10-QPeriod: Q2 FY2023

TERADYNE, INC Quarterly Report for Q2 Ended Apr 2, 2023

Filed May 5, 2023For Securities:TER

Summary

Teradyne, Inc. (TER) reported a decrease in revenue and net income for the first quarter of 2023 compared to the same period in 2022. Total revenues declined by 18.3% to $617.5 million, and net income fell by 48.4% to $83.5 million. This decline was primarily attributed to reduced demand in the Semiconductor Test and System Test segments, impacted by end-market slowdowns, particularly in high-performance compute, mobile applications, and memory testers, as well as a slower technology transition. The Robotics segment also experienced a revenue decrease. Despite the revenue challenges, the company maintained a strong gross profit margin of 57.7%. Teradyne ended the quarter with a solid liquidity position, reporting $649.2 million in cash and cash equivalents and marketable securities. The company also continued its capital allocation strategy, repurchasing $93.3 million in common stock and paying $17.2 million in dividends.

Financial Highlights

50 data points
Beta

Revenue

$617.53M

57.7% Gross Margin

Net Income

$83.53M

13.5% Net Margin

EPS (Diluted)

$0.50

Total Assets

$3.38B

Cash & Equivalents

$649.21M

Free Cash Flow

-$22.11M

Financial Statements
Beta
Revenue$617.53M
Cost of Revenue$261.11M
Gross Profit$356.42M
SG&A Expenses$150.96M
Operating Expenses$263.56M
Operating Income$92.86M
Interest Expense$987K
Net Income$83.53M
EPS (Basic)$0.54
EPS (Diluted)$0.50
Shares Outstanding (Basic)155.90M
Shares Outstanding (Diluted)166.31M

Key Highlights

  • 1Total revenues decreased by 18.3% year-over-year to $617.5 million in Q1 2023, driven by weakness in Semiconductor Test and System Test segments.
  • 2Net income decreased by 48.4% year-over-year to $83.5 million in Q1 2023.
  • 3Gross profit margin remained robust at 57.7%, though down from 60.2% in the prior year's quarter.
  • 4Cash and cash equivalents and marketable securities totaled $859.0 million at the end of the quarter, indicating strong liquidity.
  • 5The company repurchased $93.3 million of its common stock in Q1 2023, continuing its capital return to shareholders.
  • 6Operating expenses increased as a percentage of revenue, with Selling and Administrative expenses rising notably, partly due to executive retirement-related costs.
  • 7The Robotics segment experienced a revenue decline of 13.6% year-over-year, impacted by lower demand for collaborative robots and AMRs.

Frequently Asked Questions

The decrease in revenue was primarily driven by lower demand in the Semiconductor Test segment, specifically in high-performance compute, mobile applications, and memory testers, as well as a slower technology transition. The System Test segment also saw reduced sales in Storage Test and Defense/Aerospace. The Robotics segment experienced lower demand for collaborative robotic arms and autonomous mobile robots, and the Wireless Test segment saw a decrease in connectivity test products.

Teradyne reported a decrease in net income by 48.4% to $83.5 million. While the gross profit margin remained strong at 57.7%, it was a slight decrease from 60.2% in the prior year quarter. Operating expenses, particularly selling and administrative costs, increased as a percentage of revenue, partly due to costs associated with the former CEO's retirement.

Teradyne maintains a strong liquidity position. As of April 2, 2023, the company reported cash and cash equivalents and marketable securities totaling $859.0 million. This balance decreased from $1,005.2 million at the end of 2022, reflecting cash used in investing and financing activities, but remains substantial.

Teradyne is actively returning capital to shareholders. In the first quarter of 2023, the company repurchased approximately $93.3 million of its common stock under its new $2.0 billion repurchase program and paid $17.2 million in dividends. The company indicated it intends to repurchase up to $500.0 million of common stock in 2023, subject to market conditions.