Contradictions Unveiled: Alfamation's 2025 Earnings Call Highlights Defense Orders, Market Recovery, and Automotive Strategies

Revenue and Order Performance:
- inTEST Corporation reported revenue of $28.1 million for Q2 2025, with orders of nearly $28 million.
- While the company experienced a 10% sequential growth in orders, the overall revenue decline of $5.9 million year-on-year was primarily due to a $4.9 million decline in auto/EV sales.

Geographic Expansion and Manufacturing:
- The company is expanding its manufacturing footprint in Malaysia, with the new facility aimed to begin manufacturing first article products in the second half of 2025, with production ramping up in 2026.
- This expansion is intended to better serve customers in the region, capitalize on a lower cost supply chain, and enhance market competitiveness by insulating the company from potential tariff impacts.

Product Diversification and Market Penetration:
- inTEST saw increased orders in several markets, including defense/aero, which benefited from a commercial space order and a large defense order, and auto/EV, experiencing a 40% increase in demand.
- The company's success in these markets is attributed to its effective diversification efforts and innovative new products gaining traction.

Profitability and Debt Reduction:
- The company achieved a gross margin of 42.6%, up 110 basis points sequentially, driven by higher sales volume and ongoing cost actions.
- inTEST reduced its debt by $1.7 million in Q2 and $4.9 million year-to-date, bringing total debt down to approximately $10 million, demonstrating its commitment to improving profitability amid economic uncertainties.