10-Q

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 30, 2024


☐	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 July 29, 2024, was 163,176,091 shares.

TERADYNE, INC.

INDEX


		Page No.

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited):	1

	Condensed Consolidated Balance Sheets as of June 30, 2024, and December 31, 2023	1
	f
	Condensed Consolidated Statements of Operations for the Three and Six Months ended June 30, 2024 and July 2, 2023	2

	Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months ended June 30, 2024, and July 2, 2023	3

	Condensed Statements of Shareholders’ Equity for the Three and Six Months Ended June 30, 2024, and July 2, 2023	4
	d
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024, and July 2, 2023	5

	Notes to Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	39

Item 4.	Controls and Procedures	39

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	40

Item 1A.	Risk Factors	40

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41

Item 4.	Mine Safety Disclosures	41

Item 5.	Other Information	42

Item 6.	Exhibits	43

PART I

Item 1: Financial Statements

TERADYNE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	June 30, 2024			December 31, 2023
	(in thousands, except per share amount)
ASSETS
Current assets:
Cash and cash equivalents	$	421,904		$	757,571
Marketable securities		38,654			62,154
Accounts receivable, less allowance for credit losses of $1,944 and $1,988 at June 30, 2024 and December 31, 2023, respectively		470,297			422,124
Inventories, net		288,748			309,974
Prepayments		515,906			548,970
Other current assets		20,884			37,992
Current assets held for sale		—			23,250
Total current assets		1,756,393			2,162,035
Property, plant and equipment, net		472,457			445,492
Operating lease right-of-use assets, net		72,381			73,417
Marketable securities		123,723			117,434
Deferred tax assets		192,901			175,775
Retirement plans assets		11,293			11,504
Equity method investment		524,060			—
Other assets		47,923			38,580
Acquired intangible assets, net		25,465			35,404
Goodwill		405,110			415,652
Long-term assets held for sale		—			11,531
Total assets	$	3,631,706		$	3,486,824
LIABILITIES
Current liabilities:
Accounts payable	$	160,808		$	180,131
Accrued employees’ compensation and withholdings		161,187			191,750
Deferred revenue and customer advances		102,988			99,804
Other accrued liabilities		108,746			114,712
Operating lease liabilities		18,280			17,522
Income taxes payable		74,365			48,653
Current liabilities held for sale		—			7,379
Total current liabilities		626,374			659,951
Retirement plans liabilities		135,167			132,090
Long-term deferred revenue and customer advances		36,146			37,282
Long-term other accrued liabilities		16,632			19,998
Deferred tax liabilities		96			183
Long-term operating lease liabilities		61,883			65,092
Long-term incomes taxes payable		24,596			44,331
Long-term liabilities held for sale		—			2,000
Total liabilities		900,894			960,927
Commitments and contingencies (Note R)
SHAREHOLDERS’ EQUITY
Common stock, $0.125 par value, 1,000,000 shares authorized; 161,802 and 152,698 shares issued and outstanding at June 30, 2024, and December 31, 2023, respectively		20,225			19,087
Additional paid-in capital		1,865,351			1,827,274
Accumulated other comprehensive loss		(44,104	)		(26,978	)
Retained earnings		889,340			706,514
Total shareholders’ equity		2,730,812			2,525,897
Total liabilities and shareholders’ equity	$	3,631,706		$	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.

TERADYNE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	For the Three Months Ended						For the Six Months Ended
	June 30, 2024			July 2, 2023			June 30, 2024			July 2, 2023
	(in thousands, except per share amount)						(in thousands, except per share amount)
Revenues:
Products	$	596,877		$	540,375		$	1,055,310		$	1,013,793
Services		133,002			144,062			274,388			288,173
Total revenues		729,879			684,437			1,329,698			1,301,966
Cost of revenues:
Cost of products		250,236			217,011			450,999			415,675
Cost of services		53,799			64,934			113,573			127,379
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)		304,035			281,945			564,572			543,054
Gross profit		425,844			402,492			765,126			758,912
Operating expenses:
Selling and administrative		154,470			145,695			303,658			296,650
Engineering and development		111,816			105,706			215,015			211,468
Acquired intangible assets amortization		4,664			4,825			9,361			9,627
Restructuring and other		2,012			6,358			6,440			8,395
Gain on sale of business		(57,486	)		—			(57,486	)		—
Total operating expenses		215,476			262,584			476,988			526,140
Income from operations		210,368			139,908			288,138			232,772
Non-operating (income) expense:
Interest income		(6,715	)		(6,354	)		(14,582	)		(11,613	)
Interest expense		1,530			1,045			2,190			2,031
Other (income) expense, net		(3,850	)		815			8,225			868
Income before income taxes		219,403			144,402			292,305			241,486
Income tax provision		33,130			24,352			41,835			37,905
Net income	$	186,273		$	120,050		$	250,470		$	203,581
Net income per common share:
Basic	$	1.18		$	0.78		$	1.61		$	1.31
Diluted	$	1.14		$	0.73		$	1.54		$	1.23
Weighted average common shares—basic		157,804			154,760			155,426			155,332
Weighted average common shares—diluted		163,470			164,751			162,909			165,530

TERADYNE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	For the Three Months Ended						For the Six Months Ended
	June 30, 2024			July 2, 2023			June 30, 2024			July 2, 2023
	(in thousands)						(in thousands)
Net income	$	186,273		$	120,050		$	250,470		$	203,581
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment, net of tax of $0, $0, $0, and $0, respectively		(3,629	)		2,943			(15,087	)		12,250
Available-for-sale marketable securities:
Unrealized (losses) gains on marketable securities arising during period, net of tax of $(183), $(180), $(404) and $323, respectively		(721	)		(568	)		(1,622	)		1,726
Less: Reclassification adjustment for (gains) losses included in net income, net of tax of $(4), $8, $26, and $10, respectively		(13	)		28			92			33
		(734	)		(540	)		(1,530	)		1,759
Cash flow hedges:
Unrealized gains arising during period, net of tax of $0, $920, $358, and $1,088, respectively	—				3,270			1,274			3,866
Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $0, $91, $(500) and $428, respectively	—				323			(1,780	)		1,524
		—			3,593			(506	)		5,390
Defined benefit post-retirement plan:
Amortization of prior service credit, net of tax of $0, $0, $(1), and $(1), respectively		(2	)		(2	)		(3	)		(3	)
Other comprehensive income (loss)		(4,365	)		5,994			(17,126	)		19,396
Comprehensive income	$	181,908		$	126,044		$	233,344		$	222,977

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 June 30, 2024
Balance, March 31, 2024		153,757		$	19,220		$	1,848,088		$	(39,739	)	$	730,260		$	2,557,829
Net issuance of common stock under stock-based plans		125			15			4,615									4,630
Stock-based compensation expense								13,660									13,660
Warrant exercises		7,998			1,000			(1,012	)								(12	)
Repurchase of common stock		(78	)		(10	)								(8,185	)		(8,195	)
Cash dividends ($0.12 per share)														(19,008	)		(19,008	)
Net income														186,273			186,273
Other comprehensive income (loss)											(4,365	)					(4,365	)
Balance, June 30, 2024		161,802		$	20,225		$	1,865,351		$	(44,104	)	$	889,340		$	2,730,812
For the Three Months Ended July 2, 2023
Balance, April 2, 2023		155,445		$	19,431		$	1,772,352		$	(36,466	)	$	694,145		$	2,449,462
Net issuance of common stock under stock-based plans		52			7			161									168
Stock-based compensation expense								12,077									12,077
Repurchase of common stock		(1,349	)		(169	)								(135,668	)		(135,837	)
Cash dividends ($0.11 per share)														(17,031	)		(17,031	)
Settlements of convertible notes		50			6			(6	)								—
Exercise of convertible notes hedge call options		(50	)		(6	)		6									—
Net income														120,050			120,050
Other comprehensive income (loss)											5,994						5,994
Balance, July 2, 2023		154,148		$	19,269		$	1,784,590		$	(30,472	)	$	661,496		$	2,434,883


	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 Six Months Ended June 30, 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		591			73			8,373									8,446
Stock-based compensation expense								30,818									30,818
Warrant exercises		8,812			1,102			(1,114	)								(12	)
Repurchase of common stock		(299	)		(37	)								(30,253	)		(30,290	)
Cash dividends ($0.12 per share)														(37,391	)		(37,391	)
Net income														250,470			250,470
Other comprehensive income (loss)											(17,126	)					(17,126	)
Balance, June 30, 2024		161,802		$	20,225		$	1,865,351		$	(