InTest Corporation Reports 10.7% Revenue Decline in Q1 2025

InTest Corporation reported a decline in revenue for the first quarter of 2025, generating $26.6 million compared to $29.8 million in the same period of 2024, marking a decrease of 10.7%. The company's gross profit also fell to $11.1 million, down from $13.1 million, resulting in a gross margin of 41.5%, a drop from 43.8% year-over-year. The decline in revenue was primarily attributed to a significant decrease in sales within the semiconductor market, which saw a reduction of $6.0 million, alongside a $1.2 million drop in industrial market sales. However, the auto/electric vehicle (EV) sector experienced growth, contributing an additional $2.0 million in revenue.

In terms of operational performance, InTest's total orders for the first quarter increased to $25.3 million, up 11.2% from $22.8 million in the prior year. This growth was driven by strong demand in the industrial, auto/EV, safety/security, and life sciences markets, although orders in the semiconductor and defense/aerospace sectors showed a decline. The company's backlog of unfilled orders stood at $38.2 million, down from $55.5 million a year earlier, reflecting a challenging market environment.

Strategically, InTest completed the acquisition of Alfamation S.p.A. in March 2024, which has since contributed to the company's product offerings and market reach, particularly in the auto/EV and life sciences sectors. The acquisition has been integrated into the Electronic Test segment, and the full impact of Alfamation's operations was reflected in the current quarter's financials. The company also initiated a restructuring plan to consolidate operations from the Netherlands to the U.S., incurring $313,000 in restructuring costs during the quarter.

Financially, InTest's cash and cash equivalents increased to $22.0 million as of March 31, 2025, compared to $19.8 million at the end of 2024. The company reported net cash provided by operating activities of $5.5 million, a significant increase from $2.1 million in the prior year, driven by improved collections of accounts receivable. However, the company recorded a net loss of $2.3 million for the quarter, compared to net earnings of $662,000 in the same period last year, primarily due to lower revenue and increased operating expenses.

Looking ahead, InTest anticipates continued challenges in the semiconductor market, which may impact future revenue and profitability. The company is actively exploring options to address its financial covenants with its lender, particularly regarding the fixed charge coverage ratio, which fell below the required threshold. Management remains focused on diversifying its market presence and enhancing operational efficiencies to mitigate the effects of market volatility.