TERADYNE, INC

Previous wording

We are a leading global provider of automated test equipment and robotics products. 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. 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. Our automated test equipment and robotics products and services include:

Current wording

We are a leading global provider of automated test equipment and robotics products. 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, automotive, industrial, computing, communications, and defense and aerospace industries. 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. Our automated test equipment and robotics products and services include:

Previous wording

semiconductor test (“Semiconductor Test”) systems;

Current wording

semiconductor test (“Semiconductor Test”) systems and instruments;

Previous wording

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.

Current wording

product test ("Product Test") systems and instruments; and

Previous wording

On April 8, 2026, we and MultiLane formed a joint venture, MultiLane Test Products (“MLTP”), to which MultiLane contributed the assets of its test and measurement business. MLTP is expected 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. In connection with the formation of MLTP, we obtained a controlling 75% ownership interest in MLTP for a total purchase price of approximately $157.8 million, subject to customary post-closing adjustments. MLTP will be included in our Product Test Segment.

Current wording

On April 8, 2026, we and HTP Holding SAL (“MultiLane”) formed a joint venture, MultiLane Test Products Holding LLP (“MLTP”), to which MultiLane contributed the assets of its test and measurement business. We obtained a controlling 75% ownership interest in MLTP, which is expected 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. The purchase price of MLTP was approximately $157.8 million, subject to customary post-closing adjustments, and the results will be included in our Product Test Segment.

Previous wording

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 while maintaining cash balances to enable us to run the business. During the first three months of 2026 we returned $25.9 million to shareholders through $5.5 million of share buybacks and $20.4 million of dividend payments. In April 2026, we paid a combined $166.7 million towards the formation of MLTP and the acquisition of TestInsight.

Current wording

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. During the first six months of 2026, the aggregate cash consideration paid for acquisitions, net of cash acquired, totaled $165.6 million, primarily due to the acquisition of a controlling interest in MLTP. Additionally, we returned a combined $114.9 million to shareholders through $74.2 million of share buybacks and $40.7 million of dividend payments.

Previous wording

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. 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 three months ended March 29, 2026 were not material, however, compliance with these laws has limited our ability to compete in certain regions. 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 a material adverse effect on our future business or prospects.

Current wording

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. However, our trade compliance program may not identify or prevent all potential violations, and gaps in our program could be discovered, possibly resulting in fines, penalties, or other sanctions as a result. Additionally, U.S. 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. The costs we incurred in complying with applicable trade regulations for the six months ended June 28, 2026 were not material, however, compliance with these laws has limited our ability to compete in certain regions. 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 a material adverse effect on our future business or prospects.

Previous wording

We have paid certain tariffs on imported products under the International Emergency Economic Powers Act (“IEEPA”) since the inception of the IEEPA tariffs in 2025. On April 20, 2026, U.S. Customs and Border Protection (“CBP”) began accepting refund claims related to these tariffs. While we have submitted refund requests, the timing and impact of any potential refunds remain uncertain, however, we do not expect the impact to be material to our financial position or results of operations.

Current wording

We have paid certain tariffs on imported products under the International Emergency Economic Powers Act (“IEEPA”) since the inception of the IEEPA tariffs in 2025. On April 20, 2026, U.S. Customs and Border Protection (“CBP”) began accepting refund claims related to these tariffs. During the quarter ended June 28, 2026, we began receiving refunds, which did not have a material impact to our financial position or results of operations. We continue to monitor the situation, and we do not expect that any further refunds received will have a material impact on our financial position or results of operations.

Previous wording

We have identified the policies which are critical to understanding our business and our results of operations. 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. There have been no significant changes during the three months ended March 29, 2026, to the items disclosed as our critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Current wording

We have identified the policies which are critical to understanding our business and our results of operations. There have been no significant changes during the six months ended June 28, 2026, to the items disclosed as our critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Previous wording

First Quarter 2026 Compared to First Quarter 2025

Current wording

Second Quarter 2026 Compared to Second Quarter 2025

Previous wording

The increase in Semiconductor Test revenues of $568.3 million, or 104.8%, was driven primarily by higher sales in compute related to artificial intelligence applications. The increase in Robotics revenues of $22.3 million, or 32.3%, was primarily due to increased sales of collaborative robotic arms, partially offset by decreased sales of autonomous mobile robots. The increase in Product Test revenues of $6.2 million, or 8.4%, was driven primarily by higher Defense/Aerospace sales.

Current wording

The increase in Semiconductor Test revenues of $629.9 million, or 128.1%, was driven primarily by higher sales in compute and memory related to artificial intelligence applications. The increase in Product Test revenues of $22.1 million, or 26.0%, was driven by increased AI-related demand, combined with growth in Defense and Aerospace. The increase in Robotics revenues of $25.0 million, or 33.4%, was primarily due to higher sales of collaborative robotic arms and autonomous mobile robots.

Previous wording

The increase of $9.4 million in selling and administrative expenses was primarily driven by strategic investments in Semiconductor Test.

Current wording

The increase of $34.7 million in selling and administrative expenses was primarily driven by strategic investments in Semiconductor Test and from higher variable compensation across all segments.

Previous wording

The increase of $17.4 million in engineering and development expenses was primarily driven by strategic investments in Semiconductor Test.

Current wording

The increase of $37.9 million in engineering and development expenses was primarily driven by strategic investments in Semiconductor Test and from higher variable compensation across all segments.

Previous wording

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. The decrease in income before income taxes and equity in net earnings of affiliate in Product Test was driven primarily by strategic investments, partially offset by higher revenue. The decrease in loss before income taxes and equity in net earnings of affiliate in Robotics was primarily due to higher revenue and lower operating expenses primarily as a result of restructuring actions taken in 2025.

Current wording

The increase in income before income taxes and equity in net earnings of affiliate in Semiconductor Test was driven primarily by higher sales volume in compute and memory related to artificial intelligence applications. The increase in income before income taxes and equity in net earnings of affiliate in Robotics was primarily due to higher sales volume and lower operating expenses primarily as a result of restructuring actions.

Previous wording

The effective tax rate for the three months ended March 29, 2026, and March 30, 2025, was 13.3% and 12.2%, respectively. The increase in the effective tax rate from the three months ended March 30, 2025, to the three months ended March 29, 2026, is primarily attributable to lower benefits from tax credits, lower benefits related to U.S. taxation of international income, and higher expense related to Pillar Two. These impacts were partially offset by increased benefits from equity compensation and a projected shift in the geographic distribution of income.

Current wording

The effective tax rate for the three months ended June 28, 2026, and June 29, 2025, was 15.1% and 12.7%, respectively. The increase in the effective tax rate from the three months ended June 29, 2025, to the three months ended June 28, 2026, is primarily attributable to lower benefits from tax credits partially offset by increased benefits from equity compensation and a projected shift in the geographic distribution of income.

Previous wording

Gross profit as a percent of revenue increased by 0.3 points, primarily due to volume increase in Semiconductor Test.

Current wording

Gross profit as a percent of revenue increased by 1.4 points, primarily due to higher sales volume in Semiconductor Test.

Previous wording

restructuring which impacted approximately 150 employees. Additionally, we recorded $2.0 million of acquisition and divestiture related costs and $1.1 million related to lease terminations.

Current wording

During the six months ended June 29, 2025, we recorded $13.7 million of severance charges, $10.0 million of which is related to the Robotics restructuring which impacted approximately 150 employees, and $2.1 million of which related to Product Test. During the six months ended June 29, 2025, we made $8.1 million of Robotics severance payments. We expect all Robotics severance payments to be made prior to the end of our third quarter. Additionally, we recorded $1.6 million of acquisition and divestiture expenses related primarily to the Quantifi acquisition, and $1.2 million of charges related to lease terminations.

Previous wording

Our Third Amended and Restated Revolving Credit Agreement, amended as of November 7, 2023 (the “Credit Agreement”) provides a six-year, senior secured revolving credit facility of $750.0 million (the “Credit Facility”). As of March 29, 2026, Teradyne did not have an outstanding balance under the Credit Agreement. The Credit Agreement is set to expire on December 10, 2026. See

Current wording

Our Third Amended and Restated Revolving Credit Agreement, amended as of November 7, 2023 (the “Credit Agreement”) provides a six-year, senior secured revolving credit facility of $750.0 million (the “Credit Facility”). As of June 28, 2026, we did not have an outstanding balance under the Credit Agreement. The Credit Agreement is set to expire on December 10, 2026. See Note I: “Debt” for more information regarding our Credit Agreement. As of June 28, 2026, we were in compliance with all covenants under the Credit Agreement. We intend to extend the Credit Facility later in 2026.

Previous wording

Operating activities during the three months ended March 29, 2026, provided cash of $265.1 million. Changes in operating assets and liabilities, net of businesses acquired used cash of $195.5 million due to a $297.1 million increase in operating assets and a $101.7 million increase in operating liabilities. The increase in operating assets was primarily due to increases in accounts receivable of $322.0 million. The increase in operating liabilities was primarily due to increases in income taxes and in deferred revenue and customer advances of $66.3 million and $52.0 million, respectively.

Current wording

Operating activities during the six months ended June 28, 2026, provided cash of $734.3 million. Changes in operating assets and liabilities, net of businesses acquired used cash of $142.1 million due to a $369.6 million increase in operating assets and a $227.6 million increase in operating liabilities. The increase in operating assets was primarily due to increases in accounts receivable of $302.2 million. The increase in operating liabilities was primarily due to increases in accounts payable and other liabilities and in deferred revenue and customer advances of $121.8 million and $50.9 million, respectively.

Previous wording

Operating activities during the three months ended March 30, 2025, provided cash of $161.6 million. Changes in operating assets and liabilities used cash of $7.7 million due to a $12.0 million increase in operating liabilities, partially offset by a $4.3 million increase in operating assets. The change in operating assets was primarily due to a $31.0 million increase in inventories, partially offset by a $13.1 million and $13.7 million decrease in accounts receivable and other assets, respectively. The change in operating liabilities was due to growth in accounts payable of $48.0 million, a $13.0 million uptick in income taxes, and a $10.2 million increase in deferred revenue and customer advance payments, partially offset by a $58.0 million decrease in accrued other and a $1.3 million decline in retirement plan contributions.

Current wording

Operating activities during the six months ended June 29, 2025, provided cash of $343.7 million. Changes in operating assets and liabilities provided cash of $61.7 million due to a $56.7 million decrease in operating assets and a $5.0 million increase in operating liabilities. The decrease in operating assets was primarily due to decreases in accounts receivable and prepayments and other assets of $49.5 million and $30.9 million, respectively, partially offset by a $23.7 million increase in inventories. The increase in operating liabilities was due to increases in accounts payable and other liabilities and in deferred revenue and customer advances of $17.1 million and $13.1 million, respectively, partially offset by decreases in income taxes and retirement plans of $19.6 million and $5.6 million, respectively.

Previous wording

Investing activities during the three months ended March 30, 2025, included $64.0 million used for the purchase of property, plant and equipment, $17.0 million used for the acquisition of business, net of cash acquired, $10.8 million used for the purchase of marketable securities, and $3.0 million used for investments in businesses, partially offset by $27.4 million in proceeds from the maturities of marketable securities and $5.6 million in proceeds from the sale of marketable securities.

Current wording

Investing activities during the six months ended June 28, 2026, included $165.6 million used for the acquisition of businesses, $155.4 million used for the purchases of property, plant, and equipment, $48.2 million used for the purchases of marketable securities, and $10.0 million used for the purchase of investment in a business, partially offset by $29.6 million in proceeds from sales of marketable securities and $11.0 million in proceeds from maturities of marketable securities.

Previous wording

Investing activities during the three months ended March 29, 2026, included $64.7 million used for the purchases of property, plant & equipment and $40.8 million used for the purchases of marketable securities, partially offset by $27.3 million provided by proceeds from sales of marketable securities and $10.9 million provided by proceeds from maturities of marketable securities.

Current wording

Investing activities during the six months ended June 29, 2025, used cash of $240.2 million due to $144.4 million used for the acquisition of businesses, $114.4 million used for the purchase of property, plant & equipment and $17.2 million used for the purchase of marketable securities, partially offset by $32.6 million and $8.5 million in proceeds from the maturities and sales of marketable securities, respectively.

Previous wording

Financing activities during the three months ended March 29, 2026, included $200.0 million in net repayments of borrowings on revolving credit facility, $39.4 million used for payments related to net settlement of employee stock compensation awards, $20.4 million used for dividend payments, and $5.5 million used for the repurchase common stock, partially offset by $15.1 million provided by issuance of common stock under stock purchase and stock options plans.

Current wording

Financing activities during the six months ended June 28, 2026, included $200.0 million in net repayments of borrowings on the revolving credit facility, $74.2 million used for the repurchase of common stock, $41.1 million used for payment related to net settlements of employee stock compensation awards, and $40.7 million utilized for dividend payments, partially offset by $15.1 million from the issuance of common stock under employee stock purchase and stock option plans.

Previous wording

Financing activities during the three months ended March 30, 2025, included $157.5 million used for the repurchase of 1.5 million shares of common stock at an average price of $107.21 per share, $19.4 million used for dividend payments and $14.7 million used for payments related to net settlements of employee stock compensation awards, partially offset by $14.8 million in proceeds from the issuance of common stock under employee stock purchase and stock option plans.

Current wording

Financing activities during the six months ended June 29, 2025, consumed cash of $313.6 million due to $274.9 million used for the repurchase of approximately 3.0 million shares of common stock at an average price of $93.67 per share, $38.6 million utilized for dividend payments and $15.0 million used for payment related to net settlements of employee stock compensation awards, partially offset by $14.8 million from the issuance of common stock under employee stock purchase and stock option plans.

Previous wording

In January 2026 and January 2025, our Board of Directors declared a quarterly cash dividend of $0.13 and $0.12 per share, respectively. Dividend payments for the three months ended March 29, 2026, and March 30, 2025, were $20.4 million and $19.4 million, respectively.

Current wording

In January 2026 and May 2026, our Board of Directors declared a quarterly cash dividend of $0.13 per share. Dividend payments for the three and six months ended June 28, 2026, were $20.3 million and $40.7 million, respectively.

Previous wording

In January 2023, our Board of Directors approved a repurchase program for up to $2.0 billion of common stock. During the three months ended March 29, 2026, we repurchased less than 0.1 million shares of common stock for $5.5 million, which excludes related excise tax, at an average price of $229.00 per share. The cumulative repurchases under the 2023 repurchase program as of March 29, 2026, were 12.0 million shares of common stock for $1,302.8 million, which excludes related excise tax, at an average price per share of $109.62. During the three months ended March 30, 2025, we repurchased 1.5 million shares of common stock for $157.5 million, which excludes related excise tax, at an average price of $107.21 per share.

Current wording

In January 2023, our Board of Directors approved a repurchase program for up to $2.0 billion of common stock. During the six months ended June 28, 2026, we repurchased 0.2 million shares of common stock for $74.2 million, which excludes related excise tax, at an average price of $341.89 per share. The cumulative repurchases under the 2023 repurchase program as of June 28, 2026, were 12.2 million shares of common stock for $1,371.5 million, which excludes related excise tax, at an average price per share of $113.52. During the six months ended June 29, 2025, we repurchased approximately 3.0 million shares of common stock for $274.9 million, which excludes related excise tax, at an average price of $93.67 per share.