Teradyne Reports Third Quarter 2024 Results

Rhea-AI Summary

Teradyne (TER) reported strong Q3 2024 results with revenue reaching $737 million, up 5% from Q3'23, driven by strong AI-related demand. The company's Semiconductor Test segment generated $543 million, while System Test, Wireless Test, and Robotics contributed $73 million, $33 million, and $89 million respectively. GAAP EPS was $0.89, and Non-GAAP EPS reached $0.90. The company's Memory revenue hit record levels, boosted by High Bandwidth Memory demand for AI applications. For Q4 2024, Teradyne guides revenue between $710-760 million with GAAP EPS of $0.73-0.91 and non-GAAP EPS of $0.80-0.97.

Positive

• Revenue increased 5% year-over-year to $737 million
• Record Memory revenue driven by AI-related HBM demand
• Non-GAAP EPS improved to $0.90 from $0.80 in Q3'23
• Robotics segment showing growth in recurring software and services revenue

Negative

• Sequential revenue decline from Q2'24 ($730M) to Q3'24 guidance midpoint ($735M)
• Q4 guidance suggests potential sequential decline in revenue and earnings

Insights

Financial Analyst

The Q3 results showcase solid performance with $737 million revenue, marking a 5% YoY growth, primarily driven by AI-related demand. The Semiconductor Test segment remains robust at $543 million, with record Memory revenue from HBM and AI compute applications. Key financial metrics: Non-GAAP EPS of $0.90 beat Q3'23's $0.80, while GAAP EPS improved to $0.89 from $0.78. The Q4 guidance of $710-760 million revenue with non-GAAP EPS of $0.80-0.97 suggests continued momentum. The company's strategic positioning in AI testing and robotics segments, particularly the growing recurring software revenue, indicates strong long-term growth potential despite cyclical semiconductor industry dynamics.

Tech Industry Analyst

The strong performance in Memory testing, particularly in High Bandwidth Memory (HBM), aligns perfectly with the surge in AI infrastructure deployment. The segmental breakdown reveals the company's strategic diversity: Semiconductor Test ($543M), System Test ($73M), Wireless Test ($33M) and Robotics ($89M). The robotics division's progress in recurring software and services revenue, along with OEM channel development, demonstrates successful execution of the long-term diversification strategy. This positions Teradyne well to capitalize on both the immediate AI testing boom and the broader automation trends.

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

• Revenue at the high-end and earnings above Q3 guidance
• Revenue of $737 million in Q3’24, up 5% from Q3’23
• Year-over-year growth driven by strong AI-related demand

		Q3'24				Q3'23				Q2'24
Revenue (mil)		$	737			$	704			$	730
GAAP EPS		$	0.89			$	0.78			$	1.14
Non-GAAP EPS		$	0.90			$	0.80			$	0.86

Teradyne, Inc. (NASDAQ: TER) reported revenue of $737 million for the third quarter of 2024 of which $543 million was in Semiconductor Test, $73 million in System Test, $33 million in Wireless Test and $89 million in Robotics. GAAP net income for the third quarter of 2024 was $145.6 million or $0.89 per diluted share. On a non-GAAP basis, Teradyne’s net income in the third quarter of 2024 was $147.6 million, or $0.90 per diluted share, which excluded acquired intangible asset amortization, restructuring and other charges, amortization on our investment in Technoprobe, legal settlement, pension mark-to-market, and included the related tax impact on non-GAAP adjustments.

“Semiconductor Test continues to perform better than planned on record Memory revenue driven by High Bandwidth Memory (HBM) and compute demand for AI applications,” said Teradyne CEO, Greg Smith. “Robotics continues to execute to its longer-term growth strategy with improving traction in recurring software and services revenue and progress in the UR OEM channel. As we finish 2024 and look forward to 2025, we are excited about building on this progress."

Guidance for the fourth quarter of 2024 is revenue of $710 million to $760 million, with GAAP net income of $0.73 to $0.91 per diluted share and non-GAAP net income of $0.80 to $0.97 per diluted share. Non-GAAP guidance excludes acquired intangible asset amortization and amortization on our investment in Technoprobe, as well as the related tax impact on non-GAAP adjustments.

Webcast

A conference call to discuss the third quarter results, along with management’s business outlook, will follow at 8:30 a.m. ET, Thursday, October 24, 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, legal settlement, 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 6,400 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 current conflicts in Israel; the impact of regulations published by the U.S. Department of Commerce relating to semiconductors and semiconductor manufacturing equipment destined for certain end uses in China.

The risks included above are not exhaustive. For a more detailed description of the risk factors associated with Teradyne, please refer to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 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 THIRD FISCAL QUARTER OF 2024
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
		Quarter Ended												Nine Months Ended
		September 29, 2024				June 30, 2024				October 1, 2023				September 29, 2024				October 1, 2023
Net revenues		$	737,298			$	729,879			$	703,732			$	2,066,996			$	2,005,699
Cost of revenues (exclusive of acquired intangible assets amortization shown separately below) (1)			300,784				304,035				305,441				865,357				848,495
Gross profit			436,514				425,844				398,291				1,201,639				1,157,204
Operating expenses:
Selling and administrative (2)			157,649				154,470				138,330				461,307				434,979
Engineering and development			117,474				111,816				104,413				332,489				315,881
Acquired intangible assets amortization			4,748				4,664				4,720				14,108				14,348
Restructuring and other (3)			4,578				2,012				6,856				11,018				15,251
Gain on sale of business (4)			—				(57,486	)			—				(57,486	)			—
Operating expenses			284,449				215,476				254,319				761,436				780,459
Income from operations			152,065				210,368				143,972				440,203				376,745
Interest and other (income) expense (5)			(6,919	)			(9,035	)			(308	)			(11,086	)			(9,022	)
Income before income taxes and equity in net earnings of affiliate			158,984				219,403				144,280				451,289				385,767
Income tax provision			12,260				33,130				16,164				54,095				54,069
Income before equity in net earnings of affiliate			146,724				186,273				128,116				397,194				331,698
Equity in net earnings of affiliate			(1,075	)			—				—				(1,075	)			—
Net income		$	145,649			$	186,273			$	128,116			$	396,119			$	331,698
Net income per common share:
Basic		$	0.89			$	1.18			$	0.83			$	2.51			$	2.14
Diluted		$	0.89			$	1.14			$	0.78			$	2.42			$	2.01
Weighted average common shares - basic			163,002				157,804				153,762				157,951				154,809
Weighted average common shares - diluted (6)			164,253				163,470				164,050				163,357				165,037
Cash dividend declared per common share		$	0.12			$	0.12			$	0.11			$	0.36			$	0.33

(1)

Cost of revenues includes:

		Quarter Ended												Nine Months Ended
		September 29, 2024				June 30, 2024				October 1, 2023				September 29, 2024				October 1, 2023
Provision for excess and obsolete inventory		$	6,078			$	3,261			$	11,728			$	15,515			$	23,069
Legal settlement			3,600				—				—				3,600				—
Sale of previously written down inventory			(472	)			(592	)			(1,198	)			(1,787	)			(4,046	)
		$	9,206			$	2,669			$	10,530			$	17,328			$	19,023

(2)		For the nine months ended September 29, 2024, selling and administrative expenses included an equity charge of $1.7 million for the modification of Teradyne executives' retirement agreements. For the nine months ended October 1, 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												Nine Months Ended
		September 29, 2024				June 30, 2024				October 1, 2023				September 29, 2024				October 1, 2023
Employee severance		$	1,280			$	2,012			$	4,658			$	5,319			$	11,835
Acquisition and divestiture related expenses			—				—				—				2,214				—
Contract termination			—				—				1,511				—				1,511
Other			3,298				—				687				3,485				1,905
		$	4,578			$	2,012			$	6,856			$	11,018			$	15,251

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

		Quarter Ended												Nine Months Ended
		September 29, 2024				June 30, 2024				October 1, 2023				September 29, 2024				October 1, 2023
Pension actuarial losses (gains)		$	(2,262	)		$	(250	)		$	72			$	(2,513	)		$	125
Loss (gain) on foreign exchange option			—				(4,154	)			—				9,765				—

(6)

Under GAAP, when calculating diluted earnings per share, convertible debt must be assumed to have converted if the effect on EPS would be dilutive. Diluted shares assume the conversion of the convertible debt as the effect would be dilutive. Accordingly, for the quarter ended October 1, 2023, 0.6 million shares have been included in diluted shares. For the nine months ended October 1, 2023, 0.8 million shares have been included in diluted shares. For the quarters ended September 29, 2024, June 30, 2024, and October 1, 2023, diluted shares included 0.5 million, 4.9 million, and 9.2 million shares, respectively, from the convertible note hedge transaction. For the nine months ended September 29, 2024, and October 1, 2023, diluted shares included 4.8 million and 9.0 million shares, respectively, from the convertible note hedge transaction.

CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
		September 29, 2024				December 31, 2023
Assets
Cash and cash equivalents		$	510,036			$	757,571
Marketable securities			41,631				62,154
Accounts receivable, net			484,376				422,124
Inventories, net			297,340				309,974
Prepayments			489,548				548,970
Other current assets			15,935				37,992
Current assets held for sale			—				23,250
Total current assets			1,838,866				2,162,035
Property, plant and equipment, net			491,704				445,492
Operating lease right-of-use assets, net			70,784				73,417
Marketable securities			125,944				117,434
Deferred tax assets			201,881				175,775
Retirement plans assets			13,114				11,504
Equity method investment			538,351				—
Other assets			48,384				38,580
Acquired intangible assets, net			21,288				35,404
Goodwill			419,412				415,652
Assets held for sale			—				11,531
Total assets		$	3,769,728			$	3,486,824
Liabilities
Accounts payable		$	158,459			$	180,131
Accrued employees’ compensation and withholdings			159,794				191,750
Deferred revenue and customer advances			99,776				99,804
Other accrued liabilities			105,150				114,712
Operating lease liabilities			19,175				17,522
Income taxes payable			52,542				48,653
Current liabilities held for sale			—				7,379
Total current liabilities			594,896				659,951
Retirement plans liabilities			137,735				132,090
Long-term deferred revenue and customer advances			41,135				37,282
Long-term other accrued liabilities			8,373				19,998
Deferred tax liabilities			164				183
Long-term operating lease liabilities			60,287				65,092
Long-term income taxes payable			24,596				44,331
Liabilities held for sale			—				2,000
Total liabilities			867,186				960,927
Shareholders’ equity			2,902,542				2,525,897
Total liabilities and shareholders’ equity		$	3,769,728			$	3,486,824

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
		Quarter Ended								Nine Months Ended
		September 29, 2024				October 1, 2023				September 29, 2024				October 1, 2023
Cash flows from operating activities:
Net income		$	145,649			$	128,116			$	396,119			$	331,698
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			25,553				23,627				74,480				68,858
Stock-based compensation			14,574				12,787				45,267				45,236
Provision for excess and obsolete inventory			6,078				11,728				15,516				23,069
Amortization			4,736				4,503				14,133				14,083
Equity in net earnings of affiliate			1,075				—				1,075				—
Gain on sale of business			—				—				(57,486	)			—
Deferred taxes			(9,431	)			(10,455	)			(26,261	)			(24,026	)
Losses (gains) on investments			(2,951	)			1,586				10,139				(3,159	)
Retirement plan actuarial losses (gains)			(2,262	)			—				(2,512	)			—
Other			(6,282	)			80				(5,041	)			(13	)
Changes in operating assets and liabilities
Accounts receivable			(11,055	)			32,884				(65,266	)			30,191
Inventories			(5,974	)			20,240				11,127				6,395
Prepayments and other assets			39,248				(34,398	)			61,438				(63,982	)
Accounts payable and other liabilities			(10,657	)			28,513				(63,666	)			3,999
Deferred revenue and customer advances			885				(14,579	)			3,624				(49,517	)
Retirement plans contributions			(1,395	)			(1,216	)			(4,169	)			(3,698	)
Income taxes			(21,520	)			(29,069	)			(18,898	)			(42,683	)
Net cash provided by operating activities			166,271				174,347				389,619				336,451
Cash flows from investing activities:
Purchases of property, plant and equipment			(51,841	)			(34,604	)			(140,710	)			(115,306	)
Purchases of marketable securities			(7,340	)			(38,768	)			(35,097	)			(137,786	)
Purchases of investment in a business			(2,407	)			—				(527,060	)			—
Issuance of convertible loan			—				(5,000	)			—				(5,000	)
Proceeds from maturities of marketable securities			6,305				49,450				33,163				71,447
Proceeds from the sale of a business, net of cash and cash equivalents sold			3,176				—				90,348				—
Proceeds from sales of marketable securities			2,311				1,386				23,600				36,963
Proceeds from life insurance			—				—				873				460
Net cash used for investing activities			(49,796	)			(27,536	)			(554,883	)			(149,222	)
Cash flows from financing activities:
Repurchase of common stock			(24,747	)			(118,647	)			(55,053	)			(346,492	)
Dividend payments			(19,566	)			(16,897	)			(56,936	)			(51,081	)
Payments related to net settlement of employee stock compensation awards			(399	)			(278	)			(13,833	)			(20,586	)
Payments of borrowings on revolving credit facility			—				—				(185,000	)			—
Payments of convertible debt principal			—				(9,277	)			—				(26,735	)
Proceeds from borrowings on revolving credit facility			—				—				185,000				—
Issuance of common stock under stock purchase and stock option plans			15,429				17,485				37,265				34,084
Net cash used for financing activities			(29,283	)			(127,614	)			(88,557	)			(410,810	)
Effects of exchange rate changes on cash and cash equivalents			940				4,556				6,286				5,769
Increase (decrease) in cash and cash equivalents			88,132				23,753				(247,535	)			(217,812	)
Cash and cash equivalents at beginning of period			421,904				613,208				757,571				854,773
Cash and cash equivalents at end of period		$	510,036			$	636,961			$	510,036			$	636,961

GAAP to Non-GAAP Earnings Reconciliation (In millions, except per share amounts)
	Quarter Ended
	September 29, 2024				% of Net Revenues								June 30, 2024				% of Net Revenues								October 1, 2023				% of Net Revenues
Net revenues	$	737.3											$	729.9											$	703.7
Gross profit - GAAP		436.5				59.2	%							425.8				58.3	%							398.3				56.6	%
Legal settlement (1)		3.6				0.5	%							—				—								—				—
Gross profit - non-GAAP		440.1				59.7	%							425.8				58.3	%							398.3				56.6	%
Income from operations - GAAP		152.1				20.6	%							210.4				28.8	%							144.0				20.5	%
Acquired intangible assets amortization		4.7				0.6	%							4.7				0.6	%							4.7				0.7	%
Restructuring and other (2)		4.6				0.6	%							2.0				0.3	%							6.9				1.0	%
Legal settlement (1)		3.6				0.5	%							—				—								—				—
Gain on sale of business (3)		—				—								(57.5	)			-7.9	%							—				—
Income from operations - non-GAAP	$	165.0				22.4	%						$	159.6				21.9	%						$	155.6				22.1	%

									Net Income per Common Share																Net Income per Common Share																Net Income per Common Share
	September 29, 2024				% of Net Revenues				Basic				Diluted				June 30, 2024				% of Net Revenues				Basic				Diluted				October 1, 2023				% of Net Revenues				Basic				Diluted
Net income - GAAP	$	145.6				19.7	%		$	0.89			$	0.89			$	186.3				25.5	%		$	1.18			$	1.14			$	128.1				18.2	%		$	0.83			$	0.78
Acquired intangible assets amortization		4.7				0.6	%			0.03				0.03				4.7				0.6	%			0.03				0.03				4.7				0.7	%			0.03				0.03
Restructuring and other (2)		4.6				0.6	%			0.03				0.03				2.0				0.3	%			0.01				0.01				6.9				1.0	%			0.04				0.04
Legal settlement (1)		3.6				0.5	%			0.02				0.02				—				—				—				—				—				—				—				—
Amortization of equity method investment		2.4				0.3	%			0.01				0.01				—				—				—				—				—				—				—				—
Loss (gain) on foreign exchange option		—				—				—				—				(4.2	)			-0.6	%			(0.03	)			(0.03	)			—				—				—				—
Gain on sale of business (3)		—				—				—				—				(57.5	)			-7.9	%			(0.36	)			(0.35	)			—				—				—				—
Pension mark-to-market adjustment (4)		(2.3	)			-0.3	%			(0.01	)			(0.01	)			(0.3	)			0.0	%			(0.00	)			(0.00	)			0.1				0.0	%			0.00				0.00
Exclude discrete tax adjustments		(8.9	)			-1.2	%			(0.05	)			(0.05	)			10.5				1.4	%			0.07				0.06				(4.8	)			-0.7	%			(0.03	)			(0.03	)
Non-GAAP tax adjustments		(2.1	)			-0.3	%			(0.01	)			(0.01	)			(1.5	)			-0.2	%			(0.01	)			(0.01	)			(3.5	)			-0.5	%			(0.02	)			(0.02	)
Net income - non-GAAP	$	147.6				20.0	%		$	0.91			$	0.90			$	140.0				19.2	%		$	0.89			$	0.86			$	131.5				18.7	%		$	0.86			$	0.80
GAAP and non-GAAP weighted average common shares - basic		163.0																157.8																153.8
GAAP weighted average common shares - diluted (6)		164.3																163.5																164.1
Exclude dilutive shares related to convertible note transaction		—																—																(0.6	)
Non-GAAP weighted average common shares - diluted		164.3																163.5																163.4

(1)		For the three months ended September 29, 2024, legal settlement includes charges for a settlement following a judgment against the Company for infringement of expired patents.
(2)		Restructuring and other consists of:

	Quarter Ended
	September 29, 2024										June 30, 2024										October 1, 2023
Employee severance	$	1.3									$	2.0									$	4.7
Contract termination		—										—										1.5
Other		3.3										—										0.6
	$	4.6									$	2.0									$	6.9

(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 September 29, 2024, June 30, 2024 and October 1, 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 September 29, 2024, June 30, 2024, and October 1, 2023, non-GAAP weighted average diluted common shares included 0.5 million, 4.9 million and 9.2 million shares, respectively, from the convertible note hedge transaction.

	Nine Months Ended
	September 29, 2024				% of Net Revenues								October 1, 2023				% of Net Revenues
Net Revenues	$	2,067.0											$	2,005.7
Gross profit - GAAP		1,201.6				58.1	%							1,157.2				57.7	%
Legal settlement (1)		3.6				0.2	%							—				—
Gross profit - non-GAAP		1,205.2				58.3	%							1,157.2				57.7	%
Income from operations - GAAP		440.2				21.3	%							376.7				18.8	%
Acquired intangible assets amortization		14.1				0.7	%							14.3				0.7	%
Restructuring and other (2)		11.0				0.5	%							15.3				0.8	%
Legal settlement (1)		3.6				0.2	%							—				—
Equity modification charge (3)		1.7				0.1	%							5.9				0.3	%
Loss (gain) on sale of business (4)		(57.5	)			-2.8	%							—				—
Income from operations - non-GAAP	$	413.1				20.0	%						$	412.2				20.6	%

									Net Income per Common Share																Net Income per Common Share
	September 29, 2024				% of Net Revenues				Basic				Diluted				October 1, 2023				% of Net Revenues				Basic				Diluted
Net income - GAAP	$	396.1				19.2	%		$	2.51			$	2.42			$	331.7				16.5	%		$	2.14			$	2.01
Acquired intangible assets amortization		14.1				0.7	%			0.09				0.09				14.3				0.7	%			0.09				0.09
Restructuring and other (2)		11.0				0.5	%			0.07				0.07				15.3				0.8	%			0.10				0.09
Loss (gain) on foreign exchange option		9.8				0.5	%			0.06				0.06				—				—				—				—
Legal settlement (1)		3.6				0.2	%			0.02				0.02				—				—				—				—
Amortization of equity method investment		2.4				0.1	%			0.02				0.01				—				—				—				—
Equity modification charge (3)		1.7				0.1	%			0.01				0.01				5.9				0.3	%			0.04				0.04
Pension mark-to-market adjustment (5)		(2.5	)			-0.1	%			(0.02	)			(0.02	)			0.1				0.0	%			0.00				0.00
Loss (gain) on sale of business (4)		(57.5	)			-2.8	%			(0.36	)			(0.35	)			—				—				—				—
Exclude discrete tax adjustments		(0.7	)			0.0	%			(0.00	)			(0.00	)			(6.7	)			-0.3	%			(0.04	)			(0.04	)
Non-GAAP tax adjustments		(7.9	)			-0.4	%			(0.05	)			(0.05	)			(8.8	)			-0.4	%			(0.06	)			(0.05	)
Convertible share adjustment (6)		—				—				—				—				—				—				—				0.01
Net income - non-GAAP	$	370.1				17.9	%		$	2.34			$	2.27			$	351.8				17.5	%		$	2.27			$	2.14
GAAP and non-GAAP weighted average common shares - basic		158.0																154.8
GAAP weighted average common shares - diluted (6)		163.4																165.0
Exclude dilutive shares from convertible note		—																(0.8	)
Non-GAAP weighted average common shares - diluted		163.4																164.2

(1)		For the nine months ended September 29, 2024, a legal settlement includes charges for a settlement following a judgment against the Company for infringement of expired patents.
(2)		Restructuring and other consists of:

	Nine Months Ended
	September 29, 2024										October 1, 2023
Employee severance	$	5.3									$	11.8
Acquisition and divestiture related expenses		2.2										—
Contract termination		—										1.5
Other		3.5										1.9
	$	11.0									$	15.3

(3)		For the nine months ended September 29, 2024, selling and administrative expenses included an equity charge of $1.7 million for the modification of Teradyne’s executives' retirement agreements. For the nine months ended October 1, 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.
(4)		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.
(5)		For the nine months ended September 29, 2024, and October 1, 2023, adjustments to exclude actuarial gains and losses, respectively, recognized under GAAP in accordance with Teradyne’s mark-to-market pension accounting.
(6)		For the nine months ended September 29, 2024 and October 1, 2023, non-GAAP weighted average diluted common shares included 4.8 million and 9.0 million shares, respectively, from the convertible note hedge transaction.

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

GAAP and non-GAAP fourth quarter revenue guidance:			$710 million			to	$760 million
GAAP net income per diluted share			$	0.73			$	0.91
Exclude acquired intangible assets amortization				0.03				0.03
Exclude equity method investment amortization				0.05				0.05
Non-GAAP tax adjustments				(0.01	)			(0.01	)
Non-GAAP net income per diluted share			$	0.80			$	0.97

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/20241023481464/en/

Teradyne, Inc.

Traci Tsuchiguchi 978-370-2444

Vice President of Corporate Relations

Source: Teradyne, Inc.

FAQ

What was Teradyne's (TER) revenue in Q3 2024?

Teradyne reported revenue of $737 million in Q3 2024, representing a 5% increase from Q3 2023.

How much did Teradyne's Semiconductor Test segment generate in Q3 2024?

Teradyne's Semiconductor Test segment generated $543 million in revenue during Q3 2024.

What is Teradyne's Q4 2024 revenue guidance?

Teradyne guided Q4 2024 revenue between $710 million to $760 million.

How did AI-related demand affect Teradyne's Q3 2024 results?

AI-related demand drove record Memory revenue through High Bandwidth Memory (HBM) and compute applications, contributing to stronger-than-planned Semiconductor Test performance.