tapebrief
TER · Q1 2026

TER · Q2 2026 Earnings

Cautious

Teradyne

Reported July 29, 2026

30-second summary

Q2 revenue of $1.329B cleared the high end of the $1.15B–$1.25B guide by $79M (+104% YoY, +3.7% QoQ), with non-GAAP EPS of $2.47 running $0.32 above the $2.15 high end. Non-GAAP operating margin of 33.7% blew past the 30–32% guide, and Q3 was guided to $1.20B–$1.30B ($1.25B mid, below Q2 actual). But management reaffirmed FY2026 revenue at $6B and non-GAAP EPS at $9.50–$11 for the third straight quarter despite two consecutive material beats — H1 revenue of $2.611B and six-month non-GAAP diluted EPS of $5.02 now force H2 to $3.389B and implied H2 EPS to $4.48–$5.98, a mathematically clear H2 step-down that management is choosing to bake in rather than lift.

Headline numbers

EPS

Q2 FY2026

$2.47

+20.5% vs est.

Revenue

Q2 FY2026

$1.33B

+104.0% YoY

+8.9% vs est.

Gross margin

Q2 FY2026

59.8%

Free cash flow

Q2 FY2026

$0.38B

Operating margin

Q2 FY2026

32.9%

Key financials

Q2 FY2026
MetricQ2 FY2026Q2 FY2025YoYQ1 FY2026QoQ
Revenue$1.33B$0.65B+103.8%$1.28B+3.7%
EPS$2.47$0.57+333.3%$2.56-3.5%
Gross margin59.8%57.2%+260bps60.9%-110bps
Operating margin32.9%13.9%+1900bps36.9%-400bps
Free cash flow$0.38B$0.13B+186.4%$0.20B+89.0%

Guidance

Teradyne delivered a record Q2 with 104% YoY revenue growth and raised Q3 guidance by ~3–4% QoQ, but reaffirmed full-year $6B revenue and $9.50–$11 EPS targets, signaling confidence in near-term AI demand while bracing

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
RevenueQ2 FY2026$1,150M to $1,250M$1,329M+$79M to +$179M above guide / +6.3% above midpointBeat
Non-GAAP EPSQ2 FY2026$1.86 to $2.15$2.47+$0.32 to +$0.61 above guide / +22.9% above midpointBeat
GAAP EPSQ2 FY2026$1.83 to $2.12$2.38+$0.26 above guide / +12.3% above midpointBeat
Gross MarginQ2 FY202658% to 59%59.8%+0.8pts to +1.8pts above guideBeat
Non-GAAP Operating MarginQ2 FY202630% to 32%33.7%+1.7pts to +3.7pts above guideBeat

New guidance

MetricPeriodGuideYoY
RevenueQ3 FY2026$1,200M to $1,300M+55.8% to +68.8% YoY
Non-GAAP EPSQ3 FY2026$1.85 to $2.15—
GAAP EPSQ3 FY2026$1.79 to $2.09—

Reaffirmed unchanged this quarter: Revenue ($6.0B (implied)), Non-GAAP EPS ($9.50 to $11.00 (implied))

Capacity & utilization

Q2 FY2026
SegmentQ2 FY2026Q2 FY2025YoY
Memory Revenue (DRAM & NAND)Record levels——
Revenue Beat vs. GuidanceExceeded high end of Q2 guidance——
YoY Revenue Growth104%——
Earnings Growth YoY>300% (non-GAAP EPS)——

Profitability

Q2 FY2026
SegmentQ2 FY2026Q2 FY2025YoY
Operating Margin32.9%——
Non-GAAP Operating Margin33.7%——

Management tone

Transcript unavailable for this quarter — tone analysis is drawn from the press release's qualitative statements only; call commentary pending. Cross-quarter framing comparisons below reference prior-quarter briefs rather than fresh transcript review.

The AI framing shifted from "compute-led" to "wafer-to-data-center" with memory pulled forward. This quarter's press release headline framing — "Our strategy to capture test and robotics opportunities from wafer to AI data center has driven another record quarter" — deliberately encompasses the full stack, and memory is called out at "record levels" for the first time in the cycle. That aligns with the HBM/DRAM strength management has been building the case for, now delivering at the same time as compute rather than lagging it.

The 2027 anchor is new — and it's the first forward-year framing since the evergreen model retired date-stamped guidance. "Looking further ahead, rapid increase in wafer fab equipment investment sets the stage for continued growth in 2027 and beyond." Based on the prior-quarter brief record, this appears to be the first time management has used a specific future year in prepared remarks since the retreat to TAM-indexed guidance. It hints at growing conviction on cycle duration, but critically stops short of quantifying — the destination language is bullish, the slope language remains absent.

The FY reaffirmation is now a pattern, not a one-time conservatism. Q1's reaffirmation after a material EPS beat was defensible as prudent single-quarter caution. A second reaffirmation after another beat and a Q3 guide that implies revenue plateau turns the pattern into a signal: management is deliberately holding the FY unchanged as a way of communicating H2 uncertainty without saying it directly. The near-term guidance qualifier — "our Q3 guidance reflects robust AI-related demand" — pointedly limits the AI demand statement to Q3, not to Q4 or full-year.

Answers to last quarter's watch list

Does Q2 land at or above the $1.20B midpoint, and does the Q3 guide confirm or refute the H2 digestion implied by the 55–60% H1 weighting? Q2 came in at $1.329B, $129M above the midpoint and $79M above the high end. Q3 is guided to $1.25B midpoint — flat-to-down sequentially. H1 FY2026 actuals total $2.611B. Against the reaffirmed $6.0B FY target, implied H2 is $3.389B, or 56.5% of FY in H2 versus 43.5% in H1 — the opposite of the prior 55–60% H1 weighting management guided at Q1. The FY target now requires an H2 stronger than H1 in dollars, with Q3 already guided to $1.25B midpoint, leaving implied Q4 at ~$2.14B — a mathematically unrealistic figure suggesting the FY target is stale rather than a base case. Status: Resolved negatively (the H1 weighting framework is broken; the Q3 guide is a plateau).
Q2 non-GAAP operating margin delivery against the 30–32% guide. Delivered 33.7%, +170bps above the high end — the strongest possible confirmation that Q1's 37.5% was not purely one-time optics. Operating leverage is validating the upper end of the 30–34% target model at $1.3B revenue.
Resolved positively
Merchant GPU H2 conversion. Not disclosed in the press release — no update to the ~$50M FY framing, no named customer, no share-split disclosure with the incumbent.
Continue monitoring
FY revenue and EPS target — first move off $6B / $9.50–$11. Reaffirmed verbatim for the third consecutive quarter. With H1 at $2.611B revenue and $5.02 six-month non-GAAP diluted EPS, the FY range is now demonstrably conservative on the low end but management chose not to lift it. This is now a deliberate signal about H2 caution, not a modeling artifact. Status: Resolved negatively (management is structurally underwriting H2 weakness).
Robotics step-up above $91M and any further large-customer disclosures. Robotics delivered $100M, up 10% QoQ from $91M — the first crossing of the $100M threshold this cycle. No further named-customer disclosure.
Resolved positively
Silicon photonics 2026 revenue tracking against the "~$100M-ish" framing. No specific update disclosed in the press release.
Continue monitoring

What to watch into next quarter

Does Q3 land at or above the $1.25B midpoint, and does the Q4 guide finally break above the $1.30B ceiling that Q3 implies? Implied Q4 to hit the $6.0B FY target is ~$2.14B — mathematically impossible off the current run-rate. Either Q4 guidance surfaces a step-up to $1.30B–$1.50B (in which case the FY target is quietly obsolete but directionally in play), or the FY target is formally raised on the Q3 call. A third reaffirmation with a fourth beat would signal something structural about Q4 or H1 FY2027 that management has not yet articulated.

Q3 non-GAAP operating margin delivery against the 30–32% band. Two consecutive quarters (Q1 37.5%, Q2 33.7%) have printed above the upper guide band. Whether the Q3 guide narrows back to 30–32% is now the durability test — coming in above 32% for a third quarter would justify raising the target model's upper bound from 34% to 36%.

First merchant GPU customer name or revenue quantification above $50M. Two consecutive quarters have passed without an update. If the ~$50M FY figure is intact by Q3, the H2 conversion management flagged as "limited visibility" needs to become a Q4 catalyst or the 2027 story loses one of its key optionality anchors.

Whether "2027 and beyond" gets quantified. The Q2 press release introduced 2027 as a forward marker for the first time. If the Q3 call attaches a revenue or EPS figure to 2027 — even a range — it materially changes the evergreen model's meaning.

Robotics — does $100M hold and does a second named large-customer emerge? A second consecutive quarter of sequential growth with one disclosed e-commerce customer is a clean start. A second named win would convert robotics from "one-customer story" to genuine platform.

Whether the FY EPS range's low end ($9.50) is finally lifted. H1 has delivered $5.02. Holding the $9.50 low end implies H2 could deliver as little as $4.48 — below the current Q3 midpoint on its own trajectory. This is where the FY reaffirmation crosses from conservative to internally inconsistent.

Sources

  1. Teradyne Q2 FY2026 earnings press release (SEC EDGAR): https://www.sec.gov/Archives/edgar/data/97210/000119312526321933/ter-ex99_1.htm
  2. Teradyne Q1 FY2026 earnings press release (referenced for prior-quarter guide baselines and Q1 segment figures).

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