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Financial Instruments (Tables)

6 Months Ended

Jul. 02, 2023

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 July 2, 2023 and December 31, 2022.

		July 2, 2023
		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		$	311,803			$	—			$	—			$	311,803
Cash equivalents			290,548				10,857				—				301,405
Available-for-sale securities:
U.S. Treasury securities			—				52,238				—				52,238
Corporate debt securities			—				51,608				—				51,608
Commercial paper			—				30,882				—				30,882
Debt mutual funds			7,739				—				—				7,739
Certificates of deposit and time deposits			—				6,699				—				6,699
U.S. government agency securities			—				6,475				—				6,475
Non-U.S. government securities			—				544				—				544
Equity securities:
Mutual funds			43,699				—				—				43,699
		$	653,789			$	159,303			$	—			$	813,092
Derivative assets			—				5,819				—				5,819
Total		$	653,789			$	165,122			$	—			$	818,911
Liabilities
Derivative liabilities		$	—			$	994			$	—			$	994
Total		$	—			$	994			$	—			$	994
Reported as follows:
		(Level 1)				(Level 2)				(Level 3)				Total
		(in thousands)
Assets
Cash and cash equivalents		$	602,351			$	10,857			$	—			$	613,208
Marketable securities			—				95,199				—				95,199
Long-term marketable securities			51,438				53,247				—				104,685
Prepayments			—				5,819				—				5,819
Total		$	653,789			$	165,122			$	—			$	818,911
Liabilities			.
Other current liabilities		$	—			$	994			$	—			$	994
Total		$	—			$	994			$	—			$	994

		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
		$	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

Schedule of Carrying Amounts and Fair Values of Financial Instruments

The carrying amounts and fair values of Teradyne’s financial instruments at July 2, 2023 and December 31, 2022, were as follows:

		July 2, 2023								December 31, 2022
		Carrying Value				Fair Value				Carrying Value				Fair Value
		(in thousands)
Assets
Cash and cash equivalents		$	613,208			$	613,208			$	854,773			$	854,773
Marketable securities			199,884				199,884				150,389				150,389
Derivative assets			5,819				5,819				86				86
Liabilities
Derivative liabilities			994				994				4,215				4,215
Convertible debt			32,806				115,778				50,115				139,007

Schedule of Available-for-Sale Marketable Securities

The following table summarizes the composition of available-for-sale marketable securities at July 2, 2023:

		July 2, 2023
		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		$	56,107			$	2			$	(3,871	)		$	52,238			$	42,716
Corporate debt securities			56,680				12				(5,084	)			51,608				50,455
Commercial paper			30,311				581				(10	)			30,882				19,840
Debt mutual funds			8,104				—				(365	)			7,739				3,161
Certificates of deposit and time deposits			6,699				—				—				6,699				—
U.S. government agency securities			6,520				—				(45	)			6,475				6,475
Non-U.S. government securities			544				—				—				544				—
		$	164,965			$	595			$	(9,375	)		$	156,185			$	122,647

Reported as follows:

		Cost				Unrealized Gain				Unrealized (Loss)				Fair Market Value				Fair Market Value of Investments with Unrealized Losses
		(in thousands)
Marketable securities		$	95,482			$	581			$	(864	)		$	95,199			$	68,121
Long-term marketable securities			69,483				14				(8,511	)			60,986				54,526
		$	164,965			$	595			$	(9,375	)		$	156,185			$	122,647

The following table summarizes the composition of available-for-sale marketable securities at December 31, 2022:

		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

Contractual Maturities of Investments Held

The contractual maturities of investments in available-for-sale securities held at July 2, 2023, were as follows:

		July 2, 2023
		Cost				Fair Market Value
		(in thousands)
Due within one year		$	95,482			$	95,199
Due after 1 year through 5 years			17,131				16,467
Due after 5 years through 10 years			6,012				5,559
Due after 10 years			38,236				31,221
Total		$	156,861			$	148,446

Schedule of Notional Amount of Derivatives

At July 2, 2023 and December 31, 2022, 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:

		Net Notional Value
		July 2, 2023				December 31, 2022
		(in millions)
Currency Hedged (Buy/Sell)
U.S. dollar/Japanese yen		$	66.3			$	37.1
U.S. dollar/Taiwan dollar			22.3				29.2
U.S. dollar/Korean won			8.1				6.4
U.S. dollar/British pound sterling			0.9				1.2
Euro/U.S. dollar			24.5				38.4
Singapore dollar/U.S. dollar			22.0				34
Philippine peso/U.S. dollar			2.5				2.7
Chinese yuan/U.S. dollar			1.8				2.2
Danish krone/U.S. dollar			0.6				—
Total		$	149.0			$	150.7

Schedule of Foreign Currency Cash Flow Hedges

At July 2, 2023 and December 31, 2022, 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:

		Net Notional Value
		July 2, 2023				December 31, 2022
		(in millions)
Currency Hedged (Buy/Sell)
Japanese yen/U.S. dollar		$	52.8			$	23.4
Taiwan dollar/U.S. dollar			—				5.5
U.S. dollar/Japanese yen			—				61.2
U.S. dollar/Taiwan dollar			—				10.9
Total		$	52.8			$	101.0

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

The following table summarizes the fair value of derivative instruments as of July 2, 2023 and December 31, 2022:

		Balance Sheet Location		July 2, 2023				December 31, 2022
				(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts		Prepayments		$	2,138			$	86
Foreign exchange forward contracts		Other current liabilities			(994	)			(990	)
Derivatives designated as hedging instruments:
Foreign exchange forward contracts		Prepayments			3,681				—
Foreign exchange option contracts		Other current liabilities			—				(3,225	)
Total derivatives				$	4,825			$	(4,129	)

Schedule of Effect of Derivative Instruments on Statement of Operations Recognized

The following table summarizes the effect of derivative instruments recognized in the statement of operations for the three and six months ended July 2, 2023 and July 3, 2022:

				For the Three Months Ended								For the Six Months Ended
		Location of (Gains) Losses Recognized in Statement of Operations		July 2, 2023				July 3, 2022				July 2, 2023				July 3, 2022
				(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts		Other (income) expense, net		$	(4,040	)		$	(1,703	)		$	(2,781	)		$	(3,455	)
Derivatives designated as hedging instruments:
Foreign exchange option contracts		Revenue			414				—				1,952				—
Total Derivatives				$	(3,626	)		$	(1,703	)		$	(829	)		$	(3,455	)

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