Teradyne : Q1 Quarterly Results (EC Q125 Slides FINAL)

Published: 2025-04-29 09:03:08 ET TER

Financial Results for Q1 2025

April 29, 2025

Business Update and Outlook

Greg Smith, President and CEO

Q1'25 Summary

Q1'25 Range: $660M - $700M Q1'25 Range: 58.5% - 59.5% Q1'25 Range: $0.58 - $0.68

$1,000M

$800M

$600M

$400M

$200M

Quarterly Revenue ($M)

$600M

$753M

$686M

Q1'24 Q4'24 Q1'25

Quarterly Revenue

65.0%

60.0%

55.0%

50.0%

45.0%

40.0%

Non-GAAP Gross Margin % (1)

56.6%

59.4%

60.6%

Q1'24 Q4'24 Q1'25

Non-GAAP Gross Margin %

$1.40

$1.20

$1.00

$0.80

$0.60

$0.40

$0.20

Non-GAAP EPS (1)

$0.51

$0.95

$0.75

Q1'24 Q4'24 Q1'25

Non-GAAP EPS

Strength in SoC mobile demand drove Q1'25 sales up ~14%YoY (~18% excluding DIS divestiture)

Semi Test up 25% YoY Product Test down 4% YoY Robotics sales down 21% YoY

Non-GAAP gross margin beat high guide due to favorable product mix

Non-GAAP EPS of $0.75

Repurchased 1.5 million shares /

$159 million, ~$107 per share

average

162 million weighted average diluted shares outstanding

4 (1) See GAAP to non-GAAP reconciliations contained on the Teradyne website at https://www.teradyne.com by

clicking on "Investors" and then selecting the "GAAP to Non-GAAP Reconciliation" link

Q1'25 Summary and Q2'25 Outlook

Stronger than planned SoC driven primarily by Mobile

Memory in line with expectations as customers absorb HBM capacity installed in 2024

IST in line with expectations - including first SLT revenue for AI Compute

Product Test in line with expectations

Wireless Test won 13 of 13 of the WiFi 7 test opportunities

Robotics continues to face ongoing end market weakness but delivering on AI product portfolio (MiR 1200 Pallet Jack, UR AI Accelerator)

Stronger than expected GMs of 60.6% due to favorable

product mix

Opex favorable while continuing investments in strategic initiatives

Second quarter guidance reflects order pushouts due to uncertainty related to end market demand causing some customers to evaluate capital plans

Expect revenue from Mobile to be softer in Q2 following two consecutive quarters of Mobile strength

Expect substantial QoQ decline in Memory due to lumpiness of orders

GM of 56.5% to 57.5%, reflecting lower volume and product mix

Opex of 40.5% to 44.5% as a percentage of sales

Operating profit of 14.5% at the mid-point of range

Increased share buybacks up to $1B through 2026, up from target of $400M in 2025

5 See GAAP to non-GAAP reconciliations contained on the Teradyne website at https://www.teradyne.com by clicking

on "Investors" and then selecting the "GAAP to Non-GAAP Reconciliation" link

First Quarter 2025 Financial Results and Second Quarter 2025 Guidance

Sanjay Mehta, Vice President and Chief Financial Officer

Q1'25 Non-GAAP Results

$ in millions, except EPS

Q1'24 Actual(1)

Q4'24 Actual(1)

Q1'25 Actual(1)

Sales

$600M

$753M

$686M

Gross Margin

56.6%

$339M

59.4%

$447M

60.6%

$416M

R&D

17.2%

$103M

17.1%

$128M

17.2%

$118M

SG&A

24.6%

$147M

20.7%

$156M

22.9%

$157M

OPEX

41.8%

$251M

37.8%

$284M

40.1%

$275M

Operating Profit

14.8%

$89M

21.7%

$163M

20.5%

$141M

Income Taxes (& effective tax rate)

15.5%

$15M

7.6%

$13M

13.5%

$19M

EPS

$0.51

$0.95

$0.75

Diluted Shares

162M

163M

162M

7 (1) See GAAP to non-GAAP reconciliations contained on the Teradyne website at https://www.teradyne.com by

clicking on "Investors" and then selecting the "GAAP to Non-GAAP Reconciliation" link

Q1'25 Business Unit Summary

Semiconductor Test

Robotics

Product Test

Q1'25 Sales

$543M

$69M

$74M

Q1'25 Key

Highlights

Sales up 25% vs Q1'24, (32%

excl. DIS)

SoC up 34% vs Q1'24 due to

strength in Mobile

Memory Test sales flat vs Q1'24

IST sales of $27M

Sales Detail

Product: $449M

Service: $94M

Sales down 30% QoQ and down

21% from Q1'24

Continued end market weakness in Industrial Automation

UR sales of $49M

MiR sales of $20M

Sales down 4% vs Q1'24

Strength in connectivity as key WIFI 7 socket wins gain traction

Wireless Test sales of $29M

Total Company Sales Detail

Total Company Product: $562M Total Company Service: $124M

Balance Sheet & Capital Allocation

$ in millions

Q1'24 Actual

Q4'24 Actual

Q1'25 Actual

Cash and Marketable Securities

$871M

$724M

$622M

Inventory

$314M

$298M

$345M

DSO

65 days

58 days

60 days

Capital Additions

$44M

$57M

$64M

Depreciation and Amortization(1)

$44M

$49M

$46M

Free Cash Flow(2)

($37M)

$225M

$98M

Capital Return

Buybacks(3)

$22M

$144M

$159M

Dividends

$18M

$19M

Includes depreciation, stock-based compensation, amortization of acquired intangible assets

Teradyne calculates free cash flow as: GAAP Cash flow from operations, excluding discontinued operations, less property, plant and equipment

additions; see GAAP to non-GAAP reconciliations contained on the Teradyne website at https://www.teradyne.com by clicking on "Investors" and then

selecting the "GAAP to Non-GAAP Reconciliation" link.

Inclusive of excise taxes, as applicable

Q2'25 Non-GAAP Guidance

$ in millions

Q1'25 Actual(1)

Q2'25 Guidance(1)

Sales

$686M

$610M - $680M

Gross Margin

60.6%

56.5% - 57.5%

OPEX

40.1%

44.5% - 40.5%

Operating Profit

20.5%

12.0% - 17.0%

Income Taxes (& effective tax rate)

13.5%

EPS

$0.75

$0.41 - $0.64

Diluted Shares

162M

161M

(1) See GAAP to non-GAAP reconciliations contained on the Teradyne website at https://www.teradyne.com by

clicking on "Investors" and then selecting the "GAAP to Non-GAAP Reconciliation" link

Q1'25 Summary and Q2'25 Outlook

Stronger than planned SoC driven primarily by Mobile

Memory in line with expectations as customers absorb HBM capacity installed in 2024

IST in line with expectations - including first SLT revenue for AI Compute

Product Test in line with expectations

Wireless Test won 13 of 13 of the WiFi 7 test opportunities

Robotics continues to face ongoing end market weakness but delivering on AI product portfolio (MiR 1200 Pallet Jack, UR AI Accelerator)

Stronger than expected GMs of 60.6% due to favorable

product mix

Opex favorable while continuing investments in strategic initiatives

Second quarter guidance reflects order pushouts due to uncertainty related to end market demand causing some customers to evaluate capital plans

Expect revenue from Mobile to be softer in Q2 following two consecutive quarters of Mobile strength

Expect substantial QoQ decline in Memory due to lumpiness of orders

GM of 56.5% to 57.5%, reflecting lower volume and product mix

Opex of 40.5% to 44.5% as a percentage of sales

Operating profit of 14.5% at the mid-point of range

Increased share buybacks up to $1B through 2026, up from target of $400M in 2025

See GAAP to non-GAAP reconciliations contained on the Teradyne website at https://www.teradyne.com by clicking

on "Investors" and then selecting the "GAAP to Non-GAAP Reconciliation" link

11 11

Q2'25: Sales expected to be in the range of $610 - $680M | GAAP EPS of $0.35 - $0.58 | Non-GAAP EPS of $0.41 - $0.64

TERADYNE

Supplemental Information

History of Capital Allocation

$ in millions

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Q1'25

Cumulative

Buybacks(1)

$300

$146

$200

$823

$500

$88

$600

$752

$401

$199

$159

$4,168

Dividends

$51

$49

$55

$67

$61

$66

$70

$68

$76

$19

$650

Acquisitions/ Investments(2)

$283

$15

$194

$115

$12

$422

$20

$1,091

Total

$633

$210

$257

$1,085

$676

$163

$678

$822

$468

$717

$198

$5,909

Free Cash Flow(3)

$323

$370

$521

$370

$444

$684

$966

$415

$426

$474

$98

$5,091

% of FCF Returned(4)

109%

$53%

49%

240%

126%

23%

69%

198%

110%

58%

182%

95%

18%

11%

71%

Cumulative Capital Allocation Breakdown 2015 - Q1'25

Inclusive of excise taxes, as applicable

Net acquisitions includes acquisitions, minority investments and divestitures

Teradyne calculates free cash flow as: GAAP Cash flow from operations, excluding discontinued operations, less property, plant and equipment additions net of gov't subsidies; see GAAP to non-GAAP reconciliations contained on the Teradyne website at https://www.teradyne.com by clicking on "Investors" and then selecting the "GAAP to Non-GAAP Reconciliation" link.

Teradyne calculates % of FCF returned as Buybacks plus Dividends divided by Free Cash Flow

Semiconductor Test Market Growth Trends Are Favorable

SoC market powered by unit growth, complexity, new technology adoption

Memory test driven by bit growth, diversity, higher bandwidth

$6,000

$5,000

$4,000

$3,000

$2,000

$1,000

2016 2017 2018 2019 2020 2021 2022 2023 2024

(1) SoC data includes product and service; market data from SEMI WWSEMS report and internal estimates

15 (2) Trendline reflects 9% and 11% CAGRs from 2016 for SoC and Memory, respectively

Teradyne Non-GAAP Target Earnings Model

27% EPS CAGR from '24 to '28 at Mid-Point

2024 Target Model

TER Revenue ($M)

$2,820

$4,500 - $5,500

Growth off 2024

12% - 18%

Gross Margin %

59%

59% - 60%

OPEX % 38% 31% - 28%

Operating Profit 20% 28% - 32%

13%

$2.82B

87%

16%

$5.00B

84%

Non-GAAP EPS $3.22 $7.00 - $9.50

Metric Target Model Comment

Test Revenue CAGR 12-17% off 2024 Drivers: AI - Compute and Memory growth, recovery in Mobility and Auto/Ind

markets, IST growth tied to SLT

Robotics Revenue CAGR 18-24% off 2024 Drivers: AI expanding SAM and reducing implementation complexity. Persistent

labor shortages in high wage countries

1 Target Earnings Model Updated as of 1/30/2025; 2 Target Model sales mix is at mid-point of model range See GAAP to non-GAAP reconciliations contained on the Teradyne website at https://www.teradyne.com by clicking

on "Investors" and then selecting the "GAAP to Non-GAAP Reconciliation" link

GAAP to Non-GAAP

Reconciliation

In addition to disclosing results that are determined in accordance with GAAP, Teradyne also discloses in this presentation and on the earnings call non-GAAP results of operations that exclude certain income items and charges. These results are provided as a complement to results provided in accordance with GAAP. These non-GAAP performance measures are used to make operational decisions, to determine employee compensation, to forecast future operational results, and for comparison with the Company's business plan, historical operating results and the operating results of the Company's competitors. Management believes each of these non-GAAP performance measures provides useful supplemental information for investors, allowing greater transparency to the information used by management in its operational decision making and in the review of the Company's financial and operational performance, as well as facilitating meaningful comparisons of the Company's results in the current period compared with those in prior and future periods. A reconciliation of each available GAAP to non-GAAP financial measure discussed in this presentation is contained on the Teradyne website at https://www.teradyne.com by clicking on "Investors" and then selecting the "GAAP to Non-GAAP Reconciliation" link. The non-GAAP performance measures discussed in this presentation may not be comparable to similarly titled measures used by other companies. The presentation of non-GAAP measures is not meant to be considered in isolation, as a substitute for, or superior to, financial measures or information provided in accordance with GAAP.

TERADYNE

Disclaimer

Teradyne Inc. published this content on April 29, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 29, 2025 at 13:02 UTC.