Financial Data and Key Metrics Changes - In Q3 2025, Teradyne reported sales of $769 million, with non-GAAP EPS at $0.85, both near the high end of guidance ranges [18] - Non-GAAP gross margin was 58.5%, above guidance due to favorable mix [18] - Non-GAAP operating expenses were $293 million, reflecting higher R&D and sales investments tied to AI [18] Business Line Data and Key Metrics Changes - Semiconductor test revenue was $606 million, with SoC revenue contributing $440 million, up 11% sequentially and 12% year-over-year [18] - Memory revenue reached $128 million, up 110% sequentially but down 15% year-over-year, driven by HBM and AI-related LPDDR demand [18][19] - Robotics revenue was $75 million, flat quarter-on-quarter and down year-over-year, with Universal Robots contributing $62 million [19] Market Data and Key Metrics Changes - AI demand in semiconductor testing significantly drove Q3 performance, with expectations for continued growth in Q4 [6][14] - The memory total addressable market (TAM) for 2025 is expected to decline in low double digits, but Teradyne anticipates sustaining memory revenue at 2024 levels [9] - The automotive industrial market segment saw growth in AI-driven applications for power ICs, with a forecasted volume increase of over 50% by 2027 [9] Company Strategy and Development Direction - Teradyne's strategy focuses on AI verticalization and electrification as primary growth drivers moving into 2026 [14][15] - The company is investing in R&D and manufacturing capacity to capture opportunities in AI-driven semiconductor testing [10][12] - A transition in leadership was announced, with Michelle Turner set to become the new CFO, bringing extensive experience in technology and manufacturing [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about AI-related demand driving growth in Q4 and into 2026, despite acknowledging the lumpy nature of shipments [25][60] - The company expects improvements in mobile, auto, industrial, and robotics markets, although the timing and intensity of recovery remain uncertain [15] - Management highlighted the importance of dual sourcing strategies among customers in the compute segment, which could benefit Teradyne [35] Other Important Information - Teradyne repurchased $244 million of shares in Q3 and paid $19 million in dividends, returning approximately 2.5 times free cash flow to shareholders during the year [21] - The company ended Q3 with $427 million in cash and marketable securities, maintaining a balanced capital allocation strategy [21][22] Q&A Session Summary Question: Upside in Q4 guidance - Management indicated that the upside in Q4 guidance is primarily driven by compute and memory, with compute accounting for about two-thirds of the increase [31] Question: Long-term compute intensity and test insertions - Management expressed optimism about increasing test intensity due to larger die sizes and the shift towards chiplet-based designs, which necessitate more rigorous testing [34] Question: Wafer level tests and design wins - Management confirmed that SLT is critical for ensuring quality in data centers, and new technologies like CoWoP are expected to enhance testing processes [40] Question: Revenue shaping for next year - Management noted that revenue is expected to be up relative to 2025, driven by AI-related projects, but acknowledged that the business is no longer seasonally driven by mobile launches [50] Question: Memory market share and growth expectations - Management indicated that while share in final test segments is strong, wafer sort share is lower, but they expect revenue growth in the memory market overall [76]

Financial Data and Key Metrics Changes - In Q3 2025, the company reported sales of $769 million, with non-GAAP EPS at $0.85, both near the high end of guidance ranges [18] - Revenue grew sequentially by 18% and non-GAAP EPS increased by 49% compared to the previous quarter [5] - Non-GAAP gross margin was 58.5%, exceeding guidance due to favorable product mix [18] - Non-GAAP operating expenses rose to $293 million, reflecting higher R&D and sales investments related to AI [18] Business Line Data and Key Metrics Changes - Semiconductor test revenue was $606 million, with SoC revenue contributing $440 million, up 11% sequentially and 12% year-over-year [18] - Memory revenue more than doubled from Q2 to $128 million, primarily driven by AI applications [18][8] - Robotics revenue remained flat quarter-on-quarter at $75 million, with Universal Robots contributing $62 million [19] Market Data and Key Metrics Changes - The memory test market is expected to decline in total addressable market (TAM) for 2025, but the company anticipates sustaining memory revenue at 2024 levels [9] - AI-driven applications for power ICs are expected to grow significantly, with volumes forecasted to increase over 50% by 2027 [9] - The company noted persistent weakness in mobile and auto industrial markets, but Integrated Systems division shipments exceeded plans [11] Company Strategy and Development Direction - The company is focusing on AI demand in semiconductor testing, with significant investments in R&D to capture opportunities in this area [12][14] - Long-term growth drivers include AI verticalization and electrification, with expectations for solid growth in 2026 [15] - The company is strategically shifting towards large accounts and OEM channels in robotics to enhance market presence [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about AI-related demand driving growth in Q4 and into 2026, despite acknowledging the lumpy nature of shipments [25][60] - The company expects to see improvements in mobile, auto, industrial, and robotics markets, although the timing of recovery remains uncertain [15] - Management highlighted the importance of dual sourcing strategies among customers, which could benefit the company as it seeks to gain market share [35] Other Important Information - A transition in the CFO position was announced, with Michelle Turner set to take over on November 3, 2025 [16] - The company repurchased $244 million of shares in Q3 and paid $19 million in dividends, returning $575 million to shareholders through dividends and buybacks in 2025 [21] Q&A Session Summary Question: Upside in Q4 guidance - Management indicated that the upside in Q4 guidance is primarily driven by compute and memory, with compute accounting for about two-thirds of the increase [31] Question: Compute intensity and test insertions - Management expressed optimism about increasing test intensity due to larger die sizes and the shift towards chiplet-based designs [34] Question: Wafer level tests and design wins - Management confirmed that SLT is critical for ensuring quality in data centers and highlighted the importance of new technologies like CoWoP [40] Question: Memory market share and growth expectations - Management expects significant growth in memory revenue driven by market share gains, particularly in DRAM and HBM performance tests [76] Question: NAND growth expectations - Management noted that NAND is currently at a low point but anticipates growth driven by mobile industry demand and SSD capacity for AI data centers [63] Question: Mobile SOC expectations for next year - Management remains uncertain about the magnitude of growth in mobile SOC but is optimistic about potential improvements [69]

Financial Data and Key Metrics Changes - In Q3 2025, Teradyne reported sales of $769 million, with non-GAAP EPS at $0.85, both near the high end of guidance ranges [35] - Revenue grew sequentially by 18% and non-GAAP EPS increased by 49% compared to the previous quarter [23] - Non-GAAP gross margin was 58.5%, exceeding guidance due to favorable product mix [35] Business Line Data and Key Metrics Changes - Semiconductor test revenue was $606 million, with SoC revenue contributing $440 million, up 11% sequentially and 12% year over year [35] - Memory test revenue more than doubled from Q2 to $128 million, primarily driven by AI applications [35][36] - Robotics revenue was $75 million, flat quarter on quarter and down year over year, with Universal Robots contributing $62 million [36] Market Data and Key Metrics Changes - AI demand significantly influenced Q3 performance, particularly in semiconductor testing for compute and memory [23][30] - The memory total addressable market (TAM) for 2025 is expected to decline in low double digits, with Teradyne anticipating sustained memory revenue at 2024 levels despite market challenges [26] - The automotive and industrial markets showed some weakness, but AI-driven applications for power ICs were a bright spot [26] Company Strategy and Development Direction - Teradyne's strategy focuses on AI verticalization and electrification as primary growth drivers moving into 2026 [30] - The company is investing in R&D and manufacturing capacity to capture opportunities in AI-related semiconductor testing [27][30] - A transition in leadership was announced, with Michelle Turner set to become the new CFO, bringing extensive experience in technology and manufacturing [33] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about AI-related demand continuing to drive growth, particularly in compute, networking, and memory sectors [30][41] - The company noted that while Q4 is expected to show strong demand, the timing of projects remains uncertain, leading to potential lumpiness in shipments [41][92] - Overall, 2026 is anticipated to be stronger than previously expected, with improvements in mobile, auto, industrial, and robotics markets [31] Other Important Information - Teradyne repurchased $244 million of shares in Q3 and paid $19 million in dividends, returning approximately $575 million to shareholders through dividends and buybacks during the year [37] - The company ended Q3 with $427 million in cash and marketable securities [37] Q&A Session Summary Question: What is driving the upside in Q4 guidance? - Management indicated that the upside is primarily driven by compute and memory, with compute accounting for about two-thirds of the increase and memory for one-third [48] Question: How is Teradyne positioned for high-performance compute? - Management expressed optimism about increasing test intensity due to larger die sizes and the shift towards chiplet-based designs, which require more rigorous testing [56] Question: What are the expectations for memory growth in 2026? - Management expects significant growth in memory, particularly in DRAM and HBM, driven by AI applications, although NAND growth is anticipated to be slower [94] Question: How does Teradyne view the robotics market? - Management noted that while robotics revenue is expected to show some seasonal uplift in Q4, predicting growth remains challenging due to market volatility [131]