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Financial Instruments
 9 Months Ended
Sep. 28, 2025
Fair Value Disclosures [Abstract]  
Financial Instruments

I. FINANCIAL INSTRUMENTS

Cash Equivalents

Teradyne considers all highly liquid investments with original maturities of three months or less at the date of acquisition to be cash equivalents.

Marketable Securities

Teradyne’s equity and debt mutual funds are classified as Level 1 and available-for-sale debt securities are classified as Level 2. The vast majority of Level 2 securities are fixed income securities priced by second party pricing vendors. These pricing vendors utilize the most recent observable market information in pricing these securities or, if specific prices are not available, use other observable inputs like market transactions involving identical or comparable securities.

During the three and nine months ended September 28, 2025, and September 29, 2024, there were no transfers in or out of Level 1, Level 2, or Level 3 financial instruments.

 

 

 

For the Three Months
 Ended

 

 

For the Nine Months
 Ended

 

 

 

September 28,
2025

 

 

September 29,
2024

 

 

September 28,
2025

 

 

September 29,
2024

 

 

 

(in millions)

 

 

(in millions)

 

Realized gains and losses included in 'Other (income) expense, net' in the condensed consolidated statement of operations

 

 

 

 

 

 

 

 

 

 

 

 

Realized gains

 

$

0.7

 

 

$

0.8

 

 

$

1.8

 

 

$

2.1

 

Realized losses

 

 

—

 

 

 

—

 

 

 

1.3

 

 

 

0.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains and losses on equity securities included in 'Other (income) expense, net' in the condensed consolidated statement of operations

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains on equity securities

 

 

3.1

 

 

 

2.2

 

 

 

7.4

 

 

 

5.4

 

Unrealized losses on equity securities

 

 

0.1

 

 

 

—

 

 

 

3.2

 

 

 

—

 

Unrealized gains and losses on available-for-sale debt securities are included in 'Accumulated other comprehensive income (loss)' in the condensed consolidated balance sheet.

The cost of securities sold is based on average cost.

The following tables set forth by fair value hierarchy Teradyne’s financial assets and liabilities that were measured at fair value on a recurring basis as of September 28, 2025, and December 31, 2024.

 

 

 

September 28, 2025

 

 

 

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

 

$

180,730

 

 

$

—

 

 

$

—

 

 

$

180,730

 

Cash equivalents

 

 

91,970

 

 

 

—

 

 

 

—

 

 

 

91,970

 

Available-for-sale securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

 

—

 

 

 

44,759

 

 

 

—

 

 

 

44,759

 

Corporate debt securities

 

 

—

 

 

 

36,748

 

 

 

—

 

 

 

36,748

 

Debt mutual funds

 

 

14,766

 

 

 

—

 

 

 

—

 

 

 

14,766

 

Certificates of deposit and time deposits

 

 

—

 

 

 

1,613

 

 

 

—

 

 

 

1,613

 

U.S. government agency securities

 

 

—

 

 

 

1,098

 

 

 

—

 

 

 

1,098

 

Non-U.S. government securities

 

 

—

 

 

 

937

 

 

 

—

 

 

 

937

 

Equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

Mutual funds

 

 

54,754

 

 

 

—

 

 

 

—

 

 

 

54,754

 

 

$

342,220

 

 

$

85,155

 

 

$

—

 

 

$

427,375

 

Derivative assets

 

 

—

 

 

 

310

 

 

 

—

 

 

 

310

 

Total

 

$

342,220

 

 

$

85,465

 

 

$

—

 

 

$

427,685

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

 

—

 

 

 

1,129

 

 

 

—

 

 

$

1,129

 

Total

 

$

—

 

 

$

1,129

 

 

$

—

 

 

$

1,129

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

Total

 

 

 

(in thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

272,700

 

 

$

—

 

 

$

—

 

 

$

272,700

 

       Long-term marketable securities

 

 

69,520

 

 

 

60,138

 

 

 

-

 

 

 

129,658

 

Marketable securities

 

 

—

 

 

 

25,017

 

 

 

—

 

 

 

25,017

 

Prepayments

 

 

—

 

 

 

310

 

 

 

—

 

 

 

310

 

Total

 

$

342,220

 

 

$

85,465

 

 

$

—

 

 

$

427,685

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Other current liabilities

 

$

—

 

 

$

1,129

 

 

$

—

 

 

$

1,129

 

     Total

 

$

—

 

 

$

1,129

 

 

$

—

 

 

$

1,129

 

 

 

 

 

December 31, 2024

 

 

 

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

 

$

261,176

 

 

$

—

 

 

$

—

 

 

$

261,176

 

Cash equivalents

 

 

283,037

 

 

 

9,141

 

 

 

—

 

 

 

292,178

 

Available-for-sale securities:

 

 

 

 

 

 

 

 

 

 

 

 

            U.S. Treasury securities

 

 

—

 

 

 

44,942

 

 

 

—

 

 

 

44,942

 

Corporate debt securities

 

 

—

 

 

 

35,696

 

 

 

—

 

 

 

35,696

 

Certificates of deposit and time deposits

 

 

—

 

 

 

21,689

 

 

 

—

 

 

 

21,689

 

Debt mutual funds

 

 

8,951

 

 

 

—

 

 

 

—

 

 

 

8,951

 

U.S. government agency securities

 

 

—

 

 

 

3,970

 

 

 

—

 

 

 

3,970

 

Non-U.S. government securities

 

 

—

 

 

 

773

 

 

 

—

 

 

 

773

 

Equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

Mutual Funds

 

 

54,412

 

 

 

—

 

 

 

—

 

 

 

54,412

 

 

$

607,576

 

 

$

116,211

 

 

$

—

 

 

$

723,787

 

Derivative assets

 

 

—

 

 

 

1,665

 

 

 

—

 

 

 

1,665

 

Total

 

$

607,576

 

 

$

117,876

 

 

$

—

 

 

$

725,452

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

 

—

 

 

 

1,324

 

 

 

—

 

 

 

1,324

 

Total

 

$

—

 

 

$

1,324

 

 

$

—

 

 

$

1,324

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

Total

 

 

 

(in thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

544,213

 

 

$

9,141

 

 

$

—

 

 

$

553,354

 

Marketable securities

 

 

—

 

 

 

46,312

 

 

 

—

 

 

 

46,312

 

Long-term marketable securities

 

 

63,363

 

 

 

60,758

 

 

 

—

 

 

 

124,121

 

Prepayments

 

 

—

 

 

 

1,665

 

 

 

—

 

 

 

1,665

 

Total

 

$

607,576

 

 

$

117,876

 

 

$

—

 

 

$

725,452

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Other current liabilities

 

$

—

 

 

$

1,324

 

 

$

—

 

 

$

1,324

 

Total

 

$

—

 

 

$

1,324

 

 

$

—

 

 

$

1,324

 

 

The carrying amounts and fair values of Teradyne’s financial instruments at September 28, 2025, and December 31, 2024, were as follows:

 

 

 

September 28, 2025

 

 

December 31, 2024

 

 

 

Carrying Value

 

 

Fair Value

 

 

Carrying Value

 

 

Fair Value

 

 

 

(in thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

272,700

 

 

$

272,700

 

 

$

553,354

 

 

$

553,354

 

Marketable securities

 

 

154,675

 

 

 

154,675

 

 

 

170,433

 

 

 

170,433

 

Derivative assets

 

 

310

 

 

 

310

 

 

 

1,665

 

 

 

1,665

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

 

1,129

 

 

 

1,129

 

 

 

1,324

 

 

 

1,324

 

 

The fair values of accounts receivable, net and accounts payable approximate the carrying value due to the short-term nature of these instruments.

The following table summarizes the composition of available-for-sale marketable securities at September 28, 2025:

 

 

 

September 28, 2025

 

 

 

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

 

$

49,271

 

 

$

63

 

 

$

(4,575

)

 

$

44,759

 

 

$

21,338

 

Corporate debt securities

 

 

40,281

 

 

 

280

 

 

 

(3,813

)

 

 

36,748

 

 

 

24,216

 

Debt mutual funds

 

 

14,945

 

 

 

—

 

 

 

(179

)

 

 

14,766

 

 

 

2,972

 

Certificates of deposit and time deposits

 

 

1,613

 

 

 

—

 

 

 

—

 

 

 

1,613

 

 

 

—

 

U.S. government agency securities

 

 

1,098

 

 

 

—

 

 

 

—

 

 

 

1,098

 

 

 

1,098

 

Non-U.S. government securities

 

 

937

 

 

 

—

 

 

 

—

 

 

 

937

 

 

 

—

 

 

$

108,145

 

 

$

343

 

 

$

(8,567

)

 

$

99,921

 

 

$

49,624

 

 

Reported as follows:

 

 

 

Cost

 

 

Unrealized
Gain

 

 

Unrealized
(Loss)

 

 

Fair
Market
Value

 

 

Fair Market
Value of
Investments
with Unrealized
Losses

 

 

 

(in thousands)

 

Marketable securities

 

$

25,012

 

 

$

25

 

 

$

(20

)

 

$

25,017

 

 

$

6,517

 

Long-term marketable securities

 

 

83,133

 

 

 

318

 

 

 

(8,547

)

 

 

74,904

 

 

 

43,107

 

 

$

108,145

 

 

$

343

 

 

$

(8,567

)

 

$

99,921

 

 

$

49,624

 

 

The following table summarizes the composition of available-for-sale marketable securities at December 31, 2024:

 

 

 

December 31, 2024

 

 

 

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

 

$

49,879

 

 

$

14

 

 

$

(4,951

)

 

$

44,942

 

 

$

30,530

 

Corporate debt securities

 

 

40,395

 

 

 

79

 

 

 

(4,778

)

 

 

35,696

 

 

 

27,824

 

Certificates of deposit and time deposits

 

 

21,689

 

 

 

—

 

 

 

—

 

 

 

21,689

 

 

 

—

 

Debt mutual funds

 

 

9,299

 

 

 

—

 

 

 

(348

)

 

 

8,951

 

 

 

3,238

 

U.S. government agency securities

 

 

3,966

 

 

 

5

 

 

 

(1

)

 

 

3,970

 

 

 

1,946

 

Non-U.S. government securities

 

 

773

 

 

 

—

 

 

 

—

 

 

 

773

 

 

 

—

 

 

$

126,001

 

 

$

98

 

 

$

(10,078

)

 

$

116,021

 

 

$

63,538

 

 

Reported as follows:

 

 

 

Cost

 

 

Unrealized
Gain

 

 

Unrealized
(Loss)

 

 

Fair
Market
Value

 

 

Fair Market
Value of
Investments
with Unrealized
Losses

 

 

 

(in thousands)

 

Marketable securities

 

$

46,349

 

 

$

16

 

 

$

(53

)

 

$

46,312

 

 

$

10,454

 

Long-term marketable securities

 

 

79,652

 

 

 

82

 

 

 

(10,025

)

 

 

69,709

 

 

 

53,084

 

 

$

126,001

 

 

$

98

 

 

$

(10,078

)

 

$

116,021

 

 

$

63,538

 

 

 

As of September 28, 2025, the fair market value of investments with unrealized losses less than one year and greater than one year totaled $11.8 million and $37.8 million, respectively. As of December 31, 2024, the fair market value of investments with unrealized losses for less than one year and greater than one year totaled $22.6 million and $40.9 million, respectively.

Teradyne reviews its investments to identify and evaluate investments that have an indication of possible impairment. Based on this review, Teradyne determined that the unrealized losses related to these investments at September 28, 2025, and December 31, 2024, were not other than temporary.

The contractual maturities of investments in available-for-sale securities held at September 28, 2025, were as follows:

 

 

 

September 28, 2025

 

 

 

Cost

 

 

Fair Market
Value

 

 

 

(in thousands)

 

Due within one year

 

$

25,012

 

 

$

25,017

 

Due after 1 year through 5 years

 

 

24,346

 

 

 

24,202

 

Due after 5 years through 10 years

 

 

8,575

 

 

 

8,683

 

Due after 10 years

 

 

35,267

 

 

 

27,253

 

Total

 

$

93,200

 

 

$

85,155

 

 

Contractual maturities of investments in available-for-sale securities held at September 28, 2025, exclude debt mutual funds with a fair market value of $14.8 million as they do not have a contractual maturity date.

Derivatives

Teradyne conducts business in various foreign countries, with certain transactions denominated in local currencies. As a result, Teradyne is exposed to risks relating to changes in foreign currency exchange rates. Teradyne’s foreign currency risk management objective is to minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities denominated in foreign currencies, and changes in its cash inflows attributable to the forecasted cash flows from certain foreign currency denominated revenues.

To minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities denominated in foreign currencies, Teradyne enters into foreign currency forward contracts. The change in fair value of these derivatives is recorded directly in earnings and is used to offset the change in value of monetary assets and liabilities denominated in foreign currencies.

Teradyne also enters into foreign currency forward and option contracts designated as cash flow hedges to hedge the risk of changes in its cash inflows attributable to changes in foreign currency exchange rates. The cash flow hedges have maturities of less than six months and mature in the period of revenue recognition for certain products and services in backlog and forecasted to be recognized in a future period. Teradyne evaluates cash flow hedges for effectiveness at inception based on the critical terms match method. The hedges are not expected to incur any ineffectiveness however a quarterly qualitative assessment of effectiveness is done to determine if the critical terms match method remains appropriate to use. The change in fair value of the contracts is recorded in accumulated other comprehensive income (loss) and reclassified to earnings at maturity date.

Teradyne does not use derivative financial instruments for speculative purposes.

At September 28, 2025, and December 31, 2024, 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:

 

 

 

Gross Notional Value

 

 

 

September 28,
2025

 

 

December 31,
2024

 

 

 

(in millions)

 

Currency Hedged (Buy/Sell)

 

 

 

 

 

 

U.S. dollar/Taiwan dollar

 

 

24.9

 

 

 

14.5

 

U.S. dollar/Japanese yen

 

 

8.7

 

 

 

12.6

 

U.S. dollar/Danish krone

 

 

7.0

 

 

 

—

 

U.S. dollar/Korean won

 

 

4.0

 

 

 

4.2

 

U.S. dollar/British pound sterling

 

 

1.8

 

 

 

1.2

 

Singapore dollar/U.S. dollar

 

 

48.1

 

 

 

28.9

 

Euro/U.S. dollar

 

 

16.9

 

 

 

22.3

 

Danish krone/Chinese yuan

 

 

10.3

 

 

 

10.5

 

Philippine peso/U.S. dollar

 

 

1.8

 

 

 

9.4

 

Chinese yuan/U.S. dollar

 

 

0.9

 

 

 

1.6

 

Danish krone/U.S. dollar

 

 

0.8

 

 

 

16.9

 

Total

 

$

125.2

 

 

$

122.1

 

 

The fair value of the outstanding contracts was a net loss of $0.8 million and a net loss of $0.6 million at September 28, 2025, and December 31, 2024, respectively.

Unrealized gains and losses on foreign currency forward contracts and foreign currency remeasurement gains and losses on monetary assets and liabilities are included in 'Other (income) expense, net' in the condensed consolidated statement of operations.

At September 28, 2025, and December 31, 2024, 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:

 

 

 

Gross Notional Value

 

 

 

September 28,
2025

 

 

December 31,
2024

 

 

 

(in millions)

 

Currency Hedged (Buy/Sell)

 

 

 

 

 

 

U.S. dollar/Japanese yen

 

$

—

 

 

$

15.6

 

Total

 

$

—

 

 

$

15.6

 

 

The fair value of the outstanding cash flow hedge contracts was a gain of $0.9 million at December 31, 2024.

Unrealized gains and losses on foreign currency cash flow hedge contracts are included in accumulated other comprehensive income (loss). At maturity, the gains or losses associated with cash flow hedge contracts are recorded to revenue.

On November 7, 2023, in connection with Teradyne's agreement to acquire a 10% investment in Technoprobe, Teradyne purchased a call option to buy 481.0 million Euros. The expiration date of the option was April 26, 2024. On April 12, 2024, Teradyne entered into a forward to buy 481.0 million Euros which expired on May 23, 2024. For the nine months ended September 29, 2024, a realized loss of $9.8 million was recorded in 'Other (income) expense, net' in the condensed consolidated statement of operations.

The following table summarizes the fair value of derivative instruments as of September 28, 2025, and December 31, 2024:

 

 

 

Balance Sheet Location

 

September 28,
2025

 

 

December 31,
2024

 

 

 

 

 

(in thousands)

 

Derivatives not designated as hedging instruments:

 

Foreign exchange forward contracts

 

Other current assets

 

 

310

 

 

 

725

 

Foreign exchange forward contracts

 

Other current liabilities

 

 

(1,129

)

 

 

(1,324

)

Derivatives designated as hedging instruments:

 

Foreign exchange forward contracts

 

Other current assets

 

 

—

 

 

 

940

 

Total derivatives

 

 

 

$

(819

)

 

$

341

 

 

The following table summarizes the effect of derivative instruments recognized in the statement of operations for the three and nine months ended September 28, 2025, and September 29, 2024:

 

 

 

 

 

For the Three Months
 Ended

 

 

For the Nine Months
 Ended

 

 

 

Location of (Gains) Losses
Recognized in Statement
of Operations

 

September 28,
2025

 

 

September 29,
2024

 

 

September 28,
2025

 

 

September 29,
2024

 

 

 

 

 

(in thousands)

 

 

(in thousands)

 

Derivatives not designated as hedging instruments:

 

Foreign exchange forward contracts (1)

 

Other (income) expense, net

 

$

218

 

 

$

4,829

 

 

$

174

 

 

$

686

 

Foreign exchange option contracts

 

Other (income) expense, net

 

 

—

 

 

 

—

 

 

 

—

 

 

 

9,764

 

Derivatives designated as hedging instruments:

 

 

 

 

 

 

 

Foreign exchange forward and option contracts

 

Revenue

 

 

—

 

 

 

—

 

 

 

(449

)

 

 

(2,280

)

Total Derivatives

 

 

 

$

218

 

 

$

4,829

 

 

$

(275

)

 

$

8,170

 

 

(1)
The table does not reflect the corresponding gains and losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies. For the three and nine months ended September 28, 2025, net losses from remeasurement of monetary assets and liabilities denominated in foreign currencies were $2.8 million and $6.2 million, respectively. For the three and nine months ended September 29, 2024, net losses (gains) from remeasurement of monetary assets and liabilities denominated in foreign currencies were $(2.9) million and $3.1 million, respectively.

See Note J: “Debt” regarding derivatives related to the convertible senior notes.