Teradyne 2025 Q2 Earnings Misses Targets as Net Income Falls 57.9%

Teradyne (TER) reported its fiscal 2025 Q2 earnings on July 30th, 2025. The company missed analyst expectations, reporting earnings per share (EPS) of $0.49, below the consensus estimate of $0.54. Teradyne's guidance for the third quarter of 2025 was in line with expectations, forecasting revenues between $710 million and $770 million and GAAP net income between $0.62 and $0.80 per diluted share. Despite the revenue decline, the company remains optimistic about AI-driven growth in the latter half of the year.

Revenue

Teradyne reported a total revenue of $651.80 million for Q2 2025, marking a 10.7% decrease from $729.88 million in Q2 2024. The revenue was primarily driven by the Semiconductor Test Group, which contributed $492 million, while the Robotics segment added $75 million, and other sectors accounted for $85 million.

Earnings/Net Income

Teradyne's EPS declined substantially by 58.5% to $0.49 in Q2 2025 from $1.18 in Q2 2024. The company's net income experienced a similar downturn, falling 57.9% to $78.37 million from $186.27 million in the same quarter last year. This reflects a challenging earnings period for Teradyne.

Price Action

The stock price of Teradyne has edged up 1.82% during the latest trading day, has surged 15.72% during the most recent full trading week, and has surged 19.15% month-to-date.

Post Earnings Price Action Review

The strategy of buying Teradyne shares following a quarter-over-quarter revenue increase on the earnings release date and holding them for 30 days yielded moderate returns but underperformed the broader market. This approach resulted in a compound annual growth rate (CAGR) of 1.06%, significantly lagging behind the benchmark by 82.24%. The strategy exhibited a maximum drawdown of 0.00% and a Sharpe ratio of 0.02, indicating low risk but modest returns. Consequently, this strategy may appeal to investors seeking stability in their portfolio despite its underwhelming performance compared to market trends.

CEO Commentary

"Our Semiconductor Test Group drove better than expected results in the second quarter," said Greg Smith, CEO of Teradyne. He highlighted that System-on-a-Chip (SOC) for artificial intelligence applications was the strongest growth driver. Smith noted an improvement in visibility for the remainder of the year, with strengthening demand in compute, networking, and memory sectors. While the timing of program ramps and capacity additions remains uncertain, he believes that AI will significantly enhance Teradyne's performance in the second half of 2025.

Guidance

For the third quarter of 2025, Teradyne expects revenue in the range of $710 million to $770 million. The company guides for GAAP net income between $0.62 and $0.80 per diluted share, and non-GAAP net income expected to range from $0.69 to $0.87 per diluted share, excluding certain intangible asset amortizations and related tax impacts.

Additional News

Teradyne recently announced the election of two new independent directors, enhancing its governance structure. Additionally, Universal Robots, a subsidiary of Teradyne, launched UR Studio, an online simulation tool designed to simplify the customization of robotic cells. This initiative aims to strengthen Teradyne's presence in the robotics market. Furthermore, LitePoint and Pegatron have successfully launched volume manufacturing of 5G O-RAN radio units to support private 5G networks, reflecting Teradyne's commitment to advancing in the telecommunications sector.