Ladies and gentlemen, good afternoon and welcome to the Teradyne third quarter 2025 earnings conference call. At this time, all participants are in a listen only mode. A question and answer session will follow the prepared remarks at that time. If you wish to ask a question, please press star one on your telephone keypad. As a reminder, today's call is being recorded. I would now like to turn the call over to Amy McAndrews, Vice President of Corporate Relations for Teradyne. Please go ahead. Thank you, operator. Good morning everyone and welcome to our discussion of Teradyne's most recent financial results. I'm joined this morning by our CEO Greg Smith and our CFO Sanjay Mehta. Following our opening remarks, we'll provide details o f our performance for the third quarter o f 2025 and our outlook for the f ourth quarter of 2025. The press release containing our third quarter results was issued last evening. The slides as well as a copy o f this earnings script are available on the investor page of the Teradyne website. Replays of this call will be available v ia the same page after the call ends, the matters that we discuss today will include forward-looking statements that involve risks t hat could cause Teradyne's results to differ m aterially from management's current expectations. We caution listeners not to place undue r eliance on any forward-looking statements included in this presentation. We encourage you to review the safe h arbor statement contained in the slides accompanying this presentation, as well as the risk factors described in our annual report on Form 10-K for the fiscal year ended December 31st, 2024, on file with the SEC. Additionally, these forward-looking statements are made only as of today, and we do not undertake any obligation to update forward-looking statements to reflect subsequent events or c ircumstances except to the extent required by law. During today's call, we will refer to n on-GAAP financial measures. We have posted additional information concerning these. on-GAAP financial measures including reconciliation to the most directly comparable GAAP financial measures. Where available on the investor page of our website. Looking ahead, between now and our next earnings call, Teradyne expects to participate in the UBS Technology Investor Conference. Our quiet period will begin at the close of business on December 24, 2025. Following Greg and Sanjay's comments this morning, we'll open up the call for questions. This call is scheduled for one hour. Thanks, Amy. Good morning, everyone, and thanks for joining us today. I'll discuss our third quarter results, talk a bit about what is driving the business in Q4, and provide a general update on conditions across our businesses. Sanjay will then provide more detail on our third quarter results and fourth quarter guidance. As you saw in the earnings release, we grew sequential revenue 18% and non-GAAP EPS by 49% in the third quarter. This growth was driven by AI demand in semiconductor test. Our other test businesses delivered on plan in the quarter. In robotics, we continue a slow crawl up from our Q1 revenue trough in a challenging environment. The huge investments in cloud AI buildout drove our Q3 performance to the high end of our guidance range as our customers ramped production of a wide range of AI, accelerator, networking, memory, and power devices. An example of this AI strength is in compute, where our view of the second half of 2025 revenue is more than 50% higher than our expectations just three months ago. Some of this increase comes from us responding to customer pull-in requests, and some is demand increases as design, process, and packaging technologies for AI compute rapidly advance. We expect that our growth will continue. Our UltraFLEXplus system has been architected from the ground up for high performance processors and networking devices, which have demanding power, pin count, and test data requirements. As AI devices become more complex, the UltraFLEXplus architectural advantages become more valuable to potential customers by enabling fast test development times and high efficiency volume production. Our focused investment in R&D is also yielding new differentiated capabilities for compute tests, some of which have already been announced in Q3. In memory, our Q3 memory test sales more than doubled from Q2 to $128 million, with the majority of those shipments supporting AI applications. In Q3, 75% of our memory revenue was driven by DRAM, nearly all of it from final test of DRAM and HBM performance test. 25% of revenue was from flash, mainly for cloud SSD, another segment being driven by AI data centers. Our Magnum 7H product is differentiated in HBM performance test because it is a multi-generational product. It can cover the test needs of HBM3E and HBM4, and it provides upgrade headroom for HBM4E and HBM5. The Magnum 7H also supports HBM singulated stack performance test. In Q2 we won a design in for this insertion, and in Q3 we began volume shipments. At this point, Teradyne participates in all major test insertions for HBM memory die wafer sort, post stack wafer test, and singulated stack test. Our results in memory test this year are especially satisfying in light of the composition and size of the memory TAM for 2025. Our best guess is that the total memory TAM for 2025 will be down low double digits, and the weakest part of this market is Flash, our traditional strongest segment. Despite this, we expect our memory revenue will sustain at 2024 levels. AI-driven applications for power ICs were a bright spot in the auto industrial market segment. The EGLE test platform has a leading position in the test of high performance power conversion devices for data center applications. Volumes of these devices are forecast to grow over 50% between now and 2027. We expect the demand for VIP compute and networking to continue to grow significantly, and we have been investing R&D, applications, sales support, and manufacturing capacity for this expansion. This includes investments to win new VIP and merchant GPU customers. We're making good progress on new design and opportunities and are cautiously optimistic about our potential success. I would like to make it clear that our Q3 results and our Q4 guidance do not include any revenue from these types of new opportunities. For the deployed fleet of UltraFLEX and UltraFLEXplus testers, we see higher utilization and fewer system upgrades than in past quarters, which we believe means that customers are exhausting their inventory of underutilized systems. As a result, we now expect a more direct connection between inflection and end market demand and new system sales. Looking beyond AI in semiconductor test, conditions in mobile and auto industrial remain somewhat weak. In our Integrated Systems division, our Q3 shipments were above plan as SLT customers accelerated deliveries for mobile processors and compute applications. We also saw increases in orders for both HDD and SLT systems. Recall lead times are generally measured in quarters for this business, so most of that order strength will translate into revenue in 2026 and beyond. In robotics, we are growing slowly from our trough quarter in Q1 2025. If you go down one level of detail, we continue to see persistent weakness in our core indirect distribution channel as we expand our large customer and OEM channels. An important element of our robotics strategy is to establish UR cobots as the preferred platform for AI-driven work cell applications and to deliver superior performance for our AMRs by leveraging AI FE. In the third quarter, over 8% of robotics sales were for AI-related products, up from 6% in Q2. Another element of our robotics strategy is to deliver value-added service to our installed base of over 100,000 robots. Service represented 14% of sales in Q3, up from 12% in Q2. As we noted in our July call, our semiconductor test business has evolved to where the largest demand driver is AI data center investments rather than consumer end markets. We have aligned our R&D and go-to-market investments to capture the tremendous opportunities in test driven by this AI-related demand. Our investments are focused on extending our product performance advantages with innovative R&D while also expanding our engineering teams to help customers develop and ramp production of these fantastically complex devices on Teradyne platforms. Sanjay will describe how these investments translate into OpEx, but as we're seeing, the returns are well worth the investment. Looking at Q4, we expect AI-related demand for compute, networking, and memory to be the primary engine of our growth, which reflects both industry trends and the result of our investments to align with those trends. Looking to the future, the long-term themes that we've highlighted in the past, AI verticalization and electrification, remain firmly intact. As we enter 2026, we expect AI and verticalization will be the primary growth drivers. We've said before that the AI market is both highly concentrated and highly dynamic. The timing of any one project can affect the delivery schedule for hundreds of testers. This can swing quarterly results significantly. With that understanding, let me offer a few high-level comments about how we're looking at 2026. At the company level, 2026 looks stronger today than it did six months ago and all indications suggest solid growth from 2025. We anticipate that business conditions for mobile, auto, industrial, and robotics will improve, but the timing and the intensity of that recovery is uncertain. The real story in 2026 is AI and the investments that we have made to develop differentiated solutions in that space will drive our growth plan. I'd like to share a few specific examples. Massive investments in building data centers are translating into strong demand for UltraFLEXplus in VIP compute, merchant compute, and networking. In the memory market, AI will drive growth in HBM, DRAM, and Flash for SSD applications served by Magnum. Accelerated bit growth in HDD is driving the demand for more HDD test. The deployment of AI capable processors for mobile, client computing, and cloud AI is driving the demand for more system level test. We plan to give you a more detailed view as part of our model update in the January call. Now, before I hand the call over to Sanjay, I would like to say a few words about the CFO transition that we announced last night. Michelle Turner will be our Chief Financial Officer effective November 3, 2025. She brings 30 years of financial and strategic leadership experience in the technology and manufacturing sectors, and she has a strong track record of driving growth, disciplined capital allocation, and operational efficiency. She is looking forward to getting to know all of you in the upcoming quarter. I'm excited to welcome Michelle to the Teradyne team. Sanjay has been Teradyne's CFO since 2019, and he has offered to stay on as an Executive Advisor to Operations as we expand capacity in 2026. I want to thank Sanjay for his excellent leadership and contributions over the past six years, and I'm grateful that we will have the benefit of his guidance. With that, I'll turn the call over to Sanjay. Thank you, Greg. Good morning everyone. Today I'll cover the financial summary of Q3 and provide our Q4 outlook. Now to Q3, third quarter sales were $769 million and non-GAAP EPS was $0.85, both near the high end of our guidance ranges. Non-GAAP gross margin was 58.5%, above our guidance range due to favorable mix. Non-GAAP operating expenses were $293 million, up sequentially and year- over- year on higher R&D, sales and marketing investments tied to AI as well as increases in our variable compensation. Non-GAAP operating profit was 20.4%. Turning to our revenue breakdown in Q3, semiconductor test revenue for the quarter was $606 million with SoC revenue contributing $440 million, which was up 11% sequentially and 12% year- over- year. Memory revenue was $128 million, up 110% sequentially and down 15% year- over- year. Strength in SoC was driven by AI, compute and AI-related power test. Memory revenue more than doubled from Q2 on HBM and AI-related LPDDR demand. IST revenue was $38 million, up 9% sequentially and 46% year- over- year, driven by strength in SLT shipments in product test. Q3 revenue was $88 million, up 4% sequentially and 10% year- over- year, driven by growth in defense and aerospace. Now to Robotics, revenue was $75 million, flat quarter on quarter and down year- over- year. In the quarter, Universal Robots contributed $62 million and Mobile Industrial Robots contributed $13 million of revenue. As we noted in July, volume shipments to our large e-commerce customer are not expected to have a material impact on robotics revenue in 2025. Some other financial information: in Q3 we had two customers that directly or indirectly drove more than 10% of our revenue in the third quarter. The tax rate excluding discrete items for the quarter was 16% on a GAAP and non-GAAP basis. Our free cash flow was $2 million. Our net income was offset by our net working capital increases tied to accounts receivable and inventory, which reduced our free cash flow. Receivables growth was tied to increased sales, which were weighted to the second half of the quarter. Inventory growth was tied to the ramp in compute and memory driven by upcoming AI demand. CapEx of $47 million was reasonably consistent with Q2. We repurchased $244 million of shares in the quarter and paid $19 million in dividends. Through the end of the third quarter, we've returned $575 million, or approximately 2.5x our free cash flow through dividends and buybacks to shareholders during the year. We ended the quarter with $427 million in cash and marketable securities. Now a little more detail on OPEX and our balance sheet strategy to help you with your modeling. In the second half of 2025, we're continuing to lean into R&D and go to market investments for AI opportunities that we expect will drive revenue in 2026 and beyond. OPEX in the second half of 2025 is also increasing, tied to our variable compensation linked to increasing financial performance. At the midpoint of our Q4 guidance, we'll have full year revenue growth of 9% and OPEX growth of 7%. Long term, we target OPEX growth at approximately half the rate of our revenue growth in 2026 and longer term, as AI revenue blossoms, we expect to meet our OPEX target. Regarding the balance sheet, we expect to keep our cash and marketable securities at roughly $400 million while also continuing our balanced capital allocation strategy. In 2025, we saw an opportunity to accelerate buybacks in the short term to further enable shareholder value. At the operational level, we expect to exercise our credit lines more frequently as we did in Q3 and expect to in Q4. From a modeling perspective, this means the interest and other line of the P&L will reflect higher interest expense. You should expect to see a couple million dollars of net interest expense per quarter while we utilize our revolver. Now turning to our outlook for Q4, before discussing the details of Q4 guidance, I'd like to remind you of some of the commentary from our July call. Specifically, we noted that we had large projects expected to ramp which straddled Q3 Q4 or Q4 Q1. As we move through the second half of 2025, we saw projects accelerate into Q3 and are now seeing projects accelerate into Q4. These projects are AI driven. In Q3, we were able to meet early ramp demands. In Q4, we are seeing demand ramp significantly. We continue to expedite our supply chain, and we are accelerating production capacity growth at factories in multiple geographies to meet the demand. Now the details: Q4 sales are expected to be between $920 million and $1 billion. Fourth quarter gross margins are estimated at 57%- 58%. This includes some one-time supply costs in the quarter to meet accelerated demand. Turning to OPEX, Q4 OPEX is expected to run at 31%- 33% of fourth quarter sales. The non-GAAP operating profit rate at the midpoint of our fourth quarter guidance is 25.5%. The Q4 GAAP and non-GAAP tax rate is expected to be 14.5%. Q4 non-GAAP EPS is expected to be in the range of $1.20- $1.46 on 157 million diluted shares. GAAP EPS is expected to be in the range of $1.12- $1.39. Summing up our Q3 results and Q4 guidance, AI is growing across the economy, driving exceptionally strong semiconductor test demand in the second half of 2025. This is evident in our Q3 sales, profit performance, and our outlook for Q4. The acceleration of test demand in Q4 reflects customers' drive to pull AI projects in from Q1. We're optimistic about the AI-related market in 2026, but we also know shipments can be lumpy. Now to my final remarks. After six plus years at Teradyne, it's clear that Teradyne is well positioned for significant growth over the midterm. Many environmental challenges have occurred during my 10 years, such as significant government regulations, Covid, tariffs, CEO transition, along with a strategic pivot of investments to AI in 2022. Through all of these opportunities, we have strengthened the company's infrastructure and processes. Our operational resilience is significantly stronger as we have de-risked our supply chain, started the journey of multiple factories and multiple geographies to enable significant growth rooted in AI. Strong management leads our diversified portfolio enabled through our variable business model, which has consistently delivered tremendous free cash flow. Through all of the changes and volatility we've experienced, our balance sheet is strong with firepower to enable strategic investments, continue to deliver a balanced capital allocation, and strong returns for our shareholders. I've had the opportunity to make New England my home and built many lasting relationships here, internally and externally. I've enjoyed working with our shareholders and all of you in the investment community. With that, I'll turn the call back to the operator to open up the line for questions and soon hand the keys over to Michelle. Operator. We will now be taking questions from Teradyne's research analysts at this time. If you wish to ask a question, please press Star one on your telephone keypad. You may remove yourself from the queue by pressing Star two. In the interest of time, we ask that you please limit yourself to one question and one quick follow-up. We'll take our first question from CJ Muse with Cantor Fitzgerald. Your line is open. Good morning. Thank you for taking the question. Sanjay, big congrats to you. I guess when you look at short term question, long term question, short term, you know, roughly $150 million upside versus consensus for December. I would be curious if you could k ind of share how much of that upside is, you know, versus what you thought maybe three months ago is driven by HBM, VIP networking, SLT or perhaps others. CJ, it's Greg. When you look at Q4, it's really all in compute and memory is where the upside is coming from. If you look across the rest of the company, it's, you know, it's kind of not too different quarter on quarter, maybe a little bit stronger in our product test division, a little bit stronger in robotics. The real story is in compute and memory. I'd say it's kind of 2/3, 1/3 in terms of that, like compute is kind of 2/3 of it, memory is about a third of it, and HBM is really strongly represented in that memory up. Very helpful. I guess longer term question o n the compute side, would be curious as you think about high performance compute l eapfrogging mobility reports suggest that, you know, NVIDIA is going to be the lead customer for with Feynman at a 16. How are you thinking about compute intensity? How are you thinking about increased test insertions, and really how are you thinking a bout kind of test time? You know, in a world where compute i s driving leading edge. We're p retty bullish about it in general that as you know, as the die sizes get bigger and the performance required from the devices sort of gets, you know, the performance goes up, the test intensity also has to go up. The other thing that makes us pretty optimistic in terms of sort of how this will affect the TAM for compute devices is that chiplet based designs are becoming more and more of a thing. When you get to the later stages of building up these complex multi chip packages, the cost of, of sort of the cost of scrap really, really escalates. That drives this sort of shift left adding test intensity upstream. There is also the downstream effect which is these chips are going into data centers and as NVIDIA likes to say they're being used as if they're like one gigantic GPU. Like 10,000, 50,000, 100,000 nodes have to work perfectly for an entire training run. Their tolerance for latent defects coming out in the middle of those kinds of training runs is very, very low. Those sort of environmental factors really make us think that the test intensity for the compute segment is going to continue to grow over the next few years. The other thing that's happened in compute is that because it's now the primary driver for the semiconductor industry, many of the strategies that we've seen in the mobile space for years and years around things like dual sourcing are becoming much more important to the producers in this space. The strategy that you need when you're a small portion of your capital equipment providers overall shipments is different. When you actually dominate those shipments, you start to feel a little bit more vulnerable. Customers in this space are increasingly turning to this notion of dual sourcing their supply chain at every step. Since we're coming from a lower share position trying to gain share, that dual sourcing is actually a very good thing for us. Thank you, Greg. Appreciate it. We'll take our next question from Mehdi Hosseini with SIG. Your line is open. Yes, thanks for taking my question, Greg. I want to double-click on these s tructural changes that are happening at various t est insertion, and I want to focus on wafer level tests. How do you see your activity design wins manifesting into increased penetration in this specific segment? Would the Berlin on a wafer l evel be part of those design wins? I have a follow up. Yeah, we definitely believe that SLT is a critical part for this sort of late stage, ensuring that there aren't latent defects going into the data centers. We think that there's positive effect there. The other thing is that there are new technologies that are coming along like CoWoP, where more complex modules are being built up and they need to go through a relatively expensive, extensive system test and burn in. We believe that, you know, we look at this as sort of a contiguous market between burn in and SLT because the burn in is generally done with the devices fully operating, not in a sort of in a test state. Okay, maybe we could take this offline because there's so much technology. When I look at your commentary that in your prepared remarks, none of t he design wins have been embedded in y our guide, I want to go back to your 2028, the EPS target of $7- $9.50. I imagine these designers were in fact w hen you provided that target earlier this year, would that be fair s tatement, and how would you think about those targets in addition to the design w ins that you highlighted in your prepared remarks? Yeah. We will update everyone in January. In terms of our long term model, the thing that, you know, as we're thinking about it, the thing that is apparent to us is that the long term destination is not all that different, but the composition of the market is. We believe that we're well positioned to, you know, achieve the long term model that we have published prior. We believe that the composition of that business is going to be much more heavily dependent on the things that are being driven by the data center buildup, and that's across compute, networking, memory, even power. That is far more important in the mix than the way we were looking at the long term before. Thank you. We'll move next to Timothy Arcuri with UBS. Your line is open. Thanks a lot, Greg. I assume semitest is up something like $200 million in the guidance for December. I'm just wondering if you can give us a sense. I know that this stuff is all pretty lumpy, but can you give us a sense? It seems like it's maybe evenly split between memory and SSD. Is that a fair, just general number to kind of think about in terms of the composition of the growth in calendar Q4? Yeah. So. It's not quite, it's not half and half. It's more 2/3 compute and networking and 1/3 memory in the up. Okay, great, thanks. Sanjay, can you talk a little bit about revenue shaping next year? I know memory tends to be pretty lumpy, in particular memory, and I know that there's this big, you know, stuff shipping in Q4. Can you just maybe give us a little bit of a sense on Q1? I mean, should we expect it to be down a little bit and how do you see next year from a loading point of view? Thanks. I think Greg and Greg's prepared remarks, we talked about the key drivers and in my prepared key drivers going into 2026 and overall we thought that the revenue would be up relative to 2025 tied to those drivers. In my remarks as well as Greg's, we talked about the acceleration of key projects that straddled Q3, Q4, and Q4, Q1, and the ones in kind of Q1 are accelerating into Q4. Overall, we do see demand accelerating. I will share that, from a seasonality maybe, if that's what you're getting to, the revenue mix has changed as we've noted in the second half, really tied to semiconductor test driven by AI, tied to compute and memory revenue. Historically, our business has been driven by the mobile launches where we've had significant demand in Q2 and Q3. Business is no longer driven by that. If it comes in, sure, we'll have tailwinds on that front. It's more driven by compute projects and those are lumpy and they're really tied to customer launches. I think overall what you'll see is a little different shaping in the way of seasonality for our business going forward. We'll give you an update in the call in January. Okay, thanks. We'll take our next question from Krish Sankar with TD Cowen. Your line is open. Hi, thanks for taking my questions. This is Stephen calling on behalf of Krish. Greg, first question for you related to the VIP customer demand as well as your mention of merchant GPU opportunities in the future. I guess first thing is in terms of VIP customers, how much more expansion do you see in terms of the customer base from the larger CSPs, and similarly for Tier 2 CSPs, is there a direct relationship that you have also with those customers potentially, or is that more of a foundry type relationship? Similar question for merchant GPUs, is that direct or more of a foundry type of testing relationship? In terms of the VIP customer base, it is incredibly, incredibly concentrated. There are a lot of design starts, there are a lot of chips that are being developed. The vast majority of the tester demand in the VIP space is really being driven by two customers. That is how that market is playing out right now. What seems to be happening is that each of the hyperscalers has their own chip development program and they benchmark that against what they can do with merchant silicon. If the merchant silicon provides a better, you know, sort of tokens per watt, then they do not tend to ramp their internal silicon to the same extent. Right now we see that market as concentrated and it is going to expand, that base is going to expand pretty slowly because it is a very competitive environment. The thing that we see with VIPs is as those VIPs are growing, the actual specifier, the chip developer, the hyperscaler itself is exerting more control over the whole supply chain. They are moving from aggregator to aggregator, they are forming different partnerships and they are taking more control over their supply chain. The way that people looked at it in terms of the aggregator, the design partner as the one influencing the decisions, I think that is something that will fade over time and we have seen that occur in some of the VIP customers in the merchant space. It is all at the specifier, not at the foundry. The merchant GPU or CPU player is the one that is going to decide on the test platform. They are the ones that are going to control the test programs and all the test IP. Our efforts around gaining share in merchant GPUs is directed at the specifier themselves, not at anyone in the supply chain. Great, thank you so much for that color and for my quick follow up, for hard disk drives, just some of the strength that you mentioned there from cloud demand. I was just curious, like for system test, are you expecting strong double digit growth in that segment for Q4 as well, or could it be higher than that? The process of adding capacity in HDD takes time. The manufacturing process for HDD is a complex one, highly automated, and it's heavily capital intensive, so we're definitely seeing an uptick in the orders associated with that. There's a lot of optimism in the space, but we would expect that to have a greater effect in 2026 than we would expect to see anything in 2025. In 2025, I think SLT is, you know, we're not expecting to see significant growth in the ist group in Q4. Great, thank you so much. We'll move next to Shane Brett with Morgan Stanley. Your line is open. Thank you for letting me ask a question. Let me ask Tim's question in a bit more of a direct way as of this moment. Do you sort of expect SoC test to accelerate from this really strong December quarter into the first half, or should we really kind of bake in a bit of seasonal decline or kind of a bit of conservatism into the March quarter? Thank you. I'll just reiterate some comments and maybe Greg, if you want to add to it, you know, the second half of the year, 2025, we talked about straddling and we talked about the projects accelerating and we're seeing that continue to accelerate. Of course there's projects in the pipeline in Q1 and Q2 of 2026. It's just going to depend on how those projects go. Generally we're seeing projects accelerate though. I think, as we talked about, there are things that are perched between quarters. The thing that I will say is Q4 was sort of a new high watermark for us in terms of capacity and shipping against our memory test and our SoC products. We expect demand to continue to be robust going into 2026. As an analyst, it would probably be a mistake to look at the growth from Q3- Q4 and draw a line straight up from there because we're at a relatively high level and we expect continued strength, but it is really lumpy and the timing continues to be uncertain even between Q1 and Q2 of next year. Got it. Thank you, that's helpful. For my follow up on memory, at a conference in your quarter, you mentioned that on a go forward basis DRAM and NAND will grow, but NAND will grow faster because of how low it is right now. Just how low has NAND been this year relative to prior years? What sort of growth are you expecting for the NAND portion of memory going forward? Thank you. Yeah, hi, it's Sanjay. NAND is really low, really from a percentage standpoint. I think it's really going to tie to the growth driven in the mobile industry. If we see that growth, then it should take off. Right now it's at a really low point and where we see it or where we see DRAM is strengthening, obviously in the HBM environment. Yes. In the quarter our business was 75% DRAM, 25% FLASH. If you look at the results for our competitors, even more dominated by their DRAM shipments going into 2026. There are a couple of things going on in flash in 2026. There's likely to be a protocol shift in the mobile market and that will drive some tester capacity purchased just to support those new standards. There's the X factor around SSD capacity required for AI data centers. Right now I think that there are rumblings in the market that there's going to be demand increase for SSD. We haven't seen that translated in terms of increased forecasts, but we're optimistic that that market should be a bit stronger in 2026 than it was in 2025. Maybe just to add to my comment for a little bit more color, if you go back to 2020 or 2021, the DRAM and flash mix was more like 50/50 in rough numbers, but the flash view of TAM looking backwards was more than double than what it is now. It has really contracted. It's a much smaller component of the memory TAM. Got it. Thank you. That was really helpful. We'll move next to Jim Schneider with Goldman Sachs. Your line is open. Good morning. Thanks for taking my question. I was wondering if you maybe kind of return to your expectations for Mobile SoC heading into next year, realizing that Q2 and Q3 are seasonally stronger quarters. Do you have any sense about what y ou might expect directionally in terms of improvement next year? Maybe you just remind us of t he relative either test time or content i ncrease you expect moving to the N2 generation. Hi, Jim. Mobile SoC has been at a pretty low level for the past couple of years. Looking forward to next year, we don't know. I think the honest answer is we don't know exactly how big it would be. We're optimistic that it should be, you know, it should be bigger than it is this year, but we're unsure of the magnitude of that. Let me tell you the why. There are three factors in terms of how big the mobile TAM is really going to be. One is the complexity of the part. With N2 and with new packaging technologies like WMCM, we expect that the test intensity per part is going to be higher, like double digits kind of higher. The next factor is yield. For new technologies, sometimes yield is lower. We do not count on that because there's been sort of a pattern of execution at very high yields for these kinds of products. We are not expecting that to be a particular tailwind. The one that's really the most important factor right now is in unit volume, that if there is a significant upward inflection in handset sales, people are refreshing phones because new phones are doing something interesting, then that not only drives the whole mobile processor space, but it also drives RF and PIMIC and everything else. I think the big X factor for us is whether we see an inflection in unit sales in 2026. If we do, it could be a strong year. If we don't, it would probably be just a modest improvement from where it is. That's helpful, Greg. Thank you. Maybe f rom a sort of financial perspective, obviously 2026 is shaping up to be a relatively solid growth year for you, but maybe you can remind us of the OPEX leverage you expect to get in the model. In other words, for every dollar of revenue increase or every 10% of revenue increase, how much OPEX increase we do expect to flow through. Thank you. Hi, it's Andrew. As I said in m y prepared remarks, our growth in OPEX was a little bit higher relative to the leverage we wanted to have. We have in our overall earnings model that's going to happen from year to year but in 2026. Our operating principle is, basically for every dollar of revenue we want to have of growth, we see roughly 50% of that in OPEX growth. Kind of like ensuring that we are driving OPEX leverage, you know, we expect to be at roughly that rule going into next year or being at that target roughly in 2026. Yeah. We'll take our next question from Samik Chatterjee with JPMorgan. Your line is open. Hi, thanks for taking my question. Sanjay, congrats on the retirement. Michelle, congrats on the role as well. For the first one, Greg, I'm curious. You're calling out the memory increase overall in 4Q and it clearly looks like a step up for next year as well. How much of the improvement here is related to market share that you talked about? Market share wins that you talked about earlier in the year relative to general industry purchasing patterns being better. When you look at the overall portfolio, what are the end markets you would expect to gain share and which are the areas you would highlight as share opportunities as you look to 2026? I have a quick follow up. Thank you. Yeah, so the way that we look at the memory market is primarily think of it as like a two by two grid. We think of DRAM and we think of flash memory, and then the other axis is wafer sort and then final or performance test. If you look at within each segment, our share is very high. You know, like flash final test and DRAM final test, HBM performance test. We have healthy share in the final test section of the grid. Our share overall in the wafer sort excluding HBM performance test is significantly lower. When the market is dominated by program purchases for final test, our share tends to go up. When the market is dominated by capacity adds for wafer sort, our share tends to go down. Looking into 2026, we're expecting that it's going to be an expansion year for memory in general, and we think it's going to be a good year for us. We also think that there's going to be a significant expansion in the SAM for the wafer sort part of the market. I don't know if we're going to see significant share increase, but I'm pretty sure we're going to see revenue growth. Okay, great. A quick one for Sanjay here. Sanjay, I apologize if this has been addressed before. I jumped on a bit late, but the gross margin guide for 4Q relative to where you ended 3Q given the volume leverage that you should ideally have seems a bit more muted. Can you just walk through the gross margin driver for the full quarter? Volumes are going up and that's a tailwind, and we're at the midpoint. Our guide is 57.5%. The headwinds are really driven by two factors. First, we are investing in factory expansion in multiple geographies. That's a bit of a headwind, but I think the larger headwind is really tied to the significant acceleration tied to projects and end market demand. To meet our customer delivery requirements, we've gone out and we've sourced some, think of it as one-time kind of supply, that's had kind of one-time, a little bit of elevated cost tied to meeting customer requirements. That's what's occurring in Q4. Two headwinds offsetting the volume tailwind are really expansion of the factory and some supply chain kind of cost increase that's somewhat transitory or one-time. Okay, great. Thank you. Thanks for taking the questions. We'll move next to Brian Chin with Stifel. Your line is open. Hi there. Good morning. Thanks for letting us ask a few questions. Thanks Sanjay, and definitely wish you the best. For the first question on the accelerator part of the business, can you give a sense of how significantly weighted that was the second half and maybe 4Q this year? Obviously a lot of networking strength this year in SoC for the full year. Is AI accelerator revenue significantly above what you expected entering the year? It's an interesting question because our view of the year changed pretty dramatically between January and March. In January we were pretty optimistic about how 2025 would come out. By March we were far more pessimistic because there was a lot of uncertainty in the market by that time. Leaving the year, looking at it from towards the end of 2025, I would say that, you know, maybe this is at a higher level than you asked the question, but definitely significantly higher. Revenue in compute, both VIP compute and networking, have worked out to be stronger than we expected coming into the year. I would say that mobile is weaker than we expected coming into the year, and auto and industrial is a little bit weaker as well. The up in the compute space is the thing that really kind of brought us back up to that level. Memory I think is strengthened from our perspective at the beginning of the year, but not as significantly as the growth in the compute space. Thank you. For maybe just kind of a clarification and a question. In industrial robotics, do you expect Q4 to show some positive seasonality, Q1 Q or because even approach flat on a year-o ver- year basis? I know there's definitely some headwinds for the year and probably into the back half of the year. Very curious on the tighten SLP just for any given accelerator chip, is it common to just win in that insertion kind of towards the back end of that test queue, or is it more common, you think, to win multiple subsequent insertions as well? In terms of SLT, once you have been designed in for a particular AI accelerator, then t he t itan system for these AI accelerators was designed with significant upgradeability. Going from part generation to part generation, as long as it fits within the general power envelope that we can provide and there's some headroom there, you're able to do change kits and upgrades. There is an incumbency advantage in SLT. It's similar to the incumbency advantage that you have in ATE, not quite as strong, but pretty strong. On the robotics front. Sure, yeah. There is some seasonality that we are expecting. We do expect an increase from Q4- Q3 in what we view as a weaker kind of automation market. As you know, we're still working through the strategic shift to large accounts and OEMs, but we do expect a seasonal uplift. One comment on robotics is that we've seen through this year that our ability to predict our revenue is somewhat limited. It's a very high turns business. We see demand shifting and demand responding to current events depending on where you are. We are trying to be as cautious as we can in terms of predicting growth. We do expect that Q4 would be stronger. We're not predicting a gigantic hockey stick or anything like that. Great. Thanks, Sanjay. Thanks, Greg. Move next to Vedvati Shrotre with Evercore. Your line is open. Hi. Thanks for taking my question. The first one I have is a follow up to the HBM questions you had. On HBM, you talked about a new test insertion, like a singulated die test, and you're shipping volumes in 3Q. I wanted to understand if that is the norm now. Has that increased the demand and are all suppliers expected to do this? Right now only one major manufacturer is routinely doing this singulated stack HBM testing. I wouldn't say that it is even pervasive across all memory types. We're not sure if there is a significant improvement in downstream yield, you know, the device that the HBM gets put into. If yield of that device goes up and HBM related faults go down as causes of problems downstream, then that will proliferate across multiple manufacturers. Right now it's really only one of the three major HBM manufacturers is doing that for a high volume of devices. Understood. Okay. My follow up was on SoC. Can you provide any color on how much compute is as a part of SoC in the second half of 2025? Even as we think about 2028, I think during the analyst day the idea was the composition would be a third mobility, a third compute, and a third auto industrial market. Do you have enough data now that compute is a strong driver? Do you want to take the compute second half? Sure. I won't break out the specific numbers. It is a significant component just as we talked about. In the second, you know, in mobile, mobile was more first half dominated, tied to supply chain shift. Think of the second half of our business as very strongly driven by compute, really tied to VIP and networking. A very significant component. I did quick math, you know, this is trying to understand AI driven, you know, so it includes all of the memory driven stuff and the SoC compute stuff. Just like from Q3- Q4, 50% of our total revenue in Q3 was coming from AI driven stuff in those segments. It's up to 60% in Q4. This is a very different composition of business in 2025 and especially the second half of 2025 from where we were before. We'll update you in January in terms of what our long term model is. It's safe to assume that model is going to have a much heavier weight on the computer and the compute part of the market and the AI driven parts of the memory market. Thank you. We'll move next to David Duley with Steelhead Securities. Your line is open. Thank you. Thank you for squeezing my question in. I guess first I had a clarification. You talked about strength in AI in Q4 coming from networking and hyperscalers and HBM. I'm assuming that you have not won a ny business on standalone GPUs yet, and that is not included in any of the guidance statements. Yes, that's correct. We're making good progress, but we have not included that in our guide, and there wasn't revenue for that in Q3. Okay. As my follow on, do y ou think you could update us on t he size of the SoC TAM and then perhaps some of the major pieces like the high performance computing piece. Just one last question is as far as your HBM4 ramp going into Q4, excuse me, HBM ramp going i nto Q4, is that mainly driven by HBM ramping up, or is it driven by new test insertions, or is it d riven by something else? Thank you. Let me take the second one first. The HBM ramp that we're seeing in Q4 is probably half and half between new test insertion and additional capacity, and it's really like new test insertion is singulated stack test, additional capacity is for stack die wafer level test. Both of those are increasing, but it's all around capacity. As for HBM4, it's all driven by HBM4. We are not providing an update to the SoC TAM mainly because the SoC TAM is all over the place. For both Teradyne and our competition, there is a lot of dynamic action between Q4 and Q1 that's going to have a significant impact on the ultimate size of the market, and especially the size of the high performance compute market. We're going to stick with our overall guide and we're going to watch how that turns out. Thank you. This concludes the Q&A portion of today's conference. I would now like to turn the call back over to Greg Smith for closing remarks. Thank you, operator. I'd like to offer a quick final thought. I mentioned in closing the July call that I was having a profound and positive impact on Teradyne's business. I'm encouraged by how quickly we're seeing returns on our investments to pivot to AI. AI is the dominant driver of our business for the foreseeable future, and we'll continue to align ourselves to the outsized opportunities that it offers. We've made great strides so far in 2025, and while our progress is not expected to be entirely linear, we're more excited than ever about our prospects for continued profitable growth in the years ahead. Thanks for joining us today and I look forward to updating you on our progress in January. Thank you. This concludes today's Teradyne third quarter 2025 earnings call and webcast. You may disconnect your line at this time. Have a wonderful day.