InTest’s Gross Margin Hits 45.4% as Auto/EV and Life Sciences Drive Backlog to Record $53.9M
Diversified Markets Offset Semi Weakness, Backlog Grows 36% Year-on-Year
InTest Corporation wrapped up the fourth quarter of 2025 displaying marked operational improvement. Thanks to resilient demand in Auto/EV and Life Sciences segments, Q4 closed with a healthy backlog of $53.9 million—up 36.4% from a year ago. Even as the historically significant semiconductor business remained subdued, nearly 80% of Q4 revenue came from non-semiconductor markets, underscoring the success of the company’s diversification strategy.
Gross Margin Rebounds to 45.4%: Efficiency and New Products Supporting Profitability
Q4 gross margin expanded to 45.4%, up 350 basis points from the prior quarter. The improvement stemmed from cost efficiency efforts, strong product mix, and manufacturing gains, further buoyed by the successful rollout of new products at Alfamation and Acculogic. Revenue beat internal guidance, landing at $32.82 million for the quarter. Despite revenue being down 10.3% from Q4 2024, sequential momentum was clear, with a $6.6 million jump over Q3, reflecting ramping activity in Industrial and Defense/Aerospace segments.
| Quarter | Revenue ($M) | Gross Margin (%) | Backlog ($M) | Auto/EV Revenue (%) | Life Sciences Revenue (%) | Semi Revenue (%) |
|---|---|---|---|---|---|---|
| Q4 2025 | 32.82 | 45.4 | 53.92 | 18.1 | 12.3 | 21.1 |
| Q4 2024 | 36.60 | 39.7 | 39.52 | 32.6 | 3.4 | 33.3 |
Order Strength: Auto/EV and Life Sciences Propel Momentum
Q4 orders clocked in at $37.47 million, essentially flat sequentially but up 22.2% year-over-year—thanks mostly to gains in Auto/EV (up 182.7% YoY), Life Sciences (up 129.3% YoY), and Safety/Security (up 1,913% YoY). In contrast, Semi orders dipped 39.6% compared to last year. These shifts point to the company’s pivot towards less cyclical, high-growth end-markets. Management states that approximately 60% of the Q4 backlog is expected to ship beyond Q1 2026, ensuring ongoing production visibility.
| Q4 Orders by Segment ($M) | 2025 | 2024 | Change (%) |
|---|---|---|---|
| Semi | 9.45 | 15.65 | -39.6 |
| Auto/EV | 9.86 | 3.49 | 182.7 |
| Life Sciences | 5.38 | 2.35 | 129.3 |
| Safety/Security | 1.09 | 0.05 | 1,913.0 |
Profitability Metrics: Sequential Improvement, Cautious Year-Over-Year View
Despite net income of $1.24 million ($0.10 EPS) and adjusted EBITDA of $3.19 million (margin 9.7%) for the quarter, year-over-year comparisons remain muted, reflecting economic headwinds and persistent semiconductor softness. For full-year 2025, InTest posted a net loss of $2.53 million but stayed cash flow positive—generating $7.3 million in cash from operations and cutting total debt by $7.6 million.
| Metric | Q4 2025 | Q4 2024 | FY 2025 | FY 2024 |
|---|---|---|---|---|
| Net Income ($M) | 1.24 | 1.50 | -2.53 | 2.89 |
| Adjusted EBITDA ($M) | 3.19 | 4.41 | 3.95 | 10.82 |
| Adjusted Net Earnings ($M) | 1.95 | 2.78 | 0.76 | 6.21 |
| Adjusted EPS ($) | 0.16 | 0.23 | 0.06 | 0.51 |
Guidance Calls for Continued Margin Strength and Revenue Growth in 2026
Management projects revenue of $31–$33 million for Q1 2026 (gross margin ~44%), with annual revenue seen between $125–$130 million and an annual gross margin of ~45%. A pick-up in semiconductor demand is anticipated in the second half of the year, alongside contributions from a growing portfolio of engineered solutions. The company’s strong cash and debt position—$18.06 million in cash and restricted cash, and $7.5 million in debt—supports ongoing innovation and diversification.
Key Takeaway: Diversification and Innovation Buffer Against End-Market Volatility
InTest’s Q4 performance highlights the resiliency provided by its diversification. Investors will want to watch for a semiconductor recovery in the second half of 2026 and continued execution on the company’s Vision 2030 strategy. With margin expansion and strong backlog, the company is positioned for profitable growth, but sector dynamics in Semi and Auto/EV are still critical variables to monitor.
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