Teradyne Q3 Earnings Beat Estimates, Revenues Increase Y/Y, Shares Up

Teradyne TER reported third-quarter 2025 non-GAAP earnings of 85 cents per share, which beat the Zacks Consensus Estimate by 8.97% and plunged 5.6% year over year.

Revenues of $769 million beat the Zacks Consensus Estimate by 3.32% and increased 4.3% year over year.

Teradyne stock rallied 22.32% in pre-market trading.

TER’s Q3 Top-line Details

Revenues from Semiconductor Test platforms, Robotics and Product Test were $606 million (78.8% of total revenues), $75 million (9.8%), and $88 million (11.4%), respectively.

Teradyne, Inc. Price, Consensus and EPS Surprise

Teradyne, Inc. price-consensus-eps-surprise-chart | Teradyne, Inc. Quote

In the third quarter, Teradyne reported a non-GAAP gross margin of 58.5%, which contracted 120 basis points (bps) year over year.

In the reported quarter, selling and administrative expenses increased 7.3% year over year to $169.1 million. As a percentage of revenues, selling and marketing expenses were 22%, up 60 bps year over year.

Engineering and development expenses increased 6.2% year over year to $124.8 million. As a percentage of revenues, engineering and development expenses were 16.2%, up 30 bps year over year.

Non-GAAP Operating income declined 4.9% year over year to $156.9 million. As a percentage of revenues, the operating margin contracted 200 bps on a year-over-year basis to 20.4%.

TER’s Balance Sheet & Cash Flow

As of Sept. 28, 2025, Teradyne’s cash and cash equivalents (including marketable securities) were $297.7 million, lower than $367.9 million as of June 29, 2025.

In the reported quarter, net cash provided by operating activities was $49 million.

TER’s Q4 Guidance

For the fourth quarter of 2025, Teradyne expects revenues between $920 million and $1 billion.  

Non-GAAP earnings are expected to be between $1.20 and $1.46 per share.

TER’s Zacks Rank & Other Stocks to Consider

Teradyne currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader Zacks Computer and Technology sector are Alkami Technology ALKT, AMETEK AME, and Advanced Energy AEIS. While Alkami Technology sports a Zacks Rank #1 (Strong Buy), AMETEK and Advanced Energy carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alkami Technology is set to report third-quarter 2025 results on Oct. 30. Alkami Technology shares have lost 36.2% year to date.

AMETEK is slated to report third-quarter 2025 results on Oct. 30. AMETEK shares have gained 2.7% year to date.

Advanced Energy is set to report third-quarter 2025 results on Nov. 4. Advanced Energy shares have surged 77% year to date.

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This article originally published on Zacks Investment Research (zacks.com).

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