01—Abstract
Summary
Summary of the 10-K filed February 22, 2023. Cited figures are marked; the original filing is the authoritative source.
Teradyne, Inc. (TER) reported a challenging 2022, with revenues declining 15% year-over-year to $3.16 billiona.
This downturn was primarily driven by a significant slowdown in the Semiconductor Test segment, which saw demand drop in mobility and compute applications, exacerbated by inventory corrections and a slower technology transition in a key end-market. Despite the revenue headwinds, Teradyne demonstrated resilience and strategic progress. The company's Robotics segment continued its growth trajectory, increasing revenue by 7.2% to $403 millionb, driven by strong demand for collaborative robotic arms and autonomous mobile robots.
Teradyne is actively investing in its Robotics business, aiming for channel expansion and new product introductions to fuel future growth. The company also returned capital to shareholders through $752 millionc in share repurchases and $70 million in dividends in 2022, reflecting a commitment to shareholder value. Looking ahead, Teradyne anticipates a recovery in its Semiconductor Test business, driven by new process technologies (3nm and beyond) and increasing device complexity.
Management is focused on gaining market share in its test businesses and accelerating growth in robotics, while carefully balancing capital allocation. Supply chain constraints and inflationary pressures remain as potential challenges, though the company has taken steps to mitigate these risks.
02—Key points
Key Highlights
- 2022 revenues declined 15% to $3.16 billion, primarily due to a 21.3% drop in Semiconductor Test revenues caused by end-market slowdowns in mobility and compute.
- Robotics segment revenue grew 7.2% to $403 million, driven by strong demand for collaborative and autonomous mobile robots, with continued investment planned for growth.
- The company returned $752.1 million to shareholders through share repurchases and $69.7 million in dividends during 2022.
- Gross profit margin slightly decreased by 0.4 percentage points to 59.2%, impacted by higher service costs.
- Significant inventory provisions of $31.5 million were recorded, largely within the Semiconductor Test segment, reflecting revised demand forecasts.
- Teradyne is managing supply chain constraints and inflationary pressures, noting $20 million in unfulfilled test business revenue in 2022 due to these issues.
- The company expects demand in Semiconductor Test to recover in 2023, driven by new process technologies and increased device complexity.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Teradyne, Inc kept $0.23.
- Revenue$3.16B100.0%
- Cost of revenue−$1.29B40.8%
- Gross profit$1.87B59.2%
- Operating costs−$1.04B32.8%
- Operating income$831.9M26.4%
- Interest, other & tax−$116.4M3.7%
- Net income$715.5M22.7%
Where FY2022 revenue went
$3.16B- Cost of revenue: $1.29B, 41% of revenue
- Net income: $715.5M, 23% of revenue
- SG&A: $558.1M, 18% of revenue
- Other operating costs: $477.1M, 15% of revenue
- Interest, other & tax: $116.4M, 3.7% of revenue
Kept 23% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 22, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $3.16B$3.70B | −14.8% |
| Cost of Revenue | $1.29B$1.50B | −13.9% |
| Gross Profit | $1.87B$2.21B | −15.4% |
| SG&A Expenses | $558.10M$547.56M | +1.9% |
| Operating Expenses | $1.04B$1.01B | +2.9% |
| Operating Income | $831.94M$1.20B | −30.7% |
| Interest Expense | $3.72M$17.82M | −79.1% |
| Net Income | $715.50M$1.01B | −29.5% |
| EPS (Basic) | $4.52$6.15 | −26.5% |
| EPS (Diluted) | $4.22$5.53 | −23.7% |
| Shares Outstanding (Basic) | 158.43M164.96M | −4.0% |
| Shares Outstanding (Diluted) | 169.73M183.63M | −7.6% |
05—Questions
Frequently Asked Questions
What were the main drivers of Teradyne's revenue decline in 2022?
The primary driver was a significant slowdown in the Semiconductor Test segment, which experienced reduced demand in mobility and compute applications due to end-market weakness and a slower technology transition in a key market. This segment's revenue decreased by 21.3%.
How is Teradyne addressing supply chain constraints and inflation?
Teradyne is actively managing supply chain disruptions and inflationary pressures by investing in supply chain resiliency, securing inventory, sourcing from additional suppliers, and multi-sourcing components. The company also aims to pass on increased costs through price adjustments, though the ability to fully offset these is uncertain.
What is the outlook for Teradyne's Robotics segment?
Teradyne sees continued growth potential in its Robotics segment, with revenue increasing 7.2% in 2022. The company expects further growth in 2023 through sales channel expansion and new product introductions, driven by strong demand for collaborative robotic arms and autonomous mobile robots.
How is Teradyne returning capital to shareholders?
In 2022, Teradyne repurchased $752.1 million of its common stock and paid $69.7 million in dividends. The company has also authorized a new $2.0 billion share repurchase program and intends to repurchase up to $500 million in 2023, subject to market conditions.
06—Continue