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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Schedule of Income (Loss) Before Income Taxes and Provision (Benefit) for Income Taxes from Operations | 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 |
Reconciliation of Effective Tax Rate | 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 | %
Deferred Tax Assets (Liabilities) | 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 |
Operating Loss Carryforwards | 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 |
Unrecognized Tax Benefits | 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 |

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