Slide 1: Financial Results for Q2 2023
Financial Results for Q2 2023 July 27, 2023
Slide 2: Safe Harbor (page 1 of 2)
SAFE HARBOR (page 1 of 2) This presentation contains forward-looking statements regarding Teradyne’s future business prospects, results of operations, market conditions, earnings per share, the impact of supply chain conditions on the business, customer sales expectations, the payment of a quarterly
Slide 3: Safe Harbor (page 2 of 2)
SAFE HARBOR (page 2 of 2) The Company also has determined that the restrictions on the export of certain US origin components and technology for use in the development and production in China of certain semiconductor manufacturing equipment impact its manufacturing and development operations in Chin
Slide 4: Business Update and Outlook
Business Update and Outlook Greg Smith, Teradyne President and CEO 4
Slide 5: Q2'23 Summary
Q2’23 Summary Sales of $684M, Gross Margins of 58.8%, Non-GAAP EPS of $0.79 $1,000M Q2’23 Guidance Range 65% $1.40 $800M 60% $1.20 $625M - 57% - 58% $1.00 $600M $685M 55% $0.80 $0.55 - $400M $841M 50% 60.2% 58.8% $0.60 $1.21 57.7% $0.74 $684M $618M $0.40 $0.79 45% $0.55 $200M $0.20 40% $0.00 $M Q2'2
Slide 6: Q2'23 Summary and 2023 Outlook
Q2’23 Summary and 2023 Outlook • Q2’23 Sales at top of our guidance range with earnings above the high guide on better than expected gross margins due to deferred resiliency spending and favorable product mix • 2023 SOC Test Market Forecast: $3.7 - $4.1B, up $300M from April outlook • Auto related d
Slide 7: Second Quarter 2023 Financial Results and Third Quarter 2023 Guidance
Second Quarter 2023 Financial Results and Third Quarter 2023 Guidance Sanjay Mehta, Teradyne Vice President and Chief Financial Officer 7
Slide 8: Q2'23 Non-GAAP Results
Q2’23 Non-GAAP Results Q2’22 Actual(1) Q1’23 Actual(1) Q2’23 Actual(1) Sales $841M $618M $684M Gross Margin 60.2% $506M 57.7% $356M 58.8% $402M R&D 13.3% $112M 17.1% $106M 15.4% $106M SG&A 16.6% $140M 23.5% $145M 21.3% $146M OPEX 29.9% $251M 40.6% $251M 36.7% $251M Operating Profit 30.3% $255M 17.1%
Slide 9: Q2'23 Segment Summary
Q2’23 Segment Summary Semiconductor System Test Wireless Test Robotics Test 2nd Quarter $475M $94M $44M $72M Sales Sales down 30% vs Q2’22 Sales down 12% vs Q2’22 Sales down 31% vs Q2’22 Sales down 29% vs Q2’22 on Mobility and Compute Storage Test shipments down due to lower consumer PC weakening in
Slide 10: Balance Sheet & Capital Return
Balance Sheet & Capital Return Q2’22 Q1’23 Q2’23 Actual Actual Actual Cash and Marketable Securities $894M $859M $813M Inventory $296M $352M $347M DSO 74 Days 68 Days 66 Days Capital Additions $46M $41M $39M Depreciation and Amortization(1) $39M $46M $41M Free Cash Flow(2) $70M ($22M) $104M Buybacks
Slide 11: Q3'23 Non-GAAP Guidance
Q3’23 Non-GAAP Guidance $s in millions, except EPS Q2’23 Actual(1) Q3’23 Guidance(1) Sales $684M $650M - $710M Gross Margin 58.8% 56% - 57% OPEX 36.7% 38% - 35% Operating Profit 22.1% 18% - 22% Effective Tax Rate 17.2% 17.0% EPS $0.79 $0.61 - $0.81 Diluted Shares 164M 163M 11 (1) See attached append
Slide 12: Q2'23 Summary and 2023 Outlook
Q2’23 Summary and 2023 Outlook • Q2’23 Sales at top of our guidance range with earnings above the high guide on better than expected gross margins due to deferred resiliency spending and favorable product mix • Q3’23 Guidance: Sales of $650 - $710M and GAAP EPS of $0.57 - $0.77, non-GAAP EPS of $0.6
Slide 13: Supplemental Information
Supplemental Information 13
Slide 14: Teradyne Non-GAAP Earnings Model
Teradyne Non-GAAP Earnings Model Financial Model (1)(2) 2022 2026E (New Model) 2022 Sales Mix 2026E Sales Mix(3) TER Revenue ($M) $3,155 $4,500 $5,550 13% =$3,155M 19% =$5,025M(3) Growth off 2022 9% 15% Gross Margin % 59% 59% 60% OPEX % 32% 28% 26% 87% 81% Operating Profit % 28% 31% 34% Automated Ro
Slide 15: History of Capital Allocation
History of Capital Allocation • Since 2015, 76.6M shares repurchased at an average price of ~$48 per share 2015 2016 2017 2018 2019 2020 2021 2022 1H’23 Cumulative ($M) Buybacks(1) $300M $146M $200M $823M $500M $88M $600M $752M $230M $3,640M Dividends $51M $49M $55M $67M $61M $66M $66M $70M $34M $52
Slide 16: Semiconductor Test Market Growth Trends Are Favorable
Semiconductor Test Market Growth Trends Are Favorable Semiconductor Test (1) SOC Memory 6,000 $6,000 SOC market powered by unit growth, complexity, 5,000 new technology $5,000 (3) adoption 4,000 Memory test driven by $4,000 bit growth, diversity, higher bandwidth 3,000 $3,000 (2) 2,000 $2,000 2023 M
Slide 17: 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 18: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation GAAP to Non-GAAP Earnings Reconciliation (In millions, except per share amounts) Quarter Ended July 2, % of Net April 2, % of Net July 3, % of Net 2023 Revenues 2023 Revenues 2022 Revenues Net revenues $ 684.4 $ 617.5 $ 840.8 Gross profit GAAP and non-GAAP
Slide 19: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation (1) Restructuring and other consists of: Quarter Ended July 2, April 2, July 3, 2023 2023 2022 Employee severance $ 5.1 $ 2.0 $ 0.4 Other 1.2 - 1.7 $ 6.4 $ 2.0 $ 2.0 (2) For the quarter ended April 2, 2023, selling and administrative expenses include an equ
Slide 20: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation Twelve Months Ended December 31, % of Net December 31, % of Net 2022 Revenues 2021 Revenues Net Revenues $ 3,155.0 $ 3,702.9 Gross profit GAAP and non-GAAP $ 1,867.2 59.2% $ 2,206.7 59.6% Income from operations - GAAP $ 831.9 26.4% $ 1,200.7 32.4% Restructu
Slide 21: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation (1) Restructuring and other consists of: Twelve Months Ended December 31, December 31, 2022 2021 Litigation settlement $ 14.7 $ 12.0 Employee severance 2.9 1.5 Gain on sale of asset (3.4) - Contingent consideration fair value adjustment - (7.2) Other 3.0 3.
Slide 22: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation Q2'22 Q1'23 Q2'23 Q3'23 Low Guidance Q3'23 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 $258 31% $264 43% $263 38% $254 39% $256 36% Intangible Asset Amortization -$5 -1% -$5 -1% -$5 -1% -$
Slide 23: 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 24: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation New 2026 Model Range FY 2026 Low FY 2026 Mid FY 2026 High 2026 Estimated GAAP Diluted EPS $ 7.49 $ 8.74 $ 9.99 Add Back Intangible Asset Amortization $ 0.01 $ 0.01 $ 0.01 2026 Estimated Non-GAAP Diluted EPS $ 7.50 $ 8.75 $ 10.00 24