Teradyne (TER) Beats Q3 Earnings Expectations; Strong Q4 Growth Expected
Earnings Release Date: October 28, 2025
Key Points
- Revenue: $769M (+4% YoY)
- GAAP EPS: $0.75 (vs $0.89 YoY)
- Non-GAAP EPS: $0.85 (vs $0.90 YoY)
- Revenue and EPS at high end of guidance
- Semiconductor Test: $606M — primary growth driver
- Strong AI demand expected to drive Q4 sequential sales growth of +25%
Quarter Highlights
- Semiconductor Test growth exceeded expectations, especially in System-on-a-Chip (SoC) and Memory, fueled by AI-related applications.
- Product Test revenue: $88M; Robotics: $75M.
- Operating income: $145.3M (GAAP); $156.9M (non-GAAP)
- Gross margin: 58.4% (GAAP); 58.5% (non-GAAP)
- Free cash flow and capital allocation details not disclosed in release.
Guidance & Outlook
Q4 2025 Guidance:
- Revenue: $920M – $1.00B (up ~25% QoQ and +27% YoY)
- GAAP EPS: $1.12 – $1.39
- Non-GAAP EPS: $1.20 – $1.46
Company expects continued AI-related strength in Compute, Networking, and Memory segments to support this acceleration.
Financial Summary
| Metric | Q3 2025 | Q3 2024 | YoY Change |
|---|---|---|---|
| Revenue | $769M | $737M | +4% |
| GAAP Net Income | $119.6M | $145.6M | –18% |
| GAAP EPS | $0.75 | $0.89 | –16% |
| Non-GAAP Net Income | $135.9M | $147.6M | –8% |
| Non-GAAP EPS | $0.85 | $0.90 | –6% |
| Operating Income (GAAP) | $145.3M | $152.1M | –4% |
| Gross Margin (GAAP) | 58.4% | 59.2% | –80 bps |
About Teradyne
Teradyne (NASDAQ: TER) is a global supplier of automated test equipment for semiconductors, electronic systems, and industrial automation. Its segments include Semiconductor Test, System Test, Wireless Test, and Robotics.
Key Takeaways
- AI-driven growth: SOC and memory testing for AI contributed heavily to outperformance.
- Q4 outlook strong: Revenue set to accelerate 25% sequentially, a bullish signal for demand.
- Margin compression: Despite sales beat, YoY margins declined, reflecting cost pressures.
- EPS contraction: Non-GAAP EPS dipped YoY but still met guidance range.
- AI remains core narrative: Management emphasized robust demand outlook tied to AI infrastructure buildouts.
- Stock closed Wed at 173.94 +29.56 (20.47%)