TER

Broadcom AVGO reported third-quarter fiscal 2026 non-GAAP earnings of $3.32 per share, up 96.4% year over year and 3.11% above the Zacks Consensus Estimate. Revenues surged 85.5% year over year to $29.59 billion and beat the consensus mark by 0.41%. Strong custom AI accelerator and networking demand drove the quarterly results. AI semiconductor revenues jumped 221% year over year to $16.7 billion. Broadcom Inc. price-consensus-eps-surprise-chart | Broadcom Inc. Quote AI semiconductor revenues represented 56% of total revenues. XPU shipments increased more than 3.5 times year over year and accounted for 73% of AI revenues, while AI networking revenues rose more than 2.5 times.Broadcom shipped Ironwood TPU v7 in high volume to Anthropic and Google, began production shipments of Google’s next-generation TPU v8i and shipped OpenAI’s first-generation Jalapeno custom accelerator. AVGO expects Meta’s MTIA accelerator to enter production shipments in the fourth quarter.Semiconductor Solutions revenues surged 127% year over year to a record $20.84 billion and represented 70% of total revenues. Non-AI semiconductor revenues were $4.2 billion, up 5% year over year and flat sequentially.The segment's operating margin rose 440 basis points (bps) year over year to 61% as revenue growth outpaced operating expense growth. Broadcom continues to invest in research and development while expanding capacity for substrates and optical components to support semiconductor demand. Infrastructure Software revenues increased 29% year over year to $8.75 billion and contributed 30% of total revenues. Annualized recurring revenue (ARR) grew 15% year over year.Software operating margin expanded 650 bps year over year to roughly 84%. Broadcom also introduced VMware Private AI Cloud, aimed at letting enterprises run AI alongside existing applications while maintaining security, compliance and control over data. Non-GAAP gross margin was $22.19 billion, translating to a 75% gross margin. The margin declined 210 bps sequentially as AI semiconductor revenues became a larger part of the sales mix.Non-GAAP operating expenses were $2.1 billion compared with $2.04 billion a year earlier. Non-GAAP operating income increased 92% year over year to $20.1 billion, while the operating margin reached 67.9%, reflecting operating leverage from the sharp revenue increase. The company ended the quarter with $24 billion in cash and cash equivalents.Broadcom generated $14.20 billion in cash from operations and spent $532 million on capital expenditures. Free cash flow reached a record $13.67 billion, equal to 46% of revenues.AVGO paid $3.1 billion in dividends and reduced long-term debt by $5.6 billion during the quarter. The board also approved a quarterly dividend of 65 cents per share. For the fourth quarter of fiscal 2026, Broadcom expects revenues of approximately $34.8 billion, representing 93% year-over-year growth. Semiconductor revenues are projected at about $26.1 billion, including $21.7 billion of AI semiconductor revenues, up 236%.Infrastructure Software revenues are expected at roughly $8.7 billion. Broadcom forecasts a non-GAAP operating margin of about 66% and a gross margin of approximately 73% as the mix shifts further toward XPUs with higher memory content. Broadcom now expects fiscal 2026 AI semiconductor revenues of $58 billion, up 186% year over year and above its prior $56 billion outlook. The company has secured supply to support approximately $115 billion of AI semiconductor revenues in fiscal 2027.AVGO also sees fiscal 2028 AI semiconductor revenues reaching $230 billion. The company said demand exceeds its fiscal 2027 outlook, while deployment timing depends on factors including data-center readiness, leading-edge silicon, substrates and memory supply. Broadcom carries a Zacks Rank #3 (Hold) at present.Some better-ranked stocks in the broader Zacks Computer and Technology sector are Silicon Motion Technology SIMO, Sandisk SNDK and Teradyne TER. Each of the three stocks sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Long-term earnings growth rates for Silicon Motion Technology, Sandisk and Teradyne are pegged at 53.59%, 48.16% and 54.38%, respectively. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Broadcom Inc. (AVGO) : Free Stock Analysis Report Sandisk Corporation (SNDK) : Free Stock Analysis Report Teradyne, Inc. (TER) : Free Stock Analysis Report Silicon Motion Technology Corporation (SIMO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

A month has gone by since the last earnings report for Flex (FLEX). Shares have added about 3% in that time frame, underperforming the S&P 500. But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Flex due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Flex Ltd. before we dive into how investors and analysts have reacted as of late. FLEX Q1 Earnings Beat on CPI Strength Flex reported first-quarter fiscal 2027 adjusted earnings of $1.00 per share, up 38.9% year over year. The figure beat the Zacks Consensus Estimate of 93 cents by 7.5%. Revenues advanced 20.6% to $7.93 billion and topped the consensus mark of $7.58 billion by 4.6%. Broad-based segment growth, led by a 35% expansion in Cloud and Power Infrastructure, supported the results. FLEX Gains From All Three Segments Regulated Manufacturing Solutions revenues rose 12% year over year to $2.67 billion. Industrial demand benefited from energy infrastructure and warehouse automation, while connected medical devices supported Healthcare.Integrated Technology Solutions revenues increased 20% to $3.06 billion, aided by stronger advanced networking demand. Cloud and Power Infrastructure generated $2.20 billion, supported by robust demand across Power and Cloud & Cooling. Cloud and Power Infrastructure adjusted operating income rose 38% to $214 million, with margin increasing 20 basis points to 9.7%. Regulated Manufacturing Solutions income climbed 40% to $176 million, while Integrated Technology Solutions income advanced 21% to $158 million. Flex Expands Margins on Favorable Mix Adjusted gross profit increased 28% to $761 million. Adjusted gross margin expanded 50 basis points to 9.6%, reflecting the benefit of the company’s mix and operating execution. Adjusted operating income climbed 35% to $534 million, while adjusted operating margin improved 70 basis points to 6.7%. GAAP selling, general and administrative expenses rose to $334 million from $233 million. Legal and other charges totaled $67 million, including $53 million primarily tied to the planned spin-off and $14 million of acquisition costs. Cash Flow Reflects Heavy Investment Cash provided by operating activities was $276 million, down from $399 million a year earlier. Changes in working capital and other items used $149 million against a $65 million contribution in the prior-year quarter. Net capital expenditures were $235 million, leaving free cash flow of $41 million. Free cash flow included a $24 million negative impact from separation costs related to the Cloud and Power Infrastructure spin-off. Flex’s Balance Sheet Changes With Deal Activity Cash and cash equivalents increased to $2.84 billion as of June 26, 2026, from $2.39 billion at fiscal 2026-end. Long-term debt rose to $5.22 billion from $3.75 billion over the same period. The quarter included $1.13 billion of cash used for business acquisitions and $90 million of proceeds from divestitures. Flex raised $2.83 billion through bank borrowings and long-term debt and repaid $1.39 billion of borrowings and other financing liabilities. Q2 Guidance For the second quarter of fiscal 2027, FLEX expects revenues of $7.95-$8.25 billion. Adjusted operating income is projected between $535 million and $565 million, with adjusted earnings of $1.00-$1.07 per share. Management expects Regulated Manufacturing Solutions revenues to rise in the mid-single to high-single digits. Integrated Technology Solutions is projected to grow in the high-single to low-double digits, while Cloud and Power Infrastructure is expected to increase 45-55%. Fiscal 2027 Outlook Flex raised its fiscal 2027 revenue guidance to $33.7-$35.2 billion from $32.3-$33.8 billion. The adjusted operating margin outlook was tweaked to 7.0-7.2% from 7.0-7.1%. Adjusted earnings guidance was raised to $4.42-$4.74 per share from $4.21-$4.51. The company now expects Cloud and Power Infrastructure revenues to grow 65-75%, while free cash flow conversion is projected at roughly 40%, down from about 60% due to one-time separation costs. It turns out, estimates revision have trended upward during the past month. Currently, Flex has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for value investors. Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Flex has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Flex belongs to the Zacks Electronics - Miscellaneous Products industry. Another stock from the same industry, Teradyne (TER), has gained 1.8% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. Teradyne reported revenues of $1.33 billion in the last reported quarter, representing a year-over-year change of +103.9%. EPS of $2.47 for the same period compares with $0.57 a year ago. For the current quarter, Teradyne is expected to post earnings of $2.03 per share, indicating a change of +138.8% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.7% over the last 30 days. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Teradyne. Also, the stock has a VGM Score of C. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Flex Ltd. (FLEX) : Free Stock Analysis Report Teradyne, Inc. (TER) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

It has been about a month since the last earnings report for Teradyne (TER). Shares have added about 13.7% in that time frame, outperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is Teradyne due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Teradyne, Inc. before we dive into how investors and analysts have reacted as of late. Teradyne delivered second-quarter 2026 non-GAAP earnings of $2.47 per share, up 333.3% year over year and beating the Zacks Consensus Estimate by 21.08%.Revenues surged 103.9% to $1.329 billion and topped the consensus mark by 9.37%. Results reflected record Memory revenues, supported by continued DRAM strength and a resurgence in NAND final test. The company also registered its second consecutive quarter of record revenues. Semiconductor Test generated revenues of $1.122 billion, representing 84.4% of total quarterly sales. The segment remained Teradyne’s primary growth engine as demand for advanced compute and memory testing stayed strong.Product Test contributed $107 million, or 8.1% of total revenues. Robotics generated $100 million, which accounted for the remaining 7.5%. The distribution shows that Semiconductor Test continued to dominate Teradyne’s revenue mix, although each business group participated in the year-over-year expansion. Record Memory revenues were driven by continued strength in DRAM and renewed demand for NAND final-test systems. These trends supported another strong quarter for Teradyne’s semiconductor-testing portfolio.Management linked the performance to its strategy of capturing test and robotics opportunities from the wafer stage through the AI data center. The company also noted robust near-term AI-related demand across its served markets. Non-GAAP gross profit was $794.6 million, with the gross margin reaching 59.8%. This compared with $373.3 million and 57.3%, respectively, in the year-ago quarter, marking a 250-basis-point expansion.Selling and administrative expenses rose 22% year over year to $192.5 million. However, these costs represented 14.5% of revenues, down from 24.2% in the prior-year period as sales growth outpaced the increase in spending.Engineering and development expenses climbed 32% year over year to $156.3 million. As a share of revenues, the expense fell to 11.8% from 18.2%, indicating that higher development spending was absorbed by the larger revenue base. Non-GAAP income from operations increased 356.5% year over year to $448.3 million. The non-GAAP operating margin expanded to 33.7% from 15.1%, reflecting substantial operating leverage from the sharp revenue increase. As of June 28, 2026, Teradyne’s cash and cash equivalents (including marketable securities) were $354.8 million, up from $245.5 million as of March 29, 2026.Net cash provided by operating activities was $469.1 million in the second quarter. For the third quarter of 2026, Teradyne expects revenues in the range of $1.20-$1.30 billion. GAAP net income attributable to the company is projected to be in the range of $1.79-$2.09 per share.Non-GAAP earnings are expected to be between $1.85 and $2.15 per diluted share. Management said that the outlook reflects robust AI-related demand, while rising wafer fabrication equipment investment is expected to support continued growth in 2027 and beyond. It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 45.03% due to these changes. At this time, Teradyne has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy. Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Teradyne has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Teradyne, Inc. (TER) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Cisco Systems CSCO reported fourth-quarter fiscal 2026 non-GAAP earnings of $1.22 per share, up 23% year over year and beating the Zacks Consensus Estimate by 4.27%. Broad networking demand and operating leverage supported the year-over-year growth.Revenues increased 18% year over year to $17.252 billion, topping the consensus mark by 2.36%. Product revenues increased 24% year over year.Product orders increased 35% year over year (up 25% excluding hyperscalers), while annualized recurring revenue (ARR) reached $32.1 billion, up 3% year over year, highlighting broad demand. Cisco Systems, Inc. price-consensus-eps-surprise-chart | Cisco Systems, Inc. Quote Remaining performance obligations (RPO) totaled $46.7 billion, up 7% year over year, with product RPO rising 9%, while services RPO increased 6% year over year. Total software revenues increased 11% year over year to $6.183 billion, while subscription revenues represented 48% of total revenues. Networking revenues surged 28% year over year to $9.791 billion. The increase reflected triple-digit growth in AI infrastructure, double-digit growth in data center switching and continued growth in campus networking.Networking product orders jumped 40%, marking the eighth consecutive quarter of double-digit growth. Campus networking orders advanced 20%, while data center networking orders increased more than 35%. Wi-Fi 7 accounted for more than half of total wireless orders in the quarter.Hyperscaler AI infrastructure orders totaled $4 billion in the fourth quarter, taking fiscal 2026 orders to $9.3 billion, roughly 4.5 times the fiscal 2025 level. The fiscal-year mix was approximately 60% Silicon One-based systems and 40% optics.Cisco also secured three new hyperscaler design wins, covering P200-powered scale-across systems, G200-powered scale-out systems and an optical line system. AI infrastructure orders from neocloud, sovereign and enterprise customers exceeded $400 million in the quarter and totaled $1.3 billion for fiscal 2026. Security revenues increased 14% year over year to $2.226 billion. The entire security portfolio, including Splunk, recorded double-digit order growth. Firewall orders increased more than 30%, while more than 1,500 customers purchased newer offerings such as Secure Access, XDR, Hypershield and AI Defense during the quarter.Collaboration revenues advanced 12% to $1.167 billion, while Observability revenues rose 6% to $275 million. Services revenues were essentially flat at $3.793 billion. Non-GAAP gross margin was 66.3%, down 210 basis points (bps) year over year. Product gross margin fell 270 bps to 64.8%, primarily due to a higher hardware mix and memory costs, partly offset by productivity improvements and price increases. Services gross margin improved 80 bps to 71.6%.Non-GAAP operating expenses were $5.243 billion, up 5%, but declined to 30.4% of revenues from 34.1% a year earlier. Consequently, non-GAAP operating margin expanded to 35.9% from 34.3%, demonstrating operating leverage despite gross-margin pressure. Cash, cash equivalents and investments totaled $15.918 billion at the end of the fiscal fourth quarter compared with $16.6 billion at the end of the third quarter of fiscal 2026.Operating cash flow increased 27% year over year to $5.386 billion. CSCO returned $3.161 billion to shareholders through $1.502 billion of share repurchases and $1.659 billion of dividends. The current program has $8.1 billion under remaining authorization. For the first quarter of fiscal 2027, Cisco expects revenues between $18 billion and $18.2 billion. Non-GAAP earnings are projected at $1.32-$1.34 per share, with non-GAAP gross margin of 65-66% and operating margin of 35.5-36.5%.For fiscal 2027, Cisco projects revenues of $72.2-$73.4 billion and non-GAAP earnings of $5.05-$5.11 per share. Hyperscaler AI infrastructure revenues are expected to reach $7.5 billion, up from approximately $4 billion in fiscal 2026. Cisco currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Zacks Computer and Technology sector include Sandisk SNDK, Teradyne TER, and Microchip MCHP. Each of the three stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Sandisk, Teradyne and Microchip shares have jumped 474.7%, 111.2% and 24.9% year to date, respectively. Long-term earnings growth rate for Sandisk, Teradyne and Microchip is currently pegged at 48.16%, 54.38% and 45.48%, respectively. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report Sandisk Corporation (SNDK) : Free Stock Analysis Report Microchip Technology Incorporated (MCHP) : Free Stock Analysis Report Teradyne, Inc. (TER) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Teradyne, Inc. TER used its second-quarter 2026 earnings call to position record results as part of a multiyear AI-driven expansion. Management linked demand across its businesses to the data center build-out. Non-GAAP EPS of $2.47 topped the Zacks Consensus Estimate of $2.04, while revenues of $1.33 billion exceeded the $1.22 billion estimate. Management expressed stronger conviction in 2027 growth, share gains and a larger automated test equipment market. Teradyne, Inc. price-consensus-eps-surprise-chart | Teradyne, Inc. Quote President and CEO Gregory Smith said that AI-related revenues exceeded 60% of sales. Demand extended from accelerators and memory to networking, storage, power, board test and robotics. Smith said that all three business groups grew year over year and sequentially. That breadth supported the wafer-to-AI-data-center strategy, which targets opportunities from semiconductor production through rack assembly. Longer data center investment plans are giving chipmakers confidence to add wafer capacity, Smith said. He expects another year of healthy growth in 2027. Smith said that rising wafer-fab-equipment spending and advanced packaging are reshaping automated test equipment growth. More wafers, denser nodes and complex multichip packages increase transistors, bits and required test intensity. Management sees WFE spending approaching $250 billion by decade end and the ATE TAM reaching or exceeding $20 billion. Test spending rose from about 4% of semiconductor capital outlays in 2023 to 8% in the first five months of 2026. A UBS analyst asked how durable that ratio is. Smith said that it may settle between 7% and 9%, noting that WFE and ATE revenue often differ because test demand follows fab investment with a lag. Smith said that TER completed correlation with a second AI hyperscaler and shipped its first merchant GPU order. He expects these milestones to support compute share gains beginning in 2027. He also stated that progress will be gradual. One compute customer is at the mature dual-vendor stage, one is a fast follower, and one remains in qualification. Fast-follower share may rise toward 30%. A Bank of America analyst asked about server CPU exposure. Smith said that greater ARM adoption would improve TER’s share opportunity, while the company continues pursuing x86 business. CFO Michelle Turner said that Semi Test revenues were $1.12 billion, including $843 million in system-on-chip test, $212 million in memory and $67 million in industrial systems test. Memory set a record on HBM, DRAM and NAND demand. Turner highlighted Product Test revenues of $107 million and Robotics revenues of $100 million. The Omnyx board-test platform, the Multilane Test Products joint venture and electronics-manufacturing demand extended AI exposure beyond chip test. Smith said networking growth spans copper, pluggable optics and co-packaged optics. He put the 2028 CPO test market at $300-$700 million and a 2027 low-end scenario around $200 million. Turner guided third-quarter revenues to $1.2-$1.3 billion and non-GAAP EPS to $1.85-$2.15. Gross margin is expected at 58-59%, with operating expenses at 29-30% of sales. Management expects first-half revenues to represent 50% to 52% of full-year sales, reflecting better second-half visibility. Growth is expected in memory, auto and industrial, industrial systems test, Product Test and Robotics, offset by mobile weakness and compute timing. Turner said that product mix, memory and launches should put full-year gross margin near 59%. Fourth-quarter operating expenses should be comparable to the third quarter as Teradyne invests for 2027. Turner said that second-quarter free cash flow was $378 million and cash and investments totaled $517 million. Priorities remain R&D, operational scaling and M&A flexibility, alongside $20 million of dividends and $69 million of buybacks. Smith’s overarching message was that current spending on products and customer teams reflects confidence in sustained AI demand. Management plans to update its target earnings model on the fourth-quarter earnings call. TER sports a Zacks Rank #1 (Strong Buy) at present, tied to favorable earnings estimate revision trends and potential outperformance over the next one to three months. You can see the complete list of today’s Zacks #1 Rank stocks here. Its Growth Score of B and Momentum Score of B offer favorable signals, while the Value Score of F and VGM Score of C indicate weak value characteristics and middling combined style support. The Zacks Rank can change as analysts revise estimates after the reported results, so the current signal is not fixed. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Teradyne, Inc. (TER) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

For the quarter ended June 2026, Teradyne (TER) reported revenue of $1.33 billion, up 103.9% over the same period last year. EPS came in at $2.47, compared to $0.57 in the year-ago quarter. The reported revenue represents a surprise of +9.37% over the Zacks Consensus Estimate of $1.22 billion. With the consensus EPS estimate being $2.04, the EPS surprise was +21.08%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Teradyne performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Revenue- Semiconductor Test- System on-a-Chip: $842.97 million compared to the $826.1 million average estimate based on two analysts. The reported number represents a change of +112.6% year over year. Revenue- Semiconductor Test- Memory: $212.33 million versus the two-analyst average estimate of $179.3 million. The reported number represents a year-over-year change of +248.4%. Revenue- Industrial Automation (Robotics): $100 million versus $89.06 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +33.3% change. Revenue- Semiconductor Test- IST: $66.52 million compared to the $43 million average estimate based on two analysts. The reported number represents a change of +93.7% year over year. Revenue- Semiconductor Test: $1.12 billion versus the two-analyst average estimate of $1.05 billion. The reported number represents a year-over-year change of +128.1%. Revenue- Product Test: $107 million versus the two-analyst average estimate of $92.75 million. View all Key Company Metrics for Teradyne here>>> Shares of Teradyne have returned -1% over the past month versus the Zacks S&P 500 composite's -0.5% change. The stock currently has a Zacks Rank #1 (Strong Buy), indicating that it could outperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Teradyne, Inc. (TER) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Revenue: Total company revenue topped $1.3 billion, up over 100% year over year. Non-GAAP EPS: $2.47, up over 300% year over year. Semi Test Revenue: $1 billion, up 128% from Q2 2025. SoC Revenue: $843 million. Memory Revenue: $212 million, a record quarter. IST Revenue: $67 million, up 94% from the prior year. Product Test Group Revenue: $107 million, up 26% year over year. Robotics Revenue: $100 million, up 33% year over year. Gross Margin: 59.8%, up 250 basis points year over year. Operating Income: $448 million, with an operating margin of 33.7%. Free Cash Flow: $378 million in the quarter; $579 million for the first half of 2026, up 150% from the prior year period. Cash and Investments: $517 million, up over 30% from last quarter. Q3 Revenue Guidance: $1.2 billion to $1.3 billion. Q3 Non-GAAP EPS Guidance: $1.85 to $2.15. Q3 Gross Margin Guidance: 58% to 59%. Warning! GuruFocus has detected 3 Warning Signs with TER. Is TER fairly valued? Test your thesis with our free DCF calculator. Release Date: July 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Teradyne Inc (NASDAQ:TER) delivered record revenue for the second quarter, driven by strong AI demand, with total company revenue exceeding $1.3 billion, up over 100% year over year. All three business groups, Semi Test, Product Test, and Robotics, experienced year-over-year and quarter-over-quarter growth, highlighting the widespread demand for AI across the business. The company has a strong position in the AI-driven market, with AI-related revenue accounting for more than 60% of total revenue, demonstrating the effectiveness of their wafer to AI data center strategy. Teradyne Inc (NASDAQ:TER) is confident in its long-term growth prospects, driven by increased semiconductor capital investment and advanced packaging, which are expected to sustain growth in the ATE market. The company is making strategic investments in next-generation products and expanding its customer base, positioning itself for future market share gains, particularly in the compute segment and memory markets. Despite strong overall performance, there is potential for variability in gross margins due to product mix and new product launches, which could impact profitability. The company faces challenges in maintaining its market share in the highly competitive SoC segment, with expectations of only slight incremental gains. There is uncertainty regarding the correlation between WFE (wafer fab equipment) investment and ATE (automated test equipment) growth, with potential time lags affecting revenue predictability. The Robotics segment, while growing, is not receiving as much attention as other parts of the business, and its growth trajectory remains uncertain. The company acknowledges potential supply chain disruptions and the need for dual vendor strategies, which could impact its ability to meet customer demand efficiently. Q: Greg, in correlating the test TAM to the WFE TAM, typically, it's been about 8%. Is 8% the right number? And what are the puts and takes on that? A: Gregory Smith, CEO: The 8% figure is a trajectory that has increased from 4% in 2023 to 7% in 2025, and now 8% in 2026. We believe it will settle between 7% to 9%, but it won't continue to rise indefinitely. Q: When do all these new qualifications start to add to share gains? What's the right long-term share to use? A: Gregory Smith, CEO: We are gaining share in most market segments, but the strongest growth is in areas where we have the lowest share. Our compute segment share is stabilizing and starting to increase. Share changes will be gradual, with noticeable effects starting in 2027. Q: To what extent are you focused on consolidating the test insertion before the complete package? Are you facing challenges? A: Gregory Smith, CEO: We participate in an open ecosystem at every step of the wafer to data center journey. Customers value this open ecosystem, and we compete for every opportunity. Supply chain disruptions are a concern, driving dual vendor strategies to ensure capacity. Q: How are you thinking about memory into '27? Should we expect lumpiness in the first half? A: Gregory Smith, CEO: We don't anticipate particular lumpiness in memory for 2027. Capacity additions are planned, and memory manufacturers are making test capacity plans into 2027, indicating stable growth. Q: Can you speak to gross margin and the guide, and what's driving the 130 bps headwind? A: Michelle Turner, CFO: Gross margins vary quarter-to-quarter due to product mix and new product introductions. The full-year gross margin is expected to be around 59%, with memory continuing to be a strain on margins into 2027. For the complete transcript of the earnings call, please refer to the full earnings call transcript.