CANADA - 2025/03/10: In this photo illustration, the Teradyne logo is seen displayed on a smartphone screen. (Photo Illustration by Thomas Fuller/SOPA Images/LightRocket via Getty Images)SOPA Images/LightRocket via Getty ImagesTeradyne (TER)’s stock increased by 51%, driven more by a remarkable increase in investor confidence than by revenue increases and margin declines. Stimulated by demand for AI, consistent earnings surpasses, and an optimistic analyst forecast, the surge suggests confidence that extend ...

Core Insights - Teradyne reported third-quarter 2025 non-GAAP earnings of 85 cents per share, exceeding the Zacks Consensus Estimate by 8.97% but down 5.6% year over year [1][9] - Revenues reached $769 million, surpassing the Zacks Consensus Estimate by 3.32% and increasing 4.3% year over year [1][9] - The stock price of Teradyne surged 22.32% in pre-market trading following the earnings report [1] Revenue Breakdown - Revenue from Semiconductor Test platforms was $606 million, accounting for 78.8% of total revenues; Robotics generated $75 million (9.8%); and Product Test contributed $88 million (11.4%) [2] - Non-GAAP gross margin for the quarter was 58.5%, a contraction of 120 basis points year over year [2] Expense Analysis - Selling and administrative expenses rose 7.3% year over year to $169.1 million, representing 22% of revenues, an increase of 60 basis points [3] - Engineering and development expenses increased 6.2% year over year to $124.8 million, making up 16.2% of revenues, up 30 basis points [3] Operating Performance - Non-GAAP operating income declined 4.9% year over year to $156.9 million, with an operating margin of 20.4%, down 200 basis points year over year [4] Financial Position - As of September 28, 2025, Teradyne's cash and cash equivalents totaled $297.7 million, down from $367.9 million as of June 29, 2025 [5] - Net cash provided by operating activities for the quarter was $49 million [5] Future Guidance - For the fourth quarter of 2025, Teradyne anticipates revenues between $920 million and $1 billion, with non-GAAP earnings expected to range from $1.20 to $1.46 per share [6][9] Market Position - Teradyne holds a Zacks Rank 2 (Buy) [7] - Other notable stocks in the Zacks Computer and Technology sector include Alkami Technology (Rank 1), AMETEK, and Advanced Energy (both Rank 2) [7]

Teradyne (NasdaqGS:TER) Q3 2025 Earnings Call October 29, 2025 08:30 AM ET Speaker0Ladies and gentlemen, good afternoon and welcome to the Teradyne third quarter 2025 earnings conference call. At this time, all participants are in a listen only mode. A question and answer session will follow the prepared remarks at that time. If you wish to ask a question, please press star one on your telephone keypad. As a reminder, today's call is being recorded. I would now like to turn the call over to Amy McAndrews, V ...

Question-and-Answer SessionSanjay MehtaCFO, VP & Treasurer So yes, that's true that we have stopped providing our TAM update publicly. But I will share a little bit of color as what's going on in the market from our perspective. So when I think about it, I'll cover -- first, I'll talk about compute. The compute segment has consistently grown and is very strong, really driven by AI. And from our perspective, what's driving our growth, and we'll have a strong second half, but what's driving our growth is real ...

Teradyne (TER) 2025 Conference Summary Industry Overview - **Semiconductor Testing Market**: The conference primarily focused on the semiconductor testing market, with specific emphasis on segments such as Compute, Mobility, Auto, Industrial, and Memory testing. Key Points and Arguments Compute Segment - **Growth Driven by AI**: The Compute segment is experiencing strong growth, primarily driven by AI and custom ASICs from vertically integrated producers (VIPs) or hyperscalers [3][4] - **Lumpy Shipments**: Shipments are expected to be inconsistent due to project ramps occurring in Q3, Q4, and Q1 [4] - **Market Dominance**: Compute remains the dominant segment in semiconductor testing [4] Mobility Segment - **Transitory Weakness**: The Mobility segment faced challenges in the first half of the year due to supply chain transitions rather than end-market demand [5] - **Potential Recovery**: There are signs of recovery with new system demand emerging, particularly as AI integration in smartphones increases [31][36] Auto and Industrial Segments - **Low Activity Levels**: The Auto and Industrial segments are currently operating at low levels, with no significant increase in activity observed [5] Memory Segment - **Strong 2024 Expectations**: A strong total addressable market (TAM) for memory is anticipated in 2024, but a decline is expected in 2025 due to excess HBM testers in the market [6][39] - **HBM Testers Driving Growth**: The second half of 2025 is expected to be strong for memory testing, driven by HBM memory testers [6][39] Strategic Themes - **Three Key Themes**: The company identified three themes driving market growth: AI, electrification, and verticalization [8] - **Diversified Revenue Streams**: Teradyne's revenue is becoming less dependent on mobile end-market launches, focusing more on AI-driven sectors [9] Competitive Positioning - **UltraFLEX Strategy**: Teradyne's UltraFLEX product tester is designed specifically for high-performance compute, aiming to differentiate from competitors [12] - **Market Share Growth**: The company aims to capture 50% of new VIP participants in the market, currently tracking at that level [21] Robotics and Automation - **Focus on Large Accounts**: Teradyne is pivoting towards large accounts and OEMs to drive growth in the robotics segment, despite current market weaknesses [25][30] - **Profitability Challenges**: The robotics segment is not expected to reach breakeven in the near term due to ongoing market challenges [29] Financial Outlook - **Gross Margin Targets**: Teradyne aims for gross margins of 59% to 60%, with fluctuations expected based on product mix and market conditions [46][50] - **Capital Allocation Strategy**: The company prioritizes technical acquisitions that enhance market capabilities over share buybacks, with a focus on AI demand cycles [51][52] Product Innovations - **Launch of Magnum 7H**: The new memory tester, Magnum 7H, is designed for high performance and compatibility with future memory technologies, providing economic benefits to customers [43][45] Additional Important Insights - **Supply Chain Resilience**: The company has focused on supply chain resilience to mitigate geopolitical risks, impacting gross margins in 2023 [48] - **Market Dynamics**: The mobility market is expected to show signs of recovery in Q1 and Q2 of 2026, with significant shipments typically occurring in the latter half of the year [38] This summary encapsulates the key insights and strategic directions discussed during the Teradyne conference, highlighting the company's focus on AI-driven growth and its adaptive strategies in various market segments.

Core Insights - Teradyne (TER) reported second-quarter 2025 non-GAAP earnings of 57 cents per share, exceeding the Zacks Consensus Estimate by 5.56% but down 33.7% year over year [1] - Revenues for the quarter were $652 million, surpassing the Zacks Consensus Estimate by 0.89% but declining 10.7% year over year [1] Revenue Breakdown - Revenue from Semiconductor Test platforms was $492 million (75.5% of total revenues), System Test business generated $75 million (11.5%), and Robotics and Product Test contributed $85 million (13%) [2] Margin and Expenses - Non-GAAP gross margin for the quarter was 57.3%, a contraction of 110 basis points year over year [2] - Selling and administrative expenses rose 2.1% year over year to $157.8 million, accounting for 24.2% of revenues, an increase of 300 basis points [3] - Engineering and development expenses increased 5.9% year over year to $118.4 million, representing 18.2% of revenues, up 280 basis points [3] Operating Income - Non-GAAP operating income fell 38.5% year over year to $98.2 million, with the operating margin contracting 680 basis points to 15.1% [4] Balance Sheet and Cash Flow - As of June 29, 2025, Teradyne's cash and cash equivalents were $367.9 million, down from $507.8 million as of March 30, 2025 [5] - Net cash provided by operating activities in the reported quarter was $182.1 million [5] - The board authorized an expansion of the share repurchase program, increasing the target to $1 billion by the end of 2026 [5] Q3 Guidance - For Q3 2025, Teradyne expects revenues between $710 million and $770 million, with the Zacks Consensus Estimate at $764.4 million, indicating 3.7% growth year over year [6] - Non-GAAP earnings are projected to be between 69 cents and 87 cents per share, with the Zacks Consensus Estimate at 91 cents per share, suggesting 1.1% growth year over year [7] Zacks Rank and Comparisons - Teradyne currently holds a Zacks Rank 3 (Hold) [8] - Comparatively, Arista Networks (ANET) has a Zacks Rank 1 (Strong Buy), while Leidos (LDOS) and Enovix Corporation (ENVX) hold Zacks Rank 2 (Buy) [8]