Teradyne, Inc.
TER · Nasdaq
Next quarter
Expected to report Feb 1, 2027 — estimated from last year’s reporting date.
Consensus is $2.11 EPS for Dec 2026 across 6 estimates, ranging $2.07 to $2.18.
TER Sep 2026
- 12.25%
- -3.23%
- $2.04
- $2.29
- —
- $1.31B
Reported results
- $1.31B
- 59.06%
- $401.97M
- 30.78%
- $342.41M
- $2.17
Highlights
- EPS beat: Non-GAAP diluted EPS was $2.29, 12.25% above the $2.04 consensus; GAAP diluted EPS was $2.17.
- AI-led growth: Revenue of $1.306 billion rose 70% year over year, with management citing demand across memory, hard disk drive test, high-speed interconnect and robotics.
- Sequential cooling: Revenue declined 1.7% from $1.329 billion in Q2 FY2026; non-GAAP EPS fell from $2.47 and GAAP EPS from $2.38.
- Test business mix: Semiconductor Test generated $1.072 billion, Product Test $138 million and Robotics $96 million.
- Robotics progress: Robotics posted its highest third-quarter revenue to date and returned to profitability, according to the company.
- Margins: GAAP operating income was $402.0 million, a 30.8% margin, versus $437.8 million and 32.9% in Q2, and $145.3 million and 18.9% a year earlier.
- Q4 outlook: Teradyne forecast revenue of $1.25 billion to $1.35 billion and non-GAAP diluted EPS of $1.95 to $2.25.
- Cash generation: Operating cash flow was $313.6 million; after $86.3 million of capital spending, cash flow less capex was $227.3 million.
Analysis
Teradyne delivered a strong year-over-year quarter on AI-related test demand, while results eased modestly from Q2’s higher level. Revenue of $1.306 billion increased 70% from $769.2 million a year ago but slipped 1.7% sequentially from $1.329 billion. Non-GAAP diluted EPS of $2.29 beat the $2.04 consensus by 12.25%; it was down from $2.47 in Q2 and up from $0.85 in Q3 FY2025. GAAP diluted EPS was $2.17, compared with $2.38 and $0.75 in those periods. The company said revenue and earnings exceeded the high end of its Q3 guidance, though the release did not provide the prior guidance range.
The defining feature was demand spanning the AI value chain: Semiconductor Test contributed $1.072 billion of revenue, and management highlighted record revenue in Memory and Integrated Systems Test. Product Test contributed $138 million, while Robotics generated $96 million, its highest third-quarter revenue to date, and achieved profitability. Profitability remained well above last year, with GAAP operating margin at 30.8%, although below Q2’s 32.9%. For Q4, Teradyne guided to $1.25 billion-$1.35 billion of revenue and non-GAAP EPS of $1.95-$2.25, implying a revenue midpoint close to Q3 and an EPS midpoint below Q3.
AI demand and segments
Management described demand extending across the AI value chain, from memory and hard disk drive test to high-speed interconnect and robotics. The revenue mix shows Semiconductor Test as the largest contributor; the release identifies areas of strength but does not give individual product-line growth rates.
- Semiconductor Test: Revenue was $1.072 billion, and the company reported record revenue in Memory and Integrated Systems Test.
- Product Test: Revenue was $138 million.
- Robotics: Revenue was $96 million, the segment’s highest third-quarter level to date; Teradyne said Robotics achieved profitability.
Earnings and margins
The $2.29 non-GAAP diluted EPS result beat consensus by $0.25, or 12.25%. It was below Q2’s $2.47, as revenue, operating income and operating margin also declined sequentially. Year over year, the comparison remained substantial: revenue grew 70%, while non-GAAP EPS rose from $0.85 and GAAP EPS from $0.75.
- GAAP results: Net income attributable to Teradyne was $342.4 million and diluted EPS was $2.17, versus $374.5 million and $2.38 in Q2, and $119.6 million and $0.75 a year earlier.
- Operating performance: GAAP operating income was $402.0 million, or 30.8% of revenue, compared with $437.8 million and 32.9% in Q2 and $145.3 million and 18.9% in Q3 FY2025.
- Non-GAAP reconciliation: Non-GAAP EPS excludes specified items including acquired-intangible amortization, restructuring and ERP-related expenses; the reported reconciliation lists non-GAAP net income of $359.9 million.
Fourth-quarter outlook
The Q4 revenue range of $1.25 billion-$1.35 billion has a $1.30 billion midpoint, close to Q3’s $1.306 billion. The non-GAAP diluted EPS range of $1.95-$2.25 has a $2.10 midpoint, below Q3’s $2.29. Guidance excludes acquired-intangible amortization, Technoprobe investment amortization and related tax effects from non-GAAP EPS.
Cash and investment
Operating cash flow was $313.6 million, with $86.3 million used for property, plant and equipment purchases. Cash and cash equivalents ended the quarter at $460.7 million, up from $293.8 million at December 31, 2025. Working-capital movements included $170.9 million of cash use from inventory and $165.3 million from prepayments and other assets during the quarter.
