inTEST Corporation's Q3 2025 Performance: Navigating Challenges in a High-Growth Semiconductor Test Equipment Sector

The semiconductor test equipment sector is undergoing a transformative phase, driven by surging demand for AI chips, advanced packaging solutions, and defense applications. Against this backdrop, inTEST Corporation (INTT) reported its Q3 2025 results, revealing a mixed performance marked by declining revenue but robust order growth and a strengthening backlog. This analysis evaluates inTEST's competitive positioning relative to industry leaders like Teradyne and Advantest, while assessing its ability to capitalize on sector tailwinds.

A Tale of Two Metrics: Revenue Decline vs. Order Surge

InTEST's Q3 2025 revenue fell to $26.2 million, a 13.3% year-over-year decline and 6.7% drop from Q2 2025, primarily due to delayed shipments caused by technical challenges, according to the INTT Q3 2025 results release. However, the company's order growth tells a different story: orders reached $37.6 million, a 34.2% year-over-year increase and the highest level since Q2 2022, according to the INTT Q3 2025 results release. This divergence highlights inTEST's ability to secure demand despite execution hiccups.

The backlog at quarter-end ballooned to $49.3 million, up 30.1% from June 2025, with 55% expected to ship beyond Q4 2025, according to the INTT Q3 2025 results release. This suggests pent-up demand and operational resilience. Meanwhile, inTEST reduced total debt by $6.2 million year-to-date and generated $3.5 million in operating cash flow, according to the INTT Q3 2025 results release, signaling improved financial discipline.

Competitor Benchmarking: A Niche Player in a Duopoly-Driven Sector

The semiconductor test equipment market remains dominated by Teradyne and Advantest, which together control a significant share of the $7.65 billion 2025 market, according to a SEMI forecast. Teradyne, for instance, reported Q3 2025 revenue of $769 million, with memory test sales doubling to $128 million, fueled by AI-driven DRAM and HBM testing demand, according to a Teradyne earnings call. Advantest revised its full-year sales forecast upward to ¥835 billion ($5.8 billion) due to strong AI-related testing orders, according to a Advantest financial highlights.

In contrast, inTEST operates in a niche segment, with its semiconductor division accounting for 36% of trailing twelve-month revenue, according to the INTT Q3 2025 slides. Its recent $2.6 million defense industry order for thermal test systems, reported by StockTitan, underscores its specialization in high-margin, mission-critical applications. While inTEST lacks the scale of its peers, its focus on automotive/EV, defense, and life sciences markets provides a differentiated value proposition, according to StockTitan.

Sector Tailwinds and Strategic Positioning

The global semiconductor test equipment market is projected to grow by 23.2% in 2025, driven by AI, 5G, and advanced packaging demands, according to a SEMI forecast. inTEST's CEO, Nick Grant, emphasized that the company's technical issues in Q3 were resolved, leading to customer satisfaction and additional orders, according to the INTT earnings call. This aligns with broader industry trends, as companies like TSMC report record revenues from AI chip manufacturing, according to a QuiverQuant analysis, indirectly boosting demand for testing solutions.

However, inTEST's Q4 2025 guidance of $30–32 million in revenue remains cautious, reflecting ongoing execution risks, according to the INTT Q3 2025 results release. By comparison, Teradyne's Q4 2025 revenue is projected to exceed $1 billion, according to a Finimize report, underscoring the scale gap. inTEST's gross margin of 42.6% in Q2 2025, reported by StockTitan, is competitive, but scaling this profitability will require consistent order-to-revenue conversion.

Investment Implications

inTEST's Q3 performance highlights both challenges and opportunities. While revenue declines and market share constraints persist, the company's order growth, backlog strength, and strategic focus on high-margin sectors position it to benefit from long-term industry tailwinds. Investors should monitor its ability to resolve operational bottlenecks and convert the $49.3 million backlog into revenue.

For now, inTEST remains a smaller but agile player in a sector dominated by Teradyne and Advantest. Its success will hinge on executing its niche strategy while navigating the technical and logistical hurdles that plagued Q3.