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Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2022

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:

		2022				2021				2020
Risk-free interest rate			1.4	%			0.2	%			1.5	%
Teradyne volatility-historical			47.1	%			43.9	%			34.9	%
NYSE Composite Index volatility-historical			22.7	%			22.9	%			11.4	%
Dividend yield			0.4	%			0.4	%			0.6	%

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:

		2022				2021				2020
Expected life (years)			4.0				5.0				5.0
Risk-free interest rate			1.6	%			0.4	%			1.5	%
Volatility-historical			43.7	%			37.8	%			32.0	%
Dividend yield			0.4	%			0.4	%			0.5	%

Stock Compensation Plan Activity

Stock compensation plan activity for the years 2022, 2021, and 2020, is as follows:

		2022				2021				2020
		(in thousands)
Restricted Stock Units:
Non-vested at January 1			1,417				1,789				2,269
Awarded			660				447				616
Vested			(709	)			(749	)			(1,028	)
Forfeited			(51	)			(70	)			(68	)
Non-vested at December 31			1,317				1,417				1,789
Stock Options:
Outstanding at January 1			171				216				319
Granted			42				34				56
Exercised			(25	)			(78	)			(159	)
Forfeited			—				(1	)			—
Expired			—				—				—
Outstanding at December 31			188				171				216
Vested and expected to vest at December 31			188				171				216
Exercisable at December 31			69				30				27

Share Based Compensation Total Shares Available

Total shares available for the years 2022, 2021, and 2020:

		2022				2021				2020
		(in thousands)
Shares available:
Available for grant at January 1			5,713				6,123				6,727
Options granted			(42	)			(34	)			(56	)
Options forfeited			—				1				—
Restricted stock units awarded			(660	)			(447	)			(616	)
Restricted stock units forfeited			51				70				68
Available for grant at December 31			5,062				5,713				6,123

Weighted-Average Restricted Stock Unit Award Date Fair Value

Weighted average restricted stock unit award date fair value information for the years 2022, 2021, and 2020, is as follows:

		2022				2021				2020
Non-vested at January 1		$	67.97			$	47.84			$	35.58
Awarded			108.74				115.51				72.76
Vested			54.27				43.99				31.53
Forfeited			85.71				65.52				45.36
Non-vested at December 31		$	88.71			$	67.97			$	47.84

Restricted Stock Unit Awards Aggregate Intrinsic Value

Restricted stock unit awards aggregate intrinsic value information at December 31 for the years 2022, 2021, and 2020 is as follows:

		2022				2021				2020
		(in thousands)
Vested		$	95,408			$	101,679			$	71,582
Outstanding			115,087				231,763				214,509
Expected to vest			108,666				231,246				210,301

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 2022, 2021, and 2020 is as follows:

		2022				2021				2020
Outstanding			0.99				0.89				0.96
Expected to vest			0.99				0.89				0.96

Weighted Average Stock Options Exercise Price

Weighted average stock options exercise price information for the year ended December 31, 2022 is as follows:

		2022
Outstanding at January 1		$	62.13
Options granted			112.12
Options exercised			37.13
Options forfeited			—
Options cancelled			—
Outstanding at December 31			76.52
Exercisable at December 31			55.90

Stock Option Aggregate Intrinsic Value Information

Stock option aggregate intrinsic value information for the years ended December 31, 2022, 2021, and 2020 is as follows:

		2022				2021				2020
		(in thousands)
Exercised		$	2,030			$	6,345			$	9,682
Outstanding			3,963				17,356				16,083
Expected to vest			1,583				13,500				13,499
Vested and exercisable			2,380				3,856				2,584

Stock Options Weighted Average Remaining Contractual Terms

Stock options weighted average remaining contractual terms (in years) information at December 31, for the years 2022, 2021, and 2020 is as follows:

		2022				2021				2020
Outstanding			4.2				4.4				4.6
Expected to vest			4.8				4.8				4.9
Vested and exercisable			3.1				2.5				2.5

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, 2022, 2021, and 2020:

		2022				2021				2020
		(in thousands)
Cost of revenues		$	4,050			$	4,196			$	4,227
Engineering and development			9,992				9,783				12,039
Selling and administrative			34,186				31,664				28,640
Stock-based compensation			48,228				45,643				44,906
Income tax benefit			(11,493	)			(14,389	)			(13,060	)
Total stock-based compensation expense after income taxes		$	36,735			$	31,254			$	31,846

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