Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2024

Schedule of Fair Value of Financial Assets and Liabilities Measured on Recurring Basis

The following table sets forth by fair value hierarchy Teradyne’s financial assets and liabilities that were measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023.

	March 31, 2024
	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Assets
Cash	$	278,229	$	—	$	—	$	278,229
Cash equivalents		428,675		499		—		429,174
Available-for-sale securities:
U.S. Treasury securities		—		40,068		—		40,068
Corporate debt securities		—		35,845		—		35,845
Certificates of deposit and time deposits		—		21,706		—		21,706
Debt mutual funds		10,007		—		—		10,007
U.S. government agency securities		—		3,863		—		3,863
Commercial paper		—		1,689		—		1,689
Non-U.S. government securities		—		798		—		798
Equity securities:
Mutual funds		49,229		—		—		49,229
	$	766,140	$	104,468	$	—	$	870,608
Derivative assets		—		4,251		—		4,251
Total	$	766,140	$	108,719	$	—	$	874,859
Liabilities
Derivative liabilities		—		936		—	$	936
Total	$	—	$	936	$	—	$	936
Reported as follows:
	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	706,904	$	499	$	—	$	707,403
Marketable securities		—		41,300		—		41,300
Long-term marketable securities		59,236		62,669		—		121,905
Prepayments		—		4,251		—		4,251
Total	$	766,140	$	108,719	$	—	$	874,859
Liabilities
Other current liabilities	$	—	$	936	$	—	$	936
Total	$	—	$	936	$	—	$	936

	December 31, 2023
	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Assets
Cash	$	298,156	$	—	$	—	$	298,156
Cash equivalents		453,298		6,117		—		459,415
Available-for-sale securities:
Corporate debt securities		—		52,734		—		52,734
U.S. Treasury securities		—		41,808		—		41,808
Certificates of deposit and time deposits		—		21,772		—		21,772
Debt mutual funds		8,773		—		—		8,773
U.S. government agency securities		—		4,892		—		4,892
Commercial paper		—		1,667		—		1,667
Non-U.S. government securities		—		810		—		810
Equity securities:
Mutual Funds		47,132		—		—		47,132
	$	807,359	$	129,800	$	—	$	937,159
Derivative assets		—		18,746		—		18,746
Total	$	807,359	$	148,546	$	—	$	955,905
Liabilities
Derivative liabilities		—		2,545		—		2,545
Total	$	—	$	2,545	$	—	$	2,545
Reported as follows:
	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	751,454	$	6,117	$	—	$	757,571
Marketable securities		—		62,154		—		62,154
Long-term marketable securities		55,905		61,529		—		117,434
Prepayments		—		18,746		—		18,746
Total	$	807,359	$	148,546	$	—	$	955,905
Liabilities
Other current liabilities	$	—	$	2,545	$	—	$	2,545
Total	$	—	$	2,545	$	—	$	2,545

Schedule of Carrying Amounts and Fair Values of Financial Instruments

The carrying amounts and fair values of Teradyne’s financial instruments at March 31, 2024 and December 31, 2023, were as follows:

	March 31, 2024				December 31, 2023
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Assets
Cash and cash equivalents	$	707,403	$	707,403	$	757,571	$	757,571
Marketable securities		163,205		163,205		179,588		179,588
Derivative assets		4,251		4,251		18,746		18,746
Liabilities
Derivative liabilities		936		936		2,545		2,545

Schedule of Available-for-Sale Marketable Securities

The following table summarizes the composition of available-for-sale marketable securities at March 31, 2024:

	March 31, 2024
	Available-for-Sale
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Corporate debt securities	$	39,946	$	89	$	(4,190	)	$	35,845	$	31,461
U.S. Treasury securities		44,519		1		(4,452	)		40,068		38,914
Certificates of deposit and time deposits		21,706		—		—			21,706		—
Debt mutual funds		10,363		—		(356	)		10,007		3,303
U.S. government agency securities		3,883		—		(20	)		3,863		3,863
Commercial paper		1,670		19		—			1,689		—
Non-U.S. government securities		798		—		—			798		—
	$	122,885	$	109	$	(9,018	)	$	113,976	$	77,541

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	41,308	$	19	$	(27	)	$	41,300	$	17,657
Long-term marketable securities		81,577		90		(8,991	)		72,676		59,884
	$	122,885	$	109	$	(9,018	)	$	113,976	$	77,541

The following table summarizes the composition of available-for-sale marketable securities at December 31, 2023:

	December 31, 2023
	Available-for-Sale
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Corporate debt securities	$	56,458	$	201	$	(3,925	)	$	52,734	$	44,263
U.S. Treasury securities		45,725		14		(3,931	)		41,808		35,080
Certificates of deposit and time deposits		21,772		—		—			21,772		—
Debt mutual funds		9,081		—		(308	)		8,773		3,303
U.S. government agency securities		4,898		—		(6	)		4,892		4,892
Commercial paper		1,633		34		—			1,667		—
Non-U.S. government securities		810		—		—			810		—
	$	140,377	$	249	$	(8,170	)	$	132,456	$	87,538

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	62,385	$	36	$	(267	)		62,154	$	34,844
Long-term marketable securities		77,992		213		(7,903	)		70,302		52,694
	$	140,377	$	249	$	(8,170	)	$	132,456	$	87,538

Contractual Maturities of Investments Held

The contractual maturities of investments in available-for-sale securities held at March 31, 2024, were as follows:

	March 31, 2024
	Cost		Fair Market Value
	(in thousands)
Due within one year	$	41,308	$	41,300
Due after 1 year through 5 years		26,360		25,819
Due after 5 years through 10 years		7,760		7,405
Due after 10 years		37,094		29,445
Total	$	112,522	$	103,969

Schedule of Notional Amount of Derivatives

At March 31, 2024 and December 31, 2023, Teradyne had the following contracts to buy and sell non-U.S. currencies for U.S. dollars and other non-U.S. currencies with the following notional amounts:

	Net Notional Value
	March 31, 2024		December 31, 2023
	(in millions)
Currency Hedged (Buy/Sell)
U.S. dollar/Japanese yen	$	57.5	$	11.0
U.S. dollar/Danish krone		28.4		36.0
U.S. dollar/Taiwan dollar		20.1		42.7
U.S. dollar/Korean won		6.6		7.2
U.S. dollar/British pound sterling		1.0		1.5
Euro/U.S. dollar		25.8		25.3
Singapore dollar/U.S. dollar		17.6		16.6
Philippine peso/U.S. dollar		9.9		10.1
Chinese yuan/U.S. dollar		0.6		1.0
Danish krone/U.S. dollar		0.6		0.7
Total	$	168.1	$	152.1

Schedule of Foreign Currency Cash Flow Hedges

At March 31, 2024 and December 31, 2023, Teradyne had the following cash flow hedge contracts to buy and sell non-U.S. currencies for U.S. dollars with the following notional amounts:

	Net Notional Value
	March 31, 2024		December 31, 2023
	(in millions)
Currency Hedged (Buy/Sell)
U.S. dollar/Japanese yen	$	—	$	35.5
Total	$	—	$	35.5

Schedule of Derivative Instruments in Statement of Financial Position at Fair Value

The following table summarizes the fair value of derivative instruments as of March 31, 2024 and December 31, 2023:

	Balance Sheet Location	March 31, 2024			December 31, 2023
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts	Other current assets	$	805		$	733
Foreign exchange option contracts	Other current assets		3,446			17,364
Foreign exchange forward contracts	Other current liabilities		(936	)		(2,545	)
Derivatives designated as hedging instruments:
Foreign exchange forward contracts	Other current assets		—			648
Total derivatives		$	3,315		$	16,200

Schedule of Effect of Derivative Instruments on Statement of Operations Recognized

The following table summarizes the effect of derivative instruments recognized in the statement of operations for the three months ended March 31, 2024 and April 2, 2023:

		For the Three Months  Ended
	Location of (Gains) Losses Recognized in Statement of Operations	March 31, 2024			April 2, 2023
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts (1)	Other (income) expense, net	$	(1,699	)	$	1,259
Foreign exchange option contracts	Other (income) expense, net		13,918			—
Derivatives designated as hedging instruments:
Foreign exchange forward and option contracts	Revenue		(2,280	)		1,538
Total Derivatives		$	9,939		$	2,797

(1)The table does not reflect the corresponding gains and losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies. For the three months ended March 31, 2024 and April 2, 2023, net losses from remeasurement of monetary assets and liabilities denominated in foreign currencies were $2.7 million and $0.4 million, respectively.