v3.26.1
Financial Instruments
 6 Months Ended
Jun. 28, 2026
Fair Value Disclosures [Abstract]  
Financial Instruments

H. FINANCIAL INSTRUMENTS

Cash Equivalents

Teradyne considers all highly liquid investments with original maturities of three months or less at the date of acquisition to be cash equivalents.

Marketable Securities

Teradyne’s equity and debt mutual funds are classified as Level 1 and available-for-sale debt securities are classified as Level 2. The vast majority of Level 2 securities are fixed income securities priced by third party pricing vendors. These pricing vendors utilize the most recent observable market information in pricing these securities or, if specific prices are not available, use other observable inputs like market transactions involving identical or comparable securities.

During the three and six months ended June 28, 2026, and June 29, 2025, there were no transfers in or out of Level 1, Level 2, or Level 3 financial instruments.

 

 

 

For the Three Months
 Ended

 

 

For the Six Months
 Ended

 

 

 

June 28,
2026

 

 

June 29,
2025

 

 

June 28,
2026

 

 

June 29,
2025

 

 

 

(in millions)

 

 

(in millions)

 

Realized gains and losses included in ‘Other (income) expense, net’ in the condensed consolidated statement of operations

 

Realized gains

 

$

0.2

 

 

$

0.4

 

 

$

0.9

 

 

$

1.2

 

Realized losses

 

 

0.1

 

 

 

0.1

 

 

 

0.2

 

 

 

1.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains and losses on equity securities included in ‘Other (income) expense, net’ in the condensed consolidated statement of operations

 

Unrealized gains on equity securities

 

 

8.1

 

 

 

4.1

 

 

 

8.1

 

 

 

4.4

 

Unrealized losses on equity securities

 

 

—

 

 

 

—

 

 

 

4.0

 

 

 

3.1

 

Unrealized gains and losses on available-for-sale debt securities are included in ‘Accumulated other comprehensive income (loss)’ in the condensed consolidated balance sheet.

The cost of securities sold is based on average cost.

The following tables set forth by fair value hierarchy Teradyne’s financial assets and liabilities that were measured at fair value on a recurring basis as of June 28, 2026, and December 31, 2025.

 

 

 

June 28, 2026

 

 

December 31, 2025

 

 

 

Quoted Prices
in Active
Markets for
Identical
Instruments
(Level 1)

 

 

Significant
Other
Observable
Inputs
(Level 2)

 

 

Total (1)

 

 

Quoted Prices
in Active
Markets for
Identical
Instruments
(Level 1)

 

 

Significant
Other
Observable
Inputs
(Level 2)

 

 

Total (1)

 

 

 

(in thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$

178,364

 

 

$

—

 

 

$

178,364

 

 

$

214,712

 

 

$

—

 

 

$

214,712

 

Cash equivalents

 

 

170,150

 

 

 

1,024

 

 

 

171,174

 

 

 

78,068

 

 

 

971

 

 

 

79,039

 

Available-for-sale securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

 

—

 

 

 

13,459

 

 

 

13,459

 

 

 

—

 

 

 

44,143

 

 

 

44,143

 

Corporate debt securities

 

 

—

 

 

 

58,836

 

 

 

58,836

 

 

 

—

 

 

 

36,384

 

 

 

36,384

 

Debt mutual funds

 

 

13,057

 

 

 

—

 

 

 

13,057

 

 

 

14,331

 

 

 

—

 

 

 

14,331

 

Certificates of deposit and time deposits

 

 

—

 

 

 

1,177

 

 

 

1,177

 

 

 

—

 

 

 

1,354

 

 

 

1,354

 

Non-U.S. government securities

 

 

—

 

 

 

14,155

 

 

 

14,155

 

 

 

—

 

 

 

924

 

 

 

924

 

Equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mutual funds

 

 

66,881

 

 

 

—

 

 

 

66,881

 

 

 

57,367

 

 

 

—

 

 

 

57,367

 

 

$

428,452

 

 

$

88,651

 

 

$

517,103

 

 

$

364,478

 

 

$

83,776

 

 

$

448,254

 

Derivative assets

 

 

—

 

 

 

823

 

 

 

823

 

 

 

—

 

 

 

1,175

 

 

 

1,175

 

Total

 

$

428,452

 

 

$

89,474

 

 

$

517,926

 

 

$

364,478

 

 

$

84,951

 

 

$

449,429

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

 

—

 

 

 

2,045

 

 

$

2,045

 

 

 

—

 

 

 

928

 

 

$

928

 

Total

 

$

—

 

 

$

2,045

 

 

$

2,045

 

 

$

—

 

 

$

928

 

 

$

928

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Level 1)

 

 

(Level 2)

 

 

Total (1)

 

 

(Level 1)

 

 

(Level 2)

 

 

Total (1)

 

 

 

(in thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

348,514

 

 

$

1,024

 

 

 

349,538

 

 

$

292,780

 

 

$

971

 

 

 

293,751

 

Long-term marketable securities

 

 

79,938

 

 

 

82,336

 

 

 

162,274

 

 

 

71,698

 

 

 

54,558

 

 

 

126,256

 

Marketable securities

 

 

—

 

 

 

5,291

 

 

 

5,291

 

 

 

—

 

 

 

28,247

 

 

 

28,247

 

Prepayments

 

 

—

 

 

 

823

 

 

 

823

 

 

 

—

 

 

 

1,175

 

 

 

1,175

 

Total

 

$

428,452

 

 

$

89,474

 

 

$

517,926

 

 

$

364,478

 

 

$

84,951

 

 

$

449,429

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other current liabilities

 

$

—

 

 

$

2,045

 

 

$

2,045

 

 

$

—

 

 

$

928

 

 

$

928

 

     Total

 

$

—

 

 

$

2,045

 

 

$

2,045

 

 

$

—

 

 

$

928

 

 

$

928

 

 

(1)
There were no financial assets or liabilities measured using significant unobservable inputs (Level 3) as of June 28, 2026 and December 31, 2025.

 

The carrying values and fair values of Teradyne’s financial instruments at June 28, 2026, and December 31, 2025, were as follows:

 

 

 

June 28, 2026

 

 

December 31, 2025

 

 

 

Carrying Value

 

 

Fair Value

 

 

Carrying Value

 

 

Fair Value

 

 

 

(in thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

349,538

 

 

$

349,538

 

 

$

293,751

 

 

$

293,751

 

Marketable securities

 

 

167,565

 

 

 

167,565

 

 

 

154,503

 

 

 

154,503

 

Derivative assets

 

 

823

 

 

 

823

 

 

 

1,175

 

 

 

1,175

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

 

2,045

 

 

 

2,045

 

 

 

928

 

 

 

928

 

 

The fair values of accounts receivable, net and accounts payable approximate their carrying values due to the short-term nature of these instruments.

The following table summarizes the composition of available-for-sale marketable securities at June 28, 2026:

 

 

 

June 28, 2026

 

 

 

Available-for-Sale

 

 

 

Cost

 

 

Unrealized
Gain

 

 

Unrealized
(Loss)

 

 

Fair
Market
Value

 

 

Fair Market
Value of
Investments
with Unrealized
Losses

 

 

 

(in thousands)

 

U.S. Treasury securities

 

$

18,120

 

 

$

13

 

 

$

(4,674

)

 

$

13,459

 

 

$

12,949

 

Corporate debt securities

 

 

62,262

 

 

 

658

 

 

 

(4,084

)

 

 

58,836

 

 

 

25,637

 

Debt mutual funds

 

 

13,243

 

 

 

—

 

 

 

(186

)

 

 

13,057

 

 

 

3,057

 

Certificates of deposit and time deposits

 

 

1,177

 

 

 

—

 

 

 

—

 

 

 

1,177

 

 

 

—

 

Non-U.S. government securities

 

 

14,154

 

 

 

153

 

 

 

(152

)

 

 

14,155

 

 

 

3,760

 

 

$

108,956

 

 

$

824

 

 

$

(9,096

)

 

$

100,684

 

 

$

45,403

 

 

Reported as follows:

 

 

 

Cost

 

 

Unrealized
Gain

 

 

Unrealized
(Loss)

 

 

Fair
Market
Value

 

 

Fair Market
Value of
Investments
with Unrealized
Losses

 

 

 

(in thousands)

 

Marketable securities

 

$

5,315

 

 

$

—

 

 

$

(24

)

 

$

5,291

 

 

$

3,739

 

Long-term marketable securities

 

 

103,641

 

 

 

824

 

 

 

(9,072

)

 

 

95,393

 

 

 

41,664

 

 

$

108,956

 

 

$

824

 

 

$

(9,096

)

 

$

100,684

 

 

$

45,403

 

 

The following table summarizes the composition of available-for-sale marketable securities at December 31, 2025:

 

 

 

December 31, 2025

 

 

 

Available-for-Sale

 

 

 

Cost

 

 

Unrealized
Gain

 

 

Unrealized
(Loss)

 

 

Fair
Market
Value

 

 

Fair Market
Value of
Investments
with Unrealized
Losses

 

 

 

(in thousands)

 

U.S. Treasury securities

 

$

48,723

 

 

$

90

 

 

$

(4,670

)

 

$

44,143

 

 

$

13,891

 

Corporate debt securities

 

 

40,090

 

 

 

293

 

 

 

(3,999

)

 

 

36,384

 

 

 

22,941

 

Debt mutual funds

 

 

14,508

 

 

 

—

 

 

 

(177

)

 

 

14,331

 

 

 

3,020

 

Certificates of deposit and time deposits

 

 

1,354

 

 

 

—

 

 

 

—

 

 

 

1,354

 

 

 

—

 

Non-U.S. government securities

 

 

924

 

 

 

—

 

 

 

—

 

 

 

924

 

 

 

—

 

 

$

105,599

 

 

$

383

 

 

$

(8,846

)

 

$

97,136

 

 

$

39,852

 

 

Reported as follows:

 

 

 

Cost

 

 

Unrealized
Gain

 

 

Unrealized
(Loss)

 

 

Fair
Market
Value

 

 

Fair Market
Value of
Investments
with Unrealized
Losses

 

 

 

(in thousands)

 

Marketable securities

 

$

28,213

 

 

$

41

 

 

$

(7

)

 

$

28,247

 

 

$

2,293

 

Long-term marketable securities

 

 

77,386

 

 

 

342

 

 

 

(8,839

)

 

 

68,889

 

 

 

37,559

 

 

$

105,599

 

 

$

383

 

 

$

(8,846

)

 

$

97,136

 

 

$

39,852

 

 

As of June 28, 2026, the fair market value of investments with unrealized losses less than one year and greater than one year totaled $11.3 million and $34.1 million, respectively. As of December 31, 2025, the fair market value of investments with unrealized losses for less than one year and greater than one year totaled $1.1 million and $38.8 million, respectively.

Teradyne reviews its investments to identify and evaluate investments that have an indication of possible impairment. Based on this review, Teradyne determined that the unrealized losses related to these investments at June 28, 2026, and December 31, 2025, were not other than temporary.

The contractual maturities of investments in available-for-sale securities held at June 28, 2026, were as follows:

 

 

 

June 28, 2026

 

 

 

Cost

 

 

Fair Market
Value

 

 

 

(in thousands)

 

Due within one year

 

$

5,315

 

 

$

5,291

 

Due after 1 year through 5 years

 

 

8,997

 

 

 

8,828

 

Due after 5 years through 10 years

 

 

16,095

 

 

 

16,225

 

Due after 10 years

 

 

65,306

 

 

 

57,283

 

Total

 

$

95,713

 

 

$

87,627

 

 

Contractual maturities of investments in available-for-sale securities held at June 28, 2026, exclude debt mutual funds with a fair market value of $13.1 million as they do not have a contractual maturity date.

Derivatives

Teradyne conducts business in various foreign countries, with certain transactions denominated in local currencies. As a result, Teradyne is exposed to risks relating to changes in foreign currency exchange rates. Teradyne’s foreign currency risk management objective is to minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities denominated in foreign currencies, and changes in its cash inflows attributable to the forecasted cash flows from certain foreign currency denominated revenues.

To minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities denominated in foreign currencies, Teradyne enters into foreign currency forward contracts. The change in fair value of these derivatives is recorded directly in earnings and is used to offset the change in value of monetary assets and liabilities denominated in foreign currencies.

Teradyne also enters into foreign currency forward and option contracts designated as cash flow hedges to hedge the risk of changes in its cash inflows attributable to changes in foreign currency exchange rates. The cash flow hedges have maturities of less than six months and mature in the period of revenue recognition for certain products and services in backlog and forecasted to be recognized in a future period. Teradyne evaluates cash flow hedges for effectiveness at inception based on the critical terms match method. The hedges are not expected to incur any ineffectiveness, however, a quarterly qualitative assessment of effectiveness is done to determine if the critical terms match method remains appropriate to use. The change in fair value of the contracts is recorded in accumulated other comprehensive income (loss) and reclassified to earnings at maturity.

Teradyne does not use derivative financial instruments for speculative purposes.

At June 28, 2026, and December 31, 2025, Teradyne had the following contracts to buy and sell non-U.S. currencies for U.S. dollars and other non-U.S. currencies with the following notional amounts:

 

 

 

Gross Notional Value

 

 

 

June 28,
2026

 

 

December 31,
2025

 

 

 

(in millions)

 

Currency Hedged (Buy/Sell)

 

 

 

 

 

 

U.S. dollar/Taiwan dollar

 

 

17.0

 

 

 

27.0

 

U.S. dollar/Euro

 

 

6.7

 

 

 

—

 

U.S. dollar/Japanese yen

 

 

5.8

 

 

 

16.9

 

U.S. dollar/Korean won

 

 

3.8

 

 

 

7.7

 

U.S. dollar/British pound sterling

 

 

1.8

 

 

 

1.9

 

Singapore dollar/U.S. dollar

 

 

95.6

 

 

 

62.6

 

Philippine peso/U.S. dollar

 

 

1.7

 

 

 

1.8

 

Chinese yuan/U.S. dollar

 

 

1.2

 

 

 

0.7

 

Euro/U.S. dollar

 

 

—

 

 

 

20.4

 

Total

 

$

133.6

 

 

$

139.0

 

 

The change in the fair value of the outstanding contracts resulted in a net loss of $1.2 million and a net gain of $0.2 million at June 28, 2026, and December 31, 2025, respectively.

Unrealized gains and losses on foreign currency forward contracts and foreign currency remeasurement gains and losses on monetary assets and liabilities are included in ‘Other (income) expense, net’ in the condensed consolidated statement of operations.

The following table summarizes the fair value of derivative instruments as of June 28, 2026, and December 31, 2025:

 

 

 

Balance Sheet Location

 

June 28,
2026

 

 

December 31,
2025

 

 

 

 

 

(in thousands)

 

Derivatives not designated as hedging instruments:

 

Foreign exchange forward contracts

 

Other current assets

 

 

823

 

 

 

1,175

 

Foreign exchange forward contracts

 

Other current liabilities

 

 

(2,045

)

 

 

(928

)

Total derivatives

 

 

 

$

(1,222

)

 

$

247

 

 

 

The following table summarizes the effect of derivative instruments recognized in the statement of operations for the three and six months ended June 28, 2026, and June 29, 2025:

 

 

 

 

 

For the Three Months
 Ended

 

 

For the Six Months
 Ended

 

 

 

Location of (Gains) Losses
Recognized in Statement
of Operations

 

June 28,
2026

 

 

June 29,
2025

 

 

June 28,
2026

 

 

June 29,
2025

 

 

 

 

 

(in thousands)

 

 

(in thousands)

 

Derivatives not designated as hedging instruments:

 

Foreign exchange forward contracts (1)

 

Other (income) expense, net

 

$

1,522

 

 

$

122

 

 

$

2,608

 

 

$

(45

)

Derivatives designated as hedging instruments:

 

Foreign exchange forward and option contracts

 

Revenue

 

 

—

 

 

 

298

 

 

 

—

 

 

 

(449

)

Total Derivatives

 

 

 

$

1,522

 

 

$

420

 

 

$

2,608

 

 

$

(494

)

 

(1)
The table does not reflect the corresponding gains and losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies. For the three and six months ended June 28, 2026, net losses from remeasurement of monetary assets and liabilities denominated in foreign currencies were $0.7 million and $2.1 million, respectively. For the three and six months ended June 29, 2025, net losses from remeasurement of monetary assets and liabilities denominated in foreign currencies were $1.2 million and $3.4 million, respectively.