TERADYNE, INC Q1 FY2026 earnings call

Greg mentioned Paradigm delivered record results in Q1 2026 with revenue of approximately $1.3 billion and non-GAAP EPS of $2.56. The strategy is anchored across verticalization, electrification, and AI. In Q1, two significant new product introductions were made: Photon 100 for silicon photonics and co-packaged optics testing, and Omnics, a new production board test platform. The multi-lane test products joint venture closed on April 8th and the acquisition of Test Insight two weeks ago. Operations have more than doubled Ultraflex Plus shipments over the last nine months while sustaining 12- to 16-week lead times

First quarter sales were $1,282,000,000 with non-GAAP EPS of $2.56. Semi-test revenue was $1.1 billion, breaking the billion-dollar threshold, up 26% sequentially and over 100% year-over-year. Memory business delivered $203 million in revenue, relatively flat to last quarter. Product test group revenue was $80 million, up 8% year over year. Robotics revenue was $91 million, up 32% year-over-year. AI-related demand accounted for nearly 70% of revenue in Q1, up from about 60% in Q4 of 2025

For the second quarter, expect revenue in the range of $1.15 billion to $1.25 billion and non-GAAP EPS of $1.86 to $2.15. Gross margins are expected to be in the range of 58% to 59% normalized for peak volumes and one-time benefits. Operating expenses are expected to run at approximately 27% to 28% of second quarter sales. The non-GAAP operating profit rate is expected to be between 30% and 32%. Based on current customer order visibility, continue to expect first half weighted revenue with approximately 55 to 60% of annual revenue expected in the first half

Concentration of business to large customers and a smaller number of very large ASIC and commercial device programs increases risk of bottlenecks shifting demand, leading to lumpy growth. Supply chain risks in ramping capacity and potential slips within the quarter due to various factors

Q: Greg, on the back half of the year, it's a bit of a disconnect as demand signals have gotten better but guidance isn't raised.

A: Michelle and Greg discussed about timing impacts, lumpiness in large customer ordering patterns, hiccups in AI data center build out ecosystem, visibility into customer ordering, and how different technology groups are weighted in first and second half.

Q: TJ Meuse asked about TAM for the year.

A: Greg mentioned that there are uncertainties about TAM for 2026, similar to 2025 where estimates changed, and he doesn't feel confident enough to share specific TAM numbers.

Q: TJ Meuse asked about follow-through on merchant GPU and custom ASICs.

A: Greg talked about the first project being the hardest, moving into fast follower phase, and custom ASICs competition and timing. Michelle talked about gross margin commentary.

Q: Shane Morgan Stanley asked about networking share and auto industrial capacity.

A: Greg talked about networking share being balanced, and capacity and utilization in auto industrial.

Q: Chris Sankar asked about silicon photonics market size and FICON tech.

A: Greg talked about silicon photonics market size uncertainty and FICON tech being a world leader. Michelle talked about gross margin and auto industrial impact.

Q: Vivek Arya asked about GPU engagement share and visibility.

A: Greg talked about gating factors to GPU share and visibility in testing.

Q: Jim Schneider asked about CPO revenue and integration.

A: Greg talked about uncertainty in CPO revenue and four-way partnership. Michelle talked about OpEx philosophy