Teradyne (TER) Q3 2026 earnings summary

Executive summary

• Q3'26 revenue was $1,305.9M, up 70% YoY and above high-end guidance; non-GAAP EPS was $2.29, up 169% YoY.

• AI-related revenue exceeded 60% of sales, driving demand across test markets; all three business groups grew YoY.

• Memory and Integrated Systems Test set revenue records, while Robotics posted its highest Q3 revenue and returned to profitability.

Financial highlights

• Q3 revenue was $1,305.9M versus $769.2M in Q3'25 and $1,329M in Q2'26.

• Q3 non-GAAP operating income was $412.9M, with a 31.6% margin; GAAP operating income was $402.0M.

• GAAP net income was $342.4M, or $2.17 diluted EPS; non-GAAP net income was $359.9M, or $2.29 diluted EPS.

• 9M revenue was $3,917.4M; GAAP net income was $1,115.8M and diluted EPS was $7.08.

• 9M operating cash flow was $1,047.9M, versus $392.8M in the prior-year period.

Outlook and guidance

• Q4 revenue guidance is $1,250M–$1,350M; non-GAAP EPS is $1.95–$2.25 and gross margin is 57.5%–58.5%.

• Q4 midpoint guidance implies $1.3B revenue and $2.10 non-GAAP EPS; it would mark a fourth consecutive quarter above $1.25B in revenue.

• FY'26 midpoint guidance is $5.2B revenue, up over 60% YoY, and $9.41 non-GAAP EPS, up 138% YoY.

• Management expects healthy 2027 growth, with each quarter projected above its corresponding 2026 quarter; Q1 is expected to grow from Q4, subject to quarterly variability.

• Target earnings model: $12B–$14B revenue, 59%–61% gross margin, 30%–34% operating profit and $9.50–$11.00 non-GAAP EPS.