Teradyne 10-Q 2025-06-29

Filed 2025-08-01. 8 sections, 175K characters. Original on sec.gov · Markdown · JSON

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 29, 2025

OR

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File No. 001-06462

TERADYNE, INC.

(Exact name of registrant as specified in its charter)

Massachusetts04-2272148
(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.)
600 Riverpark Drive**,** North Reading**,** Massachusetts01864
(Address of Principal Executive Offices)(Zip Code)

978**-**370-2700

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock**, par value $0.125** per shareTERNasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files) Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act (check one):

Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Emerging growth company☐
Smaller reporting company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s only class of Common Stock as of July 28, 2025, was 159,073,532 shares.

TERADYNE, INC.

INDEX

Page No.
PART I. FINANCIAL INFORMATION
Item 1.Financial Statements (Unaudited):1
Condensed Consolidated Balance Sheets as of June 29, 2025, and December 31, 20241
f
Condensed Consolidated Statements of Operations for the Three and Six Months ended June 29, 2025, and June 30, 20242
Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months ended June 29, 2025, and June 30, 20243
Condensed Statements of Shareholders’ Equity for the Three and Six Months Ended June 29, 2025, and June 30, 20244
d
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 29, 2025, and June 30, 20245
Notes to Condensed Consolidated Financial Statements6
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations29
Item 3.Quantitative and Qualitative Disclosures about Market Risk38
Item 4.Controls and Procedures39
PART II. OTHER INFORMATION
Item 1.Legal Proceedings40
Item 1A.Risk Factors40
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds41
Item 4.Mine Safety Disclosures41
Item 5.Other Information42
Item 6.Exhibits43

PART I

Item 1. Financial Statements

TERADYNE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

June 29, 2025December 31, 2024
(in thousands, except per share amount)
ASSETS
Current assets:
Cash and cash equivalents$339,252$553,354
Marketable securities28,63846,312
Accounts receivable, less allowance for credit losses of $1,708 and $2,111 at June 29, 2025 and December 31, 2024, respectively433,001471,426
Inventories, net350,505298,492
Prepayments412,981429,086
Other current assets19,23017,727
Total current assets1,583,6071,816,397
Property, plant and equipment, net559,813508,171
Operating lease right-of-use assets, net67,40770,185
Marketable securities120,684124,121
Deferred tax assets239,809222,438
Retirement plans assets11,92211,994
Equity method investment545,414494,494
Other assets54,50349,620
Acquired intangible assets, net58,23315,927
Goodwill520,470395,367
Total assets$3,761,862$3,708,714
LIABILITIES
Current liabilities:
Accounts payable$172,025$134,792
Accrued employees’ compensation and withholdings176,482204,991
Deferred revenue and customer advances123,989107,710
Other accrued liabilities110,14390,777
Operating lease liabilities19,77018,699
Income taxes payable72,85667,610
Total current liabilities675,265624,579
Retirement plans liabilities139,249133,338
Long-term deferred revenue and customer advances40,41440,505
Deferred tax liabilities6,7561,038
Long-term other accrued liabilities8,1867,442
Long-term operating lease liabilities54,69157,922
Long-term incomes taxes payable—24,596
Total liabilities924,561889,420
Commitments and contingencies (Note S)
SHAREHOLDERS’ EQUITY
Common stock, $0.125 par value, 1,000,000 shares authorized; 159,210 and 161,722 shares issued and outstanding at June 29, 2025, and December 31, 2024, respectively19,90120,215
Additional paid-in capital1,941,5011,909,538
Accumulated other comprehensive loss (gain)41,036(81,220)
Retained earnings834,863970,761
Total shareholders’ equity2,837,3012,819,294
Total liabilities and shareholders’ equity$3,761,862$3,708,714

The accompanying notes, together with the Notes to Consolidated Financial Statements included in Teradyne’s Annual Report on Form 10-K for the year ended December 31, 2024, are an integral part of the condensed consolidated financial statements.

TERADYNE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

For the Three Months EndedFor the Six Months Ended
June 29, 2025June 30, 2024June 29, 2025June 30, 2024
(in thousands, except per share amount)(in thousands, except per share amount)
Revenues:
Products$522,657$596,877$1,084,614$1,055,310
Services129,140133,002252,863274,388
Total revenues651,797729,8791,337,4771,329,698
Cost of revenues:
Cost of products232,422250,236456,564450,999
Cost of services46,36353,79992,564113,573
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)278,785304,035549,128564,572
Gross profit373,012425,844788,349765,126
Operating expenses:
Selling and administrative157,782154,470315,039303,658
Engineering and development118,382111,816236,570215,015
Acquired intangible assets amortization3,7334,6648,3069,361
Restructuring and other2,3722,01216,8876,440
Gain on sale of business—(57,486)—(57,486)
Total operating expenses282,269215,476576,802476,988
Income from operations90,743210,368211,547288,138
Non-operating (income) expense:
Interest income(4,351)(6,715)(9,427)(14,582)
Interest expense8051,5301,6002,190
Other (income) expense, net(2,270)(3,850)3,7908,225
Income before income taxes and equity in net earnings of affiliate96,559219,403215,584292,305
Income tax provision12,26033,13026,80441,835
Income before equity in net earnings of affiliate84,299186,273188,780250,470
Equity in net earnings of affiliate(5,927)—(11,511)—
Net income$78,372$186,273$177,269$250,470
Net income per common share:
Basic$0.49$1.18$1.10$1.61
Diluted$0.49$1.14$1.10$1.54
Weighted average common shares—basic159,967157,804160,734155,426
Weighted average common shares—diluted160,135163,470161,065162,909

The accompanying notes, together with the Notes to Consolidated Financial Statements included in Teradyne’s Annual Report on Form 10-K for the year ended December 31, 2024, are an integral part of the condensed consolidated financial statements.

TERADYNE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

For the Three Months EndedFor the Six Months Ended
June 29, 2025*

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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, 2024. 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 provider of automated test equipment and robotics products. Our automated test systems are used to test semiconductors, wireless products, data storage, silicon photonics, and complex electronics systems in many industries including consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries. Our robotics product offerings consist primarily of collaborative robotic arms and autonomous mobile robots used by global manufacturing, logistics and industrial customers to improve quality and increase manufacturing and material handling efficiency, while reducing costs. In the first quarter of 2025, we identified opportunities for operational synergies amongst our production board test, defense and aerospace, and wireless test businesses leading to the creation of the Product Test division as a new segment effective March 2025. Our automated test equipment and robotics products and services include:

semiconductor test (“Semiconductor Test”) systems;

robotics (“Robotics”) products; and

product test ("Product Test") systems, which includes defense/aerospace ("Defense/Aerospace") test instrumentation and systems, circuit-board test and inspection ("Production Board Test") systems, wireless test systems ("Wireless Test"), and photonic integrated circuit ("PIC") test solutions.

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 products both through direct sales and sales to the customer’s 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.

Although total company revenue in the second quarter declined year over year and sequentially, we have seen demand in Semiconductor Test for the second half of the year strengthening, specifically in AI Compute, networking and memory. In the second quarter, Robotics was impacted by ongoing macroeconomic challenges and leadership changes, which resulted in a quarterly loss. We are focused on our channel transformation strategy as we transition toward serving large direct customers and we are continuing to cautiously manage operating expenses to deliver profitability in Robotics in the mid-term.

On May 31, 2025, we acquired privately held Quantifi Photonics ("Quantifi"), a leader in PIC test solutions for a total purchase price of approximately $127.2 million. This acquisition is expected to enable the delivery of scalable PIC test solutions and is included in our Product Test segment. Over time, we also intend to leverage the engineering expertise and technology to enhance functionality and create additional differentiation in our Semiconductor Test business, specifically with integration into our UltraFlexPlus platform.

On January 31, 2025, we acquired Infineon Technologies AG's ("Infineon") automated test equipment technology and associated development team ("AET") based in Regensburg, Germany for a total purchase price of 17.6 million Euros, equivalent to $18.3 million. AET adds resources and expertise to our company and strengthens the relationship between Teradyne and this key customer. AET is included in our Semiconductor Test segment.

While revenues in our test businesses are predominantly in U.S. dollars, the majority of our Robotics revenue is denominated in foreign currencies. Strengthening of the U.S. dollar would negatively affect Robotics revenue growth in 2025.

Our capital allocation plan will continue to be balanced between investing in organic and inorganic growth and returning cash to shareholders through share repurchases and dividends. During the first six months of 2025 we completed the acquisitions of Quantifi and AET and additionally, we returned $313.5 million to shareholders through $274.9 million of share buybacks and $38.6 million of dividend payments.

On July 4, 2025, H.R. 1, commonly referred to as the "One Big Beautiful Bill Act" (“OBBBA”), was signed into law, enacting significant changes to U.S. corporate tax law. As of the date of this filing, we do not expect the OBBBA to have a material impact on our condensed consolidated financial statements or our future tax positions in any tax jurisdictions where we operate. We continue to evaluate the provisions of the OBBBA and will incorporate any necessary adjustments as further guidance becomes available.

On April 2, 2025, the US government announced reciprocal tariffs which could impact our businesses. A pause until August 1, 2025, was instituted on the reciprocal tariffs (August 14 for China). We continue to assess the potential impact of the tariffs, but based on currently available information we do not anticipate a material impact to our costs as a result of these measures. However, the ramifications on end customer demand remains unclear as the global economy works through trade negotiations.

For information regarding risks associated with import-export control regulations and similar applicable laws and regulations, see Part II - Item 1A "Risk Factors- Risks Related to Legal and Regulatory Compliance" included elsewhere in this Form 10-K.

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 six months ended June 29, 2025, 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, 2024.

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 EndedFor the Six Months Ended
June 29, 2025June 30, 2024June 29, 2025June 30, 2024
Percentage of revenues:
Revenues:
Products80%82%81%79%
Services20181921
Total revenues100100100100
Cost of revenues:
Cost of products36343434
Cost of services7779
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)43424142
Gross profit57585958
Operating expenses:
Selling and administrative24212423
Engineering and development18151816
Acquired intangible assets amortization1111
Restructuring and other——1—
Gain on sale of business—(8)—(4)
Total operating expenses43304336
Income from operations14291622
Non-operating (income) expense:
Interest income(1)(1)(1)(1)
Interest expense————
Other (income) expense, net—(1)—1
Income before income taxes and equity in net earnings of affiliate15301622
Income tax provision2523
Income before equity in net earnings of affiliate13261419
Equity in net earnings of affiliate(1)—(1)—
Net income12%26%13%19%

Results of Operations

Second Quarter 2025 Compared to Second Quarter 2024

Revenues

Revenues by our reportable segments were as follows:

For the Three Months Ended
June 29, 2025June 30, 2024Dollar Change
(in millions)
Semiconductor Test$491.9$559.9$(68.0)
Robotics74.990.2(15.3)
Product Test85.179.75.4
$651.8$729.9$(78.1)

The decrease in Semiconductor Test revenues of $68.0 million, or 12.1%, was driven primarily by lower sales for memory applications. The decrease in Robotics revenues of $15.3 million, or 17.0%, was primarily due to lower sales of collaborative robotic arms due to market weakness. The increase in Product Test revenues of $5.4 million, or 6.8%, was driven by higher Defense/Aerospace, Production Board Test, and wireless tester sales.

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

For the Three Months Ended
June 29, 2025June 30, 2024
Taiwan35%21%
China1613
United States1211
Europe98
Korea729
Philippines51
Japan49
Malaysia41
Singapore32
Thailand22
Rest of World33
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
June 29, 2025June 30, 2024Dollar/Point Change
(in millions)
Gross profit$373.0$425.8$(52.8)
Percent of total revenues57.2%58.3%(1.1)

Gross profit as a percent of revenue decreased by 1.1 points, primarily due to lower volume overall and margin declines at Robotics.

Selling and Administrative

Selling and administrative expenses were as follows:

For the Three Months Ended
June 29, 2025June 30, 2024Dollar Change
(in millions)
Selling and administrative$157.8$154.5$3.3
Percent of total revenues24.2%21.2%

The increase of $3.3 million in selling and administrative expenses was primarily driven by higher spending in Semiconductor Test, partially offset by a reduction in spending in Robotics.

Engineering and Development

Engineering and development expenses were as follows:

For the Three Months Ended
June 29, 2025June 30, 2024Dollar Change
(in millions)
Engineering and development$118.4$111.8$6.6
Percent of total revenues18.2%15.3%

The increase of $6.6 million in engineering and development expenses was primarily due to higher spending in Semiconductor Test, partially offset by a reduction in spending in Robotics.

Restructuring and Other

During the three months ended June 29, 2025, we recorded $2.3 million of severance charges, $0.8 million of which is related to the Robotics restructuring which was initiated during the three months ended March 30, 2025, and impacted approximately 150 employees. During the three months ended June 29, 2025, we made $3.9 million of Robotics severance payments. We expect all outstanding Robotics severance payments to be made prior to the end of our third quarter.

During the three months ended June 30, 2024, we recorded $2.0 million of severance charges related to headcount reductions of 35 people, primarily in Robotics.

Interest and Other

For the Three Months Ended
June 29, 2025June 30, 2024Dollar Change
(in millions)
Interest income$(4.4)$(6.7)$2.3
Interest expense0.81.5$(0.7)
Other (income) expense, net(2.3)(3.9)$1.6

The decrease in interest income was driven primarily by lower cash balances in the current period.

Income (Loss) Before Income Taxes and Equity in Net Earnings of Affiliate

For the Three Months Ended
June 29, 2025June 30, 2024Dollar Change
(in millions)
Semiconductor Test$95.8$157.2$(61.4)
Robotics(18.5)(17.9)(0.6)
Product Test15.616.3(0.7)
Corporate and Eliminations (1)3.863.8(60.0)
$96.7$219.4$(122.7)

(1)

Included in Corporate and Eliminations are interest income, interest expense, net foreign exchange gains (losses), intercompany eliminations, severance charges, pension and postretirement plan actuarial gains (losses), contingent consideration adjustments, acquisition and divestiture related expenses, gain on sale of business and an expense for the modification of Teradyne's former chief executive officer's outstanding equity awards.

The decrease in income before income taxes and equity in net earnings of affiliate in Semiconductor Test was driven primarily by lower sales in memory. The decrease in income before income taxes and equity in net earnings of affiliate in Robotics was primarily due to lower sales of collaborative robotic arms, partially offset by lower operating expenses.

Income Taxes

The effective tax rate for the three months ended June 29, 2025, and June 30, 2024, was 12.7% and 15.1%, respectively. The decrease in the effective tax rate from the three months ended June 30, 2024, to the three months ended June 29, 2025, is primarily attributable to the benefit of a projected shift in the geographic distribution of income and increases in benefits related to tax credits and the international provision of the U.S. Tax Cuts and Jobs Act of 2017.

Six Months 2025 Compared to Six Months 2024

Revenues

Revenues by our reportable segments were as follows:

For the Six Months Ended
June 29, 2025June 30, 2024Dollar Change
(in millions)
Semiconductor Test$1,034.4$994.7$39.7
Robotics143.9177.9(34.0)
Product Test159.2157.12.1
$1,337.5$1,329.7$7.8

The increase in Semiconductor Test revenues of $39.7 million, or 4.0%, was driven primarily by higher sales in mobility and in compute for artificial intelligence applications partially offset by the divestiture of the DIS business and declines in memory. The decrease in Robotics revenues of $34.0 million, or 19.1%, was primarily due to lower sales of collaborative robotic arms due to market weakness.

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

For the Six Months Ended
June 29, 2025June 30, 2024
Taiwan31%17%
China1710
United States1214
Korea1028
Europe79
Singapore62
Philippines42
Japan310
Malaysia32
Thailand22
Rest of World54
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 Six Months Ended
June 29, 2025June 30, 2024Dollar/Point Change
(in millions)
Gross profit$788.3$765.1$23.2
Percent of total revenues58.9%57.5%1.4

Gross profit as a percent of revenue increased by 1.4 points, primarily due to product mix in Semiconductor Test.

Selling and Administrative

Selling and administrative expenses were as follows:

For the Six Months Ended
June 29, 2025June 30, 2024Dollar Change
(in millions)
Selling and administrative$315.0$303.7$11.3
Percent of total revenues23.6%22.8%

The increase of $11.3 million in selling and administrative expenses was primarily due to higher spending in Semiconductor Test partially offset by lower spending in Robotics.

Engineering and Development

Engineering and development expenses were as follows:

For the Six Months Ended
June 29, 2025June 30, 2024Dollar Change
(in millions)
Engineering and development$236.6$215.0$21.6
Percent of total revenues17.7%16.2%

The increase of $21.6 million in engineering and development expenses was primarily due to higher spending in Semiconductor Test partially offset by lower spending in Robotics.

Restructuring and Other

During the six months ended June 29, 2025, we recorded $13.7 million of severance charges, $10.0 million of which is related to the Robotics restructuring which impacted approximately 150 employees, and $2.1 million of which related to Product Test. During the six months ended June 29, 2025, we made $8.1 million of Robotics severance payments. We expect all Robotics severance payments to be made prior to the end of our third quarter. Additionally, we recorded $1.6 million of acquisition and divestiture expenses related primarily to the Quantifi acquisition, and $1.2 million of charges related to lease terminations.

During the six months ended June 30, 2024, we recorded $2.2 million of acquisition and divestiture expenses related to the Technoprobe transactions, and $4.2 million of severance and other charges, primarily related to headcount reductions of 66 people, principally in Robotics and Semiconductor Test, which included charges related to a voluntary early retirement program for employees meeting certain conditions.

Gain on Sale of Business

During the six months ended June 30, 2024, we recorded a gain of $57.5 million associated with the sale of DIS to Technoprobe.

Interest and Other

For the Six Months Ended
June 29, 2025June 30, 2024Dollar Change
(in millions)
Interest income$(9.4)$(14.6)$5.2
Interest expense1.62.2(0.6)
Other (income) expense, net3.88.2(4.4)

Interest income decreased by $5.2 million primarily due to lower cash balances. In the period ended June 30, 2024, other (income) expense, net included the change in value of our call option purchased in connection with the acquisition of Technoprobe. The call option expired on May 23, 2024.

Income (Loss) Before Income Taxes and Equity in Net Earnings of Affiliate

For the Six Months Ended
June 29, 2025June 30, 2024Dollar Change
(in millions)
Semiconductor Test$251.6$240.6$11.0
Robotics(55.7)(31.9)(23.8)
Product Test24.229.8(5.6)
Corporate and Eliminations (1)(4.5)53.8(58.3)
$215.6$292.3$(76.7)

(1)

Included in Corporate and Eliminations are gain on sale of business, interest income, interest expense, net foreign exchange gains (losses), intercompany eliminations, severance charges, pension and postretirement plan actuarial gains (losses), contingent consideration adjustments, acquisition and divestiture related expenses, gain on sale of business and an expense for the modification of Teradyne's former chief executive officer's outstanding equity awards.

The increase in income before income taxes and equity in net earnings of affiliate in Semiconductor Test was driven primarily by higher sales in compute for artificial intelligence applications. The decrease in income before income taxes and equity in net earnings of affiliate in Robotics was primarily due to lower sales of collaborative robotic arms, partially offset by lower operating expenses.

Income Taxes

The effective tax rate for the six months ended June 29, 2025, and June 30, 2024, was 12.4% and 14.3%, respectively. The decrease in the effective tax rate from the six months ended June 30, 2024, to the six months ended June 29, 2025, is primarily attributable to increases in benefits related to tax credits and the international provision of the U.S. Tax Cuts and Jobs Act of 2017.

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, 2024.

Liquidity and Capital Resources

Our cash, cash equivalents and marketable securities balances decreased by $235.2 million in the six months ended June 29, 2025, to $488.6 million.

Operating activities during the six months ended June 29, 2025, provided cash of $343.7 million. Changes in operating assets and liabilities provided cash of $61.7 million due to a $56.7 million decrease in operating assets and a $5.0 million increase in operating liabilities.

The decrease in operating assets was primarily due to decreases in accounts receivable and prepayments and other assets of $49.5 million and $30.9 million, respectively, partially offset by a $23.7 million increase in inventories.

The increase in operating liabilities was due to increases in accounts payable and other liabilities and in deferred revenue and customer advances of $17.1 million and $13.1 million, respectively, partially offset by decreases in income taxes and retirement plans of $19.6 million and $5.6 million, respectively.

Investing activities during the six months ended June 29, 2025, used cash of $240.2 million due to $144.4 million used for the acquisition of businesses, $114.4 million used for the purchase of property, plant & equipment and $17.2 million used for the purchase of marketable securities, partially offset by $32.6 million and $8.5 million in proceeds from the maturities and sales of marketable securities, respectively.

Financing activities during the six months ended June 29, 2025, consumed cash of $313.6 million due to $274.9 million used for the repurchase of 3.0 million shares of common stock at an average price of $93.67 per share, $38.6 million utilized for dividend payments and $15.0 million used for payment related to net settlements of employee stock compensation awards, partially offset by $14.8 million from the issuance of common stock under employee stock purchase and stock option plans.

Operating activities during the six months ended June 30, 2024, provided cash of $223.3 million. Changes in operating assets and liabilities used cash of $65.3 million due to a $14.9 million increase in operating assets and a $50.4 million decrease in operating liabilities.

The increase in operating assets was primarily due to a $54.2 million increase in accounts receivable driven by higher sales in the second quarter of 2024, partially offset by decreases in other assets and inventory of $22.2 million and $17.1 million, respectively.

The decrease in operating liabilities was due to a $30.0 million decrease in accrued employee compensation, $22.0 million decrease in accounts payable, $2.8 million decrease in retirement plans, and $1.0 million decrease in accrued other, partially offset by a $2.7 million increase in deferred revenue and customer advances and a $2.6 million increase in income taxes.

Investing activities during the six months ended June 30, 2024, used cash of $505.1 million due to $524.7 million used for the purchases of investment, $88.9 million used for the purchase of property, plant and equipment, $27.8 million used for the purchase of marketable securities, partially offset by $87.2 million in proceeds from the sale of a business, $26.9 million and $21.3 million in proceeds from the sale and maturities of marketable securities, respectively, and $0.9 million in proceeds from life insurance.

Financing activities during the six months ended June 30, 2024, used cash of $59.3 million due to $185.0 million used for proceeds from borrowings on revolving credit facility of which $185.0 million in payments were paid back in full during the quarter, $37.4 million used for dividend payment, $30.3 million used for the repurchase of 0.3 million shares of common stock at an average price of $101.40 per share and $13.4 million used for payment related to net settlements of employee stock compensation awards, partially offset by $21.8 million from the issuance of common stock under employee stock purchase and stock option plans.

In January 2025, and May 2025, our Board of Directors declared a quarterly cash dividend of $0.12 per share. Dividend payments for the three and six months ended June 29, 2025, were $19.2 million and $38.6 million, respectively.

In January 2024, and May 2024, our Board of Directors declared a quarterly cash dividend of $0.12 per share. Dividend payments for the three and six months ended June 30, 2024, were $19.0 million and $37.4 million, respectively.

During the six months ended June 29, 2025, we repurchased 3.0 million shares of common stock for $274.9 million, which excludes related excise tax, at an average price of $93.67 per share. We intend to repurchase up to $1.0 billion of common stock in 2025 and 2026, subject to market conditions. The cumulative repurchases under the 2023 repurchase program as of June 29, 2025, were 8.6 million shares of common stock for $870.1 million, which excludes related excise tax, at an average price per share of $101.90. During the six months ended June 30, 2024, we repurchased 0.3 million shares of common stock for $30.3 million, which excludes related excise tax, at an average price of $101.40 per share.

While we have previously 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. 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 (the "Credit Agreement") providing a three-year, senior secured revolving credit facility of $400.0 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. On November 7, 2023, the Credit Agreement was amended to allow for the purchase of the shares of Technoprobe. As of August 1, 2025, the Credit Facility was undrawn, and we were in compliance with all covenants under the Credit Agreement.

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 M: “Stock-Based Compensation” in our 2024 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

In December 2023, the FASB issued ASU 2023-09 –“Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which requires expanded disclosures relating to the tax rate reconciliation, income taxes paid, income (loss) before income tax expense (benefit) and income tax expense (benefit), requiring a greater disaggregation of information for each. The provisions of ASU 2023-09 are effective for fiscal years beginning after December 15, 2024. We will apply the amendments in this update on a prospective basis. This ASU will have no impact on results of operations, cash flows or financial condition.

In November 2024, the FASB issued ASU 2024-03-"Income Statement - Reporting Comprehensive Income -Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses", which requires disclosure of additional expense information on an annual and interim basis, including the amounts of inventory purchases, employee compensation, depreciation and intangible amortization included within each income statement expense caption. This standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments in this update should be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the impact of this new standard.

Item 3. Quantitative and Qualitative Disclosures about Market Risks

For “Quantitative and Qualitative Disclosures about Market Risk” affecting Teradyne, see Part 2 Item 7A, “Quantitative and Qualitative Disclosures about Market Risks,” in our Annual Report on Form 10-K filed with the SEC on February 20, 2025. There

were no material changes in our exposure to market risk from those set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Item 4. Controls and Procedures

As of the end of the period covered by this report, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(b) or Rule 15d-15(f) promulgated under the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in ensuring that material information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, including ensuring that such material information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended June 29, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1: Legal Proceedings

We are subject to various legal proceedings and claims which have arisen in the ordinary course of business such as, but not limited to, patent, employment, commercial and environmental matters. Teradyne believes that it has meritorious defenses against all pending claims and intends to vigorously contest them. While it is not possible to predict or determine the outcomes of any pending claims or to provide possible ranges of losses that may arise, Teradyne believes the potential losses associated with all of these actions are unlikely to have a material adverse effect on its business, financial position or results of operations.

Item 1A. Risk Factors

In addition to other information set forth in this Form 10-Q, including the risk discussed below, you should carefully consider the factors discussed in Part I, “Item 1A: Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 20, 2025, which could materially affect our business, financial condition or future results. The risk factors described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, remain applicable to our business.

The risks described in our Annual Report on Form 10-K are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2: Unregistered Sales of Equity Securities and Use of Proceeds

In January 2023, Teradyne’s Board of Directors cancelled our 2021 repurchase program and approved a new repurchase program for up to $2.0 billion of common stock. During the six months ended June 29, 2025, we repurchased 3.0 million shares of common stock for a total cost of $277.3 million at an average price of $93.67 per share. We record share repurchases at cost, which includes broker commissions and related excise taxes. During the six months ended June 30, 2024, we repurchased 0.3 million shares of common stock for $30.3 million at an average price of $101.40 per share.

The following table includes information with respect to repurchases we made of our common stock during the three months ended June 29, 2025, (in thousands except per share price):

PeriodTotal Number of Shares (or Units) PurchasedAverage Price Paid per Share (or Unit)Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or ProgramsMaximum Number (or Approximate Dollar Value) of Shares (or Units) that may Yet Be Purchased Under the Plans or Programs (2)
March 31, 2025 - April 27, 2025256$75.22255$1,222,173
April 28, 2025 - May 25, 2025666$78.37665$1,170,251
May 26, 2025 - June 29, 2025561$84.43560$1,122,801
1,483(1)80.12(1)1,480

(1)

Includes approximately three thousand shares at an average price of $78.19 withheld from employees for the payment of taxes.

(2)

As of January 1, 2023, share repurchases net of share issuances are subject to a 1% excise tax under the Inflation Reduction Act. Excise tax incurred is included as part of the cost basis of shares repurchased in the Condensed Consolidated Statements of Convertible Common Shares and Stockholders’ Equity.

We satisfy U.S. federal and state minimum withholding tax obligations due upon the vesting and the conversion of restricted stock units into shares of our common stock, by automatically withholding from the shares being issued, a number of shares with an aggregate fair market value on the date of such vesting and conversion that would satisfy the minimum withholding amount due.

Item 4: Mine Safety Disclosures

Not Applicable

Item 5. Other Information

10b 5-1 Trading Plans

Our officers (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (“Section 16 Officers”) and directors from time to time enter into contracts, instructions or written plans for the purchase or sale of our securities that are intended to satisfy the conditions specified in Rule 10b5-1(c) under the Exchange Act for an affirmative defense against liability for trading in securities on the basis of material nonpublic information. We refer to these contracts, instructions, and written plans as “Rule 10b5-1 trading plans” and each one as a “Rule 10b5-1 trading plan.” During our fiscal quarter ended June 29, 2025, no Section 16 Officers or directors adopted, modified or terminated Rule 10b5-1 trading plans.

Item 6. Exhibits

Exhibit NumberDescription
31.1Certification of Principal Executive Officer, pursuant to Rule 13a-14(a) of Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
31.2Certification of Principal Financial Officer, pursuant to Rule 13a-14(a) of Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
32.1Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
32.2Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
101.INSInline XBRL Instance Document
101.SCHInline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents
104Cover Page Interactive Data File (formatted as Inline XBRL, and contained in Exhibit 101)
*Management Contract or Compensatory Plan

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

TERADYNE, INC.
Registrant
/s/ SANJAY MEHTA
Sanjay Mehta Vice President, Chief Financial Officer and Treasurer (Duly Authorized Officer and Principal Financial Officer) August 1, 2025