Core Viewpoint - Teradyne's recent earnings report shows strong performance driven by AI-related demand, with revenues and earnings surpassing estimates, but the stock has underperformed the S&P 500 in the past month [1][2]. Financial Performance - Teradyne reported Q4 2024 earnings of 95 cents per share, exceeding the Zacks Consensus Estimate by 5.56% and increasing 20.3% year over year [2]. - Revenues reached $753 million, beating the Zacks Consensus Estimate by 1.65% and reflecting a 12.2% year-over-year increase [2]. - Revenue breakdown: Semiconductor Test platforms ($561 million, 74.5%), System Test business ($58 million, 7.7%), Wireless Test business ($36 million, 4.8%), and Robotics ($98 million, 13%) [3]. Cost and Expenses - Selling and administrative expenses rose 9.4% year over year to $155.7 million, accounting for 20.7% of revenues, a decrease of 50 basis points year over year [4]. - Engineering and development expenses increased 25.6% year over year to $128.4 million, representing 17.1% of revenues, an increase of 180 basis points year over year [4]. Balance Sheet and Cash Flow - As of December 31, 2024, cash and cash equivalents were $599.6 million, up from $551.7 million as of September 29, 2024 [5]. - Net cash provided by operating activities was $2.82 billion in Q4, an increase from $1.66 billion in the prior quarter [5]. Guidance - For Q1 2025, Teradyne expects revenues between $660 million and $700 million, with non-GAAP earnings projected between 58 cents and 68 cents per share [6]. Market Sentiment - There has been an upward trend in estimates revision over the past month, indicating positive market sentiment [7]. - Teradyne holds a Growth Score of A but lags in Momentum Score with a D, and a D in value, placing it in the bottom 40% for this investment strategy [8]. Overall Outlook - The stock has an aggregate VGM Score of B, indicating a balanced performance across different investment strategies [9]. - Estimates have been trending upward, but the magnitude of revisions suggests a potential downward shift, with Teradyne holding a Zacks Rank 3 (Hold) [10].

Financial Performance - Total product revenue for the year ended December 31, 2024, was $2.3 billion, with a majority relating to certain product revenue[268]. - Total revenues for 2024 reached $2,819,880, an increase of 5.3% compared to $2,676,298 in 2023[276]. - Product revenues increased to $2,294,935 in 2024, up 9.5% from $2,096,286 in 2023[276]. - Net income for 2024 was $542,372, representing a 20.9% increase from $448,752 in 2023[276]. - Gross profit for 2024 was $1,648,927, a rise of 7.3% compared to $1,536,748 in 2023[276]. - Basic net income per share for 2024 was $3.41, up from $2.91 in 2023, marking a 17.2% increase[276]. - The company reported a gross margin of approximately 58.4% in 2024, compared to 57.4% in 2023[276]. Shareholder Activities - The company repurchased a total of 1,247 shares during the period from September 30, 2024, to December 31, 2024, at an average price of $115.95 per share[164]. - A new share repurchase program of $2.0 billion was approved in January 2023, replacing the previous program[166]. - Approximately 2,000 shares were withheld from employees for tax payments at an average price of $122.14[164]. - The excise tax incurred on share repurchases is included as part of the cost basis of shares repurchased[165]. Assets and Liabilities - Total assets increased to $3,708,714 in 2024, up from $3,486,824 in 2023, reflecting a growth of 6.4%[274]. - Total liabilities decreased to $889,420 in 2024, down 7.4% from $960,927 in 2023[274]. - Shareholders' equity rose to $2,819,294 in 2024, an increase of 11.6% from $2,525,897 in 2023[274]. Cash Flow and Investments - Cash flows from operating activities for 2023 were $672,176 thousand, compared to $585,231 thousand in 2022, reflecting a 14.9% increase[286]. - Investments in businesses amounted to $532,060 thousand in 2024, indicating a significant capital allocation strategy[286]. - The total cash and cash equivalents at the end of 2023 were $553,354 thousand, down from $757,571 thousand at the end of 2022[286]. Revenue Recognition and Deferred Revenue - Teradyne's total deferred revenue and customer advances increased to $148.215 million in 2024 from $137.086 million in 2023, representing an increase of approximately 8.3%[299]. - The company recognizes revenue from contracts with customers when control is transferred, following a five-step process as per ASC 606[292]. - Teradyne's unsatisfied performance obligations as of December 31, 2024, amounted to $1,162.2 million, with an expectation to recognize 88% of this in the next 12 months[344]. Foreign Currency and Hedging - The company has entered into foreign currency forward contracts to hedge against exchange rate fluctuations, with maturities of approximately one month[251]. - A sensitivity analysis indicated that a hypothetical 10% fluctuation in foreign exchange rates would not have a material effect on the company's consolidated financial position as of December 31, 2024[253]. - The change in fair value of outstanding foreign currency forward contracts resulted in a loss of $0.6 million at December 31, 2024, compared to a loss of $1.8 million at December 31, 2023[373]. Pension and Employee Benefits - The accumulated benefit obligation for U.S. defined benefit pension plans was $109.0 million in 2024, down from $142.2 million in 2023[429]. - The fair value of Teradyne's pension plans' assets totaled $83.4 million as of December 31, 2024, with $81.4 million related to the U.S. Plan[436]. - Teradyne's net periodic pension cost for 2024 was $773,000 for the U.S. Plan, compared to a cost of $2.566 million in 2023[431]. Goodwill and Intangible Assets - The total goodwill as of December 31, 2024, was $1.157933 billion, with no impairment recorded for the Robotics and Wireless Test reporting units during the annual goodwill impairment tests conducted in 2024 and 2023[404][402]. - Teradyne's aggregate intangible assets amortization expense for 2024 was $18.8 million, slightly down from $19.0 million in 2023[407]. - The carrying amount of developed technology intangible assets was $6.438 million as of December 31, 2024, after accounting for accumulated amortization and foreign currency translation adjustments[406]. Operational Efficiency - The company maintains effective internal control over financial reporting as of December 31, 2024, based on established criteria[259]. - Teradyne's engineering and development costs are primarily expensed as incurred, consisting mainly of salaries and contractor fees, reflecting the high technical nature of its products[326]. - The company plans to continue investing in new product development and market expansion strategies in the upcoming year[276].

Core Viewpoint - Teradyne's share price has declined 10.5% year to date, underperforming both the Zacks Computer & Technology sector and the Zacks Electronics - Miscellaneous Products industry [1] Financial Performance - Teradyne reported fourth-quarter 2024 revenues of $753 million, a 12.2% year-over-year increase, surpassing the Zacks Consensus Estimate by 1.65% [3] - Earnings for the same quarter were 95 cents per share, exceeding the consensus mark by 5.56% and reflecting a 20.3% year-over-year growth [3] - The Zacks Consensus Estimate for first-quarter 2025 earnings is 61 cents per share, indicating a 19.61% growth compared to the previous year [4] Market Outlook - The company expects first-quarter 2025 sales to be between $660 million and $700 million, indicating a sequential decline [2] - Teradyne's SOC and memory test revenues increased by 17% year over year in 2024, driven by strong demand for AI accelerator ASICs and High Bandwidth Memory [8] - The SOC Total Addressable Market is projected to grow approximately 7% year over year in 2025, supported by demand for AI Compute and recovery in various sectors [9] Business Segments - The Semiconductor Test outlook remains strong, while the Robotics forecast is seasonally soft due to a challenging industrial spending environment [2] - Teradyne's System and Wireless Test businesses experienced a combined revenue decline of 4% year over year in 2024, but the Wireless Test business is expected to return to growth in 2025 [13] - The company is restructuring its Robotics division to improve efficiency, with breakeven revenues expected to decline from $440 million in 2024 to $365 million in 2025 [14][15] Valuation and Stock Performance - Teradyne shares are currently trading at a forward 12-month P/E of 27.81X, compared to the broader sector's 26.88X, indicating a premium valuation [16] - The stock is trading below both the 50-day and 200-day moving averages, suggesting a bearish trend [19] Investment Considerations - Despite the robust and diversified portfolio, weaknesses in the Robotics and System/Wireless businesses, along with a stretched valuation, present risks for investors [21] - Teradyne currently holds a Zacks Rank 3 (Hold), suggesting that investors should wait for better entry points [22]

Core Viewpoint - Teradyne (NASDAQ: TER) experienced a significant stock price decline from $140 despite beating revenue and earnings expectations, attributed to perceived weak revenue guidance, which may be an overreaction by the market [1] Company Summary - Teradyne's stock price fell significantly after the last earnings call, indicating market concerns despite positive earnings results [1] - The company beat both revenue and earnings expectations, yet the market's reaction was negative due to the revenue guidance being viewed as weak [1] Analyst Background - The analyst has 10 years of experience in investment banking and specializes in industry and company research, particularly in semiconductors, robotics, and energy [1] - The analyst holds a degree in Mechanical Engineering and is licensed by the Brazilian Securities Commission as a portfolio manager and investment consultant [1] - The investment approach emphasizes growth at a reasonable price with a mid- to long-term investment horizon, focusing on companies in oligopolistic sectors with high barriers to entry [1]

Group 1 - The core viewpoint is that Teradyne (NASDAQ: TER) is expected to benefit significantly from AI demand, leading to an upgrade to a buy rating based on positive 2Q24 guidance [1] - The investment strategy focuses on companies with long-term durability, steady growth, and strong balance sheets, rather than solely on low multiple stocks [1] - There is an acknowledgment of the risks involved in investing in successful companies, particularly regarding valuation, but the potential for vast development opportunities can lessen the immediate importance of price [1]

Core Insights - Teradyne's fourth-quarter 2024 Semiconductor Test revenues reached $561 million, exceeding the Zacks Consensus Estimate by 8.93% and reflecting a 22% year-over-year increase, constituting 74.5% of total sales [1] - Adjusted earnings for the quarter were 95 cents per share, surpassing the Zacks Consensus Estimate by 5.56% and showing a 20.3% year-over-year growth [2] - Net sales increased by 12.2% year over year to $753 million, also beating the consensus mark by 1.65% [2] Semiconductor Test Revenue Growth - The strong performance in Semiconductor Test revenue was primarily driven by robust demand from Cloud AI, which significantly contributed to growth in this segment [3] - AI-related advancements, particularly in AI accelerator Application-Specific Integrated Circuits, networking, and high-bandwidth memory (HBM) and Dynamic Random-Access Memory (DRAM), have notably increased the need for test equipment [4] - The SOC and memory test segments experienced a significant 17% year-over-year revenue growth in Q4 2024, driven by the rising demand for AI-related components and computing technologies [5] Market Outlook - The SOC Total Addressable Market (TAM) is projected to grow by 7% year over year in 2025, indicating a positive outlook for the semiconductor industry [6] Strategic Partnerships - Teradyne formed a key partnership with Infineon in Q4 2024 to enhance power semiconductor capabilities, focusing on silicon carbide and gallium nitride technologies for automotive and renewable energy markets [7][8] Challenges and Performance - Despite a strong portfolio, Teradyne faced challenges from weaker-than-expected demand in industrial automation and robotics markets, along with higher operating expenses, particularly in engineering for semiconductor testing [9] - High borrowing costs and macroeconomic uncertainty have led to reduced investments, negatively impacting demand for Teradyne's products [10] - Following the fourth-quarter results, Teradyne's shares declined by 5.71%, while the company returned 19.5% over the trailing 12 months, compared to a 27.4% increase in the Zacks Computer and Technology sector [11] Q1 2025 Guidance - Teradyne anticipates a revenue decline of approximately 5% to 10% year over year for Q1 2025, expecting revenues between $660 million and $700 million [12] - Non-GAAP earnings are projected to be between 58 cents and 68 cents per share, with the Zacks Consensus Estimate for revenues at $697.83 million, suggesting a 16.34% year-over-year increase [12] - The consensus for earnings is set at 64 cents per share, indicating a growth of 25.49% year over year [13]

Financial Results for Q4 and Full Year 2024 January 30, 2025 SAFE HARBOR This presentation 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 presentation addr ...

Core Insights - Teradyne (TER) reported Q4 2024 earnings of 95 cents per share, exceeding the Zacks Consensus Estimate by 5.56% and showing a year-over-year increase of 20.3% [1] - Revenues reached $753 million, surpassing the Zacks Consensus Estimate by 1.65% and reflecting a 12.2% year-over-year growth, driven by strong AI-related demand [1][2] - Teradyne's stock has increased by 26.4% year-to-date, compared to a 29.8% rise in the Zacks Computer and Technology sector [1] Revenue Breakdown - Revenue from Semiconductor Test platforms was $561 million (74.5% of total revenues), System Test business generated $58 million (7.7%), Wireless Test business contributed $36 million (4.8%), and Robotics brought in $98 million (13%) [2] - The growth in revenue was primarily fueled by strong momentum in the memory test end market, particularly due to High Bandwidth Memory and increased compute demand for AI applications [2] Expense Analysis - Selling and administrative expenses rose by 9.4% year over year to $155.7 million, accounting for 20.7% of revenues, which is a decrease of 50 basis points year over year [3] - Engineering and development expenses increased by 25.6% year over year to $128.4 million, representing 17.1% of revenues, an increase of 180 basis points year over year [3] Financial Position - As of December 31, 2024, Teradyne's cash and cash equivalents totaled $599.6 million, up from $551.7 million as of September 29, 2024 [4] - Net cash provided by operating activities was $2.82 billion in Q4, an increase from $1.66 billion in the prior quarter [4] Future Guidance - For Q1 2025, Teradyne expects revenues to be between $660 million and $700 million, with non-GAAP earnings projected between 58 cents and 68 cents per share [5] Market Position - Teradyne currently holds a Zacks Rank 2 (Buy), indicating a favorable investment outlook [6] - Other top-ranked stocks in the sector include BILL Holdings (Zacks Rank 1), AMETEK, and CyberArk Software (both Zacks Rank 2) [6]

Financial Performance - Q4 2024 revenue reached $753 million, a 12% increase from Q4 2023's $671 million, driven by strong demand in AI-related sectors[5] - GAAP net income for Q4 2024 was $146.3 million, or $0.90 per diluted share, compared to $145.6 million, or $0.89 per diluted share in Q3 2024[1] - Non-GAAP net income for Q4 2024 was $155.0 million, or $0.95 per diluted share, up from $0.79 per diluted share in Q4 2023[1] - Total revenue for FY 2024 was $2.82 billion, up from $2.68 billion in FY 2023[1] - For the quarter ended December 31, 2024, net income was $146.253 million, an increase from $117.054 million in the same quarter of 2023, representing a growth of 25.0%[15] - For the twelve months ended December 31, 2024, net revenues increased to $2,819.9 million, up from $2,676.3 million in 2023, representing a growth of 5.4%[19] - Net income on a GAAP basis for 2024 was $542.4 million, representing 19.2% of net revenues, with diluted earnings per share of $3.32, up from $448.8 million and $2.73 in 2023[19] - Non-GAAP net income for 2024 was $525.1 million, or 18.6% of net revenues, with diluted earnings per share of $3.22, compared to $479.6 million and $3.11 in 2023[19] Revenue Segments - Semiconductor Test segment generated $561 million in revenue, with Integrated Systems Test contributing $19 million in Q4 2024[1][3] - Gross profit (non-GAAP) for the quarter was $447.3 million, representing 59.4% of net revenues, compared to 59.7% in the previous quarter and 56.6% in the same quarter last year[16] - Income from operations (non-GAAP) was $163.2 million, or 21.7% of net revenues, down from 22.4% in the previous quarter but up from 20.1% in the same quarter last year[16] Guidance and Projections - Guidance for Q1 2025 anticipates revenue between $660 million and $700 million, with GAAP net income per diluted share projected between $0.48 and $0.59[2] - Year-over-year revenue acceleration is expected in 2025, with continued investment in AI compute and memory sectors[2] - First quarter 2025 revenue guidance is projected between $660 million and $700 million, with GAAP net income per diluted share expected to be between $0.48 and $0.59[22] - Non-GAAP net income per diluted share for the first quarter 2025 is projected to be between $0.58 and $0.68[22] Expenses and Liabilities - Operating expenses for Q4 2024 totaled $293.7 million, compared to $284.4 million in Q3 2024[11] - The company incurred restructuring and other expenses totaling $4.554 million for the quarter ended December 31, 2024, compared to $4.578 million in the previous quarter[12] - Total liabilities decreased to $889.420 million from $960.927 million, a reduction of 7.4% year-over-year[14] - Restructuring and other expenses totaled $15.6 million in 2024, down from $21.3 million in 2023[20] Cash Flow and Assets - Cash dividend declared per common share for Q4 2024 was $0.12, consistent with Q4 2023[11] - Cash and cash equivalents at the end of the period were $553.354 million, down from $757.571 million at the end of 2023, a decrease of 27.0%[15] - The company reported total assets of $3.709 billion as of December 31, 2024, compared to $3.487 billion in 2023, indicating an increase of 6.4%[14] - Operating cash flow for the twelve months ended December 31, 2024, was $672.176 million, up from $585.231 million in 2023, an increase of 14.9%[15] Legal and Other Charges - Legal settlement charges for the quarter included $3.6 million related to a judgment against the company for patent infringement[17] - The company reported a loss on foreign exchange options of $7.5 million, which accounted for -1.1% of net income[18] - The company reported a legal settlement charge of $3.6 million in 2024, which accounted for 0.1% of net revenues[19] Stock and Share Transactions - The company repurchased common stock amounting to $143.521 million during the quarter ended December 31, 2024[15] - The diluted shares included 0.5 million shares from the convertible note hedge transaction for the quarter ended September 29, 2024[13] - Non-GAAP weighted average diluted common shares included 0.5 million shares from the convertible note hedge transaction for the quarter ended September 29, 2024[18]

Earnings Performance - Teradyne reported quarterly earnings of $0.95 per share, beating the Zacks Consensus Estimate of $0.90 per share, representing a 5.56% earnings surprise [1][2] - This compares to earnings of $0.79 per share a year ago [1] - Over the last four quarters, the company has surpassed consensus EPS estimates four times [2] Revenue Performance - Teradyne posted revenues of $752.88 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.65% [3] - This compares to year-ago revenues of $670.6 million [3] - The company has topped consensus revenue estimates four times over the last four quarters [3] Stock Performance - Teradyne shares have lost about 3.2% since the beginning of the year versus the S&P 500's gain of 3.2% [4] - The sustainability of the stock's immediate price movement will depend on management's commentary on the earnings call [4] Earnings Outlook - The current consensus EPS estimate is $0.64 on $697.83 million in revenues for the coming quarter and $4.10 on $3.33 billion in revenues for the current fiscal year [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions [6] - The estimate revisions trend for Teradyne is favorable, translating into a Zacks Rank 1 (Strong Buy) for the stock [7] Industry Performance - Teradyne belongs to the Zacks Electronics - Miscellaneous Products industry, which is currently in the top 35% of the 250 plus Zacks industries [9] - The top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [9] Peer Comparison - Bel Fuse, another stock in the same industry, is expected to post quarterly earnings of $0.77 per share in its upcoming report, representing a year-over-year change of -43.8% [10] - Bel Fuse's revenues are expected to be $133.3 million, down 4.8% from the year-ago quarter [10]