Teradyne (TER) Q1 2026 earnings summary

Executive summary

• Achieved record Q1 2026 revenue of $1.282 billion (up 87% year-over-year) and non-GAAP EPS of $2.56, driven by strong AI-related demand across all business segments, with nearly 70% of revenue tied to AI.

• Semiconductor Test revenue exceeded $1 billion for the first time, fueled by AI compute and memory applications.

• Robotics and Product Test segments posted strong year-over-year and sequential growth, supported by e-commerce, electronics, and defense/aerospace markets.

• Significant new product launches (Photon 100, Omnyx) and strategic acquisitions (MultiLane Test Products JV, TestInsight) expanded capabilities in AI and data center markets.

• Customer concentration is increasing, leading to potential revenue lumpiness and volatility.

Financial highlights

• Q1 2026 revenue: $1,282 million, up 87% year-over-year and 18% sequentially; non-GAAP EPS: $2.56, up 241% year-over-year and 42% sequentially.

• Gross margin reached 60.9%, up from 57.2% in Q4 2025, driven by strong Semi Test volume and favorable mix.

• Operating margin improved to 37.5%, with GAAP net income of $398.9 million and non-GAAP net income of $402.9 million.

• Operating cash flow was $265.1 million, up from $161.6 million in the prior year.

• Cash and investments at quarter-end: ~$400 million.

Outlook and guidance

• Q2 2026 revenue guidance: $1.15 billion–$1.25 billion; non-GAAP EPS: $1.86–$2.15; gross margin: 58%–59%.

• First half 2026 revenue expected to comprise 55%–60% of annual revenue, reflecting strong demand but potential order lumpiness.

• Full-year target model: ~$6 billion revenue and $9.50–$11.00 non-GAAP EPS.

• Continued robust AI-driven momentum expected across all business groups.