Teradyne (TER) Q1 2026 Earnings Transcript

Motley Fool Transcribing, The Motley Fool

Wed, April 29, 2026 astatine 11:18 AM CDT

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DATE

Wednesday, April 29, 2026 astatine 8:30 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Gregory Smith

• Chief Financial Officer — Michelle Turner

Full Conference Call Transcript

Looking up betwixt present and our adjacent net call, Teradyne expects to enactment successful technology-focused capitalist conferences hosted by Bernstein, TD Cowen, Stifel and Bank of America. Our quiescent play volition statesman astatine the adjacent of concern connected June 12, 2026. Following Greg and Michelle's comments this morning, we'll unfastened up the telephone for questions. This telephone is scheduled for 1 hour. Greg?

Gregory Smith: Good morning, with gross of astir $1.3 cardinal and non-GAAP EPS of $2.56, Teradyne delivered grounds results successful the archetypal 4th of 2026. Our erstwhile precocious watermark was successful the consumer-driven mobile highest of Q2 of 2021. In Q1 of 2026, our gross was $200 cardinal oregon 18% higher than that erstwhile record. This caller grounds comes from durable AI request drivers and the continuing acceleration of our wafer to AI information halfway strategy. This strategy is delivering request crossed Teradyne's portfolio. In Q1, AI-related request accounted for astir 70% of our revenue, up from astir 60% successful Q4 of 2025. Our strategy continues to beryllium anchored crossed 3 wide trends: verticalization, electrification and AI.

Verticalization is the attraction of our concern into highly ample vertically-integrated exertion companies. The verticalization inclination was cleared by 2024 and continues to accelerate. This includes companies similar hyperscalers, but besides immense AI ecosystem enablers similar foundries, merchant compute, representation and networking companies. Many of these companies are customers of each 3 of our businesses: Semiconductor Test, Product Test and Robotics. And this merchandise portfolio enables america to service their needs from wafer to information center. While these monolithic customers are driving beardown growth, it besides means that the concern is progressively concentrated to these customers into a smaller fig of precise ample ASIC and commercialized instrumentality programs.

This attraction besides increases the hazard that bottlenecks successful different areas could displacement request for our products, which tin pb to short-term request peaks and valleys superimposed implicit semipermanent beardown maturation trend. In different words, it's lumpy growth. The electrification inclination continues. In the car concern segment, 46% of our gross came from information halfway devices successful the archetypal quarter, which historically has been dominated by automotive and concern devices. It goes without saying, AI is the ascendant unit shaping our business. We deliberation astir the accidental presented by AI arsenic 3 superimposed waves, each gathering connected the 1 earlier it.