0000950170-24-116845 8-K 12 20241023 2.02 9.01 20241024 20241024 TERADYNE, INC 0000097210 3825 08 Industrial Applications and Services 042272148 MA 1231 8-K 34 001-06462 241390673 600 RIVERPARK DRIVE NORTH READING MA 01864 978-370-2700 600 RIVERPARK DRIVE NORTH READING MA 01864 TERADYNE INC 19920703 8-K 1 ter-20241023.htm 8-K 0000097210false00000972102024-10-232024-10-23 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): October 23, 2024 TERADYNE, INC. (Exact Name of Registrant as Specified in Charter) Massachusetts 001-06462 04-2272148 (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 600 Riverpark Drive, North Reading, MA 01864 (Address of Principal Executive Offices) (Zip Code) Registrant’s telephone number, including area code: (978) 370-2700 (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): ? Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) ? Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) ? Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) ? Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Securities registered pursuant to Section 12(b) of the Act: Trading Name of each exchange Title of each class Symbol(s) on which registered Common Stock, par value $0.125 per share TER Nasdaq Stock Market LLC Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth 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. ? -------------------------------------------------------------------------------- Item 2.02 Results of Operations and Financial Condition. On October 23, 2024, Teradyne, Inc. (“Teradyne”) issued a press release regarding its financial results for the third quarter ended September 29, 2024. Teradyne’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. Item 9.01 Financial Statements and Exhibits. (d) Exhibits. Exhibit Description 99.1 Press Release dated October 23, 2024. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) -------------------------------------------------------------------------------- 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. TERADYNE, INC. Dated: October By: 24, 2024 /s/ SANJAY MEHTA Name: Sanjay Mehta Vice President, Chief Financial Title: Officer and Treasurer -------------------------------------------------------------------------------- EX-99.1 2 ter-ex99_1.htm EX-99.1 Exhibit 99.1 Teradyne Reports Third Quarter 2024 Results • Revenue at the high-end and earnings above Q3 guidance • Revenue of $737 million in Q3’24, up 5% from Q3’23 • Year-over-year growth driven by strong AI-related demand Q3'24 Q3'23 Q2'24 Revenue (mil) $ 737 $ 704 $ 730 GAAP EPS $ 0.89 $ 0.78 $ 1.14 Non-GAAP EPS $ 0.90 $ 0.80 $ 0.86 NORTH READING, Mass. – October 23, 2024 – Teradyne, Inc. (NASDAQ: TER) reported revenue of $737 million for the third quarter of 2024 of which $543 million was in Semiconductor Test, $73 million in System Test, $33 million in Wireless Test and $89 million in Robotics. GAAP net income for the third quarter of 2024 was $145.6 million or $0.89 per diluted share. On a non-GAAP basis, Teradyne’s net income in the third quarter of 2024 was $147.6 million, or $0.90 per diluted share, which excluded acquired intangible asset amortization, restructuring and other charges, amortization on our investment in Technoprobe, legal settlement, pension mark-to-market, and included the related tax impact on non-GAAP adjustments. “Semiconductor Test continues to perform better than planned on record Memory revenue driven by High Bandwidth Memory (HBM) and compute demand for AI applications,” said Teradyne CEO, Greg Smith. “Robotics continues to execute to its longer-term growth strategy with improving traction in recurring software and services revenue and progress in the UR OEM channel. As we finish 2024 and look forward to 2025, we are excited about building on this progress." Guidance for the fourth quarter of 2024 is revenue of $710 million to $760 million, with GAAP net income of $0.73 to $0.91 per diluted share and non-GAAP net income of $0.80 to $0.97 per diluted share. Non-GAAP guidance excludes acquired intangible asset amortization and amortization on our investment in Technoprobe, as well as the related tax impact on non-GAAP adjustments. Webcast A conference call to discuss the third quarter results, along with management’s business outlook, will follow at 8:30 a.m. ET, Thursday, October 24, 2024. Interested investors should access the webcast at www.teradyne.com and click on "Investors" at least five minutes before the call begins. Presentation materials will be available starting at 8:30 a.m. ET. A replay will be available on the Teradyne website at www.teradyne.com/investors. -------------------------------------------------------------------------------- Page 2 Non-GAAP Results In addition to disclosing results that are determined in accordance with GAAP, Teradyne also discloses non-GAAP results of operations that exclude certain income items and charges. These results are provided as a complement to results provided in accordance with GAAP. Non-GAAP income from operations and non-GAAP net income exclude acquired intangible assets amortization, restructuring and other, pension actuarial gains and losses, stock compensation modification expense, gains and losses on foreign exchange options in connection with acquisitions and divestitures, gain on sale of business, legal settlement, discrete income tax adjustments, and includes the related tax impact on non-GAAP adjustments. GAAP requires that these items be included in determining income from operations and net income. Non-GAAP income from operations, non-GAAP net income, non-GAAP income from operations as a percentage of revenue, non-GAAP net income as a percentage of revenue, and non-GAAP net income per share are non-GAAP performance measures presented to provide meaningful supplemental information regarding Teradyne’s baseline performance before gains, losses or other charges that may not be indicative of Teradyne’s current core business or future outlook. These non-GAAP performance measures are used to make operational decisions, to determine employee compensation, to forecast future operational results, and for comparison with Teradyne’s business plan, historical operating results and the operating results of Teradyne’s competitors. Non-GAAP diluted shares include the impact of Teradyne’s call option on its shares. Management believes each of these non-GAAP performance measures provides useful supplemental information for investors, allowing greater transparency to the information used by management in its operational decision making and in the review of Teradyne’s financial and operational performance, as well as facilitating meaningful comparisons of Teradyne’s results in the current period compared with those in prior and future periods. A reconciliation of each available GAAP to non-GAAP financial measure discussed in this press release is contained in the attached exhibits and on the Teradyne website at www.teradyne.com by clicking on “Investor Relations” and then selecting “Financials” and the “GAAP to Non-GAAP Reconciliation” link. The non-GAAP performance measures discussed in this press release may not be comparable to similarly titled measures used by other companies. The presentation of non-GAAP measures is not meant to be considered in isolation, as a substitute for, or superior to, financial measures or information provided in accordance with GAAP. About Teradyne Teradyne (NASDAQ:TER) test technology helps bring high-quality innovations such as smart devices, life-saving medical equipment and data storage systems to market, faster. Its advanced test solutions for semiconductors, electronic systems, wireless devices and more ensure that products perform as they were designed. Its robotics offerings include collaborative and mobile robots that help manufacturers of all sizes increase productivity, improve safety, and lower costs. In 2023, Teradyne had revenue of $2.7 billion and today employs over 6,400 people worldwide. For more information, visit teradyne.com. Teradyne® is a registered trademark of Teradyne, Inc., in the U.S. and other countries. Safe Harbor Statement This release contains forward-looking statements including statements regarding Teradyne’s future business prospects, financial performance or position and results of operations. You can identify forward-looking statements by their use of forward-looking words such as “anticipate,” “expect,” “plan,” “could,” “may,” “will,” “believe,” “estimate,” “goal” or other comparable terms. Forward-looking statements in this press release address various matters, including statements regarding Teradyne’s financial guidance. Investors are cautioned that such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements due to known and unknown risks, uncertainties, assumptions, and other factors. Such factors include, but are not limited to, macroeconomic factors and slowdowns or downturns in economic conditions generally and in the markets in which Teradyne operates; decreased or delayed product demand from one or more significant customers; a slowdown or inability in the development, delivery and acceptance of new products; the ability to grow the Robotics business; the impact of increased research and development spending; the impact of epidemics or pandemics such as COVID-19; the impact of a supply shortage on our supply chain and contract manufacturers; the consummation and success of any mergers or acquisitions; unexpected cash needs; the business judgment of the board of directors that a declaration of a dividend or the repurchase of common stock is not in Teradyne’s best interests; changes to U.S. or global tax regulations or guidance; the impact of any tariffs or export -------------------------------------------------------------------------------- Page 3 controls imposed by the U.S. or China; the impact of U.S. Department of Commerce or other government agency regulations relating to Huawei, HiSilicon and other customers or potential customers; the impact of U.S. Department Commerce export control regulations for certain U.S. products and technology sold to military end users or for military end-use in China; the impact of the current conflicts in Israel; the impact of regulations published by the U.S. Department of Commerce relating to semiconductors and semiconductor manufacturing equipment destined for certain end uses in China. The risks included above are not exhaustive. For a more detailed description of the risk factors associated with Teradyne, please refer to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Many of these factors are macroeconomic in nature and are, therefore, beyond Teradyne’s control. We caution readers not to place undue reliance on any forward-looking statements included in this press release which speak only as to the date of this press release. Teradyne specifically disclaims any obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein. -------------------------------------------------------------------------------- Page 4 TERADYNE, INC. REPORT FOR THIRD FISCAL QUARTER OF 2024 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Quarter Ended Nine Months Ended September 29, June 30, October 1, September 29, October 1, 2024 2024 2023 2024 2023 Net revenues $ 737,298 $ 729,879 $ 703,732 $ 2,066,996 $ 2,005,699 Cost of revenues (exclusive of acquired intangible assets amortization shown separately below) (1) 300,784 304,035 305,441 865,357 848,495 Gross profit 436,514 425,844 398,291 1,201,639 1,157,204 Operating expenses: Selling and administrative (2) 157,649 154,470 138,330 461,307 434,979 Engineering and development 117,474 111,816 104,413 332,489 315,881 Acquired intangible assets amortization 4,748 4,664 4,720 14,108 14,348 Restructuring and other (3) 4,578 2,012 6,856 11,018 15,251 Gain on sale of business (4) — (57,486 ) — (57,486 ) — Operating expenses 284,449 215,476 254,319 761,436 780,459 Income from operations 152,065 210,368 143,972 440,203 376,745 Interest and other (income) expense (5) (6,919 ) (9,035 ) (308 ) (11,086 ) (9,022 ) Income before income taxes and equity in net earnings of affiliate 158,984 219,403 144,280 451,289 385,767 Income tax provision 12,260 33,130 16,164 54,095 54,069 Income before equity in net earnings of affiliate 146,724 186,273 128,116 397,194 331,698 Equity in net earnings of affiliate (1,075 ) — — (1,075 ) — Net income $ 145,649 $ 186,273 $ 128,116 $ 396,119 $ 331,698 Net income per common share: Basic $ 0.89 $ 1.18 $ 0.83 $ 2.51 $ 2.14 Diluted $ 0.89 $ 1.14 $ 0.78 $ 2.42 $ 2.01 Weighted average common shares - basic 163,002 157,804 153,762 157,951 154,809 Weighted average common shares - diluted (6) 164,253 163,470 164,050 163,357 165,037 Cash dividend declared per common share $ 0.12 $ 0.12 $ 0.11 $ 0.36 $ 0.33 (1) Cost of revenues includes: Quarter Ended Nine Months Ended September 29, June 30, October 1, September 29, October 1, 2024 2024 2023 2024 2023 Provision for excess and obsolete inventory $ 6,078 $ 3,261 $ 11,728 $ 15,515 $ 23,069 Legal settlement 3,600 — — 3,600 — Sale of previously written down inventory (472 ) (592 ) (1,198 ) (1,787 ) (4,046 ) $ 9,206 $ 2,669 $ 10,530 $ 17,328 $ 19,023 (2) For the nine months ended September 29, 2024, selling and administrative expenses included an equity charge of $1.7 million for the modification of Teradyne executives' retirement agreements. For the nine months ended October 1, 2023, selling and administrative expenses included an equity charge of $5.9 million for the modification of Teradyne’s retired CEO’s outstanding equity awards in connection with his February 1, 2023, retirement. -------------------------------------------------------------------------------- Page 5 (3) Restructuring and other consists of: Quarter Ended Nine Months Ended September 29, June 30, October 1, September 29, October 1, 2024 2024 2023 2024 2023 Employee severance $ 1,280 $ 2,012 $ 4,658 $ 5,319 $ 11,835 Acquisition and divestiture related expenses — — — 2,214 — Contract termination — — 1,511 — 1,511 Other 3,298 — 687 3,485 1,905 $ 4,578 $ 2,012 $ 6,856 $ 11,018 $ 15,251 (4) On May 27, 2024, Teradyne sold Teradyne's Device Interface Solution ("DIS") business, a component of the Semiconductor Test segment, to Technoprobe S.p.A. ("Technoprobe"), for $85.0 million, net of cash and cash equivalents sold and a working capital adjustment. (5) Interest and other includes: Quarter Ended Nine Months Ended September 29, June 30, October 1, September 29, October 1, 2024 2024 2023 2024 2023 Pension actuarial losses (gains) $ (2,262 ) $ (250 ) $ 72 $ (2,513 ) $ 125 Loss (gain) on foreign exchange option — (4,154 ) — 9,765 — (6) Under GAAP, when calculating diluted earnings per share, convertible debt must be assumed to have converted if the effect on EPS would be dilutive. Diluted shares assume the conversion of the convertible debt as the effect would be dilutive. Accordingly, for the quarter ended October 1, 2023, 0.6 million shares have been included in diluted shares. For the nine months ended October 1, 2023, 0.8 million shares have been included in diluted shares. For the quarters ended September 29, 2024, June 30, 2024, and October 1, 2023, diluted shares included 0.5 million, 4.9 million, and 9.2 million shares, respectively, from the convertible note hedge transaction. For the nine months ended September 29, 2024, and October 1, 2023, diluted shares included 4.8 million and 9.0 million shares, respectively, from the convertible note hedge transaction. -------------------------------------------------------------------------------- Page 6 CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) September 29, December 31, 2024 2023 Assets Cash and cash equivalents $ 510,036 $ 757,571 Marketable securities 41,631 62,154 Accounts receivable, net 484,376 422,124 Inventories, net 297,340 309,974 Prepayments 489,548 548,970 Other current assets 15,935 37,992 Current assets held for sale — 23,250 Total current assets 1,838,866 2,162,035 Property, plant and equipment, net 491,704 445,492 Operating lease right-of-use assets, net 70,784 73,417 Marketable securities 125,944 117,434 Deferred tax assets 201,881 175,775 Retirement plans assets 13,114 11,504 Equity method investment 538,351 — Other assets 48,384 38,580 Acquired intangible assets, net 21,288 35,404 Goodwill 419,412 415,652 Assets held for sale — 11,531 Total assets $ 3,769,728 $ 3,486,824 Liabilities Accounts payable $ 158,459 $ 180,131 Accrued employees’ compensation and withholdings 159,794 191,750 Deferred revenue and customer advances 99,776 99,804 Other accrued liabilities 105,150 114,712 Operating lease liabilities 19,175 17,522 Income taxes payable 52,542 48,653 Current liabilities held for sale — 7,379 Total current liabilities 594,896 659,951 Retirement plans liabilities 137,735 132,090 Long-term deferred revenue and customer advances 41,135 37,282 Long-term other accrued liabilities 8,373 19,998 Deferred tax liabilities 164 183 Long-term operating lease liabilities 60,287 65,092 Long-term income taxes payable 24,596 44,331 Liabilities held for sale — 2,000 Total liabilities 867,186 960,927 Shareholders’ equity 2,902,542 2,525,897 Total liabilities and shareholders’ equity $ 3,769,728 $ 3,486,824 -------------------------------------------------------------------------------- Page 7 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Quarter Ended Nine Months Ended September 29, October 1, September 29, October 1, 2024 2023 2024 2023 Cash flows from operating activities: Net income $ 145,649 $ 128,116 $ 396,119 $ 331,698 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 25,553 23,627 74,480 68,858 Stock-based compensation 14,574 12,787 45,267 45,236 Provision for excess and obsolete inventory 6,078 11,728 15,516 23,069 Amortization 4,736 4,503 14,133 14,083 Equity in net earnings of affiliate 1,075 — 1,075 — Gain on sale of business — — (57,486 ) — Deferred taxes (9,431 ) (10,455 ) (26,261 ) (24,026 ) Losses (gains) on investments (2,951 ) 1,586 10,139 (3,159 ) Retirement plan actuarial losses (gains) (2,262 ) — (2,512 ) — Other (6,282 ) 80 (5,041 ) (13 ) Changes in operating assets and liabilities Accounts receivable (11,055 ) 32,884 (65,266 ) 30,191 Inventories (5,974 ) 20,240 11,127 6,395 Prepayments and other assets 39,248 (34,398 ) 61,438 (63,982 ) Accounts payable and other liabilities (10,657 ) 28,513 (63,666 ) 3,999 Deferred revenue and customer advances 885 (14,579 ) 3,624 (49,517 ) Retirement plans contributions (1,395 ) (1,216 ) (4,169 ) (3,698 ) Income taxes (21,520 ) (29,069 ) (18,898 ) (42,683 ) Net cash provided by operating activities 166,271 174,347 389,619 336,451 Cash flows from investing activities: Purchases of property, plant and equipment (51,841 ) (34,604 ) (140,710 ) (115,306 ) Purchases of marketable securities (7,340 ) (38,768 ) (35,097 ) (137,786 ) Purchases of investment in a business (2,407 ) — (527,060 ) — Issuance of convertible loan — (5,000 ) — (5,000 ) Proceeds from maturities of marketable securities 6,305 49,450 33,163 71,447 Proceeds from the sale of a business, net of cash and cash equivalents sold 3,176 — 90,348 — Proceeds from sales of marketable securities 2,311 1,386 23,600 36,963 Proceeds from life insurance — — 873 460 Net cash used for investing activities (49,796 ) (27,536 ) (554,883 ) (149,222 ) Cash flows from financing activities: Repurchase of common stock (24,747 ) (118,647 ) (55,053 ) (346,492 ) Dividend payments (19,566 ) (16,897 ) (56,936 ) (51,081 ) Payments related to net settlement of employee stock compensation awards (399 ) (278 ) (13,833 ) (20,586 ) Payments of borrowings on revolving credit facility — — (185,000 ) — Payments of convertible debt principal — (9,277 ) — (26,735 ) Proceeds from borrowings on revolving credit facility — — 185,000 — Issuance of common stock under stock purchase and stock option plans 15,429 17,485 37,265 34,084 Net cash used for financing activities (29,283 ) (127,614 ) (88,557 ) (410,810 ) Effects of exchange rate changes on cash and cash equivalents 940 4,556 6,286 5,769 Increase (decrease) in cash and cash equivalents 88,132 23,753 (247,535 ) (217,812 ) Cash and cash equivalents at beginning of period 421,904 613,208 757,571 854,773 Cash and cash equivalents at end of period $ 510,036 $ 636,961 $ 510,036 $ 636,961 -------------------------------------------------------------------------------- Page 8 GAAP to Non-GAAP Earnings Reconciliation (In millions, except per share amounts) Quarter Ended September 29, % of Net June 30, % of Net October 1, % of Net 2024 Revenues 2024 Revenues 2023 Revenues Net revenues $ 737.3 $ 729.9 $ 703.7 Gross profit - GAAP 436.5 59.2 % 425.8 58.3 % 398.3 56.6 % Legal settlement (1) 3.6 0.5 % — — — — Gross profit - non-GAAP 440.1 59.7 % 425.8 58.3 % 398.3 56.6 % Income from operations - GAAP 152.1 20.6 % 210.4 28.8 % 144.0 20.5 % Acquired intangible assets amortization 4.7 0.6 % 4.7 0.6 % 4.7 0.7 % Restructuring and other (2) 4.6 0.6 % 2.0 0.3 % 6.9 1.0 % Legal settlement (1) 3.6 0.5 % — — — — Gain on sale of business (3) — — (57.5 ) -7.9 % — — Income from operations - non-GAAP $ 165.0 22.4 % $ 159.6 21.9 % $ 155.6 22.1 % Net Income Net Income Net Income per Common Share per Common Share per Common Share September 29, % of Net June 30, % of Net October 1, % of Net 2024 Revenues Basic Diluted 2024 Revenues Basic Diluted 2023 Revenues Basic Diluted Net income - GAAP $ 145.6 19.7 % $ 0.89 $ 0.89 $ 186.3 25.5 % $ 1.18 $ 1.14 $ 128.1 18.2 % $ 0.83 $ 0.78 Acquired intangible assets amortization 4.7 0.6 % 0.03 0.03 4.7 0.6 % 0.03 0.03 4.7 0.7 % 0.03 0.03 Restructuring and other (2) 4.6 0.6 % 0.03 0.03 2.0 0.3 % 0.01 0.01 6.9 1.0 % 0.04 0.04 Legal settlement (1) 3.6 0.5 % 0.02 0.02 — — — — — — — — Amortization of equity method investment 2.4 0.3 % 0.01 0.01 — — — — — — — — Loss (gain) on foreign exchange option — — — — (4.2 ) -0.6 % (0.03 ) (0.03 ) — — — — Gain on sale of business (3) — — — — (57.5 ) -7.9 % (0.36 ) (0.35 ) — — — — Pension mark-to-market adjustment (4) (2.3 ) -0.3 % (0.01 ) (0.01 ) (0.3 ) 0.0 % (0.00 ) (0.00 ) 0.1 0.0 % 0.00 0.00 Exclude discrete tax adjustments (8.9 ) -1.2 % (0.05 ) (0.05 ) 10.5 1.4 % 0.07 0.06 (4.8 ) -0.7 % (0.03 ) (0.03 ) Non-GAAP tax adjustments (2.1 ) -0.3 % (0.01 ) (0.01 ) (1.5 ) -0.2 % (0.01 ) (0.01 ) (3.5 ) -0.5 % (0.02 ) (0.02 ) Net income - non-GAAP $ 147.6 20.0 % $ 0.91 $ 0.90 $ 140.0 19.2 % $ 0.89 $ 0.86 $ 131.5 18.7 % $ 0.86 $ 0.80 GAAP and non-GAAP weighted average common shares - basic 163.0 157.8 153.8 GAAP weighted average common shares - diluted (6) 164.3 163.5 164.1 Exclude dilutive shares related to convertible note transaction — — (0.6 ) Non-GAAP weighted average common shares - diluted 164.3 163.5 163.4 -------------------------------------------------------------------------------- Page 9 (1) For the three months ended September 29, 2024, legal settlement includes charges for a settlement following a judgment against the Company for infringement of expired patents. (2) Restructuring and other consists of: Quarter Ended September 29, June 30, October 1, 2024 2024 2023 Employee severance $ 1.3 $ 2.0 $ 4.7 Contract termination — — 1.5 Other 3.3 — 0.6 $ 4.6 $ 2.0 $ 6.9 (3) On May 27, 2024, Teradyne sold DIS, a component of the Semiconductor Test segment, to Technoprobe, for $85.0 million, net of cash and cash equivalents sold and a working capital adjustment. (4) For the quarters ended September 29, 2024, June 30, 2024 and October 1, 2023, adjustments to exclude actuarial gains and losses, respectively, recognized under GAAP in accordance with Teradyne’s mark-to-market pension accounting. (5) For the quarters ended September 29, 2024, June 30, 2024, and October 1, 2023, non-GAAP weighted average diluted common shares included 0.5 million, 4.9 million and 9.2 million shares, respectively, from the convertible note hedge transaction. -------------------------------------------------------------------------------- Page 10 Nine Months Ended September 29, % of Net October 1, % of Net 2024 Revenues 2023 Revenues Net Revenues $ 2,067.0 $ 2,005.7 Gross profit - GAAP 1,201.6 58.1 % 1,157.2 57.7 % Legal settlement (1) 3.6 0.2 % — — Gross profit - non-GAAP 1,205.2 58.3 % 1,157.2 57.7 % Income from operations - GAAP 440.2 21.3 % 376.7 18.8 % Acquired intangible assets amortization 14.1 0.7 % 14.3 0.7 % Restructuring and other (2) 11.0 0.5 % 15.3 0.8 % Legal settlement (1) 3.6 0.2 % — — Equity modification charge (3) 1.7 0.1 % 5.9 0.3 % Loss (gain) on sale of business (4) (57.5 ) -2.8 % — — Income from operations - non-GAAP $ 413.1 20.0 % $ 412.2 20.6 % Net Income Net Income per Common Share per Common Share September 29, % of Net October 1, % of Net 2024 Revenues Basic Diluted 2023 Revenues Basic Diluted Net income - GAAP $ 396.1 19.2 % $ 2.51 $ 2.42 $ 331.7 16.5 % $ 2.14 $ 2.01 Acquired intangible assets amortization 14.1 0.7 % 0.09 0.09 14.3 0.7 % 0.09 0.09 Restructuring and other (2) 11.0 0.5 % 0.07 0.07 15.3 0.8 % 0.10 0.09 Loss (gain) on foreign exchange option 9.8 0.5 % 0.06 0.06 — — — — Legal settlement (1) 3.6 0.2 % 0.02 0.02 — — — — Amortization of equity method investment 2.4 0.1 % 0.02 0.01 — — — — Equity modification charge (3) 1.7 0.1 % 0.01 0.01 5.9 0.3 % 0.04 0.04 Pension mark-to-market adjustment (5) (2.5 ) -0.1 % (0.02 ) (0.02 ) 0.1 0.0 % 0.00 0.00 Loss (gain) on sale of business (4) (57.5 ) -2.8 % (0.36 ) (0.35 ) — — — — Exclude discrete tax adjustments (0.7 ) 0.0 % (0.00 ) (0.00 ) (6.7 ) -0.3 % (0.04 ) (0.04 ) Non-GAAP tax adjustments (7.9 ) -0.4 % (0.05 ) (0.05 ) (8.8 ) -0.4 % (0.06 ) (0.05 ) Convertible share adjustment (6) — — — — — — — 0.01 Net income - non-GAAP $ 370.1 17.9 % $ 2.34 $ 2.27 $ 351.8 17.5 % $ 2.27 $ 2.14 GAAP and non-GAAP weighted average common shares - basic 158.0 154.8 GAAP weighted average common shares - diluted (6) 163.4 165.0 Exclude dilutive shares from convertible note — (0.8 ) Non-GAAP weighted average common shares - diluted 163.4 164.2 -------------------------------------------------------------------------------- Page 11 (1) For the nine months ended September 29, 2024, a legal settlement includes charges for a settlement following a judgment against the Company for infringement of expired patents. (2) Restructuring and other consists of: Nine Months Ended September 29, October 1, 2024 2023 Employee severance $ 5.3 $ 11.8 Acquisition and divestiture related expenses 2.2 — Contract termination — 1.5 Other 3.5 1.9 $ 11.0 $ 15.3 (3) For the nine months ended September 29, 2024, selling and administrative expenses included an equity charge of $1.7 million for the modification of Teradyne’s executives' retirement agreements. For the nine months ended October 1, 2023, selling and administrative expenses included an equity charge of $5.9 million for the modification of Teradyne’s retired CEO’s outstanding equity awards in connection with his February 1, 2023, retirement. (4) On May 27, 2024, Teradyne sold DIS, a component of the Semiconductor Test segment, to Technoprobe, for $85.0 million, net of cash and cash equivalents sold and a working capital adjustment. (5) For the nine months ended September 29, 2024, and October 1, 2023, adjustments to exclude actuarial gains and losses, respectively, recognized under GAAP in accordance with Teradyne’s mark-to-market pension accounting. (6) For the nine months ended September 29, 2024 and October 1, 2023, non-GAAP weighted average diluted common shares included 4.8 million and 9.0 million shares, respectively, from the convertible note hedge transaction. -------------------------------------------------------------------------------- Page 12 GAAP to Non-GAAP Reconciliation of Fourth Quarter 2024 guidance: GAAP and non-GAAP fourth quarter revenue guidance: $710 million to $760 million GAAP net income per diluted share $ 0.73 $ 0.91 Exclude acquired intangible assets amortization 0.03 0.03 Exclude equity method investment amortization 0.05 0.05 Non-GAAP tax adjustments (0.01 ) (0.01 ) Non-GAAP net income per diluted share $ 0.80 $ 0.97 For press releases and other information of interest to investors, please visit Teradyne’s homepage at http://www.teradyne.com. Contact: Teradyne, Inc. Traci Tsuchiguchi 978-370-2444 Vice President of Corporate Relations --------------------------------------------------------------------------------