Teradyne reported massive Q4 2025 results driven by AI, with revenue and EPS beating guidance. Management's commentary was extremely bullish for 2026 and beyond, introducing a new long-term target model for $6B revenue. The call highlighted the continued strength of AI infrastructure spending and new opportunities in HDD, SLT, and robotics. Q4 2025 revenue was $1.83B, with EPS of $1.80, with AI driving more than 60% of revenue.
Teradyne reported massive Q4 2025 results driven by AI, with revenue and EPS beating guidance. Management's commentary was extremely bullish for 2026 and beyond, introducing a new long-term target model for $6B revenue. The call highlighted the continued strength of AI infrastructure spending and new opportunities in HDD, SLT, and robotics. Q4 2025 revenue was $1.83B, with EPS of $1.80, with AI driving more than 60% of revenue.
Management emphasized that AI is the primary growth driver, with AI-driven revenue increasing from 40-50% of revenue in Q3 to over 60% in Q4 2025, and expected to exceed 70% in Q1 2026. They highlighted strength across AI-related segments including compute, memory, power…
Guidance · revenue to $1.2B
Guidance · revenue to $1.2B
Management introduced a new target model of $6B revenue and $9.50-$11 EPS, achievable at an ATE TAM of $12-14B.
Management emphasized that AI is the primary growth driver, with AI-driven revenue increasing from 40-50% of revenue in Q3 to over 60% in Q4 2025, and expected to exceed 70% in Q1 2026. They highlighted strength across AI-related segments including compute, memory, power management, SLT, HDD, ICT, and optical test, and positioned the company to benefit from AI data center build-outs and physical A
Mobile TAM expected to stay below 2021 peak. Management expressed strong conviction in growth prospects, citing robust Q1 guidance, record demand, and a new target earnings model, while acknowledging lumpiness and moderate uncertainty in second-half visibility.
The company did not provide specific capital expenditure guidance, but indicated a strategic investment in a joint venture with Multilane to serve AI data center test demand, expected to be accretive in 2026. They also mentioned investments in product roadmaps and customer-facing teams to capture design wins in compute and memory.
Management expressed strong conviction in growth prospects, citing robust Q1 guidance, record demand, and a new target earnings model, while acknowledging lumpiness and moderate uncertainty in second-half visibility.
“The first and most obvious is that they believe that we have a more resilient supply chain that we're able to respond to demand with generally shorter lead times.”
“AI demand drove 40% to 50% of our revenue in Q3. In Q4, AI drove more than 60% of our revenue. Looking forward to Q1 of 2026, we expect that upwards of 70% of our revenue will be driven by AI applications.”
“Our expectation was that compute was in the neighborhood of $5 billion for the year. Mobility in about a billion. Auto industrial just under a billion. And service was in the $700 million range. For memory overall, we think that the TAM wa…”
“our HDD revenue is going to double between 2025 and 2026.”
“In terms of the large e-commerce customer, we think that that revenue is going to triple-ish. between 2025 and 2026, and then grow substantially post-26 as the deployments go to a larger number of facilities.”
| 지표 | 기간 | 범위 | 중간값 | 상태 |
|---|---|---|---|---|
| EPS | FY2026 Q1 | $1.89–$2.25 | $2.07 | MAINTAINED |
| Gross margin | FY2026 Q1 | 58.5%–59.5% | 59% | MAINTAINED |
| Revenue | FY2026 Q1 | $1.15B–$1.25B | $1.2B | MAINTAINED |
| 제시 시점 | 지표 | 목표 기간 | 가이던스 | 실제 | 결과 |
|---|---|---|---|---|---|
| FY2026 Q1 | EPS | FY2026 Q2 | $1.86–$2.15 | $2.47 | Met / beat |
| FY2026 Q1 | Gross margin | FY2026 Q2 | 58%–59% | 59.79% | Met / beat |
| FY2026 Q1 | Revenue | FY2026 Q2 | $1.15B–$1.25B | $1.329B | Met / beat |
Teradyne acquired Infineon's power group to enhance its position in wide band gap power testing.
“We are in a position to gain share in the industrial and automotive space because of the acquisition of the power group that we got from Infineon last year to cover the wide band gap power market.”
That's fair. And then for the entire team, as we look at your $6 billion near-term revenue target, given your revised ATE market, it was only six, nine months ago that we were contemplating if your revenues would increased above a couple of billion, and now there's a new target. And what I wanted to figure out, what the question is, what is the sensitivity to that ATE and the $6 billion revenue target? Is that a baseline assumption? Is that kind of an average of worse than a best-case scenario? And any thoughts around how you came up with the ATE and the $6 billion revenue target will be very helpful. Thank you.
So, I think the, you know, first I'll say that it's a balanced number, that there are potential balloons and anchors around the R6 billion. Probably the most important uncertainty is the speed at which the market grows. Like, how long does it take to get to this kind of a TAM size? And I say that because, you know, like, I've been in this business for a long time and I've been in situations where we look into the future and we see, you know, like up into the right kind of TAM forecasts and then external conditions change things. So I think it's one of the reasons that we wanted to look at an evergreen model is because we can't predict the external factors that are going to drive the TAM. So that's probably the biggest X factor in all of this. The next is our share in the ATE market, and that is really related to the compute space. We believe we're positioned to gain share in the compute space on an incremental basis, that it will take time, but we think that we have a good product and good position with the customers in this space to be able to increase ourselves from a relatively low position. The next part of this and the thing that gives me a fair amount of confidence around our $6 billion number is the other stuff beyond the core ATE, the compute space, if you will. I think the mobile space, we are going to ride whatever the TAM does. And I think that TAM is going to recover on the basis of complexity. We are in a position to gain share in the industrial and automotive space because of the acquisition of the power group that we got from Infineon last year to cover the wide band gap power market. And our IST business has a much broader customer base to help drive healthy revenue growth through this midterm. And then we have this extra large customer in the robotics space on top of the core business that we think is a catalyst for growth there. So, you know, I think we have a balanced plan going on in the future, and I think that helps to de-risk that number.
In 2025, the SOC TAM reached nearly $5.0 billion for compute, about $1.0 billion for mobility, just under $1.0 billion for auto/industrial, and $700 million for service; the memory TAM was just under $1.4 billion with 1.2 billion in DRAM. — Provides a detailed breakdown of the ATE TAM by end-market and reveals the massive scale of AI-driven compute testing demand versus other segments, directly benefiting companies driving this demand.
“Our expectation was that compute was in the neighborhood of $5 billion for the year. Mobility in about a billion. Auto industrial just under a billion. And service was in the $700 million range. For memory overall, we think that the TAM”
yeah okay all right um and then uh can you break either your um michelle can you break down the ssc tan in 2025 the 7.2 can you break it down between compute mobile auto and maybe also you've talked before about how large the you know vip tan is within compute can you give us a sense of uh you know how big that was in 20 you know 2025. so um in in 2025 the uh
The TAM broke down roughly, we think it's, and this is subject to us sort of totaling up the final numbers which will come in over the next couple of months from third party sources. But our expectation was that compute was in the neighborhood of $5 billion for the year. Mobility in about a billion. Auto industrial just under a billion. And service was in the $700 million range. For memory overall, we think that the TAM was just under 1.4 billion, and 1.2 of that was DRAM. The rest was Flash.
Teradyne's HDD test revenue is expected to double between 2025 and 2026, driven by a new customer win for its commercial test platform, which is replacing in-house test systems. — The new HDD test customer and doubling revenue indicate increasing complexity or a shift by HDD manufacturers to external test suppliers, reflecting a strategic win for Teradyne and a shift in the supply chain for HDD testers.
Great. That's really helpful. I think in the prepared remarks, you mentioned a new HDD customer. Is that an example of your test platform outperforming their internal tester? I guess, how much growth do you expect from HDD tests in 26 and also what revenue base in 25? And then kind of last part of that, more broadly, Are there other historical instances of semiconductor logic and DRAM IDMs using captive test platforms? And are we at the point there where complexity and semi-test really compels those companies also to use external platforms?
Yeah, so in HDB, you're right that this is a case of commercial test replacing in-house test. Or I actually think that the right way to think about it is complementing internal test. I don't think that this is like a complete flip as much as a way for a customer to effectively build capacity. But we're really excited about the change because we've been working to try and achieve it for a number of years. From a revenue perspective, we don't break out the HDD versus other revenue inside of the ISP group, but I will tell you that our HDD revenue is going to double between 2025 and 2026. Now, sorry, a part B to your question, which is other captive in the rest of the semiconductor ATE space. So right now, there are really, there's one big player in SOC, and there's one big player in memory that have captive ATE strategies. I think, like, long-term, I think the memory one is probably more persistent. The SOC one, I think, is probably going to change over the next couple of years as there are a broader range of customers for Foundry that want commercial platforms.
Robotics revenue from a large e-commerce customer is projected to triple in 2026, indicating a significant ramp in physical AI deployments. — The tripling of revenue from a single e-commerce customer highlights the rapid scaling of physical AI deployments in logistics, offering a unique signal not visible from the headline numbers.
Understood. And then the second question I had was, on the robotics, you have the large e-commerce program starting to ramp. So does that mean that, you know, is there a possibility that your revenues grow, like the robotics piece grows to higher than the break-even revenues that you have for that business?
We're aiming a break-even for robotics this year. In terms of the large e-commerce customer, we think that that revenue is going to triple-ish. between 2025 and 2026, and then grow substantially post-26 as the deployments go to a larger number of facilities. So that's a pretty good tailwind. And, you know, so I think we're looking to have that business at breakeven in 26 and then contributing positively beyond. Understood.