Teradyne(TER) - 2024 Q1 - Quarterly Results

First Quarter 2024 Financial Highlights Teradyne's Q1 2024 performance exceeded guidance, driven by strong AI-related demand in memory and networking, despite softness in mobility Performance Summary Teradyne reported Q1 2024 revenue of $600 million, a 3% decrease year-over-year, with GAAP EPS of $0.40 and non-GAAP EPS of $0.51, exceeding guidance due to AI-driven demand Q1 2024 Key Financial Metrics (Millions USD) | | Q1'24 | Q1'23 | Q4'23 | | :--- | :--- | :--- | :--- | | Revenue | $600 | $618 | $671 | | GAAP EPS | $0.40 | $0.50 | $0.72 | | Non-GAAP EPS | $0.51 | $0.55 | $0.79 | Q1 2024 Revenue by Segment (Millions USD) | Segment | Revenue | | :--- | :--- | | Semiconductor Test | $412 | | System Test | $75 | | Wireless Test | $25 | | Robotics | $88 | - Revenue and earnings for the quarter surpassed the high-end of the company's guidance[4] - Strong year-over-year growth in memory test was counteracted by ongoing softness in the mobility market[4] Management Commentary and Business Outlook The CEO attributed the strong quarter to AI-driven demand in memory and networking, which offset mobility weakness, with Robotics expected to grow through the year - CEO Greg Smith stated that greater than expected demand in memory and networking, driven by Artificial Intelligence (AI) applications, was a key factor in exceeding revenue and earnings guidance[2] - In Robotics, the company anticipates that new products, new applications, and enhancements to its global distribution channel will drive growth for the remainder of the year[2] Q2 2024 Guidance | Metric | Guidance Range | | :--- | :--- | | Revenue | $665M - $725M | | GAAP Net Income per Share | $0.90 - $1.10 | | Non-GAAP Net Income per Share | $0.64 - $0.84 | Financial Statements This section provides a detailed overview of Teradyne's financial position, operating results, and cash flows for the first quarter of 2024 Condensed Consolidated Statements of Operations For Q1 2024, Teradyne reported net revenues of $599.8 million, a decrease from the prior year, with net income of $64.2 million and diluted EPS of $0.40 Statement of Operations Highlights (Thousands USD, except per share data) | Account | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net revenues | $599,819 | $617,529 | | Gross profit | $339,282 | $356,420 | | Income from operations | $77,771 | $92,864 | | Net income | $64,197 | $83,531 | | Diluted EPS | $0.40 | $0.50 | | Cash dividend per share | $0.12 | $0.11 | - Restructuring and other charges for Q1 2024 totaled $4.4 million, which included $2.2 million in acquisition and divestiture expenses and $2.0 million in employee severance[12] Condensed Consolidated Balance Sheets As of March 31, 2024, Teradyne's total assets were $3.41 billion, with cash and cash equivalents at $707.4 million, and shareholders' equity increasing to $2.56 billion Balance Sheet Highlights (Thousands USD) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $707,403 | $757,571 | | Total current assets | $2,065,393 | $2,162,035 | | Total assets | $3,410,720 | $3,486,824 | | Total current liabilities | $550,720 | $659,951 | | Total liabilities | $852,891 | $960,927 | | Shareholders' equity | $2,557,829 | $2,525,897 | Condensed Consolidated Statements of Cash Flows In Q1 2024, net cash from operating activities was $7.3 million, a significant decrease year-over-year, with total cash and cash equivalents decreasing by $50.2 million Cash Flow Summary (Thousands USD) | Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash from operating activities | $7,279 | $19,336 | | Net cash used for investing activities | ($24,020) | ($94,863) | | Net cash used for financing activities | ($36,668) | ($129,501) | | Decrease in cash and cash equivalents | ($50,168) | ($205,565) | - Key financing activities in Q1 2024 included $22.1 million for the repurchase of common stock and $18.4 million for dividend payments[15] GAAP to Non-GAAP Reconciliation This section provides a reconciliation of Teradyne's GAAP financial measures to non-GAAP measures for Q1 2024 and Q2 2024 guidance Q1 2024 GAAP to Non-GAAP Earnings Reconciliation For Q1 2024, Teradyne reconciled its GAAP net income of $64.2 million ($0.40 per diluted share) to a non-GAAP net income of $82.5 million ($0.51 per diluted share), primarily adjusting for a foreign exchange option loss and amortization of acquired intangibles Q1 2024 GAAP to Non-GAAP Reconciliation (Millions USD, except per share data) | Description | Net Income | Diluted EPS | | :--- | :--- | :--- | | GAAP | $64.2 | $0.40 | | Loss on foreign exchange option | $13.9 | $0.09 | | Acquired intangible assets amortization | $4.7 | $0.03 | | Restructuring and other | $4.4 | $0.03 | | Other adjustments (net) | ($4.7) | ($0.04) | | Non-GAAP | $82.5 | $0.51 | - For the quarter ended March 31, 2024, selling and administrative expenses included a $1.7 million equity charge for modifying executives' retirement agreements[18] Q2 2024 Guidance Reconciliation The company provided a reconciliation for its Q2 2024 EPS guidance, adjusting the GAAP range of $0.90 to $1.10 to a non-GAAP range of $0.64 to $0.84, mainly by excluding an anticipated gain on divestiture Q2 2024 GAAP to Non-GAAP EPS Guidance Reconciliation | Description | Low End | High End | | :--- | :--- | :--- | | GAAP net income per diluted share | $0.90 | $1.10 | | Exclude gain on divestiture | ($0.36) | ($0.36) | | Exclude acquired intangible assets amortization | $0.03 | $0.03 | | Non-GAAP tax adjustments | $0.07 | $0.07 | | Non-GAAP net income per diluted share | $0.64 | $0.84 | Other Information This section provides background on Teradyne's business and a cautionary statement regarding forward-looking information About Teradyne Teradyne is a global company providing advanced test solutions for semiconductors, electronic systems, and wireless devices, alongside collaborative and mobile robotics - Teradyne's business focuses on advanced test solutions for various electronics and robotics offerings, including collaborative and mobile robots[6] - In 2023, Teradyne's revenue was $2.7 billion, and it employs over 6,600 people worldwide[6] Safe Harbor Statement This section cautions investors that the press release contains forward-looking statements about future business and financial performance, highlighting that actual results may differ materially due to various risks and uncertainties - The release contains forward-looking statements regarding financial guidance and business prospects, which involve risks and uncertainties[7] - Identified risk factors include macroeconomic slowdowns, supply chain shortages, the ability to grow the Robotics business, and the impact of U.S. export controls related to China[7][8] - The company disclaims any obligation to update forward-looking statements[9]