Press release

Teradyne Reports Second Quarter 2024 Results

0
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Teradyne, Inc. (NASDAQ: TER):

  • Revenue and earnings above the high-end of Q2 guidance

  • Revenue of $730 million in Q2’24, up 7% from Q2’23

  • 14% YoY Growth in Q2 for Semiconductor Test driven by continued strength in memory and demand recovery in SoC

 

Q2’24

 

 

Q2’23

 

 

Q1’24

 

Revenue (mil)

 

$

730

 

 

$

684

 

 

$

600

 

GAAP EPS

 

$

1.14

 

 

$

0.73

 

 

$

0.40

 

Non-GAAP EPS

 

$

0.86

 

 

$

0.79

 

 

$

0.51

 

Teradyne, Inc. (NASDAQ: TER) reported revenue of $730 million for the second quarter of 2024 of which $543 million was in Semiconductor Test, $61 million in System Test, $36 million in Wireless Test and $90 million in Robotics. GAAP net income for the second quarter of 2024 was $186.3 million or $1.14 per diluted share. On a non-GAAP basis, Teradyne’s net income in the second quarter of 2024 was $140.0 million, or $0.86 per diluted share, which excluded acquired intangible asset amortization, restructuring and other charges, gains on foreign exchange options in connection with acquisitions and divestitures, gain on sale of business, and included the related tax impact on non-GAAP adjustments.

“In the second quarter, AI applications drove accelerated demand from both compute and memory customers, and our robotics business grew sequentially and year-over-year,” said Teradyne CEO Greg Smith. “Overall, 2024 is shaping up as we expected, and we believe the deployment of edge AI will strengthen demand in our test and robotics businesses over the mid-term.”

Guidance for the third quarter of 2024 is revenue of $680 million to $740 million, with GAAP net income of $0.62 to $0.82 per diluted share and non-GAAP net income of $0.66 to $0.86 per diluted share. Non-GAAP guidance excludes acquired intangible asset amortization and amortization on our investment in Technoprobe, as well as the related tax impact on non-GAAP adjustments.

Webcast

A conference call to discuss the second quarter results, along with management’s business outlook, will follow at 8:30 a.m. ET, Thursday, July 25, 2024. Interested investors should access the webcast at www.teradyne.com and click on “Investors” at least five minutes before the call begins. Presentation materials will be available starting at 8:30 a.m. ET. A replay will be available on the Teradyne website at www.teradyne.com/investors.

Non-GAAP Results

In addition to disclosing results that are determined in accordance with GAAP, Teradyne also discloses 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. Non-GAAP income from operations and non-GAAP net income exclude acquired intangible assets amortization, restructuring and other, pension actuarial gains and losses, stock compensation modification expense, gains and losses on foreign exchange options in connection with acquisitions and divestitures, gain on sale of business, discrete income tax adjustments, and includes the related tax impact on non-GAAP adjustments. GAAP requires that these items be included in determining income from operations and net income. Non-GAAP income from operations, non-GAAP net income, non-GAAP income from operations as a percentage of revenue, non-GAAP net income as a percentage of revenue, and non-GAAP net income per share are non-GAAP performance measures presented to provide meaningful supplemental information regarding Teradyne’s baseline performance before gains, losses or other charges that may not be indicative of Teradyne’s current core business or future outlook. These non-GAAP performance measures are used to make operational decisions, to determine employee compensation, to forecast future operational results, and for comparison with Teradyne’s business plan, historical operating results and the operating results of Teradyne’s competitors. Non-GAAP diluted shares include the impact of Teradyne’s call option on its shares. 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 Teradyne’s financial and operational performance, as well as facilitating meaningful comparisons of Teradyne’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 press release is contained in the attached exhibits and on the Teradyne website at www.teradyne.com by clicking on “Investor Relations” and then selecting “Financials” and the “GAAP to Non-GAAP Reconciliation” link. The non-GAAP performance measures discussed in this press release 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.

About Teradyne

Teradyne (NASDAQ:TER) test technology helps bring high-quality innovations such as smart devices, life-saving medical equipment and data storage systems to market, faster. Its advanced test solutions for semiconductors, electronic systems, wireless devices and more ensure that products perform as they were designed. Its robotics offerings include collaborative and mobile robots that help manufacturers of all sizes increase productivity, improve safety, and lower costs. In 2023, Teradyne had revenue of $2.7 billion and today employs over 6,200 people worldwide. For more information, visit teradyne.com. Teradyne® is a registered trademark of Teradyne, Inc., in the U.S. and other countries.

Safe Harbor Statement

This release contains forward-looking statements including statements regarding Teradyne’s future business prospects, financial performance or position and results of operations. You can identify forward-looking statements by their use of forward-looking words such as “anticipate,” “expect,” “plan,” “could,” “may,” “will,” “believe,” “estimate,” “goal” or other comparable terms. Forward-looking statements in this press release address various matters, including statements regarding Teradyne’s financial guidance. Investors are cautioned that such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements due to known and unknown risks, uncertainties, assumptions, and other factors. Such factors include, but are not limited to, macroeconomic factors and slowdowns or downturns in economic conditions generally and in the markets in which Teradyne operates; decreased or delayed product demand from one or more significant customers; a slowdown or inability in the development, delivery and acceptance of new products; the ability to grow the Robotics business; the impact of increased research and development spending; the impact of epidemics or pandemics such as COVID-19; the impact of a supply shortage on our supply chain and contract manufacturers; the consummation and success of any mergers or acquisitions; unexpected cash needs; the business judgment of the board of directors that a declaration of a dividend or the repurchase of common stock is not in Teradyne’s best interests; changes to U.S. or global tax regulations or guidance; the impact of any tariffs or export controls imposed by the U.S. or China; the impact of U.S. Department of Commerce or other government agency regulations relating to Huawei, HiSilicon and other customers or potential customers; the impact of U.S. Department Commerce export control regulations for certain U.S. products and technology sold to military end users or for military end-use in China; the impact of the Israel-Hamas conflict; the impact of regulations published by the U.S. Department of Commerce relating to semiconductors and semiconductor manufacturing equipment destined for certain end uses in China.

The risks included above are not exhaustive. For a more detailed description of the risk factors associated with Teradyne, please refer to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Many of these factors are macroeconomic in nature and are, therefore, beyond Teradyne’s control. We caution readers not to place undue reliance on any forward-looking statements included in this press release which speak only as to the date of this press release. Teradyne specifically disclaims any obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.

TERADYNE, INC. REPORT FOR SECOND FISCAL QUARTER OF 2024

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

Quarter Ended

 

 

Six Months Ended

 

 

 

June 30,

2024

 

 

March 31,

2024

 

 

July 2,

2023

 

 

June 30,

2024

 

 

July 2,

2023

 

Net revenues

 

$

729,879

 

 

$

599,819

 

 

$

684,437

 

 

$

1,329,698

 

 

$

1,301,966

 

Cost of revenues (exclusive of acquired intangible assets amortization shown separately below) (1)

 

 

304,035

 

 

 

260,537

 

 

 

281,945

 

 

 

564,572

 

 

 

543,054

 

Gross profit

 

 

425,844

 

 

 

339,282

 

 

 

402,492

 

 

 

765,126

 

 

 

758,912

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and administrative (2)

 

 

154,470

 

 

 

149,188

 

 

 

145,695

 

 

 

303,658

 

 

 

296,650

 

Engineering and development

 

 

111,816

 

 

 

103,199

 

 

 

105,706

 

 

 

215,015

 

 

 

211,468

 

Acquired intangible assets amortization

 

 

4,664

 

 

 

4,697

 

 

 

4,825

 

 

 

9,361

 

 

 

9,627

 

Restructuring and other (3)

 

 

2,012

 

 

 

4,427

 

 

 

6,358

 

 

 

6,440

 

 

 

8,395

 

Gain on sale of business (4)

 

 

(57,486

)

 

 

 

 

 

 

 

 

(57,486

)

 

 

 

Operating expenses

 

 

215,476

 

 

 

261,511

 

 

 

262,584

 

 

 

476,988

 

 

 

526,140

 

Income from operations

 

 

210,368

 

 

 

77,771

 

 

 

139,908

 

 

 

288,138

 

 

 

232,772

 

Interest and other (income) expense (5)

 

 

(9,035

)

 

 

4,869

 

 

 

(4,494

)

 

 

(4,167

)

 

 

(8,714

)

Income before income taxes

 

 

219,403

 

 

 

72,902

 

 

 

144,402

 

 

 

292,305

 

 

 

241,486

 

Income tax provision

 

 

33,130

 

 

 

8,705

 

 

 

24,352

 

 

 

41,835

 

 

 

37,905

 

Net income

 

$

186,273

 

 

$

64,197

 

 

$

120,050

 

 

$

250,470

 

 

$

203,581

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.18

 

 

$

0.42

 

 

$

0.78

 

 

$

1.61

 

 

$

1.31

 

Diluted

 

$

1.14

 

 

$

0.40

 

 

$

0.73

 

 

$

1.54

 

 

$

1.23

 

Weighted average common shares – basic

 

 

157,804

 

 

 

153,047

 

 

 

154,760

 

 

 

155,426

 

 

 

155,332

 

Weighted average common shares – diluted (6)

 

 

163,470

 

 

 

162,348

 

 

 

164,751

 

 

 

162,909

 

 

 

165,530

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividend declared per common share

 

$

0.12

 

 

$

0.12

 

 

$

0.11

 

 

$

0.24

 

 

$

0.22

 

 

(1)    Cost of revenues includes:

 
 

 

Quarter Ended

 

 

Six Months Ended

 

 

 

June 30,

2024

 

 

March 31,

2024

 

 

July 2,

2023

 

 

June 30,

2024

 

 

July 2,

2023

 

Provision for excess and obsolete inventory

 

$

3,261

 

 

$

6,177

 

 

$

5,731

 

 

$

9,438

 

 

$

11,341

 

Sale of previously written down inventory

 

 

(592

)

 

 

(722

)

 

 

(2,463

)

 

 

(1,314

)

 

 

(2,848

)

 

 

$

2,669

 

 

$

5,455

 

 

$

3,268

 

 

$

8,124

 

 

$

8,493

 

(2)

 

For the quarter ended March 31, 2024, and the six months ended June 30, 2024, selling and administrative expenses included an equity charge of $1.7 million for the modification of Teradyne executives’ retirement agreements. For the six months ended July 2, 2023, selling and administrative expenses included an equity charge of $5.9 million for the modification of Teradyne’s retired CEO’s outstanding equity awards in connection with his February 1, 2023, retirement.

 

(3)

 

Restructuring and other consists of:

 

 

Quarter Ended

 

 

Six Months Ended

 

 

 

June 30,

2024

 

 

March 31,

2024

 

 

July 2,

2023

 

 

June 30,

2024

 

 

July 2,

2023

 

Employee severance

 

$

2,012

 

 

$

2,026

 

 

$

5,140

 

 

$

4,038

 

 

$

7,177

 

Acquisition and divestiture related expenses

 

 

 

 

 

2,214

 

 

 

 

 

 

2,214

 

 

 

 

Other

 

 

 

 

 

187

 

 

 

1,218

 

 

 

187

 

 

 

1,218

 

 

 

$

2,012

 

 

$

4,427

 

 

$

6,358

 

 

$

6,440

 

 

$

8,395

 

(4)

 

On May 27, 2024, Teradyne sold Teradyne’s Device Interface Solution (“DIS”) business, a component of the Semiconductor Test segment, to Technoprobe S.p.A. (“Technoprobe”), for $85.0 million, net of cash and cash equivalents sold and a working capital adjustment.

 

(5)

 

Interest and other includes:

 

 

Quarter Ended

 

 

Six Months Ended

 

 

 

June 30,

2024

 

 

March 31,

2024

 

 

July 2,

2023

 

 

June 30,

2024

 

 

July 2,

2023

 

Loss (gain) on foreign exchange option

 

$

(4,154

)

 

$

13,918

 

 

$

 

 

$

9,765

 

 

$

 

Pension actuarial losses (gains)

 

 

(250

)

 

 

 

 

 

53

 

 

 

(250

)

 

 

53

 

(6)

 

Under GAAP, when calculating diluted earnings per share, convertible debt must be assumed to have converted if the effect on EPS would be dilutive. Diluted shares assume the conversion of the convertible debt as the effect would be dilutive. Accordingly, for the quarters ended June 30, 2024, March 31, 2024, and July 2, 2023, diluted shares included 4.9 million, 8.9 million and 8.9 million shares, respectively, from the convertible note hedge transaction. For the six months ended June 30, 2024, and July 2, 2023, diluted shares included 6.9 million and 8.9 million shares, respectively, from the convertible note hedge transaction. For the quarter ended July 2, 2023, 0.7 million shares have also been included in diluted shares. For the six months ended July 2, 2023, 0.8 million shares have also been included in diluted shares.

 
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)  

 

 

June 30,

2024

 

 

December 31,

2023

 

Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

421,904

 

 

$

757,571

 

Marketable securities

 

 

38,654

 

 

 

62,154

 

Accounts receivable, net

 

 

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

 

Assets held for sale

 

 

 

 

 

11,531

 

Total assets

 

$

3,631,706

 

 

$

3,486,824

 

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 income taxes payable

 

 

24,596

 

 

 

44,331

 

Liabilities held for sale

 

 

 

 

 

2,000

 

Total liabilities

 

 

900,894

 

 

 

960,927

 

Shareholders’ equity

 

 

2,730,812

 

 

 

2,525,897

 

Total liabilities and shareholders’ equity

 

$

3,631,706

 

 

$

3,486,824

 

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)

 

 

 

Quarter Ended

 

 

Six Months Ended

 

 

 

June 30,

2024

 

 

July 2,

2023

 

 

June 30,

2024

 

 

July 2,

2023

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

186,273

 

 

$

120,050

 

 

$

250,470

 

 

$

203,581

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

25,573

 

 

 

22,551

 

 

 

48,927

 

 

 

45,231

 

Stock-based compensation

 

 

14,935

 

 

 

13,564

 

 

 

30,693

 

 

 

32,449

 

Amortization

 

 

4,631

 

 

 

4,654

 

 

 

9,397

 

 

 

9,580

 

Provision for excess and obsolete inventory

 

 

3,261

 

 

 

5,731

 

 

 

9,438

 

 

 

11,341

 

Losses (gains) on investments

 

 

2,624

 

 

 

(2,507

)

 

 

13,090

 

 

 

(4,745

)

Gain on sale of business

 

 

(57,486

)

 

 

 

 

 

(57,486

)

 

 

 

Deferred taxes

 

 

(7,161

)

 

 

(5,937

)

 

 

(16,830

)

 

 

(13,571

)

Retirement plan actuarial losses (gains)

 

 

(250

)

 

 

 

 

 

(250

)

 

 

 

Other

 

 

453

 

 

 

(201

)

 

 

1,240

 

 

 

(92

)

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(46,156

)

 

 

(39,897

)

 

 

(54,211

)

 

 

(2,693

)

Inventories

 

 

24,034

 

 

 

9,852

 

 

 

17,102

 

 

 

(13,845

)

Prepayments and other assets

 

 

11,101

 

 

 

(14,204

)

 

 

22,190

 

 

 

(29,584

)

Accounts payable and other liabilities

 

 

52,539

 

 

 

58,694

 

 

 

(53,009

)

 

 

(24,514

)

Deferred revenue and customer advances

 

 

4,183

 

 

 

(2,233

)

 

 

2,739

 

 

 

(34,938

)

Retirement plans contributions

 

 

(1,353

)

 

 

(1,248

)

 

 

(2,774

)

 

 

(2,482

)

Income taxes

 

 

(1,132

)

 

 

(26,102

)

 

 

2,622

 

 

 

(13,614

)

Net cash provided by operating activities

 

 

216,069

 

 

 

142,767

 

 

 

223,348

 

 

 

162,104

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

(44,846

)

 

 

(39,258

)

 

 

(88,869

)

 

 

(80,702

)

Purchases of investment in a business

 

 

(524,653

)

 

 

 

 

 

(524,653

)

 

 

 

Purchases of marketable securities

 

 

(11,715

)

 

 

(29,742

)

 

 

(27,757

)

 

 

(99,018

)

Proceeds from the sale of a business, net of cash and cash equivalents sold

 

 

87,172

 

 

 

 

 

 

87,172

 

 

 

 

Proceeds from maturities of marketable securities

 

 

12,420

 

 

 

14,529

 

 

 

26,858

 

 

 

35,577

 

Proceeds from sales of marketable securities

 

 

555

 

 

 

27,648

 

 

 

21,289

 

 

 

21,997

 

Proceeds from life insurance

 

 

 

 

 

 

 

 

873

 

 

 

460

 

Net cash used for investing activities

 

 

(481,067

)

 

 

(26,823

)

 

 

(505,087

)

 

 

(121,686

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Payments of borrowings on revolving credit facility

 

 

(185,000

)

 

 

 

 

 

(185,000

)

 

 

 

Dividend payments

 

 

(19,000

)

 

 

(17,019

)

 

 

(37,370

)

 

 

(34,184

)

Repurchase of common stock

 

 

(8,189

)

 

 

(134,537

)

 

 

(30,306

)

 

 

(227,845

)

Payments related to net settlement of employee stock compensation awards

 

 

(319

)

 

 

(438

)

 

 

(13,434

)

 

 

(20,308

)

Payments of convertible debt principal

 

 

 

 

 

(2,303

)

 

 

 

 

 

(17,458

)

Proceeds from borrowings on revolving credit facility

 

 

185,000

 

 

 

 

 

 

185,000

 

 

 

 

Issuance of common stock under stock purchase and stock option plans

 

 

4,902

 

 

 

602

 

 

 

21,836

 

 

 

16,599

 

Net cash used for financing activities

 

 

(22,606

)

 

 

(153,695

)

 

 

(59,274

)

 

 

(283,196

)

Effects of exchange rate changes on cash and cash equivalents

 

 

2,105

 

 

 

1,751

 

 

 

5,346

 

 

 

1,213

 

Decrease in cash and cash equivalents

 

 

(285,499

)

 

 

(36,000

)

 

 

(335,667

)

 

 

(241,565

)

Cash and cash equivalents at beginning of period

 

 

707,403

 

 

 

649,208

 

 

 

757,571

 

 

 

854,773

 

Cash and cash equivalents at end of period

 

$

421,904

 

 

$

613,208

 

 

$

421,904

 

 

$

613,208

 

 

GAAP to Non-GAAP Earnings Reconciliation

(In millions, except per share amounts)

 

Quarter Ended

 

 

June 30,

2024

 

 

% of Net

Revenues

 

 

 

 

 

 

March 31,

2024

 

 

% of Net

Revenues

 

 

 

 

 

 

July 2,

2023

 

 

% of Net

Revenues

 

Net revenues

$

729.9

 

 

 

 

 

 

 

 

 

$

599.8

 

 

 

 

 

 

 

 

 

$

684.4

 

 

 

 

Gross profit GAAP and non-GAAP

 

425.8

 

 

 

58.3

%

 

 

 

 

 

 

339.3

 

 

 

56.6

%

 

 

 

 

 

 

402.5

 

 

 

58.8

%

Income from operations – GAAP

 

210.4

 

 

 

28.8

%

 

 

 

 

 

 

77.8

 

 

 

13.0

%

 

 

 

 

 

 

139.9

 

 

 

20.4

%

Acquired intangible assets amortization

 

4.7

 

 

 

0.6

%

 

 

 

 

 

 

4.7

 

 

 

0.8

%

 

 

 

 

 

 

4.8

 

 

 

0.7

%

Restructuring and other (1)

 

2.0

 

 

 

0.3

%

 

 

 

 

 

 

4.4

 

 

 

0.7

%

 

 

 

 

 

 

6.4

 

 

 

0.9

%

Equity modification charge (2)

 

 

 

 

 

 

 

 

 

 

 

1.7

 

 

 

0.3

%

 

 

 

 

 

 

 

 

 

 

Gain on sale of business (3)

 

(57.5

)

 

 

-7.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations – non-GAAP

$

159.6

 

 

 

21.9

%

 

 

 

 

 

$

88.6

 

 

 

14.8

%

 

 

 

 

 

$

151.1

 

 

 

22.1

%

 

 

 

 

 

 

Net Income

per Common Share

 

 

 

 

 

 

 

Net Income

per Common Share

 

 

 

 

 

 

 

 

Net Income

per Common Share

 

 

June 30,

2024

 

% of Net

Revenues

 

 

Basic

 

 

Diluted

 

 

March 31,

2024

 

% of Net

Revenues

 

 

Basic

 

 

Diluted

 

 

July 2,

2023

 

 

% of Net

Revenues

 

 

Basic

 

 

Diluted

 

Net income – GAAP

$

186.3

 

 

25.5

%

 

$

1.18

 

 

$

1.14

 

 

$

64.2

 

 

10.7

%

 

$

0.42

 

 

$

0.40

 

 

$

120.1

 

 

 

17.5

%

 

$

0.78

 

 

$

0.73

 

Acquired intangible assets amortization

 

4.7

 

 

0.6

%

 

 

0.03

 

 

 

0.03

 

 

 

4.7

 

 

0.8

%

 

 

0.03

 

 

 

0.03

 

 

 

4.8

 

 

 

0.7

%

 

 

0.03

 

 

 

0.03

 

Restructuring and other (1)

 

2.0

 

 

0.3

%

 

 

0.01

 

 

 

0.01

 

 

 

4.4

 

 

0.7

%

 

 

0.03

 

 

 

0.03

 

 

 

6.4

 

 

 

0.9

%

 

 

0.04

 

 

 

0.04

 

Equity Modification Charge (2)

 

 

 

 

 

 

 

 

 

 

 

 

1.7

 

 

0.3

%

 

 

0.01

 

 

 

0.01

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension mark-to-market adjustment (4)

 

(0.3

)

 

0.0

%

 

 

(0.00

)

 

 

(0.00

)

 

 

 

 

 

 

 

 

 

 

 

 

 

0.1

 

 

 

0.0

%

 

 

0.00

 

 

 

0.00

 

Loss (gain) on foreign exchange option

 

(4.2

)

 

-0.6

%

 

 

(0.03

)

 

 

(0.03

)

 

 

13.9

 

 

2.3

%

 

 

0.09

 

 

 

0.09

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of business (3)

 

(57.5

)

 

-7.9

%

 

 

(0.36

)

 

 

(0.35

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exclude discrete tax adjustments

 

10.5

 

 

1.4

%

 

 

0.07

 

 

 

0.06

 

 

 

(2.2

)

 

-0.4

%

 

 

(0.01

)

 

 

(0.01

)

 

 

0.5

 

 

 

0.1

%

 

 

0.00

 

 

 

0.00

 

Non-GAAP tax adjustments

 

(1.5

)

 

-0.2

%

 

 

(0.01

)

 

 

(0.01

)

 

 

(4.2

)

 

-0.7

%

 

 

(0.03

)

 

 

(0.03

)

 

 

(2.9

)

 

 

-0.4

%

 

 

(0.02

)

 

 

(0.02

)

Net income – non-GAAP

$

140.0

 

 

19.2

%

 

$

0.89

 

 

$

0.86

 

 

$

82.5

 

 

13.8

%

 

$

0.54

 

 

$

0.51

 

 

$

129.0

 

 

 

18.8

%

 

$

0.83

 

 

$

0.79

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP and non-GAAP weighted average common shares – basic

 

157.8

 

 

 

 

 

 

 

 

 

 

 

153.0

 

 

 

 

 

 

 

 

 

 

 

154.8

 

 

 

 

 

 

 

 

 

 

GAAP weighted average common shares – diluted (5)

 

163.5

 

 

 

 

 

 

 

 

 

 

 

162.3

 

 

 

 

 

 

 

 

 

 

 

164.8

 

 

 

 

 

 

 

 

 

 

Exclude dilutive shares related to convertible note transaction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.7

)

 

 

 

 

 

 

 

 

 

Non-GAAP weighted average common shares – diluted

 

163.5

 

 

 

 

 

 

 

 

 

 

 

162.3

 

 

 

 

 

 

 

 

 

 

 

164.1

 

 

 

 

 

 

 

 

 

 

(1)

 

Restructuring and other consists of:

 

Quarter Ended

 

 

 

 

 

 

 

 

June 30,

2024

 

 

 

 

 

 

 

 

March 31,

2024

 

 

 

 

 

 

 

 

July 2,

2023

 

 

 

 

 

 

 

Employee severance

$

2.0

 

 

 

 

 

 

 

 

$

2.0

 

 

 

 

 

 

 

 

$

5.1

 

 

 

 

 

 

 

Divestiture related expenses

 

 

 

 

 

 

 

 

 

 

2.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

0.2

 

 

 

 

 

 

 

 

 

1.2

 

 

 

 

 

 

 

 

$

2.0

 

 

 

 

 

 

 

 

$

4.4

 

 

 

 

 

 

 

 

$

6.4

 

 

 

 

 

 

 

(2)

  For the quarter ended March 31, 2024, selling and administrative expenses included an equity charge of $1.7 million for the modification of Teradyne executives’ retirement agreements.

(3)

 

On May 27, 2024, Teradyne sold DIS, a component of the Semiconductor Test segment, to Technoprobe, for $85.0 million, net of cash and cash equivalents sold and a working capital adjustment.

(4)

 

For the quarters ended June 30, 2024, and July 2, 2023, adjustments to exclude actuarial gains and losses, respectively, recognized under GAAP in accordance with Teradyne’s mark-to-market pension accounting.

(5)

 

For the quarters ended June 30, 2024, March 31, 2024, and July 2, 2023, non-GAAP weighted average diluted common shares included 4.9 million, 8.9 million and 8.9 million shares, respectively, from the convertible note hedge transaction.

 

Six Months Ended

 

 

 

 

 

 

June 30,

2024

 

 

% of Net

Revenues

 

 

 

 

 

 

July 2,

2023

 

 

% of Net

Revenues

 

 

 

 

 

Net Revenues

$

1,329.7

 

 

 

 

 

 

 

 

 

$

1,302.0

 

 

 

 

 

 

 

 

Gross profit GAAP and non-GAAP

 

765.1

 

 

 

57.5

%

 

 

 

 

 

 

758.9

 

 

 

58.3

%

 

 

 

 

Income from operations – GAAP

 

288.1

 

 

 

21.7

%

 

 

 

 

 

 

232.8

 

 

 

17.9

%

 

 

 

 

Acquired intangible assets amortization

 

9.4

 

 

 

0.7

%

 

 

 

 

 

 

9.6

 

 

 

0.7

%

 

 

 

 

Restructuring and other (1)

 

6.4

 

 

 

0.5

%

 

 

 

 

 

 

8.4

 

 

 

0.6

%

 

 

 

 

Equity modification charge (2)

 

1.7

 

 

 

0.1

%

 

 

 

 

 

 

5.9

 

 

 

0.5

%

 

 

 

 

Loss (gain) on sale of business (3)

 

(57.5

)

 

 

-4.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations – non-GAAP

$

248.1

 

 

 

18.7

%

 

 

 

 

 

$

256.7

 

 

 

19.7

%

 

 

 

 

 

 

 

 

 

 

 

Net Income

per Common Share

 

 

 

 

 

 

 

 

Net Income

per Common Share

 

 

June 30,

2024

 

 

% of Net

Revenues

 

 

Basic

 

 

Diluted

 

 

July 2,

2023

 

 

% of Net

Revenues

 

 

Basic

 

 

Diluted

 

Net income – GAAP

$

250.5

 

 

 

18.8

%

 

$

1.61

 

 

$

1.54

 

 

$

203.6

 

 

 

15.6

%

 

$

1.31

 

 

$

1.23

 

Loss (gain) on foreign exchange option

 

9.8

 

 

 

0.7

%

 

 

0.06

 

 

 

0.06

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired intangible assets amortization

 

9.4

 

 

 

0.7

%

 

 

0.06

 

 

 

0.06

 

 

 

9.6

 

 

 

0.7

%

 

 

0.06

 

 

 

0.06

 

Restructuring and other (1)

 

6.4

 

 

 

0.5

%

 

 

0.04

 

 

 

0.04

 

 

 

8.4

 

 

 

0.6

%

 

 

0.05

 

 

 

0.05

 

Equity modification charge (2)

 

1.7

 

 

 

0.1

%

 

 

0.01

 

 

 

0.01

 

 

 

5.9

 

 

 

0.5

%

 

 

0.04

 

 

 

0.04

 

Pension mark-to-market adjustment (4)

 

(0.3

)

 

 

0.0

%

 

 

(0.00

)

 

 

(0.00

)

 

 

0.1

 

 

 

0.0

%

 

 

0.00

 

 

 

0.00

 

Loss (gain) on sale of business (3)

 

(57.5

)

 

 

-4.3

%

 

 

(0.37

)

 

 

(0.35

)

 

 

 

 

 

 

 

 

 

 

 

 

Exclude discrete tax adjustments

 

8.2

 

 

 

0.6

%

 

 

0.05

 

 

 

0.05

 

 

 

(1.9

)

 

 

-0.1

%

 

 

(0.01

)

 

 

(0.01

)

Non-GAAP tax adjustments

 

(5.7

)

 

 

-0.4

%

 

 

(0.04

)

 

 

(0.03

)

 

 

(5.3

)

 

 

-0.4

%

 

 

(0.03

)

 

 

(0.03

)

Net income – non-GAAP

$

222.6

 

 

 

16.7

%

 

$

1.43

 

 

$

1.37

 

 

$

220.4

 

 

 

16.9

%

 

$

1.42

 

 

$

1.34

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP and non-GAAP weighted average common shares – basic

 

155.4

 

 

 

 

 

 

 

 

 

 

 

 

155.3

 

 

 

 

 

 

 

 

 

 

GAAP weighted average common shares – diluted (5)

 

162.9

 

 

 

 

 

 

 

 

 

 

 

 

165.5

 

 

 

 

 

 

 

 

 

 

Exclude dilutive shares from convertible note

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.8

)

 

 

 

 

 

 

 

 

 

Non-GAAP weighted average common shares – diluted

 

162.9

 

 

 

 

 

 

 

 

 

 

 

 

164.7

 

 

 

 

 

 

 

 

 

 

(1)

 

Restructuring and other consists of:

 

Six Months Ended

 

 

 

 

 

 

 

 

June 30,

2024

 

 

 

 

 

 

 

 

July 2,

2023

 

 

 

 

 

 

 

Employee severance

$

4.0

 

 

 

 

 

 

 

 

$

7.2

 

 

 

 

 

 

 

Divestiture related expenses

 

2.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

0.2

 

 

 

 

 

 

 

 

 

1.2

 

 

 

 

 

 

 

 

$

6.4

 

 

 

 

 

 

 

 

$

8.4

 

 

 

 

 

 

 

(2)

 

For the six months ended June 30, 2024, selling and administrative expenses included an equity charge of $1.7 million for the modification of Teradyne’s executives’ retirement agreements. For the six months ended April 2, 2023, selling and administrative expenses included an equity charge of $5.9 million for the modification of Teradyne’s retired CEO’s outstanding equity awards in connection with his February 1, 2023, retirement.

(3)

 

On May 27, 2024, Teradyne sold DIS, a component of the Semiconductor Test segment, to Technoprobe, for $85.0 million, net of cash and cash equivalents sold and a working capital adjustment.

(4)

 

For the six months ended June 30, 2024, and July 2, 2023, adjustments to exclude actuarial gains and losses, respectively, recognized under GAAP in accordance with Teradyne’s mark-to-market pension accounting.

(5)

 

For the six months ended June 30, 2024 and July 2, 2023, non-GAAP weighted average diluted common shares included 6.9 million and 8.9 million shares, respectively, from the convertible note hedge transaction.

GAAP to Non-GAAP Reconciliation of Third Quarter 2024 guidance:

GAAP and non-GAAP third quarter revenue guidance:

 

 

$680 million

 

to

$740 million

 

 

 

 

 

 

 

GAAP net income per diluted share

 

 

$

0.62

 

 

$

0.82

 

 

 

 

 

 

 

Exclude acquired intangible assets amortization

 

 

 

0.03

 

 

 

0.03

 

 

 

 

 

 

 

Exclude equity method investment amortization

 

 

 

0.02

 

 

 

0.02

 

 

 

 

 

 

 

Non-GAAP tax adjustments

 

 

 

(0.01

)

 

 

(0.01

)

 

 

 

 

 

 

Non-GAAP net income per diluted share

 

 

$

0.66

 

 

$

0.86

 

 

 

 

 

 

 

For press releases and other information of interest to investors, please visit Teradyne’s homepage at http://www.teradyne.com.