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Stock-Based Compensation (Tables) | 12 Months Ended
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Dec. 31, 2020
Schedule of Estimated Fair Value of TSR Performance-Based Restricted Stock Unit Awards Assumptions | The fair value was estimated using the Monte Carlo simulation model with the following assumptions:
|  | 2020 |  |  | 2019 |  |  | 2018 |
Risk-free interest rate |  |  | 1.5 | % |  |  | 2.6 | % |  |  | 2.2 | %
Teradyne volatility-historical |  |  | 34.9 | % |  |  | 31.9 | % |  |  | 26.8 | %
NYSE Composite Index volatility-historical |  |  | 11.4 | % |  |  | 11.9 | % |  |  | 12.4 | %
Dividend yield |  |  | 0.6 | % |  |  | 1.0 | % |  |  | 0.8 | %
Fair Value of Stock Options Using Assumptions | The fair value of stock options was estimated using the Black-Scholes option-pricing model with the following assumptions:
|  | 2020 |  |  | 2019 |  |  | 2018 |
Expected life (years) |  |  | 5.0 |  |  |  | 5.0 |  |  |  | 5.0 |
Risk-free interest rate |  |  | 1.5 | % |  |  | 2.5 | % |  |  | 2.4 | %
Volatility-historical |  |  | 32.0 | % |  |  | 30.1 | % |  |  | 26.4 | %
Dividend yield |  |  | 0.5 | % |  |  | 1.0 | % |  |  | 0.8 | %
Stock Compensation Plan Activity | Stock compensation plan activity for the years 2020, 2019, and 2018, is as follows:
|  | 2020 |  |  | 2019 |  |  | 2018 |
|  | (in thousands) |
Restricted Stock Units: |  |  |  |  |  |  |  |  |  |  |  |
Non-vested at January 1 |  |  | 2,269 |  |  |  | 2,454 |  |  |  | 3,174 |
Awarded |  |  | 616 |  |  |  | 1,139 |  |  |  | 790 |
Vested |  |  | (1,028 | ) |  |  | (1,237 | ) |  |  | (1,382 | )
Forfeited |  |  | (68 | ) |  |  | (87 | ) |  |  | (128 | )
Non-vested at December 31 |  |  | 1,789 |  |  |  | 2,269 |  |  |  | 2,454 |
Stock Options: |  |  |  |  |  |  |  |  |  |  |  |
Outstanding at January 1 |  |  | 319 |  |  |  | 506 |  |  |  | 531 |
Granted |  |  | 56 |  |  |  | 102 |  |  |  | 69 |
Exercised |  |  | (159 | ) |  |  | (280 | ) |  |  | (94 | )
Forfeited |  |  | — |  |  |  | (7 | ) |  |  | — |
Expired |  |  | — |  |  |  | (2 | ) |  |  | — |
Outstanding at December 31 |  |  | 216 |  |  |  | 319 |  |  |  | 506 |
Vested and expected to vest at December 31 |  |  | 216 |  |  |  | 319 |  |  |  | 506 |
Exercisable at December 31 |  |  | 27 |  |  |  | 85 |  |  |  | 256 |
Share Based Compensation Total Shares Available | Total shares available for the years 2020, 2019, and 2018:
|  | 2020 |  |  | 2019 |  |  | 2018 |
|  | (in thousands) |
Shares available: |  |  |  |  |  |  |  |  |  |  |  |
Available for grant at January 1 |  |  | 6,727 |  |  |  | 7,874 |  |  |  | 8,605 |
Options granted |  |  | (56 | ) |  |  | (102 | ) |  |  | (69 | )
Options forfeited |  |  | — |  |  |  | 7 |  |  |  |  |
Restricted stock units awarded |  |  | (616 | ) |  |  | (1,139 | ) |  |  | (790 | )
Restricted stock units forfeited |  |  | 68 |  |  |  | 87 |  |  |  | 128 |
Available for grant at December 31 |  |  | 6,123 |  |  |  | 6,727 |  |  |  | 7,874 |
Weighted-Average Restricted Stock Unit Award Date Fair Value | Weighted average restricted stock unit award date fair value information for the years 2020, 2019, and 2018, is as follows:
|  | 2020 |  |  | 2019 |  |  | 2018 |
Non-vested at January 1 |  | $ | 35.58 |  |  | $ | 29.22 |  |  | $ | 21.71 |
Awarded |  |  | 72.76 |  |  |  | 39.08 |  |  |  | 45.99 |
Vested |  |  | 31.53 |  |  |  | 23.59 |  |  |  | 20.20 |
Forfeited |  |  | 45.36 |  |  |  | 35.60 |  |  |  | 24.67 |
Non-vested at December 31 |  | $ | 47.84 |  |  | $ | 35.58 |  |  | $ | 29.22 |
Restricted Stock Unit Awards Aggregate Intrinsic Value | Restricted stock unit awards aggregate intrinsic value information at December 31 for the years 2020, 2019, and 2018 is as follows:
|  | 2020 |  |  | 2019 |  |  | 2018 |
|  | (in thousands) |
Vested |  | $ | 71,582 |  |  | $ | 46,110 |  |  | $ | 63,688 |
Outstanding |  |  | 214,509 |  |  |  | 154,752 |  |  |  | 77,015 |
Expected to vest |  |  | 210,301 |  |  |  | 152,374 |  |  |  | 77,187 |
Restricted Stock Units Weighted Average Remaining Contractual Terms | Restricted stock units weighted average remaining contractual terms (in years) information at December 31 for the years 2020, 2019, and 2018 is as follows:
|  | 2020 |  |  | 2019 |  |  | 2018 |
Outstanding |  |  | 0.96 |  |  |  | 1.02 |  |  |  | 0.92 |
Expected to vest |  |  | 0.96 |  |  |  | 1.02 |  |  |  | 0.91 |
Weighted Average Stock Options Exercise Price | Weighted average stock options exercise price information for the year ended December 31, 2020 is as follows:
|  | 2020 |
Outstanding at January 1 |  | $ | 29.91 |
Options granted |  |  | 72.61 |
Options exercised |  |  | 23.77 |
Options forfeited |  |  | — |
Options cancelled |  |  | — |
Outstanding at December 31 |  |  | 45.59 |
Exercisable at December 31 |  |  | 23.51 |
Stock Option Aggregate Intrinsic Value Information | Stock option aggregate intrinsic value information for the years ended December 31, 2020, 2019, and 2018 is as follows:
|  | 2020 |  |  | 2019 |  |  | 2018 |
|  | (in thousands) |
Exercised |  | $ | 9,682 |  |  | $ | 9,232 |  |  | $ | 2,960 |
Outstanding |  |  | 16,083 |  |  |  | 12,218 |  |  |  | 7,359 |
Vested and expected to vest |  |  | 13,499 |  |  |  | 7,701 |  |  |  | 7,359 |
Exercisable |  |  | 2,584 |  |  |  | 4,517 |  |  |  | 5,905 |
Stock Options Weighted Average Remaining Contractual Terms | Stock options weighted average remaining contractual terms (in years) information at December 31, for the years 2020, 2019, and 2018 is as follows:
|  | 2020 |  |  | 2019 |  |  | 2018 |
Outstanding |  |  | 4.6 |  |  |  | 4.2 |  |  |  | 3.6 |
Vested and expected to vest |  |  | 4.9 |  |  |  | 5.0 |  |  |  | 3.6 |
Exercisable |  |  | 2.5 |  |  |  | 2.1 |  |  |  | 2.4 |
Effect to Income (Loss) from Operations for Recording Stock-Based Compensation | The following table provides the effect to income from operations for recording stock-based compensation for the years ended December 31, 2020, 2019, and 2018:
|  | 2020 |  |  | 2019 |  |  | 2018 |
|  | (in thousands) |
Cost of revenues |  | $ | 4,227 |  |  | $ | 3,480 |  |  | $ | 3,129 |
Engineering and development |  |  | 12,039 |  |  |  | 9,913 |  |  |  | 9,181 |
Selling and administrative |  |  | 28,640 |  |  |  | 24,504 |  |  |  | 21,267 |
Stock-based compensation |  |  | 44,906 |  |  |  | 37,897 |  |  |  | 33,577 |
Income tax benefit |  |  | (13,060 | ) |  |  | (8,360 | ) |  |  | (12,036 | )
Total stock-based compensation expense after income taxes |  | $ | 31,846 |  |  | $ | 29,537 |  |  | $ | 21,541 |

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