Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2021

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 December 31, 2021 and 2020:

	December 31, 2021
	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	$	628,740	$	—	$	—	$	628,740
Cash equivalents		412,212		81,247		—		493,459
Available for sale securities:
Commercial paper		—		189,620		—		189,620
U.S. Treasury securities		—		77,789		—		77,789
Corporate debt securities		—		56,901		—		56,901
Debt mutual funds		7,971		—		—		7,971
U.S. government agency securities		—		4,610		—		4,610
Certificates of deposit and time deposits		—		1,356		—		1,356
Non-U.S. government securities		—		589		—		589
Equity securities:
Mutual funds		39,253		—		—		39,253
Total	$	1,088,176	$	412,112	$	—	$	1,500,288
Derivative assets		—		92		—		92
Total	$	1,088,176	$	412,204	$	—	$	1,500,380
Liabilities
Derivative liabilities		—		118		—		118
Total	$	—	$	118	$	—	$	118

Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	1,040,952	$	81,247	$	—	$	1,122,199
Marketable securities		—		244,231		—		244,231
Long-term marketable securities		47,224		86,634		—		133,858
Prepayments		—		92		—		92
Total	$	1,088,176	$	412,204	$	—	$	1,500,380
Liabilities
Other current liabilities	$	—	$	118	$	—	$	118
Total	$	—	$	118	$	—	$	118

	December 31, 2020
	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	$	443,166	$	—	$	—	$	443,166
Cash equivalents		347,768		123,187		—		470,955
Available for sale securities:
U.S. Treasury securities		—		258,304		—		258,304
Commercial paper		—		254,413		—		254,413
Corporate debt securities		—		83,615		—		83,615
Debt mutual funds		8,565		—		—		8,565
U.S. government agency securities		—		4,339		—		4,339
Certificates of deposit and time deposits		—		979		—		979
Non-U.S. government securities		—		625		—		625
Equity securities:
Mutual funds		29,420		—		—		29,420
Total	$	828,919	$	725,462	$	—	$	1,554,381
Derivative assets		—		95		—		95
Total	$	828,919	$	725,557	$	—	$	1,554,476
Liabilities
Contingent consideration	$	—	$	—	$	7,227	$	7,227
Derivative liabilities		—		504		—		504
Total	$	—	$	504	$	7,227	$	7,731

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	790,934	$	123,187	$	—	$	914,121
Marketable securities		—		522,280		—		522,280
Long-term marketable securities		37,985		79,995		—		117,980
Prepayments		—		95		—		95
Total	$	828,919	$	725,557	$	—	$	1,554,476
Liabilities
Other current liabilities	$	—	$	504	$	—	$	504
Long-term contingent consideration		—		—		7,227		7,227
Total	$	—	$	504	$	7,227	$	7,731

Schedule of Changes in Fair Value of Level 3 Contingent Consideration

Changes in the fair value of Level 3 contingent consideration for the years ended December 31, 2021 and 2020 were as follows:

	Contingent Consideration
	(in thousands)
Balance at December 31, 2019	$	39,705
Foreign currency impact		(355	)
Payments (1)		(8,852	)
Fair value adjustment (2)		(23,271	)
Balance at December 31, 2020		7,227
Foreign currency impact		—
Payments		—
Fair value adjustment (3)		(7,227	)
Balance at December 31, 2021	$	—

(1) During the year ended December 31, 2020, Teradyne paid $8.9 million of contingent consideration for the earn-out in connection with the acquisition of Mobile Industrial Robots (“MiR”).

(2) During the year ended December 31, 2020, the fair value of contingent consideration for the earn-out in connection with the acquisition of AutoGuide was decreased by $19.7 million primarily due to a decrease in forecasted revenues and earnings before interest and taxes. During the year ended December 31, 2020, the fair value of contingent consideration for the earn-out in connection with the acquisition of MiR was decreased by $3.5 million primarily due to a decrease in forecasted revenues.

(3) During the year ended December 31, 2021, the fair value of contingent consideration for the earn-outs in connection with the acquisition of AutoGuide was reduced to zero, which resulted in a benefit of $7.2 million, primarily due to a decrease in forecasted revenues and earnings before interest and taxes. As of December 31, 2021, the maximum amount of contingent consideration that could be paid in connection with the acquisition of AutoGuide is $87.7 million. The remaining earn-out period ends on December 31, 2022. The sellers of AutoGuide have filed an arbitration claim against Teradyne related to allegations of non-compliance with the earn-out obligations.

Schedule of Carrying Amounts and Fair Values of Financial Instruments

The carrying amounts and fair values of Teradyne’s financial instruments at December 31, 2021 and 2020 were as follows:

	December 31, 2021				December 31, 2020
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Assets
Cash and cash equivalents	$	1,122,199	$	1,122,199	$	914,121	$	914,121
Marketable securities		378,089		378,089		640,260		640,260
Derivative assets		92		92		95		95
Liabilities
Contingent consideration		—		—		7,227		7,227
Derivative liabilities		118		118		504		504
Convertible debt (1)		108,426		604,648		410,111		1,739,553

(1) The carrying value represents the bifurcated debt component only, while the fair value is based on quoted market prices for the convertible note which includes the equity conversion features.

Schedule of Available-for-Sale Marketable Securities

The following tables summarize the composition of available-for-sale marketable securities at December 31, 2021 and 2020:

	December 31, 2021
	Available-for-Sale
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Commercial paper	$	189,614	$	15	$	(9	)	$	189,620	$	22,784
U.S. Treasury securities		77,707		551		(470	)		77,789		46,435
Corporate debt securities		52,266		4,863		(227	)		56,901		19,422
Debt mutual funds		7,928		43		—			7,971		—
U.S. government agency securities		4,617		5		(12	)		4,610		3,296
Certificates of deposit and time deposits		1,356		—		—			1,356		—
Non-U.S. government securities		589		—		—			589		—
	$	334,077	$	5,477	$	(718	)	$	338,836	$	91,937

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	244,213	$	64	$	(46	)	$	244,231	$	54,798
Long-term marketable securities		89,864		5,413		(672	)		94,605		37,139
	$	334,077	$	5,477	$	(718	)	$	338,836	$	91,937

	December 31, 2020
	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	$	257,132	$	1,330	$	(158	)	$	258,304	$	17,243
Commercial paper		254,404		10		(1	)		254,413		12,173
Corporate debt securities		76,129		7,539		(53	)		83,615		39,896
Debt mutual funds		8,413		152		—			8,565		—
U.S. government agency securities		4,294		46		(1	)		4,339		1,106
Certificates of deposit and time deposits		979		—		—			979		—
Non-U.S. government securities		625		—		—			625		—
	$	601,976	$	9,077	$	(213	)	$	610,840	$	70,418

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	522,228	$	92	$	(40	)	$	522,280	$	61,806
Long-term marketable securities		79,748		8,985		(173	)		88,560		8,612
	$	601,976	$	9,077	$	(213	)	$	610,840	$	70,418

Contractual Maturities of Investments Held

The contractual maturities of investments in available-for-sale marketable securities held at December 31, 2021 were as follows:

	Cost		Fair Value
	(in thousands)
Due within one year	$	244,213	$	244,231
Due after 1 year through 5 years		41,459		41,377
Due after 5 years through 10 years		6,085		6,434
Due after 10 years		34,392		38,823
Total	$	326,149	$	330,865

Schedule of Notional Amount of Derivatives

At December 31, 2021 and 2020, 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:

	December 31, 2021								December 31, 2020
	Buy Position			Sell Position		Net Total			Buy Position			Sell Position		Net Total
	(in millions)
Japanese Yen	$	(31.4	)	$	—	$	(31.4	)	$	(14.1	)	$	—	$	(14.1	)
Taiwan Dollar		(35.1	)		—		(35.1	)		(27.9	)		—		(27.9	)
Korean Won		(4.2	)		—		(4.2	)		(5.3	)		—		(5.3	)
British Pound Sterling		(1.8	)		—		(1.8	)		(1.0	)		—		(1.0	)
Singapore Dollar		—			61.9		61.9			—			52.3		52.3
Euro		—			44.9		44.9			—			43.9		43.9
Philippine Peso		—			3.9		3.9			—			5.0		5.0
Chinese Yuan		—			2.8		2.8			—			3.4		3.4
Total	$	(72.5	)	$	113.5	$	41.0		$	(48.3	)	$	104.6	$	56.3

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

The following table summarizes the fair value of derivative instruments as of December 31, 2021 and 2020:

	Balance Sheet Location		December 31, 2021			December 31, 2020
			(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts		Prepayments	$	92		$	95
Foreign exchange contracts		Other current liabilities		(118	)		(504	)
Total derivatives			$	(26	)	$	(409	)

Schedule of Effect of Derivative Instruments on Statement of Operations Recognized

The following table summarizes the effect of derivative instruments in the statements of operations recognized for the years ended December 31, 2021, 2020, and 2019.

	Location of Losses Recognized in Statement of Operations	December 31, 2021		December 31, 2020		December 31, 2019
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Other (income) expense, net	$	6,488	$	3,515	$	5,960

(1) The table does not reflect the corresponding gains and losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies.

(2) For the year ended December 31, 2021 net gains from remeasurement of monetary assets and liabilities denominated in foreign currencies were $2.1 million.

(3) For the year ended December 31, 2020, net losses from remeasurement of monetary assets and liabilities denominated in foreign currencies were $2.6 million.

(4) For the year ended December 31, 2019 net gains from the remeasurement of monetary assets and liabilities denominated in foreign currencies were $1.6 million.