Teradyne (TER) Q4 2024 earnings summary

Executive summary

• Q4 2024 revenue reached $753 million, up 12% year-over-year, at the high end of guidance, driven by strong AI-related demand in semiconductor test and customer-specific equipment purchases in industrial and automotive.

• Full year 2024 revenue was $2.82 billion, with non-GAAP EPS up 10% year-over-year to $3.22 and over $470 million in free cash flow generated.

• The business shifted from high mobile concentration to a more balanced mix, with compute now a larger revenue component than mobile.

• Strategic partnerships, restructuring in robotics, and power semiconductor initiatives position the company for long-term growth.

Financial highlights

• Q4 sales were $753 million, non-GAAP EPS $0.95, both at the high end of guidance; gross margin was 59.4%.

• Full year 2024 revenue was $2.82 billion, non-GAAP EPS $3.22, gross margin 58.6%, and $474 million in free cash flow.

• Semi test revenue (including IST) was $2.124 billion; SOC $1.537 billion, memory $502 million, IST $85 million.

• Robotics revenue was $365 million for the year, with a 13% non-GAAP operating loss.

• Returned $275 million to shareholders via buybacks and dividends, ending the year with $724 million in cash and securities.

Outlook and guidance

• Q1 2025 sales expected between $660 million-$700 million, non-GAAP EPS $0.58-$0.68, gross margin 58.5%-59.5%.

• Full year 2025 gross margin expected at 59%-60%, OpEx to increase 8%-10% year-over-year.

• Robotics revenue expected to grow ~10% in 2025, with restructuring to improve efficiency and lower break-even revenue.

• Semi test TAM for 2025 forecasted at $4.9 billion, memory TAM roughly flat year-over-year.

• Midterm model targets $5 billion revenue and $8.25 EPS by 2028, implying 12%-18% revenue CAGR and 21%-31% EPS CAGR.