Financial Health Snapshot
What do Teradyne’s latest financial metrics show?
Strong. The standout is 87% Q1 2026 revenue growth, backed by positive EPS and capital returns. The main concern is that verified operating margin and absolute free cash flow are not supplied, which limits a fuller quality check.
Using the latest verified fiscal period, Q1 2026, Teradyne’s snapshot mixes fast growth, earnings strength, cash returns, and limited margin disclosure. The verdict combines growth, profitability, cash generation, balance-sheet capacity, and capital efficiency. For mission context, see Mission Statement, Vision, & Core Values (2026) of Teradyne, Inc. (TER).
Teradyne’s FY 2025 Revenue: $319B and quarterly cash dividend of $013 per share, plus a $10B buyback authorization for 2025-2026, make revenue growth the first metric to analyze deeper.
Revenue and earnings quality
Does Teradyne’s revenue growth translate into earnings quality?
Strong. Teradyne’s latest period shows revenue growth turning into much faster profit and per-share growth, with operating income, net income, EPS, and diluted EPS all rising sharply. The clearest confirmation is that earnings expanded faster than sales in the 2026-03-29 period.
Revenue growth is only the quantity side of the story. Investors compare it with operating income, net income, and EPS in the same annual or quarterly period to see whether sales are turning into real profit, not just top-line expansion. Teradyne’s latest results also fit Teradyne, Inc. (TER): History, Ownership, Mission, How It Works & Makes Money.
| Measure | Latest Period | Previous Period | Quality Test | Investor Meaning |
|---|---|---|---|---|
| Revenue | $128B, 1838% growth, 2026-03-29 | Prior comparable period not provided | Growth source appears tied to AI compute demand, HBM test intensity, high-end compute, and the Wafer-to-AI Data Center strategy | The growth looks more repeatable if those end markets stay strong, but the exact durability is still uncertain |
| Operating Income | $47300M, 5249% growth | Prior comparable period not provided | Operating income grew much faster than revenue | That is a clear sign of operating leverage and stronger earnings quality |
| Net Income | $39891M, 5508% growth | Prior comparable period not provided | Net income rose faster than operating income growth in the supplied data | Final earnings confirm the operating result, with no offsetting weakness shown in the provided figures |
| Diluted EPS | $253, 5521% growth, 2026-03-29 | $255, 5549% growth | Per-share results strengthened sharply; the supplied share-count effect is not shown separately | Shareholders got the same earnings acceleration the business showed, so the growth translated into per-share value |
How durable is Teradyne’s revenue growth?
The strongest durability signal is AI-related demand, especially HBM test intensity and high-end compute. The biggest limitation is customer and country concentration, with Taiwan at 36%, China at 14%, Korea at 14%, and the United States at 11%.
- Demand Quality: Visibility is helped by AI compute demand and the Q2 2026 Revenue Guidance of $115B–$125B, but repeatability is not proven from the provided data.
- Pricing and Volume: The split between price, volume, and mix is unavailable, so the quality call rests on faster earnings growth and AI-driven demand.
- Diversification: Exposure is concentrated by geography, especially Taiwan, China, Korea, and the United States, which raises demand and supply-chain risk.
That mix still points investors toward margins, free cash flow, and conversion of profit into cash.
Cash Conversion
Are Teradyne’s profits turning into cash?
Teradyne’s earnings quality looks positive, but cash conversion is mixed. Reported profit remained strong for 2026-03-29, while operating cash flow and free cash flow growth lagged net income growth, so the income statement is not translating into cash as cleanly as investors would want.
Teradyne reported gross profit of $78095M, operating income of $47300M, income before tax of $46568M, income tax expense of $6216M, and net income of $39891M for 2026-03-29. Gross, operating, and net margins were not supplied, so the best read here is from the profit line items and cash flow direction, not margin math. For a related ownership lens, see Exploring Teradyne, Inc. (TER) Investor Profile: Who's Buying and Why?.
| Measure | Latest Period | Previous Period | Verified Driver | Investor Meaning |
|---|---|---|---|---|
| Gross Margin | Unavailable for 2026-03-29 | Unavailable | Supplied data does not include gross margin, pricing, mix, or input-cost detail. | Product economics cannot be confirmed from the provided margin data. |
| Operating Margin | Unavailable for 2026-03-29 | Unavailable | ERP Implementation Expense: $17M in Q1 2026 is a transition cost, but no full operating margin bridge was provided. | Efficiency trends cannot be verified from the supplied figures alone. |
| Net Margin | Unavailable for 2026-03-29 | Unavailable | Income before tax, tax expense, and net income were provided, but no margin percentage was supplied. | Final profitability is strong in dollars, but margin quality cannot be measured here. |
| Operating Cash Flow | Directional decline; Operating Cash Flow Growth: -586% | Previous compatible period not supplied | Operating cash flow growth lagged net income growth, with no detailed working-capital bridge provided. | Accounting earnings are not converting smoothly into operating cash. |
| Free Cash Flow | Directional decline; Free Cash Flow Growth: -839% | Previous compatible period not supplied | Growth Capital Expenditure: -293% increased the cash burden. | Less cash remains after reinvestment, which matters for dividends and buybacks. |
What most affects Teradyne’s cash conversion?
The biggest drag is the gap between strong reported profit and much weaker cash flow growth, amplified by capital spending and the $17M ERP implementation expense. That looks partly structural if reinvestment stays high, but the working-capital details are not fully available.
- Main Driver: Capital expenditure and cash flow timing are the main pressure points; that looks more temporary than structural unless reinvestment remains elevated.
- Evidence Gap: The supplied data does not break out working-capital changes, depreciation, or non-cash adjustments.
- Metric to Monitor: Watch operating cash flow and free cash flow against net income in the next quarter.
Balance Sheet Strength
Can Teradyne fund itself comfortably?
Teradyne’s balance sheet looks Strong, and liquidity is supported by $24560M of cash and short-term investments. The main protection is its large cash position, while the main financing concern is whether that liquidity must cover acquisitions, buybacks, restructuring, and manufacturing moves at the same time.
Cash is only part of the picture. Teradyne also has to cover working capital, asset quality, debt service, solvency, refinancing, and ongoing investment needs together. That matters because a strong cash balance can still be strained if current liabilities, capital spending, or strategic uses of cash rise quickly. For company background, see Mission Statement, Vision, & Core Values (2026) of Teradyne, Inc. (TER).
| Area | Latest Evidence | Assessment | Investor Meaning |
|---|---|---|---|
| Cash and Working Capital | Cash And Cash Equivalents: $24194M; Short Term Investments: $365M; Cash And Short Term Investments: $24560M; Total Current Assets: $217B; Total Current Liabilities: $101B. | Strong | Near-term obligations look manageable, but cash may also need to support operations and investment. |
| Total and Net Debt | Short Term Debt: $1844M; Long Term Debt: $000; Capital Lease Obligations Non Current: $6396M; Enterprise Values Add Total Debt: $8240M. | Mixed | Debt is present but not extreme, so leverage does not appear to be the main constraint. |
| Debt Service and Refinancing | Total debt is $8240M, with Long Term Debt: $000 and Capital Lease Obligations Non Current: $6396M; no interest expense or maturity schedule was supplied. | Mixed | Refinancing risk looks limited from the data provided, but future commitments still need monitoring. |
| Asset Quality | Total Assets: $443B; cash is high, but the prompt does not provide receivables, inventory, goodwill, intangibles, or impairment detail. | Mixed | Asset quality cannot be fully judged, so investors should watch for hidden capital intensity or write-down risk. |
| Liabilities and Equity | Total Non Current Liabilities: $27780M; Total Current Liabilities: $101B; shareholders' equity was not supplied. | Mixed | Obligation coverage looks workable, but the missing equity figure limits a full solvency read. |
Which balance-sheet risk matters most for Teradyne?
The biggest watch item is liquidity deployment, not debt stress. Teradyne’s cash is strong, but funding operations, acquisitions, dividends, buybacks, restructuring, and manufacturing moves could reduce flexibility if cash use accelerates.
- Current Exposure: Cash And Cash Equivalents: $24194M against Total Current Liabilities: $101B.
- Protection: Cash And Short Term Investments: $24560M provides the clearest buffer.
- Warning Signal: Monitor whether strategic cash uses outpace operating cash generation.
Capital Efficiency
Is Teradyne converting capital into returns efficiently?
Teradyne is Mixed on capital efficiency. Growth and EPS signals look strong, but the core return ratios are not supplied here, and internal cash looks only partly sufficient for reinvestment because expansion, R&D, and shareholder returns still need to be balanced carefully.
Return measures need context from leverage, asset intensity, capital expenditure, working capital, and outside funding needs. For Teradyne, the latest reinvestment signals from 2026-03-29 point to heavy operating change, so the quality of returns depends on how well that spending converts into durable cash flow, not just reported growth. See also Mission Statement, Vision, & Core Values (2026) of Teradyne, Inc. (TER).
| Capital Measure | Latest Evidence | Quality Test | Investor Meaning |
|---|---|---|---|
| ROIC | unavailable | ROIC cannot be confirmed here, so operating margin and capital efficiency need to be judged from reinvestment outcomes instead. | Without the ratio, investors should focus on whether new capital is producing operating value. |
| ROE and ROA | unavailable | ROE would reflect leverage, while ROA would reflect asset efficiency; neither can be validated from the supplied data. | Shareholder returns may look better than asset returns if leverage is doing most of the work. |
| Maintenance and Growth Investment | Research And Development Expenses: $13556M; Rdexpense Growth: -538%; Asset Growth: 632%; Book Valueper Share Growth: 1245%; Debt Growth: -7626%; Growth Capital Expenditure: -293% | The mix suggests active reinvestment, but the scale makes it hard to separate maintenance from growth spending with confidence. | Teradyne appears to be funding AI test, HBM, MultiLane joint venture progress, TestInsight, Quantifi Photonics, and robotics AI strategy. |
| Internal Funding Capacity | Buybacks and dividends can support per-share returns, but cash conversion is not shown here. | If operating cash flow and free cash flow stay weak, internal funding may be only partly sufficient. | That can reduce flexibility and raise reliance on external capital or slower reinvestment. |
Are Teradyne's returns on capital sustainable?
Teradyne’s returns look sustainable only if AI test, HBM, and robotics investments keep lifting cash flow; the main weakness would be weak cash conversion or heavier spending than operating earnings can support.
- Operating Source: AI test, HBM, and mixed-productivity tools like TestInsight support returns through mix and higher-value test demand.
- Funding Requirement: The largest verified capital need is ongoing R&D and growth capex tied to new test and photonics programs.
- Durability Test: Returns weaken if operating cash flow does not keep pace with asset growth and reinvestment intensity.
Financial resilience
How resilient is Teradyne, and which warning signs matter most?
Teradyne’s resilience is Mixed. The main buffer is its diversified test business and ongoing mitigation efforts, including the $10B production relocation from Suzhou, China to Malaysia. The most important verified warning sign is geographic concentration, with Taiwan: 36% and China: 14% of revenue.
Teradyne has enough operating breadth to absorb shocks better than a single-line industrial company, but it is still exposed to revenue swings, restructuring costs, and policy risk. The recent transition pressure from Product Test consolidation, ERP Implementation Expense: $17M, and workforce reduction: 14% after workforce reduction: 10% shows management is still working through costs while protecting cash and core investment.
| Pressure | Financial Effect | Existing Protection | Warning Signal |
|---|---|---|---|
| Revenue or Margin Pressure | Geographic concentration can reduce operating leverage if demand weakens in Taiwan: 36% and China: 14%, and the SEC 10-K filing flags Taiwan and China as material risks to the 50% of revenue sourced there. | Diversified test exposure, the $10B production relocation from Suzhou, China to Malaysia, and supply chain security compliance tied to export control risk. | Falling revenue by geography, weaker margins, or lower cash flow from Asia would confirm deterioration. |
| Working-Capital or Investment Pressure | Product Test consolidation, ERP Implementation Expense: $17M, and the workforce reduction can absorb cash and distract from normal investment needs. | Internal restructuring actions and management’s ability to shift production and operations support liquidity. | Rising restructuring expense, slower cash conversion, or higher working capital would show strain. |
| Interest or Refinancing Pressure | No verified debt maturity stress is provided, but weaker cash flow would still reduce financing flexibility and interest coverage. | Current liquidity is helped by operating cash generation and restructuring discipline, not by confirmed debt detail. | Any drop in free cash flow, tighter liquidity, or refinancing need would signal rising pressure. |
Which financial warning signs should investors monitor at Teradyne?
The top signals are revenue by geography, cash conversion, and restructuring expense. Geographic weakness is already confirmed as a risk; slower cash conversion and rising restructuring costs are future pressure points that would weaken resilience further.
Geographic revenue concentration
Taiwan: 36% and China: 14% already make Teradyne sensitive to regional demand and policy shifts. The key offset is the Malaysia relocation and export-control compliance, but revenue by geography remains the next metric to watch.
Restructuring and transition costs
Product Test consolidation, ERP Implementation Expense: $17M, and workforce reduction: 14% can pressure cash and margins. That cost drag matters even if demand holds, so investors should track restructuring expense disclosures and cash conversion.
Patent and robotics execution risk
Patent litigation against Elite Robots and the Physical AI strategy transition could create legal cost and execution pressure. It matters because strategic shifts can delay returns, so the next metric is progress in robotics commercialization and any related legal expense.
Mixed Outlook
What does Teradyne’s financial health mean for investors?
Teradyne’s financial health scores Mixed. The strongest factor is AI-led earnings momentum, while the weakest is cash conversion. The most important condition for the investment case is whether profit growth can turn into durable operating cash flow and reduce geographic concentration risk.
| Financial Factor | Rating | Evidence and Investor Meaning |
|---|---|---|
| Revenue and Earnings Quality | Strong | Q1 2026 revenue and EPS improved, and AI demand supported the quarter. That points to real operating momentum, not just accounting strength. |
| Profitability and Cash | Mixed | Earnings rose, but Operating Cash Flow Growth: -586% and Free Cash Flow Growth: -839% were negative. Profit exists, but cash conversion is weak. |
| Balance Sheet and Liquidity | Strong | Cash, current assets, low stated debt, and no supplied long-term debt support liquidity and debt service capacity. That lowers near-term financing risk. |
| Capital Efficiency | Mixed | Per-share growth is strong, but ROIC, ROE, and ROA are not supplied. Investors lack a full read on reinvestment efficiency. |
| Financial Resilience | Mixed | Taiwan and China concentration, relocation, restructuring, and legal risk reduce flexibility. The balance sheet helps, but operating and geographic pressure points remain. |
- What Supports the Thesis: AI demand, stronger Q1 2026 revenue and EPS, and a solid liquidity position create the best verified financial mix.
- What Challenges the Thesis: Negative cash flow growth and Taiwan and China concentration create the biggest uncertainty for durability.
- What to Monitor: Q2 2026 Revenue Guidance: $115B–$125B, Free Cash Flow Growth: -839%, Taiwan and China revenue share.
If you’re pairing this scorecard with strategy work, Mission Statement, Vision, & Core Values (2026) of Teradyne, Inc. (TER) helps connect operating priorities to the financial picture, and the same evidence should shape forecasts, scenarios, and valuation assumptions.
FAQ
What Do Investors Ask About 's Financial Health?
Investors most often ask about the company's revenue quality, profitability, cash generation, debt, liquidity, capital efficiency, and ability to withstand financial pressure.
Does Teradyne convert profit into free cash?
The latest data is mixed Q1 2026 profit measures were strong, including Net Income: $39891M, but Operating Cash Flow Growth: -586% and Free Cash Flow Growth: -839% show weaker cash conversion direction
Is Teradyne cash enough for shareholder returns?
Teradyne reported Cash And Cash Equivalents: $24194M and Cash And Short Term Investments: $24560M at 2026-03-29 The company also declared a Quarterly Cash Dividend: $013 per share and has a $10B buyback authorization
How exposed is Teradyne to Asia supply-chain risk?
Teradyne has meaningful Asia exposure The 2025 10-K geography mix showed Taiwan: 36% and China: 14%, and the company identified Taiwan and China risks tied to 50% of revenue The Malaysia relocation helps mitigate export control exposure
What does restructuring say about financial resilience?
Restructuring suggests management is adjusting costs and operations during a strategy transition Teradyne had workforce reduction: 10% in January 2025 and workforce reduction: 14% in November 2025, mainly tied to robotics and corporate efficiency
Does Teradyne need debt to fund growth?
Supplied data does not show a need for heavy debt funding At 2026-03-29, Short Term Debt was $1844M, Long Term Debt was $000, and Add Total Debt was $8240M, but cash conversion still matters