Name: Teradyne Inc. (NASDAQ:TER) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Teradyne Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	448,752)	715,501)	1,014,589)	784,147)	467,468)
Depreciation	92,118)	90,763)	91,073)	80,119)	70,834)
Stock-based compensation	57,682)	48,228)	45,643)	44,906)	37,897)
Provision for excess and obsolete inventory	28,358)	31,452)	15,475)	17,534)	15,244)
Amortization	18,768)	19,912)	34,412)	46,624)	49,821)
Retirement plans actuarial (gains) losses	2,703)	(25,584)	(2,217)	10,284)	8,176)
Deferred taxes	(37,642)	(38,693)	(17,305)	(15,688)	(9,456)
(Gains) losses on investments	(14,915)	9,985)	(6,410)	(7,898)	(6,033)
Gains on sale of asset	—)	(3,410)	—)	—)	—)
Loss on convertible debt conversion	—)	—)	28,828)	—)	—)
Contingent consideration fair value adjustment	—)	—)	(7,227)	(23,271)	(19,257)
Investment impairment	—)	—)	—)	—)	15,000)
Other	(955)	2,353)	271)	1,557)	766)
Accounts receivable	70,977)	50,628)	(57,778)	(129,451)	(70,440)
Inventories	5,327)	(80,809)	6,495)	(8,438)	(27,408)
Prepayments and other assets	(43,101)	(140,713)	(175,846)	(64,418)	(23,784)
Accounts payable and other accrued expenses	46,782)	(60,507)	129,499)	73,167)	49,279)
Deferred revenue and customer advances	(57,210)	(6,233)	9,873)	39,974)	39,313)
Retirement plan contributions	(5,492)	(5,116)	(5,405)	(5,382)	(5,086)
Income taxes	(26,921)	(29,834)	(5,604)	25,169)	(13,584)
Changes in operating assets and liabilities, net of businesses acquired	(9,638)	(272,584)	(98,766)	(69,379)	(51,710)
Adjustments to reconcile net income from operations to net cash provided by operating activities	136,479)	(137,578)	83,777)	84,788)	111,282)
Net cash provided by operating activities	585,231)	577,923)	1,098,366)	868,935)	578,750)
Purchases of property, plant and equipment	(159,642)	(163,249)	(132,472)	(184,977)	(134,642)
Purchases of marketable securities	(161,906)	(287,409)	(661,781)	(900,196)	(662,701)
Proceeds from maturities of marketable securities	85,042)	222,941)	660,148)	479,678)	611,927)
Proceeds from sales of marketable securities	61,401)	268,058)	266,466)	35,006)	105,586)
Proceeds from insurance	460)	—)	—)	546)	2,912)
Issuance of convertible loan	(5,000)	—)	—)	—)	—)
Proceeds from sale of asset	—)	3,410)	—)	—)	—)
Purchase of investment and acquisition of business	—)	—)	(12,000)	149)	(79,742)
Net cash (used for) provided by investing activities	(179,645)	43,751)	120,361)	(569,794)	(156,660)
Repurchase of common stock	(397,241)	(752,082)	(600,000)	(88,465)	(500,000)
Dividend payments	(67,878)	(69,711)	(65,977)	(66,482)	(61,305)
Payments of convertible debt principal	(50,264)	(66,759)	(342,990)	—)	—)
Payments related to net settlement of employee stock compensation awards	(20,788)	(33,170)	(32,303)	(23,014)	(14,741)
Issuance of common stock under stock purchase and stock option plans	34,259)	28,733)	32,686)	28,527)	29,312)
Payments of contingent consideration	—)	—)	—)	(8,852)	(27,615)
Net cash used for financing activities	(501,912)	(892,989)	(1,008,584)	(158,286)	(574,349)
Effects of exchange rate changes on cash and cash equivalents	(876)	3,889)	(2,065)	(658)	(569)
Increase (decrease) in cash and cash equivalents	(97,202)	(267,426)	208,078)	140,197)	(152,828)
Cash and cash equivalents at beginning of year	854,773)	1,122,199)	914,121)	773,924)	926,752)
Cash and cash equivalents at end of year	757,571)	854,773)	1,122,199)	914,121)	773,924)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Operating cash flow exhibited significant volatility between 2019 and 2023, peaking in 2021 at 1,098,366 thousand US dollars before stabilizing at approximately 580,000 thousand US dollars in 2022 and 2023. While net income followed a similar trajectory—reaching a high of 1,014,589 thousand US dollars in 2021 and declining to 448,752 thousand US dollars by 2023—the cash provided by operating activities consistently exceeded net income. This indicates a positive adjustment from non-cash charges, primarily driven by steady depreciation and stock-based compensation, although substantial fluctuations in working capital, particularly in 2022, created periodic pressure on liquidity.

Operating Cash Flow Dynamics: A divergence between net income and operating cash flow is evident. In 2023, despite a decline in net income, operating cash flow remained resilient at 585,231 thousand US dollars, supported by positive adjustments in accounts receivable and inventories. Conversely, 2022 saw a significant cash drain from operating assets and liabilities, totaling -272,584 thousand US dollars, which offset gains from non-cash reconciliations.
Investing Activity Patterns: Capital expenditures for property, plant, and equipment remained relatively consistent, ranging from 132,472 thousand US dollars to 184,977 thousand US dollars annually. The primary driver of investing cash flow was the management of marketable securities. A notable shift occurred in 2021 and 2022, where the company transitioned from heavy net purchases of securities to net inflows from sales and maturities, which helped sustain the overall cash position during periods of operational volatility.
Financing and Shareholder Returns: Financing activities were characterized by a strong commitment to shareholder returns, primarily through common stock repurchases and consistent dividend payments. Share buybacks peaked in 2022 at 752,082 thousand US dollars, contributing to the net cash outflow from financing activities. Additionally, the company systematically reduced its liabilities, as evidenced by the payments of convertible debt principal in 2021, 2022, and 2023.
Liquidity and Cash Position: The ending cash and cash equivalents balance fluctuated from a low of 757,571 thousand US dollars in 2023 to a peak of 1,122,199 thousand US dollars in 2021. The overall trend suggests that the company utilized its operational cash flow and liquid investment portfolios to fund aggressive share repurchases and debt obligations, resulting in a gradual reduction of the cash balance toward the end of the analyzed period.

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