"Despite continued weakness in mobility, greater than expected memory and networking demand driven by Artificial Intelligence (AI) applications combined with Robotics shipments in-line with our expectations drove company revenue and earnings above the high end of our guidance in the quarter," said Teradyne CEO,
Guidance for the second quarter of 2024 is revenue of
Webcast
A conference call to discuss the first quarter results, along with management's business outlook, will follow at
Non-GAAP Results
In addition to disclosing results that are determined in accordance with GAAP, Teradyne also discloses non-GAAP results of operations that exclude certain income items and charges. These results are provided as a complement to results provided in accordance with GAAP. Non-GAAP income from operations and non-GAAP net income exclude acquired intangible assets amortization, restructuring and other, pension actuarial gains and losses, stock compensation modification expense, gains and losses on foreign exchange options in connection with acquisitions and divestitures, discrete income tax adjustments, and includes the related tax impact on non-GAAP adjustments. GAAP requires that these items be included in determining income from operations and net income. Non-GAAP income from operations, non-GAAP net income, non-GAAP income from operations as a percentage of revenue, non-GAAP net income as a percentage of revenue, and non-GAAP net income per share are non-GAAP performance measures presented to provide meaningful supplemental information regarding Teradyne's baseline performance before gains, losses or other charges that may not be indicative of Teradyne's current core business or future outlook. These non-GAAP performance measures are used to make operational decisions, to determine employee compensation, to forecast future operational results, and for comparison with Teradyne's business plan, historical operating results and the operating results of Teradyne's competitors. Non-GAAP diluted shares include the impact of Teradyne's call option on its shares. Management believes each of these non-GAAP performance measures provides useful supplemental information for investors, allowing greater transparency to the information used by management in its operational decision making and in the review of Teradyne's financial and operational performance, as well as facilitating meaningful comparisons of Teradyne's results in the current period compared with those in prior and future periods. A reconciliation of each available GAAP to non-GAAP financial measure discussed in this press release is contained in the attached exhibits and on the Teradyne website at www.teradyne.com by clicking on "Investor Relations" and then selecting "Financials" and the "GAAP to Non-GAAP Reconciliation" link. The non-GAAP performance measures discussed in this press release may not be comparable to similarly titled measures used by other companies. The presentation of non-GAAP measures is not meant to be considered in isolation, as a substitute for, or superior to, financial measures or information provided in accordance with GAAP.
About Teradyne
Teradyne (NASDAQ:TER) test technology helps bring high-quality innovations such as smart devices, life-saving medical equipment and data storage systems to market, faster. Its advanced test solutions for semiconductors, electronic systems, wireless devices and more ensure that products perform as they were designed. Its robotics offerings include collaborative and mobile robots that help manufacturers of all sizes increase productivity, improve safety, and lower costs. In 2023, Teradyne had revenue of
Safe Harbor Statement
This release contains forward-looking statements including statements regarding Teradyne's future business prospects, financial performance or position and results of operations. You can identify forward-looking statements by their use of forward-looking words such as "anticipate," "expect," "plan," "could," "may," "will," "believe," "estimate," "goal" or other comparable terms. Forward-looking statements in this press release address various matters, including statements regarding Teradyne's financial guidance. Investors are cautioned that such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements due to known and unknown risks, uncertainties, assumptions, and other factors. Such factors include, but are not limited to, macroeconomic factors and slowdowns or downturns in economic conditions generally and in the markets in which Teradyne operates; decreased or delayed product demand from one or more significant customers; a slowdown or inability in the development, delivery and acceptance of new products; the ability to grow the Robotics business; the impact of increased research and development spending; the impact of epidemics or pandemics such as COVID-19; the impact of a supply shortage on our supply chain and contract manufacturers; the consummation and success of any mergers or acquisitions; unexpected cash needs; the business judgment of the board of directors that a declaration of a dividend or the repurchase of common stock is not in Teradyne's best interests; changes to
The risks included above are not exhaustive. For a more detailed description of the risk factors associated with Teradyne, please refer to Teradyne's Annual Report on Form 10-K for the fiscal year ended
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Quarter Ended | ||||||||||||
2024 | 2023 | 2023 | ||||||||||
Net revenues | $ | 599,819 | $ | 670,600 | $ | 617,529 | ||||||
Cost of revenues (exclusive of acquired intangible assets amortization shown separately below) (1) | 260,537 | 291,055 | 261,109 | |||||||||
Gross profit | 339,282 | 379,545 | 356,420 | |||||||||
Operating expenses: | ||||||||||||
Selling and administrative (2) | 149,188 | 142,336 | 150,955 | |||||||||
Engineering and development | 103,199 | 102,207 | 105,762 | |||||||||
Acquired intangible assets amortization | 4,697 | 4,651 | 4,802 | |||||||||
Restructuring and other (3) | 4,427 | 6,027 | 2,037 | |||||||||
Operating expenses | 261,511 | 255,221 | 263,556 | |||||||||
Income from operations | 77,771 | 124,324 | 92,864 | |||||||||
Interest and other (income) expense (4) | 4,869 | (15,482 | ) | (4,220 | ) | |||||||
Income before income taxes | 72,902 | 139,806 | 97,084 | |||||||||
Income tax provision | 8,705 | 22,752 | 13,553 | |||||||||
Net income | $ | 64,197 | $ | 117,054 | $ | 83,531 | ||||||
Net income per common share: | ||||||||||||
Basic | $ | 0.42 | $ | 0.77 | $ | 0.54 | ||||||
Diluted | $ | 0.40 | $ | 0.72 | $ | 0.50 | ||||||
Weighted average common shares - basic | 153,047 | 152,812 | 155,904 | |||||||||
Weighted average common shares - diluted (5) | 162,348 | 162,106 | 166,308 | |||||||||
Cash dividend declared per common share | $ | 0.12 | $ | 0.11 | $ | 0.11 | ||||||
(1) Cost of revenues includes:
| Quarter Ended | ||||||||||||
2024 | 2023 | 2023 | ||||||||||
Provision for excess and obsolete inventory | $ | 6,177 | $ | 5,289 | $ | 5,610 | ||||||
Sale of previously written down inventory | (722 | ) | (1,115 | ) | (385 | ) | ||||||
| $ | 5,455 | $ | 4,174 | $ | 5,225 | |||||||
(2) For the quarter ended
(3) Restructuring and other consists of:
| Quarter Ended | ||||||||||||
2024 | 2023 | 2023 | ||||||||||
Acquisition and divestiture related expenses | $ | 2,214 | $ | 3,132 | - | |||||||
Employee severance | 2,026 | 2,892 | 2,037 | |||||||||
Other | 187 | 3 | - | |||||||||
| $ | 4,427 | $ | 6,027 | $ | 2,037 | |||||||
(4) Interest and other includes:
| Quarter Ended | ||||||||||||
2024 | 2023 | 2023 | ||||||||||
Loss (gain) on foreign exchange option | $ | 13,918 | $ | (7,464 | ) | $ | - | |||||
Pension actuarial losses | - | 2,575 | - | |||||||||
(5) Under GAAP, when calculating diluted earnings per share, convertible debt must be assumed to have converted if the effect on EPS would be dilutive. Diluted shares assume the conversion of the convertible debt as the effect would be dilutive. Accordingly, for the quarters ended
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
2024 | 2023 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 707,403 | $ | 757,571 | ||||
Marketable securities | 41,300 | 62,154 | ||||||
Accounts receivable, net | 426,333 | 422,124 | ||||||
Inventories, net | 314,232 | 309,974 | ||||||
Prepayments | 537,642 | 548,970 | ||||||
Other current assets | 16,057 | 37,992 | ||||||
Current assets held for sale | 22,426 | 23,250 | ||||||
Total current assets | 2,065,393 | 2,162,035 | ||||||
Property, plant and equipment, net | 457,248 | 445,492 | ||||||
Operating lease right-of-use assets, net | 74,625 | 73,417 | ||||||
Marketable securities | 121,905 | 117,434 | ||||||
Deferred tax assets | 185,734 | 175,775 | ||||||
Retirement plans assets | 11,449 | 11,504 | ||||||
Other assets | 45,098 | 38,580 | ||||||
Acquired intangible assets, net | 30,234 | 35,404 | ||||||
| 407,576 | 415,652 | |||||||
Assets held for sale | 11,458 | 11,531 | ||||||
Total assets | $ | 3,410,720 | $ | 3,486,824 | ||||
Liabilities | ||||||||
Accounts payable | $ | 153,873 | $ | 180,131 | ||||
Accrued employees' compensation and withholdings | 121,144 | 191,750 | ||||||
Deferred revenue and customer advances | 96,419 | 99,804 | ||||||
Other accrued liabilities | 101,275 | 114,712 | ||||||
Operating lease liabilities | 17,400 | 17,522 | ||||||
Income taxes payable | 55,922 | 48,653 | ||||||
Current liabilities held for sale | 4,687 | 7,379 | ||||||
Total current liabilities | 550,720 | 659,951 | ||||||
Retirement plans liabilities | 134,878 | 132,090 | ||||||
Long-term deferred revenue and customer advances | 38,683 | 37,282 | ||||||
Long-term other accrued liabilities | 16,653 | 19,998 | ||||||
Deferred tax liabilities | 134 | 183 | ||||||
Long-term operating lease liabilities | 65,554 | 65,092 | ||||||
Long-term income taxes payable | 44,331 | 44,331 | ||||||
Liabilities held for sale | 1,938 | 2,000 | ||||||
Total liabilities | 852,891 | 960,927 | ||||||
Shareholders' equity | 2,557,829 | 2,525,897 | ||||||
Total liabilities and shareholders' equity | $ | 3,410,720 | $ | 3,486,824 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
| Quarter Ended | ||||||||
2024 | 2023 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 64,197 | $ | 83,531 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation | 23,354 | 22,680 | ||||||
Stock-based compensation | 15,758 | 18,885 | ||||||
Provision for excess and obsolete inventory | 6,177 | 5,610 | ||||||
Amortization | 4,766 | 4,926 | ||||||
Deferred taxes | (9,669 | ) | (7,634 | ) | ||||
Losses (gains) on investments | 10,466 | (2,238 | ) | |||||
Other | 787 | 108 | ||||||
Changes in operating assets and liabilities | ||||||||
Accounts receivable | (8,055 | ) | 37,204 | |||||
Inventories | (6,932 | ) | (23,697 | ) | ||||
Prepayments and other assets | 11,089 | (15,380 | ) | |||||
Accounts payable and other liabilities | (105,548 | ) | (83,208 | ) | ||||
Deferred revenue and customer advances | (1,444 | ) | (32,705 | ) | ||||
Retirement plans contributions | (1,421 | ) | (1,234 | ) | ||||
Income taxes | 3,754 | 12,488 | ||||||
Net cash provided by operating activities | 7,279 | 19,336 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property, plant and equipment | (44,023 | ) | (41,444 | ) | ||||
Purchases of marketable securities | (16,042 | ) | (69,276 | ) | ||||
Proceeds from maturities of marketable securities | 14,438 | 7,468 | ||||||
Proceeds from sales of marketable securities | 20,734 | 7,929 | ||||||
Proceeds from life insurance | 873 | 460 | ||||||
Net cash used for investing activities | (24,020 | ) | (94,863 | ) | ||||
Cash flows from financing activities: | ||||||||
Repurchase of common stock | (22,117 | ) | (93,308 | ) | ||||
Dividend payments | (18,370 | ) | (17,165 | ) | ||||
Payments of convertible debt principal | - | (15,155 | ) | |||||
Payments related to net settlement of employee stock compensation awards | (13,115 | ) | (19,870 | ) | ||||
Issuance of common stock under stock purchase and stock option plans | 16,934 | 15,997 | ||||||
Net cash used for financing activities | (36,668 | ) | (129,501 | ) | ||||
Effects of exchange rate changes on cash and cash equivalents | 3,241 | (537 | ) | |||||
Decrease in cash and cash equivalents | (50,168 | ) | (205,565 | ) | ||||
Cash and cash equivalents at beginning of period | 757,571 | 854,773 | ||||||
Cash and cash equivalents at end of period | $ | 707,403 | $ | 649,208 | ||||
GAAP to Non-GAAP Earnings Reconciliation
(In millions, except per share amounts)
| Quarter Ended | ||||||||||||||||||||||||
2024 | % of Net Revenues | 2023 | % of Net Revenues | 2023 | % of Net Revenues | |||||||||||||||||||
Net revenues | $ | 599.8 | $ | 670.6 | $ | 617.5 | ||||||||||||||||||
Gross profit GAAP and non-GAAP | 339.3 | 56.6 | % | 379.5 | 56.6 | % | 356.4 | 57.7 | % | |||||||||||||||
Income from operations - GAAP | 77.8 | 13.0 | % | 124.3 | 18.5 | % | 92.9 | 15.0 | % | |||||||||||||||
Acquired intangible assets amortization | 4.7 | 0.8 | % | 4.7 | 0.7 | % | 4.8 | 0.8 | % | |||||||||||||||
Restructuring and other (1) | 4.4 | 0.7 | % | 6.0 | 0.9 | % | 2.0 | 0.3 | % | |||||||||||||||
Equity Modification Charge (4) | 1.7 | 0.3 | % | - | 0.0 | % | 5.9 | 1.0 | % | |||||||||||||||
Income from operations - non-GAAP | $ | 88.6 | 14.8 | % | $ | 135.0 | 20.1 | $ | 105.6 | 17.1 | % | |||||||||||||
