TER TERADYNE, INC

Overview and Growth

In fiscal 2025, TERADYNE, INC recorded $3.19B of revenue, net income of $554.05M, and an operating cash inflow of $674.41M. Revenue of $3.19B sets the scale for evaluating how effectively sales translated into profit and cash during the year. Compared with $2.82B in fiscal 2024, revenue recorded a 13.1% year-over-year increase. The company reported diluted EPS of $3.47, adding a shareholder-level measure to the absolute income figures considered below. The per-share result recorded a 4.5% increase from fiscal 2024 diluted EPS of $3.32. Asset turnover was 0.76x, relating the company’s annual revenue directly to the total assets reported at the period end.

Profitability

After reported cost of revenue, the company retained $1.86B as gross profit before recognizing operating expenses and other items. Gross margin was 58.2%, so that share of each revenue unit remained after the cost of revenue reported for the period. Operating income was $650.05M, the earnings remaining from reported operations after the company’s recognized operating cost structure. Relative to revenue, operating income represented 20.4%, showing how efficiently sales converted into operating profit. Net income came to $554.05M, completing the progression from revenue through gross and operating profitability to the final reported result. Net margin was 17.4%, meaning that this portion of revenue remained as net income after all recognized expenses. Pretax income was $653.26M, isolating the reported earnings outcome before the income-tax provision recognized for the fiscal year. The pretax margin was 20.5%, relating income before taxes directly to revenue. Income tax expense totaled $79.30M, providing the reported tax component that separates pretax and after-tax earnings. The effective relationship between income tax and positive pretax income was 12.1%, without assuming a statutory-rate comparison. Net income equaled 19.8% of period-end equity, showing the earnings generated on shareholders’ book capital. The net-income-to-assets relationship measured 13.2%, showing earnings relative to the full balance sheet.

Liquidity and Capital Structure

At period end, the $4.18B asset base was financed through $1.39B of liabilities and $2.80B of equity. The near-term balance sheet paired $1.95B of current assets with $1.12B of current liabilities at the reporting date. The current ratio was 1.75x, with current assets exceeding current liabilities and providing a short-term liquidity cushion. Reported cash and equivalents were $293.75M, separating immediately recognizable cash resources from the rest of the current-asset base. The cash balance equaled 26.3% of current liabilities, showing how much near-term coverage came from cash alone. Liabilities represented 33.2% of total assets, quantifying the liability-funded share of the company’s resource base. Measured against total assets, cash and equivalents represented 7.0%, a balance-sheet composition measure rather than a liquidity forecast. The asset base changed 12.8% from $3.71B in fiscal 2024, leaving current total assets higher year over year.

Cash Flow and Earnings Quality

Operating activities produced a cash inflow of $674.41M, giving the cash-flow counterpart to the accrual-based profit measures reported for the year. The operating-cash-flow-to-net-income relationship was 1.22x, comparing cash generated by operations with the bottom-line earnings result. Capital expenditures used $224.01M, identifying the reported investment outflow deducted from operating cash flow in the free-cash-flow calculation. Capital spending absorbed 33.2% of operating cash flow, quantifying the share of cash from operations directed to investment. After capital spending, free cash flow was $450.41M, leaving cash available for debt reduction, shareholder returns, or further investment. Free cash flow represented 14.1% of revenue, linking post-investment cash generation with the company’s operating scale. Free cash flow equaled 10.8% of total assets, relating post-investment cash generation to the company’s resource base.

Based on the annual report for the fiscal year ending Dec 31, 2025. Analysis generated Oct 21, 2026.