Certain Non-GAAP financial measures discussed during the Third Quarter of 2026 Earnings Conference Call October 28, 2026
On the Company's earnings conference call on October 28, 2026, the following non-GAAP financial measures were discussed or presented:
EPS | Operating Profit | Gross Margin | Operating Expenses | Tax rate (excluding discretes) | Shares | FCF | Net Income attributable to Teradyne | |||||
% | $M | % | $M | % | $M | % | $M | M | $M | $M | ||
Q3 2026 | $ 2.29 | 31.6% | 413 | 59.1% | 771 | 27.4% | 358 | 14.7% | 60 | 158 | 227 | 360 |
Q2 2026 | $ 2.47 | 33.7% | 448 | 59.8% | 795 | 26.1% | 346 | 15.5% | 70 | 158 | 378 | 389 |
Q3 2025 | $ 0.85 | 20.4% | 157 | 58.5% | 450 | 38.1% | 293 | 16.0% | 26 | 159 | 2 | 136 |
2026 Q3 YTD | $ 7.31 | |||||||||||
FY2025 | $ 3.96 | 22.3% | 58.3% | 36.0% | 12.8% | 91 | ||||||
Q4'26 Guidance | $1.95- $2.25 | 28% - 30% | 29.5% - 28.5% | 15.25% | ||||
Q4'26 Mid-point Guidance | $2.10 | |||||||
$9.50-
$11.00
Target Earnings Model
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2025 Q3 YTD | 2026 Q3 YTD | |
Free Cash Flow | 323 | 370 | 521 | 370 | 444 | 684 | 966 | 415 | 426 | 474 | 450 | 232 | 806 |
GAAP to Non-GAAP Earnings Reconciliation
(In millions, except per share amounts)
Quarter Ended
September 27,
2026
% of Net Revenues
June 28,
2026
% of Net Revenues
September 28,
2025
% of Net Revenues
Net revenues | $ 1,306.0 | $ 1,329.0 | $ 769.2 | ||||||||||||
Gross profit GAAP | 771.3 | 59.1 % | 794.6 | 59.8 % | 449.3 | 58.4 % | |||||||||
Inventory step-up | - | 0.0 % | - | 0.0 % | 0.4 | 0.1 % | |||||||||
Gross profit non-GAAP | 771.3 | 59.1 % | 794.6 | 59.8 % | 449.7 | 58.5 % | |||||||||
Income from operations - GAAP | 402.0 | 30.8 % | 437.8 | 32.9 % | 145.3 | 18.9 % | |||||||||
Acquired intangible assets amortization | 5.3 | 0.4 % | 5.0 | 0.4 % | 3.5 | 0.5 % | |||||||||
Restructuring and other (1) | 2.0 | 0.2 % | 3.0 | 0.2 % | 6.6 | 0.9 % | |||||||||
ERP related expenses (2) | 3.7 | 0.3 % | 2.5 | 0.2 % | 1.1 | 0.1 % | |||||||||
Inventory step-up | - | 0.0 % | - | 0.0 % | 0.4 | 0.1 % | |||||||||
Income from operations - non-GAAP | $ 413.0 | 31.6 % | $ 448.3 | 33.7 % | $ 156.9 | 20.4 % | |||||||||
Earnings per Common Share attributable to Teradyne | Earnings per Common Share attributable to Teradyne | Earnings per Common Share attributable to Teradyne | |||||||||||||
September 27,
2026
% of Net Basic Diluted Revenues
June 28,
2026
% of Net Basic Diluted Revenues
September 28,
2025
% of Net Basic Diluted Revenues
Net income attributable to Teradyne - GAAP | $ 342.4 | 26.2 % $ | 2.19 | $ 2.17 | $ 374.5 | 28.2 % $ | 2.39 | $ 2.38 | $ 119.6 | 15.5 % $ | 0.75 | $ 0.75 | ||||||
Amortization of equity method investment | 7.6 | 0.6 % | 0.05 | 0.05 | 7.6 | 0.6 % | 0.05 | 0.05 | 7.7 | 1.0 % | 0.05 | 0.05 | ||||||
Acquired intangible assets amortization | 5.3 | 0.4 % | 0.03 | 0.03 | 5.0 | 0.4 % | 0.03 | 0.03 | 3.5 | 0.5 % | 0.02 | 0.02 | ||||||
ERP related expenses (2) | 3.7 | 0.3 % | 0.02 | 0.02 | 2.5 | 0.2 % | 0.02 | 0.02 | 1.1 | 0.1 % | 0.01 | 0.01 | ||||||
Restructuring and other (1) | 2.0 | 0.2 % | 0.01 | 0.01 | 3.0 | 0.2 % | 0.02 | 0.02 | 6.6 | 0.9 % | 0.04 | 0.04 | ||||||
Non-GAAP noncontrolling interest adjustment | (0.6 ) | -0.0 % | (0.00 ) | (0.00 ) | - | - | - | - | - | - | - | - | ||||||
Pension settlement loss (gain) | (0.1 ) | -0.0 % | (0.00 ) | (0.00 ) | - | - | - | - | (0.8 ) | -0.1 % | (0.01 ) | (0.01 ) | ||||||
Pension actuarial losses (gains) (3) | - | - | - | - | (0.2 ) | -0.0 % | (0.00 ) | (0.00 ) | - | - | - | - | ||||||
Inventory step-up | - | - | - | - | - | - | - | - | 0.4 | 0.1 % | 0.00 | 0.00 | ||||||
Exclude discrete tax adjustments | (0.1 ) | -0.0 % | (0.00 ) | (0.00 ) | (1.7 ) | -0.1 % | (0.01 ) | (0.01 ) | (0.6 ) | -0.1 % | (0.00 ) | (0.00 ) | ||||||
Non-GAAP tax adjustments | (0.3 ) | -0.0 % | (0.00 ) | (0.00 ) | (1.7 ) | -0.1 % | (0.01 ) | (0.01 ) | (1.6 ) | -0.2 % | (0.01 ) | (0.01 ) | ||||||
Net income attributable to Teradyne - non-GAAP | $ | 359.9 | 27.6 % $ | 2.30 | $ | 2.29 | $ | 389.0 | 29.3 % $ | 2.49 | $ | 2.47 | $ | 135.9 | 17.7 % $ | 0.86 | $ | 0.85 |
GAAP and non-GAAP weighted average common shares - basic
GAAP and non-GAAP weighted average common shares - diluted
156.3 156.5 158.6
157.5 157.7 159.1
(1) Restructuring and other consists of: Quarter Ended
September 27, 2026 | June 28, 2026 | September 28, 2025 | ||||||||||
Employee severance (a) | $ 1.2 | $ 1.4 | $ 4.8 | |||||||||
Acquisition and divestiture related expenses | 0.4 | 1.5 | 0.2 | |||||||||
Asset impairment | - | - | 0.3 | |||||||||
Other | 0.4 | 0.1 | 1.3 | |||||||||
$ 2.0 | $ 3.0 | $ 6.6 | ||||||||||
Nine Months Ended | ||||||||||||
September 27, 2026 | % of Net Revenues | September 28, 2025 | % of Net | |||||||||
Net Revenues | $ 3,917.4 | $ 2,106.7 | ||||||||||
Gross profit GAAP | 2,346.8 | 59.9 % | 1,237.7 | 58.8 % | ||||||||
Inventory step-up | 0.1 | 0.0 % | 0.9 | 0.0 % | ||||||||
Gross profit non-GAAP | 2,346.9 | 59.9 % | 1,238.6 | 58.8 % | ||||||||
Income from operations - GAAP | 1,312.8 | 33.5 % | 356.9 | 16.9 % | ||||||||
Acquired intangible assets amortization | 12.4 | 0.3 % | 11.8 | 0.6 % | ||||||||
Restructuring and other (1) | 8.5 | 0.2 % | 23.5 | 1.1 % | ||||||||
ERP related expenses (2) | 7.9 | 0.2 % | 2.9 | 0.1 % | ||||||||
Inventory step-up | 0.1 | 0.0 % | 0.9 | 0.0 % | ||||||||
Income from operations - non-GAAP | $ 1,341.7 | 34.3 % | $ 396.0 | 18.8 % | ||||||||
E | arnings per Common Share attributable to Teradyne | E | arnings per Common Share attributable to Teradyne | |||||||||
September % of Net September % of Net 27, Revenues Basic Diluted 28, Revenues Basic Diluted 2026 2025 | ||||||||||||
Net income attributable to Teradyne - GAAP | $ 1,115.8 | 28.5 % $ | 7.14 | $ 7.08 | $ 296.8 | 14.1 % $ | 1.85 | $ 1.85 | ||||
Amortization of equity method investment | 22.9 | 0.6 % | 0.15 | 0.15 | 22.5 | 1.1 % | 0.14 | 0.14 | ||||
Acquired intangible assets amortization | 12.4 | 0.3 % | 0.08 | 0.08 | 11.8 | 0.6 % | 0.07 | 0.07 | ||||
Restructuring and other (1) | 8.5 | 0.2 % | 0.05 | 0.05 | 23.5 | 1.1 % | 0.15 | 0.15 | ||||
ERP related expenses (2) | 7.9 | 0.2 % | 0.05 | 0.05 | 2.9 | 0.1 % | 0.02 | 0.02 | ||||
Inventory step-up | 0.1 | 0.0 % | 0.00 | 0.00 | 0.9 | 0.0 % | 0.01 | 0.01 | ||||
Non-GAAP noncontrolling interest adjustment | (0.6 ) | -0.0 % | (0.00 ) | (0.00 ) | - | - | - | - | ||||
Pension actuarial losses (gains) (3) | (0.2 ) | -0.0 % | (0.00 ) | (0.00 ) | 0.1 | 0.0 % | 0.00 | 0.00 | ||||
Pension settlement loss (gain) | (0.1 ) | -0.0 % | (0.00 ) | (0.00 ) | (0.8 ) | -0.0 % | (0.01 ) | (0.00 ) | ||||
Loss (gain) on foreign exchange contract | - | - | - | - | (0.6 ) | -0.0 % | (0.00 ) | (0.00 ) | ||||
Exclude discrete tax adjustments | (11.0 ) | -0.3 % | (0.07 ) | (0.07 ) | 0.4 | 0.0 % | 0.00 | 0.00 | ||||
Non-GAAP tax adjustments | (4.0 ) | -0.1 % | (0.03 ) | (0.03 ) | (8.4 ) | -0.4 % | (0.05 ) | (0.05 ) | ||||
Net income attributable to Teradyne - non-GAAP | $ | 1,151.8 | 29.4 % $ | 7.36 | $ | 7.31 | $ | 349.1 | 16.6 % $ | 2.18 | $ 2.18 | |
Revenues
GAAP and non-GAAP weighted average common shares - basic
156.4 160.0
GAAP and non-GAAP weighted average common shares - diluted (7) (1) Restructuring and other consists of: | 157.6 | Nine Months Ended | 160.4 |
September | September | ||
27, | 28, | ||
2026 | 2025 | ||
Acquisition and divestiture related expenses | 4.5 | 2.0 | |
Employee severance (a) | $ 3.4 | $ 18.5 | |
Asset impairment | - | 1.5 | |
Other | 0.5 | 1.4 | |
$ 8.5 | $ 23.4 |
GAAP to Non-GAAP Reconciliation of Third Quarter 2026 guidance:
GAAP and non-GAAP third quarter revenue guidance: $1,250 million $1,350 million GAAP net income attributable to Teradyne per diluted share $ 1.88 $ 2.18
Exclude acquired intangible assets amortization | 0.03 $ | 0.03 |
Exclude equity method investment amortization | 0.05 $ | 0.05 |
Non-GAAP tax adjustments | (0.01 ) $ | (0.01 ) |
Non-GAAP net income attributable to Teradyne per diluted share
$ 1.95 $ 2.25
December 31,
2025
Twelve Months Ended
% of Net
Revenues 2025
$'s % of sales
Net Revenues | $ 3,190.0 | GAAP Operating Expenses | $ 1,207 | 38 % | ||
Intangible Asset Amortization | $ (15 ) | 0 % | ||||
Gross profit - GAAP | 1,857.3 | 58.2 % | Restructuring and Other | $ (39 ) | -1 % | |
Inventory step-up | 1.3 | 0.0 % | ERP Related Expenses | $ (5 ) | 0 % | |
Legal settlement (1) - - Non-GAAP Operating Expenses $ 1,149 36.0 % Gross profit - non-GAAP 1,858.6 58.3 % | ||||||
Income from operations - GAAP | 650.1 | 20.4 % | 2025 | |||
Restructuring and other (2) | 38.6 | 1.2 % | $'s | % | ||
Acquired intangible assets amortization | 15.3 | 0.5 % | GAAP Income Tax | $ 79 | 12 % | |
ERP related expenses (3) | 4.8 | 0.2 % | Exclude discrete tax adjustments | $ -1 | 0 % | |
Inventory step-up | 1.3 | 0.0 % | Tax effect of Non-GAAP adjustments | $ 13 | 2 % | |
Legal settlement (1) | - | - | Effect of Higher Non-GAAP PBT | -1 % | ||
Equity modification charge (4) | - | - | Non-GAAP Income Tax | $ 91 | 12.8 % | |
Loss (gain) on sale of business (5) | - | - | ||||
Income from operations - non-GAAP | $ 710.1 | 22.3 % | ||||
Earnings per Common Share attributable to Teradyne | ||||||
December 31, 2025 | % of Net Revenues | Basic | Diluted | |||
Net income - GAAP | $ 554.0 | 17.4 % $ | 3.48 $ | 3.47 | ||
Restructuring and other (2) | 38.6 | 1.2 % | 0.24 | 0.24 | ||
Amortization of equity method investment | 30.1 | 0.9 % | 0.19 | 0.19 | ||
Acquired intangible assets amortization | 15.3 | 0.5 % | 0.10 | 0.10 | ||
ERP related expenses (3) | 4.8 | 0.2 % | 0.03 | 0.03 | ||
Pension mark-to-market adjustment (6) | 1.5 | 0.0 % | 0.01 | 0.01 | ||
Inventory step-up | 1.3 | 0.0 % | 0.01 | 0.01 | ||
Loss (gain) on foreign exchange contract | (0.6 ) | 0.0 % | (0.00 ) | (0.00 ) | ||
Pension settlement loss (gain) | (0.8 ) | 0.0 % | (0.01 ) | (0.01 ) | ||
Legal settlement (1) | - | - | - | - | ||
Equity modification charge (4) | - | - | - | - | ||
Loss (gain) on sale of business (5) | - | - | - | - | ||
Exclude discrete tax adjustments | 0.5 | 0.0 % | 0.00 | 0.00 | ||
Non-GAAP tax adjustments | (12.6 ) | -0.4 % | (0.08 ) | (0.08 ) | ||
Convertible share adjustment (6) | - | - | - | |||
Net income - non-GAAP | $ 632.1 | 19.8 % $ | 3.97 $ | 3.96 | ||
GAAP and non-GAAP weighted average common shares - basic | 159.1 | |||||
GAAP and non-GAAP weighted average common shares - diluted (7) | 159.7 | |||||
Exclude dilutive shares from convertible note | - | |||||
Non-GAAP weighted average common shares - diluted | 159.7 | |||||
(2) Restructuring and other consists of: Twelve Months Ended | ||||||
December 31,
2025
Employee severance (a) $ 29.4
Asset impairment 4.9
Acquisition and divestiture related expenses 2.3
Other 2.1
$ 38.6
GAAP to Non-GAAP Earnings Reconciliation
($ in millions except per share amounts)
Q3'25 Q2'26 Q3'26 Q4'26 Low Guidance Q4'26 High Guidance
$'s | % of sales | $'s | % of sales | $'s | % of sales | $'s | % of sales | $'s | % of sales | |
GAAP Operating Expenses | $ 304 | 40 % | $ 357 | 27 % | $ 369 | 28 % | $ 374 | 30 % | $ 390 | 29 % |
Intangible Asset Amortization | $ (4 ) | 0 % | $ (5 ) | 0 % | $ (5 ) | 0 % | $ (5 ) | 0 % | $ (5 ) | 0 % |
Restructuring and Other | $ (7 ) | -1 % | $ (3 ) | 0 % | $ (2 ) | 0 % | ||||
ERP Related Expenses | $ (1 ) | 0 % | $ (3 ) | 0 % | $ (4 ) | 0 % | ||||
Non-GAAP Operating Expenses | $ 293 | 38.1 % | $ 346 | 26.1 % | $ 358 | 27.4 % | $ 369 | 29.5 % | $ 385 | 28.5 % |
Q3'25 | Q2'26 | Q3'26 | ||||
$'s | % | $'s | % | $'s | % | |
GAAP Income Tax | $ 23 | 16 % | $ 67 | 15 % | $ 60 | 15 % |
Exclude discrete tax adjustments | $ 1 | 0 % | $ 2 | 0 % | $ 0 | 0 % |
Tax effect of Non-GAAP adjustments | $ 2 | 1 % | $ 2 | 0 % | $ 0 | 0 % |
Effect of Higher Non-GAAP PBT | -1 % | 0 % | 0 % | |||
Non-GAAP Income Tax | $ 26 | 16.0 % | $ 70 | 15.5 % | $ 60 | 14.7 % |
Q4'26 Guidance | Low End | High End | |
GAAP Operating Profit as % of Sales | 27.6 % | 29.7 % | |
Acquired intangible asset amortization | 0.4 % | 0.3 % | |
Restructuring and Other | 0.0 % | 0.0 % | |
Non-GAAP Operating Profit as % of Sales | 28.0 % | 30.0 % | |
FY 2026 GAAP estimated tax rate | 15.25 % | ||
Adjustment for Non-GAAP items | 0.0 % | ||
FY 2026 Non-GAAP estimated tax rate | 15.25 % | ||
Target | Target | Target Model | |
Model Low | Model Mid | High | |
Target Model Estimated GAAP Diluted EPS | $ 9.30 | $ 10.05 | $ 10.80 |
Add Back Intangible Asset Amortization | $ 0.20 | $ 0.20 | $ 0.20 |
Target Model Estimated Non-GAAP Diluted EPS | $ 9.50 | $ 10.25 | $ 11.00 |
GAAP and non-GAAP Q4'26 EPS mid-point guidance: | |||
GAAP net income per diluted share | $ 2.03 | ||
Exclude acquired intangible assets amortization | $ 0.03 | ||
Exclude equity method investment amortization | $ 0.05 | ||
Non-GAAP tax adjustments | $ (0.01 ) | ||
Non-GAAP net income per diluted share | $ 2.10 |
2015 | 2016 | 2017 2018 | 2019 | 2020 | 2021 | 2022 2023 | 2024 | 2025 | Q3'25 QTD | Q3'25 Q3'26 YTD QTD | Q3'26 YTD | Q4'25 | Q2'26 | ||||
GAAP Cash Flow from Operations, Excl Disc Ops | $ 413 | $ 455 | $ 626 $ | 477 $ 579 $ 869 | $ 1,098 | $ 578 $ | 585 | $ 672 $ 674 $ | 49 $ 393 $ | 314 | $ 1,048 $ 282 $ 469 | ||||||
Less Property, Plant, and Equipment Additions net of Gov't Subsidy | (90 ) | (85 ) | (105 ) | (107 ) | (135 ) | (185 ) | (132 ) | (163 ) | (160 ) | (198 ) | (224 ) | (47 ) | (161 ) | (86 ) | (242 ) | (63 ) | (91 ) |
Non-GAAP Operating Cash Flow ("Free Cash Flow") | $ 323 $ 370 | $ | 521 $ | 370 $ 444 $ 684 $ 966 | $ | 415 $ | 426 $ 474 $ 450 $ | 2 $ 232 $ | 227 $ 806 $ 219 $ 378 | ||||||||