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What changed in Teradyne's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Teradyne's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+334 added−328 removedSource: 10-K (2026-02-19) vs 10-K (2025-02-20)

Top changes in Teradyne's 2025 10-K

334 paragraphs added · 328 removed · 229 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

56 edited+20 added−20 removed25 unchanged
Biggest changeSales and Distribution In each of the years, 2024, 2023 and 2022, our five largest direct customers in aggregate accounted for 36%, 32% and 26% of our consolidated revenues, respectively. 5 Table of Contents OSAT customers often purchase our test systems based upon recommendations from OEMs, IDMs and Fabless companies.
Biggest changeIn addition to support of high volume manufacturing test, the Product Test solutions aid customers in the development, verification, and scaling of next-generation technologies. Sales and Distribution In each of the years, 2025, 2024 and 2023, our five largest direct customers in aggregate accounted for 44%, 36%, and 32% of our consolidated revenues, respectively.
Our customers obtain the overall benefit of comprehensively testing devices and reducing the total costs associated with testing by using our Semiconductor Test systems to: • improve and control product quality; • measure and improve product performance; • reduce time to market; and • increase production yields.
Our customers obtain the overall benefit of comprehensively testing devices and reducing the total costs associated with testing by using our Semiconductor Test systems to: • improve and control product quality; • measure and enhance product performance; • reduce time to market; and • increase production yields.
The FLEX Test Platform architecture addresses customer requirements through the following key capabilities: • A high efficiency multi-site architecture that reduces tester overhead such as instrument setup, synchronization and data movement, and signal processing; • The IG-XL™ software operating system which provides fast program development, including instant conversion from single to multi-site test; and • Broad technology coverage by instruments designed to cover the range of test parameters, coupled with a universal slot test head design that allows easy test system reconfiguration to address changing test needs.
The FLEX Test Platform architecture addresses customer requirements through the following key capabilities: • A high efficiency multi-site architecture that reduces tester overhead such as instrument setup, synchronization and data movement, and signal processing; • The IG-XL™ software operating system which provides fast program development, including instant conversion from single to multi-site test; and 3 Table of Contents • Broad technology coverage by instruments designed to cover the range of test parameters, coupled with a universal slot test head design that allows easy test system reconfiguration to address changing test needs.
It is a priority for us to ensure that our people feel inspired, supported, safe and able to achieve their personal best. We are committed to equality through nondiscrimination, harassment prevention and pay equity policies. We value a diverse, inclusive and respectful work environment where all employees enjoy challenging assignments, development opportunities and a safe, positive culture.
It is a priority for us to ensure that our people feel inspired, supported, safe and able to achieve their personal best. We are committed to equality through nondiscrimination, harassment prevention and pay equity policies. We value a respectful work environment where all employees enjoy challenging assignments, development opportunities and a safe, positive culture.
Semiconductor devices span a broad range of functionality, from very simple low-cost devices such as appliance microcontrollers, operational amplifiers or voltage regulators to complex digital signal processors, Artificial Intelligence/Machine Learning (“AI/ML”) training, high performance computing and microprocessors as well as memory devices.
Semiconductor devices span a broad range of functionality, from very simple low-cost devices such as microcontrollers, operational amplifiers or voltage regulators to complex digital signal processors, Artificial Intelligence/Machine Learning (“AI/ML”) training ASICs, high performance computing and microprocessors as well as memory devices.
The market for our test products is concentrated with a limited number of significant customers accounting for a substantial portion of the purchases of test equipment. A few customers drive significant demand for our products both through direct sales and sales to the customer’s supply partners.
The market for our test products is concentrated with a limited number of significant customers accounting for a substantial portion of the purchases of test equipment. A few customers drive sizable demand for our offerings both through direct sales and sales to the customer’s supply partners.
We protect our rights in proprietary information, brands and technology through various methods, such as: • patents; • copyrights; • trademarks; • trade secrets; • standards of business conduct and related business practices; and • technology license agreements, software license agreements, non-disclosure agreements, employment agreements, and other agreements. However, these protections might not be effective in all circumstances.
We protect our rights in proprietary information, brands and technology through various methods, such as: • patents; • copyrights; • trademarks; • trade secrets; • standards of business conduct and related business practices; and • technology license agreements, software license agreements, non-disclosure agreements, employment agreements, and other agreements. 6 Table of Contents However, these protections might not be effective in all circumstances.
See also “Item 1A: Risk Factors” and Note U: “Operating Segment, Geographic and Significant Customer Information” in Notes to Consolidated Financial Statements. Competition We face significant competition throughout the world in each of our reportable segments. Competitors in the Semiconductor Test segment include, among others, Advantest Corporation, SPEA S.p.A., and Cohu, Inc.
See also “Item 1A: Risk Factors” and Note V: “Segment, Geographic, and Significant Customer Information” in Notes to Consolidated Financial Statements. Competition We face significant competition throughout the world in each of our reportable segments. Competitors in the Semiconductor Test segment include, among others, Advantest Corporation, SPEA S.p.A., and Cohu, Inc.
MiR’s products are differentiated by their: • Ease of Use and Speed of Deployment: Our robots are designed for quick deployment and flexibility, allowing customers to adapt tasks based on changing demands. • Safe Operations: Equipped with 360 safety coverage, our robots navigate around static and dynamic obstacles, ensuring safety in busy environments. • Reliable Autonomous Navigation: MiR robots demonstrate consistent, reliable navigation across large manufacturing and warehouse areas. • Short Payback Period: With an average payback period of 12–24 months, MiR's products provide a swift return on investment.
All models can be easily integrated into existing production environments, differentiated by their: • Ease of Use and Speed of Deployment: Our robots are designed for quick deployment and flexibility, allowing customers to adapt tasks based on changing demands. • Safe Operations: Equipped with 360 safety coverage, our robots navigate around static and dynamic obstacles, ensuring safety in busy environments. • Reliable Autonomous Navigation: MiR robots demonstrate consistent, reliable navigation across large manufacturing and warehouse areas. • Short Payback Period: With an average payback period of 12–24 months, MiR's products provide a swift return on investment.
All models are robust, built to withstand a wide range of industrial environments, and can be easily integrated into existing production setups, providing a number of game-changing benefits: • Straightforward programming – UR's intuitive software, PolyScope, enables users to program a cobot easily and have an application up and running within a few hours. • High return on investment – cobots require a lower initial investment than traditional robotics and have an average payback time of 12-18 months. • Versatile deployment – cobots' high degree of flexibility allows customers to change the task and pace of the cobot according to production demands. • Collaborative-capable safety functions – following a risk assessment, most cobots can seamlessly operate alongside employees, assisting with dull, dirty, and dangerous tasks. • Cutting-edge precision engineering – UR's global team of talented engineers creatively tackles customer challenges, ensuring our cobots are rigorously tested and built for demanding industrial tasks.
All models, including the UR8 Long, UR15, UR18, UR20, UR30, UR3e, UR7e, UR12e, and UR16e are built to withstand a wide range of industrial environments, and can be easily integrated into existing production setups, providing a number of game-changing benefits: • Straightforward programming – UR's intuitive software, PolyScope, enables users to program a cobot easily and have an application up and running within a few hours. • High return on investment – cobots require a lower initial investment than traditional robotics and have an average payback time of 12-18 months. • Versatile deployment – cobots' high degree of flexibility allows customers to change the task and pace of the cobot according to production demands. 4 Table of Contents • Collaborative-capable safety functions – following a risk assessment, most cobots can seamlessly operate alongside employees, assisting with dull, dirty, and repetitive tasks. • Cutting-edge precision engineering – UR's global team of talented engineers creatively tackles customer challenges, ensuring our cobots are rigorously tested and built for demanding industrial tasks.
The manufacturing activities for our Robotics businesses are done primarily in our production facilities in Denmark and the U.S. Sales to customers outside the United States were 87%, 84%, and 85%, respectively, of our consolidated revenues in 2024, 2023 and 2022. Sales are attributed to geographic areas based on the location of the customer site.
The manufacturing activities for our Robotics businesses are done primarily in our production facilities in Denmark and the U.S. 5 Table of Contents Sales to customers outside the United States were 89%, 87%, and 84%, respectively, of our consolidated revenues in 2025, 2024 and 2023. Sales are attributed to geographic areas based on the location of the customer site.
We are committed to complying with all applicable regulatory health and safety requirements wherever we operate. We conduct internal audits, regular reviews and monitoring of regulations to ensure compliance with laws and regulations at the local, state, province and country levels.
Health and Safety The health and safety of our employees worldwide is our highest priority. We are committed to complying with all applicable regulatory health and safety requirements wherever we operate. We conduct internal audits, regular reviews and monitoring of regulations to ensure compliance with laws and regulations at the local, state, province and country levels.
The ETS-800, a high performance multi-site production test system, is used to test high complexity power devices in automotive, industrial and consumer applications. The Integrated System Test group is comprised of our system level test ("SLT") testers and our hard disk drive ("HDD") testers.
The ETS-800, a high performance multi-site production test system, is used to test high complexity power devices in automotive, industrial and consumer applications. The Integrated System Test group is comprised of our system level test (“SLT”) testers and our HDD and SSD testers.
The Eagle platform includes the ETS-88 which is a high performance multi-site production test system designed to test a wide variety of high volume power and precision devices including Silicon Carbide ("SiC") and Gallium Nitride ("GaN") power devices used in vehicle electrification.
The Eagle platform includes the ETS-88 which is a high performance multi-site production test system designed to test a wide variety of high volume power and precision devices including Silicon Carbide (“SiC”) and Gallium Nitride (“GaN”) power devices used in vehicle electrification and data center power delivery and conversion.
We sell in these areas predominantly through a direct sales force, except for Robotics products, which are sold principally through distributors and OEMs. Our manufacturing activities for our test businesses are primarily conducted through subcontractors and outsourced contract manufacturers with significant operations in Malaysia.
We have sales and service offices located throughout North America, Central America, Asia and Europe. We sell in these areas predominantly through a direct sales force, except for Robotics products, which are sold principally through distributors and OEMs. Our manufacturing activities for our test businesses are primarily conducted through subcontractors and outsourced contract manufacturers with significant operations in Malaysia.
To make it easier for employees to support charitable activities and magnify the impact of support, we established a formal matching gift program, “Teradyne Gives.” The program matches up to $1,000 per year of an employee’s donations to charities of their choosing, selected from a wide range of qualified non-profit organizations. 8 Table of Contents Additionally, advancing education for future generations is a primary initiative at Teradyne.
To make it easier for employees to support charitable activities and magnify the impact of support, we established a formal matching gift program, “Teradyne Gives.” The program matches up to $1,000 per year of an employee’s donations to charities of their choosing, selected from a wide range of qualified non-profit organizations.
We seek to achieve this objective by linking a meaningful portion of compensation to company and business unit performance. We enable employees worldwide to share in the success of the company through various programs including a stock purchase program, equity compensation and bonus plans. We seek competitiveness and fairness in total compensation with reference to peer comparisons and internal equity.
We enable employees worldwide to share in the success of the company through various programs including a stock purchase program, equity compensation and bonus plans. We seek competitiveness and fairness in total compensation with reference to peer comparisons and internal equity.
The client market is driven by the needs of desktop, laptop, and external HDD storage products. The enterprise market is driven by the needs of data centers and cloud storage. Robotics Our Robotics segment is comprised of two business units: Universal Robots and Mobile Industrial Robots.
The client market is driven by the needs of desktop, laptop, and external HDD storage products. The enterprise market is driven by the needs of data centers and cloud storage. Robotics Our Robotics segment is comprised of two product lines, our cobot arms under Universal Robots branding and our autonomous mobile robots under Mobile Industrial Robots branding.
Additionally, we offer reimbursement for educational courses related to an employee’s work or as part of a degree program, including tuition, lab fees and books. We also offer a scholarship program for employees with college-age children, step-children and grandchildren. In 2024, approximately half of the scholarship recipients were outside of the United States.
Additionally, we offer reimbursement for educational courses 7 Table of Contents related to an employee’s work or as part of a degree program, including tuition, lab fees and books. We also offer a scholarship program for employees with college-age children, step-children and grandchildren.
Changes in, and responses to, U.S. trade policy could reduce the competitiveness of our products and cause our sales to drop, which could have a material adverse effect on our business, financial condition or results of operations.
Compliance with these laws has limited our sales and likely will continue to limit sales to certain customers in the future. Changes in, and responses to, U.S. trade policy could reduce the competitiveness of our products and cause our sales to drop, which could have a material adverse effect on our business, financial condition or results of operations.
The J750 is designed to handle high volume semiconductor devices, such as microcontrollers, that are central to the functionality of almost every consumer electronics product, from small appliances to automobiles. J750 test systems combine compact packaging, high throughput and ease of production test. We extended the J750 platform technology to create the IP750 Image Sensor™ test system.
Our J750™ test system shares the IG-XL software environment with the family of FLEX Test Platform systems. The J750 is designed to handle high volume semiconductor devices, such as microcontrollers, that are central to the functionality of almost every consumer electronics product, from small appliances to automobiles. J750 test systems combine compact packaging, high throughput and ease of production test.
We must also comply with export restrictions and laws imposed by other countries affecting trade and investments. We maintain an export compliance program but there are risks that the compliance controls could be circumvented, exposing us to legal liabilities. Compliance with these laws has limited our sales and likely will continue to limit sales to certain customers in the future.
Department of Commerce export control regulations restricting transactions with certain customers in China. We must also comply with export restrictions and laws imposed by other countries affecting trade and investments. We maintain an export compliance program but there are risks that the compliance controls could be circumvented, exposing us to legal liabilities.
We have continued to invest in 3 Table of Contents the J750 platform with new instrument releases that bring new capabilities to existing market segments and expand the J750 platform to new devices that include high end microcontrollers and the latest generation of image sensors.
We have continued to invest in the J750 platform with new instrument releases that bring new capabilities to existing market segments and expand the J750 platform to new devices that include high end microcontrollers and the latest generation of image sensors. Our Magnum platform addresses the requirements of mass production test of memory devices for flash, DRAM, and HBM memory.
The IP750 is focused on testing image sensor devices used in smartphones, automobiles and other imaging products.
We extended the J750 platform technology to create the IP750 Image Sensor™ test system. The IP750 is focused on testing image sensor devices used in smartphones, automobiles and other imaging products.
Strengthening of the U.S. dollar would negatively affect Robotics revenue growth in 2025. Our corporate strategy for our test businesses is to profitably grow market share while in Robotics, we plan to profitably grow revenue through the introduction of differentiated products targeting expanding markets.
Strengthening of the U.S. dollar would negatively affect Robotics revenue in 2026. 2 Table of Contents Our corporate strategy is to profitably grow revenue and market share through the introduction of differentiated products targeting expanding markets and customer needs.
Our robotics products include collaborative robotic arms and autonomous mobile robots (“AMRs”) used by global manufacturing, logistics and industrial customers to improve quality, increase manufacturing and material handling efficiency and decrease manufacturing and logistics costs.
Teradyne's robotics product offerings consist primarily of collaborative robotic arms and autonomous mobile robots used by global manufacturing, logistics and industrial customers to improve quality, increase manufacturing and material handling efficiency while reducing costs.
We have policies regarding gender pay equity and regularly conduct audits of pay equity in the United States. We are an equal opportunity employer committed to making employment decisions without regard to race, religion, ethnicity or national origin, gender, sexual orientation, gender identity or expression, age, disability, protected veteran status or any other characteristics protected by law.
Since the inception of our business, we have experienced no work stoppages or other labor disturbances. We are an equal opportunity employer committed to making employment decisions without regard to race, religion, ethnicity or national origin, gender, sexual orientation, gender identity or expression, age, disability, protected veteran status or any other characteristics protected by law.
Anywhere.” Since introducing the world's first commercially viable cobot in 2008, Universal Robots has sold over 75,000 cobots worldwide and has developed a product portfolio reflecting a range of reaches and payloads, including the UR3e, UR5e, UR10e, UR16e, UR20 and UR30 robots.
Since introducing the world's first commercially viable cobot in 2008, Teradyne Robotics has sold over 110,000 cobots worldwide and has developed a product portfolio reflecting a range of reaches and payloads.
We seek to increase the diversity of STEM graduates worldwide through our support of STEM programs at the middle, high school and collegiate level. We also donate test equipment and robots to colleges, universities, and vocational programs. Health and Safety The health and safety of our employees worldwide is our highest priority.
Additionally, advancing education for future generations is a primary initiative at Teradyne. We seek to increase the number of STEM graduates worldwide through our support of STEM programs at the middle, high school and collegiate level. We also donate test equipment and robots to colleges, universities, and vocational programs.
The SEC maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file documents electronically. 2 Table of Contents You can access financial and other information, including the charters of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, our Corporate Governance Guidelines and Code of Conduct, by clicking the Investors link on our web site at www.teradyne.com.
You can access financial and other information, including the charters of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, our Corporate Governance Guidelines and Code of Conduct, by clicking the Investors link on our web site at www.teradyne.com.
We do not believe that any single piece of intellectual property or proprietary rights is essential to our business. Human Capital We believe that our future success depends upon our continued ability to attract, develop, and retain a high-performance workforce bound by shared values.
We do not believe that any single piece of intellectual property or proprietary rights is essential to our business. Human Capital We believe that our future success depends upon our continued ability to attract, develop, and retain a high-performance workforce. As of December 31, 2025, we employed approximately 6,600 employees, of whom approximately 2,200 were employed in the United States.
Our Magnum platform addresses the requirements of mass production test of memory devices for flash and DRAM memory. Flash and DRAM memory are widely used core building blocks in modern electronic products finding wide application in consumer, industrial, and computing equipment.
Flash, DRAM and HBM memory are widely used core building blocks in modern electronic products finding wide application in consumer, industrial, and computing equipment.
Some of our competitors have introduced or announced new products with certain performance characteristics which may be considered equal or superior to those we currently offer. We expect our competitors to continue to improve the performance of their current products and to introduce new products or new technologies that provide improved cost of ownership and performance characteristics.
We expect our competitors to continue to improve the performance of their current products and to introduce new products or new technologies that provide improved cost of ownership and performance characteristics.
MiR AMRs enhance productivity, offering a high return on investment by streamlining workforce efficiency, reducing lead times, and improving workplace safety. These AMRs operate autonomously, eliminating the need for traditional guidance infrastructure.
Teradyne Robotics’ AMRs enhance productivity, offering a high return on investment by streamlining workforce efficiency, reducing lead times, and improving workplace safety. These AMRs, which include MiR250, MiR600, and MiR1350, as well as the MiR1200 Pallet Jack, operate autonomously, eliminating the need for traditional guidance infrastructure. Teradyne Robotics’ has sold over 11,000 AMRs globally.
An extensive ecosystem has grown around the company's cobot, technology creating innovation and choice for customers and a wide range of components, kits and solutions to suit every application.
An extensive ecosystem (“UR+”) has grown around the company's cobot technology, creating innovation and choice for customers and a wide range of components, kits and solutions to suit numerous applications. Autonomous mobile robots (“AMRs”) are used in the manufacturing and logistics segments.
Our proprietary SmartPin ™ technology enables high efficiency multi-site testing on an individual test system permitting greater test throughput. Semiconductors tested by ETS platform systems are incorporated into a wide range of products in historically high-growth markets including mobile devices, automotive electronics, computer peripherals, and notebook and desktop computers.
Semiconductors tested by ETS platform systems are incorporated into a wide range of products in historically high-growth markets including mobile devices, automotive electronics, computer peripherals, data center platforms, and notebook and desktop computers.
In certain circumstances, export control and economic sanctions or regulations prohibit the export of certain products, services, and technologies, and in other circumstances we are required to obtain an export license before exporting the controlled item. For example, we must comply with current U.S. Department of Commerce export control regulations restricting transactions with certain customers in China.
In certain circumstances, export control and economic sanctions or regulations prohibit the export of certain products, services, and technologies, and in other circumstances we are required to obtain an export license, which may not be approved, before exporting the controlled item.
We are committed to conducting business in a responsible manner, with strategic operational policies, procedures and values that support transparency, sustainability and legal compliance.
We are committed to conducting business in a responsible manner, with strategic operational policies, procedures and values that support transparency, sustainability and legal compliance. We ensure ethical operations and business commitments through robust governance of the company’s code of conduct and global environmental, health and safety programs.
We have a tradition of amplifying the charitable actions of our employees and responding to the needs of the communities where we work.
Our Talent Community initiatives are designed to foster opportunity and innovation across all stages of the educational and professional journey. We have a tradition of amplifying the charitable actions of our employees and responding to the needs of the communities where we work.
Products Semiconductor Test We design, manufacture, sell and support Semiconductor Test products and services and hard disk drives on a worldwide basis. The test systems we provide are used for wafer level, device package testing, and system level testing of semiconductor devices. These devices are used in automotive, industrial, communications, consumer, smartphones, cloud, computer and electronic game applications, among others.
Products Semiconductor Test We design, manufacture, sell and support Semiconductor, Hard Disk Drive (“HDD”), and Solid State Disk (“SSD”) test systems and related services on a worldwide basis. The test systems we provide are used for wafer level, device package testing, and system level testing.
Our Magnum 7 solution is designed for parallel memory test in the flash, DRAM and multi-chip package markets while our Magnum platform called Magnum EPIC giving us full product coverage of the memory test market. Our ETS platform is used by semiconductor manufacturers and assembly and test subcontractors, primarily in the analog/mixed signal markets that cover cost sensitive applications.
Our Magnum 7 solution is designed for parallel memory test in the flash, DRAM, HBM and multi-chip package markets while our Magnum EPIC platform, gives us full product coverage of the memory test market with final test capabilities.
Our automated test equipment and robotics products and services include: • semiconductor test (“Semiconductor Test”) systems; • robotics (“Robotics”) products; and • defense/aerospace (“Defense/Aerospace”) test instrumentation and systems, circuit-board test and inspection (“Production Board Test”) systems, and wireless test systems (referred collectively as "All Other").
Teradyne’s automated test equipment and robotics products and services include: • semiconductor test (“Semiconductor Test”) systems; • robotics (“Robotics”) products; and • product test (“Product Test”) systems, which include circuit-board test and inspection systems, wireless test systems, photonic integrated circuit (“PIC”) test solutions, and defense and aerospace test instrumentation and systems.
The loss of, or significant decrease in demand from key OEM customers or any of our five largest direct customers, could have a material adverse effect on our business, results of operations and financial condition. We have sales and service offices located throughout North America, Central America, Asia and Europe.
In 2023, one customer of our Semiconductor Test segment, accounted for approximately 10% of our consolidated revenues. The loss of, or significant decrease in demand from a significant OEM, IDM, or Fabless customer, or any of our five largest direct customers, could have a material adverse effect on our business, results of operations and financial condition.
We ensure ethical operations and business commitments through robust governance of the company’s code of conduct and global environmental, health and safety programs. 7 Table of Contents Competitive Pay and Benefits The primary objective of our compensation program is to provide a compensation and benefits package that will continue to attract, retain, motivate and reward high performing employees who operate in a highly competitive and technologically challenging environment.
Competitive Pay and Benefits The primary objective of our compensation program is to provide a compensation and benefits package that will continue to attract, retain, motivate and reward high performing employees who operate in a highly competitive environment. We seek to achieve this objective by linking a meaningful portion of compensation to company and business unit performance.
Our automated test systems are used to test semiconductors, wireless products, data storage and complex electronics systems in many industries including consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries.
Item 1: B usiness Teradyne, Inc. (“Teradyne”) was founded in 1960 and is a leading global provider of automated test equipment and robotics solutions. Teradyne's automated test systems are used to test semiconductors, wireless products, data storage, silicon photonics, and complex electronics systems in many industries including consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries.
The sale resulted in a pre-tax gain of $57.1 million recorded as 'Gain on sale of business' in the consolidated statement of operations. Our financial statements are denominated in U.S. dollars. While revenues in our test businesses are predominantly in U.S. dollars, the majority of our Robotics revenue is denominated in foreign currencies.
AET is included in our Semiconductor Test segment. Our financial statements are denominated in U.S. dollars. While revenues in our test businesses are predominantly in U.S. dollars, the majority of our Robotics revenue is denominated in foreign currencies.
Competitors in the System Test operating segment include, among others, Advantest Corporation and Test Research, Inc. Competitors in our Wireless Test operating segment include, among others, Rohde & Schwarz GmbH & Co. KG, Anritsu Company, National Instruments Corporation, Welzek and iTest.
Competitors in our Product Test operating segment include, among others, Keysight Technologies, Test Research, Inc., Rohde & Schwarz GmbH & Co. KG, Anritsu Company, National Instruments Corporation, Welzek and iTest. Some of our competitors may have greater financial and other resources to pursue engineering, manufacturing, marketing, and distribution of their products.
Our capital allocation plan will continue to be balanced between investing in organic and inorganic growth and returning cash to shareholders through share repurchases and dividends. Investor Information We are a Massachusetts corporation incorporated on September 23, 1960. We are subject to the informational requirements of the Securities Exchange Act of 1934 (“Exchange Act”).
Our capital allocation plan will continue to be balanced between investing in organic and inorganic growth and returning cash to shareholders through share repurchases and dividends. We are subject to tariffs and restrictions from the dynamically changing global trade environment.
We file periodic reports, proxy statements and other information with the SEC.
We file periodic reports, proxy statements and other information with the SEC. The SEC maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file documents electronically.
In 2022, we estimate consolidated revenues driven by Qualcomm, a customer of our Semiconductor Test, System Test, and Wireless Test operating segments, combining direct and indirect sales, accounted for approximately 11% of our consolidated revenues.
The additional direct customer, a customer of our Semiconductor Test segment, accounted for 19% of consolidated revenues including certain revenues specified by other customers. In 2024, we estimate one customer of our Semiconductor Test and Wireless Test segments, specified approximately 13% of our consolidated revenues.
Some of our competitors may have greater financial and other resources to pursue engineering, manufacturing, marketing, and distribution of their products. We also face competition from emerging Asian companies and from internal supply at several of our customers.
We also face competition from emerging Asian companies and from internal supply at several of our customers. Some of our competitors have introduced or announced new products with certain performance characteristics which may be considered equal or superior to those we currently offer.
We expect that sales of our test products will continue to be concentrated with a limited number of significant customers for the foreseeable future. In 2024, we saw strength in our Semiconductor Test business, with memory and compute offerings growing considerably compared to 2023.
We expect that sales of our test products will continue to be concentrated with a limited number of major customers for the foreseeable future. In 2025, our Semiconductor Test segment achieved considerable growth driven by robust demand from Artificial Intelligence (“AI”) applications in networking and with vertically integrated producer (“VIP”) compute solutions.
In 2019, we introduced our next generation UltraFLEX Plus tester, the newest member of the UltraFLEX family, which uses the new PACE TM architecture to deliver superior economics and fast time to market for complex digital devices. Our J750™ test system shares the IG-XL software environment with the family of FLEX Test Platform systems.
More recently data centers and AI are the drivers for the FLEX Test Platform and specifically the UltraFLEXplus tester, the newest member of the UltraFLEX family, which uses the new PACETM architecture to deliver superior economics and fast time to market for complex compute devices.
Due to possible customer changes in delivery schedules and cancellation of orders, our backlog at any particular date is not necessarily 6 Table of Contents indicative of the actual sales for any succeeding period.
See also “Item 1A: Risk Factors.” Backlog Our backlog at any particular date is not necessarily indicative of the actual sales for any succeeding period because our customers may delay delivery of products or cancel orders without advanced notice, subject to possible cancellation penalties.
As of December 31, 2024, we employed approximately 6,500 employees, of whom approximately 2,200 were employed in the United States and approximately 4,300 were employed outside of the United States. Our largest non-US employee populations are in the Philippines (18%), Denmark (12%), China (7%), Costa Rica (7%) and Taiwan (5%).
Our largest non-US employee populations are in the Philippines (19%), Denmark (10%), Costa Rica (7%), China (7%) and Taiwan (5%). We also leverage contractors to provide flexibility for our business and manufacturing needs. As of December 31, 2025, we worked with approximately 600 contractors globally.
The broad consumer, automotive and broadband markets have historically driven most of the device volume growth in the semiconductor industry. These markets include mobile phones and tablets, PCs, servers, networking and automotive electronics. These end use markets continue to be drivers for the FLEX Test Platform family of products because they require a wide range of technologies and instrument coverage.
The broad consumer, automotive and broadband markets have historically driven most of the device volume growth in the semiconductor industry.
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Item 1: B usiness Teradyne, Inc. (“Teradyne”) was founded in 1960 and is a leading global supplier of automated test equipment and robotics solutions. We design, develop, manufacture and sell automated test systems and robotics products.
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In the first quarter of 2025, Teradyne identified opportunities for operational synergies amongst our production board test, defense and aerospace, and wireless test businesses leading to the creation of the Product Test division as a new segment effective March 2025.
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We expect mobile, automotive, and industrial will grow in 2025 and that recent advancements in AI inference may help mid-term recovery in these markets. Beyond AI compute, we are investing in other areas of the semiconductor test market that offer the opportunity for accelerating long-term growth, including power semi-conductors and the shift towards vertically integrated products ("VIPs").
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Memory test revenue remained stable despite a smaller overall market, supported by share gains in high bandwidth memory (“HBM”) and DRAM final test applications. The Semiconductor Test segment’s strategic shift toward AI-driven semiconductor testing resulted in AI related customer demand driving the majority of our revenue in the second half of 2025.
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We have seen the benefits start to materialize in 2024 and expect them to continue through the mid-term. 2024 was a very weak industrial automation market resulting in a year-over-year decline in Robotics revenues while outperforming our peer group.
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Looking ahead to 2026, we expect AI related customer demand to continue to represent the bulk of our revenues in the first quarter. Our results reflect our focused investments in AI applications and VIP customers, with benefits from these initiatives materializing throughout 2025 and expected to continue in 2026.
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In 2024, we built key OEM, systems integrators and large account strategic partnerships which will strengthen our go to market for years to come. Introduction of new products, including the MiR 1200 Pallet Jack, will further expand our available markets to support our growth .
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In the Product Test Group, we also achieved revenue growth in 2025, bolstered primarily by strength in defense and aerospace applications. In our Robotics segment, the fourth quarter of 2025 represented the third consecutive quarter of sequential revenue growth.
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On May 27, 2024, we paid 483.1 million Euros, equivalent to $524.1 million, to purchase a combination of previously issued and outstanding shares and shares newly issued by Technoprobe, S.p.A. ("Technoprobe"). The shares purchased represent 10% of the issued and outstanding shares of Technoprobe. We also received a board seat as part of the purchase.
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During the year, we aimed at strategic partnerships with original equipment manufacturers, systems integrators, and large enterprise accounts, concentrating on high-growth verticals such as ecommerce, logistics, semiconductor, and electronics. At the same time, we also reduced costs through restructuring activities designed to better position the Robotics organization for future success.
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Additionally, as part of the transaction, we completed the sale of the Device Interface Solutions ("DIS") business, a component of our Semiconductor Test segment, to Technoprobe for $85.0 million in cash, net of cash and cash equivalents sold, and a customary working capital adjustment.
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On January 29, 2026, we and MultiLane, a leading high-speed input/output (“I/O”) test and measurement company, announced an agreement to form a joint venture, MultiLane Test Products (“MLTP”). MLTP is being created to serve the growing demand from the AI Data Center equipment market by accelerating the development of test solutions for critical high speed data connections.
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Universal Robots Universal Robots is a leading provider of collaborative robots ("cobots") used across various industries, including automotive, food & beverage, metal & machining, electronics, pharmaceutical, and in education. Founded in 2005 and headquartered in Odense, Denmark, Universal Robots aims to create a world where people work with robots, not like robots. Its mission is simple: “ Automation for anyone.
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Under the agreement, MultiLane will contribute all the assets related to its test and measurement business to the joint venture and we will invest approximately $157 million in exchange for 75% ownership of MLTP. This transaction is expected to close in the first half of 2026 and is subject to customary closing conditions.
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UR also provides an all-encompassing customer experience including UR Academy - an award-winning training program, available both online and in person in more than 120 training centers worldwide, and three tiers of service offerings carefully designed to accelerate customer success. 4 Table of Contents Universal Robots has recently established global Centers of Excellence for Welding, Palletizing, and Machine Tending applications.
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On May 31, 2025, we acquired privately held Quantifi Photonics (“Quantifi”), a leader in PIC test solutions for a total purchase price of $127.2 million. This acquisition enables the delivery of scalable PIC test solutions and is included in our Product Test segment.
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These centers, led by subject matter experts, serve as knowledge hubs, offering expert recommendations and guidance on the latest trends in the field to UR partners and key customers worldwide. Mobile Industrial Robots MiR is a leading provider of autonomous mobile robots ("AMRs") for the manufacturing and logistics segments.
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Over time, we also intend to leverage Quantifi's engineering expertise and technology to enhance functionality and create additional differentiation in our Semiconductor Test business, specifically with integration into our UltraFlexplus platform.
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MiR currently offers three deckload AMR models, each supporting a different payload capacity—MiR250, MiR600, and MiR1350—as well as a pallet jack AMR—MiR1200 Pallet Jack—all managed by our unified fleet management software, MiR Fleet. All models can be easily integrated into existing production environments.
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On January 31, 2025, we acquired Infineon Technologies AG's (“Infineon”) automated test equipment technology and associated development team (“AET”) based in Regensburg, Germany for a total purchase price of 17.6 million Euros, equivalent to $18.3 million. AET adds resources and expertise to our company and strengthens the relationship between us and this key customer.
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System Test Our System Test operating segment is comprised of two business units: Defense/Aerospace and Production Board Test. Defense/Aerospace We are a leading provider of high performance test systems, subsystems, instruments and service for the defense and aerospace markets. Our test products are used to ensure the readiness of military and commercial aerospace electronics systems.
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While it is difficult to quantify the exact impact, current trade restrictions are limiting our ability to be competitive, particularly in certain markets, where some competitors are not subjected to the same restrictions.
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New programs, such as tactical aircraft and missile systems, as well as upgrade programs, continue to fuel the demand for high performance test systems in this market. Our test products are well-suited to the demands of defense/aerospace electronics manufacturers and repair depots worldwide.
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We continue to monitor developments in international trade policy, including potential changes to tariffs, further export controls, and other regulatory measures that could affect our supply chain, cost structure, or market access.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe following factors could impact future operations: • a worldwide economic slowdown or disruption in the global financial or industrial markets; • cost increases from inflation on materials, employee wages, third party labor, and contract manufacturing; • competitive pressures on selling prices; • our ability to introduce, and the market acceptance of, new products; • changes in product revenues mix resulting from changes in customer demand; • the level of orders received which can be shipped in a quarter because of the tendency of customers to wait until late in a quarter to commit to purchase due to capital expenditure approvals and constraints occurring at the end of a quarter, or the hope of obtaining more favorable pricing from a competitor seeking the business; • engineering and development investments relating to new product introductions, and the expansion of manufacturing, outsourcing and engineering operations in Asia; • provisions for excess and obsolete inventory relating to the lack of demand for and the discontinuance of products; • impairment charges for certain long-lived and intangible assets, and goodwill; • an increase in the leasing of our products to customers; • disruption caused by health pandemics, • the success of sales channel expansion in Robotics; • our ability to expand our global distribution channel for our collaborative and mobile robots; • parallel or multi-site testing which could lead to a decrease in the ultimate size of the market for our semiconductor and electronic test products; and • the ability of our suppliers and subcontractors to meet product quality or delivery requirements needed to satisfy customer orders for our products, especially if consolidated revenues increase.
Biggest changeThe following factors could impact future operations: • macroeconomic conditions, a worldwide economic slowdown or disruption in the global financial or industrial markets; • legal, tax, accounting or regulatory changes (including changes in import/export regulations and tariffs, such as regulations imposed by the U.S. government restricting exports to China) or changes in the interpretation or enforcement of existing requirements; • cost increases from inflation on materials, employee wages, third party labor, and contract manufacturing; • competitive pressures on selling prices; • foreign currency exchange rate fluctuations; • our ability to introduce, and the market acceptance of, new products; • changes in product revenues mix resulting from changes in customer demand; • customer demand considerations, including the size and timing of customer orders, customers’ decisions to accelerate, decelerate or delay shipments, customers’ decisions on how to manage their inventory, customers’ rate of replacement of our consumable products or their decisions to delay expansion projects; • the level of orders received which can be shipped in a quarter because of the tendency of customers to wait until late in a quarter to commit to purchase due to capital expenditure approvals and constraints occurring at the end of a quarter, or the hope of obtaining more favorable pricing from a competitor seeking the business; • engineering and development investments relating to new product introductions, and the expansion of manufacturing, outsourcing and engineering operations in Asia; • provisions for excess and obsolete inventory relating to the lack of demand for and the discontinuance of products; • impairment charges for certain long-lived and intangible assets, and goodwill; • our ability to increase sales in line with our increased manufacturing capacity; • an increase in the leasing of our products to customers; • disruption caused by health pandemics, natural disasters, or global conflict; • the success of sales channel expansion in Robotics; • our ability to expand our global distribution channel for our collaborative and mobile robots; • parallel or multi-site testing which could lead to a decrease in the ultimate size of the market for our semiconductor and electronic test products; and • the ability of our suppliers and subcontractors to meet product quality or delivery requirements needed to satisfy customer orders for our products, especially if consolidated revenues increase. 15 Table of Contents As a result of the foregoing and other factors, we have experienced and may continue to experience material fluctuations in future operating results on a quarterly or annual basis which could materially and adversely affect our business, financial condition, operating results or stock price.
If we fail in successfully coordinating and managing the outsourced service providers, it may cause an adverse effect on our operations which could have a material adverse effect on our business, results of operations or financial condition. 16 Table of Contents Our business may suffer if we are unable to attract and retain key employees.
If we fail in successfully 16 Table of Contents coordinating and managing the outsourced service providers, it may cause an adverse effect on our operations, which could have a material adverse effect on our business, results of operations or financial condition. Our business may suffer if we are unable to attract and retain key employees.
However, if we are unable to secure manufacturing capacities from our current or new suppliers and contract manufacturers, on acceptable terms or at all, or successfully manage our purchase commitments and inventory for components, our ability to deliver our products to our customers in the desired quantities, at competitive prices or in a timely manner may be negatively impacted for 2025.
However, if we are unable to secure manufacturing capacities from our current or new suppliers and contract manufacturers, on acceptable terms or at all, or successfully manage our purchase commitments and inventory for components, our ability to deliver our products to our customers in the desired quantities, at competitive prices or in a timely manner may be negatively impacted.
Additionally, we may fund acquisitions of new businesses, strategic alliances, or joint ventures by utilizing our cash, incurring debt, issuing shares of our common stock, or by other means. Additionally, we may face restrictions pursuant to the terms of an acquisition or strategic alliance agreement.
Additionally, we may fund acquisitions of new businesses, strategic alliances, or joint ventures by utilizing our cash, incurring debt, issuing shares of our common stock, or by other means. We may also face restrictions pursuant to the terms of an acquisition or strategic alliance agreement.
We could continue to have warranty and product liability claims or product recalls in the future. Any of these results could have a material adverse effect on our business, results of operations or financial condition.
We may continue to have warranty and product liability claims or product recalls in the future. Any of these results could have a material adverse effect on our business, results of operations or financial condition.
We are subject to U.S. laws and regulations that limit and restrict the export of some of our products and services and may restrict our transactions with certain customers, business partners and other persons.
We are subject to U.S. laws and regulations that limit and restrict the export of some of our products and services and may restrict our transactions with certain customers, business partners, suppliers and other persons.
(“Plexus”) to manufacture and test our Magnum products from its facilities in Malaysia and Thailand and our ETS family of products from its facility in Malaysia; SAM Meerkat to manufacture and test our storage test family of products from its facilities in Malaysia and Thailand and on other contract manufacturers to manufacture other products.
(“Plexus”) to manufacture and test our FLEX and Magnum products from its facilities in Malaysia and Thailand and our ETS family of products from its facility in Malaysia; SAM Meerkat to manufacture and test our storage test family of products from its facilities in Malaysia and Thailand and on other contract manufacturers to manufacture other products.
Such disruption could materially increase our costs and expenses as well as cause delays in, among other things, shipments of products to our customers, our ability to perform services requested by our customers, or the installation and acceptance of our products at customer sites.
Additionally, any such disruption could materially increase our costs and expenses as well as cause delays in, among other things, shipments of products to our customers, our ability to perform services requested by our customers, or the installation and acceptance of our products at customer sites.
In addition to the factors discussed in this "Risk Factors" section and elsewhere in this report, factors that could cause fluctuations in the market price of our common stock include the following: • ratings changes by any securities analysts who follow our company; • announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments; • changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; • changes in accounting standards, policies, guidelines, interpretations, or principles; • actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally; • developments or disputes concerning our intellectual property or our products and platform capabilities, or third-party proprietary rights; 14 Table of Contents • cybersecurity attacks or incidents; • announced or completed acquisitions of businesses or technologies by us or our competitors; • changes in our board of directors or management; • announced or completed equity or debt transactions involving our securities; • sales of shares of our common stock by us, our officers, directors, or other stockholders; and • other events or factors, including those resulting from global and macroeconomic conditions, including heightened inflation, rising interest rates, bank failures, and a potential recession, and speculation regarding the same, as well as public health crises, geopolitical tension, incidents of terrorism, or responses to these events.
In addition to the factors discussed in this “Risk Factors” section and elsewhere in this report, factors that could cause fluctuations in the market price of our common stock include the following: • ratings changes by any securities analysts who follow our company or the failure to achieve our financial guidance or targets; • announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments; • changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; • changes in accounting standards, policies, guidelines, interpretations, or principles; • actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally; • developments or disputes concerning our intellectual property or our products and platform capabilities, or third-party proprietary rights; • cybersecurity attacks or incidents; • announced or completed acquisitions of businesses or technologies by us or our competitors; • changes in our board of directors or management; • announced or completed equity or debt transactions involving our securities; • sales of shares of our common stock by us, our officers, directors, or other stockholders; and 14 Table of Contents • other events or factors, including those resulting from global and macroeconomic conditions, including heightened inflation, rising interest rates, bank failures, and a potential recession, and speculation regarding the same, as well as public health crises, geopolitical tension, incidents of terrorism, or responses to these events.
If we are unable to generate sufficient cash flows or otherwise obtain funds necessary to make required payments on our senior secured revolving credit facility or certain of our other obligations, we would be in default under the terms thereof, which would permit the holders of those obligations to accelerate their maturity and also could cause defaults under future indebtedness we may incur.
If we are unable to generate sufficient cash flows or otherwise obtain funds necessary to make required payments on our Credit Facility or certain of our other obligations, we would be in default under the terms thereof, which would permit the holders of those obligations to accelerate their maturity and also could cause defaults under future indebtedness we may incur.
We have taken actions to address the effects of general economic variability and recurring 9 Table of Contents industry cyclicality, including implementing cost control and reduction measures. We cannot predict whether these measures will be sufficient to offset global or market-specific disruptions that might affect our businesses and we may need to take additional or different measures in the future.
We have taken actions to address the effects of general economic variability and recurring industry cyclicality, including implementing cost control and reduction measures. We cannot predict whether these measures will be sufficient to offset global or market-specific disruptions that might affect our businesses and we may need to take additional or different measures in the future.
In addition, our senior secured revolving credit facility contains financial and other restrictive covenants that limit our ability to engage in activities that may be in our long-term best interest, such as, subject to permitted exceptions, making capital expenditures in excess of certain thresholds, making investments, loans and other advances, and prepaying any additional indebtedness while our indebtedness under our senior secured revolving credit facility is outstanding.
In addition, our Credit Facility contains financial and other restrictive covenants that limit our ability to engage in activities that may be in our long-term best interest, such as, subject to permitted exceptions, making capital expenditures in excess of certain thresholds, making investments, loans and other advances, and prepaying any additional indebtedness while our indebtedness under our Credit Facility is outstanding.
Our failure to comply with financial and other restrictive covenants could result in an event of default, which if not cured or waived, could result in the lenders requiring immediate payment of all outstanding borrowings or foreclosing on collateral pledged to them to secure the indebtedness. We may not be able to pay our debt and other obligations.
Our failure to comply with financial and other restrictive covenants could result in an event of default, which if not cured or waived, could result in the lenders requiring immediate payment of all outstanding borrowings or foreclosing on collateral pledged to them to secure the indebtedness. 13 Table of Contents We may not be able to pay our debt and other obligations.
Restrictive covenants in the agreement governing our senior secured revolving credit facility may restrict our ability to pursue business strategies. 13 Table of Contents The agreement governing our senior secured revolving credit facility limits our ability, among other things, to incur additional secured indebtedness; sell, transfer, license or dispose of assets; consolidate or merge; enter into transactions with our affiliates; and incur liens.
Restrictive covenants in the agreement governing our senior secured revolving credit facility may restrict our ability to pursue business strategies. The agreement governing our Credit Facility limits our ability, among other things, to incur additional secured indebtedness; sell, transfer, license or dispose of assets; consolidate or merge; enter into transactions with our affiliates; and incur liens.
Competition for employees with skills we require is intense in the high technology industry. We expect intense competition for employees to continue in 2025. Our success will depend on our ability to attract and retain key technical employees.
Competition for employees with skills we require is intense in the high technology industry. We expect intense competition for employees will continue in 2026. Our success will depend on our ability to attract and retain key technical employees.
Our business and results of operations depend, in significant part, upon capital expenditures of manufacturers of semiconductors, electronics, and other industrial products, which in turn depend upon the current and anticipated market demand for those products. Disruption or deterioration in economic conditions may reduce customer purchases of our products, thereby reducing our revenues and earnings.
Our business and results of operations depend, in significant part, upon capital expenditures of manufacturers of semiconductors, electronics, and other industrial products, which in turn depend upon the current and anticipated market demand for those products. Disruption or deterioration in global or industry-specific economic conditions may reduce customer purchases of our products, thereby reducing our revenues and earnings.
As of December 31, 2024, we have not incurred material costs as a result of the monitoring and remediation steps taken at the Massachusetts and New Hampshire sites.
As of December 31, 2025, we have not incurred material costs as a result of the monitoring and remediation steps taken at the Massachusetts and New Hampshire sites.
In addition, third party suppliers and service providers that we rely on to manage our networks and 17 Table of Contents systems and who process and store our proprietary and confidential data, including the data of our customers and suppliers, may also be subject to similar attacks.
In addition, third party suppliers and service providers that we rely on to manage our networks and systems and who process and store our proprietary and confidential data, including the data of our customers and suppliers, may also be subject to similar attacks.
In November 2020, we entered into an agreement with the Singapore Economic Development Board which extended our Singapore tax holiday under substantially similar terms to the agreement which expired on December 31, 2020. The new tax holiday is scheduled to expire on December 31, 2025.
In December 2025, we entered into an agreement with the Singapore Economic Development Board which extended our Singapore tax holiday under substantially similar terms to the agreement which expired on December 31, 2025. The new tax holiday is scheduled to expire on December 31, 2035.
Pursuant to present regulations and agreements, we are conducting groundwater and subsurface assessment and monitoring and are implementing remediation and corrective action plans for facilities located in Massachusetts and New Hampshire which are no longer conducting manufacturing operations.
Pursuant to present U.S. federal regulations and agreements, we are conducting groundwater and subsurface assessment and monitoring and are implementing remediation and corrective action plans for facilities located in Massachusetts and New Hampshire which are no longer conducting manufacturing operations.
We have pursued a global tax strategy that could be adversely affected by the mix of earnings and tax rates in the countries where we operate, changes to tax laws (including but not limited to Pillar Two), tax regulations or an adverse tax ruling by administrative authorities. We are also subject to tax audits in the countries where we operate.
We have pursued a global tax strategy that could be adversely affected by the mix of earnings and tax rates in the countries where we operate, changes to tax laws (including but not limited to Pillar Two), tax regulations or an adverse tax ruling by administrative authorities.
We have also sourced components from additional suppliers and multi-sourced and pre0ordered components and finished goods inventory in some cases in an effort to reduce the impact of the adverse supply chain conditions we have experienced in the past.
We have also sourced components from additional suppliers and multi-sourced and pre-ordered components and finished goods inventory in some cases in an effort to reduce the impact of the adverse supply chain conditions we have experienced in the past.
In addition, future regulations in response to global climate change may affect us, our suppliers, and our customers. Such regulations could cause us to incur additional direct costs for compliance, as well as increased indirect costs resulting from our customers and/or suppliers. Future climate change regulations could result in decreased demand for our products.
In addition, future regulations in response to global climate change may affect us, our suppliers, and our customers. Such regulations could cause us to 19 Table of Contents incur additional direct costs for compliance, as well as increased indirect costs resulting from our customers and/or suppliers. Future climate change regulations could result in decreased demand for our products.
In certain circumstances, export control and economic sanctions regulations prohibit the export of certain products, services and technologies, and in other circumstances are required to obtain an export license before exporting the controlled item. We must also comply with export restrictions and laws imposed by other countries affecting trade and investments.
In certain circumstances, export control and economic sanctions regulations prohibit the export of certain products, services and technologies, and in other circumstances are required to obtain an export license. We must also comply with export restrictions and laws imposed by other countries affecting trade and investments.
The market for our products is concentrated with a limited number of significant customers accounting for a substantial portion of the purchases of test equipment. In each of the years, 2024, 2023 and 2022, our five largest direct customers in aggregate accounted for 36%, 32% and 26% of consolidated revenues, respectively.
The market for our products is concentrated with a limited number of significant global customers accounting for a substantial portion of the purchases of test equipment. In each of the years, 2025, 2024 and 2023, our five largest direct customers in aggregate accounted for 44%, 36% and 32% of consolidated revenues, respectively.
Item 1A: R isk Factors The risks described below are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
The risks described below are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
Such activities could interfere with our ability to execute our business plans, be costly and time-consuming, disrupt our operations, divert the attention of management, or result in our initiating borrowing or increasing our share repurchase plan or dividend, any of which could have an adverse effect on our business or stock price.
Such activities could interfere with our ability to execute our business plans, be costly and time-consuming, disrupt our operations, divert the attention of management, or result in our initiating borrowing or increasing our share repurchase plan or dividend, any of which could have an adverse effect on our business or stock price. Item 1B: Unreso lved Staff Comments None.
Successful product development or acquisition, introduction and acceptance depend upon a number of factors, including: • new product selection; • ability to meet customer requirements including with respect to safety and cyber security; • development of competitive products by competitors; • timely and efficient completion of product design; • timely and efficient implementation of manufacturing and manufacturing processes; • timely remediation of product performance issues, if any, identified during testing; • assembly processes and product performance at customer locations; • differentiation of our products from our competitors' products; • management of customer expectations concerning product capabilities and product life cycles; • transition of customers to new product platforms; 10 Table of Contents • compliance with product safety regulations; • ability to protect products from cyber attacks when used by our customers; • ability to attract and retain technical talent; and • innovation that does not infringe on the intellectual property rights of third parties.
Successful product development or acquisition, introduction and acceptance depend upon a number of factors, including: • new product selection and ability to predict market requirements and design new products that address those requirements; • ability to meet customer requirements including with respect to safety and cybersecurity; • development of competitive products by competitors; • timely and efficient completion of product design; • timely and efficient implementation of manufacturing and manufacturing processes; • timely remediation of product performance issues, if any, identified during testing; • assembly processes and product performance at customer locations; • differentiation of our products from our competitors' products; • management of customer expectations concerning product capabilities and product life cycles; • transition of customers to new product platforms; • compliance with product safety regulations; • ability to protect products from cyber attacks when used by our customers; • ability to attract and retain technical talent; and • innovation that does not infringe on the intellectual property rights of third parties. 10 Table of Contents Risks Associated with Operating a Global Business We are subject to risks of operating internationally.
Additionally, we have confidentiality obligations to certain customers and if breached would require the payment of significant penalties. If we become liable under any of these obligations, it could materially and adversely affect our business, financial condition or operating results. For additional information see Note N: “Commitments and Contingencies-Guarantees and Indemnification Obligations” in Notes to Consolidated Financial Statements.
Additionally, we have confidentiality obligations to certain customers, which if breached would require the payment of significant penalties. If we become liable under any of these obligations, it could materially and adversely affect our business, financial condition or operating results. For additional information see Note O: “Commitments and Contingencies” in Notes to Consolidated Financial Statements.
Our operations, and those of our customers and suppliers, are subject to disruption for a variety of reasons, including work stoppages, acts of war, terrorism, health epidemics, fires, earthquakes, hurricanes, typhoons, volcanic eruptions, energy shortages, telecommunication failures, tsunamis, flooding or other natural disasters.
Our operations, and those of our customers and suppliers, are subject to disruption for a variety of reasons, including work stoppages, acts of war and geopolitical conflict, terrorism, health epidemics, fires, earthquakes, hurricanes, typhoons, volcanic eruptions, energy shortages, telecommunication failures, tsunamis, flooding or other natural disasters, including as a result of global climate change.
However, notwithstanding our efforts, the retaliatory tariffs or other trade restrictions implemented by China and possible future retaliatory actions by China or other nations could disrupt our business operations, sales and supply chain and, therefore, have a material adverse effect on our business, financial condition or results of operations.
The retaliatory tariffs or other trade restrictions implemented by China and possible future retaliatory actions by China or other nations may in the future disrupt our business operations, sales and supply chain and, therefore, have a material adverse effect on our business, financial condition or results of operations.
We have significant guarantees, indemnification, and customer confidentiality obligations. From time to time, we make guarantees to customers regarding the delivery, price and performance of our products and guarantee certain indebtedness, performance obligations or lease commitments of our subsidiary and affiliate companies.
From time to time, we make guarantees to customers regarding the delivery, price and performance of our products and guarantee certain indebtedness, performance obligations or lease commitments of our subsidiary and affiliate companies.
We invest significant resources in the design, manufacturing and testing of our products. However, from time to time, we discover design or manufacturing defects in our products after they have been shipped and, as a result, we have incurred development and remediation costs and settled warranty and product liability claims.
However, from time to time, we discover design or manufacturing defects in our products after they have been shipped and, as a result, we have incurred development and remediation costs and settled warranty and product liability claims.
Our international sales and operations are subject to significant risks and difficulties, including: • unexpected changes in legal and regulatory requirements affecting international markets; • cost increases due to inflation; • changes in tariffs and exchange rates; • social, political and economic instability, acts of terrorism and international conflicts; • disruption caused by health pandemics; • difficulties in protecting intellectual property; • difficulties in accounts receivable collection; • cultural differences in the conduct of business; • difficulties in staffing and managing international operations; • compliance with anti-corruption laws; • compliance with data privacy regulations; • compliance with customs and trade regulations; and • compliance with international tax laws and regulations.
Our international sales and operations are subject to significant risks and difficulties, including: • unexpected changes in legal and regulatory requirements affecting international markets; • cost increases due to inflation; • expense and complexity of complying with U.S. and foreign import and export regulations; • changes in tariffs and foreign currency exchange rates; • social, political and economic instability, acts of terrorism and international conflicts; • restrictions on the transfer of funds; • disruption caused by health pandemics; • difficulties in protecting intellectual property; • difficulties in accounts receivable collection; • cultural differences in the conduct of business; • difficulties in staffing and managing international operations; • compliance with anti-corruption laws, cybersecurity, data privacy regulations, customs and trade regulations; • compliance with international tax laws and regulations.
In addition, when our products contain defects or have reliability, quality or safety issues, we have conducted a product recall which resulted in significant repair or replacement costs and 19 Table of Contents substantial delays in product shipments and may damage our reputation which could make it more difficult to sell our products.
In addition, when our products contain defects or have reliability, quality or safety issues, in the past we have conducted a product recall which has resulted in significant repair or replacement costs and substantial delays in product shipments, which in the future could damage our reputation and could make it more difficult to sell our products.
The tax savings attributable to the Singapore tax holiday for the years ended December 31, 2024, 2023 and 2022 were $17.1 million or $0.10 per diluted share, $1.4 million or $0.01 per diluted share, and $16.0 million or $0.09 per diluted share, respectively.
The tax savings attributable to the Singapore tax holiday for the years ended December 31, 2025, 2024 and 2023 were $21.6 million or $0.14 per diluted share, $17.1 million or $0.10 per diluted share, and $1.4 million or $0.01 per diluted share, respectively.
In addition to the risks associated with the tariffs and trade regulations detailed below, we are subject to the following risks associated with doing business in China: • adverse changes in Chinese political, economic or social conditions or Chinese laws, regulations or policies, including the imposition of unexpected or confiscatory taxation, restrictions on currency conversion, imports and sources of supply, devaluations of currency, the nationalization or other expropriation of private enterprises, or the reversal of economic reform policies that encourage private economic activity, foreign investments and greater economic decentralization; • differing economic practices compared to most developed countries, including with respect to the amount of government involvement, control of foreign exchange and allocation of resources; • uncertainties presented by the Chinese legal system, which is not fully integrated and continues to rapidly evolve, impeding our ability to interpret certain Chinese laws and regulations, predict and evaluate the outcome of administrative and court proceedings and the level of legal protection to enforce contracts we have entered into in China; and Chinese controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China, restricting our ability to remit sufficient foreign currency to pay dividends or make other payments to us, or otherwise satisfy foreign currency-denominated obligations. 11 Table of Contents The foregoing risks and the ongoing geopolitical tensions and economic uncertainty between the United States and China and the unknown impact of current and future Chinese rules and regulations, may cause increased costs, as well as restrictions on our ability to sell, or a decreased demand from customers to purchase, our products, which could harm our business, financial condition and operating results.
In addition to the risks associated with the tariffs and trade regulations detailed below, we are subject to the following risks associated with doing business in China: • adverse changes in Chinese political, economic or social conditions or Chinese laws, regulations or policies, including the imposition of unexpected or confiscatory taxation, restrictions on currency conversion, imports and sources of supply, devaluations of currency, the nationalization or other expropriation of private enterprises, or the reversal of economic reform policies that encourage private economic activity, foreign investments and greater economic decentralization; • differing economic practices compared to most developed countries, including with respect to the amount of government involvement, control of foreign exchange and allocation of resources; • uncertainties presented by the Chinese legal system, which is not fully integrated and continues to rapidly evolve, impeding our ability to interpret certain Chinese laws and regulations, predict and evaluate the outcome of administrative and court proceedings and the level of legal protection to enforce contracts we have entered into in China; and Chinese controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China, restricting our ability to remit sufficient foreign currency to pay dividends or make other payments to us, or otherwise satisfy foreign currency-denominated obligations.
Our outstanding and any additional indebtedness, among other things, could: • make it difficult to make payments on this indebtedness and our other obligations; • make it difficult to obtain any necessary future financing for working capital, capital expenditures, debt service requirements or other purposes; • require the dedication of a substantial portion of any cash flows from operations to service for indebtedness, thereby reducing the amount of cash flows available for other purposes, including capital expenditures, and • limit our flexibility in planning for or reacting to changes in our business and the industries in which we complete.
Our outstanding and any additional indebtedness, among other things, could: • make it difficult to make payments on this indebtedness and our other obligations; • make it difficult to obtain any necessary future financing for working capital, capital expenditures, debt service requirements or other purposes; • increase our vulnerability to adverse changes in general economic, industry and competitive conditions; • require the dedication of a substantial portion of any cash flows from operations to service for indebtedness, thereby reducing the amount of cash flows available for other purposes, including capital expenditures; and • limit our flexibility in planning for or reacting to changes in our business and the industries in which we complete and placing us at a disadvantage compared to competitors with less debt or debt on more favorable terms.
Future cash dividends and share repurchases are subject to the discretion of our Board of Directors and will depend, among other things, upon our earnings, capital requirements and financial condition.
We may discontinue or reduce our quarterly cash dividend or share repurchase program. Future cash dividends and share repurchases are subject to the discretion of our Board of Directors and will depend, among other things, upon our earnings, capital requirements and financial condition.
Our competitors may be more successful in their use of AI tools, including by developing superior products or improving their operations with the assistance of AI. Additionally, there could be adverse impacts from flawed algorithms.
Our competitors may be more successful in their use of AI tools, including by developing superior products or improving their operations with the assistance of AI.
Although we are evaluating, and where we believe appropriate, incorporating AI tools into our products and operations, our use of AI tools may subject us to significant competitive, legal, regulatory and other risks, and there can be no assurance that our use of AI tools will enhance our products, business operations or result in a benefit to us.
We are exposed to risks related to the use of AI tools by us and others. Our use of AI tools may subject us to significant competitive, legal, regulatory and other risks, and there can be no assurance that our use of AI tools will enhance our products, business operations or result in a benefit to us.
On December 10, 2021, the credit agreement was amended to extend the maturity date of the credit facility to December 10, 2026. On October 5, 2022, the credit agreement was amended to increase the amount of the credit facility to $750.0 million from $400.0 million.
On October 5, 2022, the credit agreement was amended to increase the amount of the Credit Facility to $750.0 million from $400.0 million.
While we seek to detect and investigate all security incidents and to prevent their recurrence, attempts to gain unauthorized access to our information technology networks and systems may be successful, and in some cases, we might be unaware of an incident or its magnitude and effects.
Attempts to gain unauthorized access to our information technology networks and systems may be successful, and in some cases, we might be unaware of an incident or its magnitude and effects.
We may be subject to security breaches of certain of our products caused by viruses, illegal break-ins or hacking, sabotage, or acts of vandalism by third parties or our employees or contractors.
A breach of the security of our products could negatively affect our business and results of operations. We may be subject to security breaches of certain of our products caused by viruses, illegal break-ins or hacking, sabotage, or acts of vandalism by third parties or our employees or contractors.
While revenues in our test businesses are predominantly in U.S. dollars, the majority of our Robotics revenue is denominated in foreign currencies. Strengthening of the U.S. dollar would negatively affect Robotics revenue growth.
The majority of our Robotics revenue is denominated in foreign currencies, and the strengthening of the U.S. dollar would negatively affect Robotics revenue growth.
While we have declared a quarterly cash dividend on our common stock and authorized a share repurchase program, we are not required to do either and may reduce or eliminate our cash dividend or share repurchase program in the future.
We are not required to do either and may reduce or eliminate our cash dividend or share repurchase program in the future.
We may face risks associated with shareholder activism. We may become subject to campaigns by shareholders advocating corporate actions such as financial restructuring, increased borrowing, special dividends, stock repurchases or divestitures.
We may become subject to campaigns by shareholders advocating corporate actions such as financial restructuring, increased borrowing, special dividends, stock repurchases or divestitures, and changes in management.
Department of Commerce has restricted the access of U.S. origin technologies to certain Chinese semiconductor companies by adding those companies to the Entity List and the Foreign Direct Product Rule ("FDP") under U.S. Export Administration Regulations (“EAR”). On May 16, 2019, Huawei and 68 of its affiliates, including HiSilicon, were added to the U.S.
Department of Commerce has restricted the access of U.S. origin technologies to certain Chinese semiconductor companies by adding those companies to the Entity List and the Foreign Direct Product Rule (“FDP”) under U.S. Export Administration Regulations (“EAR”).
The actual impact on any new tariffs is subject to a number of factors including the effective date, duration, amount, scope and nature of the tariffs, any retaliatory actions any impacted country may take, and any mitigating actions that are available.
The actual impact on any new tariffs is subject to a number of factors including the effective date, duration, amount, scope and nature of the tariffs.
The market price of our common stock is subject to wide fluctuations in response to various factors, some of which are beyond our control.
Our stock price has been subject to fluctuations, and will likely continue to be subject to fluctuations, which may be volatile and due to factors beyond our control. The market price of our common stock is subject to wide fluctuations in response to various factors, some of which are beyond our control.
We may continue to acquire additional businesses, form strategic alliances, or create joint ventures with third parties that we believe will complement or augment our existing businesses. We may not be able to realize the expected synergies and cost savings from the integration with our existing operations of other businesses or technologies that we may acquire.
We may not be able to realize the benefits of acquiring or successfully growing these businesses. We may continue to acquire additional businesses, form strategic alliances, or create joint ventures with third parties that we believe will complement or augment our existing businesses.
If a significant portion of our IP is invalidated or ineffective, our business could be materially adversely affected. A breach of our operational or security systems could negatively affect our business and results of operations.
However, even with these protections, our IP may still be challenged, invalidated or subject to other infringement actions. If a significant portion of our IP is invalidated or ineffective, our business could be materially adversely affected. A breach of our operational or security systems could negatively affect our business and results of operations.
Capital equipment providers in the electronics, semiconductor industries and robotics, such as Teradyne, have, in the past, been negatively impacted by both sudden slowdowns in the global economies and recurring cyclicality within those industries. These cycles have resulted in periods of over-supply; a trend we believe will continue to occur.
Capital equipment providers in the electronics, semiconductor industries and robotics, such as Teradyne, have, in the past, been negatively impacted by both sudden slowdowns in the global economies and recurring cyclicality within those industries.
The Company is assessing the potential impact of these new Chinese laws and monitoring relevant laws and regulations issued by the Chinese government. The impact of these new Chinese laws on our business activities in China remains uncertain at this time. We may be subject to product recalls and warranty and product liability claims.
The impact of these new Chinese laws on our business activities in China remains uncertain at this time. We may be subject to product recalls and warranty and product liability claims. We invest significant resources in the design, manufacturing and testing of our products.
As of March 13, 2023, access to our cash and cash equivalents at SVB was fully restored. There is no guarantee that the FDIC or any other global insurer will provide access to uninsured funds in the future in the event of the closure of any other banks or financial institutions in a timely fashion or at all.
There is no guarantee that the FDIC or any other global insurer will provide access to uninsured funds in the future in the event of the closure of any other banks or financial institutions in a timely fashion or at all. Any inability to access or delay in accessing these funds could adversely affect our business, financial position, and liquidity.
The addition of certain of these companies to the entity list and FDP has had and will continue to have an adverse impact on our business with these customers. We will take appropriate actions, including filing for licenses with the U.S. Department of Commerce to attempt to minimize the impact of the restrictions on our business.
The addition of certain of these companies to the Entity List has had and will continue to have an adverse impact on our business with these customers. We cannot guarantee that we will be able to file for licenses with the U.S.
A license could be very expensive to obtain or may not be available at all. Similarly, changing our products or processes to avoid infringing the rights of others may be costly or impractical. Additionally, patent litigation could require a significant use of management resources and involve a lengthy and expensive defense, even if we eventually prevail.
A license could be very expensive to obtain or may not be available at all. Similarly, changing our products or processes to avoid infringing the rights of others may be costly or impractical.
To the extent the regulations impact actual and potential customers or disrupt the global semiconductor industry, our business and revenues will be adversely impacted. In response to the regulations issued by the U.S. Department of Commerce, the Chinese government has passed new laws, including blocking legislation, which may impact our business activities in China.
In response to the regulations issued by the U.S. Department of Commerce, the Chinese government has passed new laws, including blocking legislation, which may impact our business activities in China. The Company is assessing the potential impact of these new Chinese laws and monitoring relevant laws and regulations issued by the Chinese government.
Any material change in our tax liability resulting from changes in tax laws, tax regulations, administrative rulings or audits from an administrative tax or revenue authority could negatively affect our financial results. As a multinational corporation, we are subject to income taxes as well as non-income-based taxes, in both the United States and various foreign jurisdictions.
We are also subject to tax audits in the countries where we operate. Any material change in our tax liability resulting from changes in tax laws, tax regulations, administrative rulings or audits from an administrative tax or revenue authority could negatively affect our financial results.
Risks Associated with Operating a Global Business We are subject to risks of operating internationally. A significant portion of our consolidated revenues is derived from customers outside the United States.
A significant portion of our consolidated revenues is derived from customers outside the United States.
Adverse developments affecting the financial services industry, including events or risks involving liquidity, defaults or non-performance by financial institutions, could have a material adverse effect on our business, financial condition or results of operations. We hold cash balances in several large financial institutions significantly in excess of the Federal Deposit Insurance Corporation ("FDIC") and global insurance limits.
As a result, currency fluctuations and changes in foreign exchange regulations can have a material adverse effect on our liquidity and financial condition. Adverse developments affecting the financial services industry, including events or risks involving liquidity, defaults or non-performance by financial institutions, could have a material adverse effect on our business, financial condition or results of operations.
We have also outsourced certain general and administrative functions to reputable service providers, many of which are in foreign countries, sometimes impacting communication with them because of language and time differences. Their presence in foreign countries also increases the risk they could be exposed to political and cybersecurity risk.
We have, however, significantly invested in our internal manufacturing for FLEX products in our Cebu site. We have also outsourced certain general and administrative functions to reputable service providers, many of which are in foreign countries, sometimes impacting communication with them because of language and time differences.
Risks Related to Intellectual Property (“IP”) and Cybersecurity Third parties may claim we are infringing their intellectual property and we could suffer significant litigation costs, licensing expenses or be prevented from selling our products. We have been sued for patent infringement and receive notifications from time to time that we may be in violation of patents held by others.
Any of these conditions could have a material adverse effect on our business, financial condition or results of operations. Risks Related to Intellectual Property (“IP”) and Cybersecurity Third parties may claim we are infringing their intellectual property and we could suffer significant litigation costs, licensing expenses or be prevented from selling our products.
The reduction or elimination of our cash dividend or our share repurchase program could adversely affect the market price of our common stock. We have incurred indebtedness and may incur additional indebtedness. On May 1, 2020, we entered into a three-year, senior secured revolving credit facility of up to $400.0 million.
The amount and frequency of our share repurchases may fluctuate and the reduction or elimination of our cash dividend or our share repurchase program could adversely affect the market price of our common stock or reduce our cash reserves. We have incurred indebtedness and may incur additional indebtedness.
Additionally, there may be difficulties encountered in coordinating the outsourced operations with existing functions and operations.
Their presence in foreign countries also increases the risk they could be exposed to political, conflict and cybersecurity risk. Additionally, there may be difficulties encountered in coordinating the outsourced operations with existing functions and operations.
These tax savings may not be achievable in subsequent years due to changes in Singapore’s tax laws, issuance of new global minimum tax laws, or the expiration of the tax holiday. 12 Table of Contents In addition, we may incur additional costs, including headcount expenses, in order to maintain or obtain a foreign tax incentive or tax holiday in a particular foreign jurisdiction.
These tax savings may not be achievable in subsequent years due to changes in Singapore’s tax laws or the issuance of new global minimum tax laws. 12 Table of Contents We have significant guarantees, indemnification, and customer confidentiality obligations.
In addition, the integration process for our acquisitions may be complex, costly and time consuming and include unanticipated issues, expenses, and liabilities.
We may not be able to realize the expected synergies and cost savings from the integration with our existing operations of other businesses or technologies that we may acquire. In addition, the integration process for our acquisitions may be complex, costly and time consuming and include unanticipated issues, expenses, and liabilities.
Our operations may be adversely impacted if our outsourced contract manufacturers or service providers fail to perform. We depend on Flex Ltd. (“Flex”) to manufacture and test our FLEX and J750 family of products from its facility in Malaysia; Plexus Corp.
(“Flex”) to manufacture and test our FLEX and J750 family of products from its facility in Malaysia; Plexus Corp.
Despite the preventative security measures we have implemented, we may continue to be vulnerable to attempts by third parties to gain unauthorized access to our networks or sabotage our systems. These attempts, which might be related to criminal hackers, industrial espionage or state-sponsored intrusions, include trying to covertly introduce malware to our computers, networks and systems and impersonating authorized users.
These attempts, which might be related to criminal hackers, industrial espionage or state-sponsored intrusions, include trying to covertly introduce malware to our computers, networks and systems and impersonating authorized users. Additionally, evolving geopolitical tensions or conflicts have created a heightened risk of cybersecurity attacks.
We also have been, and may continue to attempt to, offset the effect of these inflationary pressures by increasing the prices of our products. However, we may not be fully able to pass additional costs on to our customers, which could have a negative impact on our results of operations and financial condition.
We may also not be fully able to pass additional costs on to our customers, which could have a negative impact on our results of operations and financial condition. Our operations may be adversely impacted if our outsourced contract manufacturers or service providers fail to perform. We depend on Flex Ltd.
Department of Commerce issued a list of companies in China and other countries that it considered to be military end users. Compliance with the new export controls has impacted our ability to sell products to certain customers in China. In addition, while we maintain an export compliance program, our compliance controls could be circumvented, exposing us to legal liabilities.
Compliance with the military end user rule has impacted our ability to sell products to certain customers in China. We cannot be certain that the actions we take will address all of the risks associated with the export controls that may impact our business and our compliance controls could be circumvented, exposing us to legal liabilities. We anticipate the U.S.
The new rules, which took effect on November 17, 2023, significantly limit the impact of the October 7, 2022 restrictions on our business. On December 2, 2024, the U.S. Department of Commerce released additional new rules updating export controls. These regulations may continue to have an adverse impact on certain actual or potential customers and on the global semiconductor industry.
Department of Commerce will continue to release new export control regulations. These regulations may continue to have an adverse impact on certain actual or potential customers and on the global semiconductor industry. To the extent the regulations impact actual and potential customers or disrupt the global semiconductor industry, our business and revenues will be adversely impacted.
As a result, the existing tariffs have not had a material adverse effect on our business, financial condition or results of operations. The implementation of additional tariffs by the United States could have a material adverse effect on our business, financial condition or results of operations.
To date, recent tariff changes have not had a material adverse effect on our business, financial condition or results of operations, however, in the future, the implementation of additional tariffs by the United States or other countries could have a material adverse effect on our business, financial condition or results of operations. 18 Table of Contents In addition to the actions taken by the United States, China has implemented retaliatory tariffs on products made in the United States and imported into China.
There has been a trend toward customer consolidation in the semiconductor industry through business combinations, including mergers, asset acquisitions and strategic partnerships.
We would have no or limited contractual recourse if our significant customers decided to stop buying and using our products with limited advance notice to us. Customer consolidation could affect our operating results. There has been a trend toward customer consolidation in the semiconductor industry through business combinations, including mergers, asset acquisitions and strategic partnerships.
We maintain an export compliance program but there are risks that the compliance controls could be circumvented, exposing us to legal liabilities. As further described below, compliance with these laws has not significantly limited our sales over time, but could significantly limit them in the future.
As further described below, we cannot quantify the impact that the export controls and economic sanctions has had on our sales, however, compliance with these laws has limited our ability to compete in certain regions, and could continue to limit them in the future.
New product introductions by competitors could cause a decline in revenues or loss of market acceptance of our products. The market for our products is concentrated, and our business depends, in part, on obtaining orders from a few significant customers.
If in the future we are unable to maintain our competitive position, we could experience downward pressure on prices, fewer customer orders, reduced margins, the inability to take advantage of new business opportunities and a loss of market acceptance of our products, any of which could have a material adverse effect on our revenues and results of operations. 9 Table of Contents The market for our products is concentrated, and our business depends, in part, on obtaining orders from a few significant customers.
Our business operations and supply chain are global and may be disrupted by the implementation of tariffs. In 2018, the United States Trade Representative imposed a 25% tariff on many lists of products, including certain Teradyne products that are made in China and imported into the United States.
Our business operations and supply chain are global and may be disrupted by the implementation of tariffs. In recent years, the United States has imposed significant tariffs on goods from some of our trading partners, and more significant tariffs continue to be threatened in light of rapidly evolving geopolitical tensions.
We expect to continue to devote significant resources to the security of our information technology networks and systems. A breach of the security of our products could negatively affect our business and results of operations.
We expect to continue to devote significant resources to the security of our information technology networks and systems. Furthermore, our efforts to comply with evolving laws and regulations related to cybersecurity may be costly and any failure to comply could result in investigations, proceedings, investor lawsuits and reputational damage.
Removed
We estimate consolidated revenues driven by Samsung, a customer of our Semiconductor Test and Wireless Test Segments, combining direct sales to that customer with sales to the customer’s OSATs, accounted for 12.5% of our consolidated revenues in 2024. Customer consolidation could affect our operating results.
Added
Item 1A: R isk Factors Descriptions of risks associated with our business are set forth below. Some of these risks are highlighted in the following discussion and in Management's Discussion and Analysis of Financial Condition and Results of Operations, Legal Proceedings, Controls and Procedures and Quantitative and Qualitative Disclosures About Market Risk of this Annual Report.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe rely on contract manufacturing organizations and distributors to deliver our products to our customers, and a cybersecurity incident at one of these organizations or a key supplier could materially adversely impact us. We assess third party and supply chain cybersecurity controls through risk monitoring services tailored to align with our risk policy.
Biggest changeWe also share and receive threat intelligence with our industry peers, cybersecurity associations, and our cyber controls vendors. We rely on contract manufacturing organizations and distributors to deliver our products to our customers, and a cybersecurity incident at one of these organizations or a key supplier could materially adversely impact us.
These risks are included in the risk universe that the ERM function evaluates to assess top enterprise risks on an annual basis and is reviewed and evaluated by the Board of Directors. The Board of Directors is also apprised of cybersecurity issues or incidents deemed to have a moderate or higher business impact as they arise, even if considered immaterial.
Cyber risks are included in the risk universe that the ERM function evaluates to assess top enterprise risks on an annual basis and is reviewed and evaluated by the Board of Directors. The Board of Directors is also apprised of cybersecurity issues or incidents deemed to have a moderate or higher business impact as they arise, even if considered immaterial.
We have implemented cybersecurity policies and frameworks based on industry and governmental standards to align closely with DoD requirements, instructions, and guidance. Moreover, we are pursuing the necessary controls to support the Cybersecurity Maturity Model Certification ("CMMC") program, DoD’s program to ensure members of the defense industrial base meet cybersecurity requirements for handling CUI and federal contract information.
We have implemented cybersecurity policies and frameworks based on industry and governmental standards to align closely with DoD requirements, instructions, and guidance. Moreover, we are pursuing the necessary controls to support the Cybersecurity Maturity Model Certification (“CMMC”) program, DoD’s program to ensure members of the defense industrial base meet cybersecurity requirements for handling CUI and federal contract information.
Central to this organization is our global cyber operations team, which is responsible for the protection, detection, and response capabilities used in the defense of critical data and enterprise computing services. We also have a corporate-wide insider threat detection program to proactively identify external and internal threats and mitigate those threats in a timely manner.
Central to this organization is our global cyber operations team, which is responsible for the protection, detection, and response capabilities used in the defense of critical data and enterprise computing services. We also have a corporate-wide in sider AI-enabled threat detection program to proactively identify external and internal threats and mitigate those threats in a timely manner.
Senior leadership, including our Chief Information Security Officer ("CISO"), brief the Audit Committee of the Board of Directors quarterly and the full Board of Directors at least annually on our cybersecurity and information security posture. The corporate information security organization, under the CISO, has implemented a governance structure and processes to assess, identify, manage, and report cybersecurity risks.
Senior leadership, including our Chief Information Security Officer (“CISO”), brief the Audit Committee of the Board of Directors quarterly and the full Board of Directors at least annually on our cybersecurity and information security posture. The corpo rate information security organization, under the CISO, has implemented a governance structure and processes to assess, identify, manage, and report cybersecurity risks.
Additionally, for our business that supports the defense and aerospace sector, we must comply with extensive regulations, including requirements imposed by the Defense Federal Acquisition Regulation Supplement ("DFARS") related to adequately safeguarding controlled unclassified information ("CUI") and reporting cybersecurity incidents to the DoD .
Additionally, for our business that supports the defense and aerospace sector, we must comply with extensive regulations, including requirements imposed by the Defense Federal Acquisition Regulation Supplement (“DFARS”) related to adequately safeguarding controlled unclassified information (“CUI”) and reporting cybersecurity incidents to the DoD .
Our customers, suppliers, and partners face similar cybersecurity threats and, while we have not been materially affected to date, a cybersecurity incident impacting us or any of these entities could materially adversely affect our operations, performance, and results of operations. These cybersecurity threats and related risks make it imperative that we maintain a strong focus on cybersecurity.
Our customers, suppliers, and partners face similar cybersecurity threats and, while we have not been materially affected to date, a cy bersecurity incident impacting us or any of these entities could materially adversely affect our operations, performance, and results of operations.
The CISO chairs management’s Cybersecurity Steering Committee, in which current cyber threats, program performance, and ongoing risk mitigations are regularly reviewed . Cybersecurity related risks are also integrated into our overall enterprise risk management ("ERM") process.
The cybersecurity program is aligned to the NIST Cybersecurity Framework and is integrated into our enterprise risk management processes. The CISO chairs management’s Cybersecurity Steering Committee, in which current cyber threats, program performance, and ongoing risk mitigations are regularly reviewed .
As a producer of leading-edge electronic testing products and maker of advanced robotics, we face a multitude of cybersecurity threats that range from attacks common to most industries, such as ransomware and denial-of-service, to attacks from more advanced, persistent, and highly organized adversaries, including nation state actors, that may target us for our role in critical infrastructure sectors.
As a producer of leading-edge electronic testing produc ts and maker of advanced robotics, we face a multitude of cybersecurity threats that range from attacks common to most industries, such as vulnerability exploits, credential theft, and social engineering, to attacks from more advanced, persistent, and highly organized adversaries, including nation state actors, that may target us for our role in critical infrastructure sectors, all of which are becoming more sophisticated and effective by the use of AI.
Our broader Teradyne employee community also has a key role in our cybersecurity defenses and is immersed in a comprehensive training and awareness curriculum to build and promote a corporate culture supportive of security. Third parties also play a role in our cybersecurity. We engage third-party services to provide 24x7x365 monitoring, escalation, and response to cyber events.
Our broader Teradyne employee community also has a key role in our cybersecurity defenses and is immersed in a comprehensive training and awareness curriculum to build and promote a corporate culture supportive of security. We conduct annual tabletop exercises and regular penetration testing to validate and improve our incident response capabilities. Third parties also play a role in our cybersecurity.
In addition to consulting on best practices, we leverage third parties for independent evaluations of our security controls through penetration testing and independent audits. These evaluations include testing both the design and operational effectiveness of security controls. We also share and receive threat intelligence with our industry peers, cybersecurity associations, and our cyber controls vendors.
We engage third-party services to provide 24x7x365 monitoring, escalation, and response to cyber events. In addition to consulting on best practices, we leverage third parties for independent evaluations of our security controls through penetration testing and independent audits. These evaluations include testing both the design and operational effectiveness of security controls.
Added
These cybersecurity threats and related risks make it imperative that we maintain a strong focus on cybersecurity. 20 Table of Contents Our products and connected systems may be susceptible to cybersecurity threats such as hacking, malware, ransomware, or other unauthorized intrusions targeting data confidentiality, integrity or system availability.
Added
Threat actors — including third parties or malicious insiders — might exploit software vulnerabilities or misconfigurations to disrupt operations, exfiltrate confidential or personal data, or degrade system performance. A significant cybersecurity incident could expose us to regulatory enforcement, liability for damages, contractual penalties, remediation costs, and eroded customer trust.
Added
To date, we have not experienced any cybersecurity incidents that have materially affected our business, operations, or financial results. However, we continue to monitor and assess risks that could have a material impact in the future.
Added
Risks resulting from threat actor use of AI are included in these updates.
Added
We assess third party and supply chain cybersecurity controls through risk monitoring services tailored to align with our risk policy.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe our existing facilities are adequate to meet our current and reasonably foreseeable requirements. We regularly evaluate our expected facility needs and periodically make adjustments based on these evaluations. In 2024, we completed construction of an approximately 200,000 square foot building in Odense, Denmark, for our Robotics operations.
Biggest changeWe believe our existing and planned facilities are adequate to meet our current and reasonably foreseeable requirements. We regularly evaluate our expected facility needs and periodically make adjustments based on these evaluations.
Item 2: P roperties We conduct manufacturing, engineering, sales and marketing, service, corporate administration and other operations in various leased and owned facilities throughout the world. We own approximately 920,000 square feet of office space and lease approximately 1,340,000 square feet of office space. We own our corporate headquarters in North Reading, Massachusetts, which is approximately 422,000 square feet.
Item 2: P roperties We conduct manufacturing, engineering, sales and marketing, service, corporate administration and other operations in various leased and owned facilities throughout the world. We own approximately 1,210,000 square feet of office space and lease approximately 1,416,000 square feet of office space. We own our corporate headquarters in North Reading, Massachusetts, which is approximately 422,000 square feet.
Added
We also own an approximately 200,000 square foot building in Odense, Denmark for our Robotics operations. In 2025, we completed the purchase of an approximately 290,000 square foot building in Cebu, Philippines for Semiconductor Test production and initiated our fit out of our leased 68,000 square foot Robotics U.S manufacturing site in the Metro Detroit area.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table includes information with respect to repurchases we made of our common stock during the three months ended December 31, 2024 (in thousands except per share price): Period (a) Total Number of Shares (or Units) Purchased (b) Average Price Paid per Share (or Unit) (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that may Yet Be Purchased Under the Plans or Programs September 30, 2024 – October 27, 2024 104 $ 129.01 103 $ 1,531,150 October 28, 2024 – November 24, 2024 475 107.04 475 1,480,482 November 25, 2024 – December 31, 2024 668 120.26 668 1,400,063 1,247 (1) $ 115.95 (1) 1,246 (1) Includes approximately two thousand shares at an average price of $122.14 withheld from employees for the payment of taxes.
Biggest changeThe following table includes information with respect to repurchases we made of our common stock during the three months ended December 31, 2025 (in thousands except per share price): Period (a) Total Number of Shares (or Units) Purchased (b) Average Price Paid per Share (or Unit) (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that may Yet Be Purchased Under the Plans or Programs September 29, 2025 – October 26, 2025 642 $ 141.80 641 $ 785,712 October 27, 2025 – November 23, 2025 451 172.43 451 708,911 November 24, 2025 – December 31, 2025 93 179.59 93 691,363 1,186 (1) 156.42 (1) 1,185 (1) Includes approximately three thousand shares at an average price of $163.25 withheld from employees for the payment of taxes.
As of January 1, 2023, share repurchases net of share issuances are subject to a 1% excise tax under the Inflation Reduction Act. Excise tax incurred is included as part of the cost basis of shares repurchased in the Condensed Consolidated Statements of Convertible Common Shares and Stockholders' Equity.
As of January 1, 2023, share repurchases net of share issuances are subject to a 1% excise tax under the Inflation Reduction Act. Excise tax incurred is included as part of the cost basis of shares repurchased in the Condensed Consolidated Statements of Stockholders' Equity.
Item 5: Market for Registrant’s Common Equity, Rel ated Shareholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the Nasdaq Global Select Market under the trading symbol “TER.” As of February 20, 2025, there were approximately 1,084 holders of record of shares of our common stock.
Item 5: Market for Registrant’s Common Equity, Rel ated Shareholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the Nasdaq Global Select Market under the trading symbol “TER.” As of February 19, 2026, there were approximately 1,013 holders of record of shares of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

72 edited+46 added−51 removed16 unchanged
Biggest changeThe following table sets forth the percentage of total net revenues included in our consolidated statements of operations: Years Ended December 31, 2024 2023 Percentage of revenues: Revenues: Products 81.4 % 78.3 % Services 18.6 21.7 Total revenues 100.0 100.0 Cost of revenues: Cost of products 34.1 33.0 Cost of services 7.4 9.6 Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below) 41.5 42.6 Gross profit 58.5 57.4 Operating expenses: Selling and administrative 21.9 21.6 Engineering and development 16.3 15.6 Acquired intangible assets amortization 0.7 0.7 Restructuring and other 0.6 0.8 Gain on sale of business (2.0 ) 0.0 Total operating expenses 37.4 38.7 Income from operations 21.1 18.7 Non-operating (income) expenses: Interest income (0.9 ) (1.0 ) Interest expense 0.1 0.1 Other (income) expense, net 0.2 (0.0 ) Income before income taxes and equity in net earnings of affiliate 21.6 19.6 Income tax provision 2.1 2.9 Income before equity in net earnings of affiliate 19.5 16.8 Equity in net earnings of affiliate (0.3 ) 0.0 Net income 19.2 % 16.8 % Revenues Revenues for our reportable segments were as follows: 2024 2023 2023-2024 Dollar Change (in millions) Semiconductor Test $ 2,123.9 $ 1,957.2 $ 166.7 Robotics 364.8 375.2 (10.4 ) All Other 331.1 343.9 (12.8 ) $ 2,819.9 $ 2,676.3 $ 143.5 The increase in Semiconductor Test revenues of $166.7 million, or 8.5%, was driven primarily by higher tester sales for computing, ADAS, and memory applications, partially offset by lower tester sales for legacy automotive applications.
Biggest changeThe following table sets forth the percentage of total net revenues included in our consolidated statements of operations: Years Ended December 31, 2025 2024 Percentage of revenues: Revenues: Products 83.4 % 81.4 % Services 16.6 18.6 Total revenues 100.0 100.0 Cost of revenues: Cost of products 35.6 34.1 Cost of services 6.2 7.4 Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below) 41.8 41.5 Gross profit 58.2 58.5 Operating expenses: Selling and administrative 20.3 21.9 Engineering and development 15.8 16.3 Acquired intangible assets amortization 0.5 0.7 Restructuring and other 1.2 0.6 Gain on sale of business — (2.0 ) Total operating expenses 37.8 37.4 Income from operations 20.4 21.1 Non-operating (income) expenses: Interest income (0.5 ) (0.9 ) Interest expense 0.2 0.1 Other (income) expense, net 0.2 0.2 Income before income taxes and equity in net earnings of affiliate 20.5 21.6 Income tax provision 2.5 2.1 Income before equity in net earnings of affiliate 18.0 19.5 Equity in net earnings of affiliate (0.6 ) (0.3 ) Net income 17.4 % 19.2 % 27 Table of Contents Revenues Revenues for our reportable segments were as follows: 2025 2024 Dollar Change (in millions) Semiconductor Test $ 2,523.7 $ 2,123.9 $ 399.8 Product Test 358.0 331.1 26.9 Robotics 308.3 364.8 (56.5 ) $ 3,190.0 $ 2,819.9 $ 370.1 The increase in Semiconductor Test revenues of $399.8 million, or 18.8%, was driven primarily by higher sales in compute related to artificial intelligence applications and in Integrated System Test primarily related to system level testers.
Critical Accounting Policies and Estimates We have identified the policies and estimates discussed below as critical to understanding our business and our results of operations and financial condition.
Critical Accounting Estimates We have identified the policies and estimates discussed below as critical to understanding our business and our results of operations and financial condition.
Restructuring and Other During the year ended December 31, 2024, we recorded $5.2 million of severance charges related to headcount reductions of 98 people primarily in Robotics and Semiconductor Test, which included charges related to a voluntary early retirement program for employees meeting certain conditions, $3.6 million of acquisition and divestiture expenses, and $1.3 million of charges related to lease terminations.
During the year ended December 31, 2024, we recorded $5.2 million of severance charges related to headcount reductions of 98 people primarily in Robotics and Semiconductor Test, which included charges related to a voluntary early retirement program for employees meeting certain conditions, $3.6 million of acquisition and divestiture expenses, and $1.3 million of charges related to lease terminations.
The market for our test products is concentrated with a limited number of significant customers accounting for a substantial portion of the purchases of test equipment. A few customers drive significant demand for our products both through direct sales and sales to the customer’s supply partners.
The market for our test products is concentrated with a limited number of significant customers accounting for a substantial portion of the purchases of test equipment. A few customers drive sizable demand for our offerings both through direct sales and sales to the customer’s supply partners.
We evaluate other assumptions related 32 Table of Contents to demographic factors, such as retirement age, mortality and turnover periodically, and update them to reflect our experience and expectations for the future. In developing the expected return on U.S. Plan assets assumption, we evaluated input from our investment manager and pension consultants, including their forecast of asset class return expectations.
We evaluate other assumptions related to demographic factors, such as retirement age, mortality and turnover periodically, and update them to reflect our experience and expectations for the future. In developing the expected return on U.S. Plan assets assumption, we evaluated input from our investment manager and pension consultants, including their forecast of asset class return expectations.
The comparison assumes $100.00 was invested on December 31, 2019 in our common stock and in each of the foregoing indices and assumes reinvestment of dividends, if any. Historic stock price performance is not necessarily indicative of future price performance.
The comparison assumes $100.00 was invested on December 31, 2020 in our common stock and in each of the foregoing indices and assumes reinvestment of dividends, if any. Historic stock price performance is not necessarily indicative of future price performance.
Our automated test systems are used to test semiconductors, wireless products, data storage and complex electronics systems in many industries including consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries.
Our automated test systems are used to test semiconductors, wireless products, data storage, silicon photonics, and complex electronics systems in many industries including consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries.
Investing activities during 2024 used cash of $622.3 million, comprised of $532.1 million used for investments in businesses, $198.1 million used for purchases of property, plant and equipment, and $45.8 million used for purchases of marketable securities, partially offset by $90.3 million in proceeds from the sale of a business, $38.4 million and $24.0 million in proceeds from the maturities and sales of marketable securities, respectively, and $0.9 million in proceeds from life insurance.
Investing activities during 2024 included $532.1 million used for investments in businesses, $198.1 million used for purchases of property, plant and equipment, and $45.8 million used for purchases of marketable securities, partially offset by $90.3 million in proceeds from the sale of a business, $38.4 million and $24.0 million in proceeds from the maturities and sales of marketable securities, respectively, and $0.9 million in proceeds from life insurance.
In November 2020, we entered into an agreement with the Singapore Economic Development Board which extended our Singapore tax holiday under substantially similar terms to the agreement which expired on December 31, 2020. The new tax holiday is scheduled to expire on December 31, 2025.
In December 2025, we entered into an agreement with the Singapore Economic Development Board which extended our Singapore tax holiday under substantially similar terms to the agreement which expired on December 31, 2025. The new tax holiday is scheduled to expire on December 31, 2035.
It is possible, however, that future developments, including changes in laws and regulations or government policies, could lead to material costs, and such costs may have a material adverse effect on our future business or prospects.
It is possible that future developments, including changes in laws and regulations or government policies, could lead to material costs, and such costs may have an material adverse effect on our future business or prospects.
Discount rate and expected return on assets are two assumptions which are important elements of pension plan expense and asset/liability measurement. We evaluate our discount rate and expected rate of return on assets assumptions annually on a plan and country specific basis.
Discount rate and expected return on assets are two assumptions 25 Table of Contents which are important elements of pension plan expense and asset/liability measurement. We evaluate our discount rate and expected rate of return on assets assumptions annually on a plan and country specific basis.
Contributions to be made in 2025 to certain qualified plans for non-U.S. subsidiaries are based on local statutory requirements and are estimated at approximately $1.1 million.
Contributions to be made in 2026 to certain qualified plans for non-U.S. subsidiaries are based on local statutory requirements and are estimated at approximately $1.7 million.
For information regarding risks associated with import-export control regulations and similar applicable laws and regulations, see Part II - Item 1A "Risk Factors- Risks Related to Legal and Regulatory Compliance" included elsewhere in this Form 10-K.
For information regarding risks associated with import-export control regulations and similar applicable laws and regulations, see Part II - Item 1A “Risk Factors- Risks Related to Legal and Regulatory Compliance” included elsewhere in this Form 10-K.
Of the $18.9 million of total excess and obsolete provisions, $13.6 million was related to Semiconductor Test, $2.3 million was related to Robotics, and $3.1 million was related to All Other.
Of the $18.9 million of total excess and obsolete provisions, $13.6 million was related to Semiconductor Test, $2.3 million was related to Robotics, and $3.1 million was related to Product Test.
We believe that 4.65% was an appropriate rate of return on assets to use for 2024. The December 31, 2024 asset allocation for our U.S. Plan was 94.0% invested in fixed income securities, 5% invested in equity securities, and 1% invested in other securities.
We believe that 5.05% was an appropriate rate of return on assets to use for 2025. The December 31, 2025, asset allocation for our U.S. Plan was 94.0% invested in fixed income securities, 5% invested in equity securities, and 1% invested in other securities.
We believe that 4.65% was an appropriate rate of return on assets to use for 2024. The December 31, 2024 asset allocation for our U.S. Plan was 94% invested in fixed income securities, 5% invested in equity securities, and 1% invested in other securities.
We believe that 5.05% was an appropriate rate of return on assets to use for 2025. The December 31, 2025, asset allocation for our U.S. Plan was 94% invested in fixed income securities, 5% invested in equity securities, and 1% invested in other securities.
We believe our cash, cash equivalents and marketable securities balance will be sufficient to pay our quarterly dividend and meet our working capital and expenditure needs for at least the next twelve months. Inflation has not had a significant long-term impact on earnings.
We believe our cash, cash equivalents, marketable securities and senior secured revolving credit facility will be sufficient to pay our quarterly dividend and meet our working capital and expenditure needs for at least the next twelve months. Inflation has not had a significant long-term impact on earnings.
For the year ended December 31, 2024, our pension expense, which includes the U.S. Qualified Pension Plan (“U.S. Plan”), certain qualified plans for non-U.S. subsidiaries, and a U.S. Supplemental Executive Defined Benefit Plan, was approximately $0.1 million. Pension expense is calculated based upon a number of actuarial assumptions.
For the year ended December 31, 2025, our pension expense, which includes the U.S. Qualified Pension Plan (“U.S. Plan”), certain qualified plans for non-U.S. subsidiaries, and a U.S. Supplemental Executive Defined Benefit Plan, was approximately $4.3 million. Pension expense is calculated based upon a number of actuarial assumptions.
Plan pension expense estimate for 2025 is based on a 5.45% discount rate and a 5.05% return on assets. Future pension expense or income will depend on future investment performance, changes in future discount rates and various other factors related to the employee population participating in our pension plans.
Plan pension income estimate for 2026 is based on a 5.30% discount rate and a 5.10% return on assets. Future pension expense or income will depend on future investment performance, changes in future discount rates and various other factors related to the employee population participating in our pension plans.
During 2024, we made contributions of $3.1 million to the U.S. supplemental executive defined benefit pension plan, and $1.0 million to certain qualified plans for non-U.S. subsidiaries. In 2025, we expect to contribute approximately $3.3 million to the U.S. supplemental executive defined benefit pension plan.
During 2025, we made contributions of $3.3 million to the U.S. supplemental executive defined benefit pension plan, and $1.2 million to certain qualified plans for non-U.S. subsidiaries. In 2026, we expect to contribute approximately $3.6 million to the U.S. supplemental executive defined benefit pension plan.
Plan’s liability decreased from $101.1 million at December 31, 2023 to $69.4 million at December 31, 2024. Our funding policy is to make contributions to our pension plans in accordance with local laws and to the extent that such contributions are tax deductible.
Plan’s liability decreased from $69.4 million at December 31, 2024 to $68.6 million at December 31, 2025. Our funding policy is to make contributions to our pension plans in accordance with local laws and to the extent that such contributions are tax deductible.
As of December 31, 2024, our pension plans had no unrecognized pension prior service cost. The assets of the U.S. Plan consist substantially of fixed income securities. U.S. Plan assets have decreased from $112.6 million at December 31, 2023 to $81.4 million at December 31, 2024, while the U.S.
As of December 31, 2025, our pension plans had no unrecognized pension prior service cost. 33 Table of Contents The assets of the U.S. Plan consist substantially of fixed income securities. U.S. Plan assets have decreased from $81.4 million at December 31, 2024 to $80.6 million at December 31, 2025, while the U.S.
Plan is based on the FTSE Pension Index adjusted for the U.S. Plan’s expected cash flows and was 5.45% at December 31, 2024, up from 4.75% at December 31, 2023. We estimate that in 2025, we will recognize approximately $0.1 million of pension expense for the U.S. Plan. The U.S.
Plan is based on the FTSE Pension Index adjusted for the U.S. Plan’s expected cash flows and was 5.30% at December 31, 2025, down from 5.45% at December 31, 2024. We estimate that in 2026 we will recognize approximately $0.1 million of pension income for the U.S. Plan. The U.S.
The tax savings attributable to the Singapore tax holiday for the years ended December 31, 2024 and 2023 were $17.1 million or $0.10 per diluted share and $1.4 million or $0.01 per diluted share, respectively.
The tax savings attributable to the Singapore tax holiday for the years ended December 31, 2025, and 2024 were $21.6 million or $0.14 per diluted share and $17.1 million or $0.10 per diluted share, respectively.
In January 2024, May 2024, August 2024 and November 2024, our Board of Directors declared a quarterly cash dividend of $0.12 per share. Total dividend payments in 2024 were $76.4 million. In January 2023, May 2023, August 2023 and November 2023, our Board of Directors declared a quarterly cash dividend of $0.11 per share.
Material Cash Requirements In January 2025, May 2025, August 2025 and November 2025, our Board of Directors declared a quarterly cash dividend of $0.12 per share. Total dividend payments in 2025 were $76.3 million. In January 2024, May 2024, August 2024 and November 2024, our Board of Directors declared a quarterly cash dividend of $0.12 per share.
Income Taxes Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.
Any changes in key assumptions could impact the result of the impairment assessment. Income Taxes Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.
Plan’s expected cash flows and was 5.45% at December 31, 2024, up from 4.75% at December 31, 2023. We estimate that in 2025 we will recognize approximately $0.1 million of pension expense for the U.S. Plan. The U.S. Plan pension expense estimate for 2025 is based on a 5.45% discount rate and a 5.05% return on assets.
Plan’s expected cash flows and was 5.30% at December 31, 2025, down from 5.45% at December 31, 2024. We estimate that in 2026 we will recognize approximately $0.1 million of pension income for the U.S. Plan. The U.S. Plan pension income estimate for 2026 is based on a 5.30% discount rate and a 5.10% return on assets.
During the years ended December 31, 2024 and 2023, we scrapped $10.6 million and $26.4 million of inventory, respectively, and sold $2.2 million and $5.2 million of previously written-down or written-off inventory, respectively. As of December 31, 2024, we had inventory related reserves for amounts which had been written-down or written-off totaling $141.4 million.
During the years ended December 31, 2025, and 2024, we scrapped $11.8 million and $10.6 million of inventory, respectively, and sold $3.6 million and $2.2 million of previously written-down or written-off inventory, respectively. As of December 31, 2025, we had inventory related reserves for amounts which had been written-down or written-off totaling $151.8 million.
This quarterly process identifies obsolete and excess inventory. Obsolete inventory, which represents items for which there is no demand, is fully reserved. Excess inventory, which represents inventory items that are not expected to be consumed within the forecasted demand window, is written 25 Table of Contents down to estimated net realizable value.
On a quarterly basis, we evaluate all inventories for net realizable value. This quarterly process identifies obsolete and excess inventory. Obsolete inventory, which represents items for which there is no demand, is fully reserved. Excess inventory, which represents inventory items that are not expected to be consumed within the forecasted demand window, is written down to estimated net realizable value.
Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview We are a leading global supplier of automated test equipment and robotics products. We design, develop, manufacture and sell automated test systems and robotics products.
Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview We are a leading global provider of automated test equipment and robotics products.
The impact and any associated risks related to these estimates on our business operations is discussed throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations where such policies affect our reported and expected financial results. For a full description of our accounting policies related to the below items refer to Note B.
The impact and any associated risks related to these estimates on our business operations is discussed throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations where such policies affect our reported and expected financial results.
Financing activities during 2024 used cash of $251.8 million, due to $198.6 million used for the repurchase of 1.7 million shares of common stock at an average price of $114.63 per share, $76.4 million used for dividend payments, and $14.1 million used for payments related to net settlement of employee stock compensation awards, partially offset by $37.3 million from the issuance of common stock under employee stock purchase and stock option plans.
Financing activities during 2024 included $198.6 million used for the repurchase of common stock, $76.4 million used for dividend payments, and $14.1 million used for payments related to net settlement of employee stock compensation awards, partially offset by $37.3 million from the issuance of common stock under employee stock purchase and stock option plans.
The following table presents information about these plans as of December 31, 2024 (share numbers in thousands): Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column one) Equity plans approved by shareholders 1,668 (1) $ 99.51 6,862 (2) (1) Includes 1,527,351 shares of restricted stock units that are not included in the calculation of the weighted average exercise price. 33 Table of Contents (2) Consists of 3,638,237 securities available for issuance under the 2006 Equity Plan and 3,224,044 of securities available for issuance under the Employee Stock Purchase Plan.
The following table presents information about these plans as of December 31, 2025 (share numbers in thousands): Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights (1) Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column one) (2) Equity plans approved by shareholders 1,798 $ 108.00 6,227 (1) Includes 1,634,922 shares of restricted stock units that are not included in the calculation of the weighted average exercise price.
Income (Loss) Before Income Taxes 2024 2023 2023-2024 Change (in millions) Semiconductor Test $ 558.2 $ 498.5 $ 59.7 Robotics (77.6 ) (54.3 ) (23.3 ) All Other 65.7 79.5 (13.8 ) Corporate and Eliminations (1) 62.7 1.9 60.8 $ 609.1 $ 525.6 $ 83.5 (1) Included in Corporate and Eliminations are gain on sale of business, interest income, interest expense, net foreign exchange gains (losses), intercompany eliminations, severance charges, pension and postretirement plan actuarial gains (losses), acquisition and divestiture related fees, legal and environmental fees, contract termination settlement charge, and modification of outstanding equity awards.
Income Before Income Taxes and Equity in Net Earnings of Affiliate 2025 2024 2024-2025 Change (in millions) Semiconductor Test $ 700.7 $ 558.2 $ 142.5 Product Test 60.7 65.7 (5.0 ) Robotics (99.4 ) (77.6 ) (21.8 ) Corporate and Eliminations (1) (8.8 ) 62.7 (71.5 ) $ 653.3 $ 609.1 $ 44.2 (1) Included in Corporate and Eliminations are gain on sale of business, interest income, interest expense, net foreign exchange gains (losses), intercompany eliminations, severance charges, pension and postretirement plan actuarial gains (losses), acquisition and divestiture related expenses, legal and environmental fees, contract termination settlement charge, and modification of outstanding equity awards.
Our Robotics products include collaborative robotic arms and autonomous mobile robots (“AMRs”) used by global manufacturing, logistics and industrial customers to improve quality, increase manufacturing and material handling efficiency and decrease manufacturing and logistics costs.
Our robotics product offerings consist primarily of collaborative robotic arms and autonomous mobile robots used by global manufacturing, logistics and industrial customers to improve quality and increase manufacturing and material handling efficiency, while reducing costs.
Total dividend payments in 2023 were $67.9 million. In January 2023, our Board of Directors cancelled the 2021 repurchase program and approved a new repurchase program for up to $2.0 billion of common stock. In 2024, we repurchased 1.7 million shares of common stock for $198.6 million, which excludes related excise tax, at an average price of $114.63 per share.
Total dividend payments in 2024 were $76.4 million. In January 2023, our Board of Directors approved a repurchase program for up to $2.0 billion of common stock. In 2025, we repurchased 6.3 million shares of common stock for $702.1 million, which excludes related excise tax, at an average price of $112.21 32 Table of Contents per share.
The decrease in Robotics revenues of $10.4 million, or 2.8%, was driven primarily by continued weakness in the Industrial Automation market and softer sales in Universal Robots. 27 Table of Contents Our reportable segments accounted for the following percentages of consolidated revenues: 2024 2023 Semiconductor Test 75 % 73 % Robotics 13 14 All Other 12 13 100 % 100 % Revenues by country as a percentage of total revenues were as follows (1): 2024 2023 Korea 25 % 15 % Taiwan 21 14 United States 13 16 China 13 12 Europe 9 10 Japan 6 11 Singapore 3 4 Philippines 2 7 Thailand 2 3 Malaysia 2 3 Rest of the World 4 5 100 % 100 % (1) Revenues attributable to a country are based on the location of the customer site.
Our reportable segments accounted for the following percentages of consolidated revenues: 2025 2024 Semiconductor Test 79 % 75 % Product Test 11 12 Robotics 10 13 100 % 100 % Revenues by country as a percentage of total revenues were as follows (1): 2025 2024 Taiwan 36 % 21 % China 14 13 Korea 14 25 United States 11 13 Europe 7 9 Malaysia 3 2 Singapore 3 3 Philippines 3 2 Thailand 2 2 Japan 2 6 Rest of the World 4 4 100 % 100 % (1) Revenues attributable to a country are based on the location of the customer site.
We evaluate each of the deliverables to determine if it meets the definition of a performance obligation, which requires that it is capable of being distinct and distinct within the context of the contract.
We often sell bundled orders that include both product and services or multiple different products within the same order. We evaluate each of the deliverables to determine if it meets the definition of a performance obligation, which requires that it is capable of being distinct and distinct within the context of the contract.
“Income Taxes” of Notes to Consolidated Financial Statements in this Annual Report for information about those obligations, which Notes are incorporated by reference into this section. Our purchase obligations were approximately $419.8 million, with $409.6 million expected to be paid within twelve months.
See Note L: “Debt,” Note K: “Leases,” Note R: “Retirement Plans,” and Note U: “Income Taxes” of Notes to Consolidated Financial Statements in this Annual Report for information about those obligations, which Notes are incorporated by reference into this section. Our purchase obligations were approximately $1,473.0 million, with $1,415.1 million expected to be paid within twelve months.
Engineering and Development Engineering and development expenses were as follows: 2024 2023 2023-2024 Change (in millions) Engineering and development $ 460.9 $ 418.1 $ 42.8 Percent of total revenues 16.3 % 15.6 % 29 Table of Contents The increase of $42.8 million in engineering and development expenses was primarily due to higher spending in Semiconductor Test.
Selling and Administrative Selling and administrative expenses were as follows: 2025 2024 2024-2025 Change (in millions) Selling and administrative $ 648.9 $ 617.0 $ 31.8 Percent of total revenues 20.3 % 21.9 % The increase of $31.8 million in selling and administrative expenses was primarily due to higher spending in Semiconductor Test partially offset by lower spending in Robotics. 29 Table of Contents Engineering and Development Engineering and development expenses were as follows: 2025 2024 2024-2025 Change (in millions) Engineering and development $ 504.6 $ 460.9 $ 43.7 Percent of total revenues 15.8 % 16.3 % The increase of $43.7 million in engineering and development expenses was primarily due to higher spending in Semiconductor Test partially offset by lower spending in Robotics.
The decrease in operating assets was primarily due to a decrease in other assets and inventory of $119.5 million and $8.7 million respectively, partially offset by a $52.7 million increase in accounts receivable, driven by higher sales at year-end.
The decrease in operating assets was primarily due to a decrease in other assets of $119.5 million, partially offset by a $52.7 million increase in accounts receivable. The decrease in operating liabilities was primarily due to a $48.2 million decrease in accounts payable.
Of the $28.4 million of total excess and obsolete provisions, $22.5 million was related to Semiconductor Test, $2.3 million was related to Robotics, and $3.6 million was related to All Other.
Of the $25.8 million of total excess and obsolete provisions, $17.5 million was related to Semiconductor Test, $6.0 million was related to Robotics, and $2.2 million was related to Product Test.
Although realization is not assured, based on our assessment, we concluded that it is more likely than not that such assets, net of the existing valuation allowance, will be realized. 26 Table of Contents Results of Operations Information pertaining to fiscal year 2022 results of operations, including a year-to-year comparison against fiscal year 2023, was included in our Annual Report on Form 10-K for the year ended December 31, 2023 under Part II, Item 7, “Management’s Discussion and Analysis of Financial Position and Results of Operations,” which was filed with the SEC on February 22, 2024.
Results of Operations Information pertaining to fiscal year 2023 results of operations, including a year-to-year comparison against fiscal year 2024, was included in our Annual Report on Form 10-K for the year ended December 31, 2024 under Part II, Item 7, “Management’s Discussion and Analysis of Financial Position and Results of Operations,” which was filed with the SEC on February 20, 2025.
Equity Compensation Plans In addition to our 1996 Employee Stock Purchase Plan discussed in Note R: “Stock-Based Compensation” in Notes to Consolidated Financial Statements, we have a 2006 Equity and Cash Compensation Incentive Plan (the “2006 Equity Plan”) under which equity securities are authorized for issuance. The 2006 Equity Plan was initially approved by stockholders on May 25, 2006.
Equity Compensation Plans As of December 31, 2025, our stockholders have approved two equity compensations plans under which equity securities are authorized for issuance: our 1996 Employee Stock Purchase Plan (the “ESPP”), as discussed in Note S: “Stock-Based Compensation” in Notes to Consolidated Financial Statements, as well as our Equity and Cash Compensation Incentive Plan (the “Equity Plan”).
Changes in operating assets and liabilities used cash of $23.9 million. This was due to a $75.5 million decrease in operating assets and a $51.6 million decrease in operating liabilities.
The increase in operating liabilities was primarily due to increases in accounts payable and other liabilities of $208.8 million. Operating activities during 2024 provided cash of $672.2 million. Changes in operating assets and liabilities used cash of $23.9 million. This was due to a $75.5 million decrease in operating assets and a $51.6 million decrease in operating liabilities.
Future pension expense or income will depend on future investment performance, changes in future discount rates and various other factors related to the employee population participating in our pension plans.
Future pension expense or income will depend on future investment performance, changes in future discount rates and various other factors related to the employee population participating in our pension plans. Goodwill, Intangible and Long-Lived Assets Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired.
At our annual meeting of stockholders held May 12, 2015, our stockholders approved an amendment to the 2006 Equity Plan to extend its term until May 12, 2025.
At our annual meeting of stockholders held May 9, 2025, our stockholders approved an amendment and restatement of the Equity Plan.
Gross Profit 2024 2023 2023-2024 Dollar / Point Change (in millions) Gross profit $ 1,648.9 $ 1,536.7 $ 112.2 Percent of total revenues 58.5 % 57.4 % 1.1 Gross profit as a percent of total revenues increased by 1.1 points, primarily due to a higher volume and product and service mix. 28 Table of Contents The breakout of product and service gross profit was as follows: 2024 2023 2023-2024 Dollar / Point Change (in millions) Product gross profit $ 1,334.0 $ 1,213.4 $ 120.6 Percent of product revenues 58.1 % 57.9 % 0.2 Service gross profit $ 314.9 $ 323.4 $ (8.5 ) Percent of service revenues 60.0 % 55.7 % 4.3 Service and product revenues gross profit percentage increased by 4.3 points and 0.2 points, respectively, primarily due to higher volume and product and service mix.
The breakout of product and service gross profit was as follows: 2025 2024 2024-2025 Dollar / Point Change (in millions) Product gross profit $ 1,524.2 $ 1,334.0 $ 190.2 Percent of product revenues 57.3 % 58.1 % (0.8 ) Service gross profit $ 333.2 $ 314.9 $ 18.3 Percent of service revenues 62.9 % 60.0 % 2.9 Product revenues gross profit percentage decreased by 0.8 points primarily due to product mix.
Our automated test equipment and robotics products and services include: • semiconductor test (“Semiconductor Test”) systems; • robotics (“Robotics”) products; and • defense/aerospace (“Defense/Aerospace”) test instrumentation and systems, circuit-board test and inspection (“Production Board Test”) systems, and wireless test systems (referred collectively as "All Other").
Our automated test equipment and robotics products and services include: • semiconductor test (“Semiconductor Test”) systems; • robotics (“Robotics”) products; and • product test (“Product Test”) systems, which includes circuit-board test and inspection systems, wireless test systems photonic integrated circuit (“PIC”) test solutions, and defense and aerospace test instrumentation and systems.
These decreases in expense were partially offset by reductions in benefits from foreign tax credits, U.S research and development credits and the U.S. foreign derived intangible income deduction. We qualify for a tax holiday in Singapore by fulfilling the requirements of an agreement with the Singapore Economic Development Board under which certain headcount and spending requirements must be met.
This increase was partially offset by a shift in the geographic distribution of income which resulted in a reduction of income in higher tax rate jurisdictions. We qualify for a tax holiday in Singapore by fulfilling the requirements of an agreement with the Singapore Economic Development Board under which certain headcount and spending requirements must be met.
In 2023, we repurchased 3.9 million shares of common stock for $397.2 million, which excludes related excise tax, at an average price of $102.47 per share against the 2023 repurchase program.
In 2024, we repurchased 1.7 million shares of common stock for $198.6 million, which excludes related excise tax, at an average price of $114.63 per share.
Actual results could differ significantly from these estimates under different assumptions or conditions. Revenue Recognition In accordance with ASC 606, “ Revenue from Contracts with Customers” (“ASC 606”) , we recognize revenues, when or as control is transferred to a customer.
Revenue Recognition In accordance with ASC 606, “ Revenue from Contracts with Customers” (“ASC 606”) , we recognize revenues, when or as control is transferred to a customer. Our determination of revenue requires judgment in the determination of performance obligations and allocation of the transaction price to performance obligations.
The cumulative repurchases as of December 31, 2024, under the 2023 repurchase program, were 5.6 million shares of common stock for $595.2 million, exclusive of tax, at an average price per share of $106.21. In 2025, we intend to repurchase up to $400.0 million.
The cumulative repurchases as of December 31, 2025, under the 2023 repurchase program, were 12.0 million shares of common stock for $1,297.3 million, which excludes related excise tax, at an average price per share of $109.38.
Accounting Policies, included in the Notes to Consolidated Financial Statements in this Annual Report. Critical accounting estimates are complex and may require significant judgment by management. Changes to the underlying assumptions may have a material impact on our financial condition and results of operations. These estimates may change, as new events occur, and additional information is obtained.
Changes to the underlying assumptions may have a material impact on our financial condition and results of operations. These estimates may change, as new events occur, and additional information is obtained. Actual results could differ significantly from these estimates under different assumptions or conditions.
During the year ended December 31, 2023, we recorded an inventory provision of $28.4 million included in cost of revenues, primarily due to downward revisions to previously forecasted demand levels for certain products.
Service revenues gross profit percentage increased by 2.9 points primarily in Semiconductor Test as a result of the sale of the DIS business on May 27, 2024. During the year ended December 31, 2025, we recorded an inventory provision of $25.8 million included in cost of revenues, primarily due to downward revisions to previously forecasted demand levels for certain products.
The purpose of the 2006 Equity Plan is to motivate employees, officers and directors by providing equity ownership and compensation opportunities in Teradyne. The aggregate number of shares available under the 2006 Equity Plan as of December 31, 2024 was 3,638,237 shares of our common stock.
(2) Consists of 3,050,235 securities available for issuance under the 2006 Equity Plan and 3,176,598 of securities available for issuance under the Employee Stock Purchase Plan. The purpose of the 2006 Equity Plan is to motivate employees, officers and directors by providing equity ownership and compensation opportunities in Teradyne.
Performance Graph The following graph compares the change in our cumulative total shareholder return in our common stock with (i) the Standard & Poor’s 500 Index and (ii) the Morningstar Global Semiconductor Equipment & Materials GR USD Industry Group.
As of December 31, 2025, total unrecognized compensation expense related to non-vested restricted stock units and options was $97.3 million and is expected to be recognized over a weighted average period of 2.6 years. 34 Table of Contents Comparative Stock Performance Graph The following graph compares the change in our cumulative total shareholder return in our common stock with (i) the Standard & Poor’s 500 Index and (ii) the Morningstar Global Semiconductor Equipment & Materials GR USD Industry Group.
The sale resulted in a pre-tax gain of $57.1 million recorded as 'Gain on sale of business' in the consolidated statement of operations. Our financial statements are denominated in U.S. dollars. While revenues in our test businesses are predominantly in U.S. dollars, the majority of our Robotics revenue is denominated in foreign currencies.
AET is included in our Semiconductor Test segment. While revenues in our test businesses are predominantly in U.S. dollars, the majority of our Robotics revenue is denominated in foreign currencies.
Additionally, United States and foreign governmental authorities have taken, and may continue to take, administrative, legislative or regulatory action that could impact our operations. We believe that our operations are in material compliance with applicable trade regulations.
Government Regulations We are subject to numerous U.S. and foreign laws and regulations, including, without limitation, tariffs, trade sanctions, trade barriers, trade embargoes, regulations relating to import-export control, technology transfer restrictions, and other laws and regulations. Additionally, U.S. and foreign governmental authorities have taken, and may continue to take, administrative, legislative or regulatory action that could impact our operations.
The maximum number of shares of stock-based awards that may be granted to one participant during any one fiscal year is 2,000,000 shares of common stock. As of December 31, 2024, total unrecognized compensation expense related to non-vested restricted stock units and options was $82.6 million and is expected to be recognized over a weighted average period of 2.5 years.
The maximum number of shares of stock-based awards that may be granted to one participant during any one fiscal year is 2,000,000 shares of common stock.
We expect that sales of our test products will continue to be concentrated with a limited number of significant customers for the foreseeable future. In 2024, we saw strength in our Semiconductor Test business, with memory and compute offerings growing considerably compared to 2023.
We expect that sales of our test products will continue to be concentrated with a limited number of major customers for the foreseeable future. In 2025, our Semiconductor Test segment achieved considerable growth driven by robust demand from Artificial Intelligence (“AI”) applications in networking and with vertically integrated producer (“VIP”) compute solutions.
While we declared a quarterly cash dividend and authorized a share repurchase program, we may reduce or eliminate the cash dividend or share repurchase program in the future. Future cash dividends and stock repurchases are subject to the discretion of our Board of Directors, which will consider, among other things, our earnings, capital requirements and financial condition.
Future cash dividends and stock repurchases are subject to the discretion of our Board of Directors, which will consider, among other things, our earnings, capital requirements and financial condition. At December 31, 2025, our future contractual obligations were related to debt, leases, retirement plan liabilities, deferred tax benefits, and purchase obligations.
Financing activities during 2023 used cash of $501.9 million, due to $397.2 million used for the repurchase of 3.9 million shares of common stock at an average price of $102.47 per share, $67.9 million used for dividend payments, $50.3 million used for the 31 Table of Contents payments of convertible debt principal, and $20.8 million used for payments related to net settlement of employee stock compensation awards, partially offset by $34.3 million from the issuance of common stock under employee stock purchase and stock option plans.
Financing Activities Financing activities during 2025 included $702.1 million used for repurchase of common stock, $76.3 million used for dividend payments, and $15.7 million used for payments related to net settlement of employee stock compensation awards, partially offset by net proceeds from borrowings on revolving credit facility of $200.0 million and $31.9 million from issuance of common stock under stock purchase and stock option plans.
We monitor on an ongoing basis its equity method investments for indicators of other-than-temporary declines in fair value below carrying value. Inventories Inventories are stated at the lower of cost using a standard costing system which approximates cost based on a first-in, first-out basis or net realizable value. On a quarterly basis, we evaluate all inventories for net realizable value.
The estimated standalone selling price is determined using all information reasonably available to us, including standalone transactions, market information and other observable inputs. Inventories Inventories are stated at the lower of cost using a standard costing system which approximates cost based on a first-in, first-out basis or net realizable value.
Interest and Other 2024 2023 2023-2024 Change (in millions) Interest income $ (24.8 ) $ (27.3 ) $ 2.5 Interest expense 3.6 3.8 (0.2 ) Other (income) expense, net 5.9 (1.0 ) 6.8 Other (income) expense, net decreased by $6.8 million primarily due to $9.8 million loss on our call option in connection with our agreement to acquire a 10% investment in Technoprobe S.p.A, partially offset by the change in pension actuarial gains/losses, from a $2.7 million loss in 2023 to a $4.4 million gain in 2024.
Interest and Other 2025 2024 Dollar Change (in millions) Interest income $ (15.7 ) $ (24.8 ) $ 9.1 Interest expense 6.8 3.6 3.2 Other (income) expense, net 5.6 5.9 (0.3 ) Interest income decreased by $9.1 million primarily due to lower interest rates and a reduced cash balance compared to 2024.
We review intangible and long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate.
We evaluate the recoverability of intangible assets and long-lived assets whenever events and changes in circumstances, such as reductions in demand or significant economic slowdowns, indicate that the carrying amount of an asset may not be fully recoverable. When indicators of impairment are present, the future undiscounted cash flows of the related asset group are compared to its carrying value.
Investing activities during 2023 used cash of $179.6 million, due to $161.9 million used for purchases of marketable securities, $159.6 million used for purchases of property, plant and equipment, and $5.0 million used for issuance of convertible loans, partially offset by $85.0 million and $61.4 million in proceeds from maturities and sales of marketable securities, respectively, and $0.5 million in proceeds from the cancellation of Teradyne owned life insurance policies related to the cash surrender value.
Investing Activities Investing activities during 2025 included $224.0 million used for purchases of property, plant, and equipment, $144.4 million used for acquisition of businesses, net of cash and cash equivalents acquired, $33.0 million used for purchases of marketable securities, and $25.5 million used for purchase of investment in a business, partially offset by $49.0 million provided by proceeds from maturities of marketable securities and $9.3 million provided by proceeds from sales of marketable securities.
Our capital allocation plan will continue to be balanced between investing in organic and inorganic growth and returning cash to shareholders through share repurchases and dividends. Supply Chain Constraints and Inflationary Pressures The global supply shortage of electrical components, including semiconductor chips, impacted our supply chain in the first half of 2023.
Strengthening of the U.S. dollar has, and will continue to, negatively affect Robotics revenue in 2025 and 2026, respectively. 24 Table of Contents Our capital allocation plan will continue to be focused on investing in organic and inorganic growth and returning cash to shareholders through share repurchases and dividends.
The increase in income before income taxes in Semiconductor Test was driven primarily by higher tester sales for computing, ADAS, and memory applications, partially offset by lower tester sales for legacy automotive application.
The increase in income before income taxes and equity in net earnings of affiliate in Semiconductor Test was driven primarily by higher sales in compute related to artificial intelligence applications and in Integrated System Test primarily related to system level testers, partially offset by higher spending in selling and administrative and engineering and development.
The breakout of product and service revenues was as follows: 2024 2023 2023-2024 Dollar Change (in millions) Product revenues $ 2,294.9 $ 2,096.3 $ 198.6 Service revenues 524.9 580.0 (55.1 ) $ 2,819.9 $ 2,676.3 $ 143.5 Our product revenues increased $198.6 million, or 9.5%, primarily driven by higher tester sales for computing, ADAS, and memory applications, partially offset by lower tester sales for legacy automotive application.
The breakout of product and service revenues was as follows: 2025 2024 Dollar Change (in millions) Product revenues $ 2,660.2 $ 2,294.9 $ 365.3 Service revenues 529.8 524.9 4.9 $ 3,190.0 $ 2,819.9 $ 370.2 Our product revenues increased $365.3 million, or 15.9%, driven primarily by higher sales in compute related to artificial intelligence applications and in Integrated System Test primarily related to system level testers. 28 Table of Contents In 2025 and 2024, our five largest direct customers in aggregate accounted for 44% and 36% of our consolidated revenues, respectively.
At our annual meeting of stockholders held May 7, 2021, our stockholders approved an amendment to our 1996 Employee Stock Purchase Plan to increase the number of shares issuable thereunder by 3.0 million, for an aggregate of 33.4 million shares issuable thereunder.
The plans were initially approved by our stockholders on March 19, 1996 and May 12, 2006, respectively, and most recently approved as amended on May 7, 2021, and May 12, 2025, respectively. Under the ESPP and the Equity Plan, as amended, our stockholders have approved an aggregate of 33.4 million and 32.0 million shares, respectively, issuable thereunder.
The costs we incurred in complying with applicable trade regulations for the year ended December 31, 2024 were not material, and we do not currently expect the cost of complying with existing trade laws and regulations to have a material adverse effect on our capital expenditures or earnings or on our competitive position in any one year.
We believe that our operations are in material compliance with applicable trade regulations. The costs we incurred in complying with applicable trade regulations for the year ended December 31, 2025 were not material, however, compliance with these laws has limited our ability to compete in certain regions.
Removed
We expect mobile, automotive, and industrial will grow in 2025 and that recent advancements in AI inference may help mid-term recovery in these markets. Beyond AI compute, we are investing in other areas of the semiconductor test market that offer the opportunity for accelerating long-term growth, including power semi-conductors and the shift towards vertically integrated products ("VIPs").
Added
In the first quarter of 2025, we identified opportunities for operational synergies amongst our production board test, defense and aerospace, and wireless test businesses leading to the creation of the Product Test division as a new segment effective March 2025.
Removed
We have seen the benefits start to materialize in 2024 and expect them to continue through the mid-term. 2024 was a very weak industrial automation market resulting in a year-over-year decline in Robotics revenues while outperforming our peer group.
Added
Memory test revenue remained stable despite a smaller overall market, supported by share gains in high bandwidth memory (“HBM”) and DRAM final test applications. The Semiconductor Test segment’s strategic shift toward AI-driven semiconductor testing resulted in AI related customer demand driving the majority of our revenue in the second half of 2025.
Removed
In 2024, we built key OEM, systems integrators and large account strategic partnerships which will strengthen our go to market for years to come. Introduction of new products, including the MiR 1200 Pallet Jack will further expand our available markets to support our growth .
Added
Looking ahead to 2026, we expect AI related customer demand to continue to represent the bulk of our revenues in the first quarter. Our results reflect our focused investments in AI applications and VIP customers, with benefits from these initiatives materializing throughout 2025 and expected to continue in 2026.
Removed
On May 27, 2024, we paid 483.1 million Euros, equivalent to $524.1 million, to purchase a combination of previously issued and outstanding shares and shares newly issued by Technoprobe, S.p.A. ("Technoprobe"). The shares purchased represent 10% of the issued and outstanding shares of Technoprobe. We also received a board seat as part of the purchase.
Added
In the Product Test Group, we also achieved revenue growth in 2025, bolstered primarily by strength in defense and aerospace applications. In our Robotics segment, the fourth quarter of 2025 represented the third consecutive quarter of sequential revenue growth.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+1 added−0 removed3 unchanged
Biggest changeOn November 7, 2023, in connection with our agreement to acquire 10% investment in Technoprobe S.p.A, we purchased a call option to buy 481.0 million Euros, which expired in April 2024. On April 12, 2024, we entered into a forward to buy 481.0 million Euros, which expired on May 23, 2024.
Biggest changeWe do not engage in currency speculation. On January 13, 2025, we entered into a forward to buy 23.7 million Euros which expired on February 3, 2025. On November 7, 2023, in connection with our agreement to acquire 10% investment in Technoprobe S.p.A, we purchased a call option to buy 481.0 million Euros, which expired in April 2024.
Market risk for the short and long-term marketable securities was estimated as the potential change in the fair value resulting from a hypothetical change in interest rates for securities contained in the investment portfolio. The potential change in the fair value from changes in interest rates is immaterial as of December 31, 2024 and 2023. 35 Table of Contents
Market risk for the short and long-term marketable securities was estimated as the potential change in the fair value resulting from a hypothetical change in interest rates for securities contained in the investment portfolio. The potential change in the fair value from changes in interest rates is immaterial as of December 31, 2025, and 2024. 36 Table of Contents
These contracts are used to minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities. We also enter into foreign currency forward contracts to hedge the impact of exchange rates on our revenues in Japanese Yen. These contracts have maturities of less than one year. We do not engage in currency speculation.
These contracts are used to minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities. 35 Table of Contents We also enter into foreign currency forward contracts to hedge the impact of exchange rates on our revenues in Japanese Yen. These contracts have maturities of less than one year.
Interest Rate Risk Management We are exposed to potential losses due to changes in interest rates. Our interest rate exposure is primarily related to short-term and long-term marketable securities. In order to estimate the potential loss due to interest rate risk, a fluctuation in interest rates of 25 basis points was assumed.
Our interest rate exposure is primarily related to short-term and long-term marketable securities. In order to estimate the potential loss due to interest rate risk, a fluctuation in interest rates of 25 basis points was assumed.
We perform ongoing credit evaluations of our customers’ financial condition and from time to time may require customers to provide a letter of credit from a bank to secure accounts receivable. As of December 31, 2024, two customers of our Semiconductor Test segment, Taiwan Semiconductor Manufacturing Co. and SK Hynix Inc, each accounted for 10% of our accounts receivable balance.
We perform ongoing credit evaluations of our customers’ financial condition and from time to time may require customers to provide a letter of credit from a bank to secure accounts receivable. As of December 31, 2025, two customers primarily of our Semiconductor Test segment accounted for approximately 22% and 20%, respectively, of our accounts receivable balance.
We performed a sensitivity analysis assuming a hypothetical 10% fluctuation in foreign exchange rates to the hedging contracts and the underlying exposures described above. As of December 31, 2024 and 2023, the analysis indicated that these hypothetical market movements would not have a material effect on our consolidated financial position, results of operations or cash flows.
As of December 31, 2025, and 2024, the analysis indicated that these hypothetical market movements would not have a material effect on our consolidated financial position, results of operations or cash flows. Interest Rate Risk Management We are exposed to potential losses due to changes in interest rates.
As of December 31, 2023, a customer of our Semiconductor Test segment, Texas Instruments Inc., accounted for 18% of our accounts receivable balance.
As of December 31, 2024, two customers of our Semiconductor Test segment each accounted for 10% of our accounts receivable balance.
Added
On April 12, 2024, we entered into a forward to buy 481.0 million Euros, which expired on May 23, 2024. We performed a sensitivity analysis assuming a hypothetical 10% fluctuation in foreign exchange rates to the hedging contracts and the underlying exposures described above.

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