TERADYNE, INC Q1 FY2025 earnings call

• Long-term themes of AI, verticalization, and electrification remain primary industry drivers.
• Near-term, tariffs have caused orders to push out, with minimal direct impact on Teradyne's model but concern over end market demand impact.
• Semi Test saw strength from SoC for mobile, Compute revenue grew with Ultra Flex testers for AI accelerators.
• Memory Business Unit won HBM4 performance test win with a major DRAM manufacturer. IST achieved initial customer acceptance for Titan-HP for AI accelerators.
• Robotics underwent structural reorganization, received largest order in history from a global automotive manufacturer, and has resilient response to macro backdrop.
• Partnership with ADI to deploy UR cobots and MiR AMRs for collaborative automation.

Semi Test: Q1 revenue was $543 million. SoC contributed $406 million, Memory $109 million, and IST $27 million. Product Test: Q1 revenue was $74 million, down 4% year-over-year. Wireless test revenue was $29 million, up 20% year-over-year, while production board test was weak due to automotive and defense/aerospace. Robotics: Q1 revenue was $69 million, declining sequentially and year-over-year. UR contributed $49 million and MiR $20 million. Operating loss in robotics was $22 million.

• Q2 sales expected to be between $610 million and $680 million. Second quarter gross margins estimated at 56.5% to 57.5%. OpEx expected to run at 40.5% to 44.5% of Q2 sales. Non-GAAP operating profit rate at midpoint of guidance is 14.5%, non-GAAP EPS range $0.41 to $0.64.
• No full-year guidance provided due to lack of visibility on end market demand and trade policy impact.
• Increased share buyback target from $400 million in 2025 to up to $1 billion through end of 2026.

• Tariffs impacting end market demand for customers in mobile, automotive, and industrial segments.
• Uncertainty in end market demand visibility beyond the second quarter.
• Potential impact of significant changes to AI diffusion rule or semiconductor trade restrictions on Compute market.

Q: When will the robotics largest order help the business?

A: Shipments spread from Q1 to Q2, lead times for robotics products are short.

Q: NAND memory test orders?

A: Driven by mobile phone unit volume, AI-enabled smartphones' local storage needs, and new interface standards.

Q: Compute business outlook?

A: No significant pushouts in Q1/Q2, but uncertainty in second half; view from Analyst Day remains largely the same.

Q: Robotics segment growth expectations?

A: Still expect to significantly outgrow traditional industrial automation peers, but struggling with sluggish end market; restructuring aimed at reducing breakeven revenue.