Teradyne Reports 11% Revenue Decline and Decreased Net Income in Q2 2025

Teradyne, Inc. reported a decline in financial performance for the second quarter of 2025, with total revenues of $651.8 million, down 11% from $729.9 million in the same period last year. The decrease was primarily driven by a 12.1% drop in Semiconductor Test revenues, which fell to $491.9 million, largely due to reduced sales in memory applications. Robotics revenues also decreased by 17.0% to $74.9 million, attributed to market weakness in collaborative robotic arms. In contrast, Product Test revenues increased by 6.8% to $85.1 million, supported by higher sales in defense/aerospace and wireless testing.

The company's net income for the second quarter was $78.4 million, a significant decrease from $186.3 million in the prior year, resulting in diluted earnings per share of $0.49 compared to $1.14. The decline in profitability was influenced by increased operating expenses, which rose to $282.3 million from $215.5 million, driven by higher selling and administrative costs and engineering and development expenses. Gross profit margins also contracted, with gross profit at $373.0 million, representing 57.2% of total revenues, down from 58.3% in the previous year.

In terms of strategic developments, Teradyne made two significant acquisitions in early 2025. The company acquired Quantifi Photonics for approximately $127.2 million, enhancing its capabilities in photonic integrated circuit testing, and Infineon Technologies' automated test equipment technology for $18.3 million, which is expected to strengthen its Semiconductor Test segment. These acquisitions are part of Teradyne's strategy to leverage synergies and enhance product offerings across its segments.

Operationally, Teradyne's total assets increased to $3.76 billion as of June 29, 2025, compared to $3.71 billion at the end of 2024. The company reported a cash and cash equivalents balance of $339.3 million, down from $553.4 million, reflecting cash used for acquisitions and share repurchases. Teradyne's employee headcount remained stable, with ongoing efforts to manage costs amid restructuring initiatives, particularly in the Robotics segment, which has faced challenges due to leadership changes and market conditions.

Looking ahead, Teradyne anticipates strengthening demand in its Semiconductor Test segment, particularly in AI compute and networking applications, for the second half of 2025. However, the company remains cautious about the Robotics segment due to ongoing macroeconomic challenges. Teradyne's capital allocation strategy will continue to balance investments in growth with returning cash to shareholders through dividends and stock repurchases, with plans to repurchase up to $1 billion of common stock in 2025 and 2026, subject to market conditions.