Teradyne Reports Second Quarter 2024 Results

Rhea-AI Summary

Teradyne (NASDAQ: TER) reported strong Q2 2024 results, with revenue of $730 million, up 7% from Q2'23. The company saw 14% YoY growth in Semiconductor Test, driven by strength in memory and SoC demand recovery. GAAP EPS reached $1.14, while non-GAAP EPS was $0.86. CEO Greg Smith highlighted the impact of AI applications on accelerated demand from compute and memory customers. The robotics business also showed growth both sequentially and year-over-year. For Q3 2024, Teradyne guides revenue between $680-$740 million, with GAAP EPS of $0.62-$0.82 and non-GAAP EPS of $0.66-$0.86.

Positive

• Revenue of $730 million in Q2'24, up 7% from Q2'23
• 14% YoY Growth in Q2 for Semiconductor Test
• GAAP EPS increased to $1.14 from $0.73 in Q2'23
• Non-GAAP EPS rose to $0.86 from $0.79 in Q2'23
• AI applications driving accelerated demand from compute and memory customers
• Robotics business grew sequentially and year-over-year

Negative

• None.

Insights

Financial Analyst

Teradyne's Q2 2024 results demonstrate robust performance, surpassing the high-end of their guidance. The company reported $730 million in revenue, marking a 7% year-over-year increase. This growth was primarily driven by the Semiconductor Test segment, which saw a notable 14% year-over-year expansion.

Key financial highlights include:

• GAAP EPS of $1.14, a significant jump from $0.73 in Q2 2023
• Non-GAAP EPS of $0.86, up from $0.79 in the same period last year
• Semiconductor Test revenue of $543 million, representing about 74% of total revenue

The company's performance appears to be benefiting from the surge in AI applications, driving demand from both compute and memory customers. This trend aligns with the broader semiconductor industry's pivot towards AI-centric technologies.

Looking ahead, Teradyne's Q3 2024 guidance suggests continued strength, with projected revenue between $680 million and $740 million. The expected non-GAAP EPS range of $0.66 to $0.86 indicates potential for further growth.

While the results are impressive, investors should note the company's heavy reliance on the Semiconductor Test segment. Diversification into areas like Robotics ($90 million in Q2 revenue) could be important for long-term stability, especially given the cyclical nature of the semiconductor industry.

Tech Industry Analyst

Teradyne's Q2 2024 results underscore the accelerating impact of AI on the semiconductor testing industry. The 14% year-over-year growth in Semiconductor Test revenue signals a robust demand for advanced testing solutions, particularly in memory and System-on-Chip (SoC) applications.

The company's performance is closely tied to the AI boom, with CEO Greg Smith highlighting the role of AI applications in driving demand from both compute and memory customers. This trend is likely to persist as the industry continues to develop more sophisticated AI chips and memory solutions to support the growing computational requirements of AI workloads.

Interestingly, Teradyne's outlook on edge AI deployment is particularly noteworthy. The company believes this will strengthen demand for both their test and robotics businesses over the mid-term. This perspective aligns with industry projections of increased AI processing at the edge, which could lead to a surge in demand for specialized testing equipment for edge AI chips.

While Teradyne's core business remains strong, the relatively modest contribution from the Robotics segment ($90 million) suggests there's still significant room for growth in this area. As automation and AI continue to converge, Teradyne's robotics division could become an increasingly important part of its business strategy, potentially offering a hedge against fluctuations in the semiconductor testing market.

Overall, Teradyne's results reflect the broader trends in the tech industry, particularly the growing influence of AI on various sectors. The company's strong performance and optimistic outlook suggest it's well-positioned to capitalize on these trends, but it will need to continue innovating to maintain its competitive edge in a rapidly evolving tech landscape.

 

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

• Revenue and earnings above the high-end of Q2 guidance
• Revenue of $730 million in Q2’24, up 7% from Q2’23
• 14% YoY Growth in Q2 for Semiconductor Test driven by continued strength in memory and demand recovery in SoC

		Q2'24				Q2'23				Q1'24
Revenue (mil)		$	730			$	684			$	600
GAAP EPS		$	1.14			$	0.73			$	0.40
Non-GAAP EPS		$	0.86			$	0.79			$	0.51

Teradyne, Inc. (NASDAQ: TER) reported revenue of $730 million for the second quarter of 2024 of which $543 million was in Semiconductor Test, $61 million in System Test, $36 million in Wireless Test and $90 million in Robotics. GAAP net income for the second quarter of 2024 was $186.3 million or $1.14 per diluted share. On a non-GAAP basis, Teradyne’s net income in the second quarter of 2024 was $140.0 million, or $0.86 per diluted share, which excluded acquired intangible asset amortization, restructuring and other charges, gains on foreign exchange options in connection with acquisitions and divestitures, gain on sale of business, and included the related tax impact on non-GAAP adjustments.

“In the second quarter, AI applications drove accelerated demand from both compute and memory customers, and our robotics business grew sequentially and year-over-year,” said Teradyne CEO Greg Smith. “Overall, 2024 is shaping up as we expected, and we believe the deployment of edge AI will strengthen demand in our test and robotics businesses over the mid-term.”

Guidance for the third quarter of 2024 is revenue of $680 million to $740 million, with GAAP net income of $0.62 to $0.82 per diluted share and non-GAAP net income of $0.66 to $0.86 per diluted share. Non-GAAP guidance excludes acquired intangible asset amortization and amortization on our investment in Technoprobe, as well as the related tax impact on non-GAAP adjustments.

Webcast

A conference call to discuss the second quarter results, along with management’s business outlook, will follow at 8:30 a.m. ET, Thursday, July 25, 2024. Interested investors should access the webcast at www.teradyne.com and click on "Investors" at least five minutes before the call begins. Presentation materials will be available starting at 8:30 a.m. ET. A replay will be available on the Teradyne website at www.teradyne.com/investors.

Non-GAAP Results

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

About Teradyne

Teradyne (NASDAQ:TER) test technology helps bring high-quality innovations such as smart devices, life-saving medical equipment and data storage systems to market, faster. Its advanced test solutions for semiconductors, electronic systems, wireless devices and more ensure that products perform as they were designed. Its robotics offerings include collaborative and mobile robots that help manufacturers of all sizes increase productivity, improve safety, and lower costs. In 2023, Teradyne had revenue of $2.7 billion and today employs over 6,200 people worldwide. For more information, visit teradyne.com. Teradyne^® is a registered trademark of Teradyne, Inc., in the U.S. and other countries.

Safe Harbor Statement

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

The risks included above are not exhaustive. For a more detailed description of the risk factors associated with Teradyne, please refer to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Many of these factors are macroeconomic in nature and are, therefore, beyond Teradyne’s control. We caution readers not to place undue reliance on any forward-looking statements included in this press release which speak only as to the date of this press release. Teradyne specifically disclaims any obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.

TERADYNE, INC. REPORT FOR SECOND FISCAL QUARTER OF 2024

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
		Quarter Ended												Six Months Ended
		June 30, 2024				March 31, 2024				July 2, 2023				June 30, 2024				July 2, 2023
Net revenues		$	729,879			$	599,819			$	684,437			$	1,329,698			$	1,301,966
Cost of revenues (exclusive of acquired intangible assets amortization shown separately below) (1)			304,035				260,537				281,945				564,572				543,054
Gross profit			425,844				339,282				402,492				765,126				758,912
Operating expenses:
Selling and administrative (2)			154,470				149,188				145,695				303,658				296,650
Engineering and development			111,816				103,199				105,706				215,015				211,468
Acquired intangible assets amortization			4,664				4,697				4,825				9,361				9,627
Restructuring and other (3)			2,012				4,427				6,358				6,440				8,395
Gain on sale of business (4)			(57,486	)			—				—				(57,486	)			—
Operating expenses			215,476				261,511				262,584				476,988				526,140
Income from operations			210,368				77,771				139,908				288,138				232,772
Interest and other (income) expense (5)			(9,035	)			4,869				(4,494	)			(4,167	)			(8,714	)
Income before income taxes			219,403				72,902				144,402				292,305				241,486
Income tax provision			33,130				8,705				24,352				41,835				37,905
Net income		$	186,273			$	64,197			$	120,050			$	250,470			$	203,581
Net income per common share:
Basic		$	1.18			$	0.42			$	0.78			$	1.61			$	1.31
Diluted		$	1.14			$	0.40			$	0.73			$	1.54			$	1.23
Weighted average common shares - basic			157,804				153,047				154,760				155,426				155,332
Weighted average common shares - diluted (6)			163,470				162,348				164,751				162,909				165,530
Cash dividend declared per common share		$	0.12			$	0.12			$	0.11			$	0.24			$	0.22
(1)    Cost of revenues includes:

		Quarter Ended												Six Months Ended
		June 30, 2024				March 31, 2024				July 2, 2023				June 30, 2024				July 2, 2023
Provision for excess and obsolete inventory		$	3,261			$	6,177			$	5,731			$	9,438			$	11,341
Sale of previously written down inventory			(592	)			(722	)			(2,463	)			(1,314	)			(2,848	)
		$	2,669			$	5,455			$	3,268			$	8,124			$	8,493

(2)		For the quarter ended March 31, 2024, and the six months ended June 30, 2024, selling and administrative expenses included an equity charge of $1.7 million for the modification of Teradyne executives' retirement agreements. For the six months ended July 2, 2023, selling and administrative expenses included an equity charge of $5.9 million for the modification of Teradyne’s retired CEO’s outstanding equity awards in connection with his February 1, 2023, retirement.
(3)		Restructuring and other consists of:

		Quarter Ended												Six Months Ended
		June 30, 2024				March 31, 2024				July 2, 2023				June 30, 2024				July 2, 2023
Employee severance		$	2,012			$	2,026			$	5,140			$	4,038			$	7,177
Acquisition and divestiture related expenses			—				2,214				—				2,214				—
Other			—				187				1,218				187				1,218
		$	2,012			$	4,427			$	6,358			$	6,440			$	8,395

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

		Quarter Ended												Six Months Ended
		June 30, 2024				March 31, 2024				July 2, 2023				June 30, 2024				July 2, 2023
Loss (gain) on foreign exchange option		$	(4,154	)		$	13,918			$	—			$	9,765			$	—
Pension actuarial losses (gains)			(250	)			—				53				(250	)			53

(6)		Under GAAP, when calculating diluted earnings per share, convertible debt must be assumed to have converted if the effect on EPS would be dilutive. Diluted shares assume the conversion of the convertible debt as the effect would be dilutive. Accordingly, for the quarters ended June 30, 2024, March 31, 2024, and July 2, 2023, diluted shares included 4.9 million, 8.9 million and 8.9 million shares, respectively, from the convertible note hedge transaction. For the six months ended June 30, 2024, and July 2, 2023, diluted shares included 6.9 million and 8.9 million shares, respectively, from the convertible note hedge transaction. For the quarter ended July 2, 2023, 0.7 million shares have also been included in diluted shares. For the six months ended July 2, 2023, 0.8 million shares have also been included in diluted shares.

CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
		June 30, 2024				December 31, 2023
Assets
Cash and cash equivalents		$	421,904			$	757,571
Marketable securities			38,654				62,154
Accounts receivable, net			470,297				422,124
Inventories, net			288,748				309,974
Prepayments			515,906				548,970
Other current assets			20,884				37,992
Current assets held for sale			—				23,250
Total current assets			1,756,393				2,162,035
Property, plant and equipment, net			472,457				445,492
Operating lease right-of-use assets, net			72,381				73,417
Marketable securities			123,723				117,434
Deferred tax assets			192,901				175,775
Retirement plans assets			11,293				11,504
Equity method investment			524,060				—
Other assets			47,923				38,580
Acquired intangible assets, net			25,465				35,404
Goodwill			405,110				415,652
Assets held for sale			—				11,531
Total assets		$	3,631,706			$	3,486,824
Liabilities
Accounts payable		$	160,808			$	180,131
Accrued employees’ compensation and withholdings			161,187				191,750
Deferred revenue and customer advances			102,988				99,804
Other accrued liabilities			108,746				114,712
Operating lease liabilities			18,280				17,522
Income taxes payable			74,365				48,653
Current liabilities held for sale			—				7,379
Total current liabilities			626,374				659,951
Retirement plans liabilities			135,167				132,090
Long-term deferred revenue and customer advances			36,146				37,282
Long-term other accrued liabilities			16,632				19,998
Deferred tax liabilities			96				183
Long-term operating lease liabilities			61,883				65,092
Long-term income taxes payable			24,596				44,331
Liabilities held for sale			—				2,000
Total liabilities			900,894				960,927
Shareholders’ equity			2,730,812				2,525,897
Total liabilities and shareholders’ equity		$	3,631,706			$	3,486,824

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
		Quarter Ended								Six Months Ended
		June 30, 2024				July 2, 2023				June 30, 2024				July 2, 2023
Cash flows from operating activities:
Net income		$	186,273			$	120,050			$	250,470			$	203,581
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			25,573				22,551				48,927				45,231
Stock-based compensation			14,935				13,564				30,693				32,449
Amortization			4,631				4,654				9,397				9,580
Provision for excess and obsolete inventory			3,261				5,731				9,438				11,341
Losses (gains) on investments			2,624				(2,507	)			13,090				(4,745	)
Gain on sale of business			(57,486	)			—				(57,486	)			—
Deferred taxes			(7,161	)			(5,937	)			(16,830	)			(13,571	)
Retirement plan actuarial losses (gains)			(250	)			—				(250	)			—
Other			453				(201	)			1,240				(92	)
Changes in operating assets and liabilities
Accounts receivable			(46,156	)			(39,897	)			(54,211	)			(2,693	)
Inventories			24,034				9,852				17,102				(13,845	)
Prepayments and other assets			11,101				(14,204	)			22,190				(29,584	)
Accounts payable and other liabilities			52,539				58,694				(53,009	)			(24,514	)
Deferred revenue and customer advances			4,183				(2,233	)			2,739				(34,938	)
Retirement plans contributions			(1,353	)			(1,248	)			(2,774	)			(2,482	)
Income taxes			(1,132	)			(26,102	)			2,622				(13,614	)
Net cash provided by operating activities			216,069				142,767				223,348				162,104
Cash flows from investing activities:
Purchases of property, plant and equipment			(44,846	)			(39,258	)			(88,869	)			(80,702	)
Purchases of investment in a business			(524,653	)			—				(524,653	)			—
Purchases of marketable securities			(11,715	)			(29,742	)			(27,757	)			(99,018	)
Proceeds from the sale of a business, net of cash and cash equivalents sold			87,172				—				87,172				—
Proceeds from maturities of marketable securities			12,420				14,529				26,858				35,577
Proceeds from sales of marketable securities			555				27,648				21,289				21,997
Proceeds from life insurance			—				—				873				460
Net cash used for investing activities			(481,067	)			(26,823	)			(505,087	)			(121,686	)
Cash flows from financing activities:
Payments of borrowings on revolving credit facility			(185,000	)			—				(185,000	)			—
Dividend payments			(19,000	)			(17,019	)			(37,370	)			(34,184	)
Repurchase of common stock			(8,189	)			(134,537	)			(30,306	)			(227,845	)
Payments related to net settlement of employee stock compensation awards			(319	)			(438	)			(13,434	)			(20,308	)
Payments of convertible debt principal			—				(2,303	)			—				(17,458	)
Proceeds from borrowings on revolving credit facility			185,000				—				185,000				—
Issuance of common stock under stock purchase and stock option plans			4,902				602				21,836				16,599
Net cash used for financing activities			(22,606	)			(153,695	)			(59,274	)			(283,196	)
Effects of exchange rate changes on cash and cash equivalents			2,105				1,751				5,346				1,213
Decrease in cash and cash equivalents			(285,499	)			(36,000	)			(335,667	)			(241,565	)
Cash and cash equivalents at beginning of period			707,403				649,208				757,571				854,773
Cash and cash equivalents at end of period		$	421,904			$	613,208			$	421,904			$	613,208

GAAP to Non-GAAP Earnings Reconciliation
(In millions, except per share amounts)
	Quarter Ended
	June 30, 2024				% of Net Revenues								March 31, 2024				% of Net Revenues								July 2, 2023				% of Net Revenues
Net revenues	$	729.9											$	599.8											$	684.4
Gross profit GAAP and non-GAAP		425.8				58.3	%							339.3				56.6	%							402.5				58.8	%
Income from operations - GAAP		210.4				28.8	%							77.8				13.0	%							139.9				20.4	%
Acquired intangible assets amortization		4.7				0.6	%							4.7				0.8	%							4.8				0.7	%
Restructuring and other (1)		2.0				0.3	%							4.4				0.7	%							6.4				0.9	%
Equity modification charge (2)		—				—								1.7				0.3	%							—				—
Gain on sale of business (3)		(57.5	)			-7.9	%							—				—								—				—
Income from operations - non-GAAP	$	159.6				21.9	%						$	88.6				14.8	%						$	151.1				22.1	%

								Net Income per Common Share															Net Income per Common Share																Net Income per Common Share
	June 30, 2024			% of Net Revenues				Basic				Diluted				March 31, 2024			% of Net Revenues				Basic				Diluted				July 2, 2023				% of Net Revenues				Basic				Diluted
Net income - GAAP	$	186.3			25.5	%		$	1.18			$	1.14			$	64.2			10.7	%		$	0.42			$	0.40			$	120.1				17.5	%		$	0.78			$	0.73
Acquired intangible assets amortization		4.7			0.6	%			0.03				0.03				4.7			0.8	%			0.03				0.03				4.8				0.7	%			0.03				0.03
Restructuring and other (1)		2.0			0.3	%			0.01				0.01				4.4			0.7	%			0.03				0.03				6.4				0.9	%			0.04				0.04
Equity Modification Charge (2)		—			—				—				—				1.7			0.3	%			0.01				0.01				—				—				—				—
Pension mark-to-market adjustment (4)		(0.3	)		0.0	%			(0.00	)			(0.00	)			—			—				—				—				0.1				0.0	%			0.00				0.00
Loss (gain) on foreign exchange option		(4.2	)		-0.6	%			(0.03	)			(0.03	)			13.9			2.3	%			0.09				0.09				—				—				—				—
Gain on sale of business (3)		(57.5	)		-7.9	%			(0.36	)			(0.35	)			—			—				—				—				—				—				—				—
Exclude discrete tax adjustments		10.5			1.4	%			0.07				0.06				(2.2	)		-0.4	%			(0.01	)			(0.01	)			0.5				0.1	%			0.00				0.00
Non-GAAP tax adjustments		(1.5	)		-0.2	%			(0.01	)			(0.01	)			(4.2	)		-0.7	%			(0.03	)			(0.03	)			(2.9	)			-0.4	%			(0.02	)			(0.02	)
Net income - non-GAAP	$	140.0			19.2	%		$	0.89			$	0.86			$	82.5			13.8	%		$	0.54			$	0.51			$	129.0				18.8	%		$	0.83			$	0.79
GAAP and non-GAAP weighted average common shares - basic		157.8															153.0															154.8
GAAP weighted average common shares - diluted (5)		163.5															162.3															164.8
Exclude dilutive shares related to convertible note transaction		—															—															(0.7	)
Non-GAAP weighted average common shares - diluted		163.5															162.3															164.1

(1)

Restructuring and other consists of:

	Quarter Ended
	June 30, 2024										March 31, 2024										July 2, 2023
Employee severance	$	2.0									$	2.0									$	5.1
Divestiture related expenses		—										2.2										—
Other		—										0.2										1.2
	$	2.0									$	4.4									$	6.4

(2)		For the quarter ended March 31, 2024, selling and administrative expenses included an equity charge of $1.7 million for the modification of Teradyne executives' retirement agreements.
(3)		On May 27, 2024, Teradyne sold DIS, a component of the Semiconductor Test segment, to Technoprobe, for $85.0 million, net of cash and cash equivalents sold and a working capital adjustment.
(4)		For the quarters ended June 30, 2024, and July 2, 2023, adjustments to exclude actuarial gains and losses, respectively, recognized under GAAP in accordance with Teradyne’s mark-to-market pension accounting.
(5)		For the quarters ended June 30, 2024, March 31, 2024, and July 2, 2023, non-GAAP weighted average diluted common shares included 4.9 million, 8.9 million and 8.9 million shares, respectively, from the convertible note hedge transaction.

	Six Months Ended
	June 30, 2024				% of Net Revenues								July 2, 2023				% of Net Revenues
Net Revenues	$	1,329.7											$	1,302.0
Gross profit GAAP and non-GAAP		765.1				57.5	%							758.9				58.3	%
Income from operations - GAAP		288.1				21.7	%							232.8				17.9	%
Acquired intangible assets amortization		9.4				0.7	%							9.6				0.7	%
Restructuring and other (1)		6.4				0.5	%							8.4				0.6	%
Equity modification charge (2)		1.7				0.1	%							5.9				0.5	%
Loss (gain) on sale of business (3)		(57.5	)			-4.3	%							—				—
Income from operations - non-GAAP	$	248.1				18.7	%						$	256.7				19.7	%

									Net Income per Common Share																Net Income per Common Share
	June 30, 2024				% of Net Revenues				Basic				Diluted				July 2, 2023				% of Net Revenues				Basic				Diluted
Net income - GAAP	$	250.5				18.8	%		$	1.61			$	1.54			$	203.6				15.6	%		$	1.31			$	1.23
Loss (gain) on foreign exchange option		9.8				0.7	%			0.06				0.06				—				—				—				—
Acquired intangible assets amortization		9.4				0.7	%			0.06				0.06				9.6				0.7	%			0.06				0.06
Restructuring and other (1)		6.4				0.5	%			0.04				0.04				8.4				0.6	%			0.05				0.05
Equity modification charge (2)		1.7				0.1	%			0.01				0.01				5.9				0.5	%			0.04				0.04
Pension mark-to-market adjustment (4)		(0.3	)			0.0	%			(0.00	)			(0.00	)			0.1				0.0	%			0.00				0.00
Loss (gain) on sale of business (3)		(57.5	)			-4.3	%			(0.37	)			(0.35	)			—				—				—				—
Exclude discrete tax adjustments		8.2				0.6	%			0.05				0.05				(1.9	)			-0.1	%			(0.01	)			(0.01	)
Non-GAAP tax adjustments		(5.7	)			-0.4	%			(0.04	)			(0.03	)			(5.3	)			-0.4	%			(0.03	)			(0.03	)
Net income - non-GAAP	$	222.6				16.7	%		$	1.43			$	1.37			$	220.4				16.9	%		$	1.42			$	1.34
GAAP and non-GAAP weighted average common shares - basic		155.4																155.3
GAAP weighted average common shares - diluted (5)		162.9																165.5
Exclude dilutive shares from convertible note		—																(0.8	)
Non-GAAP weighted average common shares - diluted		162.9																164.7

(1)

Restructuring and other consists of:

	Six Months Ended
	June 30, 2024										July 2, 2023
Employee severance	$	4.0									$	7.2
Divestiture related expenses		2.2										—
Other		0.2										1.2
	$	6.4									$	8.4

(2)		For the six months ended June 30, 2024, selling and administrative expenses included an equity charge of $1.7 million for the modification of Teradyne’s executives' retirement agreements. For the six months ended April 2, 2023, selling and administrative expenses included an equity charge of $5.9 million for the modification of Teradyne’s retired CEO’s outstanding equity awards in connection with his February 1, 2023, retirement.
(3)		On May 27, 2024, Teradyne sold DIS, a component of the Semiconductor Test segment, to Technoprobe, for $85.0 million, net of cash and cash equivalents sold and a working capital adjustment.
(4)		For the six months ended June 30, 2024, and July 2, 2023, adjustments to exclude actuarial gains and losses, respectively, recognized under GAAP in accordance with Teradyne’s mark-to-market pension accounting.
(5)		For the six months ended June 30, 2024 and July 2, 2023, non-GAAP weighted average diluted common shares included 6.9 million and 8.9 million shares, respectively, from the convertible note hedge transaction.

GAAP to Non-GAAP Reconciliation of Third Quarter 2024 guidance:

GAAP and non-GAAP third quarter revenue guidance:			$680 million			to	$740 million
GAAP net income per diluted share			$	0.62			$	0.82
Exclude acquired intangible assets amortization				0.03				0.03
Exclude equity method investment amortization				0.02				0.02
Non-GAAP tax adjustments				(0.01	)			(0.01	)
Non-GAAP net income per diluted share			$	0.66			$	0.86

For press releases and other information of interest to investors, please visit Teradyne’s homepage at http://www.teradyne.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240723866897/en/

Teradyne, Inc.

Traci Tsuchiguchi 978-370-2444

Vice President of Corporate Relations

Source: Teradyne, Inc.

FAQ

What was Teradyne's (TER) revenue for Q2 2024?

Teradyne's revenue for Q2 2024 was $730 million, up 7% from Q2 2023.

How much did Teradyne's (TER) Semiconductor Test segment grow in Q2 2024?

Teradyne's Semiconductor Test segment grew 14% year-over-year in Q2 2024.

What is Teradyne's (TER) Q3 2024 revenue guidance?

Teradyne's Q3 2024 revenue guidance is between $680 million to $740 million.

How did AI impact Teradyne's (TER) Q2 2024 performance?

AI applications drove accelerated demand from both compute and memory customers in Q2 2024.