01—Abstract
Summary
Summary of the 10-Q filed May 3, 2024. Cited figures are marked; the original filing is the authoritative source.
Teradyne, Inc. reported total revenues of $599.8 milliona for the first quarter of 2024, a decrease of 2.9% compared to $617.5 million in the prior year period.
This decline was primarily driven by a significant drop in Wireless Test revenues, down 36.4%, and a slight decrease in Semiconductor Test revenues. The company's net income for the quarter was $64.2 millionb, or $0.40 per diluted share, compared to $83.5 million, or $0.50 per diluted share, in the first quarter of 2023. This performance reflects a challenging market environment, particularly in the mobility sector, although artificial intelligence applications provided a boost to Semiconductor Test performance.
Despite the revenue dip, Teradyne maintained a strong gross profit margin of 56.6%c. The company is actively managing its operating expenses, with a slight decrease in Selling and Administrative and Engineering and Development costs.
Teradyne is also progressing with its strategic partnership with Technoprobe S.p.A., with the transaction expected to close in the second quarter of 2024. The company continues to return capital to shareholders through dividends and share repurchases, demonstrating a commitment to shareholder value while navigating market fluctuations.
02—Key points
Key Highlights
- Total revenues decreased by 2.9% year-over-year to $599.8 million in Q1 2024.
- Net income decreased to $64.2 million ($0.40/share) in Q1 2024 from $83.5 million ($0.50/share) in Q1 2023.
- Wireless Test revenue saw a significant decline of 36.4% compared to the prior year period.
- Semiconductor Test revenue showed resilience, driven by AI applications, offsetting weakness in mobility.
- Gross profit margin remained strong at 56.6%, although down slightly from 57.7% in the prior year.
- The company repurchased $22.1 million of common stock in Q1 2024 and paid $18.4 million in dividends.
- The strategic partnership and acquisition of a 10% equity investment in Technoprobe is on track for closing in Q2 2024.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2024, Teradyne, Inc kept $0.11.
- Revenue$599.8M100.0%
- Cost of revenue−$260.5M43.4%
- Gross profit$339.3M56.6%
- Operating costs−$261.5M43.6%
- Operating income$77.8M13.0%
- Interest, other & tax−$13.6M2.3%
- Net income$64.2M10.7%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed May 3, 2024Financial Statements
| Revenue | $599.82M |
| Cost of Revenue | $260.54M |
| Gross Profit | $339.28M |
| SG&A Expenses | $149.19M |
| Operating Expenses | $261.51M |
| Operating Income | $77.77M |
| Interest Expense | $661K |
| Net Income | $64.20M |
| EPS (Basic) | $0.42 |
| EPS (Diluted) | $0.40 |
| Shares Outstanding (Basic) | 153.05M |
| Shares Outstanding (Diluted) | 162.35M |
05—Questions
Frequently Asked Questions
What drove the decrease in Teradyne's revenues in the first quarter of 2024?
Teradyne's total revenues decreased by 2.9% to $599.8 million in the first quarter of 2024 compared to the same period in 2023. The primary drivers for this decline were a significant decrease of 36.4% in Wireless Test revenues and a slight decrease in Semiconductor Test revenues, though this was partially offset by AI-driven demand in Memory Test. The mobility test market also continues to experience weak demand.
How did Teradyne manage its expenses in the quarter?
Teradyne demonstrated effective cost management. Selling and administrative expenses decreased slightly by $1.8 million, and engineering and development expenses decreased by $2.6 million, primarily due to lower spending in the Robotics segment and Semiconductor Test, respectively. The company also recorded $4.2 million in restructuring and other charges, including acquisition and divestiture costs related to the Technoprobe transaction and severance charges.
What is the status of the Technoprobe partnership and investment?
Teradyne announced a strategic partnership with Technoprobe S.p.A. on November 7, 2023, which includes Teradyne investing 481.0 million Euros for a 10% equity stake and Technoprobe acquiring Teradyne's Device Interface Solutions (DIS) business for $85.0 million. This transaction is expected to close in the second quarter of 2024, subject to regulatory approvals.
How is Teradyne returning capital to shareholders?
Teradyne continued its commitment to returning capital to shareholders in the first quarter of 2024. The company repurchased approximately $22.1 million of its common stock and declared a quarterly cash dividend of $0.12 per share, resulting in $18.4 million in dividend payments. The company intends to repurchase up to $90.0 million of its common stock in 2024, subject to market conditions.
06—Continue