Slide 1: Financial Results: Q2 2024
Financial Results: Q2 2024 July 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: Q2'24 Summary
Q2’24 Summary Sales of $730M |Gross Margin of 58.3% | Non-GAAP EPS of $0.86 | Above High Guidance $1,000M Q2’24 60% Guidance Range $1.40 Q2’24 $800M Guidance Range 57% - 58% $1.20 $665M - 55% Q2’24 $1.00 Guidance Range $600M $725M $0.80 $0.64 - 50% 58.8% $400M 58.3% $0.84 $730M 56.6% $0.60 $684M $60
Slide 5: Q2'24 Summary and Full Year Outlook
Q2’24 Summary and Full Year Outlook Q2 Summary 2024 Outlook Mid-Term Earnings Model Growth Drivers Remain in Place Q2’24 sales of $730M and SOC TAM unchanged at $3.6-$4.2B earnings (non-GAAP EPS of • Compute TAM estimated at $1.6B vs $1.5B Test $0.86) were above the high prior estimate (at midpoint)
Slide 6: Second Quarter 2024 Financial Results & Third Quarter 2024 Guidance
Second Quarter 2024 Financial Results & Third Quarter 2024 Guidance Sanjay Mehta, Vice President and Chief Financial Officer 6
Slide 7: Q2'24 Non-GAAP Results
Q2’24 Non-GAAP Results Q2’23 Actual(1) Q1’24 Actual(1) Q2’24 Actual(1) Sales $684M $600M $730M Gross Margin 58.8% $402M 56.6% $339M 58.3% $426M R&D 15.4% $106M 17.2% $103M 15.3% $112M SG&A 21.3% $146M 24.6% $147M 21.2% $154M OPEX 36.7% $251M 41.8% $251M 36.5% $266M Operating Profit 22.1% $151M 14.8%
Slide 8: Q2'24 Key Highlights
Q2’24 Segment Summary Semiconductor System Test Wireless Test Robotics Test Q2’24 Sales $543M $61M $36M $90M Sales up 14% vs Q2’23 Sales down 36% vs Q2’23 Sales down 17% vs Q2’23 Sales up 26% from Q2’23 SOC up 17% vs Q2’23 on Storage Test down due to Increased Wi-Fi 7 demand UR sales up 29% from Q2’
Slide 9: Balance Sheet & Capital Allocation
Balance Sheet & Capital Allocation Q2’23 Q1’24 Q2’24 Actual Actual Actual Cash and Marketable Securities $813M $871M $584M Inventory $347M $314M $289M DSO 66 Days 65 Days 59 Days Capital Additions $39M $44M $45M Depreciation and Amortization(1) $41M $45M $45M Free Cash Flow(2) $104M ($37M) $171M Buy
Slide 10: Q3'24 Non-GAAP Guidance
Q3’24 Non-GAAP Guidance $s in millions, except EPS Q2’24 Actual(1) Q3’24 Guidance(1) Sales $730M $680M - $740M Gross Margin 58.3% 58.5% - 59.5% OPEX 36.5% 40% - 38% Operating Profit 21.9% 18.5% - 21.5% Effective Tax Rate 14.6% 15.0% EPS $0.86 $0.66 - $0.86 Diluted Shares 163M 164M (1) See attached a
Slide 11: Q2'24 Summary and Full Year Outlook
Q2’24 Summary and Full Year Outlook Q2 Summary 2024 Outlook Mid-Term Earnings Model Growth Drivers Remain in Place Q2’24 sales of $730M and SOC TAM unchanged at $3.6-$4.2B earnings (non-GAAP EPS of • Compute TAM estimated at $1.6B vs $1.5B Test $0.86) were above the high prior estimate (at midpoint)
Slide 12: Supplemental Information
Supplemental Information 12
Slide 13: Semiconductor Test TAM Estimates
Semiconductor Test TAM Estimates Semi ATE TAM Est. Ranges 2023 Historical Estimate TAM Est as of 1/24 TAM Est as of 4/24 TAM Est as of 7/24 ($ in billions) SOC $4.0 $3.6 – $4.2 $3.6 – $4.2 $3.6 – $4.2 Memory $0.9 $1.0 – $1.1 $1.2 – $1.3 $1.2 – $1.3 Total Semi ATE $4.9 $4.6 - $5.3 $4.6 - $5.3 $4.6 -
Slide 14: History of Capital Allocation
History of Capital Allocation Since 2015, 78.6M shares repurchased at an average price of ~$49 per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 1H'24 Cumulative ($M) Buybacks(1) 300 146 200 823 500 88 600 752 401 30 3,841 Dividends 51 49 55 67 61 66 66 70 68 37 591 (2) Net Acquisitions 283 15
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, (2) complexity, new technology adoption Memory test driven by bit growth, diversity, higher bandwidth (2) 2024 Market Sizes at Mid-Point of Range $1.25B SOC (1) SOC data includes product a
Slide 16: Teradyne Non-GAAP Mid-Term Earnings Model
Teradyne Non-GAAP Mid-Term Earnings Model Financial Model (1)(2) 2023 2026E (Updated Model) 2023 Sales Mix 2026E Sales Mix(3) TER Revenue ($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 | 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 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 23
Slide 24: Appendix | GAAP to Non-GAAP Reconciliation
Appendix | GAAP to Non-GAAP Reconciliation Q2'23 Q1'24 Q2'24 Q3'24 Low Guidance Q3'24 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 $263 38% $262 44% $215 30% $278 41% $282 38% Intangible Asset Amortization -$5 -1% -$5 -1% -$5 -1% -$
Slide 25: 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 26: 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 26