--- ticker: TER company: Teradyne Inc. filing_type: 10-K year_current: 2025 year_prior: 2024 risks_added: 10 risks_removed: 33 risks_modified: 48 risks_unchanged: 64 source: SEC EDGAR url: https://riskdiff.com/ter/2025-vs-2024/ markdown_url: https://riskdiff.com/ter/2025-vs-2024/index.md generated: 2026-06-01 --- # Teradyne Inc.: 10-K Risk Factor Changes 2025 vs 2024 > Source: U.S. Securities and Exchange Commission (EDGAR) > Generated: 2026-06-01 > All data extracted directly from official filings. No hallucinated content. ## Summary | Status | Count | |--------|-------| | New risks added | 10 | | Risks removed | 33 | | Risks modified | 48 | | Unchanged | 64 | --- ## New in Current Filing: We are exposed to risks related to the use of AI tools by us and others. Although we are evaluating, and where we believe appropriate, incorporating AI tools into our products and operations, our use of AI tools may subject us to significant competitive, legal, regulatory and other risks, and there can be no assurance that our use of AI tools will enhance our products, business operations or result in a benefit to us. Our competitors may be more successful in their use of AI tools, including by developing superior products or improving their operations with the assistance of AI. Additionally, there could be adverse impacts from flawed algorithms. Our use of AI tools, or our customers uses of our products that incorporate AI, could also result in the loss of confidential information or intellectual property or an inability to claim or enforce intellectual property rights, as well as subject us to risks related to intellectual property infringement or misappropriation, data privacy, cybersecurity, and the unauthorized use of our data. The jurisdictions in which we conduct business have and may adopt laws and regulations related to AI, which could cause us to incur greater compliance costs, limit our use of AI tools, or subject us to legal liabilities. --- ## New in Current Filing: Government Regulations We are subject to numerous United States and foreign laws and regulations, including, without limitation, tariffs, trade sanctions, trade barriers, trade embargoes, regulations relating to import-export control, technology transfer restrictions, and other laws and regulations. Additionally, United States and foreign governmental authorities have taken, and may continue to take, administrative, legislative or regulatory action that could impact our operations. We believe that our operations are in material compliance with applicable trade regulations. The costs we incurred in complying with applicable trade regulations for the year ended December 31, 2024 were not material, and we do not currently expect the cost of complying with existing trade laws and regulations to have a material adverse effect on our capital expenditures or earnings or on our competitive position in any one year. It is possible, however, that future developments, including changes in laws and regulations or government policies, could lead to material costs, and such costs may have a material adverse effect on our future business or prospects. For information regarding risks associated with import-export control regulations and similar applicable laws and regulations, see Part II - Item 1A "Risk Factors- Risks Related to Legal and Regulatory Compliance" included elsewhere in this Form 10-K. --- ## New in Current Filing: Equity Method Investments We account for investments using the equity method of accounting when it has significant influence over the financial and operating policies, but not control, of the investee. The equity method investments are initially recorded at cost and included in the 'Equity method investment' in the consolidated balance sheet. We record our share of investee's net income or loss and other comprehensive income, and the amortization of equity method basis difference, calculated as the difference between the investment and the amount of underlying equity in net assets acquired, on a 3-month lag, which is applied consistently from period to period. Our share of investee's net income and the amortization of equity method basis difference are reported in 'Equity in net earnings of affiliate' in the consolidated statement of operations. We include our share of investee's other comprehensive income and a cumulative translation adjustment in the consolidated statements of comprehensive income. We monitor on an ongoing basis its equity method investments for indicators of other-than-temporary declines in fair value below carrying value. --- ## New in Current Filing: Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of Teradyne, Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Teradyne, Inc. and its subsidiaries (the "Company") as of December 31, 2024 and 2023, and the related consolidated statements of operations, of comprehensive income, of convertible common shares and shareholders' equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended December 31, 2024 appearing under Item 15(c) (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. --- ## New in Current Filing: Year Ended December 31, 2023 $ - 152,698 $ 19,087 $ 1,827,274 $ (26,978 ) $ 706,514 $ 2,525,897 Net issuance of common stock under stock-based plans 728 91 23,137 23,228 Stock-based compensation expense 60,397 60,397 Warrant exercises 10,036 1,254 (1,270 ) (16 ) Repurchase of common stock (1,740 ) (217 ) (201,666 ) (201,883 ) Cash dividends ($0.48 per share) (76,459 ) (76,459 ) Net income 542,372 542,372 Other comprehensive income (54,242 ) (54,242 ) --- ## New in Current Filing: Year Ended December 31, 2024 $ - 161,722 $ 20,215 $ 1,909,538 $ (81,220 ) $ 970,761 $ 2,819,294 The accompanying notes are an integral part of the consolidated financial statements. 41 41 41 Table of Contents Table of Contents Table of Contents --- ## New in Current Filing: THE COMPANY Teradyne, Inc. ("Teradyne") is a leading global supplier of automated test equipment and robotics solutions. Teradyne designs, develops, manufactures, and sells automated test systems and robotics products. Teradyne's automated test systems are used to test semiconductors, wireless products, data storage and complex electronics systems in many industries including consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries. Teradyne's robotics products consist primarily of collaborative robotic arms and autonomous mobile robots used by global manufacturing, logistics and industrial customers to improve quality, increase manufacturing and material handling efficiency, and decrease manufacturing and logistics costs. Teradyne's automated test equipment and robotics products and services include: •semiconductor test ("Semiconductor Test") systems; semiconductor test ("Semiconductor Test") systems; •robotics ("Robotics") products; and robotics ("Robotics") products; and •defense/aerospace ("Defense/Aerospace") test instrumentation and systems, circuit-board test and inspection ("Production Board Test") systems, and wireless test systems (referred collectively as "All Other"). defense/aerospace ("Defense/Aerospace") test instrumentation and systems, circuit-board test and inspection ("Production Board Test") systems, and wireless test systems (referred collectively as "All Other"). B.ACCOUNTING POLICIES The consolidated financial statements include the accounts of Teradyne and its wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated. Certain prior years' amounts were reclassified to conform to the current year presentation. Preparation of Financial Statements and Use of Estimates The preparation of consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an on-going basis, management evaluates its estimates, including those related to revenue, inventories, investments, goodwill, intangible and other long-lived assets, accounts receivable, income taxes, deferred tax assets and liabilities, pensions, warranties, and loss contingencies. Management bases its estimates on historical experience and on appropriate and customary assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date of issuance of this Annual Report on Form 10-K. These estimates may change, as new events occur and additional information is obtained. Actual results may differ significantly from these estimates under different assumptions or conditions. Revenue Recognition Revenue from Contracts with Customers In accordance with ASC 606, Teradyne recognizes revenues, when or as control is transferred to a customer. Teradyne's determination of revenue is dependent upon a five-step process outlined below. •Teradyne accounts for a contract with a customer when there is written approval, the contract is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection. •Teradyne periodically enters into contracts with customers in which a customer may purchase a combination of goods and services, such as products with extended warranty obligations. Teradyne determines performance obligations by assessing whether the products or services are distinct from the other elements of the contract. In order to be distinct, the product or service must perform either on its own or with readily available resources and must be separate within the context of the contract. •Teradyne determines the transaction price to be the amount of consideration to which Teradyne expects to be entitled to, which is generally at contractually stated prices.•Transaction price is allocated to each individual performance obligation based on the standalone selling price of that performance obligation. Teradyne uses standalone transactions when available to value each performance obligation. If standalone transactions are not available, Teradyne will estimate the standalone selling price through market assessments or --- ## New in Current Filing: Equity Method Investments We account for investments using the equity method of accounting when it has significant influence over the financial and operating policies, but not control, of the investee. The equity method investments are initially recorded at cost and included in the 'Equity method investment' in the consolidated balance sheet. We record our share of investee's net income or loss and other comprehensive income, and the amortization of equity method basis difference, calculated as the difference between the investment and the amount of underlying equity in net assets acquired, on a 3-month lag, which is applied consistently from period to period. Our share of investee's net income and the amortization of equity method basis difference are reported in 'Equity in net earnings of affiliate' in the consolidated statement of operations. We include our share of investee's other comprehensive income and a cumulative translation adjustment in the consolidated statements of comprehensive income. We monitor on an ongoing basis its equity method investments for indicators of other-than-temporary declines in fair value below carrying value. --- ## New in Current Filing: Timing of Revenue Recognition Point in Time $ 1,255,579 $ 472,279 $ 63,288 $ 356,384 $ 2,147,530 $ 266,955 $ - $ 2,414,485 Over Time 281,545 29,509 21,720 $ 8,464 341,238 64,157 - $ 405,395 Total $ 1,537,124 $ 501,788 $ 85,008 $ 364,848 $ 2,488,768 $ 331,112 $ - $ 2,819,880 --- ## New in Current Filing: Geographical Market Asia Pacific $ 1,400,149 $ 466,214 $ 78,719 $ 69,353 $ 2,014,435 $ 113,263 $ - $ 2,127,698 Americas 92,386 15,017 6,289 $ 147,607 261,299 174,084 - $ 435,383 Europe, Middle East and Africa 44,589 20,557 - $ 147,888 213,034 43,765 - $ 256,799 Total $ 1,537,124 $ 501,788 $ 85,008 $ 364,848 $ 2,488,768 $ 331,112 $ - $ 2,819,880 --- ## No Match in Current: Our warrant transactions could impact the value of our stock. *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* On December 12, 2016, we completed a private offering of $460.0 million aggregate principal amount of 1.25% convertible senior unsecured notes (the "Notes") that matured on December 15, 2023. Concurrent with the offering of the Notes, we entered into convertible note hedge transactions with the initial purchasers or their affiliates (the "Option Counterparties"). Separately and concurrent with the pricing of the Notes, we entered into warrant transactions with the Option Counterparties (the "Warrant Transactions") in which we sold net-share-settled (or, at our election subject to certain conditions, cash-settled) warrants to the Option Counterparties. The Warrant Transactions, which expire between March 18, 2024 and July 10, 2024, cover, subject to customary 14 14 Table of Contents Table of Contents Table of Contents anti-dilution adjustments, approximately 14.7 million shares of our common stock. The strike price of the warrants is $39.40 per share. The Warrant Transactions could result in increased common stock outstanding to the extent that the market price per share of our common stock, as measured under the terms of the Warrant Transactions, exceeds the applicable strike price of the warrants. --- ## No Match in Current: Impact of the Israel-Hamas conflict on our Business *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* The recent Israel-Hamas conflict could have a negative impact on our future revenue and supply chain, either of which could adversely affect our business and financial results. Our customers in Israel may experience delays in product releases due to impacts to their labor force and impacts on their suppliers because of the conflict, which could materially impact demand for our products. Similarly, our suppliers in Israel may experience delays in providing us with parts due to the conflict. In addition, the global economic uncertainty following the start of the conflict could impact demand for our products. --- ## No Match in Current: Impact of October 7, 2022 and October 17, 2023 U.S. Department of Commerce Regulations on our Business *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* On October 7, 2022, the U.S. Department of Commerce published new regulations restricting the export to China of advanced semiconductors, supercomputer technology, equipment for the manufacturing of advanced semiconductors and components and technology for the manufacturing in China of certain semiconductor manufacturing equipment. As previously disclosed, the restrictions impacted Teradyne's sales to certain companies in China and Teradyne's manufacturing and development operations in China. Teradyne mitigated the impact of these restrictions on its business by obtaining licenses from the Department of Commerce. On October 17, 2023, the Department of Commerce released new rules updating the exporting controls issued on October 7, 2022. The new rules which took effect on November 17, 2023 significantly limit the impact of the October 7, 2022 restrictions on Teradyne's business. However, the regulations may continue to have an adverse impact on certain actual or potential customers of Teradyne and on the global semiconductor industry. To the extent the regulations impact actual and potential customers or disrupt the global semiconductor industry, Teradyne's business and revenues will be adversely impacted. See Part II - Item 1A, "Risk Factors," included herein for updates to our risk factors regarding risks associated with supply chain issues, international conflicts, and legal and regulatory compliance. --- ## No Match in Current: Report of Independent Registered Public Accounting Firm *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* To the Board of Directors and Shareholders of Teradyne, Inc. --- ## No Match in Current: Year Ended December 31, 2020 *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* $ 3,787 166,123 $ 20,765 $ 1,765,323 $ 33,516 $ 387,414 2,207,018 Net issuance of common stock under stock-based plans 899 113 (225 ) (112 ) Stock-based compensation expense 45,632 45,632 Repurchase of common stock (4,771 ) (597 ) (599,403 ) (600,000 ) Cash dividends ($0.40 per share) (66,034 ) (66,034 ) Settlements of convertible notes 8,148 1,018 984,622 985,640 Exercise of convertible notes hedge call options (8,148 ) (1,018 ) (986,082 ) (987,100 ) Convertible common shares (2,275 ) 2,275 2,275 Net income 1,014,589 1,014,589 Other comprehensive loss (39,464 ) (39,464 ) --- ## No Match in Current: Year Ended December 31, 2023 *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* $ - 152,698 $ 19,087 $ 1,827,274 $ (26,978 ) $ 706,514 $ 2,525,897 The accompanying notes are an integral part of the consolidated financial statements. 43 43 Table of Contents Table of Contents Table of Contents --- ## No Match in Current: Financial Assets and Financial Liabilities *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Teradyne records changes in fair value of equity securities directly in earnings and unrealized gains and losses in other (income) expense, net, in accordance with ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." 48 48 Table of Contents Table of Contents Table of Contents Prepayments Prepayments consist of the following: 2023 (1) 2022 (in thousands) Contract manufacturer and supplier prepayments $ 502,257 $ 491,105 Prepaid maintenance and other services 17,592 14,545 Prepaid taxes 16,083 18,625 Other prepayments 13,038 8,687 Total prepayments $ 548,970 $ 532,962 (1)Excludes $5.3 million of contract manufacturer and supplier prepayments, classified as assets held for sale. See Note E: "Assets held for sale" for additional information. --- ## No Match in Current: Geographical Market *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Asia Pacific $ 1,214,322 $ 366,151 $ 153,387 $ 63,312 $ 10,424 $ 85,415 $ - $ 1,893,011 Americas 117,728 11,367 151,579 111,761 36,191 50,770 - 479,396 Europe, Middle East and Africa 100,571 8,497 33,231 128,719 24,776 8,097 - 303,891 Total $ 1,432,621 $ 386,015 $ 338,197 $ 303,792 $ 71,391 $ 144,282 $ - $ 2,676,298 --- ## No Match in Current: Timing of Revenue Recognition *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Point in Time $ 1,141,882 $ 356,417 $ 268,379 $ 296,252 $ 66,986 $ 129,399 $ - $ 2,259,315 Over Time 290,739 29,598 69,818 7,540 4,405 14,883 - 416,983 Total $ 1,432,621 $ 386,015 $ 338,197 $ 303,792 $ 71,391 $ 144,282 $ - $ 2,676,298 --- ## No Match in Current: ASSETS HELD FOR SALE *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* On November 7, 2023, Teradyne entered into a definitive agreement to sell Teradyne's Device Interface Solutions ("DIS") business, a component of the Semiconductor Test segment, to Technoprobe S.p.A. for $85.0 million in cash. As a result, the related assets and liabilities met the criteria and were classified as held-for-sale in Teradyne's consolidated balance sheet as of December 31, 2023. The transaction, which does not qualify as a strategic shift required for discontinued operations treatment, is expected to close in the first half of 2024. 53 53 Table of Contents Table of Contents Table of Contents Assets held-for-sale comprise of the following as of December 31, 2023: December 31, 2023 (in thousands) Current assets: Inventories, net $ 17,952 Prepayments 5,298 Total current assets held for sale 23,250 Property, plant and equipment, net 8,986 Operating lease right-of-use assets, net 2,545 Total assets held for sale $ 34,781 Current liabilities: Accounts payable $ 6,356 Other accrued liabilities 552 Operating lease liabilities 471 Total current liabilities held for sale 7,379 Long-term operating lease liabilities 2,000 Total liabilities held for sale $ 9,379 Net assets held for sale $ 25,402 Assets held-for-sale comprise of the following as of December 31, 2023: --- ## No Match in Current: (in thousands) *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Net income $ 448,752 $ 715,501 $ 1,014,589 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively 17,407 (29,031 ) (36,207 ) Available-for-sale marketable securities: Unrealized gains (losses) on marketable securities arising during period, net of tax of $568, $(3,388), ($578), respectively 2,423 (12,666 ) (2,255 ) Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $12, $25, $(277), respectively 44 301 (995 ) 2,467 (12,365 ) (3,250 ) Cash flow hedges: Unrealized gains (losses) arising during period, net of tax of $1,537, $(708), $0, respectively 5,464 (2,517 ) - Less: Reclassification adjustment for losses included in net income, net of tax of $(686), $0, $0, respectively (2,441 ) - - 3,023 (2,517 ) - Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) 22,890 (43,920 ) (39,464 ) Comprehensive income $ 471,642 $ 671,581 $ 975,125 The accompanying notes are an integral part of the consolidated financial statements. 42 42 Table of Contents Table of Contents Table of Contents --- ## No Match in Current: INVENTORIES *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Inventories, net consisted of the following at December 31, 2023 and 2022: 2023 (1) 2022 (in thousands) Raw material $ 258,422 $ 256,065 Work-in-process 26,851 37,982 Finished goods 24,701 30,972 $ 309,974 $ 325,019 (1)Excludes $18.0 million of primarily work-in-process inventories, net classified as assets held for sale. See Note E: "Assets held for sale" for additional information. Inventories, net consisted of the following at December 31, 2023 and 2022: 2023 (1) 2022 --- ## No Match in Current: (in thousands) *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Net income $ 448,752 $ 715,501 $ 1,014,589 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively 17,407 (29,031 ) (36,207 ) Available-for-sale marketable securities: Unrealized gains (losses) on marketable securities arising during period, net of tax of $568, $(3,388), ($578), respectively 2,423 (12,666 ) (2,255 ) Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $12, $25, $(277), respectively 44 301 (995 ) 2,467 (12,365 ) (3,250 ) Cash flow hedges: Unrealized gains (losses) arising during period, net of tax of $1,537, $(708), $0, respectively 5,464 (2,517 ) - Less: Reclassification adjustment for losses included in net income, net of tax of $(686), $0, $0, respectively (2,441 ) - - 3,023 (2,517 ) - Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) 22,890 (43,920 ) (39,464 ) Comprehensive income $ 471,642 $ 671,581 $ 975,125 The accompanying notes are an integral part of the consolidated financial statements. 42 42 Table of Contents Table of Contents Table of Contents --- ## No Match in Current: PROPERTY, PLANT AND EQUIPMENT *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Property, plant and equipment, net consisted of the following at December 31, 2023 and 2022: 2023 (1) 2022 (in thousands) Land $ 19,487 $ 18,481 Buildings 127,705 128,991 Machinery, equipment and software 1,047,235 1,059,880 Furniture and fixtures 28,093 29,929 Leasehold improvements 66,777 64,631 Construction in progress 54,799 22,470 1,344,096 1,324,382 Less: accumulated depreciation 898,604 905,699 $ 445,492 $ 418,683 (1)Excludes $9.0 million of property, plant and equipment, net classified as assets held for sale. See Note E: "Assets held for sale" for additional information. Property, plant and equipment, net consisted of the following at December 31, 2023 and 2022: 2023 (1) 2022 --- ## No Match in Current: (in thousands) *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Net income $ 448,752 $ 715,501 $ 1,014,589 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively 17,407 (29,031 ) (36,207 ) Available-for-sale marketable securities: Unrealized gains (losses) on marketable securities arising during period, net of tax of $568, $(3,388), ($578), respectively 2,423 (12,666 ) (2,255 ) Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $12, $25, $(277), respectively 44 301 (995 ) 2,467 (12,365 ) (3,250 ) Cash flow hedges: Unrealized gains (losses) arising during period, net of tax of $1,537, $(708), $0, respectively 5,464 (2,517 ) - Less: Reclassification adjustment for losses included in net income, net of tax of $(686), $0, $0, respectively (2,441 ) - - 3,023 (2,517 ) - Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) 22,890 (43,920 ) (39,464 ) Comprehensive income $ 471,642 $ 671,581 $ 975,125 The accompanying notes are an integral part of the consolidated financial statements. 42 42 Table of Contents Table of Contents Table of Contents --- ## No Match in Current: Cash Equivalents *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Teradyne considers all highly liquid investments with maturities of three months or less at the date of acquisition to be cash equivalents. --- ## No Match in Current: Marketable Securities *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Teradyne's equity and debt mutual funds are classified as Level 1 and available-for-sale debt securities are classified as Level 2. Contingent consideration is classified as Level 3. The vast majority of Level 2 securities are fixed income securities priced by third party pricing vendors. These pricing vendors utilize the most recent observable market information in pricing these securities or, if specific prices are not available, use other observable inputs like market transactions involving identical or comparable securities. During the years ended December 31, 2023 and 2022, there were no transfers in or out of Level 1, Level 2, or Level 3 financial instruments. Realized gains recorded in 2023, 2022, and 2021 were $0.6 million, $0.8 million, and $3.1 million, respectively. Realized losses recorded in 2023 and 2022 were $0.3 million and $1.0 million, respectively. No realized losses were recorded in 2021. Realized gains and losses are included in other (income) expense, net. Unrealized gains on equity securities recorded during the years ended December 31, 2023, 2022 and 2021 were $8.9 million, $1.9 million and $5.1 million, respectively. Unrealized losses on equity securities recorded during the years ended December 31, 2023, 2022, and 2021 were $1.7 million, $11.6 million and $1.8 million, respectively. Unrealized gains and losses on equity securities are included in other (income) expense, net. Unrealized gains and losses on available-for-sale debt securities are included in accumulated other comprehensive income (loss) on the balance sheet. The cost of securities sold is based on average cost. 55 55 Table of Contents Table of Contents Table of Contents The following table sets forth by fair value hierarchy Teradyne's financial assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2023 and 2022: The following table sets forth by fair value hierarchy Teradyne's financial assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2023 and 2022: December 31, 2023 Quoted Pricesin ActiveMarkets forIdenticalInstruments(Level 1) SignificantOtherObservableInputs(Level 2) SignificantUnobservableInputs(Level 3) Total (in thousands) Assets Cash $ 298,156 $ - $ - $ 298,156 Cash equivalents 453,298 6,117 - 459,415 Available for sale securities: Corporate debt securities - 52,734 - 52,734 U.S. Treasury securities - 41,808 - 41,808 Commercial paper - 1,667 - 1,667 Debt mutual funds 8,773 - - 8,773 U.S. government agency securities - 4,892 - 4,892 Certificates of deposit and time deposits - 21,772 - 21,772 Non-U.S. government securities - 810 - 810 Equity securities: Mutual funds 47,132 - - 47,132 Total $ 807,359 $ 129,800 $ - $ 937,159 Derivative assets - 18,746 - 18,746 Total $ 807,359 $ 148,546 $ - $ 955,905 Liabilities Derivative liabilities - 2,545 - 2,545 Total $ - $ 2,545 $ - $ 2,545 Reported as follows: (Level 1) (Level 2) (Level 3) Total (in thousands) Assets Cash and cash equivalents $ 751,454 $ 6,117 $ - $ 757,571 Marketable securities - 62,154 - 62,154 Long-term marketable securities 55,905 61,529 - 117,434 Other current assets - 18,746 - 18,746 Total $ 807,359 $ 148,546 $ - $ 955,905 Liabilities Other current liabilities $ - $ 2,545 $ - $ 2,545 Total $ - $ 2,545 $ - $ 2,545 56 Table of Contents December 31, 2022 Quoted Pricesin ActiveMarkets forIdenticalInstruments(Level 1) SignificantOtherObservableInputs(Level 2) SignificantUnobservableInputs(Level 3) Total (in thousands) Assets Cash $ 632,417 $ - $ - $ 632,417 Cash equivalents 161,767 60,589 - 222,356 Available for sale securities: Corporate debt securities - 50,856 - 50,856 U.S. Treasury securities - 39,649 - 39,649 Commercial paper - 7,159 - 7,159 Debt mutual funds 6,580 - - 6,580 U.S. government agency securities - 6,352 - 6,352 Certificates of deposit and time deposits - 1,740 - 1,740 Non-U.S. government securities - 535 - 535 Equity securities: Mutual funds 37,518 - - 37,518 Total $ 838,282 $ 166,880 $ - $ 1,005,162 Derivative assets - 86 - 86 Total $ 838,282 $ 166,966 $ - $ 1,005,248 Liabilities Derivative liabilities - 4,215 - 4,215 Total $ - $ 4,215 $ - $ 4,215 Reported as follows: (Level 1) (Level 2) (Level 3) Total (in thousands) Assets Cash and cash equivalents $ 794,184 $ 60,589 $ - $ 854,773 Marketable securities - 39,612 - 39,612 Long-term marketable securities 44,098 66,679 - 110,777 Other current assets - 86 - 86 Total $ 838,282 $ 166,966 $ - $ 1,005,248 Liabilities Other current liabilities $ - $ 4,215 $ - $ 4,215 Total $ - $ 4,215 $ - $ 4,215 The carrying amounts and fair values of Teradyne's financial instruments at December 31, 2023 and 2022 were as follows: December 31, 2023 December 31, 2022 Carrying Value Fair Value Carrying Value Fair Value (in thousands) Assets Cash and cash equivalents $ 757,571 $ 757,571 $ 854,773 $ 854,773 Marketable securities 179,588 179,588 150,389 150,389 Derivative assets 18,746 18,746 86 86 Liabilities Derivative liabilities 2,545 2,545 4,215 4,215 Convertible debt (1) - - 50,115 139,007 (1)The carrying value represents the bifurcated debt component only, while the fair value is based on quoted market prices for the convertible note which includes the equity conversion features. The fair values of accounts receivable, net and accounts payable approximate the carrying amount due to the short-term nature of these instruments. 57 Table of Contents The following tables summarize the composition of available-for-sale marketable securities at December 31, 2023 and 2022: December 31, 2023 Available-for-Sale Cost UnrealizedGain Unrealized(Loss) Fair MarketValue Fair MarketValue of Investmentswith Unrealized Losses (in thousands) Corporate debt securities $ 56,458 $ 201 $ (3,925 ) $ 52,734 $ 44,263 U.S. Treasury securities 45,725 14 (3,931 ) 41,808 35,080 Certificates of deposit and time deposits 21,772 - - 21,772 - Debt mutual funds 9,081 - (308 ) 8,773 3,303 U.S. government agency securities 4,898 - (6 ) 4,892 4,892 Commercial paper 1,633 34 - 1,667 - Non-U.S. government securities 810 - - 810 - $ 140,377 $ 249 $ (8,170 ) $ 132,456 $ 87,538 Reported as follows: Cost UnrealizedGain Unrealized(Loss) Fair MarketValue Fair MarketValue of Investmentswith Unrealized Losses (in thousands) Marketable securities $ 62,385 $ 36 $ (267 ) $ 62,154 $ 34,844 Long-term marketable securities 77,992 213 (7,903 ) $ 70,302 52,694 $ 140,377 $ 249 $ (8,170 ) $ 132,456 $ 87,538 December 31, 2022 Available-for-Sale Cost UnrealizedGain Unrealized(Loss) Fair MarketValue Fair MarketValue of Investmentswith Unrealized Losses (in thousands) Corporate debt securities $ 57,006 $ 3 $ (6,153 ) $ 50,856 $ 50,667 U.S. Treasury securities 44,030 - (4,381 ) 39,649 39,649 Commercial paper 7,089 70 - 7,159 - Debt mutual funds 6,997 - (417 ) 6,580 3,095 U.S. government agency securities 6,442 - (90 ) 6,352 6,352 Certificates of deposit and time deposits 1,740 - - 1,740 - Non-U.S. government securities 535 - - 535 - $ 123,839 $ 73 $ (11,041 ) $ 112,871 $ 99,763 Reported as follows: Cost UnrealizedGain Unrealized(Loss) Fair MarketValue Fair MarketValue of Investmentswith Unrealized Losses (in thousands) Marketable securities $ 39,950 $ 70 $ (408 ) $ 39,612 $ 30,713 Long-term marketable securities 83,889 3 (10,633 ) $ 73,259 69,050 $ 123,839 $ 73 $ (11,041 ) $ 112,871 $ 99,763 As of December 31, 2023, the fair market value of investments with unrealized losses less than one year and greater than one year totaled $22.3 million and $65.2 million, respectively. As of December 31, 2022, the fair market value of investments with unrealized losses less than one year and greater than one year totaled $66.3 million and $33.4 million, respectively. 58 Table of Contents Teradyne reviews its investments to identify and evaluate investments that have an indication of possible impairment. Based on this review, Teradyne determined that the unrealized losses related to these investments at December 31, 2023 and 2022 were not other than temporary. The contractual maturities of investments in available-for-sale marketable securities held at December 31, 2023 were as follows: Cost Fair Value (in thousands) Due within one year $ 62,385 $ 62,154 Due after 1 year through 5 years 23,703 23,319 Due after 5 years through 10 years 6,049 5,735 Due after 10 years 39,159 32,475 Total $ 131,296 $ 123,683 Contractual maturities of investments in available-for-sale marketable securities held at December 31, 2023 exclude debt mutual funds with the fair market value of $8.8 million as they do not have a contractual maturity date. Derivatives Teradyne conducts business in various foreign countries, with certain transactions denominated in local currencies. As a result, Teradyne is exposed to risks relating to changes in foreign currency exchange rates. Teradyne's foreign currency risk management objective is to minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities denominated in foreign currencies, and changes in its cash inflows attributable to the forecasted cash flows from certain foreign currency denominated revenues. To minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities denominated in foreign currencies, Teradyne enters into foreign currency forward contracts. The change in fair value of these derivatives is recorded directly in earnings and is used to offset the change in value of monetary assets and liabilities denominated in foreign currencies. Teradyne also enters into foreign currency forward and option contracts designated as cash flow hedges to hedge the risk of changes in its cash inflows attributable to changes in foreign currency exchange rates. The cash flow hedges have maturities of less than six months and mature in the period of revenue recognition for certain products and services in backlog and forecasted to be recognized in a future period. Teradyne evaluates cash flow hedges for effectiveness at inception based on the critical terms match method. The hedges are not expected to incur any ineffectiveness however a quarterly qualitative assessment of effectiveness is done to determine if the critical terms match method remains appropriate to use. The change in fair value of the contracts is recorded in accumulated other comprehensive income (loss) and reclassified to earnings at maturity date. Teradyne does not use derivative financial instruments for speculative purposes. 59 Table of Contents At December 31, 2023 and 2022, to hedge certain of its local currency balance sheet assets and liabilities, Teradyne had the following contracts to buy and sell non-U.S. currencies for U.S. dollars and other non-U.S. currencies with the following notional amounts: Net Notional Value December 31,2023 December 31, 2022 (in millions) Currency Hedged (Buy/Sell) U.S. dollar/Taiwan dollar $ 42.7 $ 29.2 U.S. dollar/Danish krone 36.0 - U.S. dollar/Japanese yen 11.0 37.1 U.S. dollar/Korean won 7.2 6.4 U.S. dollar/British pound sterling 1.5 1.2 Euro/U.S. dollar 25.3 38.4 Singapore dollar/U.S. dollar 16.6 33.5 Philippine peso/U.S. dollar 10.1 2.7 Chinese yuan/U.S. dollar 1.0 2.2 Danish krone/U.S. dollar 0.7 - Total 152.1 150.7 The change in the fair value of the outstanding contracts was a loss of $1.8 million and $0.9 million, respectively, at December 31, 2023 and 2022. Unrealized gains and losses on foreign currency forward contracts and foreign currency remeasurement gains and losses on monetary assets and liabilities are included in other (income) expense, net. At December 31, 2023 and 2022, Teradyne had the following cash flow hedge contracts to buy and sell non-U.S. currencies for U.S. dollars with the following notional amounts: Net Notional Value December 31,2023 December 31, 2022 (in millions) Currency Hedged (Buy/Sell) U.S. dollar/Japanese yen $ 35.5 $ 61.2 U.S. dollar/Taiwan dollar - 10.9 Japanese yen/U.S. dollar - 23.4 Taiwan dollar/U.S. dollar - 5.5 Total $ 35.5 $ 101.0 The change in the fair value of the outstanding cash flow hedge contracts was a gain of $0.6 million at December 31, 2023 and a loss of $3.2 million at December 31, 2022.Unrealized gains and losses on foreign currency cash flow hedge contracts are included in accumulated other comprehensive income (loss). At maturity, the gains or losses associated with cash flow hedge contracts are recorded to revenue. On November 7, 2023, in connection with our agreement to acquire 10% investment in Technoprobe S.p.A we purchased a call option to buy 481.0 million Euros. The expiration date of the option is April 26, 2024. At December 31, 2023, the fair value of the outstanding contract was $17.4 million and an unrealized gain of $7.5 million was recorded in other (income) expense, net.60 Table of Contents The following table summarizes the fair value of derivative instruments as of December 31, 2023 and 2022: Balance Sheet Location December 31,2023 December 31,2022 (in thousands) Derivatives not designated as hedging instruments: Foreign exchange forward contracts Other current assets $ 733 $ 86 Foreign exchange option contracts Other current assets 17,364 - Foreign exchange forward contracts Other current liabilities (2,545 ) (990 ) Derivatives designated as hedging instruments: Foreign exchange forward contracts Other current assets 648 - Foreign exchange option contracts Other current liabilities - (3,225 ) Total derivatives $ 16,200 $ (4,129 ) The following table summarizes the effect of derivative instruments in the statements of operations recognized for the years ended December 31, 2023, 2022, and 2021: Location of (Gains) Losses Recognized in Statementof Operations December 31,2023 December 31,2022 December 31,2021 (in thousands) Derivatives not designated as hedging instruments: Foreign exchange forward contracts (1) Other (income) expense, net $ (1,843 ) $ (2,482 ) $ 6,488 Foreign exchange option contracts Other (income) expense, net (7,464 ) - - Derivatives designated as hedging instruments: Foreign exchange forward and option contracts Revenue (3,127 ) (251 ) - Total derivatives $ (12,434 ) $ (2,733 ) $ 6,488 (1)The table does not reflect the corresponding gains and losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies. For the years ended December 31, 2023, 2022 and 2021, net losses (gains) from remeasurement of monetary assets and liabilities denominated in foreign currencies were $10.9 million, $10.8 million, and $(2.1) million, respectively. See Note J: "Debt" regarding derivatives related to the convertible senior notes. Concentration of Credit Risk Financial instruments which potentially subject Teradyne to concentrations of credit risk consist principally of cash equivalents, marketable securities, forward currency contracts and accounts receivable. Teradyne's cash equivalents consist primarily of money market funds invested in U.S. Treasuries and government agencies. Teradyne's fixed income available-for-sale marketable securities have a minimum rating of AA by one or more of the major credit rating agencies. Teradyne places foreign currency forward contracts with high credit-quality financial institutions in order to minimize credit risk exposure. Concentrations of credit risk with respect to accounts receivable are limited due to the large number of geographically dispersed customers. Teradyne performs ongoing credit evaluations of its customers' financial condition and from time to time may require customers to provide a letter of credit from a bank to secure accounts receivable. As of December 31, 2023, one customer of our Semiconductor Test segment, Texas Instruments Inc., accounted for 18% of our accounts receivable balance. There were no customers who accounted for more than 10% of our accounts receivable balance as of December 31, 2022. December 31, 2023 Quoted Pricesin ActiveMarkets forIdenticalInstruments(Level 1) SignificantOtherObservableInputs(Level 2) SignificantUnobservableInputs(Level 3) Total (in thousands) Assets Cash $ 298,156 $ - $ - $ 298,156 Cash equivalents 453,298 6,117 - 459,415 Available for sale securities: Corporate debt securities - 52,734 - 52,734 U.S. Treasury securities - 41,808 - 41,808 Commercial paper - 1,667 - 1,667 Debt mutual funds 8,773 - - 8,773 U.S. government agency securities - 4,892 - 4,892 Certificates of deposit and time deposits - 21,772 - 21,772 Non-U.S. government securities - 810 - 810 Equity securities: Mutual funds 47,132 - - 47,132 Total $ 807,359 $ 129,800 $ - $ 937,159 Derivative assets - 18,746 - 18,746 Total $ 807,359 $ 148,546 $ - $ 955,905 Liabilities Derivative liabilities - 2,545 - 2,545 Total $ - $ 2,545 $ - $ 2,545 Reported as follows: (Level 1) (Level 2) (Level 3) Total (in thousands) Assets Cash and cash equivalents $ 751,454 $ 6,117 $ - $ 757,571 Marketable securities - 62,154 - 62,154 Long-term marketable securities 55,905 61,529 - 117,434 Other current assets - 18,746 - 18,746 Total $ 807,359 $ 148,546 $ - $ 955,905 Liabilities Other current liabilities $ - $ 2,545 $ - $ 2,545 Total $ - $ 2,545 $ - $ 2,545 56 Table of Contents --- ## No Match in Current: (in thousands) *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Net income $ 448,752 $ 715,501 $ 1,014,589 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively 17,407 (29,031 ) (36,207 ) Available-for-sale marketable securities: Unrealized gains (losses) on marketable securities arising during period, net of tax of $568, $(3,388), ($578), respectively 2,423 (12,666 ) (2,255 ) Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $12, $25, $(277), respectively 44 301 (995 ) 2,467 (12,365 ) (3,250 ) Cash flow hedges: Unrealized gains (losses) arising during period, net of tax of $1,537, $(708), $0, respectively 5,464 (2,517 ) - Less: Reclassification adjustment for losses included in net income, net of tax of $(686), $0, $0, respectively (2,441 ) - - 3,023 (2,517 ) - Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) 22,890 (43,920 ) (39,464 ) Comprehensive income $ 471,642 $ 671,581 $ 975,125 The accompanying notes are an integral part of the consolidated financial statements. 42 42 Table of Contents Table of Contents Table of Contents --- ## No Match in Current: (in thousands) *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Net income $ 448,752 $ 715,501 $ 1,014,589 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively 17,407 (29,031 ) (36,207 ) Available-for-sale marketable securities: Unrealized gains (losses) on marketable securities arising during period, net of tax of $568, $(3,388), ($578), respectively 2,423 (12,666 ) (2,255 ) Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $12, $25, $(277), respectively 44 301 (995 ) 2,467 (12,365 ) (3,250 ) Cash flow hedges: Unrealized gains (losses) arising during period, net of tax of $1,537, $(708), $0, respectively 5,464 (2,517 ) - Less: Reclassification adjustment for losses included in net income, net of tax of $(686), $0, $0, respectively (2,441 ) - - 3,023 (2,517 ) - Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) 22,890 (43,920 ) (39,464 ) Comprehensive income $ 471,642 $ 671,581 $ 975,125 The accompanying notes are an integral part of the consolidated financial statements. 42 42 Table of Contents Table of Contents Table of Contents --- ## No Match in Current: (in thousands) *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Net income $ 448,752 $ 715,501 $ 1,014,589 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively 17,407 (29,031 ) (36,207 ) Available-for-sale marketable securities: Unrealized gains (losses) on marketable securities arising during period, net of tax of $568, $(3,388), ($578), respectively 2,423 (12,666 ) (2,255 ) Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $12, $25, $(277), respectively 44 301 (995 ) 2,467 (12,365 ) (3,250 ) Cash flow hedges: Unrealized gains (losses) arising during period, net of tax of $1,537, $(708), $0, respectively 5,464 (2,517 ) - Less: Reclassification adjustment for losses included in net income, net of tax of $(686), $0, $0, respectively (2,441 ) - - 3,023 (2,517 ) - Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) 22,890 (43,920 ) (39,464 ) Comprehensive income $ 471,642 $ 671,581 $ 975,125 The accompanying notes are an integral part of the consolidated financial statements. 42 42 Table of Contents Table of Contents Table of Contents --- ## No Match in Current: (in thousands) *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Net income $ 448,752 $ 715,501 $ 1,014,589 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively 17,407 (29,031 ) (36,207 ) Available-for-sale marketable securities: Unrealized gains (losses) on marketable securities arising during period, net of tax of $568, $(3,388), ($578), respectively 2,423 (12,666 ) (2,255 ) Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $12, $25, $(277), respectively 44 301 (995 ) 2,467 (12,365 ) (3,250 ) Cash flow hedges: Unrealized gains (losses) arising during period, net of tax of $1,537, $(708), $0, respectively 5,464 (2,517 ) - Less: Reclassification adjustment for losses included in net income, net of tax of $(686), $0, $0, respectively (2,441 ) - - 3,023 (2,517 ) - Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) 22,890 (43,920 ) (39,464 ) Comprehensive income $ 471,642 $ 671,581 $ 975,125 The accompanying notes are an integral part of the consolidated financial statements. 42 42 Table of Contents Table of Contents Table of Contents --- ## No Match in Current: (in thousands) *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Net income $ 448,752 $ 715,501 $ 1,014,589 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively 17,407 (29,031 ) (36,207 ) Available-for-sale marketable securities: Unrealized gains (losses) on marketable securities arising during period, net of tax of $568, $(3,388), ($578), respectively 2,423 (12,666 ) (2,255 ) Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $12, $25, $(277), respectively 44 301 (995 ) 2,467 (12,365 ) (3,250 ) Cash flow hedges: Unrealized gains (losses) arising during period, net of tax of $1,537, $(708), $0, respectively 5,464 (2,517 ) - Less: Reclassification adjustment for losses included in net income, net of tax of $(686), $0, $0, respectively (2,441 ) - - 3,023 (2,517 ) - Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) 22,890 (43,920 ) (39,464 ) Comprehensive income $ 471,642 $ 671,581 $ 975,125 The accompanying notes are an integral part of the consolidated financial statements. 42 42 Table of Contents Table of Contents Table of Contents --- ## No Match in Current: (in thousands) *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Net income $ 448,752 $ 715,501 $ 1,014,589 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively 17,407 (29,031 ) (36,207 ) Available-for-sale marketable securities: Unrealized gains (losses) on marketable securities arising during period, net of tax of $568, $(3,388), ($578), respectively 2,423 (12,666 ) (2,255 ) Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $12, $25, $(277), respectively 44 301 (995 ) 2,467 (12,365 ) (3,250 ) Cash flow hedges: Unrealized gains (losses) arising during period, net of tax of $1,537, $(708), $0, respectively 5,464 (2,517 ) - Less: Reclassification adjustment for losses included in net income, net of tax of $(686), $0, $0, respectively (2,441 ) - - 3,023 (2,517 ) - Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) 22,890 (43,920 ) (39,464 ) Comprehensive income $ 471,642 $ 671,581 $ 975,125 The accompanying notes are an integral part of the consolidated financial statements. 42 42 Table of Contents Table of Contents Table of Contents --- ## No Match in Current: (in thousands) *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Net income $ 448,752 $ 715,501 $ 1,014,589 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively 17,407 (29,031 ) (36,207 ) Available-for-sale marketable securities: Unrealized gains (losses) on marketable securities arising during period, net of tax of $568, $(3,388), ($578), respectively 2,423 (12,666 ) (2,255 ) Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $12, $25, $(277), respectively 44 301 (995 ) 2,467 (12,365 ) (3,250 ) Cash flow hedges: Unrealized gains (losses) arising during period, net of tax of $1,537, $(708), $0, respectively 5,464 (2,517 ) - Less: Reclassification adjustment for losses included in net income, net of tax of $(686), $0, $0, respectively (2,441 ) - - 3,023 (2,517 ) - Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) 22,890 (43,920 ) (39,464 ) Comprehensive income $ 471,642 $ 671,581 $ 975,125 The accompanying notes are an integral part of the consolidated financial statements. 42 42 Table of Contents Table of Contents Table of Contents --- ## No Match in Current: (in thousands) *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Net income $ 448,752 $ 715,501 $ 1,014,589 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively 17,407 (29,031 ) (36,207 ) Available-for-sale marketable securities: Unrealized gains (losses) on marketable securities arising during period, net of tax of $568, $(3,388), ($578), respectively 2,423 (12,666 ) (2,255 ) Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $12, $25, $(277), respectively 44 301 (995 ) 2,467 (12,365 ) (3,250 ) Cash flow hedges: Unrealized gains (losses) arising during period, net of tax of $1,537, $(708), $0, respectively 5,464 (2,517 ) - Less: Reclassification adjustment for losses included in net income, net of tax of $(686), $0, $0, respectively (2,441 ) - - 3,023 (2,517 ) - Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) 22,890 (43,920 ) (39,464 ) Comprehensive income $ 471,642 $ 671,581 $ 975,125 The accompanying notes are an integral part of the consolidated financial statements. 42 42 Table of Contents Table of Contents Table of Contents --- ## No Match in Current: (in thousands) *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Net income $ 448,752 $ 715,501 $ 1,014,589 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively 17,407 (29,031 ) (36,207 ) Available-for-sale marketable securities: Unrealized gains (losses) on marketable securities arising during period, net of tax of $568, $(3,388), ($578), respectively 2,423 (12,666 ) (2,255 ) Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $12, $25, $(277), respectively 44 301 (995 ) 2,467 (12,365 ) (3,250 ) Cash flow hedges: Unrealized gains (losses) arising during period, net of tax of $1,537, $(708), $0, respectively 5,464 (2,517 ) - Less: Reclassification adjustment for losses included in net income, net of tax of $(686), $0, $0, respectively (2,441 ) - - 3,023 (2,517 ) - Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) 22,890 (43,920 ) (39,464 ) Comprehensive income $ 471,642 $ 671,581 $ 975,125 The accompanying notes are an integral part of the consolidated financial statements. 42 42 Table of Contents Table of Contents Table of Contents --- ## No Match in Current: (in thousands) *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Net income $ 448,752 $ 715,501 $ 1,014,589 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively 17,407 (29,031 ) (36,207 ) Available-for-sale marketable securities: Unrealized gains (losses) on marketable securities arising during period, net of tax of $568, $(3,388), ($578), respectively 2,423 (12,666 ) (2,255 ) Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $12, $25, $(277), respectively 44 301 (995 ) 2,467 (12,365 ) (3,250 ) Cash flow hedges: Unrealized gains (losses) arising during period, net of tax of $1,537, $(708), $0, respectively 5,464 (2,517 ) - Less: Reclassification adjustment for losses included in net income, net of tax of $(686), $0, $0, respectively (2,441 ) - - 3,023 (2,517 ) - Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) 22,890 (43,920 ) (39,464 ) Comprehensive income $ 471,642 $ 671,581 $ 975,125 The accompanying notes are an integral part of the consolidated financial statements. 42 42 Table of Contents Table of Contents Table of Contents --- ## No Match in Current: Derivatives *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Teradyne conducts business in various foreign countries, with certain transactions denominated in local currencies. As a result, Teradyne is exposed to risks relating to changes in foreign currency exchange rates. Teradyne's foreign currency risk management objective is to minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities denominated in foreign currencies, and changes in its cash inflows attributable to the forecasted cash flows from certain foreign currency denominated revenues. To minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities denominated in foreign currencies, Teradyne enters into foreign currency forward contracts. The change in fair value of these derivatives is recorded directly in earnings and is used to offset the change in value of monetary assets and liabilities denominated in foreign currencies. Teradyne also enters into foreign currency forward and option contracts designated as cash flow hedges to hedge the risk of changes in its cash inflows attributable to changes in foreign currency exchange rates. The cash flow hedges have maturities of less than six months and mature in the period of revenue recognition for certain products and services in backlog and forecasted to be recognized in a future period. Teradyne evaluates cash flow hedges for effectiveness at inception based on the critical terms match method. The hedges are not expected to incur any ineffectiveness however a quarterly qualitative assessment of effectiveness is done to determine if the critical terms match method remains appropriate to use. The change in fair value of the contracts is recorded in accumulated other comprehensive income (loss) and reclassified to earnings at maturity date. Teradyne does not use derivative financial instruments for speculative purposes. 59 59 Table of Contents Table of Contents Table of Contents At December 31, 2023 and 2022, to hedge certain of its local currency balance sheet assets and liabilities, Teradyne had the following contracts to buy and sell non-U.S. currencies for U.S. dollars and other non-U.S. currencies with the following notional amounts: Net Notional Value December 31,2023 December 31, 2022 (in millions) Currency Hedged (Buy/Sell) U.S. dollar/Taiwan dollar $ 42.7 $ 29.2 U.S. dollar/Danish krone 36.0 - U.S. dollar/Japanese yen 11.0 37.1 U.S. dollar/Korean won 7.2 6.4 U.S. dollar/British pound sterling 1.5 1.2 Euro/U.S. dollar 25.3 38.4 Singapore dollar/U.S. dollar 16.6 33.5 Philippine peso/U.S. dollar 10.1 2.7 Chinese yuan/U.S. dollar 1.0 2.2 Danish krone/U.S. dollar 0.7 - Total 152.1 150.7 At December 31, 2023 and 2022, to hedge certain of its local currency balance sheet assets and liabilities, Teradyne had the following contracts to buy and sell non-U.S. currencies for U.S. dollars and other non-U.S. currencies with the following notional amounts: --- ## No Match in Current: (in millions) *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Semiconductor Test $ 1,818.6 $ 2,080.6 $ (262.0 ) Robotics 375.2 403.1 (27.9 ) System Test 338.2 469.3 (131.1 ) Wireless Test 144.3 201.7 (57.4 ) Corporate and Eliminations - 0.3 (0.3 ) $ 2,676.3 $ 3,155.0 $ (478.7 ) The decrease in Semiconductor Test revenues of $262.0 million, or 12.6%, was driven primarily by lower tester sales for compute and mobility applications. The decrease in Robotics revenues of $27.9 million, or 6.9%, was driven primarily by softening demand due to slowing global industrial activity and macro-economic headwinds and the impact of the transformation of Universal Robots' sales channel. The decrease in System Test revenues of $131.1 million, or 27.9%, was primarily due to lower sales in Storage Test of system level and hard disk drive testers. The decrease in Wireless Test revenues of $57.4 million, or 28.5%, was primarily due to a decrease in sales of connectivity test products. Our reportable segments accounted for the following percentages of consolidated revenues: 2023 2022 Semiconductor Test 68 % 66 % Robotics 14 13 System Test 13 15 Wireless Test 5 6 100 % 100 % Revenues by country as a percentage of total revenues were as follows (1): 2023 2022 United States 16 % 15 % Korea 15 17 Taiwan 14 20 China 12 16 Japan 11 5 Europe 10 9 Philippines 7 4 Singapore 4 3 Thailand 3 4 Malaysia 3 5 Rest of the World 5 2 100 % 100 % (1)Revenues attributable to a country are based on the location of the customer site. Revenues attributable to a country are based on the location of the customer site. The breakout of product and service revenues was as follows: 2023 2022 --- ## No Match in Current: (in millions) *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Semiconductor Test $ 1,818.6 $ 2,080.6 $ (262.0 ) Robotics 375.2 403.1 (27.9 ) System Test 338.2 469.3 (131.1 ) Wireless Test 144.3 201.7 (57.4 ) Corporate and Eliminations - 0.3 (0.3 ) $ 2,676.3 $ 3,155.0 $ (478.7 ) The decrease in Semiconductor Test revenues of $262.0 million, or 12.6%, was driven primarily by lower tester sales for compute and mobility applications. The decrease in Robotics revenues of $27.9 million, or 6.9%, was driven primarily by softening demand due to slowing global industrial activity and macro-economic headwinds and the impact of the transformation of Universal Robots' sales channel. The decrease in System Test revenues of $131.1 million, or 27.9%, was primarily due to lower sales in Storage Test of system level and hard disk drive testers. The decrease in Wireless Test revenues of $57.4 million, or 28.5%, was primarily due to a decrease in sales of connectivity test products. Our reportable segments accounted for the following percentages of consolidated revenues: 2023 2022 Semiconductor Test 68 % 66 % Robotics 14 13 System Test 13 15 Wireless Test 5 6 100 % 100 % Revenues by country as a percentage of total revenues were as follows (1): 2023 2022 United States 16 % 15 % Korea 15 17 Taiwan 14 20 China 12 16 Japan 11 5 Europe 10 9 Philippines 7 4 Singapore 4 3 Thailand 3 4 Malaysia 3 5 Rest of the World 5 2 100 % 100 % (1)Revenues attributable to a country are based on the location of the customer site. Revenues attributable to a country are based on the location of the customer site. The breakout of product and service revenues was as follows: 2023 2022 --- ## No Match in Current: (in thousands) *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Net income $ 448,752 $ 715,501 $ 1,014,589 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively 17,407 (29,031 ) (36,207 ) Available-for-sale marketable securities: Unrealized gains (losses) on marketable securities arising during period, net of tax of $568, $(3,388), ($578), respectively 2,423 (12,666 ) (2,255 ) Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $12, $25, $(277), respectively 44 301 (995 ) 2,467 (12,365 ) (3,250 ) Cash flow hedges: Unrealized gains (losses) arising during period, net of tax of $1,537, $(708), $0, respectively 5,464 (2,517 ) - Less: Reclassification adjustment for losses included in net income, net of tax of $(686), $0, $0, respectively (2,441 ) - - 3,023 (2,517 ) - Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) 22,890 (43,920 ) (39,464 ) Comprehensive income $ 471,642 $ 671,581 $ 975,125 The accompanying notes are an integral part of the consolidated financial statements. 42 42 Table of Contents Table of Contents Table of Contents --- ## No Match in Current: (in thousands) *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Net income $ 448,752 $ 715,501 $ 1,014,589 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively 17,407 (29,031 ) (36,207 ) Available-for-sale marketable securities: Unrealized gains (losses) on marketable securities arising during period, net of tax of $568, $(3,388), ($578), respectively 2,423 (12,666 ) (2,255 ) Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $12, $25, $(277), respectively 44 301 (995 ) 2,467 (12,365 ) (3,250 ) Cash flow hedges: Unrealized gains (losses) arising during period, net of tax of $1,537, $(708), $0, respectively 5,464 (2,517 ) - Less: Reclassification adjustment for losses included in net income, net of tax of $(686), $0, $0, respectively (2,441 ) - - 3,023 (2,517 ) - Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) 22,890 (43,920 ) (39,464 ) Comprehensive income $ 471,642 $ 671,581 $ 975,125 The accompanying notes are an integral part of the consolidated financial statements. 42 42 Table of Contents Table of Contents Table of Contents --- ## No Match in Current: Concentration of Credit Risk *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash equivalents, marketable securities, forward currency contracts and accounts receivable. Our cash equivalents consist primarily of money market funds invested in U.S. Treasuries and government agencies. Our fixed income available-for-sale marketable securities have a minimum rating of AA by one or more of the major credit rating agencies. We place forward currency contracts with high credit-quality financial institutions in order to minimize credit risk exposure. Concentrations of credit risk with respect to accounts receivable 36 36 Table of Contents Table of Contents Table of Contents are limited due to the large number of geographically dispersed customers. We perform ongoing credit evaluations of our customers' financial condition and from time to time may require customers to provide a letter of credit from a bank to secure accounts receivable. As of December 31, 2023, a customer of our Semiconductor Test segment, Texas Instruments Inc., accounted for 18% of our accounts receivable balance. There were no customers who accounted for more than 10% of our accounts receivable balance as of December 31, 2022. --- ## Modified: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS **Key changes:** - Reworded sentence: "Teradyne designs, develops, manufactures, and sells automated test systems and robotics products." - Reworded sentence: "Teradyne's robotics products consist primarily of collaborative robotic arms and autonomous mobile robots used by global manufacturing, logistics and industrial customers to improve quality, increase manufacturing and material handling efficiency, and decrease manufacturing and logistics costs." **Prior (2024):** A.THE COMPANY Teradyne, Inc. ("Teradyne") is a leading global supplier of automated test equipment and robotics solutions. Teradyne designs, develops, manufactures and sells automated test systems and robotics products. Teradyne's automated test systems are used to test semiconductors, wireless products, data storage and complex electronics systems in many industries including consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries. Teradyne's robotics products include collaborative robotic arms, autonomous mobile robots, and advanced robotic control software used by global manufacturing, logistics and industrial customers to improve quality, increase manufacturing and material handling efficiency and decrease manufacturing and logistics costs. Teradyne's automated test equipment and robotics products and services include: •semiconductor test ("Semiconductor Test") systems; •storage and system level test ("Storage Test") systems, defense/aerospace ("Defense/Aerospace") test instrumentation and systems, and circuit-board test and inspection ("Production Board Test") systems (collectively these products represent "System Test"); •wireless test ("Wireless Test") systems; and **Current (2025):** A.THE COMPANY Teradyne, Inc. ("Teradyne") is a leading global supplier of automated test equipment and robotics solutions. Teradyne designs, develops, manufactures, and sells automated test systems and robotics products. Teradyne's automated test systems are used to test semiconductors, wireless products, data storage and complex electronics systems in many industries including consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries. Teradyne's robotics products consist primarily of collaborative robotic arms and autonomous mobile robots used by global manufacturing, logistics and industrial customers to improve quality, increase manufacturing and material handling efficiency, and decrease manufacturing and logistics costs. Teradyne's automated test equipment and robotics products and services include: •semiconductor test ("Semiconductor Test") systems; •robotics ("Robotics") products; and•defense/aerospace ("Defense/Aerospace") test instrumentation and systems, circuit-board test and inspection ("Production Board Test") systems, and wireless test systems (referred collectively as "All Other"). --- ## Modified: The market for our products is concentrated, and our business depends, in part, on obtaining orders from a few significant customers. **Key changes:** - Reworded sentence: "The market for our products is concentrated with a limited number of significant customers accounting for a substantial portion of the purchases of test equipment." **Prior (2024):** 10 10 Table of Contents Table of Contents Table of Contents The market for our products is concentrated with a limited number of significant customers accounting for a substantial portion of the purchases of test equipment. In each of the years, 2023, 2022 and 2021, our five largest direct customers in aggregate accounted for 32%, 26% and 33% of consolidated revenues, respectively. We estimate consolidated revenues driven by one OEM customer, of our Semiconductor Test and Wireless Test segments, combining direct sales to that customer with sales to the customer's OSATs (which include Taiwan Semiconductor Manufacturing Company Ltd.), accounted for 19% of our consolidated revenues in 2021. **Current (2025):** The market for our products is concentrated with a limited number of significant customers accounting for a substantial portion of the purchases of test equipment. In each of the years, 2024, 2023 and 2022, our five largest direct customers in aggregate accounted for 36%, 32% and 26% of consolidated revenues, respectively. We estimate consolidated revenues driven by Samsung, a customer of our Semiconductor Test and Wireless Test Segments, combining direct sales to that customer with sales to the customer's OSATs, accounted for 12.5% of our consolidated revenues in 2024. --- ## Modified: Capital Resources and Material Cash Requirements **Key changes:** - Reworded sentence: "Our cash, cash equivalents and marketable securities balance decreased by $213.4 million in 2024 to $723.8 million." - Reworded sentence: "The decrease in operating liabilities was due to a $57.2 million decrease in deferred revenue and customer advance payments, a $26.9 million decrease in income taxes, a $21.2 million decrease in accrued employee compensation, and $5.5 million of retirement plan contributions, partially offset by a $45.0 million increase in accounts payable, and a $23.0 million increase in other accrued liabilities." - Removed sentence: "In January 2022, May 2022, August 2022 and November 2022, our Board of Directors declared a quarterly cash dividend of $0.11 per share." - Removed sentence: "Total dividend payments in 2022 were $69.7 million." - Reworded sentence: "In 2024, we repurchased 1.7 million shares of common stock for $198.6 million, which excludes related excise tax, at an average price of $114.63 per share." **Prior (2024):** Our cash, cash equivalents and marketable securities balance decreased by $68.0 million in 2023 to $937.2 million. Cash decreased due to stock repurchases in the amount of $397.2 million, quarterly cash dividend payments in the amount of $67.9 million, and payments of convertible debt principal in the amount of $50.3 million, partially offset by cash generated by our global operations. Operating activities during 2023 provided cash of $585.2 million. Changes in operating assets and liabilities used cash of $9.6 million. This was due to a $33.2 million decrease in operating assets and a $42.8 million decrease in operating liabilities. The decrease in operating assets was due to a $71.0 million decrease in accounts receivable due to lower sales and a $5.3 million decrease in inventories, partially offset by a $43.1 million increase in prepayments and other assets due to prepayments to our contract manufacturers. 32 32 Table of Contents Table of Contents Table of Contents The decrease in operating liabilities was due to a $57.2 million decrease in deferred revenue and customer advance payments, a $26.9 million decrease in income taxes, a $21.2 million decrease in accrued employee compensation, and $5.5 million of retirement plan contributions, partially offset by a $45.0 million increase in accounts payable, and a $23.0 million increase in other accrued liabilities. Investing activities during 2023 used cash of $179.6 million, due to $161.9 million used for purchases of marketable securities, $159.6 million used for purchases of property, plant and equipment, and $5.0 million used for issuance of convertible loan, partially offset by $85.0 million and $61.4 million in proceeds from maturities and sales of marketable securities, respectively, and $0.5 million in proceeds from the cancellation of Teradyne owned life insurance policies related to the cash surrender value. Financing activities during 2023 used cash of $501.9 million, due to $397.2 million used for the repurchase of 3.9 million shares of common stock at an average price of $102.47 per share, $67.9 million used for dividend payments, $50.3 million used for the payments of convertible debt principal, and $20.8 million used for payments related to net settlement of employee stock compensation awards, partially offset by $34.3 million from the issuance of common stock under employee stock purchase and stock option plans. Operating activities during 2022 provided cash of $577.9 million. Changes in operating assets and liabilities used cash of $272.6 million. This was due to a $170.9 million increase in operating assets and a $101.7 million decrease in operating liabilities. The increase in operating assets was due to a $140.7 million increase in prepayments and other assets due to prepayments to our contract manufacturers, and an $80.8 million increase in inventories, partially offset by a $50.6 million decrease in accounts receivable due to lower sales. The decrease in operating liabilities was due to a $40.3 million decrease in accrued employee compensation, a $29.8 million decrease in income taxes, a $10.8 million decrease in accounts payable, a $9.3 million decrease in other accrued liabilities, a $6.2 million decrease in deferred revenue and customer advance payments, and $5.1 million of retirement plan contributions. Investing activities during 2022 provided cash of $43.8 million, due to $268.1 million and $222.9 million in proceeds from sales and maturities of marketable securities, respectively, $3.4 million due to sale of an asset, partially offset by $287.4 million used for purchases of marketable securities and $163.2 million used for purchases of property, plant and equipment. Financing activities during 2022 used cash of $893.0 million, due to $752.1 million used for the repurchase of 7.3 million shares of common stock at an average price of $103.69 per share, $69.7 million used for dividend payments, $66.8 million used for the payments of convertible debt principal, and $33.2 million used for payments related to net settlement of employee stock compensation awards, partially offset by $28.7 million from the issuance of common stock under employee stock purchase and stock option plans. In January 2023, May 2023, August 2023 and November 2023, our Board of Directors declared a quarterly cash dividend of $0.11 per share. Total dividend payments in 2023 were $67.9 million. In January 2022, May 2022, August 2022 and November 2022, our Board of Directors declared a quarterly cash dividend of $0.11 per share. Total dividend payments in 2022 were $69.7 million. In January 2023, our Board of Directors cancelled the 2021 repurchase program and approved a new repurchase program for up to $2.0 billion of common stock. In 2023, we repurchased 3.9 million shares of common stock for $397.2 million, which excludes related excise tax, at an average price of $102.47 per share. In 2022, we repurchased 7.3 million shares of common stock for $752.1 million at an average price of $103.69 per share against the 2021 repurchase program. The cumulative repurchases as of December 31, 2022, under the 2021 repurchase program, were 12.0 million shares of common stock for $1,352.1 million at an average price per share of $112.44. In 2024 we intend to repurchase up to $90.0 million. While we declared a quarterly cash dividend and authorized a share repurchase program, we may reduce or eliminate the cash dividend or share repurchase program in the future. Future cash dividends and stock repurchases are subject to the discretion of our Board of Directors, which will consider, among other things, our earnings, capital requirements and financial condition. On November 7, 2023, Teradyne announced a strategic partnership with Technoprobe S.p.A including Teradyne's agreement to acquire a 10% equity investment in Technoprobe for 481.0 million Euros. Teradyne will face a three year restriction on the transfer or disposition of the Technoprobe shares upon closing of the agreement, subject to certain early termination events. On May 1, 2020, we entered into a credit agreement providing a three-year, senior secured revolving credit facility of $400 million. On December 10, 2021, the credit agreement was amended to extend the senior secured revolving credit facility to December 10, 2026. On October 5, 2022, the credit agreement was amended to increase the amount of the credit facility to $750.0 million from $400.0 million. As of February 22, 2023, we have not borrowed any funds under the credit facility. 33 33 Table of Contents Table of Contents Table of Contents We expect operations to continue to be the primary source of cash to operate the business and meet material cash commitments, including any payments of convertible debt principal, our stock repurchase program, our quarterly dividends, our office lease obligations, contractual obligations related to inventory purchases and the construction of new facilities. We believe our cash, cash equivalents and marketable securities balance will be sufficient to pay our quarterly dividend and meet our working capital and expenditure needs for at least the next twelve months. Inflation has not had a significant long-term impact on earnings. At December 31, 2023, our future contractual obligations were related to debt, leases, retirement plan liabilities, deferred tax benefits, and purchase obligations. See Note J. "Debt", Note I. "Leases", Note P. "Retirement Plans", and Note S. "Income Taxes" of Notes to Consolidated Financial Statements in this Annual Report for information about those obligations, which Notes are incorporated by reference into this section. Our purchase obligations were approximately $414.4 million, with $379.1 million expected to be paid within twelve months. **Current (2025):** Our cash, cash equivalents and marketable securities balance decreased by $213.4 million in 2024 to $723.8 million. Cash decreased due to investments in businesses for $532.1 million, stock repurchases in the amount of $198.6 million, and quarterly cash dividend payments in the amount of $76.4 million, partially offset by proceeds from the sale of business and cash generated by our global operations. Operating activities during 2024 provided cash of $672.2 million. Changes in operating assets and liabilities used cash of $23.9 million. This was due to a $75.5 million decrease in operating assets and a $51.6 million decrease in operating liabilities. The decrease in operating assets was primarily due to a decrease in other assets and inventory of $119.5 million and $8.7 million respectively, partially offset by a $52.7 million increase in accounts receivable, driven by higher sales at year-end. The decrease in operating liabilities was due to a $48.2 million decrease in accounts payable, a $6.2 million decrease in other accrued compensation, $5.8 million of retirement plan contributions, and a $3.6 million decrease in income taxes, partially offset by a $12.2 million increase in deferred revenue and customer advance payments. Investing activities during 2024 used cash of $622.3 million, comprised of $532.1 million used for investments in businesses, $198.1 million used for purchases of property, plant and equipment, and $45.8 million used for purchases of marketable securities, partially offset by $90.3 million in proceeds from the sale of a business, $38.4 million and $24.0 million in proceeds from the maturities and sales of marketable securities, respectively, and $0.9 million in proceeds from life insurance. Financing activities during 2024 used cash of $251.8 million, due to $198.6 million used for the repurchase of 1.7 million shares of common stock at an average price of $114.63 per share, $76.4 million used for dividend payments, and $14.1 million used for payments related to net settlement of employee stock compensation awards, partially offset by $37.3 million from the issuance of common stock under employee stock purchase and stock option plans. Operating activities during 2023 provided cash of $585.2 million. Changes in operating assets and liabilities used cash of $9.6 million. This was due to a $33.2 million decrease in operating assets and a $42.8 million decrease in operating liabilities. The decrease in operating assets was due to a $71.0 million decrease in accounts receivable due to lower sales and a $5.3 million decrease in inventories, partially offset by a $43.1 million increase in prepayments and other assets due to prepayments to our contract manufacturers. The decrease in operating liabilities was due to a $57.2 million decrease in deferred revenue and customer advance payments, a $26.9 million decrease in income taxes, a $21.2 million decrease in accrued employee compensation, and $5.5 million of retirement plan contributions, partially offset by a $45.0 million increase in accounts payable, and a $23.0 million increase in other accrued liabilities. Investing activities during 2023 used cash of $179.6 million, due to $161.9 million used for purchases of marketable securities, $159.6 million used for purchases of property, plant and equipment, and $5.0 million used for issuance of convertible loans, partially offset by $85.0 million and $61.4 million in proceeds from maturities and sales of marketable securities, respectively, and $0.5 million in proceeds from the cancellation of Teradyne owned life insurance policies related to the cash surrender value. Financing activities during 2023 used cash of $501.9 million, due to $397.2 million used for the repurchase of 3.9 million shares of common stock at an average price of $102.47 per share, $67.9 million used for dividend payments, $50.3 million used for the 31 31 31 Table of Contents Table of Contents Table of Contents payments of convertible debt principal, and $20.8 million used for payments related to net settlement of employee stock compensation awards, partially offset by $34.3 million from the issuance of common stock under employee stock purchase and stock option plans. In January 2024, May 2024, August 2024 and November 2024, our Board of Directors declared a quarterly cash dividend of $0.12 per share. Total dividend payments in 2024 were $76.4 million. In January 2023, May 2023, August 2023 and November 2023, our Board of Directors declared a quarterly cash dividend of $0.11 per share. Total dividend payments in 2023 were $67.9 million. In January 2023, our Board of Directors cancelled the 2021 repurchase program and approved a new repurchase program for up to $2.0 billion of common stock. In 2024, we repurchased 1.7 million shares of common stock for $198.6 million, which excludes related excise tax, at an average price of $114.63 per share. In 2023, we repurchased 3.9 million shares of common stock for $397.2 million, which excludes related excise tax, at an average price of $102.47 per share against the 2023 repurchase program. The cumulative repurchases as of December 31, 2024, under the 2023 repurchase program, were 5.6 million shares of common stock for $595.2 million, exclusive of tax, at an average price per share of $106.21. In 2025, we intend to repurchase up to $400.0 million. While we declared a quarterly cash dividend and authorized a share repurchase program, we may reduce or eliminate the cash dividend or share repurchase program in the future. Future cash dividends and stock repurchases are subject to the discretion of our Board of Directors, which will consider, among other things, our earnings, capital requirements and financial condition. On May 27, 2024, we paid 483.1 million Euros, equivalent to $524.1 million, to purchase a combination of previously issued and outstanding shares and shares newly issued by Technoprobe, S.p.A. ("Technoprobe"). The shares purchased represent 10% of the issued and outstanding shares of Technoprobe. We also received a board seat as part of the purchase. Additionally, as part of the transaction, we completed the sale of the Device Interface Solutions ("DIS") business, a component of the Semiconductor Test segment, to Technoprobe for $85.0 million in cash, net of cash and cash equivalents sold, and a customary working capital adjustment. The sale resulted in a pre-tax gain of $57.1 million recorded as 'Gain on sale of business' in the consolidated statement of operations. On May 1, 2020, we entered into a credit agreement providing a three-year, senior secured revolving credit facility of $400 million. On December 10, 2021, the credit agreement was amended to extend the senior secured revolving credit facility to December 10, 2026. On October 5, 2022, the credit agreement was amended to increase the amount of the credit facility to $750.0 million from $400.0 million. On November 7, 2023, the Credit Agreement was amended to allow for the purchase of the shares of Technoprobe. On May 16, 2024, we borrowed $185.0 million under the credit agreement to partially fund the acquisition of 10% of the issued and outstanding shares of Technoprobe. We fully repaid our borrowings on the revolving credit facility prior to December 31, 2024. As of February 20, 2025, there are no outstanding borrowings under the credit facility. We expect operations to continue to be the primary source of cash to operate the business and meet material cash commitments, including any payments of convertible debt principal, our stock repurchase program, our quarterly dividends, our office lease obligations, contractual obligations related to inventory purchases and the construction of new facilities. We believe our cash, cash equivalents and marketable securities balance will be sufficient to pay our quarterly dividend and meet our working capital and expenditure needs for at least the next twelve months. Inflation has not had a significant long-term impact on earnings. At December 31, 2024, our future contractual obligations were related to debt, leases, retirement plan liabilities, deferred tax benefits, and purchase obligations. See Note K. "Debt", Note J. "Leases", Note Q. "Retirement Plans", and Note T. "Income Taxes" of Notes to Consolidated Financial Statements in this Annual Report for information about those obligations, which Notes are incorporated by reference into this section. Our purchase obligations were approximately $419.8 million, with $409.6 million expected to be paid within twelve months. --- ## Modified: Foreign currency exchange rates and fluctuations in those rates may affect the Company's ability to realize projected growth rates in its sales and earnings. **Key changes:** - Reworded sentence: "While revenues in our test businesses are predominantly in U.S." **Prior (2024):** Our financial statements are denominated in U.S. dollars. While the majority of our revenues are in U.S. dollars, approximately 70% of our Robotics revenue in 2023 was denominated in foreign currencies. Correspondingly, our results of operations and our ability to realize projected growth rates in sales and earnings in Robotics could be adversely affected if the U.S. dollar strengthens significantly against foreign currencies. **Current (2025):** Our financial statements are denominated in U.S. dollars. While revenues in our test businesses are predominantly in U.S. dollars, the majority of our Robotics revenue is denominated in foreign currencies. Strengthening of the U.S. dollar would negatively affect Robotics revenue growth. --- ## Modified: Advertising Costs **Key changes:** - Reworded sentence: "Advertising costs were $16.1 million, $15.5 million and $17.3 million in 2024, 2023 and 2022, respectively." - Reworded sentence: "dollar, except for Robotics and Lemsys for which the local currency is its functional currency." - Reworded sentence: "For Robotics and Lemsys, assets and liabilities are translated into U.S." - Reworded sentence: "For the years ended December 31, 2024, 2023 and 2022, losses (gains) from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $2.8 million, $10.9 million, and $10.8 million, respectively." **Prior (2024):** Teradyne expenses all advertising costs as incurred. Advertising costs were $15.5 million, $17.3 million and $13.4 million in 2023, 2022 and 2021, respectively. Translation of Non-U.S. Currencies The functional currency for all non-U.S. subsidiaries is the U.S. dollar, except for Universal Robots, MiR and Lemsys for which the local currency is its functional currency. All foreign currency denominated monetary assets and liabilities are remeasured on a monthly basis into the functional currency using exchange rates in effect at the end of the period. All foreign currency denominated non-monetary assets and liabilities are remeasured into the functional currency using historical exchange rates. Net foreign exchange gains and losses resulting from remeasurement are included in other (income) expense, net. For Universal Robots, MiR and Lemsys, assets and liabilities are translated into U.S. dollars using exchange rates in effect at the end of the period. Revenues and expense amounts are translated using an average of exchange rates in effect during the period. Translation adjustments are recorded within accumulated other comprehensive income (loss) on the balance sheet. Net foreign exchange gains and losses resulting from remeasurement are included in other (income) expense, net. For the years ended December 31, 2023, 2022 and 2021, losses (gains) from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $10.9 million, $10.8 million, and $(2.1) million, respectively. 51 Table of Contents These amounts do not reflect the corresponding (gains) losses from foreign exchange contracts. See Note H: "Financial Instruments" regarding foreign exchange contracts. **Current (2025):** Teradyne expenses all advertising costs as incurred. Advertising costs were $16.1 million, $15.5 million and $17.3 million in 2024, 2023 and 2022, respectively. Translation of Non-U.S. Currencies The functional currency for all non-U.S. subsidiaries is the U.S. dollar, except for Robotics and Lemsys for which the local currency is its functional currency. All foreign currency denominated monetary assets and liabilities are remeasured on a monthly basis into the functional currency using exchange rates in effect at the end of the period. All foreign currency denominated non-monetary assets and liabilities are remeasured into the functional currency using historical exchange rates. Net foreign exchange gains and losses resulting from remeasurement are included in other (income) expense, net. For Robotics and Lemsys, assets and liabilities are translated into U.S. dollars using exchange rates in effect at the end of the period. Revenues and expense amounts are translated using an average of exchange rates in effect during the period. Translation adjustments are recorded within accumulated other comprehensive income (loss) on the balance sheet. Net foreign exchange gains and losses resulting from remeasurement are included in other (income) expense, net. For the years ended December 31, 2024, 2023 and 2022, losses (gains) from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $2.8 million, $10.9 million, and $10.8 million, respectively. --- ## Modified: (in thousands) **Key changes:** - Reworded sentence: "Contract manufacturer and supplier prepayments $ 365,875 $ 502,257 Prepaid maintenance and other services 22,176 17,592 Prepaid taxes 22,211 16,083 Other prepayments 18,824 13,038 Total prepayments $ 429,086 $ 548,970 (1)Excludes $5.3 million of contract manufacturer and supplier prepayments, classified as assets held for sale." - Reworded sentence: "See Note E: "Dispositions" for additional information." - Reworded sentence: "See Note E: "Dispositions" for additional information." **Prior (2024):** Net income $ 448,752 $ 715,501 $ 1,014,589 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively 17,407 (29,031 ) (36,207 ) Available-for-sale marketable securities: Unrealized gains (losses) on marketable securities arising during period, net of tax of $568, $(3,388), ($578), respectively 2,423 (12,666 ) (2,255 ) Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $12, $25, $(277), respectively 44 301 (995 ) 2,467 (12,365 ) (3,250 ) Cash flow hedges: Unrealized gains (losses) arising during period, net of tax of $1,537, $(708), $0, respectively 5,464 (2,517 ) - Less: Reclassification adjustment for losses included in net income, net of tax of $(686), $0, $0, respectively (2,441 ) - - 3,023 (2,517 ) - Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) 22,890 (43,920 ) (39,464 ) Comprehensive income $ 471,642 $ 671,581 $ 975,125 The accompanying notes are an integral part of the consolidated financial statements. 42 42 Table of Contents Table of Contents Table of Contents **Current (2025):** Net income $ 542,372 $ 448,752 $ 715,501 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively (52,847 ) 17,407 (29,031 ) Available-for-sale marketable securities: Unrealized (losses) gains on marketable securities arising during period, net of tax of $(470), $568, ($3,388), respectively (1,699 ) 2,423 (12,666 ) Less: Reclassification adjustment for (gains) losses included in net income, net of tax of $24, $12, $25, respectively 86 44 301 (1,613 ) 2,467 (12,365 ) Cash flow hedges: Unrealized (losses) gains arising during period, net of tax of $593, $1,537, $(708), respectively 2,100 5,464 (2,517 ) Less: Reclassification adjustment for (gains) losses included in net income, net of tax of $(527), $(686), $0, respectively (1,875 ) (2,441 ) - 225 3,023 (2,517 ) Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) (54,242 ) 22,890 (43,920 ) Comprehensive income $ 488,130 $ 471,642 $ 671,581 The accompanying notes are an integral part of the consolidated financial statements. 40 40 40 Table of Contents Table of Contents Table of Contents --- ## Modified: The global supply shortage of electrical components and inflationary cost increases impact our ability to meet customer demand and could adversely affect our business and financial results. **Key changes:** - Reworded sentence: "The global supply shortage of electrical components, including semiconductor chips, impacted our supply chain in 2023." **Prior (2024):** The global supply shortage of electrical components, including semiconductor chips, continued to impact our supply chain in 2023. As a result, we have experienced, and may experience in the future, increases in our lead times and costs for certain components for certain products and delays in the delivery of some orders placed by our customers. In addition, in 2023, inflationary pressures contributed to increased costs for product components and wage inflation, which had minimal impact on our cost of products, gross margin and profit for the year. Our supply chain team, and our suppliers, continue to manage numerous supply, production and logistics obstacles. In an effort to mitigate these risks, in some cases, we have incurred higher costs due to investment in supply chain resiliency and to secure available inventory or have extended or placed non-cancellable purchase commitments with semiconductor suppliers, which introduces inventory risk if our forecasts and assumptions prove inaccurate. We have also sourced components from additional suppliers and multi-sourced and pre-ordered components and finished goods inventory in some cases in an effort to reduce the impact of the adverse supply chain conditions we have experienced. However, if we are unable to secure manufacturing capacities from our current or new suppliers and contract manufacturers, on acceptable terms or at all, or successfully manage our purchase commitments and inventory for components, our ability to deliver our products to our customers in the desired quantities, at competitive prices or in a timely manner may be negatively impacted for 2024. Also, our suppliers and contract manufacturers have increased their prices, which increased our cost of products. We also have been, and may continue to attempt to, offset the effect of these inflationary pressures by increasing the prices of our products. However, we may not be fully able to pass additional costs on to our customers, which could have a negative impact on our results of operations and financial condition. **Current (2025):** The global supply shortage of electrical components, including semiconductor chips, impacted our supply chain in 2023. As a result, we experienced and may experience in the future, increases in our lead times and costs for certain components for certain products. We may also experience delays in the delivery of some orders placed by our customers. In addition, inflationary pressures have in the past contributed to increased costs for product components along with wage inflation which yielded a minimal impact to the costs of our products, gross margin and profit for the year. In an effort to mitigate these risks, we may in some cases, incur higher costs due to investment in supply chain resiliency and to secure available inventory or have extended or non-cancellable purchase commitments with semiconductor suppliers, which introduces inventory risk if our forecasts prove inaccurate. We have also sourced components from additional suppliers and multi-sourced and pre0ordered components and finished goods inventory in some cases in an effort to reduce the impact of the adverse supply chain conditions we have experienced in the past. However, if we are unable to secure manufacturing capacities from our current or new suppliers and contract manufacturers, on acceptable terms or at all, or successfully manage our purchase commitments and inventory for components, our ability to deliver our products to our customers in the desired quantities, at competitive prices or in a timely manner may be negatively impacted for 2025. We also have been, and may continue to attempt to, offset the effect of these inflationary pressures by increasing the prices of our products. However, we may not be fully able to pass additional costs on to our customers, which could have a negative impact on our results of operations and financial condition. --- ## Modified: Adverse developments affecting the financial services industry, including events or risks involving liquidity, defaults or non-performance by financial institutions, could have a material adverse effect on our business, financial condition or results of operations. **Key changes:** - Reworded sentence: "We hold cash balances in several large financial institutions significantly in excess of the Federal Deposit Insurance Corporation ("FDIC") and global insurance limits." - Reworded sentence: "There is no guarantee that the FDIC or any other global insurer will provide access to uninsured funds in the future in the event of the closure of any other banks or financial institutions in a timely fashion or at all." **Prior (2024):** On March 10, 2023, Silicon Valley Bank (SVB), who is a lender in our revolving credit facility and where we maintain certain accounts and cash deposits, was placed into receivership with the Federal Deposit Insurance Corporation (FDIC), which resulted in all funds held at SVB being temporarily inaccessible by SVB's customers. As of March 13, 2023, access to our cash and cash equivalents at SVB was fully restored. Although our cash balances at SVB are insignificant and we do not expect further developments at SVB to have a material impact on our cash and cash equivalents, we do hold cash balances in several large financial institutions significantly in excess of FDIC and global insurance limits. If other banks and financial institutions with whom we have banking relationships enter receivership or become insolvent in the future, we may be unable to access, and we may lose, some or all of our existing cash, cash equivalents and investments to the extent those funds are not insured or otherwise protected by the FDIC. **Current (2025):** We hold cash balances in several large financial institutions significantly in excess of the Federal Deposit Insurance Corporation ("FDIC") and global insurance limits. If banks and financial institutions with whom we have banking relationships enter receivership or become insolvent in the future, we may be unable to access, and we may lose some or all of our existing cash, cash equivalents and investments to the extent those funds are not insured or otherwise protected by the FDIC. For example, on March 10, 2023, Silicon Valley Bank ("SVB"), who is a lender in our revolving credit facility and where we maintain certain accounts and cash deposits, was placed into receivership with the FDIC, which resulted in all funds held at SVB being temporarily inaccessible by SVB's customers. As of March 13, 2023, access to our cash and cash equivalents at SVB was fully restored. There is no guarantee that the FDIC or any other global insurer will provide access to uninsured funds in the future in the event of the closure of any other banks or financial institutions in a timely fashion or at all. Any inability to access or delay in accessing these funds could adversely affect our business, financial position, and liquidity. --- ## Modified: Translation of Non-U.S. Currencies **Key changes:** - Reworded sentence: "dollar, except for Robotics and Lemsys for which the local currency is its functional currency." - Reworded sentence: "For Robotics and Lemsys, assets and liabilities are translated into U.S." - Reworded sentence: "For the years ended December 31, 2024, 2023 and 2022, losses (gains) from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $2.8 million, $10.9 million, and $10.8 million, respectively." - Reworded sentence: "With respect to its convertible debt issued in 2016, Teradyne was required to settle the principal of the convertible debt in cash; accordingly, the principal amount was excluded from the determination of diluted earnings per share." **Prior (2024):** The functional currency for all non-U.S. subsidiaries is the U.S. dollar, except for Universal Robots, MiR and Lemsys for which the local currency is its functional currency. All foreign currency denominated monetary assets and liabilities are remeasured on a monthly basis into the functional currency using exchange rates in effect at the end of the period. All foreign currency denominated non-monetary assets and liabilities are remeasured into the functional currency using historical exchange rates. Net foreign exchange gains and losses resulting from remeasurement are included in other (income) expense, net. For Universal Robots, MiR and Lemsys, assets and liabilities are translated into U.S. dollars using exchange rates in effect at the end of the period. Revenues and expense amounts are translated using an average of exchange rates in effect during the period. Translation adjustments are recorded within accumulated other comprehensive income (loss) on the balance sheet. Net foreign exchange gains and losses resulting from remeasurement are included in other (income) expense, net. For the years ended December 31, 2023, 2022 and 2021, losses (gains) from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $10.9 million, $10.8 million, and $(2.1) million, respectively. 51 51 Table of Contents Table of Contents Table of Contents These amounts do not reflect the corresponding (gains) losses from foreign exchange contracts. See Note H: "Financial Instruments" regarding foreign exchange contracts. Net Income per Common Share Basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Except where the result would be anti-dilutive, diluted net income per common share is calculated by dividing net income by the sum of the weighted average number of common shares plus common stock equivalents, if applicable. With respect to its convertible debt issued in 2016, Teradyne is required to settle the principal of the convertible debt in cash; accordingly, the principal amount is excluded from the determination of diluted earnings per share. As a result, Teradyne is accounting for the conversion spread using the treasury stock method. **Current (2025):** The functional currency for all non-U.S. subsidiaries is the U.S. dollar, except for Robotics and Lemsys for which the local currency is its functional currency. All foreign currency denominated monetary assets and liabilities are remeasured on a monthly basis into the functional currency using exchange rates in effect at the end of the period. All foreign currency denominated non-monetary assets and liabilities are remeasured into the functional currency using historical exchange rates. Net foreign exchange gains and losses resulting from remeasurement are included in other (income) expense, net. For Robotics and Lemsys, assets and liabilities are translated into U.S. dollars using exchange rates in effect at the end of the period. Revenues and expense amounts are translated using an average of exchange rates in effect during the period. Translation adjustments are recorded within accumulated other comprehensive income (loss) on the balance sheet. Net foreign exchange gains and losses resulting from remeasurement are included in other (income) expense, net. For the years ended December 31, 2024, 2023 and 2022, losses (gains) from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $2.8 million, $10.9 million, and $10.8 million, respectively. 50 50 50 Table of Contents Table of Contents Table of Contents These amounts do not reflect the corresponding (gains) losses from foreign exchange contracts. See Note I: "Financial Instruments" regarding foreign exchange contracts.Net Income per Common Share Basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Except where the result would be anti-dilutive, diluted net income per common share is calculated by dividing net income by the sum of the weighted average number of common shares plus common stock equivalents, if applicable. With respect to its convertible debt issued in 2016, Teradyne was required to settle the principal of the convertible debt in cash; accordingly, the principal amount was excluded from the determination of diluted earnings per share. As a result, Teradyne is accounting for the conversion spread using the treasury stock method. Comprehensive Income Comprehensive income includes net income, unrealized pension and postretirement prior service costs and benefits, unrealized gains and losses on investments in debt marketable securities, unrealized gains and losses on cash flow hedge and foreign currency translation adjustment. These amounts do not reflect the corresponding (gains) losses from foreign exchange contracts. See Note I: "Financial Instruments" regarding foreign exchange contracts. These amounts do not reflect the corresponding (gains) losses from foreign exchange contracts. See Note I: "Financial Instruments" regarding foreign exchange contracts. Net Income per Common Share Basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Except where the result would be anti-dilutive, diluted net income per common share is calculated by dividing net income by the sum of the weighted average number of common shares plus common stock equivalents, if applicable. With respect to its convertible debt issued in 2016, Teradyne was required to settle the principal of the convertible debt in cash; accordingly, the principal amount was excluded from the determination of diluted earnings per share. As a result, Teradyne is accounting for the conversion spread using the treasury stock method. --- ## Modified: Number of securities remainingavailable for future issuanceunder equity compensationplans (excluding securitiesreflected in column one) **Key changes:** - Reworded sentence: "Equity plans approved by shareholders 1,668 (1) $ 99.51 6,862 (2) (1)Includes 1,527,351 shares of restricted stock units that are not included in the calculation of the weighted average exercise price." - Reworded sentence: "The aggregate number of shares available under the 2006 Equity Plan as of December 31, 2024 was 3,638,237 shares of our common stock." - Reworded sentence: "As of December 31, 2024, total unrecognized compensation expense related to non-vested restricted stock units and options was $82.6 million and is expected to be recognized over a weighted average period of 2.5 years." **Prior (2024):** Equity plans approved by shareholders 1,548 (1) $ 94.85 7,863 (2) (1)Includes 1,377,662 shares of restricted stock units that are not included in the calculation of the weighted average exercise price. Includes 1,377,662 shares of restricted stock units that are not included in the calculation of the weighted average exercise price. (2)Consists of 4,352,428 securities available for issuance under the 2006 Equity Plan and 3,510,784 of securities available for issuance under the Employee Stock Purchase Plan. Consists of 4,352,428 securities available for issuance under the 2006 Equity Plan and 3,510,784 of securities available for issuance under the Employee Stock Purchase Plan. The purpose of the 2006 Equity Plan is to motivate employees, officers and directors by providing equity ownership and compensation opportunities in Teradyne. The aggregate number of shares available under the 2006 Equity Plan as of December 31, 2023 was 4,352,428 shares of our common stock. The 2006 Equity Plan authorizes the grant of stock-based awards in the form of (1) non-qualified and incentive stock options, (2) stock appreciation rights, (3) restricted stock awards and restricted stock unit awards, (4) phantom stock, and (5) other stock-based awards. Awards may be tied to time-based vesting schedules and/or performance-based vesting measured by reference to performance criteria chosen by the Compensation Committee of the Board of Directors, which administers the 2006 Equity Plan. Awards may be made to any employee, officer, consultant and advisor of Teradyne and our subsidiaries, as well as to our directors. The maximum number of shares of stock-based awards that may be granted to one participant during any one fiscal year is 2,000,000 shares of common stock. As of December 31, 2023, total unrecognized compensation expense related to non-vested restricted stock units and options was $73.7 million and is expected to be recognized over a weighted average period of 2.5 years. 35 35 Table of Contents Table of Contents Table of Contents **Current (2025):** Equity plans approved by shareholders 1,668 (1) $ 99.51 6,862 (2) (1)Includes 1,527,351 shares of restricted stock units that are not included in the calculation of the weighted average exercise price. Includes 1,527,351 shares of restricted stock units that are not included in the calculation of the weighted average exercise price. 33 33 33 Table of Contents Table of Contents Table of Contents (2)Consists of 3,638,237 securities available for issuance under the 2006 Equity Plan and 3,224,044 of securities available for issuance under the Employee Stock Purchase Plan. Consists of 3,638,237 securities available for issuance under the 2006 Equity Plan and 3,224,044 of securities available for issuance under the Employee Stock Purchase Plan. The purpose of the 2006 Equity Plan is to motivate employees, officers and directors by providing equity ownership and compensation opportunities in Teradyne. The aggregate number of shares available under the 2006 Equity Plan as of December 31, 2024 was 3,638,237 shares of our common stock. The 2006 Equity Plan authorizes the grant of stock-based awards in the form of (1) non-qualified and incentive stock options, (2) stock appreciation rights, (3) restricted stock awards and restricted stock unit awards, (4) phantom stock, and (5) other stock-based awards. Awards may be tied to time-based vesting schedules and/or performance-based vesting measured by reference to performance criteria chosen by the Compensation Committee of the Board of Directors, which administers the 2006 Equity Plan. Awards may be made to any employee, officer, consultant and advisor of Teradyne and our subsidiaries, as well as to our directors. The maximum number of shares of stock-based awards that may be granted to one participant during any one fiscal year is 2,000,000 shares of common stock. As of December 31, 2024, total unrecognized compensation expense related to non-vested restricted stock units and options was $82.6 million and is expected to be recognized over a weighted average period of 2.5 years. --- ## Modified: Risk management and strategy **Key changes:** - Added sentence: "Central to this organization is our global cyber operations team, which is responsible for the protection, detection, and response capabilities used in the defense of critical data and enterprise computing services." - Added sentence: "We also have a corporate-wide insider threat detection program to proactively identify external and internal threats and mitigate those threats in a timely manner." - Added sentence: "Our broader Teradyne employee community also has a key role in our cybersecurity defenses and is immersed in a comprehensive training and awareness curriculum to build and promote a corporate culture supportive of security.Third parties also play a role in our cybersecurity." - Added sentence: "We engage third-party services to provide 24x7x365 monitoring, escalation, and response to cyber events." - Added sentence: "In addition to consulting on best practices, we leverage third parties for independent evaluations of our security controls through penetration testing and independent audits." **Prior (2024):** Our global information security organization, led by our CISO, is responsible for our overall information security strategy, policy, security engineering, operations, and cyber threat detection and response. Our CISO is an experienced cybersecurity senior executive with more than 25 years of experience building and leading cybersecurity, risk management and information technology teams. The information security organization manages and continually enhances a robust enterprise security structure with the goal of preventing cybersecurity incidents to the extent feasible, while simultaneously increasing system resilience and deploying highly proficient detection and response capabilities in an effort to minimize the business impact should an incident occur. Central to this organization is our global cyber operations team, which is responsible for the protection, detection, and response capabilities used in the defense of critical data and enterprise computing services. We also have a corporate-wide insider threat detection program to proactively identify external and internal threats and mitigate those threats in a timely manner. Our broader Teradyne employee community also has a key role in our cybersecurity defenses and is immersed in a comprehensive training and awareness curriculum to build and promote a corporate culture supportive of security. Third parties also play a role in our cybersecurity. We engage third-party services to provide 24x7x365 monitoring, escalation, and response to cyber events. In addition to consulting on best practices, we leverage third parties for independent evaluations of our security controls through penetration testing and independent audits. These evaluations include testing both the design and operational effectiveness of security controls. We also share and receive threat intelligence with our industry peers, cybersecurity associations, and our cyber controls vendors. We rely on contract manufacturing organizations and distributors to deliver our products to our customers, and a cybersecurity incident at one of these organizations or a key supplier could materially adversely impact us. We assess third party and supply chain cybersecurity controls through risk monitoring services tailored to align with our risk policy. Notwithstanding the extensive approach we take to cybersecurity, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us, either directly within our managed environment or indirectly via a third-party partner or supply chain vendor. Periodically we have a recognized independent security expert firm to assess our cyber security maturity along with risks and provide feedback on where we should continue to improve to mitigate exposures. We share this review with our Board and develop a security roadmap which incorporates this feedback. Additionally, for our business that supports the defense and aerospace sector, we must comply with extensive regulations, including requirements imposed by the Defense Federal Acquisition Regulation Supplement ("DFARS") related to adequately safeguarding controlled unclassified information ("CUI") and reporting cybersecurity incidents to the DoD. We have implemented cybersecurity policies and frameworks based on industry and governmental standards to align closely with DoD requirements, instructions, and guidance. Moreover, we are pursuing the necessary controls to support the Cybersecurity Maturity Model Certification ("CMMC") program, DoD's program to ensure members of the defense industrial base meet cybersecurity requirements for handling CUI and federal contract information. We believe we are well positioned to meet the requirements of the CMMC and are preparing for certification once the requirements are effective. 22 22 Table of Contents Table of Contents Table of Contents Item 2: Properties We conduct manufacturing, engineering, sales and marketing, service, corporate administration and other operations in various leased and owned facilities throughout the world. We own approximately 720,000 square feet of office space and lease approximately 1,500,000 square feet of office space. Our corporate headquarters is in North Reading, Massachusetts, in buildings that we own consisting of approximately 422,000 square feet. We believe our existing facilities and planned expansions noted below are adequate to meet our current and reasonably foreseeable requirements. We regularly evaluate our expected facility needs and periodically make adjustments based on these evaluations. In 2019, we purchased land in Denmark, approximately 200,000 square feet, to construct a new building for our Robotics operations. The new building construction is expected to be completed by the first half of 2024. Item 3: Legal Proceedings We are subject to legal proceedings, claims and investigations that arise in the ordinary course of business such as, but not limited to, patent, employment, commercial and environmental matters. We believe that we have meritorious defenses against all pending claims and intend to vigorously contest them. While it is not possible to predict or determine the outcomes of any pending claims or to provide possible ranges of losses that may arise, we believe the potential losses associated with all these actions are unlikely to have a material adverse effect on our results of operations, financial condition or cash flows. Item 4: Mine Safety Disclosure Not Applicable. 23 23 Table of Contents Table of Contents Table of Contents PART II Item 5: Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the Nasdaq Global Select Market under the trading symbol "TER." As of February 22, 2024, there were approximately 1,148 holders of record of shares of our common stock. See "Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations," for information on the frequency and amounts of our quarterly cash dividends, equity compensation plans and performance graph. The following table includes information with respect to repurchases we made of our common stock during the three months ended December 31, 2023 (in thousands except per share price): Period **Current (2025):** Our global information security organization, led by our CISO, is responsible for our overall information security strategy, policy, security engineering, operations, and cyber threat detection and response. Our CISO is an experienced cybersecurity senior executive with more than 25 years of experience building and leading cybersecurity, risk management and information technology teams. The information security organization manages and continually enhances a robust enterprise security structure with the goal of preventing cybersecurity incidents to the extent feasible, while simultaneously increasing system resilience and deploying highly proficient detection and response capabilities in an effort to minimize the business impact should an incident occur. Central to this organization is our global cyber operations team, which is responsible for the protection, detection, and response capabilities used in the defense of critical data and enterprise computing services. We also have a corporate-wide insider threat detection program to proactively identify external and internal threats and mitigate those threats in a timely manner. Our broader Teradyne employee community also has a key role in our cybersecurity defenses and is immersed in a comprehensive training and awareness curriculum to build and promote a corporate culture supportive of security.Third parties also play a role in our cybersecurity. We engage third-party services to provide 24x7x365 monitoring, escalation, and response to cyber events. In addition to consulting on best practices, we leverage third parties for independent evaluations of our security controls through penetration testing and independent audits. These evaluations include testing both the design and operational effectiveness of security controls. We also share and receive threat intelligence with our industry peers, cybersecurity associations, and our cyber controls vendors.We rely on contract manufacturing organizations and distributors to deliver our products to our customers, and a cybersecurity incident at one of these organizations or a key supplier could materially adversely impact us. We assess third party and supply chain cybersecurity controls through risk monitoring services tailored to align with our risk policy. Notwithstanding the extensive approach we take to cybersecurity, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us, either directly within our managed environment or indirectly via a third-party partner or supply chain vendor. Periodically we have a recognized independent security expert firm to assess our cyber security maturity along with risks and provide Our global information security organization, led by our CISO, is responsible for our overall information security strategy, policy, security engineering, operations, and cyber threat detection and response. Our CISO is an experienced cybersecurity senior executive with more than 25 years of experience building and leading cybersecurity, risk management and information technology teams. The information security organization manages and continually enhances a robust enterprise security structure with the goal of preventing cybersecurity incidents to the extent feasible, while simultaneously increasing system resilience and deploying highly proficient detection and response capabilities in an effort to minimize the business impact should an incident occur. Our global information security organization, led by our CISO, is responsible for our overall information security strategy Our CISO is an experienced cybersecurity senior executive with more than 25 years of experience building and leading cybersecurity, risk management and information technology teams. The information security organization manages and continually enhances a robust enterprise security structure with the goal of preventing cybersecurity incidents to the extent feasible, while simultaneously increasing system resilience and deploying highly proficient detection and response capabilities in an effort to minimize the business impact should an incident occur. Central to this organization is our global cyber operations team, which is responsible for the protection, detection, and response capabilities used in the defense of critical data and enterprise computing services. We also have a corporate-wide insider threat detection program to proactively identify external and internal threats and mitigate those threats in a timely manner. Our broader Teradyne employee community also has a key role in our cybersecurity defenses and is immersed in a comprehensive training and awareness curriculum to build and promote a corporate culture supportive of security. Central to this organization is our global cyber operations team, which is responsible for the protection, detection, and response capabilities used in the defense of critical data and enterprise computing services. We also have a corporate-wide insider threat detection program to proactively identify external and internal threats and mitigate those threats in a timely manner. Our broader Teradyne employee community also has a key role in our cybersecurity defenses and is immersed in a comprehensive training and awareness curriculum to build and promote a corporate culture supportive of security. Central to this organization is our global cyber operations team, which is responsible for the protection, detection, and response capabilities used in the defense of critical data and enterprise computing services. We also have a corporate-wide insider threat detection program to proactively identify external and internal threats and mitigate those threats in a timely manner. Our broader Teradyne employee community also has a key role in our cybersecurity defenses and is immersed in a comprehensive training and awareness curriculum to build and promote a corporate culture supportive of security. Third parties also play a role in our cybersecurity. We engage third-party services to provide 24x7x365 monitoring, escalation, and response to cyber events. In addition to consulting on best practices, we leverage third parties for independent evaluations of our security controls through penetration testing and independent audits. These evaluations include testing both the design and operational effectiveness of security controls. We also share and receive threat intelligence with our industry peers, cybersecurity associations, and our cyber controls vendors. We engage third-party third-party services to provide 24x7x365 monitoring, escalation, and response to cyber events. We rely on contract manufacturing organizations and distributors to deliver our products to our customers, and a cybersecurity incident at one of these organizations or a key supplier could materially adversely impact us. We assess third party and supply chain cybersecurity controls through risk monitoring services tailored to align with our risk policy. Notwithstanding the extensive approach we take to cybersecurity, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us, either directly within our managed environment or indirectly via a third-party partner or supply chain vendor. Periodically we have a recognized independent security expert firm to assess our cyber security maturity along with risks and provide 21 21 21 Table of Contents Table of Contents Table of Contents feedback on where we should continue to improve to mitigate exposures. We share this review with our Board and develop a security roadmap which incorporates this feedback. Additionally, for our business that supports the defense and aerospace sector, we must comply with extensive regulations, including requirements imposed by the Defense Federal Acquisition Regulation Supplement ("DFARS") related to adequately safeguarding controlled unclassified information ("CUI") and reporting cybersecurity incidents to the DoD. We have implemented cybersecurity policies and frameworks based on industry and governmental standards to align closely with DoD requirements, instructions, and guidance. Moreover, we are pursuing the necessary controls to support the Cybersecurity Maturity Model Certification ("CMMC") program, DoD's program to ensure members of the defense industrial base meet cybersecurity requirements for handling CUI and federal contract information. We believe we are well positioned to meet the requirements of the CMMC and are preparing for certification once the requirements are effective. feedback on where we should continue to improve to mitigate exposures. We share this review with our Board and develop a security roadmap which incorporates this feedback. Additionally, for our business that supports the defense and aerospace sector, we must comply with extensive regulations, including requirements imposed by the Defense Federal Acquisition Regulation Supplement ("DFARS") related to adequately safeguarding controlled unclassified information ("CUI") and reporting cybersecurity incidents to the DoD. We have implemented cybersecurity policies and frameworks based on industry and governmental standards to align closely with DoD requirements, instructions, and guidance. Moreover, we are pursuing the necessary controls to support the Cybersecurity Maturity Model Certification ("CMMC") program, DoD's program to ensure members of the defense industrial base meet cybersecurity requirements for handling CUI and federal contract information. We believe we are well positioned to meet the requirements of the CMMC and are preparing for certification once the requirements are effective. feedback on where we should continue to improve to mitigate exposures. We share this review with our Board and develop a security roadmap which incorporates this feedback. Additionally, for our business that supports the defense and aerospace sector, we must comply with extensive regulations, including requirements imposed by the Defense Federal Acquisition Regulation Supplement ("DFARS") related to adequately safeguarding controlled unclassified information ("CUI") and reporting cybersecurity incidents to the DoD. We have implemented cybersecurity policies and frameworks based on industry and governmental standards to align closely with DoD requirements, instructions, and guidance. Moreover, we are pursuing the necessary controls to support the Cybersecurity Maturity Model Certification ("CMMC") program, DoD's program to ensure members of the defense industrial base meet cybersecurity requirements for handling CUI and federal contract information. We believe we are well positioned to meet the requirements of the CMMC and are preparing for certification once the requirements are effective. Additionally, for our business that supports the defense and aerospace sector, we must comply with extensive regulations, including requirements imposed by the Defense Federal Acquisition Regulation Supplement ("DFARS") related to adequately safeguarding controlled unclassified information ("CUI") and reporting cybersecurity incidents to the DoD. We have implemented cybersecurity policies and frameworks based on industry and governmental standards to align closely with DoD requirements, instructions, and guidance. Moreover, we are pursuing the necessary controls to support the Cybersecurity Maturity Model Certification ("CMMC") program, DoD's program to ensure members of the defense industrial base meet cybersecurity requirements for handling CUI and federal contract information. We believe we are well positioned to meet the requirements of the CMMC and are preparing for certification once the requirements are effective. reporting cybersecurity incidents to the DoD Item 2: Properties We conduct manufacturing, engineering, sales and marketing, service, corporate administration and other operations in various leased and owned facilities throughout the world. We own approximately 920,000 square feet of office space and lease approximately 1,340,000 square feet of office space. We own our corporate headquarters in North Reading, Massachusetts, which is approximately 422,000 square feet. We believe our existing facilities are adequate to meet our current and reasonably foreseeable requirements. We regularly evaluate our expected facility needs and periodically make adjustments based on these evaluations. In 2024, we completed construction of an approximately 200,000 square foot building in Odense, Denmark, for our Robotics operations. Item 3: Legal Proceedings We are subject to legal proceedings, claims and investigations that arise in the ordinary course of business such as, but not limited to, patent, employment, commercial and environmental matters. We believe that we have meritorious defenses against all pending claims and intend to vigorously contest them. While it is not possible to predict or determine the outcomes of any pending claims or to provide possible ranges of losses that may arise, we believe the potential losses associated with all these actions are unlikely to have a material adverse effect on our results of operations, financial condition or cash flows. Item 4: Mine Safety Disclosure Not Applicable. 22 22 22 Table of Contents Table of Contents Table of Contents PART II Item 5: Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the Nasdaq Global Select Market under the trading symbol "TER." As of February 20, 2025, there were approximately 1,084 holders of record of shares of our common stock. See "Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations," for information on the frequency and amounts of our quarterly cash dividends, equity compensation plans and performance graph. The following table includes information with respect to repurchases we made of our common stock during the three months ended December 31, 2024 (in thousands except per share price): Period --- ## Modified: (in millions) **Key changes:** - Reworded sentence: "Product gross profit $ 1,334.0 $ 1,213.4 $ 120.6 Percent of product revenues 58.1 % 57.9 % 0.2 Service gross profit $ 314.9 $ 323.4 $ (8.5 ) Percent of service revenues 60.0 % 55.7 % 4.3 Service and product revenues gross profit percentage increased by 4.3 points and 0.2 points, respectively, primarily due to higher volume and product and service mix." - Added sentence: "During the year ended December 31, 2024, we recorded an inventory provision of $18.9 million included in cost of revenues, primarily due to downward revisions to previously forecasted demand levels for certain products." - Added sentence: "Of the $18.9 million of total excess and obsolete provisions, $13.6 million was related to Semiconductor Test, $2.3 million was related to Robotics, and $3.1 million was related to All Other." - Reworded sentence: "Of the $28.4 million of total excess and obsolete provisions, $22.5 million was related to Semiconductor Test, $2.3 million was related to Robotics, and $3.6 million was related to All Other." **Prior (2024):** Semiconductor Test $ 1,818.6 $ 2,080.6 $ (262.0 ) Robotics 375.2 403.1 (27.9 ) System Test 338.2 469.3 (131.1 ) Wireless Test 144.3 201.7 (57.4 ) Corporate and Eliminations - 0.3 (0.3 ) $ 2,676.3 $ 3,155.0 $ (478.7 ) The decrease in Semiconductor Test revenues of $262.0 million, or 12.6%, was driven primarily by lower tester sales for compute and mobility applications. The decrease in Robotics revenues of $27.9 million, or 6.9%, was driven primarily by softening demand due to slowing global industrial activity and macro-economic headwinds and the impact of the transformation of Universal Robots' sales channel. The decrease in System Test revenues of $131.1 million, or 27.9%, was primarily due to lower sales in Storage Test of system level and hard disk drive testers. The decrease in Wireless Test revenues of $57.4 million, or 28.5%, was primarily due to a decrease in sales of connectivity test products. Our reportable segments accounted for the following percentages of consolidated revenues: 2023 2022 Semiconductor Test 68 % 66 % Robotics 14 13 System Test 13 15 Wireless Test 5 6 100 % 100 % Revenues by country as a percentage of total revenues were as follows (1): 2023 2022 United States 16 % 15 % Korea 15 17 Taiwan 14 20 China 12 16 Japan 11 5 Europe 10 9 Philippines 7 4 Singapore 4 3 Thailand 3 4 Malaysia 3 5 Rest of the World 5 2 100 % 100 % (1)Revenues attributable to a country are based on the location of the customer site. Revenues attributable to a country are based on the location of the customer site. The breakout of product and service revenues was as follows: 2023 2022 **Current (2025):** Semiconductor Test $ 2,123.9 $ 1,957.2 $ 166.7 Robotics 364.8 375.2 (10.4 ) All Other 331.1 343.9 (12.8 ) $ 2,819.9 $ 2,676.3 $ 143.5 The increase in Semiconductor Test revenues of $166.7 million, or 8.5%, was driven primarily by higher tester sales for computing, ADAS, and memory applications, partially offset by lower tester sales for legacy automotive applications. The decrease in Robotics revenues of $10.4 million, or 2.8%, was driven primarily by continued weakness in the Industrial Automation market and softer sales in Universal Robots. 27 27 27 Table of Contents Table of Contents Table of Contents Our reportable segments accounted for the following percentages of consolidated revenues: 2024 2023 Semiconductor Test 75 % 73 % Robotics 13 14 All Other 12 13 100 % 100 % Revenues by country as a percentage of total revenues were as follows (1): 2024 2023 Korea 25 % 15 % Taiwan 21 14 United States 13 16 China 13 12 Europe 9 10 Japan 6 11 Singapore 3 4 Philippines 2 7 Thailand 2 3 Malaysia 2 3 Rest of the World 4 5 100 % 100 % (1)Revenues attributable to a country are based on the location of the customer site. Revenues attributable to a country are based on the location of the customer site. The breakout of product and service revenues was as follows: 2024 2023 --- ## Modified: (in thousands) **Key changes:** - Reworded sentence: "Maintenance, service and training $ 58,473 $ 66,458 Customer advances, undelivered elements and other 48,118 35,731 Extended warranty 41,624 34,897 Total deferred revenue and customer advances $ 148,215 $ 137,086 45 45 45 Table of Contents Table of Contents Table of Contents Product Warranty Teradyne generally provides a one-year warranty on its products, commencing upon installation, acceptance or shipment." - Reworded sentence: "The balance below is included in other accrued liabilities: Amount (in thousands) Balance at December 31, 2021 $ 24,577 Accruals for warranties issued during the period 21,851 Accruals related to pre-existing warranties (5,618 ) Settlements made during the period (26,629 ) Balance at December 31, 2022 14,181 Accruals for warranties issued during the period 21,644 Accruals related to pre-existing warranties (1,576 ) Settlements made during the period (18,551 ) Balance at December 31, 2023 15,698 Accruals for warranties issued during the period 11,315 Accruals related to pre-existing warranties (1,078 ) Settlements made during the period (12,973 ) Balance at December 31, 2024 $ 12,962 When Teradyne receives revenue for extended warranties, beyond one year, it is deferred and recognized on a straight-line basis over the contract period." - Reworded sentence: "The balance below is included in short and long-term deferred revenue and customer advances: Amount (in thousands) Balance at December 31, 2021 $ 64,168 Deferral of new extended warranty revenue 33,686 Recognition of extended warranty deferred revenue (41,674 ) Balance at December 31, 2022 56,180 Deferral of new extended warranty revenue 14,330 Recognition of extended warranty deferred revenue (35,613 ) Balance at December 31, 2023 34,897 Deferral of new extended warranty revenue 29,990 Recognition of extended warranty deferred revenue (23,263 ) Balance at December 31, 2024 $ 41,624 Accounts Receivable and Allowance for Credit LossesTrade accounts receivable are recorded at the invoiced amount and do not bear interest." **Prior (2024):** Net income $ 448,752 $ 715,501 $ 1,014,589 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively 17,407 (29,031 ) (36,207 ) Available-for-sale marketable securities: Unrealized gains (losses) on marketable securities arising during period, net of tax of $568, $(3,388), ($578), respectively 2,423 (12,666 ) (2,255 ) Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $12, $25, $(277), respectively 44 301 (995 ) 2,467 (12,365 ) (3,250 ) Cash flow hedges: Unrealized gains (losses) arising during period, net of tax of $1,537, $(708), $0, respectively 5,464 (2,517 ) - Less: Reclassification adjustment for losses included in net income, net of tax of $(686), $0, $0, respectively (2,441 ) - - 3,023 (2,517 ) - Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) 22,890 (43,920 ) (39,464 ) Comprehensive income $ 471,642 $ 671,581 $ 975,125 The accompanying notes are an integral part of the consolidated financial statements. 42 42 Table of Contents Table of Contents Table of Contents **Current (2025):** Net income $ 542,372 $ 448,752 $ 715,501 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively (52,847 ) 17,407 (29,031 ) Available-for-sale marketable securities: Unrealized (losses) gains on marketable securities arising during period, net of tax of $(470), $568, ($3,388), respectively (1,699 ) 2,423 (12,666 ) Less: Reclassification adjustment for (gains) losses included in net income, net of tax of $24, $12, $25, respectively 86 44 301 (1,613 ) 2,467 (12,365 ) Cash flow hedges: Unrealized (losses) gains arising during period, net of tax of $593, $1,537, $(708), respectively 2,100 5,464 (2,517 ) Less: Reclassification adjustment for (gains) losses included in net income, net of tax of $(527), $(686), $0, respectively (1,875 ) (2,441 ) - 225 3,023 (2,517 ) Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) (54,242 ) 22,890 (43,920 ) Comprehensive income $ 488,130 $ 471,642 $ 671,581 The accompanying notes are an integral part of the consolidated financial statements. 40 40 40 Table of Contents Table of Contents Table of Contents --- ## Modified: Provisions of our charter and by-laws and Massachusetts law may make a takeover of Teradyne more difficult. **Key changes:** - Reworded sentence: "20 20 20 Table of Contents Table of Contents Table of Contents Item 1C: Cybersecurity We believe cybersecurity is critical to supporting our vision and enabling our strategy." - Reworded sentence: "These cybersecurity threats and related risks make it imperative that we maintain a strong focus on cybersecurity.GovernanceThe Board of Directors oversees management's processes for identifying and mitigating risks, including cybersecurity risks, to help align our risk exposure with our strategic objectives." - Added sentence: "Risk management and strategyOur global information security organization, led by our CISO, is responsible for our overall information security strategy, policy, security engineering, operations, and cyber threat detection and response." - Added sentence: "Our CISO is an experienced cybersecurity senior executive with more than 25 years of experience building and leading cybersecurity, risk management and information technology teams." - Added sentence: "The information security organization manages and continually enhances a robust enterprise security structure with the goal of preventing cybersecurity incidents to the extent feasible, while simultaneously increasing system resilience and deploying highly proficient detection and response capabilities in an effort to minimize the business impact should an incident occur." **Prior (2024):** There are provisions in our basic corporate documents and under Massachusetts law that could discourage, delay or prevent a change in control, even if a change in control may be regarded as beneficial to some or all of our stockholders. Item 1B: Unresolved Staff Comments None. Item 1C: Cybersecurity We believe cybersecurity is critical to supporting our vision and enabling our strategy. As a producer of leading-edge electronic testing products and maker of advanced robotics, we face a multitude of cybersecurity threats that range from attacks common to most industries, such as ransomware and denial-of-service, to attacks from more advanced, persistent, and highly organized adversaries, including nation state actors, that may target us for our role in critical infrastructure sectors. Our customers, suppliers, and partners face similar cybersecurity threats and, while we have not been materially affected to date, a cybersecurity incident impacting us or any of these entities could materially adversely affect our operations, performance, and results of operations. These cybersecurity threats and related risks make it imperative that we maintain a strong focus on cybersecurity. 21 21 Table of Contents Table of Contents Table of Contents Governance The Board of Directors oversees management's processes for identifying and mitigating risks, including cybersecurity risks, to help align our risk exposure with our strategic objectives. Senior leadership, including our Chief Information Security Officer ("CISO"), regularly brief the Audit Committee of the Board of Directors on our cybersecurity and information security posture. The corporate information security organization, under the CISO, has implemented a governance structure and processes to assess, identify, manage, and report cybersecurity risks. The CISO chairs management's Cybersecurity Steering Committee, in which current cyber threats, program performance, and ongoing risk mitigations are regularly reviewed. Cybersecurity related risks are also integrated into our overall enterprise risk management ("ERM") process. These risks are included in the risk universe that the ERM function evaluates to assess top enterprise risks on an annual basis and is reviewed and evaluated by the Board of Directors. The Board of Directors is also apprised of cybersecurity issues or incidents deemed to have a moderate or higher business impact as they arise, even if considered immaterial. In the event of a significant incident, we intend to follow our detailed incident response playbooks, which outline the steps to be followed from incident detection through mitigation, recovery and notification, including escalation to functional areas (e.g., legal), and escalation to senior leadership via the Cybersecurity Steering Committee. Upon escalation, the Cybersecurity Steering Committee will review all inputs, assess the materiality of the incident, and then brief the Board of Directors on the determination and on how management intends to respond. **Current (2025):** There are provisions in our basic corporate documents and under Massachusetts law that could discourage, delay or prevent a change in control, even if a change in control may be regarded as beneficial to some or all of our stockholders. Item 1B: Unresolved Staff Comments None. 20 20 20 Table of Contents Table of Contents Table of Contents Item 1C: Cybersecurity We believe cybersecurity is critical to supporting our vision and enabling our strategy. As a producer of leading-edge electronic testing products and maker of advanced robotics, we face a multitude of cybersecurity threats that range from attacks common to most industries, such as ransomware and denial-of-service, to attacks from more advanced, persistent, and highly organized adversaries, including nation state actors, that may target us for our role in critical infrastructure sectors. Our customers, suppliers, and partners face similar cybersecurity threats and, while we have not been materially affected to date, a cybersecurity incident impacting us or any of these entities could materially adversely affect our operations, performance, and results of operations. These cybersecurity threats and related risks make it imperative that we maintain a strong focus on cybersecurity.GovernanceThe Board of Directors oversees management's processes for identifying and mitigating risks, including cybersecurity risks, to help align our risk exposure with our strategic objectives. Senior leadership, including our Chief Information Security Officer ("CISO"), brief the Audit Committee of the Board of Directors quarterly and the full Board of Directors at least annually on our cybersecurity and information security posture. The corporate information security organization, under the CISO, has implemented a governance structure and processes to assess, identify, manage, and report cybersecurity risks. The CISO chairs management's Cybersecurity Steering Committee, in which current cyber threats, program performance, and ongoing risk mitigations are regularly reviewed. Cybersecurity related risks are also integrated into our overall enterprise risk management ("ERM") process. These risks are included in the risk universe that the ERM function evaluates to assess top enterprise risks on an annual basis and is reviewed and evaluated by the Board of Directors. The Board of Directors is also apprised of cybersecurity issues or incidents deemed to have a moderate or higher business impact as they arise, even if considered immaterial. In the event of a significant incident, we intend to follow our detailed incident response playbooks, which outline the steps to be followed from incident detection through mitigation, recovery and notification, including escalation to functional areas (e.g., legal), and escalation to senior leadership via the Cybersecurity Steering Committee. Upon escalation, the Cybersecurity Steering Committee will review all inputs, assess the materiality of the incident, and then brief the Board of Directors on the determination and on how management intends to respond. Risk management and strategyOur global information security organization, led by our CISO, is responsible for our overall information security strategy, policy, security engineering, operations, and cyber threat detection and response. Our CISO is an experienced cybersecurity senior executive with more than 25 years of experience building and leading cybersecurity, risk management and information technology teams. The information security organization manages and continually enhances a robust enterprise security structure with the goal of preventing cybersecurity incidents to the extent feasible, while simultaneously increasing system resilience and deploying highly proficient detection and response capabilities in an effort to minimize the business impact should an incident occur. Central to this organization is our global cyber operations team, which is responsible for the protection, detection, and response capabilities used in the defense of critical data and enterprise computing services. We also have a corporate-wide insider threat detection program to proactively identify external and internal threats and mitigate those threats in a timely manner. Our broader Teradyne employee community also has a key role in our cybersecurity defenses and is immersed in a comprehensive training and awareness curriculum to build and promote a corporate culture supportive of security.Third parties also play a role in our cybersecurity. We engage third-party services to provide 24x7x365 monitoring, escalation, and response to cyber events. In addition to consulting on best practices, we leverage third parties for independent evaluations of our security controls through penetration testing and independent audits. These evaluations include testing both the design and operational effectiveness of security controls. We also share and receive threat intelligence with our industry peers, cybersecurity associations, and our cyber controls vendors.We rely on contract manufacturing organizations and distributors to deliver our products to our customers, and a cybersecurity incident at one of these organizations or a key supplier could materially adversely impact us. We assess third party and supply chain cybersecurity controls through risk monitoring services tailored to align with our risk policy. Notwithstanding the extensive approach we take to cybersecurity, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us, either directly within our managed environment or indirectly via a third-party partner or supply chain vendor. Periodically we have a recognized independent security expert firm to assess our cyber security maturity along with risks and provide Item 1C: Cybersecurity We believe cybersecurity is critical to supporting our vision and enabling our strategy. As a producer of leading-edge electronic testing products and maker of advanced robotics, we face a multitude of cybersecurity threats that range from attacks common to most industries, such as ransomware and denial-of-service, to attacks from more advanced, persistent, and highly organized adversaries, including nation state actors, that may target us for our role in critical infrastructure sectors. Our customers, suppliers, and partners face similar cybersecurity threats and, while we have not been materially affected to date, a cybersecurity incident impacting us or any of these entities could materially adversely affect our operations, performance, and results of operations. These cybersecurity threats and related risks make it imperative that we maintain a strong focus on cybersecurity. not been materially affected Governance The Board of Directors oversees management's processes for identifying and mitigating risks, including cybersecurity risks, to help align our risk exposure with our strategic objectives. Senior leadership, including our Chief Information Security Officer ("CISO"), brief the Audit Committee of the Board of Directors quarterly and the full Board of Directors at least annually on our cybersecurity and information security posture. The corporate information security organization, under the CISO, has implemented a governance structure and processes to assess, identify, manage, and report cybersecurity risks. The CISO chairs management's Cybersecurity Steering Committee, in which current cyber threats, program performance, and ongoing risk mitigations are regularly reviewed. Cybersecurity related risks are also integrated into our overall enterprise risk management ("ERM") process. These risks are included in the risk universe that the ERM function evaluates to assess top enterprise risks on an annual basis and is reviewed and evaluated by the Board of Directors. The Board of Directors is also apprised of cybersecurity issues or incidents deemed to have a moderate or higher business impact as they arise, even if considered immaterial. In the event of a significant incident, we intend to follow our detailed incident response playbooks, which outline the steps to be followed from incident detection through mitigation, recovery and notification, including escalation to functional areas (e.g., legal), and escalation to senior leadership via the Cybersecurity Steering Committee. Upon escalation, the Cybersecurity Steering Committee will review all inputs, assess the materiality of the incident, and then brief the Board of Directors on the determination and on how management intends to respond. The Board of Directors oversees management's processes for identifying and mitigating risks, including cybersecurity risks, to help align our risk exposure with our strategic objectives. Senior leadership, including our Chief Information Security Officer ("CISO"), brief the Audit Committee of the Board of Directors quarterly and the full Board of Directors at least annually on our cybersecurity and information security posture. The corporate information security organization, under the CISO, has implemented a governance structure and processes to assess, identify, manage, and report cybersecurity risks. The CISO chairs management's Cybersecurity Steering Committee, in which current cyber threats, program performance, and ongoing risk mitigations are regularly reviewed. Cybersecurity related risks are also integrated into our overall enterprise risk management ("ERM") process. These risks are included in the risk universe that the ERM function evaluates to assess top enterprise risks on an annual basis and is reviewed and evaluated by the Board of Directors. The Board of Directors is also apprised of cybersecurity issues or incidents deemed to have a moderate or higher business impact as they arise, even if considered immaterial. The corporate information security organization, under the CISO, has implemented a governance structure and processes to assess, identify, manage, and report cybersecurity risks. The CISO chairs management's Cybersecurity Steering Committee, in which current cyber threats, program performance, and ongoing risk mitigations are regularly reviewed. Cybersecurity related risks are also integrated into our overall enterprise risk management ("ERM") process. These risks are included in the risk universe that the ERM function evaluates to assess top enterprise risks on an annual basis and is reviewed and evaluated by the Board of Directors. The Board of Directors is also apprised of cybersecurity issues or incidents deemed to have a moderate or higher business impact as they arise, even if considered immaterial. . Cybersecurity related risks are also integrated integrated into our overall enterprise risk management ("ERM") process. These risks are included in the risk universe that the ERM function evaluates to assess top enterprise risks on an annual basis and is reviewed and evaluated by the Board of Directors. The Board of Directors is also apprised of cybersecurity issues or incidents deemed to have a moderate or higher business impact as they arise, even if considered immaterial. In the event of a significant incident, we intend to follow our detailed incident response playbooks, which outline the steps to be followed from incident detection through mitigation, recovery and notification, including escalation to functional areas (e.g., legal), and escalation to senior leadership via the Cybersecurity Steering Committee. Upon escalation, the Cybersecurity Steering Committee will review all inputs, assess the materiality of the incident, and then brief the Board of Directors on the determination and on how management intends to respond. Upon escalation, the Cybersecurity Steering Committee will review all inputs, assess the materiality of the incident, and then brief the Board of Directors on the determination and on how management intends to respond. --- ## Modified: Exchange Rate Risk Management **Key changes:** - Reworded sentence: "We also enter into foreign currency forward contracts to hedge the impact of exchange rates on our revenues in Japanese Yen." - Reworded sentence: "On November 7, 2023, in connection with our agreement to acquire 10% investment in Technoprobe S.p.A, we purchased a call option to buy 481.0 million Euros, which expired in April 2024." - Reworded sentence: "As of December 31, 2024 and 2023, the analysis indicated that these hypothetical market movements would not have a material effect on our consolidated financial position, results of operations or cash flows." **Prior (2024):** We regularly enter into foreign currency forward contracts to hedge the value of our monetary assets and liabilities in Japanese Yen, British Pound, Korean Won, Taiwan Dollar, Singapore Dollar, Euro, Philippine Peso, Chinese Yuan, and Danish Krone. These foreign currency forward contracts have maturities of approximately one month. These contracts are used to minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities. We also enter into foreign currency forward contracts to hedge the impact of exchange rates on our revenues in Japanese Yen and Taiwan Dollar. These contracts have maturities of less than one year. We do not engage in currency speculation. On November 7, 2023, in connection with our agreement to acquire 10% investment in Technoprobe S.p.A, we purchased a call option to buy 481.0 million Euros. The expiration date of the option is April 26, 2024. Since the transaction price was agreed to in Euros, this option contract reduces the impact to the purchase price of changes in the Euro to U.S. Dollar exchange rate. We performed a sensitivity analysis assuming a hypothetical 10% fluctuation in foreign exchange rates to the hedging contracts and the underlying exposures described above. As of December 31, 2023 and 2022, the analysis indicated that these hypothetical market movements would not have a material effect on our consolidated financial position, results of operations or cash flows. **Current (2025):** We regularly enter into foreign currency forward contracts to hedge the value of our monetary assets and liabilities in Japanese Yen, British Pound, Korean Won, Taiwan Dollar, Singapore Dollar, Euro, Philippine Peso, Chinese Yuan, and Danish Krone. These foreign currency forward contracts have maturities of approximately one month. These contracts are used to minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities. We also enter into foreign currency forward contracts to hedge the impact of exchange rates on our revenues in Japanese Yen. These contracts have maturities of less than one year. We do not engage in currency speculation. On November 7, 2023, in connection with our agreement to acquire 10% investment in Technoprobe S.p.A, we purchased a call option to buy 481.0 million Euros, which expired in April 2024. On April 12, 2024, we entered into a forward to buy 481.0 million Euros, which expired on May 23, 2024. We performed a sensitivity analysis assuming a hypothetical 10% fluctuation in foreign exchange rates to the hedging contracts and the underlying exposures described above. As of December 31, 2024 and 2023, the analysis indicated that these hypothetical market movements would not have a material effect on our consolidated financial position, results of operations or cash flows. --- ## Modified: Comprehensive Income **Key changes:** - Reworded sentence: "2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures", which requires Teradyne to disclose significant segment expenses and other segment items used by the Chief Operating Decision Maker ("CODM") on an annual and interim basis as well as provide in interim periods all disclosures about a reportable segment's profit or loss and assets that are currently required annually." - Added sentence: "In November 2024, the FASB issued ASU 2024-03-"Income Statement - Reporting Comprehensive Income -Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses", which requires disclosure of additional expense information on an annual and interim basis, including the amounts of inventory purchases, employee compensation, depreciation and intangible amortization included within each income statement expense caption." - Added sentence: "This standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted." - Added sentence: "The amendments in this update should be applied on a prospective basis, but retrospective application is permitted." - Added sentence: "Teradyne is currently evaluating the impact of this new standard." **Prior (2024):** Comprehensive income includes net income, unrealized pension and postretirement prior service costs and benefits, unrealized gains and losses on investments in debt marketable securities, unrealized gains and losses on cash flow hedge and foreign currency translation adjustment. C.RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures", which will require us to disclose significant segment expenses and other segment items used by the Chief Operating Decision Maker ("CODM") on an annual and interim basis as well as provide in interim periods all disclosures about a reportable segment's profit or loss and assets that are currently required annually. Additionally, we will be required to disclose the title and position of the CODM. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. This ASU will have no impact on Teradyne's results of operations, cash flows or financial condition. Upon adoption, Teradyne will apply the amendments in this ASU retrospectively to all prior period disclosures presented in the financial statements.In December 2023, FASB issued ASU 2023-09 -"Income Taxes (Topic 740): Improvements to Income Tax Disclosures", which requires expanded disclosures relating to the tax rate reconciliation, income taxes paid, income (loss) before income tax expense (benefit) and income tax expense (benefit), requiring a greater disaggregation of information for each. The provisions of ASU 2023-09 are effective for fiscal years beginning after December 15, 2024. The amendments in this update should be applied on a prospective basis, but retrospective application is permitted. Teradyne is currently evaluating the impact of this new standard. **Current (2025):** Comprehensive income includes net income, unrealized pension and postretirement prior service costs and benefits, unrealized gains and losses on investments in debt marketable securities, unrealized gains and losses on cash flow hedge and foreign currency translation adjustment. C.RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures", which requires Teradyne to disclose significant segment expenses and other segment items used by the Chief Operating Decision Maker ("CODM") on an annual and interim basis as well as provide in interim periods all disclosures about a reportable segment's profit or loss and assets that are currently required annually. Additionally, we are required to disclose the title and position of the CODM. Teradyne retrospectively adopted and complied with this standard for the annual period ending December 31, 2024. Teradyne updated our segment disclosures to comply with the requirements. See Note U: "Segment, Geographic and Significant Customer Information." The adoption of this standard had no impact on Teradyne results of operations, cash flows or financial condition.In December 2023, the FASB issued ASU 2023-09 -"Income Taxes (Topic 740): Improvements to Income Tax Disclosures", which requires expanded disclosures relating to the tax rate reconciliation, income taxes paid, income (loss) before income tax expense (benefit) and income tax expense (benefit), requiring a greater disaggregation of information for each. The provisions of ASU 2023-09 are effective for fiscal years beginning after December 15, 2024. The amendments in this update should be applied on a prospective basis, but retrospective application is permitted. Teradyne is currently evaluating the impact of this new standard. In November 2024, the FASB issued ASU 2024-03-"Income Statement - Reporting Comprehensive Income -Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses", which requires disclosure of additional expense information on an annual and interim basis, including the amounts of inventory purchases, employee compensation, depreciation and intangible amortization included within each income statement expense caption. This standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments in this update should be applied on a prospective basis, but retrospective application is permitted. Teradyne is currently evaluating the impact of this new standard. --- ## Modified: Recently Issued Accounting Pronouncements **Key changes:** - Reworded sentence: "2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures", which requires us to disclose significant segment expenses and other segment items used by the Chief Operating Decision Maker ("CODM") on an annual and interim basis as well as provide in interim periods all disclosures about a reportable segment's profit or loss and assets that are currently required annually." - Added sentence: "In November 2024, the FASB issued ASU 2024-03-"Income Statement - Reporting Comprehensive Income -Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses", which requires disclosure of additional expense information on an annual and interim basis, including the amounts of inventory purchases, employee compensation, depreciation and intangible amortization included within each income statement expense caption." - Added sentence: "This standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted." - Added sentence: "The amendments in this update should be applied on a prospective basis, but retrospective application is permitted." - Added sentence: "We are currently evaluating the impact of this new standard." **Prior (2024):** In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures", which will require us to disclose significant segment expenses and other segment items used by the Chief Operating Decision Maker ("CODM") on an annual and interim basis as well as provide in interim periods all disclosures about a reportable segment's profit or loss and assets that are currently required annually. Additionally, we will be required to disclose the title and position of the CODM. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. This ASU will have no impact on our results of operations, cash flows or financial condition. Upon adoption, we will apply the amendments in this ASU retrospectively to all prior period disclosures presented in the financial statements. In December 2023, FASB issued ASU 2023-09 -"Income Taxes (Topic 740): Improvements to Income Tax Disclosures", which requires expanded disclosures relating to the tax rate reconciliation, income taxes paid, income (loss) before income tax expense (benefit) and income tax expense (benefit), requiring a greater disaggregation of information for each. The provisions of ASU 2023-09 are effective for fiscal years beginning after December 15, 2024. The amendments in this update should be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the impact of this new standard. Item 7A: Quantitative and Qualitative Disclosures about Market Risks **Current (2025):** In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures", which requires us to disclose significant segment expenses and other segment items used by the Chief Operating Decision Maker ("CODM") on an annual and interim basis as well as provide in interim periods all disclosures about a reportable segment's profit or loss and assets that are currently required annually. Additionally, we are required to disclose the title and position of the CODM. We retrospectively adopted and complied with this standard for the annual period ending December 31, 2024. See Note U: "Segment, Geographic and Significant Customer Information." The adoption of this standard had no impact on our results of operations, cash flows or financial condition. 34 34 34 Table of Contents Table of Contents Table of Contents In December 2023, the FASB issued ASU 2023-09 -"Income Taxes (Topic 740): Improvements to Income Tax Disclosures", which requires expanded disclosures relating to the tax rate reconciliation, income taxes paid, income (loss) before income tax expense (benefit) and income tax expense (benefit), requiring a greater disaggregation of information for each. The provisions of ASU 2023-09 are effective for fiscal years beginning after December 15, 2024. The amendments in this update should be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the impact of this new standard. In November 2024, the FASB issued ASU 2024-03-"Income Statement - Reporting Comprehensive Income -Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses", which requires disclosure of additional expense information on an annual and interim basis, including the amounts of inventory purchases, employee compensation, depreciation and intangible amortization included within each income statement expense caption. This standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments in this update should be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the impact of this new standard. Item 7A: Quantitative and Qualitative Disclosures about Market Risks --- ## Modified: Business Combination **Key changes:** - Reworded sentence: "Teradyne uses all pertinent information known at the time of acquisition to estimate the fair value of contingent consideration at the time of the acquisition using all pertinent information known to us at the time to assess the probability of payment of contingent amounts or through the use of a Monte Carlo simulation model." - Reworded sentence: "48 48 48 Table of Contents Table of Contents Table of Contents Property, Plant and Equipment Property, plant and equipment are stated at cost and depreciated over the estimated useful lives of the assets." - Reworded sentence: "The net book value of internally manufactured test systems sold in the years ended December 31, 2024, 2023, and 2022 was $4.0 million, $2.8 million, and $6.6 million, respectively." **Prior (2024):** Teradyne recognizes the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The fair value of identifiable intangible assets is based on detailed cash flows valuations that use information and assumptions provided by management. Teradyne estimates the fair value of contingent consideration at the time of the acquisition using all pertinent information known to us at the time to assess the probability of payment of contingent amounts or through the use of a Monte Carlo simulation model. Teradyne allocates any excess purchase price over the fair value of the net tangible and intangible assets acquired and liabilities assumed to goodwill. The assumptions used in the valuations for our acquisitions may differ materially from actual results depending on performance of the acquired businesses and other factors. While Teradyne believes the assumptions used were appropriate, different assumptions in the valuation of assets acquired and liabilities assumed could have a material impact on the timing and extent of impact on our statements of operations. Goodwill is assigned to reporting units as of the date of the related acquisition. 49 49 Table of Contents Table of Contents Table of Contents Property, Plant and Equipment Property, plant and equipment are stated at cost and depreciated over the estimated useful lives of the assets. Leasehold improvements and major renewals are capitalized and included in property, plant and equipment accounts, while expenditures for maintenance and repairs and minor renewals are charged to expense. When assets are retired, the assets and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the consolidated statements of operations. Teradyne provides for depreciation of its assets principally on the straight-line method with the cost of the assets being charged to expense over their useful lives as follows: Buildings 40 years Building improvements 5 to 10 years Leasehold improvements Lesser of lease term or 10 years Furniture and fixtures 10 years Test systems manufactured internally 6 years Machinery, equipment and software 3 to 5 years Test systems manufactured internally are used by Teradyne for customer evaluations and manufacturing and support of its customers. Teradyne depreciates the test systems manufactured internally over a six-year life to cost of revenues, engineering and development, and selling and administrative expenses. Teradyne often sells internally manufactured test equipment to customers. Upon the sale of an internally manufactured test system, the net book value of the system is transferred to inventory and expensed as cost of revenues. The net book value of internally manufactured test systems sold in the years ended December 31, 2023, 2022, and 2021 was $2.8 million, $6.6 million, and $16.6 million, respectively. **Current (2025):** Teradyne recognizes the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The fair value of identifiable intangible assets is based on detailed cash flows valuations that use information and assumptions provided by management. Teradyne uses all pertinent information known at the time of acquisition to estimate the fair value of contingent consideration at the time of the acquisition using all pertinent information known to us at the time to assess the probability of payment of contingent amounts or through the use of a Monte Carlo simulation model. Teradyne allocates any excess purchase price over the fair value of the net tangible and intangible assets acquired and liabilities assumed to goodwill. The assumptions used in the valuations for our acquisitions may differ materially from actual results depending on performance of the acquired businesses and other factors. While Teradyne believes the assumptions used were appropriate, different assumptions in the valuation of assets acquired and liabilities assumed could have a material impact on the timing and extent of impact on our statements of operations. Goodwill is assigned to reporting units as of the date of the related acquisition. 48 48 48 Table of Contents Table of Contents Table of Contents Property, Plant and Equipment Property, plant and equipment are stated at cost and depreciated over the estimated useful lives of the assets. Leasehold improvements and major renewals are capitalized and included in property, plant and equipment accounts, while expenditures for maintenance and repairs and minor renewals are charged to expense. When assets are retired, the assets and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the consolidated statements of operations. Teradyne provides for depreciation of its assets principally on the straight-line method with the cost of the assets being charged to expense over their useful lives as follows: Buildings 40 years Building improvements 5 to 10 years Leasehold improvements Lesser of lease term or 10 years Furniture and fixtures 10 years Test systems manufactured internally 6 years Machinery, equipment and software 3 to 5 years Test systems manufactured internally are used by Teradyne for customer evaluations and manufacturing and support of its customers. Teradyne depreciates the test systems manufactured internally over a six-year life to cost of revenues, engineering and development, and selling and administrative expenses. Teradyne often sells internally manufactured test equipment to customers. Upon the sale of an internally manufactured test system, the net book value of the system is transferred to inventory and expensed as cost of revenues. The net book value of internally manufactured test systems sold in the years ended December 31, 2024, 2023, and 2022 was $4.0 million, $2.8 million, and $6.6 million, respectively. Convertible Debt Teradyne adopted Accounting Standards Update ("ASU") ASU 2020-06 - "Debt - Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity's Own Equity," on January 1, 2022 using the modified retrospective method of adoption. As a result of adoption, Teradyne recorded an increase of $1.4 million to current debt for unsettled shares, an increase of $1.8 million to deferred tax assets, an increase of $6.6 million to long-term debt for unamortized debt discount, and an increase to retained earnings of $94.6 million for the reclassification of the equity component. Mezzanine equity representing unsettled shares value was reduced to zero and additional paid-in capital was reduced by $100.8 million. In accordance with ASU 2020-06, Teradyne accounts for a convertible debt instrument as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. Unsettled shares are recorded in current debt, and there is no recognition of a debt discount, which was previously amortized to interest expense. Settled shares reduce the outstanding debt balance in an amount equal to the cash paid, but do not result in any gain or loss on extinguishment. We use the if-converted method in the diluted EPS calculation for convertible instruments. Leases Under ASC 842, a contract is or contains a lease when Teradyne has the right to control the use of an identified asset. Teradyne determines if an arrangement is a lease at inception of the contract, which is the date on which the terms of the contract are agreed to and the agreement creates enforceable rights and obligations. The commencement date of the lease is the date that the lessor makes an underlying asset available for use by Teradyne. As of December 31, 2024, Teradyne does not have material leases that have not yet commenced. Teradyne determines if the lease is an operating or finance lease at the lease commencement date based upon the terms of the lease and the nature of the asset. The lease term used to calculate the lease liability includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised. The lease liability is measured at the present value of future lease payments, discounted using the discount rate for the lease at the commencement date. As Teradyne is typically unable to determine the implicit rate, Teradyne uses an incremental borrowing rate based on the lease term and economic environment at commencement date. Teradyne initially measures payments based on an index by using the applicable rate at lease commencement. Variable payments that do not depend on an index are not included in the lease liability and are recognized as they are incurred. The right-of-use ("ROU") asset is initially measured as the amount of lease liability, adjusted for any initial lease costs, prepaid lease payments, and reduced by any lease incentives. Property, Plant and Equipment Property, plant and equipment are stated at cost and depreciated over the estimated useful lives of the assets. Leasehold improvements and major renewals are capitalized and included in property, plant and equipment accounts, while expenditures for maintenance and repairs and minor renewals are charged to expense. When assets are retired, the assets and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the consolidated statements of operations. Teradyne provides for depreciation of its assets principally on the straight-line method with the cost of the assets being charged to expense over their useful lives as follows: Buildings 40 years Building improvements 5 to 10 years Leasehold improvements Lesser of lease term or 10 years Furniture and fixtures 10 years Test systems manufactured internally 6 years Machinery, equipment and software 3 to 5 years Test systems manufactured internally are used by Teradyne for customer evaluations and manufacturing and support of its customers. Teradyne depreciates the test systems manufactured internally over a six-year life to cost of revenues, engineering and development, and selling and administrative expenses. Teradyne often sells internally manufactured test equipment to customers. Upon the sale of an internally manufactured test system, the net book value of the system is transferred to inventory and expensed as cost of revenues. The net book value of internally manufactured test systems sold in the years ended December 31, 2024, 2023, and 2022 was $4.0 million, $2.8 million, and $6.6 million, respectively. --- ## Modified: (in thousands) **Key changes:** - Reworded sentence: "Net income $ 542,372 $ 448,752 $ 715,501 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively (52,847 ) 17,407 (29,031 ) Available-for-sale marketable securities: Unrealized (losses) gains on marketable securities arising during period, net of tax of $(470), $568, ($3,388), respectively (1,699 ) 2,423 (12,666 ) Less: Reclassification adjustment for (gains) losses included in net income, net of tax of $24, $12, $25, respectively 86 44 301 (1,613 ) 2,467 (12,365 ) Cash flow hedges: Unrealized (losses) gains arising during period, net of tax of $593, $1,537, $(708), respectively 2,100 5,464 (2,517 ) Less: Reclassification adjustment for (gains) losses included in net income, net of tax of $(527), $(686), $0, respectively (1,875 ) (2,441 ) - 225 3,023 (2,517 ) Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) (54,242 ) 22,890 (43,920 ) Comprehensive income $ 488,130 $ 471,642 $ 671,581 The accompanying notes are an integral part of the consolidated financial statements." **Prior (2024):** Net income $ 448,752 $ 715,501 $ 1,014,589 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively 17,407 (29,031 ) (36,207 ) Available-for-sale marketable securities: Unrealized gains (losses) on marketable securities arising during period, net of tax of $568, $(3,388), ($578), respectively 2,423 (12,666 ) (2,255 ) Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $12, $25, $(277), respectively 44 301 (995 ) 2,467 (12,365 ) (3,250 ) Cash flow hedges: Unrealized gains (losses) arising during period, net of tax of $1,537, $(708), $0, respectively 5,464 (2,517 ) - Less: Reclassification adjustment for losses included in net income, net of tax of $(686), $0, $0, respectively (2,441 ) - - 3,023 (2,517 ) - Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) 22,890 (43,920 ) (39,464 ) Comprehensive income $ 471,642 $ 671,581 $ 975,125 The accompanying notes are an integral part of the consolidated financial statements. 42 42 Table of Contents Table of Contents Table of Contents **Current (2025):** Net income $ 542,372 $ 448,752 $ 715,501 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively (52,847 ) 17,407 (29,031 ) Available-for-sale marketable securities: Unrealized (losses) gains on marketable securities arising during period, net of tax of $(470), $568, ($3,388), respectively (1,699 ) 2,423 (12,666 ) Less: Reclassification adjustment for (gains) losses included in net income, net of tax of $24, $12, $25, respectively 86 44 301 (1,613 ) 2,467 (12,365 ) Cash flow hedges: Unrealized (losses) gains arising during period, net of tax of $593, $1,537, $(708), respectively 2,100 5,464 (2,517 ) Less: Reclassification adjustment for (gains) losses included in net income, net of tax of $(527), $(686), $0, respectively (1,875 ) (2,441 ) - 225 3,023 (2,517 ) Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) (54,242 ) 22,890 (43,920 ) Comprehensive income $ 488,130 $ 471,642 $ 671,581 The accompanying notes are an integral part of the consolidated financial statements. 40 40 40 Table of Contents Table of Contents Table of Contents --- ## Modified: The implementation of tariffs on our products may have a material impact on our business. **Key changes:** - Reworded sentence: "On February 1, 2025, President Trump issued an executive order directing the United States to impose an additional 10% tariff on all imports from China effective February 4, 2025.We plan to implement operational changes that mitigate some of the impact of these tariffs on the import of our impacted products into the United States." - Reworded sentence: "In addition to the actions taken by the United States, China has implemented retaliatory tariffs on products made in the United States and imported into China." **Prior (2024):** Our business operations and supply chain are global and may be disrupted by the implementation of tariffs. In 2018, the United States Trade Representative imposed a 25% tariff on many lists of products, including certain Teradyne products that are made in China and imported into the United States. We have implemented operational changes that mitigate the impact of the 25% tariff on the import of our impacted products into the United States. As a result, the existing tariff has not had a material adverse effect on our business, financial condition or results of operations. The implementation of additional tariffs by the United States could have a material adverse effect on our business, financial condition or results of operations. In addition to the actions taken by the United States, China has implemented retaliatory tariffs on products made in the United States and imported into China, including certain Teradyne products. We have implemented, if appropriate, operational changes that would mitigate the impact of the retaliatory tariffs. However, notwithstanding our efforts, the retaliatory tariffs or other trade restrictions implemented by China could disrupt our business operations, sales and supply chain and, therefore, have a material adverse effect on our business, financial condition or results of operations. **Current (2025):** Our business operations and supply chain are global and may be disrupted by the implementation of tariffs. In 2018, the United States Trade Representative imposed a 25% tariff on many lists of products, including certain Teradyne products that are made in China and imported into the United States. On February 1, 2025, President Trump issued an executive order directing the United States to impose an additional 10% tariff on all imports from China effective February 4, 2025.We plan to implement operational changes that mitigate some of the impact of these tariffs on the import of our impacted products into the United States. As a result, the existing tariffs have not had a material adverse effect on our business, financial condition or results of operations. The implementation of additional tariffs by the United States could have a material adverse effect on our business, financial condition or results of operations. In addition to the actions taken by the United States, China has implemented retaliatory tariffs on products made in the United States and imported into China. These tariffs have not yet impacted Teradyne products. However, notwithstanding our efforts, the retaliatory tariffs or other trade restrictions implemented by China and possible future retaliatory actions by China or other nations could disrupt our business operations, sales and supply chain and, therefore, have a material adverse effect on our business, financial condition or results of operations. In February, 2025, President Trump issued executive orders directing the United States to impose new or additional tariffs on certain imports from Canada, Mexico and China and subsequently announced his intention to pause such tariffs on Canada and Mexico. While we do not believe any tariffs announced to date will have a material adverse effect on our business, financial condition or results of operations, we are still evaluating the potential impact of these tariffs and any additional tariffs implemented by the 18 18 18 Table of Contents Table of Contents Table of Contents Trump administration as well as any retaliatory actions by the impacted countries to our business and financial condition and outlook. The actual impact on any new tariffs is subject to a number of factors including the effective date, duration, amount, scope and nature of the tariffs, any retaliatory actions any impacted country may take, and any mitigating actions that are available. --- ## Modified: Convertible Debt **Key changes:** - Reworded sentence: "In accordance with ASU 2020-06, we account for a convertible debt instrument as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives." **Prior (2024):** We adopted Accounting Standards Update ("ASU") ASU 2020-06 - "Debt - Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity's Own Equity," on January 1, 2022 using the modified retrospective method of adoption. As a result of adoption, we recorded an increase of $1.4 million to current debt for unsettled shares, an increase of $1.8 million to deferred tax assets, an increase of $6.6 million to long-term debt for unamortized debt discount, and an increase to retained earnings of $94.6 million for the reclassification of the equity component. Mezzanine equity representing unsettled shares value was reduced to zero and additional paid-in capital was reduced by $100.8 million. In accordance with ASU 2020-06, we account for a 27 27 Table of Contents Table of Contents Table of Contents convertible debt instrument as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. Unsettled shares are recorded in current debt, and there is no recognition of a debt discount, which was previously amortized to interest expense. Settled shares reduce the outstanding debt balance in an amount equal to the cash paid, but do not result in any gain or loss on extinguishment. We use the if-converted method in the diluted EPS calculation for convertible instruments. **Current (2025):** We adopted Accounting Standards Update ("ASU") ASU 2020-06 - "Debt - Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity's Own Equity," on January 1, 2022 using the modified retrospective method of adoption. In accordance with ASU 2020-06, we account for a convertible debt instrument as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. Unsettled shares are recorded in current debt, and there is no recognition of a debt discount, which was previously amortized to interest expense. Settled shares reduce the outstanding debt balance in an amount equal to the cash paid, but do not result in any gain or loss on extinguishment. We use the if-converted method in the diluted EPS calculation for convertible instruments. --- ## Modified: Income Taxes **Key changes:** - Reworded sentence: "Income tax expense for 2024 and 2023 totaled $59.5 million and $76.8 million, respectively." - Removed sentence: "These decreases in expense were partially offset by a shift in the geographic distribution of income, which increased the income subject to taxation in higher tax rate jurisdictions relative to lower tax rate jurisdictions and a reduction in benefit from equity compensation." - Reworded sentence: "The tax savings attributable to the Singapore tax holiday for the years ended December 31, 2024 and 2023 were $17.1 million or $0.10 per diluted share and $1.4 million or $0.01 per diluted share, respectively." **Prior (2024):** Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The measurement of deferred tax assets is reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be realized. Evaluating the positive and negative evidence regarding the realization of the net deferred tax assets in accordance with ASC 740, "Accounting for Income Taxes" is a key judgment in the valuation of income taxes. This assessment included the evaluation of scheduled reversals of deferred tax liabilities, estimates of projected future taxable income and tax-planning strategies. Although realization is not assured, based on our assessment, we concluded that it is more likely than not that such assets, net of the existing valuation allowance, will be realized. **Current (2025):** Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The measurement of deferred tax assets is reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be realized. Evaluating the positive and negative evidence regarding the realization of the net deferred tax assets in accordance with ASC 740, "Accounting for Income Taxes" is a key judgment in the valuation of income taxes. This assessment included the evaluation of scheduled reversals of deferred tax liabilities, estimates of projected future taxable income and tax-planning strategies. Although realization is not assured, based on our assessment, we concluded that it is more likely than not that such assets, net of the existing valuation allowance, will be realized. 26 26 26 Table of Contents Table of Contents Table of Contents --- ## Modified: Supply Chain Constraints and Inflationary Pressures **Key changes:** - Reworded sentence: "In the second half of 2023 and the full year of 2024, we saw improvements related to supply constraints and, consequently, did not experience material increases in our lead times and costs for components." **Prior (2024):** The global supply shortage of electrical components, including semiconductor chips, impacted our supply chain in the first half of 2023. In the second half of 2023, we saw improvements related to supply constraints and, consequently, did not experience material increases in our lead times and costs for components. In addition, in the 2023, inflationary pressures contributed to increased costs for product components and wage inflation, which had a minimal impact on our cost of products, gross margin and profit for the year. Our supply chain team, and our suppliers, continue to manage numerous supply, production, and logistics obstacles. In an effort to mitigate these risks, in some cases, we have incurred higher costs due to investment in supply chain resiliency and to secure available inventory or have extended or placed non-cancellable purchase commitments with semiconductor suppliers, which introduces inventory risk if our forecasts and assumptions prove inaccurate. We have also sourced components from additional suppliers and multi-sourced and pre-ordered components and finished goods inventory in some cases in an effort to reduce the impact of the adverse supply chain conditions we have experienced. Though these mitigation efforts have not had a material impact on our financial results, our continuing efforts may not be successful. While our businesses could be impacted by supply constraints in the future, we do not anticipate supply chain constraints will have a material impact on our financial results in 2024. **Current (2025):** The global supply shortage of electrical components, including semiconductor chips, impacted our supply chain in the first half of 2023. In the second half of 2023 and the full year of 2024, we saw improvements related to supply constraints and, consequently, did not experience material increases in our lead times and costs for components. In addition, in 2023 and 2024, inflationary pressures contributed to increased costs for product components and wage inflation, which had a minimal impact on our cost of products, gross margin and profit for the year. While our businesses could be impacted by supply constraints in the future, we do not anticipate supply chain constraints will have a material impact on our financial results in 2025. 24 24 24 Table of Contents Table of Contents Table of Contents --- ## Modified: Restructuring and Other **Key changes:** - Reworded sentence: "During the year ended December 31, 2024, we recorded $5.2 million of severance charges related to headcount reductions of 98 people primarily in Robotics and Semiconductor Test, which included charges related to a voluntary early retirement program for employees meeting certain conditions, $3.6 million of acquisition and divestiture expenses, and $1.3 million of charges related to lease terminations." **Prior (2024):** During the year ended December 31, 2023, we recorded $14.7 million of severance charges related to headcount reductions of 215 people primarily in Semiconductor Test and Robotics, which included charges related to a voluntary early retirement program for employees meeting certain conditions, $3.1 million of acquisition and divestiture expenses related to the Technoprobe transaction, a $1.5 million contract termination charge, and a charge of $1.1 million for an increase in environmental liability. During the year ended December 31, 2022, we recorded a charge of $14.7 million related to the arbitration claim filed against Teradyne and AutoGuide related to an earn-out dispute which was settled on March 25, 2022 for $26.7 million, $2.9 million of severance charges primarily in Robotics, and a charge of $2.7 million for an increase in environmental and legal liabilities, partially offset by a $3.4 million gain on sale of an asset. **Current (2025):** During the year ended December 31, 2024, we recorded $5.2 million of severance charges related to headcount reductions of 98 people primarily in Robotics and Semiconductor Test, which included charges related to a voluntary early retirement program for employees meeting certain conditions, $3.6 million of acquisition and divestiture expenses, and $1.3 million of charges related to lease terminations. During the year ended December 31, 2023, we recorded a charge of $14.7 million of severance charges related to headcount reductions of 215 people primarily in Semiconductor Test and Robotics, which included charges related to a voluntary early retirement program for employees meeting certain conditions, $3.1 million of acquisition and divestiture expenses related to the Technoprobe transaction, a $1.5 million contract termination charge, and a charge of $1.1 million for an increase in environmental liabilities. --- ## Modified: Accounts Receivable and Allowance for Credit Losses **Key changes:** - Reworded sentence: "Total trade accounts receivable sold under the factoring agreements were $129.0 million and $243.5 million during 2024 and 2023, respectively." - Reworded sentence: "Equity Method InvestmentsTeradyne accounts for investments using the equity method of accounting when it has significant influence over the financial and operating policies, but not control, of the investee." **Prior (2024):** Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Teradyne maintains allowances for estimated losses resulting from the inability of its customers to make required payments. Estimated allowances for credit losses are reviewed periodically taking into account the customer's recent payment history, the customer's current financial statements and other information regarding the customer's creditworthiness. Account balances are written off against the allowance when it is determined the receivable will not be recovered. Teradyne sells certain trade accounts receivables on a non-recourse basis to third-party financial institutions pursuant to factoring agreements. Teradyne accounts for these transactions as sales of receivables and presents cash proceeds as a cash provided by operating activities in the consolidated statements of cash flows. Total trade accounts receivable sold under the factoring agreements were $243.5 million and $93.9 million during 2023 and 2022, respectively. Factoring fees for the sales of receivables are recorded in interest expense and are not material. 47 47 Table of Contents Table of Contents Table of Contents Inventories Inventories are stated at the lower of cost (first-in, first-out basis) or net realizable value. On a quarterly basis, Teradyne uses consistent methodologies to evaluate all inventories for net realizable value. Teradyne records a provision for both excess and obsolete inventory when such write-downs or write-offs are identified through the quarterly review process. The inventory valuation is based upon assumptions about future demand, product mix and possible alternative uses. **Current (2025):** Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Teradyne maintains allowances for estimated losses resulting from the inability of its customers to make required payments. Estimated allowances for credit losses are reviewed periodically taking into account the customer's recent payment history, the customer's current financial statements and other information regarding the customer's creditworthiness. Account balances are written off against the allowance when it is determined the receivable will not be recovered. Teradyne sells certain trade accounts receivables on a non-recourse basis to third-party financial institutions pursuant to factoring agreements. Teradyne accounts for these transactions as sales of receivables and presents cash proceeds as a cash provided by operating activities in the consolidated statements of cash flows. Total trade accounts receivable sold under the factoring agreements were $129.0 million and $243.5 million during 2024 and 2023, respectively. Factoring fees for the sales of receivables are recorded in interest expense and are not material. Equity Method InvestmentsTeradyne accounts for investments using the equity method of accounting when it has significant influence over the financial and operating policies, but not control, of the investee. The equity method investments are initially recorded at cost and included in 'Equity method investment' in the consolidated balance sheet. Teradyne records its share of investee's net income or loss and other --- ## Modified: Prepayments **Key changes:** - Reworded sentence: "Prepayments consist of the following: 2024 2023 (1) (in thousands) Contract manufacturer and supplier prepayments $ 365,875 $ 502,257 Prepaid maintenance and other services 22,176 17,592 Prepaid taxes 22,211 16,083 Other prepayments 18,824 13,038 Total prepayments $ 429,086 $ 548,970 (1)Excludes $5.3 million of contract manufacturer and supplier prepayments, classified as assets held for sale." **Prior (2024):** Prepayments consist of the following: 2023 (1) 2022 (in thousands) Contract manufacturer and supplier prepayments $ 502,257 $ 491,105 Prepaid maintenance and other services 17,592 14,545 Prepaid taxes 16,083 18,625 Other prepayments 13,038 8,687 Total prepayments $ 548,970 $ 532,962 (1)Excludes $5.3 million of contract manufacturer and supplier prepayments, classified as assets held for sale. See Note E: "Assets held for sale" for additional information. Prepayments consist of the following: 2023 (1) 2022 **Current (2025):** Prepayments consist of the following: 2024 2023 (1) (in thousands) Contract manufacturer and supplier prepayments $ 365,875 $ 502,257 Prepaid maintenance and other services 22,176 17,592 Prepaid taxes 22,211 16,083 Other prepayments 18,824 13,038 Total prepayments $ 429,086 $ 548,970 (1)Excludes $5.3 million of contract manufacturer and supplier prepayments, classified as assets held for sale. See Note E: "Dispositions" for additional information. Prepayments consist of the following: 2024 2023 (1) --- ## Modified: (d) Maximum Number(or Approximate DollarValue) of Shares (orUnits) that may Yet BePurchased Under thePlans or Programs **Key changes:** - Reworded sentence: "September 30, 2024 - October 27, 2024 104 $ 129.01 103 $ 1,531,150 October 28, 2024 - November 24, 2024 475 107.04 475 1,480,482 November 25, 2024 - December 31, 2024 668 120.26 668 1,400,063 1,247 (1) $ 115.95 (1) 1,246 (1)Includes approximately two thousand shares at an average price of $122.14 withheld from employees for the payment of taxes." - Removed sentence: "(3)In January 2023, the Board of Directors cancelled the 2021 repurchase program and approved a new $2.0 billion of common stock." - Removed sentence: "Unless terminated by resolution of our Board of Directors, the repurchase program will expire when we have repurchased all shares authorized for repurchase under the share repurchase program." - Reworded sentence: "Item 6: (Reserved) 23 23 23 Table of Contents Table of Contents Table of Contents Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations Overview We are a leading global supplier of automated test equipment and robotics products." - Reworded sentence: "Our automated test equipment and robotics products and services include: •semiconductor test ("Semiconductor Test") systems; semiconductor test ("Semiconductor Test") systems; •robotics ("Robotics") products; and robotics ("Robotics") products; and •defense/aerospace ("Defense/Aerospace") test instrumentation and systems, circuit-board test and inspection ("Production Board Test") systems, and wireless test systems (referred collectively as "All Other")." **Prior (2024):** October 2, 2023 - October 29, 2023 363 $ 97.65 362 $ 1,615,390 October 30, 2023 - November 26, 2023 185 85.97 185 1,599,497 November 27, 2023 - December 31, 2023 1 93.70 - 1,599,497 549 (1) $ 93.70 (1) 547 (1)Includes approximately two thousand shares at an average price of $94.13 withheld from employees for the payment of taxes. Includes approximately two thousand shares at an average price of $94.13 withheld from employees for the payment of taxes. (2)As of January 1, 2023, share repurchases net of share issuances are subject to a 1% excise tax under the Inflation Reduction Act. Excise tax incurred is included as part of the cost basis of shares repurchased in the Condensed Consolidated Statements of Convertible Common Shares and Stockholders' Equity. As of January 1, 2023, share repurchases net of share issuances are subject to a 1% excise tax under the Inflation Reduction Act. Excise tax incurred is included as part of the cost basis of shares repurchased in the Condensed Consolidated Statements of Convertible Common Shares and Stockholders' Equity. (3)In January 2023, the Board of Directors cancelled the 2021 repurchase program and approved a new $2.0 billion of common stock. Unless terminated by resolution of our Board of Directors, the repurchase program will expire when we have repurchased all shares authorized for repurchase under the share repurchase program. In January 2023, the Board of Directors cancelled the 2021 repurchase program and approved a new $2.0 billion of common stock. Unless terminated by resolution of our Board of Directors, the repurchase program will expire when we have repurchased all shares authorized for repurchase under the share repurchase program. We satisfy U.S. federal and state minimum withholding tax obligations due upon the vesting and the conversion of restricted stock units into shares of our common stock, by automatically withholding from the shares being issued, a number of shares with an aggregate fair market value on the date of such vesting and conversion that would satisfy the minimum withholding amount due. Item 6: (Reserved) 24 24 Table of Contents Table of Contents Table of Contents Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations Overview We are a leading global supplier of automated test equipment and robotics products. We design, develop, manufacture and sell automated test systems and robotics products. Our automated test systems are used to test semiconductors, wireless products, data storage and complex electronics systems in many industries including consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries. Our Robotics products include collaborative robotic arms and autonomous mobile robots ("AMRs") used by global manufacturing, logistics and industrial customers to improve quality, increase manufacturing and material handling efficiency and decrease manufacturing and logistics costs. Our automated test equipment and robotics products and services include: •semiconductor test ("Semiconductor Test") systems; semiconductor test ("Semiconductor Test") systems; •storage and system level test ("Storage Test") systems, defense/aerospace ("Defense/Aerospace") test instrumentation and systems and circuit-board test and inspection ("Production Board Test") systems (collectively these products represent "System Test"); storage and system level test ("Storage Test") systems, defense/aerospace ("Defense/Aerospace") test instrumentation and systems and circuit-board test and inspection ("Production Board Test") systems (collectively these products represent "System Test"); •wireless test ("Wireless Test") systems; and wireless test ("Wireless Test") systems; and •robotics ("Robotics") products. robotics ("Robotics") products. The market for our test products is concentrated with a limited number of significant customers accounting for a substantial portion of the purchases of test equipment. A few customers drive significant demand for our products both through direct sales and sales to the customer's supply partners. We expect that sales of our test products will continue to be concentrated with a limited number of significant customers for the foreseeable future. In 2023, the demand in our Semiconductor Test business continued to be impacted by a correction cycle driven by excess semiconductor inventory, primarily in the mobility segment of the market. The depth of this slowdown and the timing of the recovery are uncertain, however, strong automotive and image sensor demand partially offset these declines. The growth of DDR5 and High Bandwidth Memory ("HBM") devices for data center applications continued to drive demand for our products in the memory market in 2023. Over the midterm, we expect the ramp of 3 nanometer and gate-all-around process technology, increasing multichip packaging, additional device complexity and unit growth will drive additional demand for Semiconductor Test. Our Robotics segment consists of Universal Robots A/S ("UR"), a leading supplier of collaborative robotic arms, and Mobile Industrial Robots A/S ("MiR"), a leading maker of AMRs for industrial automation. The market for our Robotics segment products is dependent on the adoption of new automation technologies by large manufacturers as well as small and medium enterprises ("SMEs") throughout the world. Demand in the fourth quarter of 2023 increased, tied to introduction of new products and seasonally high demand in Robotics after market softness and the impact of our channel transformation resulted in a weaker than forecasted first half of 2023. On November 7, 2023, Teradyne and Technoprobe S.p.A, ("Technoprobe"), a leader in the design and production of probe cards, announced establishment of a strategic partnership that will seek to accelerate growth for both companies and enable higher performance semiconductor test interfaces for customers worldwide. As part of the partnership, Teradyne will make an investment of 481.0 million Euros in exchange for a 10% equity investment in Technoprobe and Technoprobe will acquire 100% of Teradyne's Device Interface Solutions ("DIS") business in exchange for $85.0 million. The transaction is expected to close during the first half of 2024. In 2023, inflation had minimal effect on our results. While both our test and robotics businesses may continue to be influenced by supply constraints, which could impact our revenue and costs, We do not anticipate that supply chain constraints will have a material impact on our financial results in 2024. Our financial statements are denominated in U.S. dollars. While the majority of our revenues are in U.S. dollars, approximately 70 percent of our Robotics revenue is denominated in foreign currencies. There was no material impact to our 2023 results due to changes in foreign exchange rates, however, in 2022, the strengthening of the U.S. dollar was a factor in lower than forecasted revenues in our Robotics segment. Continued strengthening of the U.S. dollar would adversely affect Robotics revenue growth in 2024. Our corporate strategy continues to focus on profitably gaining market share in our test businesses through the introduction of differentiated products that target expanding segments and accelerating growth through continued investment in our Robotics businesses. We plan to continue investing in our growth while balancing capital allocations between stock repurchases and dividends and using capital for acquisitions. 25 25 Table of Contents Table of Contents Table of Contents **Current (2025):** September 30, 2024 - October 27, 2024 104 $ 129.01 103 $ 1,531,150 October 28, 2024 - November 24, 2024 475 107.04 475 1,480,482 November 25, 2024 - December 31, 2024 668 120.26 668 1,400,063 1,247 (1) $ 115.95 (1) 1,246 (1)Includes approximately two thousand shares at an average price of $122.14 withheld from employees for the payment of taxes. Includes approximately two thousand shares at an average price of $122.14 withheld from employees for the payment of taxes. As of January 1, 2023, share repurchases net of share issuances are subject to a 1% excise tax under the Inflation Reduction Act. Excise tax incurred is included as part of the cost basis of shares repurchased in the Condensed Consolidated Statements of Convertible Common Shares and Stockholders' Equity. In January 2023, the Board of Directors cancelled the 2021 repurchase program and approved a new $2.0 billion of common stock. Unless terminated by resolution of our Board of Directors, the repurchase program will expire when we have repurchased all shares authorized for repurchase under the share repurchase program. We satisfy U.S. federal and state minimum withholding tax obligations due upon the vesting and the conversion of restricted stock units into shares of our common stock, by automatically withholding from the shares being issued, a number of shares with an aggregate fair market value on the date of such vesting and conversion that would satisfy the minimum withholding amount due. Item 6: (Reserved) 23 23 23 Table of Contents Table of Contents Table of Contents Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations Overview We are a leading global supplier of automated test equipment and robotics products. We design, develop, manufacture and sell automated test systems and robotics products. Our automated test systems are used to test semiconductors, wireless products, data storage and complex electronics systems in many industries including consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries. Our Robotics products include collaborative robotic arms and autonomous mobile robots ("AMRs") used by global manufacturing, logistics and industrial customers to improve quality, increase manufacturing and material handling efficiency and decrease manufacturing and logistics costs. Our automated test equipment and robotics products and services include: •semiconductor test ("Semiconductor Test") systems; semiconductor test ("Semiconductor Test") systems; •robotics ("Robotics") products; and robotics ("Robotics") products; and •defense/aerospace ("Defense/Aerospace") test instrumentation and systems, circuit-board test and inspection ("Production Board Test") systems, and wireless test systems (referred collectively as "All Other"). defense/aerospace ("Defense/Aerospace") test instrumentation and systems, circuit-board test and inspection ("Production Board Test") systems, and wireless test systems (referred collectively as "All Other"). The market for our test products is concentrated with a limited number of significant customers accounting for a substantial portion of the purchases of test equipment. A few customers drive significant demand for our products both through direct sales and sales to the customer's supply partners. We expect that sales of our test products will continue to be concentrated with a limited number of significant customers for the foreseeable future. In 2024, we saw strength in our Semiconductor Test business, with memory and compute offerings growing considerably compared to 2023. We expect mobile, automotive, and industrial will grow in 2025 and that recent advancements in AI inference may help mid-term recovery in these markets. Beyond AI compute, we are investing in other areas of the semiconductor test market that offer the opportunity for accelerating long-term growth, including power semi-conductors and the shift towards vertically integrated products ("VIPs"). We have seen the benefits start to materialize in 2024 and expect them to continue through the mid-term. 2024 was a very weak industrial automation market resulting in a year-over-year decline in Robotics revenues while outperforming our peer group. In 2024, we built key OEM, systems integrators and large account strategic partnerships which will strengthen our go to market for years to come. Introduction of new products, including the MiR 1200 Pallet Jack will further expand our available markets to support our growth. On May 27, 2024, we paid 483.1 million Euros, equivalent to $524.1 million, to purchase a combination of previously issued and outstanding shares and shares newly issued by Technoprobe, S.p.A. ("Technoprobe"). The shares purchased represent 10% of the issued and outstanding shares of Technoprobe. We also received a board seat as part of the purchase. Additionally, as part of the transaction, we completed the sale of the Device Interface Solutions ("DIS") business, a component of our Semiconductor Test segment, to Technoprobe for $85.0 million in cash, net of cash and cash equivalents sold, and a customary working capital adjustment. The sale resulted in a pre-tax gain of $57.1 million recorded as 'Gain on sale of business' in the consolidated statement of operations. Our financial statements are denominated in U.S. dollars. While revenues in our test businesses are predominantly in U.S. dollars, the majority of our Robotics revenue is denominated in foreign currencies. Strengthening of the U.S. dollar would negatively affect Robotics revenue growth in 2025. Our corporate strategy for our test businesses is to profitably grow market share while in Robotics, we plan to profitably grow revenue through the introduction of differentiated products targeting expanding markets. Our capital allocation plan will continue to be balanced between investing in organic and inorganic growth and returning cash to shareholders through share repurchases and dividends. --- ## Modified: Preparation of Financial Statements and Use of Estimates **Key changes:** - Reworded sentence: "On an on-going basis, management evaluates its estimates, including those related to revenue, inventories, investments, goodwill, intangible and other long-lived assets, accounts receivable, income taxes, deferred tax assets and liabilities, pensions, warranties, and loss contingencies." - Reworded sentence: "•Teradyne determines the transaction price to be the amount of consideration to which Teradyne expects to be entitled to, which is generally at contractually stated prices.•Transaction price is allocated to each individual performance obligation based on the standalone selling price of that performance obligation." - Reworded sentence: "If standalone transactions are not available, Teradyne will estimate the standalone selling price through market assessments or" **Prior (2024):** The preparation of consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an on-going basis, management evaluates its estimates, including those related to inventories, investments, goodwill, intangible and other long-lived assets, accounts receivable, income taxes, deferred tax assets and liabilities, pensions, warranties, contingent consideration liabilities, and loss contingencies. Management bases its estimates on historical experience and on appropriate and customary assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date of issuance of this Annual Report on Form 10-K. These estimates may change, as new events occur and additional information is obtained. Actual results may differ significantly from these estimates under different assumptions or conditions. Revenue Recognition Revenue from Contracts with Customers In accordance with ASC 606, Teradyne recognizes revenues, when or as control is transferred to a customer. Teradyne's determination of revenue is dependent upon a five-step process outlined below. •Teradyne accounts for a contract with a customer when there is written approval, the contract is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection. •Teradyne periodically enters into contracts with customers in which a customer may purchase a combination of goods and services, such as products with extended warranty obligations. Teradyne determines performance obligations by assessing whether the products or services are distinct from the other elements of the contract. In order to be distinct, the product or service must perform either on its own or with readily available resources and must be separate within the context of the contract. 45 Table of Contents •Teradyne determines the transaction price to be the amount of consideration to which Teradyne expects to be entitled to, which is generally at contractually stated prices.•Transaction price is allocated to each individual performance obligation based on the standalone selling price of that performance obligation. Teradyne uses standalone transactions when available to value each performance obligation. If standalone transactions are not available, Teradyne will estimate the standalone selling price through market assessments or cost plus a reasonable margin analysis. Any discounts from standalone selling price are spread proportionally to each performance obligation. •In order to determine the appropriate timing for revenue recognition, Teradyne first determines if the transaction meets any of three criteria for over time recognition. If the transaction meets the criteria for over time recognition, Teradyne recognizes revenue as the good or service is delivered. Teradyne uses input variables such as hours or months utilized or costs incurred to determine the amount of revenue to recognize in a given period. Input variables are used as they best align consumption with benefit to the customer. For transactions that do not meet the criteria for over time recognition, Teradyne will recognize revenue at a point in time based on an assessment of the five criteria for transfer of control. Teradyne has concluded that revenue should be recognized when shipped or delivered based on contractual terms. Typically, acceptance of Teradyne's products and services is a formality as Teradyne delivers similar systems, instruments and robots to standard specifications. In cases where acceptance is not deemed a formality, Teradyne will defer revenue recognition until customer acceptance. Performance Obligations Products Teradyne products consist primarily of semiconductor test systems and instruments, defense/aerospace test instrumentation and systems, storage test systems and instruments, circuit-board test and inspection systems and instruments, wireless test systems and robotics products. Teradyne's hardware is typically recognized at a point in time upon transfer of control to the customer. Services Teradyne services consist of extended warranties, training and application support, service agreements, post contract customer support ("PCS") and replacement parts. Each service is recognized based on relative standalone selling price. Extended warranty, training and support, service agreements and PCS are recognized over time based on the period of service. Replacement parts are recognized at a point in time upon transfer of control to the customer. Teradyne does not allow customer returns or provide refunds to customers for any products or services. Teradyne products include a standard 12-month warranty. This warranty is not considered a distinct performance obligation because it does not obligate Teradyne to provide a separate service to the customer and it cannot be purchased separately. Cost related to warranties are included in cost of revenues when product revenues are recognized. As of December 31, 2023 and 2022, deferred revenue and customer advances consisted of the following and are included in the short and long-term deferred revenue and customer advances: 2023 2022 (in thousands) Maintenance, service and training $ 66,458 $ 78,089 Customer advances, undelivered elements and other 35,731 59,147 Extended warranty 34,897 56,180 Total deferred revenue and customer advances $ 137,086 $ 193,416 **Current (2025):** The preparation of consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an on-going basis, management evaluates its estimates, including those related to revenue, inventories, investments, goodwill, intangible and other long-lived assets, accounts receivable, income taxes, deferred tax assets and liabilities, pensions, warranties, and loss contingencies. Management bases its estimates on historical experience and on appropriate and customary assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date of issuance of this Annual Report on Form 10-K. These estimates may change, as new events occur and additional information is obtained. Actual results may differ significantly from these estimates under different assumptions or conditions. Revenue Recognition Revenue from Contracts with Customers In accordance with ASC 606, Teradyne recognizes revenues, when or as control is transferred to a customer. Teradyne's determination of revenue is dependent upon a five-step process outlined below. •Teradyne accounts for a contract with a customer when there is written approval, the contract is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection. •Teradyne periodically enters into contracts with customers in which a customer may purchase a combination of goods and services, such as products with extended warranty obligations. Teradyne determines performance obligations by assessing whether the products or services are distinct from the other elements of the contract. In order to be distinct, the product or service must perform either on its own or with readily available resources and must be separate within the context of the contract. •Teradyne determines the transaction price to be the amount of consideration to which Teradyne expects to be entitled to, which is generally at contractually stated prices.•Transaction price is allocated to each individual performance obligation based on the standalone selling price of that performance obligation. Teradyne uses standalone transactions when available to value each performance obligation. If standalone transactions are not available, Teradyne will estimate the standalone selling price through market assessments or --- ## Modified: LIABILITIES **Key changes:** - Reworded sentence: "Current liabilities: Accounts payable $ 134,792 $ 180,131 Accrued employees' compensation and withholdings 204,991 191,750 Deferred revenue and customer advances 107,710 99,804 Other accrued liabilities 90,777 114,712 Operating lease liabilities 18,699 17,522 Income taxes payable 67,610 48,653 Current liabilities held for sale - 7,379 Total current liabilities 624,579 659,951 Retirement plans liabilities 133,338 132,090 Long-term deferred revenue and customer advances 40,505 37,282 Deferred tax liabilities 1,038 183 Long-term other accrued liabilities 7,442 19,998 Long-term operating lease liabilities 57,922 65,092 Long-term income taxes payable 24,596 44,331 Long-term liabilities held for sale - 2,000 Total liabilities 889,420 960,927 Commitments and contingencies (Note N) Commitments and contingencies (Note N) Commitments and contingencies (Note N) Commitments and contingencies (Note N)" **Prior (2024):** Current liabilities: Accounts payable $ 180,131 $ 139,722 Accrued employees' compensation and withholdings 191,750 212,266 Deferred revenue and customer advances 99,804 148,285 Other accrued liabilities 114,712 112,271 Operating lease liabilities 17,522 18,594 Income taxes payable 48,653 65,010 Current debt - 50,115 Current liabilities held for sale 7,379 - Total current liabilities 659,951 746,263 Retirement plans liabilities 132,090 116,005 Long-term deferred revenue and customer advances 37,282 45,131 Deferred tax liabilities 183 3,267 Long-term other accrued liabilities 19,998 15,981 Long-term operating lease liabilities 65,092 64,176 Long-term income taxes payable 44,331 59,135 Long-term liabilities held for sale 2,000 - Total liabilities 960,927 1,049,958 Commitments and contingencies (Note M) Commitments and contingencies (Note M) Commitments and contingencies (Note M) Commitments and contingencies (Note M) **Current (2025):** Current liabilities: Accounts payable $ 134,792 $ 180,131 Accrued employees' compensation and withholdings 204,991 191,750 Deferred revenue and customer advances 107,710 99,804 Other accrued liabilities 90,777 114,712 Operating lease liabilities 18,699 17,522 Income taxes payable 67,610 48,653 Current liabilities held for sale - 7,379 Total current liabilities 624,579 659,951 Retirement plans liabilities 133,338 132,090 Long-term deferred revenue and customer advances 40,505 37,282 Deferred tax liabilities 1,038 183 Long-term other accrued liabilities 7,442 19,998 Long-term operating lease liabilities 57,922 65,092 Long-term income taxes payable 24,596 44,331 Long-term liabilities held for sale - 2,000 Total liabilities 889,420 960,927 Commitments and contingencies (Note N) Commitments and contingencies (Note N) Commitments and contingencies (Note N) Commitments and contingencies (Note N) --- ## Modified: (in millions) **Key changes:** - Reworded sentence: "Interest income $ (24.8 ) $ (27.3 ) $ 2.5 Interest expense 3.6 3.8 (0.2 ) Other (income) expense, net 5.9 (1.0 ) 6.8 Other (income) expense, net decreased by $6.8 million primarily due to $9.8 million loss on our call option in connection with our agreement to acquire a 10% investment in Technoprobe S.p.A, partially offset by the change in pension actuarial gains/losses, from a $2.7 million loss in 2023 to a $4.4 million gain in 2024." **Prior (2024):** Semiconductor Test $ 1,818.6 $ 2,080.6 $ (262.0 ) Robotics 375.2 403.1 (27.9 ) System Test 338.2 469.3 (131.1 ) Wireless Test 144.3 201.7 (57.4 ) Corporate and Eliminations - 0.3 (0.3 ) $ 2,676.3 $ 3,155.0 $ (478.7 ) The decrease in Semiconductor Test revenues of $262.0 million, or 12.6%, was driven primarily by lower tester sales for compute and mobility applications. The decrease in Robotics revenues of $27.9 million, or 6.9%, was driven primarily by softening demand due to slowing global industrial activity and macro-economic headwinds and the impact of the transformation of Universal Robots' sales channel. The decrease in System Test revenues of $131.1 million, or 27.9%, was primarily due to lower sales in Storage Test of system level and hard disk drive testers. The decrease in Wireless Test revenues of $57.4 million, or 28.5%, was primarily due to a decrease in sales of connectivity test products. Our reportable segments accounted for the following percentages of consolidated revenues: 2023 2022 Semiconductor Test 68 % 66 % Robotics 14 13 System Test 13 15 Wireless Test 5 6 100 % 100 % Revenues by country as a percentage of total revenues were as follows (1): 2023 2022 United States 16 % 15 % Korea 15 17 Taiwan 14 20 China 12 16 Japan 11 5 Europe 10 9 Philippines 7 4 Singapore 4 3 Thailand 3 4 Malaysia 3 5 Rest of the World 5 2 100 % 100 % (1)Revenues attributable to a country are based on the location of the customer site. Revenues attributable to a country are based on the location of the customer site. The breakout of product and service revenues was as follows: 2023 2022 **Current (2025):** Semiconductor Test $ 2,123.9 $ 1,957.2 $ 166.7 Robotics 364.8 375.2 (10.4 ) All Other 331.1 343.9 (12.8 ) $ 2,819.9 $ 2,676.3 $ 143.5 The increase in Semiconductor Test revenues of $166.7 million, or 8.5%, was driven primarily by higher tester sales for computing, ADAS, and memory applications, partially offset by lower tester sales for legacy automotive applications. The decrease in Robotics revenues of $10.4 million, or 2.8%, was driven primarily by continued weakness in the Industrial Automation market and softer sales in Universal Robots. 27 27 27 Table of Contents Table of Contents Table of Contents Our reportable segments accounted for the following percentages of consolidated revenues: 2024 2023 Semiconductor Test 75 % 73 % Robotics 13 14 All Other 12 13 100 % 100 % Revenues by country as a percentage of total revenues were as follows (1): 2024 2023 Korea 25 % 15 % Taiwan 21 14 United States 13 16 China 13 12 Europe 9 10 Japan 6 11 Singapore 3 4 Philippines 2 7 Thailand 2 3 Malaysia 2 3 Rest of the World 4 5 100 % 100 % (1)Revenues attributable to a country are based on the location of the customer site. Revenues attributable to a country are based on the location of the customer site. The breakout of product and service revenues was as follows: 2024 2023 --- ## Modified: (in thousands) **Key changes:** - Reworded sentence: "Cash flows from operating activities: Net income $ 542,372 $ 448,752 $ 715,501 Adjustments to reconcile net income from operations to net cash provided by operating activities: Depreciation 100,977 92,118 90,763 Stock-based compensation 60,122 57,682 48,228 Provision for excess and obsolete inventory 18,922 28,358 31,452 Amortization 18,764 18,768 19,912 Losses (gains) on investments 10,056 (14,915 ) 9,985 Equity in net earnings of affiliate 7,211 - - Gain on sale of business (57,119 ) - - Deferred taxes (46,360 ) (37,642 ) (38,693 ) Retirement plans actuarial (gains) losses (4,355 ) 2,703 (25,584 ) Loss (gain) on sale of asset - - (3,410 ) Other (2,290 ) (955 ) 2,353 Changes in operating assets and liabilities, net of businesses acquired: Accounts receivable (52,659 ) 70,977 50,628 Inventories 8,707 5,327 (80,809 ) Prepayments and other assets 119,454 (43,101 ) (140,713 ) Accounts payable and other accrued expenses (54,386 ) 46,782 (60,507 ) Deferred revenue and customer advances 12,176 (57,210 ) (6,233 ) Retirement plan contributions (5,814 ) (5,492 ) (5,116 ) Income taxes (3,602 ) (26,921 ) (29,834 ) Net cash provided by operating activities 672,176 585,231 577,923 Cash flows from investing activities: Investments in businesses (532,060 ) - - Purchases of property, plant and equipment (198,095 ) (159,642 ) (163,249 ) Purchases of marketable securities (45,796 ) (161,906 ) (287,409 ) Issuance of convertible loan - (5,000 ) - Proceeds from the sale of a business, net of cash and cash equivalents sold 90,348 - - Proceeds from maturities of marketable securities 38,353 85,042 222,941 Proceeds from sales of marketable securities 24,035 61,401 268,058 Proceeds from life insurance 873 460 - Proceeds from sale of asset - - 3,410 Net cash (used for) provided by investing activities (622,342 ) (179,645 ) 43,751 Cash flows from financing activities: Repurchase of common stock (198,574 ) (397,241 ) (752,082 ) Payments of borrowings on revolving credit facility (185,000 ) - - Dividend payments (76,423 ) (67,878 ) (69,711 ) Payments related to net settlement of employee stock compensation awards (14,100 ) (20,788 ) (33,170 ) Payments of convertible debt principal - (50,264 ) (66,759 ) Proceeds from borrowings on revolving credit facility 185,000 - - Issuance of common stock under stock purchase and stock option plans 37,330 34,259 28,733 Net cash used for financing activities (251,767 ) (501,912 ) (892,989 ) Effects of exchange rate changes on cash and cash equivalents (2,284 ) (876 ) 3,889 (Decrease) increase in cash and cash equivalents (204,217 ) (97,202 ) (267,426 ) Cash and cash equivalents at beginning of year 757,571 854,773 1,122,199 Cash and cash equivalents at end of year $ 553,354 $ 757,571 $ 854,773 Supplementary disclosure of cash flow information: Cash paid for: Interest $ 767 $ 296 $ 1,498 Income taxes $ 121,428 $ 140,239 $ 193,246 Non-cash investing activities: Capital expenditures incurred but not yet paid: $ 3,893 $ 2,735 $ 1,826 42 42 42 Table of Contents Table of Contents Table of Contents The accompanying notes are an integral part of the consolidated financial statements." **Prior (2024):** Net income $ 448,752 $ 715,501 $ 1,014,589 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively 17,407 (29,031 ) (36,207 ) Available-for-sale marketable securities: Unrealized gains (losses) on marketable securities arising during period, net of tax of $568, $(3,388), ($578), respectively 2,423 (12,666 ) (2,255 ) Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $12, $25, $(277), respectively 44 301 (995 ) 2,467 (12,365 ) (3,250 ) Cash flow hedges: Unrealized gains (losses) arising during period, net of tax of $1,537, $(708), $0, respectively 5,464 (2,517 ) - Less: Reclassification adjustment for losses included in net income, net of tax of $(686), $0, $0, respectively (2,441 ) - - 3,023 (2,517 ) - Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) 22,890 (43,920 ) (39,464 ) Comprehensive income $ 471,642 $ 671,581 $ 975,125 The accompanying notes are an integral part of the consolidated financial statements. 42 42 Table of Contents Table of Contents Table of Contents **Current (2025):** Net income $ 542,372 $ 448,752 $ 715,501 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $0, $0, $0, respectively (52,847 ) 17,407 (29,031 ) Available-for-sale marketable securities: Unrealized (losses) gains on marketable securities arising during period, net of tax of $(470), $568, ($3,388), respectively (1,699 ) 2,423 (12,666 ) Less: Reclassification adjustment for (gains) losses included in net income, net of tax of $24, $12, $25, respectively 86 44 301 (1,613 ) 2,467 (12,365 ) Cash flow hedges: Unrealized (losses) gains arising during period, net of tax of $593, $1,537, $(708), respectively 2,100 5,464 (2,517 ) Less: Reclassification adjustment for (gains) losses included in net income, net of tax of $(527), $(686), $0, respectively (1,875 ) (2,441 ) - 225 3,023 (2,517 ) Defined benefit post-retirement plan: Amortization of prior service credit, net of tax $(2), $(2), $(2), respectively (7 ) (7 ) (7 ) Other comprehensive income (loss) (54,242 ) 22,890 (43,920 ) Comprehensive income $ 488,130 $ 471,642 $ 671,581 The accompanying notes are an integral part of the consolidated financial statements. 40 40 40 Table of Contents Table of Contents Table of Contents --- ## Modified: (in millions) **Key changes:** - Reworded sentence: "Semiconductor Test $ 558.2 $ 498.5 $ 59.7 Robotics (77.6 ) (54.3 ) (23.3 ) All Other 65.7 79.5 (13.8 ) Corporate and Eliminations (1) 62.7 1.9 60.8 $ 609.1 $ 525.6 $ 83.5 (1)Included in Corporate and Eliminations are gain on sale of business, interest income, interest expense, net foreign exchange gains (losses), intercompany eliminations, severance charges, pension and postretirement plan actuarial gains (losses), acquisition and divestiture related fees, legal and environmental fees, contract termination settlement charge, and modification of outstanding equity awards." **Prior (2024):** Semiconductor Test $ 1,818.6 $ 2,080.6 $ (262.0 ) Robotics 375.2 403.1 (27.9 ) System Test 338.2 469.3 (131.1 ) Wireless Test 144.3 201.7 (57.4 ) Corporate and Eliminations - 0.3 (0.3 ) $ 2,676.3 $ 3,155.0 $ (478.7 ) The decrease in Semiconductor Test revenues of $262.0 million, or 12.6%, was driven primarily by lower tester sales for compute and mobility applications. The decrease in Robotics revenues of $27.9 million, or 6.9%, was driven primarily by softening demand due to slowing global industrial activity and macro-economic headwinds and the impact of the transformation of Universal Robots' sales channel. The decrease in System Test revenues of $131.1 million, or 27.9%, was primarily due to lower sales in Storage Test of system level and hard disk drive testers. The decrease in Wireless Test revenues of $57.4 million, or 28.5%, was primarily due to a decrease in sales of connectivity test products. Our reportable segments accounted for the following percentages of consolidated revenues: 2023 2022 Semiconductor Test 68 % 66 % Robotics 14 13 System Test 13 15 Wireless Test 5 6 100 % 100 % Revenues by country as a percentage of total revenues were as follows (1): 2023 2022 United States 16 % 15 % Korea 15 17 Taiwan 14 20 China 12 16 Japan 11 5 Europe 10 9 Philippines 7 4 Singapore 4 3 Thailand 3 4 Malaysia 3 5 Rest of the World 5 2 100 % 100 % (1)Revenues attributable to a country are based on the location of the customer site. Revenues attributable to a country are based on the location of the customer site. The breakout of product and service revenues was as follows: 2023 2022 **Current (2025):** Semiconductor Test $ 2,123.9 $ 1,957.2 $ 166.7 Robotics 364.8 375.2 (10.4 ) All Other 331.1 343.9 (12.8 ) $ 2,819.9 $ 2,676.3 $ 143.5 The increase in Semiconductor Test revenues of $166.7 million, or 8.5%, was driven primarily by higher tester sales for computing, ADAS, and memory applications, partially offset by lower tester sales for legacy automotive applications. The decrease in Robotics revenues of $10.4 million, or 2.8%, was driven primarily by continued weakness in the Industrial Automation market and softer sales in Universal Robots. 27 27 27 Table of Contents Table of Contents Table of Contents Our reportable segments accounted for the following percentages of consolidated revenues: 2024 2023 Semiconductor Test 75 % 73 % Robotics 13 14 All Other 12 13 100 % 100 % Revenues by country as a percentage of total revenues were as follows (1): 2024 2023 Korea 25 % 15 % Taiwan 21 14 United States 13 16 China 13 12 Europe 9 10 Japan 6 11 Singapore 3 4 Philippines 2 7 Thailand 2 3 Malaysia 2 3 Rest of the World 4 5 100 % 100 % (1)Revenues attributable to a country are based on the location of the customer site. Revenues attributable to a country are based on the location of the customer site. The breakout of product and service revenues was as follows: 2024 2023 --- ## Modified: SHAREHOLDERS' EQUITY **Key changes:** - Reworded sentence: "Common stock, $0.125 par value, 1,000,000 shares authorized, 161,722 and 152,698 shares issued and outstanding at December 31, 2024 and 2023, respectively 20,215 19,087 Additional paid-in capital 1,909,538 1,827,274 Accumulated other comprehensive loss (81,220 ) (26,978 ) Retained earnings 970,761 706,514 Total shareholders' equity 2,819,294 2,525,897 Total liabilities and shareholders' equity $ 3,708,714 $ 3,486,824 The accompanying notes are an integral part of the consolidated financial statements." **Prior (2024):** Common stock, $0.125 par value, 1,000,000 shares authorized, 152,698 and 155,759 shares issued and outstanding at December 31, 2023 and 2022, respectively 19,087 19,470 Additional paid-in capital 1,827,274 1,755,963 Accumulated other comprehensive loss (26,978 ) (49,868 ) Retained earnings 706,514 725,729 Total shareholders' equity 2,525,897 2,451,294 Total liabilities, convertible common shares and shareholders' equity $ 3,486,824 $ 3,501,252 The accompanying notes are an integral part of the consolidated financial statements. 40 40 Table of Contents Table of Contents Table of Contents **Current (2025):** Common stock, $0.125 par value, 1,000,000 shares authorized, 161,722 and 152,698 shares issued and outstanding at December 31, 2024 and 2023, respectively 20,215 19,087 Additional paid-in capital 1,909,538 1,827,274 Accumulated other comprehensive loss (81,220 ) (26,978 ) Retained earnings 970,761 706,514 Total shareholders' equity 2,819,294 2,525,897 Total liabilities and shareholders' equity $ 3,708,714 $ 3,486,824 The accompanying notes are an integral part of the consolidated financial statements. 38 38 38 Table of Contents Table of Contents Table of Contents --- ## Modified: RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS **Key changes:** - Reworded sentence: "2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures", which requires Teradyne to disclose significant segment expenses and other segment items used by the Chief Operating Decision Maker ("CODM") on an annual and interim basis as well as provide in interim periods all disclosures about a reportable segment's profit or loss and assets that are currently required annually." - Reworded sentence: "In November 2024, the FASB issued ASU 2024-03-"Income Statement - Reporting Comprehensive Income -Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses", which requires disclosure of additional expense information on an annual and interim basis, including the amounts of inventory purchases, employee compensation, depreciation and intangible amortization included within each income statement expense caption." - Reworded sentence: "Semiconductor Test Robotics Reportable Segments All Other System-on-a-chip Memory IST CorporateandEliminations Total (in thousands) For the Year Ended December 31, 2024 (1) Timing of Revenue Recognition Point in Time $ 1,255,579 $ 472,279 $ 63,288 $ 356,384 $ 2,147,530 $ 266,955 $ - $ 2,414,485 Over Time 281,545 29,509 21,720 $ 8,464 341,238 64,157 - $ 405,395 Total $ 1,537,124 $ 501,788 $ 85,008 $ 364,848 $ 2,488,768 $ 331,112 $ - $ 2,819,880 Geographical Market Asia Pacific $ 1,400,149 $ 466,214 $ 78,719 $ 69,353 $ 2,014,435 $ 113,263 $ - $ 2,127,698 Americas 92,386 15,017 6,289 $ 147,607 261,299 174,084 - $ 435,383 Europe, Middle East and Africa 44,589 20,557 - $ 147,888 213,034 43,765 - $ 256,799 Total $ 1,537,124 $ 501,788 $ 85,008 $ 364,848 $ 2,488,768 $ 331,112 $ - $ 2,819,880 For the Year Ended December 31, 2023 (1) Timing of Revenue Recognition Point in Time $ 1,141,882 $ 356,417 $ 115,220 $ 363,238 $ 1,976,757 $ 282,558 $ - $ 2,259,315 Over Time 290,739 29,598 23,332 $ 11,945 355,614 61,369 - $ 416,983 Total $ 1,432,621 $ 386,015 $ 138,552 $ 375,183 $ 2,332,371 $ 343,927 $ - $ 2,676,298 Geographical Market Asia Pacific $ 1,214,322 $ 366,151 $ 135,502 $ 73,736 $ 1,789,711 $ 103,300 $ - $ 1,893,011 Americas 117,728 11,367 3,050 $ 147,952 280,097 199,299 - $ 479,396 Europe, Middle East and Africa 100,571 8,497 - $ 153,495 262,563 41,328 - $ 303,891 Total $ 1,432,621 $ 386,015 $ 138,552 $ 375,183 $ 2,332,371 $ 343,927 $ - $ 2,676,298 For the Year Ended December 31, 2022 (1) Timing of Revenue Recognition Point in Time $ 1,445,238 $ 344,693 $ 248,919 $ 391,326 $ 2,430,176 $ 342,195 $ 251 $ 2,772,622 Over Time 261,646 29,013 21,094 $ 11,812 323,565 58,858 - $ 382,423 Total $ 1,706,884 $ 373,706 $ 270,013 $ 403,138 $ 2,753,741 $ 401,053 $ 251 $ 3,155,045 Geographical Market Asia Pacific $ 1,514,964 $ 360,176 $ 266,729 $ 89,654 $ 2,231,523 $ 168,388 $ - $ 2,399,911 Americas 122,575 11,987 3,284 $ 147,416 285,262 190,106 251 $ 475,619 Europe, Middle East and Africa 69,345 1,543 - $ 166,068 236,956 42,559 - $ 279,515 Total $ 1,706,884 $ 373,706 $ 270,013 $ 403,138 $ 2,753,741 $ 401,053 $ 251 $ 3,155,045 (1)Includes $3.7 million, $5.2 million and $8.2 million in 2024, 2023 and 2022, respectively, for leases of Teradyne's systems recognized outside of ASC 606: "Revenue from Contracts with Customers." Contract Balances For the years ended December 31, 2024, 2023 and 2022, Teradyne recognized $72.7 million, $108.1 million and $112.4 million, respectively, that was included within the deferred revenue and customer advances balances at the beginning of the period." - Reworded sentence: "As of December 31, 2024, Teradyne had $1,162.2 million of unsatisfied performance obligations." **Prior (2024):** In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures", which will require us to disclose significant segment expenses and other segment items used by the Chief Operating Decision Maker ("CODM") on an annual and interim basis as well as provide in interim periods all disclosures about a reportable segment's profit or loss and assets that are currently required annually. Additionally, we will be required to disclose the title and position of the CODM. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. This ASU will have no impact on Teradyne's results of operations, cash flows or financial condition. Upon adoption, Teradyne will apply the amendments in this ASU retrospectively to all prior period disclosures presented in the financial statements. In December 2023, FASB issued ASU 2023-09 -"Income Taxes (Topic 740): Improvements to Income Tax Disclosures", which requires expanded disclosures relating to the tax rate reconciliation, income taxes paid, income (loss) before income tax expense (benefit) and income tax expense (benefit), requiring a greater disaggregation of information for each. The provisions of ASU 2023-09 are effective for fiscal years beginning after December 15, 2024. The amendments in this update should be applied on a prospective basis, but retrospective application is permitted. Teradyne is currently evaluating the impact of this new standard. 52 52 Table of Contents Table of Contents Table of Contents D. REVENUE Disaggregation of Revenue The following table provides information about disaggregated revenue by timing of revenue recognition, primary geographical market, and major product lines. Semiconductor Test Robotics System-on-a-chip Memory SystemTest Universal Robots Mobile Industrial Robots WirelessTest CorporateandEliminations Total (in thousands) For the Year Ended December 31, 2023 (1) Timing of Revenue Recognition Point in Time $ 1,141,882 $ 356,417 $ 268,379 $ 296,252 $ 66,986 $ 129,399 $ - $ 2,259,315 Over Time 290,739 29,598 69,818 7,540 4,405 14,883 - 416,983 Total $ 1,432,621 $ 386,015 $ 338,197 $ 303,792 $ 71,391 $ 144,282 $ - $ 2,676,298 Geographical Market Asia Pacific $ 1,214,322 $ 366,151 $ 153,387 $ 63,312 $ 10,424 $ 85,415 $ - $ 1,893,011 Americas 117,728 11,367 151,579 111,761 36,191 50,770 - 479,396 Europe, Middle East and Africa 100,571 8,497 33,231 128,719 24,776 8,097 - 303,891 Total $ 1,432,621 $ 386,015 $ 338,197 $ 303,792 $ 71,391 $ 144,282 $ - $ 2,676,298 For the Year Ended December 31, 2022 (1) Timing of Revenue Recognition Point in Time $ 1,445,238 $ 344,693 $ 402,074 $ 317,514 $ 73,812 $ 189,040 $ 251 $ 2,772,622 Over Time 261,646 29,013 67,272 8,218 3,594 12,680 - 382,423 Total $ 1,706,884 $ 373,706 $ 469,346 $ 325,732 $ 77,406 $ 201,720 $ 251 $ 3,155,045 Geographical Market Asia Pacific $ 1,514,964 $ 360,176 $ 294,350 $ 73,930 $ 15,724 $ 140,767 $ - $ 2,399,911 Americas 122,575 11,987 146,040 112,203 35,213 47,350 251 475,619 Europe, Middle East and Africa 69,345 1,543 28,956 139,599 26,469 13,603 - 279,515 Total $ 1,706,884 $ 373,706 $ 469,346 $ 325,732 $ 77,406 $ 201,720 $ 251 $ 3,155,045 For the Year Ended December 31, 2021 (1) Timing of Revenue Recognition Point in Time $ 1,989,979 $ 365,441 $ 409,383 $ 305,512 $ 60,884 $ 204,247 $ - $ 3,335,446 Over Time 256,751 30,171 58,356 5,670 3,839 12,648 - 367,435 Total $ 2,246,730 $ 395,612 $ 467,739 $ 311,182 $ 64,723 $ 216,895 $ - $ 3,702,881 Geographical Market Asia Pacific $ 2,076,647 $ 381,444 $ 306,812 $ 81,456 $ 12,919 $ 172,103 $ - $ 3,031,381 Americas 102,702 10,665 135,230 94,897 26,069 36,173 - 405,736 Europe, Middle East and Africa 67,381 3,503 25,697 134,829 25,735 8,619 - 265,764 Total $ 2,246,730 $ 395,612 $ 467,739 $ 311,182 $ 64,723 $ 216,895 $ - $ 3,702,881 (1)Includes $5.2 million, $8.2 million and $13.2 million in 2023, 2022 and 2021, respectively, for leases of Teradyne's systems recognized outside of ASC 606: "Revenue from Contracts with Customers." Contract Balances For the years ended December 31, 2023, 2022 and 2021, Teradyne recognized $108.1 million, $112.4 million and $102.5 million, respectively, that was included within the deferred revenue and customer advances balances at the beginning of the period. This revenue primarily relates to undelivered hardware, extended warranties, training, application support, and post contract support. Each of these represents a distinct performance obligation. As of December 31, 2023, Teradyne had $1,124.6 million of unsatisfied performance obligations. Teradyne expects to recognize 90% of the remaining performance obligation in the next 12 months, 9% in 1-3 years, and 1% thereafter. D. REVENUE **Current (2025):** In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures", which requires Teradyne to disclose significant segment expenses and other segment items used by the Chief Operating Decision Maker ("CODM") on an annual and interim basis as well as provide in interim periods all disclosures about a reportable segment's profit or loss and assets that are currently required annually. Additionally, we are required to disclose the title and position of the CODM. Teradyne retrospectively adopted and complied with this standard for the annual period ending December 31, 2024. Teradyne updated our segment disclosures to comply with the requirements. See Note U: "Segment, Geographic and Significant Customer Information." The adoption of this standard had no impact on Teradyne results of operations, cash flows or financial condition. In December 2023, the FASB issued ASU 2023-09 -"Income Taxes (Topic 740): Improvements to Income Tax Disclosures", which requires expanded disclosures relating to the tax rate reconciliation, income taxes paid, income (loss) before income tax expense (benefit) and income tax expense (benefit), requiring a greater disaggregation of information for each. The provisions of ASU 2023-09 are effective for fiscal years beginning after December 15, 2024. The amendments in this update should be applied on a prospective basis, but retrospective application is permitted. Teradyne is currently evaluating the impact of this new standard. In November 2024, the FASB issued ASU 2024-03-"Income Statement - Reporting Comprehensive Income -Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses", which requires disclosure of additional expense information on an annual and interim basis, including the amounts of inventory purchases, employee compensation, depreciation and intangible amortization included within each income statement expense caption. This standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments in this update should be applied on a prospective basis, but retrospective application is permitted. Teradyne is currently evaluating the impact of this new standard. 51 51 51 Table of Contents Table of Contents Table of Contents D. REVENUE Disaggregation of Revenue The following table provides information about disaggregated revenue by timing of revenue recognition, primary geographical market, and major product lines. Semiconductor Test Robotics Reportable Segments All Other System-on-a-chip Memory IST CorporateandEliminations Total (in thousands) For the Year Ended December 31, 2024 (1) Timing of Revenue Recognition Point in Time $ 1,255,579 $ 472,279 $ 63,288 $ 356,384 $ 2,147,530 $ 266,955 $ - $ 2,414,485 Over Time 281,545 29,509 21,720 $ 8,464 341,238 64,157 - $ 405,395 Total $ 1,537,124 $ 501,788 $ 85,008 $ 364,848 $ 2,488,768 $ 331,112 $ - $ 2,819,880 Geographical Market Asia Pacific $ 1,400,149 $ 466,214 $ 78,719 $ 69,353 $ 2,014,435 $ 113,263 $ - $ 2,127,698 Americas 92,386 15,017 6,289 $ 147,607 261,299 174,084 - $ 435,383 Europe, Middle East and Africa 44,589 20,557 - $ 147,888 213,034 43,765 - $ 256,799 Total $ 1,537,124 $ 501,788 $ 85,008 $ 364,848 $ 2,488,768 $ 331,112 $ - $ 2,819,880 For the Year Ended December 31, 2023 (1) Timing of Revenue Recognition Point in Time $ 1,141,882 $ 356,417 $ 115,220 $ 363,238 $ 1,976,757 $ 282,558 $ - $ 2,259,315 Over Time 290,739 29,598 23,332 $ 11,945 355,614 61,369 - $ 416,983 Total $ 1,432,621 $ 386,015 $ 138,552 $ 375,183 $ 2,332,371 $ 343,927 $ - $ 2,676,298 Geographical Market Asia Pacific $ 1,214,322 $ 366,151 $ 135,502 $ 73,736 $ 1,789,711 $ 103,300 $ - $ 1,893,011 Americas 117,728 11,367 3,050 $ 147,952 280,097 199,299 - $ 479,396 Europe, Middle East and Africa 100,571 8,497 - $ 153,495 262,563 41,328 - $ 303,891 Total $ 1,432,621 $ 386,015 $ 138,552 $ 375,183 $ 2,332,371 $ 343,927 $ - $ 2,676,298 For the Year Ended December 31, 2022 (1) Timing of Revenue Recognition Point in Time $ 1,445,238 $ 344,693 $ 248,919 $ 391,326 $ 2,430,176 $ 342,195 $ 251 $ 2,772,622 Over Time 261,646 29,013 21,094 $ 11,812 323,565 58,858 - $ 382,423 Total $ 1,706,884 $ 373,706 $ 270,013 $ 403,138 $ 2,753,741 $ 401,053 $ 251 $ 3,155,045 Geographical Market Asia Pacific $ 1,514,964 $ 360,176 $ 266,729 $ 89,654 $ 2,231,523 $ 168,388 $ - $ 2,399,911 Americas 122,575 11,987 3,284 $ 147,416 285,262 190,106 251 $ 475,619 Europe, Middle East and Africa 69,345 1,543 - $ 166,068 236,956 42,559 - $ 279,515 Total $ 1,706,884 $ 373,706 $ 270,013 $ 403,138 $ 2,753,741 $ 401,053 $ 251 $ 3,155,045 (1)Includes $3.7 million, $5.2 million and $8.2 million in 2024, 2023 and 2022, respectively, for leases of Teradyne's systems recognized outside of ASC 606: "Revenue from Contracts with Customers." Contract Balances For the years ended December 31, 2024, 2023 and 2022, Teradyne recognized $72.7 million, $108.1 million and $112.4 million, respectively, that was included within the deferred revenue and customer advances balances at the beginning of the period. This revenue primarily relates to undelivered hardware, extended warranties, training, application support, and post contract support. Each of these represents a distinct performance obligation. As of December 31, 2024, Teradyne had $1,162.2 million of unsatisfied performance obligations. Teradyne expects to recognize 88% of the remaining performance obligation in the next 12 months and the remainder in 1-3 years. D. REVENUE --- ## Modified: (in thousands, except per share amount) **Key changes:** - Reworded sentence: "Revenues: Products $ 2,294,935 $ 2,096,286 $ 2,591,572 Services 524,945 580,012 563,473 Total revenues 2,819,880 2,676,298 3,155,045 Cost of revenues: Cost of products 960,888 882,892 1,042,555 Cost of services 210,065 256,658 245,339 Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below) 1,170,953 1,139,550 1,287,894 Gross profit 1,648,927 1,536,748 1,867,151 Operating expenses: Selling and administrative 617,047 577,315 558,103 Engineering and development 460,876 418,089 440,591 Acquired intangible assets amortization 18,764 18,999 19,333 Restructuring and other 15,571 21,277 17,185 Gain on sale of business (57,119 ) - - Total operating expenses 1,055,139 1,035,680 1,035,212 Income from operations 593,788 501,068 831,939 Non-operating (income) expenses: Interest income (24,772 ) (27,348 ) (6,379 ) Interest expense 3,587 3,806 3,719 Other (income) expense, net 5,887 (962 ) (5,786 ) Income before income taxes and equity in net earnings of affiliate 609,086 525,572 840,385 Income tax provision 59,503 76,820 124,884 Income before equity in net earnings of affiliate 549,583 448,752 715,501 Equity in net earnings of affiliate (7,211 ) - - Net income $ 542,372 $ 448,752 $ 715,501 Net income per common share: Basic $ 3.41 $ 2.91 $ 4.52 Diluted $ 3.32 $ 2.73 $ 4.22 Weighted average common shares - basic 159,083 154,310 158,434 Weighted average common shares - diluted 163,314 164,304 169,734 The accompanying notes are an integral part of the consolidated financial statements." **Prior (2024):** ASSETS Current assets: Cash and cash equivalents $ 757,571 $ 854,773 Marketable securities 62,154 39,612 Accounts receivable, less allowance for credit losses of $1,988 and $1,955 in 2023 and 2022, respectively 422,124 491,145 Inventories, net 309,974 325,019 Prepayments 548,970 532,962 Other current assets 37,992 14,404 Current assets held for sale 23,250 - Total current assets 2,162,035 2,257,915 Property, plant and equipment, net 445,492 418,683 Operating lease right-of-use assets, net 73,417 73,734 Marketable securities 117,434 110,777 Deferred tax assets 175,775 142,784 Retirement plans assets 11,504 11,761 Other assets 38,580 28,925 Acquired intangible assets, net 35,404 53,478 Goodwill 415,652 403,195 Long-term assets held for sale 11,531 - Total assets $ 3,486,824 $ 3,501,252 **Current (2025):** ASSETS Current assets: Cash and cash equivalents $ 553,354 $ 757,571 Marketable securities 46,312 62,154 Accounts receivable, less allowance for credit losses of $2,111 and $1,988 in 2024 and 2023, respectively 471,426 422,124 Inventories, net 298,492 309,974 Prepayments 429,086 548,970 Other current assets 17,727 37,992 Current assets held for sale - 23,250 Total current assets 1,816,397 2,162,035 Property, plant and equipment, net 508,171 445,492 Operating lease right-of-use assets, net 70,185 73,417 Marketable securities 124,121 117,434 Deferred tax assets 222,438 175,775 Retirement plans assets 11,994 11,504 Equity Method Investment 494,494 - Other assets 49,620 38,580 Acquired intangible assets, net 15,927 35,404 Goodwill 395,367 415,652 Long-term assets held for sale - 11,531 Total assets $ 3,708,714 $ 3,486,824 --- ## Modified: (in millions) **Key changes:** - Reworded sentence: "Gross profit $ 1,648.9 $ 1,536.7 $ 112.2 Percent of total revenues 58.5 % 57.4 % 1.1 Gross profit as a percent of total revenues increased by 1.1 points, primarily due to a higher volume and product and service mix." **Prior (2024):** Semiconductor Test $ 1,818.6 $ 2,080.6 $ (262.0 ) Robotics 375.2 403.1 (27.9 ) System Test 338.2 469.3 (131.1 ) Wireless Test 144.3 201.7 (57.4 ) Corporate and Eliminations - 0.3 (0.3 ) $ 2,676.3 $ 3,155.0 $ (478.7 ) The decrease in Semiconductor Test revenues of $262.0 million, or 12.6%, was driven primarily by lower tester sales for compute and mobility applications. The decrease in Robotics revenues of $27.9 million, or 6.9%, was driven primarily by softening demand due to slowing global industrial activity and macro-economic headwinds and the impact of the transformation of Universal Robots' sales channel. The decrease in System Test revenues of $131.1 million, or 27.9%, was primarily due to lower sales in Storage Test of system level and hard disk drive testers. The decrease in Wireless Test revenues of $57.4 million, or 28.5%, was primarily due to a decrease in sales of connectivity test products. Our reportable segments accounted for the following percentages of consolidated revenues: 2023 2022 Semiconductor Test 68 % 66 % Robotics 14 13 System Test 13 15 Wireless Test 5 6 100 % 100 % Revenues by country as a percentage of total revenues were as follows (1): 2023 2022 United States 16 % 15 % Korea 15 17 Taiwan 14 20 China 12 16 Japan 11 5 Europe 10 9 Philippines 7 4 Singapore 4 3 Thailand 3 4 Malaysia 3 5 Rest of the World 5 2 100 % 100 % (1)Revenues attributable to a country are based on the location of the customer site. Revenues attributable to a country are based on the location of the customer site. The breakout of product and service revenues was as follows: 2023 2022 **Current (2025):** Semiconductor Test $ 2,123.9 $ 1,957.2 $ 166.7 Robotics 364.8 375.2 (10.4 ) All Other 331.1 343.9 (12.8 ) $ 2,819.9 $ 2,676.3 $ 143.5 The increase in Semiconductor Test revenues of $166.7 million, or 8.5%, was driven primarily by higher tester sales for computing, ADAS, and memory applications, partially offset by lower tester sales for legacy automotive applications. The decrease in Robotics revenues of $10.4 million, or 2.8%, was driven primarily by continued weakness in the Industrial Automation market and softer sales in Universal Robots. 27 27 27 Table of Contents Table of Contents Table of Contents Our reportable segments accounted for the following percentages of consolidated revenues: 2024 2023 Semiconductor Test 75 % 73 % Robotics 13 14 All Other 12 13 100 % 100 % Revenues by country as a percentage of total revenues were as follows (1): 2024 2023 Korea 25 % 15 % Taiwan 21 14 United States 13 16 China 13 12 Europe 9 10 Japan 6 11 Singapore 3 4 Philippines 2 7 Thailand 2 3 Malaysia 2 3 Rest of the World 4 5 100 % 100 % (1)Revenues attributable to a country are based on the location of the customer site. Revenues attributable to a country are based on the location of the customer site. The breakout of product and service revenues was as follows: 2024 2023 --- ## Modified: Years Ended December 31, **Key changes:** - Reworded sentence: "2024 2023 Percentage of revenues: Revenues: Products 81.4 % 78.3 % Services 18.6 21.7 Total revenues 100.0 100.0 Cost of revenues: Cost of products 34.1 33.0 Cost of services 7.4 9.6 Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below) 41.5 42.6 Gross profit 58.5 57.4 Operating expenses: Selling and administrative 21.9 21.6 Engineering and development 16.3 15.6 Acquired intangible assets amortization 0.7 0.7 Restructuring and other 0.6 0.8 Gain on sale of business (2.0 ) 0.0 Total operating expenses 37.4 38.7 Income from operations 21.1 18.7 Non-operating (income) expenses: Interest income (0.9 ) (1.0 ) Interest expense 0.1 0.1 Other (income) expense, net 0.2 (0.0 ) Income before income taxes and equity in net earnings of affiliate 21.6 19.6 Income tax provision 2.1 2.9 Income before equity in net earnings of affiliate 19.5 16.8 Equity in net earnings of affiliate (0.3 ) 0.0 Net income 19.2 % 16.8 % Revenues Revenues for our reportable segments were as follows: 2024 2023" **Prior (2024):** 2023 2022 Percentage of revenues: Revenues: Products 78.3 % 82.1 % Services 21.7 17.9 Total revenues 100.0 100.0 Cost of revenues: Cost of products 33.0 33.0 Cost of services 9.6 7.8 Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below) 42.6 40.8 Gross profit 57.4 59.2 Operating expenses: Selling and administrative 21.6 17.7 Engineering and development 15.6 14.0 Acquired intangible assets amortization 0.7 0.6 Restructuring and other 0.8 0.5 Total operating expenses 38.7 32.8 Income from operations 18.7 26.4 Non-operating (income) expenses: Interest income (1.0 ) (0.2 ) Interest expense 0.1 0.1 Other (income) expense, net - (0.2 ) Income before income taxes 19.6 26.6 Income tax provision 2.9 4.0 Net income 16.8 % 22.7 % 28 28 Table of Contents Table of Contents Table of Contents Revenues Revenues for our reportable segments were as follows: 2023 2022 **Current (2025):** 2024 2023 Percentage of revenues: Revenues: Products 81.4 % 78.3 % Services 18.6 21.7 Total revenues 100.0 100.0 Cost of revenues: Cost of products 34.1 33.0 Cost of services 7.4 9.6 Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below) 41.5 42.6 Gross profit 58.5 57.4 Operating expenses: Selling and administrative 21.9 21.6 Engineering and development 16.3 15.6 Acquired intangible assets amortization 0.7 0.7 Restructuring and other 0.6 0.8 Gain on sale of business (2.0 ) 0.0 Total operating expenses 37.4 38.7 Income from operations 21.1 18.7 Non-operating (income) expenses: Interest income (0.9 ) (1.0 ) Interest expense 0.1 0.1 Other (income) expense, net 0.2 (0.0 ) Income before income taxes and equity in net earnings of affiliate 21.6 19.6 Income tax provision 2.1 2.9 Income before equity in net earnings of affiliate 19.5 16.8 Equity in net earnings of affiliate (0.3 ) 0.0 Net income 19.2 % 16.8 % Revenues Revenues for our reportable segments were as follows: 2024 2023 --- ## Modified: (in thousands, except per share amount) **Key changes:** - Reworded sentence: "ASSETS Current assets: Cash and cash equivalents $ 553,354 $ 757,571 Marketable securities 46,312 62,154 Accounts receivable, less allowance for credit losses of $2,111 and $1,988 in 2024 and 2023, respectively 471,426 422,124 Inventories, net 298,492 309,974 Prepayments 429,086 548,970 Other current assets 17,727 37,992 Current assets held for sale - 23,250 Total current assets 1,816,397 2,162,035 Property, plant and equipment, net 508,171 445,492 Operating lease right-of-use assets, net 70,185 73,417 Marketable securities 124,121 117,434 Deferred tax assets 222,438 175,775 Retirement plans assets 11,994 11,504 Equity Method Investment 494,494 - Other assets 49,620 38,580 Acquired intangible assets, net 15,927 35,404 Goodwill 395,367 415,652 Long-term assets held for sale - 11,531 Total assets $ 3,708,714 $ 3,486,824" **Prior (2024):** ASSETS Current assets: Cash and cash equivalents $ 757,571 $ 854,773 Marketable securities 62,154 39,612 Accounts receivable, less allowance for credit losses of $1,988 and $1,955 in 2023 and 2022, respectively 422,124 491,145 Inventories, net 309,974 325,019 Prepayments 548,970 532,962 Other current assets 37,992 14,404 Current assets held for sale 23,250 - Total current assets 2,162,035 2,257,915 Property, plant and equipment, net 445,492 418,683 Operating lease right-of-use assets, net 73,417 73,734 Marketable securities 117,434 110,777 Deferred tax assets 175,775 142,784 Retirement plans assets 11,504 11,761 Other assets 38,580 28,925 Acquired intangible assets, net 35,404 53,478 Goodwill 415,652 403,195 Long-term assets held for sale 11,531 - Total assets $ 3,486,824 $ 3,501,252 **Current (2025):** ASSETS Current assets: Cash and cash equivalents $ 553,354 $ 757,571 Marketable securities 46,312 62,154 Accounts receivable, less allowance for credit losses of $2,111 and $1,988 in 2024 and 2023, respectively 471,426 422,124 Inventories, net 298,492 309,974 Prepayments 429,086 548,970 Other current assets 17,727 37,992 Current assets held for sale - 23,250 Total current assets 1,816,397 2,162,035 Property, plant and equipment, net 508,171 445,492 Operating lease right-of-use assets, net 70,185 73,417 Marketable securities 124,121 117,434 Deferred tax assets 222,438 175,775 Retirement plans assets 11,994 11,504 Equity Method Investment 494,494 - Other assets 49,620 38,580 Acquired intangible assets, net 15,927 35,404 Goodwill 395,367 415,652 Long-term assets held for sale - 11,531 Total assets $ 3,708,714 $ 3,486,824 --- ## Modified: (in millions) **Key changes:** - Reworded sentence: "Product revenues $ 2,294.9 $ 2,096.3 $ 198.6 Service revenues 524.9 580.0 (55.1 ) $ 2,819.9 $ 2,676.3 $ 143.5 Our product revenues increased $198.6 million, or 9.5%, primarily driven by higher tester sales for computing, ADAS, and memory applications, partially offset by lower tester sales for legacy automotive application." - Reworded sentence: "In 2024 and 2023, our five largest direct customers in aggregate accounted for 36% and 32% of our consolidated revenues, respectively." **Prior (2024):** Semiconductor Test $ 1,818.6 $ 2,080.6 $ (262.0 ) Robotics 375.2 403.1 (27.9 ) System Test 338.2 469.3 (131.1 ) Wireless Test 144.3 201.7 (57.4 ) Corporate and Eliminations - 0.3 (0.3 ) $ 2,676.3 $ 3,155.0 $ (478.7 ) The decrease in Semiconductor Test revenues of $262.0 million, or 12.6%, was driven primarily by lower tester sales for compute and mobility applications. The decrease in Robotics revenues of $27.9 million, or 6.9%, was driven primarily by softening demand due to slowing global industrial activity and macro-economic headwinds and the impact of the transformation of Universal Robots' sales channel. The decrease in System Test revenues of $131.1 million, or 27.9%, was primarily due to lower sales in Storage Test of system level and hard disk drive testers. The decrease in Wireless Test revenues of $57.4 million, or 28.5%, was primarily due to a decrease in sales of connectivity test products. Our reportable segments accounted for the following percentages of consolidated revenues: 2023 2022 Semiconductor Test 68 % 66 % Robotics 14 13 System Test 13 15 Wireless Test 5 6 100 % 100 % Revenues by country as a percentage of total revenues were as follows (1): 2023 2022 United States 16 % 15 % Korea 15 17 Taiwan 14 20 China 12 16 Japan 11 5 Europe 10 9 Philippines 7 4 Singapore 4 3 Thailand 3 4 Malaysia 3 5 Rest of the World 5 2 100 % 100 % (1)Revenues attributable to a country are based on the location of the customer site. Revenues attributable to a country are based on the location of the customer site. The breakout of product and service revenues was as follows: 2023 2022 **Current (2025):** Semiconductor Test $ 2,123.9 $ 1,957.2 $ 166.7 Robotics 364.8 375.2 (10.4 ) All Other 331.1 343.9 (12.8 ) $ 2,819.9 $ 2,676.3 $ 143.5 The increase in Semiconductor Test revenues of $166.7 million, or 8.5%, was driven primarily by higher tester sales for computing, ADAS, and memory applications, partially offset by lower tester sales for legacy automotive applications. The decrease in Robotics revenues of $10.4 million, or 2.8%, was driven primarily by continued weakness in the Industrial Automation market and softer sales in Universal Robots. 27 27 27 Table of Contents Table of Contents Table of Contents Our reportable segments accounted for the following percentages of consolidated revenues: 2024 2023 Semiconductor Test 75 % 73 % Robotics 13 14 All Other 12 13 100 % 100 % Revenues by country as a percentage of total revenues were as follows (1): 2024 2023 Korea 25 % 15 % Taiwan 21 14 United States 13 16 China 13 12 Europe 9 10 Japan 6 11 Singapore 3 4 Philippines 2 7 Thailand 2 3 Malaysia 2 3 Rest of the World 4 5 100 % 100 % (1)Revenues attributable to a country are based on the location of the customer site. Revenues attributable to a country are based on the location of the customer site. The breakout of product and service revenues was as follows: 2024 2023 --- ## Modified: Financial Assets and Financial Liabilities **Key changes:** - Reworded sentence: "Teradyne records changes in fair value of equity securities directly in earnings and unrealized gains and losses in other (income) expense, net, in accordance with ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." 47 47 47 Table of Contents Table of Contents Table of Contents Prepayments Prepayments consist of the following: 2024 2023 (1) (in thousands) Contract manufacturer and supplier prepayments $ 365,875 $ 502,257 Prepaid maintenance and other services 22,176 17,592 Prepaid taxes 22,211 16,083 Other prepayments 18,824 13,038 Total prepayments $ 429,086 $ 548,970 (1)Excludes $5.3 million of contract manufacturer and supplier prepayments, classified as assets held for sale." - Reworded sentence: "Teradyne uses all pertinent information known at the time of acquisition to estimate the fair value of contingent consideration at the time of the acquisition using all pertinent information known to us at the time to assess the probability of payment of contingent amounts or through the use of a Monte Carlo simulation model." - Reworded sentence: "Prepayments Prepayments consist of the following: 2024 2023 (1) (in thousands) Contract manufacturer and supplier prepayments $ 365,875 $ 502,257 Prepaid maintenance and other services 22,176 17,592 Prepaid taxes 22,211 16,083 Other prepayments 18,824 13,038 Total prepayments $ 429,086 $ 548,970 (1)Excludes $5.3 million of contract manufacturer and supplier prepayments, classified as assets held for sale." **Prior (2024):** Teradyne, Inc. ("Teradyne") is a leading global supplier of automated test equipment and robotics solutions. Teradyne designs, develops, manufactures and sells automated test systems and robotics products. Teradyne's automated test systems are used to test semiconductors, wireless products, data storage and complex electronics systems in many industries including consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries. Teradyne's robotics products include collaborative robotic arms, autonomous mobile robots, and advanced robotic control software used by global manufacturing, logistics and industrial customers to improve quality, increase manufacturing and material handling efficiency and decrease manufacturing and logistics costs. Teradyne's automated test equipment and robotics products and services include: •semiconductor test ("Semiconductor Test") systems; semiconductor test ("Semiconductor Test") systems; •storage and system level test ("Storage Test") systems, defense/aerospace ("Defense/Aerospace") test instrumentation and systems, and circuit-board test and inspection ("Production Board Test") systems (collectively these products represent "System Test"); storage and system level test ("Storage Test") systems, defense/aerospace ("Defense/Aerospace") test instrumentation and systems, and circuit-board test and inspection ("Production Board Test") systems (collectively these products represent "System Test"); •wireless test ("Wireless Test") systems; and wireless test ("Wireless Test") systems; and •robotics ("Robotics") products. robotics ("Robotics") products. robotics ("Robotics") products. B.ACCOUNTING POLICIES The consolidated financial statements include the accounts of Teradyne and its wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated. Certain prior years' amounts were reclassified to conform to the current year presentation. Preparation of Financial Statements and Use of Estimates The preparation of consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an on-going basis, management evaluates its estimates, including those related to inventories, investments, goodwill, intangible and other long-lived assets, accounts receivable, income taxes, deferred tax assets and liabilities, pensions, warranties, contingent consideration liabilities, and loss contingencies. Management bases its estimates on historical experience and on appropriate and customary assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date of issuance of this Annual Report on Form 10-K. These estimates may change, as new events occur and additional information is obtained. Actual results may differ significantly from these estimates under different assumptions or conditions. Revenue Recognition Revenue from Contracts with Customers In accordance with ASC 606, Teradyne recognizes revenues, when or as control is transferred to a customer. Teradyne's determination of revenue is dependent upon a five-step process outlined below. •Teradyne accounts for a contract with a customer when there is written approval, the contract is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection. •Teradyne periodically enters into contracts with customers in which a customer may purchase a combination of goods and services, such as products with extended warranty obligations. Teradyne determines performance obligations by assessing whether the products or services are distinct from the other elements of the contract. In order to be distinct, the product or service must perform either on its own or with readily available resources and must be separate within the context of the contract. 45 Table of Contents •Teradyne determines the transaction price to be the amount of consideration to which Teradyne expects to be entitled to, which is generally at contractually stated prices.•Transaction price is allocated to each individual performance obligation based on the standalone selling price of that performance obligation. Teradyne uses standalone transactions when available to value each performance obligation. If standalone transactions are not available, Teradyne will estimate the standalone selling price through market assessments or cost plus a reasonable margin analysis. Any discounts from standalone selling price are spread proportionally to each performance obligation. •In order to determine the appropriate timing for revenue recognition, Teradyne first determines if the transaction meets any of three criteria for over time recognition. If the transaction meets the criteria for over time recognition, Teradyne recognizes revenue as the good or service is delivered. Teradyne uses input variables such as hours or months utilized or costs incurred to determine the amount of revenue to recognize in a given period. Input variables are used as they best align consumption with benefit to the customer. For transactions that do not meet the criteria for over time recognition, Teradyne will recognize revenue at a point in time based on an assessment of the five criteria for transfer of control. Teradyne has concluded that revenue should be recognized when shipped or delivered based on contractual terms. Typically, acceptance of Teradyne's products and services is a formality as Teradyne delivers similar systems, instruments and robots to standard specifications. In cases where acceptance is not deemed a formality, Teradyne will defer revenue recognition until customer acceptance. Performance Obligations Products Teradyne products consist primarily of semiconductor test systems and instruments, defense/aerospace test instrumentation and systems, storage test systems and instruments, circuit-board test and inspection systems and instruments, wireless test systems and robotics products. Teradyne's hardware is typically recognized at a point in time upon transfer of control to the customer. Services Teradyne services consist of extended warranties, training and application support, service agreements, post contract customer support ("PCS") and replacement parts. Each service is recognized based on relative standalone selling price. Extended warranty, training and support, service agreements and PCS are recognized over time based on the period of service. Replacement parts are recognized at a point in time upon transfer of control to the customer. Teradyne does not allow customer returns or provide refunds to customers for any products or services. Teradyne products include a standard 12-month warranty. This warranty is not considered a distinct performance obligation because it does not obligate Teradyne to provide a separate service to the customer and it cannot be purchased separately. Cost related to warranties are included in cost of revenues when product revenues are recognized. As of December 31, 2023 and 2022, deferred revenue and customer advances consisted of the following and are included in the short and long-term deferred revenue and customer advances: 2023 2022 (in thousands) Maintenance, service and training $ 66,458 $ 78,089 Customer advances, undelivered elements and other 35,731 59,147 Extended warranty 34,897 56,180 Total deferred revenue and customer advances $ 137,086 $ 193,416 46 Table of Contents Product Warranty Teradyne generally provides a one-year warranty on its products, commencing upon installation, acceptance or shipment. A provision is recorded upon revenue recognition to cost of revenues for estimated warranty expense based on historical experience. Related costs are charged to the warranty accrual as incurred. The balance below is included in other accrued liabilities: Amount (in thousands) Balance at December 31, 2020 $ 16,633 Accruals for warranties issued during the period 35,727 Accruals related to pre-existing warranties (6,846 ) Settlements made during the period (20,937 ) Balance at December 31, 2021 24,577 Accruals for warranties issued during the period 21,851 Accruals related to pre-existing warranties (5,618 ) Settlements made during the period (26,629 ) Balance at December 31, 2022 14,181 Accruals for warranties issued during the period 21,644 Accruals related to pre-existing warranties (1,576 ) Settlements made during the period (18,551 ) Balance at December 31, 2023 $ 15,698 When Teradyne receives revenue for extended warranties, beyond one year, it is deferred and recognized on a straight-line basis over the contract period. Related costs are expensed as incurred. The balance below is included in short and long-term deferred revenue and customer advances: Amount (in thousands) Balance at December 31, 2020 $ 51,929 Deferral of new extended warranty revenue 43,597 Recognition of extended warranty deferred revenue (31,358 ) Balance at December 31, 2021 64,168 Deferral of new extended warranty revenue 33,686 Recognition of extended warranty deferred revenue (41,674 ) Balance at December 31, 2022 56,180 Deferral of new extended warranty revenue 14,330 Recognition of extended warranty deferred revenue (35,613 ) Balance at December 31, 2023 $ 34,897 Accounts Receivable and Allowance for Credit LossesTrade accounts receivable are recorded at the invoiced amount and do not bear interest. Teradyne maintains allowances for estimated losses resulting from the inability of its customers to make required payments. Estimated allowances for credit losses are reviewed periodically taking into account the customer's recent payment history, the customer's current financial statements and other information regarding the customer's creditworthiness. Account balances are written off against the allowance when it is determined the receivable will not be recovered. Teradyne sells certain trade accounts receivables on a non-recourse basis to third-party financial institutions pursuant to factoring agreements. Teradyne accounts for these transactions as sales of receivables and presents cash proceeds as a cash provided by operating activities in the consolidated statements of cash flows. Total trade accounts receivable sold under the factoring agreements were $243.5 million and $93.9 million during 2023 and 2022, respectively. Factoring fees for the sales of receivables are recorded in interest expense and are not material. 47 Table of Contents Inventories Inventories are stated at the lower of cost (first-in, first-out basis) or net realizable value. On a quarterly basis, Teradyne uses consistent methodologies to evaluate all inventories for net realizable value. Teradyne records a provision for both excess and obsolete inventory when such write-downs or write-offs are identified through the quarterly review process. The inventory valuation is based upon assumptions about future demand, product mix and possible alternative uses. Investments Teradyne accounts for its investments in debt and equity securities in accordance with the provisions of ASC 320-10, "Investments - Debt and Equity Securities." ASC 320-10 requires that certain debt and equity securities be classified into one of three categories; trading, available-for-sale or held-to-maturity securities. On a quarterly basis, Teradyne reviews its investments to identify and evaluate those that have an indication of a potential other-than-temporary impairment. Factors considered in determining whether a loss is other-than-temporary include: •The length of time and the extent to which the market value has been less than cost; •The financial condition and near-term prospects of the issuer; and •The intent and ability to retain the investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value. Teradyne uses the market and income approach techniques to value its financial instruments and there were no changes in valuation techniques during the twelve months ended December 31, 2023 and 2022. Teradyne measures its debt and equity investments at fair value, in accordance with ASC 820-10, "Fair Value Measurements and Disclosures." ASC 820-10 defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants and requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories: Level 1: Quoted prices in active markets for identical assets as of the reporting date; Level 2: Inputs other than Level 1, that are observable either directly or indirectly as of the reporting date. For example, a common approach for valuing fixed income securities is the use of matrix pricing. Matrix pricing is a mathematical technique used to value securities by relying on the securities' relationship to other benchmark quoted prices, and is considered a Level 2 input; or Level 3: Unobservable inputs that are not supported by market data. Unobservable inputs are developed based on the best information available, which might include Teradyne's own data. Teradyne's debt investments are classified as Level 2, and equity investments are classified as Level 1. Acquisition-related contingent consideration is classified as Level 3. Teradyne determines the fair value of acquisition-related contingent consideration using a Monte Carlo simulation model. Assumptions utilized in the model include forecasted revenues, revenue volatility, earnings before interest and taxes, and discount rate. Financial Assets and Financial Liabilities Teradyne records changes in fair value of equity securities directly in earnings and unrealized gains and losses in other (income) expense, net, in accordance with ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." 48 Table of Contents Prepayments Prepayments consist of the following: 2023 (1) 2022 (in thousands) Contract manufacturer and supplier prepayments $ 502,257 $ 491,105 Prepaid maintenance and other services 17,592 14,545 Prepaid taxes 16,083 18,625 Other prepayments 13,038 8,687 Total prepayments $ 548,970 $ 532,962 (1)Excludes $5.3 million of contract manufacturer and supplier prepayments, classified as assets held for sale. See Note E: "Assets held for sale" for additional information.Retirement and Postretirement Plans Teradyne recognizes net actuarial gains and losses and the change in the fair value of the plan assets in its operating results in the year in which they occur or upon any interim remeasurement of the plans. Teradyne calculates the expected return on plan assets using the fair value of the plan assets. Actuarial gains and losses are generally measured annually as of December 31 and, accordingly, recorded during the fourth quarter of each year or upon any interim remeasurement of the plans. Teradyne reports net periodic pension cost and net periodic postretirement benefit costs in accordance with ASU 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost." The service cost component of net benefit costs is reported in the same line item in the consolidated statement of operations as other employee compensation costs. The non-service components of net benefit costs such as interest cost, expected return on assets, amortization of prior service cost, and actuarial gains or losses, are reported within other (income) expense, net. Goodwill, Intangible and Long-Lived Assets Teradyne accounts for goodwill and intangible assets in accordance with ASC 350-10, "Intangibles-Goodwill and Other." Intangible assets are amortized over their estimated useful economic life and are carried at cost less accumulated amortization. Goodwill is assessed for impairment at least annually in the fourth quarter, as of December 31, on a reporting unit basis, or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired. In accordance with ASC 350-10, Teradyne has the option to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If Teradyne determines this is the case, Teradyne is required to perform a quantitative goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized. If Teradyne determines that it is more likely than not that the fair value of the reporting unit is greater than its carrying amounts, a quantitative goodwill impairment test is not required. In accordance with ASC 360-10, "Impairment or Disposal of Long-Lived Assets," Teradyne reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the estimated undiscounted cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value based on a discounted cash flows analysis. The cash flows estimates used to determine the impairment, if any, contain management's best estimates using appropriate assumptions and projections at that time. Business Combination Teradyne recognizes the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The fair value of identifiable intangible assets is based on detailed cash flows valuations that use information and assumptions provided by management. Teradyne estimates the fair value of contingent consideration at the time of the acquisition using all pertinent information known to us at the time to assess the probability of payment of contingent amounts or through the use of a Monte Carlo simulation model. Teradyne allocates any excess purchase price over the fair value of the net tangible and intangible assets acquired and liabilities assumed to goodwill. The assumptions used in the valuations for our acquisitions may differ materially from actual results depending on performance of the acquired businesses and other factors. While Teradyne believes the assumptions used were appropriate, different assumptions in the valuation of assets acquired and liabilities assumed could have a material impact on the timing and extent of impact on our statements of operations. Goodwill is assigned to reporting units as of the date of the related acquisition. 49 Table of Contents Property, Plant and Equipment Property, plant and equipment are stated at cost and depreciated over the estimated useful lives of the assets. Leasehold improvements and major renewals are capitalized and included in property, plant and equipment accounts, while expenditures for maintenance and repairs and minor renewals are charged to expense. When assets are retired, the assets and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the consolidated statements of operations. Teradyne provides for depreciation of its assets principally on the straight-line method with the cost of the assets being charged to expense over their useful lives as follows: Buildings 40 years Building improvements 5 to 10 years Leasehold improvements Lesser of lease term or 10 years Furniture and fixtures 10 years Test systems manufactured internally 6 years Machinery, equipment and software 3 to 5 years Test systems manufactured internally are used by Teradyne for customer evaluations and manufacturing and support of its customers. Teradyne depreciates the test systems manufactured internally over a six-year life to cost of revenues, engineering and development, and selling and administrative expenses. Teradyne often sells internally manufactured test equipment to customers. Upon the sale of an internally manufactured test system, the net book value of the system is transferred to inventory and expensed as cost of revenues. The net book value of internally manufactured test systems sold in the years ended December 31, 2023, 2022, and 2021 was $2.8 million, $6.6 million, and $16.6 million, respectively. Convertible Debt Teradyne adopted Accounting Standards Update ("ASU") ASU 2020-06 - "Debt - Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity's Own Equity," on January 1, 2022 using the modified retrospective method of adoption. As a result of adoption, Teradyne recorded an increase of $1.4 million to current debt for unsettled shares, an increase of $1.8 million to deferred tax assets, an increase of $6.6 million to long-term debt for unamortized debt discount, and an increase to retained earnings of $94.6 million for the reclassification of the equity component. Mezzanine equity representing unsettled shares value was reduced to zero and additional paid-in capital was reduced by $100.8 million. In accordance with ASU 2020-06, Teradyne accounts for a convertible debt instrument as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. Unsettled shares are recorded in current debt, and there is no recognition of a debt discount, which was previously amortized to interest expense. Settled shares reduce the outstanding debt balance in an amount equal to the cash paid, but do not result in any gain or loss on extinguishment. We use the if-converted method in the diluted EPS calculation for convertible instruments. Leases Under ASC 842, a contract is or contains a lease when Teradyne has the right to control the use of an identified asset. Teradyne determines if an arrangement is a lease at inception of the contract, which is the date on which the terms of the contract are agreed to and the agreement creates enforceable rights and obligations. The commencement date of the lease is the date that the lessor makes an underlying asset available for use by Teradyne. As of December 31, 2023, Teradyne does not have material leases that have not yet commenced. Teradyne determines if the lease is an operating or finance lease at the lease commencement date based upon the terms of the lease and the nature of the asset. The lease term used to calculate the lease liability includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised. The lease liability is measured at the present value of future lease payments, discounted using the discount rate for the lease at the commencement date. As Teradyne is typically unable to determine the implicit rate, Teradyne uses an incremental borrowing rate based on the lease term and economic environment at commencement date. Teradyne initially measures payments based on an index by using the applicable rate at lease commencement. Variable payments that do not depend on an index are not included in the lease liability and are recognized as they are incurred. The right-of-use ("ROU") asset is initially measured as the amount of lease liability, adjusted for any initial lease costs, prepaid lease payments, and reduced by any lease incentives. 50 Table of Contents Teradyne's contracts often include non-lease components such as common area maintenance. Teradyne elected the practical expedient to account for the lease and non-lease components as a single lease component. For leases with a term of one year or less, Teradyne has elected not to record the lease asset or liability. The lease payments are recognized in the consolidated statement of earnings on a straight-line basis over the lease term. Teradyne includes lease costs within cost of revenues and operating expenses. See Note I: "Leases." Engineering and Development Costs Teradyne's products are highly technical in nature and require a large and continuing engineering and development effort. Software development costs incurred prior to the establishment of technological feasibility are charged to expense. Software development costs incurred subsequent to the establishment of technological feasibility are capitalized until the product is available for release to customers. To date, the period between achieving technological feasibility and general availability of the product has been short and software development costs eligible for capitalization have not been material. Engineering and development costs are expensed as incurred and consist primarily of salaries, contractor fees including non-recurring engineering charges related to product design, allocated facility costs, depreciation, and tooling costs. Stock Compensation Plans and Employee Stock Purchase Plan Stock-based compensation expense is based on the grant-date fair value estimated in accordance with the provisions of ASC 718-10, "Compensation-Stock Compensation." Teradyne elects to account for forfeitures by applying an estimated forfeiture rate and recognizes compensation costs only for those stock-based compensation awards expected to vest. Under its stock compensation plans, Teradyne has granted stock options, restricted stock units and performance-based restricted stock units, and employees are eligible to purchase Teradyne's common stock through its Employee Stock Purchase Plan ("ESPP"). Excess tax benefits or tax deficiencies are recognized as a discrete tax benefit or discrete tax expense to the current income tax provision in Teradyne's consolidated statements of operations, all excess tax benefits related to share-based payments are reported as cash flows from operating activities, and all cash payments made to taxing authorities on the employees' behalf for withheld shares are presented as financing activities on the statement of cash flows. Income Taxes Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The measurement of deferred tax assets is reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be realized. Teradyne performed the required assessment of positive and negative evidence regarding the realization of the net deferred tax assets in accordance with ASC 740, "Accounting for Income Taxes." This assessment included the evaluation of scheduled reversals of deferred tax liabilities, estimates of projected future taxable income and tax-planning strategies. Although realization is not assured, based on its assessment, Teradyne concluded that it is more likely than not that such assets, net of the existing valuation allowance, will be realized. Advertising Costs Teradyne expenses all advertising costs as incurred. Advertising costs were $15.5 million, $17.3 million and $13.4 million in 2023, 2022 and 2021, respectively. Translation of Non-U.S. Currencies The functional currency for all non-U.S. subsidiaries is the U.S. dollar, except for Universal Robots, MiR and Lemsys for which the local currency is its functional currency. All foreign currency denominated monetary assets and liabilities are remeasured on a monthly basis into the functional currency using exchange rates in effect at the end of the period. All foreign currency denominated non-monetary assets and liabilities are remeasured into the functional currency using historical exchange rates. Net foreign exchange gains and losses resulting from remeasurement are included in other (income) expense, net. For Universal Robots, MiR and Lemsys, assets and liabilities are translated into U.S. dollars using exchange rates in effect at the end of the period. Revenues and expense amounts are translated using an average of exchange rates in effect during the period. Translation adjustments are recorded within accumulated other comprehensive income (loss) on the balance sheet. Net foreign exchange gains and losses resulting from remeasurement are included in other (income) expense, net. For the years ended December 31, 2023, 2022 and 2021, losses (gains) from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $10.9 million, $10.8 million, and $(2.1) million, respectively. 51 Table of Contents These amounts do not reflect the corresponding (gains) losses from foreign exchange contracts. See Note H: "Financial Instruments" regarding foreign exchange contracts. Net Income per Common Share Basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Except where the result would be anti-dilutive, diluted net income per common share is calculated by dividing net income by the sum of the weighted average number of common shares plus common stock equivalents, if applicable. With respect to its convertible debt issued in 2016, Teradyne is required to settle the principal of the convertible debt in cash; accordingly, the principal amount is excluded from the determination of diluted earnings per share. As a result, Teradyne is accounting for the conversion spread using the treasury stock method. Comprehensive Income Comprehensive income includes net income, unrealized pension and postretirement prior service costs and benefits, unrealized gains and losses on investments in debt marketable securities, unrealized gains and losses on cash flow hedge and foreign currency translation adjustment. **Current (2025):** Teradyne records changes in fair value of equity securities directly in earnings and unrealized gains and losses in other (income) expense, net, in accordance with ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." 47 47 47 Table of Contents Table of Contents Table of Contents Prepayments Prepayments consist of the following: 2024 2023 (1) (in thousands) Contract manufacturer and supplier prepayments $ 365,875 $ 502,257 Prepaid maintenance and other services 22,176 17,592 Prepaid taxes 22,211 16,083 Other prepayments 18,824 13,038 Total prepayments $ 429,086 $ 548,970 (1)Excludes $5.3 million of contract manufacturer and supplier prepayments, classified as assets held for sale. See Note E: "Dispositions" for additional information.Retirement and Postretirement Plans Teradyne recognizes net actuarial gains and losses and the change in the fair value of the plan assets in its operating results in the year in which they occur or upon any interim remeasurement of the plans. Teradyne calculates the expected return on plan assets using the fair value of the plan assets. Actuarial gains and losses are generally measured annually as of December 31 and, accordingly, recorded during the fourth quarter of each year or upon any interim remeasurement of the plans. Teradyne reports net periodic pension cost and net periodic postretirement benefit costs in accordance with ASU 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost." The service cost component of net benefit costs is reported in the same line item in the consolidated statement of operations as other employee compensation costs. The non-service components of net benefit costs such as interest cost, expected return on assets, amortization of prior service cost, and actuarial gains or losses, are reported within other (income) expense, net. Goodwill, Intangible and Long-Lived Assets Teradyne accounts for goodwill and intangible assets in accordance with ASC 350-10, "Intangibles-Goodwill and Other." Intangible assets are amortized over their estimated useful economic life and are carried at cost less accumulated amortization. Goodwill is assessed for impairment at least annually in the fourth quarter, as of December 31, on a reporting unit basis, or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired. In accordance with ASC 350-10, Teradyne has the option to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If Teradyne determines this is the case, Teradyne is required to perform a quantitative goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized. If Teradyne determines that it is more likely than not that the fair value of the reporting unit is greater than its carrying amounts, a quantitative goodwill impairment test is not required. In accordance with ASC 360-10, "Impairment or Disposal of Long-Lived Assets," Teradyne reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the estimated undiscounted cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value based on a discounted cash flows analysis. The cash flows estimates used to determine the impairment, if any, contain management's best estimates using appropriate assumptions and projections at that time. Business Combination Teradyne recognizes the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The fair value of identifiable intangible assets is based on detailed cash flows valuations that use information and assumptions provided by management. Teradyne uses all pertinent information known at the time of acquisition to estimate the fair value of contingent consideration at the time of the acquisition using all pertinent information known to us at the time to assess the probability of payment of contingent amounts or through the use of a Monte Carlo simulation model. Teradyne allocates any excess purchase price over the fair value of the net tangible and intangible assets acquired and liabilities assumed to goodwill. The assumptions used in the valuations for our acquisitions may differ materially from actual results depending on performance of the acquired businesses and other factors. While Teradyne believes the assumptions used were appropriate, different assumptions in the valuation of assets acquired and liabilities assumed could have a material impact on the timing and extent of impact on our statements of operations. Goodwill is assigned to reporting units as of the date of the related acquisition. Prepayments Prepayments consist of the following: 2024 2023 (1) (in thousands) Contract manufacturer and supplier prepayments $ 365,875 $ 502,257 Prepaid maintenance and other services 22,176 17,592 Prepaid taxes 22,211 16,083 Other prepayments 18,824 13,038 Total prepayments $ 429,086 $ 548,970 (1)Excludes $5.3 million of contract manufacturer and supplier prepayments, classified as assets held for sale. See Note E: "Dispositions" for additional information. --- ## Modified: (in millions) **Key changes:** - Reworded sentence: "Selling and administrative $ 617.0 $ 577.3 $ 39.7 Percent of total revenues 21.9 % 21.6 % The increase of $39.7 million in selling and administrative expenses was primarily due to higher sales and marketing spending in Semiconductor Test." **Prior (2024):** Semiconductor Test $ 1,818.6 $ 2,080.6 $ (262.0 ) Robotics 375.2 403.1 (27.9 ) System Test 338.2 469.3 (131.1 ) Wireless Test 144.3 201.7 (57.4 ) Corporate and Eliminations - 0.3 (0.3 ) $ 2,676.3 $ 3,155.0 $ (478.7 ) The decrease in Semiconductor Test revenues of $262.0 million, or 12.6%, was driven primarily by lower tester sales for compute and mobility applications. The decrease in Robotics revenues of $27.9 million, or 6.9%, was driven primarily by softening demand due to slowing global industrial activity and macro-economic headwinds and the impact of the transformation of Universal Robots' sales channel. The decrease in System Test revenues of $131.1 million, or 27.9%, was primarily due to lower sales in Storage Test of system level and hard disk drive testers. The decrease in Wireless Test revenues of $57.4 million, or 28.5%, was primarily due to a decrease in sales of connectivity test products. Our reportable segments accounted for the following percentages of consolidated revenues: 2023 2022 Semiconductor Test 68 % 66 % Robotics 14 13 System Test 13 15 Wireless Test 5 6 100 % 100 % Revenues by country as a percentage of total revenues were as follows (1): 2023 2022 United States 16 % 15 % Korea 15 17 Taiwan 14 20 China 12 16 Japan 11 5 Europe 10 9 Philippines 7 4 Singapore 4 3 Thailand 3 4 Malaysia 3 5 Rest of the World 5 2 100 % 100 % (1)Revenues attributable to a country are based on the location of the customer site. Revenues attributable to a country are based on the location of the customer site. The breakout of product and service revenues was as follows: 2023 2022 **Current (2025):** Semiconductor Test $ 2,123.9 $ 1,957.2 $ 166.7 Robotics 364.8 375.2 (10.4 ) All Other 331.1 343.9 (12.8 ) $ 2,819.9 $ 2,676.3 $ 143.5 The increase in Semiconductor Test revenues of $166.7 million, or 8.5%, was driven primarily by higher tester sales for computing, ADAS, and memory applications, partially offset by lower tester sales for legacy automotive applications. The decrease in Robotics revenues of $10.4 million, or 2.8%, was driven primarily by continued weakness in the Industrial Automation market and softer sales in Universal Robots. 27 27 27 Table of Contents Table of Contents Table of Contents Our reportable segments accounted for the following percentages of consolidated revenues: 2024 2023 Semiconductor Test 75 % 73 % Robotics 13 14 All Other 12 13 100 % 100 % Revenues by country as a percentage of total revenues were as follows (1): 2024 2023 Korea 25 % 15 % Taiwan 21 14 United States 13 16 China 13 12 Europe 9 10 Japan 6 11 Singapore 3 4 Philippines 2 7 Thailand 2 3 Malaysia 2 3 Rest of the World 4 5 100 % 100 % (1)Revenues attributable to a country are based on the location of the customer site. Revenues attributable to a country are based on the location of the customer site. The breakout of product and service revenues was as follows: 2024 2023 --- ## Modified: Timing of Revenue Recognition **Key changes:** - Reworded sentence: "Point in Time $ 1,445,238 $ 344,693 $ 248,919 $ 391,326 $ 2,430,176 $ 342,195 $ 251 $ 2,772,622 Over Time 261,646 29,013 21,094 $ 11,812 323,565 58,858 - $ 382,423 Total $ 1,706,884 $ 373,706 $ 270,013 $ 403,138 $ 2,753,741 $ 401,053 $ 251 $ 3,155,045" **Prior (2024):** Point in Time $ 1,141,882 $ 356,417 $ 268,379 $ 296,252 $ 66,986 $ 129,399 $ - $ 2,259,315 Over Time 290,739 29,598 69,818 7,540 4,405 14,883 - 416,983 Total $ 1,432,621 $ 386,015 $ 338,197 $ 303,792 $ 71,391 $ 144,282 $ - $ 2,676,298 **Current (2025):** Point in Time $ 1,255,579 $ 472,279 $ 63,288 $ 356,384 $ 2,147,530 $ 266,955 $ - $ 2,414,485 Over Time 281,545 29,509 21,720 $ 8,464 341,238 64,157 - $ 405,395 Total $ 1,537,124 $ 501,788 $ 85,008 $ 364,848 $ 2,488,768 $ 331,112 $ - $ 2,819,880 --- ## Modified: (in millions) **Key changes:** - Reworded sentence: "Semiconductor Test $ 2,123.9 $ 1,957.2 $ 166.7 Robotics 364.8 375.2 (10.4 ) All Other 331.1 343.9 (12.8 ) $ 2,819.9 $ 2,676.3 $ 143.5 The increase in Semiconductor Test revenues of $166.7 million, or 8.5%, was driven primarily by higher tester sales for computing, ADAS, and memory applications, partially offset by lower tester sales for legacy automotive applications." - Reworded sentence: "The breakout of product and service revenues was as follows: 2024 2023" **Prior (2024):** Semiconductor Test $ 1,818.6 $ 2,080.6 $ (262.0 ) Robotics 375.2 403.1 (27.9 ) System Test 338.2 469.3 (131.1 ) Wireless Test 144.3 201.7 (57.4 ) Corporate and Eliminations - 0.3 (0.3 ) $ 2,676.3 $ 3,155.0 $ (478.7 ) The decrease in Semiconductor Test revenues of $262.0 million, or 12.6%, was driven primarily by lower tester sales for compute and mobility applications. The decrease in Robotics revenues of $27.9 million, or 6.9%, was driven primarily by softening demand due to slowing global industrial activity and macro-economic headwinds and the impact of the transformation of Universal Robots' sales channel. The decrease in System Test revenues of $131.1 million, or 27.9%, was primarily due to lower sales in Storage Test of system level and hard disk drive testers. The decrease in Wireless Test revenues of $57.4 million, or 28.5%, was primarily due to a decrease in sales of connectivity test products. Our reportable segments accounted for the following percentages of consolidated revenues: 2023 2022 Semiconductor Test 68 % 66 % Robotics 14 13 System Test 13 15 Wireless Test 5 6 100 % 100 % Revenues by country as a percentage of total revenues were as follows (1): 2023 2022 United States 16 % 15 % Korea 15 17 Taiwan 14 20 China 12 16 Japan 11 5 Europe 10 9 Philippines 7 4 Singapore 4 3 Thailand 3 4 Malaysia 3 5 Rest of the World 5 2 100 % 100 % (1)Revenues attributable to a country are based on the location of the customer site. Revenues attributable to a country are based on the location of the customer site. The breakout of product and service revenues was as follows: 2023 2022 **Current (2025):** Semiconductor Test $ 2,123.9 $ 1,957.2 $ 166.7 Robotics 364.8 375.2 (10.4 ) All Other 331.1 343.9 (12.8 ) $ 2,819.9 $ 2,676.3 $ 143.5 The increase in Semiconductor Test revenues of $166.7 million, or 8.5%, was driven primarily by higher tester sales for computing, ADAS, and memory applications, partially offset by lower tester sales for legacy automotive applications. The decrease in Robotics revenues of $10.4 million, or 2.8%, was driven primarily by continued weakness in the Industrial Automation market and softer sales in Universal Robots. 27 27 27 Table of Contents Table of Contents Table of Contents Our reportable segments accounted for the following percentages of consolidated revenues: 2024 2023 Semiconductor Test 75 % 73 % Robotics 13 14 All Other 12 13 100 % 100 % Revenues by country as a percentage of total revenues were as follows (1): 2024 2023 Korea 25 % 15 % Taiwan 21 14 United States 13 16 China 13 12 Europe 9 10 Japan 6 11 Singapore 3 4 Philippines 2 7 Thailand 2 3 Malaysia 2 3 Rest of the World 4 5 100 % 100 % (1)Revenues attributable to a country are based on the location of the customer site. Revenues attributable to a country are based on the location of the customer site. The breakout of product and service revenues was as follows: 2024 2023 --- ## Modified: Timing of Revenue Recognition **Key changes:** - Reworded sentence: "Point in Time $ 1,141,882 $ 356,417 $ 115,220 $ 363,238 $ 1,976,757 $ 282,558 $ - $ 2,259,315 Over Time 290,739 29,598 23,332 $ 11,945 355,614 61,369 - $ 416,983 Total $ 1,432,621 $ 386,015 $ 138,552 $ 375,183 $ 2,332,371 $ 343,927 $ - $ 2,676,298" **Prior (2024):** Point in Time $ 1,141,882 $ 356,417 $ 268,379 $ 296,252 $ 66,986 $ 129,399 $ - $ 2,259,315 Over Time 290,739 29,598 69,818 7,540 4,405 14,883 - 416,983 Total $ 1,432,621 $ 386,015 $ 338,197 $ 303,792 $ 71,391 $ 144,282 $ - $ 2,676,298 **Current (2025):** Point in Time $ 1,255,579 $ 472,279 $ 63,288 $ 356,384 $ 2,147,530 $ 266,955 $ - $ 2,414,485 Over Time 281,545 29,509 21,720 $ 8,464 341,238 64,157 - $ 405,395 Total $ 1,537,124 $ 501,788 $ 85,008 $ 364,848 $ 2,488,768 $ 331,112 $ - $ 2,819,880 --- ## Modified: Disaggregation of Revenue **Key changes:** - Reworded sentence: "Semiconductor Test Robotics Reportable Segments All Other System-on-a-chip Memory IST CorporateandEliminations Total (in thousands) For the Year Ended December 31, 2024 (1) Timing of Revenue Recognition Point in Time $ 1,255,579 $ 472,279 $ 63,288 $ 356,384 $ 2,147,530 $ 266,955 $ - $ 2,414,485 Over Time 281,545 29,509 21,720 $ 8,464 341,238 64,157 - $ 405,395 Total $ 1,537,124 $ 501,788 $ 85,008 $ 364,848 $ 2,488,768 $ 331,112 $ - $ 2,819,880 Geographical Market Asia Pacific $ 1,400,149 $ 466,214 $ 78,719 $ 69,353 $ 2,014,435 $ 113,263 $ - $ 2,127,698 Americas 92,386 15,017 6,289 $ 147,607 261,299 174,084 - $ 435,383 Europe, Middle East and Africa 44,589 20,557 - $ 147,888 213,034 43,765 - $ 256,799 Total $ 1,537,124 $ 501,788 $ 85,008 $ 364,848 $ 2,488,768 $ 331,112 $ - $ 2,819,880 For the Year Ended December 31, 2023 (1) Timing of Revenue Recognition Point in Time $ 1,141,882 $ 356,417 $ 115,220 $ 363,238 $ 1,976,757 $ 282,558 $ - $ 2,259,315 Over Time 290,739 29,598 23,332 $ 11,945 355,614 61,369 - $ 416,983 Total $ 1,432,621 $ 386,015 $ 138,552 $ 375,183 $ 2,332,371 $ 343,927 $ - $ 2,676,298 Geographical Market Asia Pacific $ 1,214,322 $ 366,151 $ 135,502 $ 73,736 $ 1,789,711 $ 103,300 $ - $ 1,893,011 Americas 117,728 11,367 3,050 $ 147,952 280,097 199,299 - $ 479,396 Europe, Middle East and Africa 100,571 8,497 - $ 153,495 262,563 41,328 - $ 303,891 Total $ 1,432,621 $ 386,015 $ 138,552 $ 375,183 $ 2,332,371 $ 343,927 $ - $ 2,676,298 For the Year Ended December 31, 2022 (1) Timing of Revenue Recognition Point in Time $ 1,445,238 $ 344,693 $ 248,919 $ 391,326 $ 2,430,176 $ 342,195 $ 251 $ 2,772,622 Over Time 261,646 29,013 21,094 $ 11,812 323,565 58,858 - $ 382,423 Total $ 1,706,884 $ 373,706 $ 270,013 $ 403,138 $ 2,753,741 $ 401,053 $ 251 $ 3,155,045 Geographical Market Asia Pacific $ 1,514,964 $ 360,176 $ 266,729 $ 89,654 $ 2,231,523 $ 168,388 $ - $ 2,399,911 Americas 122,575 11,987 3,284 $ 147,416 285,262 190,106 251 $ 475,619 Europe, Middle East and Africa 69,345 1,543 - $ 166,068 236,956 42,559 - $ 279,515 Total $ 1,706,884 $ 373,706 $ 270,013 $ 403,138 $ 2,753,741 $ 401,053 $ 251 $ 3,155,045 (1)Includes $3.7 million, $5.2 million and $8.2 million in 2024, 2023 and 2022, respectively, for leases of Teradyne's systems recognized outside of ASC 606: "Revenue from Contracts with Customers." The following table provides information about disaggregated revenue by timing of revenue recognition, primary geographical market, and major product lines." **Prior (2024):** The following table provides information about disaggregated revenue by timing of revenue recognition, primary geographical market, and major product lines. Semiconductor Test Robotics System-on-a-chip Memory SystemTest Universal Robots Mobile Industrial Robots WirelessTest CorporateandEliminations Total (in thousands) For the Year Ended December 31, 2023 (1) Timing of Revenue Recognition Point in Time $ 1,141,882 $ 356,417 $ 268,379 $ 296,252 $ 66,986 $ 129,399 $ - $ 2,259,315 Over Time 290,739 29,598 69,818 7,540 4,405 14,883 - 416,983 Total $ 1,432,621 $ 386,015 $ 338,197 $ 303,792 $ 71,391 $ 144,282 $ - $ 2,676,298 Geographical Market Asia Pacific $ 1,214,322 $ 366,151 $ 153,387 $ 63,312 $ 10,424 $ 85,415 $ - $ 1,893,011 Americas 117,728 11,367 151,579 111,761 36,191 50,770 - 479,396 Europe, Middle East and Africa 100,571 8,497 33,231 128,719 24,776 8,097 - 303,891 Total $ 1,432,621 $ 386,015 $ 338,197 $ 303,792 $ 71,391 $ 144,282 $ - $ 2,676,298 For the Year Ended December 31, 2022 (1) Timing of Revenue Recognition Point in Time $ 1,445,238 $ 344,693 $ 402,074 $ 317,514 $ 73,812 $ 189,040 $ 251 $ 2,772,622 Over Time 261,646 29,013 67,272 8,218 3,594 12,680 - 382,423 Total $ 1,706,884 $ 373,706 $ 469,346 $ 325,732 $ 77,406 $ 201,720 $ 251 $ 3,155,045 Geographical Market Asia Pacific $ 1,514,964 $ 360,176 $ 294,350 $ 73,930 $ 15,724 $ 140,767 $ - $ 2,399,911 Americas 122,575 11,987 146,040 112,203 35,213 47,350 251 475,619 Europe, Middle East and Africa 69,345 1,543 28,956 139,599 26,469 13,603 - 279,515 Total $ 1,706,884 $ 373,706 $ 469,346 $ 325,732 $ 77,406 $ 201,720 $ 251 $ 3,155,045 For the Year Ended December 31, 2021 (1) Timing of Revenue Recognition Point in Time $ 1,989,979 $ 365,441 $ 409,383 $ 305,512 $ 60,884 $ 204,247 $ - $ 3,335,446 Over Time 256,751 30,171 58,356 5,670 3,839 12,648 - 367,435 Total $ 2,246,730 $ 395,612 $ 467,739 $ 311,182 $ 64,723 $ 216,895 $ - $ 3,702,881 Geographical Market Asia Pacific $ 2,076,647 $ 381,444 $ 306,812 $ 81,456 $ 12,919 $ 172,103 $ - $ 3,031,381 Americas 102,702 10,665 135,230 94,897 26,069 36,173 - 405,736 Europe, Middle East and Africa 67,381 3,503 25,697 134,829 25,735 8,619 - 265,764 Total $ 2,246,730 $ 395,612 $ 467,739 $ 311,182 $ 64,723 $ 216,895 $ - $ 3,702,881 (1)Includes $5.2 million, $8.2 million and $13.2 million in 2023, 2022 and 2021, respectively, for leases of Teradyne's systems recognized outside of ASC 606: "Revenue from Contracts with Customers." The following table provides information about disaggregated revenue by timing of revenue recognition, primary geographical market, and major product lines. **Current (2025):** The following table provides information about disaggregated revenue by timing of revenue recognition, primary geographical market, and major product lines. Semiconductor Test Robotics Reportable Segments All Other System-on-a-chip Memory IST CorporateandEliminations Total (in thousands) For the Year Ended December 31, 2024 (1) Timing of Revenue Recognition Point in Time $ 1,255,579 $ 472,279 $ 63,288 $ 356,384 $ 2,147,530 $ 266,955 $ - $ 2,414,485 Over Time 281,545 29,509 21,720 $ 8,464 341,238 64,157 - $ 405,395 Total $ 1,537,124 $ 501,788 $ 85,008 $ 364,848 $ 2,488,768 $ 331,112 $ - $ 2,819,880 Geographical Market Asia Pacific $ 1,400,149 $ 466,214 $ 78,719 $ 69,353 $ 2,014,435 $ 113,263 $ - $ 2,127,698 Americas 92,386 15,017 6,289 $ 147,607 261,299 174,084 - $ 435,383 Europe, Middle East and Africa 44,589 20,557 - $ 147,888 213,034 43,765 - $ 256,799 Total $ 1,537,124 $ 501,788 $ 85,008 $ 364,848 $ 2,488,768 $ 331,112 $ - $ 2,819,880 For the Year Ended December 31, 2023 (1) Timing of Revenue Recognition Point in Time $ 1,141,882 $ 356,417 $ 115,220 $ 363,238 $ 1,976,757 $ 282,558 $ - $ 2,259,315 Over Time 290,739 29,598 23,332 $ 11,945 355,614 61,369 - $ 416,983 Total $ 1,432,621 $ 386,015 $ 138,552 $ 375,183 $ 2,332,371 $ 343,927 $ - $ 2,676,298 Geographical Market Asia Pacific $ 1,214,322 $ 366,151 $ 135,502 $ 73,736 $ 1,789,711 $ 103,300 $ - $ 1,893,011 Americas 117,728 11,367 3,050 $ 147,952 280,097 199,299 - $ 479,396 Europe, Middle East and Africa 100,571 8,497 - $ 153,495 262,563 41,328 - $ 303,891 Total $ 1,432,621 $ 386,015 $ 138,552 $ 375,183 $ 2,332,371 $ 343,927 $ - $ 2,676,298 For the Year Ended December 31, 2022 (1) Timing of Revenue Recognition Point in Time $ 1,445,238 $ 344,693 $ 248,919 $ 391,326 $ 2,430,176 $ 342,195 $ 251 $ 2,772,622 Over Time 261,646 29,013 21,094 $ 11,812 323,565 58,858 - $ 382,423 Total $ 1,706,884 $ 373,706 $ 270,013 $ 403,138 $ 2,753,741 $ 401,053 $ 251 $ 3,155,045 Geographical Market Asia Pacific $ 1,514,964 $ 360,176 $ 266,729 $ 89,654 $ 2,231,523 $ 168,388 $ - $ 2,399,911 Americas 122,575 11,987 3,284 $ 147,416 285,262 190,106 251 $ 475,619 Europe, Middle East and Africa 69,345 1,543 - $ 166,068 236,956 42,559 - $ 279,515 Total $ 1,706,884 $ 373,706 $ 270,013 $ 403,138 $ 2,753,741 $ 401,053 $ 251 $ 3,155,045 (1)Includes $3.7 million, $5.2 million and $8.2 million in 2024, 2023 and 2022, respectively, for leases of Teradyne's systems recognized outside of ASC 606: "Revenue from Contracts with Customers." The following table provides information about disaggregated revenue by timing of revenue recognition, primary geographical market, and major product lines. --- ## Modified: Geographical Market **Key changes:** - Reworded sentence: "Asia Pacific $ 1,514,964 $ 360,176 $ 266,729 $ 89,654 $ 2,231,523 $ 168,388 $ - $ 2,399,911 Americas 122,575 11,987 3,284 $ 147,416 285,262 190,106 251 $ 475,619 Europe, Middle East and Africa 69,345 1,543 - $ 166,068 236,956 42,559 - $ 279,515 Total $ 1,706,884 $ 373,706 $ 270,013 $ 403,138 $ 2,753,741 $ 401,053 $ 251 $ 3,155,045 (1)Includes $3.7 million, $5.2 million and $8.2 million in 2024, 2023 and 2022, respectively, for leases of Teradyne's systems recognized outside of ASC 606: "Revenue from Contracts with Customers." Includes $3.7 million, $5.2 million and $8.2 million in 2024, 2023 and 2022, respectively, for leases of Teradyne's systems recognized outside of ASC 606: "Revenue from Contracts with Customers." Includes $ 3.7 m illion, $ 5.2 million and $ 8.2 million in 2024, 2023 and 2022, respectively, for leases of Teradyne's systems recognized outside of ASC 606: "Revenue from Contracts with Customers." Contract Balances For the years ended December 31, 2024, 2023 and 2022, Teradyne recognized $72.7 million, $108.1 million and $112.4 million, respectively, that was included within the deferred revenue and customer advances balances at the beginning of the period." - Reworded sentence: "As of December 31, 2024, Teradyne had $1,162.2 million of unsatisfied performance obligations." **Prior (2024):** Asia Pacific $ 1,214,322 $ 366,151 $ 153,387 $ 63,312 $ 10,424 $ 85,415 $ - $ 1,893,011 Americas 117,728 11,367 151,579 111,761 36,191 50,770 - 479,396 Europe, Middle East and Africa 100,571 8,497 33,231 128,719 24,776 8,097 - 303,891 Total $ 1,432,621 $ 386,015 $ 338,197 $ 303,792 $ 71,391 $ 144,282 $ - $ 2,676,298 **Current (2025):** Asia Pacific $ 1,400,149 $ 466,214 $ 78,719 $ 69,353 $ 2,014,435 $ 113,263 $ - $ 2,127,698 Americas 92,386 15,017 6,289 $ 147,607 261,299 174,084 - $ 435,383 Europe, Middle East and Africa 44,589 20,557 - $ 147,888 213,034 43,765 - $ 256,799 Total $ 1,537,124 $ 501,788 $ 85,008 $ 364,848 $ 2,488,768 $ 331,112 $ - $ 2,819,880 --- ## Modified: Geographical Market **Key changes:** - Reworded sentence: "Asia Pacific $ 1,214,322 $ 366,151 $ 135,502 $ 73,736 $ 1,789,711 $ 103,300 $ - $ 1,893,011 Americas 117,728 11,367 3,050 $ 147,952 280,097 199,299 - $ 479,396 Europe, Middle East and Africa 100,571 8,497 - $ 153,495 262,563 41,328 - $ 303,891 Total $ 1,432,621 $ 386,015 $ 138,552 $ 375,183 $ 2,332,371 $ 343,927 $ - $ 2,676,298" **Prior (2024):** Asia Pacific $ 1,214,322 $ 366,151 $ 153,387 $ 63,312 $ 10,424 $ 85,415 $ - $ 1,893,011 Americas 117,728 11,367 151,579 111,761 36,191 50,770 - 479,396 Europe, Middle East and Africa 100,571 8,497 33,231 128,719 24,776 8,097 - 303,891 Total $ 1,432,621 $ 386,015 $ 338,197 $ 303,792 $ 71,391 $ 144,282 $ - $ 2,676,298 **Current (2025):** Asia Pacific $ 1,400,149 $ 466,214 $ 78,719 $ 69,353 $ 2,014,435 $ 113,263 $ - $ 2,127,698 Americas 92,386 15,017 6,289 $ 147,607 261,299 174,084 - $ 435,383 Europe, Middle East and Africa 44,589 20,557 - $ 147,888 213,034 43,765 - $ 256,799 Total $ 1,537,124 $ 501,788 $ 85,008 $ 364,848 $ 2,488,768 $ 331,112 $ - $ 2,819,880 --- ## Modified: (in millions) **Key changes:** - Reworded sentence: "Engineering and development $ 460.9 $ 418.1 $ 42.8 Percent of total revenues 16.3 % 15.6 % 29 29 29 Table of Contents Table of Contents Table of Contents The increase of $42.8 million in engineering and development expenses was primarily due to higher spending in Semiconductor Test." **Prior (2024):** Semiconductor Test $ 1,818.6 $ 2,080.6 $ (262.0 ) Robotics 375.2 403.1 (27.9 ) System Test 338.2 469.3 (131.1 ) Wireless Test 144.3 201.7 (57.4 ) Corporate and Eliminations - 0.3 (0.3 ) $ 2,676.3 $ 3,155.0 $ (478.7 ) The decrease in Semiconductor Test revenues of $262.0 million, or 12.6%, was driven primarily by lower tester sales for compute and mobility applications. The decrease in Robotics revenues of $27.9 million, or 6.9%, was driven primarily by softening demand due to slowing global industrial activity and macro-economic headwinds and the impact of the transformation of Universal Robots' sales channel. The decrease in System Test revenues of $131.1 million, or 27.9%, was primarily due to lower sales in Storage Test of system level and hard disk drive testers. The decrease in Wireless Test revenues of $57.4 million, or 28.5%, was primarily due to a decrease in sales of connectivity test products. Our reportable segments accounted for the following percentages of consolidated revenues: 2023 2022 Semiconductor Test 68 % 66 % Robotics 14 13 System Test 13 15 Wireless Test 5 6 100 % 100 % Revenues by country as a percentage of total revenues were as follows (1): 2023 2022 United States 16 % 15 % Korea 15 17 Taiwan 14 20 China 12 16 Japan 11 5 Europe 10 9 Philippines 7 4 Singapore 4 3 Thailand 3 4 Malaysia 3 5 Rest of the World 5 2 100 % 100 % (1)Revenues attributable to a country are based on the location of the customer site. Revenues attributable to a country are based on the location of the customer site. The breakout of product and service revenues was as follows: 2023 2022 **Current (2025):** Semiconductor Test $ 2,123.9 $ 1,957.2 $ 166.7 Robotics 364.8 375.2 (10.4 ) All Other 331.1 343.9 (12.8 ) $ 2,819.9 $ 2,676.3 $ 143.5 The increase in Semiconductor Test revenues of $166.7 million, or 8.5%, was driven primarily by higher tester sales for computing, ADAS, and memory applications, partially offset by lower tester sales for legacy automotive applications. The decrease in Robotics revenues of $10.4 million, or 2.8%, was driven primarily by continued weakness in the Industrial Automation market and softer sales in Universal Robots. 27 27 27 Table of Contents Table of Contents Table of Contents Our reportable segments accounted for the following percentages of consolidated revenues: 2024 2023 Semiconductor Test 75 % 73 % Robotics 13 14 All Other 12 13 100 % 100 % Revenues by country as a percentage of total revenues were as follows (1): 2024 2023 Korea 25 % 15 % Taiwan 21 14 United States 13 16 China 13 12 Europe 9 10 Japan 6 11 Singapore 3 4 Philippines 2 7 Thailand 2 3 Malaysia 2 3 Rest of the World 4 5 100 % 100 % (1)Revenues attributable to a country are based on the location of the customer site. Revenues attributable to a country are based on the location of the customer site. The breakout of product and service revenues was as follows: 2024 2023 --- *Data sourced from SEC EDGAR. Last updated 2026-06-01.*