Teradyne sells equipment that checks whether chips and electronic systems work correctly, along with robots that help factories and warehouses operate. In the third quarter of fiscal 2026, demand tied to artificial intelligence helped lift revenue 69.8% from a year earlier. Across the first nine months, the business generated $806.1 million of cash after purchases of property and equipment, enough to fund acquisitions, shareholder payments, and net debt repayment. That gives Teradyne room to expand, although more cash is now tied up in customer bills and supplies.
Analysis period: quarter and nine months ended September 27, 2026. Research cutoff: November 2, 2026, New York date. The latest company filing used is dated October 30, 2026.
Source: Teradyne Q3 2026 Form 10-Q, statements of operations and cash flows, pp. 2 and 5; management discussion, pp. 29 and 32–38. Cash after property purchases is calculated below.
1. AI demand is reaching several parts of the testing business
Chip testing supplied almost 87% of Teradyne’s quarterly revenue increase. Customers bought more equipment for AI-related computing and memory, while demand also spread into storage and the connections that move data between systems. This gives Teradyne more ways to serve the same large infrastructure buildout.
The product figures show where that growth occurred. System-on-a-chip testing checks chips that combine processing and other functions. Memory testing checks chips that store data. Integrated Systems Test covers storage and system-level testing, while Product Test includes circuit boards, wireless equipment, defense and aerospace electronics, and optical connections.
| Revenue, US$ millions | Q3 2025 | Q3 2026 | Calculated growth |
|---|---|---|---|
| System-on-a-chip testing | 440.2 | 676.5 | 53.7% |
| Memory testing | 128.1 | 300.8 | 134.9% |
| Integrated Systems Test | 37.6 | 94.7 | 151.9% |
| Product Test | 88.3 | 138.1 | 56.5% |
| Robotics | 75.1 | 95.8 | 27.6% |
| Consolidated revenue | 769.2 | 1,306.0 | 69.8% |
Reporting basis: The first three rows together form Semiconductor Test. Product Test and Robotics are separate segments. Growth uses the filing’s unrounded figures; rounded rows may not sum exactly.
Source: Q3 2026 Form 10-Q, Note E, pp. 9–10; Note T, pp. 26–27; management discussion, pp. 29 and 32.
Management attributes the chip-testing increase mainly to higher sales for AI computing and memory. Product Test also benefited from wireless and defense and aerospace sales, alongside AI-related demand and the addition of MultiLane Test Products. Because Teradyne does not separately disclose MultiLane’s revenue contribution, the Product Test increase combines expansion of existing operations with acquired business.
The first nine months support the conclusion that this was more than one strong shipment quarter. Semiconductor Test revenue doubled to $3.305 billion, and consolidated revenue rose 86.0% to $3.917 billion. That is a marked acceleration from full-year revenue growth of 5.4% in 2024 and 13.1% in 2025. Those annual comparisons provide historical context; they are separate from the nine-month comparison.
Sources: Q3 2026 Form 10-Q, Notes D and T and management discussion, pp. 7, 27 and 34; 2025 Form 10-K, consolidated statements of operations, p. 41. Annual revenue was $2.676 billion in 2023, $2.820 billion in 2024, and $3.190 billion in 2025.
Competitor evidence supports a wider testing-market expansion. Advantest reported revenue of ¥845.2 billion for April–September 2026, compared with ¥526.7 billion a year earlier. It linked demand to increased production and complexity of AI chips, and said it was expanding supply-chain capacity. Its growth also benefited from a weaker yen. This supports Teradyne’s explanation of customer demand, but does not establish that Teradyne gained market share. Advantest reports under IFRS over a different fiscal period, so its profit margins are not treated here as directly comparable.
Source: Advantest FY2026 second-quarter financial results, October 28, 2026, pp. 2–3, covering the six months ended September 30, 2026.
The expansion still depends heavily on a concentrated customer base. Teradyne’s five largest direct customers generated 44% of 2025 revenue, up from 36% in 2024. A chip designer may choose the tester while a manufacturing partner places the order, so purchasing addresses do not identify all the businesses driving demand. In Q3 2026, customer sites in Korea accounted for 32% of revenue, China 21%, and Taiwan 14%. These are delivery-market concentrations, not disclosed shares for individual customers.
For Teradyne, the broader product range reduces dependence on any one type of tester. It leaves substantial exposure to the pace at which a small group of customers builds AI capacity.
Sources: 2025 Form 10-K, “Sales and Distribution,” pp. 4–5; Q3 2026 Form 10-Q, management discussion, pp. 29 and 32.
2. Higher sales lifted profit much faster than spending
Teradyne kept far more profit from each dollar of sales, even while increasing engineering spending. The main reason was that revenue grew much faster than the expenses of developing, selling, and administering its products.
After the direct costs of products and services, Teradyne retained 59.1% of quarterly revenue, compared with 58.4% a year earlier. Management attributes that improvement to higher sales and a better product mix. The larger change came further down the income statement: total operating expenses rose 21.5%, much less than revenue’s 69.8% increase.
| Consolidated results, US$ millions except margins and EPS | Q3 2025 | Q3 2026 | First nine months 2025 | First nine months 2026 |
|---|---|---|---|---|
| Revenue | 769.2 | 1,306.0 | 2,106.7 | 3,917.4 |
| Operating profit | 145.3 | 402.0 | 356.9 | 1,312.8 |
| Operating margin | 18.9% | 30.8% | 16.9% | 33.5% |
| Net income attributable to Teradyne | 119.6 | 342.4 | 296.8 | 1,115.8 |
| Net margin attributable to Teradyne | 15.5% | 26.2% | 14.1% | 28.5% |
| Diluted EPS, US$ per share | 0.75 | 2.17 | 1.85 | 7.08 |
Reporting basis: All earnings are reported US GAAP amounts. Margins are calculated. Net income attributable to Teradyne excludes the minority owners’ share of consolidated subsidiary profit.
Source: Q3 2026 Form 10-Q, statement of operations, p. 2; management discussion, pp. 32–36.
Engineering and development spending increased to $163.1 million in the quarter from $124.8 million. Selling and administrative costs increased to $199.0 million from $169.1 million. Management links both increases to investment in Semiconductor Test and higher performance-related compensation. The company is using part of the sales increase to develop its next products while still widening operating profit.
Lower restructuring costs helped, but were a small part of the improvement. Quarterly restructuring and other charges fell by $4.6 million before tax, against a $256.7 million increase in operating profit. The quarterly tax rate declined from 15.8% to 14.8%, but the first-nine-month rate increased from 13.8% to 14.4%. The central earnings improvement therefore comes from the operating business, rather than a lower tax rate across the year.
Source: Q3 2026 Form 10-Q, statement of operations; Notes P and S; management discussion, pp. 33–36. The restructuring comparison is pretax and is not an adjusted-net-income calculation.
Robotics shows a useful but still limited recovery. Its quarterly segment profit before tax was $0.345 million, compared with a $17.567 million loss a year earlier. Management cites higher sales, better product mix, and lower operating expenses following restructuring. The resulting margin was only 0.4%, and the segment still lost $3.2 million over the first nine months. It is contributing much less drag on the group, but has yet to produce a substantial profit cushion.
By comparison, Semiconductor Test earned $366.9 million and Product Test earned $41.4 million before tax in the quarter. After $4.4 million of corporate costs and eliminations, the group reported $404.3 million before taxes and its share of affiliate earnings. This reconciliation matters because the segment figures are not after-tax earnings available entirely to Teradyne’s shareholders.
Source: Q3 2026 Form 10-Q, Note T, pp. 26–27, and management discussion, pp. 34 and 36.
3. Growth required more cash before customers and suppliers settled their bills
Operating cash rose strongly, even though the expanding business tied up an additional $218.3 million in operating balances. Teradyne generated $1.048 billion of operating cash in the first nine months, compared with $392.8 million a year earlier. Understanding the payment timing explains why this cash figure differs from profit.
Customers had not yet paid for more of the sales already recorded. That increase in receivables used $302.7 million of cash in the cash-flow calculation. Building inventory used another $178.8 million, and prepayments and other assets used $224.9 million. Together, these three uses absorbed $706.5 million.
Suppliers and other parties, however, had not yet been paid for all the costs Teradyne had recorded. The increase in accounts payable and other liabilities supported cash by $347.6 million. Customer advances and revenue awaiting recognition supplied another $64.0 million. Tax-payment timing added $81.1 million, while retirement contributions used $4.6 million. Together, these movements reduced the net cash absorbed to $218.3 million.
| Profit-to-cash bridge, US$ millions | First nine months 2025 | First nine months 2026 |
|---|---|---|
| Consolidated net income, including minority owners | 296.8 | 1,121.5 |
| Net noncash and other reconciliation adjustments | 144.5 | 144.6 |
| Net effect of operating asset and liability changes | −48.6 | −218.3 |
| Operating cash flow | 392.8 | 1,047.9 |
Calculation notes: The adjustments include depreciation, stock compensation, amortization, inventory provisions, affiliate results, investment gains, deferred taxes, and other disclosed items. Exact inputs are in the closing notes. Operating-balance movements exclude acquired businesses, so they differ from simple changes between two balance-sheet dates.
Source: Q3 2026 Form 10-Q, cash-flow statement, p. 5, and “Operating Activities,” pp. 37–38.
The balance sheet shows what the expansion required. Supplier prepayments explain $175.5 million of the $186.1 million increase in total prepayments. Teradyne had paid manufacturers and suppliers $539.7 million in advance by quarter-end. That money helps support future supply, but is already committed to operations.
| Selected operating balances, US$ millions | December 31, 2025 | September 27, 2026 |
|---|---|---|
| Customer receivables, net | 786.9 | 1,110.8 |
| Inventory, net | 379.6 | 575.0 |
| Manufacturer and supplier prepayments | 364.2 | 539.7 |
| Accounts payable | 269.2 | 517.0 |
| Deferred revenue and customer advances, current and long-term | 204.0 | 270.0 |
Source: Q3 2026 Form 10-Q, balance sheet, p. 1; Notes E, G and J, pp. 9–10 and 17.
Inventory growth was spread across production stages. Raw materials rose by $91.7 million, work in progress by $36.9 million, and finished goods by $66.8 million. The reserve against inventory that may be excess or obsolete increased from $151.8 million to $165.6 million. The first-nine-month expense for excess and obsolete inventory was essentially unchanged at $19.2 million. These figures show a larger stock of supplies and products; they do not, by themselves, establish whether customer demand will absorb every item.
Teradyne’s cash generation is strong enough to carry this larger operating base for now. Its next cash requirement depends partly on how quickly customers pay and how quickly prepaid components and completed equipment become sales. The tax and supplier-payment support in current cash flow will also change as those obligations are paid.
Source: Q3 2026 Form 10-Q, Note G, p. 10, and cash-flow statement, p. 5.
4. Teradyne is buying and building capabilities across the testing process
The expansion has a clear business purpose: help customers test more of the components used in advanced computing. Teradyne is spending on internal development, physical assets, acquired technology, and partnerships that connect its testers to customers’ devices.
The September 29 launch of Magnum E2 illustrates the internal effort. Teradyne says the memory-testing system supports advanced DRAM and flash interfaces, using a common hardware and software platform for engineering work and volume production. The intended benefit is to help customers move new memory designs into manufacturing without changing the whole testing platform. The launch occurred after quarter-end and does not explain revenue already reported for Q3; its commercial effect depends on customer adoption.
Source: Teradyne’s Magnum E2 announcement, September 29, 2026.
Physical investment also increased. Cash purchases of property and equipment reached $241.8 million in the first nine months, versus $161.1 million a year earlier. The segment note attributes $208.0 million of property additions to Semiconductor Test. Net property and equipment rose from $563.0 million at year-end to $679.6 million. The filing identifies where most investment occurred, but does not provide a maintenance-versus-expansion spending split.
The MultiLane transaction adds another part of the process: testing high-speed data connections. Teradyne obtained control of 75% of MultiLane Test Products on April 8 for approximately $157.8 million. It expects the business to accelerate development of test solutions for AI data-center equipment. Its 2025 purchase of Quantifi added technology for testing chips that use light to transmit signals. Together, these businesses extend Product Test’s reach into the connections needed around advanced processors.
MultiLane also brings a potential later payment. Subject to contractual conditions, its minority owner can require Teradyne to buy the remaining interest as early as 2029. That interest was recorded at $49.1 million at September 27; the eventual payment will follow a contractual formula. It is separate from the cash already paid to acquire control.
Sources: Q3 2026 Form 10-Q, balance sheet and cash-flow statement; Notes B and D, pp. 6–8; Note T, p. 27.
Buying capabilities also creates assets whose value depends on future results. Goodwill rose by $142.8 million to $663.8 million. This is the acquisition value assigned to expected benefits, such as combined operations and an assembled workforce, beyond the assets and liabilities identified separately. Acquisitions added $153.9 million, including $131.6 million from MultiLane, while currency translation reduced goodwill by $11.2 million. Net acquired intangible assets rose from $51.3 million to $96.7 million, with MultiLane adding $46.7 million of identified technology and customer relationships before subsequent amortization.
Robotics still held $405.3 million of goodwill at quarter-end. Its improved results help support the business case for those past acquisitions. A larger profit contribution would make this previously acquired business more useful in balancing the group’s dependence on testing.
Source: Q3 2026 Form 10-Q, Notes D and N, pp. 7–8 and 21–22. Goodwill is tested annually and when relevant adverse developments require an interim assessment; no intangible-asset impairment was recorded in the first nine months.
The next major cash commitment is the planned $300 million minority investment in FormFactor, agreed on October 6. The companies intend to combine Teradyne’s testing platforms with FormFactor’s probes, contactors, and interfaces—the parts that connect testing equipment to the device being checked. They identify advanced packaging, high-bandwidth memory, silicon photonics, and high-performance computing as opportunities. At the October 30 filing date, closing was expected in Q4, subject to closing conditions and regulatory approvals.
This is a partnership investment, so it should not be treated as a purchase of all FormFactor revenue or profit. Teradyne already has a different minority relationship with Technoprobe: its 10% holding was carried at $518.6 million. The carrying value fell $18.5 million during the first nine months, mainly from currency and other comprehensive-income changes, plus a $3.3 million share of affiliate losses after related amortization. Teradyne records those affiliate results with a three-month lag.
The commercial test for these investments is whether combined solutions win customer use and shorten the path from new device designs to production. Their strategic fit is evident; the filing does not quantify the future revenue or cash benefit of the FormFactor collaboration.
Sources: Q3 2026 Form 10-Q, Notes F and V, pp. 10 and 28; FormFactor and Teradyne collaboration announcement, October 12, 2026.
5. Cash covered expansion and shareholder payments, while debt fell
Teradyne funded its major cash uses and repaid debt without reducing its cash balance. Management describes its allocation policy as balancing internal growth, acquisitions, and cash returned through dividends and repurchases. The first-nine-month cash statement shows that this balance became easier to finance than a year earlier.
| Cash generation and allocation, US$ millions | First nine months 2025 | First nine months 2026 |
|---|---|---|
| Operating cash flow | 392.8 | 1,047.9 |
| Property and equipment purchases, cash paid | 161.1 | 241.8 |
| Calculated cash remaining after those purchases | 231.7 | 806.1 |
| Acquisitions, net of cash acquired | 144.4 | 165.6 |
| Other investment in a business, cash paid | 25.5 | 20.9 |
| Dividends paid | 57.6 | 61.0 |
| Share repurchases, cash paid | 518.7 | 173.5 |
Reporting basis: Spending and shareholder-payment rows are positive cash uses. The third row is free cash flow as defined here: operating cash less cash purchases of property and equipment. It excludes acquisitions and purchases of business investments. All figures cover nine months.
Source: Q3 2026 Form 10-Q, cash-flow statement, p. 5; management’s allocation discussion, p. 29.
After those listed uses and $200.0 million of net debt repayment, $185.1 million remained in 2026. Securities transactions, employee share-plan cash flows, financing fees, and currency movements account for the difference between that remainder and the $167.0 million increase in cash. The exact reconciliation appears in the notes.
Buybacks used $345.2 million less cash than in the comparable 2025 period. This reduction preserved cash for other purposes. Yet the 2026 repurchases did not reduce the share count from year-end: Teradyne issued a net 558,000 shares under employee plans and repurchased 496,000, leaving issued and outstanding shares 62,000 higher at September 27. The company removes repurchased shares from reported issued and outstanding shares rather than showing a separate treasury-share balance.
The average diluted share count was nevertheless 1.0% below Q3 2025, reflecting the timing of repurchases and issuance across periods. Holding current-quarter profit unchanged, that smaller denominator added about $0.02 to EPS. Most of the rise from $0.75 to $2.17 therefore came from higher profit. Stock compensation also matters for cash interpretation: the cash-flow statement added back $63.6 million of this noncash expense, while employee awards can create future dilution.
Source: Q3 2026 Form 10-Q, statements of equity and cash flows, pp. 4–5; Notes O and U, pp. 22 and 28. EPS sensitivity uses reported attributable income and diluted weighted-average shares, not quarter-end shares.
At September 27, cash was $460.7 million and short- and long-term marketable securities totaled $164.1 million. Combined, these balances were $624.9 million, versus $448.3 million at year-end. They exclude the separately reported Technoprobe holding.
The planned FormFactor payment is meaningful against these resources. As a scale illustration, subtracting $300 million from quarter-end cash alone would leave $160.7 million, before any subsequent operating receipts or other payments. This is not a forecast of Q4 cash. It shows why continued collections and the new credit facility matter even after a strong cash-generating period.
Teradyne replaced its credit facility in August with a $1.0 billion revolving facility maturing in August 2031. It had no borrowings outstanding at quarter-end, compared with $200 million at December 31. During the nine months it borrowed $350 million and repaid $550 million. The refinancing removed the previous facility’s December 2026 expiry as a near-term funding issue.
Borrowings under the new facility carry a floating rate based on SOFR, a US borrowing-rate benchmark, plus an additional lender charge. Teradyne also pays fees to keep unused borrowing capacity available. The agreement limits certain investments, payments, and other actions. It generally requires a maximum consolidated leverage ratio of 3.50 times and minimum interest coverage of 2.50 times, subject to contractual exceptions. These lender-defined tests limit borrowing relative to earnings and require sufficient earnings to cover interest. The facility is secured by company and certain subsidiary assets, with provisions for release of that security if specified credit ratings are maintained. Teradyne reported compliance. Interest paid on its credit facilities during the first nine months was $4.8 million.
Source: Q3 2026 Form 10-Q, Note H, pp. 11–15; Note I, pp. 16–17; cash-flow statement and liquidity discussion, pp. 5 and 37–38.
Retaining profit after dividends and buybacks was the main reason shareholders’ equity increased from $2.796 billion to $3.688 billion. Employee share plans and currency movements also affected the balance; the complete reconciliation is in the notes.
Lease commitments remain alongside the undrawn bank facility. Recorded operating-lease liabilities increased to $137.1 million from $83.2 million, including $17.1 million classified as current. These reflect continuing costs for facilities and other leased assets. With stronger equity, more cash, and no outstanding bank borrowing, Teradyne has greater financial flexibility, but still needs to reserve resources for ordinary operating commitments.
Source: Q3 2026 Form 10-Q, balance sheet, p. 1; 2025 Form 10-K, Note K, pp. 62–63. The historical lease-payment schedule is summarized in the calculation notes.
6. Larger supply commitments make the pace of customer spending more important
The main operating risk is committing to supply faster than customers turn that supply into purchases. Component and material purchase commitments reached $2.253 billion at September 27, including $1.906 billion due within one year. At December 31, the disclosed total was $1.473 billion. The total therefore increased 52.9%.
These are future operating purchases that support deliveries. Their scale should be assessed together with customer demand and payment timing, rather than treated as bank debt due immediately. The filing says some supplier guarantees carry cancellation or modification penalties, while most do not. Flexibility therefore depends on the contract; the full total cannot be assumed either freely cancellable or an unavoidable loss.
Sources: Q3 2026 Form 10-Q, Note R, pp. 24–25; 2025 Form 10-K, Note O, p. 67. The annual filing described its component commitments as non-cancelable; the quarterly filing does not repeat that qualifier for its aggregate.
The latest outlook points to maintaining a high sales level rather than another immediate step upward. On October 27, management forecast Q4 revenue of $1.250–$1.350 billion. The $1.300 billion midpoint is close to Q3’s $1.306 billion. Q3 itself was 1.7% below Q2 revenue, while operating profit declined from $437.8 million to $402.0 million. Operating margin moved from 32.9% to 30.8%. Those sequential results show that a large year-over-year increase can coexist with a more demanding near-term profit comparison.
Source: Teradyne Q3 results release, October 27, 2026, reported quarterly results, GAAP operating-income comparison, and Q4 revenue guidance. Q2 ended June 28, 2026. Guidance is management’s forecast, not an actual result.
Trade restrictions also affect how much demand Teradyne can serve. China represented 21% of quarterly customer-site revenue. Management says trade-compliance costs were not material in the first nine months, but restrictions already limited its ability to compete in some regions. The business consequence is lost access to potential customers, even when the administrative cost of compliance is small.
Other reviewed exposures are less central to the current earnings change. Teradyne disclosed ordinary-course patent, employment, commercial, and environmental claims, but no estimable range of potential losses. Management considers a material adverse outcome unlikely; that judgment does not remove the exposure. Uncertain-tax-position reserves remained $6.9 million. The Singapore tax holiday generated $16.4 million of first-nine-month tax savings and runs through 2035, subject to employment and spending requirements. Keeping those benefits requires meeting those conditions.
Source: Q3 2026 Form 10-Q, Notes R and S, pp. 24–26; “Government Regulations,” p. 30; geographic revenue table, p. 32.
7. Stronger cash gives Teradyne room to develop its next businesses
Teradyne’s operating expansion is currently funding its investment plans while strengthening its finances. Chip-testing demand has raised profit enough to cover a much larger operating base, increased physical investment, acquisitions, shareholder payments, and net debt repayment. Product Test adds relevant capabilities, while Robotics has sharply reduced its losses.
The next stage depends on execution across that larger business. Customer collections need to keep pace with shipments, and the supply commitments need to support equipment that customers actually take. MultiLane and the planned FormFactor collaboration need to turn their technical fit into customer adoption. Continued demand at the level described in Q4 guidance would support that effort; slower customer spending combined with sustained advance purchasing would consume more cash and reduce the flexibility built this year.
Sources: Q3 2026 Form 10-Q, statements of operations and cash flows, Notes D, R, T and V, and management discussion; October 27 results and outlook. The business implications above are analysis of those reported results and plans.
Reporting basis: This analysis uses Teradyne, Inc.’s consolidated, unaudited US GAAP Form 10-Q, accession 0001193125-26-441091, filed October 30, 2026. The quarter runs June 29–September 27, 2026, compared with June 30–September 28, 2025. Nine-month figures run from January 1 to the respective September period-end. Balance-sheet comparisons use December 31, 2025. Controlled subsidiaries are consolidated with intercompany transactions eliminated. MultiLane’s full results enter consolidation from acquisition, and the minority owners’ share is then separately identified. Technoprobe is an equity-method investment, not a consolidated subsidiary.
Source: SEC filing index; 10-Q, cover and Notes B, D and F.
Reporting basis: The research cutoff is November 2, 2026, New York date. Company financial conclusions use the October 30 filing; the revenue outlook is dated October 27. Relevant primary product and partnership announcements and Advantest’s October 28 results supplement the filing. No later material change or completion of the FormFactor investment was independently established in the sources reviewed. Amounts are in US dollars unless another currency is identified. Tables usually round to one decimal million; calculations use unrounded filing inputs. Selected SEC XBRL facts were checked against the same accession, units, and date contexts. The supplied complete filing remains the main evidence source.
Calculation notes: Growth and margins. Revenue growth is the current amount divided by its comparable prior-period amount, minus one. Quarterly revenue uses $1,305.950 million and $769.210 million; nine-month revenue uses $3,917.434 million and $2,106.687 million. Semiconductor Test’s share of quarterly revenue growth is its $466.144 million increase divided by the group’s $536.740 million increase, or 86.8%. Operating margin is operating profit divided by revenue. Net margin uses income attributable to Teradyne. The EPS share-count sensitivity holds profit at $342.407 million and compares 157.502 million diluted shares with 159.097 million: approximately $2.174 versus $2.152, a $0.022 difference.
Source: 10-Q, statement of operations, Notes E, O and T; SEC company facts, facts carrying accession 0001193125-26-441091. The XBRL consolidated-profit amount includes minority interests; the attributable-net-income amount excludes them.
Calculation notes: Checking profit against operating cash. All inputs below are US$ millions for the first nine months of the stated year. Noncash adjustments remove expenses that did not use cash in the period and gains that did not provide operating cash; deferred-tax adjustments reconcile tax accounting with payment timing.
| Operating-cash reconciliation input, US$ millions | 2025 | 2026 |
|---|---|---|
| Consolidated net income | 296.827 | 1,121.533 |
| Wear-and-tear expense on physical assets (depreciation) | 79.484 | 90.256 |
| Share-based employee compensation | 47.561 | 63.649 |
| Share of affiliate losses added back | 16.709 | 3.277 |
| Expense for using assets over time (amortization) | 12.723 | 12.925 |
| Expense for excess and obsolete inventory | 19.175 | 19.213 |
| Investment gains removed | −4.722 | −7.076 |
| Deferred taxes | −29.100 | −41.163 |
| Retirement-plan gains removed | −0.673 | −0.228 |
| Other adjustments | 3.344 | 3.757 |
| Increase in receivables | −111.787 | −302.733 |
| Increase in inventories | −34.618 | −178.794 |
| Prepayments and other assets | −22.599 | −224.940 |
| Accounts payable and other liabilities | 121.447 | 347.615 |
| Deferred revenue and customer advances | 25.652 | 64.045 |
| Retirement contributions | −6.986 | −4.605 |
| Income-tax balance movements | −19.661 | 81.144 |
| Operating cash flow | 392.776 | 1,047.875 |
Some tax expense in reported profit relates to future payments or deductions. The deferred-tax adjustment removes that timing difference when calculating cash flow. The separate income-tax balance movement captures the difference between current tax costs and payments; the two rows are not extra tax savings to add to earnings.
Source: 10-Q, cash-flow statement, p. 5.
Calculation notes: Cash generation, uses, and closing balance. First-nine-month free cash flow is $1,047.875 million of operating cash less $241.762 million of cash property purchases, equaling $806.113 million. The 2025 calculation is $392.776 million less $161.121 million, equaling $231.655 million. The 2026 cash-spending basis excludes $12.292 million of capital expenditures incurred but not yet paid.
The 2026 allocation check starts with $806.113 million and subtracts acquisitions of $165.611 million, other business investment of $20.900 million, dividends of $61.024 million, buybacks of $173.502 million, and net debt repayment of $200.000 million. The remainder is $185.076 million. Net securities purchases use $7.517 million; employee share issuance less award-settlement payments uses $8.445 million; debt issuance fees use $2.686 million; currency adds $0.563 million. The resulting cash increase is $166.991 million.
| Cash-statement reconciliation, US$ millions | First nine months 2025 | First nine months 2026 |
|---|---|---|
| Opening cash and equivalents | 553.354 | 293.751 |
| Operating cash flow | 392.776 | 1,047.875 |
| Investing cash flow | −307.692 | −435.790 |
| Financing cash flow | −361.410 | −445.657 |
| Exchange-rate effect | −4.328 | 0.563 |
| Closing cash and equivalents | 272.700 | 460.742 |
Reporting basis: The cash-flow statement reconciles cash and cash equivalents and presents no separate restricted-cash reconciliation amount. Marketable securities are outside this opening-to-closing cash calculation.
Source: 10-Q, cash-flow statement, p. 5.
Calculation notes: Equity and minority ownership. Teradyne’s shareholders’ equity increased $892.144 million to $3,687.896 million. The following checks use US$ millions and the equity statement’s recorded amounts, which are distinct from cash paid.
| Equity account, US$ millions | December 31, 2025 | Additions | Reductions | September 27, 2026 |
|---|---|---|---|---|
| Common-stock par value | 19.511 | 0.070 | 0.062 | 19.519 |
| Additional paid-in capital | 1,989.911 | 62.616 | 8.590 | 2,043.937 |
| Retained earnings | 744.435 | 1,115.849 | 241.382 | 1,618.902 |
| Accumulated other comprehensive income | 41.895 | 0.000 | 36.357 | 5.538 |
Common-stock par value is the small legal amount assigned to each issued share. Paid-in capital records the other equity effects of employee share plans and compensation. Retained earnings accumulate profit after distributions and other direct charges. Retained-earnings reductions comprise $172.776 million of repurchases charged to that account, $61.024 million of dividends, and $7.582 million for the increase toward the minority interest’s expected redemption value. The $36.357 million other-comprehensive-income decline mainly reflects $31.396 million of currency-translation losses and $4.913 million of net losses on marketable securities, recorded outside net income.
The equity statement records a total repurchase reduction of $172.838 million, including par value. The cash-flow statement reports $173.502 million paid. Likewise, the equity statement’s compensation entry is $62.616 million, while the cash-flow addback is $63.649 million. Each reconciliation uses its own statement’s amount; the filing does not separately explain these small differences.
MultiLane’s redeemable minority interest is shown between liabilities and permanent equity. Its $49.065 million balance comprises $35.799 million recognized at acquisition, $5.684 million of allocated profit, and $7.582 million added toward the expected redemption value. The September balance-sheet check is $1,712.232 million of liabilities + $49.065 million of redeemable minority interest + $3,687.896 million of shareholders’ equity = $5,449.193 million of assets. At December 31, 2025, $1,387.847 million of liabilities + $2,795.752 million of equity = $4,183.599 million of assets.
Source: 10-Q, balance sheet and statement of equity, pp. 1 and 4; Notes B and M, pp. 6 and 20.
Calculation notes: Lease payment timing. The December 31, 2025 schedule showed $22.710 million of undiscounted lease payments in 2026, $48.684 million in 2027–2030, and $29.793 million thereafter. The $101.187 million total includes payments years into the future. Subtracting the $17.948 million financing component used in lease accounting produced the then-recorded $83.239 million liability. The Q3 filing reports a larger $137.115 million liability but no updated annual payment schedule; the historical schedule is not a forecast of the current balance’s payments.
Source: 2025 Form 10-K, Note K, pp. 62–63; Q3 2026 Form 10-Q, balance sheet, p. 1.
This report is for general information and business analysis. It is not investment advice.
