Teradyne’s first quarter results landed in line with Wall Street’s revenue expectations, but market reaction was negative following the earnings release. Management attributed the quarter’s year-over-year sales growth to demand in its semiconductor test (Semi Test) business, particularly for mobile system-on-chip (SoC) testers, as well as increased activity in AI accelerator testing. CEO Greg Smith clarified that mobile demand was driven by supply chain transitions rather than an end-market recovery, and noted that the company’s memory business secured a new high bandwidth memory (HBM4) test win. While product mix benefited gross margins, management pointed to ongoing challenges in the robotics segment and a generally cautious near-term outlook due to persistent uncertainty around customer capital spending.
Is now the time to buy TER? Find out in our full research report (it’s free).
Teradyne (TER) Q1 CY2025 Highlights:
- Revenue: $685.7 million vs analyst estimates of $683.9 million (14.3% year-on-year growth, in line)
- Adjusted EPS: $0.75 vs analyst estimates of $0.62 (21.7% beat)
- Adjusted EBITDA: $166.3 million vs analyst estimates of $144.9 million (24.3% margin, 14.8% beat)
- Revenue Guidance for Q2 CY2025 is $645 million at the midpoint, roughly in line with what analysts were expecting
- Adjusted EPS guidance for Q2 CY2025 is $0.53 at the midpoint, below analyst estimates of $0.53
- Operating Margin: 17.6%, up from 13% in the same quarter last year
- Inventory Days Outstanding: 116, up from 88 in the previous quarter
- Market Capitalization: $13.84 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Teradyne’s Q1 Earnings Call
- Krish Sankar (TD Cowen) asked how tariffs are affecting customer order patterns. CEO Greg Smith responded that pushouts are mainly from automotive and industrial customers, while mobile demand remains stable for now.
- C.J. Muse (Cantor Fitzgerald) probed for full-year gross margin expectations. CFO Sanjay Mehta explained that margin variability will depend on product mix and top-line trends, and management is not providing full-year guidance due to uncertainty.
- Timothy Arcuri (UBS) inquired about the timing and impact of the record robotics order. Smith clarified that shipments are spread across Q1 and Q2, with no immediate extension into the second half.
- Priyanka Thapa (JPMorgan) asked whether tariffs have shifted customer preferences to non-U.S. suppliers. Smith replied that tariffs have not led to a loss of competitive positioning or caused customers to switch vendors.
- Shane Brett (Morgan Stanley) questioned what would drive renewed demand in the NAND memory testing market. Smith pointed to mobile phone volume growth and evolving AI-enabled device requirements as key factors.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be watching (1) how global trade policy developments and tariffs influence customer spending and order timing, (2) whether Semi Test and memory growth can offset continued softness in robotics and product test, and (3) progress on new product initiatives such as silicon photonics testing and enterprise robotics automation. Shifts in customer capital spending and execution on cost controls will also be critical indicators.
Teradyne currently trades at $86.92, up from $76.83 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).
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