Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Statements in this Quarterly Report on Form 10-Q which are not historical facts, so called “forward-looking statements,” are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those detailed in our filings with the Securities and Exchange Commission. See also Part II, Item 1A of this Quarterly Report on Form 10-Q and Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022. Readers are cautioned not to place undue reliance on these forward-looking statements which reflect management’s analysis only as of the date hereof. We assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting forward-looking statements, except as may be required by law.

Overview

We are a leading global supplier of automated test equipment and robotics solutions. We design, develop, manufacture and sell automatic test systems and robotics products. Our automatic test systems are used to test semiconductors, wireless products, data storage and complex electronics systems in many industries including the consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries. Our robotics products include collaborative robotic arms and autonomous mobile robots (“AMRs”) used by global manufacturing, logistics and industrial customers to improve quality, increase manufacturing and material handling efficiency and decrease manufacturing and logistics costs. Our automatic test equipment and robotics products and services include:

semiconductor test (“Semiconductor Test”) systems;

storage and system level test (“Storage Test”) systems, defense/aerospace (“Defense/Aerospace”) test instrumentation and systems, and circuit-board test and inspection (“Production Board Test”) systems (collectively these products represent “System Test”);

wireless test (“Wireless Test”) systems; and

robotics (“Robotics”) products.

The market for our test products is concentrated with a limited number of significant customers accounting for a substantial portion of the purchases of test equipment. A few customers drive significant demand for our test products both through direct sales and sales to the customers’ supply partners. We expect that sales of our test products will continue to be concentrated with a limited number of significant customers for the foreseeable future.

In the third quarter of 2023, the demand in our Semiconductor Test business continued to be impacted by a correction cycle driven by excess semiconductor inventory, primarily in the mobility segment of the market. The depth of this slowdown and the timing of the recovery are uncertain, however, strong automotive and image sensor demand partially offset these declines. The growth of DDR5 and High Bandwidth Memory ("HBM") devices for data center applications continue to drive demand for our products in the memory market. Over the midterm we expect the ramp of 3 nanometer and gate-all-around process technology, increasing multichip packaging, additional device complexity and unit growth will drive additional demand for test.

Our Robotics segment consists of Universal Robots A/S (“UR”), a leading supplier of collaborative robotic arms and Mobile Industrial Robots A/S (“MiR”), a leading maker of AMRs for industrial automation. The market for our Robotics segment products is dependent on the adoption of new automation technologies by large manufacturers as well as small and medium enterprises (“SMEs”) throughout the world. In the third quarter of 2023, Robotics demand stabilized after softening in the first half of 2023 .

In the third quarter of 2023, Robotics and Semiconductor Test shipments came in above our plan. While both our test and robotics businesses could still be impacted by supply constraints, our fourth quarter 2023 forecast does not exclude any revenue due to supply chain constraints.

Our financial statements are denominated in U.S. dollars. While the majority of our revenues are in U.S. dollars, approximately 70 percent of our Robotics revenue is denominated in foreign currencies. In 2022, the strengthening of the U.S. dollar was a factor in lower than forecasted revenues in our Robotics segment. Strengthening of the U.S. dollar would negatively affect Robotics revenue growth in 2023.

Our corporate strategy continues to focus on profitably gaining market share in our test businesses through the introduction of differentiated products that target expanding segments and accelerating growth through continued investment in our Robotics businesses. We plan to execute on our strategy while balancing capital allocations between returning capital to our shareholders through stock repurchases and dividends and using capital for opportunistic accretive acquisitions.

Impact of the Israel-Hamas conflict on our Business

The recent Israel-Hamas conflict could have a negative impact on our future revenue and supply chain, either of which could adversely affect our business and financial results. Our customers in Israel may experience delays in product releases due to impacts to their labor force and impacts on their suppliers because of the conflict, which could materially impact demand for our products. Similarly, our suppliers in Israel may experience delays in providing us with parts due to the conflict. In addition, the global economic uncertainty following the start of the conflict could impact demand for our products.

Supply Chain Constraints and Inflationary Pressures

The global supply shortage of electrical components, including semiconductor chips, impacted our supply chain in the first half of 2023. In the third quarter of 2023, we saw improvements related to supply constraints and, consequently, did not experience material increases in our lead times and costs for components. In addition, while not material, inflationary pressures contributed to increased costs for product components and wage inflation, impacting our cost of products, gross margin and profit for the quarter. Our supply chain team, and our suppliers, continue to manage numerous supply, production, and logistics obstacles. While not material through the third quarter of 2023, in an effort to mitigate these risks, in some cases, we have incurred higher costs due to investment in supply chain resiliency and to secure available inventory or have extended or placed non-cancellable purchase commitments with semiconductor suppliers, which introduces inventory risk if our forecasts and assumptions prove inaccurate. We have also sourced components from additional suppliers and multi-sourced and pre-ordered components and finished goods inventory in some cases in an effort to reduce the impact of the adverse supply chain conditions we have experienced. There is no assurance that these efforts will be successful. While our businesses could still be impacted by supply constraints in the future, our fourth quarter 2023 forecast does not exclude any revenue due to supply chain constraints.

See Part II—Item 1A, “Risk Factors,” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 for our risk factors regarding risks associated with both the supply chain constraints and international conflicts.

Critical Accounting Policies and Estimates

We have identified the policies which are critical to understanding our business and our results of operations. There have been no significant changes during the nine months ended October 1, 2023, to the items disclosed as our critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, except as noted below.

Critical accounting estimates are complex and may require significant judgment by management. Changes to the underlying assumptions may have a material impact on our financial condition and results of operations. These estimates may change, as new events occur and additional information is obtained. Actual results could differ significantly from these estimates under different assumptions or conditions.

Preparation of Financial Statements and Use of Estimates

The preparation of consolidated financial statements requires management to make estimates and judgments that affect the amounts reported in the financial statements. Actual results may differ significantly from these estimates under different assumptions or conditions.

SELECTED RELATIONSHIPS WITHIN THE CONDENSED CONSOLIDATED

STATEMENTS OF OPERATIONS

		For the Three Months Ended								For the Nine Months Ended
		October 1, 2023				October 2, 2022				October 1, 2023				October 2, 2022
Percentage of revenues:
Revenues:
Products			78	%			82	%			78	%			83	%
Services			22				18				22				17
Total revenues			100				100				100				100
Cost of revenues:
Cost of products			34				34				33				33
Cost of services			9				8				10				7
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)			43				41				42				40
Gross profit			57				59				58				60
Operating expenses:
Selling and administrative			20				16				22				17
Engineering and development			15				14				16				14
Acquired intangible assets amortization			1				1				1				1
Restructuring and other			1				—				1				1
Total operating expenses			36				31				39				32
Income from operations			20				28				19				27
Non-operating (income) expense:
Interest income			(1	)			—				(1	)			—
Interest expense			—				—				—				—
Other (income) expense, net			1				1				—				1
Income before income taxes			21				27				19				27
Income tax provision			2				5				3				4
Net income			18	%			22	%			17	%			22	%

Results of Operations

Third Quarter 2023 Compared to Third Quarter 2022

Revenues

Revenues by our reportable segments were as follows:

		For the Three Months Ended
		October 1, 2023				October 2, 2022				Dollar Change
		(in millions)
Semiconductor Test		$	497.9			$	575.7			$	(77.8	)
System Test			83.2				116.2				(33.0	)
Robotics			85.7				89.1				(3.4	)
Wireless Test			37.0				46.1				(9.1	)
		$	703.7			$	827.1			$	(123.4	)

The decrease in Semiconductor Test revenues of $77.8 million, or 13.5%, was driven primarily by lower tester sales for compute and industrial applications and Memory Test sales in DRAM wafer sort and Flash Final Test. The decrease in System Test revenues of $33.0 million, or 28.4%, was primarily due to lower sales in Storage Test of system level and hard disk drive testers, partially offset by higher sales in Defense/Aerospace. The decrease in Robotics revenues of $3.4 million, or 3.8%, was driven primarily by softening demand due to slowing global industrial activity and macro-economic headwinds, and the impact of the transformation of Universal Robots sales channel. The decrease in Wireless Test revenues of $9.1 million, or 19.7% was primarily due to a decrease in connectivity test products.

Revenues by country as a percentage of total revenues were as follows (1):

		For the Three Months Ended
		October 1, 2023				October 2, 2022
Korea			15	%			18	%
Japan			15				4
Taiwan			14				23
United States			13				14
China			12				16
Europe			9				7
Philippines			8				5
Singapore			4				3
Malaysia			3				4
Thailand			3				4
Rest of World			4				2
			100	%			100	%

(1)

Revenues attributable to a country are based on location of customer site.

Gross Profit

Our gross profit was as follows:

		For the Three Months Ended
		October 1, 2023				October 2, 2022				Dollar/Point Change
		(in millions)
Gross profit		$	398.3			$	485.4			$	(87.1	)
Percent of total revenues			56.6	%			58.7	%			(2.1	)

Gross profit as a percent of revenue decreased by 2.1 points, primarily due to product mix, spending to strengthen our supply chain, and lower volume.

Selling and Administrative

Selling and administrative expenses were as follows:

		For the Three Months Ended
		October 1, 2023				October 2, 2022				Dollar Change
		(in millions)
Selling and administrative		$	138.3			$	135.6			$	2.7
Percent of total revenues			19.7	%			16.4	%

The increase of $2.7 million in selling and administrative expenses was primarily due to higher spending in Robotics, partially offset by lower variable compensation.

Engineering and Development

Engineering and development expenses were as follows:

		For the Three Months Ended
		October 1, 2023				October 2, 2022				Dollar Change
		(in millions)
Engineering and development		$	104.4			$	111.7			$	(7.3	)
Percent of total revenues			14.8	%			13.5	%

The decrease of $7.3 million in engineering and development expenses was primarily due to lower spending in Semiconductor Test and lower variable compensation, partially offset by higher spending in Robotics.

Restructuring and Other

During the three months ended October 1, 2023, we recorded $4.7 million of severance charges related to headcount reductions of 94 people primarily in Semiconductor Test and Robotics, which included charges related to a voluntary early retirement program for employees meeting certain conditions, and a $1.5 million contract termination charge.

During the three months ended October 2, 2022, we recorded $1.2 million of severance charges primarily in Robotics, and a charge of $0.7 million for an increase in legal liabilities.

Interest and Other

		For the Three Months Ended
		October 1, 2023				October 2, 2022				Dollar Change
		(in millions)
Interest income		$	(6.9	)		$	(1.3	)		$	(5.6	)
Interest expense			1.0				0.8			$	0.2
Other (income) expense, net			5.6				5.8			$	(0.2	)

Interest income increased by $5.6 million primarily due to higher interest rates in 2023.

Income (Loss) Before Income Taxes

		For the Three Months Ended
		October 1, 2023				October 2, 2022				Dollar Change
		(in millions)
Semiconductor Test		$	136.5			$	182.6			$	(46.1	)
System Test			23.8				40.2				(16.4	)
Wireless Test			9.5				12.6				(3.1	)
Robotics			(21.8	)			(4.0	)			(17.8	)
Corporate and Eliminations (1)			(3.6	)			(5.3	)			1.7
		$	144.3			$	226.2			$	(81.9	)

(1)

Included in Corporate and Eliminations are interest income, interest expense, net foreign exchange gains (losses), intercompany eliminations, legal and environmental fees, contract termination settlement charge and severance charges.

The decrease in income before income taxes in Semiconductor Test was driven primarily by lower tester sales for compute and industrial applications, and Memory Test sales in DRAM wafer sort and flash final test. The decrease in income before income taxes in System Test was primarily due to lower sales in Storage Test of system level and hard disk drive testers. The decrease in income before income taxes in Wireless Test was driven primarily by a decrease in sales of connectivity test products. The decrease in income before income taxes in Robotics was driven primarily by softening demand due to slowing global industrial activity and macro-economic headwinds, the impact of the transformation of Universal Robots sales channel and product mix. The loss before income taxes in Corporate and Eliminations was primarily due to changes in unrealized gains/losses on equity securities.

Income Taxes

The effective tax rate for the three months ended October 1, 2023 and October 2, 2022, was 11.2% and 18.9%, respectively. The decrease in the effective tax rate from the three months ended October 2, 2022, to three months ended October 1, 2023, primarily resulted from an increase in benefit related to tax credits and an increase in benefit related to the international provisions of the U.S. Tax Cuts and Jobs Act of 2017. These decreases were partially offset by an increase in discrete expense related to foreign currency gain or loss.

Nine Months 2023 Compared to Nine Months 2022

Revenues

Revenues by our reportable segments were as follows:

		For the Nine Months Ended
		October 1, 2023				October 2, 2022				Dollar Change
		(in millions)
Semiconductor Test		$	1,387.6			$	1,599.4			$	(211.8	)
System Test			252.1				369.5				(117.4	)
Robotics			246.5				292.8				(46.3	)
Wireless Test			119.5				161.5				(42.0	)
		$	2,005.7			$	2,423.2			$	(417.5	)

The decrease in Semiconductor Test revenues of $211.8 million or 13.2%, was driven primarily by lower tester sales for mobility and compute applications. The decrease in System Test revenues of $117.4 million, or 31.8%, was primarily due to lower sales in Storage Test of system level and hard disk drive testers. The decrease in Robotics revenues of $46.3 million, or 15.8%, was driven primarily by softening demand due to slowing global industrial activity and macro-economic headwinds and the impact of the transformation of Universal Robots sales channel. The decrease in Wireless Test revenues of $42.0 million, or 26.0%, was primarily due to a decrease in sales of connectivity test products.

Revenues by country as a percentage of total revenues were as follows (1):

		For the Nine Months Ended
		October 1, 2023				October 2, 2022
United States			16	%			14	%
Taiwan			15				22
Korea			14				16
Japan			12				5
China			12				16
Europe			10				8
Philippines			6				3
Singapore			5				3
Malaysia			4				5
Thailand			3				5
Rest of World			3				3
			100	%			100	%

(1)

Revenues attributable to a country are based on location of customer site.

Gross Profit

Our gross profit was as follows:

		For the Nine Months Ended
		October 1, 2023				October 2, 2022				Dollar/Point Change
		(in millions)
Gross profit		$	1,157.2			$	1,446.7			$	(289.5	)
Percent of total revenues			57.7	%			59.7	%			(2.0	)

Gross profit as a percent of revenue decreased by 2.0 points, primarily due to a lower volume, spending to strengthen our supply chain, and product mix.

Selling and Administrative

Selling and administrative expenses were as follows:

		For the Nine Months Ended
		October 1, 2023				October 2, 2022				Dollar Change
		(in millions)
Selling and administrative		$	435.0			$	415.4			$	19.6
Percent of total revenues			21.7	%			17.1	%

The increase of $19.6 million in selling and administrative expenses was primarily due to the charge of $5.9 million recorded in the nine months ended October 1, 2023, related to the modification of Teradyne’s chief executive officer’s outstanding equity awards in connection with his retirement and higher spending in Robotics, System Test, and Semiconductor Test.

Engineering and Development

Engineering and development expenses were as follows:

		For the Nine Months Ended
		October 1, 2023				October 2, 2022				Dollar Change
		(in millions)
Engineering and development		$	315.9			$	331.8			$	(15.9	)
Percent of total revenues			15.7	%			13.7	%

The decrease of $15.9 million in engineering and development expenses was due to lower variable compensation and lower spending in Semiconductor Test, partially offset by higher spending in Robotics.

Restructuring and Other

During the nine months ended October 1, 2023, we recorded $11.8 million of severance charges related to headcount reductions of 197 people primarily in Semiconductor Test and Robotics, which included charges related to a voluntary early retirement program for employees meeting certain conditions, a $1.5 million contract termination charge, and a charge of $1.1 million for an increase in environmental liability.

During the nine months ended October 2, 2022, we recorded a charge of $14.7 million related to the arbitration claim filed against Teradyne and AutoGuide related to an earn-out dispute, which was settled on March 25, 2022 for $26.7 million, a charge of $2.7 million for an increase in environmental and legal liabilities, and $2.1 million of severance charges primarily in Robotics.

Interest and Other

		For the Nine Months Ended
		October 1, 2023				October 2, 2022				Dollar Change
		(in millions)
Interest income		$	(18.5	)		$	(3.0	)		$	(15.5	)
Interest expense			3.0				2.7				0.3
Other (income) expense, net			6.5				20.5				(14.0	)

Interest income increased by $15.5 million primarily due to higher interest rates in 2023. Other (income) expense, net decreased by $14.0 million primarily due to changes in unrealized gains/losses on equity securities, from an $11.1 million loss in 2022 to a $2.9 million gain in 2023.

Income (Loss) Before Income Taxes

		For the Nine Months Ended
		October 1, 2023				October 2, 2022				Dollar Change
		(in millions)
Semiconductor Test		$	361.7			$	510.1			$	(148.4	)
System Test			67.6				135.6				(68.0	)
Wireless Test			30.8				56.7				(25.9	)
Robotics			(66.7	)			(15.5	)			(51.2	)
Corporate and Eliminations (1)			(7.7	)			(41.7	)			34.0
		$	385.8			$	645.1			$	(259.3	)

(1)

Included in Corporate and Eliminations are interest income, interest expense, net foreign exchange gains (losses), intercompany eliminations, legal and environmental fees, severance charges, pension, contract termination settlement charge and an expense for the modification of Teradyne’s former chief executive officer’s outstanding equity awards.

The decrease in income before income taxes in Semiconductor Test was driven primarily by lower tester sales for mobility and compute applications. The decrease in income before income taxes in System Test was primarily due to lower sales in Storage Test of system level and hard disk drive testers. The decrease in income before income taxes in Wireless Test was driven primarily by a decrease in sales of connectivity test products. The decrease in income before income taxes in Robotics was driven primarily by softening demand due to slowing global industrial activity and macro-economic headwinds and the impact of the transformation of Universal Robots sales channel. The decrease in loss before income taxes in Corporate and Eliminations was primarily due to legal settlement charges in 2022 related to litigation for the earn-out dispute in connection with the AutoGuide acquisition, changes in unrealized gains/losses on equity securities and higher interest income.

Income Taxes

The effective tax rate for the nine months ended October 1, 2023 and October 2, 2022, was 14.0% and 15.8%, respectively. The decrease in the effective tax rate from the nine months ended October 1, 2023, to the nine months ended October 2, 2022, primarily resulted from an increase in benefit related to tax credits and an increase in benefit related to the international provisions of the U.S. Tax Cuts and Jobs Act of 2017. These decreases were partially offset by a projected shift in the geographic distribution of income, which increases the income subject to taxation in higher tax rate jurisdictions relative to lower tax rate jurisdictions and a reduction in discrete benefit from equity compensation.

Contractual Obligations

There have been no changes outside of the ordinary course of business to our contractual obligations as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

Liquidity and Capital Resources

Our cash, cash equivalents and marketable securities balances decreased by $184.7 million in the nine months ended October 1, 2023, to $820.4 million.

Operating activities during the nine months ended October 1, 2023, provided cash of $336.5 million. Changes in operating assets and liabilities used cash of $119.3 million due to a $27.4 million increase in operating assets and a $91.9 million decrease in operating liabilities.

The increase in operating assets was primarily due to a $64.0 million increase in prepayments and other assets due to prepayments to our contract manufacturers, partially offset by a $30.2 million decrease in accounts receivable and a $6.4 million decrease in inventories.

The decrease in operating liabilities was due to a $56.6 million decrease in accrued employee compensation, a $49.5 million decrease in deferred revenue and customer advance payments, a $42.7 million decrease in income taxes, and $3.7 million of retirement plan contributions, partially offset by a $36.0 million increase in accounts payable, and a $24.5 million increase in other accrued liabilities.

Investing activities during the nine months ended October 1, 2023, used cash of $149.2 million due to $137.8 million used for purchases of marketable securities, $115.3 million used for purchases of property, plant and equipment, and $5.0 million used for issuance of convertible loan, partially offset by $37.0 million and $71.4 million in proceeds from sales and maturities of marketable securities, respectively, and $0.5 million in proceeds from the cancellation of Teradyne owned life insurance policies related to the cash surrender value.

Financing activities during the nine months ended October 1, 2023, used cash of $410.8 million due to $346.5 million used for the repurchase of 3.4 million shares of common stock at an average price of $103.89 per share, $51.1 million used for dividend payments, $26.7 million used for payments of convertible debt principal, and $20.6 million used for payment related to net settlements of employee stock compensation awards, partially offset by $34.1 million from the issuance of common stock under employee stock purchase and stock option plans.

Operating activities during the nine months ended October 2, 2022, provided cash of $394.5 million. Changes in operating assets and liabilities used cash of $271.7 million. This was due to a $158.9 million increase in operating assets and a $112.8 million decrease in operating liabilities.

The increase in operating assets was due to a $94.3 million increase in prepayments and other assets due to prepayments to our contract manufacturers, a $68.8 million increase in inventories, partially offset by a $4.2 million decrease in accounts receivable.

The decrease in operating liabilities was due to a $82.9 million decrease in accrued employee compensation, a $31.4 million decrease in income taxes, a $7.5 million decrease in other accrued liabilities, a $5.9 million decrease in deferred revenue and customer advance payments and $3.9 million of retirement plan contributions, partially offset by an $18.7 million increase in accounts payable.

Investing activities during the nine months ended October 2, 2022 provided cash of $45.4 million due to $259.2 million and $182.1 million in proceeds from sales and maturities of marketable securities, respectively, partially offset by $267.2 million used for purchases of marketable securities, and $128.7 million used for purchases of property, plant and equipment.

Financing activities during the nine months ended October 2, 2022 used cash of $858.8 million due to $750.0 million used for the repurchase of 7.2 million shares of common stock at an average price of $103.83 per share, $52.6 million used for dividend payments, $52.0 million used for payments of convertible debt principal, and $33.0 million used for payment related to net settlements of employee stock compensation awards, partially offset by $28.7 million from the issuance of common stock under employee stock purchase and stock option plans.

In January 2023, May 2023, and August 2023, Teradyne’s Board of Directors declared a quarterly cash dividend of $0.11 per share. Dividend payments for the three and nine months ended October 1, 2023, were $16.9 million and $51.1 million, respectively.

In January 2022, May 2022, and August 2022, Teradyne’s Board of Directors declared a quarterly cash dividend to $0.11 per share. Dividend payments for the three and nine months ended October 2, 2022, were $17.1 million and $52.6 million, respectively.

In January 2023, our Board of Directors cancelled the 2021 repurchase program and approved a new repurchase program for up to $2.0 billion of common stock. We intend to repurchase up to $500.0 million of common stock in 2023 subject to market conditions.

During the nine months ended October 1, 2023, we repurchased 3.4 million shares of common stock for $346.5 million, which excludes related excise tax, at an average price of $103.89 per share. During the nine months ended October 2, 2022 , we repurchased 7.2 million shares of common stock for $750.0 million at an average price of $103.83 per share.

While we declared a quarterly cash dividend and authorized a share repurchase program, we may reduce or eliminate the cash dividend or share repurchase program in the future. Future cash dividends and stock repurchases are subject to the discretion of our Board of Directors, which will consider, among other things, our earnings, capital requirements and financial condition.

On May 1, 2020, we entered into a credit agreement providing a three-year, senior secured revolving credit facility of $400 million. On December 10, 2021, the credit agreement was amended to extend the senior secured revolving credit facility to December 10, 2026. On October 5, 2022, the credit agreement was amended to increase the amount of the credit facility to $750.0 million from $400.0 million. As of November 3, 2023, we have not borrowed any funds under the credit facility.

We believe our cash, cash equivalents, marketable securities and senior secured revolving credit facility will be sufficient to pay our quarterly dividend and meet our working capital and expenditure needs for at least the next twelve months. Inflation has not had a significant long-term impact on earnings.

Equity Compensation Plans

In addition to our 1996 Employee Stock Purchase Program as discussed in Note Q: “Stock-Based Compensation” in our 2022 Annual Report on Form 10-K, we have a 2006 Equity and Cash Compensation Incentive Plan (the “2006 Equity Plan”).

The purpose of the 1996 Employee Stock Purchase Plan is to encourage stock ownership by all eligible employees of Teradyne. The purpose of the 2006 Equity Plan is to provide equity ownership and compensation opportunities in Teradyne to our employees, officers and directors. Both plans were approved by our shareholders.

Recently Issued Accounting Pronouncements

For the nine months ended October 1, 2023, there were no recently issued accounting pronouncements that had, or are expected to have, a material impact to our consolidated financial statements.