XML 44 R32.htm IDEA: XBRL DOCUMENT
v3.25.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | T. INCOME TAXES The components of income before income taxes and the provision (benefit) for income taxes as shown in the consolidated statements of operations were as follows:
|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | (in thousands) |
Income before income taxes: |  |  |  |  |  |  |  |  |
U.S. |  | $ | 231,346 |  |  | $ | 307,997 |  |  | $ | 385,968 |
Non-U.S. |  |  | 377,740 |  |  |  | 217,575 |  |  |  | 454,417 |
|  | $ | 609,086 |  |  | $ | 525,572 |  |  | $ | 840,385 |
Provision (benefit) for income taxes: |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |
U.S. Federal |  | $ | 40,296 |  |  | $ | 58,063 |  |  | $ | 86,692 |
Non-U.S. |  |  | 62,851 |  |  |  | 54,037 |  |  |  | 74,204 |
State |  |  | 2,716 |  |  |  | 2,362 |  |  |  | 2,681 |
|  |  | 105,863 |  |  |  | 114,462 |  |  |  | 163,577 |
Deferred: |  |  |  |  |  |  |  |  |
U.S. Federal |  |  | (33,195 | ) |  |  | (27,459 | ) |  |  | (36,739 | )
Non-U.S. |  |  | (9,003 | ) |  |  | (8,584 | ) |  |  | 1,232 |
State |  |  | (4,162 | ) |  |  | (1,599 | ) |  |  | (3,186 | )
|  |  | (46,360 | ) |  |  | (37,642 | ) |  |  | (38,693 | )
Total provision for income taxes: |  | $ | 59,503 |  |  | $ | 76,820 |  |  | $ | 124,884 |
Income tax expense for 2024, 2023 and 2022 totaled $59.5 million, $76.8 million, and $124.9 million, respectively. The effective tax rate for 2024, 2023 and 2022 was 9.8%, 14.6% and 14.9%, respectively. At December 31, 2024, Teradyne’s remaining tax liability resulting from the U.S. one-time transition tax on the mandatory deemed repatriation of foreign earnings amounts to $44.3 million. Teradyne will pay approximately $19.7 million related to the transition tax in 2025, and $24.6 million in one to three years. Teradyne has made an accounting policy election to account for global intangible low-taxed income (“GILTI”) as a component of tax expense in the period in which Teradyne is subject to the rules and therefore did not provide any deferred tax impacts of GILTI in its consolidated financial statements. The decrease in the effective tax rate from 2023 to 2024 is primarily attributable to a shift in the geographic distribution of income which resulted in a reduction in income in higher tax rate foreign jurisdictions, the benefit of the release of reserves for uncertain tax positions as a result of the expiration of statute and a decrease in non-deductible officer’s compensation. These rate benefits were partially offset by reductions in benefits from foreign tax credits, U.S. research and development credits and the U.S. foreign derived intangible income deduction. The decrease in the effective tax rate from 2022 to 2023 is primarily attributable to benefit from tax credits and the U.S. foreign derived intangible income deduction. These decreases in expense were partially offset by a shift in the geographic distribution of income, which increased the income subject to taxation in higher tax rate jurisdictions relative to lower tax rate jurisdictions and a reduction in benefit from equity compensation. A reconciliation of the effective tax rate for the years 2024, 2023 and 2022 is as follows:
|  | 2024 |  |  | 2023 |  |  | 2022 |
U.S. statutory federal tax rate |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | %
U.S. global intangible low-taxed income |  |  | 1.2 |  |  |  | 0.8 |  |  |  | 1.2 |
Non-deductible officers’ compensation |  |  | 0.3 |  |  |  | 1.1 |  |  |  | 1.3 |
Equity compensation |  |  | — |  |  |  | (0.4 | ) |  |  | (1.1 | )
U.S. foreign derived intangible income |  |  | (3.1 | ) |  |  | (3.9 | ) |  |  | (3.1 | )
U.S. research and development credit |  |  | (3.0 | ) |  |  | (4.2 | ) |  |  | (1.8 | )
Foreign taxes |  |  | (2.7 | ) |  |  | 2.5 |  |  |  | (1.9 | )
Uncertain tax positions |  |  | (1.9 | ) |  |  | 0.7 |  |  |  | 0.1 |
Foreign tax credits |  |  | (1.3 | ) |  |  | (3.3 | ) |  |  | (1.0 | )
State income taxes, net of federal tax benefit |  |  | (0.1 | ) |  |  | 0.1 |  |  |  | (0.1 | )
Other, net |  |  | (0.6 | ) |  |  | 0.2 |  |  |  | 0.3 |
|  |  | 9.8 | % |  |  | 14.6 | % |  |  | 14.9 | %
Teradyne qualifies for a tax holiday in Singapore by fulfilling the requirements of an agreement with the Singapore Economic Development Board under which certain headcount and spending requirements must be met. The tax savings attributable to the Singapore tax holiday for the years ended December 31, 2024, 2023 and 2022 were $17.1 million or $0.10 per diluted share, $1.4 million or $0.01 per diluted share, and $16.0 million or $0.09 per diluted share, respectively. In November 2020, Teradyne entered into an agreement with the Singapore Economic Development Board which extended our Singapore tax holiday under substantially similar terms to the agreement which expired on December 31, 2020. The new tax holiday is scheduled to expire on December 31, 2025. Significant components of Teradyne’s deferred tax assets (liabilities) as of December 31, 2024 and 2023 were as follows:
|  | 2024 |  |  | 2023 |
|  | (in thousands) |
Deferred tax assets: |  |  |  |  |  |
Tax credits |  | $ | 121,635 |  |  | $ | 112,571 |
Research and development |  |  | 116,746 |  |  |  | 82,571 |
Pension liabilities |  |  | 25,202 |  |  |  | 24,997 |
Accruals |  |  | 23,946 |  |  |  | 25,644 |
Inventory valuations |  |  | 18,688 |  |  |  | 19,289 |
Lease liability |  |  | 17,828 |  |  |  | 21,167 |
Net operating loss carryforwards |  |  | 16,894 |  |  |  | 5,737 |
Deferred revenue |  |  | 14,562 |  |  |  | 13,807 |
Equity compensation |  |  | 8,901 |  |  |  | 7,179 |
Vacation accrual |  |  | 6,847 |  |  |  | 6,096 |
Intangible assets |  |  | 4,720 |  |  |  | 2,323 |
Investment impairment |  |  | 3,328 |  |  |  | 3,292 |
Marketable securities |  |  | — |  |  |  | 128 |
Other |  |  | 322 |  |  |  | 953 |
Gross deferred tax assets |  |  | 379,619 |  |  |  | 325,754 |
Less: valuation allowance |  |  | (117,254 | ) |  |  | (109,251 | )
Total deferred tax assets |  | $ | 262,365 |  |  | $ | 216,503 |
Deferred tax liabilities: |  |  |  |  |  |
Depreciation |  | $ | (18,788 | ) |  | $ | (16,681 | )
Right of use assets |  |  | (16,257 | ) |  |  | (19,016 | )
Contingent consideration |  |  | (5,270 | ) |  |  | (5,214 | )
Marketable securities |  |  | (650 | ) |  |  | — |
Total deferred tax liabilities |  | $ | (40,965 | ) |  | $ | (40,911 | )
Net deferred assets |  | $ | 221,400 |  |  | $ | 175,592 |
As of December 31, 2024 and 2023, Teradyne evaluated the likelihood that it would realize deferred income taxes to offset future taxable income and concluded that it is more likely than not that the majority of its deferred tax assets will be realized through consideration of both the positive and negative evidence. At December 31, 2024 and 2023, Teradyne maintained a valuation allowance for certain deferred tax assets of $117.3 million and $109.3 million, respectively, primarily related to state net operating losses and state tax credit carryforwards, due to the uncertainty regarding their realization. Adjustments could be required in the future if Teradyne estimates that the amount of deferred tax assets to be realized is more or less than the net amount recorded. At December 31, 2024, Teradyne had tax effected operating loss carryforwards that expire in the following years:
|  | State Operating Loss Carryforwards |  |  | Foreign Operating Loss Carryforwards |
|  | (in thousands) |
2025 |  | $ | 4 |  |  | $ | — |
2026 |  |  | — |  |  |  | — |
2027 |  |  | — |  |  |  | — |
2028 |  |  | 10 |  |  |  | 80 |
2029 |  |  | 49 |  |  |  | 465 |
2030-2034 |  |  | 62 |  |  |  | 34 |
2035-2039 |  |  | 37 |  |  |  | — |
Beyond 2039 |  |  | 19 |  |  |  | — |
Non-expiring |  |  | 54 |  |  |  | 16,079 |
Total |  | $ | 235 |  |  | $ | 16,658 |
Teradyne has approximately $158.2 million of tax credit carryforwards including federal business tax credits of approximately $4.3 million which expire in 2028 through 2034, and state tax credits of $153.9 million, of which $81.5 million do not expire and the remainder expire in the years 2025 through 2043. Teradyne’s gross unrecognized tax benefits for the years ended December 31, 2024, 2023 and 2022 were as follows:
|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | (in thousands) |
Beginning balance as of January 1 |  | $ | 18,606 |  |  | $ | 15,608 |  |  | $ | 14,465 |
Additions: |  |  |  |  |  |  |  |  |
Tax positions for current year |  |  |  |  |  | — |  |  |  | 1,398 |
Tax positions for prior years |  |  |  |  |  | 3,024 |  |  |  | 13 |
Reductions: |  |  |  |  |  |  |  |  |
Tax positions for prior years |  |  | (2,696 | ) |  |  | (26 | ) |  |  | (56 | )
Expiration of statutes |  |  | (8,247 | ) |  |  | — |  |  |  | (212 | )
Ending balance as of December 31 |  | $ | 7,663 |  |  | $ | 18,606 |  |  | $ | 15,608 |
Current year reductions primarily relate to foreign transfer pricing and research credits. Of the $7.7 million of unrecognized tax benefits as of December 31, 2024, $2.3 million would impact the consolidated income tax rate if ultimately recognized. The remaining $5.4 million would impact deferred taxes if recognized. As of December 31, 2024, Teradyne estimates that it is reasonably possible that the balance of unrecognized tax benefits may decrease approximately $0.7 million in the next twelve months as a result of a lapse of statutes of limitation. The estimated decrease relates to federal research credits. Teradyne records all interest and penalties related to income taxes as a component of income tax expense. Accrued interest and penalties related to income tax items at December 31, 2024 and 2023 amounted to $0.3 million and $1.3 million, respectively. For the years ended December 31, 2024, 2023 and 2022, benefit of $1.0 million, expense of $0.9 million, and expense of $0.1 million, respectively, was recorded for interest and penalties related to income tax items. Teradyne is subject to U.S. federal income tax, as well as income tax in multiple state, local and foreign jurisdictions. As of December 31, 2024, all material state and local income tax matters have been concluded through 2019, all material federal income tax matters have been concluded through 2020 and all material foreign income tax matters have been concluded through 2017. However, in some jurisdictions, including the United States, operating losses and tax credits may be subject to adjustment until such time as they are utilized and the year of utilization is closed to adjustment. As of December 31, 2024, Teradyne is not permanently reinvested with respect to the unremitted earnings of non-U.S. subsidiaries to the extent that those earnings exceed local statutory and operational requirements. Remittance of those earnings is not expected to result in material income tax. On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law. The IRA introduced a 15% alternative minimum tax based on the financial statement income of certain large corporations (“CAMT”), effective January 1, 2023. Teradyne currently does not expect the CAMT to have a material impact on its financial results. The Organization for Economic Cooperation and Development (the “OECD”) has introduced a framework to implement a global minimum tax of 15% for certain multinational companies, referred to as Pillar Two. While it is uncertain whether the United States will enact legislation to adopt Pillar Two, certain countries in which Teradyne operates have enacted Pillar Two legislation, and other countries are in the process of introducing draft Pillar Two legislation. Teradyne is closely monitoring these developments and evaluating the potential future impact on our effective tax rate. As of December 31, 2024, the effective tax rate impact from Pillar Two was not material to our consolidated financial statements.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income tax. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 231 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482663/740-10-55-231 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12C -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12B -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147477891/740-270-50-1 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480990/946-20-50-13 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/740/tableOfContent Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-14 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-21 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-17 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration