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Teradyne Q1 Earnings Beat Estimates, Revenues Increase Y/Y, Share Down
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Key Takeaways
TER posted Q1 EPS of $2.56, up 241% Y/Y, with revenue jumping 86.9% to a record $1.282B.
Teradyne saw about 70% of revenue tied to AI demand, led by Semiconductor Test at 86.7% of sales.
TER expects Q2 revenues of $1.15B-$1.25B, citing continued AI and compute demand strength.
Teradyne (TER - Free Report) delivered first-quarter 2026 non-GAAP earnings of $2.56 per share, up 241.3% year over year and beating the Zacks Consensus Estimate by 21.43%.
Revenue climbed 86.9% from the year-ago quarter to $1.282 billion, beating the Zacks Consensus Estimate by 5.15%.
Results were powered by AI-related demand strength across compute segments, with management estimating about 70% of quarterly revenue tied to AI. The company also set a new companywide quarterly revenue record and said all three business groups posted strong year-over-year growth.
Teradyne stock plunged 7.66% in pre-market trading.
TER Delivers Record Revenue Led by Semiconductor Test
Semiconductor Test remained the clear volume driver, notably generating $1.111 billion (86.7% of total revenues) of quarterly revenue. Robotics contributed $91 million (7.1%), while Product Test added $80 million (6.2%), underscoring that demand strength was not confined to a single end market.
The mix highlights how Teradyne’s “wafer-to-AI data center” strategy is translating into broad-based shipment momentum. In particular, the Semiconductor Test scale advantage left the company well positioned to capture elevated test intensity tied to advanced compute and memory deployments.
Teradyne Sees Sequential Margin Expansion
In the first quarter, Teradyne reported a non-GAAP gross margin of 60.9%, which expanded 40 basis points (bps) year over year.
In the reported quarter, selling and administrative expenses increased 6% year over year to $166.7 million. As a percentage of revenues, selling and marketing expenses were 13%, down 990 bps year over year.
Engineering and development expenses increased 14.7% year over year to $135.6 million. As a percentage of revenues, engineering and development expenses were 10.6%, down 670 bps year over year.
Non-GAAP operating income increased 241.2% year over year to $480.4 million. As a percentage of revenues, the operating margin rose to 37.5% in the first quarter of 2026 from 20.5% in the year-ago quarter.
TER’s Balance Sheet & Cash Flow
As of March 29, 2026, Teradyne’s cash and cash equivalents (including marketable securities) were $245.5 million, down from $321.9 million as of Dec. 31, 2025.
In the reported quarter, net cash provided by operating activities was $265million.
TER’s 2Q26 Outlook
For the second quarter of 2026, Teradyne expects revenues in the range of $1.150-$1.250 billion. Non-GAAP earnings is projected to be in the range of $1.86-$2.15.
Shares of Analog Devices have gained 41.3% in the year-to-date period. Analog Devices is set to report the second quarter of fiscal 2026 results on May 20.
Shares of Advanced Energy have surged 76.3% in the year-to-date period. Advanced Energy is slated to report first-quarter 2026 results on May 4.
Arista Networks shares have gained 26.1% in the year-to-date period. Arista Networks is set to report first-quarter 2026 results on May 5.
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Teradyne Q1 Earnings Beat Estimates, Revenues Increase Y/Y, Share Down
Key Takeaways
Teradyne (TER - Free Report) delivered first-quarter 2026 non-GAAP earnings of $2.56 per share, up 241.3% year over year and beating the Zacks Consensus Estimate by 21.43%.
Revenue climbed 86.9% from the year-ago quarter to $1.282 billion, beating the Zacks Consensus Estimate by 5.15%.
Results were powered by AI-related demand strength across compute segments, with management estimating about 70% of quarterly revenue tied to AI. The company also set a new companywide quarterly revenue record and said all three business groups posted strong year-over-year growth.
Teradyne stock plunged 7.66% in pre-market trading.
Teradyne, Inc. Price, Consensus and EPS Surprise
Teradyne, Inc. price-consensus-eps-surprise-chart | Teradyne, Inc. Quote
TER Delivers Record Revenue Led by Semiconductor Test
Semiconductor Test remained the clear volume driver, notably generating $1.111 billion (86.7% of total revenues) of quarterly revenue. Robotics contributed $91 million (7.1%), while Product Test added $80 million (6.2%), underscoring that demand strength was not confined to a single end market.
The mix highlights how Teradyne’s “wafer-to-AI data center” strategy is translating into broad-based shipment momentum. In particular, the Semiconductor Test scale advantage left the company well positioned to capture elevated test intensity tied to advanced compute and memory deployments.
Teradyne Sees Sequential Margin Expansion
In the first quarter, Teradyne reported a non-GAAP gross margin of 60.9%, which expanded 40 basis points (bps) year over year.
In the reported quarter, selling and administrative expenses increased 6% year over year to $166.7 million. As a percentage of revenues, selling and marketing expenses were 13%, down 990 bps year over year.
Engineering and development expenses increased 14.7% year over year to $135.6 million. As a percentage of revenues, engineering and development expenses were 10.6%, down 670 bps year over year.
Non-GAAP operating income increased 241.2% year over year to $480.4 million. As a percentage of revenues, the operating margin rose to 37.5% in the first quarter of 2026 from 20.5% in the year-ago quarter.
TER’s Balance Sheet & Cash Flow
As of March 29, 2026, Teradyne’s cash and cash equivalents (including marketable securities) were $245.5 million, down from $321.9 million as of Dec. 31, 2025.
In the reported quarter, net cash provided by operating activities was $265million.
TER’s 2Q26 Outlook
For the second quarter of 2026, Teradyne expects revenues in the range of $1.150-$1.250 billion. Non-GAAP earnings is projected to be in the range of $1.86-$2.15.
TER’s Zacks Rank & Other Stocks to Consider
Teradyne currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader Zacks Computer and Technology sector include Analog Devices (ADI - Free Report) , Advanced Energy (AEIS - Free Report) and Arista Networks (ANET - Free Report) . Each stock currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Analog Devices have gained 41.3% in the year-to-date period. Analog Devices is set to report the second quarter of fiscal 2026 results on May 20.
Shares of Advanced Energy have surged 76.3% in the year-to-date period. Advanced Energy is slated to report first-quarter 2026 results on May 4.
Arista Networks shares have gained 26.1% in the year-to-date period. Arista Networks is set to report first-quarter 2026 results on May 5.