• Revenue: $686 million for Q1, towards the high-end of guidance.
• Non-GAAP EPS: $0.75, above the high-end guide of $0.68.
• Non-GAAP Gross Margin: 60.6%, above guidance due to product mix.
• Non-GAAP Operating Expenses: $275 million, up year-over-year, but down sequentially.
• Non-GAAP Operating Profit: 20.5%.
• Semi Test Revenue: $543 million, with SoC at $406 million, Memory at $109 million, and IST at $27 million.
• Product Test Revenue: $74 million, down 4% year-over-year.
• Wireless Test Revenue: $29 million, up 20% year-over-year.
• Robotics Revenue: $69 million, declining both sequentially and year-over-year.
• Free Cash Flow: $98 million.
• Cash and Marketable Securities: $622 million at the end of the quarter.
• Q2 Sales Guidance: Expected between $610 million and $680 million.
• Q2 Gross Margin Guidance: Estimated at 56.5% to 57.5%.
• Q2 Non-GAAP EPS Guidance: Expected to be in the range of $0.41 to $0.64.
• Share Buyback Target: Increased from $400 million in 2025 to up to $1 billion through the end of 2026.

• Warning! GuruFocus has detected 4 Warning Signs with TER.

Release Date: April 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Teradyne Inc (NASDAQ:TER) delivered first quarter revenue towards the high end of their guidance range with gross margin and earnings per share above expectations.
• The company secured a significant HBM 4 performance test win with a major DRAM manufacturer, marking a milestone for their memory business.
• Teradyne's Robotics division received the largest order in its history from a global automotive manufacturer, indicating strong demand in the sector.
• The company is on track to close the acquisition of Quantifi Photonics, which supports their goal to establish a leadership position in silicon photonics test.
• Teradyne Inc (NASDAQ:TER) increased their share buyback target from $400 million to up to $1 billion through the end of 2026, reflecting confidence in their long-term plans and free cash flow generation.

Negative Points

• Visibility beyond the second quarter is very limited, and the company is not commenting on or reaffirming expectations beyond this period.
• Trade policy and customer uncertainty around end market demand have caused order pushouts, particularly affecting the auto and industrial segments.
• The wireless test end market for Teradyne's LitePoint business has been generally weak since 2023.
• Revenue in the Robotics division declined both sequentially and year-over-year, with an operating loss of $22 million.
• The impact of tariffs on end market demand remains a concern, with potential effects on mobile, automotive, and industrial end markets.

Q & A Highlights

Q: Greg, you mentioned tariff-related pushouts at your Analyst Day. Are you seeing any pull-ins, and which end verticals are affected? A: The pushouts are primarily from customers in the auto and industrial sectors. We haven't seen significant pull-ins or pushouts in mobile, but we're concerned about potential end market impacts that are yet to be seen. - Gregory Smith, CEO

Q: Can you provide an update on the HBM wafer assortment win? Is it with an existing customer? A: The HBM4 win is with a new customer where we didn't have existing HBM3 or 3E business. This involves a performance test at the wafer level for stacked HBM memory. - Gregory Smith, CEO

Q: How are you thinking about gross margin and OpEx for the full year given the uncertainty? A: We're not providing a full-year gross margin guide due to revenue mix uncertainty. For OpEx, we'll prioritize Semi Test, engineering, and go-to-market efforts, with robotics expected to decline year-over-year. - Sanjay Mehta, CFO

Q: Can you elaborate on the SLT wins and AI accelerators? A: We've won additional mobile sockets for 2025 and 2026. For AI accelerators, system-level testing is becoming essential due to higher failure rates in assemblies, and we've implemented this for a leading-edge AI accelerator. - Gregory Smith, CEO

Q: Have tariffs shifted international customers towards non-US competitors in the testing space? A: We haven't seen any competitive impact from tariffs. Customers haven't shifted to other vendors due to tariffs, and the market remains competitive. - Gregory Smith, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.