Thank you, Latonya. 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 of our performance for the 2023 first quarter, along with our outlook for the second quarter. The press release containing our first quarter results was issued last evening. We're providing slides on the Investor page of the website that may be helpful to you in following the discussion. Replays of this call will be available via the same page after the call ends. The matters that we discuss today will include forward-looking statements that involve risk factors that could cause Teradyne's results to differ materially from management's current expectations. We encourage you to review the safe harbor statement contained in the earnings release as well as our most recent SEC filings. Additionally, those forward-looking statements are made as of today, and we take no obligation to update them as a result of developments occurring after this call. During today's call, we'll make reference to non-GAAP financial measures. We've posted additional information concerning these non-GAAP financial measures, including reconciliation to the most directly comparable GAAP financial measure where applicable on the Investor page of our website. Looking ahead between now and our next earnings call, Teradyne expects to participate in technology or industrial-focused investor conferences hosted by JPMorgan, KeyBanc, Cowen, Stifel, and Bank of America. Now let's get on with the rest of the agenda. First, Greg will comment on our results and the market conditions as we enter the second quarter. Sanjay will then offer more details on our quarterly results, along with our guidance for the second quarter. We'll then answer your questions, and this call is scheduled for one hour. Greg?

Thanks, Andy, and good morning, everyone. Today, I will summarize our Q1 results, comment on the current environment, and outline how we see the market developing. Sanjay will then provide the financial details on Q1, our outlook for Q2, and some thoughts on full-year planning. From a financial perspective, we delivered first quarter sales above the midpoint of our guidance range, with earnings above the high guide on improved gross margins. In Q1, our flexible business model enabled us to convert improving component availability in semiconductor test into additional revenue and profit, and our robotics businesses delivered on plan for the quarter. Stepping back from the Q1 results, I would like to outline our view of the current market conditions and how we expect the next few quarters to unfold. In semiconductor test, lower end market demand and high channel inventory is persisting, and our measures of tester utilization in Q1 of 2023 are at their lowest level in over 10 years. The weakness is concentrated in Compute and Mobility SoC test and reflects further erosion in end market demand in 2023. After a 20% decline in PC shipments in 2022, they are forecast to decline an additional 4% this year. Smartphones dropped 10% in 2022 and are forecasted to drop another 4% in 2023. We have clearly seen utilization weaken as well. Intel inventory levels in these supply chains come into balance and the utilization levels improve, we expect test demand for these markets to remain at low levels. As a result, we don't expect any 10% customers in these end markets in 2023. Over the past four years, the Compute and Mobility segments have represented over 70% of the SoC market, so weakness in these segments has an outsized impact on the overall industry. There are however several factors beyond inventory alone that make forecasting in this cycle challenging. These factors are likely to impact both the depth of the cycle and the shape of the cycle recovery. The first is the strength in the other roughly 30% of the SoC test market: automotive and industrial test. The demand that we're seeing here is stronger and more persistent than we expected in January. Tester utilization at IDM customers that drive this sector is substantially higher than at OSATs, which primarily serve the Compute and Mobility markets. In fact, high demand has pushed out our tester lead times for some configurations to be longer than our target. Wafer capacity expansion plans announced by many of our automotive and industrial customers bode well for sustained demand for us in these segments. Strength in these segments is being driven by a wide range of new and growing device applications such as EVs, autonomous driving, and the digitization of industrial activity. We also see these customers working to replenish the inventory that has been depleted over the last three years. This strength suggests that the depth of the SoC test market decline of this cycle may not be as deep as past cycles. Another factor that makes this cycle very different is strong tester demand from China-based chipmakers. The current test buy rate is substantially greater in 2022 and higher than the broader market and may not be sustainable at these levels. In the vertically integrated producer category, we have seen no slowdown in R&D or design-in activities. However, we expect low OSAT utilizations to significantly impact production capacity buys in 2023. When taken together, these three factors make it challenging to predict the timing and the strength of the recovery. Having said that, we do have better insight into the full year than we had one quarter ago. We estimate the SoC market in 2023 will be between $3.3 billion and $3.8 billion, down about 20% to 30% from last year's roughly $4.7 billion. We expect our share of the SoC market will increase two or three points from last year's 36%. I will note that we have increased our 2022 market size estimate by $100 million since January. In the Memory segment, while oversupply is limiting capacity expansion investments, the technology transitions we discussed in the past are continuing to drive test demand, especially for LPDDR5 and high-speed flash. For the full year, we expect the market to be flat to down 10% from last year's approximately $1 billion level. This is unchanged from our view in January. We expect our share to be in the high 30s, also up a point or so from last year. We know that global trends have driven over $300 billion of wafer front-end investment over the past four years, and that has not yet fully been converted into testament. When coupled with a forecast of an additional $160 billion of investment over the next few years, we think the fundamentals for midterm growth are strong. In our LitePoint Wireless Test segment, we see a more familiar correction cycle. We are also a year or so away from the next big complexity leap in connectivity, the transition to Wi-Fi 7. As a result, our early view has LitePoint sales down 20% to 25% from last year's level. In System Test, the storage portion of the business is impacted both by reduced demand for HDDs and declining smartphone shipments. As a result, our System Test group revenue will likely be down 20% to 25% for the year. Now turning to the Robotics businesses. Robotics revenue in Q1 2023 is down 14% compared to Q1 of 2022. The first quarter of 2022 was the last strong quarter before the invasion of Ukraine and slowing industrial growth began to significantly impact our results. As we've discussed in prior calls, there are both external and internal factors that are limiting the growth of our robotics business. Addressing these challenges remains a high priority for our Universal Robots and MiR teams. At Universal Robots, we see a mixed picture. The external market conditions remain weak. Overall sales softened and were lower in Q1 than in the same period last year. However, shipments to Europe have returned to their highest level since then. And in the United States, demand slowed substantially in Q1 after a very strong Q4. Demand in Asia also softened in the quarter. In most years, we see a weaker Q1 as strong Q4 shipments are digested. But it is clear that the manufacturing economy is also slowing, as indicated by weakening manufacturing PMIs in Q1 for almost all repays. The primary internal factor that is impacting our growth is the ongoing realignment of our distribution system. Recall, we're shifting resources to put more focus on opportunities at large customers and OEM partners that have higher long-term growth potential. We are seeing some short-term headwinds from the shift in resources. An important positive for Universal Robots are strong preorders for our new high-payload UR20 cobot. We expect to have a backlog of over six months of volume shipments when we begin deliveries mid-year. The UR20 has already won numerous industry awards, including a recent Robots Business Review Innovation Award. At MiR, where we're coming off record Q4 shipments, we're seeing similar industry-level headwinds, along with seasonal slowdown in Q1 demand. However, our strategy to increase direct engagement with large accounts is latching with installed unit growth of over 40% in this sector from Q1 of 2022. With the persistent weak macro environment and with little evidence to suggest a near-term change in these conditions, we've brought our full-year revenue estimate for our Robotics group downward to be flat to 10% growth from last year's $403 million. I would like to emphasize that despite the current market conditions, our view of the long-term growth potential for robotics remains unchanged. It is clear that there is a large and growing market for collaborative robotics, driven by labor shortages and escalating labor costs. Our strategy is to address this market with an expanding range of applications for our robots and a focused distribution strategy that we expect to yield an average of 20% to 30% annual growth over the midterm. The fundamental drivers of all of our served markets, Test and Robotics make them as attractive as ever. We are focused on continuing to operate efficiently with strong financial discipline as demand begins to recover. With our flexible business model, we will maintain careful investments in our products and capabilities that are the fuel for our future profits. I'll turn things over to Sanjay for the financial details.

Thank you, Greg. Good morning, everyone. Today, I'll discuss the financial summary for Q1, our outlook for Q2, and the planning assumptions for the full year. I will also provide some insights into our robotics segment and update you on our supply chain and resilience progress. In Q1, our sales totaled $618 million, exceeding our mid-guide by $28 million, while our non-GAAP EPS was $0.55, surpassing our high guide of $0.52. Our non-GAAP gross margins reached 57.7%, exceeding guidance due to a favorable product mix, operational efficiencies, and the deferral of some resiliency costs. Non-GAAP operating expenses stood at $251 million, roughly the same as the previous quarter, resulting in a non-GAAP operating profit rate of 17%. We did not have any customers contributing 10% or more in the quarter. The tax rate, excluding discrete items, was 16.5% on a GAAP basis and 16.75% on a non-GAAP basis. Our revenue from Semi Test for the quarter was $415 million, with SoC revenue making up $347 million and memory contributing $68 million. The strength in SoC was primarily in the automotive and industrial markets. In memory, our strongest sales came from flash final tests, followed by DRAM final tests, aligning with industry trends for higher-speed devices in smartphones and server applications. The System Test Group generated $75 million in revenue, with $34 million coming from storage tests amid low SLT and HDD demand, particularly as SLT is heavily tied to the smartphone market, which is currently weak. Wireless Test revenue for Q1 was $39 million, impacted by low volumes in both PC and smartphones and less complex testing investments as we prepare for the expected rollout of Wi-Fi 7 in 2024. Turning to robotics, our segment generated $89 million in revenue, with UR contributing $72 million and MiR $17 million. Foreign exchange had no significant impact on our financial performance. Profitability was negative due to weaker revenue growth, and we are aiming for breakeven profitability this year, below our target range of 5% to 15%. Our gross margins in robotics remain above the corporate average. The reasons for lower than expected growth in 2023, as noted by Greg, are hindering our profit goals. In terms of UR, we see significant potential in this large market, which is currently less than 5% penetrated, coupled with our product and ecosystem leadership. However, our distribution strategy has limited long-term growth, and we are working on transitioning to an omnichannel approach to enhance growth potential. In the current slower market, our traditional channels are feeling the effects before we fully realize the benefits of our new strategy. Historically, UR has recorded profits of 10% to 15% since 2017, excluding the initial COVID year in 2020, and we anticipate profitability for UR to remain within that range in 2023. For MiR, being earlier in its lifecycle, it operates in a fragmented AMR market with no clear leader and the top competitors holding less than 10% market share. MiR ranks among the top five participants with mid-single-digit share. We do not expect MiR to be profitable until 2025, aligning with our strategy to secure a leadership position in a market that also has less than 5% penetration. The demand from our large customers is strong, leading us to invest significantly in R&D to seize opportunities. The concentrated customer base allows us to focus on distribution while being heavily involved in sales, service, and product requirements. In summary, UR is currently profitable and holds a leading market position while we refine our go-to-market strategy. MiR is in a phase of heavy engineering investments, creating solutions with large customers and aiming for profitability in 2025. Gross margins for robotics are above the corporate average, and if we do not see substantial growth opportunities in the market, we will adjust our OpEx growth to achieve over 20% operating profits, similar to our test businesses. Now, shifting back to our financials, our company faced a free cash flow outflow of $22 million during the quarter, which is common as we pay variable employee compensation in Q1. We repurchased $93 million in shares, paid $17 million in dividends, and settled $15 million in debt. Our share repurchase program, which commenced in late January, represents about two months of purchases. We concluded the quarter with $859 million in cash and securities. Looking ahead to Q2, we anticipate sales between $625 million and $685 million, with non-GAAP EPS ranging from $0.55 to $0.74 based on 164 million diluted shares. This guidance excludes the amortization of acquired intangibles and is slightly more optimistic than our January outlook, as demand in automotive and industrial semiconductor tests exceeds our earlier estimates. We forecast gross margins for Q2 to be between 57% and 58%, with OpEx expected to be around 37% to 40% of sales, remaining consistent with Q1. The midpoint of our guidance projects a non-GAAP operating profit rate of 19%. For the rest of the year, we expect Q3 sales to be comparable to Q2, with Q4 showing slight improvement, resulting in a better second half relative to the first. We have improved gross margins in the first half due to operational efficiencies and deferring manufacturing resiliency spending to the second half. We estimate full-year gross margins to be in the 57% to 58% range. Our OpEx will likely be flat compared to 2022, with forecasted GAAP and non-GAAP tax rates at 17% for 2023. Regarding our supply chain, while balance is returning for most components, some analog and logic devices remain in short supply, affecting about 25% of Tester revenue in Q2 and falling outside our guidance range. Efforts to strengthen our supply chain are mostly on track, with substantial completion for tester product manufacturing expected in Q3, while qualifications for components will continue for several quarters thereafter. Adjustments to our hardware services supply chain will persist throughout the year, with associated costs included in our gross margin estimates. In conclusion, we achieved sales above the midpoint of our guidance and earnings that surpassed our highest expectations, driven by improved gross margins. The auto and industrial Semiconductor Test markets in 2023 appear stronger than anticipated, despite softer Mobility and Compute markets. Demand in robotics is also slightly weaker. In this context, we are investing in strengthening our global supply chain while maintaining focus on R&D and go-to-market strategies for long-term growth in testing and robotics. We have managed to keep OpEx roughly flat since 2021, enabling us to project solid free cash flow in 2023, which we will use to maximize shareholder value through M&A, dividends, and share repurchases.

Thanks, Sanjay. And Latonya, we'd now like to take some questions. And as a reminder, please limit yourself to one question and a follow-up.

Yes, thanks for taking my questions. Two follow-ups. I want to go to your LitePoint. Can you please help to understand opportunities in the Wi-Fi 6 area? It seems like that's already behind us? And when would you expect contribution from Wi-Fi 7 to materialize? Is that late this year or do we have to wait till next year? And I do have a follow-up.

Hi, Mehdi. At LitePoint, there are several phases of Wi-Fi 6. The tooling for that is mostly established. However, there's a shift towards Wi-Fi 6E, which is likely the main factor driving Wi-Fi investments in 2023. A significant amount of R&D and development work is currently underway for Wi-Fi 7 chipsets and equipment, which is expected to increase in 2024. We anticipate some Wi-Fi 6E investment throughout this year, followed by a rise in Wi-Fi 7 investment in 2024. Does that help?

Yes, absolutely. And then second question, the favorite topic how 3-nanometer capacity ramp in '24 could attribute? And the fact that you don't have toughened customer this year. Does that mean that next year is to be a big SoC ramp for Teradyne, especially given the delay in 3-nanometer that would finally have 3-nanometer high-volume manufacturing next year?

That's a great question. So first, in terms of like technology transition to 3-nanometer, we've seen no real substantial changes from any of our customers in terms of the pace at which they are trying to move to 3-nanometer to support more complex designs. So that drumbeat is continuing. The thing that we are seeing is that the declines in unit volume in PCs and smartphones has created a fair amount of idle capacity that needs to get filled up before tester demand is going to return. So we think that this is likely to be significantly stronger in 2024. At this point in time, we don't know whether 2024 is going to be good or great. The other things that are going on is like I talked about the demand in China that might be sustainable, the automotive and industrial markets have been going really, really well, and we think they have great long-term potential, but there are often temporary supply/demand imbalances. So they might get incrementally softer. So there are some things that could mute the up that you see in 2024 that I think all of us expect with sort of a return in unit demand.

Thank you. In comparison to your previous forecast for the SoC total addressable market, it appears you are down about 20% at the midpoint from a 4.6 figure. I understand you adjusted this to 4.7 last year. It seems you've effectively removed a few hundred million dollars from the total addressable market this year. The automotive sector seems to be performing better than expected; while you anticipated a decline in this area, it now appears to be stable at around $100 million. Can you break down the 3.5 to 3.6 number at the midpoint that you currently have for your revised SoC total addressable market?

Sure. It's Sanjay. Disaggregating it, we think the Compute market this year is roughly a billion dollars, Mobility at $900 million. We believe Auto is flat, with Auto and Microcontrollers at about $600 million, Industrial at $400 million, and Service at roughly $700 million.

Got it. Thank you for that, Sanjay. Greg, can we discuss the 3-nanometer? This year seems to be more evenly split than usual, typically leading to a front-end loaded year. I’m curious if there's a structural issue at play given the ongoing debate between cyclical and structural factors with your largest customer. I still believe there will be significant growth next year, but is there something happening beneath the surface, perhaps more reuse of testers? Can you elaborate on what’s occurring that might influence the SoC market size next year and your market share?

I can give you a little bit of color. So there's no significant change in the amount of reuse. The tester capacity that we've put in place is largely fungible across all of the technology nodes that are here now or coming. So we're really talking about what's the incremental demand, how much more capacity needs to be put in place. The one structural change is that we haven't really seen a peak in demand since leading producers of mobile phones have started to reuse silicon in lower parts of their product line. So instead of putting a new processor in all of the phones, they use last year's processor in a portion of the volume. So at this point, we haven't seen a significantly strong year since that decision has happened. We believe that long-term, that kind of thing will come out in the wash, but it may make the demand less peaky.

Yes, good morning. Thank you for taking the question. I guess a follow-on question. Mobility at $900 million, worse level of spending in five years and 55% lower than peak. You talked about maybe not such a great year, next year, but curious what's kind of a base case kind of recovery assumption if you were to make the view that handset units would be at least flat. And given what you know content-wise and increased test times, what might that kind of impute for Mobility?

Yes. I think we don't have enough visibility into the way 2024 is going to shape up to really call a market size for next year. Directionally, I think it will be stronger, but I can't really tell you how much.

Okay. And you talked about Q4 revenues accelerated to some degree. I'm curious if you can kind of speak to DDR5 kind of ramp when that starts and how that impacts before, and the same thing for UR20. Is that a meaningful driver given your backlog? Or is that something that might get pushed into '24? Thanks so much.

Yes, so the DDR5 ramp we're kind of running against the same schedules that we've had for a while. So we haven't seen any significant pushout of the technology shift. So I think we've got a pretty steady demand for the capacity to support the new technology DRAM testers. For UR20, we're going to be starting substantial shipments of that in the second half of this year. And I would say that it will have a substantial impact on the growth that we're able to achieve in UR this year. It's going to have a meaningful single-digit impact on growth.

Thank you for taking my questions. I’d like to start with the automotive sector. While you have mentioned the current trend, could you share your perspective on its sustainability? Specifically, how do you see this trend correlating with production volumes, especially in the Chinese market, where various players are indicating risks to both production and demand? I have a follow-up as well. Thank you.

Sure. So how sustainable. There's a fairly large capacity increase that has come online in terms of ability to produce vehicles, and the supply chain has reacted to that. We are starting to see that the lead times for many of the parts, the sort of electronics that go into cars are starting to come down but there are a lot of linear devices that still have extremely low inventory levels and extremely long lead times. And so that appears to be where capacity is being added to support reducing those lead times. So if they catch up, if vehicle sales drop remarkably, or if they bring that more into balance, then I would expect that to soften. But the thing I'll remind you is that the current situation for us and our competitors in this space is we're running with tester lead times that are in excess of 26 weeks. So we have a pretty good idea of what these customers are going to need over the next few quarters. And so I would say that the likelihood that we're going to see a lot of softening in that space is probably out a little ways in time.

Okay. I understand. For my follow-up, regarding the memory side, there seems to be some news or speculation about China considering sanctions on Micron. What are your thoughts on how this could affect the dynamics of your revenue mix in memory and your customers in China and their investments in memory? Thank you.

Yes. So I really don't think I can speculate on what's going to happen in terms of those regulations. I will say that we are a supplier to the two major memory producers in China. And if there are regulations that impact that, it will have an impact on our sales there. To sort of size that, our sales to indigenous memory in China, like all indigenous in China is about 4%, 5% of total Teradyne revenues, and the portion that goes to memory there is probably between a half and two-thirds of that number.

Hi, good morning. Thank you so much for taking the question. My first one is on component shortages. I just wanted to clarify. I think, Sanjay, you talked about the shortage of analog and logic devices impacting semi test revenue in Q2 by 25%. So the interpretation there should be without the shortages, your Q2 revenue should be 25% higher. Am I understanding that correctly? And when do those headwinds have...

Yes, I noted on my prepared remarks, $25 million, which is outside of our range and it's roughly its SoC in memory.

Yes. Okay. Got it. And then my second question, just on your Robotics business. So again, you're taking down your full-year growth outlook for the year. Greg, you talked about the macro environment. You talked about the transition from distribution to direct, and that having an impact. I'm curious if competition is having any impact here. It's always difficult to compare and contrast how you guys are doing relative to your competition because most of your competitors, they're either startups or small businesses within bigger conglomerates, but curious, particularly in China, is there anything going on the competition front? Thank you so much.

Yes, Toshiya, that's a great question. Regarding robotics growth, I'd like to clarify that the change to distribution isn't a shift to direct sales. We're actually focusing on an omnichannel strategy, continuing to support our traditional distributors while also adding new channels, including OEMs and direct business in some instances. It's not a complete overhaul, but we are reallocating resources. As for market share, I agree that obtaining accurate statistics on the COBOT market is quite challenging. Our best data indicates that from 2021 to 2022, our market share remained relatively stable. We're looking at a range of 35% to 40% for 2023, which we believe will be about a $1 billion market. Our closest competitor likely holds less than a third, possibly a quarter to a third, of that market share, and that number two player has fluctuated over the years. The trend you've pointed out regarding Chinese competitors is indeed accurate; they are gaining traction and performing well in the Chinese market. Prices in that region are significantly lower than in other parts of the world, and their knowledge of that market surpasses ours or that of other foreign competitors. Consequently, our products tend to appeal to a premium segment, particularly with international customers or those who value our unique ecosystem, including specialized software or adapters that local suppliers don't offer. We believe we can maintain our market share in China within this segment, but we are certainly facing competitive pricing pressures from Chinese suppliers, which we aim to counter through differentiation.

Yes, hi, thanks for taking my question. I had two of them. First one, let us say Sanjay knows the auto industry is pretty strong, maybe Mobility rebounds next year. I understand you don't want to give color into calendar '24, but would that change the gross margin profile because it seems like the auto industry has a much higher gross margin than Mobility? And then I have a follow-up.

Sure. Thanks for the question. This year, as I noted in my prepared remarks, we're going to be at 57% to 58%, and it's really tied to both product mix as well as we've got these, what I would call, transitory costs tied to manufacturing resilience. I think when that's materially behind us, I see no reason why we don't get back to our model gross margin of 59% to 60%.

Yes, it's definitely a topic we've been discussing internally. Here's our perspective: the growth of generative AI, including platforms like ChatGPT, is creating a significant demand for additional cloud compute capacity, particularly accelerated capacity. At this moment, traditional GPUs are the main means of providing that acceleration. Therefore, I anticipate this will benefit our competitor, who has a larger market share in traditional compute. However, the companies making aggressive efforts to capture AI market share are also vertically integrated producers creating their own solutions for accelerating compute. Our primary focus is on attracting these customers as they introduce this technology. I don’t want to imply that we have guaranteed contracts, but the situation differs from traditional compute suppliers, as these new entrants lack extensive relationships with any single vendor. We're competing in numerous scenarios and winning a significant share. As the market develops and AI becomes increasingly vital for vertically integrated producers or hyperscalers, we hope that these internal devices will experience higher long-term growth compared to traditional compute. In the short run, traditional compute is quite strong, but in the long run, the outlook is more favorable for vertically integrated solutions.

Thanks for taking my question. I actually had a longer-term one. It seems like you're keeping your long-term sales and earnings model unchanged. But when I look at your largest end markets, mostly on the consumer side, they seem to have matured quite a bit. So what's underpinning the confidence about reaccelerating to that double-digit growth? And let's say if the new model is not for double-digit growth, what will you need to change about your cost structure to realize better profitability?

So Vivek, we don't see any fundamental change regarding the maturing of our consumer markets. The main factor driving growth in semiconductor testing is the speed at which leading chipmakers embrace new process technology. The transition from 5-nanometer to 3-nanometer has taken longer than anticipated, contributing to a slowdown in market growth. However, there are consistently advancing 3-nanometer capabilities emerging from the major foundries, along with upcoming gate-all-around technology. As we mentioned, Compute and Mobility constitute 70% of the SoC test market. The complexity in these areas is also driving advancements in memory technologies and improvements in memory density. If the pace of node and node technology development continues, we believe the fundamentals for growth remain strong. Additionally, there's a considerable amount of wafer front-end capacity that has been installed but not yet activated. We view this as a long-term demand driver in the testing sector because it essentially acts as test equipment for untapped resources. It's in place and will be utilized, which will necessitate testers.

Got it. And for my follow-up, Greg. Seems like your SoC business could be down in the second half, if I take that 39% share that you suggested of the lower TAM. So I just wanted to confirm that. And would Mobility also be down? And if it is down, is it the 3-nanometer comment that you mentioned, is it not as big a node? So does that have implications on what we should be thinking about for calendar '24 growth in your SoC test business also?

Yes. So second half, I think you asked about SoC revenue in the second half. As I noted in my prepared remarks, we expect revenue to be a bit higher in the second half. And part of that increment is really tied to SoC. And while it does have auto and industrial as the main driver. We expect SoC in the second half to be stronger.

Could you please repeat the second half of your question?

Good morning. Thanks. If I just ask a few questions. Maybe to start with, I think there's an advanced SoC can outlook. So I think they rarely align these are things like service, etc. that might be in or out of your forecast. But they've seen especially far part this year with sort of the high end of your range, worse than the low end of theirs. I'm just wondering what do you think explains the discrepancy between each of your forecast this year?

Yes, Brian, that's a great question. Each year begins with differing perspectives, which can lead to varying views. The challenge for us is predicting how robust or weak their business will be, and they face the same difficulty in assessing our business. Currently, we see a divergence, similar to what occurred last year. Typically, these numbers align over the quarters. We feel confident in our range of 3.3% to 3.8%, and if conditions improve throughout the year, we’ll adjust that range quarterly. I don't find it unusual to see that level of spread.

Okay. Fair enough. So I guess your molds are better than theirs...

Actually, I don't want you to walk away thinking that. I think we ended up having a more accurate prediction last year than they did at the similar time, but if you look at it this year, I don't know that our molds are better than their molds for sure.

Thanks. Good morning. Greg, thinking about your prepared comments. How do you reconcile the strength in semi test for industrial digitization with the softer forecast for robotics? It seems like those should be correlated to some degree? Or is there some other aspect of digitization that's driving the test volume?

Hi, Steve. That's a very thoughtful question. The situation is that when you compare us to other industrial robotics companies, our results tend to be much more volatile. The main distinction is that cobots account for $1 billion in a roughly $12 billion industrial robot market. Meanwhile, the broader industrial robot market operates with one to two-year lead times and is currently busy delivering products for the establishment of various EV and battery factories. This aspect isn’t primarily related to the cobot sector. One of the factors at play is that there is significant consumption of electronics in other areas of the robotics business, but our performance tends to align more closely with PMIs and other broader economic indicators than that longer lead time segment. I don't really consider this a volume play because that implies commoditization, which we don't see happening. This is a high-tech field where differentiating technology is crucial. Having a superior robot, better software, and user-friendly features makes a significant impact, as does having a network of partners that can assist in rapidly developing solutions. When I think about focusing on larger accounts, I see it mainly in terms of our sales costs; by targeting fewer larger accounts, we can sell more robots to each, which enables our sales growth to outstrip sales cost growth over time. I perceive this as a matter of efficiency. Regarding the distinction between hardware and services, I believe this is an important part of our future plans. We see opportunities for profit in maintaining engagement with customers who have purchased our products, not only through service but also by offering new software and components that help them maximize their product's utility in the future. Ultimately, our robots are very reliable and rarely break down. Therefore, I wouldn’t anticipate a break-fix business generating significant volume. However, as robots become integral to more critical processes, customers will increasingly be willing to pay for uptime, leading to a more profitable service model.

Would you get into more cobot as a service or robotics as a service over time based on that comment?

Well, we might want to get a beer to have that conversation. I think that like in a nutshell, we believe in service as a service, right that the models where people are trying to offer hardware that depreciates as a service is largely around who carries the depreciation, and I think it's an interesting model at the low levels of penetration that we have right now in robotics because customers are reluctant. They're worried about making investments that won't pay off. Robots as a service allow them to walk away more easily. We're far more focused on solving those problems so that customers are willing to make those investments because they're smart enough to figure out if they get a better deal by carrying the depreciation versus paying rent for the robot. And that's basically what you're talking about.

Okay, folks. And we're out of time. So this concludes the call. Thank you all for your interest in Teradyne, and we look forward to working with you in the weeks ahead. Bye-bye.

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time, and thank you for your participation.