Common-Size Income Statement
Quarterly Data
Teradyne Inc., common-size consolidated income statement (quarterly data)
Based on: 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-10-01), 10-Q (reporting date: 2023-07-02), 10-Q (reporting date: 2023-04-02), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-10-02), 10-Q (reporting date: 2022-07-03), 10-Q (reporting date: 2022-04-03), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
- Revenue Composition
- Over the observed periods, the percentage of revenue derived from products generally remained dominant, fluctuating between approximately 76% and 87%. A notable decline in product revenue share can be seen starting from early 2023, dropping from over 80% to around 76% by the first quarter of 2024. Conversely, services revenue showed a reciprocal increase, rising from roughly 13-20% in earlier years to over 23% by the latest quarter. This trend indicates a gradual shift toward higher services contribution in the revenue mix.
- Cost of Revenues
- The cost associated with products ranged mostly between 32% and 38% of revenues, with noticeable spikes around mid-2020. Cost of services generally remained lower, between 4.5% and 10%, but showed an increasing trend in recent quarters, peaking near 10% toward late 2023 and early 2024. Overall, total costs excluding amortization hovered around 39% to 44%, indicating somewhat stable gross costs relative to revenues, despite fluctuations in the product and service cost components.
- Gross Profit Margin
- Gross profit consistently ranged around 56% to 60% of revenues, displaying moderate variability but no drastic long-term changes. Margins peaked in several quarters such as late 2020 and early 2021 reaching close to 60%, before slightly declining in 2023 and early 2024 to nearer 56%. The stable gross margin suggests maintained efficiency in managing production and service costs relative to sales.
- Operating Expenses
- Selling and administrative expenses showed greater volatility, initially decreasing from about 20.65% to around 13.5% in mid-2020, but surged thereafter to roughly 25% by early 2024. Engineering and development expenses maintained a narrower range mostly between 10% and 17%, with a gradual increase noticed from 2022 onward. Restructuring and other items fluctuated but remained relatively minor in magnitude. Overall operating expenses as a percentage of revenues exhibit a rising trend, especially notable after 2022, which may exert pressure on operating margins.
- Operating Income
- Income from operations demonstrated significant fluctuation, initially improving from about 19% to peak at around 33% by late 2020, followed by a gradual decrease to near 13% by the first quarter of 2024. This declining trend in operating margin coincides with increasing operating expenses, particularly selling and administrative costs, suggesting rising costs are impacting profitability.
- Non-Operating Income and Interest
- Interest income remained low and relatively stable throughout periods, generally below 2%, while interest expense showed a declining trend from about 1.16% to roughly 0.11%. Other income or expense components were more volatile, occasionally turning positive or negative but without a clear consistent trend. The net non-operating income consequently fluctuated, sometimes negatively affecting the pre-tax income.
- Income Before Taxes and Tax Provision
- Income before income taxes tracked closely with operating income, reaching peaks above 32% in 2020 and declining to around 12% by early 2024. The income tax provision as a percentage of revenues fluctuated, often negative reflecting tax benefits or credits, but generally remained within -6% to -1.5%, without a clear directional trend. This variability implies changing effective tax rates or adjustments across periods.
- Net Income
- Net income percentages were relatively strong in earlier periods, reaching above 27% at peaks, but exhibited a noticeable downward trend commencing in 2022 and continuing through early 2024. The net income fell to approximately 10.7% by the latest quarter, indicating reduced profitability likely resulting from higher operating expenses and fluctuating non-operating results. This declining net margin signals challenges in maintaining profitability levels amid evolving cost structure and revenue composition.