Teradyne's Q2 2025 Earnings Call: Unpacking Contradictions in Margins, AI Growth, and Robotics

Gross margin expectations, AI compute business growth, robotics segment growth, robotics segment growth projections, and growth opportunities in AI Compute are the key contradictions discussed in Teradyne's latest 2025Q2 earnings call.



AI Compute and Semiconductor Test Growth:
- Teradyne's Semi Test segment, particularly SOC, reported $397 million in revenue, driven by AI compute applications.
- The growth in AI compute exceeded expectations, with SOC becoming the dominant driver in the second half of 2025.
- This momentum is attributed to the strengthening demand for AI applications and a broadening of opportunities in AI compute.

Mobile Market Dynamics:
- Teradyne's mobile segment experienced modest demand in Q3, with expectations for limited additional demand in the second half.
- The improvement in mobile power and RF demand was noted, albeit within a broader slowing trend in the mobile market.
- The slowdown is due to the end market's caution regarding significant capacity adds and a shift towards customer-specific dynamics rather than general end market demand.

HBM and Memory Market Recovery:
- Memory revenue was lower at $61 million in Q2, expected to rebound in the second half of 2025 due to HBM4 post-stack wins.
- The integration of HBM4 post-stack singulated die testing is anticipated to drive future Memory TAM growth.
- This rebound is linked to the timing of customer deliveries and the addition of HBM test coverage to improve device quality.

Robotics Segment Restructuring:
- The Robotics segment reported $75 million in revenue, up quarter-on-quarter but down year-over-year.
- Despite challenging market conditions, the business achieved 9% quarter-on-quarter growth post-restructuring.
- The restructuring, which includes customer-facing sales and marketing consolidation, is aimed at optimizing operations and leveraging large customer opportunities.

Financial Performance and Guidance:
- Q2 sales were $652 million, exceeding the midpoint of guidance, with non-GAAP EPS at $0.57.
- Q3 sales guidance is between $710 million and $770 million, with a non-GAAP operating profit rate at the midpoint of 19.5%.
- The improved visibility and optimism are driven by stronger demand in AI compute and a more confident outlook for the second half of the year.