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Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of Fair Value of Financial Assets and Liabilities Measured on Recurring Basis

The following table sets forth by fair value hierarchy Teradyne’s financial assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2022 and 2021:

		December 31, 2022
		Quoted Prices in Active Markets for Identical Instruments (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Total
		(in thousands)
Assets
Cash		$	632,417			$	—			$	—			$	632,417
Cash equivalents			161,767				60,589				—				222,356
Available for sale securities:
Corporate debt securities			—				50,856				—				50,856
U.S. Treasury securities			—				39,649				—				39,649
Commercial paper			—				7,159				—				7,159
Debt mutual funds			6,580				—				—				6,580
U.S. government agency securities			—				6,352				—				6,352
Certificates of deposit and time deposits			—				1,740				—				1,740
Non-U.S. government securities			—				535				—				535
Equity securities:
Mutual funds			37,518				—				—				37,518
Total		$	838,282			$	166,880			$	—			$	1,005,162
Derivative assets			—				86				—				86
Total		$	838,282			$	166,966			$	—			$	1,005,248
Liabilities
Derivative liabilities			—				4,215				—				4,215
Total		$	—			$	4,215			$	—			$	4,215
Reported as follows:
		(Level 1)				(Level 2)				(Level 3)				Total
		(in thousands)
Assets
Cash and cash equivalents		$	794,184			$	60,589			$	—			$	854,773
Marketable securities			—				39,612				—				39,612
Long-term marketable securities			44,098				66,679				—				110,777
Prepayments			—				86				—				86
Total		$	838,282			$	166,966			$	—			$	1,005,248
Liabilities
Other current liabilities		$	—			$	4,215			$	—			$	4,215
Total		$	—			$	4,215			$	—			$	4,215

		December 31, 2021
		Quoted Prices in Active Markets for Identical Instruments (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Total
		(in thousands)
Assets
Cash		$	628,740			$	—			$	—			$	628,740
Cash equivalents			412,212				81,247				—				493,459
Available for sale securities:
Commercial paper			—				189,620				—				189,620
U.S. Treasury securities			—				77,789				—				77,789
Corporate debt securities			—				56,901				—				56,901
Debt mutual funds			7,971				—				—				7,971
U.S. government agency securities			—				4,610				—				4,610
Certificates of deposit and time deposits			—				1,356				—				1,356
Non-U.S. government securities			—				589				—				589
Equity securities:
Mutual funds			39,253				—				—				39,253
Total		$	1,088,176			$	412,112			$	—			$	1,500,288
Derivative assets			—				92				—				92
Total		$	1,088,176			$	412,204			$	—			$	1,500,380
Liabilities
Derivative liabilities			—				118				—				118
Total		$	—			$	118			$	—			$	118
Reported as follows:
		(Level 1)				(Level 2)				(Level 3)				Total
		(in thousands)
Assets
Cash and cash equivalents		$	1,040,952			$	81,247			$	—			$	1,122,199
Marketable securities			—				244,231				—				244,231
Long-term marketable securities			47,224				86,634				—				133,858
Prepayments			—				92				—				92
Total		$	1,088,176			$	412,204			$	—			$	1,500,380
Liabilities
Other current liabilities		$	—			$	118			$	—			$	118
Total		$	—			$	118			$	—			$	118

Schedule of Changes in Fair Value of Level 3 Contingent Consideration

Changes in the fair value of Level 3 contingent consideration for the years ended December 31, 2022 and 2021 were as follows:

		Contingent Consideration
		(in thousands)
Balance at December 31, 2020		$	7,227
Fair value adjustment (1)			(7,227	)
Balance at December 31, 2021			—
Fair value adjustment			—
Balance at December 31, 2022		$	—

(1) During the year ended December 31, 2021, the fair value of contingent consideration for the earn-outs in connection with the acquisition of AutoGuide was reduced to zero, which resulted in a benefit of $7.2 million, primarily due to a decrease in forecasted revenues and earnings before interest and taxes.

Schedule of Carrying Amounts and Fair Values of Financial Instruments

The carrying amounts and fair values of Teradyne’s financial instruments at December 31, 2022 and 2021 were as follows:

		December 31, 2022								December 31, 2021
		Carrying Value				Fair Value				Carrying Value				Fair Value
		(in thousands)
Assets
Cash and cash equivalents		$	854,773			$	854,773			$	1,122,199			$	1,122,199
Marketable securities			150,389				150,389				378,089				378,089
Derivative assets			86				86				92				92
Liabilities
Derivative liabilities			4,215				4,215				118				118
Convertible debt (1)			50,115				139,007				108,426				604,648

(1) The carrying value represents the bifurcated debt component only, while the fair value is based on quoted market prices for the convertible note which includes the equity conversion features.

Schedule of Available-for-Sale Marketable Securities

The following tables summarize the composition of available-for-sale marketable securities at December 31, 2022 and 2021:

		December 31, 2022
		Available-for-Sale
		Cost				Unrealized Gain				Unrealized (Loss)				Fair Market Value				Fair Market Value of Investments with Unrealized Losses
		(in thousands)
Corporate debt securities		$	57,006			$	3			$	(6,153	)		$	50,856			$	50,667
U.S. Treasury securities			44,030				—				(4,381	)			39,649				39,649
Commercial paper			7,089				70				—				7,159				—
Debt mutual funds			6,997				—				(417	)			6,580				3,095
U.S. government agency securities			6,442				—				(90	)			6,352				6,352
Certificates of deposit and time deposits			1,740				—				—				1,740				—
Non-U.S. government securities			535				—				—				535				—
		$	123,839			$	73			$	(11,041	)		$	112,871			$	99,763

Reported as follows:

		Cost				Unrealized Gain				Unrealized (Loss)				Fair Market Value				Fair Market Value of Investments with Unrealized Losses
		(in thousands)
Marketable securities		$	39,950			$	70			$	(408	)		$	39,612			$	30,713
Long-term marketable securities			83,889				3				(10,633	)			73,259				69,050
		$	123,839			$	73			$	(11,041	)		$	112,871			$	99,763

		December 31, 2021
						Available-for-Sale
		Cost				Unrealized Gain				Unrealized (Loss)				Fair Market Value				Fair Market Value of Investments with Unrealized Losses
		(in thousands)
Commercial paper		$	189,614			$	15			$	(9	)		$	189,620			$	22,784
U.S. Treasury securities			77,707				551				(470	)			77,789				46,435
Corporate debt securities			52,266				4,863				(227	)			56,901				19,422
Debt mutual funds			7,928				43				—				7,971				—
U.S. government agency securities			4,617				5				(12	)			4,610				3,296
Certificates of deposit and time deposits			1,356				—				—				1,356				—
Non-U.S. government securities			589				—				—				589				—
		$	334,077			$	5,477			$	(718	)		$	338,836			$	91,937

Reported as follows:

		Cost				Unrealized Gain				Unrealized (Loss)				Fair Market Value				Fair Market Value of Investments with Unrealized Losses
		(in thousands)
Marketable securities		$	244,213			$	64			$	(46	)		$	244,231			$	54,798
Long-term marketable securities			89,864				5,413				(672	)			94,605				37,139
		$	334,077			$	5,477			$	(718	)		$	338,836			$	91,937

Contractual Maturities of Investments Held

The contractual maturities of investments in available-for-sale marketable securities held at December 31, 2022 were as follows:

		Cost				Fair Value
		(in thousands)
Due within one year		$	39,950			$	39,612
Due after 1 year through 5 years			33,045				31,466
Due after 5 years through 10 years			4,782				4,232
Due after 10 years			39,065				30,981
Total		$	116,842			$	106,291

Schedule of Notional Amount of Derivatives

At December 31, 2022 and 2021, 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:

		December 31, 2022												December 31, 2021
		Buy Position				Sell Position				Net Total				Buy Position				Sell Position				Net Total
		(in millions)
Japanese Yen		$	(37.1	)		$	—			$	(37.1	)		$	(31.4	)		$	—			$	(31.4	)
Taiwan Dollar			(29.2	)			—				(29.2	)			(35.1	)			—				(35.1	)
Korean Won			(6.4	)			—				(6.4	)			(4.2	)			—				(4.2	)
British Pound Sterling			(1.2	)			—				(1.2	)			(1.8	)			—				(1.8	)
Euro			—				38.4				38.4				—				44.9				44.9
Singapore Dollar			—				33.5				33.5				—				61.9				61.9
Philippine Peso			—				2.7				2.7				—				3.9				3.9
Chinese Yuan			—				2.2				2.2				—				2.8				2.8
Total		$	(73.9	)		$	76.8			$	2.9			$	(72.5	)		$	113.5			$	41.0

Schedule of Foreign Currency Cash Flow Hedges

At December 31, 2022 and 2021, 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:

		December 31, 2022												December 31, 2021
		Buy Position				Sell Position				Net Total				Buy Position				Sell Position				Net Total
		(in millions)
Japanese Yen		$	(23.4	)		$	61.2			$	37.8			$	—			$	—			$	—
Taiwan Dollar			(5.5	)			10.9				5.4				—				—				—
Total		$	(28.9	)		$	72.1			$	43.2			$	—			$	—			$	—

Schedule of Derivative Instruments in Statement of Financial Position at Fair Value

The following table summarizes the fair value of derivative instruments as of December 31, 2022 and 2021:

		Balance Sheet Location				December 31, 2022				December 31, 2021
						(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts			Prepayments			$	86			$	92
Foreign exchange forward contracts			Other current liabilities				(990	)			(118	)
Derivatives designated as hedging instruments:
Foreign exchange option contracts			Other current liabilities				(3,225	)			—
Total derivatives						$	(4,129	)		$	(26	)

Schedule of Effect of Derivative Instruments on Statement of Operations Recognized

The following table summarizes the effect of derivative instruments in the statements of operations recognized for the years ended December 31, 2022, 2021, and 2020:

		Location of (Gains) Losses Recognized in Statement of Operations		December 31, 2022				December 31, 2021				December 31, 2020
				(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts		Other (income) expense, net		$	(2,482	)		$	6,488			$	3,515
Derivatives designated as hedging instruments:
Foreign exchange option contracts		Revenue			(251	)			—				—
Total derivatives				$	(2,733	)		$	6,488			$	3,515

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