Teradyne Posts Third-Quarter EPS of $2.29, Guides for Revenue of Up to $1.35 Billion
Key Facts
Teradyne reported third-quarter 2026 results on October 27, posting diluted earnings of $2.17 per share under generally accepted accounting principles and $2.29 under the company's non-GAAP measure. The company said earnings per share were $0.75 and $0.85, respectively, in the third quarter of 2025. On a year-over-year basis, this quarter's figures were well above the year-earlier levels. Analysts said before the release that they expected earnings of $2.08 per share and revenue of $1.26 billion, with year-over-year growth of 145% in earnings and 64% in revenue. The results came as investors tracked whether demand for AI-related testing could continue to support the company's business.
Revenue from semiconductor testing was $1.072 billion in the third quarter, compared with $138 million from product testing and $96 million from robotics. The figures put semiconductor testing at the top of the revenue components disclosed by the company, with smaller contributions from product testing and robotics. CEO Greg Smith said demand extended across the AI value chain, from memory and drive testing to high-speed interconnects and robotics. He added that results exceeded the high end of prior guidance. In comments reported by Reuters, Smith said, "The company's chip-to-data-center strategy and broad product portfolio maintained positive momentum in the third quarter."
The company said its robotics business posted its highest revenue for any third quarter in its history and was profitable during the period. Memory and integrated systems testing revenue also reached record levels, driven by AI-related demand, Reuters reported, citing the company. These segment results add detail to the demand picture Smith described as spanning memory and drives, high-speed interconnects and robotics. The market's focus, however, was not limited to revenue achieved; questions ahead of the earnings call centered on demand's durability, customer adoption of new platforms and the path of upcoming guidance. Analysts had expected earnings and revenue to decline sequentially after the second quarter.
In the second quarter of 2026, Teradyne posted earnings of $2.47 per share and revenue of $1.33 billion, with both figures topping Wall Street estimates, Reuters reported. Prior forecasts for the third quarter had called for sequential declines of about 16% in earnings and 5% in revenue compared with the second quarter. Teradyne thus entered its October results release after a strong previous quarter and amid expectations for a sequential contraction, alongside estimates of substantial annual growth in earnings and revenue. Before the results, the stock fell 11% on October 22 amid a broader selloff in semiconductor stocks. That decline provides context for trading after the release without changing its timing or attributing it to an earlier session.
Despite topping analyst expectations, Teradyne shares fell after the results were released. StockStory said the stock dropped 6.6% to $303.92 immediately after the results were announced on October 27, while Reuters, via Investing.com, reported a decline of about 6% after the results. The stock closed at $309 on October 26, according to EL7 data, before the company reported results the following day. The closing data and reported reactions show that the post-announcement decline occurred at a different time from the October 26 close. Investors were looking for details on AI-related demand, customer adoption of new platforms and whether high growth rates could continue.
The company set fourth-quarter 2026 revenue guidance at $1.25 billion to $1.35 billion and non-GAAP earnings per share at $1.95 to $2.25. The revenue range sets the low and high ends of management's expectations for the next period, while the earnings guidance defines the expected per-share range under the non-GAAP measure. Teradyne is scheduled to hold a conference call to discuss third-quarter results and management's outlook on October 28, 2026, at 8:30 a.m. Eastern time. Investors were awaiting details on customer adoption of new platforms and demand trends during the call, points Reuters said could clarify whether high growth rates were sustainable.