01—Abstract
Summary
Summary of the 10-Q filed May 1, 2026. Cited figures are marked; the original filing is the authoritative source.
Teradyne, Inc. (TER) reported a significant increase in revenue and net income for the quarter ended March 29, 2026, compared to the prior year period.
Total revenues surged to $1.28 billiona from $685.7 million, primarily driven by exceptional performance in the Semiconductor Test segment, which saw revenues more than double year-over-year to $1.11 billion. This growth was largely attributed to robust demand for AI-related semiconductor testing solutions, particularly for High Bandwidth Memory (HBM) and DRAM. The company also experienced sequential revenue growth in its Robotics segment and a year-over-year increase in its Product Test segment.
Profitability also saw a substantial improvement, with net income rising to $398.9 millionb from $98.9 million in the prior year. Diluted earnings per share increased to $2.53 from $0.61. The company's gross profit margin remained strong at 60.9%.
Management highlighted strong execution, benefits from prior investments, and continued demand in key markets as drivers for these results. Recent strategic moves include the formation of a joint venture, MultiLane Test Products (MLTP), and the acquisition of TestInsight Ltd. to further strengthen its position in AI data center testing and semiconductor test development, respectively. Teradyne expects these initiatives, along with ongoing investments, to support continued performance throughout 2026.
02—Key points
Key Highlights
- Total revenues increased by 87% to $1.28 billion for the three months ended March 29, 2026, compared to $685.7 million for the same period in 2025.
- Net income more than quadrupled to $398.9 million, up from $98.9 million in the prior year's quarter.
- Diluted earnings per share (EPS) rose significantly to $2.53, compared to $0.61 in the prior year quarter.
- The Semiconductor Test segment was the primary growth driver, with revenues soaring 104.8% to $1.11 billion, fueled by AI-related demand.
- Gross profit margin improved slightly to 60.9% from 60.6% in the prior year, indicating strong operational efficiency.
- The company announced the formation of a joint venture, MultiLane Test Products (MLTP), and the acquisition of TestInsight Ltd. to expand its capabilities in AI data center testing and semiconductor test development.
- Cash provided by operating activities increased by 64.1% to $265.1 million, demonstrating strong cash generation.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Teradyne, Inc kept $0.31.
- Revenue$1.28B100.0%
- Cost of revenue−$501.5M39.1%
- Gross profit$780.9M60.9%
- Operating costs−$307.9M24.0%
- Operating income$473.0M36.9%
- Interest, other & tax−$74.1M5.8%
- Net income$398.9M31.1%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed May 1, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $1.28B$685.68M | +87.0% |
| Cost of Revenue | $501.55M$270.34M | +85.5% |
| Gross Profit | $780.95M$415.34M | +88.0% |
| SG&A Expenses | $166.74M$157.26M | +6.0% |
| Operating Expenses | $307.95M$294.53M | +4.6% |
| Operating Income | $473.00M$120.80M | +291.5% |
| Interest Expense | $3.15M$795K | +296.4% |
| Net Income | $398.91M$98.90M | +303.4% |
| EPS (Basic) | $2.55$0.61 | +318.0% |
| EPS (Diluted) | $2.53$0.61 | +314.8% |
| Shares Outstanding (Basic) | 156.41M161.50M | −3.2% |
| Shares Outstanding (Diluted) | 157.64M162.00M | −2.7% |
05—Questions
Frequently Asked Questions
What was the primary driver for Teradyne's significant revenue growth in the quarter?
The primary driver for Teradyne's significant revenue growth was the exceptional performance of its Semiconductor Test segment. Revenues in this segment more than doubled year-over-year, reaching $1.11 billion, driven by a surge in demand for AI-related semiconductor testing solutions, particularly for High Bandwidth Memory (HBM) and DRAM, supporting AI data center infrastructure.
How did the company's profitability change compared to the prior year?
Teradyne's profitability saw a substantial improvement. Net income increased significantly from $98.9 million in the first quarter of 2025 to $398.9 million in the first quarter of 2026. Correspondingly, diluted earnings per share (EPS) rose to $2.53 from $0.61.
What strategic initiatives did Teradyne undertake recently to bolster its market position?
Teradyne has recently undertaken two key strategic initiatives. First, they formed a joint venture called MultiLane Test Products (MLTP) with MultiLane to focus on test solutions for the AI Data Center equipment market. Second, they acquired TestInsight Ltd., a provider of semiconductor test development software, to enhance their capabilities in this area. These moves are aimed at strengthening Teradyne's position in high-growth markets, particularly those related to AI and advanced semiconductor testing.
What is the outlook for the company's liquidity and financial resources?
Teradyne reported strong cash flow from operations, generating $265.1 million in the current quarter, an increase from $161.6 million in the prior year. While the total cash, cash equivalents, and marketable securities decreased slightly to $394.0 million from $448.3 million, the company ended the quarter with no outstanding balance under its $750 million revolving credit facility. Management believes its current liquidity, along with the credit facility, will be sufficient to meet its working capital needs and dividend payments for at least the next twelve months. They also intend to extend the credit facility later in 2026.
06—Continue