Teradyne Reports Second Quarter 2022 Results

GAAP to Non-GAAP Earnings Reconciliation

(In millions, except per share amounts)
																Quarter Ended
			July 3, 2022			% of Net Revenues										April 3, 2022			% of Net Revenues								July 4, 2021			% of Net Revenues

Net revenues			$	840.8												$	755.4										$	1,085.7

Gross profit GAAP and non-GAAP			$	506.4			60.2	%								$	454.9		60.2	%							$	647.0		59.6	%

Income from operations - GAAP			$	248.0			29.5	%								$	185.9		24.6	%							$	388.9		35.8	%
		Restructuring and other (1)		2.0			0.2	%									15.7		2.1	%								2.5		0.2	%
		Acquired intangible assets amortization		4.9			0.6	%									5.1		0.7	%								5.4		0.5	%
Income from operations - non-GAAP			$	254.9			30.3	%								$	206.7		27.4	%							$	396.8		36.5	%

										Net Income per Common Share											Net Income per Common Share											Net Income per Common Share
			July 3, 2022			% of Net Revenues				Basic			Diluted			April 3, 2022			% of Net Revenues		Basic			Diluted			July 4, 2021			% of Net Revenues		Basic			Diluted
Net income - GAAP			$	197.8			23.5	%		$	1.24		$	1.16		$	161.9		21.4	%	$	1.00		$	0.92		$	328.3		30.2	%	$	1.98		$	1.76
		Restructuring and other (1)		2.0			0.2	%			0.01			0.01			15.7		2.1	%		0.10			0.09			2.5		0.2	%		0.02			0.01
		Acquired intangible assets amortization		4.9			0.6	%			0.03			0.03			5.1		0.7	%		0.03			0.03			5.4		0.5	%		0.03			0.03
		Loss on convertible debt conversions (2)		-			-				-			-			-		-			-			-			1.2		0.1	%		0.01			0.01
		Interest and other (2)		-			-				-			-			-		-			-			-			3.3		0.3	%		0.02			0.02
		Pension mark-to-market adjustment (2)		-			-				-			-			-		-			-			-			(0.6	)	-0.1	%		(0.00	)		(0.00	)
		Exclude discrete tax adjustments		1.6			0.2	%			0.01			0.01			(10.4	)	-1.4	%		(0.06	)		(0.06	)		(1.1	)	-0.1	%		(0.01	)		(0.01	)
		Non-GAAP tax adjustments		(2.3	)		-0.3	%			(0.01	)		(0.01	)		(3.3	)	-0.4	%		(0.02	)		(0.02	)		(1.5	)	-0.1	%		(0.01	)		(0.01	)
		Convertible share adjustment (3)		-			-				-			0.01			-		-			-			0.01			-		-			-			0.10
Net income - non-GAAP			$	204.0			24.3	%		$	1.28		$	1.21		$	169.0		22.4	%	$	1.04		$	0.98		$	337.5		31.1	%	$	2.03		$	1.91

GAAP and non-GAAP weighted average common shares - basic				159.6													162.0											166.0
GAAP weighted average common shares - diluted				171.2													175.6											186.8
		Exclude dilutive shares related to convertible note transaction		(1.9	)												(2.5	)										(9.6	)
Non-GAAP weighted average common shares - diluted				169.3													173.1											177.2

(1	)	Restructuring and other consists of:
			Quarter Ended
			July 3, 2022													April 3, 2022											July 4, 2021
		Employee severance	$	0.4												$	0.6										$	0.4
		Litigation settlement		-													14.7											-
		Acquisition related expenses and compensation		-													(0.2	)										0.3
		Other		1.7													0.7											1.8
			$	2.0												$	15.7										$	2.5


(2	)	For the quarter ended July 4, 2021, adjustment to exclude loss on convertible debt conversions. For the quarter ended July 4, 2021, Interest and other included non-cash convertible debt interest expense. For the quarter ended July 4, 2021, adjustments to exclude actuarial (gain) loss recognized under GAAP in accordance with Teradyne's mark-to-market pension accounting.

(3	)	For the quarters ended July 3, 2022, April 3, 2022, and July 4, 2021, the non-GAAP diluted EPS calculation adds back $0.2 million, $0.3 million, and $0.9 million, respectively, of convertible debt interest expense to non-GAAP net income. For the quarters ended July 3, 2022, April 3, 2022, and July 4, 2021, non-GAAP weighted average diluted common shares include 9.0 million, 10.0 million and 10.1 million shares, respectively, from the convertible note hedge transaction.

			Six Months Ended
			July 3, 2022			% of Net Revenues										July 4, 2021			% of Net Revenues

Net Revenues			$	1,596.1												$	1,867.3

Gross profit GAAP and non-GAAP			$	961.3			60.2	%								$	1,108.6		59.4	%

Income from operations - GAAP			$	433.8			27.2	%								$	621.9		33.3	%
		Restructuring and other (1)		17.8			1.1	%									(4.6	)	-0.2	%
		Acquired intangible assets amortization		9.9			0.6	%									10.9		0.6	%
Income from operations - non-GAAP			$	461.5			28.9	%								$	628.2		33.6	%

										Net Income per Common Share											Net Income per Common Share
			July 3, 2022			% of Net Revenues				Basic			Diluted			July 4, 2021			% of Net Revenues		Basic			Diluted
Net income - GAAP			$	359.7			22.5	%		$	2.24		$	2.07		$	533.8		28.6	%	$	3.21		$	2.85
		Restructuring and other (1)		17.8			1.1	%			0.11			0.10			(4.6	)	-0.2	%		(0.03	)		(0.02	)
		Acquired intangible assets amortization		9.9			0.6	%			0.06			0.06			10.9		0.6	%		0.07			0.06
		Loss on convertible debt conversions (2)		-			-				-			-			5.2		0.3	%		0.03			0.03
		Interest and other (2)		-			-				-			-			6.9		0.4	%		0.04			0.04
		Pension mark-to-market adjustment (2)		-			-				-			-			(0.6	)	-0.0	%		(0.00	)		(0.00	)
		Exclude discrete tax adjustments		(8.8	)		-0.6	%			(0.05	)		(0.05	)		(16.3	)	-0.9	%		(0.10	)		(0.09	)
		Non-GAAP tax adjustments		(5.6	)		-0.4	%			(0.03	)		(0.03	)		(1.9	)	-0.1	%		(0.01	)		(0.01	)
		Convertible share adjustment (3)		-			-				-			0.03			-		-			-			0.16
Net income - non-GAAP			$	373.0			23.4	%		$	2.32		$	2.18		$	533.4		28.6	%	$	3.21		$	3.02

GAAP and non-GAAP weighted average common shares - basic				160.8													166.2
GAAP weighted average common shares - diluted				173.4													187.2
		Exclude dilutive shares from convertible note		(2.2	)												(9.9	)
Non-GAAP weighted average common shares - diluted				171.2													177.3

(1	)	Restructuring and other consists of:
			Six Months Ended
			July 3, 2022													July 4, 2021
		Litigation settlement	$	14.7												$	-
		Employee severance		0.9													0.6
		Acquisition related expenses and compensation		(0.2	)												-
		Contingent consideration fair value adjustment		-													(7.2	)
		Other		2.3													1.9											-
			$	17.8												$	(4.6	)

(2	)	For the six months ended July 4, 2021, adjustment to exclude loss on convertible debt conversions. For the six months ended July 4, 2021, Interest and other included non-cash convertible debt interest expense. For the six months ended July 4, 2021, adjustments to exclude actuarial (gain) loss recognized under GAAP in accordance with Teradyne's mark-to-market pension accounting.

(3	)	For the six months ended July 3, 2022 and July 4, 2021, the non-GAAP diluted EPS calculation adds back $0.5 million and $2.1 million, respectively, of convertible debt interest expense to non-GAAP net income. For the six months ended July 3, 2022 and July 4, 2021, non-GAAP weighted average diluted common shares include 9.5 million and 9.8 million shares, respectively, related to the convertible debt hedge transaction.

GAAP to Non-GAAP Reconciliation of Third Quarter 2022 guidance:

GAAP and non-GAAP third quarter revenue guidance:						$760 million			to	$840 million
GAAP net income per diluted share						$	0.86			$	1.12
		Exclude acquired intangible assets amortization					0.03				0.03
		Convertible share adjustment					0.01				0.01
Non-GAAP net income per diluted share						$	0.90			$	1.16

For press releases and other information of interest to investors, please visit Teradyne's homepage at http://www.teradyne.com.
		Contact: Teradyne, Inc.
		Andy Blanchard 978-370-2425
		Vice President of Corporate Relations

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