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INTERLINK ELECTRONICS INC (LINK)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered a return to profitability: revenue rose 18% YoY to $3.41M, gross margin expanded sequentially to 45.0%, Adjusted EBITDA reached $0.32M, and net income was $0.10M .
  • Results beat Street on both revenue and EPS: revenue of $3.41M vs $2.80M consensus* and EPS of $0.00 vs -$0.05 consensus*; coverage remains thin (1 estimate each). The setup improves into H2 with management guiding to continued YoY revenue and GM improvement .
  • Product-line dynamics: strength in gas sensors and printed electronics (Calman; aided by stronger GBP) and contributions from Conductive Transfers offset softer force-sensing demand .
  • Strategic catalysts: integrated sensing design win (pre-production in Q3; ≈$1M revenue expected in 2026) and a $280K NIH SBIR for AI-enabled air-quality monitoring; post-quarter, a UK LOI (up to ~$1.9M purchase price) broadens EU footprint .

What Went Well and What Went Wrong

  • What Went Well

    • Delivered profitable quarter with operating leverage: net income $0.10M, Adjusted EBITDA $0.323M on 45.0% GM; CEO cited “disciplined execution and a favorable product mix” .
    • Demand momentum and mix tailwinds: higher gas-sensor shipments, stronger printed electronics (Calman) helped by a stronger Pound Sterling, and contributions from Conductive Transfers .
    • Strategic wins reinforce medium-term growth: integrated sensing design win (~$1M revenue in 2026, expansion in 2027+) and $280K SBIR award for AI forecasting in air quality .

  • What Went Wrong

    • Force-sensing softness persisted, partially offsetting growth in other lines; management also noted revenue timing sensitivity to order flow/production cycles .
    • Year-to-date growth still modest: H1 revenue $6.08M vs $6.02M (+0.9%), highlighting a gradual recovery in the base business .
    • Prior-quarter profitability pressure not fully behind the company: Q1 2025 GM was 35.6% and Adjusted EBITDA was $(0.623)M, evidencing ongoing sensitivity to mix/volume .

Financial Results

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$2.898 $2.986 $2.664 $3.414
Gross Margin (%)45.0% 39.6% 35.6% 45.0%
Operating Income ($USD Millions)-$0.313 -$0.510 -$0.849 $0.066
Net Income ($USD Millions)-$0.307 -$0.413 -$0.805 $0.100
Diluted EPS ($)-$0.04 -$0.05 -$0.09 $0.00
Adjusted EBITDA ($USD Millions)-$0.080 -$0.233 -$0.623 $0.323

Actual vs Wall Street Consensus (Q2 2025)

MetricConsensusActualBeat/MissNotes
Revenue ($USD Millions)$2.80*$3.414 Beat1 estimate*
Primary EPS ($)-$0.05*$0.00 Beat1 estimate*

Values retrieved from S&P Global*

Product-line color (qualitative; no segment reporting)

AreaQ2 2025 CommentaryTrend
Gas sensorsHigher shipments; SBIR-supported AI forecasting initiative Improving
Printed electronics (Calman)Stronger demand; FX tailwind (stronger GBP) Improving
Force-sensingLower sales; expected steady rebound as demand normalizes Stabilizing (gradual recovery)

Balance sheet KPIs

KPIDec 31, 2024Mar 31, 2025Jun 30, 2025
Cash & Cash Equivalents ($USD Millions)$2.950 $2.585 $2.329
Inventories ($USD Millions)$2.009 $1.840 $1.651

Non-GAAP note: Adjusted EBITDA adds back interest, taxes, D&A and stock-based comp (Q2 2025: D&A $0.232M; SBC $0.007M) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue (directional)H2 2025Not quantifiedExpect continued YoY revenue improvement Initiated qualitative outlook
Gross margin (directional)H2 2025Not quantifiedExpect YoY GM improvement; sequentially up to 45% in Q2 Positive tone
Profitability2026Return to profitability with double-digit organic growth in 2026 “2026 will be a defining year… accelerating top-line, expanding margins, consistent profitability” Maintained/strengthened tone
Design win contribution2026Pre-production in Q3 2025; ≈$1M 2026 revenue; expansion in 2027+ Reiterated ≈$1M 2026, with meaningful expansion beyond Maintained
Capital deployment (M&A)OngoingEvaluating pipeline; act when aligned with strategy Actively evaluating growing pipeline; subsequent UK LOI up to ~$1.9M Increased activity post-quarter

No formal quantitative revenue/EPS/GM ranges were issued for Q3/H2 2025.

Earnings Call Themes & Trends

(No Q2 2025 earnings call transcript was available in our document set; table reflects management commentary across recent quarters.)

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
AI/technology initiativesSensor innovation and multiple grants; launched new gas sensors; CES 2025 110-37x family $280K SBIR for AI-enabled hyper-local air quality forecasting Advancing
Supply chain/tariffsPartial production shift to Scotland to mitigate tariff impacts FX tailwind (stronger GBP) benefitted Calman printed electronics Mixed but manageable
Product performanceQ1 low point; GM 35.6% on softer force- and gas-sensor shipments Stronger gas sensors and printed electronics; force-sensing expected to rebound Improving mix
Regional/FXEurope footprint via Calman; UK/Scotland manufacturing GBP strength a tailwind; post-quarter UK LOI broadens EU presence Building EU presence
R&D executionNIST Phase II ($400K) and NASA Phase I ($150K) in FY2024; launch of new sensor families NIH/NIEHS SBIR ($280K) to develop AI-forecasting air-quality system Sustained grant momentum
M&AAcquired Conductive Transfers (e-textiles) late 2024 Pipeline active; contributions to Q2; LOI in UK announced Sept 2 Increasing activity

Management Commentary

  • “Revenue increased 18% year‑over‑year, driven by higher gas‑sensor shipments, stronger printed electronics demand through our Calman Technology subsidiary, and contributions from our recent Conductive Transfers acquisition. Sequential gross margin improvement to 45% reflects disciplined execution and a favorable product mix. We expect to see continued year‑over‑year revenue and gross margin improvements in the second half of 2025 and in to 2026.” — Steven N. Bronson, Chairman, President, and CEO .
  • “Momentum in our gas‑sensor and printed electronics product-lines is particularly encouraging, and we anticipate a steady rebound in our force‑sensing business as demand normalizes.” .

Q&A Highlights

  • No Q2 2025 earnings call transcript was available in our source set; management’s outlook and details above are drawn from the press release and 8‑K exhibits .

Estimates Context

  • Consensus (S&P Global): Revenue $2.80M* and EPS -$0.05* (1 estimate each) for Q2 2025. Actuals: revenue $3.414M and EPS $0.00 — both beats. Coverage remains thin, so estimate dispersion/precision should be treated cautiously .
    Values retrieved from S&P Global*

  • Implication: Street will need to raise near-term revenue/margin assumptions given sequential GM improvement to 45% and better mix, while keeping in mind variability tied to order timing and force-sensing demand recovery .

Key Takeaways for Investors

  • Q2 marked a clean inflection to profitability with sequential margin expansion to 45% and positive net income/Adjusted EBITDA — a key narrative shift vs Q1’s trough metrics .
  • Results beat consensus on both the top line and EPS despite limited coverage, providing a positive setup into H2 2025 as management guides to continued YoY revenue and GM improvements .
  • Mix tailwinds (gas sensors, printed electronics) and FX (GBP) aided results; management expects force-sensing to normalize, which would further support margins and utilization .
  • Strategic pipeline is active: integrated sensing win (≈$1M in 2026, with expansion beyond) and ongoing M&A (post-quarter UK LOI) support medium-term growth optionality and EU presence .
  • Watch cash/inventory discipline: cash declined to $2.33M at 6/30/25; improving EBITDA should help, but working capital management remains important for small-cap hardware suppliers .
  • Trading lens: the transition from Q1 trough to Q2 profit, plus estimate beats, is a positive catalyst; sustained execution in H2 (gross margin durability, force-sensing recovery) is key to multiple expansion .

Citations: Q2 2025 press release and exhibits ; 8‑K with Exhibit 99.1 and financials ; NIH SBIR (July 31, 2025) ; Gateway Conference PR (Aug 20, 2025) ; UK LOI (Sept 2, 2025) ; Q1 2025 8‑K ; FY/Q4 2024 PR .