Teradyne(US:TER)2025-07-30 13:32Financial Data and Key Metrics Changes - In Q2, the company reported sales of $652 million and a non-GAAP EPS of $0.57, both above the midpoint of guidance ranges [19][20] - Non-GAAP gross margins were 57.3%, consistent with guidance, while non-GAAP operating expenses were $275 million, reflecting increased R&D investments [20][24] - Free cash flow for the quarter was $132 million, with $117 million used for share repurchases and $19 million for dividends [24][25] Business Line Data and Key Metrics Changes - Semi Test revenue was $492 million, with SoC revenue contributing $397 million, memory at $61 million, and IST at $34 million [21] - IST revenue more than doubled year-over-year, driven by HDD and mobile SLT testers [12][21] - Robotics revenue was $75 million, up quarter-over-quarter but down year-over-year, with expectations of continued weak market conditions [23] Market Data and Key Metrics Changes - Demand in AI compute is strengthening, with expectations that it will be the dominant driver of SoC business in the second half of 2025 [9][14] - The mobile segment is expected to see modest growth, primarily driven by new technology advancements in 2026 [15][16] - The automotive and industrial markets are stabilizing at low levels, with some strength in power semiconductors for data center build-outs [16] Company Strategy and Development Direction - The company is focusing on AI, verticalization, and electrification as primary growth drivers, with a strategic pivot towards large customers in robotics [9][13] - An acquisition of Quantify Photonics was completed to enhance capabilities in AI compute testing [13][19] - Plans to open a manufacturing operation in the U.S. to better serve regional customers are underway [14][40] Management's Comments on Operating Environment and Future Outlook - Management expressed increased confidence in demand trends for AI compute, with improved visibility and utilization rates [17][29] - The second half of 2025 is expected to be stronger than the first half, driven by AI-related revenue [29] - There is optimism regarding the long-term growth drivers of AI, electrification, and verticalization trends [29] Other Important Information - The company expects Q3 sales to be between $710 million and $770 million, with gross margins projected at 56.5% to 57.5% [25] - A significant customer accounted for more than 10% of revenue in Q2 [24] Q&A Session Summary Question: Outlook and Demand Trends - The company noted that the positive outlook is due to an uptick in demand, primarily in AI compute, with expectations for continued growth into Q4 [31][32] Question: Robotics Business and Manufacturing - Management discussed the establishment of a U.S. manufacturing facility to enhance supply chain resilience, with significant growth expected in 2026 [40][41] Question: Mobile Market Recovery - There is cautious optimism regarding the mobile market, with potential improvements expected in 2026 due to increased complexity and new technology [43][45] Question: AI Compute Business Size - AI compute was approximately 20% of SoC revenue in Q2, with expectations for significant growth in the back half of the year [60][61] Question: GPU Testing Opportunities - The company is optimistic about entering the GPU testing market, with expectations for modest contributions in 2026 and potential growth over time [58][76] Question: HBM Memory Market Outlook - Management clarified that the memory market outlook remains stable, with expectations for increased demand for HBM in Q4 [84][85]