01—Abstract
Summary
Summary of the 10-K filed February 23, 2022. Cited figures are marked; the original filing is the authoritative source.
Teradyne, Inc.'s 2021 10-K filing reveals a strong performance in its test businesses, particularly Semiconductor Test, driven by increased demand for high-performance processors and industrial/automotive devices.
Revenue growth was also observed in System Test and Wireless Test segments. The Industrial Automation segment saw significant growth, driven by demand for collaborative robots and autonomous mobile robots. Despite a strong overall revenue increase of $581.4 million to $3,702.9 milliona, the company anticipates a slowdown in its Semiconductor Test business for 2022 due to a technology transition in a key end-market, with expectations for acceleration in 2023 driven by 3-nanometer technology adoption.
Financially, Teradyne demonstrated robust profitability, with gross profit increasing by 2.4 percentage points to 59.6% of revenues, attributed to a favorable product mix and operating leverage. The company continued to return capital to shareholders through repurchases and dividends, repurchasing $600 millionb in common stock in 2021 and intending to repurchase at least $750 million in 2022. The company ended the year with a solid cash position of $1,122.2 million, demonstrating financial stability amidst ongoing global supply chain challenges, including semiconductor shortages.
02—Key points
Key Highlights
- Teradyne reported a 18.6% year-over-year revenue increase, reaching $3.7 billion, driven by strong performance in its Semiconductor Test and Industrial Automation segments.
- Gross profit margin improved by 2.4 percentage points to 59.6% in 2021, indicating enhanced operational efficiency and favorable product mix.
- The Semiconductor Test segment, the largest revenue contributor (71% of total), saw a 16.9% revenue increase, primarily due to demand for high-performance compute processors and automotive/industrial devices.
- The Industrial Automation segment experienced substantial growth of 34.4%, driven by increased demand for collaborative robotic arms and autonomous mobile robots.
- The company repurchased $600 million of its common stock in 2021 and announced an intention to repurchase at least $750 million in 2022, underscoring its commitment to returning capital to shareholders.
- Teradyne anticipates a temporary slowdown in its Semiconductor Test business in 2022 due to a technology transition, with an expected recovery and acceleration in 2023.
- The company maintained a strong liquidity position with $1.1 billion in cash and cash equivalents as of December 31, 2021.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Teradyne, Inc kept $0.27.
- Revenue$3.70B100.0%
- Cost of revenue−$1.50B40.4%
- Gross profit$2.21B59.6%
- Operating costs−$1.01B27.2%
- Operating income$1.20B32.4%
- Interest, other & tax−$186.1M5.0%
- Net income$1.01B27.4%
Where FY2021 revenue went
$3.70B- Cost of revenue: $1.50B, 40% of revenue
- Net income: $1.01B, 27% of revenue
- SG&A: $547.6M, 15% of revenue
- Other operating costs: $458.4M, 12% of revenue
- Interest, other & tax: $186.1M, 5.0% of revenue
Kept 27% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 23, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $3.70B$3.12B | +18.6% |
| Cost of Revenue | $1.50B$1.34B | +12.0% |
| Gross Profit | $2.21B$1.79B | +23.6% |
| SG&A Expenses | $547.56M$464.77M | +17.8% |
| Operating Expenses | $1.01B$857.33M | +17.3% |
| Operating Income | $1.20B$928.41M | +29.3% |
| Interest Expense | $17.82M$24.18M | −26.3% |
| Net Income | $1.01B$784.15M | +29.4% |
| EPS (Basic) | $6.15$4.72 | +30.3% |
| EPS (Diluted) | $5.53$4.28 | +29.2% |
| Shares Outstanding (Basic) | 164.96M166.12M | −0.7% |
| Shares Outstanding (Diluted) | 183.63M183.04M | +0.3% |
05—Questions
Frequently Asked Questions
What is Teradyne's primary business and how is it segmented?
Teradyne is a global supplier of automation equipment for test and industrial applications. Its business is segmented into four main areas: Semiconductor Test, System Test, Wireless Test, and Industrial Automation. The Semiconductor Test segment provides systems for testing semiconductors used in various industries. System Test includes products for storage, system-level, defense/aerospace, and production board testing. Wireless Test focuses on solutions for testing wireless devices and modules, while Industrial Automation offers collaborative robots and autonomous mobile robots for manufacturing and logistics.
What were the key drivers of Teradyne's revenue growth in 2021?
Teradyne's revenue growth in 2021 was primarily driven by increased demand in its test businesses, specifically higher tester sales in the Semiconductor Test segment for high-performance compute processors, industrial, and automotive devices. The System Test segment saw growth due to elevated sales in Storage Test and Production Board Test. The Industrial Automation segment experienced robust growth due to increased demand for collaborative robotic arms and autonomous mobile robots. Additionally, the Wireless Test segment benefited from higher Wi-Fi tester sales and demand for ultra-wide band wireless test.
What is Teradyne's outlook for its Semiconductor Test business in 2022 and beyond?
Teradyne expects lower demand in its Semiconductor Test business for 2022 due to a slower technology transition in one of its largest end-markets. However, the company anticipates this demand to accelerate in 2023 with the expected ramp-up in volume production of semiconductor devices using 3-nanometer manufacturing technology.
How is Teradyne returning capital to its shareholders?
Teradyne is returning capital to shareholders through a combination of stock repurchases and dividends. In 2021, the company repurchased $600 million of its common stock and paid quarterly cash dividends. Teradyne intends to continue these capital allocation strategies, with a stated intention to repurchase a minimum of $750 million in common stock in 2022.
06—Continue