Executive Summary

Q4 2024 delivered record revenue of $36.6M at the high end of prior guidance, while gross margin fell to 39.7% due to a one-time $1.6M inventory step-up from the Alfamation acquisition; adjusted EBITDA rose 82% year over year to $4.4M .
Mix improved in back-end semi, defense/aerospace and auto/EV (Alfamation), offset by softness in front-end semi and industrial; orders increased 11% YoY to $30.7M and backlog ended at $39.5M (≈50% expected to ship beyond Q1) .
2025 outlook is cautious: FY revenue $125–$135M, Q1 revenue $27–$29M, GM ≈41%, OpEx $13.6–$14.0M; management cited tariff uncertainty and customer pushouts (~$3M) to 2H as drivers of cadence and mix .
Near-term catalysts: renewed $10M repurchase plan (~$9M remaining) and Vision 2030 strategy briefing; medium-term drivers include gradual back-end semi recovery, defense/aero momentum, and geographic/channel expansion (Malaysia, Japan, Southeast Asia) .

What Went Well and What Went Wrong

What Went Well

Revenue beat the high end of company Q4 guidance ($36.6M vs $34–$37M) with strength in auto/EV (Alfamation +$7.9M YoY), defense/aero (+$2.7M YoY), and back-end semi (+$1.5M YoY) .
Adjusted profitability improved sharply: adjusted EPS $0.23 (+44% YoY), adjusted EBITDA $4.4M (+82% YoY), supported by higher volumes and cost actions; OpEx declined sequentially by $1.1M .
Orders and pipeline improved: Q4 orders +11% YoY to $30.7M and +9% QoQ; back-end semi orders doubled sequentially, and life sciences demand more than doubled YoY to a record $2.3M .

Management quote: “Our team delivered record revenue and strong operational results in the fourth quarter… Excluding the one-time acquisition inventory step-up impact, our gross margin exceeded our guidance for both the quarter and the year.”

What Went Wrong

Gross margin compressed to 39.7% (−660 bps QoQ, −490 bps YoY) primarily due to the $1.6M inventory step-up charge (−430 bps impact) and mix .
Front-end semi remained paused and auto/EV demand slowed; industrial sales fell $3.7M YoY due to market softness and project timing .
Backlog decreased sequentially (−$6.0M) as Alfamation shipments were worked down and customer deliveries were pushed into 2H 2025 amid tariff uncertainty .

Financial Results

Consolidated P&L vs Prior Year and Quarter

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($USD Millions)	$27.884	$30.272	$36.603
Gross Profit ($USD Millions)	$12.449	$14.012	$14.539
Gross Margin (%)	44.6%	46.3%	39.7%
Operating Expenses ($USD Millions)	$11.340	$13.525	$12.460
Operating Income ($USD Millions)	$1.109	$0.487	$2.079
Operating Margin (%)	4.0%	1.6%	5.7%
Net Earnings ($USD Millions)	$1.455	$0.495	$1.504
Net Margin (%)	5.2%	1.6%	4.1%
Diluted EPS ($)	$0.12	$0.04	$0.12
Adjusted Net Earnings ($USD Millions)	$1.910	$1.216	$2.782
Adjusted EPS ($)	$0.16	$0.10	$0.23
Adjusted EBITDA ($USD Millions)	$2.418	$2.441	$4.412
Adjusted EBITDA Margin (%)	8.7%	8.1%	12.1%

Note: Q4 gross margin included a one-time $1.6M inventory step-up charge (−430 bps impact) related to Alfamation purchase accounting .

Market Revenue Breakdown

Market Revenue ($USD Millions)	Q4 2023	Q3 2024	Q4 2024
Semi	$10.743	$11.410	$12.207
Industrial	$5.911	$3.534	$2.246
Auto/EV	$3.981	$6.250	$11.928
Life Sciences	$0.878	$1.322	$1.231
Defense/Aerospace	$2.416	$3.239	$5.157
Security	$0.819	$0.666	$0.947
Other	$3.136	$3.851	$2.887
Total	$27.884	$30.272	$36.603

Segment Performance (Revenue and Divisional Operating Income)

Segment	Q4 2023 Revenue ($M)	Q4 2023 Div Op Inc ($M)	Q3 2024 Revenue ($M)	Q3 2024 Div Op Inc ($M)	Q4 2024 Revenue ($M)	Q4 2024 Div Op Inc ($M)
Electronic Test	$8.105	$1.702	$15.481	$2.311	$21.122	$2.865
Environmental Technologies	$7.623	$0.594	$6.734	$0.426	$7.063	$0.682
Process Technologies	$12.156	$2.182	$8.057	$1.070	$8.418	$0.971

KPIs

KPI	Q4 2023	Q3 2024	Q4 2024
Orders ($USD Millions)	$27.523	$28.054	$30.669
Backlog ($USD Millions)	$40.130	$45.454	$39.520

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance / Actual	Change
Revenue ($M)	Q4 2024	$34–$37	$36.6 actual	Met at high end (beat vs midpoint)
Gross Margin (%)	Q4 2024	≈42%	39.7% actual (−430 bps inventory step-up)	Lower than guide (one-time accounting)
OpEx ($M)	Q4 2024	≈$13.5	$12.46 actual	Better than guide (lower OpEx)
Revenue ($M)	Q1 2025	N/A	$27–$29	New
Gross Margin (%)	Q1 2025	N/A	≈41%	New
OpEx ($M)	Q1 2025	N/A	$13.6–$14.0 (excl. ~$0.2M restructuring)	New
Revenue ($M)	FY 2025	N/A	$125–$135	New
Amortization ($M)	FY 2025	N/A	$3.4	New
Effective Tax Rate (%)	FY 2025	N/A	≈18%	New
Capex (% of revenue)	FY 2025	N/A	≈1%–2%	New

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 and Q3)	Current Period (Q4)	Trend
Front-end semi cycle	Q2: demand subdued into 2025; Q3: potential deliveries 2H25 as customers plan next-gen lines	Management expects front-end to remain paused through 2025, likely picking up in 2026	More cautious vs Q3 (pushout by ~6–12 months)
Back-end semi recovery	Back-end orders improved sequentially in Q2 and Q3; Q3 GM expansion on higher back-end mix	Continued improvement; sequential semi orders doubled; revenue up YoY/ QoQ	Gradual improvement continues
Auto/EV (Alfamation)	Q2: added $9.7M; lumpy orders; Q3: $5.4M; integration synergies	Q4: $8.5M revenue; orders slowed amid market softness; pipeline healthy	Mixed: strong revenue, softer run-rate orders
Life Sciences	Q2: +$1.1M; Q3: stabilizing	Q4: orders doubled to record $2.3M; broad-based demand for induction heating	Strengthening
Defense/Aerospace	Q3: modest; improving orders	Q4: record sales; strong interest across primes, commercial space, NASA	Strong momentum
Tariffs/macro & customer cadence	Q3: post-election capex could increase	Tariff uncertainty causing pushouts (~$3M) and cautious FY guide; localized supply chain; may pass cost increases to customers	Headwind near term
Supply chain & footprint	Q2/Q3: Malaysia build-out; channel upgrades	Malaysia facility ramping by year-end; new partner in Japan; SEA channels expanded	Expansion progressing
M&A pipeline	Active; valuation dependent	Still active; ready to act on strategic targets	Ongoing
Capital allocation	Q3 share repurchase ($1M)	$10M plan renewed (~$9M remaining)	Supportive

Management Commentary

“Record fourth quarter revenue of $36.6 million… third consecutive year of record revenue at $130.7 million.” – Nick Grant
“Gross margin… negatively impacted… $1.6 million inventory step-up… 430 basis point impact.” – Duncan Gilmour
“Outlook for 2025 is cautious… full year revenue approximately $125 million to $135 million… Q1 revenue $27 million to $29 million, GM ~41%.” – Duncan Gilmour
“Tariff uncertainty is delaying customer investments… supply chain relatively localized… will pass increases on to customers if needed.” – Nick Grant
“Board… renewed our stock repurchase plan… confidence in long-term value creation.” – Nick Grant

Q&A Highlights

Pushouts vs cancellations: timing issue only; no cancellations reported; product substitutions occurred in some cases .
Cadence and mix: stronger back-end semi in 2H; auto sector softer near term; broader industrial markets challenged by tariffs and uncertainty .
Guidance range drivers: backlog deliveries in 2H underpin higher-end outcomes; front-end recovery assumptions pushed out .
M&A: still active; valuations more favorable; ready to act on strategic opportunities .
Segment reporting: company manages to divisional operating income rather than segment gross margin; will provide required detail per 10-K .

Estimates Context

Wall Street consensus (S&P Global) was not available at the time of analysis due to data access limits; therefore, comparison vs consensus cannot be provided.
Company-level guidance comparison: Q4 revenue met the high end of prior guide ($36.6M vs $34–$37M), while gross margin underperformed guide (~42% guided vs 39.7% actual) due to the one-time $1.6M inventory step-up .

Key Takeaways for Investors

Q4 print was operationally strong: revenue at guidance high end with high-quality order momentum in back-end semi and defense/aero; adjusted profitability improved materially YoY and QoQ .
Margin headwind was accounting-driven (non-recurring inventory step-up), suggesting underlying gross margin quality better than reported; adjusted metrics and sequential OpEx reduction support this view .
2025 set-up is “back-half weighted”: tariff-related pushouts (~$3M) and cautious demand temper Q1; expect gradual improvement as back-end semi and defense/aero build through the year .
Front-end semi expectations reset: recovery now expected in 2026 vs prior commentary of potential 2H25, which may cap near-term multiple expansion until greater visibility returns .
Capital allocation remains supportive: renewed $10M buyback (~$9M remaining) and ongoing M&A readiness provide optionality to drive EPS and strategic positioning .
Geographic/channel expansion (Malaysia production, Japan partner, SEA channels) and Alfamation synergies broaden reach and underpin medium-term diversification benefits .
Monitor: tariff developments, cadence of backlog conversion, auto/EV order run-rate at Alfamation, and the March 26 Vision 2030 strategy update for medium-term revenue and margin targets .

INTEST CORP (INTT)·Q4 2024 Earnings Summary