As noted in 'Note D. Acquisitions' and based on the underlying business activities and established reporting structure, upon acquisition, PIC Testing was aggregated into Product Test. As a result, Teradyne has three reportable segments (Semiconductor Test, Robotics, and Product Test). As of September 28, 2025, each of Teradyne's reportable segments represents an individual operating segment. All prior period disclosures have been recast to conform to the current segment structure and presentation requirements.
The Semiconductor Test segment includes operations related to the design, manufacturing and marketing of semiconductor test products and services inclusive of storage and system level test products. The Robotics segment includes operations related to the design, manufacturing and marketing of collaborative robotic arms and autonomous mobile robots. The Product Test segment includes operations related to the design, manufacturing and marketing of products and services for defense/aerospace test, circuit-board test, wireless test systems, and silicon photonics testing. Each reportable segment has a segment manager who is accountable to and maintains regular contact with Teradyne’s CODM to discuss operating activities, financial results, forecasts, and plans for the segment.
The CODM uses business segment income (loss) before income taxes predominantly in the annual budgeting and forecasting process. The CODM also uses this measure when making decisions about the allocation of operating and capital resources to each segment. The accounting policies of the business segments are the same as those described in Teradyne’s Annual Report on Form 10-K in Note B: “Accounting Policies.”

28

Segment information for the three and nine months ended September 28, 2025, and September 29, 2024, is as follows:
 

 

Semiconductor
Test

 

 

Robotics

 

 

Product Test

 

 

Total Reportable Segments

 

 

Corporate
and Eliminations

 

 

Consolidated

 

 

(in thousands)

 

Three months ended September 28, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

605,867

 

 

$

75,087

 

 

$

88,256

 

 

$

769,210

 

 

$

—

 

 

$

769,210

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

248,971

 

 

 

32,974

 

 

 

32,323

 

 

 

314,268

 

 

 

—

 

 

 

314,268

 

Engineering and development

 

85,331

 

 

 

14,395

 

 

 

13,106

 

 

 

112,832

 

 

 

—

 

 

 

112,832

 

Selling and marketing

 

58,983

 

 

 

23,400

 

 

 

12,703

 

 

 

95,086

 

 

 

—

 

 

 

95,086

 

General and administrative

 

27,161

 

 

 

9,746

 

 

 

6,108

 

 

 

43,015

 

 

 

( 298

)

 

 

42,717

 

Other segment items (1)(2)

 

34,589

 

 

 

12,139

 

 

 

8,120

 

 

 

54,848

 

 

 

1,359

 

 

 

56,207

 

Income (loss) before taxes (2)

 

150,832

 

 

 

( 17,567

)

 

 

15,896

 

 

 

149,161

 

 

 

( 1,061

)

 

 

148,100

 

Total assets (3)

 

1,564,196

 

 

 

739,066

 

 

 

371,793

 

 

 

2,675,055

 

 

 

1,288,676

 

 

 

3,963,731

 

Property additions

 

40,341

 

 

 

1,450

 

 

 

4,901

 

 

 

46,692

 

 

 

—

 

 

 

46,692

 

Depreciation and amortization expense

 

22,979

 

 

 

4,615

 

 

 

2,919

 

 

 

30,513

 

 

 

3

 

 

 

30,516

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended September 29, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

568,518

 

 

$

88,651

 

 

$

80,129

 

 

$

737,298

 

 

$

—

 

 

$

737,298

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

223,828

 

 

 

36,367

 

 

 

30,057

 

 

 

290,252

 

 

 

—

 

 

 

290,252

 

Engineering and development

 

74,007

 

 

 

17,438

 

 

 

11,857

 

 

 

103,302

 

 

 

—

 

 

 

103,302

 

Selling and marketing

 

46,332

 

 

 

29,408

 

 

 

12,901

 

 

 

88,641

 

 

 

—

 

 

 

88,641

 

General and administrative

 

23,208

 

 

 

15,292

 

 

 

5,394

 

 

 

43,894

 

 

 

( 1,356

)

 

 

42,538

 

Other segment items (1)(2)

 

33,722

 

 

 

14,352

 

 

 

6,762

 

 

 

54,836

 

 

 

( 1,255

)

 

 

53,581

 

Income (loss) before taxes (2)

 

167,421

 

 

 

( 24,206

)

 

 

13,158

 

 

 

156,373

 

 

 

2,611

 

 

 

158,984

 

Total assets (3)

 

1,360,277

 

 

 

794,277

 

 

 

202,927

 

 

 

2,357,481

 

 

 

1,412,247

 

 

 

3,769,728

 

Property additions

 

42,802

 

 

 

6,441

 

 

 

2,598

 

 

 

51,841

 

 

 

—

 

 

 

51,841

 

Depreciation and amortization expense

 

21,278

 

 

 

7,338

 

 

 

1,684

 

 

 

30,300

 

 

 

( 11

)

 

 

30,289

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 28, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

1,640,249

 

 

$

218,940

 

 

$

247,498

 

 

$

2,106,687

 

 

$

—

 

 

$

2,106,687

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

658,919

 

 

 

99,421

 

 

 

95,448

 

 

 

853,788

 

 

 

—

 

 

 

853,788

 

Engineering and development

 

247,668

 

 

 

44,319

 

 

 

37,319

 

 

 

329,306

 

 

 

—

 

 

 

329,306

 

Selling and marketing

 

163,270

 

 

 

72,155

 

 

 

36,103

 

 

 

271,528

 

 

 

—

 

 

 

271,528

 

General and administrative

 

79,845

 

 

 

29,490

 

 

 

16,773

 

 

 

126,108

 

 

 

2,383

 

 

 

128,491

 

Other segment items (1)(2)

 

88,150

 

 

 

46,832

 

 

 

21,771

 

 

 

156,753

 

 

 

3,137

 

 

 

159,890

 

Income (loss) before taxes (2)

 

402,397

 

 

 

( 73,277

)

 

 

40,084

 

 

 

369,204

 

 

 

( 5,520

)

 

 

363,684

 

Total assets (3)

 

1,564,196

 

 

 

739,066

 

 

 

371,793

 

 

 

2,675,055

 

 

 

1,288,676

 

 

 

3,963,731

 

Property additions

 

143,666

 

 

 

7,654

 

 

 

10,966

 

 

 

162,286

 

 

 

—

 

 

 

162,286

 

Depreciation and amortization expense

 

69,239

 

 

 

16,624

 

 

 

6,351

 

 

 

92,214

 

 

 

( 7

)

 

 

92,207

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 29, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

1,563,204

 

 

$

266,552

 

 

$

237,240

 

 

$

2,066,996

 

 

$

—

 

 

$

2,066,996

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

647,625

 

 

 

108,229

 

 

 

86,984

 

 

 

842,838

 

 

 

—

 

 

 

842,838

 

Engineering and development

 

210,616

 

 

 

49,412

 

 

 

34,546

 

 

 

294,574

 

 

 

—

 

 

 

294,574

 

Selling and marketing

 

138,432

 

 

 

82,809

 

 

 

37,103

 

 

 

258,344

 

 

 

—

 

 

 

258,344

 

General and administrative

 

65,794

 

 

 

40,938

 

 

 

15,758

 

 

 

122,490

 

 

 

398

 

 

 

122,888

 

Other segment items (1)(2)

 

92,714

 

 

 

41,263

 

 

 

19,904

 

 

 

153,881

 

 

 

( 56,818

)

 

 

97,063

 

Income (loss) before taxes (2)

 

408,023

 

 

 

( 56,099

)

 

 

42,945

 

 

 

394,869

 

 

 

56,420

 

 

 

451,289

 

Total assets (3)

 

1,360,277

 

 

 

794,277

 

 

 

202,927

 

 

 

2,357,481

 

 

 

1,412,247

 

 

 

3,769,728

 

Property additions

 

115,041

 

 

 

19,760

 

 

 

5,909

 

 

 

140,710

 

 

 

—

 

 

 

140,710

 

Depreciation and amortization expense

 

62,542

 

 

 

20,896

 

 

 

5,149

 

 

 

88,587

 

 

 

26

 

 

 

88,613

 

 
(1) For each reportable segment, the other segment items category includes equity and variable compensation, acquired intangible assets amortization, inventory step-up, and restructuring and other charges.

(2) Included in Corporate and Eliminations are interest income, interest expense, net foreign exchange gains (losses), intercompany eliminations, severance charges, pension and postretirement plan actuarial gains (losses), acquisition and divestiture related expenses, ERP implementation related costs, and an expense for the modification of outstanding equity awards.

(3) Total assets are attributable to each segment. Corporate assets consist of cash and cash equivalents, marketable securities, and certain other assets.

29

V. SHAREHOLDERS’ EQUITY
Stock Repurchase Program
In January 2023, Teradyne’s Board of Directors cancelled its January 2021 repurchase program and approved a new repurchase program for up to $ 2.0 billion of common stock. As of January 1, 2023, share repurchases in excess of issuances are subject to a 1 % excise tax, which is included as part of the cost basis of the shares acquired. Teradyne intends to repurchase up to a total of $ 1.0 billion of its common stock in 2025 and 2026 based on market conditions.
During the nine months ended September 28, 2025, Teradyne repurchased 5.1 million shares of common stock for a total cost of $ 523.5 million at an average price of $ 102.01 per share. The cumulative repurchases under the January 2023 repurchase program as of September 28, 2025, were 10.8 million shares of common stock for $ 1,123.4 million at an average price per share of $ 104.21 .
During the nine months ended September 29, 2024, Teradyne repurchased 0.5 million shares of common stock for a total cost of $ 55.1 million at an average price of $ 111.32 per share.
The total cost of shares acquired includes commissions and related excise tax and is recorded as a reduction to retained earnings.
Dividend
Holders of Teradyne’s common stock are entitled to receive dividends when they are declared by Teradyne’s Board of Directors.
In January 2025, May 2025, and August 2025 , Teradyne’s Board of Directors declared a quarterly cash dividend of $ 0.12 per share. Dividend payments for the three and nine months ended September 28, 2025, were $ 19.0 million and $ 57.6 million , respectively.
In January 2024, May 2024, and August 2024 , Teradyne’s Board of Directors declared a quarterly cash dividend of $ 0.12 per share. Dividend payments for the three and nine months ended September 29, 2024, were $ 19.6 million and $ 57.0 million , respectively.

W. SUBSEQUENT EVENTS
On October 28, 2025 the Company announced the appointment of Michelle Turner as Chief Financial Officer, effective November 3, 2025. This leadership change was approved subsequent to the end of the reporting period and will become effective following the filing of this Quarterly Report on Form 10-Q. The appointment does not impact the Company’s financial condition or results of operations as of September 28, 2025.

30

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations
Statements in this Quarterly Report on Form 10-Q which are not historical facts, so called “forward-looking statements,” are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those detailed in our filings with the Securities and Exchange Commission. See also Part II, Item 1A of this Quarterly Report on Form 10-Q and Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024. Readers are cautioned not to place undue reliance on these forward-looking statements which reflect management’s analysis only as of the date hereof. We assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting forward-looking statements, except as may be required by law.
Overview
We are a leading global provider of automated test equipment and robotics products. Our automated test systems are used to test semiconductors, wireless products, data storage, silicon photonics, and complex electronics systems in many industries including consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries. Our robotics product offerings consist primarily of collaborative robotic arms and autonomous mobile robots used by global manufacturing, logistics and industrial customers to improve quality and increase manufacturing and material handling efficiency, while reducing costs. In the first quarter of 2025, we identified opportunities for operational synergies amongst our production board test, defense and aerospace, and wireless test businesses leading to the creation of the Product Test division as a new segment effective March 2025. Our automated test equipment and robotics products and services include:
• semiconductor test (“Semiconductor Test”) systems;

• robotics (“Robotics”) products; and

• product test ("Product Test") systems, which includes defense/aerospace ("Defense/Aerospace") test instrumentation and systems, circuit-board test and inspection ("Production Board Test") systems, wireless test systems ("Wireless Test"), and photonic integrated circuit ("PIC") test solutions.

The market for our test products is concentrated with a limited number of significant customers accounting for a substantial portion of the purchases of test equipment. A few customers drive significant demand for our products both through direct sales and sales to the customer’s supply partners. We expect that sales of our test products will continue to be concentrated with a limited number of significant customers for the foreseeable future.
Artificial Intelligence applications and data center power demand drove strong third quarter performance with our customers accelerating development and ramping production for a wide range of devices. We expect this acceleration to continue and even expand into the fourth quarter and into 2026 and are currently investing in sales, engineering, and support to pursue these, and additional, market opportunities in Semiconductor Test. Robotics revenue in the third quarter was flat with second quarter sales due to ongoing business environment challenges. Our focus in the Robotics segment remains on operating expense management and our channel transformation strategy as we transition toward serving large direct customers and building a Robotics organization that can grow profitably over the mid-term.
On May 31, 2025, we acquired privately held Quantifi Photonics ("Quantifi"), a leader in PIC test solutions for a total purchase price of approximately $127.2 million. This acquisition enables the delivery of scalable PIC test solutions and is included in our Product Test segment. Over time, we also intend to leverage the engineering expertise and technology to enhance functionality and create additional differentiation in our Semiconductor Test business, specifically with integration into our UltraFlexPlus platform.
On January 31, 2025, we acquired Infineon Technologies AG's ("Infineon") automated test equipment technology and associated development team ("AET") based in Regensburg, Germany for a total purchase price of 17.6 million Euros, equivalent to $18.3 million. AET adds resources and expertise to our company and strengthens the relationship between Teradyne and this key customer. AET is included in our Semiconductor Test segment.
While revenues in our test businesses are predominantly in U.S. dollars, the majority of our Robotics revenue is denominated in foreign currencies. Strengthening of the U.S. dollar has, and will continue to, negatively affect Robotics revenue throughout 2025.
Our capital allocation plan will continue to be balanced between investing in organic and inorganic growth and returning cash to shareholders through share repurchases and dividends. During the first nine months of 2025 we completed the acquisitions of Quantifi and AET and additionally, we returned $576.3 million to shareholders through $518.7 million of share buybacks and $57.6 million of dividend payments.

31

On July 4, 2025, H.R. 1, commonly referred to as the "One Big Beautiful Bill Act" (“OBBBA”), was signed into law, enacting significant changes to U.S. corporate tax law. The OBBBA modified and made permanent several provisions of the Tax Cuts and Jobs Act, including reductions in scheduled increases for the rate of taxation of foreign income, immediate deductibility of U.S. research and development expenses, and reinstatement of 100% bonus depreciation for qualified property. As of September 28, 2025, the condensed consolidated financial statements were not materially impacted by the OBBBA. Teradyne continues to evaluate the provisions of the OBBBA and will incorporate any necessary adjustments as further guidance becomes available.
While it is difficult to quantify the exact impact, current trade restrictions are limiting our ability to be competitive particularly in certain markets, where other companies are not subjected to the same restrictions. Current tariffs have not had a material impact on our business operations or financial results, however, the global trade environment remains dynamic and subject to change. We continue to monitor developments in international trade policy, including potential changes to tariffs, further export controls, and other regulatory measures that could affect our supply chain, cost structure, or market access.
For information regarding risks associated with import-export control regulations and similar applicable laws and regulations, see Part II - Item 1A "Risk Factors- Risks Related to Legal and Regulatory Compliance" included elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Critical Accounting Policies and Estimates
We have identified the policies which are critical to understanding our business and our results of operations. There have been no significant changes during the nine months ended September 28, 2025, to the items disclosed as our critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Critical accounting estimates are complex and may require significant judgment by management. Changes to the underlying assumptions may have a material impact on our financial condition and results of operations. These estimates may change, as new events occur and additional information is obtained. Actual results could differ significantly from these estimates under different assumptions or conditions.
Preparation of Financial Statements and Use of Estimates
The preparation of consolidated financial statements requires management to make estimates and judgments that affect the amounts reported in the financial statements. Actual results may differ significantly from these estimates under different assumptions or conditions.

32

SELECTED RELATIONSHIPS WITHIN THE CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
 

 

 

For the Three Months
 Ended

 

 

For the Nine Months
 Ended

 

 

 

September 28,
2025

 

 

September 29,
2024

 

 

September 28,
2025

 

 

September 29,
2024

 

Percentage of revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

 

82

%

 

 

83

%

 

 

81

%

 

 

81

%

Services

 

 

18

 

 

 

17

 

 

 

19

 

 

 

19

 

Total revenues

 

 

100

 

 

 

100

 

 

 

100

 

 

 

100

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of products

 

 

35

 

 

 

34

 

 

 

35

 

 

 

34