☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Massachusetts | 04-2272148 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
600 Riverpark Drive, North Reading, Massachusetts | 01864 | |
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock, par value $0.125 per share | TER | Nasdaq Stock Market LLC |
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☐ | Emerging growth company | ☐ | |||
Smaller reporting company | ☐ |
TERADYNE, INC.
INDEX
Page No. | ||||||
| ||||||
Item 1. | 1 | |||||
Condensed Consolidated Balance Sheets as of July 2, 2023 and December 31, 2022 | 1 | |||||
Condensed Consolidated Statements of Operations for the Three and Six Months ended | 2 | |||||
3 | ||||||
4 | ||||||
5 | ||||||
6 | ||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |||||
Item 3. | ||||||
Item 4. | ||||||
Item 1. | ||||||
Item 1A. | ||||||
Item 2. | ||||||
Item 4. | ||||||
Item | ||||||
Item 6. | Exhibits | 40 |
Item 1: | Financial Statements |
April 2, 2023 | December 31, 2022 | |||||||
(in thousands, except per share amount) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 649,208 | $ | 854,773 | ||||
Marketable securities | 92,895 | 39,612 | ||||||
Accounts receivable, less allowance for credit losses of $1,973 and $1,955 at April 2, 2023 and December 31, 2022, respectively | 455,334 | 491,145 | ||||||
Inventories, net | 352,058 | 325,019 | ||||||
Prepayments | 549,114 | 532,962 | ||||||
Other current assets | 13,367 | 14,404 | ||||||
Total current assets | 2,111,976 | 2,257,915 | ||||||
Property, plant and equipment, net | 432,381 | 418,683 | ||||||
Operating lease right-of-use | 74,939 | 73,734 | ||||||
Marketable securities | 116,938 | 110,777 | ||||||
Deferred tax assets | 148,527 | 142,784 | ||||||
Retirement plans assets | 11,650 | 11,761 | ||||||
Other assets | 27,922 | 28,925 | ||||||
Acquired intangible assets, net | 49,246 | 53,478 | ||||||
Goodwill | 409,828 | 403,195 | ||||||
Total assets | $ | 3,383,407 | $ | 3,501,252 | ||||
LIABILITIES | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 142,382 | $ | 139,722 | ||||
Accrued employees’ compensation and withholdings | 119,433 | 212,266 | ||||||
Deferred revenue and customer advances | 119,355 | 148,285 | ||||||
Other accrued liabilities | 114,739 | 112,271 | ||||||
Operating lease liabilities | 19,985 | 18,594 | ||||||
Income taxes payable | 77,089 | 65,010 | ||||||
Current debt | 35,109 | 50,115 | ||||||
Total current liabilities | 628,092 | 746,263 | ||||||
Retirement plans liabilities | 121,303 | 116,005 | ||||||
Long-term deferred revenue and customer advances | 41,797 | 45,131 | ||||||
Long-term other accrued liabilities | 16,211 | 15,981 | ||||||
Deferred tax liabilities | 2,325 | 3,267 | ||||||
Long-term operating lease liabilities | 65,082 | 64,176 | ||||||
Long-term incomes taxes payable | 59,135 | 59,135 | ||||||
Total liabilities | 933,945 | 1,049,958 | ||||||
Commitments and contingencies (Note P) | ||||||||
SHAREHOLDERS’ EQUITY | ||||||||
Common stock, $0.125 par value, 1,000,000 shares authorized; 155,445 and 155,759 shares issued and outstanding at April 2, 2023 and December 31, 2022, respectively | 19,431 | 19,470 | ||||||
Additional paid-in capital | 1,772,352 | 1,755,963 | ||||||
Accumulated other comprehensive loss | (36,466 | ) | (49,868 | ) | ||||
Retained earnings | 694,145 | 725,729 | ||||||
Total shareholders’ equity | 2,449,462 | 2,451,294 | ||||||
Total liabilities and shareholders’ equity | $ | 3,383,407 | $ | 3,501,252 | ||||
July 2, 2023 | December 31, 2022 | |||||||
(in thousands, except per share amount) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 613,208 | $ | 854,773 | ||||
Marketable securities | 95,199 | 39,612 | ||||||
Accounts receivable, less allowance for credit losses of $2,232 and $1,955 at July 2, 2023 and December 31, 2022, respectively | 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 | 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 | ||||||||
Current 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 incomes taxes payable | 44,331 | 59,135 | ||||||
Total liabilities | 960,013 | 1,049,958 | ||||||
Commitments and contingencies (Note P) | ||||||||
SHAREHOLDERS’ EQUITY | ||||||||
Common stock, $0.125 par value, 1,000,000 shares authorized; 154,148 and 155,759 shares issued and outstanding at July 2, 2023 and December 31, 2022, respectively | 19,269 | 19,470 | ||||||
Additional paid-in capital | 1,784,590 | 1,755,963 | ||||||
Accumulated other comprehensive loss | (30,472 | ) | (49,868 | ) | ||||
Retained earnings | 661,496 | 725,729 | ||||||
Total shareholders’ equity | 2,434,883 | 2,451,294 | ||||||
Total liabilities and shareholders’ equity | $ | 3,394,896 | $ | 3,501,252 | ||||
For the Three Months Ended | ||||||||
April 2, | April 3, | |||||||
2023 | 2022 | |||||||
(in thousands, except per share amount) | ||||||||
Revenues: | ||||||||
Products | $ | 473,418 | $ | 625,875 | ||||
Services | 144,111 | 129,495 | ||||||
Total revenues | 617,529 | 755,370 | ||||||
Cost of revenues: | ||||||||
Cost of products | 198,665 | 243,016 | ||||||
Cost of services | 62,444 | 57,421 | ||||||
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below) | 261,109 | 300,437 | ||||||
Gross profit | 356,420 | 454,933 | ||||||
Operating expenses: | ||||||||
Selling and administrative | 150,955 | 140,185 | ||||||
Engineering and development | 105,762 | 108,116 | ||||||
Acquired intangible assets amortization | 4,802 | 5,063 | ||||||
Restructuring and other | 2,037 | 15,714 | ||||||
Total operating expenses | 263,556 | 269,078 | ||||||
Income from operations | 92,864 | 185,855 | ||||||
Non-operating (income) expense: | ||||||||
Interest income | (5,258 | ) | (703 | ) | ||||
Interest expense | 987 | 1,012 | ||||||
Other (income) expense, net | 51 | 5,187 | ||||||
Income before income taxes | 97,084 | 180,359 | ||||||
Income tax provision | 13,553 | 18,431 | ||||||
Net income | $ | 83,531 | $ | 161,928 | ||||
Net income per common share: | ||||||||
Basic | $ | 0.54 | $ | 1.00 | ||||
Diluted | $ | 0.50 | $ | 0.92 | ||||
Weighted average common shares—basic | 155,904 | 162,048 | ||||||
Weighted average common shares—diluted | 166,308 | 175,575 | ||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 2, 2023 | July 3, 2022 | July 2, 2023 | July 3, 2022 | |||||||||||||
(in thousands, except per share amount) | ||||||||||||||||
Revenues: | ||||||||||||||||
Products | $ | 540,375 | $ | 697,954 | $ | 1,013,793 | $ | 1,323,829 | ||||||||
Services | 144,062 | 142,812 | 288,173 | 272,307 | ||||||||||||
Total revenues | 684,437 | 840,766 | 1,301,966 | 1,596,136 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Cost of products | 217,011 | 274,674 | 415,675 | 517,690 | ||||||||||||
Cost of services | 64,934 | 59,703 | 127,379 | 117,124 | ||||||||||||
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below) | 281,945 | 334,377 | 543,054 | 634,814 | ||||||||||||
Gross profit | 402,492 | 506,389 | 758,912 | 961,322 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling and administrative | 145,695 | 139,533 | 296,650 | 279,718 | ||||||||||||
Engineering and development | 105,706 | 111,951 | 211,468 | 220,067 | ||||||||||||
Acquired intangible assets amortization | 4,825 | 4,871 | 9,627 | 9,934 | ||||||||||||
Restructuring and other | 6,358 | 2,044 | 8,395 | 17,758 | ||||||||||||
Total operating expenses | 262,584 | 258,399 | 526,140 | 527,477 | ||||||||||||
Income from operations | 139,908 | 247,990 | 232,772 | 433,845 | ||||||||||||
Non-operating (income) expense: | ||||||||||||||||
Interest income | (6,354 | ) | (951 | ) | (11,613 | ) | (1,653 | ) | ||||||||
Interest expense | 1,045 | 913 | 2,031 | 1,925 | ||||||||||||
Other (income) expense, net | 815 | 9,436 | 868 | 14,622 | ||||||||||||
Income before income taxes | 144,402 | 238,592 | 241,486 | 418,951 | ||||||||||||
Income tax provision | 24,352 | 40,805 | 37,905 | 59,236 | ||||||||||||
Net income | $ | 120,050 | $ | 197,787 | $ | 203,581 | $ | 359,715 | ||||||||
Net income per common share: | ||||||||||||||||
Basic | $ | 0.78 | $ | 1.24 | $ | 1.31 | $ | 2.24 | ||||||||
Diluted | $ | 0.73 | $ | 1.16 | $ | 1.23 | $ | 2.07 | ||||||||
Weighted average common shares—basic | 154,760 | 159,563 | 155,332 | 160,805 | ||||||||||||
Weighted average common shares—diluted | 164,751 | 171,159 | 165,530 | 173,367 | ||||||||||||
For the Three Months Ended | ||||||||
April 2, | April 3, | |||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Net income | $ | 83,531 | $ | 161,928 | ||||
Other comprehensive income (loss) , net of tax: | ||||||||
Foreign currency translation adjustment, net of tax of $0 and $0, respectively | 9,309 | (8,076 | ) | |||||
Available-for-sale | ||||||||
Unrealized gains (losses) on marketable securities arising during period, net of tax of $503 and $(1,333), respectively | 2,294 | (5,388 | ) | |||||
Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $2 and $(18), respectively | 5 | (65 | ) | |||||
2,299 | (5,453 | ) | ||||||
Cash flow hedges: | ||||||||
Unrealized gains arising during period, net of tax of $167, $0, respectively | 596 | — | ||||||
Less: Reclassification adjustment for losses included in net income, net of tax of $338 and $0, respectively | 1,200 | — | ||||||
1,796 | — | |||||||
Defined benefit post-retirement plan: | ||||||||
Amortization of prior service credit, net of tax of $0 and $0, respectively | (2 | ) | (2 | ) | ||||
Other comprehensive income (loss) | 13,402 | (13,531 | ) | |||||
Comprehensive income | $ | 96,933 | $ | 148,397 | ||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 2, 2023 | July 3, 2022 | July 2, 2023 | July 3, 2022 | |||||||||||||
(in thousands) | ||||||||||||||||
Net income | $ | 120,050 | $ | 197,787 | $ | 203,581 | $ | 359,715 | ||||||||
Other comprehensive income, net of tax: | ||||||||||||||||
Foreign currency translation adjustment, net of tax of $0, $0, $0, $0, respectively | 2,943 | (29,230 | ) | 12,250 | (37,307 | ) | ||||||||||
Available-for-sale | ||||||||||||||||
Unrealized (losses) gains on marketable securities arising during period, net of tax of $(180), $(1,240), $323, and $(2,573), respectively | (568 | ) | (4,522 | ) | 1,726 | (9,910 | ) | |||||||||
Less: Reclassification adjustment for losses included in net income, net of tax of $8, $77, $10, $59, respectively | 28 | 274 | 33 | 209 | ||||||||||||
(540 | ) | (4,248 | ) | 1,759 | (9,701 | ) | ||||||||||
Cash flow hedges: | ||||||||||||||||
Unrealized gains arising during period, net of tax of $920, $0, $1,088, $0 respectively | 3,270 | — | 3,866 | — | ||||||||||||
Less: Reclassification adjustment for losses included in net income, net of tax of $91, $0, $428, $0 respectively | 323 | — | 1,524 | — | ||||||||||||
3,593 | — | 5,390 | — | |||||||||||||
Defined benefit post-retirement plan: | ||||||||||||||||
Amortization of prior service credit, net of tax of $0, $0, $(1), $(1), respectively | (2 | ) | (2 | ) | (3 | ) | (3 | ) | ||||||||
Other comprehensive income (loss) | 5,994 | (33,480 | ) | 19,396 | (47,011 | ) | ||||||||||
Comprehensive income | $ | 126,044 | $ | 164,307 | $ | 222,977 | $ | 312,704 | ||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||
Convertible Common Shares Value | Common Stock Shares | Common Stock Par Value | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Total Shareholders’ Equity | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||
For the Three Months Ended April 2, 2023 | ||||||||||||||||||||||||||||
Balance, December 31, 2022 | $ | — | 155,759 | $ | 19,470 | $ | 1,755,963 | $ | (49,868 | ) | $ | 725,729 | $ | 2,451,294 | ||||||||||||||
Net issuance of common stock under stock-based plans | 579 | 73 | (3,943 | ) | (3,870 | ) | ||||||||||||||||||||||
Stock-based compensation expense | 20,332 | 20,332 | ||||||||||||||||||||||||||
Repurchase of common stock | (893 | ) | (112 | ) | (97,936 | ) | (98,048 | ) | ||||||||||||||||||||
Cash dividends ($0.11 per share) | (17,179 | ) | (17,179 | ) | ||||||||||||||||||||||||
Settlements of convertible notes | 324 | 41 | (41 | ) | — | |||||||||||||||||||||||
Exercise of convertible notes hedge call options | (324 | ) | (41 | ) | 41 | — | ||||||||||||||||||||||
Net income | 83,531 | 83,531 | ||||||||||||||||||||||||||
Other comprehensive income | 13,402 | 13,402 | ||||||||||||||||||||||||||
Balance, April 2, 2023 | $ | — | 155,445 | $ | 19,431 | $ | 1,772,352 | $ | (36,466 | ) | $ | 694,145 | $ | 2,449,462 | ||||||||||||||
For the Three Months Ended April 3, 2022 | ||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | 1,512 | 162,251 | $ | 20,281 | $ | 1,811,545 | $ | (5,948 | ) | $ | 736,566 | $ | 2,562,444 | ||||||||||||||
Net issuance of common stock under stock-based plans | 552 | 70 | (14,644 | ) | (14,574 | ) | ||||||||||||||||||||||
Stock-based compensation expense | 14,204 | 14,204 | ||||||||||||||||||||||||||
Repurchase of common stock | (1,750 | ) | (219 | ) | (211,247 | ) | (211,466 | ) | ||||||||||||||||||||
Cash dividends ($0.11 per share) | (17,908 | ) | (17,908 | ) | ||||||||||||||||||||||||
Settlements of convertible notes | 509 | 64 | (157 | ) | (93 | ) | ||||||||||||||||||||||
Exercise of convertible notes hedge call options | (509 | ) | (64 | ) | 64 | — | ||||||||||||||||||||||
Cumulative-effect of change in accounting principle related to convertible debt | (1,512 | ) | (99,322 | ) | 92,850 | (6,472 | ) | |||||||||||||||||||||
Net income | 161,928 | 161,928 | ||||||||||||||||||||||||||
Other comprehensive loss | (13,531 | ) | (13,531 | ) | ||||||||||||||||||||||||
Balance, April 3, 2022 | $ | — | 161,053 | $ | 20,132 | $ | 1,711,690 | $ | (19,479 | ) | $ | 762,189 | $ | 2,474,532 | ||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||
Convertible Common Shares Value | Common Stock Shares | Common Stock Par Value | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Total Shareholders’ Equity | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||
For the Three Months Ended July 2, 2023 | ||||||||||||||||||||||||||||
Balance, April 2, 2023 | $ | — | 155,445 | $ | 19,431 | $ | 1,772,352 | $ | (36,466 | ) | $ | 694,145 | $ | 2,449,462 | ||||||||||||||
Net issuance of common stock under stock-based plans | 52 | 7 | 161 | 168 | ||||||||||||||||||||||||
Stock-based compensation expense | 12,077 | 12,077 | ||||||||||||||||||||||||||
Repurchase of common stock | (1,349 | ) | (169 | ) | (135,668 | ) | (135,837 | ) | ||||||||||||||||||||
Cash dividends ($0.11 per share) | (17,031 | ) | (17,031 | ) | ||||||||||||||||||||||||
Settlements of convertible notes | 50 | 6 | (6 | ) | — | |||||||||||||||||||||||
Exercise of convertible notes hedge call options | (50 | ) | (6 | ) | 6 | — | ||||||||||||||||||||||
Net income | 120,050 | 120,050 | ||||||||||||||||||||||||||
Other comprehensive income | 5,994 | 5,994 | ||||||||||||||||||||||||||
Balance, July 2, 2023 | $ | — | 154,148 | $ | 19,269 | $ | 1,784,590 | $ | (30,472 | ) | $ | 661,496 | $ | 2,434,883 | ||||||||||||||
For the Three Months Ended July 3, 2022 | ||||||||||||||||||||||||||||
Balance, April 3, 2022 | $ | — | 161,053 | $ | 20,132 | $ | 1,711,690 | $ | (19,479 | ) | $ | 762,189 | $ | 2,474,532 | ||||||||||||||
Net issuance of common stock under stock-based plans | 33 | 4 | (1,675 | ) | (1,671 | ) | ||||||||||||||||||||||
Stock-based compensation expense | 11,658 | 11,658 | ||||||||||||||||||||||||||
Repurchase of common stock | (3,206 | ) | (401 | ) | (333,933 | ) | (334,334 | ) | ||||||||||||||||||||
Cash dividends ($0.11 per share) | (17,561 | ) | (17,561 | ) | ||||||||||||||||||||||||
Settlements of convertible notes | 495 | 62 | (149 | ) | (87 | ) | ||||||||||||||||||||||
Exercise of convertible notes hedge call options | (495 | ) | (62 | ) | 62 | — | ||||||||||||||||||||||
Cumulative-effect of change in accounting principle related to convertible debt | 1,752 | 1,752 | ||||||||||||||||||||||||||
Net income | 197,787 | 197,787 | ||||||||||||||||||||||||||
Other comprehensive loss | (33,480 | ) | (33,480 | ) | ||||||||||||||||||||||||
Balance, July 3, 2022 | $ | — | 157,880 | $ | 19,735 | $ | 1,721,586 | $ | (52,959 | ) | $ | 610,234 | $ | 2,298,596 | ||||||||||||||
For the Six Months Ended July 2, 2023 | ||||||||||||||||||||||||||||
Balance, December 31, 2022 | $ | — | 155,759 | $ | 19,470 | $ | 1,755,963 | $ | (49,868 | ) | $ | 725,729 | $ | 2,451,294 | ||||||||||||||
Net issuance of common stock under stock-based plans | 631 | 79 | (3,782 | ) | (3,703 | ) | ||||||||||||||||||||||
Stock-based compensation expense | 32,409 | 32,409 | ||||||||||||||||||||||||||
Repurchase of common stock | (2,242 | ) | (280 | ) | (233,604 | ) | (233,884 | ) | ||||||||||||||||||||
Cash dividends ($0.22 per share) | (34,210 | ) | (34,210 | ) | ||||||||||||||||||||||||
Settlements of convertible notes | 375 | 47 | (47 | ) | — | |||||||||||||||||||||||
Exercise of convertible notes hedge call options | (375 | ) | (47 | ) | 47 | — | ||||||||||||||||||||||
Net income | 203,581 | 203,581 | ||||||||||||||||||||||||||
Other comprehensive income | 19,396 | 19,396 | ||||||||||||||||||||||||||
Balance, July 2, 2023 | $ | — | 154,148 | $ | 19,269 | $ | 1,784,590 | $ | (30,472 | ) | $ | 661,496 | $ | 2,434,883 | ||||||||||||||
For the Six Months Ended July 3, 2022 | ||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | 1,512 | 162,251 | $ | 20,281 | $ | 1,811,545 | $ | (5,948 | ) | $ | 736,566 | $ | 2,562,444 | ||||||||||||||
Net issuance of common stock under stock-based plans | 585 | 73 | (16,318 | ) | (16,245 | ) | ||||||||||||||||||||||
Stock-based compensation expense | 25,862 | 25,862 | ||||||||||||||||||||||||||
Repurchase of common stock | (4,956 | ) | (619 | ) | (545,179 | ) | (545,798 | ) | ||||||||||||||||||||
Cash dividends ($0.22 per share) | (35,470 | ) | (35,470 | ) | ||||||||||||||||||||||||
Settlements of convertible notes | 1,004 | 125 | (306 | ) | (181 | ) | ||||||||||||||||||||||
Exercise of convertible notes hedge call options | (1,004 | ) | (125 | ) | 125 | — | ||||||||||||||||||||||
Cumulative-effect of change in accounting principle related to convertible debt | (1,512 | ) | (99,322 | ) | 94,602 | (4,720 | ) | |||||||||||||||||||||
Net income | 359,715 | 359,715 | ||||||||||||||||||||||||||
Other comprehensive loss | (47,011 | ) | (47,011 | ) | ||||||||||||||||||||||||
Balance, July 3, 2022 | $ | — | 157,880 | $ | 19,735 | $ | 1,721,586 | $ | (52,959 | ) | $ | 610,234 | $ | 2,298,596 | ||||||||||||||
For the Three Months Ended | ||||||||
April 2, | April 3, | |||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 83,531 | $ | 161,928 | ||||
Adjustments to reconcile net income from operations to net cash provided by operating activities: | ||||||||
Depreciation | 22,680 | 22,503 | ||||||
Stock-based compensation | 18,885 | 12,894 | ||||||
Provision for excess and obsolete inventory | 5,610 | 1,590 | ||||||
Amortization | 4,926 | 5,233 | ||||||
Deferred taxes | (7,634 | ) | 11,288 | |||||
(Gains) losses on investments | (2,238 | ) | 2,001 | |||||
Other | 108 | 177 | ||||||
Changes in operating assets and liabilities | ||||||||
Accounts receivable | 37,204 | 208 | ||||||
Inventories | (23,697 | ) | (9,480 | ) | ||||
Prepayments and other assets | (15,380 | ) | (74,305 | ) | ||||
Accounts payable and other accrued expenses | (83,208 | ) | (124,382 | ) | ||||
Deferred revenue and customer advances | (32,705 | ) | 6,747 | |||||
Retirement plan contributions | (1,234 | ) | (1,329 | ) | ||||
Income taxes | 12,488 | (7,611 | ) | |||||
Net cash provided by operating activities | 19,336 | 7,462 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property, plant and equipment | (41,444 | ) | (43,999 | ) | ||||
Purchases of marketable securities | (69,276 | ) | (165,977 | ) | ||||
Proceeds from sales of marketable securities | 7,929 | 30,581 | ||||||
Proceeds from maturities of marketable securities | 7,468 | 96,682 | ||||||
Proceeds from life insurance | 460 | — | ||||||
Net cash used for investing activities | (94,863 | ) | (82,713 | ) | ||||
Cash flows from financing activities: | ||||||||
Issuance of common stock under stock purchase and stock option plans | 15,997 | 16,475 | ||||||
Repurchase of common stock | (93,308 | ) | (201,465 | ) | ||||
Payments related to net settlement of employee stock compensation awards | (19,870 | ) | (31,048 | ) | ||||
Dividend payments | (17,165 | ) | (17,895 | ) | ||||
Payments of convertible debt principal | (15,155 | ) | (20,694 | ) | ||||
Net cash used for financing activities | (129,501 | ) | (254,627 | ) | ||||
Effects of exchange rate changes on cash and cash equivalents | (537 | ) | 2,282 | |||||
Decrease in cash and cash equivalents | (205,565 | ) | (327,596 | ) | ||||
Cash and cash equivalents at beginning of period | 854,773 | 1,122,199 | ||||||
Cash and cash equivalents at end of period | $ | 649,208 | $ | 794,603 | ||||
Non-cash investing activities: | ||||||||
Capital expenditures incurred but not yet paid: | $ | 3,823 | $ | 2,500 |
For the Six Months Ended | ||||||||
July 2, 2023 | July 3, 2022 | |||||||
(in thousands) | ||||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 203,581 | $ | 359,715 | ||||
Adjustments to reconcile net income from operations to net cash provided by operating activities: | ||||||||
Depreciation | 45,231 | 44,460 | ||||||
Stock-based compensation | 32,449 | 25,122 | ||||||
Provision for excess and obsolete inventory | 11,341 | 6,695 | ||||||
Amortization | 9,580 | 10,095 | ||||||
Deferred taxes | (13,571 | ) | (23,597 | ) | ||||
(Gains) losses on investments | (4,745 | ) | 8,973 | |||||
Other | (92 | ) | 522 | |||||
Changes in operating assets and liabilities | ||||||||
Accounts receivable | (2,693 | ) | (146,384 | ) | ||||
Inventories | (13,845 | ) | (46,682 | ) | ||||
Prepayments and other assets | (29,584 | ) | (94,751 | ) | ||||
Accounts payable and other liabilities | (24,514 | ) | (43,611 | ) | ||||
Deferred revenue and customer advances | (34,938 | ) | 14,163 | |||||
Retirement plans contributions | (2,482 | ) | (2,618 | ) | ||||
Income taxes | (13,614 | ) | 10,815 | |||||
Net cash provided by operating activities | 162,104 | 122,917 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property, plant and equipment | (80,702 | ) | (89,743 | ) | ||||
Purchases of marketable securities | (99,018 | ) | (247,881 | ) | ||||
Proceeds from sales of marketable securities | 35,577 | 143,642 | ||||||
Proceeds from maturities of marketable securities | 21,997 | 139,652 | ||||||
Proceeds from life insurance | 460 | — | ||||||
Net cash used for investing activities | (121,686 | ) | (54,330 | ) | ||||
Cash flows from financing activities: | ||||||||
Repurchase of common stock | (227,845 | ) | (532,799 | ) | ||||
Dividend payments | (34,184 | ) | (35,442 | ) | ||||
Payments related to net settlement of employee stock compensation awards | (20,308 | ) | (32,780 | ) | ||||
Payments of convertible debt principal | (17,458 | ) | (42,292 | ) | ||||
Issuance of common stock under stock purchase and stock option plans | 16,599 | 16,536 | ||||||
Net cash used for financing activities | (283,196 | ) | (626,777 | ) | ||||
Effects of exchange rate changes on cash and cash equivalents | 1,213 | 8,014 | ||||||
Decrease in cash and cash equivalents | (241,565 | ) | (550,176 | ) | ||||
Cash and cash equivalents at beginning of period | 854,773 | 1,122,199 | ||||||
Cash and cash equivalents at end of period | $ | 613,208 | $ | 572,023 | ||||
Non-cash investing activities: | ||||||||
Capital expenditures incurred but not yet paid: | $ | 1,741 | $ | 1,855 |
Semiconductor Test | Robotics | |||||||||||||||||||||||||||||||
System on- a-Chip | Memory | System Test | Universal Robots | Mobile Industrial Robots | Wireless Test | Corporate and Eliminations | Total | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
For the Three Months Ended April 2, 2023 (1) | ||||||||||||||||||||||||||||||||
Timing of Revenue Recognition | ||||||||||||||||||||||||||||||||
Point in Time | $ | 273,275 | $ | 61,258 | $ | 56,857 | $ | 70,029 | $ | 15,959 | $ | 35,363 | $ | — | $ | 512,741 | ||||||||||||||||
Over Time | 73,559 | 6,917 | 17,774 | 2,008 | 1,218 | 3,312 | — | 104,788 | ||||||||||||||||||||||||
Total | $ | 346,834 | $ | 68,175 | $ | 74,631 | $ | 72,037 | $ | 17,177 | $ | 38,675 | $ | — | $ | 617,529 | ||||||||||||||||
Geographical Market | ||||||||||||||||||||||||||||||||
Asia Pacific | $ | 283,259 | $ | 63,695 | $ | 39,590 | $ | 13,217 | $ | 1,502 | $ | 23,231 | $ | — | $ | 424,494 | ||||||||||||||||
Americas | 41,568 | 2,944 | 28,980 | 20,447 | 11,806 | 12,846 | — | 118,591 | ||||||||||||||||||||||||
Europe, Middle East and Africa | 22,007 | 1,536 | 6,061 | 38,373 | 3,869 | 2,598 | — | 74,444 | ||||||||||||||||||||||||
Total | $ | 346,834 | $ | 68,175 | $ | 74,631 | $ | 72,037 | $ | 17,177 | $ | 38,675 | $ | — | $ | 617,529 | ||||||||||||||||
For the Three Months Ended April 3, 2022 (1) | ||||||||||||||||||||||||||||||||
Timing of Revenue Recognition | ||||||||||||||||||||||||||||||||
Point in Time | $ | 323,456 | $ | 88,723 | $ | 105,288 | $ | 83,182 | $ | 16,744 | $ | 48,429 | $ | (346 | ) | $ | 665,476 | |||||||||||||||
Over Time | 63,129 | 7,033 | 13,380 | 2,102 | 1,161 | 3,089 | — | 89,894 | ||||||||||||||||||||||||
Total | $ | 386,585 | $ | 95,756 | $ | 118,668 | $ | 85,284 | $ | 17,905 | $ | 51,518 | $ | (346 | ) | $ | 755,370 | |||||||||||||||
Geographical Market | ||||||||||||||||||||||||||||||||
Asia Pacific | $ | 340,741 | $ | 93,151 | $ | 73,784 | $ | 18,621 | $ | 2,592 | $ | 34,946 | $ | — | $ | 563,835 | ||||||||||||||||
Americas | 29,714 | 2,046 | 36,608 | 28,148 | 8,564 | 9,687 | (346 | ) | 114,421 | |||||||||||||||||||||||
Europe, Middle East and Africa | 16,130 | 559 | 8,276 | 38,515 | 6,749 | 6,885 | — | 77,114 | ||||||||||||||||||||||||
Total | $ | 386,585 | $ | 95,756 | $ | 118,668 | $ | 85,284 | $ | 17,905 | $ | 51,518 | $ | (346 | ) | $ | 755,370 | |||||||||||||||
Semiconductor Test | Robotics | |||||||||||||||||||||||||||||||
System on-a-Chip | Memory | System Test | Universal Robots | Mobile Industrial Robots | Wireless Test | Corporate and Eliminations | Total | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
For the Three Months Ended July 2, 2023 (1) | ||||||||||||||||||||||||||||||||
Timing of Revenue Recognition | ||||||||||||||||||||||||||||||||
Point in Time | $ | 282,080 | $ | 112,547 | $ | 76,801 | $ | 55,737 | $ | 12,770 | $ | 40,261 | $ | — | $ | 580,196 | ||||||||||||||||
Over Time | 72,614 | 7,467 | 17,471 | 2,116 | 1,011 | 3,562 | — | 104,241 | ||||||||||||||||||||||||
Total | $ | 354,694 | $ | 120,014 | $ | 94,272 | $ | 57,853 | $ | 13,781 | $ | 43,823 | $ | — | $ | 684,437 | ||||||||||||||||
Geographical Market | ||||||||||||||||||||||||||||||||
Asia Pacific | $ | 303,062 | $ | 115,250 | $ | 41,644 | $ | 14,883 | $ | 2,291 | $ | 22,362 | $ | — | $ | 499,492 | ||||||||||||||||
Americas | 32,191 | 4,286 | 40,163 | 22,832 | 6,086 | 19,491 | — | 125,049 | ||||||||||||||||||||||||
Europe, Middle East and Africa | 19,441 | 478 | 12,465 | 20,138 | 5,404 | 1,970 | — | 59,896 | ||||||||||||||||||||||||
Total | $ | 354,694 | $ | 120,014 | $ | 94,272 | $ | 57,853 | $ | 13,781 | $ | 43,823 | $ | — | $ | 684,437 | ||||||||||||||||
For the Three Months Ended July 3, 2022 (1) | ||||||||||||||||||||||||||||||||
Timing of Revenue Recognition | ||||||||||||||||||||||||||||||||
Point in Time | $ | 395,211 | $ | 74,790 | $ | 118,692 | $ | 80,409 | $ | 17,801 | $ | 60,765 | $ | (193 | ) | $ | 747,475 | |||||||||||||||
Over Time | 64,253 | 7,094 | 16,010 | 2,104 | 741 | 3,089 | — | 93,291 | ||||||||||||||||||||||||
Total | $ | 459,464 | $ | 81,884 | $ | 134,702 | $ | 82,513 | $ | 18,542 | $ | 63,854 | $ | (193 | ) | $ | 840,766 | |||||||||||||||
Geographical Market | ||||||||||||||||||||||||||||||||
Asia Pacific | $ | 413,537 | $ | 78,996 | $ | 95,584 | $ | 17,357 | $ | 5,317 | $ | 44,106 | $ | — | $ | 654,897 | ||||||||||||||||
Americas | 28,714 | 2,552 | 33,409 | 27,732 | 7,229 | 17,460 | (193 | ) | 116,903 | |||||||||||||||||||||||
Europe, Middle East and Africa | 17,213 | 336 | 5,709 | 37,424 | 5,996 | 2,288 | — | 68,966 | ||||||||||||||||||||||||
Total | $ | 459,464 | $ | 81,884 | $ | 134,702 | $ | 82,513 | $ | 18,542 | $ | 63,854 | $ | (193 | ) | $ | 840,766 | |||||||||||||||
For the Six Months Ended July 2, 2023 (2) | ||||||||||||||||||||||||||||||||
Timing of Revenue Recognition | ||||||||||||||||||||||||||||||||
Point in Time | $ | 555,354 | $ | 173,805 | $ | 133,658 | $ | 125,760 | $ | 28,735 | $ | 75,624 | $ | — | $ | 1,092,937 | ||||||||||||||||
Over Time | 146,173 | 14,384 | 35,245 | 4,124 | 2,229 | 6,874 | — | 209,029 | ||||||||||||||||||||||||
Total | $ | 701,528 | $ | 188,189 | $ | 168,903 | $ | 129,884 | $ | 30,964 | $ | 82,498 | $ | — | $ | 1,301,966 | ||||||||||||||||
Geographical Market | ||||||||||||||||||||||||||||||||
Asia Pacific | $ | 586,321 | $ | 178,945 | $ | 81,234 | $ | 28,100 | $ | 3,793 | $ | 45,593 | $ | — | $ | 923,986 | ||||||||||||||||
Americas | 73,759 | 7,230 | 69,143 | 43,273 | 17,898 | 32,337 | — | 243,640 | ||||||||||||||||||||||||
Europe, Middle East and Africa | 41,448 | 2,014 | 18,526 | 58,511 | 9,273 | 4,568 | — | 134,340 | ||||||||||||||||||||||||
Total | $ | 701,528 | $ | 188,189 | $ | 168,903 | $ | 129,884 | $ | 30,964 | $ | 82,498 | $ | — | $ | 1,301,966 | ||||||||||||||||
For the Six Months Ended July 3, 2022 (2) | ||||||||||||||||||||||||||||||||
Timing of Revenue Recognition | ||||||||||||||||||||||||||||||||
Point in Time | $ | 718,666 | $ | 163,513 | $ | 223,981 | $ | 163,591 | $ | 34,545 | $ | 109,194 | $ | (539 | ) | $ | 1,412,951 | |||||||||||||||
Over Time | 127,382 | 14,127 | 29,390 | 4,206 | 1,902 | 6,178 | — | 183,185 | ||||||||||||||||||||||||
Total | $ | 846,048 | $ | 177,640 | $ | 253,371 | $ | 167,797 | $ | 36,447 | $ | 115,372 | $ | (539 | ) | $ | 1,596,136 | |||||||||||||||
Geographical Market | ||||||||||||||||||||||||||||||||
Asia Pacific | $ | 754,277 | $ | 172,147 | $ | 169,369 | $ | 35,978 | $ | 7,909 | $ | 79,052 | $ | — | $ | 1,218,732 | ||||||||||||||||
Americas | 58,428 | 4,598 | 70,017 | 55,880 | 15,793 | 27,147 | (539 | ) | 231,324 | |||||||||||||||||||||||
Europe, Middle East and Africa | 33,343 | 895 | 13,985 | 75,939 | 12,745 | 9,173 | — | 146,080 | ||||||||||||||||||||||||
Total | $ | 846,048 | $ | 177,640 | $ | 253,371 | $ | 167,797 | $ | 36,447 | $ | 115,372 | $ | (539 | ) | $ | 1,596,136 | |||||||||||||||
(1) | Includes $1.3 million and “Revenue from Contracts with Customers.” |
(2) | Includes $2.5 million and $4.2 million in 2023 and 2022, respectively, for leases of Teradyne’s systems recognized outside ASC 606 “Revenue from Contracts with Customers.” |
April 2, 2023 | December 31, 2022 | |||||||
(in thousands) | ||||||||
Maintenance, service and training | $ | 70,609 | $ | 78,089 | ||||
Extended warranty | 49,343 | 56,180 | ||||||
Customer advances, undelivered elements and other | 41,200 | 59,147 | ||||||
Total deferred revenue and customer advances | $ | 161,152 | $ | 193,416 | ||||
July 2, | December 31, | |||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Maintenance, service and training | $ | 68,282 | $ | 78,089 | ||||
Customer advances, undelivered elements and other | 46,380 | 59,147 | ||||||
Extended warranty | 44,422 | 56,180 | ||||||
Total deferred revenue and customer advances | $ | 159,084 | $ | 193,416 | ||||
April 2, 2023 | December 31, 2022 | |||||||
(in thousands) | ||||||||
Raw material | $ | 264,035 | $ | 256,065 | ||||
Work-in-process | 43,987 | 37,982 | ||||||
Finished goods | 44,036 | 30,972 | ||||||
$ | 352,058 | $ | 325,019 | |||||
July 2, 2023 | December 31, 2022 | |||||||
(in thousands) | ||||||||
Raw material | $ | 250,422 | $ | 256,065 | ||||
Work-in-process | 43,685 | 37,982 | ||||||
Finished goods | 53,188 | 30,972 | ||||||
$ | 347,295 | $ | 325,019 | |||||
April 2, 2023 | ||||||||||||||||
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash | $ | 244,542 | $ | — | $ | — | $ | 244,542 | ||||||||
Cash equivalents | 252,374 | 152,292 | — | 404,666 | ||||||||||||
Available-for-sale | ||||||||||||||||
U.S. Treasury securities | — | 52,168 | — | 52,168 | ||||||||||||
Corporate debt securities | — | 51,369 | — | 51,369 | ||||||||||||
Commercial paper | — | 47,548 | — | 47,548 | ||||||||||||
U.S. government agency securities | — | 7,394 | — | 7,394 | ||||||||||||
Debt mutual funds | 6,800 | — | — | 6,800 | ||||||||||||
Certificates of deposit and time deposits | — | 1,754 | — | 1,754 | ||||||||||||
Non-U.S. government securities | — | 554 | — | 554 | ||||||||||||
Equity securities: | ||||||||||||||||
Mutual funds | 42,246 | — | — | 42,246 | ||||||||||||
Total | $ | 545,962 | $ | 313,079 | $ | — | $ | 859,041 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | $ | — | $ | 1,980 | $ | — | $ | 1,980 | ||||||||
Total | $ | — | $ | 1,980 | $ | — | $ | 1,980 | ||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 496,916 | $ | 152,292 | $ | — | $ | 649,208 | ||||||||
Marketable securities | — | 92,895 | — | 92,895 | ||||||||||||
Long-term marketable securities | 49,046 | 67,892 | — | 116,938 | ||||||||||||
Total | $ | 545,962 | $ | 313,079 | $ | — | $ | 859,041 | ||||||||
Liabilities | ||||||||||||||||
Other current liabilities | $ | — | $ | 1,980 | $ | — | $ | 1,980 | ||||||||
Total | $ | — | $ | 1,980 | $ | — | $ | 1,980 | ||||||||
July 2, 2023 | ||||||||||||||||
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash | $ | 311,803 | $ | — | $ | — | $ | 311,803 | ||||||||
Cash equivalents | 290,548 | 10,857 | — | 301,405 | ||||||||||||
Available-for-sale | ||||||||||||||||
U.S. Treasury securities | — | 52,238 | — | 52,238 | ||||||||||||
Corporate debt securities | — | 51,608 | — | 51,608 | ||||||||||||
Commercial paper | — | 30,882 | — | 30,882 | ||||||||||||
Debt mutual funds | 7,739 | — | — | 7,739 | ||||||||||||
Certificates of deposit and time deposits | — | 6,699 | — | 6,699 | ||||||||||||
U.S. government agency securities | — | 6,475 | — | 6,475 | ||||||||||||
Non-U.S. government securities | — | 544 | — | 544 | ||||||||||||
Equity securities: | ||||||||||||||||
Mutual funds | 43,699 | — | — | 43,699 | ||||||||||||
$ | 653,789 | $ | 159,303 | $ | — | $ | 813,092 | |||||||||
Derivative assets | — | 5,819 | — | 5,819 | ||||||||||||
Total | $ | 653,789 | $ | 165,122 | $ | — | $ | 818,911 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | $ | — | $ | 994 | $ | — | $ | 994 | ||||||||
Total | $ | — | $ | 994 | $ | — | $ | 994 | ||||||||
Reported as follows: | ||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 602,351 | $ | 10,857 | $ | — | $ | 613,208 | ||||||||
Marketable securities | — | 95,199 | — | 95,199 | ||||||||||||
Long-term marketable securities | 51,438 | 53,247 | — | 104,685 | ||||||||||||
Prepayments | — | 5,819 | — | 5,819 | ||||||||||||
Total | $ | 653,789 | $ | 165,122 | $ | — | $ | 818,911 | ||||||||
Liabilities | . | |||||||||||||||
Other current liabilities | $ | — | $ | 994 | $ | — | $ | 994 | ||||||||
Total | $ | — | $ | 994 | $ | — | $ | 994 | ||||||||
December 31, 2022 | ||||||||||||||||
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash | $ | 632,417 | $ | — | $ | — | $ | 632,417 | ||||||||
Cash equivalents | 161,767 | 60,589 | — | 222,356 | ||||||||||||
Available-for-sale | — | |||||||||||||||
Corporate debt securities | — | 50,856 | — | 50,856 | ||||||||||||
U.S. Treasury securities | — | 39,649 | — | 39,649 | ||||||||||||
Commercial paper | — | 7,159 | — | 7,159 | ||||||||||||
Debt mutual funds | 6,580 | — | — | 6,580 | ||||||||||||
U.S. government agency securities | — | 6,352 | — | 6,352 | ||||||||||||
Certificates of deposit and time deposits | — | 1,740 | — | 1,740 | ||||||||||||
Non-U.S. government securities | — | 535 | — | 535 | ||||||||||||
Equity securities: | ||||||||||||||||
Mutual Funds | 37,518 | — | — | 37,518 | ||||||||||||
$ | 838,282 | $ | 166,880 | $ | — | $ | 1,005,162 | |||||||||
Derivative assets | — | 86 | — | 86 | ||||||||||||
Total | $ | 838,282 | $ | 166,966 | $ | — | $ | 1,005,248 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | — | 4,215 | — | 4,215 | ||||||||||||
Total | $ | — | $ | 4,215 | $ | — | $ | 4,215 | ||||||||
December 31, 2022 | ||||||||||||||||
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash | $ | 632,417 | $ | — | $ | — | $ | 632,417 | ||||||||
Cash equivalents | 161,767 | 60,589 | — | 222,356 | ||||||||||||
Available for sale securities: | ||||||||||||||||
Corporate debt securities | — | 50,856 | — | 50,856 | ||||||||||||
U.S. Treasury securities | — | 39,649 | — | 39,649 | ||||||||||||
Commercial paper | — | 7,159 | — | 7,159 | ||||||||||||
Debt mutual funds | 6,580 | — | — | 6,580 | ||||||||||||
U.S. government agency securities | — | 6,352 | — | 6,352 | ||||||||||||
Certificates of deposit and time deposits | — | 1,740 | — | 1,740 | ||||||||||||
Non-U.S. government securities | — | 535 | — | 535 | ||||||||||||
Equity securities: | ||||||||||||||||
Mutual funds | 37,518 | — | — | 37,518 | ||||||||||||
Total | $ | 838,282 | $ | 166,880 | $ | — | $ | 1,005,162 | ||||||||
Derivative assets | — | 86 | — | 86 | ||||||||||||
Total | $ | 838,282 | $ | 166,966 | $ | — | $ | 1,005,248 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | $ | — | $ | 4,215 | $ | — | $ | 4,215 | ||||||||
Total | $ | — | $ | 4,215 | $ | — | $ | 4,215 | ||||||||
Reported as follows: |
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 794,184 | $ | 60,589 | $ | — | $ | 854,773 | ||||||||
Marketable securities | — | 39,612 | — | 39,612 | ||||||||||||
Long-term marketable securities | 44,098 | 66,679 | — | 110,777 | ||||||||||||
Prepayments | — | 86 | — | 86 | ||||||||||||
Total | $ | 838,282 | $ | 166,966 | $ | — | $ | 1,005,248 | ||||||||
Liabilities | ||||||||||||||||
Other current liabilities | $ | — | $ | 4,215 | $ | — | $ | 4,215 | ||||||||
Total | $ | — | $ | 4,215 | $ | — | $ | 4,215 | ||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 794,184 | $ | 60,589 | $ | — | $ | 854,773 | ||||||||
Marketable securities | — | 39,612 | — | 39,612 | ||||||||||||
Long-term marketable securities | 44,098 | 66,679 | — | 110,777 | ||||||||||||
Prepayments | — | 86 | — | 86 | ||||||||||||
Total | $ | 838,282 | $ | 166,966 | $ | — | $ | 1,005,248 | ||||||||
Liabilities | ||||||||||||||||
Other current liabilities | $ | — | $ | 4,215 | $ | — | $ | 4,215 | ||||||||
Total | $ | — | $ | 4,215 | $ | — | $ | 4,215 | ||||||||
April 2, 2023 | December 31, 2022 | |||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 649,208 | $ | 649,208 | $ | 854,773 | $ | 854,773 | ||||||||
Marketable securities | 209,833 | 209,833 | 150,389 | 150,389 | ||||||||||||
Derivative assets | — | — | 86 | 86 | ||||||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | 1,980 | 1,980 | 4,215 | 4,215 | ||||||||||||
Convertible debt | 35,109 | 119,586 | 50,115 | 139,007 |
July 2, 2023 | December 31, 2022 | |||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 613,208 | $ | 613,208 | $ | 854,773 | $ | 854,773 | ||||||||
Marketable securities | 199,884 | 199,884 | 150,389 | 150,389 | ||||||||||||
Derivative assets | 5,819 | 5,819 | 86 | 86 | ||||||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | 994 | 994 | 4,215 | 4,215 | ||||||||||||
Convertible debt | 32,806 | 115,778 | 50,115 | 139,007 |
April 2, 2023 | ||||||||||||||||||||
Available-for-Sale | ||||||||||||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
U.S. Treasury securities | $ | 55,615 | $ | 38 | $ | (3,485 | ) | $ | 52,168 | $ | 49,669 | |||||||||
Corporate debt securities | 56,040 | 41 | (4,712 | ) | 51,369 | 49,131 | ||||||||||||||
Commercial paper | 47,225 | 337 | (14 | ) | 47,548 | 16,845 | ||||||||||||||
U.S. government agency securities | 7,427 | 9 | (42 | ) | 7,394 | 4,419 | ||||||||||||||
Debt mutual funds | 7,130 | — | (330 | ) | 6,800 | 3,312 | ||||||||||||||
Certificates of deposit and time deposits | 1,754 | — | — | 1,754 | — | |||||||||||||||
Non-U.S. government securities | 554 | — | — | 554 | — | |||||||||||||||
$ | 175,745 | $ | 425 | $ | (8,583 | ) | $ | 167,587 | $ | 123,376 | ||||||||||
July 2, 2023 | ||||||||||||||||||||
Available-for-Sale | ||||||||||||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
U.S. Treasury securities | $ | 56,107 | $ | 2 | $ | (3,871 | ) | $ | 52,238 | $ | 42,716 | |||||||||
Corporate debt securities | 56,680 | 12 | (5,084 | ) | 51,608 | 50,455 | ||||||||||||||
Commercial paper | 30,311 | 581 | (10 | ) | 30,882 | 19,840 | ||||||||||||||
Debt mutual funds | 8,104 | — | (365 | ) | 7,739 | 3,161 | ||||||||||||||
Certificates of deposit and time deposits | 6,699 | — | — | 6,699 | — | |||||||||||||||
U.S. government agency securities | 6,520 | — | (45 | ) | 6,475 | 6,475 | ||||||||||||||
Non-U.S. government securities | 544 | — | — | 544 | — | |||||||||||||||
$ | 164,965 | $ | 595 | $ | (9,375 | ) | $ | 156,185 | $ | 122,647 | ||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Marketable securities | $ | 92,915 | $ | 337 | $ | (357 | ) | $ | 92,895 | $ | 60,438 | |||||||||
Long-term marketable securities | 82,830 | 88 | (8,226 | ) | 74,692 | 62,938 | ||||||||||||||
$ | 175,745 | $ | 425 | $ | (8,583 | ) | $ | 167,587 | $ | 123,376 | ||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Marketable securities | $ | 95,482 | $ | 581 | $ | (864 | ) | $ | 95,199 | $ | 68,121 | |||||||||
Long-term marketable securities | 69,483 | 14 | (8,511 | ) | 60,986 | 54,526 | ||||||||||||||
$ | 164,965 | $ | 595 | $ | (9,375 | ) | $ | 156,185 | $ | 122,647 | ||||||||||
December 31, 2022 | ||||||||||||||||||||
Available-for-Sale | ||||||||||||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Corporate debt securities | $ | 57,006 | $ | 3 | $ | (6,153 | ) | $ | 50,856 | $ | 50,667 | |||||||||
U.S. Treasury securities | 44,030 | — | (4,381 | ) | 39,649 | 39,649 | ||||||||||||||
Commercial paper | 7,089 | 70 | — | 7,159 | — | |||||||||||||||
Debt mutual funds | 6,997 | — | (417 | ) | 6,580 | 3,095 | ||||||||||||||
U.S. government agency securities | 6,442 | — | (90 | ) | 6,352 | 6,352 | ||||||||||||||
Certificates of deposit and time deposits | 1,740 | — | — | 1,740 | — | |||||||||||||||
Non-U.S. government securities | 535 | — | — | 535 | — | |||||||||||||||
$ | 123,839 | $ | 73 | $ | (11,041 | ) | $ | 112,871 | $ | 99,763 | ||||||||||
December 31, 2022 | ||||||||||||||||||||
Available-for-Sale | ||||||||||||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Corporate debt securities | $ | 57,006 | $ | 3 | $ | (6,153 | ) | $ | 50,856 | $ | 50,667 | |||||||||
U.S. Treasury securities | 44,030 | — | (4,381 | ) | 39,649 | 39,649 | ||||||||||||||
Commercial paper | 7,089 | 70 | — | 7,159 | — | |||||||||||||||
Debt mutual funds | 6,997 | — | (417 | ) | 6,580 | 3,095 | ||||||||||||||
U.S. government agency securities | 6,442 | — | (90 | ) | 6,352 | 6,352 | ||||||||||||||
Certificates of deposit and time deposits | 1,740 | — | — | 1,740 | — | |||||||||||||||
Non-U.S. government securities | 535 | — | — | 535 | — | |||||||||||||||
$ | 123,839 | $ | 73 | $ | (11,041 | ) | $ | 112,871 | $ | 99,763 | ||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Marketable securities | $ | 39,950 | $ | 70 | $ | (408 | ) | $ | 39,612 | $ | 30,713 | |||||||||
Long-term marketable securities | 83,889 | 3 | (10,633 | ) | 73,259 | 69,050 | ||||||||||||||
$ | 123,839 | $ | 73 | $ | (11,041 | ) | $ | 112,871 | $ | 99,763 | ||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Marketable securities | $ | 39,950 | $ | 70 | $ | (408 | ) | $ | 39,612 | $ | 30,713 | |||||||||
Long-term marketable securities | 83,889 | 3 | (10,633 | ) | 73,259 | 69,050 | ||||||||||||||
$ | 123,839 | $ | 73 | $ | (11,041 | ) | $ | 112,871 | $ | 99,763 | ||||||||||
April 2, 2023 | ||||||||
Cost | Fair Market Value | |||||||
(in thousands) | ||||||||
Due within one year | $ | 92,915 | $ | 92,895 | ||||
Due after 1 year through 5 years | 31,721 | 30,672 | ||||||
Due after 5 years through 10 years | 5,022 | 4,612 | ||||||
Due after 10 years | 38,957 | 32,608 | ||||||
Total | $ | 168,615 | $ | 160,787 | ||||
July 2, 2023 | ||||||||
Cost | Fair Market Value | |||||||
(in thousands) | ||||||||
Due within one year | $ | 95,482 | $ | 95,199 | ||||
Due after 1 year through 5 years | 17,131 | 16,467 | ||||||
Due after 5 years through 10 years | 6,012 | 5,559 | ||||||
Due after 10 years | 38,236 | 31,221 | ||||||
Total | $ | 156,861 | $ | 148,446 | ||||
April 2, 2023 | December 31, 2022 | |||||||||||||||||||||||
Buy Position | Sell Position | Net Total | Buy Position | Sell Position | Net Total | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Japanese Yen | $ | (57.7 | ) | $ | — | $ | (57.7 | ) | $ | (37.1 | ) | $ | — | $ | (37.1 | ) | ||||||||
Taiwan Dollar | (38.3 | ) | — | (38.3 | ) | (29.2 | ) | — | (29.2 | ) | ||||||||||||||
Korean Won | (3.1 | ) | — | (3.1 | ) | (6.4 | ) | — | (6.4 | ) | ||||||||||||||
British Pound Sterling | (1.2 | ) | — | (1.2 | ) | (1.2 | ) | — | (1.2 | ) | ||||||||||||||
Singapore Dollar | — | 35.7 | 35.7 | — | 33.5 | 33.5 | ||||||||||||||||||
Euro | — | 24.3 | 24.3 | — | 38.4 | 38.4 | ||||||||||||||||||
Philippine Peso | — | 2.5 | 2.5 | — | 2.7 | 2.7 | ||||||||||||||||||
Chinese Yuan | — | 1.9 | 1.9 | — | 2.2 | 2.2 | ||||||||||||||||||
Total | $ | (100.3 | ) | $ | 64.4 | $ | (35.9 | ) | $ | (73.9 | ) | $ | 76.8 | $ | 2.9 | |||||||||
Net Notional Value | ||||||||
July 2, 2023 | December 31, 2022 | |||||||
(in millions) | ||||||||
Currency Hedged (Buy/Sell) | ||||||||
U.S. dollar/Japanese yen | $ | 66.3 | $ | 37.1 | ||||
U.S. dollar/Taiwan dollar | 22.3 | 29.2 | ||||||
U.S. dollar/Korean won | 8.1 | 6.4 | ||||||
U.S. dollar/British pound sterling | 0.9 | 1.2 | ||||||
Euro/U.S. dollar | 24.5 | 38.4 | ||||||
Singapore dollar/U.S. dollar | 22.0 | 34 | ||||||
Philippine peso/U.S. dollar | 2.5 | 2.7 | ||||||
Chinese yuan/U.S. dollar | 1.8 | 2.2 | ||||||
Danish krone/U.S. dollar | 0.6 | — | ||||||
Total | $ | 149.0 | $ | 150.7 | ||||
April 2, 2023 | December 31, 2022 | |||||||||||||||||||||||
Buy Position | Sell Position | Net Total | Buy Position | Sell Position | Net Total | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Japanese Yen | $ | (13.6 | ) | $ | 30.2 | $ | 16.6 | $ | (23.4 | ) | $ | 61.2 | $ | 37.8 | ||||||||||
Taiwan Dollar | — | — | — | (5.5 | ) | 10.9 | 5.4 | |||||||||||||||||
Total | $ | (13.6 | ) | $ | 30.2 | $ | 16.6 | $ | (28.9 | ) | $ | 72.1 | $ | 43.2 | ||||||||||
Net Notional Value | ||||||||
July 2, 2023 | December 31, 2022 | |||||||
(in millions) | ||||||||
Currency Hedged (Buy/Sell) | ||||||||
Japanese yen/U.S. dollar | $ | 52.8 | $ | 23.4 | ||||
Taiwan dollar/U.S. dollar | — | 5.5 | ||||||
U.S. dollar/Japanese yen | — | 61.2 | ||||||
U.S. dollar/Taiwan dollar | — | 10.9 | ||||||
Total | $ | 52.8 | $ | 101.0 | ||||
Balance Sheet Location | April 2, 2023 | December 31, 2022 | ||||||||||
(in thousands) | ||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||
Foreign exchange forward contracts | Prepayments | $ | — | $ | 86 | |||||||
Foreign exchange forward contracts | Other current liabilities | (1,057 | ) | (990 | ) | |||||||
Derivatives designated as hedging instruments: | ||||||||||||
Foreign exchange option contracts | Other current liabilities | (923 | ) | (3,225 | ) | |||||||
Total derivatives | $ | (1,980 | ) | $ | (4,129 | ) | ||||||
Balance Sheet Location | July 2, 2023 | December 31, 2022 | ||||||||
(in thousands) | ||||||||||
Derivatives not designated as hedging instruments: | ||||||||||
Foreign exchange forward contracts | Prepayments | $ | 2,138 | $ | 86 | |||||
Foreign exchange forward contracts | Other current liabilities | (994 | ) | (990 | ) | |||||
Derivatives designated as hedging instruments: | ||||||||||
Foreign exchange forward contracts | Prepayments | 3,681 | — | |||||||
Foreign exchange option contracts | Other current liabilities | — | (3,225 | ) | ||||||
Total derivatives | $ | 4,825 | $ | (4,129 | ) | |||||
For the Three Months Ended | ||||||||||||
Location of Losses (Gains) Recognized in Statement of Operations | April 2, 2023 | April 3, 2022 | ||||||||||
(in thousands) | ||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||
Foreign exchange forward contracts | Other (income) expense, net | $ | 1,259 | $ | (1,752 | ) | ||||||
Derivatives designated as hedging instruments: | ||||||||||||
Foreign exchange option contracts | Revenue | 1,538 | — | |||||||||
Total Derivatives | $ | 2,797 | $ | (1,752 | ) | |||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||
Location of (Gains) Losses Recognized in Statement of Operations | July 2, 2023 | July 3, 2022 | July 2, 2023 | July 3, 2022 | ||||||||||||||
(in thousands) | ||||||||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||
Foreign exchange forward contracts | Other (income) expense, net | $ | (4,040 | ) | $ | (1,703 | ) | $ | (2,781 | ) | $ | (3,455 | ) | |||||
Derivatives designated as hedging instruments: | ||||||||||||||||||
Foreign exchange option contracts | Revenue | 414 | — | 1,952 | — | |||||||||||||
Total Derivatives | $ | (3,626 | ) | $ | (1,703 | ) | $ | (829 | ) | $ | (3,455 | ) | ||||||
April 2, 2023 | December 31, 2022 | |||||||
(in thousands) | ||||||||
Debt principal | $ | 35,109 | $ | 50,228 | ||||
Unamortized debt issuance fees | — | 113 | ||||||
Net carrying amount of convertible debt | $ | 35,109 | $ | 50,115 | ||||
July 2, 2023 | December 31, 2022 | |||||||
(in thousands) | ||||||||
Debt principal | $ | 32,806 | $ | 50,228 | ||||
Unamortized debt issuance fees | — | 113 | ||||||
Net c arrying amount of convertible debt | $ | 32,806 | $ | 50,115 | ||||
For the Three Months Ended | ||||||||
April 2, 2023 | April 3, 2022 | |||||||
(in thousands) | ||||||||
Contractual interest expense on the coupon | $ | 138 | $ | 311 | ||||
Amortization of the issue fees recognized as interest expense | 113 | 66 | ||||||
Total interest expense on the convertible debt | $ | 251 | $ | 377 | ||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 2, 2023 | July 3, 2022 | July 2, 2023 | July 3, 2022 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Contractual interest expense on the coupon | $ | 100 | $ | 121 | $ | 238 | $ | 432 | ||||||||
Amortization of debt issuance fees recognized as interest expense | — | 64 | 113 | 130 | ||||||||||||
Total interest expense on the convertible debt | $ | 100 | $ | 185 | $ | 351 | $ | 562 | ||||||||
April 2, 2023 | December 31, 2022 | July 2, 2023 | December 31, 2022 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Contract manufacturer and supplier prepayments | $ | 494,849 | $ | 491,105 | $ | 515,350 | $ | 491,105 | ||||||||
Prepaid maintenance and other services | 15,557 | 14,545 | ||||||||||||||
Prepaid taxes | 22,677 | 18,625 | 15,437 | 18,625 | ||||||||||||
Prepaid maintenance and other services | 16,591 | 14,545 | ||||||||||||||
Other prepayments | 14,997 | 8,687 | 14,338 | 8,687 | ||||||||||||
Total prepayments | $ | 549,114 | $ | 532,962 | $ | 560,682 | $ | 532,962 | ||||||||
For the Three Months Ended | ||||||||
April 2, 2023 | April 3, 2022 | |||||||
(in thousands) | ||||||||
Balance at beginning of period | $ | 14,181 | $ | 24,577 | ||||
Accruals for warranties issued during the period | 4,117 | 4,100 | ||||||
Accruals related to pre-existing warranties | (405 | ) | (2,758 | ) | ||||
Settlements made during the period | (4,992 | ) | (5,814 | ) | ||||
Balance at end of period | $ | 12,901 | $ | 20,105 | ||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 2, | July 3, | July 2, | July 3, | |||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(in thousands) | ||||||||||||||||
Balance at beginning of period | $ | 12,901 | $ | 20,105 | $ | 14,181 | $ | 24,577 | ||||||||
Accruals for warranties issued during the period | 3,261 | 6,429 | 7,378 | 10,530 | ||||||||||||
Accruals related to pre-existing warranties | (352 | ) | (1,611 | ) | (757 | ) | (4,370 | ) | ||||||||
Settlements made during the period | (3,267 | ) | (8,887 | ) | (8,259 | ) | (14,701 | ) | ||||||||
Balance at end of period | $ | 12,543 | $ | 16,036 | $ | 12,543 | $ | 16,036 | ||||||||
For the Three Months Ended | ||||||||
April 2, 2023 | April 3, 2022 | |||||||
(in thousands) | ||||||||
Balance at beginning of period | $ | 56,180 | $ | 64,168 | ||||
Deferral of new extended warranty revenue | 4,413 | 11,774 | ||||||
Recognition of extended warranty deferred revenue | (11,250 | ) | (10,216 | ) | ||||
Balance at end of period | $ | 49,343 | $ | 65,726 | ||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 2, | July 3, | July 2, | July 3, | |||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(in thousands) | ||||||||||||||||
Balance at beginning of period | $ | 49,343 | $ | 65,726 | $ | 56,180 | $ | 64,168 | ||||||||
Deferral of new extended warranty revenue | 4,467 | 9,788 | 8,881 | 21,563 | ||||||||||||
Recognition of extended warranty deferred revenue | (9,388 | ) | (9,723 | ) | (20,639 | ) | (19,940 | ) | ||||||||
Balance at end of period | $ | 44,422 | $ | 65,791 | $ | 44,422 | $ | 65,791 | ||||||||
For the Three Months Ended | ||||||||
April 2, 2023 | April 3, 2022 | |||||||
Risk-free interest rate | 3.9 | % | 1.4 | % | ||||
Teradyne volatility-historical | 50.2 | % | 47.1 | % | ||||
NYSE Composite Index volatility-historical | 24.8 | % | 22.7 | % | ||||
Dividend yield | 0.4 | % | 0.4 | % |
For the Six Months Ended | ||||||||
July 2, | July 3, | |||||||
2023 | 2022 | |||||||
Risk-free interest rate | 3.9 | % | 1.4 | % | ||||
Teradyne volatility-historical | 50.2 | % | 47.1 | % | ||||
NYSE Composite Index volatility-historical | 24.8 | % | 22.7 | % | ||||
Dividend yield | 0.4 | % | 0.4 | % |
For the Three Months Ended | ||||||||
April 2, 2023 | April 3, 2022 | |||||||
Expected life (years) | 4.0 | 4.0 | ||||||
Risk-free interest rate | 3.7 | % | 1.6 | % | ||||
Volatility-historical | 46.7 | % | 43.7 | % | ||||
Dividend yield | 0.4 | % | 0.4 | % |
For the Six Months Ended | ||||||||
July 2, | July 3, | |||||||
2023 | 2022 | |||||||
Expected life (years) | 4.0 | 4.0 | ||||||
Risk-free interest rate | 3.7 | % | 1.6 | % | ||||
Volatility-historical | 46.7 | % | 43.7 | % | ||||
Dividend yield | 0.4 | % | 0.4 | % |
Foreign Currency Translation Adjustment | Unrealized (Losses) Gains on Marketable Securities | Unrealized (Losses) Gains on Cash Flow Hedges | Retirement Plans Prior Service Credit | Total | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Three Months Ended April 2, 2023 | ||||||||||||||||||||
Balance at December 31, 2022, net of tax of $0, $(2,308), $(708), $(1,130), respectively | $ | (39,849 | ) | $ | (8,661 | ) | $ | (2,517 | ) | $ | 1,159 | $ | (49,868 | ) | ||||||
Other comprehensive gain before reclassifications, net of tax of $0, $503, $167, $0, respectively | 9,309 | 2,294 | 596 | — | 12,199 | |||||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $2, $338, $0, respectively | — | 5 | 1,200 | (2 | ) | 1,203 | ||||||||||||||
Net current period other comprehensive gain (loss), net of tax of $0, $505, $505 $0, respectively | 9,309 | 2,299 | 1,796 | (2 | ) | 13,402 | ||||||||||||||
Balance at April 2, 2023, net of tax of $0, $(1,803), $(203), $(1,130) respectively | $ | (30,540 | ) | $ | (6,362 | ) | $ | (721 | ) | $ | 1,157 | $ | (36,466 | ) | ||||||
Three Months Ended April 3, 2022 | ||||||||||||||||||||
Balance at December 31, 2021, net of tax of $0, $1,055, $0, $(1,128), respectively | $ | (10,818 | ) | $ | 3,704 | $ | — | $ | 1,166 | $ | (5,948 | ) | ||||||||
Other comprehensive loss before reclassifications, net of tax of $0, $(1,333), $0, $0, respectively | (8,076 | ) | (5,388 | ) | — | — | (13,464 | ) | ||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $(18), $0, $0, respectively | — | (65 | ) | — | (2 | ) | (67 | ) | ||||||||||||
Net current period other comprehensive loss, net of tax of $0, $(1,351), $0, $0, respectively | (8,076 | ) | (5,453 | ) | — | (2 | ) | (13,531 | ) | |||||||||||
Balance at April 3, 2022, net of tax of $0, $(296), $0, $(1,128), respectively | $ | (18,894 | ) | $ | (1,749 | ) | $ | — | $ | 1,164 | $ | (19,479 | ) | |||||||
Foreign Currency Translation Adjustment | Unrealized (Losses) Gains on Marketable Securities | Unrealized (Losses) Gains on Cash Flow Hedges | Retirement Plans Prior Service Credit | Total | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Six Months Ended July 2, 2023 | ||||||||||||||||||||
Balance at December 31, 2022, net of tax of $0, $(2,308), $(708), $(1,130), respectively | $ | (39,849 | ) | $ | (8,661 | ) | $ | (2,517 | ) | $ | 1,159 | $ | (49,868 | ) | ||||||
Other comprehensive gain before reclassifications, net of tax of $0, $323, $1,088, $0, respectively | 12,250 | 1,726 | 3,866 | — | 17,842 | |||||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $10, $428, $(1), respectively | — | 33 | 1,524 | (3 | ) | 1,554 | ||||||||||||||
Net current period other comprehensive gain (loss), net of tax of $0, $333, $1,516, $(1), respectively | 12,250 | 1,759 | 5,390 | (3 | ) | 19,396 | ||||||||||||||
Balance at July 2, 2023, net of tax of $0, $(1,975), $808, $(1,131), respectively | $ | (27,599 | ) | $ | (6,902 | ) | $ | 2,873 | $ | 1,156 | $ | (30,472 | ) | |||||||
Six Months Ended July 3, 2022 | ||||||||||||||||||||
Balance at December 31, 2021, net of tax of $0, $1,055, $0, $(1,128), respectively | $ | (10,818 | ) | $ | 3,704 | $ | — | $ | 1,166 | $ | (5,948 | ) | ||||||||
Other comprehensive loss before reclassifications, net of tax of $0, $(2,573), $0, $0, respectively | (37,307 | ) | (9,910 | ) | — | — | (47,217 | ) | ||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $59, $0, $(1), respectively | — | 209 | — | (3 | ) | 206 | ||||||||||||||
Net current period other comprehensive loss, net of tax of $0, $(2,514), $0, $(1), respectively | (37,307 | ) | (9,701 | ) | — | (3 | ) | (47,011 | ) | |||||||||||
Balance at July 3, 2022, net of tax of $0, $(1,459), $0, $(1,129), respectively | $ | (48,125 | ) | $ | (5,997 | ) | $ | — | $ | 1,163 | $ | (52,959 | ) | |||||||
Details about Accumulated Other Comprehensive Income (Loss) Components | For the Three Months Ended | Affected Line Item in the Statements of Operations | ||||||||||
April 2, | April 3, | |||||||||||
2023 | 2022 | |||||||||||
(in thousands) | ||||||||||||
Available-for-sale | ||||||||||||
Unrealized (losses) gains, net of tax of $(2) and $18, respectively | $ | (5 | ) | $ | 65 | Other (income) expense, net | | |||||
Cash flow hedges: | ||||||||||||
Unrealized losses, net of tax of $(338) and $0, respectively | (1,200 | ) | — | Revenue | ||||||||
Defined benefit pension and postretirement plans: | ||||||||||||
Amortization of prior service benefit, net of tax of $0 and $0, respectively | 2 | 2 | (a) | |||||||||
Total reclassifications, net of tax of $(340) and $18, respectively | $ | (1,203 | ) | $ | 67 | Net income | ||||||
Details about Accumulated Other Comprehensive Income (Loss) Components | For the Three Months Ended | For the Six Months Ended | Affected Line Item in the Statements of Operations | |||||||||||||||
July 2, | July 3, | July 2, | July 3, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||
(in thousands) | ||||||||||||||||||
Available-for-sale | ||||||||||||||||||
Unrealized losses, net of tax of $(8), $(77), $(10), $(59), respectively | $ | (28 | ) | $ | (274 | ) | $ | (33 | ) | $ | (209 | ) | Other (income) expense, net | |||||
Cash flow hedges: | ||||||||||||||||||
Unrealized losses, net of tax of $(91), $0, $(428), $0, respectively | (323 | ) | — | (1,524 | ) | — | Revenue | |||||||||||
Defined benefit pension and postretirement plans: | ||||||||||||||||||
Amortization of prior service credit, net of tax of $0, $0, $1, $1, respectively | 2 | 2 | 3 | 3 | (a) | |||||||||||||
Total reclassifications, net of tax of $(99), $(77), $(437), $(58), respectively | $ | (349 | ) | $ | (272 | ) | $ | (1,554 | ) | $ | (206 | ) | Net income | |||||
(a) | The amortization of prior service credit is included in the computation of net periodic postretirement benefit cost. See Note |
Robotics | Wireless Test | Semiconductor Test | System Test | Total | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Balance at December 31, 2022 | ||||||||||||||||||||
Goodwill | $ | 383,166 | $ | 361,819 | $ | 262,077 | $ | 158,699 | $ | 1,165,761 | ||||||||||
Accumulated impairment losses | — | (353,843 | ) | (260,540 | ) | (148,183 | ) | (762,566 | ) | |||||||||||
383,166 | 7,976 | 1,537 | 10,516 | 403,195 | ||||||||||||||||
Foreign currency translation adjustment | 6,609 | — | 24 | — | 6,633 | |||||||||||||||
Balance at April 2, 2023 | ||||||||||||||||||||
Goodwill | 389,775 | 361,819 | 262,101 | 158,699 | 1,172,394 | |||||||||||||||
Accumulated impairment losses | — | (353,843 | ) | (260,540 | ) | (148,183 | ) | (762,566 | ) | |||||||||||
$ | 389,775 | $ | 7,976 | $ | 1,561 | $ | 10,516 | $ | 409,828 | |||||||||||
Robotics | Wireless Test | Semiconductor Test | System Test | Total | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Balance at December 31, 2022 | ||||||||||||||||||||
Goodwill | $ | 383,166 | $ | 361,819 | $ | 262,077 | $ | 158,699 | $ | 1,165,761 | ||||||||||
Accumulated impairment losses | — | (353,843 | ) | (260,540 | ) | (148,183 | ) | (762,566 | ) | |||||||||||
Total Goodwill | 383,166 | 7,976 | 1,537 | 10,516 | 403,195 | |||||||||||||||
Foreign currency translation adjustment | 8,857 | — | 58 | — | 8,915 | |||||||||||||||
Balance at July 2, 2023 | ||||||||||||||||||||
Goodwill | 392,023 | 361,819 | 262,135 | 158,699 | 1,174,676 | |||||||||||||||
Accumulated impairment losses | — | (353,843 | ) | (260,540 | ) | (148,183 | ) | (762,566 | ) | |||||||||||
Total Goodwill | $ | 392,023 | $ | 7,976 | $ | 1,595 | $ | 10,516 | $ | 412,110 | ||||||||||
Gross Carrying Amount (1) | Accumulated Amortization (1) | Foreign Currency Translation Adjustment | Net Carrying Amount | |||||||||||||
(in thousands) | ||||||||||||||||
Balance at July 2, 2023 | ||||||||||||||||
Developed technology | $ | 267,708 | $ | (237,078 | ) | $ | (5,444 | ) | $ | 25,186 | ||||||
Customer relationships | 52,109 | (46,699 | ) | 200 | 5,610 | |||||||||||
Tradenames and trademarks | 59,007 | (43,904 | ) | (1,288 | ) | 13,815 | ||||||||||
Total intangible assets | $ | 378,824 | $ | (327,681 | ) | $ | (6,532 | ) | $ | 44,611 | ||||||
Balance, December 31, 2022 | ||||||||||||||||
Developed technology | $ | 270,967 | $ | (234,208 | ) | $ | (5,935 | ) | $ | 30,824 | ||||||
Customer relationships | 57,739 | (51,186 | ) | 172 | 6,725 | |||||||||||
Tradenames and trademarks | 59,387 | (41,930 | ) | (1,528 | ) | 15,929 | ||||||||||
Total intangible assets | $ | 388,093 | $ | (327,324 | ) | $ | (7,291 | ) | $ | 53,478 | ||||||
Gross Carrying Amount | Accumulated Amortization | Foreign Currency Translation Adjustment | Net Carrying Amount | |||||||||||||
(in thousands) | ||||||||||||||||
Balance at April 2, 2023 | ||||||||||||||||
Developed technology | $ | 270,967 | $ | (237,269 | ) | $ | (5,560 | ) | $ | 28,138 | ||||||
Customer relationships | 57,739 | (51,756 | ) | 184 | 6,167 | |||||||||||
Tradenames and trademarks | 59,387 | (43,101 | ) | (1,345 | ) | 14,941 | ||||||||||
Total intangible assets | $ | 388,093 | $ | (332,126 | ) | $ | (6,721 | ) | $ | 49,246 | ||||||
Balance, December 31, 2022 | ||||||||||||||||
Developed technology | $ | 270,967 | $ | (234,208 | ) | $ | (5,935 | ) | $ | 30,824 | ||||||
Customer relationships | 57,739 | (51,186 | ) | 172 | 6,725 | |||||||||||
Tradenames and trademarks | 59,387 | (41,930 | ) | (1,528 | ) | 15,929 | ||||||||||
Total intangible assets | $ | 388,093 | $ | (327,324 | ) | $ | (7,291 | ) | $ | 53,478 | ||||||
(1) | In 2023, $9.3 million of amortizable intangible assets became fully amortized and have been eliminated from the gross carrying amount and accumulated amortization. |
Year | Amortization Expense | |||
(in thousands) | ||||
2023 | $ | 14,219 | ||
2024 | 18,749 | |||
2025 | 11,320 | |||
2026 | 2,371 | |||
2027 | 1,155 | |||
Thereafter | 1,432 |
Year | Amortization Expense | |||
(in thousands) | ||||
2023 | $ | 9,443 | ||
2024 | 18,834 | |||
2025 | 11,352 | |||
2026 | 2,379 | |||
2027 | 1,162 | |||
Thereafter | 1,441 |
For the Three Months Ended | ||||||||
April 2, | April 3, | |||||||
2023 | 2022 | |||||||
(in thousands, except per share amounts) | ||||||||
Net income for basic and diluted net income per share | $ | 83,531 | $ | 161,928 | ||||
Weighted average common shares-basic | 155,904 | 162,048 | ||||||
Effect of dilutive potential common shares: | ||||||||
Convertible note hedge warrant shares (1) | 8,983 | 10,028 | ||||||
Incremental shares from assumed conversion of convertible notes (2) | 914 | 2,541 | ||||||
Restricted stock units | 453 | 875 | ||||||
Stock options | 48 | 69 | ||||||
Employee stock purchase plan | 6 | 14 | ||||||
Dilutive potential common shares | 10,404 | 13,527 | ||||||
Weighted average common shares-diluted | 166,308 | 175,575 | ||||||
Net income per common share-basic | $ | 0.54 | $ | 1.00 | ||||
Net income per common share-diluted | $ | 0.50 | $ | 0.92 | ||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 2, | July 3, | July 2, | July 3, | |||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
Net income for basic and diluted net income per share | $ | 120,050 | $ | 197,787 | $ | 203,581 | $ | 359,715 | ||||||||
Weighted average common shares-basic | 154,760 | 159,563 | 155,332 | 160,805 | ||||||||||||
Effect of dilutive potential common shares: | ||||||||||||||||
Convertible note hedge warrant shares (1) | 8,876 | 9,029 | 8,929 | 9,528 | ||||||||||||
Incremental shares from assumed conversion of convertible notes (2) | 742 | 1,900 | 828 | 2,220 | ||||||||||||
Restricted stock units | 323 | 581 | 389 | 730 | ||||||||||||
Stock options | 43 | 54 | 45 | 61 | ||||||||||||
Employee stock purchase plan | 7 | 32 | 7 | 23 | ||||||||||||
Dilutive potential common shares | 9,991 | 11,596 | 10,198 | 12,562 | ||||||||||||
Weighted average common shares-diluted | 164,751 | 171,159 | 165,530 | 173,367 | ||||||||||||
Net income per common share-basic | $ | 0.78 | $ | 1.24 | $ | 1.31 | $ | 2.24 | ||||||||
Net income per common share-diluted | $ | 0.73 | $ | 1.16 | $ | 1.23 | $ | 2.07 | ||||||||
(1) | Convertible notes hedge warrant shares were calculated using the difference between the average Teradyne stock price for the period and the warrant price, multiplied by the number of warrant shares. The result of this calculation, representing the total intrinsic value of the warrant, was divided by the average Teradyne stock price for the period. |
(2) | Incremental shares from assumed conversion of the convertible notes were calculated using the difference between the average Teradyne stock price for the period and the conversion price, multiplied by the number of convertible notes shares. The result of this calculation, representing the total intrinsic value of the convertible debt, was divided by the average Teradyne stock price for the period. |
For the Three Months Ended | ||||||||||||||||
April 2, 2023 | April 3, 2022 | |||||||||||||||
United States | Foreign | United States | Foreign | |||||||||||||
(in thousands) | ||||||||||||||||
Service cost | $ | 272 | $ | 109 | $ | 397 | $ | 206 | ||||||||
Interest cost | 1,711 | 262 | 1,222 | 118 | ||||||||||||
Expected return on plan assets | (1,285 | ) | (9 | ) | (732 | ) | (20 | ) | ||||||||
Total net periodic pension cost | $ | 698 | $ | 362 | $ | 887 | $ | 304 | ||||||||
For the Three Months Ended | ||||||||||||||||
July 2, 2023 | July 3, 2022 | |||||||||||||||
United States | Foreign | United States | Foreign | |||||||||||||
(in thousands) | ||||||||||||||||
Service cost | $ | 272 | $ | 110 | $ | 397 | $ | 180 | ||||||||
Interest cost | 1,714 | 263 | 1,221 | 120 | ||||||||||||
Expected return on plan assets | (1,286 | ) | (9 | ) | (732 | ) | (18 | ) | ||||||||
Net actuarial loss (gain) | 24 | — | (45 | ) | — | |||||||||||
Total net periodic pension cost | $ | 724 | $ | 364 | $ | 841 | $ | 282 | ||||||||
For the Six Months Ended | ||||||||||||||||
July 2, 2023 | July 3, 2022 | |||||||||||||||
United States | Foreign | United States | Foreign | |||||||||||||
(in thousands) | ||||||||||||||||
Service cost | $ | 543 | $ | 220 | $ | 794 | $ | 386 | ||||||||
Interest cost | 3,425 | 526 | 2,443 | 238 | ||||||||||||
Expected return on plan assets | (2,571 | ) | (18 | ) | (1,463 | ) | (38 | ) | ||||||||
Net actuarial loss (gain) | 24 | — | (45 | ) | — | |||||||||||
Total net periodic pension cost | $ | 1,421 | $ | 728 | $ | 1,729 | $ | 586 | ||||||||
For the Three Months Ended | ||||||||
April 2, | April 3, | |||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Service cost | $ | 9 | $ | 17 | ||||
Interest cost | 61 | 44 | ||||||
Amortization of prior service credit | (2 | ) | (2 | ) | ||||
Total net periodic postretirement benefit cost | $ | 68 | $ | 59 | ||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 2, 2023 | July 3, 2022 | July 2, 2023 | July 3, 2022 | |||||||||||||
(in thousands) | ||||||||||||||||
Service cost | $ | 8 | $ | 15 | $ | 17 | $ | 32 | ||||||||
Interest cost | 60 | 45 | 121 | 88 | ||||||||||||
Amortization of prior service credit | (2 | ) | (2 | ) | (4 | ) | (4 | ) | ||||||||
Special termination benefits | 369 | — | 369 | — | ||||||||||||
Net actuarial loss | 30 | 54 | 30 | 54 | ||||||||||||
Total net periodic postretirement benefit cost | $ | 465 | $ | 112 | $ | 533 | $ | 170 | ||||||||
For the Three Months Ended | ||||||||
April 2, | April 3, | |||||||
2023 | 2022 | |||||||
US statutory federal tax rate | 21.0 | % | 21.0 | % | ||||
Non-deductible officers’ compensation | 0.9 | 1.1 | ||||||
Discrete benefit related to equity compensation | (3.3 | ) | (6.6 | ) | ||||
International provisions of the U.S. Tax Cuts and Jobs Act of 2017 | (3.2 | ) | (1.3 | ) | ||||
Tax credits | (2.5 | ) | (1.6 | ) | ||||
Foreign taxes | (0.6 | ) | (3.4 | ) | ||||
Other, net | 1.7 | 1.0 | ||||||
Effective tax rate | 14.0 | % | 10.2 | % | ||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 2, 2023 | July 3, 2022 | July 2, 2023 | July 3, 2022 | |||||||||||||
U.S. statutory federal tax rate | 21.0 | % | 21.0 | % | 21.0 | % | 21.0 | % | ||||||||
Discrete expense related to foreign currency gain/loss | 1.2 | 0.6 | 0.7 | 0.6 | ||||||||||||
Non-deductible officers’ compensation | 1.0 | 1.4 | 1.0 | 1.3 | ||||||||||||
International provisions of the U.S. Tax Cuts and Jobs Act of 2017 | (2.5 | ) | (1.0 | ) | (2.8 | ) | (1.2 | ) | ||||||||
Tax credits | (2.4 | ) | (2.0 | ) | (2.4 | ) | (1.8 | ) | ||||||||
Discrete benefit related to equity compensation | (0.1 | ) | (0.2 | ) | (1.4 | ) | (2.9 | ) | ||||||||
Foreign taxes | (1.0 | ) | (3.2 | ) | (0.8 | ) | (3.3 | ) | ||||||||
Other, net | (0.3 | ) | 0.5 | 0.4 | 0.4 | |||||||||||
Effective tax rate | 16.9 | % | 17.1 | % | 15.7 | % | 14.1 | % | ||||||||
Semiconductor Test | System Test | Robotics | Wireless Test | Corporate and Eliminations | Consolidated | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Three Months Ended April 2, 2023 | ||||||||||||||||||||||||
Revenues | $ | 415,009 | $ | 74,631 | $ | 89,214 | $ | 38,675 | $ | — | $ | 617,529 | ||||||||||||
Income (loss) before income taxes (1)(2) | 96,185 | 15,275 | (18,490 | ) | 9,352 | (5,238 | ) | 97,084 | ||||||||||||||||
Total assets (3) | 1,386,851 | 173,669 | 676,092 | 87,875 | 1,058,920 | 3,383,407 | ||||||||||||||||||
Three Months Ended April 3, 2022 | ||||||||||||||||||||||||
Revenues | $ | 482,341 | $ | 118,668 | $ | 103,189 | $ | 51,518 | $ | (346 | ) | $ | 755,370 | |||||||||||
Income (loss) before income taxes (1)(2) | 149,705 | 41,322 | (5,098 | ) | 18,619 | (24,189 | ) | 180,359 | ||||||||||||||||
Total assets (3) | 1,296,070 | 187,283 | 675,560 | 113,821 | 1,336,420 | 3,609,154 |
Semiconductor Test | System Test | Robotics | Wireless Test | Corporate and Eliminations | Consolidated | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Three Months Ended July 2, 2023 | ||||||||||||||||||||||||
Revenues | $ | 474,708 | $ | 94,272 | $ | 71,634 | $ | 43,823 | $ | — | $ | 684,437 | ||||||||||||
Income (loss) before income taxes (1)(2) | 129,040 | 28,599 | (26,401 | ) | 12,020 | 1,144 | 144,402 | |||||||||||||||||
Total assets (3) | 1,416,109 | 191,002 | 685,132 | 88,869 | 1,013,784 | 3,394,896 | ||||||||||||||||||
Three Months Ended July 3, 2022 | ||||||||||||||||||||||||
Revenues | $ | 541,348 | $ | 134,702 | $ | 101,055 | $ | 63,854 | $ | (193 | ) | $ | 840,766 | |||||||||||
Income (loss) before income taxes (1)(2) | 177,782 | 54,042 | (6,406 | ) | 25,393 | (12,219 | ) | 238,592 | ||||||||||||||||
Total assets (3) | 1,449,878 | 229,359 | 644,099 | 118,445 | 1,046,645 | 3,488,426 | ||||||||||||||||||
Six Months Ended July 2, 2023 | ||||||||||||||||||||||||
Revenues | $ | 889,717 | $ | 168,903 | $ | 160,848 | $ | 82,498 | $ | — | $ | 1,301,966 | ||||||||||||
Income (loss) before income taxes (1)(2) | 225,225 | 43,874 | (44,891 | ) | 21,372 | (4,094 | ) | 241,486 | ||||||||||||||||
Total assets (3) | 1,416,109 | 191,002 | 685,132 | 88,869 | 1,013,784 | 3,394,896 | ||||||||||||||||||
Six Months Ended July 3, 2022 | ||||||||||||||||||||||||
Revenues | $ | 1,023,688 | $ | 253,371 | $ | 204,244 | $ | 115,372 | $ | (539 | ) | $ | 1,596,136 | |||||||||||
Income (loss) before income taxes (1)(2) | 327,487 | 95,365 | (11,504 | ) | 44,012 | (36,409 | ) | 418,951 | ||||||||||||||||
Total assets (3) | 1,449,878 | 229,359 | 644,099 | 118,445 | 1,046,645 | 3,488,426 |
(1) | Included in Corporate and Eliminations are: interest income, interest expense, net foreign exchange gains (losses), intercompany eliminations, legal and environmental fees, severance charges, |
(2) | Included in income (loss) before taxes are charges related to restructuring and other, and inventory charges. |
(3) | Total assets are attributable to each segment. Corporate assets consist of cash and cash equivalents, marketable securities, and certain other assets. |
For the Three Months Ended | ||||||||
April 2, | April 3, | |||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Semiconductor Test: | ||||||||
Cost of revenues—inventory charge | $ | 3,768 | $ | — | ||||
Restructuring and other—employee severance | 794 | — | ||||||
System Test: | ||||||||
Cost of revenues—inventory charge | $ | 675 | — | |||||
Robotics: | ||||||||
Cost of revenues—inventory charge | $ | 782 | $ | — | ||||
Wireless: | ||||||||
Cost of revenues—inventory charge | $ | — | $ | 877 | ||||
Corporate and Other: | ||||||||
Selling and administrative - equity modification charge | $ | 5,889 | $ | — | ||||
Restructuring and other—employee severance | 659 | — | ||||||
Restructuring and other—legal settlement charge | — | 14,700 |
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 2, 2023 | July 3, 2022 | July 2, 2023 | July 3, 2022 | |||||||||||||
(in thousands) | ||||||||||||||||
Semiconductor Test: | ||||||||||||||||
Cost of revenues—inventory charge | $ | 4,184 | $ | 2,071 | $ | 7,952 | $ | 2,315 | ||||||||
Restructuring and other—employee severance | 2,485 | — | 3,279 | |||||||||||||
System Test: | ||||||||||||||||
Cost of revenues—inventory charge | $ | — | $ | — | $ | 1,113 | $ | — | ||||||||
Restructuring and other—employee severance | — | — | 642 | — | ||||||||||||
Robotics: | ||||||||||||||||
Restructuring and other—employee severance | $ | 1,638 | $ | — | $ | 2,071 | $ | — | ||||||||
Cost of revenues—inventory charge | 769 | 831 | 1,551 | 1,197 | ||||||||||||
Wireless: | ||||||||||||||||
Cost of revenues—inventory charge | $ | — | $ | 2,099 | $ | 725 | $ | 2,976 | ||||||||
Corporate and Eliminations: | ||||||||||||||||
Restructuring and other—other | $ | 1,100 | 1,500 | 1,100 | 2,000 | |||||||||||
Restructuring and other—employee severance | — | — | 1,124 | — | ||||||||||||
Selling and administrative—equity modification charge | — | — | 5,889 | — | ||||||||||||
Restructuring and other—legal settlement charge | — | — | — | 14,700 |
Item 2: | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
test.
2023, Robotics demand has softened significantly due to slowing global industrial activity and macro-economic headwinds.
26
27
For the Three Months Ended | ||||||||
April 2, | April 3, | |||||||
2023 | 2022 | |||||||
Percentage of revenues: | ||||||||
Revenues: | ||||||||
Products | 77 | % | 83 | % | ||||
Services | 23 | 17 | ||||||
|
|
|
| |||||
Total revenues | 100 | 100 | ||||||
Cost of revenues: | ||||||||
Cost of products | 32 | 32 | ||||||
Cost of services | 10 | 8 | ||||||
|
|
|
| |||||
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below) | 42 | 40 | ||||||
|
|
|
| |||||
Gross profit | 58 | 60 | ||||||
Operating expenses: | ||||||||
Selling and administrative | 24 | 19 | ||||||
Engineering and development | 17 | 14 | ||||||
Acquired intangible assets amortization | 1 | 1 | ||||||
Restructuring and other | — | 2 | ||||||
|
|
|
| |||||
Total operating expenses | 43 | 36 | ||||||
|
|
|
| |||||
Income from operations | 15 | 25 | ||||||
Non-operating (income) expense: | ||||||||
Interest income | (1 | ) | — | |||||
Interest expense | — | — | ||||||
Other (income) expense, net | — | 1 | ||||||
|
|
|
| |||||
Income before income taxes | 16 | 24 | ||||||
Income tax provision | 2 | 2 | ||||||
|
|
|
| |||||
Net income | 14 | % | 21 | % | ||||
|
|
|
|
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 2, | July 3, | July 2, | July 3, | |||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Percentage of revenues: | ||||||||||||||||
Revenues: | ||||||||||||||||
Products | 79 | % | 83 | % | 78 | % | 83 | % | ||||||||
Services | 21 | 17 | 22 | 17 | ||||||||||||
Total revenues | 100 | 100 | 100 | 100 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Cost of products | 32 | 33 | 32 | 32 | ||||||||||||
Cost of services | 9 | 7 | 10 | 7 | ||||||||||||
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below) | 41 | 40 | 42 | 40 | ||||||||||||
Gross profit | 59 | 60 | 58 | 60 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling and administrative | 21 | 17 | 23 | 18 | ||||||||||||
Engineering and development | 15 | 13 | 16 | 14 | ||||||||||||
Acquired intangible assets amortization | 1 | — | 1 | 1 | ||||||||||||
Restructuring and other | 1 | — | 1 | 1 | ||||||||||||
Total operating expenses | 38 | 31 | 40 | 33 | ||||||||||||
Income from operations | 20 | 29 | 18 | 27 | ||||||||||||
Non-operating (income) expense: | ||||||||||||||||
Interest income | (1 | ) | — | (1 | ) | — | ||||||||||
Interest expense | — | — | — | — | ||||||||||||
Other (income) expense, net | — | 1 | — | 1 | ||||||||||||
Income before income taxes | 21 | 28 | 19 | 26 | ||||||||||||
Income tax provision | 4 | 5 | 3 | 4 | ||||||||||||
Net income | 18 | % | 24 | % | 16 | % | 23 | % | ||||||||
First
For the Three Months Ended | ||||||||||||
April 2, | April 3, | Dollar | ||||||||||
2023 | 2022 | Change | ||||||||||
(in millions) | ||||||||||||
Semiconductor Test | $ | 415.0 | $ | 482.3 | $ | (67.3 | ) | |||||
System Test | 74.6 | 118.7 | (44.1 | ) | ||||||||
Robotics | 89.2 | 103.2 | (14.0 | ) | ||||||||
Wireless Test | 38.7 | 51.5 | (12.8 | ) | ||||||||
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$ | 617.5 | $ | 755.4 | $ | (137.9 | ) | ||||||
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For the Three Months Ended | ||||||||||||
July 2, | July 3, | Dollar | ||||||||||
2023 | 2022 | Change | ||||||||||
(in millions) | ||||||||||||
Semiconductor Test | $ | 474.7 | $ | 541.3 | $ | (66.6 | ) | |||||
System Test | 94.3 | 134.7 | (40.4 | ) | ||||||||
Robotics | 71.6 | 101.1 | (29.5 | ) | ||||||||
Wireless Test | 43.8 | 63.9 | (20.1 | ) | ||||||||
Corporate and Eliminations | — | (0.2 | ) | 0.2 | ||||||||
$ | 684.4 | $ | 840.8 | $ | (156.4 | ) | ||||||
28
For the Three Months Ended | ||||||||
April 2, 2023 | April 3, 2022 | |||||||
Taiwan | 18 | % | 18 | % | ||||
United States | 18 | 15 | ||||||
Korea | 12 | 13 | ||||||
Europe | 12 | 10 | ||||||
China | 10 | 19 | ||||||
Japan | 9 | 6 | ||||||
Singapore | 8 | 4 | ||||||
Philippines | 5 | 2 | ||||||
Malaysia | 3 | 5 | ||||||
Thailand | 3 | 5 | ||||||
Rest of World | 2 | 3 | ||||||
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100 | % | 100 | % | |||||
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For the Three Months Ended | ||||||||
July 2, | July 3, | |||||||
2023 | 2022 | |||||||
United States | 17 | % | 14 | % | ||||
Korea | 15 | 17 | ||||||
Taiwan | 15 | 25 | ||||||
China | 13 | 13 | ||||||
Japan | 13 | 5 | ||||||
Europe | 9 | 8 | ||||||
Malaysia | 5 | 5 | ||||||
Thailand | 4 | 6 | ||||||
Philippines | 4 | 3 | ||||||
Singapore | 3 | 2 | ||||||
Rest of World | 2 | 2 | ||||||
100 | % | 100 | % | |||||
(1) | Revenues attributable to a country are based on location of customer site. |
Gross profit Percent of total revenues volume. Selling and administrative Percent of total revenues For the Three Months
Ended April 2,
2023 April 3,
2022 Dollar/Point
Change (in millions) $ 356.4 $ 454.9 $ (98.5 ) 57.7 % 60.2 % (2.5 ) $ 402.5 $ 506.4 $ (103.9 ) 58.8 % 60.2 % (1.4 ) 2.51.4 points, primarily due to lower volume and product mix in Semiconductor Test and higher inventory reserves. For the Three Months
Ended April 2,
2023 April 3,
2022 Dollar
Change (in millions) $ 151.0 $ 140.2 $ 10.8 24.4 % 18.6 % $ 145.7 $ 139.5 $ 6.2 21.3 % 16.6 % $10.8$6.2 million in selling and administrative expenses was primarily due to the chargehigher variable compensation.
Engineering and development Percent of total revenues a charge of $1.1 million for an increase in environmental liability. legal liabilities. Interest income Interest expense Other (income) expense, net Semiconductor Test System Test Wireless Test Robotics Corporate and Other (1) in System Test was primarily due to lower sales in Storage Test of system level and hard disk drive testers. The decrease in income before income taxes in Wireless Test was driven primarily by a decrease in sales of connectivity test products. The decrease in income before income taxes in Robotics was driven primarily by softening demand due to slowing global industrial activity and macro-economic headwinds and the impact of the transformation of Universal Robots distribution channel. The income before income taxes in Corporate and Eliminations was primarily due to changes in unrealized gains/losses on equity securities. For the Three Months
Ended April 2,
2023 April 3,
2022 Dollar
Change (in millions) $ 105.8 $ 108.1 $ (2.3 ) 17.1 % 14.3 % $ 105.7 $ 112.0 $ (6.3 ) 15.4 % 13.3 % $2.3$6.3 million in engineering and development expenses was primarily due to lower variable compensation,spending in Semiconductor Test, partially offset by higher spending in Robotics.AprilJuly 2, 2023, we recorded $2.0$5.1 million of severance charges related to headcount reductionreductions of 67112 people primarily in Semiconductor Test and Robotics which included charges related to a voluntary early retirement program for employees meeting certain conditions and Corporate.AprilJuly 3, 2022, we recorded a charge of $14.7$1.5 million related to the arbitration claim filed against Teradynefor an increase in environmental and AutoGuide related to an earn-out dispute, which was settled on March 25, 2022 for $26.7 million. For the Three Months
Ended April 2,
2023 April 3,
2022 Dollar
Change (in millions) $ (5.3 ) $ (0.7 ) $ (4.6 ) 1.0 1.0 — 0.1 5.2 (5.1 ) $ (6.4 ) $ (1.0 ) $ (5.4 ) 1.0 0.9 $ 0.1 0.8 9.4 $ (8.6 ) $4.6$5.4 million primarily due to higher interest rates in 2023. Other (income) expense, net decreased by $5.1$8.6 million primarily due to changes in unrealized gains/losses on equity securities, from a $2.2$6.6 million loss in 2022 to a $2.0$2.6 million gain in 2023. For the Three Months
Ended April 2,
2023 April 3,
2022 Dollar
Change (in millions) $ 96.2 $ 149.7 $ (53.5 ) 15.3 41.3 (26.0 ) 9.4 18.6 (9.2 ) (18.5 ) (5.1 ) (13.4 ) (5.2 ) (24.2 ) 19.0 $ 97.1 $ 180.4 $ (83.3 ) $ 129.0 $ 177.8 $ (48.8 ) 28.6 54.0 (25.4 ) 12.0 25.4 (13.4 ) (26.4 ) (6.4 ) (20.0 ) 1.1 (12.2 ) 13.3 $ 144.4 $ 238.6 $ (94.2 ) (1) charges, acquisition related charges and compensation, and an expense for the modification of Teradyne’s former chief executive officer’s outstanding equity awards.charges.revenues in compute processor and mobiletester sales for Mobility applications, and lower memorypartially offset by higher Memory test sales of DRAM memory testers.in Flash Final Test. The decrease in income before income taxes30
For the Six Months Ended | ||||||||||||
July 2, | July 3, | Dollar | ||||||||||
2023 | 2022 | Change | ||||||||||
(in millions) | ||||||||||||
Semiconductor Test | $ | 889.7 | $ | 1,023.7 | $ | (134.0 | ) | |||||
System Test | 168.9 | 253.4 | (84.5 | ) | ||||||||
Robotics | 160.8 | 204.2 | (43.4 | ) | ||||||||
Wireless Test | 82.5 | 115.4 | (32.9 | ) | ||||||||
Corporate and Eliminations | — | (0.5 | ) | 0.5 | ||||||||
$ | 1,302.0 | $ | 1,596.1 | $ | (294.1 | ) | ||||||
For the Six Months Ended | ||||||||
July 2, | July 3, | |||||||
2023 | 2022 | |||||||
United States | 17 | % | 15 | % | ||||
Taiwan | 16 | 22 | ||||||
Korea | 14 | 15 | ||||||
China | 12 | 16 | ||||||
Japan | 11 | 5 | ||||||
Europe | 10 | 9 | ||||||
Singapore | 5 | 3 | ||||||
Philippines | 5 | 3 | ||||||
Malaysia | 4 | 5 | ||||||
Thailand | 3 | 5 | ||||||
Rest of World | 3 | 2 | ||||||
100 | % | 100 | % | |||||
(1) | Revenues attributable to a country are based on location of customer site. |
For the Six Months Ended | ||||||||||||
July 2, | July 3, | Dollar/Point | ||||||||||
2023 | 2022 | Change | ||||||||||
(in millions) | ||||||||||||
Gross profit | $ | 758.9 | $ | 961.3 | $ | (202.4 | ) | |||||
Percent of total revenues | 58.3 | % | 60.2 | % | (1.9 | ) |
For the Six Months Ended | ||||||||||||
July 2, | July 3, | Dollar | ||||||||||
2023 | 2022 | Change | ||||||||||
(in millions) | ||||||||||||
Selling and administrative | $ | 296.7 | $ | 279.7 | $ | 17.0 | ||||||
Percent of total revenues | 22.8 | % | 17.5 | % |
For the Six Months Ended | ||||||||||||
July 2, | July 3, | Dollar | ||||||||||
2023 | 2022 | Change | ||||||||||
(in millions) | ||||||||||||
Engineering and development | $ | 211.5 | $ | 220.1 | $ | (8.6 | ) | |||||
Percent of total revenues | 16.2 | % | 13.8 | % |
For the Six Months Ended | ||||||||||||
July 2, | July 3, | Dollar | ||||||||||
2023 | 2022 | Change | ||||||||||
(in millions) | ||||||||||||
Interest income | $ | (11.6 | ) | $ | (1.7 | ) | $ | (9.9 | ) | |||
Interest expense | 2.0 | 1.9 | 0.1 | |||||||||
Other (income) expense, net | 0.9 | 14.6 | (13.7 | ) |
For the Six Months Ended | ||||||||||||
July 2, | July 3, | Dollar | ||||||||||
2023 | 2022 | Change | ||||||||||
(in millions) | ||||||||||||
Semiconductor Test | $ | 225.2 | $ | 327.5 | $ | (102.3 | ) | |||||
System Test | 43.9 | 95.4 | (51.5 | ) | ||||||||
Wireless Test | 21.4 | 44.0 | (22.6 | ) | ||||||||
Robotics | (44.9 | ) | (11.5 | ) | (33.4 | ) | ||||||
Corporate and Eliminations (1) | (4.1 | ) | (36.4 | ) | 32.3 | |||||||
$ | 241.5 | $ | 419.0 | $ | (177.5 | ) | ||||||
(1) | Included in Corporate and Eliminations are interest income, interest expense, net foreign exchange gains (losses), intercompany eliminations, legal and environmental fees, severance charges, pension, and an expense for the modification of Teradyne’s former chief executive officer’s outstanding equity awards. |
acquisition, changes in unrealized gains/losses on equity securities and higher interest income.
2017.
liabilities.
inventories.
income taxes.
31
Financing activities during the threesix months ended AprilJuly 3, 2022, used cash of $254.6$626.8 million due to $201.5$532.8 million used for the repurchase of 1.85.0 million shares of common stock at an average price of $115.12$107.5 per share, $31.0$42.3 million used for payments of convertible debt principal, $35.4 million used for dividend payments, and $32.8 million used for payment related to net settlements of employee stock compensation awards, $20.7 million used for payments of convertible debt principal, $17.9 million used for dividend payments, partially offset by $16.5 million from the issuance of common stock under employee stock purchase and stock option plans.
$17.5 million and $35.4 million, respectively.
Item 3: | Quantitative and Qualitative Disclosures about Market Risks |
32
we carry the Notes at face value less unamortized discount on our balance sheet, and we present the fair value for required disclosure purposes only. In connection with the offering of the Notes we also sold warrants to the option counterparties. These transactions have been accounted for as an adjustment to our shareholders’ equity. The convertible note hedge transactions are expected to reduce the potential equity dilution upon conversion of the Notes. The warrants along with any shares issuable upon conversion of the Notes will have a dilutive effect on our earnings per share to the extent that the average market price of our common stock for a given reporting period exceeds the applicable strike price or conversion price of the warrants or Notes, respectively.
Hypothetical Change in Teradyne Stock Price | Fair Value | Estimated change in fair value | Hypothetical percentage increase (decrease) in fair value | |||||||||
10% Increase | $ | 131,584 | $ | 11,998 | 10.0 | % | ||||||
No Change | 119,586 | — | — | |||||||||
10% Decrease | 107,588 | (11.998 | ) | (10.0 | ) |
Hypothetical Change in Teradyne Stock Price | Fair Value | Estimated change in fair value | Hypothetical percentage increase (decrease) in fair value | |||||||||
10% Increase | $ | 127,385 | $ | 11,607 | 10.0 | % | ||||||
No Change | 115,778 | — | — | |||||||||
10% Decrease | 104,171 | (11,607 | ) | (10.0 | ) |
Item 4: | Controls and Procedures |
Item 1: | Legal Proceedings |
Item 1A: | Risk Factors |
33
Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds |
Period | Total Number of Shares (or Units) Purchased | Average Price Paid per Share (or Unit) | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares (or Units) that may Yet Be Purchased Under the Plans or Programs (2) | ||||||||||||
January 1, 2023 - January 29, 2023 | 147 | $ | 103.09 | — | $ | 2,000,000 | ||||||||||
January 30, 2023 – February 26, 2023 | 414 | $ | 105.18 | 369 | $ | 1,960,941 | ||||||||||
February 27, 2023 – April 2, 2023 | 526 | $ | 104.25 | 524 | $ | 1,906,292 | ||||||||||
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1,087 | (1) | $ | 104.44 | (1) | 893 | |||||||||||
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Period | Total Number of Shares (or Units) Purchased | Average Price Paid per Share (or Unit) | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares (or Units) that may Yet Be Purchased Under the Plans or Programs (2) | ||||||||||||||||
April 3, 2023 – April 30, 2023 | 410 | $ | 100.73 | 409 | $ | 1,865,063 | ||||||||||||||
May 1, 2023 – May 28, 2023 | 469 | $ | 92.88 | 467 | $ | 1,821,664 | ||||||||||||||
May 29, 2023 – July 2, 2023 | 474 | $ | 108.31 | 473 | $ | 1,770,455 | ||||||||||||||
1,354 | (1) | $ | 100.66 | (1) | 1,349 | |||||||||||||||
(1) | Includes approximately |
(2) | As of January 1, 2023, share repurchases net of share issuances are subject to a 1% excise tax under the Inflation Reduction Act. Excise tax incurred is included as part of the cost basis of shares repurchased in the Condensed Consolidated Statements of Convertible Common Shares and Stockholders’ Equity. |
Item 4: | Mine Safety Disclosures |
34
Item 5: | Other Information |
Item 6: | Exhibits |
35
TERADYNE, INC. |
Registrant |
/s/ S ANJAY MEHTA |
Sanjay Mehta Vice President, Chief Financial Officer and Treasurer (Duly Authorized Officer and Principal Financial Officer)
August 4, 2023 |
36