Teradyne Q1 Earnings Surpass Estimates, Revenues Increase Y/Y

Teradyne TER reported first-quarter 2025 non-GAAP earnings of 75 cents per share, which comfortably beat the Zacks Consensus Estimate by 22.95% and jumped 47.1% year over year.Revenues of $686 million beat the Zacks Consensus Estimate by 0.26% and increased 14.3% year over year. The rise was driven by a strong performance in the Semiconductor Test division.TER’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the surprise being 22.16%, on average. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)TER’s Q1 Top-Line DetailsRevenues from Semiconductor Test platforms, Robotics and Product Test were $543 million (79.2% of total revenues), $69 million (10.1%) and $74 million (10.8%), respectively.Teradyne, Inc. Price, Consensus and EPS Surprise  Teradyne, Inc. price-consensus-eps-surprise-chart | Teradyne, Inc. QuoteSystem-on-a-Chip, primarily for mobile applications, was the leading growth driver.It delivered the highest contribution to overall performance expansion.In the first quarter, Teradyne reported a non-GAAP gross margin of 60.6%, which expanded 400 basis points (bps) year over year.In the reported quarter, selling and administrative expenses increased 5.4% year over year to $157.3 million. As a percentage of revenues, selling and marketing expenses were 22.9%, which contracted 190 bps year over year.Engineering and development expenses increased 14.5% year over year to $118.2 million. As a percentage of revenues, engineering and development expenses remained steady on a year-over-year basis at 17.2%.Non-GAAP operating income improved 58.9% year over year to $140.8 million. The operating margin expanded 580 bps on a year-over-year basis to 20.5%.TER’s Balance Sheet & Cash FlowAs of March 30, 2025, Teradyne’s cash and cash equivalents (including marketable securities) were $507.8 million, lower than $599.7 million as of Dec. 31, 2024.Teradyne’s board authorized an expansion of the company’s share repurchase program, increasing the target to $1 billion by the end of 2026.In the reported quarter, net cash provided by operating activities was $1.61 billion compared with $2.82 billion in the previous quarter.TER Provides Cautious Q2 GuidanceDespite Teradyne’s strong first-quarter results, the sequentially lower guidance for the second quarter reflects management’s conservative stance amid persistent demand uncertainties. The company’s outlook suggests a near-term softness.For the second quarter of 2025, Teradyne expects revenues between $610 million and $680 million.Non-GAAP earnings per share are expected between 41 cents and 64 cents.TER’s Zacks Rank & Stocks to ConsiderTeradyne currently carries a Zacks Rank #4 (Sell).ATN International ATNI, Compass COMP and Red Violet RDVT are some better-ranked stocks in the broader Zacks Computer and Technology sector. ATN International sports a Zacks Rank #1 (Strong Buy), and Compass and Red Violet carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.ATN International shares have gained 6.4% year to date. ATNI is set to report first-quarter 2025 results on April 30.Compass’ shares have gained 26.2% year to date. COMP is set to post first-quarter 2025 results on May 8.Red Violet shares have returned 3.9% year to date. RDVT is set to report first-quarter 2025 results on May 7.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Teradyne, Inc. (TER): Free Stock Analysis Report ATN International, Inc. (ATNI): Free Stock Analysis Report Compass, Inc. (COMP): Free Stock Analysis Report Red Violet, Inc. (RDVT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks