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InTest (INTT) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Information Technology· Aug 10, 2026

Source: earnings call transcript

Executive summary

InTest Q2 FY26 — Strong Semi Orders and Raised Full-Year Revenue Outlook

InTest delivered a solid second quarter, driven by broad demand and a significant rebound in semiconductor orders, leading to a raised full-year revenue outlook. While gross margin faced pressure from product mix, the company demonstrated strong operating leverage and cash generation. Management is focused on operational efficiency and cross-collaboration to improve profitability and consistency.

Highlights

5

  • Q2 revenue of $35.3 million was up approximately 26% year-over-year, marking the third consecutive quarter of sequential revenue growth and second consecutive quarter of year-over-year growth above 25%.

  • Semi orders increased 56% sequentially and 64% year-over-year, the strongest semi order intake in 6 quarters, converting the anticipated 'semi wave' into orders.

  • Full-year revenue guidance was raised to $135 million to $140 million, representing approximately 21% growth over 2025 at the midpoint, driven by diversified demand and improving semi outlook.

  • Adjusted EBITDA increased approximately 73% year-over-year to $2.2 million, with an adjusted EBITDA margin of 6.2%.

  • Ended Q2 with $22.1 million in cash and cash equivalents, an increase of $6.4 million from Q1, and total liquidity of $62 million.

Concerns

4

  • Q2 gross margin declined 280 basis points sequentially to 40.5% due to an unfavorable mix of high-revenue, lower-margin projects in auto EV and a shortfall of higher contribution revenue shifting to Q3.

  • Auto EV orders declined 67% sequentially after four quarters of strong order flow, reflecting normalization from an elevated peak.

  • Backlog decreased 12% sequentially to $45.4 million, reflecting the normalization of auto EV projects.

  • A material weakness in internal control over financial reporting at Alfamation was identified in connection with Q1 revisions, with remediation plans implemented.

Guidance & targets

CategoryTargetConfidence
Q3 Revenue
$33 million to $35 million
high materiality
High
Q3 Gross Margin
approximately 44%
medium materiality
High
Q3 Operating Expenses
$13.8 million to $14.2 million
medium materiality
High
Q3 Amortization
$0.5 million
low materiality
High
Full-year Revenue
$135 million to $140 million
high materiality
High
Full-year Gross Margin
approximately 43%
medium materiality
High
Full-year Operating Expenses
$55 million to $57 million
medium materiality
High
Full-year Amortization
$2.6 million
low materiality
High
Full-year Interest Expense
approximately $0.3 million
low materiality
High
Full-year Effective Tax Rate
18%
medium materiality
High
Full-year Capital Expenditures
1% to 2% of revenue
low materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Auto EV
Revenue increased $6 million sequentially and $7.6 million year-over-year, driven by shipment of high-revenue, lower-margin Alfamation projects from backlog and some pull-ins. Orders declined 67% sequentially, reflecting normalization from an elevated peak, but funnel activity remains healthy.
—$7.6 million$6 million—
Industrial
Revenue contributed $1.1 million sequentially and $0.6 million year-over-year.
—$0.6 million$1.1 million—
Defense Aerospace
Revenue declined $2.1 million sequentially following a strong Q1, but increased $7.2 million year-over-year. Orders declined 28% sequentially, but increased 70% year-over-year on higher DoD procurement.
—increased $7.2 milliondeclined $2.1 million—
Life Sciences
Revenue decreased $1.6 million sequentially but increased $0.6 million year-over-year.
—$0.6 milliondecreased $1.6 million—
Semi
Revenue declined $1.4 million sequentially and $1.1 million year-over-year. Orders increased 56% sequentially and 64% year-over-year, representing the strongest semi order intake in 6 quarters, converting the 'semi wave' into orders. The pace of activity in back-end markets is picking up. Gross margin profile is in the mid-50s percentage range.
—declined $1.1 milliondeclined $1.4 millionmid-50s %

Orderbook & backlog

Total Orders $28.9 million Q2 FY26

down 9% sequentially, up 4% year-over-year

Semi Orders increased 56% sequentially Q2 FY26

increased 64% year-over-year

Strongest semi order intake in 6 quarters, converting the 'semi wave' into orders.

Auto EV Orders declined 67% sequentially Q2 FY26

Follows 4 quarters of strong order flow, reflecting normalization.

Defense Aerospace Orders declined 28% sequentially Q2 FY26

increased 70% year-over-year

Sequential decline reflects nonrecurring orders that drove strong Q1; YoY growth on higher DoD procurement.

Total Backlog $45.4 million Q2 FY26

sequential decrease of 12%, year-over-year increase of 20%

Approximately 45% of the backlog is expected to ship beyond the third quarter, reflecting normalization of an elevated peak in auto EV projects.

Product announcements

ProductTypeDetails
eco heat (next-generation)milestone
Robotic docking and intelligent interface solutionsupdate
Advanced high-powered chillersroadmap
Test solutions for high power, high-voltage devicesroadmap

Risks & headwinds

Unfavorable mix of high-revenue, low-margin projects Q2 FY26

Q2 gross margin declined 280 basis points sequentially to 40.5%

Mitigation:Expected shift in revenue mix towards higher-margin semi sales in the second half of the year.

Material weakness in internal control over financial reporting Identified in Q1 FY26, expected remediation by FY26 year-end

Controlled efficiencies underlying the Q1 revision at Alfamation constituted a material weakness.

Mitigation:Remediation plans have been implemented and are fully expected to demonstrate effective operation by fiscal year-end.

Macroeconomic conditions Through the end of FY26

Guidance assumes macroeconomic conditions remain unchanged.

Mitigation:Ongoing operational review to improve cost efficiencies and productivity across the cost structure.

What to watch in Q3 FY26

Gross margin trajectory

Q3 FY26
Current 40.5% (Q2 FY26)
Target ~44% (Q3 FY26 guidance)

Why it matters

Gross margin was impacted by mix in Q2; improvement is guided for Q3 and critical for overall profitability.

For Q3, we project revenue of $33 million to $35 million. gross margin of approximately 44%...

Find out whether INTT delivers this. Inve re-checks your case every morning.

Q&A highlights

Was the Q2 semi order intake in line with internal expectations, and how are orders expected to trend throughout Q3 and Q4?

The Q2 semi order intake was as expected, confirming the strong second-half outlook. Management anticipates continued strong order intake for the next one to two quarters, barring macroeconomic changes.

“As we see it now, the order intake through the next quarter to quarter, maybe 2 will be as expected. There's unless something changes in the market space as we see it, things are looking strong.”

asked by Maxwell Michaelis · answered by Richard Rogoff

2 min read 5 chapters

Detailed narrative

Q2 Performance Overview

InTest reported Q2 revenue of $35.3 million, gross margin of 40.5%, and operating expenses of $13.9 million, aligning with its pre-announcement. Revenue was up 26% year-over-year, marking the third consecutive quarter of sequential growth and second consecutive quarter of over 25% YoY growth, driven by strong project delivery in auto EV and a building semiconductor funnel.

Order and Backlog Dynamics

Q2 orders were $28.9 million, down 9% sequentially but up 4% YoY. Semiconductor orders were a standout, increasing 56% sequentially and 64% YoY, converting the previously referenced 'semi wave' into actual orders. Auto EV orders declined 67% sequentially after four strong quarters, while Defense Aerospace orders decreased 28% sequentially but were up 70% YoY. Backlog stood at $45.4 million, a 12% sequential decrease, with approximately 45% expected to ship beyond Q3.

End Market Trends and Growth Drivers

The company sees expanding opportunities in higher-margin end markets. In semi, activity in back-end markets is picking up due to demand for testing high-power devices in the electrified economy. Defense and Aerospace benefits from higher DoD spending and capacity expansion. Auto EV demand remains healthy, supported by increasing electronic content in vehicles, with order activity following multi-year automotive programs.

Strategic Initiatives and Product Development

InTest is deepening its position with existing strategic accounts, cross-selling its broader portfolio, and expanding channel coverage. New products like the next-generation eco heat are progressing towards customer shipments. The company is also developing advanced high-powered chillers to meet demand for higher power conversion and focusing test solutions on high-power, high-voltage devices like silicon carbide and gallium nitride.

Operational Efficiency and Internal Controls

Management is undertaking an operational review to improve cost efficiencies and productivity, including examining the manufacturing footprint and business unit cost structure. This aims to build consistency in adjusted EBITDA performance. The company also disclosed a material weakness in internal controls at Alfamation related to Q1 revisions, with remediation plans in place expected to be effective by year-end.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.