Key Takeaways:
- Teradyne posted record Q2 revenue of $1.33B, beating consensus by $110M.
- Non-GAAP EPS of $2.47 surged more than 300% year over year.
- Q3 guidance of $1.2B-$1.3B revenue crushed analyst estimates of $1.03B.
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Teradyne posts record $1.33B revenue as AI demand drives 104% surge
Teradyne reported record second-quarter revenue of $1.33 billion, with non-GAAP earnings per share of $2.47 surging more than 300% from a year earlier.
"For the second quarter in a row, we delivered record revenue, and once again, AI was the driver," Chief Executive Officer Greg Smith said.
Revenue rose 104% from $651.8 million a year earlier and beat the average analyst estimate of $1.22 billion by about $110 million. Adjusted earnings per share of $2.47 exceeded the consensus forecast of $2.04 by 21%. Semiconductor Test revenue exceeded $1 billion for the second straight quarter, rising 128% year over year, driven by compute and memory demand.
Shares rose as much as 16% in early trading before settling up 4.7% as the broader market declined. The stock has gained 73% year to date, far outpacing the S&P 500's 8.3% advance. Teradyne forecast third-quarter revenue of $1.2 billion to $1.3 billion and adjusted EPS of $1.85 to $2.15, both well above analyst projections.
AI-related sales accounted for more than 60% of total revenue during the quarter, Smith said. Within Semiconductor Test, system-on-chip revenue reached $843 million, with compute representing 70% of that total and compute revenue rising nearly 600% from the prior-year quarter. Memory revenue hit a record $212 million, marking the third consecutive quarter above $200 million, supported by HBM and DRAM test solutions. Integrated Systems Test revenue rose 94% year over year to $67 million.
Product Test Group revenue increased 26% year over year to $107 million, driven by broad-based growth in production board test, optical test, and defense and aerospace. Robotics revenue totaled $100 million, up 33% from a year earlier, with electronics manufacturing and semiconductors becoming the group's largest end market.
Gross margin came in at 59.8%, up 250 basis points from a year earlier but down 110 basis points sequentially. The company generated $378 million in free cash flow during the quarter and ended with $517 million in cash and investments, up more than 30% sequentially.
Chief Financial Officer Michelle Turner said the company expects second-half growth in memory, automotive and industrial, integrated systems test, Product Test and robotics, partly offset by mobile softness and compute order timing.
The guidance raise signals management expects AI-driven demand to sustain its momentum across semiconductor test, product test and robotics. Investors will watch the third-quarter earnings call for updates on memory market expansion and the ramp of co-packaged optics testing, which Teradyne estimates could become a $300 million to $700 million market by 2028.
This article is for informational purposes only and does not constitute investment advice.
