Teradyne, Inc. (TER) — Fundamental Analysis
Based on 10-K filings through fiscal year 2025 and the most recent 10-Q for the quarter ended March 29, 2026.
Snapshot & Big Picture
Teradyne is a global leader in automated test equipment (ATE), serving semiconductor, electronics, and industrial automation markets. Its products are embedded in the supply chains of virtually every major chipmaker and consumer electronics manufacturer, making Teradyne's revenue closely tied to semiconductor capital spending cycles. The company also operates a growing robotics segment through its Universal Robots and MiR subsidiaries. Over the three fiscal years captured here, Teradyne has grown revenue from roughly $2.68 billion to $3.19 billion — a steady upward trend even as the semiconductor industry navigated inventory corrections and demand volatility.
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Revenue | $2.68B | $2.82B | $3.19B |
| EBITDA | $612.0M | $713.5M | $778.0M |
| Gross Margin | 57.4% | 58.5% | 58.2% |
| Operating Margin | 18.7% | 21.1% | 20.4% |
| Net Margin | 16.8% | 19.2% | 17.4% |
Latest Quarter Snapshot (Q1 2026 — Most Current Data)
The quarter ended March 29, 2026 — reported in the 10-Q filed May 1, 2026 — shows a notably strong period for Teradyne, and represents more current performance than the full-year 2025 figures above. Revenue came in at $1.28 billion for a single quarter, and profitability metrics surged meaningfully above recent annual averages, suggesting significant operating leverage or a favorable product/customer mix in the period.
| Metric | Q1 2026 (Quarter Ended Mar 29, 2026) |
|---|---|
| Revenue | $1.28B |
| EBITDA | $505.7M |
| Gross Margin | 60.9% |
| Operating Margin | 36.9% |
| Net Margin | 31.1% |
| Current Ratio | 2.15x |
| Debt-to-Equity | 0.41x |
The Q1 2026 operating margin of 36.9% and net margin of 31.1% are substantially higher than anything seen in the three prior full fiscal years, which averaged operating margins in the 18–21% range. This warrants attention: either Teradyne experienced an exceptionally strong demand quarter (possibly driven by AI-related semiconductor test demand), or there are one-time items reflected in these figures. Investors should review the full 10-Q for any non-recurring components.
Profitability — Multi-Year Trend
Looking at the annual data, Teradyne's profitability followed a clear arc: gross margins have been stable and improving, moving from 57.4% in FY 2023 to 58.5% in FY 2024 before easing slightly to 58.2% in FY 2025. Operating and net margins dipped in FY 2025 relative to FY 2024's peak, though both remain healthy for an industrial technology company. EBITDA has grown consistently each year, rising 27% from FY 2023 to FY 2025, indicating real underlying earnings growth even as margins fluctuate modestly.
| Year | Gross Margin | Operating Margin | Net Margin | EBITDA |
|---|---|---|---|---|
| FY 2023 | 57.4% | 18.7% | 16.8% | $612.0M |
| FY 2024 | 58.5% | 21.1% | 19.2% | $713.5M |
| FY 2025 | 58.2% | 20.4% | 17.4% | $778.0M |
Financial Health
Teradyne's balance sheet shows some noteworthy changes over the three-year window. The current ratio declined from a very comfortable 3.28x at the end of FY 2023 to 1.75x at the end of FY 2025 — still above 1.0x and therefore solvent in the short term, but the downward trend is worth monitoring. The Q1 2026 current ratio recovered to 2.15x, suggesting the year-end 2025 figure may have reflected timing around cash deployment or share repurchases rather than a structural deterioration.
Debt-to-equity rose from 0.38x in FY 2023 to 0.50x in FY 2025, then moderated slightly to 0.41x in Q1 2026. Teradyne carries manageable leverage — it is not a heavily indebted company — but investors should note the gradual increase in leverage over the annual period.
| Period | Current Ratio | Debt-to-Equity |
|---|---|---|
| FY 2023 | 3.28x | 0.38x |
| FY 2024 | 2.91x | 0.32x |
| FY 2025 | 1.75x | 0.50x |
| Q1 2026 | 2.15x | 0.41x |
Growth
Revenue growth has been consistent if not explosive on an annual basis: +5.4% from FY 2023 to FY 2024, and +13.1% from FY 2024 to FY 2025. The FY 2025 acceleration is encouraging and aligns with broad industry commentary about renewed investment in advanced semiconductor test tied to AI chip proliferation. On a trailing basis, the single Q1 2026 quarter alone generated $1.28 billion in revenue — equal to roughly 40% of full-year FY 2025 revenue — which, if sustained, would imply a significant step-up in annual run rate.
| Period | Revenue | YoY Growth |
|---|---|---|
| FY 2023 | $2.68B | — |
| FY 2024 | $2.82B | +5.4% |
| FY 2025 | $3.19B | +13.1% |
| Q1 2026 (single quarter) | $1.28B | N/A (quarterly) |
Plain English Summary
Teradyne is a well-run, high-margin technology company that makes the machines used to test semiconductors and other electronics — a business that quietly sits at the heart of how every chip gets verified before it ships. Over the past three fiscal years, the company has grown revenue steadily, kept gross margins above 57%, and turned a meaningful portion of sales into cash earnings. Its balance sheet is conservatively leveraged, and while the current ratio dipped at year-end 2025, it bounced back in the most recent quarter. The standout data point here is Q1 2026: in just one quarter, Teradyne posted margins — operating margin of 37%, net margin of 31% — that were nearly double its recent annual norms. That kind of result typically reflects either unusually strong demand (AI-related semiconductor test spending is a plausible driver) or some non-recurring benefit, and it deserves a close read of the actual 10-Q filing. Overall, the fundamental picture is of a company in good health, with a durable competitive position, improving revenue trajectory, and a potentially very strong start to 2026.
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