Teradyne, Inc.

Teradyne reported Q2 2026 revenue of more than $1.3 billion, up over 100% year over year, and non-GAAP EPS of $2.47, up over 300% year over year. For the first half of 2026, revenue was $2.6 billion and non-GAAP EPS was $5.02, up close to 100% and 275% year over year, respectively. Gross margin was 59.8%, up 250 basis points year over year, and non-GAAP operating income was $448 million with a 33.7% operating margin. Q3 guidance is for revenue of $1.2 billion to $1.3 billion, non-GAAP EPS of $1.85 to $2.15, gross margin of 58% to 59%, operating expenses of about 29% to 30% of sales, and a non-GAAP operating profit rate of 28% to 30%. Management said the first-half weighting of annual revenue is now expected to be 50% to 52%, with stronger second-half demand, especially in memory, auto and industrial, IST, product test, and robotics, partly offset by softness in mobile and timing in compute.

Gregory Smith framed the quarter as evidence that Teradyne’s wafer-to-AI data center strategy is working, with AI now driving growth across semis, product test, and robotics. He emphasized that the company sees a multiyear growth phase ahead, supported by rising wafer fab spending, advanced packaging, and broader data-center build-out needs. He sounded confident and increasingly constructive on 2026, 2027, and the midterm, saying Teradyne is leaning into investments to capture a larger opportunity across the value chain.

Michelle Turner said both revenue and non-GAAP EPS came in above the high end of guidance, with sequential sales up 4% from the prior record quarter. She highlighted gross margin of 59.8%, up 250 basis points year over year, but down 110 basis points sequentially due in part to one-time Q1 benefits; she also said Q3 gross margin should be 58% to 59% because of product mix, new product launches, and continued pricing pressure, especially from memory. On capital allocation, she said cash and investments ended at $517 million, up over 30% sequentially, free cash flow was $351 million in the quarter and $579 million in the first half, capex was $26 million, dividends were $20 million, and buybacks were $69 million.

Analysts focused on how closely Teradyne’s growth tracks WFE spending, when share gains might show up, and whether the company’s expanding TAM claims were realistic. Management said the test-equipment share of semi capex has risen from about 4% in 2023 to 7% in 2025 and 8% in the first five months of 2026, and they think it may settle in a 7% to 9% range rather than keep rising. They also said share gains should begin to show more clearly in 2027, but gradually, socket by socket, while compute share is starting to stabilize and inflect upward. Questions also covered memory mix, robotics, CPO/silicon photonics, and gross margins; management answered that memory is getting stronger in DDR, HBM, and NAND, robotics should broadly track company growth, and CPO remains early with a very wide 2028 TAM range of $300 million to $700 million.