Teradyne, Inc. · NASDAQ:TER
Teradyne — Q1 2024 Earnings Presentation
25 slides from Teradyne's earnings presentation, Apr 25, 2024
Slide 1: Financial Results: Q1 2024
Financial Results: Q1 2024 April 25, 2024
Slide 2: Safe Harbor
SAFE HARBOR 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 “anticipate,”
Slide 3: Business Update and Outlook
Business Update and Outlook Greg Smith, President and CEO 3
Slide 4: Q1'24 Summary
Q1’24 Summary Sales of $600M, Gross Margin of 56.6%, Non-GAAP EPS of $0.51 Q1’24 Guidance $1,000M Range 60% $1.40 $800M $1.20 55% 53.5% - 54.5% $1.00 $600M $0.80 $540M - 50% $590M 57.7% 56.6% 56.6% $0.60 $400M $618M $671M $600M $0.40 45% $0.79 $0.22 - $200M $0.55 $0.51 $0.38 $0.20 $M 40% $0.00 Q1'23
Slide 5: Q1'24 Summary and Full Year Outlook
Q1’24 Summary and Full Year Outlook Q1 Summary 2024 Outlook Mid-Term Earnings Model growth Q1’24 sales of $600M and SOC TAM unchanged at $3.6-$4.2B drivers remain in place earnings (non-GAAP EPS of • Compute TAM estimated at $1.5B vs $1.4B Test $0.51) were above the top prior estimate • AI drives SO
Slide 6: First Quarter 2024 Financial Results & Second Quarter 2024 Guidance
First Quarter 2024 Financial Results & Second Quarter 2024 Guidance Sanjay Mehta, Vice President and Chief Financial Officer 6
Slide 7: Q1'24 Non-GAAP Results
Q1’24 Non-GAAP Results Q1’23 Actual(1) Q4’23 Actual(1) Q1’24 Actual(1) Sales $618M $671M $600M Gross Margin 57.7% $356M 56.6% $380M 56.6% $339M R&D 17.1% $106M 15.2% $102M 17.2% $103M SG&A 23.5% $145M 21.2% $142M 24.6% $147M OPEX 40.6% $251M 36.5% $245M 41.8% $251M Operating Profit 17.1% $106M 20.1%
Slide 8: Q1'24 Segment Summary / 2024 Q1 Key Highlights
Q1’24 Segment Summary Semiconductor System Test Wireless Test Robotics Test Q1’24 Sales $412M $75M $25M $88M Sales down ~1% vs Q1’23 Sales flat vs Q1’23 Sales down 36% vs Q1’23 Sales down 2% from Q1’23 SOC test down 13% vs Q1’23 Storage Test down vs Q1’23 on Sustained lower PC, UR sales down 6% from
Slide 9: Balance Sheet & Capital Allocation
Balance Sheet & Capital Allocation Q1’23 Q4’23 Q1’24 Actual Actual Actual Cash and Marketable Securities $859M $937M $871M Inventory $352M $310M $314M DSO 68 Days 57 Days 65 Days Capital Additions $41M $44M $44M Depreciation and Amortization(1) $46M $40M $44M Free Cash Flow(2) ($22M) $204M ($37M) Bu
Slide 10: Q2'24 Non-GAAP Guidance
Q2’24 Non-GAAP Guidance $s in millions, except EPS Q1’24 Actual(1) Q2’24 Guidance(1) Sales $600M $665M - $725M Gross Margin 56.6% 57% - 58% OPEX 41.8% 39% - 36% Operating Profit 14.8% 18% - 22% Effective Tax Rate 15.5% 15.5% EPS $0.51 $0.64 - $0.84 Diluted Shares 162M 162M (1) See attached appendix
Slide 11: Q1'24 Summary and Full Year Outlook
Q1’24 Summary and Full Year Outlook Q1 Summary 2024 Outlook Mid-Term Earnings Model growth Q1’24 sales of $600M and SOC TAM unchanged at $3.6-$4.2B drivers remain in place earnings (non-GAAP EPS of • Compute TAM estimated at $1.5B vs $1.4B prior Test $0.51) were above the top end estimate • AI drive
Slide 12: Supplemental Information
Supplemental Information 12
Slide 13: History of Capital Allocation
History of Capital Allocation Since 2015, 78.5M shares repurchased at an average price of ~$49 per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q1'24 Cumulative ($M) Buybacks(1) 300 146 200 823 500 88 600 752 401 22 3,833 Dividends 51 49 55 67 61 66 66 70 68 18 572 Acquisitions/Investments 283
Slide 14: Semiconductor Test Market Growth Trends Are Favorable
Semiconductor Test Market Growth Trends Are Favorable Semiconductor Test (1) SOC market powered by unit growth, (2) complexity, new technology adoption Memory test driven by bit growth, diversity, higher bandwidth (2) 2024 Market Sizes at Mid-Point of Range (1) SOC data includes product and service;
Slide 15: 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% Growth off 2023 13% 20% =$2,676M =$4,250M(3) Gross Margin % 57% 59% 60% OPEX % 37% 31% 28% Operating Profit % 20% 28% 32% 86% 83
Slide 16: 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 17: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation 17
Slide 18: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation 18
Slide 19: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation 19
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 Q1'23 Q4'23 Q1'24 Q2'24 Low Guidance Q2'24 High Guidance $'s % of sales $'s % of sales $'s % of sales $'s % of sales $'s % of sales GAAP Operating Expenses $264 43% $255 38% $262 44% $264 40% $266 37% Intangible Asset Amortization -$5 -1% -$5 -1% -$5 -1% -$
Slide 24: 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 25: 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 25