Teradyne reported record Q2 FY2026 revenue of $1.3B (+100% YoY) driven by AI, but guided Q3 down to $1.2-1.3B due to order timing in compute and mobile. Management emphasized a multi-year growth cycle driven by WFE expansion, advanced packaging, and dual-vendor compute qualifications, with 2027 expected to be another year of healthy growth. Q2 revenue $1.3B, EPS $2.47; Q3 guide $1.2-1.3B, EPS $1.85-2.15, gross margin 58-59%.
Teradyne reported record Q2 FY2026 revenue of $1.3B (+100% YoY) driven by AI, but guided Q3 down to $1.2-1.3B due to order timing in compute and mobile. Management emphasized a multi-year growth cycle driven by WFE expansion, advanced packaging, and dual-vendor compute qualifications, with 2027 expected to be another year of healthy growth. Q2 revenue $1.3B, EPS $2.47; Q3 guide $1.2-1.3B, EPS $1.85-2.15, gross margin 58-59%.
Management stated that AI was the driver of record revenue for the second consecutive quarter, with AI-driven revenue exceeding 60% of total company revenue, and that the wafer-to-AI data center strategy is delivering results.
Management's tone was highly confident, driven by record revenue, strong AI demand across all business groups, and increased optimism for 2026 and 2027, with no notable shift in confidence from prior calls.
Guidance · revenue to $1.25B
Management stated that AI was the driver of record revenue for the second consecutive quarter, with AI-driven revenue exceeding 60% of total company revenue, and that the wafer-to-AI data center strategy is delivering results.
Management stated that AI was the driver of record revenue for the second consecutive quarter, with AI-driven revenue exceeding 60% of total company revenue, and that the wafer-to-AI data center strategy is delivering results.
Memory TAM likely >40% larger than 2025. Management's tone was highly confident, driven by record revenue, strong AI demand across all business groups, and increased optimism for 2026 and 2027, with no notable shift in confidence from prior calls.
Capital expenditures increased $26 million quarter-over-quarter driven by continued investments in innovation and operations scaling, and management noted they are leaning further into investments to capture opportunities across the value chain.
Management's tone was highly confident, driven by record revenue, strong AI demand across all business groups, and increased optimism for 2026 and 2027, with no notable shift in confidence from prior calls.
“and the types of optical testing that you can do at insertion one are limited because the lens assembly is a critical part of the optical path.”
“Demand signals remain strong as memory manufacturers are planning capacity additions further out in time, driving our book-to-bill ratio in the quarter over two.”
“During the fast follower phase, we expect market share to grow incrementally from zero up to about 30%.”
“We expect CPO alone will be a $300 to $700 million market by 2028.”
“If you look back to 2023, it was down near 4% of the total capex spent on test equipment. And by 2025, that had gone up to 7%. The first five months of 2026, it's 8%.”
| 지표 | 기간 | 범위 | 중간값 | 상태 |
|---|---|---|---|---|
| EPS | FY2026 Q3 | $1.85–$2.15 | $2.00 | GUIDED |
| Gross margin | FY2026 Q3 | 58%–59% | 58.5% | GUIDED |
| Revenue | FY2026 Q3 | $1.2B–$1.3B | $1.25B | GUIDED |
| 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 |
| FY2025 Q4 | EPS | FY2026 Q1 | $1.89–$2.25 | $2.56 | Met / beat |
| FY2025 Q4 | Gross margin | FY2026 Q1 | 58.5%–59.5% | 60.89% | Met / beat |
| FY2025 Q4 | Revenue | FY2026 Q1 | $1.15B–$1.25B | $1.2825B | Met / beat |
The Infineon strategic partnership is specifically aiding Teradyne in wide-bandgap discrete testing, a niche expected to grow robustly.
“The part of that market where the Infineon deal that we did is most helpful is in wideband gap discrete tests.”
Understood. Thank you. And for my follow-up, so you talked about auto-industrial being better half-on-half. Can you talk a little bit about what the path back to prior peak would look like? I'd also appreciate if you could talk about how much of prior peak was China-driven, if there's sort of an element of China localization risk, but also some of the tailwinds you're seeing just on the back of the Infineon strategic partnership back in January of 2025. Thank you.
I think it's likely 27 is going to be up to or exceeding prior peaks in that space. We haven't done all of the work, but that's my gut feeling around that. There's some China localization. I would say that our China power mix and many, many more. In the power market overall, the part of that market where the Infineon deal that we did is most helpful is in wideband gap discrete tests. So that's a smaller chunk of that market, but one that is expected to grow robustly over this period of time. And I would say that the technologies and the people that we have in that group is positioning us to establish a real leadership position in the testing of wideband gap discreets.
Teradyne's CEO acknowledges Advantest's TAM estimates as broadly accurate, implying competitive alignment on market sizing rather than a material share shift.
“The numbers that Admin Test put out for the total TAM, both SOC and for memory, are kind of in the right zip code.”
Okay, great. Thank you. And then from your slide, it looks like you think The range of like 12 to 14, it's pretty similar to the new TAM range that Advantest put out last night because they don't include Vernon in their TAM. If I use those TAM numbers and I use your loading for the back half, it basically implies that CQ4 is basically flat, Q on Q. I get your test share for this year is up just a touch, but it's still basically flat, sort of in the 37% range. So the question is, when do all these new quals start to add to share gains? You know, you talked about these quals, and, like, what's the right long-term share to use? Like, is 40% your sort of aspirational share? Is, you know, 42%…
So sort of taking that bit by bit, I think that the numbers that Admin Test put out for the total TAM, both SOC and for memory, are kind of in the right zip code. We were surprised when they hadn't brought it up last quarter because it seemed like the writing was on the wall that the TAM was increasing pretty strongly. The other commentary that they had was that they believed that they were going to continue to gain share in SOC and that they were going to lose a bit of share in memory. I have to say I agree with their commentary about memory, but I think in terms of SOC, it's probably going to be pretty flat, maybe a slight incremental gain for us year on year. So I would say that we are gaining share in most of the segments of the market, but the part of the market that is growing most strongly is the part of the market where we're starting with the lowest share. The important thing for us in 2021 Okay, great. Thank you.
Memory book-to-bill ratio exceeded 2x in Q2, signaling strong future revenue from HBM, DRAM, and NAND capacity additions. — A >2x book-to-bill is rare and implies memory test revenue should remain elevated for multiple quarters, directly benefiting memory makers' own production plans.
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Our memory business delivered another strong quarter at $212 million in revenue. This is another record quarter up from the previous one set in Q4 2025. This represents our third consecutive quarter of revenue, over $200 million, driven by robust HBM and DRAM test solutions demand and a resurgence in NAND. Demand signals remain strong as memory manufacturers are planning capacity additions further out in time, driving our book-to-bill ratio in the quarter over two. Finally, turning to IST. Revenue in the quarter was $67 million, up 94% from the prior year, driven by AI-related HDD storage demand from all three major suppliers in this space. Now on to product test group. Revenue was $107 million, up 26% year-over-year and 33% quarter-over-quarter. The group experienced broad-based growth across all in-markets from production board tests to optical tests to defense and aerospace to scale-up networking at our newest portfolio addition, the multi-lane test products JV, also known as MLTP. Last quarter, we announced our new production board test platform, Omnics, which is focused on enabling earlier detection of defects that are impacting the build-out of AI data centers. The initial customer traction is strong, with units already shipping in the second quarter and continued growth expected in the second half. Similarly, momentum is building in MLTP as the need for high-speed I.O. and data center interconnect test solutions is increasing. Both Omnics and MLTP are examples of our wafer to AI data center strategy in action. Both solutions focus on solving our customers' most critical pain points along the value chain. As a result, we anticipate their continued growth in the second half of the year. Robotics revenue was $100 million, up 33% year-over-year and 9% quarter-over-quarter. Electronics manufacturing and semiconductor revenue increased by 50% from Q1 and is now the largest in-market segment in this group, which includes AI data centers. Our U.S. sales increased to 32% of the robotics overall sales. Aligned with us, our US-based manufacturing center is on track for opening later this year. Now moving down the P&L. Strong earnings results continued in the second quarter driven by robust AI-driven volume and favorable product mix. Gross margins for the quarter were 59.8% of 250 basis points year-over-year driven by strong semi-test volume and product mix, …
Teradyne's compute share gain timeline: fast-follower phase takes 9-12 months per qualification, then share rises from zero to ~30% over several years. — This provides an explicit roadmap for Teradyne's share gains in the compute test market, helping investors model revenue inflection from dual-vendor qualifications at hyperscalers and GPU merchants.
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… The next surge for these customers is expected to be in the first half of 2027. Since dual vendor strategies are emerging at the largest compute customers, I'd like to give you a bit more color about how we think this will play out. These customers recognize the importance of de-risking their supply chain. We see this as an important share driver over the next few years. The dual vendor qualification process generally runs through four phases. The first, an opportunity to compete. Second, developing a working solution. Third, correlation. And then finally, a production ramp. If successful, it takes nine to 12 months from the start to the ramp. After the initial dual sourced part ramps, we enter a fast follower phase where additional parts are converted and ramped. Ultimately, the account reaches a mature dual vendor stage where either platform is used for initial part release. It can take a few years to get from fast follower to mature dual vendor. During the fast follower phase, we expect market share to grow incrementally from zero up to about 30%. Right now, we have one compute customer in the mature dual vendor phase, one in fast follower, and one in qualification prior to ramp. I'd also like to add a little color around networking. Frontier models require ever larger accelerator clusters. This is driving extreme growth in networking for scale out, scale across, and scale up applications. While the total number of network connections is growing fast, the timing of transitions from cable to backplane and from pluggable to XPO and CPO is in constant flux. Our belief is that there is robust growth in all of these technologies. This drove our acquisition of Quantify Photonics, the development of the Photon 100 solution for optical connections, and our multi-lane test products JV for copper connections. We are working with multiple ecosystem partners to develop leading-edge solutions from silicon photonics wafers to full data center racks. We expect CPO alone will be a $300 to $700 million market by 2028. Our IST business grew revenue two and a half times quarter over quarter on strength in HDD fueled by AI. We expect continued growth of our IST business in the second half. Given the strong forecast for greater than 20% annual exabyte growth and our design wins, we are confident this business will grow over the midterm as well. The data center build-out …
CPO test market could be $300-$700M by 2028, but wide range reflects uncertainty over pace of scale-out adoption. — This wide range signals that CPO test is still at an inflection point; the upside case (fast scale-out ramp) could more than double the market size within two years, influencing Teradyne's optical test investments.
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… we expect market share to grow incrementally from zero up to about 30%. Right now, we have one compute customer in the mature dual vendor phase, one in fast follower, and one in qualification prior to ramp. I'd also like to add a little color around networking. Frontier models require ever larger accelerator clusters. This is driving extreme growth in networking for scale out, scale across, and scale up applications. While the total number of network connections is growing fast, the timing of transitions from cable to backplane and from pluggable to XPO and CPO is in constant flux. Our belief is that there is robust growth in all of these technologies. This drove our acquisition of Quantify Photonics, the development of the Photon 100 solution for optical connections, and our multi-lane test products JV for copper connections. We are working with multiple ecosystem partners to develop leading-edge solutions from silicon photonics wafers to full data center racks. We expect CPO alone will be a $300 to $700 million market by 2028. Our IST business grew revenue two and a half times quarter over quarter on strength in HDD fueled by AI. We expect continued growth of our IST business in the second half. Given the strong forecast for greater than 20% annual exabyte growth and our design wins, we are confident this business will grow over the midterm as well. The data center build-out will drive growth for our product test and robotics groups through the end of the decade as well. The logic chain is straightforward. More data center construction drives more rack shipments per year, which is driving growth at contract manufacturers and original design manufacturers. This, combined with the rapid advancement of data center architectures, creates a significant opportunity for Teradyne to provide solutions well-matched to the volume, quality, and flexibility data center applications required. This is best reflected in the total available market for automation and test among contract manufacturers and ODMs. We believe that there is currently a multibillion-dollar market for assembly, automation, test, and burn-in equipment, and we expect mid-double-digit growth rates through the end of the decade. By addressing these applications with enhanced production board tests, optical tests, backplane tests, and robotic-assisted test and assembly, Teradyne is uniquely …
Test equipment spending as a % of semi-capEX has risen from 4% in 2023 to 8% in first half 2026, reversing a decade-long trend. — This structural shift implies ATE is now growing faster than wafer fab equipment, a permanent re-rating of the test TAM that benefits Teradyne and its competitors.