UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 28, 2026
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File No. 001-06462
TERADYNE, INC.
(Exact name of registrant as specified in its charter)
Massachusetts
04-2272148
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)
600 Riverpark Drive, North Reading,
01864
(Address of Principal Executive Offices)
(Zip Code)
978-370-2700
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange
on which registered
Common Stock, par value $0.125
per share
TER
Nasdaq Stock Market LLC
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files) Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (check one):
Large accelerated filer
Accelerated filer
Non-accelerated filer
Emerging growth company
Smaller reporting company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares outstanding of the registrant’s only class of Common Stock as of July 27, 2026, was 156,340,750 shares.
INDEX
Page No.
PART I. FINANCIAL INFORMATION
Item 1.
Financial Statements (Unaudited):
1
Condensed Consolidated Balance Sheets as of June 28, 2026, and December 31, 2025
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 28, 2026, and June 29, 2025
2
Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 28, 2026, and June 29, 2025
3
Condensed Consolidated Statements of Equity for the Three and Six Months Ended June 28, 2026, and June 29, 2025
4
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 28, 2026, and June 29, 2025
5
Notes to Condensed Consolidated Financial Statements
6
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
29
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
39
Item 4.
Controls and Procedures
PART II. OTHER INFORMATION
Legal Proceedings
40
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
41
Mine Safety Disclosures
Item 5.
Other Information
42
Item 6.
Exhibits
43
PART I
Item 1: Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 28,2026
December 31,2025
(in thousands,except per share amount)
ASSETS
Current assets:
Cash and cash equivalents
$
349,538
293,751
Marketable securities
5,291
28,247
Accounts receivable, less allowance for credit losses of $2,835 and $2,410 at June 28, 2026 and December 31, 2025, respectively
1,109,711
786,913
Inventories, net
403,297
379,552
Prepayments
468,174
427,564
Other current assets
30,011
33,273
Total current assets
2,366,022
1,949,300
Property, plant and equipment, net
634,839
562,999
Operating lease right-of-use assets, net
94,302
76,635
162,274
126,256
Deferred tax assets
289,582
275,265
Retirement plans assets
12,140
12,059
Equity method investment
514,957
537,098
Other assets
85,774
71,697
Acquired intangible assets, net
101,910
51,271
Goodwill
663,817
521,019
Total assets
4,925,617
4,183,599
LIABILITIES
Current liabilities:
Accounts payable
383,422
269,185
Accrued employees’ compensation and withholdings
220,690
254,973
Deferred revenue and customer advances
193,840
153,124
Other accrued liabilities
133,399
111,845
Operating lease liabilities
17,258
19,340
Short-term debt
—
200,000
Income taxes payable
164,907
106,740
Total current liabilities
1,113,516
1,115,207
Retirement plans liabilities
151,436
144,874
Long-term deferred revenue and customer advances
62,985
50,888
Deferred tax liabilities
12,929
5,378
Long-term other accrued liabilities
28,569
7,601
Long-term operating lease liabilities
82,869
63,899
Total liabilities
1,452,304
1,387,847
Commitments and contingencies (Note R)
EQUITY
Common stock, $0.125 par value, 1,000,000 shares authorized; 156,378 and 156,088 shares issued and outstanding at June 28, 2026, and December 31, 2025, respectively
19,547
19,511
Additional paid-in capital
2,003,232
1,989,911
Accumulated other comprehensive loss (gain)
10,756
41,895
Retained earnings
1,403,627
744,435
Total Teradyne shareholders’ equity
3,437,162
2,795,752
Equity attributable to noncontrolling interests
36,151
Total equity
3,473,313
Total liabilities and equity
The accompanying notes, together with the Notes to Consolidated Financial Statements included in Teradyne’s Annual Report on Form 10-K for the year ended December 31, 2025, are an integral part of the condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended
For the Six Months Ended
June 29,2025
(in thousands, except per share amount)
Revenues:
Products
1,191,327
522,657
2,334,298
1,084,614
Services
137,663
129,140
277,186
252,863
Total revenues
1,328,990
651,797
2,611,484
1,337,477
Cost of revenues:
Cost of products
487,221
232,422
940,667
456,564
Cost of services
47,151
46,363
95,249
92,564
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)
534,372
278,785
1,035,916
549,128
Gross profit
794,618
373,012
1,575,568
788,349
Operating expenses:
Selling and administrative
192,520
157,782
359,257
315,039
Engineering and development
156,284
118,382
291,845
236,570
Acquired intangible assets amortization
4,972
3,733
7,196
8,306
Restructuring and other
3,032
2,372
6,457
16,887
Total operating expenses
356,808
282,269
664,755
576,802
Income from operations
437,810
90,743
910,813
211,547
Non-operating (income) expense:
Interest income
(3,182
)
(4,351
(5,604
(9,427
Interest expense
2,964
805
6,115
1,600
Other (income) expense, net
(5,591
(2,270
1,006
3,790
Income before income taxes and equity in net earnings of affiliate
443,619
96,559
909,296
215,584
Income tax provision
66,788
12,260
128,945
26,804
Income before equity in net earnings of affiliate
376,831
84,299
780,351
188,780
Equity in net earnings of affiliate
(1,946
(5,927
(6,557
(11,511
Consolidated net income
374,885
78,372
773,794
177,269
Less: Net income attributable to noncontrolling interests
352
Net income attributable to Teradyne
374,533
773,442
Earnings per common share attributable to Teradyne:
Basic
2.39
0.49
4.94
1.10
Diluted
2.38
4.91
Weighted average common shares—basic
156,470
159,967
156,440
160,734
Weighted average common shares—diluted
157,693
160,135
157,664
161,065
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment, net of tax of $0, $0, $0, and $0, respectively
(11,444
82,997
(31,377
122,316
Available-for-sale marketable securities:
Unrealized (losses) gains on marketable securities arising during period, net of tax of $176, $(17), $(68), and $115, respectively
1,767
(35
227
585
Less: Reclassification adjustment for (gains) losses included in net income, net of tax of $16, $6, $12, $27, respectively
55
15
13
89
1,822
(20
240
674
Cash flow hedges:
Unrealized (losses) gains arising during period, net of tax of $0, $(51), $0, and $(109), respectively
(179
(381
Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $0, $66, $0, and $(100), respectively
232
(350
53
(731
Defined benefit post-retirement plan:
Amortization of prior service credit, net of tax of $0, $0, $(1), and $(1), respectively
(1
(2
(3
Other comprehensive income (loss)
(9,623
83,028
(31,139
122,256
Consolidated comprehensive income
365,262
161,400
742,655
299,525
Less: comprehensive income attributable to noncontrolling interests
Total comprehensive income attributable to Teradyne
364,910
742,303
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
Teradyne Shareholders
CommonStock Shares
Common Stock Par Value
Additional Paid-in Capital
Accumulated Other Comprehensive Income (Loss)
Retained Earnings
Total Teradyne Shareholders’ Equity
Total Equity
For the Three Months Ended June 28, 2026
Balance, March 29, 2026
156,540
19,568
1,986,089
20,379
1,117,780
3,143,816
Net issuance of common stock under stock-based plans
31
(1,680
(1,676
Stock-based compensation expense
18,823
Repurchase of common stock
(193
(25
(68,338
(68,363
Cash dividends ($0.13 per share)
(20,348
Acquisition of noncontrolling interest
35,799
Balance, June 28, 2026
156,378
For the Three Months Ended June 29, 2025
Balance, March 30, 2025
160,674
20,084
1,926,180
(41,992
893,227
2,797,499
16
(231
(229
15,552
(1,480
(185
(117,550
(117,735
Cash dividends ($0.12 per share)
(19,186
Net income
Balance, June 29, 2025
159,210
19,901
1,941,501
41,036
834,863
2,837,301
For the Six Months Ended June 28, 2026
Balance, December 31, 2025
156,088
507
63
(26,151
(26,088
39,472
(217
(27
(73,540
(73,567
Cash dividends ($0.26 per share)
(40,710
For the Six Months Ended June 29, 2025
Balance, December 31, 2024
161,722
20,215
1,909,538
(81,220
970,761
2,819,294
448
56
(218
(162
32,181
Warrant exercises
(2,960
(370
(274,567
(274,937
Cash dividends ($0.24 per share)
(38,600
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash flows from operating activities:
Adjustments to reconcile consolidated net income from operations to net cash provided by operating activities:
Depreciation
58,884
52,835
Stock-based compensation
41,964
32,031
6,557
11,511
Losses (gains) on investments
(4,923
(1,078
Provision for excess and obsolete inventory
8,281
12,347
Amortization
7,421
8,856
Deferred taxes
(18,230
(14,998
Retirement plan actuarial losses (gains)
(157
127
Other
2,760
3,168
Changes in operating assets and liabilities, net of businesses acquired:
Accounts receivable
(302,176
49,496
Inventories
(7,852
(23,707
Prepayments and other assets
(59,621
30,879
Accounts payable and other liabilities
121,803
17,135
50,863
13,056
Retirement plans contributions
(3,098
(5,576
Income taxes
57,992
(19,625
Net cash provided by operating activities
734,262
343,726
Cash flows from investing activities:
Purchases of property, plant and equipment
(155,439
(114,429
Acquisition of businesses, net of cash and cash equivalents acquired
(165,611
(144,380
Purchase of investment in a business
(10,030
(5,368
Purchases of marketable securities
(48,235
(17,150
Proceeds from maturities of marketable securities
11,069
32,603
Proceeds from sales of marketable securities
29,615
8,487
Net cash used for investing activities
(338,631
(240,237
Cash flows from financing activities:
Proceeds from borrowings on revolving credit facility
350,000
Repayments of borrowings on revolving credit facility
(550,000
Dividend payments
(38,584
(74,238
(274,873
Payments related to net settlement of employee stock compensation awards
(41,113
(14,954
Issuance of common stock under stock purchase and stock option plans
15,101
14,792
Net cash used for financing activities
(340,960
(313,619
Effects of exchange rate changes on cash and cash equivalents
1,116
(3,972
(Decrease) increase in cash and cash equivalents
55,787
(214,102
Cash and cash equivalents at beginning of period
553,354
Cash and cash equivalents at end of period
339,252
Non-cash investing activities:
Capital expenditures incurred but not yet paid:
9,791
4,722
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
A. THE COMPANY
Teradyne, Inc. (“Teradyne”) is a leading global provider of automated test equipment and robotics solutions. Teradyne’s automated test systems are used to test semiconductors, wireless products, data storage, silicon photonics, and complex electronics systems in many industries including consumer electronics, automotive, industrial, computing, communications, and defense and aerospace industries. Teradyne’s robotics product offerings consist primarily of collaborative robotic arms and autonomous mobile robots used by global manufacturing, logistics and industrial customers to improve quality and increase manufacturing and material handling efficiency while reducing costs. Teradyne’s automated test equipment and robotics products and services include:
B. ACCOUNTING POLICIES
Basis of Presentation
The condensed consolidated interim financial statements include the accounts of Teradyne, its wholly owned subsidiaries, and all other entities in which it has a controlling financial interest. All significant intercompany balances and transactions have been eliminated. These condensed consolidated interim financial statements are unaudited and reflect all normal recurring adjustments that are, in the opinion of management, necessary for the fair statement of such condensed consolidated interim financial statements. The December 31, 2025, condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by United States of America generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. The accompanying financial information should be read in conjunction with the consolidated financial statements and notes thereto contained in Teradyne’s Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on February 19, 2026, for the year ended December 31, 2025.
Preparation of Financial Statements and Use of Estimates
The preparation of consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an on-going basis, management evaluates its estimates, including those related to inventories, investments, goodwill, intangible and other long-lived assets, accounts receivable, income taxes, deferred tax assets and liabilities, pensions, warranties, and loss contingencies. Management bases its estimates on historical experience and on appropriate and customary assumptions that are believed to be reasonable under the circumstances, which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change, as new events occur and additional information is obtained. Actual results may differ significantly from these estimates under different assumptions or conditions.
Noncontrolling Interests
Teradyne accounts for investments with noncontrolling interests in accordance with Accounting Standards Codification (“ASC”) 810 “Consolidation.” Noncontrolling interests represent the third-party ownership not attributable, directly or indirectly, to Teradyne, and is presented separately from total Teradyne shareholder’s equity on the condensed consolidated financial statements. Net income (loss) of MLTP is allocated between Teradyne and the noncontrolling interests in an amount proportional to each party’s ownership share. Net income attributable to noncontrolling interests is presented separately from net income attributable to Teradyne on the condensed consolidated financial statements.
C. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03 - “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):
Disaggregation of Income Statement Expenses,” which requires disclosure of additional expense information on an annual and interim basis, including the amounts of inventory purchases, employee compensation, depreciation, and intangible asset amortization included within each income statement expense caption. This standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. Teradyne is currently evaluating the impact of this new standard.
D. ACQUISITIONS
MultiLane Test Products
On April 8, 2026, Teradyne and HTP Holding SAL (“MultiLane”) formed a joint venture, MultiLane Test Products Holding LLP (“MLTP”), in which Teradyne holds a controlling 75% ownership interest, with the remaining 25% attributable to noncontrolling interests, for a total purchase price of $157.8 million, subject to customary post-closing adjustments. MLTP is expected to serve the growing demand from the AI Data Center equipment market by accelerating the development of test solutions for critical high speed data connections. The fair value of the noncontrolling interests was estimated to be $35.8 million based on the noncontrolling interest holders’ proportionate ownership of MLTP, adjusted to reflect the lack of control and marketability characteristics of the interest. Teradyne’s total allocation of the purchase price was goodwill of $131.6 million, which is not deductible for tax purposes, acquired intangible assets of $46.7 million with a weighted average estimated useful life of 4.7 years, and $15.3 million of net tangible assets. The goodwill is attributable to cost synergies, assembled workforce and anticipated incremental revenue streams. Teradyne’s estimates, assumptions, and tax impacts used in determining the estimated fair values of certain assets, liabilities, and the noncontrolling interests are subject to change within the measurement period (up to twelve months from the acquisition date) as a result of additional information obtained with regards to facts and circumstances that existed as of the acquisition date. The results of MLTP have been included in Teradyne’s Product Test segment from the date of acquisition.
Based upon a preliminary valuation, the total purchase price was allocated as follows:
Purchase Price Allocation
131,634
Intangible assets
46,700
Tangible assets acquired and liabilities assumed:
Current assets
23,616
Other non-current assets
790
Accounts payable and current liabilities
(980
Long-term deferred tax liabilities
(7,939
Other long-term liabilities
(183
Noncontrolling interests
(35,799
Total purchase price
157,839
Teradyne estimated the fair value of intangible assets using the income approach. The fair value of developed technology was estimated using the Multi-Period Excess Earnings Method. Acquired intangible assets are amortized on a straight-line basis over their estimated useful lives. Components of these intangible assets and their estimated useful lives at the acquisition date are as follows:
Fair Value
Estimated Useful Life
(in years)
Developed technology
40,900
4.0
Customer relationships
5,800
10.0
Total Intangible assets
4.7
Teradyne has not separately disclosed MLTP’s standalone contribution to total company revenue or income from operations before income taxes or pro forma financial information as the impact of the acquisition on the condensed consolidated financial statements is not material.
Quantifi Photonics
On May 31, 2025, Teradyne acquired all of the issued and outstanding shares of Quantifi Photonics (“Quantifi”), a privately held company in New Zealand and a leader in photonic integrated circuit (“PIC”) test solutions for a total purchase price of $127.2 million. The acquisition of Quantifi enables Teradyne to deliver scalable PIC test solutions. Teradyne’s allocation of the purchase
7
price was goodwill of $83.1 million, which is not deductible for tax purposes, acquired intangible assets of $43.6 million with a weighted average estimated useful life of 10.0 years, and $0.6 million of net tangible assets. The goodwill is attributable to cost synergies, assembled workforce and anticipated incremental revenue streams. The fair values of the tangible and identifiable intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions. The results of Quantifi have been included in Teradyne’s Product Test segment from the date of acquisition.
The total purchase price was allocated as follows:
83,068
Intangible Assets
43,600
6,148
Long-term deferred tax assets
6,271
2,516
(1,609
(12,208
(548
127,238
Teradyne estimated the fair value of intangible assets using the income and cost approaches. The fair value of developed technology was estimated using the Multi-Period Excess Earnings Method. Acquired intangible assets are amortized on a straight-line basis over their estimated useful lives. Components of these intangible assets and their estimated useful lives at the acquisition date are as follows:
38,600
Trademarks and tradenames
4,400
600
8.0
Total Intangible Assets
Teradyne has not separately disclosed Quantifi’s standalone contribution to total company revenue or income from operations before income taxes or pro forma financial information because the impact of the acquisition on the condensed consolidated financial statements is not material.
Automated Test Equipment Technology
On January 31, 2025, Teradyne acquired from Infineon Technologies AG (“Infineon”) its automated test equipment technology and associated development team (“AET”) based in Regensburg, Germany for a total purchase price of 17.6 million Euros, equivalent to $18.3 million, subject to customary adjustments. AET adds resources and expertise to Teradyne and strengthens the relationship between Teradyne and Infineon. The AET acquisition was accounted for as a business combination and, accordingly, the results have been included in Teradyne’s Semiconductor Test segment from the date of acquisition. As of the acquisition date, Teradyne’s purchase price allocation was goodwill of $1.3 million for expected synergies from combining operations, acquired intangible assets of $6.4 million, consisting of developed technology and customer relationships, with a weighted average estimated useful life of 4.6 years, and $10.7 million of net tangible assets, including $11.7 million of inventory. The fair values of the tangible and identifiable intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions. The acquisition was not material to Teradyne’s condensed consolidated financial statements.
E. REVENUE
Disaggregation of Revenue
The following table provides information about disaggregated revenue by timing of revenue recognition, primary geographical market, and major product lines.
8
Semiconductor Test
Robotics
Product Test
Total
System on-a-Chip
Memory
IST
Timing of Revenue Recognition
Point in Time
771,416
199,765
60,562
97,169
90,538
1,219,450
Over Time
71,555
12,568
5,959
2,748
16,710
109,540
842,971
212,333
66,521
99,917
107,248
Geographical Market
Asia Pacific
814,023
210,830
65,578
21,576
46,859
1,158,866
Americas
14,908
941
943
41,751
51,036
109,579
Europe, Middle East and Africa
14,040
562
36,590
9,353
60,545
325,588
51,993
28,827
72,724
66,159
545,291
71,000
8,950
5,520
2,142
18,894
106,506
396,588
60,943
34,347
74,866
85,053
364,883
58,467
32,468
15,939
34,901
506,658
15,920
2,077
1,879
27,160
42,229
89,265
15,785
399
31,767
7,923
55,874
1,579,520
393,487
79,328
185,929
152,453
2,390,717
145,260
21,294
13,737
5,246
35,230
220,767
1,724,780
414,781
93,065
191,175
187,683
1,629,426
405,887
90,171
38,522
71,547
2,235,553
31,953
7,779
2,894
82,273
98,559
223,458
63,401
1,115
70,380
17,577
152,473
663,278
153,656
51,719
139,870
122,717
1,131,240
139,700
16,695
9,334
3,983
36,525
206,237
802,978
170,351
61,053
143,853
159,242
722,985
166,149
58,484
31,001
60,447
1,039,066
50,972
2,994
2,569
59,631
83,014
199,180
29,021
1,208
53,221
15,781
99,231
Contract Balances
During the three and six months ended June 28, 2026, Teradyne recognized $34.9 million and $103.5 million, respectively, that were included within the deferred revenue and customer advances balances at the beginning of the period. During the three and six months ended June 29, 2025, Teradyne recognized $22.2 million and $47.5 million, respectively, that were included within the deferred revenue and customer advances balances at the beginning of the period. This revenue primarily relates to undelivered hardware, extended warranties, training, application support, and post contract support. Each of these represents a distinct performance obligation. As of June 28, 2026, Teradyne had $130.2 million of unsatisfied performance obligations with an original duration of greater than one year, of which 51% is expected to be recognized as revenue within the next twelve months.
Deferred revenue and customer advances consist of the following and are included in short and long-term deferred revenue and customer advances on the balance sheet:
9
Maintenance, service and training
60,663
62,337
Customer advances, undelivered elements and other
118,038
85,762
Extended warranty
78,124
55,913
Total deferred revenue and customer advances
256,825
204,012
F. EQUITY METHOD INVESTMENTS
On May 27, 2024, Teradyne paid 483.1 million Euros, equivalent to $524.1 million, to purchase a combination of previously issued and outstanding shares and shares newly issued by Technoprobe, S.p.A. (“Technoprobe”). The shares purchased represent 10% of the issued and outstanding shares of Technoprobe. Teradyne also received a board seat as part of the purchase. Teradyne accounts for this investment using the equity method as a result of being able to exercise significant influence over the operating and financial decisions of Technoprobe.
The following table summarizes the change in the carrying value of our equity method investment:
Balance at beginning of period
522,583
509,626
494,494
Other comprehensive income related to investment
(5,680
41,715
(15,584
62,431
Balance at end of period
545,414
Based on the quoted closing price of Technoprobe stock as of June 28, 2026, the fair value of the publicly traded investment was $2,457.9 million.
Teradyne’s equity method basis difference was calculated as the difference between the investment and the amount of underlying equity in net assets acquired. The basis differences, net of tax, will be amortized over the estimated useful lives. Teradyne made an accounting policy election to report its share of Technoprobe’s results on a 3-month lag, which is applied consistently from period to period. Teradyne records its share of Technoprobe’s net income or loss and the amortization of equity method basis difference, as ‘Equity in net earnings of affiliate’ in the condensed consolidated statements of operations. Teradyne includes its share of Technoprobe’s other comprehensive income and a cumulative translation adjustment in the condensed consolidated statements of comprehensive income.
G. INVENTORIES
Inventories, net consisted of the following at June 28, 2026, and December 31, 2025:
Raw material
272,105
267,566
Work-in-process
65,691
47,876
Finished goods
65,501
64,110
Total inventories, net
Inventory reserves at June 28, 2026, and December 31, 2025, were $155.8 million and $151.8 million, respectively.
10
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 third 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 and six months ended June 28, 2026, and June 29, 2025, there were no transfers in or out of Level 1, Level 2, or Level 3 financial instruments.
(in millions)
Realized gains and losses included in ‘Other (income) expense, net’ in the condensed consolidated statement of operations
Realized gains
0.2
0.4
0.9
1.2
Realized losses
0.1
1.4
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
8.1
4.1
4.4
Unrealized losses on equity securities
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.
11
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 June 28, 2026, and December 31, 2025.
June 28, 2026
December 31, 2025
Quoted Pricesin ActiveMarkets forIdenticalInstruments(Level 1)
SignificantOtherObservableInputs(Level 2)
Total (1)
Assets
Cash
178,364
214,712
Cash equivalents
170,150
1,024
171,174
78,068
971
79,039
Available-for-sale securities:
U.S. Treasury securities
13,459
44,143
Corporate debt securities
58,836
36,384
Debt mutual funds
13,057
14,331
Certificates of deposit and time deposits
1,177
1,354
Non-U.S. government securities
14,155
924
Equity securities:
Mutual funds
66,881
57,367
428,452
88,651
517,103
364,478
83,776
448,254
Derivative assets
823
1,175
89,474
517,926
84,951
449,429
Liabilities
Derivative liabilities
2,045
928
Reported as follows:
(Level 1)
(Level 2)
348,514
292,780
Long-term marketable securities
79,938
82,336
71,698
54,558
Other current liabilities
12
The carrying values and fair values of Teradyne’s financial instruments at June 28, 2026, and December 31, 2025, were as follows:
Carrying Value
167,565
154,503
The fair values of accounts receivable, net and accounts payable approximate their carrying values due to the short-term nature of these instruments.
The following table summarizes the composition of available-for-sale marketable securities at June 28, 2026:
Available-for-Sale
Cost
UnrealizedGain
Unrealized(Loss)
Fair MarketValue
Fair MarketValue ofInvestmentswith UnrealizedLosses
18,120
(4,674
12,949
62,262
658
(4,084
25,637
13,243
(186
3,057
14,154
153
(152
3,760
108,956
824
(9,096
100,684
45,403
5,315
(24
3,739
103,641
(9,072
95,393
41,664
The following table summarizes the composition of available-for-sale marketable securities at December 31, 2025:
48,723
90
(4,670
13,891
40,090
293
(3,999
22,941
14,508
(177
3,020
105,599
383
(8,846
97,136
39,852
28,213
(7
2,293
77,386
342
(8,839
68,889
37,559
As of June 28, 2026, the fair market value of investments with unrealized losses less than one year and greater than one year totaled $11.3 million and $34.1 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 June 28, 2026, and December 31, 2025, were not other than temporary.
The contractual maturities of investments in available-for-sale securities held at June 28, 2026, were as follows:
Due within one year
Due after 1 year through 5 years
8,997
8,828
Due after 5 years through 10 years
16,095
16,225
Due after 10 years
65,306
57,283
95,713
87,627
Contractual maturities of investments in available-for-sale securities held at June 28, 2026, exclude debt mutual funds with a fair market value of $13.1 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.
14
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.
Teradyne does not use derivative financial instruments for speculative purposes.
At June 28, 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:
Gross Notional Value
Currency Hedged (Buy/Sell)
U.S. dollar/Taiwan dollar
17.0
27.0
U.S. dollar/Euro
6.7
U.S. dollar/Japanese yen
5.8
16.9
U.S. dollar/Korean won
3.8
7.7
U.S. dollar/British pound sterling
1.8
1.9
Singapore dollar/U.S. dollar
95.6
62.6
Philippine peso/U.S. dollar
1.7
Chinese yuan/U.S. dollar
0.7
Euro/U.S. dollar
20.4
133.6
139.0
The change in the fair value of the outstanding contracts resulted in a net loss of $1.2 million and a net gain of $0.2 million at June 28, 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.
The following table summarizes the fair value of derivative instruments as of June 28, 2026, and December 31, 2025:
Balance Sheet Location
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts
(2,045
(928
Total derivatives
(1,222
247
The following table summarizes the effect of derivative instruments recognized in the statement of operations for the three and six months ended June 28, 2026, and June 29, 2025:
Location of (Gains) LossesRecognized in Statementof Operations
Foreign exchange forward contracts (1)
1,522
122
2,608
(45
Derivatives designated as hedging instruments:
Foreign exchange forward and option contracts
Revenue
298
(449
Total Derivatives
420
(494
I. DEBT
Revolving Credit Facility
On May 1, 2020, Teradyne entered into a credit agreement (the “Credit Agreement”) with Truist Bank, as administrative agent and collateral agent, and the lenders party thereto. The Credit Agreement provides for a three-year, senior secured revolving credit facility of $400.0 million (the “Credit Facility”). On December 10, 2021, the Credit Agreement was amended to extend the maturity date of the Credit Facility to December 10, 2026. On October 5, 2022, the Credit Agreement was amended to increase the amount of the Credit Facility to $750.0 million from $400.0 million. On November 7, 2023, the Credit Agreement was further amended to allow for the purchase of the shares of Technoprobe. The Credit Agreement provides that, subject to customary conditions, Teradyne may seek to obtain from existing or new lenders the available incremental amount under the Credit Facility, not to exceed the greater of $200.0 million or 15% of consolidated EBITDA. The interest rate applicable to loans under the Credit Facility are, at Teradyne’s option, equal to either a base rate plus a margin ranging from 0.00% to 0.75% per annum or SOFR plus a margin ranging from 1.10% to 1.85% per annum, based on the consolidated leverage ratio of Teradyne. In addition, Teradyne will pay a commitment fee on the unused portion of the commitments under the Credit Facility ranging from 0.15% to 0.25% per annum, based on the then applicable consolidated leverage ratio. Teradyne is not required to repay any loans under the Credit Facility prior to maturity, subject to certain customary exceptions. Teradyne is permitted to prepay all or any portion of the loans under the Credit Facility prior to maturity without premium or penalty, other than customary SOFR breakage costs. The Credit Agreement contains customary events of default, representations, warranties and affirmative and negative covenants that, among other things, limit Teradyne’s ability to sell assets, grant liens on assets, incur other secured indebtedness and make certain investments and restricted payments, all subject to exceptions set forth in the Credit Agreement. The Credit Agreement also requires Teradyne to satisfy two financial ratios measured as of the end of each fiscal quarter: a consolidated leverage ratio and an interest coverage ratio. The Credit Facility is guaranteed by certain of Teradyne’s domestic subsidiaries and collateralized by assets of Teradyne and such subsidiaries, including a pledge of 65% of the capital stock of certain foreign subsidiaries.
As of June 28, 2026, Teradyne did not have an outstanding balance under the Credit Agreement. As of December 31, 2025, Teradyne had an outstanding balance of $200 million under the Credit Agreement. The weighted-average interest rate on the outstanding borrowings as of December 31, 2025 was 4.86%. During the six months ended June 28, 2026, Teradyne paid $4.8 million in interest related to its debt from the Credit Facility. As of June 28, 2026, Teradyne was in compliance with all covenants under the Credit Agreement.
J. PREPAYMENTS
Prepayments consist of the following:
Contract manufacturer and supplier prepayments
412,443
364,170
Prepaid maintenance and other services
19,961
16,662
Prepaid taxes
10,458
9,861
Other prepayments
25,312
36,871
Total prepayments
K. PRODUCT WARRANTY
Teradyne generally provides a one-year warranty on its products, commencing upon installation, acceptance or shipment. A provision is recorded upon revenue recognition to cost of revenues for estimated warranty expense based on historical experience. Related costs are charged to the warranty accrual as incurred. The balance below is included in other accrued liabilities.
23,380
13,076
19,150
12,962
Accruals for warranties issued during the period
9,338
4,210
18,087
10,155
Accruals related to pre-existing warranties
657
(369
353
(921
Settlements made during the period
(7,681
(4,679
(11,896
(9,958
25,694
12,238
When Teradyne receives revenue for extended warranties, beyond one year, it is deferred and recognized on a straight-line basis over the contract period. Related costs are expensed as incurred. The balance below is included in short and long-term deferred revenue and customer advances.
67,011
44,312
41,624
Deferral of new extended warranty revenue
18,426
9,705
36,204
17,643
Recognition of extended warranty deferred revenue
(7,313
(7,266
(13,993
(12,516
46,751
L. STOCK-BASED COMPENSATION
Under Teradyne’s stock compensation plans, Teradyne grants time-based restricted stock units, performance-based restricted stock units and stock options, and employees are eligible to purchase Teradyne’s common stock through its Employee Stock Purchase Plan (“ESPP”).
Service-based restricted stock unit awards granted to employees vest in equal annual installments over four years. Restricted stock unit awards granted to non-employee directors vest after a one-year period, with 100% of the award vesting on the earlier of (a) the first anniversary of the grant date or (b) the date of the following year’s Annual Meeting of Shareholders. Teradyne expenses the cost of the restricted stock unit awards subject to time-based vesting, which is determined to be the fair market value of the shares at the date of grant, ratably over the period during which the restrictions lapse.
17
Performance-based restricted stock units (“PRSUs”) may have a performance metric based on relative total shareholder return (“TSR”). For PRSUs granted beginning in 2026, Teradyne’s three‑year TSR performance will be measured against all other companies within the S&P 500. PRSUs granted prior to 2026, including those that remain outstanding and unvested, will continue to be measured against the New York Stock Exchange (“NYSE”) Composite Index for their full three‑year performance periods. The final number of TSR PRSUs that vest will vary based upon the level of performance achieved from 0% to 200% of the target shares. The TSR PRSUs will vest upon the three-year anniversary of the grant date. The TSR PRSUs are valued using a Monte Carlo simulation model. The number of units expected to be earned, based upon the achievement of the TSR market condition, is factored into the grant date Monte Carlo valuation. Compensation expense is recognized on a straight-line basis over the shorter of the three-year service period or the period from the grant to the date described in the retirement provisions below.
PRSUs may also have a performance metric based on three-year cumulative non-GAAP profit before interest and tax (“PBIT”) as a percent of Teradyne’s revenue. Non-GAAP PBIT is a financial measure equal to GAAP income from operations less restructuring and other, net; amortization of acquired intangible assets; acquisition and divestiture related charges or credits; pension actuarial gains and losses; non-cash convertible debt interest expense, when applicable; and other non-recurring gains and charges such as ERP implementation related costs and equity modification charges. The final number of PBIT PRSUs that vest will vary based upon the level of performance achieved from 0% to 200% of the target shares. The PBIT PRSUs will vest upon the three-year anniversary of the grant date. Compensation expense is recognized on a straight-line basis over the shorter of the three-year service period or the period from the grant date to the date described in the retirement provisions below. Compensation expense for employees meeting the retirement provisions prior to the grant date is recognized during the year following the grant. Compensation expense is recognized based on the number of units that are earned based upon the three-year Teradyne PBIT as a percent of Teradyne’s revenue, provided the recipient remains an employee at the end of the three-year period subject to the retirement and termination eligibility provisions noted below.
If a PRSU recipient’s employment ends prior to the determination of the performance percentage due to (1) permanent disability or death or (2) retirement or termination other than for cause, after attaining both at least age 60 and at least 10 years of service, then all or a portion of the recipient’s PRSUs (based on the actual performance percentage achieved on the determination date) will vest on the date the performance percentage is determined. Except as set forth in the preceding sentence, no PRSUs will vest if the recipient is no longer an employee at the end of the three-year period. Stock options to purchase Teradyne’s common stock at 100% of the fair market value on the grant date vest in equal annual installments over four years from the grant date and have a maximum term of seven years.
On January 22, 2024, the Board enacted the Executive Retirement Policy for Restricted Stock Unit and Option Vesting (the “Retirement Policy”). Under the Retirement Policy, an executive officer that is over the age of 65 and has 10 or more years of service as of the effective date of his or her retirement will be eligible for continued vesting of his or her unvested time-based restricted stock units and stock options granted prior to his or her retirement date.
During the six months ended June 28, 2026, and June 29, 2025, Teradyne granted 0.2 million and 0.6 million of service-based restricted stock unit awards to employees at a weighted average grant date fair value of $270.22 and $112.40, respectively, and less than 0.1 million and less than 0.1 million of service-based restricted stock unit awards to non-employee directors at a weighted average grant date fair value of $359.26 and $76.98, respectively.
During the six months ended June 28, 2026, and June 29, 2025, Teradyne granted 0.1 million and 0.1 million of PBIT PRSUs with a weighted average grant date fair value of $272.70 and $108.34, respectively.
During the six months ended June 28, 2026, and June 29, 2025, Teradyne granted 0.1 million and 0.1 million of TSR PRSUs, with a weighted average grant date fair value of $449.92 and $108.26, respectively. The grant date fair value was estimated using the Monte Carlo simulation model with the following assumptions:
Risk-free interest rate
3.6
%
Teradyne volatility-historical
47.9
41.7
S&P 500 Constituents volatility-historical
27.6
NYSE Composite Index volatility-historical
14.7
Dividend yield
18
Expected volatility was based on the historical volatility of Teradyne’s stock and the companies within the S&P 500 for shares granted in 2026 and the NYSE Composite Index for shares granted prior to 2026 over the most recent three-year period. The risk-free interest rate was determined using the U.S. Treasury yield curve in effect at the time of the applicable grant. Dividend yield was based upon an estimated annual dividend amount of $0.52 per share divided by Teradyne’s stock price on the grant dates, which have a weighted average grant date stock price of $274.13 for the 2026 grants, and an estimated annual dividend amount of $0.48 per share divided by Teradyne’s stock price on the grant date of $109.49 for the 2025 grants.
During the six months ended June 28, 2026, and June 29, 2025, Teradyne granted 0.1 million and 0.1 million of service-based stock options at a weighted average grant date fair value of $104.02 and $41.93, respectively.
The fair value of stock options was estimated using the Black-Scholes option-pricing model with the following assumptions:
Expected life (years)
3.5
3.7
4.2
Volatility-historical
47.1
43.9
Teradyne determined the stock options’ expected life based upon historical exercise data for recipients, the age of the employee and the terms of the stock option grant. Volatility was determined using historical volatility for a period equal to the expected life. The risk-free interest rate was determined using the U.S. Treasury yield curve in effect at the time of grant. Dividend yield was based upon an estimated annual dividend amount of $0.52 per share divided by Teradyne’s stock price on the grant date, which have a weighted average grant date stock price of $274.03 for the 2026 grant and an estimated annual dividend amount of $0.48 per share divided by Teradyne’s stock price on the grant date of $109.29 for the 2025 grant.
19
M. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Changes in accumulated other comprehensive income (loss) attributable to Teradyne, which are presented net of tax, consist of the following:
ForeignCurrencyTranslationAdjustment
Unrealized(Losses) Gains onMarketableSecurities
Unrealized (Losses) Gains on Cash Flow Hedges
RetirementPlans PriorServiceCredit
Six Months Ended June 28, 2026
Total balance at December 31, 2025, net of tax of $0, $(1,892), $0, $(1,136), respectively
47,328
(6,571
1,138
Other comprehensive (loss) gain before reclassifications, net of tax of $0, $(68), $0, $0, respectively
(31,150
Amounts reclassified from accumulated other comprehensive income (loss), net of tax of $0, $12, $0, $(1), respectively
Net current period other comprehensive loss, net of tax of $0, $(56), $0, $(1), respectively
Total balance attributable to Teradyne at June 28, 2026, net of tax of $0, $(1,948), $0, $(1,137), respectively
15,951
(6,331
1,136
Six Months Ended June 29, 2025
Total balance at December 31, 2024, net of tax of $0, $(2,174), $209, $(1,134), respectively
(75,289
(7,807
731
1,145
Other comprehensive (loss) gain before reclassifications, net of tax of $0, $115, $(109), $0, respectively
122,520
Amounts reclassified from accumulated other comprehensive income (loss), net of tax of $0, $27, $(100), $(1), respectively
(264
Net current period other comprehensive loss, net of tax of $0, $142, $(209), $(1), respectively
Total balance attributable to Teradyne at June 29, 2025, net of tax of $0, $(2,032), $0, $(1,135), respectively
47,027
(7,133
1,142
Reclassifications out of accumulated other comprehensive income (loss) to the statement of operations for the three and six months ended June 28, 2026, and June 29, 2025, were as follows:
Details about Accumulated Other Comprehensive Income (Loss) Components
Affected Line Itemin the Statementsof Operations
Unrealized (losses) gains, net of tax of $(16), (6), $(12), $(27), respectively
(55
(15
(13
(89
Unrealized (losses) gains, net of tax of $0, $(66), $0, $100, respectively
(232
350
Defined benefit pension and postretirement plans:
Amortization of prior service credit, net of tax of $0, $0, $1, $1, respectively
(a)
Total reclassifications, net of tax of $(16), $(72), $(11), $74, respectively
(54
(245
(11
264
As of June 28, 2026, there were no components of accumulated other comprehensive income (loss) attributable to noncontrolling interests.
20
N. GOODWILL AND ACQUIRED INTANGIBLE ASSETS
Goodwill is considered impaired when the carrying value of a reporting unit exceeds its estimated fair value. Teradyne performs its annual goodwill impairment test as required under the provisions of ASC 350-10, “Intangibles—Goodwill and Other” on December 31 of each fiscal year unless there are negative qualitative factors relating to macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, and other relevant events and changes during an interim period. The presence of such factors could, under certain circumstances, be a triggering event that causes us to perform a goodwill impairment test.
The changes in the carrying amount of goodwill by reportable segments for the six months ended June 28, 2026, were as follows:
ProductTest
Balance at December 31, 2025
416,401
263,598
603,586
1,283,585
Accumulated impairment losses
(260,540
(502,026
(762,566
Total Goodwill
3,058
101,560
Acquisitions (1)
22,305
153,939
Foreign currency translation adjustment
(11,104
(37
(11,141
Balance at June 28, 2026
405,297
285,866
735,220
1,426,383
25,326
233,194
Teradyne reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. For the six months ended June 28, 2026, the Company did not record any intangible asset impairment.
Amortizable intangible assets consist of the following and are included in intangible assets, net on the balance sheet:
GrossCarryingAmount (1)
AccumulatedAmortization (1)
Foreign Currency Translation Adjustment
NetCarryingAmount
269,110
(185,930
83,180
54,064
(42,735
11,329
Tradenames and trademarks
39,157
(30,606
(1,150
7,401
Total intangible assets
362,331
(259,271
250,025
(211,662
60
38,423
56,480
(51,953
204
4,731
40,487
(31,339
(1,031
8,117
346,992
(294,954
(767
21
Aggregate intangible asset amortization expense was $5.0 million and $7.2 million, respectively, for the three and six months ended June 28, 2026, and $3.7 million and $8.3 million, respectively, for the three and six months ended June 29, 2025.
Estimated intangible asset amortization expense for each of the five succeeding fiscal years and thereafter is as follows:
Year
AmortizationExpense
2026
10,294
2027
19,603
2028
19,522
2029
18,200
2030
9,643
Thereafter
24,648
O. EARNINGS PER COMMON SHARE ATTRIBUTABLE TO TERADYNE
The following table sets forth the computation of basic and diluted earnings per common share attributable to Teradyne:
(in thousands, except per share amounts)
Net income attributable to Teradyne for basic and diluted earnings per common share
Weighted average common shares-basic
Effect of dilutive potential common shares:
Restricted stock units
160
302
Stock options
81
77
Employee stock purchase plan
26
Dilutive potential common shares
1,223
168
1,224
331
Weighted average common shares-diluted
Earnings per common share attributable to Teradyne - basic
Earnings per common share attributable to Teradyne - diluted
The computation of diluted earnings per common share attributable to Teradyne for the three and six months ended June 28, 2026, excludes the effect of the potential vesting of less than 0.1 million of restricted stock units because the effect would have been anti-dilutive. The computation of diluted earnings per common share attributable to Teradyne for the three and six months ended June 29, 2025, excludes the effect of the potential vesting of 1.4 million and 1.9 million, respectively, of restricted stock units because the effect would have been anti-dilutive.
P. RESTRUCTURING AND OTHER
During the three months ended June 28, 2026, Teradyne recorded $3.0 million of restructuring and other charges, of which $1.5 million were related to acquisition and divestiture related expenses and $1.4 million were severance charges.
During the three months ended June 29, 2025, Teradyne recorded $2.3 million of severance charges, $0.8 million of which is related to the Robotics restructuring which was initiated during the three months ended March 30, 2025, and impacted approximately 150 employees. During the three months ended June 29, 2025, Teradyne made $3.9 million of Robotics severance payments.
During the six months ended June 28, 2026, Teradyne recorded $6.5 million of restructuring and other charges, of which $3.2 million were related to acquisition and divestiture related expenses and $2.3 million were severance charges.
During the six months ended June 29, 2025, Teradyne recorded $13.7 million of severance charges, $10.0 million of which is related to the Robotics restructuring which impacted approximately 150 employees, and $2.1 million of which related to Product Test. During the six months ended June 29, 2025, Teradyne made $8.1 million of Robotics severance payments. Teradyne expects all
22
Robotics severance payments to be made prior to the end of our third quarter. Additionally, Teradyne recorded $1.6 million of acquisition and divestiture expenses related primarily to the Quantifi acquisition, and $1.2 million of charges related to lease terminations.
Q. RETIREMENT PLANS
ASC 715, “Compensation—Retirement Benefits,” requires an employer with defined benefit plans or other postretirement benefit plans to recognize an asset or a liability on its balance sheet for the overfunded or underfunded status of the plans as defined by ASC 715. The pension asset or liability represents a difference between the fair value of the pension plan’s assets and the projected benefit obligation at December 31. Teradyne uses a December 31 measurement date for all its plans.
Defined Benefit Pension Plans
Teradyne has defined benefit pension plans covering a portion of domestic employees and employees of certain non-U.S. subsidiaries. Benefits under these plans are based on employees’ years of service and compensation. Teradyne’s funding policy is to make contributions to these plans in accordance with local laws and to the extent that such contributions are tax deductible. The assets of the U.S. qualified pension plan consist primarily of fixed income and equity securities. In addition, Teradyne has an unfunded supplemental executive defined benefit plan in the United States to provide retirement benefits in excess of levels allowed by the Employment Retirement Income Security Act (“ERISA”) and the Internal Revenue Code (the “IRC”), as well as unfunded qualified foreign plans.
In the six months ended June 28, 2026, and June 29, 2025, Teradyne contributed $1.8 million and $1.6 million, respectively, to the U.S. supplemental executive defined benefit pension plan, and $0.8 million and $3.3 million, respectively, to certain qualified pension plans for non-U.S. subsidiaries.
For the three and six months ended June 28, 2026, and June 29, 2025, Teradyne’s net periodic pension cost was comprised of the following:
June 29, 2025
UnitedStates
Foreign
Service cost
143
296
96
150
Interest cost
1,358
345
1,165
301
Expected return on plan assets
(975
(665
Net actuarial loss (gain)
(43
Total net periodic pension cost
483
586
637
426
286
598
309
289
2,716
697
2,873
595
(1,950
(109
(1,981
(50
1,009
1,187
1,242
834
Postretirement Benefit Plan
In addition to receiving pension benefits, Teradyne employees in the United States who meet early retirement eligibility requirements as of their termination dates may participate in Teradyne’s Welfare Plan, which includes medical and dental benefits up to age 65. Death benefits provide a fixed sum to retirees’ survivors and are available to all retirees. Substantially all of Teradyne’s current U.S. employees could become eligible for these benefits and the existing benefit obligation relates primarily to those employees. During the six months ended June 29, 2025, Teradyne recorded special termination benefit charges associated with a voluntary early retirement program.
23
For the three and six months ended June 28, 2026, and June 29, 2025, Teradyne’s net periodic postretirement benefit cost was comprised of the following:
66
80
134
Amortization of prior service credit
(4
Special termination benefits
684
(114
87
Total net periodic postretirement benefit cost
(42
173
32
938
R. COMMITMENTS AND CONTINGENCIES
Purchase Commitments
As of June 28, 2026, Teradyne had entered into purchase commitments for certain components and materials. The purchase commitments covered by the agreements aggregate to approximately $1,781.4 million, of which $1,558.8 million is for less than one year.
Legal Claims
Teradyne is subject to various legal proceedings and claims which have arisen in the ordinary course of business such as, but not limited to, patent, employment, commercial and environmental matters. Teradyne believes that it has meritorious defenses against all pending claims and intends to vigorously contest them. While it is not possible to predict or determine the outcomes of any pending claims or to provide possible ranges of losses that may arise, Teradyne believes the potential losses associated with all of these actions are unlikely to have a material adverse effect on its business, financial position or results of operations.
Guarantees and Indemnification Obligations
Teradyne provides indemnification, to the extent permitted by law, to its officers, directors, employees and agents for liabilities arising from certain events or occurrences, while the officer, director, employee, or agent, is or was serving, at Teradyne’s request in such capacity. Teradyne may enter into indemnification agreements with certain of its officers and directors. With respect to acquisitions, Teradyne provides indemnifications to or assumes indemnification obligations for the current and former directors, officers and employees of the acquired companies in accordance with the acquired companies’ by-laws and charter. As a matter of practice, Teradyne has maintained directors’ and officers’ liability insurance coverage including coverage for directors and officers of acquired companies.
Teradyne enters into agreements in the ordinary course of business with customers, resellers, distributors, integrators and suppliers. Most of these agreements require Teradyne to defend and/or indemnify the other party against intellectual property infringement claims brought by a third party with respect to Teradyne’s products. From time to time, Teradyne also indemnifies customers and business partners for damages, losses and liabilities they may suffer or incur relating to personal injury, personal property damage, product liability, breach of confidentiality obligations and environmental claims relating to the use of Teradyne’s products and services or resulting from the acts or omissions of Teradyne, its employees, authorized agents or subcontractors. On occasion, Teradyne has also provided guarantees to customers regarding the delivery and performance of its products in addition to the warranty described below.
As a matter of ordinary course of business, Teradyne warrants that its products will substantially perform in accordance with its standard published specifications in effect at the time of delivery. Most warranties have a one-year duration commencing from installation. A provision is recorded upon revenue recognition to cost of revenues for estimated warranty expense based upon historical experience. When Teradyne receives revenue for extended warranties beyond the standard duration, the revenue is deferred and recognized on a straight-line basis over the contract period. Related costs are expensed as incurred. As of June 28, 2026, and December 31, 2025, Teradyne had a product warranty accrual of $25.7 million and $19.2 million, respectively, included in other accrued liabilities and revenue deferrals related to extended warranties of $78.1 million and $55.9 million, respectively, included in short and long-term deferred revenue and customer advances.
24
In addition, in the ordinary course of business, Teradyne provides minimum purchase guarantees to certain vendors to ensure continuity of supply against the market demand. Although some of these guarantees provide penalties for cancellations and/or modifications to the purchase commitments as the market demand decreases, most of the guarantees do not. Therefore, as the market demand decreases, Teradyne re-evaluates these guarantees and determines what charges, if any, should be recorded.
With respect to its agreements covering product, business or entity divestitures and acquisitions, Teradyne provides certain representations, warranties and covenants to purchasers and agrees to indemnify and hold such purchasers harmless against breaches of such representations, warranties and covenants. Many of the indemnification claims have a definite expiration date while some remain in force indefinitely. With respect to its acquisitions, Teradyne may, from time to time, assume the liability for certain events or occurrences that took place prior to the date of acquisition.
As a matter of ordinary course of business, Teradyne occasionally guarantees certain indebtedness obligations of its subsidiary companies, limited to the borrowings from financial institutions, purchase commitments to certain vendors and lease commitments to landlords.
Based on historical experience and information known as of June 28, 2026, and December 31, 2025, except for product warranty, Teradyne has not recorded any liabilities for these guarantees and obligations because the amount would be immaterial.
S. INCOME TAXES
The effective tax rate for the three months ended June 28, 2026, and June 29, 2025, was 15.1% and 12.7%, respectively. The increase in the effective tax rate from the three months ended June 29, 2025, to the three months ended June 28, 2026, is primarily attributable to lower benefits from tax credits partially offset by increased benefits from equity compensation and a projected shift in the geographic distribution of income.
The effective tax rate for the six months ended June 28, 2026, and June 29, 2025, was 14.2% and 12.4%, respectively. The increase in the effective tax rate from the six months ended June 29, 2025, to the six months ended June 28, 2026, is primarily attributable to lower benefits from tax credits partially offset by increased benefits from equity compensation and a projected shift in the geographic distribution of income.
On a quarterly basis, Teradyne evaluates the realizability of the deferred tax assets by jurisdiction and assesses the need for a valuation allowance. As of June 28, 2026, Teradyne believes that it will ultimately realize the deferred tax assets recorded on the condensed consolidated balance sheet. However, should Teradyne believe that it is more-likely-than-not that the deferred tax assets would not be realized, the tax provision would increase in the period in which Teradyne determined that the realizability was not likely. Teradyne considers the probability of future taxable income and historical profitability, among other factors, in assessing the realizability of the deferred tax assets.
As of both June 28, 2026, and December 31, 2025, Teradyne had $6.9 million of reserves for uncertain tax positions.
Teradyne recognizes interest and penalties related to income tax matters in income tax expense. As of June 28, 2026, and December 31, 2025, $0.3 million and $0.3 million, respectively, of interest and penalties were accrued for uncertain tax positions. For the six months ended June 28, 2026, and June 29, 2025, an expense of less than $0.1 million and less than $0.1 million, respectively, was recorded for interest and penalties related to income tax items.
Teradyne qualifies for a tax holiday in Singapore by fulfilling the requirements of an agreement with the Singapore Economic Development Board under which certain headcount and spending requirements must be met. The tax savings due to the tax holiday for the six months ended June 28, 2026 and June 29, 2025, were $14.9 million, or $0.09 per diluted share, and $3.6 million, or $0.02 per diluted share, respectively. In December 2025, Teradyne entered into a new agreement with the Singapore Economic Development Board which extended our Singapore tax holiday under substantially similar terms to the agreement which expired on December 31, 2025. The new tax holiday is scheduled to expire on December 31, 2035.
On January 5, 2026, the Organisation for Economic Co-operation and Development (OECD/G20) Inclusive Framework released a ‘side-by-side’ arrangement that, if adopted by foreign jurisdictions, will provide a safe harbor for U.S.-headquartered multinationals. The arrangement would effectively recognize the U.S. tax system as complying with the Pillar Two GloBE rules for fiscal years beginning on or after January 1, 2026. Under this arrangement, the Company expects its U.S.-parented group and foreign subsidiaries to be exempt from the Income Inclusion Rule (IIR) and the Undertaxed Profits Rule (UTPR) in foreign jurisdictions that adopt this safe harbor. As a result, while the ‘side-by-side’ arrangement has not yet been formally adopted in any significant jurisdictions which Teradyne operates in, we do not currently expect to have a material impact from top-up taxes under the IIR and
25
UTPR. Teradyne continues to monitor the implementation of Qualified Domestic Minimum Top-up Taxes (QDMTTs) in foreign jurisdictions, which remain unaffected by the side-by-side arrangement.
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA, P.L. 119-21) was enacted, introducing significant changes to U.S. federal income tax law. Key provisions include a permanent extension of 100% bonus depreciation, immediate expensing of research and experimental expenditures, and modifications to the business interest expense deduction. The OBBBA also reduces deduction rates related to foreign income and export sales income. The key provisions of the OBBBA that became effective in 2026 are not expected to have a material impact on Teradyne’s consolidated financial statements for the year ended December 31, 2026.
T. SEGMENT INFORMATION
Teradyne has three reportable segments (Semiconductor Test, Robotics, and Product Test). As of June 28, 2026, each of Teradyne’s reportable segments represents an individual operating segment. Teradyne’s Chief Executive Officer serves as the Chief Operating Decision Maker (“CODM”) for Teradyne.
The Semiconductor Test segment includes operations related to the design, manufacturing and marketing of semiconductor test products and services inclusive of storage and system level test products. The Robotics segment includes operations related to the design, manufacturing and marketing of collaborative robotic arms and autonomous mobile robots. The Product Test segment includes operations related to the design, manufacturing and marketing of products and services for defense/aerospace test, circuit-board test, wireless test systems, high-speed test and measurement and silicon photonics testing. Each reportable segment has a segment manager who is accountable to and maintains regular contact with Teradyne’s CODM to discuss operating activities, financial results, forecasts, and plans for the segment.
The CODM uses business segment income (loss) before income taxes predominantly in the annual budgeting and forecasting process. The CODM also uses this measure when making decisions about the allocation of operating and capital resources to each segment. The accounting policies of the business segments are the same as those described in Teradyne’s Annual Report on Form 10-K in Note B: “Accounting Policies.”
Segment information for the three and six months ended June 28, 2026, and June 29, 2025, is as follows:
SemiconductorTest
Total Reportable Segments
Corporateand Eliminations
Consolidated
Three months ended June 28, 2026
Revenues
1,121,825
Less:
Cost of revenues
438,344
46,508
39,573
524,425
107,393
13,121
15,419
135,933
Selling and marketing
65,277
22,689
14,602
102,568
General and administrative
28,980
9,069
7,001
45,050
Other segment items (1)(2)
54,511
11,106
12,664
78,281
(886
77,395
Income (loss) before taxes (2)
427,320
(2,576
17,989
442,733
886
Total assets (3)
2,264,787
700,966
595,974
3,561,727
1,363,890
Property additions
80,542
6,215
3,949
90,706
Depreciation and amortization expense
25,273
2,572
5,771
33,616
34
33,650
Three months ended June 29, 2025
491,878
207,201
34,155
33,090
274,446
82,126
14,069
12,674
108,869
52,590
24,241
11,663
88,494
26,132
9,879
5,696
41,707
28,066
11,055
6,378
45,499
(3,777
41,722
95,763
(18,533
92,782
3,777
1,349,429
745,839
358,829
2,454,097
1,307,765
3,761,862
43,593
3,528
3,287
50,408
23,395
6,068
1,926
31,389
Six months ended June 28, 2026
2,232,626
852,199
91,693
74,137
1,018,029
200,689
25,383
29,758
255,830
129,108
43,877
27,715
200,700
55,819
17,827
13,487
87,133
99,439
15,935
19,890
135,264
5,232
140,496
895,372
(3,540
22,696
914,528
(5,232
139,035
9,046
7,358
155,439
49,962
6,899
9,336
66,197
108
66,305
Six months ended June 29, 2025
1,034,382
409,948
66,447
63,125
539,520
162,337
29,924
24,213
216,474
104,287
48,755
23,400
176,442
52,684
19,744
10,665
83,093
53,561
34,693
13,651
101,905
4,459
106,364
251,565
(55,710
24,188
220,043
(4,459
103,325
6,204
6,065
115,594
46,260
12,009
3,432
61,701
(10
61,691
27
U. EQUITY
Stock Repurchase Program
In January 2023, Teradyne’s Board of Directors cancelled its January 2021 repurchase program and approved a new repurchase program for up to $2.0 billion of common stock. As of January 1, 2023, share repurchases in excess of issuances are subject to a 1% excise tax, which is included as part of the cost basis of the shares acquired.
During the six months ended June 28, 2026, Teradyne repurchased 0.2 million shares of common stock for a total cost of $74.2 million at an average price of $341.89 per share. The cumulative repurchases under the January 2023 repurchase program as of June 28, 2026, were 12.2 million shares of common stock for $1,382.9 million at an average price per share of $113.52.
During the six months ended June 29, 2025, Teradyne repurchased 3.0 million shares of common stock for a total cost of $277.3 million at an average price of $93.67 per share.
The total cost of shares acquired includes commissions and related excise tax and is recorded as a reduction to retained earnings.
Dividend
Holders of Teradyne’s common stock are entitled to receive dividends when they are declared by Teradyne’s Board of Directors.
In January 2026 and May 2026, Teradyne’s Board of Directors declared a quarterly cash dividend of $0.13 per share. Dividend payments for the three and six months ended June 28, 2026, were $20.3 million and $40.7 million, respectively.
In January 2025 and May 2025, Teradyne’s Board of Directors declared a quarterly cash dividend of $0.12 per share. Dividend payments for the three and six months ended June 29, 2025, were $19.2 million and $38.6 million, respectively.
28
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations
Statements in this Quarterly Report on Form 10-Q which are not historical facts, so called “forward-looking statements,” are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those detailed in our filings with the Securities and Exchange Commission. See also Part II, Item 1A of this Quarterly Report on Form 10-Q and Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. Readers are cautioned not to place undue reliance on these forward-looking statements which reflect management’s analysis only as of the date hereof. We assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting forward-looking statements, except as may be required by law.
Overview
We are a leading global provider of automated test equipment and robotics products. Our automated test systems are used to test semiconductors, wireless products, data storage, silicon photonics, and complex electronics systems in many industries including consumer electronics, automotive, industrial, computing, communications, and defense and aerospace industries. Our robotics product offerings consist primarily of collaborative robotic arms and autonomous mobile robots used by global manufacturing, logistics and industrial customers to improve quality and increase manufacturing and material handling efficiency, while reducing costs. Our automated test equipment and robotics products and services include:
The market for our test products is concentrated with a limited number of significant customers accounting for a substantial portion of the purchases of test equipment. A few customers drive significant demand for our products both through direct sales and sales to the customer’s supply partners. We expect that sales of our test products will continue to be concentrated with a limited number of significant customers for the foreseeable future.
For the second consecutive quarter, our Semiconductor Test segment revenue, driven primarily by sustained demand in Artificial Intelligence (“AI”) applications across both compute and memory markets, hit a new record high. Continued investment by hyperscalers, vertically integrated producers, and customers in AI data center infrastructure supported the robust compute market revenue. In memory, revenue exceeded $200 million for the third consecutive quarter, reflecting strong demand for high bandwidth memory (“HBM”) and DRAM test solutions supporting AI compute deployments, as well as renewed demand for NAND final test applications. Strong Robotics revenue of $100 million, marked the fifth consecutive quarter of sequential growth, driven primarily by demand from electronics manufacturing and semiconductor customers, which has become the segment's largest end-market. Within Product Test Group, revenue increased 26% year over year and 33% sequentially, reflecting broad-based growth across multiple markets and applications. The current quarter record performance is the result of prior investments and our current strategy and execution model. Looking ahead, we see significant future opportunities, and we are committed to judicious additional investments today, which we believe are required to continue growing our business in 2027.
On April 8, 2026, we and HTP Holding SAL (“MultiLane”) formed a joint venture, MultiLane Test Products Holding LLP (“MLTP”), to which MultiLane contributed the assets of its test and measurement business. We obtained a controlling 75% ownership interest in MLTP, which is expected to serve the growing demand from the AI Data Center equipment market by accelerating the development of test solutions for critical high speed data connections. The purchase price of MLTP was approximately $157.8 million, subject to customary post-closing adjustments, and the results will be included in our Product Test Segment.
Our capital allocation plan will continue to be balanced between investing in organic and inorganic growth and returning cash to shareholders through share repurchases and dividends. During the first six months of 2026, the aggregate cash consideration paid for acquisitions, net of cash acquired, totaled $165.6 million, primarily due to the acquisition of a controlling interest in MLTP. Additionally, we returned a combined $114.9 million to shareholders through $74.2 million of share buybacks and $40.7 million of dividend payments.
Government Regulations
We are subject to numerous U.S. and foreign laws and regulations, including, without limitation, tariffs, trade sanctions, trade barriers, trade embargoes, regulations relating to import-export control, technology transfer restrictions, and other laws and regulations. However, our trade compliance program may not identify or prevent all potential violations, and gaps in our program
could be discovered, possibly resulting in fines, penalties, or other sanctions as a result. Additionally, U.S. and foreign governmental authorities have taken, and may continue to take, administrative, legislative or regulatory action that could impact our operations. We believe that our operations are in material compliance with applicable trade regulations. The costs we incurred in complying with applicable trade regulations for the six months ended June 28, 2026 were not material, however, compliance with these laws has limited our ability to compete in certain regions. It is possible that future developments, including changes in laws and regulations or government policies, could lead to material costs, and such costs may have a material adverse effect on our future business or prospects.
We have paid certain tariffs on imported products under the International Emergency Economic Powers Act (“IEEPA”) since the inception of the IEEPA tariffs in 2025. On April 20, 2026, U.S. Customs and Border Protection (“CBP”) began accepting refund claims related to these tariffs. During the quarter ended June 28, 2026, we began receiving refunds, which did not have a material impact to our financial position or results of operations. We continue to monitor the situation, and we do not expect that any further refunds received will have a material impact on our financial position or results of operations.
For information regarding risks associated with import-export control regulations and similar applicable laws and regulations, see Part II - Item 1A “Risk Factors- Risks Related to Legal and Regulatory Compliance” included elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Critical Accounting Policies and Estimates
We have identified the policies which are critical to understanding our business and our results of operations. There have been no significant changes during the six months ended June 28, 2026, to the items disclosed as our critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Critical accounting estimates are complex and may require significant judgment by management. Changes to the underlying assumptions may have a material impact on our financial condition and results of operations. These estimates may change, as new events occur and additional information is obtained. Actual results could differ significantly from these estimates under different assumptions or conditions.
The preparation of consolidated financial statements requires management to make estimates and judgments that affect the amounts reported in the financial statements. Actual results may differ significantly from these estimates under different assumptions or conditions.
30
SELECTED RELATIONSHIPS WITHIN THE CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
Percentage of revenues:
100
37
36
57
59
33
35
Results of Operations
Second Quarter 2026 Compared to Second Quarter 2025
Revenues by our reportable segments were as follows:
DollarChange
1,121.8
491.9
629.9
107.2
85.1
22.1
99.9
74.9
25.0
1,329.0
651.8
677.2
The increase in Semiconductor Test revenues of $629.9 million, or 128.1%, was driven primarily by higher sales in compute and memory related to artificial intelligence applications. The increase in Product Test revenues of $22.1 million, or 26.0%, was driven by increased AI-related demand, combined with growth in Defense and Aerospace. The increase in Robotics revenues of $25.0 million, or 33.4%, was primarily due to higher sales of collaborative robotic arms and autonomous mobile robots.
Revenues by country as a percentage of total revenues were as follows (1):
Taiwan
Korea
China
United States
Singapore
Europe
Malaysia
Thailand
Philippines
Japan
Rest of World
Gross Profit
Our gross profit was as follows:
Dollar/PointChange
794.6
373.0
421.6
Percent of total revenues
59.8
57.2
2.6
Gross profit as a percent of revenue increased by 2.6 points, primarily due to higher sales and product mix in Semiconductor Test.
Selling and Administrative
Selling and administrative expenses were as follows:
192.5
157.8
34.7
14.5
24.2
The increase of $34.7 million in selling and administrative expenses was primarily driven by strategic investments in Semiconductor Test and from higher variable compensation across all segments.
Engineering and Development
Engineering and development expenses were as follows:
156.3
118.4
37.9
11.8
18.2
The increase of $37.9 million in engineering and development expenses was primarily driven by strategic investments in Semiconductor Test and from higher variable compensation across all segments.
Restructuring and Other
During the three months ended June 28, 2026, we recorded $3.0 million of restructuring and other charges, of which $1.5 million were related to acquisition and divestiture related expenses and $1.4 million were severance charges.
During the three months ended June 29, 2025, we recorded $2.3 million of severance charges, $0.8 million of which is related to the Robotics restructuring which was initiated during the three months ended March 30, 2025, and impacted approximately 150 employees. During the three months ended June 29, 2025, we made $3.9 million of Robotics severance payments.
Interest and Other
(3.2
(4.4
3.0
0.8
2.2
(5.6
(2.3
(3.3
Interest expense increased by $2.2 million primarily due to higher debt during a portion of the period.
Income (Loss) Before Income Taxes and Equity in Net Earnings of Affiliate
427.3
95.8
331.5
18.0
15.6
2.4
(2.6
(18.5
15.9
Corporate and Eliminations (1)
(2.9
443.6
96.6
347.0
The increase in income before income taxes and equity in net earnings of affiliate in Semiconductor Test was driven primarily by higher sales volume in compute and memory related to artificial intelligence applications. The increase in income before income taxes and equity in net earnings of affiliate in Robotics was primarily due to higher sales volume and lower operating expenses primarily as a result of restructuring actions.
Income Taxes
Six Months 2026 Compared to Six Months 2025
2,232.6
1,034.4
1,198.2
191.2
143.9
47.3
187.7
159.2
28.5
2,611.5
1,337.5
1,274.0
The increase in Semiconductor Test revenues of $1,198.2 million, or 115.8%, was driven primarily by higher sales in compute and memory primarily related to artificial intelligence applications. The increase in Robotics revenues of $47.3 million, or 32.9%, was primarily due to higher sales of collaborative robotic arms. The increase in Product Test revenues of $28.5 million, or 17.9%, was driven primarily by AI-related demand, combined with growth in Defense and Aerospace.
1,575.6
788.3
787.3
60.3
58.9
Gross profit as a percent of revenue increased by 1.4 points, primarily due to higher sales volume in Semiconductor Test.
359.3
315.0
44.3
13.8
23.6
The increase of $44.3 million in selling and administrative expenses was primarily driven by strategic investments in Semiconductor Test and from higher variable compensation across all segments.
291.8
236.6
55.2
11.2
17.7
The increase of $55.2 million in engineering and development expenses was primarily driven by strategic investments in Semiconductor Test and from higher variable compensation across all segments.
During the six months ended June 28, 2026, we recorded $6.5 million of restructuring and other charges, of which $3.2 million were related to acquisition and divestiture related expenses and $2.3 million were severance charges.
During the six months ended June 29, 2025, we recorded $13.7 million of severance charges, $10.0 million of which is related to the Robotics restructuring which impacted approximately 150 employees, and $2.1 million of which related to Product Test. During the six months ended June 29, 2025, we made $8.1 million of Robotics severance payments. We expect all Robotics severance payments to be made prior to the end of our third quarter. Additionally, we recorded $1.6 million of acquisition and divestiture expenses related primarily to the Quantifi acquisition, and $1.2 million of charges related to lease terminations.
(9.4
6.1
1.6
4.5
1.0
(2.8
Interest expense increased by $4.5 million primarily due to outstanding debt balances during portions of 2026.
895.4
251.6
643.8
22.7
(1.5
(3.5
(55.7
52.2
(5.2
(4.5
(0.7
909.3
215.6
693.7
The increase in income before income taxes and equity in net earnings of affiliate in Semiconductor Test was driven primarily by higher compute and memory sales volume, partially offset by higher selling and administrative and engineering and development spending. The increase in income before income taxes and equity in net earnings of affiliate in Robotics was primarily due to higher sales volume and lower operating expenses primarily as a result of restructuring actions.
The effective tax rate for the six months ended June 28, 2026, and June 29, 2025, was 14.2% and 12.4%, respectively. The increase in the effective tax rate from the six months ended June 29, 2025, to the six months ended June 28, 2026, is primarily
attributable to lower benefits from tax credits partially offset by increased benefits from equity compensation and a projected shift in the geographic distribution of income.
Contractual Obligations
There have been no changes outside of the ordinary course of business to our contractual obligations as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
Liquidity and Capital Resources
Sources of Liquidity
Change
Cash, cash equivalents and marketable securities:
349.5
293.8
55.7
Short-term marketable securities
5.3
28.2
(22.9
162.3
126.3
36.0
Total cash, cash equivalents and marketable securities:
517.1
448.3
68.8
200.0
(200.0
Our cash, cash equivalents and marketable securities balances increased by $68.8 million in the six months ended June 28, 2026, to $517.1 million. Cash increased primarily as a result of operating cash inflows.
Our Third Amended and Restated Revolving Credit Agreement, amended as of November 7, 2023 (the “Credit Agreement”) provides a six-year, senior secured revolving credit facility of $750.0 million (the “Credit Facility”). As of June 28, 2026, we did not have an outstanding balance under the Credit Agreement. The Credit Agreement is set to expire on December 10, 2026. See Note I: “Debt” for more information regarding our Credit Agreement. As of June 28, 2026, we were in compliance with all covenants under the Credit Agreement. We intend to extend the Credit Facility later in 2026.
Cash Flows
Net cash (used for) provided by:
Operating activities
734.3
343.7
390.6
Investing activities
(338.6
(240.2
(98.4
Financing activities
(341.0
(313.6
(27.4
1.1
(4.0
5.1
Net increase (decrease) in cash and cash equivalents
55.8
(214.1
269.9
Net change in operating assets and liabilities, net of businesses acquired
(142.1
61.7
(203.8
Operating Activities
Operating activities during the six months ended June 28, 2026, provided cash of $734.3 million. Changes in operating assets and liabilities, net of businesses acquired used cash of $142.1 million due to a $369.6 million increase in operating assets and a $227.6 million increase in operating liabilities. The increase in operating assets was primarily due to increases in accounts receivable of $302.2 million. The increase in operating liabilities was primarily due to increases in accounts payable and other liabilities and in deferred revenue and customer advances of $121.8 million and $50.9 million, respectively.
Operating activities during the six months ended June 29, 2025, provided cash of $343.7 million. Changes in operating assets and liabilities provided cash of $61.7 million due to a $56.7 million decrease in operating assets and a $5.0 million increase in operating liabilities. The decrease in operating assets was primarily due to decreases in accounts receivable and prepayments and other assets of $49.5 million and $30.9 million, respectively, partially offset by a $23.7 million increase in inventories. The increase in
operating liabilities was due to increases in accounts payable and other liabilities and in deferred revenue and customer advances of $17.1 million and $13.1 million, respectively, partially offset by decreases in income taxes and retirement plans of $19.6 million and $5.6 million, respectively.
Investing Activities
Investing activities during the six months ended June 28, 2026, included $165.6 million used for the acquisition of businesses, $155.4 million used for the purchases of property, plant, and equipment, $48.2 million used for the purchases of marketable securities, and $10.0 million used for the purchase of investment in a business, partially offset by $29.6 million in proceeds from sales of marketable securities and $11.0 million in proceeds from maturities of marketable securities.
Investing activities during the six months ended June 29, 2025, used cash of $240.2 million due to $144.4 million used for the acquisition of businesses, $114.4 million used for the purchase of property, plant & equipment and $17.2 million used for the purchase of marketable securities, partially offset by $32.6 million and $8.5 million in proceeds from the maturities and sales of marketable securities, respectively.
Financing Activities
Financing activities during the six months ended June 28, 2026, included $200.0 million in net repayments of borrowings on the revolving credit facility, $74.2 million used for the repurchase of common stock, $41.1 million used for payment related to net settlements of employee stock compensation awards, and $40.7 million utilized for dividend payments, partially offset by $15.1 million from the issuance of common stock under employee stock purchase and stock option plans.
Financing activities during the six months ended June 29, 2025, consumed cash of $313.6 million due to $274.9 million used for the repurchase of approximately 3.0 million shares of common stock at an average price of $93.67 per share, $38.6 million utilized for dividend payments and $15.0 million used for payment related to net settlements of employee stock compensation awards, partially offset by $14.8 million from the issuance of common stock under employee stock purchase and stock option plans.
Material Cash Requirements
In January 2026 and May 2026, our Board of Directors declared a quarterly cash dividend of $0.13 per share. Dividend payments for the three and six months ended June 28, 2026, were $20.3 million and $40.7 million, respectively.
In January 2025 and May 2025, our Board of Directors declared a quarterly cash dividend of $0.12 per share. Dividend payments for the three and six months ended June 29, 2025, were $19.2 million and $38.6 million, respectively.
In January 2023, our Board of Directors approved a repurchase program for up to $2.0 billion of common stock. During the six months ended June 28, 2026, we repurchased 0.2 million shares of common stock for $74.2 million, which excludes related excise tax, at an average price of $341.89 per share. The cumulative repurchases under the 2023 repurchase program as of June 28, 2026, were 12.2 million shares of common stock for $1,371.5 million, which excludes related excise tax, at an average price per share of $113.52. During the six months ended June 29, 2025, we repurchased approximately 3.0 million shares of common stock for $274.9 million, which excludes related excise tax, at an average price of $93.67 per share.
While we have previously declared a quarterly cash dividend and authorized a share repurchase program, we may reduce or eliminate the cash dividend or share repurchase program in the future. Cash dividends and stock repurchases are subject to the discretion of our Board of Directors, which will consider, among other things, our earnings, capital requirements and financial condition.
We believe our cash, cash equivalents, marketable securities and senior secured revolving credit facility will be sufficient to pay our quarterly dividend and meet our working capital and expenditure needs for at least the next twelve months. Inflation has not had a significant long-term impact on earnings. As of June 28, 2026, we were in compliance with all covenants under the Credit Agreement.
Equity Compensation Plans
In addition to our 1996 Employee Stock Purchase Program as discussed in Note M: “Stock-Based Compensation” in our 2025 Annual Report on Form 10-K, we have a 2006 Equity and Cash Compensation Incentive Plan (the “2006 Equity Plan”).
38
The purpose of the 1996 Employee Stock Purchase Plan is to encourage stock ownership by all eligible employees of Teradyne. The purpose of the 2006 Equity Plan is to provide equity ownership and compensation opportunities in Teradyne to our employees, officers and directors. Both plans were approved by our shareholders.
Recently Issued Accounting Pronouncements
For a description of accounting changes and recent accounting pronouncements, including the expected dates of adoption and estimated effects, if any, on our consolidated financial statements, see Note C: “Recently Issued Accounting Pronouncements” of this Form 10-Q.
Item 3: Quantitative and Qualitative Disclosures about Market Risk
For quantitative and qualitative disclosures about market risk affecting Teradyne, see Part 2 Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” in our Annual Report on Form 10-K filed with the SEC on February 19, 2026. There were no material changes in our exposure to market risk from those set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Item 4: Controls and Procedures
As of the end of the period covered by this report, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(b) or Rule 15d-15(b) promulgated under the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in ensuring that material information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, including ensuring that such material information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended June 28, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 1: Legal Proceedings
We are subject to various legal proceedings and claims which have arisen in the ordinary course of business such as, but not limited to, patent, employment, commercial and environmental matters. Teradyne believes that it has meritorious defenses against all pending claims and intends to vigorously contest them. While it is not possible to predict or determine the outcomes of any pending claims or to provide possible ranges of losses that may arise, Teradyne believes the potential losses associated with all of these actions are unlikely to have a material adverse effect on its business, financial position or results of operations.
Item 1A: Risk Factors
In addition to other information set forth in this Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A: Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 19, 2026, which could materially affect our business, financial condition or future results. The risk factors described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, remain applicable to our business.
The risks described in our Annual Report on Form 10-K are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds
In January 2023, Teradyne’s Board of Directors cancelled our 2021 repurchase program and approved a new repurchase program for up to $2.0 billion of common stock. During the six months ended June 28, 2026, we repurchased 0.2 million shares of common stock for a total cost of $74.2 million at an average price of $341.89 per share. We record share repurchases at cost, which includes broker commissions and related excise taxes. During the six months ended June 29, 2025, we repurchased 3.0 million shares of common stock for $277.3 million at an average price of $93.67 per share.
The following table includes information with respect to repurchases we made of our common stock during the three months ended June 28, 2026, (in thousands except per share price):
Period
TotalNumber ofShares(or Units)Purchased
AveragePrice Paid perShare (or Unit)
Total Number ofShares (or Units)Purchased as Part ofPublicly AnnouncedPlans or Programs
Maximum Number(or Approximate DollarValue) of Shares (orUnits) that may Yet BePurchased Under thePlans or Programs (2)
March 30, 2026 - April 26, 2026
310.31
685,844
April 27, 2026 - May 24, 2026
349.13
126
641,928
May 25, 2026 - June 28, 2026
69
369.18
67
617,124
198
(1)
355.66
193
We satisfy U.S. federal and state minimum withholding tax obligations due upon the vesting and the conversion of restricted stock units into shares of our common stock, by automatically withholding from the shares being issued, a number of shares with an aggregate fair market value on the date of such vesting and conversion that would satisfy the minimum withholding amount due.
Item 4: Mine Safety Disclosures
Not Applicable
Item 5: Other Information
10b5-1 Trading Plans
Our officers (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (“Section 16 Officers”) and directors from time to time enter into contracts, instructions or written plans for the purchase or sale of our securities that are intended to satisfy the conditions specified in Rule 10b5-1(c) under the Exchange Act for an affirmative defense against liability for trading in securities on the basis of material nonpublic information. We refer to these contracts, instructions, and written plans as “Rule 10b5-1 trading plans” and each one as a “Rule 10b5-1 trading plan.” During our fiscal quarter ended June 28, 2026, no Section 16 Officers or directors adopted, modified or terminated Rule 10b5-1 trading plans.
Item 6: Exhibits
Exhibit
Number
Description
31.1
Certification of Principal Executive Officer, pursuant to Rule 13a-14(a) of the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
31.2
Certification of Principal Financial Officer, pursuant to Rule 13a-14(a) of the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
32.1
Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
32.2
Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
101.INS
Inline XBRL Instance Document
101.SCH
Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents
104
Cover Page Interactive Data File (formatted as Inline XBRL, and contained in Exhibit 101)
*
Management Contract or Compensatory Plan
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Registrant
/s/ MICHELLE TURNER
Michelle Turner
Vice President,
Chief Financial Officer and Treasurer
(Duly Authorized Officer
and Principal Financial Officer)
July 31, 2026
44