Teradyne Reports Second Quarter 2023 Results

  • Revenue and earnings above the mid-point of Q2 guidance
  • Revenue of $684 million in Q2’23, down 19% from Q2’22
  • Returned $152 million to shareholders in share repurchases and dividends in Q2’23
    Q2’23       Q2’22       Q1’23  
Revenue (mil) $ 684     $ 841     $ 618  
GAAP EPS $ 0.73     $ 1.16     $ 0.50  
Non-GAAP EPS $ 0.79     $ 1.21     $ 0.55  
                       

NORTH READING, Mass., July 26, 2023 (GLOBE NEWSWIRE) — Teradyne, Inc. (NASDAQ: TER) reported revenue of $684 million for the second quarter of 2023 of which $475 million was in Semiconductor Test, $94 million in System Test, $44 million in Wireless Test and $72 million in Robotics. GAAP net income for the second quarter was $120.1 million or $0.73 per diluted share. On a non-GAAP basis, Teradyne’s net income in the second quarter was $129.0 million, or $0.79 per diluted share, which excluded restructuring and other charges, acquired intangible asset amortization, and included the related tax impact on non-GAAP adjustments.

“We delivered revenue at the high end of our guidance range with higher semiconductor test shipments which more than offset weaker robotics demand in the quarter while profits exceeded plan on higher gross margins,” said Teradyne CEO Greg Smith. “As we enter Q3, test demand for DRR5 and HBM memory devices for data center applications remains strong and SOC test demand for automotive applications is incrementally stronger. In robotics, we expect order rates to decline as customers navigate slowing global industrial activity and macro-economic headwinds.”

Guidance for the third quarter of 2023 is revenue of $650 million to $710 million, with GAAP net income of $0.57 to $0.77 per diluted share and non-GAAP net income of $0.61 to $0.81 per diluted share. Non-GAAP guidance excludes acquired intangible asset amortization, restructuring and other charges and includes the related tax impact on non-GAAP adjustments.

Webcast
A conference call to discuss the second quarter results, along with management’s business outlook, will follow at 8:30 a.m. ET, Thursday, July 27. Interested investors should access the webcast at http://investors.teradyne.com/events-presentations. Presentation materials will be available starting at 8:30 a.m. ET. A replay will also be available at the website.

Non-GAAP Results
In addition to disclosing results that are determined in accordance with GAAP, Teradyne also discloses non-GAAP results of operations that exclude certain income items and charges. These results are provided as a complement to results provided in accordance with GAAP. Non-GAAP income from operations and non-GAAP net income exclude acquired intangible assets amortization, restructuring and other, pension actuarial gains and losses, stock compensation modification expense, discrete income tax adjustments, and includes the related tax impact on non-GAAP adjustments. GAAP requires that these items be included in determining income from operations and net income. Non-GAAP income from operations, non-GAAP net income, non-GAAP income from operations as a percentage of revenue, non-GAAP net income as a percentage of revenue, and non-GAAP net income per share are non-GAAP performance measures presented to provide meaningful supplemental information regarding Teradyne’s baseline performance before gains, losses or other charges that may not be indicative of Teradyne’s current core business or future outlook. These non-GAAP performance measures are used to make operational decisions, to determine employee compensation, to forecast future operational results, and for comparison with Teradyne’s business plan, historical operating results and the operating results of Teradyne’s competitors. Non-GAAP diluted shares include the impact of Teradyne’s call option on its shares. Management believes each of these non-GAAP performance measures provides useful supplemental information for investors, allowing greater transparency to the information used by management in its operational decision making and in the review of Teradyne’s financial and operational performance, as well as facilitating meaningful comparisons of Teradyne’s results in the current period compared with those in prior and future periods. A reconciliation of each available GAAP to non-GAAP financial measure discussed in this press release is contained in the attached exhibits and on the Teradyne website at www.teradyne.com by clicking on “Investor Relations” and then selecting “Financials” and the “GAAP to Non-GAAP Reconciliation” link. The non-GAAP performance measures discussed in this press release may not be comparable to similarly titled measures used by other companies. The presentation of non-GAAP measures is not meant to be considered in isolation, as a substitute for, or superior to, financial measures or information provided in accordance with GAAP.

About Teradyne
Teradyne (NASDAQ:TER) test technology helps bring high-quality innovations such as smart devices, life-saving medical equipment and data storage systems to market, faster. Its advanced test solutions for semiconductors, electronic systems, wireless devices and more ensure that products perform as they were designed. Its robotics offerings include collaborative and mobile robots that help manufacturers of all sizes increase productivity, improve safety, and lower costs. In 2022, Teradyne had revenue of $3.2 billion and today employs over 6,500 people worldwide. For more information, visit teradyne.com. Teradyne® is a registered trademark of Teradyne, Inc., in the U.S. and other countries.

Safe Harbor Statement
This release contains forward-looking statements regarding Teradyne’s future business prospects, results of operations, market conditions, earnings per share, the impact of supply chain conditions on the business, customer sales expectations, the payment of a quarterly dividend, the repurchase of Teradyne common stock pursuant to a share repurchase program, the continued impact of the global COVID-19 pandemic, and the impact of U.S. and Chinese export and tariff laws, including regulations published by the U.S. Department of Commerce on October 7, 2022. Such statements are based on the current assumptions and expectations of Teradyne’s management and are neither promises nor guarantees of future performance, events, customer sales, supply chain conditions or improvements, earnings per share, use of cash, payment of dividends, repurchases of common stock, payment of the senior convertible notes, the impact of the COVID-19 pandemic, the impact of any tariffs or export controls imposed by the U.S. or China, compliance with trade protection measures or export restrictions, the impact of U.S. Department of Commerce or other government agency regulations relating to Huawei, HiSilicon and other customers or potential customers, the impact of U.S. Department of Commerce export control regulations for certain U.S. products and technology sold to military end users or for military end-use in China, or the impact of regulations published by the U.S. Department of Commerce relating to the export of semiconductors and semiconductor manufacturing equipment destined to certain end users and for certain end uses in China. There can be no assurance that management’s estimates of Teradyne’s future results or other forward-looking statements will be achieved. Specifically, Teradyne’s 2026 earnings model is aspirational and includes many assumptions. There can be no assurance that these assumptions will be accurate or that model results will be achieved. As set forth below, there are many factors that could cause our 2026 earnings model and actual results to differ materially from those presently expected. Additionally, the current dividend and share repurchase programs may be modified, suspended or discontinued at any time.

On October 7, 2022, the U.S. Department of Commerce published regulations restricting the export to China of advanced semiconductors, supercomputer technology, equipment for the manufacturing of advanced semiconductors and components and technology for the manufacturing in China of certain semiconductor manufacturing equipment. The restrictions on the sale of semiconductor testers in China to test certain advanced semiconductors impact Teradyne’s sales to certain companies in China. Several multinational companies manufacturing these advanced semiconductors in China have obtained one-year licenses allowing suppliers such as Teradyne to continue to provide testers to the facilities operated by these companies. We expect that other companies manufacturing advanced semiconductors in China will not receive licenses, thereby restricting Teradyne’s ability to provide testers to the facilities operated by these companies that do not receive a license. The Company has filed license applications to sell to and support certain customers in China for certain end uses. Several applications have been denied or granted with limitations so that our business will continue to be impacted by the regulation restrictions. In addition to the specific restrictions impacting Teradyne’s business, the regulations may have an adverse impact on certain actual or potential customers and on the global semiconductor industry. To the extent the regulations impact actual and potential customers or disrupt the global semiconductor industry, Teradyne’s business and revenues will be adversely impacted.

The Company also has determined that the restrictions on the export of certain US origin components and technology for use in the development and production in China of certain semiconductor manufacturing equipment impact its manufacturing and development operations in China. Teradyne received a temporary authorization from the Department of Commerce allowing the Company to continue its manufacturing and development operations. On May 25, 2023, the Department of Commerce issued an export license to replace this temporary authorization. The license is effective through May 31, 2027.  

Important factors that could cause actual results, the 2026 earnings model, earnings per share, use of cash, dividend payments, repurchases of common stock, or payment of the senior convertible notes to differ materially from those presently expected include: conditions affecting the markets in which Teradyne operates; decreased or delayed product demand from one or more significant customers; development, delivery and acceptance of new products; the ability to grow the Robotics business; increased research and development spending; deterioration of Teradyne’s financial condition; the continued impact of the COVID-19 pandemic and related government responses on the market and demand for Teradyne’s products, on its contract manufacturers and supply chain, and on its workforce; the impact of a supply shortage on our supply chain and contract manufacturers; the consummation and success of any mergers or acquisitions; unexpected cash needs; insufficient cash flow to make required payments and pay the principal amount on the senior convertible notes; the business judgment of the board of directors that a declaration of a dividend or the repurchase of common stock is not in the Company’s best interests; additional U.S. or global tax regulations or guidance; the impact of any tariffs or export controls imposed by the U.S. or China; compliance with trade protection measures or export restrictions; the impact of U.S. Department of Commerce or other government agency regulations relating to Huawei, HiSilicon and other customers or potential customers; the impact of U.S. Department Commerce export control regulations for certain U.S. products and technology sold to military end users or for military end-use in China; the impact of regulations published by the U.S. Department of Commerce relating to semiconductors and semiconductor manufacturing equipment destined for certain end uses in China; and other events, factors and risks disclosed in filings with the SEC, including, but not limited to, the “Risk Factors” section of Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and Quarterly Report on Form 10-Q for the fiscal quarter ended April 2, 2023. The forward-looking statements provided by Teradyne in this press release represent management’s views as of the date of this release. Teradyne anticipates that subsequent events and developments may cause management’s views to change. However, while Teradyne may elect to update these forward-looking statements at some point in the future, Teradyne specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Teradyne’s views as of any date subsequent to the date of this release.

TERADYNE, INC. REPORT FOR SECOND FISCAL QUARTER OF 2023
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 

      Quarter Ended   Six Months Ended
      July 2,
2023
  April 2,
2023
  July 3,
2022
  July 2,
2023
  July 3,
2022
                       
Net revenues   $ 684,437     $ 617,529     $ 840,766     $ 1,301,966     $ 1,596,136  
Cost of revenues (exclusive of acquired intangible assets amortization shown separately below) (1)     281,945       261,109       334,377       543,054       634,814  
                       
Gross profit     402,492       356,420       506,389       758,912       961,322  
                       
Operating expenses:                    
Selling and administrative (2)     145,695       150,955       139,533       296,650       279,718  
Engineering and development     105,706       105,762       111,951       211,468       220,067  
Acquired intangible assets amortization     4,825       4,802       4,871       9,627       9,934  
Restructuring and other (3)     6,358       2,037       2,044       8,395       17,758  
Operating expenses     262,584       263,556       258,399       526,140       527,477  
                       
Income from operations     139,908       92,864       247,990       232,772       433,845  
                       
Interest and other (income) expense (4)     (4,494 )     (4,220 )     9,398       (8,714 )     14,894  
                       
Income before income taxes     144,402       97,084       238,592       241,486       418,951  
Income tax provision     24,352       13,553       40,805       37,905       59,236  
Net income   $ 120,050     $ 83,531     $ 197,787     $ 203,581     $ 359,715  
                       
Net income per common share:                    
Basic   $ 0.78     $ 0.54     $ 1.24     $ 1.31     $ 2.24  
Diluted   $ 0.73     $ 0.50     $ 1.16     $ 1.23     $ 2.07  
                       
Weighted average common shares – basic     154,760       155,904       159,563       155,332       160,805  
                       
Weighted average common shares – diluted (5)     164,751       166,308       171,159       165,530       173,367  
                       
Cash dividend declared per common share   $ 0.11     $ 0.11     $ 0.11     $ 0.22     $ 0.22  
                       
                       
(1) Cost of revenues includes:   Quarter Ended   Six Months Ended
      July 2,
2023
  April 2,
2023
  July 3,
2022
  July 2,
2023
  July 3,
2022
  Provision for excess and obsolete inventory   $ 5,731     $ 5,610     $ 5,105     $ 11,341     $ 6,695  
  Sale of previously written down inventory     (2,463 )     (385 )     (449 )     (2,848 )     (711 )
      $ 3,268     $ 5,225     $ 4,656     $ 8,493     $ 5,984  
                       
(2) For the quarter ended April 2, 2023 and the six months ended July 2, 2023, selling and administrative expenses included an equity charge of $5.9 million for the modification of Teradyne’s retired CEO’s outstanding equity awards in connection with his February 1, 2023 retirement.
                       
(3) Restructuring and other consists of:   Quarter Ended   Six Months Ended
      July 2,
2023
  April 2,
2023
  July 3,
2022
  July 2,
2023
  July 3,
2022
  Employee severance   $ 5,140     $ 2,037     $ 383     $ 7,177     $ 934  
  Litigation settlement                             14,700  
  Acquisition related expenses and compensation                             (201 )
  Other     1,218             1,661       1,218       2,325  
      $ 6,358     $ 2,037     $ 2,044     $ 8,395     $ 17,758  
                       
(4) Interest and other includes:   Quarter Ended   Six Months Ended
      July 2,
2023
  April 2,
2023
  July 3,
2022
  July 2,
2023
  July 3,
2022
  Pension actuarial losses   $ 53     $     $     $ 53     $  
      $ 53     $     $     $ 53     $  
                       
(5) Under GAAP, when calculating diluted earnings per share, convertible debt must be assumed to have converted if the effect on EPS would be dilutive. Diluted shares assume the conversion of the convertible debt as the effect would be dilutive. Accordingly, for the quarters ended July 2, 2023, April 2, 2023 and July 3, 2022, 0.7 million, 0.9 million and 1.9 million shares, respectively, have been included in diluted shares. For the six months ended July 2, 2023 and July 3, 2022, 0.8 million and 2.2 million shares, respectively, have been included in diluted shares. For the quarters ended July 2, 2023, April 2, 2023 and July 3, 2022, diluted shares also included 8.9 million, 9.0 million and 9.0 million shares, respectively, from the convertible note hedge transaction. For the six months ended July 2, 2023 and July 3, 2022, diluted shares included 8.9 million and 9.5 million shares, respectively, from the convertible note hedge transaction.
   

CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)        
         
    July 2,
2023
  December 31,
2022
Assets          
Cash and cash equivalents   $ 613,208     $ 854,773  
Marketable securities     95,199       39,612  
Accounts receivable, net     493,234       491,145  
Inventories, net     347,295       325,019  
Prepayments     560,682       532,962  
Other current assets     14,222       14,404  
Total current assets     2,123,840       2,257,915  
         
Property, plant and equipment, net     437,077       418,683  
Operating lease right-of-use assets, net     75,889       73,734  
Marketable securities     104,685       110,777  
Deferred tax assets     152,471       142,784  
Retirement plans assets     11,514       11,761  
Other assets     32,699       28,925  
Acquired intangible assets, net     44,611       53,478  
Goodwill     412,110       403,195  
Total assets   $ 3,394,896     $ 3,501,252  
         
Liabilities         
Accounts payable   $ 153,157     $ 139,722  
Accrued employees’ compensation and withholdings     163,653       212,266  
Deferred revenue and customer advances     120,085       148,285  
Other accrued liabilities     114,435       112,271  
Operating lease liabilities     20,212       18,594  
Income taxes payable     65,437       65,010  
Current debt     32,806       50,115  
         
Total current liabilities     669,785       746,263  
         
Retirement plans liabilities     124,040       116,005  
Long-term deferred revenue and customer advances     38,999       45,131  
Long-term other accrued liabilities     16,475       15,981  
Deferred tax liabilities     1,304       3,267  
Long-term operating lease liabilities     65,079       64,176  
Long-term income taxes payable     44,331       59,135  
Total liabilities     960,013       1,049,958  
         
Shareholders’ equity     2,434,883       2,451,294  
Total liabilities and shareholders’ equity   $ 3,394,896     $ 3,501,252  
                 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)              
               
  Quarter Ended   Six Months Ended
  July 2,
2023
  July 3,
2022
  July 2,
2023
  July 3,
2022
Cash flows from operating activities:              
Net income $ 120,050     $ 197,787     $ 203,581     $ 359,715  
Adjustments to reconcile net income to net cash provided by operating activities:              
Depreciation   22,551       21,957       45,231       44,460  
Stock-based compensation   13,564       12,228       32,449       25,122  
Provision for excess and obsolete inventory   5,731       5,105       11,341       6,695  
Amortization   4,654       4,862       9,580       10,095  
Deferred taxes   (5,937 )     (34,885 )     (13,571 )     (23,597 )
(Gains) losses on investments   (2,507 )     6,972       (4,745 )     8,973  
Other   (201 )     345       (92 )     522  
               
Changes in operating assets and liabilities              
Accounts receivable   (39,897 )     (146,592 )     (2,693 )     (146,384 )
Inventories   9,852       (37,202 )     (13,845 )     (46,682 )
Prepayments and other assets   (14,204 )     (25,597 )     (29,584 )     (99,902 )
Accounts payable and other liabilities   58,694       85,922       (24,514 )     (38,460 )
Deferred revenue and customer advances   (2,233 )     7,416       (34,938 )     14,163  
Retirement plans contributions   (1,248 )     (1,289 )     (2,482 )     (2,618 )
Income taxes   (26,102 )     18,426       (13,614 )     10,815  
Net cash provided by operating activities   142,767       115,455       162,104       122,917  
               
Cash flows from investing activities:              
Purchases of property, plant and equipment   (39,258 )     (45,744 )     (80,702 )     (89,743 )
Purchases of marketable securities   (29,742 )     (81,904 )     (99,018 )     (247,881 )
Proceeds from sales of marketable securities   27,648       113,061       35,577       143,642  
Proceeds from maturities of marketable securities   14,529       42,970       21,997       139,652  
Proceeds from life insurance               460        
Net cash (used for) provided by investing activities   (26,823 )     28,383       (121,686 )     (54,330 )
               
Cash flows from financing activities:              
Repurchase of common stock   (134,537 )     (331,334 )     (227,845 )     (532,799 )
Dividend payments   (17,019 )     (17,547 )     (34,184 )     (35,442 )
Payments of convertible debt principal   (2,303 )     (21,598 )     (17,458 )     (42,292 )
Payments related to net settlement of employee stock compensation awards   (438 )     (1,732 )     (20,308 )     (32,780 )
Issuance of common stock under stock purchase and stock option plans   602       61       16,599       16,536  
Net cash used for financing activities   (153,695 )     (372,150 )     (283,196 )     (626,777 )
               
Effects of exchange rate changes on cash and cash equivalents   1,751       5,732       1,213       8,014  
Decrease in cash and cash equivalents   (36,000 )     (222,580 )     (241,565 )     (550,176 )
Cash and cash equivalents at beginning of period   649,208       794,603       854,773       1,122,199  
Cash and cash equivalents at end of period $ 613,208     $ 572,023     $ 613,208     $ 572,023  
                               

GAAP to Non-GAAP Earnings Reconciliation
                                                 
(In millions, except per share amounts)                                              
                    Quarter Ended                        
    July 2, 2023   % of Net Revenues           April 2, 2023   % of Net Revenues           July 3, 2022   % of Net Revenues        
                                                 
Net revenues $ 684.4                 $ 617.5                 $ 840.8              
                                                 
Gross profit GAAP and non-GAAP $ 402.5       58.8 %           $ 356.4     57.7 %           $ 506.4     60.2 %        
                                                 
Income from operations – GAAP $ 139.9       20.4 %           $ 92.9     15.0 %           $ 248.0     29.5 %        
Restructuring and other (1)   6.4       0.9 %             2.0     0.3 %             2.0     0.2 %        
Acquired intangible assets amortization   4.8       0.7 %             4.8     0.8 %             4.9     0.6 %        
Equity modification charge (2)                       5.9     1.0 %                          
Income from operations – non-GAAP $ 151.1       22.1 %           $ 105.6     17.1 %           $ 254.9     30.3 %        
                                                 
            Net Income per Common Share           Net Income per Common Share           Net Income per Common Share
    July 2, 2023   % of Net Revenues   Basic   Diluted   April 2, 2023   % of Net Revenues   Basic   Diluted   July 3, 2022   % of Net Revenues   Basic   Diluted
Net income – GAAP $ 120.1       17.5 %   $ 0.78     $ 0.73     $ 83.5     13.5 %   $ 0.54     $ 0.50     $ 197.8     23.5 %   $ 1.24     $ 1.16  
Restructuring and other (1)   6.4       0.9 %     0.04       0.04       2.0     0.3 %     0.01       0.01       2.0     0.2 %     0.01       0.01  
Acquired intangible assets amortization   4.8       0.7 %     0.03       0.03       4.8     0.8 %     0.03       0.03       4.9     0.6 %     0.03       0.03  
Pension mark-to-market adjustment (3)   0.1       0.0 %     0.00       0.00                                              
Equity modification charge (2)                           5.9     1.0 %     0.04       0.04                        
Exclude discrete tax adjustments   0.5       0.1 %     0.00       0.00       (2.5 )   -0.4 %     (0.02 )     (0.02 )     1.6     0.2 %     0.01       0.01  
Non-GAAP tax adjustments   (2.9 )     -0.4 %     (0.02 )     (0.02 )     (2.4 )   -0.4 %     (0.02 )     (0.01 )     (2.3 )   -0.3 %     (0.01 )     (0.01 )
Convertible share adjustment (4)                                                                 0.01  
Net income – non-GAAP $ 129.0       18.8 %   $ 0.83     $ 0.79     $ 91.3     14.8 %   $ 0.59     $ 0.55     $ 204.0     24.3 %   $ 1.28     $ 1.21  
                                                 
GAAP and non-GAAP weighted average common shares – basic   154.8                   155.9                   159.6              
GAAP weighted average common shares – diluted   164.8                   166.3                   171.2              
Exclude dilutive shares related to convertible note transaction   (0.7 )                 (0.9 )                 (1.9 )            
Non-GAAP weighted average common shares – diluted   164.1                   165.4                   169.3              
                                                 
                                                 
(1) Restructuring and other consists of:                                              
    Quarter Ended            
    July 2, 2023               April 2, 2023               July 3, 2022            
  Employee severance $ 5.1                 $ 2.0                 $ 0.4              
  Other   1.2                                     1.7              
    $ 6.4                 $ 2.0                 $ 2.0              
                                                 
(2) For the quarter ended April 2, 2023, selling and administrative expenses include an equity charge of $5.9 million for the modification of Teradyne’s retired CEO’s outstanding equity awards in connection with his February 1, 2023 retirement.   
                                                 
(3) For the quarter ended July 2, 2023 adjustment to exclude actuarial loss recognized under GAAP in accordance with Teradyne’s mark-to-market pension accounting.           
                                                 
(4) For the quarters ended April 2, 2023, and July 3, 2022, the non-GAAP diluted EPS calculation adds back $0.1 million, and $0.2 million, respectively, of convertible debt interest expense to non-GAAP net income. For the quarters ended July 2, 2023, April 2, 2023, and July 3, 2022, non-GAAP weighted average diluted common shares include 8.9 million, 9.0 million and 9.0 million shares, respectively, from the convertible note hedge transaction.     
                                                 
    Six Months Ended                
    July 2, 2023   % of Net Revenues           July 3, 2022   % of Net Revenues                        
                                                 
Net Revenues $ 1,302.0                 $ 1,596.1                              
                                                 
Gross profit GAAP and non-GAAP $ 758.9       58.3 %           $ 961.3     60.2 %                        
                                                 
Income from operations – GAAP $ 232.8       17.9 %           $ 433.8     27.2 %                        
Acquired intangible assets amortization   9.6       0.7 %             9.9     0.6 %                        
Restructuring and other (1)   8.4       0.6 %             17.8     1.1 %                        
Equity modification charge (2)   5.9       0.5 %                                          
Income from operations – non-GAAP $ 256.7       19.7 %           $ 461.5     28.9 %                        
                                                 
            Net Income per Common Share           Net Income per Common Share                
    July 2, 2023   % of Net Revenues   Basic   Diluted   July 3, 2022   % of Net Revenues   Basic   Diluted                
Net income – GAAP $ 203.6       15.6 %   $ 1.31     $ 1.23     $ 359.7     22.5 %   $ 2.24     $ 2.07                  
Acquired intangible assets amortization   9.6       0.7 %     0.06       0.06       9.9     0.6 %     0.06       0.06                  
Restructuring and other (1)   8.4       0.6 %     0.05       0.05       17.8     1.1 %     0.11       0.10                  
Equity modification charge (2)   5.9       0.5 %     0.04       0.04                                        
Pension mark-to-market adjustment (3)   0.1       0.0 %     0.00       0.00                                        
Exclude discrete tax adjustments   (1.9 )     -0.1 %     (0.01 )     (0.01 )     (8.8 )   -0.6 %     (0.05 )     (0.05 )                
Non-GAAP tax adjustments   (5.3 )     -0.4 %     (0.03 )     (0.03 )     (5.6 )   -0.4 %     (0.03 )     (0.03 )                
Convertible share adjustment (4)                     0.01                       0.03                  
Net income – non-GAAP $ 220.4       16.9 %   $ 1.42     $ 1.34     $ 373.0     23.4 %   $ 2.32     $ 2.18                  
                                                 
GAAP and non-GAAP weighted average common shares – basic   155.3                   160.8                              
GAAP weighted average common shares – diluted   165.5                   173.4                              
Exclude dilutive shares from convertible note   (0.8 )                 (2.2 )                            
Non-GAAP weighted average common shares – diluted   164.7                   171.2                              
                                                 
(1) Restructuring and other consists of:                                              
    Six Months Ended                            
    July 2, 2023               July 3, 2022                            
  Employee severance $ 7.2                 $ 0.9                              
  Litigation settlement                     14.7                              
  Acquisition related expenses and compensation                     (0.2 )                            
  Other   1.2                   2.3                                
    $ 8.4                 $ 17.8                              
                                                 
(2) For the six months ended July 2, 2023, selling and administrative expenses include an equity charge of $5.9 million for the modification of Teradyne’s retired CEO’s outstanding equity awards in connection with his February 1, 2023 retirement.  
                                                 
(3) For the six months ended July 2, 2023 adjustment to exclude actuarial loss recognized under GAAP in accordance with Teradyne’s mark-to-market pension accounting.          
                                                 
(4) For the six months ended July 2, 2023 and July 3, 2022, the non-GAAP diluted EPS calculation adds back $0.2 million and $0.5 million, respectively, of convertible debt interest expense to non-GAAP net income. For the six months ended July 2, 2023 and July 3, 2022, non-GAAP weighted average diluted common shares include 8.9 million and 9.5 million shares, respectively, related to the convertible debt hedge transaction.        
                                                 
GAAP to Non-GAAP Reconciliation of Third Quarter 2023 guidance:
                                                 
GAAP and non-GAAP third quarter revenue guidance:     $650 million to $710 million                                    
GAAP net income per diluted share     $ 0.57     $ 0.77                                      
Exclude acquired intangible assets amortization       0.03       0.03                                      
Exclude acquired restructuring and other charges       0.02       0.02                                      
Non-GAAP tax adjustments       (0.01 )     (0.01 )                                    
Non-GAAP net income per diluted share     $ 0.61     $ 0.81                                      

For press releases and other information of interest to investors, please visit Teradyne’s homepage at http://www.teradyne.com.
Contact: Teradyne, Inc.
Andy Blanchard 978-370-2425
Vice President of Corporate Relations

Disclaimer: The above press release comes to you under an arrangement with GlobeNewswire. TheTechOutlook.com takes no editorial responsibility for the same.




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