d

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 March 31, 2024

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)

Massachusetts	04-2272148
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
600 Riverpark Drive, North Reading, Massachusetts	01864
(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 class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.125 per share	TER	Nasdaq 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 April 29, 2024, was 156,111,885 shares.

TERADYNE, INC.

INDEX

		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited):	1
	Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	1
	f
	Condensed Consolidated Statements of Operations for the Three Months ended March 31, 2024 and April 2, 2023	2
	Condensed Consolidated Statements of Comprehensive Income for the Three Months ended March 31, 2024 and April 2, 2023	3
	Condensed Statements of Shareholders’ Equity for the Three Months Ended March 31, 2024 and April 2, 2023	4
	d
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and April 2, 2023	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33
Item 4.	Controls and Procedures	33
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	36
Item 6.	Exhibits	37

PART I

Item 1: Financial Statements

TERADYNE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31, 2024			December 31, 2023
	(in thousands, except per share amount)
ASSETS
Current assets:
Cash and cash equivalents	$	707,403		$	757,571
Marketable securities		41,300			62,154
Accounts receivable, less allowance for credit losses of $1,947 and $1,988 at March 31, 2024    and December 31, 2023, respectively		426,333			422,124
Inventories, net		314,232			309,974
Prepayments		537,642			548,970
Other current assets		16,057			37,992
Current assets held for sale		22,426			23,250
Total current assets		2,065,393			2,162,035
Property, plant and equipment, net		457,248			445,492
Operating lease right-of-use assets, net		74,625			73,417
Marketable securities		121,905			117,434
Deferred tax assets		185,734			175,775
Retirement plans assets		11,449			11,504
Other assets		45,098			38,580
Acquired intangible assets, net		30,234			35,404
Goodwill		407,576			415,652
Long-term assets held for sale		11,458			11,531
Total assets	$	3,410,720		$	3,486,824
LIABILITIES
Current liabilities:
Accounts payable	$	153,873		$	180,131
Accrued employees’ compensation and withholdings		121,144			191,750
Deferred revenue and customer advances		100,058			99,804
Other accrued liabilities		101,275			114,712
Operating lease liabilities		17,400			17,522
Income taxes payable		55,922			48,653
Current liabilities held for sale		4,687			7,379
Total current liabilities		554,359			659,951
Retirement plans liabilities		134,878			132,090
Long-term deferred revenue and customer advances		35,044			37,282
Long-term other accrued liabilities		16,653			19,998
Deferred tax liabilities		134			183
Long-term operating lease liabilities		65,554			65,092
Long-term incomes taxes payable		44,331			44,331
Long-term liabilities held for sale		1,938			2,000
Total liabilities		852,891			960,927
Commitments and contingencies (Note Q)
SHAREHOLDERS’ EQUITY
Common stock, $0.125 par value, 1,000,000 shares authorized; 153,757 and 152,698 shares issued    and outstanding at March 31, 2024 and December 31, 2023, respectively		19,220			19,087
Additional paid-in capital		1,848,088			1,827,274
Accumulated other comprehensive loss		(39,739	)		(26,978	)
Retained earnings		730,260			706,514
Total shareholders’ equity		2,557,829			2,525,897
Total liabilities and shareholders’ equity	$	3,410,720		$	3,486,824

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, 2023, are an integral part of the condensed consolidated financial statements.

1

TERADYNE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the Three Months  Ended
	March 31, 2024			April 2, 2023
	(in thousands, except per share amount)
Revenues:
Products	$	458,433		$	473,418
Services		141,386			144,111
Total revenues		599,819			617,529
Cost of revenues:
Cost of products		200,763			198,665
Cost of services		59,774			62,444
Total cost of revenues (exclusive of acquired intangible    assets amortization shown separately below)		260,537			261,109
Gross profit		339,282			356,420
Operating expenses:
Selling and administrative		149,188			150,955
Engineering and development		103,199			105,762
Acquired intangible assets amortization		4,697			4,802
Restructuring and other		4,427			2,037
Total operating expenses		261,511			263,556
Income from operations		77,771			92,864
Non-operating (income) expense:
Interest income		(7,867	)		(5,258	)
Interest expense		661			987
Other (income) expense, net		12,075			51
Income before income taxes		72,902			97,084
Income tax provision		8,705			13,553
Net income	$	64,197		$	83,531
Net income per common share:
Basic	$	0.42		$	0.54
Diluted	$	0.40		$	0.50
Weighted average common shares—basic		153,047			155,904
Weighted average common shares—diluted		162,348			166,308

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, 2023, are an integral part of the condensed consolidated financial statements.

2

TERADYNE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	For the Three Months  Ended
	March 31, 2024			April 2, 2023
	(in thousands)
Net income	$	64,197		$	83,531
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment, net of tax of $0 and $0, respectively		(11,457	)		9,309
Available-for-sale marketable securities:
Unrealized (losses) gains on marketable securities arising during period,    net of tax of $(221) and $503, respectively		(902	)		2,294
Less: Reclassification adjustment for losses included in net income,    net of tax of $30 and $2, respectively		106			5
		(796	)		2,299
Cash flow hedges:
Unrealized gains arising during period, net of tax of $358 and $167, respectively		1,274			596
Less: Reclassification adjustment for (gains) losses included in net income,    net of tax of $(500) and $338 respectively		(1,780	)		1,200
		(506	)		1,796
Defined benefit post-retirement plan:
Amortization of prior service credit, net of tax of $0 and $0, respectively		(2	)		(2	)
Other comprehensive income (loss)		(12,761	)		13,402
Comprehensive income	$	51,436		$	96,933

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, 2023, are an integral part of the condensed consolidated financial statements.

3

TERADYNE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

	Shareholders' Equity
	Common Stock Shares			Common Stock Par Value			Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Total Shareholders’ Equity
	(in thousands)
For the Three Months Ended March 31, 2024
Balance, December 31, 2023		152,698		$	19,087		$	1,827,274		$	(26,978	)	$	706,514		$	2,525,897
Net issuance of common stock under stock-based plans		466			58			3,758									3,816
Stock-based compensation expense								17,158									17,158
Warrant exercises	813			102				(102	)								—
Repurchase of common stock		(220	)		(27	)								(22,068	)		(22,095	)
Cash dividends ($0.12 per share)														(18,383	)		(18,383	)
Net income														64,197			64,197
Other comprehensive income (loss)											(12,761	)					(12,761	)
Balance, March 31, 2024		153,757		$	19,220		$	1,848,088		$	(39,739	)	$	730,260		$	2,557,829
For the Three Months Ended April 2, 2023
Balance, December 31, 2022		155,759		$	19,470		$	1,755,963		$	(49,868	)	$	725,729		$	2,451,294
Net issuance of common stock under stock-based plans		579			73			(3,943	)								(3,870	)
Stock-based compensation expense								20,332									20,332
Repurchase of common stock		(893	)		(112	)								(97,936	)		(98,048	)
Cash dividends ($0.11 per share)														(17,179	)		(17,179	)
Settlements of convertible notes		324			41			(41	)								—
Exercise of convertible notes hedge call options		(324	)		(41	)		41									—
Net income														83,531			83,531
Other comprehensive income (loss)											13,402						13,402
Balance, April 2, 2023		155,445		$	19,431		$	1,772,352		$	(36,466	)	$	694,145		$	2,449,462

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, 2023, are an integral part of the condensed consolidated financial statements.

4

TERADYNE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Three Months  Ended
	March 31, 2024			April 2, 2023
	(in thousands)
Cash flows from operating activities:
Net income	$	64,197		$	83,531
Adjustments to reconcile net income from operations to net cash provided by operating activities:
Depreciation		23,354			22,680
Stock-based compensation		15,758			18,885
Provision for excess and obsolete inventory		6,177			5,610
Amortization		4,766			4,926
Deferred taxes		(9,669	)		(7,634	)
Losses (gains) on investments		10,466			(2,238	)
Other		787			108
Changes in operating assets and liabilities
Accounts receivable		(8,055	)		37,204
Inventories		(6,932	)		(23,697	)
Prepayments and other assets		11,089			(15,380	)
Accounts payable and other liabilities		(105,548	)		(83,208	)
Deferred revenue and customer advances		(1,444	)		(32,705	)
Retirement plans contributions		(1,421	)		(1,234	)
Income taxes		3,754			12,488
Net cash provided by operating activities		7,279			19,336
Cash flows from investing activities:
Purchases of property, plant and equipment		(44,023	)		(41,444	)
Purchases of marketable securities		(16,042	)		(69,276	)
Proceeds from maturities of marketable securities		14,438			7,468
Proceeds from sales of marketable securities		20,734			7,929
Proceeds from insurance		873			460
Net cash used for investing activities		(24,020	)		(94,863	)
Cash flows from financing activities:
Repurchase of common stock		(22,117	)		(93,308	)
Dividend payments		(18,370	)		(17,165	)
Payments of convertible debt principal		—			(15,155	)
Payments related to net settlement of employee stock compensation awards		(13,115	)		(19,870	)
Issuance of common stock under stock purchase and stock option plans		16,934			15,997
Net cash used for financing activities		(36,668	)		(129,501	)
Effects of exchange rate changes on cash and cash equivalents		3,241			(537	)
Decrease in cash and cash equivalents		(50,168	)		(205,565	)
Cash and cash equivalents at beginning of period		757,571			854,773
Cash and cash equivalents at end of period	$	707,403		$	649,208
Non-cash investing activities:
Capital expenditures incurred but not yet paid:	$	3,086		$	3,823

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, 2023, are an integral part of the condensed consolidated financial statements.

5

TERADYNE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

A. THE COMPANY

Teradyne, Inc. (“Teradyne”) is a leading global supplier of automated test equipment and robotics solutions. Teradyne designs, develops, manufactures and sells automated test systems and robotics products. Teradyne’s automated test systems are used to test semiconductors, wireless products, data storage and complex electronics systems in many industries including consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries. Teradyne’s robotics products include collaborative robotic arms, autonomous mobile robots, and advanced robotic control software used by global manufacturing, logistics and industrial customers to improve quality, increase manufacturing and material handling efficiency and decrease manufacturing and logistics costs. Teradyne’s automated 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.

B. ACCOUNTING POLICIES

Basis of Presentation

The consolidated interim financial statements include the accounts of Teradyne and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. These interim financial statements are unaudited and reflect all normal recurring adjustments that are, in the opinion of management, necessary for the fair statement of such interim financial statements. The December 31, 2023 condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by United States of America generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. The accompanying financial information should be read in conjunction with the consolidated financial statements and notes thereto contained in Teradyne’s Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on February 22, 2024, for the year ended December 31, 2023.

Preparation of Financial Statements and Use of Estimates

The preparation of consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an on-going basis, management evaluates its estimates, including those related to inventories, investments, goodwill, intangible and other long-lived assets, accounts receivable, income taxes, deferred tax assets and liabilities, pensions, warranties, contingent consideration liabilities, and loss contingencies. Management bases its estimates on historical experience and on appropriate and customary assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change, as new events occur and additional information is obtained. Actual results may differ significantly from these estimates under different assumptions or conditions.

C. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures", which will require Teradyne to disclose significant segment expenses and other segment items used by the Chief Operating Decision Maker ("CODM") on an annual and interim basis as well as provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, Teradyne will be required to disclose the title and position of the CODM. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. This ASU will have no impact on results of operations, cash flows or financial condition. Upon

6

adoption, Teradyne will apply the amendments in this ASU retrospectively to all prior period disclosures presented in the financial statements.

In December 2023, 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. The amendments in this update should be applied on a prospective basis, but retrospective application is permitted. This ASU will have no impact on results of operations, cash flows or financial condition.

D. REVENUE

Disaggregation of Revenue

The following table provides information about disaggregated revenue by timing of revenue recognition, primary geographical market, and major product lines.

		Semiconductor Test				System Test		Robotics				Wireless Test
		System on-a-Chip		Memory				Universal Robots		Mobile Industrial Robots				Total
	(in thousands)
For the Three Months Ended March 31, 2024 (1)
Timing of Revenue Recognition
Point in Time		$	229,592	$	102,436	$	58,073	$	65,893	$	19,290	$	20,914	$	496,198
Over Time			72,716		7,510		17,249		1,868		603		3,675		103,621
Total		$	302,308	$	109,946	$	75,322	$	67,761	$	19,893	$	24,589	$	599,819
Geographical Market
Asia Pacific		$	270,567	$	95,606	$	25,781	$	11,625	$	2,954	$	17,141	$	423,674
Americas			22,551		9,052		36,594		20,005		14,625		5,824		108,651
Europe, Middle East and Africa			9,190		5,288		12,947		36,131		2,314		1,624		67,494
Total		$	302,308	$	109,946	$	75,322	$	67,761	$	19,893	$	24,589	$	599,819
For the Three Months Ended April 2, 2023 (1)
Timing of Revenue Recognition
Point in Time		$	273,275	$	61,258	$	56,857	$	70,029	$	15,959	$	35,363	$	512,741
Over Time			73,559		6,917		17,774		2,008		1,218		3,312		104,788
Total		$	346,834	$	68,175	$	74,631	$	72,037	$	17,177	$	38,675	$	617,529
Geographical Market
Asia Pacific		$	283,259	$	63,695	$	39,590	$	13,217