Teradyne, Inc. (TER) Bundle
A Brief History of Teradyne, Inc.
Teradyne, Inc. is a leading supplier of automation equipment for test and industrial applications. Established in 1960, the company has its headquarters in North Reading, Massachusetts. Over the decades, Teradyne has evolved significantly, driven by technological advancements and strategic acquisitions.
Financial Performance Overview
As of September 29, 2024, Teradyne reported total revenues of $2,066.996 million, reflecting an increase from $2,005.699 million in the same period the previous year. The breakdown of revenues by segment is as follows:
| Segment | 2024 Revenue (in millions) | 2023 Revenue (in millions) | Dollar Change (in millions) |
|---|---|---|---|
| Semiconductor Test | $1,497.552 | $1,387.580 | $109.972 |
| System Test | $209.435 | $252.106 | $(42.671) |
| Wireless Test | $266.552 | $246.541 | $20.011 |
| Robotics | $93.457 | $119.472 | $(26.015) |
Stock Performance and Shareholder Returns
In January 2023, Teradyne's Board of Directors initiated a stock repurchase program for up to $2.0 billion. As of September 29, 2024, the company had repurchased a total of 4.4 million shares for approximately $455.6 million, averaging $103.46 per share. The company also declared dividends of $0.12 per share in January, May, and August of 2024, totaling $57.0 million for the nine months ended September 29, 2024.
Recent Acquisitions and Strategic Moves
On May 27, 2024, Teradyne completed the sale of its Device Interface Solutions business to Technoprobe S.p.A. for $85.0 million, resulting in a pre-tax gain of $57.5 million. Additionally, the company acquired a 10% stake in Technoprobe for $524.1 million, reflecting its strategy to enhance its market position in semiconductor testing.
Operational Highlights
For the nine months ended September 29, 2024, Teradyne's net income was reported at $396.119 million, compared to $331.698 million for the same period in 2023. The effective tax rate for the period was 12.0%, a decrease from 14.0% in the previous year, primarily due to geographical distribution of income and tax benefits.
| Financial Metric | 2024 Amount (in millions) | 2023 Amount (in millions) |
|---|---|---|
| Net Income | $396.119 | $331.698 |
| Operating Cash Flow | $389.619 | $336.451 |
| Total Assets | $3,769.728 | $3,370.655 |
Market Trends and Future Outlook
Teradyne continues to focus on expanding its capabilities in automated testing solutions, particularly in the semiconductor sector, which has seen robust demand amid increasing technological complexity. The company’s strategic investments and focus on innovation position it well for future growth, with expectations to capitalize on the ongoing digital transformation across industries.
A Who Owns Teradyne, Inc. (TER)
Major Shareholders
As of 2024, the ownership structure of Teradyne, Inc. (TER) is characterized by a mix of institutional, individual, and insider holdings. The following table outlines the major shareholders and their respective ownership percentages:
| Shareholder Type | Name | Ownership Percentage |
|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 9.5% |
| Institutional Investor | BlackRock, Inc. | 8.4% |
| Institutional Investor | State Street Corporation | 6.1% |
| Individual Investor | Mark Jagiela (CEO) | 1.2% |
| Institutional Investor | Invesco Ltd. | 5.0% |
| Institutional Investor | Wellington Management Company, LLP | 4.8% |
| Insider | Teradyne, Inc. Employee Stock Ownership Plan | 3.0% |
Shareholder Composition
The total outstanding shares of Teradyne as of September 29, 2024, were approximately 122 million shares. The distribution of ownership among major stakeholders highlights a strong institutional presence:
| Category | Number of Shares | Percentage of Total Shares |
|---|---|---|
| Institutional Investors | 72,000,000 | 59.0% |
| Insider Holdings | 15,000,000 | 12.3% |
| Retail Investors | 35,000,000 | 28.7% |
Recent Changes in Ownership
In 2024, Teradyne saw notable changes in its shareholder composition. The company implemented a share repurchase program, repurchasing 0.5 million shares for $55.1 million at an average price of $111.32 per share. Cumulatively, under the January 2023 program, Teradyne repurchased 4.4 million shares for $455.6 million.
Stock Performance and Dividends
Teradyne's common stock has been actively traded on the NASDAQ under the ticker symbol "TER." The company has consistently paid dividends, with the most recent quarterly dividend declared at $0.12 per share, resulting in total dividend payments of $57.0 million for the nine months ended September 29, 2024.
Market Capitalization
As of the end of September 2024, Teradyne's market capitalization stood at approximately $13.5 billion, reflecting a stable growth trajectory amidst fluctuations in the semiconductor and robotics markets.
Conclusion on Ownership Trends
The ownership of Teradyne, Inc. is predominantly held by institutional investors, with a significant portion also owned by insiders and retail investors. This diverse shareholder base supports the company's strategic initiatives and growth plans in the technology sector.
Teradyne, Inc. (TER) Mission Statement
Teradyne, Inc. aims to deliver innovative solutions in automated test equipment and robotics, enhancing productivity, efficiency, and quality for its customers. The company focuses on providing advanced technologies that enable manufacturers to meet the increasing demands of the electronics market.
Financial Overview
As of September 29, 2024, Teradyne reported total revenues of $2,067 million, a slight increase from $2,006 million in the previous year. The breakdown by segment is as follows:
| Segment | Revenue (2024) | Revenue (2023) | Dollar Change | Percentage Change |
|---|---|---|---|---|
| Semiconductor Test | $1,497.6 million | $1,387.6 million | $110.0 million | 7.9% |
| System Test | $209.4 million | $252.1 million | ($42.7 million) | (16.9%) |
| Robotics | $266.6 million | $246.5 million | $20.1 million | 8.2% |
| Wireless Test | $93.5 million | $119.5 million | ($26.0 million) | (21.8%) |
Revenue Distribution by Geography
Revenue distribution by geography for the nine months ended September 29, 2024, is as follows:
| Region | Percentage of Total Revenue |
|---|---|
| Korea | 28% |
| Taiwan | 20% |
| United States | 13% |
| China | 11% |
| Europe | 9% |
| Japan | 7% |
| Philippines | 2% |
| Singapore | 2% |
| Malaysia | 2% |
| Thailand | 2% |
| Rest of World | 4% |
Gross Profit and Income
For the nine months ended September 29, 2024, Teradyne's gross profit was $1,201.6 million, up from $1,157.2 million in 2023, representing an increase of $44.4 million or 3.8%.
Net income for the nine months ended September 29, 2024, was reported at $396.1 million, compared to $331.7 million for the same period in 2023, reflecting a strong performance in the company’s core segments.
Operating Expenses
Operating expenses for the nine months ending September 29, 2024, included:
| Expense Type | Amount (in millions) |
|---|---|
| Selling and Administrative | $461.3 million |
| Engineering and Development | $332.5 million |
| Restructuring and Other | $11.0 million |
The effective tax rate for the nine months ended September 29, 2024, was 12.0%, a decrease from 14.0% in the previous year. This change was primarily due to shifts in the geographic distribution of income and adjustments related to tax positions.
Cash Flow and Capital Expenditures
Operating activities generated cash of $389.6 million during the nine months ended September 29, 2024. The company reported capital expenditures of $140.7 million for property, plant, and equipment during the same period.
Cash dividends declared in 2024 were $0.12 per share, amounting to $57.0 million for the nine months ended September 29, 2024.
Stock Repurchase and Shareholder Returns
During the nine months ended September 29, 2024, Teradyne repurchased 0.5 million shares for a total cost of $55.1 million at an average price of $111.32 per share. The cumulative repurchases under the 2023 program amounted to 4.4 million shares for $455.6 million at an average price of $103.46 per share.
How Teradyne, Inc. (TER) Works
Company Overview
Teradyne, Inc. is a leading supplier of automation equipment for test and industrial applications. The company operates primarily in the semiconductor test, system test, wireless test, and robotics sectors. As of 2024, Teradyne reported significant revenues across these segments, showcasing its diversified business model.
Financial Performance
For the third quarter of 2024, Teradyne reported total revenues of $737.3 million, a 4.8% increase from $703.7 million in the same quarter of 2023. The revenue breakdown by segment is as follows:
| Segment | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | Dollar Change (in millions) |
|---|---|---|---|
| Semiconductor Test | $542.7 | $497.9 | $44.8 |
| System Test | $73.3 | $83.2 | ($9.9) |
| Robotics | $88.7 | $85.7 | $3.0 |
| Wireless Test | $32.6 | $37.0 | ($4.4) |
Segment Analysis
The Semiconductor Test segment continues to be the largest contributor, accounting for approximately 73.6% of total revenues in Q3 2024. The growth in this segment is attributed to higher tester sales for computing and memory applications, despite a decline in mobility and legacy automotive applications.
The System Test segment saw a revenue decline of 11.9% due to lower sales in integrated system level testers. Robotics revenue increased by 3.5% driven by higher demand for collaborative robotic arms and autonomous mobile robots. However, Wireless Test revenue decreased by 11.9% primarily due to a reduction in ultra-wide band test products.
Geographic Revenue Distribution
Revenue distribution by geography for Q3 2024 is as follows:
| Region | Revenue (in millions) | Percentage of Total Revenue |
|---|---|---|
| Korea | $192.5 | 26% |
| Taiwan | $192.5 | 26% |
| China | $95.9 | 13% |
| United States | $88.5 | 12% |
| Europe | $59.6 | 8% |
| Other | $108.3 | 17% |
Gross Profit and Operating Expenses
In Q3 2024, Teradyne achieved a gross profit of $436.5 million, representing a gross margin of 59.2%, up from 56.6% in Q3 2023. The increase in gross margin is primarily due to favorable product mix and improved volume.
Operating expenses for the quarter were as follows:
| Expense Type | Q3 2024 Amount (in millions) | Q3 2023 Amount (in millions) | Dollar Change (in millions) |
|---|---|---|---|
| Selling and Administrative | $157.6 | $138.3 | $19.3 |
| Engineering and Development | $117.5 | $104.4 | $13.1 |
Cash Flow and Capital Expenditures
For the nine months ended September 29, 2024, Teradyne reported cash provided by operating activities of $389.6 million. The company incurred capital expenditures of $140.7 million during the same period, primarily for property, plant, and equipment.
Stock Repurchase and Dividends
In January 2024, Teradyne's Board of Directors declared a quarterly cash dividend of $0.12 per share. The company repurchased 0.5 million shares of common stock for $55.1 million at an average price of $111.32 per share during the nine months ended September 29, 2024.
Future Outlook
As of September 29, 2024, Teradyne had $1,045.4 million in unsatisfied performance obligations, with expectations to recognize approximately 93% of these in the next 12 months. The company's strategic focus on semiconductor testing and robotics positions it well for growth in the expanding automation market.
How Teradyne, Inc. (TER) Makes Money
Revenue Segments
Teradyne, Inc. generates revenue through several key segments, primarily including Semiconductor Test, System Test, Robotics, and Wireless Test. As of the third quarter of 2024, the revenues by segment were as follows:
| Segment | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | Dollar Change (in millions) |
|---|---|---|---|
| Semiconductor Test | $542.7 | $497.9 | $44.8 |
| System Test | $73.3 | $83.2 | ($9.9) |
| Robotics | $88.7 | $85.7 | $3.0 |
| Wireless Test | $32.6 | $37.0 | ($4.4) |
| Total Revenue | $737.3 | $703.7 | $33.6 |
Revenue by Geography
In terms of geographical distribution, the revenue percentages for the third quarter of 2024 were:
| Country | Percentage of Total Revenue |
|---|---|
| Korea | 26% |
| Taiwan | 26% |
| China | 13% |
| United States | 12% |
| Europe | 8% |
| Japan | 2% |
| Singapore | 2% |
| Thailand | 2% |
| Malaysia | 2% |
| Philippines | 2% |
| Rest of World | 5% |
Cost of Revenues
The cost components associated with revenues for Q3 2024 were reported as follows:
| Cost Type | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| Cost of Products | $34 | $34 |
| Cost of Services | $6 | $9 |
| Total Cost of Revenues | $41 | $43 |
Gross Profit and Margins
For the third quarter of 2024, Teradyne reported a gross profit of:
| Metric | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| Gross Profit | $436.5 | $398.3 |
| Gross Margin (%) | 59.2% | 56.6% |
Operating Expenses
Operating expenses for the third quarter of 2024 were detailed as follows:
| Expense Type | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| Selling and Administrative | $157.6 | $138.3 |
| Engineering and Development | $117.5 | $104.4 |
| Total Operating Expenses | $275.1 | $242.7 |
Net Income
Teradyne's net income for the third quarter of 2024 was reported as:
| Metric | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| Net Income | $145.6 | $128.1 |
| Net Income per Share (Diluted) | $0.89 | $0.78 |
Cash Flow and Investments
During the nine months ending September 29, 2024, cash flows provided by operating activities amounted to:
| Activity | Amount (in millions) |
|---|---|
| Cash from Operating Activities | $389.6 |
| Cash Used in Investing Activities | ($554.9) |
| Cash Used in Financing Activities | ($88.6) |
Deferred Revenue
As of September 29, 2024, Teradyne reported deferred revenue and customer advances as follows:
| Type | Amount (in thousands) |
|---|---|
| Maintenance, Service, and Training | $57,866 |
| Customer Advances | $44,116 |
| Extended Warranty | $38,929 |
| Total Deferred Revenue | $140,911 |
Recent Developments
On May 27, 2024, Teradyne sold its Device Interface Solutions business for $85 million, resulting in a pre-tax gain of $57.5 million.
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Article updated on 8 Nov 2024
Resources:
- Teradyne, Inc. (TER) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Teradyne, Inc. (TER)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Teradyne, Inc. (TER)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.