Executive Summary

Q1 2025 revenue declined to $2.664M with gross margin compression to 35.6%, driving GAAP diluted EPS of $(0.09) and adjusted EBITDA of $(0.623)M; management framed Q1 as the low point of a transitional year focused on execution toward 2026 profitability .
Sequentially softer vs Q4 2024 (revenue $2.986M; GM 39.6%; EPS $(0.05); adj. EBITDA $(0.233)M), with year-over-year declines versus Q1 2024 on revenue and margins; pressure stemmed from lower shipments of traditional force/gas-sensor products and mix .
Strategic updates: major integrated sensing design win with a division of a top-10 global OEM (pre-production in Q3 2025; ~$1M revenue expected in 2026), expanded gas-sensor portfolio (industry-first odor sensors; 4‑series CO sensor), and tariff mitigation via shifting some production from China to Scotland .
No numeric 2025 guidance; directional outlook targets a return to profitability with double-digit organic revenue growth and gross margin recovery in 2026; no S&P Global consensus estimates were available for Q1 2025, so no beat/miss analysis is presented .

What Went Well and What Went Wrong

What Went Well
- Design win with a division of a top-10 global OEM; pre-production slated for Q3 2025 with almost $1M revenue expected in 2026 and “meaningful expansion” beyond 2027 .
- Product innovation momentum: launched industry-first odor sensors (TBM/THT) and an industry-standard 4-series CO sensor family, broadening addressable safety and environmental applications .
- Management underscored 2026 profitability path and double-digit organic growth, citing operational discipline and customer momentum: “Q1 was in line with our expectations… We believe 2026 will be a breakout year… driven by profitability, margin expansion, and sustained revenue growth.” .
What Went Wrong
- Revenue fell year over year and versus the prior quarter, primarily due to lower shipments of traditional force-sensor and gas-sensor products; mix effects also pressured margins .
- Gross margin compressed to 35.6% from 40.1% YoY and 39.6% QoQ, reflecting lower volume and less favorable mix .
- Loss metrics deteriorated sequentially: operating loss $(0.849)M and adjusted EBITDA $(0.623)M versus Q4 2024’s $(0.510)M and $(0.233)M, respectively, despite YoY opex reductions; Q1 included $172k amortization and $7k stock comp (non‑GAAP adjustments) .

Financial Results

Metric	Q1 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$3.124	$2.986	$2.664
Gross Margin (%)	40.1%	39.6%	35.6%
Operating Income (Loss) ($USD Millions)	$(0.751)	$(0.510)	$(0.849)
Net Income (Loss) ($USD Millions)	$(0.741)	$(0.413)	$(0.805)
Diluted EPS ($USD)	$(0.09)	$(0.05)	$(0.09)
Adjusted EBITDA ($USD Millions)	$(0.508)	$(0.233)	$(0.623)

Notes:

Management attributed the YoY revenue decline to lower shipments in traditional products, partially offset by Calman Technology and newly acquired Conductive Transfers contributions; margin compression reflected mix and volume .
Q1 2025 adjusted EBITDA excludes $7k stock-based compensation and adds back $172k amortization and $47k depreciation as per the reconciliation .
No S&P Global consensus estimates were available for Q1 2025; estimate comparison is omitted.

KPIs and Operating Drivers

KPI	Q3 2024	Q4 2024	Q1 2025
Cash & Equivalents ($USD Millions)	$3.810	$2.950	$2.585
Accounts Receivable ($USD Millions)	$1.174	$1.612	$1.640
Inventories ($USD Millions)	$2.494	$2.009	$1.840
R&D Expense ($USD Millions)	$0.486	$0.480	$0.434
SG&A Expense ($USD Millions)	$1.095	$1.213	$1.364
Gross Profit ($USD Millions)	$1.105	$1.183	$0.949

Segment breakdown: Not disclosed numerically in Q1 2025 materials; management commentary cites contributions from Calman Technology and Conductive Transfers and mix impact, but no formal segment table provided .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Profitability	FY 2026	None provided	Return to profitability in 2026	Introduced directional outlook
Organic Revenue Growth	FY 2026	None provided	Double‑digit organic growth expected in 2026	Introduced directional outlook
Gross Margin	FY 2026	None provided	Continued recovery expected	Introduced directional outlook
Production/Cost Mitigation	2025–2026	None provided	Shift some production from China to Scotland to mitigate tariffs	New operational action
M&A Strategy	Ongoing	Opportunistic	Continue to evaluate a growing pipeline; act when aligned	Maintained/affirmed

No numeric guidance (revenue/EPS/margins/opex/tax) was provided for 2025; management framed 2025 as a transitional year with execution toward 2026 targets .

Earnings Call Themes & Trends

Topic	Q3 2024 (Q‑2)	Q4 2024 (Q‑1)	Q1 2025 (Current)	Trend
Gas-sensor/product innovation	Emphasized expanding gas-sensor offerings; pipeline for 2025 growth	Launched 110‑37x gas sensors; grants supporting scale-up	Launched industry‑first odor sensors; 4‑series CO sensors broaden reach	Improving momentum
Customer pipeline/design wins	Robust pipeline; optimism for 2025–2026	—	Major design win with top‑10 OEM; pre‑prod Q3’25; ~$1M 2026 revenue expected	Pipeline converting
Tariffs/supply chain	—	—	Shifting production from China to Scotland to mitigate tariffs	New headwind mitigated
M&A	—	Acquired Conductive Transfers to expand e‑textiles/smart textiles	Evaluating growing pipeline; opportunistic execution	Active/ongoing
Gross margin trajectory	41.4% (mix/volume pressure)	39.6%	35.6% (mix/volume)	Near‑term pressure
R&D/grants	—	NIST Phase II $400k to scale printed gas-sensor manufacturing	NASA SBIR Phase I $150k for predictive air quality systems	Supportive funding

Management Commentary

“Q1 was in line with our expectations and marks the start of a year focused on disciplined execution and steady progress toward our long-term goals.” — Steven N. Bronson, Chairman, President, and CEO .
“We’re particularly encouraged by the traction in our gas sensor product line… [advancements] significantly expand our relevance in high-value environmental and safety applications.” .
“Due to recent tariff fluctuations, we will shift some of our production activities to our facility in Scotland… to reduce the impact of tariffs on our cost structure and customer pricing.” .
“We believe 2026 will be a breakout year for Interlink, driven by profitability, margin expansion, and sustained revenue growth.” .

Q&A Highlights

No Q1 2025 earnings call transcript was available in the company document set during the quarter; therefore, Q&A themes and clarifications are not included.

Estimates Context

S&P Global (Capital IQ) showed no published Wall Street consensus for Q1 2025 EPS or revenue for LINK; as a result, no beat/miss analysis versus estimates is provided (S&P Global).

Key Takeaways for Investors

Near-term softness with volume/mix pressure: Q1 2025 marked lower revenue and margins versus both Q4 2024 and Q1 2024; watch for cadence improvement as Q3 2025 pre-production and customer wins phase in .
2026 setup improving: a credible path is articulated—profitability, double-digit organic growth, and GM recovery—supported by design wins, product launches, and cost actions (tariff mitigation) .
Innovation engine remains a differentiator: industry-first odor sensors and 4‑series CO line should expand TAM and improve mix over time if adoption ramps .
Track opex discipline vs growth investment: Q1 showed lower YoY opex but higher SG&A QoQ; monitor hiring/sales investments against pipeline conversion .
Liquidity monitored: cash declined to $2.585M at Q1; inventory down QoQ; working capital still adequate but execution on revenue scale-up is key .
M&A optionality: tuck-ins remain on the table; integration success (e.g., Conductive Transfers) and synergy realization can accelerate the 2026 trajectory .
Trading setup: catalysts over next 12 months include converting the top‑10 OEM program, additional gas-sensor design wins, tariff cost mitigation benefits, and any accretive M&A—each with potential to re-rate on evidence of revenue inflection and GM recovery .

INTERLINK ELECTRONICS INC (LINK)·Q1 2025 Earnings Summary