Teradyne TER reported second-quarter 2025 non-GAAP earnings of 57 cents per share, which beat the Zacks Consensus Estimate by 5.56% but plunged 33.7% year over year. The figure came in above the mid-point of Teradyne’s guidance range.
Revenues of $652 million beat the Zacks Consensus Estimate by 0.89% but declined 10.7% year over year. The figure also came in above the mid-point of Teradyne’s guidance range.
TER’s Q2 Top-line Details
Revenues from Semiconductor Test platforms, System Test business, Robotics and Product Test were $492 million (75.5% of total revenues), $75 million (11.5%) and $85 million (13%), respectively.
In the second quarter, Teradyne reported a non-GAAP gross margin of 57.3%, which contracted 110 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 2.1% year over year to $157.8 million. As a percentage of revenues, selling and marketing expenses were 24.2%, up 300 bps year over year.
Engineering and development expenses increased 5.9% year over year to $118.4 million. As a percentage of revenues, engineering and development expenses were 18.2%, up 280 bps year over year.
Non-GAAP operating income declined 38.5% year over year to $98.2 million. As a percentage of revenues, the operating margin contracted 680 bps year over year to 15.1%.
TER’s Balance Sheet & Cash Flow
As of June 29, 2025, Teradyne’s cash and cash equivalents (including marketable securities) were $367.9 million, lower than $507.8 million as of March 30, 2025.
In the reported quarter, net cash provided by operating activities was $182.1.
Teradyne’s board authorized an expansion of the company’s share repurchase program, increasing the target to $1 billion by the end of 2026.
TER’s Q3 Guidance
For the third quarter of 2025, Teradyne expects revenues between $710 million and $770 million. The Zacks Consensus Estimate for third-quarter 2025 revenues is pegged at $764.4 million, suggesting 3.7% growth from the figure reported in the year-ago quarter.
Non-GAAP earnings are expected to be between 69 cents and 87 cents per share. The Zacks Consensus Estimate for third-quarter 2025 earnings is pegged at 91 cents per share, suggesting 1.1% growth from the figure reported in the year-ago quarter.
TER’s Zacks Rank & Stocks to Consider
Teradyne currently carries a Zacks Rank #3 (Hold).
Arista Networks ANET, Leidos LDOS and Enovix Corporation ENVX are better-ranked stocks in the broader Zacks Computer and Technology sector. Arista Networks currently sports a Zacks Rank #1 (Strong Buy), while Leidos and Enovix Corporation each carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks shares have gained 9.4% year to date. ANET is set to report its second-quarter 2025 results on Aug. 5.
Leidos shares have 12% year to date. LDOS is set to report its second-quarter 2025 results on Aug. 5.
Enovix shares have returned 26.9% year to date. ENVX is set to report its second-quarter 2025 results on July 31.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
