INTEST CORP (INTT)·Q2 2025 Earnings Summary

Executive Summary

• Q2 revenue was $28.13M, up 5.6% sequentially and down 17.2% year over year; gross margin expanded 110 bps q/q to 42.6% (up 200 bps y/y), while GAAP diluted EPS was -$0.04 and Adjusted EPS was $0.03 .
• Versus S&P Global consensus, revenue slightly beat ($28.13M vs $28.00M*) and GAAP EPS modestly missed (-$0.04 vs -$0.03*); adjusted EPS of $0.03 outperformed the negative consensus baseline, reflecting cost controls and mix benefits *.
• Orders improved 9.5% q/q to $27.8M and 6.0% y/y, driven by auto/EV and life sciences, while semi orders remained soft; backlog ended at $37.9M with roughly 50% expected to ship beyond Q3 .
• Q3 guidance: revenue $28–$30M, gross margin similar to Q2, and OpEx $12.6–$13.1M (ex restructuring) — a slight sequential improvement versus Q2 OpEx; management continues to focus on cost reductions and “in-the-region for-the-region” manufacturing .
• Catalysts: continued auto/EV orders momentum (Alfamation record orders) and defense wins (new $2.6M thermal test systems order) vs lingering macro/tariff uncertainty and semi front-end weakness .

What Went Well and What Went Wrong

What Went Well

• Gross margin expanded to 42.6% (+110 bps q/q; +200 bps y/y) on higher volume, favorable mix and cost reductions; management narrowed operating loss to $(0.9)M and net loss to $(0.5)M .
• Orders strengthened: $27.8M (+9.5% q/q; +6.0% y/y), with notable momentum in auto/EV and life sciences; “Alfamation achieved its highest level of orders since joining InTest” .
• Debt reduction and liquidity: total debt down $1.7M q/q to $10.1M, cash $19.2M, and $40M of available facilities (delayed draw + revolver); covenant waiver arranged through Q1’26 to support flexibility .
• Quote: “recently introduced products continued to gain traction; we added new customers; and further expanded our channel network” — positioning for recovery while controlling costs .

What Went Wrong

• Year-over-year revenue fell 17.2% (auto/EV down $4.9M y/y; life sciences and defense/aero slightly lower), reflecting cautious capital spending and tariff/macro uncertainty .
• Semi orders slowed and remain soft; although back-end improved sequentially on revenue (+$1.2M q/q), front-end demand remains weak; semi orders fell q/q by $2.35M .
• Working capital usage and cash decline: cash decreased $2.8M q/q due to working capital investments (operations used $0.7M in Q2), despite sequential order improvement .

Financial Results

Segment revenue

Revenue by market

KPIs: Orders and Backlog

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Against a backdrop of ongoing global economic and tariff uncertainties… we stayed focused on executing our VISION 2030 Growth Strategy, driving innovation, market diversification and geographic expansion… orders of $27.8 million improved over both the prior year and trailing quarters… Alfamation achieved its highest level of orders since joining InTest.” — Nick Grant, President & CEO .
• “We continue to make progress… wins in auto/EV, life sciences and defense/aerospace… we still expect to deliver growth quarter over quarter in 2025, albeit at a slower pace than originally anticipated.” — Nick Grant .
• Leadership/OpEx: Environmental Technologies leadership transition to accelerate performance and reduce costs (executive reduction), consistent with OpEx control initiatives .
• Balance sheet/liquidity: Covenant waiver with U.S. lender through Q1’26 in exchange for pledging cash equal to U.S. debt outstanding; $30M delayed draw and $10M revolver available .

Q&A Highlights

• A Q2 2025 earnings call transcript was not available in the document catalog at the time of this analysis; we reference Q1 2025 Q&A for context.
• Visibility and tariffs: Customers began slowing mid-Q1; order pushouts to 2H; management insulated supply chain and plans Malaysia production to mitigate tariff exposures .
• Swing factors: Semi and auto are the largest swing factors; back-end semi expected to improve before front-end (2026 assumed) .
• Break-even level: Management indicated ~$30M plus/minus historically; Q2 OpEx reductions aim to lower breakeven closer to the $27–$29M revenue range .
• Industrial demand: $1.5M induction heating order from a returning customer; use-case on utility pole weld preconditioning .

Estimates Context

Q2 vs consensus

Q1 vs consensus

Additional consensus context

Values retrieved from S&P Global.*

Key Takeaways for Investors

• Mix and cost actions: Sequential gross margin expansion and narrowed losses indicate effective cost control and favorable mix; watch for sustained margin resilience if volumes continue to recover .
• Orders momentum where it matters: Auto/EV and life sciences orders are improving, with Alfamation posting record orders; defense/aero demand supported by a new $2.6M order — these should support near-term revenue stability while semi front-end remains soft .
• Guidance implies steady sequential improvement: Q3 revenue guide $28–$30M and lower OpEx suggest trajectory toward breakeven/improved profitability; execution on OpEx discipline is critical .
• Liquidity risk managed: Covenant waiver and available facilities provide flexibility through Q1’26; monitor working capital consumption and backlog conversion amidst cautious customer capital spending .
• Thesis hinge: Back-end semi and auto/EV adoption trends, plus regional manufacturing (Malaysia) to mitigate tariffs, are core to medium-term recovery; front-end semi likely a 2026 event per prior commentary .
• Non-GAAP vs GAAP optics: Adjusted EPS turned positive ($0.03) despite GAAP loss; understanding non-GAAP adjustments (amortization, restructuring) is key for valuation narratives .
• Watch catalysts: Additional defense/space orders, continued auto/EV wins, Malaysia production milestones, and any tariff policy clarity could shift estimates and sentiment .