Teradyne Q1 Earnings Surpass Estimates, Revenues Increase Y/Y

Teradyne TER reported first-quarter 2025 non-GAAP earnings of 75 cents per share, which comfortably beat the Zacks Consensus Estimate by 22.95% and jumped 47.1% year over year.

Revenues of $686 million beat the Zacks Consensus Estimate by 0.26% and increased 14.3% year over year. The rise was driven by a strong performance in the Semiconductor Test division.

TER’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the surprise being 22.16%, on average. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

TER’s Q1 Top-Line Details

Revenues from Semiconductor Test platforms, Robotics and Product Test were $543 million (79.2% of total revenues), $69 million (10.1%) and $74 million (10.8%), respectively.

Teradyne, Inc. Price, Consensus and EPS Surprise

 

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

System-on-a-Chip, primarily for mobile applications, was the leading growth driver.
It delivered the highest contribution to overall performance expansion.

In the first quarter, Teradyne reported a non-GAAP gross margin of 60.6%, which expanded 400 basis points (bps) year over year.

In the reported quarter, selling and administrative expenses increased 5.4% year over year to $157.3 million. As a percentage of revenues, selling and marketing expenses were 22.9%, which contracted 190 bps year over year.

Engineering and development expenses increased 14.5% year over year to $118.2 million. As a percentage of revenues, engineering and development expenses remained steady on a year-over-year basis at 17.2%.

Non-GAAP operating income improved 58.9% year over year to $140.8 million. The operating margin expanded 580 bps on a year-over-year basis to 20.5%.

TER’s Balance Sheet & Cash Flow

As of March 30, 2025, Teradyne’s cash and cash equivalents (including marketable securities) were $507.8 million, lower than $599.7 million as of Dec. 31, 2024.

Teradyne’s board authorized an expansion of the company’s share repurchase program, increasing the target to $1 billion by the end of 2026.

In the reported quarter, net cash provided by operating activities was $1.61 billion compared with $2.82 billion in the previous quarter.

TER Provides Cautious Q2 Guidance

Despite Teradyne’s strong first-quarter results, the sequentially lower guidance for the second quarter reflects management’s conservative stance amid persistent demand uncertainties. The company’s outlook suggests a near-term softness.

For the second quarter of 2025, Teradyne expects revenues between $610 million and $680 million.

Non-GAAP earnings per share are expected between 41 cents and 64 cents.

TER’s Zacks Rank & Stocks to Consider

Teradyne currently carries a Zacks Rank #4 (Sell).

ATN International ATNI, Compass COMP and Red Violet RDVT are some better-ranked stocks in the broader Zacks Computer and Technology sector. ATN International sports a Zacks Rank #1 (Strong Buy), and Compass and Red Violet carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

ATN International shares have gained 6.4% year to date. ATNI is set to report first-quarter 2025 results on April 30.

Compass’ shares have gained 26.2% year to date. COMP is set to post first-quarter 2025 results on May 8.

Red Violet shares have returned 3.9% year to date. RDVT is set to report first-quarter 2025 results on May 7.

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

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