Teradyne reports Q3 2021 results
Teradyne, Inc. reported revenue of $951 million for the third quarter of 2021 of which $688 million was in Semiconductor Test, $103 million in System Test, $69 million in Wireless Test and $91 million in Industrial Automation (IA). GAAP net income for the third quarter was $256.7 million or $1.41 per diluted share. On a non-GAAP basis, Teradyne’s net income in the third quarter was $278.6 million, or $1.59 per diluted share, which excluded losses on convertible debt conversions, acquired intangible asset amortization, restructuring and other charges, non-cash convertible debt interest, discrete tax adjustments and included the related tax impact on non-GAAP adjustments.
“Demand for both our Test and Industrial Automation products remained strong in Q3 and we delivered our eighth consecutive quarter of double-digit, year on year revenue and profit growth,” said Teradyne CEO and President Mark Jagiela. “Higher than expected test shipments balanced lower than planned shipments from our Industrial Automation businesses as we encountered supply constraints in those product lines in the quarter.”
“Q4’21 sales are expected to increase over 10% from Q4 2020’s record level on growing demand in Industrial/Automotive Test, Storage Test, and Industrial Automation. Full year company sales, GAAP EPS and non-GAAP EPS are expected to grow 18%, 28% and 27%, respectively, at the mid-point of our guidance.”
Guidance for the fourth quarter of 2021 is revenue of $820 million to $900 million, with GAAP net income of $1.08 to $1.33 per diluted share and non-GAAP net income of $1.14 to $1.40 per diluted share. Non-GAAP guidance excludes acquired intangible asset amortization, non-cash convertible debt interest and includes the related tax impact on non-GAAP adjustments.
A conference call to discuss the third quarter results, along with management’s business outlook, is scheduled at 8:30 a.m. ET, Wednesday, October 27. Interested investors should access the webcast at www.teradyne.com/investors, scroll to the Events section and click View All at least five minutes before the call begins. Presentation materials will be available starting at 8:30 a.m. ET. A replay will be available on the Teradyne website at www.teradyne.com/investors.
In addition to disclosing results that are determined in accordance with GAAP, Teradyne also discloses non-GAAP results of operations that exclude certain income items and charges. These results are provided as a complement to results provided in accordance with GAAP. Non-GAAP income from operations and non-GAAP net income exclude losses on convertible debt conversions, acquired intangible assets amortization, non-cash convertible debt interest, pension actuarial gains and losses, discrete income tax adjustments, fair value inventory step-up, and restructuring and other, and includes the related tax impact on non-GAAP adjustments. GAAP requires that these items be included in determining income from operations and net income. Non-GAAP income from operations, non-GAAP net income, non-GAAP income from operations as a percentage of revenue, non-GAAP net income as a percentage of revenue, and non-GAAP net income per share are non-GAAP performance measures presented to provide meaningful supplemental information regarding Teradyne’s baseline performance before gains, losses or other charges that may not be indicative of Teradyne’s current core business or future outlook. These non-GAAP performance measures are used to make operational decisions, to determine employee compensation, to forecast future operational results, and for comparison with Teradyne’s business plan, historical operating results and the operating results of Teradyne’s competitors. Non-GAAP gross margin excludes fair value inventory step-up. GAAP requires that this item be included in determining gross margin. Non-GAAP gross margin dollar amount and percentage are non-GAAP performance measures that management believes provide useful supplemental information for management and the investor. Management uses non-GAAP gross margin as a performance measure for Teradyne’s current core business and future outlook and for comparison with Teradyne’s business plan, historical gross margin results and the gross margin results of Teradyne’s competitors. Non-GAAP diluted shares include the impact of Teradyne’s call option on its shares. Management believes each of these non-GAAP performance measures provides useful supplemental information for investors, allowing greater transparency to the information used by management in its operational decision making and in the review of Teradyne’s financial and operational performance, as well as facilitating meaningful comparisons of Teradyne’s results in the current period compared with those in prior and future periods. A reconciliation of each available GAAP to non-GAAP financial measure discussed in this press release is contained in the attached exhibits and on the Teradyne website at www.teradyne.com by clicking on “Investor Relations” and then selecting “Financials” and the “GAAP to Non-GAAP Reconciliation” link. The non-GAAP performance measures discussed in this press release may not be comparable to similarly titled measures used by other companies. The presentation of non-GAAP measures is not meant to be considered in isolation, as a substitute for, or superior to, financial measures or information provided in accordance with GAAP.
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