$TER · TERADYNE, INC
Teradyne filed its Q3 FY2026 10-Q, reporting revenue of $1.306B (+69.8% YoY), GAAP EPS of $2.17, gross margin of 59.1%, and operating margin of 30.8%. The Semiconductor Test segment drove the surge with $1.07B in revenue (+76.9%), fueled by AI-related memory and compute demand. Korea became the dominant geography at 32% of revenue, up from 12% a year ago. Nine-month operating cash flow reached $1.05B, and retained earnings more than doubled to $1.62B.
- Q3 revenue $1.306B, +69.8% YoY, driven by Semiconductor Test segment up 76.9% to $1.07B
- Q3 GAAP EPS $2.17 vs $0.75 a year ago; gross margin expanded 0.7pp to 59.1%
- Korea surged to 32% of revenue from 12% last year; Taiwan dropped to 14% from 37%
- Nine-month operating cash flow $1.05B vs $393M YoY; retained earnings more than doubled to $1.62B
- Stock repurchases slowed sharply: $173M YTD vs $524M in prior-year period
Shares fell 9.69% to $267.52 despite blockbuster results, suggesting the market had priced in even stronger AI-driven growth or is rotating on peak-cycle fears. The $41.8B market cap implies the selloff erased roughly $4B in value.
A 70% revenue surge and near-tripling of EPS that still triggers a ~10% single-day selloff signals peak expectations in AI-exposed semiconductor equipment names.
Teradyne's 70% revenue growth mirrors the AI capex boom lifting peers like AMAT and LRCX, but the sharp selloff on strong numbers echoes a pattern of semiconductor equipment stocks struggling to exceed already-elevated expectations.
Customer concentration risk is acute: Korea alone represented 32% of Q3 revenue, and the filing notes the semiconductor test business depends heavily on a limited number of large customers. A downturn in memory or compute AI capex could disproportionately hit results.