Teradyne Q4 Earnings Beat Estimates: Will Raised View Aid Shares?

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]