Teradyne Q4 Earnings Beat Estimates, Revenues Increase Y/Y, Shares Up

Teradyne TER reported fourth-quarter 2025 non-GAAP earnings of $1.8 per share, which beat the Zacks Consensus Estimate by 32.22% and surged 89.5% year over year.

Revenues of $1.08 billion beat the Zacks Consensus Estimate by 11.82% and increased 43.7% year over year.

Teradyne stock rallied 20.7% in pre-market trading.

TER’s Q4 Top-line Details

Revenues from Semiconductor Test platforms, Robotics, and Product Test were $883 million (81.6% of total revenues), $89 million (8.2%), and $110 million (10.2%), respectively.

In the fourth quarter, Teradyne reported a non-GAAP gross margin of 57.3%, which contracted 210 basis points (bps) year over year.

Teradyne, Inc. Price, Consensus and EPS Surprise

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

In the reported quarter, selling and administrative expenses increased 5.7% year over year to $164.7 million. As a percentage of revenues, selling and marketing expenses were 15.2%, down 550 bps year over year.

Engineering and development expenses increased 11.6% year over year to $143.3 million. As a percentage of revenues, engineering and development expenses were 13.2%, down 380 bps year over year.

Non-GAAP Operating income increased 92.4% year over year to $314 million. As a percentage of revenues, the operating margin contracted 730 bps on a year-over-year basis to 29%.

TER’s Balance Sheet & Cash Flow

As of Dec. 31, 2025, Teradyne’s cash and cash equivalents (including marketable securities) were $321.9 million, lower than $297.7 million as of Sept. 28, 2025.

In the reported quarter, net cash provided by operating activities was $281 million.

TER’s Q1 Guidance

For the first quarter of 2026, Teradyne expects revenues between $1,150 million and $1,250 million.  

Non-GAAP earnings are expected to be between $1.89 and $2.25 per share.

TER’s Zacks Rank & Stocks to Consider

Teradyne currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Computer and Technology sector include Arista Networks ANET, Advanced Energy AEIS, and Amkor Technology AMKR. While Amkor Technology sports a Zacks Rank #1 (Strong Buy), Arista Networks and Advanced Energy carry a Zacks Rank 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Arista Networks have gained 15% in the trailing six-month period. Arista Networks is set to report fourth-quarter 2025 results on Feb. 12

Shares of Advanced Energy have gained 86.3% in the trailing six-month period. Advanced Energy is slated to report third-quarter 2025 results on Feb. 10.

Amkor Technology shares have surged 115.7% in the trailing six-month period. Amkor Technology is set to report fourth-quarter 2025 results on Feb. 9.

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

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