What changed in Teradyne,'s 10-K for the fiscal year ended December 31, 2025

[added] In 2025, we had two customers who specified greater than 10% of our consolidated revenues and one additional customer who directly purchased more than 10% of our consolidated revenues. The two specifying customers drove 12% and 10% of consolidated revenues. The additional direct customer accounted for 19% of consolidated revenues including certain revenues specified by our 10% specifiers.

We rely on various information technology networks and systems to process, transmit and store electronic information, including proprietary and confidential data, and to carry out and support a variety of business activities, including manufacturing, research and development, supply chain management, sales and accounting. We have experienced several attempted cyber-attacks of our network. None of the attempted attacks have caused a disruption to our operations or had a material adverse effect on our business or financial results. As a result of the attempts, we have taken further preventive security measures to protect our systems. Despite the preventive security measures we have implemented, we may continue to be vulnerable to attempts by third parties to gain unauthorized access to our networks or sabotage our systems. These attempts, which might be related to criminal hackers, industrial espionage or state-sponsored intrusions, include trying to covertly introduce malware to our computers, networks and systems and impersonating authorized users. Additionally, evolving geopolitical tensions or conflicts have created a heightened risk of cybersecurity attacks. In addition, third party suppliers and service providers that we rely on to manage our networks and systems and who process and store our proprietary and confidential data, including the data of our customers and suppliers, may also be subject to similar attacks. Employees and contractors may also attempt to gain unauthorized access to our systems and steal proprietary and confidential data. Such attempts could result in the misappropriation, theft, misuse, disclosure or loss or destruction of the intellectual property, or the proprietary, confidential or personal information, of Teradyne or our employees, customers, suppliers or other third parties, as well as damage to or disruptions in our information technology networks and systems. These threats are constantly evolving and expanding, such as through the increased use of artificial intelligence in our products and expanding remote work opportunities for our employees, thereby increasing the difficulty of defending against them or implementing adequate preventative measures. Attempts to gain unauthorized access to our information technology networks and systems may be successful, and in some cases, we might be unaware of an incident or its magnitude and effects. [added] A failure in or a breach of our operational or security systems or infrastructure, or those of our suppliers and other service providers, including as a result of cyber-attacks, could have a material adverse effect on our business or financial results, disrupt our business, result in the disclosure or misuse of proprietary or confidential information, damage our reputation, cause losses and increase our costs. We expect to continue to devote significant resources to the security of our information technology networks and systems. Furthermore, our efforts to comply with evolving laws and regulations related to cybersecurity may be costly and any failure to comply could result in investigations, proceedings, investor lawsuits and reputational damage.

[added] customer demand considerations, including the size and timing of customer orders, customers' decisions to accelerate, decelerate or delay shipments, customers' decisions on how to manage their inventory, customers' rate of replacement of our consumable products or their decisions to delay expansion projects;

[added] Following an acquisition, we may not achieve the revenue or net income levels that justify the acquisition. Acquisitions may also result in one-time charges (such as acquisition-related expenses, write-offs or restructuring charges) or in the future, impairment of goodwill or acquired intangible assets, or adjustments to contingent consideration liabilities that adversely affect our operating results. We review our amortizable intangible assets for impairment at the reporting unit level when events or changes in circumstances indicate the carrying value may not be recoverable and we test goodwill for impairment at least annually. Factors that may be considered in assessing whether goodwill or intangible assets may be impaired include a decline in our stock price or market capitalization, reduced estimates of reporting unit future cash flows and slower growth rates in our industries. We have in the past recorded, and may in the future be required to record, a significant charge in our consolidated financial statements during the period in which any impairment of our goodwill or amortizable intangible assets is determined, negatively affecting our financial position and results of operations. Our valuation methodology for assessing impairment requires management to make judgments and assumptions based on experience and to rely heavily on projections of future operating performance. Because we operate in highly competitive environments, projections of our future operating results and cash flows may vary significantly from our actual results.

[added] On January 29, 2026, we and MultiLane, a leading high-speed input/output ("I/O") test and measurement company, announced an agreement to form a joint venture, MultiLane Test Products ("MLTP"). MLTP is being created to serve the growing demand from the AI Data Center equipment market by accelerating the development of test solutions for critical high speed data connections. Under the agreement, MultiLane will contribute all the assets related to its test and measurement business to the joint venture and we will invest approximately $157 million in exchange for 75% ownership of MLTP. This transaction is expected to close in the first half of 2026 and is subject to customary closing conditions.

[added] Interest income decreased by $9.1 million primarily due to lower interest rates and a reduced cash balance compared to 2024. Interest expense increased by $3.2 million primarily due to borrowing from the credit facility during 2025.

[added] In January 2023, our Board of Directors approved a repurchase program for up to $2.0 billion of common stock. In 2025, we repurchased 6.3 million shares of common stock for $702.1 million, which excludes related excise tax, at an average price of $112.21 per share. In 2024, we repurchased 1.7 million shares of common stock for $198.6 million, which excludes related excise tax, at an average price of $114.63 per share. The cumulative repurchases as of December 31, 2025, under the 2023 repurchase program, were 12.0 million shares of common stock for $1,297.3 million, which excludes related excise tax, at an average price per share of $109.38.

No corresponding language in the FY2025 10-K.

No corresponding language in the FY2025 10-K.

No corresponding language in the FY2025 10-K.

No corresponding language in the FY2025 10-K.

No corresponding language in the FY2025 10-K.

On May 1, 2020, we entered into a three-year, senior secured revolving credit facility of up to $400.0 [added] million (the "Credit Facility"). On December 10, 2021, the credit agreement was amended to extend the maturity date of the [added] Credit Facility to December 10, 2026. On October 5, 2022, the credit agreement was amended to increase the amount of the [added] Credit Facility to $750.0 million from $400.0 million. The amended credit agreement provides that, subject to customary conditions, we may seek to obtain from existing or new lenders the available incremental amount under the credit facility, not to exceed the greater of $200.0 million or 15% of consolidated EBIDTA. We could borrow funds under this [added] Credit Facility at any time for general corporate purposes and working capital. On [added] September 4, 2025, September 19, 2025, and October 7, 2025, Teradyne borrowed a combined $250.0 million under [added] the Credit Facility to support the ramp-up in manufacturing capabilities for Semiconductor Test and the strategy to return cash to shareholders through share repurchases, dividends, and inorganic growth opportunities. On December 31, [added] 2025, we repaid $50 million of the outstanding borrowings. Further, we may incur significant additional secured and unsecured indebtedness in the future.

The market for our products is concentrated with a limited number of significant [added] global customers accounting for a substantial portion of the purchases of test equipment. In each of the years, [added] 2025, 2024 and 2023, our five largest direct customers in aggregate accounted for [added] 44%, 36% and 32% of consolidated revenues, respectively.

[added] If we were to lose any of our significant customers, if our products fail to meet changes in customers' demands or if we suffer a material reduction in our customers' purchase orders, our revenue could decline and our operating results and financial condition could be materially and adversely affected. We would have no or limited contractual recourse if our significant customers decided to stop buying and using our products with limited advance notice to us.

[added] Our Third Amended and Restated Revolving Credit Agreement, amended as of November 7, 2023 (the "Credit Agreement") provides a six-year, senior secured revolving credit facility [added] of $750.0 million (the "Credit Facility"). During 2025, we borrowed a combined $250.0 million under the Credit Agreement [added] to fund our capital allocation strategy, of which $200.0 million was outstanding as of year-end. The Credit Agreement is set to expire on December 10, 2026. See Note L: "Debt" for more information regarding our Credit Agreement. As of February [added] 19, 2026, we were in compliance with all covenants under the [added] Credit Agreement.

We [added] believe our cash, cash equivalents, marketable securities and senior secured revolving credit facility will be sufficient to pay our quarterly dividend and meet our working capital and expenditure needs for at least the next twelve months. Inflation has not had a significant long-term impact on earnings.

At December 31, [added] 2025, our future contractual obligations were related to debt, leases, retirement plan liabilities, deferred tax benefits, and purchase obligations. See Note [added] L: "Debt," Note K: "Leases," Note R: "Retirement Plans," and Note [added] U: "Income Taxes" of Notes to Consolidated Financial Statements in this Annual Report for information about those obligations, which Notes are incorporated by reference into this section. Our purchase obligations were approximately [added] $1,473.0 million, with [added] $1,415.1 million expected to be paid within twelve months.

Our cash, cash equivalents and marketable securities balance decreased by [added] $275.5 million in [added] 2025 to $448.3 million. Cash decreased [added] primarily due to stock repurchases in the amount of [added] $702.1 million and acquisitions of businesses in the amount of [added] $144.4 million, partially offset by [added] operating cash proceeds.

In [added] 2025 and 2024, our five largest direct customers in aggregate accounted for [added] 44% and 36% of our [added] consolidated revenues, respectively. See Note V: "Segment, Geographic, and Significant Customer Information" for additional discussion of significant customer concentrations.

We are subject to numerous [added] U.S. and foreign laws and regulations, including, without limitation, tariffs, trade sanctions, trade barriers, trade embargoes, regulations relating to import-export control, technology transfer restrictions, and other laws and regulations. Additionally, [added] U.S. and foreign governmental authorities have taken, and may continue to take, administrative, legislative or regulatory action that could impact our operations. We believe that our operations are in material compliance with applicable trade regulations. The costs we incurred in complying with applicable trade regulations for the year ended December 31, [added] 2025 were not material, [added] however, compliance with these laws has limited our ability to compete in certain regions. It is [added] possible that future developments, including changes in laws and regulations or government policies, could lead to material costs, and such costs may have [added] an material adverse effect on our future business or prospects.

During the year ended December 31, [added] 2025, we recorded [added] $29.4 million of severance charges, $24.3 million of [added] which is related to [added] the Robotics restructuring which impacted approximately 400 employees, $1.8 million of which was related to Product Test and [added] $1.6 million of which was related to [added] Semiconductor Test. During the year ended December 31, 2025, we made $15.3 million of [added] Robotics severance payments. We expect all Robotics severance payments to be made prior to the end of the third quarter of 2026. Additionally, we recorded $4.9 million of asset impairment expenses and $2.3 million of acquisition and divestiture expenses.

In [added] 2025, our Semiconductor Test segment achieved considerable growth driven by robust demand from Artificial Intelligence ("AI") applications in networking and with vertically integrated producer ("VIP") compute solutions. Memory test revenue remained stable despite a smaller overall market, supported by share gains in high bandwidth memory ("HBM") and DRAM final test applications. The Semiconductor Test segment's strategic shift toward AI-driven semiconductor testing resulted in AI [added] related customer demand driving the majority of our revenue in the second half of 2025. Looking ahead to 2026, we expect AI related customer demand to continue to represent the bulk of our revenues in the first quarter. Our results reflect our focused investments in AI applications and VIP customers, with benefits from these initiatives materializing throughout 2025 and expected to continue in 2026. In the Product Test Group, we also achieved revenue growth in 2025, bolstered primarily by strength in defense and aerospace applications.

For the year ended December 31, [added] 2025, our pension expense, which includes the U.S. Qualified Pension Plan ("U.S. Plan"), certain qualified plans for non-U.S. subsidiaries, and a U.S. Supplemental Executive Defined Benefit Plan, was approximately [added] $4.3 million. Pension expense is calculated based upon a number of actuarial assumptions. Discount rate and expected return on assets are two assumptions which are important elements of pension plan expense and asset/liability measurement. We evaluate our discount rate and expected rate of return on assets assumptions annually on a plan and country specific basis. We evaluate other assumptions related[added] to demographic factors, such as retirement age, mortality and turnover periodically, and update them to reflect our experience and expectations for the future.

Our [added] capital allocation plan will continue to be focused on investing in organic and inorganic growth and returning cash to shareholders through share repurchases and dividends. During 2025, we completed the acquisitions of Quantifi and AET and additionally, we returned $778.4 million to shareholders through [added] $702.1 million of share buybacks and $76.3 million of dividend payments.

On May [added] 31, 2025, we acquired privately held Quantifi Photonics ("Quantifi"), a leader in PIC test solutions for a total purchase price of $127.2 million. This acquisition enables the delivery of scalable PIC test solutions and is included in our Product Test segment. Over time, we also intend to leverage the engineering expertise and technology to enhance functionality and create additional differentiation in our Semiconductor Test business, specifically with integration into our UltraFlexplus platform.

On [added] January 31, 2025, we acquired Infineon Technologies AG's ("Infineon") automated test equipment technology and associated development team ("AET") based in Regensburg, Germany for a total purchase price of 17.6 million Euros, equivalent to $18.3 million. AET adds resources and expertise to our company and strengthens the relationship between us and this key customer. AET is included in our Semiconductor Test [added] segment.

[added] In our Robotics segment, the fourth quarter of 2025 represented the third consecutive quarter of sequential revenue growth. During the year, we aimed at strategic partnerships with original equipment manufacturers, systems integrators, and large [added] enterprise accounts, concentrating on high-growth verticals such as ecommerce, logistics, semiconductor, and electronics. At the same time, we also reduced costs through restructuring activities designed to better position the Robotics organization for future success.

[added] Product revenues gross profit percentage decreased by 0.8 points primarily due to product mix. Service revenues gross profit percentage increased by [added] 2.9 points primarily in Semiconductor Test as a result of the sale of the DIS business on May 27, 2024.

Investing activities during [added] 2025 included $224.0 million used for purchases of property, plant, and equipment, $144.4 million used for [added] acquisition of businesses, net of cash and cash equivalents acquired, $33.0 million used for purchases of [added] marketable securities, and $25.5 million used for [added] purchase of investment in a business, partially offset by [added] $49.0 million provided by proceeds from maturities of marketable [added] securities and $9.3 million provided by proceeds from [added] sales of marketable securities.

[added] Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. Goodwill is assessed for impairment [added] at the reporting unit level annually during the fourth quarter of each fiscal year, as of December 31, or more frequently if we believe indicators of impairment exist. Potential impairment is identified by comparing the fair value of a reporting [added] unit to its carrying value, including goodwill. For our annual impairment assessment, we have the option to evaluate qualitative factors such as industry and market conditions, and entity specific financial performance and events, including changes in management, strategy and key customers. If based on our qualitative assessment it is more likely than not that the fair value of the reporting unit is less than its carry amount, we are required to perform quantitative impairment testing. If necessary, an impairment loss is recognized in an amount equal to the excess of the reporting unit's carrying value over its fair value, up to the amount of goodwill allocated to the reporting unit.

Gross profit as a percent of total revenues [added] decreased by 0.3 points, primarily due to [added] product mix.

Our product revenues increased [added] $365.3 million, or [added] 15.9%, driven primarily by higher [added] sales in compute related to artificial intelligence applications and in Integrated System Test primarily related to [added] system level testers.

The increase of [added] $31.8 million in selling and administrative expenses was primarily due to higher [added] spending in Semiconductor Test partially offset by lower spending in [added] Robotics.

Financing activities during [added] 2025 included $702.1 million used for repurchase of common stock, $76.3 million used for [added] dividend payments, and $15.7 million used for payments related to net settlement of employee stock compensation awards, partially offset by net proceeds from borrowings on revolving credit facility of $200.0 million and $31.9 million from issuance of common stock under stock purchase and stock option plans.

The increase in income before income taxes [added] and equity in net earnings of affiliate in Semiconductor Test was driven primarily by higher [added] sales in compute related to artificial intelligence applications and in Integrated System Test primarily related to system level testers, partially offset by [added] higher spending in selling and administrative and engineering and development. The decrease in income before income taxes [added] and equity in net earnings of affiliate in Robotics was primarily due to lower sales of collaborative robotic arms, partially offset by lower operating expenses. The change in income before income taxes [added] and equity in net earnings of affiliate in Corporate and Eliminations was primarily due to the sale of the DIS business on May 27, 2024.

[added] Under the ESPP and the Equity Plan, as amended, our stockholders [added] have approved an aggregate of [added] 33.4 million and 32.0 million shares, respectively, issuable thereunder. At our annual meeting of stockholders held May [added] 9, 2025, our stockholders approved an amendment [added] and restatement of the Equity Plan. The amendments, among other changes, renamed the plan to the "Equity and Cash Compensation Incentive Plan," eliminated the then-current term end date of May 12, 2025, and added a provision that incentive stock options may not be granted without shareholder approval following the ten-year anniversary of the Board's approval of the amended Equity Plan, which is March 24, 2035.

The increase of [added] $43.7 million in engineering and development expenses was primarily due to higher spending in Semiconductor [added] Test partially offset by lower spending in Robotics.

Income tax expense for [added] 2025 and 2024 totaled $79.3 million and [added] $59.5 million, respectively. The effective tax rate for [added] 2025 and 2024 was 12.1% and 9.8%, respectively. The increase in the effective tax rate from the year ended December 31, 2024, to the year ended December 31, 2025, is primarily attributable to decreases in benefits related to reserves for uncertain tax positions, foreign tax credits and U.S. research and development tax credits. This increase was partially offset by a shift in the geographic distribution of income which resulted in a reduction of income in higher tax rate jurisdictions.

In January 2023, our Board of Directors approved a repurchase program for up to $2.0 billion of common stock. In 2025, we repurchased 6.3 million shares of common stock for $702.1 million, which excludes related excise tax, at an average price of $112.21 [added] per share. In 2024, we repurchased 1.7 million shares of common stock for $198.6 million, which excludes related excise tax, at an average price of $114.63 per share. The cumulative repurchases as of December 31, [added] 2025, under the 2023 repurchase program, were [added] 12.0 million shares of common stock for [added] $1,297.3 million, which excludes related excise tax, at an average price per share of [added] $109.38.

Operating activities during [added] 2025 provided cash of [added] $674.4 million. Changes in operating assets and [added] liabilities, net of businesses acquired used $72.5 million due to a [added] $340.6 million increase in operating assets and a [added] $268.1 million increase in operating liabilities.[added] The increase in operating assets was primarily due to increases in accounts receivable of $305.6 million. The increase in operating liabilities was primarily due to increases in accounts payable and other liabilities of $208.8 million.

We are a leading global [added] provider of automated test equipment and robotics products. Our automated test systems are used to test semiconductors, wireless products, data [added] storage, silicon photonics, and complex electronics systems in many industries including consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries. Our [added] robotics product offerings consist primarily of collaborative robotic arms and autonomous mobile robots used by global manufacturing, logistics and industrial customers to improve [added] quality and increase manufacturing and material handling [added] efficiency, while reducing costs. In the first quarter of 2025, we identified opportunities for operational synergies amongst our production board test, defense and aerospace, and wireless test businesses leading to the creation of the Product Test division as a new segment effective March 2025. Our automated test equipment and robotics products and services include:

The increase in Semiconductor Test revenues of [added] $399.8 million, or [added] 18.8%, was driven primarily by higher [added] sales in compute related to artificial intelligence applications and in Integrated System Test primarily related to system level testers. The decrease in Robotics revenues of [added] $56.5 million, or [added] 15.5%, was primarily due to lower sales of collaborative robotic arms and autonomous mobile robots. The increase in Product Test revenues of $26.9 million, or 8.1%, was primarily due to higher sales of defense and aerospace testing systems.

While revenues in our test businesses are predominantly in U.S. dollars, the majority of our Robotics revenue is denominated in foreign currencies. Strengthening of the U.S. dollar [added] has, and will continue to, negatively affect Robotics revenue [added] in 2025 and 2026, respectively.

Investing activities during 2024 [added] included $532.1 million used for investments in businesses, $198.1 million used for purchases of property, plant and equipment, and $45.8 million used for purchases of marketable securities, partially offset by $90.3 million in proceeds from the sale of a business, $38.4 million and $24.0 million in proceeds from the maturities and sales of marketable securities, respectively, and $0.9 million in proceeds from life insurance.

The discount rate that we utilized for determining future pension obligations for the U.S. Plan is based on the FTSE Pension Index adjusted for the U.S. Plan's expected cash flows and was [added] 5.30% at December 31, [added] 2025, down from 5.45% at December 31, [added] 2024. We estimate that in [added] 2026 we will recognize approximately $0.1 million of pension [added] income for the U.S. Plan. The U.S. Plan pension [added] income estimate for [added] 2026 is based on a [added] 5.30% discount rate and a [added] 5.10% return on assets. Future pension expense or income will depend on future investment performance, changes in future discount rates and various other factors related to the employee population participating in our pension plans.

The discount rate that we utilized for determining future pension obligations for the U.S. Plan is based on the FTSE Pension Index adjusted for the U.S. Plan's expected cash flows and was [added] 5.30% at December 31, [added] 2025, down from 5.45% at December 31, [added] 2024. We estimate that in [added] 2026 we will recognize approximately $0.1 million of pension [added] income for the U.S. Plan. The U.S. Plan pension [added] income estimate for [added] 2026 is based on a [added] 5.30% discount rate and a [added] 5.10% return on assets. Future pension expense or income will depend on future investment performance, changes in future discount rates and various other factors related to the employee population participating in our pension plans.

Operating activities during 2024 provided cash of $672.2 million. Changes in operating assets and liabilities used cash of $23.9 million. This was due to a $75.5 million decrease in operating assets and a $51.6 million decrease in operating liabilities.[added] The decrease in operating assets was primarily due to a decrease in other assets of $119.5 million, partially offset by a $52.7 million increase in accounts receivable. The decrease in operating liabilities was primarily due to a $48.2 million decrease in accounts payable.

We qualify for a tax holiday in Singapore by fulfilling the requirements of an agreement with the Singapore Economic Development Board under which certain headcount and spending requirements must be met. The tax savings attributable to the Singapore tax holiday for the years ended December 31, [added] 2025, and 2024 were $21.6 million or [added] $0.14 per diluted share and [added] $17.1 million or [added] $0.10 per diluted share, respectively. In [added] December 2025, we entered into an agreement with the Singapore Economic Development Board which extended our Singapore tax holiday under substantially similar terms to the agreement which expired on December 31, [added] 2025. The new tax holiday is scheduled to expire on December 31, [added] 2035.

The purpose of the 2006 Equity Plan is to motivate employees, officers and directors by providing equity ownership and compensation opportunities in Teradyne. The aggregate number of shares available under the 2006 Equity Plan as of December 31, [added] 2025, was 3,050,235 shares of our common stock. The 2006 Equity Plan authorizes the grant of stock-based awards in the form of (1) non-qualified and incentive stock options, (2) stock appreciation rights, (3) restricted stock awards and restricted stock unit awards, (4) phantom stock, and (5) other stock-based awards. Awards may be tied to time-based vesting schedules and/or performance-based vesting measured by reference to performance criteria chosen by the Compensation Committee of the Board of Directors, which administers the 2006 Equity Plan. Awards may be made to any employee, officer, consultant and advisor of Teradyne and our subsidiaries, as well as to our directors. The maximum number of shares of stock-based awards that may be granted to one participant during any one fiscal year is 2,000,000 shares of common stock.

As of December 31, [added] 2025, total unrecognized compensation expense related to non-vested restricted stock units and options was [added] $97.3 million and is expected to be recognized over a weighted average period of [added] 2.6 years.