Teradyne — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue for Q3 2026 was $1,306 million, up 70% year-over-year from $769 million in Q3 2025.
• GAAP net income attributable to Teradyne was $342.4 million ($2.17 per diluted share), compared to $119.6 million ($0.75 per diluted share) in Q3 2025.
• Non-GAAP net income attributable to Teradyne was $359.9 million ($2.29 per diluted share), compared to $135.9 million ($0.85 per diluted share) in Q3 2025.
• Gross profit was $771.3 million (59.1% of revenue) on a GAAP basis and $771.3 million (59.1%) on a non-GAAP basis.
• Operating income was $402.0 million (30.8% of revenue) on a GAAP basis and $412.9 million (31.6%) on a non-GAAP basis.
• Net cash provided by operating activities for the nine months ended September 27, 2026, was $1,047.9 million, compared to $392.8 million in the prior year period.
• Cash and cash equivalents increased to $460.7 million at September 27, 2026, from $293.8 million at December 31, 2025.
• Accounts receivable increased to $1,110.8 million at September 27, 2026, from $786.9 million at December 31, 2025.
• Inventories increased to $575.0 million at September 27, 2026, from $379.6 million at December 31, 2025.
• Deferred revenue and customer advances increased to $270.0 million (current and long-term combined) at September 27, 2026, from $204.0 million at December 31, 2025.
• Total liabilities were $1,712.2 million at September 27, 2026, compared to $1,387.8 million at December 31, 2025.
• Total Teradyne shareholders' equity was $3,687.9 million at September 27, 2026, compared to $2,795.8 million at December 31, 2025.

Guidance and Future Outlook:

• Q4 2026 revenue guidance is $1,250 million to $1,350 million.
• Q4 2026 GAAP net income per diluted share guidance is $1.88 to $2.18.
• Q4 2026 non-GAAP net income per diluted share guidance is $1.95 to $2.25.
• Non-GAAP guidance excludes acquired intangible asset amortization, amortization on the investment in Technoprobe, and related tax impacts.
• Management stated they approach 2027 with a more diversified business and an expanding set of opportunities.

Business Segments and Product Lines:

• Semiconductor Test revenue was $1,072 million in Q3 2026.
• Product Test revenue was $138 million in Q3 2026.
• Robotics revenue was $96 million in Q3 2026, representing the highest third-quarter revenue to date for the segment.
• The Robotics segment achieved profitability in Q3 2026.
• Record revenue in Memory and Integrated Systems Test was driven by AI demand.
• Demand extended across the AI value chain, including memory and hard disk drive test, high-speed interconnect, and robotics.

Market and Competitive Landscape:

• Demand extended across the AI value chain from memory and hard disk drive test to high-speed interconnect and robotics.
• The company's "wafer to data center strategy" sustained positive momentum.

Risks and Challenges:

• Forward-looking statements involve risks including macroeconomic factors, economic slowdowns, and downturns in markets where Teradyne operates.
• Risks include decreased or delayed product demand from significant customers.
• Potential risks involve slowdowns in the development, delivery, and acceptance of new products.
• Challenges include the ability to grow the Robotics business and the impact of increased R&D spending.
• Risks include supply chain disruptions, epidemics, pandemics, and the impact of tariffs or export controls.
• Specific regulatory risks include impacts from U.S. Department of Commerce regulations regarding Huawei, HiSilicon, military end users, and semiconductor equipment destined for China.
• Geopolitical conflicts and changes to tax regulations are also cited as potential risks.

Management Commentary and Tone:

• CEO Greg Smith stated, "Our wafer to data center strategy and the breadth of our portfolio sustained positive momentum in Q3."
• Management noted that results exceeded the high end of Q3 guidance.
• Management expressed confidence in multiple growth engines across test and robotics.

Other Key Points:

• A cash dividend of $0.13 per common share was declared for the quarter.
• Net cash used for financing activities in Q3 2026 was $104.7 million, including $99.3 million in repurchases of common stock and $20.3 million in dividend payments.
• Net cash used for investing activities in Q3 2026 was $97.2 million, primarily due to $86.3 million in purchases of property, plant, and equipment.
• Acquired intangible assets amortization was $5.3 million for the quarter.
• Restructuring and other charges were $2.0 million for the quarter, including $1.2 million in employee severance.
• ERP-related expenses included $3.7 million in selling and administrative expenses for the quarter.
• Provision for excess and obsolete inventory was $10.9 million for the quarter.
• Equity in net earnings of affiliate was $3.3 million for the quarter.
• A conference call to discuss results and outlook is scheduled for October 28, 2026, at 8:30 a.m. ET.