inTest Stock price
Is inTest a Top Scorer Stock based on the Dividend, High-Growth-Investing or Leverman Strategy?
As a Free StocksGuide user, you can view scores for all 9,127 stocks worldwide.
StocksGuide Premium
StocksGuide Unlimited
Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $145.57m | Revenue (TTM) = $128.26m
Market Cap = $145.57m | Estimated Revenue = $141.09m
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $129.71m | Revenue (TTM) = $128.26m
Enterprise Value = $129.71m | Forward Revenue = $141.09m
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF)
📈 What is it?
EV/FCF shows how many years it would take for a company to "pay back" its enterprise value using its free cash flow.
🧮 How is it calculated?
🏛️ Why is it important?
It focuses on real cash generation, ignoring accounting noise — ideal for assessing profitability and value based on liquidity, not earnings.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF may signal undervaluation and strong cash generation.
- A high EV/FCF might reflect weak recent cash flow or aggressive growth expectations.
- Best suited for stable, mature businesses with predictable free cash flows.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF)
📈 What is it?
Free Cash Flow shows how much actual cash remains after a company covers its operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow means the company generates real, usable cash – independent of reported net income.
- It’s often the most reliable base for sustainable dividends and buybacks.
- Declining FCF can be an early warning sign – even when profits appear stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net Margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free cash flow margin
📈 What is it?
The free cash flow (FCF) margin shows how much of a company’s revenue remains as actual free cash after covering all operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
This margin reflects the true liquidity generated by the business – independent of accounting rules or depreciation. It’s especially relevant for dividends, buybacks, and reinvestment decisions.
🧮 Calculation
🎯 What does this mean for investors?
- A high FCF margin means a company consistently generates strong cash flow.
- It’s a positive signal for financial stability and shareholder returns.
- The long-term trend is key – a declining margin may indicate rising investments or weakening operating efficiency.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Turnover per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
inTest Stock Analysis
Analyst Opinions
9 Analysts have issued a inTest forecast:
Analyst Opinions
9 Analysts have issued a inTest forecast:
inTest Events
Past Events
|
AUG
10
Q2 2026 Earnings Call
about 2 months ago
|
|
MAY
5
Q1 2026 Earnings Call
5 months ago
|
|
FEB
27
Q4 2025 Earnings Call
7 months ago
|
|
NOV
5
Q3 2025 Earnings Call
11 months ago
|
StocksGuide Free
inTest — Q2 2026 Earnings Call
1. Management Discussion
Greetings, and welcome to the InTest Corporation Second Quarter 2026 Financial Results Conference Call. [Operator Instructions]
As a reminder, this conference is being recorded. It is now my pleasure to introduce Sanjay Hurry, Investor Relations. Please go ahead.
Good morning, everyone, and thank you for joining us. With me on the call are Rich Rogoff, President and Chief Executive Officer; and Duncan Gilmour, Chief Financial Officer and Treasurer. The earnings press release was issued this morning as well as the slides that management will use during today's call. Both can be found in the Investor Relations section of the intest.com website.
Please turn to Slide 2 for a review of the safe harbor statement. During this call, management may make some forward-looking statements about their current plans, beliefs and expectations. These statements apply to future events that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from what is stated here today. These risks, uncertainties and other factors are provided in the earnings release as well as in other documents filed by the company with the Securities and Exchange Commission. These documents can be found on the InTest website or at sec.gov.
Also, as covered in Slide 3, management will refer to some non-GAAP financial measures. We believe these will be useful in evaluating the company's performance. However, you should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. You can find reconciliations of non-GAAP measures with comparable GAAP measures in the tables that accompany today's release and slides.
Before management begins today's discussion on Slide 4 of the presentation, please note that certain first quarter 2026 comparisons in their prepared remarks reflect InTest's revised Q1 results. As the company announced on July 31, management revised Q1 cost of revenues, gross profit, gross margin, income tax expense, net earnings and earnings per share, together with their related non-GAAP measures. Q1 revenue and operating expenses were not affected by the revision. Q1 2026 financials provided as part of this presentation have been revised accordingly.
With that, I would now like to turn the call over to our first speaker, Rich Rogoff, President and CEO. Please go ahead, Rich.
Thank you, Sanjay. Good morning, everyone, and thank you for joining us. On today's call, I will start with an overview of our second quarter performance, and Duncan will walk you through the Q2 financial results, after which I will discuss end market dynamics that support our raised revenue guidance for the year and then open the call to Q&A. We are reporting Q2 results that are in line with our preannouncement with revenue of $35 million, gross margin of approximately 41% and operating expenses of $13.9 million.
Demand across InTest divisions remained healthy in Q2, with revenue up approximately 26% year-over-year. Q2 also marks our third consecutive quarter of sequential revenue growth and our second consecutive quarter of year-over-year growth above 25%. The strength we saw was broad, led by strong project delivery in Auto/EV and a semiconductor funnel that continued to build towards the second half. The diversity we have built continues to broaden our revenue base, which gives us confidence in our raised full year top line guidance.
As disclosed in our preannouncement on July 31, our second quarter margin reflected an unfavorable mix of high revenue, low-margin projects at Alfamation alongside a shortfall of higher contribution revenue that shifted to the third quarter.
Turning to orders and backlog on Slide 5. Q2 orders were $28.9 million, down 9% sequentially, following 3 consecutive quarters above $30 million and up 4% year-over-year. Semi was a standout. Orders here increased 56% sequentially, our strongest semi order intake in 6 quarters and grew 64% year-over-year. The semi wave that we referenced in our Q1 call is now converting into orders. In Auto/EV, orders declined 67% sequentially after 4 quarters of strong order flow. Funnel activity in this end market remains healthy. In defense/aerospace, orders declined 28% sequentially, reflecting nonrecurring orders that drove strong Q1 and increased 70% year-over-year on higher DoD procurement.
Turning to backlog at quarter end. Backlog was $45.4 million, a sequential decrease of 12%, reflecting normalization of an elevated peak in Auto/EV projects. This also represents a year-over-year increase of 20%. Approximately 45% of the backlog is expected to ship beyond the third quarter.
With that, I will turn it over to Duncan to take you through the financial detail beginning on Slide 6. Duncan?
Thank you, Rich. Starting on Slide 6. On a sequential basis, revenue in Q2 increased $1.4 million or 4% from $33.9 million in Q1 to $35.3 million. The net increase was driven almost entirely by Auto/EV, which increased by $6 million on the shipment of high revenue, lower-margin Alfamation automotive projects from backlog. Industrial contributed $1.1 million. Partially offsetting these gains was a $2.1 million decline in defense/aerospace following a particularly strong first quarter as well as decreases of $1.6 million in Life Sciences and $1.4 million in semi.
Compared to Q2 2025, revenues increased $7.2 million or 26% from $28.1 million. The increase over the prior year period reflects the continued gradual recovery in the capital spending environment and continued penetration of non-semi-correlated end markets. Non-semi markets accounted for approximately 74% of Q2 revenue. Sales in Auto/EV increased $7.6 million, followed by Life Sciences and Industrial at approximately $0.6 million each. Partially offsetting these gains was a $1.1 million decline in semi.
Turning to Slide 7. Second quarter gross profit was $14.3 million and gross margin was 40.5%. Compared to revised Q1 results, gross margin declined 280 basis points sequentially, reflecting a shift in revenue mix towards high revenue, lower-margin Auto/EV shipments. For the same reason, gross margin declined 210 basis points from 42.6% in the prior year period.
Moving on to Slide 8. Operating expenses for the second quarter were $13.9 million, a decrease of $0.5 million sequentially. The sequential decrease was due primarily to approximately $0.7 million in nonrecurring restructuring costs associated with the CEO transition that we recorded in Q1 and did not recur in the second quarter. On a year-over-year basis, we generated $7.2 million of incremental revenue while absorbing only $1 million of incremental operating expenses, which resulted in a reduction in operating expenses as a percentage of revenue to 39.5%.
Turning to Slides 9 and 10 that collectively measure our profitability. On Slide 9, for Q2, net income was $0.5 million, representing a net margin of 1.3%. Adjusted EBITDA was $2.2 million, representing an adjusted EBITDA margin of 6.2% and up approximately 73% from $1.3 million in Q2 of 2025.
On Slide 10, net income was $0.04 per diluted share. Adjusted EPS, which adds back tax-affected acquired intangible amortization and restructuring charges, was $0.09 per diluted share. Our Q2 results include a discrete income tax benefit of approximately $0.02 per diluted share that is driven by stock option exercises during the quarter. This benefit is specific to the second quarter, but we continue to expect a full year effective tax rate of approximately 18%.
Slide 11 shows our capital structure and cash flow. We ended the second quarter with cash and cash equivalents of $22.1 million, an increase of $6.4 million from the end of Q1. During the second quarter, we generated $6.3 million of cash from operating activities and received $2.9 million in proceeds from stock option exercises. These inflows were partially offset by $2.3 million of net debt repayments, including a $1 million reduction in term debt and by $0.4 million of capital expenditures.
At June 30, 2026, we had approximately $62 million in total liquidity. In addition to $22.1 million of cash and equivalents, we had $40 million of available borrowing capacity under our delayed draw term loan and revolving credit facilities, which we have extended through August 28, 2026. Total debt was $6.2 million, and our leverage ratio was 0.8x trailing 12-month adjusted EBITDA.
Turning to Slide 12 and our financial guidance for the year. We are introducing guidance for Q3 and are reiterating the outlook we provided on July 31. For Q3, we project revenue of $33 million to $35 million, gross margin of approximately 44%, operating expenses of $13.8 million to $14.2 million and amortization of $0.5 million.
For the full year, we now expect revenue of $135 million to $140 million. At the midpoint, this represents growth of approximately 21% over 2025's $113.8 million. This increased revenue guidance reflects continued diversified demand supported by our backlog and improving order flow and outlook into the second half, particularly in semi sales. Gross margin, approximately 43%, operating expenses of $55 million to $57 million, amortization of $2.6 million and interest expense of approximately $0.3 million with an effective tax rate estimated to be 18%. And finally, we expect capital expenditures of 1% to 2% of revenue, consistent with our historical investment levels. This guidance excludes any potential acquisitions and restructuring costs and assumes our view of macroeconomic conditions remain unchanged through the end of the year.
Finally, a brief word on internal controls. In connection with the Q1 revision on July 31, management and our Audit Committee concluded that the control deficiencies underlying the revision at Alfamation constituted a material weakness in our internal control over financial reporting. We have implemented remediation plans and fully expect to demonstrate that these controls are operating effectively by fiscal year-end. This is described more fully in our Form 10-Q that will be filed later today.
With that, if you turn to Slide 13, I will now turn the call back over to Rich.
Thanks, Duncan. On our Q1 call, I noted that funnel activity and order flow were pointing to a strong second half of the year. Since then, we have seen demand strengthen, leading us to raise our full year revenue outlook. To date, in the third quarter, we have recognized the roughly $2 million of delayed shipments that moved out of Q2 and order activity across all our divisions is demonstrating momentum.
Opportunities in the higher-margin end markets we serve are expanding. In semi, the pace of activity in the back-end markets is picking up, reflecting growing demand to test high-power devices in the new electrified economy. In defense and aerospace, significantly higher DoD spending and capacity expansion are building an expanding funnel of testing opportunities. And in our Auto/EV market, demand remains healthy, supported by rising electronic content of today's vehicles. Order activity follows the cadence of our customers' multiyear automotive programs.
Much of our growth in Q2 came from deepening and expanding our position with existing strategic accounts where customers are standardizing on InTest solutions and returning to us as they move to new test platforms and programs. We are also realizing the benefit of our broader portfolio as we cross-sell our businesses and bring combined capabilities to shared customers. At the same time, we are steadily building our channel and partner coverage to extend our reach into customers and new geographies.
Turning to technology and innovation, which is the foundation of InTest's long-term value creation, we are seeing good traction from recently introduced products. In our induction heating business, our next-generation EKOHEAT is progressing through applications lab and distributor testing with first customer shipments targeted for later this year. Across electronic testing, our robotic docking and intelligent interface solutions are increasingly being qualified as tools of record as customers transition to new tester and handler platforms, which positions us to win follow-on hardware as those programs ramp.
Our advanced high-powered chillers is another place where customers are pulling us forward. Our current portfolio delivers between 1.5 and 7 kilowatts of cooling capacity and customers need more as they embrace the demand for much higher power conversion. We are also directing new product development toward the highest value, fastest-growing pockets of demand in each of our divisions. For example, our test solutions for high-power, high-voltage devices, including silicon carbide, gallium nitride, power modules, rising electronic content, batteries and battery management systems are all involved in today's evolving power conversion architectures.
In conclusion, we have ample opportunities for growth in our end markets and profitability has further to go. My aim is to build consistency into how this business performs, converting our commercial momentum into steadier adjusted EBITDA as we gain operating leverage across our cost structure. Near term, that means taking a close look at our manufacturing footprint and business unit cost structure with a view towards improving cost efficiencies and productivity. This continues the operational review I described on our Q1 call and remains central as we move through the second half. There is a great deal of work ahead, and we are on it.
With that, operator, please open the call to questions.
[Operator Instructions] Our first question today will come from Max Michaelis with Lake Street Capital Markets.
2. Question Answer
A few for me. Nice job on the quarter as well. Just going to the order numbers, semi, obviously up nicely this quarter. I mean, can you give us a sense, was that in line with internal expectations? And maybe not -- you can't give exact detail, but maybe help us out how you expect orders to trend throughout Q3 and Q4.
Sure, Max. Thanks for joining us. Yes. So I think the order intake is as expected. As we mentioned in our Q1 call, we're pretty optimistic about the second half, and we're actually seeing that come to fruition. As we see it now, the order intake through the next quarter, quarter maybe 2 will be as expected, unless something changes in the market space. As we see it, things are looking strong. So I don't know, Duncan, if you have anything to add to that?
Yes. No, agreed. I think as we said earlier in the year, we see semi starting to come back. We start to see that here in the Q2 order numbers. I mean the other side of that, as you can see, our mix shifts as we look towards the second half of the year with some of those strong Auto/EV revenues dropping a little bit and semi starting to come through.
Yes. Totally understood. And then can you help me out, Auto/EV, was that just one large customer, one large program that kind of drove the massive outperformance in Q2?
Well, it was a combination, actually. So as we mentioned, and I think you saw it was Q3, Q4 of last year, even into Q1, we had a strong order intake in Auto/EV. So there were planned deliveries, of course, of those -- of that backlog. So it would make a good Q2. And then there were some pull-ins from one or two customers that increased the revenues as well.
Next, we'll move to Ted Jackson with Northland Securities.
Congrats on the quarter. I'm going to start out on Auto/EV. That's been -- I mean, it's an awesome business that you bought and that's really contributed to the company tremendously. It goes through its own kind of cycles. And I was kind of curious when you -- since you're tied to the development cycles of your auto customers, can you give us a sense with regards to kind of the cadence of projects in front of you? I mean, do you have like a pipeline of opportunity that's going to keep the business growing? Or have you kind of run through some of that pipeline and it's in the backlog and you're going to work through it? So maybe that would be my first question is just kind of trying to think about that business over the next 6 to -- yes, 6 to 18 months.
Yes. Great question. Thanks, Ted. The cycles are a little bit longer as we've discussed in the past in the Auto/EV, they will develop a new product and we'll develop solutions for that product. There's some commonality, of course, but there's also some customization that occurs. Our funnel is pretty strong with those projects. So we don't see a major shift in things going forward. Of course, the cycles of new product introductions from the automotive companies themselves will dictate a little bit of that. But we have quite a few projects that we're working on, which we believe will continue the momentum there as well as we're looking to expand beyond automotive, of course, as we did last year a little bit with Life Sciences.
Okay. And then shifting over, kind of a similar question on the semi side of the house. The company has an extensive history with regards to the semi test market, particularly in the back end. And you're kind of going through a new cycle now. You're seeing a pickup in order activity. Do you expect to continue through the second half? How long is a typical cycle for something like that?
I know that typically, with regards to it, you sort of the back end of the cycles as they go through. But I mean, is it the kind of thing where you see continue typically, typically, not trying to say this is what this person -- this particular situation is. But typically, do you see a pickup in order and activity that lasts for 6 months, 12 months, 18 months? What's kind of a standard way to think about that in terms of like a cycle for you?
Yes, it's a great question. I guess if I had the exact answer, we would have a different conversation, right? But I've been in the semi business myself for more than 30 years. And typical cycles, it kind of goes ebbs and flows with the node transitions, which have typically been on the 18-month kind of time frame, of course, barring any macroeconomic changes to the situation, right? So for example, today, memory shortages, right, that maybe drive increased capacity needs.
So I would say, typically, you see something on the order of 9 to 12 months of higher order capacity increases, technology changes and then you get into a somewhat of a slowdown period. So something along those lines would make sense. But then you throw in the macro part of it, which is today's memory shortages, the AI aspect and it kind of makes it a difficult answer to really predict.
But if you just were to say like this is the average. In an average scenario, a typical thing when a cycle turns, you're at the beginning of it. And generally speaking, you would see continued strength as you finish off '26 and go into '27?
Yes. That would be the expectation. Certainly, we're watching that guardedly, right? But we -- typical would be -- like I said, we would plan something in the order of 6 to 9 months, maybe a maximum of 12 or so and then really start to consider what would happen next. Of course, we then plan for projects for next round of technology growth, which would refuel the cycle again, right?
And then I know the semi business is one of the better margin businesses for InTest. Could you give us some kind of color with regards to the margin profile for your back-end semi business relative to corporate averages?
Yes, I can touch on that. I think we've talked about this before. I mean our back-end semi business, as you mentioned, Ted, one of the legacy pieces of the business, certainly, the margins there higher towards the, let's say, sort of mid-50s kind of range, certainly one of the higher margin profiles across our product portfolio. And that shift between those higher margins versus some of the great auto projects, but tend to be higher volume, lower margin, that change of mix as we go into the second half, a real driver of the margin shift that we see in the second half versus the first half.
Okay. And then my last question, Rich, you alluded to a renewed focus, if you would, on efficiency within InTest. Is this, as you kind of dug in for the last 100 days and you're looking at it and saying, "Hey, we can do even better than this." Is this something that's been sort of part and parcel of things in the past?
Are you -- is it something where we might be -- you might be coming back to us in a quarter or so and say, "Hey, we're taking these different programs, and we're going to take this kind of cost out of the business." You mean like, I guess, Duncan, you did that -- you guys did that a year or 2 ago. Like how much of it is kind of just a continual improvement? And how much of it is kind of like, well, we're going to put pencil to paper and this is actually something that's going to be a defined project?
Yes. It's -- I mean, I think we're always in a continuous mode of looking at things. As you mentioned, we did some things last year. We're taking a harder look at things for sure now than we have in the past per se. Whether there's going to be a project or 2, I think it's still a bit early to answer that question. We're still going through some of our analysis and things. One thing we are doing that we're implementing now, which will hopefully yield some good efficiency gains going forward is working on more cross-collaboration between the businesses, utilizing our resources a little better.
It's hard to put a number on that and the timing, but those are activities that are ongoing. But we're taking a hard look at everything in the business with regards to footprint, consolidation of efforts around purchasing and things like this that we hope will yield some things. And as mentioned in Q1, we hope by the Q3, Q4 time frame, we'll be able to come back with some more concrete things.
[Operator Instructions] Next, we'll move to Dick Ryan with Oak Ridge Financial.
Rich, just a couple of more questions on the semi side. Are you seeing anything show up yet on the front end? Was the front end any part of the increasing funnel that you're talking about in the second half? Or is that still something we should be anticipating in 2027?
Yes, it's still more 2027 related in our estimation, although I will say activities are picking up in that space as well.
No, I think you mentioned new product development, introducing something for the silicon carbide testing. Do you need to get that product line out? Or is your product portfolio sufficient at this point versus what you're seeing coming at you in the funnel?
It's -- the product line is somewhat unrelated. I think the front-end semi business that we've had in the past is -- there's still evolutions to the product that we're working with customers on. It's more of a demand issue on that side than it is a product development issue. More of the developments that we're seeing today in that space are more around the testing, which is more towards the back end of that space.
Okay. A question on the back end. I mean, with the introduction of robotics and automation, how has that increased your available market that you can go after versus the non-robotic automated side of things?
I think it's an evolution of the product and the market. So traditionally, the back end of the market has been very manual. And as labor is tight and people are moving to get more efficient, things are becoming more and more automated. So I wouldn't say it's necessarily growing the market significantly, although our solutions are enabling us to take more of that market share.
Okay. One last one on the expanding opportunities across the end markets and deepening customer penetration. How do you see your customer concentration, whether it's top 5, top 10? How do you see that shaping over the next year or so?
Yes. I would guess that the goal would be to have a few -- to get our top 10 customers or top 5 customers even -- in a way, even bigger. So we penetrate with more of our product solutions than maybe we do today. We're seeing joint activities between the businesses that are driving some of that activity, which would increase our wallet share at those customers. But I also see it as we've been growing, we've been changing the landscape of those top 5 customers over the quarters. So we'd like to get more customers up into those levels, but it will probably change from quarter-to-quarter based upon their demands, right?
[Operator Instructions] And this will conclude the question-and-answer session. I would now like to turn the floor back to Rich Rogoff for closing remarks.
Thank you, operator. We appreciate everyone joining us today. Thank you for your time, and we welcome the opportunity to answer any questions. Please reach out to our Investor Relations team to coordinate our continued dialogue. On Slide 14, please note the details regarding the replay of this call as well as our up-and-coming investor event schedule. We will publicize additional conferences -- conference attendances via Release Advisories or on our IR website. Thanks again for participating in today, and have a great day.
Thank you. This does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time.
inTest — Q2 2026 Earnings Call
inTest — Q1 2026 Earnings Call
1. Management Discussion
Ladies and gentlemen, greetings, and welcome to the InTest Corporation First Quarter 2026 Financial Results Conference Call.
[Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host for today, Sanjay Hurry, Investor Relations. Please go ahead.
Good morning, everyone, and thank you for joining us. With me on the call are Rich Rogoff, President and Chief Executive Officer; and Duncan Gilmour, Chief Financial Officer and Treasurer.
The earnings press release was issued this morning as well as the slides that management will use during the call. Both can be found in the Investor Relations section of the InTest.com website.
Please turn to Slide 2 for a review of the safe harbor statement. During this call, management will make some forward-looking statements about their current plans, beliefs and expectations. These statements apply to future events that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from what is stated here today. These risks and uncertainties and other factors are provided in the press release as well as in other documents filed by the company with the Securities and Exchange Commission. These documents can be found on the InTest website or at sec.gov.
Also as covered in Slide 3, management will refer to some non-GAAP financial measures. We believe these will be useful in evaluating the company's performance. However, you should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. You can find reconciliations of non-GAAP measures with comparable GAAP measures in the tables that accompany today's press release and slides. Management will begin today's discussion on Slide 4 of the presentation.
With that, I'll turn the call over to Rich.
Thank you, Sanjay. Good morning, everyone. Thank you for joining us this morning. Since this is my first call as InTest CEO, I'm going to begin the call by sharing with you my experience both before joining InTest and during my tenure at the company. I'll then review Q1 revenues and orders and turn the call over to Duncan to take you through the financial results. After that, I'll wrap up by discussing my priorities at a high level, and we'll be happy to take your questions.
On the right side of Slide 4 are the details of my 30-plus years of experience and increasing responsibility in operations and business building roles in capital equipment companies. The left side lists my positions at InTest since joining the company in October 2021.
I was initially a consultant to the company before being brought on as Vice President of Corporate Development. In 2023, I was appointed Division President of Environmental Technologies and then Division President of Process Technologies, both on an interim basis. At the same time, I led the corporate development function, bringing on Acculogic, Videology and Alfamation. In 2025, I was appointed Division President of Environmental Technologies and a member of the company's Operating Efficiency Committee targeted to drive divisional growth and operational improvement.
In short, I am new to the CEO position, but not to InTest. I know the business, I know the customers, I know the opportunities, and I have hit the ground running.
From my perspective, InTest is a company that has built real commercial momentum, having focused on diversifying and driving revenue and new product development. We have a growing customer base and a broad set of end markets that reward engineering capability and innovation. With this solid foundation in place, InTest is now beginning its next phase of growth. My priority as CEO is to build on this foundation, driving adjusted EBITDA growth through operating leverage as we continue to scale the business and improve operational efficiencies.
Let me now turn to a deeper dive of our Q1 performance on Slide 5. We delivered a strong first quarter. Revenue of $33.9 million and gross margins of 45.5%, both exceeded our guidance range. On a year-over-year basis, revenue growth was driven by gains in defense/aerospace, life sciences and auto/EV. With revenues up 27% versus the first quarter of 2025, we realized operating leverage and combined with favorable mix, delivered adjusted EBITDA of $3.2 million for a margin of 9.3%.
First quarter orders of $31.8 million were up 25% year-over-year, reflecting deepening penetration of our diverse end markets. Backlog at quarter end stood at $51.8 million, up 36% year-over-year, providing healthy revenue visibility.
Looking more closely at orders and backlog on Slide 6. First quarter orders of $31.8 million declined 15% sequentially after 2 consecutive quarters of very strong order flow. Orders in Q1 were a little lower sequentially in 3 end markets: life sciences after an outsized Q4 of orders that were driven by Alfamation program timing, safety and security and semi, where orders declined modestly from Q4 as customers prioritized fulfilment of their prior quarter's orders. That said, we are seeing a healthy quote activity and strengthening sales funnel for back-end semi. These order declines were offset by continued strength in auto/EV, defense/aerospace and industrial.
To give you some color on the orders we received this quarter, Alfamation secured a multiyear program in Mexico, spanning displays and hardware variants in many different models of automobiles, and we continue to see meaningful activity from leading EV and battery customers. These are the kinds of wins that illustrate the value of the platform we have built and demonstrate the commercial momentum we are seeing.
On a year-over-year basis, quarter 1 orders grew 25%, led by auto/EV and defense/aerospace. Semi orders declined. Auto/EV and defense/aerospace were standouts. Auto/EV more than doubled due to Alfamation's order activity that was driven by new model introductions and vehicle platform refreshes. In defense/aerospace, our orders almost tripled as sustained armament replenishment and capacity expansion programs continue to drive engagement.
Quarter end backlog of $51.8 million declined 4% sequentially from near record levels at the end of Q4, but increased 36% year-over-year. Approximately 50% of the current backlog is expected to ship beyond Q2, providing meaningful forward revenue visibility.
With that, I'll turn it over to Duncan to walk through the detailed financial results, starting with revenue on Slide 7.
Thank you, Rich. Starting on Slide 7. On a sequential basis, revenue in Q1 increased $1.1 million or 3% from $32.8 million in Q4 to $33.9 million. This increase was primarily driven by semi, which increased by $3.6 million on back-end semi shipments from prior year backlog. Auto/EV contributed an additional $1.6 million, reflecting strong second half 2025 order flow from Alfamation's automotive customer base and safety security, which was up $0.6 million. Defense/aerospace contributed a more modest $0.3 million increase. Partially offsetting these gains were a $3.7 million decline in industrial that followed an unusually strong fourth quarter as well as decreases of $0.8 million in other and $0.5 million in life sciences.
Compared to Q1 2025, revenues increased $7.2 million or 27% from $26.6 million in Q1 2025. The increase over the prior year period reflects a continued gradual improvement in the capital spending environment and penetration into less semi-correlated end markets.
Sales in defense/aerospace accounted for $3 million of the year-over-year increase, followed by life sciences at $1.9 million and auto/EV and semi at approximately $1.5 million each. Safety security and industrial contributed an additional $0.5 million and $0.2 million respectively. Partially offsetting these gains was a $1.4 million decline in other, which represents revenue from a range of additional end markets we serve, including specialty consumer electronics, university research and telecom.
Turning to Slide 8. Gross margin increased modestly by 10 basis points sequentially from 45.4% in Q4 2025 to 45.5% in Q1 2026. Gross margin outperformed our guidance of approximately 44%, tracking closer to the Q4 2025 level as product and customer mix proved more favorable than anticipated due to higher-than-expected back-end semi shipments from backlog.
On a year-over-year basis, first quarter gross margin expanded by 400 basis points from 41.5%. The expansion was driven by higher revenue volume, a favorable shift in product and customer mix, specifically the growing contribution of higher-margin Alfamation products and manufacturing efficiency initiatives implemented throughout 2025 that continue to benefit the cost structure in the current period.
Moving on to Slide 9. Operating expenses for the first quarter were $14.5 million, an increase of $0.8 million sequentially, driven primarily by restructuring costs associated with the CEO transition. We recorded approximately $0.7 million of nonrecurring restructuring expense in connection with the CEO transition that became effective on March 31, 2026. As with restructuring charges in prior periods, we excluded them from our calculation of non-GAAP adjusted net income and adjusted EPS.
On a year-over-year basis, we generated $7.2 million in incremental revenue while absorbing only $0.5 million of incremental operating expenses, which resulted in a reduction in operating expenses as a percentage of revenue to 42.7%.
Slides 10 and 11 collectively illustrate our Q1 profitability. Starting with Slide 10. For the first quarter, net income was $0.8 million. Adjusted EBITDA was $3.2 million, representing an adjusted EBITDA margin of 9.3%.
On Slide 11, on a per share basis, net income was $0.06 per diluted share. Adjusted EPS, which adds back tax-affected acquired intangible amortization charges and restructuring charges was $0.16 per diluted share.
Slide 12 shows our capital structure and cash flow. During the first quarter, we reduced our U.S. term debt by approximately $1 million through scheduled principal payments, continuing the cadence of debt paydown that contributed to a $4.1 million reduction in U.S. term debt during full year 2025.
Total reported debt, however, increased modestly to approximately $8.5 million at March 31, 2026, from $7.5 million at December 31, 2025. The difference reflects short-term working capital borrowings at our Alfamation subsidiary during the quarter via a relatively low interest receivables factoring arrangement.
We continue to have availability under our $30 million delayed draw term loan facility and our $10 million revolving credit facility, providing us with liquidity to support both organic growth initiatives and our M&A pipeline.
We ended the quarter with approximately $56 million in liquidity, including cash, cash equivalents and restricted cash of $15.7 million.
Turning to Slide 13 and our financial guidance for the year. We are introducing Q2 guidance and are raising our fiscal 2026 guidance to reflect our Q1 outperformance and some improvement in market conditions. For the second quarter of 2026, we project revenue of $32 million to $34 million, gross margin of approximately 45%, operating expenses of $13.8 million to $14.2 million and amortization of $0.7 million.
Turning to our full year raised guidance. I note that our guidance assumes no material impact, positive or negative, from changes in the broader economic and/or geopolitical environment. For the full year 2026, we now expect revenue of $130 million to $135 million. At the midpoint, this represents growth of approximately 16% over 2025's $113.8 million. This guidance reflects the diversified demand, particularly in industrial, aerospace/defense, auto/EV and life sciences, supported by our backlog, but does not contemplate a meaningful rebound in semi sales at this time, though, as Rich noted, we are seeing early signs of a demand wave building.
Gross margin of approximately 45% and operating expenses of $55 million to $57 million, reflecting higher variable selling costs.
Amortization of $2.6 million and interest expense of approximately $0.3 million with an effective tax rate estimated to be 18%. We expect amortization expenses to be higher in the first half of the year than in the second half as certain intangible assets reach the end of their amortization lives. Finally, we expect capital expenditures of 1% to 2% of revenue, consistent with our historical investment levels.
With that, if you turn to Slide 14, I will now turn the call back over to Rich.
Thanks, Duncan. Before we open to questions, I wanted to share with you my thoughts about our road map going forward as we execute InTest's next phase of growth.
First, we have a growing backlog and a platform of engineered solutions that our customers rely on in demanding applications. The work ahead is to deepen those relationships, respond to evolving customer requirements with speed and precision, extend our coverage into adjacent programs, geographies and convert that commercial momentum into durable revenue growth.
Second, we are going to intensify our focus on operating leverage and adjusted EBITDA expansion. We have demonstrated that our business model is designed to generate strong operating leverage. While we continue to drive revenue growth, we will look to identify manufacturing cost improvements by advancing factory and supply chain efficiency initiatives to remove friction, lift throughput and unlock platform synergies. It also means honing our operating expenses, ensuring investments are deployed to the highest returning commercial and product opportunities.
Third, we intend to continue to allocate capital in a disciplined fashion. Our near-term focus is on targeted organic investments in product development and global customer expansion, building on a platform we have already assembled. We will pursue M&A selectively where the synergies are clear and the integration risk is manageable.
In the near-term, I will spend my time meeting customers, engaging our employees and visiting our facilities. These interactions are essential to execution, ensuring our teams are aligned on the priorities, focused on the highest impact work and positioned to deliver. In addition, I will be fleshing out the road map and developing an operational plan for the company, along with goals and objectives for the team at InTest. I look forward to sharing this operational plan with you on future earnings calls.
To summarize, I believe the opportunity and strategy are clear. The platform is strong, and I am committed to delivering strong profitability from these strengths.
With that, operator, please open the call to questions.
[Operator Instructions] Our first question comes from Max Michaelis with Lake Street Capital Markets.
2. Question Answer
This is Jaeson on for Max. I just want to start with the life sciences segment. You called that out in the prepared remarks. Curious if the momentum you're seeing is broad-based or concentrated at a few accounts or in a few specific programs?
Yes, Jaeson, thanks for the question. At the moment, we're realizing the backlog and the orders that we're taking in some specific areas. But as we grow, those are specialized test equipment usually designed for customers. And as we grow our intimacy with these different customers, we see it expanding broader than just the 1 or 2 customers.
Got you. That's helpful. And then just looking at the semi market, understanding that it doesn't sound like you're baking in large expectations into the rest of this year. Just curious what you're seeing from an order activity or quoting activity standpoint currently here in Q2.
Yes. As I mentioned in my remarks earlier, we're seeing increased order activity and quote activity coming through the pipeline and the funnel looks fairly strong. But we're not -- we're cautiously optimistic. We haven't seen it roar back at this point, but we do see the activity picking up, which leads us to signs of the future being better than it has been.
The next question comes from Ted Jackson with Northland Securities.
Richard, I think you're an old hand at this for your first quarterly call. You're a pro. So congrats on that. The First question on, like on the strength in the quarter, you commented that some of it was executing against backlog and your commentary on semi was that you have stuff in backlog that came out in the quarter that perhaps wasn't expected. And so I guess the question I'm getting to, so when we kind of back into what's going on in the business is, how much of the stronger quarter was from timing of things maybe coming in the backlog that you hadn't expected? And how much of the upside in the quarter came from business just being things that you didn't see, you know what I'm saying kind of more organic new kind of revenue? That's my first question.
Yes. Let me try to answer that and Duncan can add color as he sees as well. I think the business overall -- the strength is there. We're seeing it across the different markets, and it's a result of us being intimately engaged with the customers and trying to solve their needs. So while maybe one business goes up and down on a cycle, the other one goes up and down on a cycle at a different ratio, that's the nice part about the diversity in the market space, right? And so while we're -- we've stated we've seen slower semi, life sciences and aerospace/defense, for example, have been up. And that's a result of the teams being engaged with the customers at an intimate level. So I would say it's based on strength and not just realizing backlog, which I think is what you're trying to ask. And we see that...
It's more about what the mix was between strength and backlog. And what I'm really kind of getting to is I mean, you beat by over $2 million relative to kind of expectations and expectations were at the higher end of your previous range. So if you had expectations and just tap $2 million on you're basically at your guidance. But if you actually look at the midpoint of your previous guidance, your take-up, if you would, for '26 would be closer to around $4-ish million to see where I'm going with this in terms of revenue guidance. And so I'm trying to kind of sort of bogey and get a sense of how much of that change is driven from your view that you're seeing more strength in your markets and how much of it maybe as a result of just kind of getting into some of your backlog more than that's kind of where I was heading to with my question.
Yes. I mean I think as you can see from our guidance, taking our guidance up $5 million on both ends of the ranges we are a little bit more optimistic about the full year. I think Q1, we did deliver a little bit more from backlog of our semi in our semi space as we kind of indicated. The order activity for semi, not quite as strong. You can see that in the order numbers. As Rich mentioned, I think we are seeing a lot of activity in that space. Funnel is looking strong. So that cautious optimism is still there.
Broadly speaking, outside of semi, which I just talked about specifically there, the other markets are performing pretty well. Happy really with what we're seeing there from an order intake, funnels, so on and so forth. I think the dynamic we're seeing, we probably shipped a little bit more from our semi backlog than we anticipated with our Q1 guide is I think the driver of that slight Q1 delta that I think you're highlighting.
Okay. So if I really step back, the change in guide really is it's not being driven per se by maybe a little more revenue coming out of backlog than anticipated. Fundamentally, it's improved market outlook across your segments.
Yes. No, no, absolutely.
Okay. My next question, going back into just kind of the semi and it's more about the quoting strength that you're seeing, the activity. Can you talk a little bit about maybe a -- I mean, I assume when you're talking about that, most of that is back-end oriented? Or is it back and front? And then where are you seeing that from a geography standpoint?
Yes. So you're correct. It's -- our focus -- primary focus anyway is still in the back-end test space, mixed signal, higher power devices as they're coming through from a perspective of testing as well as temperature control, obviously. The front-end semi business is still slower reminder that we're on the very front end, right? So in the silicon carbide manufacturing space, if you will, the wafer itself. So that's still on the slower side, but we are seeing some signs of activity there, mostly about ramping up of existing equipment, not so much of adding new equipment. So we expect, hopefully that will change, but so far, have not seen any uptick in that market.
And is there a particular geography where you're seeing more activity than others?
No, I would say it's across the board. Obviously, a lot of back-end test is out of Asia, but we're seeing some strength in Europe and U.S. as well, some activity picking up.
Our next question comes from Dick Ryan with Oak Ridge Financial.
Welcome aboard, Rich, in your new role. [ indiscernible ] question more higher level, Rich. I mean you've had your fingers into most of the segments of the business since you've been on board, either on the consulting side or further responsibility there. And trying to coordinate that with the commentary from the news release and the slide deck of removing operational frictions and working together. When you look at the portfolio, there's a lot of commonality and touch points to end markets. When you talk about the friction side, is that more supply chain, bringing Malaysia into the answer? Or is it the divisions working amongst themselves?
I think as any good business does, we're going to try to optimize all of it and you're never optimized. You're always looking on how to get better, of course. So in a nutshell, I think it is on the commercial side, how our businesses can work together better, benefiting us to penetrate customers deeper and wider at the same time. And obviously, on the operational side, how we can become even more efficient and utilize our supply chains, our operations, our businesses, our locations more effectively. And we'll continue to look at that as we should. We've been doing that. As you recall, we've had restructuring charges over the last year where we're optimizing our footprint. We're going to continue and even more aggressively approach some of those things.
Okay. And on the selective M&A comment, is it still kind of in the environmental space that you'd like to build out? Or are there other priorities moving up the list now that you've had a little bit more time in the role?
Yes. I would think to say that in general, it would be in the environmental space still. But more importantly, it will be something that fits the business, whether environmental or electronic test or vision that has good synergies, and we can realize those cost synergies and those operational efficiencies.
Our next question comes from Ted Jackson with Northland Securities.
Okay. I'm just back for a couple of other questions. You commented with regards to Alfamation and the defense/aerospace having some strength in terms of order activity, quoting activity. You specifically mentioned it was Alfamation, Mexican market in auto with EV battery and inception. So I wanted to maybe see if you could give a little bit more color on both of those segments with regards to Alfamation. You've been expanding beyond auto, but is there -- are we looking at like some renewed strength in auto as we go through a model cycle change? And then in the defense/aerospace, maybe just some color as what you can see driving the strength there beyond just the generic that we're going to war with everyone we want to these days.
Sure, Ted. So on the Alfamation side, maybe let me start with that. The auto space is, as you know, it was been down for 18 months or so, maybe 2 years' time. And we are seeing those new model refreshes start to pick up pace and come out. So that's a lot of the strength. I think Duncan has talked about this prior, actually he calls the strength in orders that we saw in the last 2 quarters, Q3 and Q4, specifically with Alfamation, a lot of that was around auto as well as life sciences. So we are seeing that now, and we're seeing a lot of activity still around that. And again, these are custom solutions for the auto supply market. And so as we get involved in more of those activities, we see positive momentum there at the moment, and we hope it continues.
On the defense/aerospace side, yes, it has a lot to do with capacity expansions to recoup from the use of the armaments, but also new technologies that are being introduced. And the activity is occurring primarily here in the U.S., it has been, but we're seeing it expand to places like Europe, activity requests are coming in from there.
Okay. And then my next question is you commented about really kind of doing a better job of tying the different parts of InTest together and being able to drive operational efficiencies and also probably expand kind of your addressable markets through being able to work closer together. With it relates to some of the restructuring efforts that you're doing, could you comment about like for us on the outside, what will we be looking for in terms of metrics to see that you're having success? Is it going to be improved gross margins? Is it going to be reductions in OpEx or just slower growth in OpEx? Maybe a little color in terms of kind of what are the bogeys and for those of us that follow the company, how will we see that translate into the financial statements?
Yes. I think, I need a few more days to figure that out, I guess. No, I think, the focus is to -- as we've guided towards our Vision 2030, that's still our sort of our North Star to achieve that. And we haven't changed that focus at the moment. As far as changing our guidance for the year or anything like that, no, we've put that out, and we're aligned with that. And we'll continue to work on some of those efficiencies, and I'll be happy to come back in the next earnings call or 2 and give you some more details as we flesh that out over the next 90 days or so.
[Operator Instructions] Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to Rich Rogoff for the closing remarks.
Thank you, operator. We appreciate everyone joining us today. Thank you for your time, and we welcome the opportunity to answer any additional questions. Please reach out to our Investor Relations team to coordinate our continued dialogue.
On Slide 15, please note the details regarding the replay of this call as well as our upcoming investor event schedule. We will publicize additional conference attendances via press release, advisories and on our IR website. Thanks again for participating in today, and have a great day.
Ladies and gentlemen, the conference call of InTest Corporation has now concluded. Thank you for your participation. You may now disconnect your lines.
inTest — Q1 2026 Earnings Call
inTest — Q4 2025 Earnings Call
1. Management Discussion
Welcome to inTEST Corporation's Fourth Quarter 2025 Financial Results Conference Call. [Operator Instructions] Please note, today's conference is being recorded. At this time, I'll now turn the conference over to Sanjay Hurry, Investor Relations. Please go ahead, Sanjay.
Good morning, everyone, and thank you for joining us. With me on the call are Nick Grant, President and Chief Executive Officer; and Duncan Gilmour, Chief Financial Officer and Treasurer. The earnings press release was issued this morning as well as the slides that management will use during this call. Both can be found in the Investor Relations section of the intest.com website. Please turn to Slide 2 for a review of the safe harbor statement.
During this call, management will make some forward-looking statements about our current plans, beliefs and expectations. These statements apply to future events that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from what is stated here today. These risks, uncertainties and other factors are provided in the earnings release as well as in other documents filed by the company with the Securities and Exchange Commission.
These documents can be found on our website or at sec.gov. Also, as covered in Slide 3, management will refer to some non-GAAP financial measures. We believe these will be useful in evaluating the company's performance. However, you should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. You can find reconciliations of non-GAAP measures with comparable GAAP measures in the tables that accompany today's release and slides.
With that, I'll turn the call over to Nick. Good morning, Nick.
Good morning, Sanjay, and thank you. Good morning, everyone. Thanks for joining us on our fourth quarter and year-end 2025 earnings call. We'll begin today's discussion on Slide 4 of the presentation. Our fourth quarter results represent a strong finish to a challenging year. Much of this challenge stemmed from customer hesitation to spend on capital projects driven by tariff and macroeconomic uncertainties as well as ongoing soft demand in our semi business. After seeing some pockets of customers move forward with capital projects in the third quarter, we continue to see strong demand in the fourth quarter as our orders once again exceeded $37 million.
As a result, we delivered revenue of $32.8 million that was above our guidance range, and we ended the year with a healthy year-end backlog of $53.9 million, representing a 36% increase over year-end 2024. I want to personally thank the entire inTEST team for their hard work and steadfast dedication. Revenue for the fourth quarter was at the highest quarterly level for the year, which benefited from approximately $2 million related to orders that slipped out from the third quarter.
Demonstrating the effectiveness of our diversification strategy, fourth quarter revenue reflected strength in industrial, defense, aerospace and life sciences end markets. In addition, growing market acceptance of our new products introduced over the past several quarters, particularly from Alfamation and from Acculogic contributed meaningfully to the top line and progressed us towards our Vision 2030 target of generating 25% of revenue from new products.
During the fourth quarter, we benefited from the cost actions taken across the businesses throughout the year. We continue to execute manufacturing efficiency initiatives and further scaled our Malaysia operation to support customers in the region. Our efforts were further complemented by growing customer acceptance of new products that drove incremental revenue and a margin lift. Through effective execution of our diversification strategy, we delivered gross margins of 45.4%.
Notably, this was achieved without a significant contribution from our semi business, historically one of our highest margin end markets. Revenue diversification and new product innovation are two key pillars of our Vision 2030 growth strategy. With nearly 80% of fourth quarter revenue derived from non-semi end markets and momentum in new product sales contributing meaningfully to revenue and gross margin, we believe our strategy is working.
Market diversification is creating broader order opportunities for us and fertile ground for new product adoption, while our innovative new products are resonating with customers and earning their place in their purchasing decisions. With that context in place, let's go deeper on orders and backlog for the fourth quarter on Slide 5. After deferring spending plans due to tariffs and macroeconomic uncertainties in the first half of the year, we continue to see customers move away from a wait-and-see mode in the fourth quarter as they recognize that the cost of inaction increasingly outweighed perceived market risk.
The momentum in our order book demonstrated demand durability engineered through deliberate end market focus. This strategy enables us to expand our addressable market and diversification into higher growth, less semi-correlated verticals. In fact, over the past 5 years, our non-semi revenues have grown at approximately a 20% CAGR, which is something we are quite proud of.
Equally important, the momentum in our order book also reflects customer adoption in end markets where we are still in the early stages of penetration. During the fourth quarter, we saw continued strength in our Life Sciences orders as they tripled sequentially, reflecting strong bookings for new Alfamation products. Encouragingly, semi orders were up about 18% sequentially as some customers began to move forward with plans to provision new test facilities, a trend that builds on the modest order growth recorded between the second and third quarters.
Year-over-year, Q4 orders were up 22%, an increase of $6.8 million versus Q4 2024. This improvement was broad-based with strength in auto EV, life sciences, defense, aerospace and safety security, partially offset by continued softness in semi. On a full year basis, Life Sciences orders were up 137% year-over-year. Auto EV orders were up 89% and Industrial was up 53%.
Touching on our semi business. Year-over-year orders were down from a year ago period and represented about 25% of total orders this past Q4 compared to 40% for the fourth quarter of 2024. This is a compelling testament to our deliberate market diversification strategy succeeding and lessening our exposure to the cyclicality of the semi business. We ended the year with a healthy backlog of $53.9 million, up 9% sequentially and 36% year-over-year.
Backlog bottomed in the second quarter of 2025 and has steadily improved since. Approximately 60% of our backlog is expected to ship beyond the first quarter of 2026, providing forward visibility into the year. With a higher and more diversified backlog at the end of 2025, we are in a solid position for recovering growth in 2026.
With that, I'll turn it over to Duncan to walk through the financial results in detail, starting with revenue on Slide 6. Duncan, over to you.
Thank you, Nick. Starting on Slide 6. Revenue in Q4 increased $6.6 million or 25% from $26.2 million in Q3 to $32.8 million, reflecting a gradual improvement in the capital spending environment and momentum in new product sales as well as about $2 million of revenue that slipped out of Q3.
Sales in Industrial accounted for $3.3 million of the increase, followed by Defense/Aerospace at $3.2 million, Life Sciences at $2.1 million and Auto EV about $1 million. Partially offsetting these increases was a $2.9 million decline in semi. Compared to Q4 2024, revenue declined by $3.8 million, reflecting lower auto EV, semi and safety security revenue totaling $11.7 million that was partially offset by increases in Industrial, Life Sciences and Defense/Aerospace totaling $7.9 million.
Although demand trends in 2025 dampened volume and revenue, roughly 3/4 of the nearly $17 million decline between our 2024 revenue and our 2025 revenue was directly attributable to semiconductor market weakness. The remainder reflected a slower-than-anticipated capital spending recovery in our non-semiconductor end markets.
Moving to Slide 7. Gross margin expanded 350 basis points sequentially from 41.9% in Q3 2025 to 45.4% in Q4 2025. This improvement was driven by volume gains and higher sales of new Alfamation products, which provided a lift to consolidated gross margin as these differentiated innovative solutions carry higher margin profiles relative to our legacy product portfolio.
Notably, as Nick previously mentioned, we achieved Q4's gross margin level without a significant contribution from semi. On a year-over-year basis, fourth quarter gross margin expanded by 570 basis points. The expansion was driven by the lapping of a $1.6 million onetime acquisition-related inventory step-up charge that pushed the Q4 2024 margin down 430 basis points and the remaining 140 basis point increase reflected improved operating leverage because of cost reduction and manufacturing efficiency initiatives implemented throughout 2025.
It also reflected a favorable product mix shift towards higher-margin Alfamation products. On a full year basis, normalizing for the 120 basis point full year impact of the inventory step-up, full year 2025 gross margin of 43% reflected a modest underlying decline versus the prior year, driven primarily by lower revenue volume in our semi end market that reduced our ability to spread fixed manufacturing costs across a larger revenue base.
Moving on to Slide 8. Operating expenses for the fourth quarter were $13.6 million, an increase of $1.4 million sequentially, driven primarily by higher sales commissions and marketing activity commensurate with the higher levels of revenue in the quarter. We generated $6.6 million in incremental revenue while absorbing only $1.4 million in incremental operating expenses, which resulted in a reduction in operating expenses as a percentage of revenue to 41.5%. This reduction is the operating leverage profile we expect to see as revenue scales, and it reinforces our confidence that the cost discipline we have maintained throughout this cycle positions inTEST to expand margins as market conditions continue to improve. Fourth quarter 2025 operating expenses increased $1.2 million year-over-year, rising from $12.5 million in Q4 2024 to $13.6 million in Q4 2025.
The comparison includes a nonrecurring $800,000 amortization credit recorded in Q4 2024 tied to the finalization of Alfamation purchase accounting, while Q4 2025 absorbed $200,000 of restructuring charges. Stripping out these nonrecurring and acquisition-related items, underlying operating expenses remained effectively flat year-over-year.
Slides 9 and 10 collectively illustrate our Q4 profitability. Starting with Slide 9. For the fourth quarter, net income was $1.2 million. Adjusted EBITDA was $3.2 million, representing an adjusted EBITDA margin of 9.7%. You can see here the improvement in adjusted EBITDA for Q4 2025 from the Q3 2025 trough of $400,000 at a 1.5% margin.
This demonstrates our operational leverage as revenue recovers. For the full year 2025, net loss was $2.5 million. Adjusted EBITDA was $4 million, representing an adjusted EBITDA margin of 3.5% compared to $10.8 million and an 8.3% margin in full year 2024. On Slide 10, on a per share basis, net income was $0.10 per diluted share. Adjusted EPS, which adds back tax-affected acquired intangible amortization charges and restructuring charges, was $0.16 per diluted share.
For the full year 2025, net loss was $0.21 per share. Adjusted net income, which adds back tax-affected acquired intangible amortization charges and restructuring charges, was $800,000 or $0.06 adjusted EPS. This compares to an adjusted EPS of $0.51 in the prior year. Slide 11 shows our capital structure and cash flow. We reduced debt by $1.4 million in Q4 and by $7.6 million in 2025.
Total debt outstanding at the end of the year was $7.5 million. We ended the year with approximately $58 million in liquidity, including cash, cash equivalents and restricted cash of $18.1 million. We also maintained full access to our $30 million delayed draw term loan facility and our $10 million revolver.
Our ability to generate cash and maintain substantial liquidity even in a challenging macroeconomic environment positions us well to scale the business and achieve our Vision 2030 goals. With respect to the waiver on our term loan entered into last August, we expect to return to full compliance with our original covenant terms by midyear with no anticipated impact on interest expense or reported profitability.
Turning to Slide 12 and our 2026 guidance. We entered the year with a healthy backlog, of which 60% we expect to ship after the first quarter, combined with positive indications of a gradual broadening recovery in capital spending that began to take shape in the third and fourth quarters of 2025, we expect 2026 will be a year of returning growth. As a result, we are comfortable resuming our practice of offering guidance for the full year 2026 as well as the first quarter of the year.
Against this backdrop, strong backlog, improving demand, a leaner cost structure and growing new product contributions, we are well positioned for profitable growth throughout 2026. For the first quarter of 2026, we project revenue of $31 million to $33 million, gross margin of approximately 44%. This is a step down from the 45.4% we delivered in Q4, primarily reflecting expected Q1 product and customer mix versus Q4's particularly favorable Alfamation contribution.
Operating expenses of $13.3 million to $13.7 million. Q1 operating expenses reflect the typical first quarter annual compensation resets and amortization of $800,000. Before walking through the specifics of our full year guidance, I note that our guidance does not contemplate any material impact, positive or negative, from changes in tariff policy or the broader geopolitical environment. For the full year 2026, we expect revenue of $125 million to $130 million -- at the midpoint, this represents growth of approximately 12% over 2025's $113.8 million.
This guidance reflects the diversified demand, particularly in industrial, aerospace, defense, auto EV and life sciences, supported by our growing backlog, but does not contemplate a meaningful rebound in semi sales. Gross margin of approximately 45%. This reflects the combination of higher volume, the capture of continued manufacturing efficiency and the expanding contribution of new higher-margin products.
And operating expenses of $53 million to $55 million, reflecting higher variable selling costs. Amortization of $2.6 million and interest expense of approximately $300,000 with an effective tax rate of approximately 18%. We expect amortization expenses to be higher in the first half of the year than in the second half as certain intangible assets reach the end of their amortization lives. And finally, we expect capital expenditures of 1% to 2% of revenue, consistent with our historical investment levels. With that, if you turn to Slide 13, I will now turn the call back over to Nick.
Thanks, Duncan. In summary, the momentum we are seeing across new product adoption and market diversification and geographic reach is the direct result of a deliberate strategy and disciplined execution. Our non-semiconductor business has grown meaningfully, improving inTEST's long-term earnings profile with less dependency on semi cyclicality. The establishment of our Malaysia manufacturing hub in 2023 and expanded European footprint due to the acquisition of Alfamation in 2024 positions us to better serve customers. They also enable us to deepen relationships in these regions that represent significant long-term opportunities.
In addition, our operational excellence initiatives, which are a contributor to our margin improvement story, give us confidence that as conditions improve and we scale the business, we will realize greater operating leverage inherent in our business model. New product revenue contribution is trending in the right direction, reinforcing our confidence that we are on pace towards our Vision 2030 goal of generating 25% of revenue from new product sales.
In Southeast Asia, in Europe and in the U.S., a local presence enables the engineering collaboration and customer intimacy that drives higher value, long-cycle relationships. And increasingly, it is our new products themselves that are opening doors to customers who are discovering us for the first time and to others who are rediscovering inTEST. We entered 2026 well positioned for diversified growth as capital spending strengthens with an expanding portfolio of highly valued engineered solutions, a growing in-region presence across key geographies and a strong balance sheet. We are poised to translate the structural changes we have made to inTEST over the past two years into sustainable profitable growth for our shareholders.
With that, operator, please open the call for questions.
[Operator Instructions] Our first question is from Max Michaelis with Lake Street Capital Markets. .
2. Question Answer
Congratulations on the good quarter and the solid guide for 2026. First question is just around the semi space here. I was hoping you can elaborate a little bit. You talked about modest growth picking up in the back half of 2026. A lot of the companies that are following have been talking about sort of a strong order rebound in the back half of 2026. Is your language in the press release sort of just a case of you guys being ultra conservative? Or I mean, what else can you guys kind of provide us around the semi space?
Yes. Max, great to hear from you here. Yes, as we laid out, our guidance we provided there really is based on just modest recovery in semi, which, yes, could be conservative. Semi certainly has come back strong historically and if we look at trends and what have you, and I believe we're well positioned to capture that if it does happen again. But we just wanted to make sure we're providing the guidance we're confident we're able to achieve.
Okay. And then maybe we go back to last quarter, you talked about the 2027 automotive program. How is that progressing as we enter 2026 here? And then can you kind of touch on how we should expect auto orders to trend throughout the year?
Yes. So auto has been a nice bright spot on our order pattern here in the last couple of quarters. We really did see customers start moving forward with some 2027 model year programs, making the investments in Q3. They continue to kick off more of those capacity additions in Q4 there. So we believe well positioned from an auto perspective with Alfamation to support these new model year programs. And across the board, I would say auto demand hasn't taken off or what have you. Inventories have been worked down. But I think we're well positioned now that as the demand comes back, these new model programs come out and creates greater demand around the new tech and the cars and everything else, that is only going to complement this kind of wave of build-out that we're seeing right now.
Great. Last one for me, guys. Life Sciences has really taken off here. I mean is there anything else you can share? I mean, pockets of strength that you're seeing in Life Sciences that's really driving the solid growth in orders and revenue?
Yes. No Life Sciences is a bright spot for sure. And this is really a concentrated effort we've made to go after MedTech, the MedTech space, testing various technology in this area. And it's really broader across all the businesses, had really nice success with Alfamation, diversifying them in the MedTech space with some glucometer electronic testing.
We did a press release on that in the second half of last year and continue to see good momentum there. We winning applications at our Acculogic Group around MedTech. And even in process technology, we're gaining applications there around induction heating and imaging in the MedTech area. So really pleased with the progress. It's one of the areas that we highlighted is still a low penetration area for us. So we think it will be a good growth avenue for us.
Our next question is from the line of Dick Ryan with Oak Ridge. .
I want to go back to the semi side. If we can talk a little bit about the back end and your front end and maybe it focuses more on the positioning, up and down the line, semi cap is talking about a strong WFE for this year. Your back end typically is kind of lagged that as back-end test is a little bit out of sync with what happens on the front end. But nonetheless, you brought automation into the back end. And how do you think you're positioned on your back-end test with customers or with some of the new products you've rolled out, the automation?
Yes. We're very well positioned in that back-end test space, not only from our traditional EMS business, but also on our thermal solutions supporting testing of chips and electronics back there. So you're right, a lot of companies are out there talking about it, and we're well positioned to capture that growth as it materializes out there. And the new products we've been launching really has broadened our customer base, win back some competitive accounts. So I believe when that comes back, we're in a better position to benefit from the growth as the investments in these testing spaces take off.
Okay. And probably more importantly, I'm more interested maybe on the front end. The comments coming out of the silicon carbide space is pretty encouraging. One of the players saying that after the downfall, they are looking for a ramp in '26 with getting back to the '24 levels by '27. I mean you guys generated a lot of revenue in that silicon carbide space in the heyday '23, '24. What -- how are you positioned there? And would you also kind of echo those comments that you may be seeing some growth come back in, not necessarily '26, but '27 and beyond?
Yes. We're very well positioned in that space. As you know, we're really serving a number of players in the silicon carbide, gallium nitride space, not only on the crystal growth, but on the epitaxy side of things as well. And as those -- and we've been talking about it, as these technologies get adopted into new applications and creates more demand as auto comes back, demand for autos, it's only going to drive the need for additional capacity down the road. And we're staying very close to our customers and ready to support them as they need going forward here. And you're exactly right. It was a very meaningful part of revenue growth that we achieved there, and we have the capacity to scale right up to support them at those levels and beyond.
Would you think any of that comes in, in this year? Or is that more of a '27 story?
I think we do see it. It will be more in the second half of this year starting to come back, but '27 should be a more meaningful impact on that. Duncan, your thoughts on that?
No, agreed. As he said, modest increases in semi baked in. The front-end side has been slow. We think the outlook looks great, but we're really not banking on a great deal in 2026.
The next question is from the line of Ted Jackson with Northland Securities.
So Nick, Duncan, my first question, I want to jump over on gross margins and guidance and kind of just kind of thinking through. So you put up some -- you showed improving margin as you've been putting a lot of efficiencies in the business and you're clearly scaling and it's non-semi and semi is your higher-margin business.
And so like if you look at your revenue in prior periods and some historical periods, when you were hitting some of these revenue targets, your gross margin was actually almost close to 50%. And so my first question is, is the lack of semi keeping you from getting to that? And then behind that is given that the margin is probably substantially better than it might have been for the non-semi business. If semi does stick around and turn, could we be seeing your margins through that next cycle, not only retrace back to those kind of close to 50% margin levels, but maybe even exceed it?
So I think a lot of your observations are correct. We had a nice strong Q4 from a margin perspective, some favorable product mix within some of our businesses, so certain product lines within Alfamation in particular. The semi contribution was low, as we've indicated, yet we still had a nice gross margin quarter.
We don't have, as we said, tremendous growth baked into semi. Our back-end semi, in particular, is where we see higher margins, command higher margins. So it's correct to assert that if that comes back in a strong fashion at some point, then we'd expect margin to tick up.
Whether it would tick up to the 50s, I think some of those 50s were when the business was much less diversified and much more dependent upon that business and smaller. But we'd certainly expect positive margin contribution as and when back-end semi in particular, bounces back up. So I mean, in summary, I would say almost yes, yes and yes to what you said, albeit 50% would be probably spectacular. I'm not going to say unachievable, but would require a high percentage of that back-end semi contribution.
Okay. And then going kind of into guidance, and I'm going to keep with this state. The guidance you provided shows some nice solid year-over-year growth. Can you talk a bit about the cadence? Is it the kind of thing where we will see -- you've given first quarter guidance that we'll see continued sequential improvement as we roll through the year? Will there be any type of seasonality within it? And then going back into the revenue guidance, if it's going to be building over the year and then the back half of the year is going to have more contribution from semi, should we be thinking of a bit more of a step-up in terms of margin improvement in the second half of '26 vis-a-vis the first.
Yes. So we're cautiously optimistic about 2026. As we've mentioned, haven't built in a tremendous amount of semi upside, and I think that's reflected in the guide vis-a-vis what we saw in Q4, what we're laying out for Q1. Q4 was, if we back out the $2 million of delayed shipments, we did see growth in Q4 over Q3. We are projecting a similar quarter in Q1, a little bit of growth. And I'd say we're expecting cautious sequential growth throughout the year with respect to our cautiously optimistic guide, if that's the best way to put it.
As we've mentioned a couple of times, if there was a really strong recovery in semi in particular, we would expect to see the benefits of that. Just a reminder, we are -- our back-end semi business squarely in the analog mixed signal space, which is an area that I think a lot of people are cautiously optimistic about and seeing some green shoots of recovery, but we haven't seen the turn yet.
Okay. Next question, just -- we're well into the first quarter. You've had two quarters in a row now of really nice bookings. Can you give us a little color in terms of what you're seeing with regards to bookings activity quarter-to-date? And so both in terms of momentum and maybe in terms of sector?
Yes. So as noted, we've had really two strong quarters of bookings and I'd say, really fueled by our automotive exposure at Alfamation on these 2027 model year programs. Our funnel -- overall funnel is healthy. And -- but I would expect Alfamations order rate to kind of moderate back a little bit. They've been running at $12 million, $13 million in the last two quarters. That business was in the $25 million when we bought it kind of run rate there.
So really strong quarters. I think they're going to continue to see nice booking levels, but more traditional for that kind of business. So we also, in Q1, have a little bit of the Lunar New Year kind of impact on some activities out of Asia. There a bit slower. But for the most part, the funnels are healthy and the opportunities are there. If customers move forward with spending as we believe they will here, orders, we're well positioned to deliver on the year we've laid out.
Okay. And then my last question is you've come through a rough patch, and it's just more because I've seen it with several companies I cover because it seems like everybody has been going through a rough patch. When you've laid out your guidance for OpEx, I mean, are you -- I assume you guys have really dialed back on a lot of incentive comp over the last year. Are you factoring in, in your guidance kind of a reinstatement of kind of basically more variable comp and incentive? Or is there the chance that if you kind of roll in and say you do better than this optimistic conservative guidance that we see an expense structure adjustment as you have to layer in...
Yes. Yes, we have. And obviously, if we did a lot better than laid out, then there would be an operating expense impact from an incentive comp standpoint, reflective of the dynamic you're talking about. But yes, we have factored in the incentive comp side of the numbers that we've laid out with respect to the spending guidelines.
[Operator Instructions] At this time, I'll turn the floor back to Nick for closing comments.
Thank you, Rob. We appreciate everyone joining us today. Thank you for your time, and we welcome the opportunity to answer any additional questions you may have. Please reach out to our Investor Relations team to coordinate. On Slide 14, please note the details regarding the replay of this call as well as our upcoming investor event schedule.
We will publicize additional conference attendance as they arise via press release advisories and on our website. I want to thank everyone again for participating today. And I wish you all a great day. Thanks, everyone.
Thank you. This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.
inTest — Q4 2025 Earnings Call
inTest — Q3 2025 Earnings Call
1. Management Discussion
Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the inTEST Corporation Third Quarter 2025 Financial Results Conference Call.
[Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Alex Villalta. Thank you. You may begin.
Good morning, everyone and thank you for joining us. With me on the call are Nick Grant, our President and Chief Executive Officer; and Duncan Gilmour, our Chief Financial Officer and Treasurer.
The earnings release was issued this morning as well as the slides that management will use during the call. Both of these can be found in the Investor Relations section of the intest.com website. Please turn to Slide 2 for a review of the safe harbor statement. During this call, management may make some forward-looking statements about our current plans, beliefs and expectations. These statements apply to future events that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from what is stated herein today. These risks, uncertainties and other factors are provided in the earnings release as well as in other documents filed by the company with the Securities and Exchange Commission.
These documents can be found on our website or at sec.gov. Also, as covered on Slide 3, management will refer to some non-GAAP financial measures. We believe these will be useful in evaluating our performance. However, you should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. You can find reconciliations of non-GAAP measures with comparable GAAP measures in the tables that accompany today's release and slides.
With that, I'll turn the call over to Nick.
Thank you, Alex and good morning, everyone. Thanks for joining us for our third quarter 2025 earnings call. We will begin today's discussion on Slide 4 of the presentation. After several months of order sluggishness as tariff and economic uncertainties complicated customers' capital investment plans, it's refreshing to see some pockets of customers break free and move forward with capital projects. We have always contended that a market recovery is a matter of when, not if. Our funnel of opportunities has been at high levels since Q1 and this quarter, the conversion rate picked up, resulting in orders of $37.6 million, our strongest level since Q2 of 2022, leading to a sequential $11.4 million increase in our backlog.
Most of this improving demand is coming from customers in the automotive and defense/aerospace end markets, a clear testament to the success of our market diversification strategy. These customers are relying on our innovative and differentiated test equipment that enable better quality control in increasingly complex manufacturing processes. While this increase in orders is encouraging, conversion rates do vary by end market and many customers still remain hesitant to commit to new capital projects. This is especially true in semi. However, based on what we are seeing and hearing, it feels like we may be moving into a period of gradual recovery. Revenue for Q3 was $26.2 million, lower than Q2 and below the guidance range we provided on last quarter's call. During the quarter, our engineers encountered technical challenges in finalizing a few systems, which delayed approximately $2 million in shipments.
In one case, the challenges were associated with new capabilities. In the other case, the systems were for a new customer in a new target market. These challenges have since been resolved and the systems have been shipped. We are excited about the positive impact our steadfast resolve to drive innovations and add new customers will have on our future as we execute on our VISION 2030 strategy. During the quarter, we continued to strengthen our competitive position in preparation for a broader market recovery by making more progress in penetrating targeted accounts and driving adoption of new products. We believe we have the balance sheet, the financial flexibility and capacity to support our customers as demand improves.
Let me now review orders and backlog on Slide 5. auto/EV led the climb in orders this quarter, accounting for around 3/4 of the sequential growth and doubling to $14.6 million. Alfamation bookings were at an all-time record level for the business, representing strong demand for test equipment from Tier 1 electronic suppliers as they expand capacity to support 2027 model year programs and start new projects. Defense/aerospace orders more than doubled sequentially to $6.4 million, primarily due to the increased test demand for next-generation weapon systems. We continue to see success with our new products. This is especially true at Acculogic, where they have expanded their flying probe capabilities to include radio frequency and oscilloscope measurement test solutions, thereby enhancing our customers' manufacturing efficiencies. These expanded capabilities drove multiple system orders in the quarter from new customers.
In addition, several defense contractors are continuing to qualify our new products. Year-over-year, orders were up 34.2%. The increase reflects the strength in auto/EV, which grew $7.4 million; industrial, which increased $2.4 million; defense/aerospace, which increased $1.9 million, life sciences increased $0.9 million and semi, which was up $0.4 million. These increases outpaced the declines in safety, security and other markets. Although we saw some pickup in semi orders, overall, the semi market remains sluggish, especially in our analog mixed signal business. Backlog at September 30 was $49.3 million, substantially above where it was at the end of the second quarter and positioning us well for the upcoming quarters. Before turning the call over to Duncan to review the financials and outlook in more detail, I want to thank the entire inTEST team for their continued dedication and commitment to our shared VISION 2030 goals.
Duncan, over to you.
Thank you, Nick. Starting on Slide 6. Revenue for the third quarter was $26.2 million compared to $28.1 million for the second quarter, a decrease of $1.9 million. Sales in defense/aerospace accounted for $1.3 million of the decline, followed by auto/EV, which declined $0.9 million and semi, which decreased $0.4 million. This decline was partially offset by an increase of $0.7 million across life sciences, safety/security and other markets. Compared with Q3 2024, revenue declined $4 million, reflecting lower semi, auto/EV, defense/aerospace and other sales totaling $5 million, partially offset by increases in life sciences and safety/security totaling $1 million.
Moving to Slide 7. Starting with the sequential comparison. Gross profit decreased $1 million to $11 million and gross margin declined 70 basis points to 41.9%, primarily due to lower volume. Compared to the prior year period, gross profit declined $3 million and gross margin declined 440 basis points due to reduced volume and unfavorable product mix. We continue to execute tariff mitigation tactics to minimize gross margin impacts. As you can see on Slide 8, our operating expenses of $12.2 million decreased $0.7 million sequentially and $1.3 million compared to the third quarter last year as our cost reduction actions are flowing through in an effort to improve our long-term profitability. The consolidation of our Videology Netherlands facility, which we estimate will translate into annualized savings of approximately $500,000 beginning in 2026 remains on track.
Turning to Slide 9. You can see our bottom line and adjusted EBITDA results. For the quarter, net loss was $0.9 million or a loss of $0.08 per share. Adjusted net loss, which adds back tax-affected acquired intangible amortization charges and restructuring charges was a loss of $0.02 per share. Adjusted EBITDA for Q3 was $0.4 million. Slide 10 shows our capital structure and cash flow. In the first 9 months of 2025, we reduced debt by $6.2 million, including the $1.2 million we paid down in the third quarter. Total debt outstanding was $8.9 million at quarter end for a total debt leverage ratio of 1.7x. Cash, cash equivalents and restricted cash at the end of the third quarter were $21.1 million, up $1.8 million from the end of the second quarter. We ended the quarter with approximately $61 million in liquidity. inTEST remains a cash-generating company that we believe has the financial resources to scale the business and achieve our VISION 2030 goals.
Turning to Slide 11 and our guidance. Our long-term fundamentals are solid with inTEST maintaining its strong leadership position in specialized high-value applications and our readiness for a market recovery. As Nick said, we are seeing some pockets of renewed capital spending but many customers still remain hesitant to commit to capital projects and we do not have visibility into the timing of an overall market recovery. Therefore, we are continuing to offer guidance on a forward quarter basis only. Including the shipments, which slipped from the third to the fourth quarter and the orders in backlog that we anticipate to fulfill and ship, during the fourth quarter, we expect revenue in the fourth quarter to rebound to a range of $30 million to $32 million.
We are forecasting gross margin of approximately 43% and operating expenses of $12.3 million to $12.7 million, excluding approximately $200,000 of restructuring expenses. Amortization and interest expense are projected to be consistent with Q3. As usual, our guidance does not include the potential impact from any nonoperating expenses such as corporate development and incremental restructuring that may occur nor does it include the potential impact from any additional acquisitions we may make.
With that, if you will turn to Slide 12, I will now turn the call back over to Nick.
Thanks, Duncan. Although the third quarter had its challenges, we are pleased with our performance overall. Our order book expanded, our market diversification strategy continues to take hold and our innovative new products are gaining traction as we continue to execute our VISION 2030 growth strategy. The adoption of these new products position us well to capture new opportunities and expand our serviceable market. This quarter's increase in backlog, a little more than half of which is scheduled to ship in 2026 and our strong funnel of opportunities suggest that demand in some of our end markets is beginning to recover.
Although as Duncan noted, visibility for a full market recovery remains limited. While our market conditions have been weak this year, we have not been idle. We have been strengthening our market recovery readiness, penetrating new target accounts, broadening our channel networks, expanding our manufacturing footprint to support global customer needs, while introducing new products that deliver more value to our customers. We believe we have the right technologies and that we are focused on the right markets and the right customers to scale the business as we advance towards our VISION 2030 goals.
With that, operator, let's open the lines for questions.
[Operator Instructions] Our first question is from Max Michaelis with Lake Street Capital Markets.
2. Question Answer
Thanks for quantifying sort of the pushouts that happened in the quarter of $2 million. I was wondering if you could kind of break out into what verticals that $2 million falls into.
Yes. So about $1.5 million of it was tied to the life science markets. It was the -- tied to a couple of units, a couple of systems at our Alfamation business, which is really for the medical technology kind of diversification efforts we've been driving there. And they had a little bit of a delay in getting the systems ready to go by the end of the quarter. So -- but the challenges they faced have been resolved and customer's FAT is completed and the tools have been shipped. So customer is very happy on that side. In fact, they've given us an LOI for additional systems. So very -- while it was disappointing, we didn't get those out at the end of the system -- or end of the quarter, it's -- we're pleased that the outcome there. The other was for our semi industry at Acculogic, one tool was missed, the shipments at the end of the quarter just by -- we shipped the following week. So -- but -- into the semi market.
And then next question. So if we look at your order growth, really solid in the quarter, especially with A&D and then automotive. You highlighted 2027 automotive programs kind of driving the demand in that vertical. I mean how -- what's the -- I mean, how long does that last? Like is that a few more quarters of strong momentum? Or kind of give us like an idea on how long we can expect this strong automotive orders to continue?
Yes. No, as you noted there, that the front end -- or the automotive programs tied to these new 2027 model years, really started last quarter. We saw Alfamation have a nice strong quarter in Q2 and then really picked up here in Q3. What's encouraging is, their funnel, even though they've booked quite a bit of this, activity still remains healthy. They're filling in new opportunities. And so we do see that this test investment for the new technologies around infotainment, CCUs, displays, lighting, et cetera, in these vehicles should continue for a foreseeable future here.
[Operator Instructions] Our next question is from Dick Ryan with Oak Ridge.
Nick, just to discuss the challenges again in the quarter, were they a continuation of the ones that you saw in the first quarter? Or are they kind of more one-off and those issues are behind?
Yes, very different than the ones we saw in the first quarter. Those were challenges at our ITS thermal solution and where we were seeing more, I'd say, repetitive challenges there for that business, and we needed to make a change, which we did. These were really 2 shipments that were tied to new technologies at Alfamation and Acculogic. And as you know, Dick, we're always pushing the envelope, working with customers to solve some of their toughest challenges. And it doesn't always lead to us being able to hit our time lines there. But the important thing is that we do solve the challenges. The customers are happy and we built that installed base to position us for future growth with these customers and that's where we're at. The timing was unfortunate but certainly something -- we see from time to time just because of the work we do.
Sure. sure. Okay. Say on the semi side, you talked sluggish. Can you talk a little bit about front end, back end? I mean, I think some of the commentary for the analog side says at least that market is stable. There may not be much growth over the next couple of quarters. But then it seems on the silicon carbide side, commentary for '26 seems to be more growth oriented coming off of a transformational 2025. What are you seeing in those 2 markets from your customer conversations?
I mean let me just touch on that, Dick. I mean I think on the front-end side, activity pretty anemic still as I think we see across the marketplace. Although there are signs of life, I think we're starting to see a little bit more activity. As we've talked about before, customers are still interested. We still have good dialogue in terms of projects that they're still working on. But as you indicate, looking further out into later '26, into '27, things like that. So we're still very optimistic about the future in that space. But not a great deal happening right now in terms of order placement revenue generation.
On the back end, things have been a little bit softer as we indicated. And I would characterize that as some of our larger customers, for example, are still struggling a little bit with the tariff situation, still struggling a little bit with where to place their chips investment-wise. So things like investment into, say, China, is perhaps a little bit slowed. So we're certainly seeing a little bit of that. And again, I think the rhetoric around analog mixed signal with a number of the larger players, a very similar story.
Our next question comes from Ted Jackson with Northland Securities.
So I wanted to talk a bit about just sort of what happened during the quarter and kind of the -- what maybe has changed in the near term vis-a-vis when you entered the quarter, let's say. I mean the timing stuff, I mean, stuff like that happens. But I was -- I'm a little surprised that we didn't see with regards to the guidance in the fourth quarter, maybe a little bit more because you're basically bringing $2 million of revenue from the third quarter into the fourth. So the high end of your range at $32 million is pretty much where the consensus and everyone was looking for anyway. And so when I think about that, is that -- was there a downtick in terms of kind of the economic environment for you? And was there a shift in something or some part of the business as we kind of went through this quarter -- this last quarter and got into this quarter relative to where things were, call it, 3 months ago? That's kind of my first question.
Yes. So the first part of that, the issue really is around these new technologies, as we highlighted. And once our teams get these things implemented for the applications, building the next follow-on tools is less risky and challenges or what have you. So from there on, it's pretty much rinse and repeat. So we're confident that the initial challenges in this life sciences market that delayed some shipments have been resolved and additional shipments that will occur will go much smoother from that side of it. The other being the -- around that technology, specifically around our RF probes and new probes that we launched for the customer's application there, it slipped by a few days, just timing-wise. The important thing is we get it right and that's what the team did. So yes, again, positions us well.
And in fact, that business at Acculogic has received multiple new orders for their RF and oscilloscope in the quarter from new systems. So that technology is really resonating with the market out there. So we're excited about that. As for Q4 kind of the range we put out there, I would say our teams are very confident given -- providing numbers on what they're going to hit this quarter. We made it very clear, slippage, things that are at risk but I don't want them in the forecast. So that's what we're kind of seeing, things that we were able to deliver on with minimal risk. Now if we get some other stuff out, then that's all upside. But these guys, they've got the message loud and clear.
Yes. I would also add, a lot of the strong order activity in Q3, which was great to see, testament to the work that the teams have all been doing. A lot of that is for delivery in Q1 and beyond 2026. So a lot of that is slightly longer lead time stuff that isn't necessarily turning in Q4 here. So I think that's another piece of the puzzle in terms of putting together those components.
You see what I'm getting at is like, so you had $2 million that slipped out that you were expecting to come in the third quarter. So your third quarter instead of being $26.2 million, it should have been $28 million. And then if you take that out, that would mean that your third -- your fourth quarter guidance is at best flat. See where I'm going with this. And...
I see where you're going.
So my question is like -- has -- does that -- my sense is that, that's kind of -- I think you didn't give guidance, it's not like a guide down but that's a bit disappointing vis-a-vis perhaps what you would have thought last time we had a call.
And maybe I'm wrong with that but that's just sort of my sense. And so I'm just kind of curious, is that because there's been some kind of change within the dynamics or that you're just kind of tightening up the things that you're putting in and counting on, you seem [ saving ] for your budget. And why I bring all this up? Because to be honest, like the tone of this call, it's the best tone that you've had all year. I mean, clearly, you're feeling better about your business today than you were 3 months ago or 6 months ago going [indiscernible]. And so there's just a disconnect with that. So I'm just trying to understand.
Yes. I mean I think, Ted, obviously, the tone is positive. The orders were extremely encouraging. Quite honestly, there were literally 2 or 3 systems that make up the $2 million, it's a very small number of tools, which -- and quite frankly, the story behind those misses is a very positive one in terms of the new technologies, the new capabilities, they just took a little bit longer to turn around as well as on the automation side, into the life sciences, penetrating new markets. So although disappointing that it was a revenue miss, the fact that it was literally slippage of a few days, a few weeks, very positive aspects. In terms of this sequential revenue, I think we were looking at revenue growing Q2 versus Q3 versus Q4.
The $2 million slips, we would have been in the low 28s, flattish with Q3. Had all of those systems gone out the door, then we would have been looking at, say, around $30 million instead of a $30 million to $32 million. So not a spectacular ramp. I think we have indicated the recovery is going to be gradual here. We do feel most of our markets are at a relatively low point. We don't see a spectacular ramp back up. So I think we feel somewhat in line with what we had painted. We're always disappointed when the numbers -- we'd always like the number to be higher, I suppose, is one way to look at it.
Don't we all. Okay. Then my next thing, let's go into something a little different. So when you look at kind of the book-to-bill and you look at your different segments, so I'd like to talk a little bit maybe just about industrial. No one brings it up anymore but you've actually put up a book-to-bill number better than 1 for the 4 quarters in a row and actually 5 of the last 6. So with regards to industrial, I know it's not -- it's been -- let's just say, it hasn't been a problem child for you per se, like kind of what's happening within that segment are you...
Yes. No, you're right. Industrial hasn't been the most challenging segment for us. And it's stable, I would say. But we do have a number of projects in the funnels on the industrial side of things there that are still kind of delayed as customers hold back on CapEx. So it could be better. But the teams are capturing what they can capture out there. So we still believe industrial has throttled back a little bit. As we've commented, semi is still slow for us on that. But on the positive, defense/aero, really robust for us, the activities we're seeing in there, the orders we're getting, the automotive, these programs and the life science activities we're driving. So the diversification we drove really is paying off as semi will come back and our industrial base will get -- pick up stronger here as economy improves. And so we're in a good position as we go forward here and it's great to see a few of our target markets coming in nicely.
Ladies and gentlemen, we have reached the end of the question-and-answer session. I would like to turn the call back to Nick Grant for closing remarks.
Thank you, David. We appreciate you joining us today and thank you for your time and we welcome the opportunity to answer any further questions you may have. On Slide 13, please note that in addition to the details regarding the replay of this call, we will be participating in 2 conferences before the end of the year. We hope to see some of you there.
Coming into this call, I understand there was some website technical challenges for a few folks there. Our team has been working to get that resolved and we'll continue to do so as quickly as possible if it's not already completed. So thank you again for taking the time and you all have a great day.
This concludes today's conference. inTEST thanks you for your participation. You may disconnect your lines at this time.
inTest — Q3 2025 Earnings Call
Financial data from inTest
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 128 128 |
5%
5%
100%
|
|
| - Direct Costs | 73 73 |
4%
4%
57%
|
|
| Gross Profit | 56 56 |
8%
8%
43%
|
|
| - Selling and Administrative Expenses | 40 40 |
4%
4%
31%
|
|
| - Research and Development Expense | 9.84 9.84 |
9%
9%
8%
|
|
| EBITDA | 5.66 5.66 |
496%
496%
4%
|
|
| - Depreciation and Amortization | 3.16 3.16 |
90%
90%
2%
|
|
| EBIT (Operating Income) EBIT | 2.50 2.50 |
450%
450%
2%
|
|
| Net Profit | 1.57 1.57 |
289%
289%
1%
|
|
In millions USD.
Don't miss a Thing! We will send you all news about inTest directly to your mailbox free of charge.
If you wish, we will send you an e-mail every morning with news on stocks of your portfolios.
inTest Stock News
Company Profile
inTEST Corp. engages in the supply of precision-engineered solutions for manufacturing and testing across a wide range of markets including automotive, defense, aerospace, electronics, fiber optic, machining, medical, telecom, and semiconductors. It operates through the Thermal Products and Electromechanical Solutions (EMS) business segments. The Thermal Products segment designs, manufactures, and markets tester interface products. The EMS segment is composed of the manufacturing operations in New Jersey and California. The company was founded by Stuart F. Daniels, Daniel J. Graham, and Alyn R. Holt in September 1981 and is headquartered in Mount Laurel, NJ.
StocksGuide Premium
| Head office | United States |
| CEO | Mr. Grant |
| Employees | 396 |
| Founded | 1981 |
| Website | www.intest.com |


