Slide 1: Financial Results: Q3 2024
Financial Results: Q3 2024 October 24, 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: Q3'24 Summary
Q3’24 Summary Sales of $737M | Non-GAAP Gross Margin of 59.7% | Non-GAAP EPS of $0.90 | EPS Above High Guidance Q3’24 Q3’24 Guidance Range Guidance Range $680M - Q3’24 $740M 58.5% - 59.5% Guidance Range $0.66 - $0.86 Quarterly Revenue Non-GAAP Gross Margin % Non-GAAP EPS(1) • Semi Test strength in C
Slide 5: Q3'24 Summary and Full Year Outlook
Q3’24 Summary and Full Year Outlook Q3 Summary 2024 Outlook Mid-Term Earnings Model Growth Drivers Remain in Place Q3’24 sales of $737M (at the SOC TAM expected ~$4.2B (high end of high end of guidance range) range) Test and non-GAAP EPS of $0.90 (vs • Compute TAM estimated at $1.8B vs $1.6B • AI dr
Slide 6: Third Quarter 2024 Financial Results & Fourth Quarter 2024 Guidance
Third Quarter 2024 Financial Results & Fourth Quarter 2024 Guidance Sanjay Mehta, Vice President and Chief Financial Officer 6
Slide 7: Q3'24 Non-GAAP Results
Q3’24 Non-GAAP Results Q3’23 Actual(1) Q2’24 Actual(1) Q3’24 Actual(1) Sales $704M $730M $737M Gross Margin 56.6% $398M 58.3% $426M 59.7% $440M R&D 14.8% $104M 15.3% $112M 15.9% $117M SG&A 19.7% $138M 21.2% $154M 21.4% $158M OPEX 34.5% $243M 36.5% $266M 37.3% $275M Operating Profit 22.1% $156M 21.9%
Slide 8: Q3'24 Segment Summary and Key Highlights
Q3’24 Segment Summary Semiconductor System Test Wireless Test Robotics Test Q3’24 Sales $543M $73M $33M $89M Sales up 9% vs Q3’23 Sales down 12% vs Q3’23 Sales down 12% vs Q3’23 Sales up 3% from Q3’23 SOC down 3% vs Q3’23 due to Storage Test demand remains Slower than expected uptake Sales up 8% YTD
Slide 9: Balance Sheet & Capital Allocation
Balance Sheet & Capital Allocation Q3’23 Q2’24 Q3’24 Actual Actual Actual Cash and Marketable Securities $820M $584M $678M Inventory $323M $289M $297M DSO 59 Days 59 Days 60 Days Capital Additions $35M $45M $52M Depreciation and Amortization(1) $41M $45M $45M Free Cash Flow(2) $140M $171M $114M Buyb
Slide 10: Q4'24 Non-GAAP Guidance
Q4’24 Non-GAAP Guidance $s in millions, except EPS Q3’24 Actual(1) Q4’24 Guidance(1) Sales $737M $710M - $760M Gross Margin 59.7% 59.5% - 60.5% OPEX 37.3% 38.5% – 36.5% Operating Profit 22.4% 21.0% - 24.0% Effective Tax Rate 13.8% 14.5% EPS $0.90 $0.80 - $0.97 Diluted Shares 164M 164M (1) See attach
Slide 11: Q3'24 Summary and Full Year Outlook
Q3’24 Summary and Full Year Outlook Q3 Summary 2024 Outlook Mid-Term Earnings Model Growth Drivers Remain in Place Q3’24 sales of $737M (at the high end SOC TAM expected ~$4.2B (high end of of guidance range) and non-GAAP EPS range) Test of $0.90 (vs High Guide of $0.86) • Compute TAM estimated at $
Slide 12: Supplemental Information
Supplemental Information 12
Slide 13: Semiconductor Test TAM Estimates
Semiconductor Test TAM Estimates Semi ATE TAM Est. Ranges 2023 Historical Estimate TAM Est as of 1/24 TAM Est as of 7/24 TAM Est as of 10/24 ($ in billions) SOC $4.0 $3.6 – $4.2 $3.6 – $4.2 ~$4.2 Memory $0.9 $1.0 – $1.1 $1.2 – $1.3 ~$1.4 Total Semi ATE $4.9 $4.6 - $5.3 $4.8 - $5.5 ~$5.6 Semi ATE TAM
Slide 14: History of Capital Allocation
History of Capital Allocation Since 2015, 78.8M shares repurchased at an average price of ~$49 per share YTD ($M) 2015 2016 2017 2018 2019 2020 2021 2022 2023 Cumulative Q3'24 Buybacks (1) 300 146 200 823 500 88 600 752 401 55 3,866 Dividends 51 49 55 67 61 66 66 70 68 57 611 Acquisitions/Investment
Slide 15: Semiconductor Test Market Growth Trends Are Favorable
Semiconductor Test Market Growth Trends Are Favorable Semiconductor Test (1) SOC market powered by unit growth, complexity, new (2) technology adoption Memory test driven by bit growth, diversity, higher bandwidth (2) (1) SOC data includes product and service; market data from SEMI WWSEMS report and
Slide 16: 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 17: Appendix | 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 | Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation 18
Slide 19: Appendix | Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation 19
Slide 20: Appendix | Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation 20
Slide 21: Appendix | Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation 21
Slide 22: Appendix | Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation Q3'23 Q2'24 Q3'24 Q4'24 Low Guidance Q4'24 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 36% $215 30% $284 39% $277 41% $281 38% Intangible Asset Amortization -$5 -1% -$5 -1% -$5 -1% -$
Slide 23: Appendix | 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 | 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 24