Slide 1: Financial Results for Q4 and Full Year 2023
Financial Results for Q4 and Full Year 2023 January 31, 2024
Slide 2: Safe Harbor
SAFE HARBOR (page 1 of 1) This presentation 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
Slide 3: Business Update and Outlook
Business Update and Outlook Greg Smith, Teradyne President and CEO 4
Slide 4: Q4'23 and 2023 Summary
Q4’23 and 2023 Summary Q4 Sales of $671M, Non-GAAP EPS of $0.79, 2023 Sales of $2,676M, Non-GAAP EPS of $2.93 $4.0B $7.00 Sales EPS 2020 2021 2022 2023 $3.5B $3.7B $6.00 $1,200 $5.98 $3.0B $3.1B $3.2B $1,000 $5.00 $2.5B $4.62 $2.7B $800 $4.25 $4.00 $2.3B $2.0B $2.1B $2.1B $600 $3.00 $1.5B $2.86 $2.9
Slide 5: Q4 and 2023 Summary & 2024 Outlook
Q4 and 2023 Summary & 2024 Outlook • Q4 and 2023 Summary: – Memory test shipments grew 11% sequentially and 47% year on year in Q4 on HBM and DDR5 demand – Robotics shipments grew 50% sequentially and 17% year on year in Q4 on UR20, UR30 and stable legacy robot demand – Total Company revenues at $2.
Slide 6: Fourth Quarter and Full Year 2023 Financial Results and Q1 2024 Guidance
Fourth Quarter and Full Year 2023 Financial Results, Mid-Term Earnings Model Update and First Quarter 2024 Guidance Sanjay Mehta, Teradyne Vice President and Chief Financial Officer 6
Slide 7: Q4'23 Non-GAAP Results
Q4’23 Non-GAAP Results Q4’22 Actual(1) Q3’23 Actual(1) Q4’23 Actual(1) Sales $732M $704M $671M Gross Margin 57.4% $420M 56.6% $398M 56.6% $380M R&D 14.9% $109M 14.8% $104M 15.2% $102M SG&A 19.5% $143M 19.7% $138M 21.2% $142M OPEX 34.4% $252M 34.5% $243M 36.5% $245M Operating Profit 23.1% $169M 22.1%
Slide 8: Q4'23 Segment Summary
Q4’23 Segment Summary Semiconductor System Test Wireless Test Robotics Test 4th Quarter $431M $86M $25M $129M Sales Sales down 10% vs Q4’22 Sales down 14% vs Q4’22 Sales down 38% vs Q4’22 Sales up 17% vs Q4’22 and SOC test down 20% vs Q4’22 up 50% from Q3’23 Storage Test shipments down Lower consume
Slide 9: Annual Non-GAAP Results
Annual Non-GAAP Results $s in millions, except EPS 2022(1) 2023(1) Sales $3,155M $2,676M Gross Margin 59.2% $1,867M 57.4% $1,537M R&D 14.0% $441M 15.6% $418M SG&A 17.7% $558M 21.4% $571M OPEX 31.7% $999M 37.0% $990M Operating Profit 27.5% $868M 20.4% $547M Income Taxes (& effective tax rate) 16.3% $
Slide 10: 2023 Segment Summary
2023 Segment Summary Semiconductor System Test Wireless Test Robotics Test 2023 Sales $1,819M $338M $144M $375M Sales down 13% YoY vs ATE Sales down 28% YoY on Sales down 28% YoY on Sales down 7% YoY on weak market down 16% weak HDD and SLT (mobility) lower consumer PC, end market conditions demand
Slide 11: Q1'24 Non-GAAP Guidance
Q1’24 Non-GAAP Guidance $s in millions, except EPS Q4’23 Actual(1) Q1’24 Guidance(1) Sales $671M $540M - $590M Gross Margin 56.6% 53.5% - 54.5% OPEX 36.5% 46% - 42% Operating Profit 20.1% 8% - 12% Effective Tax Rate 12.6% 16.0% EPS $0.79 $0.22 - $0.38 Diluted Shares 162M 162M 11 (1) See attached app
Slide 12: Balance Sheet & Capital Return
Balance Sheet & Capital Return Q4’22 Q3’23 Q4’23 Actual Actual Actual Cash and Marketable Securities $1,005M $820M $937M Inventory $325M $323M $310M DSO 60 Days 59 Days 57 Days Capital Additions $35M $35M $44M Depreciation and Amortization(1) $39M $41M $40M Free Cash Flow(2) $149M $140M $204M Buybac
Slide 13: Teradyne Non-GAAP Mid-Term Earnings Model
Teradyne Non-GAAP Mid-Term Earnings Model Financial Model (1)(2) 2023 2026E (Updated Model) 2023 Sales Mix 2026E Sales Mix(3) TER Revenue ($M) $2,676 $3,900 $4,600 14% 17% =$2,676M =$4,250M(3) Growth off 2023 13% 20% Gross Margin % 57% 59% 60% OPEX % 37% 31% 28% 86% 83% Operating Profit % 20% 28% 32
Slide 14: Q4 and 2023 Summary & 2024 Outlook
Q4 and 2023 Summary & 2024 Outlook • Q4 and 2023 Summary: – Memory test shipments grew 11% sequentially and 47% year on year in Q4 on HBM and DDR5 demand – Robotics shipments grew 50% sequentially and 17% year on year in Q4 on UR20, UR30 and stable legacy robot demand – Total Company revenues at $2.
Slide 15: Supplemental Information
Supplemental Information 15
Slide 16: History of Capital Allocation
History of Capital Allocation • Since 2015, 78.3M shares repurchased at an average price of ~$49 per share ($M) 2015 2016 2017 2018 2019 2020 2021 2022 2023 Cumulative (1) Buybacks 300 146 200 823 500 88 600 752 401 3,811 Dividends 51 49 55 67 61 66 66 70 68 554 Acquisitions 283 15 1 194 115 9 12 -
Slide 17: Semiconductor Test Market Growth Trends Are Favorable
Semiconductor Test Market Growth Trends Are Favorable (1) Semiconductor Test (2) SOC market powered by unit growth, complexity, new technology adoption Memory test driven by bit growth, diversity, higher bandwidth (2) 2024 Market Sizes at Mid- Point of Range (1) $1.05B SOC Memory $3.9B 1) SOC data i
Slide 18: Teradyne Mid-Term Earnings Model
Teradyne Mid-Term Earnings Model EPS revised downward, but showing 125% growth from 2023 to 2026 • Enterprise revenue below trend in 2023 and 2024 with revenue growth above trend in outer years • SemiTest revenue rebound tied to ATE market recovery along with share gains in Compute segment • Robotic
Slide 19: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation In addition to disclosing results that are determined in accordance with GAAP, Teradyne also discloses in this presentation and on the earnings call non-GAAP results of operations that exclude certain income items and charges. These results are provided as
Slide 20: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation 20
Slide 21: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation 21
Slide 22: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation 22
Slide 23: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation 23
Slide 24: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation 24
Slide 25: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation 25
Slide 26: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation 26
Slide 27: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation 27
Slide 28: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation 28
Slide 29: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation 29
Slide 30: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation 30
Slide 31: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation 31
Slide 32: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation Q4'22 Q3'23 Q4'23 Q1'24 Low Guidance Q1'24 High Guidance #039;s % of sales #039;s % of sales #039;s % of sales #039;s % of sales #039;s % of sales GAAP Operating Expenses $254 35% $254 36% $255 38% $255 47% $257 43% Intangible Asset Amortization -$5 -1% -$5 -1% -$5 -1% -$
Slide 33: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation • Teradyne determines non-GAAP operating cash flow (“Free Cash Flow”) by adjusting GAAP cash flow from operations excluding discontinued operations, less property, plant and equipment additions. Free cash flow is considered a non-GAAP financial measure. Ter
Slide 34: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation 2026 Model Range FY 2026 Low FY 2026 Mid FY 2026 High 2026 Estimated GAAP Diluted EPS $ 5.49 $ 6.49 $ 7.49 Add Back Intangible Asset Amortization $ 0.01 $ 0.01 $ 0.01 2026 Estimated Non-GAAP Diluted EPS $ 5.50 $ 6.50 $ 7.50 34