inTEST (INTT -1.32%), a supplier of test and process technology solutions for high-growth industrial markets, released its second quarter 2025 results on August 6, 2025. The earnings report revealed a modest outperformance: adjusted earnings per share (Non-GAAP) was $0.03 for Q2 2025, topping the $(0.03) consensus. Revenue (GAAP) reached $28.1 million in Q2 2025, just above the $28.0 million estimate, though the company still saw a 17.2% decline from the same quarter last year. Overall, the results for Q2 2025 showed improvements in margin and orders versus the prior quarter, but continued year-over-year declines in sales and profitability.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.03 | $(0.03) | $0.08 | (62.5%) |
| EPS (GAAP) | $(0.04) | $0.02 | (300.0%) | |
| Revenue | $28.1 million | $28.0 million | N/A | N/A |
| Gross Margin | 42.6% | 40.6% | 2.0 pp | |
| Adjusted EBITDA (Non-GAAP) | $1.3 million | N/A | N/A |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
What Does inTEST Do and Where Is It Focused?
inTEST builds technology that enables the automated testing and processing of complex electronics, scientific equipment, and other precision components. Its offerings reach across various industrial and technology markets, including semiconductor, automotive and electric vehicles, life sciences, industrial, defense/aerospace, and safety/security. Core products include test instrumentation, environmental testing equipment, and process technologies like induction heating and imaging solutions.
Recently, inTEST has placed increased emphasis on innovation, customer and market diversification, and global expansion. Critical to its growth are new products like the SCAiLX Edge AI platform and advanced heating systems, as well as targeted acquisitions such as the test automation specialist Alfamation. Its success hinges on developing differentiated technology, entering new high-value markets, and managing the cyclical swings in core areas like semiconductors.
Quarter in Review: Data and Key Developments
Q2 2025 showed inTEST stabilizing from earlier lows, as sequential comparisons improved. Revenue (GAAP) grew 5.6% sequentially versus Q1, led by a rebound in semiconductor, industrial, and defense/aerospace sales. The company delivered $1.3 million in adjusted EBITDA (non-GAAP), swinging back to positive after a loss the prior quarter. Gross margin reached 42.6% in Q2 2025, up 2.0 percentage points from last year, as product mix improved and cost containment took hold.
Orders painted a mixed but improving picture. Total orders rose 6.0% year over year and 9.5% sequentially to $27.76 million in Q2 2025, with particular strength in automotive/electric vehicle and life sciences, both supported by Alfamation's strong performance. Life sciences orders surged 179.3% year over year in Q2 2025. The backlog at quarter-end was $37.9 million in Q2 2025, down 20.6% from the year before, with about half slated for shipment beyond the next quarter, reflecting longer project cycles.
Results by market highlighted varied trends. Semiconductor revenue increased 0.7% year over year in Q2 2025 compared to Q2 2024 and rose 13.3% sequentially compared to Q1 2025 to $10.2 million, but orders in this segment fell 33.9% year over year compared to Q2 2024, revealing ongoing caution in capital spending. Automotive/EV posted $6.0 million of GAAP revenue in Q1 2025, a drop of 50.0% from last year, as customer order timing and project cycles shifted. Other gains came from industrial and safety/security, both achieving double-digit year-over-year growth in revenue and orders in Q2 2025 (GAAP).
Segment results for Q2 2025 showed relatively balanced revenue: Electronic Test led at $13.7 million, followed by $7.2 million each from Environmental Technologies and Process Technologies. Electronic Test, focused on equipment to evaluate the function and reliability of advanced electronics, generated the highest operating profit among divisions. The period also included $0.2 million in restructuring charges in Q2 2025 as management continued to trim costs and focus investments, supported by a recent leadership transition.
Product and Market Expansion, Innovation, and Execution Risks
inTEST’s focus on differentiation and innovation was front and center during the quarter. Alfamation, which specializes in test automation for the automotive and consumer electronics sectors, reported its highest level of orders since joining the company, helping to drive non-semiconductor growth in Q2 2025. New products and expanded global distribution channels kept the opportunity pipeline at record levels. CEO Nick Grant noted, “recently introduced products continued to gain traction; we added new customers; and further expanded our channel network.”
Still, challenges remain. Revenue and profit (GAAP) were both lower than last year in Q2 2025, with the automotive/EV and life sciences segments seeing the sharpest declines. Management called out semi order weakness and customer hesitancy to initiate large capital projects amid macroeconomic and tariff uncertainties. The backlog, although sizable, decreased from $40.1 million at December 31, 2023, to $39.5 million at December 31, 2024, indicating a less robust project pipeline. Operating losses persisted but narrowed in Q2 2025 as cost control efforts helped offset the sales drop.
One-time restructuring continued as inTEST sought greater efficiency, with ongoing cost actions and an expectation for operating expenses between $12.6 and $13.1 million in Q3 2025, excluding about $0.1 million of further restructuring. The company ended Q2 2025 with $19.2 million in cash and undrawn term loan capacity, even as working capital needs drove a cash outflow of $2.8 million during the period. Debt was reduced by $1.7 million to $10.1 million in Q2 2025. Some banking covenants required waivers due to these changes in liquidity.
Segment diversity cushioned some of the declines in the core semiconductor area. For example, increased demand in industrial markets came from customers returning for specialized induction heating systems to support utility infrastructure. Life sciences orders, despite near-term revenue declines, show a longer-term pipeline. The “in-region for the region” manufacturing strategy, including work to establish production in Malaysia, aims to make the supply chain more resilient to shifting global trade policies.
Looking Ahead: Guidance and Watch Points
Management projected Q3 2025 revenue in the $28 million to $30 million range, implying stable or slightly improved sequential sales and a gross margin near Q2 2025’s level. Operating expenses are expected to decline somewhat. No full-year guidance was offered due to the uncertain timing of customer investments and broader market instability.
Key watch points remain: the magnitude and pace of semiconductor order recovery, execution of ongoing cost reductions, and progress in the automotive/EV and life sciences segments. With half the backlog set to ship after Q3 2025 and customers hesitant to commit capital, forward visibility is still limited. Investors may want to monitor how well inTEST can continue diversifying its markets, scaling its new products, and managing liquidity as the sector works through its cyclical trough.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
