Teradyne surges after Q3, outlook beat estimates driven by AI-related demand

[Teradyne headquarters in North Reading, MA, United States]
JHVEPhoto

Shares of Teradyne (TER [https://seekingalpha.com/symbol/TER]) soared about 18% premarket on Wednesday after third quarter results and fourth quarter outlook exceeded expectations.

The automated test systems and robotics products maker saw third quarter revenue grow [https://seekingalpha.com/pr/20283370-teradyne-reports-third-quarter-2025-results#hasComeFromMpArticle] 4% year-over-year to $769.21M. Meanwhile, Non-GAAP EPS declined about 5.5% year-over-year to $0.85. However, both top and bottom line numbers beat analysts expectations [https://seekingalpha.com/news/4509840-teradyne-non-gaap-eps-of-0_85-beats-by-0_06-revenue-of-769m-beats-by-25_15m].

"Our Semiconductor Test Group delivered third quarter sales that exceeded expectations, driving company sales and profit to the high end of our Q3 guidance range," said Teradyne CEO Greg Smith. “Growth was driven primarily by System-on-a-Chip (SOC) solutions for artificial intelligence applications and strong performance in memory."

Separately, Teradyne said Michelle Turner has been appointed [https://seekingalpha.com/news/4509877-teradyne-announces-michelle-turner-as-new-cfo] as its CFO, effective Nov. 3, replacing Sanjay Mehta, who has served in the role since 2019.

Mehta will stay on as an executive advisor to help support capacity expansion driven by a demand in Semiconductor Test. Mehta plans to retire in 2026.

OUTLOOK

The company noted that strong AI-related demand in Compute and Memory is expected to grow in the fourth quarter of 2025.

"As we look ahead to Q4, AI-related test demand remains robust across compute, networking and memory segments. Q4'25 sales are expected to increase 25% sequentially and 27% from Q4'24," said Smith.

Teradyne expects fourth quarter revenue between $920M and $1B, compared to the revenue consensus [https://seekingalpha.com/symbol/TER/earnings/estimates?period=quarterly] of $816.62M. The company expects non-GAAP net income of $1.20 to $1.46 per share (midpoint at $1.33) versus consensus of $1.04.

MORE ON TERADYNE

* Teradyne: Great Run, Moving To Hold On Valuation (Rating Downgrade) [https://seekingalpha.com/article/4830165-teradyne-great-run-moving-to-hold-on-valuation-rating-downgrade]
* Teradyne: Fair Value And Position Adjustments After This Rally [https://seekingalpha.com/article/4826336-teradyne-fair-value-and-position-adjustments-after-this-rally]
* Teradyne, Inc. (TER) Presents At Goldman Sachs Communicopia + Technology Conference 2025 Transcript [https://seekingalpha.com/article/4820618-teradyne-inc-ter-presents-at-goldman-sachs-communicopia-technology-conference-2025-transcript]
* Biggest stock movers Wednesday: NVDA, JOBY, ENPH, and more [https://seekingalpha.com/news/4509971-biggest-stock-movers-wednesday-joby-enph-and-more]
* Teradyne Non-GAAP EPS of $0.85 beats by $0.06, revenue of $769M beats by $25.15M [https://seekingalpha.com/news/4509840-teradyne-non-gaap-eps-of-0_85-beats-by-0_06-revenue-of-769m-beats-by-25_15m]