v3.26.3
Financial Instruments
 9 Months Ended
Sep. 27, 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 nine months ended September 27, 2026, and September 28, 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 Nine Months
 Ended

 

 

 

September 27,
2026

 

 

September 28,
2025

 

 

September 27,
2026

 

 

September 28,
2025

 

 

 

(in millions)

 

 

(in millions)

 

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

 

Realized gains

 

$

0.6

 

 

$

0.7

 

 

$

1.5

 

 

$

1.8

 

Realized losses

 

 

0.0

 

 

 

—

 

 

 

0.2

 

 

 

1.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

1.9

 

 

 

3.1

 

 

 

10.0

 

 

 

7.4

 

Unrealized losses on equity securities

 

 

0.3

 

 

 

0.1

 

 

 

4.3

 

 

 

3.2

 

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 September 27, 2026, and December 31, 2025.

 

 

 

September 27, 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

 

$

222,532

 

 

$

—

 

 

$

222,532

 

 

$

214,712

 

 

$

—

 

 

 

214,712

 

Cash equivalents

 

 

238,210

 

 

 

—

 

 

 

238,210

 

 

 

78,068

 

 

 

971

 

 

 

79,039

 

Available-for-sale securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt securities

 

 

—

 

 

 

54,916

 

 

 

54,916

 

 

 

—

 

 

 

36,384

 

 

 

36,384

 

Debt mutual funds

 

 

13,271

 

 

 

—

 

 

 

13,271

 

 

 

14,331

 

 

 

—

 

 

 

14,331

 

U.S. Treasury securities

 

 

—

 

 

 

13,260

 

 

 

13,260

 

 

 

—

 

 

 

44,143

 

 

 

44,143

 

Non-U.S. government securities

 

 

—

 

 

 

13,108

 

 

 

13,108

 

 

 

—

 

 

 

924

 

 

 

924

 

Certificates of deposit and time deposits

 

 

—

 

 

 

1,134

 

 

 

1,134

 

 

 

—

 

 

 

1,354

 

 

 

1,354

 

Equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mutual funds

 

 

68,434

 

 

 

—

 

 

 

68,434

 

 

 

57,367

 

 

 

—

 

 

 

57,367

 

 

$

542,447

 

 

$

82,418

 

 

$

624,865

 

 

$

364,478

 

 

$

83,776

 

 

$

448,254

 

Derivative assets

 

 

—

 

 

 

724

 

 

 

724

 

 

 

—

 

 

 

1,175

 

 

 

1,175

 

Total

 

$

542,447

 

 

$

83,142

 

 

$

625,589

 

 

$

364,478

 

 

$

84,951

 

 

$

449,429

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

 

—

 

 

 

1,732

 

 

 

1,732

 

 

 

—

 

 

 

928

 

 

 

928

 

Total

 

$

—

 

 

$

1,732

 

 

$

1,732

 

 

$

—

 

 

$

928

 

 

$

928

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Level 1)

 

 

(Level 2)

 

 

Total (1)

 

 

(Level 1)

 

 

(Level 2)

 

 

Total (1)

 

 

 

(in thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

460,742

 

 

$

—

 

 

$

460,742

 

 

$

292,780

 

 

$

971

 

 

$

293,751

 

Long-term marketable securities

 

 

81,705

 

 

 

76,571

 

 

 

158,276

 

 

 

71,698

 

 

 

54,558

 

 

 

126,256

 

Marketable securities

 

 

—

 

 

 

5,847

 

 

 

5,847

 

 

 

—

 

 

 

28,247

 

 

 

28,247

 

Prepayments

 

 

—

 

 

 

724

 

 

 

724

 

 

 

—

 

 

 

1,175

 

 

 

1,175

 

Total

 

$

542,447

 

 

$

83,142

 

 

$

625,589

 

 

$

364,478

 

 

$

84,951

 

 

$

449,429

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other accrued liabilities

 

$

—

 

 

$

1,732

 

 

$

1,732

 

 

$

—

 

 

$

928

 

 

$

928

 

     Total

 

$

—

 

 

$

1,732

 

 

$

1,732

 

 

$

—

 

 

$

928

 

 

$

928

 

 

(1)
There were no financial assets or liabilities measured using significant unobservable inputs (Level 3) as of September 27, 2026 and December 31, 2025.

 

The carrying values and fair values of Teradyne’s financial instruments at September 27, 2026, and December 31, 2025, were as follows:

 

 

 

September 27, 2026

 

 

December 31, 2025

 

 

 

Carrying Value

 

 

Fair Value

 

 

Carrying Value

 

 

Fair Value

 

 

 

(in thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

460,742

 

 

$

460,742

 

 

$

293,751

 

 

$

293,751

 

Marketable securities

 

 

164,123

 

 

 

164,123

 

 

 

154,503

 

 

 

154,503

 

Derivative assets

 

 

724

 

 

 

724

 

 

 

1,175

 

 

 

1,175

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

 

1,732

 

 

 

1,732

 

 

 

928

 

 

 

928

 

 

The fair values of accounts receivable, net, accounts payable, and borrowings drawn on the revolving credit facility approximate their carrying values.

The following table summarizes the composition of available-for-sale marketable securities at September 27, 2026:

 

 

 

September 27, 2026

 

 

 

Available-for-Sale

 

 

 

Cost

 

 

Unrealized
Gain

 

 

Unrealized
(Loss)

 

 

Fair
Market
Value

 

 

Fair Market
Value of
Investments
with Unrealized
Losses

 

 

 

(in thousands)

 

Corporate debt securities

 

$

62,028

 

 

$

7

 

 

$

(7,119

)

 

$

54,916

 

 

$

53,587

 

U.S. Treasury securities

 

 

18,785

 

 

 

—

 

 

 

(5,525

)

 

 

13,260

 

 

 

13,260

 

Non-U.S. government securities

 

 

14,206

 

 

 

—

 

 

 

(1,098

)

 

 

13,108

 

 

 

12,237

 

Debt mutual funds

 

 

13,573

 

 

 

—

 

 

 

(302

)

 

 

13,271

 

 

 

3,469

 

Certificates of deposit and time deposits

 

 

1,134

 

 

 

—

 

 

 

—

 

 

 

1,134

 

 

 

—

 

 

$

109,726

 

 

$

7

 

 

$

(14,044

)

 

$

95,689

 

 

$

82,553

 

 

Reported as follows:

 

 

 

Cost

 

 

Unrealized
Gain

 

 

Unrealized
(Loss)

 

 

Fair
Market
Value

 

 

Fair Market
Value of
Investments
with Unrealized
Losses

 

 

 

(in thousands)

 

Marketable securities

 

$

5,873

 

 

$

—

 

 

$

(26

)

 

$

5,847

 

 

$

4,713

 

Long-term marketable securities

 

 

103,853

 

 

 

7

 

 

 

(14,018

)

 

 

89,842

 

 

 

77,840

 

 

$

109,726

 

 

$

7

 

 

$

(14,044

)

 

$

95,689

 

 

$

82,553

 

 

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 September 27, 2026, the fair market value of investments with unrealized losses less than one year and greater than one year totaled $50.3 million and $32.2 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 September 27, 2026, and December 31, 2025, did not meet the criteria for impairment, and accordingly no allowance for credit losses was recorded.

The contractual maturities of investments in available-for-sale securities held at September 27, 2026, were as follows:

 

 

 

September 27, 2026

 

 

 

Cost

 

 

Fair Market
Value

 

 

 

(in thousands)

 

Due within one year

 

$

5,873

 

 

$

5,847

 

Due after 1 year through 5 years

 

 

8,341

 

 

 

8,023

 

Due after 5 years through 10 years

 

 

17,815

 

 

 

17,039

 

Due after 10 years

 

 

64,124

 

 

 

51,509

 

Total

 

$

96,153

 

 

$

82,418

 

 

Contractual maturities of investments in available-for-sale securities held at September 27, 2026, exclude debt mutual funds with a fair market value of $13.3 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 September 27, 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

 

 

 

September 27,
2026

 

 

December 31,
2025

 

 

 

(in millions)

 

Currency Hedged (Buy/Sell)

 

 

 

 

 

 

U.S. dollar/Taiwan dollar

 

 

28.1

 

 

 

27.0

 

U.S. dollar/Danish krone

 

 

15.3

 

 

 

—

 

Danish krone/Chinese yuan

 

 

8.2

 

 

 

—

 

U.S. dollar/Japanese yen

 

 

8.2

 

 

 

16.9

 

U.S. dollar/Euro

 

 

5.1

 

 

 

—

 

U.S. dollar/Korean won

 

 

3.3

 

 

 

7.7

 

U.S. dollar/British pound sterling

 

 

0.9

 

 

 

1.9

 

Singapore dollar/U.S. dollar

 

 

117.0

 

 

 

62.6

 

Philippine peso/U.S. dollar

 

 

1.7

 

 

 

1.8

 

Chinese yuan/U.S. dollar

 

 

0.4

 

 

 

0.7

 

Euro/U.S. dollar

 

 

—

 

 

 

20.4

 

Total

 

$

188.2

 

 

$

139.0

 

 

The change in the fair value of the outstanding contracts resulted in a net loss of $0.9 million and a net gain of $0.2 million at September 27, 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.

At September 27, 2026, and December 31, 2025, Teradyne had the following cash flow hedge contracts to buy and sell non-U.S. currencies for U.S. dollars with the following notional amounts:

 

 

 

Gross Notional Value

 

 

 

September 27,
2026

 

 

December 31,
2025

 

 

 

(in millions)

 

Currency Hedged (Buy/Sell)

 

 

 

 

 

 

U.S. dollar/Japanese yen

 

$

4.7

 

 

$

—

 

Total

 

$

4.7

 

 

$

—

 

 

The change in fair value of the outstanding cash flow hedge contracts resulted in a loss of $0.1 million at September 27, 2026.

The following table summarizes the fair value of derivative instruments as of September 27, 2026, and December 31, 2025:

 

 

 

Balance Sheet Location

 

September 27,
2026

 

 

December 31,
2025

 

 

 

 

 

(in thousands)

 

Derivatives not designated as hedging instruments:

 

Foreign exchange forward contracts

 

Prepayments

 

 

724

 

 

 

1,175

 

Foreign exchange forward contracts

 

Other accrued liabilities

 

 

(1,674

)

 

 

(928

)

Derivatives designated as hedging instruments:

 

Foreign exchange forward contracts

 

Other accrued liabilities

 

 

(58

)

 

 

—

 

Total derivatives

 

 

 

$

(1,008

)

 

$

247

 

 

The following table summarizes the effect of derivative instruments recognized in the statement of operations for the three and nine months ended September 27, 2026, and September 28, 2025:

 

 

 

 

 

For the Three Months
 Ended

 

 

For the Nine Months
 Ended

 

 

 

Location of (Gains) Losses
Recognized in Statement
of Operations

 

September 27,
2026

 

 

September 28,
2025

 

 

September 27,
2026

 

 

September 28,
2025

 

 

 

 

 

(in thousands)

 

 

(in thousands)

 

Derivatives not designated as hedging instruments:

 

Foreign exchange forward contracts (1)

 

Other (income) expense, net

 

$

1,379

 

 

$

218

 

 

$

3,987

 

 

$

174

 

Derivatives designated as hedging instruments:

 

Foreign exchange forward and option contracts

 

Revenue

 

 

88

 

 

 

—

 

 

 

88

 

 

 

(449

)

Total Derivatives

 

 

 

$

1,467

 

 

$

218

 

 

$

4,075

 

 

$

(275

)

 

(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 nine months ended September 27, 2026, net losses from remeasurement of monetary assets and liabilities denominated in foreign currencies were $0.3 million and $2.4 million, respectively. For the three and nine months ended September 28, 2025, net losses from remeasurement of monetary assets and liabilities denominated in foreign currencies were $2.8 million and $6.2 million, respectively.