TER US S&P 500NASDAQ-100Russell 1000 Earnings call
Teradyne (TER) · Q2 2026 results and valuation
Share price: $265.78 · 2026-11-11
Teradyne is a designer and manufacturer of automatic test equipment. The company provides products to customers such as Samsung, Qualcomm, Intel, Analog Devices, Texas Instruments, and IBM. Source: Wikipedia
Results Q2 2026 vs Q1 2026 · previous quarter · published 29 Jul 2026 and 29 Apr 2026
Net income down 6.1% on the previous quarter. Management sounded about as positive as a typical company call, in its script and in answers to analysts.
1 · Numbers
−6.1%
Net income vs Q1 2026
Outlook given
Net income 374.5M vs 398.9M
Revenue +3.6%
Why Against the same quarter last year (+377.9%), net income rose primarily because of robust AI-driven volume and favorable product mix, specifically driven by demand for HBM and DRAM test solutions and a resurgence in NAND.
2 · How management spoke
Typical
More upbeat than 59% of company calls
Answers to analysts: upbeat, in line with the script.
Similar to last call.
3 · What stood out
Teradyne's AI-driven revenue reached more than 60%, demonstrating that its wafer-to-AI data center strategy is delivering results.
Valuation
Is Teradyne undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 0.4% growth a year (3-year revenue growth), the model's fair value is $35.64 a share — the stock trades 646% above it. Today's price assumes 28.7% growth a year.
Current price
$265.78
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+28.7% for 10 yrs
Fair value / share
$35.64
Buy below
$26.73
Price vs fair value
Overvalued >200%
Price vs buy-below price
Overvalued >200%
Management expects
Growth +17.5% · from the Q2 2026 report: “Memory bit production is forecast to grow at a 15% to 20% CAGR over the midterm as an analogous predictor for the memory TAM.”
A guidance figure for growth, usually one year ahead, not a 10-year free-cash-flow rate.
Read between the lines
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Guidance
The company expects revenue between $1.2 billion and $1.3 billion and non-GAAP EPS of $1.85 to $2.15 for the quarter.
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Figure
Total company revenue topped $1.3 billion, up over 100% year-over-year, while non-GAAP EPS of $2.47 rose over 300% year-over-year.
Source quote
“Total company revenue topped $1.3 billion up over 100% year-over-year with non-GAAP EPS of $2.47 up over 300% year-over-year.”
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Figure
AI-driven revenue reached more than 60%, demonstrating that the company's wafer-to-AI data center strategy is delivering results.
Source quote
“At more than 60%, AI-driven revenue is the key proof point that our wafer-to-AI data center strategy is delivering results.”
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Guidance
Memory bit production is forecast to grow at a 15% to 20% CAGR over the midterm as an analogous predictor for the memory TAM.
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Figure
Compute revenue grew nearly 600% year-over-year due to strong AI-related demand.
Source quote
“Compute revenue grew nearly 600% year-over-year on strong AI-related demand.”
4 more
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Figure
Free cash flow for the first half of 2026 was $579 million, up 150% from the prior year period.
Source quote
“For the first half of 2026, free cash flow was $579 million, up 150% from the prior year period.”
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Guidance
Revenue and non-GAAP EPS exceeded the high end of the guidance range because of continued AI-driven demand across all parts of the portfolio.
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Key theme
The book-to-bill ratio rose over two in the quarter as memory manufacturers' plans for future capacity additions drove demand signals.
Source quote
“Demand signals remain strong as memory manufacturers are planning capacity additions further out in time driving our book-to-bill ratio in the quarter over two.”
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Figure
The 2026 memory TAM is likely to be more than 40% larger than in 2025, with notable growth expected from the first half of 2026 to the second half.
Source quote
“The 2026 memory TAM is likely to be more than 40% larger than in 2025 with notable growth from the first half of 2026 to the second half.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q2 2026. Ring: Q1 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“With the strong forecast for greater than 20% annual exabyte growth and our design wins, we are confident this business will grow over the midterm as well.”
“So we certainly are seeing increased strength in CPU business We definitely benefit more as the share mix of server CPU shifts towards ARM that gives us a greater share...”
“Similarly, momentum is building in MLTP as the need for high-speed IO in data center interconnect test solutions is increasing.”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-06-28)
| Metric | Q2 2026period end 2026-06-28 | Q1 2026period end 2026-03-29 | Change | Q2 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 1.33B | 1.28B | +3.6% | 651.8M | +103.9% |
| Gross profit | 794.6M | 780.9M | +1.8% | 373.0M | +113.0% |
| Operating income | 437.8M | 473.0M | −7.4% | 90.7M | +382.5% |
| Net income | 374.5M | 398.9M | −6.1% | 78.4M | +377.9% |
| EPS | 2.38 | 2.53 | −5.9% | 0.49 | +385.7% |
| P/E today 25.1 | 60.0 | 54.8 | +5.2 | 31.4 | +28.6 |
Topics
Most discussed now
- New Teradyne's fastest growing segment in robotics is really electronics manufacturing and semiconductors.
- The long timeline of data center investment plans has given Teradyne's SoC and memory customers the confidence to aggressively invest...
- However, data centers are now also the primary growth drivers for flash memory, hard disk drives...
- To being in a growing market, Teradyne is confident that it will be able to gain share over...
- The thing that you are bringing up in terms of that 8% is a really interesting trajectory that if you...
Faded since Q1 2026
- Dropped As time goes on, the ultimate phase of fast follower is something that I've referred to as tester agnostic development.
- Fading This includes companies like hyperscalers, but also huge AI ecosystem enablers like foundries, merchant compute, memory and networking…
- Fading The thing that is setting the time line to get to, say, 25% share of GPU is how efficiently Teradyne...
- Fading This is either lumpiness in terms of large customer ordering patterns or it could also be hiccups in the AI...
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Results of operations · SEC 8-K
- Material agreement; New financial obligation · SEC 8-K
Teradyne, Inc. entered into a Credit Agreement on August 7, 2026, for a five-year, senior secured revolving credit facility of $1.0 billion for working capital and general corporate purposes.
- Results of operations · SEC 8-K
- Shareholder vote results · SEC 8-K · routine
- Results of operations · SEC 8-K
- Results of operations · SEC 8-K
- Results of operations · SEC 8-K
- Director or officer change; Regulation FD disclosure · SEC 8-K
The company announced the appointment of Michelle Turner as Vice President and Chief Financial Officer, effective November 3, 2025, replacing Sanjay Mehta.
Balance sheet & ownership
From SEC filings; short interest is FINRA data via Yahoo. Collected 2026-10-11.
Cash & runway
Cash & equivalents
$349.5M
2026-06-28
Short-term investments
$488.4M
Long-term investments
$364.1M
total liquidity $1.20B
Implied runway
—
operating cash flow positive over the TTM window
Dilution
weighted-average basic shares, per quarter. Change: -2.2% YoY, +0.0% QoQ.
| Quarter | Shares |
|---|---|
| Q3 2024 | 163.0M |
| Q1 2025 | 161.5M |
| Q2 2025 | 160.0M |
| Q3 2025 | 158.6M |
| Q1 2026 | 156.4M |
| Q2 2026 | 156.5M |
Shares outstanding: 156.3M (2026-07-27)
Insider transactions
Form 4 open-market trades (codes S/P), trailing 12 months. Coverage: newest 50 of 74 filings; 50 filings parsed.
Sold by insiders
36.1K shares
$13.2M · 25 transactions
Bought by insiders
0 shares
0 transactions
Net direction
net selling
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
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at the close of business on September 11, 2026
quiet period
Source quote
“Our quiet period will begin at the close of business on September 11, 2026.”
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the first half of 2027
next surge for these customers
Source quote
“The next surge for these customers is expected to be in the first half of 2027.”
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nine to 12 months from the start to the ramp
time to ramp for a successful dual-sourced part
Source quote
“If successful, it takes nine to 12 months from the start to the ramp.”
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by 2028
CPO market size
Source quote
“We expect CPO alone will be a $300 million to $700 million market by 2028.”
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the second half
continued growth of IST business
Source quote
“We expect continued growth of our IST business in the second half.”