Analysis of Geographic Areas
Teradyne Inc. operates in 2 regions: United States and Foreign.
Area Asset Turnover
Teradyne Inc., asset turnover by geographic area
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| United States | 1.34 | 1.43 | 1.27 | 1.10 | 1.32 |
| Foreign | 10.78 | 16.36 | 22.43 | 17.71 | 15.70 |
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).
An analysis of geographic asset turnover reveals a stark contrast in asset utilization efficiency between domestic and international operations from 2019 to 2023.
- United States Asset Turnover
- Domestic asset turnover remained relatively stable with minor fluctuations over the five-year period. After a decrease to 1.10 in 2020, the ratio trended upward to a peak of 1.43 in 2022 before correcting slightly to 1.34 by the end of 2023. This suggests a consistent, though modest, level of asset efficiency within the U.S. market.
- Foreign Asset Turnover
- International operations exhibited significantly higher turnover ratios and greater volatility. Asset efficiency increased from 15.70 in 2019 to a peak of 22.43 in 2021. However, a substantial decline followed, with the ratio falling to 16.36 in 2022 and further decreasing to 10.78 in 2023. This represents a notable reduction in the efficiency of foreign asset utilization toward the end of the analyzed period.
- Comparative Regional Analysis
- A profound disparity exists in the scale of asset turnover between the two regions. While U.S. operations maintain a low and stable ratio, foreign operations operate at a substantially higher turnover rate, implying a much lighter asset base relative to the revenue generated abroad. Despite the downward trend observed in international markets since 2021, the foreign asset turnover ratio in 2023 remains significantly higher than the domestic equivalent.
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Area Asset Turnover: United States
Teradyne Inc.; United States; area asset turnover calculation
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Revenues from customers | 433,661) | 469,948) | 392,626) | 321,674) | 333,059) |
| Long-lived assets | 322,445) | 328,341) | 308,438) | 291,234) | 252,812) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 1.34 | 1.43 | 1.27 | 1.10 | 1.32 |
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).
1 2023 Calculation
Area asset turnover = Revenues from customers ÷ Long-lived assets
= 433,661 ÷ 322,445 = 1.34
The analysis of the United States geographic segment indicates a fluctuating yet generally resilient asset utilization efficiency between 2019 and 2023. The area asset turnover ratio exhibited a cyclical pattern, experiencing a notable dip in 2020 before recovering and peaking in 2022.
- Revenue Performance
- Revenues from customers in the US began at 333,059 thousand US dollars in 2019 and experienced a slight contraction to 321,674 thousand US dollars in 2020. A strong growth phase followed, with revenues increasing to 392,626 thousand US dollars in 2021 and reaching a peak of 469,948 thousand US dollars in 2022. A moderate decline was observed in 2023, with revenues settling at 433,661 thousand US dollars.
- Long-lived Asset Investment
- A consistent upward trend in the long-lived asset base was observed from 2019 through 2022, increasing from 252,812 thousand US dollars to 328,341 thousand US dollars. This suggests a period of sustained capital investment in the region. This growth trend reversed slightly in 2023, with assets decreasing to 322,445 thousand US dollars.
- Area Asset Turnover Efficiency
- The asset turnover ratio, which measures the efficiency of generating revenue from long-lived assets, declined from 1.32 in 2019 to 1.10 in 2020. Efficiency improved significantly over the following two years, reaching a maximum of 1.43 in 2022. By December 31, 2023, the ratio moderated to 1.34, returning to a level closely aligned with the 2019 baseline despite a higher overall asset and revenue base.
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Area Asset Turnover: Foreign
Teradyne Inc.; Foreign; area asset turnover calculation
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Revenues from customers | 2,242,637) | 2,685,097) | 3,310,255) | 2,799,795) | 1,961,906) |
| Long-lived assets | 207,995) | 164,076) | 147,609) | 158,135) | 124,943) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 10.78 | 16.36 | 22.43 | 17.71 | 15.70 |
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).
1 2023 Calculation
Area asset turnover = Revenues from customers ÷ Long-lived assets
= 2,242,637 ÷ 207,995 = 10.78
An analysis of foreign area asset turnover from 2019 to 2023 reveals a period of significant volatility, characterized by a peak in asset efficiency in 2021 followed by a pronounced decline. The operational efficiency of foreign assets shifted from a trajectory of growth to one of contraction over the five-year period.
- Revenue Trends
- Foreign revenues exhibited strong growth in the early part of the period, increasing from $1.96 billion in 2019 to a peak of $3.31 billion in 2021. This growth phase was followed by a consistent decline, with revenues falling to $2.69 billion in 2022 and further decreasing to $2.24 billion by December 31, 2023.
- Long-Lived Asset Expansion
- Investment in foreign long-lived assets followed a general upward trend, growing from $124.9 million in 2019 to $207.9 million in 2023. A notable divergence is observed between 2021 and 2023, where long-lived assets continued to increase despite the simultaneous decline in revenues generated from those areas.
- Asset Turnover Efficiency
- The area asset turnover ratio reflects the diverging trends of revenue and asset investment. The ratio improved from 15.70 in 2019 to a peak of 22.43 in 2021, indicating highly efficient asset utilization during the revenue surge. However, the ratio declined sharply thereafter, reaching 10.78 in 2023. This indicates a significant reduction in the ability of foreign assets to generate sales, as the asset base expanded by approximately 66% since 2019 while revenues remained relatively flat compared to the 2019 baseline.
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Revenues from customers
Teradyne Inc., revenues from customers by geographic area
US$ in thousands
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| United States | 433,661) | 469,948) | 392,626) | 321,674) | 333,059) |
| Foreign | 2,242,637) | 2,685,097) | 3,310,255) | 2,799,795) | 1,961,906) |
| Total | 2,676,298) | 3,155,045) | 3,702,881) | 3,121,469) | 2,294,965) |
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).
Total revenue exhibited a growth trajectory from 2019 to 2021, reaching a peak of US$ 3,702,881 thousand before entering a period of contraction through 2023. The volatility in overall revenue is heavily influenced by the performance of foreign markets, which constitute the vast majority of the revenue stream.
- Foreign Market Performance
- Foreign revenues showed significant expansion between 2019 and 2021, increasing from US$ 1,961,906 thousand to a peak of US$ 3,310,255 thousand. However, a sharp decline followed, with revenues dropping to US$ 2,242,637 thousand by 2023, representing a substantial correction from the 2021 high.
- United States Market Performance
- Revenue from the United States demonstrated greater stability and a different growth cycle compared to foreign markets. Domestic revenue grew steadily after 2020, peaking in 2022 at US$ 469,948 thousand before experiencing a moderate decline in 2023 to US$ 433,661 thousand.
- Geographic Revenue Concentration
- There is a high level of geographic concentration outside the United States. Foreign markets consistently accounted for the bulk of total revenues, reaching a peak proportion of approximately 89% of total revenue in 2021 and remaining above 80% throughout the entire five-year period.
- Analysis of Revenue Volatility
- The divergence between the domestic growth peak in 2022 and the foreign growth peak in 2021 suggests distinct market drivers in different regions. The overall downward trend in total revenue since 2021 is primarily attributed to the contraction in foreign sales, which outweighed the domestic gains observed during the 2021-2022 period.
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Long-lived assets
Teradyne Inc., long-lived assets by geographic area
US$ in thousands
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| United States | 322,445) | 328,341) | 308,438) | 291,234) | 252,812) |
| Foreign | 207,995) | 164,076) | 147,609) | 158,135) | 124,943) |
| Total | 530,440) | 492,417) | 456,047) | 449,369) | 377,755) |
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).
Total long-lived assets experienced a consistent upward trajectory over the five-year period ending December 31, 2023. The total valuation grew from 377,755 thousand US dollars in 2019 to 530,440 thousand US dollars in 2023, representing a cumulative increase of approximately 40.4%.
- Domestic Asset Trends
- Long-lived assets within the United States exhibited steady growth from 2019 through 2022, rising from 252,812 thousand US dollars to a peak of 328,341 thousand US dollars. However, a slight contraction occurred in 2023, with assets decreasing to 322,445 thousand US dollars, indicating a stabilization or minor reduction in domestic capital investment.
- Foreign Asset Trends
- Assets held in foreign jurisdictions demonstrated a general growth trend characterized by higher volatility than domestic assets. After an initial increase in 2020, a moderate decline was observed in 2021. This was followed by a significant acceleration in growth between 2022 and 2023, with foreign assets reaching 207,995 thousand US dollars by the end of the period, a 66.5% increase since 2019.
- Geographic Asset Allocation
- A strategic shift in the geographic distribution of long-lived assets is evident. In 2019, United States assets comprised approximately 66.9% of the total. By December 31, 2023, this proportion decreased to 60.8%, while foreign assets increased their share of the total from 33.1% to 39.2%. This trend suggests a growing emphasis on international infrastructure and operational expansion.
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