inTEST's Q1 2025: Navigating Contradictions in Order Visibility, Market Recovery, and Breakeven Points

Customer order visibility and market uncertainty, semi and auto market recovery timing, breakeven revenue point are the key contradictions discussed in inTEST's latest 2025Q1 earnings call



Revenue and Market Conditions:
- InTest reported $26.6 million in revenue for Q1 2025, with gross margins at 41.5%.
- The decline in revenue was primarily due to delays in customer spending, macroeconomic turmoil, and engineering challenges affecting its Environmental Technologies division.

Tariff Exposure and Mitigation Efforts:
- Approximately $1.5 million of InTest's material spend is directly impacted by current tariffs, representing less than 3% of their total spend.
- The company is mitigating tariff impacts by developing alternate supply sources and expanding its global presence.

Order Trends and Backlog:
- First quarter orders increased by 11% year-over-year, driven by demand growth in industrial, auto/EV, and life sciences sectors.
- Backlog at March 31 was $38.2 million, with a sequential decline due to the completion of Alfamation backlog.

Cost Management and Profitability:
- InTest generated $5.5 million in cash from operations and reduced debt by more than $3 million.
- The company implemented cost controls, reduced headcount, and leveraged government programs to improve profitability amidst challenging market conditions.

Geographic Expansion and Product Innovation:
- InTest is expanding its manufacturing footprint to Southeast Asia, with plans to begin production in Malaysia later this year.
- New products represented 17% of total sales in Q1, contributing to a strong pipeline and supporting long-term growth.