Financial Instruments

3 Months Ended

Mar. 29, 2026

Fair Value Disclosures [Abstract]

Financial Instruments

H. FINANCIAL INSTRUMENTS

Cash Equivalents

Teradyne considers all highly liquid investments with original maturities of three months or less at the date of acquisition to be cash equivalents.

Marketable Securities

Teradyne’s equity and debt mutual funds are classified as Level 1 and available-for-sale debt securities are classified as Level 2. The vast majority of Level 2 securities are fixed income securities priced by second party pricing vendors. These pricing vendors utilize the most recent observable market information in pricing these securities or, if specific prices are not available, use other observable inputs like market transactions involving identical or comparable securities.

During the three months ended March 29, 2026, and March 30, 2025, there were no transfers in or out of Level 1, Level 2, or Level 3 financial instruments.

	For the Three Months  Ended
	March 29, 2026		March 30, 2025
	(in millions)
Realized gains and losses included in ‘Other (income) expense, net’ in the condensed consolidated statement of operations
Realized gains	$	0.7	$	0.7
Realized losses		0.1		1.2
Unrealized gains and losses on equity securities included in ‘Other (income) expense, net’ in the condensed consolidated statement of operations
Unrealized gains on equity securities	$	—	$	0.2
Unrealized losses on equity securities		4.0		3.1

Unrealized gains and losses on available-for-sale debt securities are included in ‘Accumulated other comprehensive income (loss)’ in the condensed consolidated balance sheet.

The cost of securities sold is based on average cost.

The following tables set forth by fair value hierarchy Teradyne’s financial assets and liabilities that were measured at fair value on a recurring basis as of March 29, 2026, and December 31, 2025.

	March 29, 2026
	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	$	193,259	$	—	$	—	$	193,259
Cash equivalents		47,762		923		—		48,685
Available-for-sale securities:
Corporate debt securities		—		57,288		—		57,288
U.S. Treasury securities		—		12,627		—		12,627
Debt mutual funds		12,045		—		—		12,045
Non-U.S. government securities		—		9,731		—		9,731
Certificates of deposit and time deposits		—		1,329		—		1,329
Equity securities:
Mutual funds		59,007		—		—		59,007
	$	312,073	$	81,898	$	—	$	393,971
Derivative assets		—		1,145		—		1,145
Total	$	312,073	$	83,043	$	—	$	395,116
Liabilities
Derivative liabilities		—		2,994		—		2,994
Total	$	—	$	2,994	$	—	$	2,994
Reported as follows:
	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	241,021	$	923	$	—	$	241,944
Long-term marketable securities		71,052		77,322		—		148,374
Marketable securities		—		3,653		—		3,653
Prepayments		—		1,145		—		1,145
Total	$	312,073	$	83,043	$	—	$	395,116
Liabilities
Other current liabilities	$	—	$	2,994	$	—	$	2,994
Total	$	—	$	2,994	$	—	$	2,994

	December 31, 2025
	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	$	214,712	$	—	$	—	$	214,712
Cash equivalents		78,068		971		—		79,039
Available-for-sale securities:
U.S. Treasury securities		—		44,143		—		44,143
Corporate debt securities		—		36,384		—		36,384
Certificates of deposit and time deposits		—		1,354		—		1,354
Debt mutual funds		14,331		—		—		14,331
Non-U.S. government securities		—		924		—		924
Equity securities:
Mutual Funds		57,367		—		—		57,367
	$	364,478	$	83,776	$	—	$	448,254
Derivative assets		—		1,175		—		1,175
Total	$	364,478	$	84,951	$	—	$	449,429
Liabilities
Derivative liabilities		—		928		—		928
Total	$	—	$	928	$	—	$	928
Reported as follows:
	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	292,780	$	971	$	—	$	293,751
Long-term marketable securities		71,698		54,558		—		126,256
Marketable securities		—		28,247		—		28,247
Prepayments		—		1,175		—		1,175
Total	$	364,478	$	84,951	$	—	$	449,429
Liabilities
Other current liabilities	$	—	$	928	$	—	$	928
Total	$	—	$	928	$	—	$	928

The carrying amounts and fair values of Teradyne’s financial instruments at March 29, 2026, and December 31, 2025, were as follows:

	March 29, 2026				December 31, 2025
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Assets
Cash and cash equivalents	$	241,944	$	241,944	$	293,751	$	293,751
Marketable securities		152,027		152,027		154,503		154,503
Derivative assets		1,145		1,145		1,175		1,175
Liabilities
Derivative liabilities		2,994		2,994		928		928

The fair values of accounts receivable, net and accounts payable approximate the carrying value due to the short-term nature of these instruments.

The following table summarizes the composition of available-for-sale marketable securities at March 29, 2026:

	March 29, 2026
	Available-for-Sale
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Corporate debt securities	$	62,249	$	110	$	(5,071	)	$	57,288	$	49,277
U.S. Treasury securities		17,472		11		(4,856	)		12,627		12,112
Debt mutual funds		12,254		—		(209	)		12,045		2,929
Non-U.S. government securities		10,005		—		(274	)		9,731		8,830
Certificates of deposit and time deposits		1,329		—		—			1,329		—
	$	103,309	$	121	$	(10,410	)	$	93,020	$	73,148

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	3,656	$	1	$	(4	)	$	3,653	$	1,953
Long-term marketable securities		99,653		120		(10,406	)		89,367		71,195
	$	103,309	$	121	$	(10,410	)	$	93,020	$	73,148

The following table summarizes the composition of available-for-sale marketable securities at December 31, 2025:

	December 31, 2025
	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	$	48,723	$	90	$	(4,670	)	$	44,143	$	13,891
Corporate debt securities		40,090		293		(3,999	)		36,384		22,941
Debt mutual funds		14,508		—		(177	)		14,331		3,020
Certificates of deposit and time deposits		1,354		—		—			1,354		—
Non-U.S. government securities		924		—		—			924		—
	$	105,599	$	383	$	(8,846	)	$	97,136	$	39,852

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	28,213	$	41	$	(7	)	$	28,247	$	2,293
Long-term marketable securities		77,386		342		(8,839	)		68,889		37,559
	$	105,599	$	383	$	(8,846	)	$	97,136	$	39,852

As of March 29, 2026, the fair market value of investments with unrealized losses less than one year and greater than one year totaled $39.7 million and $33.5 million, respectively. As of December 31, 2025, the fair market value of investments with unrealized losses for less than one year and greater than one year totaled $1.1 million and $38.8 million, respectively.

Teradyne reviews its investments to identify and evaluate investments that have an indication of possible impairment. Based on this review, Teradyne determined that the unrealized losses related to these investments at March 29, 2026, and December 31, 2025, were not other than temporary.

The contractual maturities of investments in available-for-sale securities held at March 29, 2026, were as follows:

	March 29, 2026
	Cost		Fair Market Value
	(in thousands)
Due within one year	$	3,656	$	3,653
Due after 1 year through 5 years		10,079		9,871
Due after 5 years through 10 years		13,104		12,974
Due after 10 years		64,221		54,482
Total	$	91,060	$	80,980

Contractual maturities of investments in available-for-sale securities held at March 29, 2026, exclude debt mutual funds with a fair market value of $12.0 million as they do not have a contractual maturity date.

Derivatives

Teradyne conducts business in various foreign countries, with certain transactions denominated in local currencies. As a result, Teradyne is exposed to risks relating to changes in foreign currency exchange rates. Teradyne’s foreign currency risk management objective is to minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities denominated in foreign currencies, and changes in its cash inflows attributable to the forecasted cash flows from certain foreign currency denominated revenues.

To minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities denominated in foreign currencies, Teradyne enters into foreign currency forward contracts. The change in fair value of these derivatives is recorded directly in earnings and is used to offset the change in value of monetary assets and liabilities denominated in foreign currencies.

Teradyne also enters into foreign currency forward and option contracts designated as cash flow hedges to hedge the risk of changes in its cash inflows attributable to changes in foreign currency exchange rates. The cash flow hedges have maturities of less than six months and mature in the period of revenue recognition for certain products and services in backlog and forecasted to be recognized in a future period. Teradyne evaluates cash flow hedges for effectiveness at inception based on the critical terms match method. The hedges are not expected to incur any ineffectiveness however a quarterly qualitative assessment of effectiveness is done to determine if the critical terms match method remains appropriate to use. The change in fair value of the contracts is recorded in accumulated other comprehensive income (loss) and reclassified to earnings at maturity date.

Teradyne does not use derivative financial instruments for speculative purposes.

At March 29, 2026, and December 31, 2025, 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
	March 29, 2026		December 31, 2025
	(in millions)
Currency Hedged (Buy/Sell)
U.S. dollar/Taiwan dollar	$	28.6	$	27.0
U.S. dollar/Japanese yen		14.2		16.9
U.S. dollar/Euro		13.4		—
U.S. dollar/Korean won		4.4		7.7
U.S. dollar/British pound sterling		1.5		1.9
Singapore dollar/U.S. dollar		89.8		62.6
Danish krone/U.S. dollar		12.0		—
Danish krone/Chinese yuan		6.5		—
Philippine peso/U.S. dollar		1.7		1.8
Chinese yuan/U.S. dollar		0.6		0.7
Euro/U.S. dollar		—		20.4
Total	$	172.7	$	139.0

The change in the fair value of the outstanding contracts resulted in a net loss of $1.8 million and a net gain of $0.2 million at March 29, 2026, and December 31, 2025, respectively.

Unrealized gains and losses on foreign currency forward contracts and foreign currency remeasurement gains and losses on monetary assets and liabilities are included in ‘Other (income) expense, net’ in the condensed consolidated statement of operations.

Unrealized gains and losses on foreign currency cash flow hedge contracts are included in accumulated other comprehensive income (loss). At maturity, the gains or losses associated with cash flow hedge contracts are recorded to revenue.

The following table summarizes the fair value of derivative instruments as of March 29, 2026, and December 31, 2025:

	Balance Sheet Location	March 29, 2026			December 31, 2025
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts	Other current assets		1,145			1,175
Foreign exchange forward contracts	Other current liabilities		(2,994	)		(928	)
Total derivatives		$	(1,849	)	$	247

The following table summarizes the effect of derivative instruments recognized in the statement of operations for the three months ended March 29, 2026, and March 30, 2025:

		For the Three Months  Ended
	Location of (Gains) Losses Recognized in Statement of Operations	March 29, 2026		March 30, 2025
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts (1)	Other (income) expense, net	$	1,086	$	(166	)
Derivatives designated as hedging instruments:
Foreign exchange forward and option contracts	Revenue		—		(747	)
Total Derivatives		$	1,086	$	(913	)

(1)The table does not reflect the corresponding gains and losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies. For the three months ended March 29, 2026 and March 30, 2025, net losses from

remeasurement of monetary assets and liabilities denominated in foreign currencies were $1.4 million and $2.2 million, respectively.

See Note I: “Debt” regarding derivatives related to the convertible senior notes.