Financial Instruments (Tables)

9 Months Ended

Oct. 01, 2023

Schedule of Fair Value of Financial Assets and Liabilities Measured on Recurring Basis

The following table sets forth by fair value hierarchy Teradyne’s financial assets and liabilities that were measured at fair value on a recurring basis as of October 1, 2023 and December 31, 2022.

	October 1, 2023
	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Assets
Cash	$	309,348	$	—	$	—	$	309,348
Cash equivalents		307,160		20,453		—		327,613
Available-for-sale securities:
U.S. Treasury securities		—		58,499		—		58,499
Corporate debt securities		—		50,830		—		50,830
Commercial paper		—		12,454		—		12,454
Debt mutual funds		8,236		—		—		8,236
Certificates of deposit and time deposits		—		6,688		—		6,688
U.S. government agency securities		—		4,774		—		4,774
Equity securities:
Mutual funds		42,000		—		—		42,000
	$	666,744	$	153,698	$	—	$	820,442
Derivative assets		—		5,198		—		5,198
Total	$	666,744	$	158,896	$	—	$	825,640
Liabilities
Derivative liabilities	$	—	$	1,128	$	—	$	1,128
Total	$	—	$	1,128	$	—	$	1,128
Reported as follows:
	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	616,508	$	20,453	$	—	$	636,961
Marketable securities		—		79,570		—		79,570
Long-term marketable securities		50,236		53,675		—		103,911
Prepayments		—		5,198		—		5,198
Total	$	666,744	$	158,896	$	—	$	825,640
Liabilities
Other current liabilities	$	—	$	1,128	$	—	$	1,128
Total	$	—	$	1,128	$	—	$	1,128

	December 31, 2022
	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Assets
Cash	$	632,417	$	—	$	—	$	632,417
Cash equivalents		161,767		60,589		—		222,356
Available-for-sale securities:
Corporate debt securities		—		50,856		—		50,856
U.S. Treasury securities		—		39,649		—		39,649
Commercial paper		—		7,159		—		7,159
Debt mutual funds		6,580		—		—		6,580
U.S. government agency securities		—		6,352		—		6,352
Certificates of deposit and time deposits		—		1,740		—		1,740
Non-U.S. government securities		—		535		—		535
Equity securities:
Mutual Funds		37,518		—		—		37,518
	$	838,282	$	166,880	$	—	$	1,005,162
Derivative assets		—		86		—		86
Total	$	838,282	$	166,966	$	—	$	1,005,248
Liabilities
Derivative liabilities		—		4,215		—		4,215
Total	$	—	$	4,215	$	—	$	4,215
Reported as follows:
	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	794,184	$	60,589	$	—	$	854,773
Marketable securities		—		39,612		—		39,612
Long-term marketable securities		44,098		66,679		—		110,777
Prepayments		—		86		—		86
Total	$	838,282	$	166,966	$	—	$	1,005,248
Liabilities
Other current liabilities	$	—	$	4,215	$	—	$	4,215
Total	$	—	$	4,215	$	—	$	4,215

Schedule of Carrying Amounts and Fair Values of Financial Instruments

The carrying amounts and fair values of Teradyne’s financial instruments at October 1, 2023 and December 31, 2022, were as follows:

	October 1, 2023				December 31, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Assets
Cash and cash equivalents	$	636,961	$	636,961	$	854,773	$	854,773
Marketable securities		183,481		183,481		150,389		150,389
Derivative assets		5,198		5,198		86		86
Liabilities
Derivative liabilities		1,128		1,128		4,215		4,215
Convertible debt		23,529		74,919		50,115		139,007

Schedule of Available-for-Sale Marketable Securities

The following table summarizes the composition of available-for-sale marketable securities at October 1, 2023:

	October 1, 2023
	Available-for-Sale
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
U.S. Treasury securities	$	63,773	$	—	$	(5,274	)	$	58,499	$	57,794
Corporate debt securities		57,710		—		(6,880	)		50,830		50,830
Commercial paper		12,411		44		(1	)		12,454		2,988
Debt mutual funds		8,724		—		(488	)		8,236		3,082
Certificates of deposit and time deposits		6,688		—		—			6,688		—
U.S. government agency securities		4,823		—		(49	)		4,774		4,774
	$	154,129	$	44	$	(12,692	)	$	141,481	$	119,468

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	80,145	$	44	$	(619	)	$	79,570	$	62,711
Long-term marketable securities		73,984		—		(12,073	)		61,911		56,757
	$	154,129	$	44	$	(12,692	)	$	141,481	$	119,468

The following table summarizes the composition of available-for-sale marketable securities at December 31, 2022:

	December 31, 2022
	Available-for-Sale
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Corporate debt securities	$	57,006	$	3	$	(6,153	)	$	50,856	$	50,667
U.S. Treasury securities		44,030		—		(4,381	)		39,649		39,649
Commercial paper		7,089		70		—			7,159		—
Debt mutual funds		6,997		—		(417	)		6,580		3,095
U.S. government agency securities		6,442		—		(90	)		6,352		6,352
Certificates of deposit and time deposits		1,740		—		—			1,740		—
Non-U.S. government securities		535		—		—			535		—
	$	123,839	$	73	$	(11,041	)	$	112,871	$	99,763

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	39,950	$	70	$	(408	)	$	39,612	$	30,713
Long-term marketable securities		83,889		3		(10,633	)		73,259		69,050
	$	123,839	$	73	$	(11,041	)	$	112,871	$	99,763

Contractual Maturities of Investments Held

The contractual maturities of investments in available-for-sale securities held at October 1, 2023, were as follows:

	October 1, 2023
	Cost		Fair Market Value
	(in thousands)
Due within one year	$	80,145	$	79,570
Due after 1 year through 5 years		20,012		19,257
Due after 5 years through 10 years		6,858		6,128
Due after 10 years		38,390		28,290
Total	$	145,405	$	133,245

Schedule of Notional Amount of Derivatives

At October 1, 2023 and December 31, 2022, Teradyne had the following contracts to buy and sell non-U.S. currencies for U.S. dollars and other non-U.S. currencies with the following notional amounts:

	Net Notional Value
	October 1, 2023		December 31, 2022
	(in millions)
Currency Hedged (Buy/Sell)
U.S. dollar/Japanese yen	$	49.6	$	37.1
U.S. dollar/Taiwan dollar		29.5		29.2
U.S. dollar/Korean won		9.3		6.4
U.S. dollar/British pound sterling		1.2		1.2
Euro/U.S. dollar		22.7		38.4
Singapore dollar/U.S. dollar		13.3		33.5
Philippine peso/U.S. dollar		10.0		2.7
Chinese yuan/U.S. dollar		1.3		2.2
Danish krone/U.S. dollar		0.6		—
Total	$	137.5	$	150.7

Schedule of Foreign Currency Cash Flow Hedges

At October 1, 2023 and December 31, 2022, Teradyne had the following cash flow hedge contracts to buy and sell non-U.S. currencies for U.S. dollars with the following notional amounts:

	Net Notional Value
	October 1, 2023		December 31, 2022
	(in millions)
Currency Hedged (Buy/Sell)
U.S. dollar/Japanese yen	$	38.6	$	61.2
U.S. dollar/Taiwan dollar		—		10.9
Japanese yen/U.S. dollar		—		23.4
Taiwan dollar/U.S. dollar		—		5.5
Total	$	38.6	$	101.0

Schedule of Derivative Instruments in Statement of Financial Position at Fair Value

The following table summarizes the fair value of derivative instruments as of October 1, 2023 and December 31, 2022:

	Balance Sheet Location	October 1, 2023			December 31, 2022
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts	Prepayments	$	2,159		$	86
Foreign exchange forward contracts	Other current liabilities		(1,128	)		(990	)
Derivatives designated as hedging instruments:
Foreign exchange option contracts	Prepayments		3,039			—
Foreign exchange option contracts	Other current liabilities		—			(3,225	)
Total derivatives		$	4,070		$	(4,129	)

Schedule of Effect of Derivative Instruments on Statement of Operations Recognized

The following table summarizes the effect of derivative instruments recognized in the statement of operations for the three and nine months ended October 1, 2023 and October 2, 2022:

		For the Three Months  Ended					For the Nine Months  Ended
	Location of (Gains) Losses Recognized in Statement of Operations	October 1, 2023			October 2, 2022		October 1, 2023			October 2, 2022
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts	Other (income) expense, net	$	(1,886	)	$	1,246	$	(4,667	)	$	(2,209	)
Derivatives designated as hedging instruments:
Foreign exchange option contracts	Revenue		(3,960	)		—		(2,008	)		—
Total Derivatives		$	(5,846	)	$	1,246	$	(6,675	)	$	(2,209	)