TERADYNE, INC [TER] Filings

10-Q 1 ter-20240929.htm 10-Q 10-Q

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 September 29, 2024


☐	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, Massachusetts	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 October 28, 2024, was 162,861,462 shares.

TERADYNE, INC.

INDEX


		Page No.

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited):	1

	Condensed Consolidated Balance Sheets as of September 29, 2024, and December 31, 2023	1
	f
	Condensed Consolidated Statements of Operations for the Three and Nine Months ended September 29, 2024, and October 1, 2023	2

	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months ended September 29, 2024, and October 1, 2023	3

	Condensed Statements of Shareholders’ Equity for the Three and Nine Months Ended September 29, 2024, and October 1, 2023	4
	d
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 29, 2024, and October 1, 2023	5

	Notes to Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	40

Item 4.	Controls and Procedures	40

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	41

Item 1A.	Risk Factors	41

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42

Item 4.	Mine Safety Disclosures	42

Item 5.	Other Information	43

Item 6.	Exhibits	44

PART I

Item 1: Financial Statements

TERADYNE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	September 29, 2024			December 31, 2023
	(in thousands, except per share amount)
ASSETS
Current assets:
Cash and cash equivalents	$	510,036		$	757,571
Marketable securities		41,631			62,154
Accounts receivable, less allowance for credit losses of $1,972 and $1,988 at September 29, 2024 and December 31, 2023, respectively		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
Long-term assets held for sale		—			11,531
Total assets	$	3,769,728		$	3,486,824
LIABILITIES
Current 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 incomes taxes payable		24,596			44,331
Long-term liabilities held for sale		—			2,000
Total liabilities		867,186			960,927
Commitments and contingencies (Note R)
SHAREHOLDERS’ EQUITY
Common stock, $0.125 par value, 1,000,000 shares authorized; 162,959 and 152,698 shares issued and outstanding at September 29, 2024, and December 31, 2023, respectively		20,370			19,087
Additional paid-in capital		1,896,161			1,827,274
Accumulated other comprehensive loss		(4,028	)		(26,978	)
Retained earnings		990,039			706,514
Total shareholders’ equity		2,902,542			2,525,897
Total liabilities and shareholders’ equity	$	3,769,728		$	3,486,824

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, 2023, are an integral part of the condensed consolidated financial statements.

TERADYNE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	For the Three Months Ended						For the Nine Months Ended
	September 29, 2024			October 1, 2023			September 29, 2024			October 1, 2023
	(in thousands, except per share amount)						(in thousands, except per share amount)
Revenues:
Products	$	612,871		$	551,982		$	1,668,181		$	1,565,776
Services		124,427			151,750			398,815			439,923
Total revenues		737,298			703,732			2,066,996			2,005,699
Cost of revenues:
Cost of products		253,129			239,827			704,129			655,502
Cost of services		47,655			65,614			161,228			192,993
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)		300,784			305,441			865,357			848,495
Gross profit		436,514			398,291			1,201,639			1,157,204
Operating expenses:
Selling and administrative		157,649			138,330			461,307			434,979
Engineering and development		117,474			104,413			332,489			315,881
Acquired intangible assets amortization		4,748			4,720			14,108			14,348
Restructuring and other		4,578			6,856			11,018			15,251
Gain on sale of business		—			—			(57,486	)		—
Total operating expenses		284,449			254,319			761,436			780,459
Income from operations		152,065			143,972			440,203			376,745
Non-operating (income) expense:
Interest income		(5,076	)		(6,873	)		(19,658	)		(18,486	)
Interest expense		808			963			2,998			2,994
Other (income) expense, net		(2,651	)		5,602			5,574			6,470
Income before income taxes and equity in net earnings of affiliate		158,984			144,280			451,289			385,767
Income tax provision		12,260			16,164			54,095			54,069
Income before equity in net earnings of affiliate		146,724			128,116			397,194			331,698
Equity in net earnings of affiliate		(1,075	)		—			(1,075	)		—
Net income	$	145,649		$	128,116		$	396,119		$	331,698
Net income per common share:
Basic	$	0.89		$	0.83		$	2.51		$	2.14
Diluted	$	0.89		$	0.78		$	2.42		$	2.01
Weighted average common shares—basic		163,002			153,762			157,951			154,809
Weighted average common shares—diluted		164,253			164,050			163,357			165,037

TERADYNE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	For the Three Months Ended						For the Nine Months Ended
	September 29, 2024			October 1, 2023			September 29, 2024			October 1, 2023
	(in thousands)						(in thousands)
Net income	$	145,649		$	128,116		$	396,119		$	331,698
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment, net of tax of $0, $0, $0, and $0, respectively		37,838			(14,325	)		22,751			(2,073	)
Available-for-sale marketable securities:
Unrealized (losses) gains on marketable securities arising during period, net of tax of $609, $(731), $205, and $(408), respectively		2,507			(2,628	)		885			(903	)
Less: Reclassification adjustment for (gains) losses included in net income, net of tax of $(2), $0, $24, and $9, respectively		(7	)		—			86			33
		2,500			(2,628	)		971			(870	)
Cash flow hedges:
Unrealized (losses) gains arising during period, net of tax of $(73), $728, $285, and $1,816, respectively		(260	)		2,590			1,014			6,456
Less: Reclassification adjustment for (gains) losses included in net income, net of tax of $0, $(869), $(500) and $(441) respectively		—			(3,091	)		(1,780	)		(1,567	)
		(260	)		(501	)		(766	)		4,889
Defined benefit post-retirement plan:
Amortization of prior service credit, net of tax of $0, $0, $(1), and $(1), respectively		(2	)		(2	)		(6	)		(6	)
Other comprehensive income (loss)		40,076			(17,456	)		22,950			1,940
Comprehensive income	$	185,725		$	110,660		$	419,069		$	333,638

TERADYNE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)


	Shareholders' Equity
	Common Stock Shares			Common Stock Par Value			Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Total Shareholders’ Equity
	(in thousands)
For the Three Months Ended September 29, 2024
Balance, June 30, 2024		161,802		$	20,225		$	1,865,351		$	(44,104	)	$	889,340		$	2,730,812
Net issuance of common stock under stock-based plans		130			17			14,966									14,983
Stock-based compensation expense								15,999									15,999
Warrant exercises		1,223			153			(155	)								(2	)
Repurchase of common stock		(196	)		(25	)								(25,376	)		(25,401	)
Cash dividends ($0.12 per share)														(19,574	)		(19,574	)
Net income														145,649			145,649
Other comprehensive income (loss)											40,076						40,076
Balance, September 29, 2024		162,959		$	20,370		$	1,896,161		$	(4,028	)	$	990,039		$	2,902,542
For the Three Months Ended October 1, 2023
Balance, July 2, 2023		154,148		$	19,269		$	1,784,590		$	(30,472	)	$	661,496		$	2,434,883
Net issuance of common stock under stock-based plans		207			26			17,180									17,206
Stock-based compensation expense								14,367									14,367
Repurchase of common stock		(1,120	)		(141	)								(118,766	)		(118,907	)
Cash dividends ($0.11 per share)														(16,909	)		(16,909	)
Settlements of convertible notes		210			25			(25	)								—
Exercise of convertible notes hedge call options		(210	)		(25	)		25									—
Net income														128,116			128,116
Other comprehensive income (loss)											(17,456	)					(17,456	)
Balance, October 1, 2023		153,235		$	19,154		$	1,816,137		$	(47,928	)	$	653,937		$	2,441,300


	Shareholders' Equity
	Common Stock Shares		Common Stock Par Value		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)			Retained Earnings		Total Shareholders’ Equity
	(in thousands)
For the Nine Months Ended September 29, 2024
Balance, December 31, 2023		152,698	$	19,087	$	1,827,274	$	(26,978	)	$	706,514	$	2,525,897
Net issuance of common stock under stock-based plans		720		91		23,340							23,431
Stock-based compensation expense						46,817							46,817
Warrant exercises		10,036