Key Highlights

• inTEST reported Q2 2026 Revenue of $35.3 million, up 26 percent year-over-year, beating the $35 million estimate by 0.99 percent.

• Semiconductor orders increased 56 percent sequentially and 64 percent year-over-year, the company's strongest semi order intake in six quarters.

• The company raised full-year 2026 revenue guidance to $135 million to $140 million, representing approximately 21 percent growth over 2025.

• Management disclosed a material weakness in internal controls related to a first quarter revision at its Alfamation Subsidiary and is implementing remediation plans expected to be effective by fiscal year-end.

Broad-Based Demand Drives Third Consecutive Quarter of Sequential Growth

inTEST Corporation (NYSE Arca:INTT) reported second quarter revenue of $35.3 million, up approximately 26 percent year-over-year, marking its third consecutive quarter of sequential revenue growth and second consecutive quarter of year-over-year growth above 25 percent. inTEST designs and manufactures test and process technology solutions across semiconductor, automotive and electric vehicle, defense and aerospace, life sciences, and industrial end markets. Gross Margin was 40.5 percent, down 210 basis points year-over-year, reflecting a shift in revenue mix toward high-revenue, lower-margin automotive and EV shipments at its Alfamation subsidiary, alongside a shortfall of higher-contribution revenue that shifted into the third quarter.

Non-semiconductor markets accounted for approximately 74 percent of second quarter revenue, with sales in automotive and EV increasing $7.6 million year-over-year, reflecting the continued gradual recovery in the Capital spending environment and the company's expanding penetration of non-semiconductor-correlated end markets. Adjusted EBITDA of $2.2 million, representing a 6.2 percent margin, increased approximately 73 percent from $1.3 million in the prior-year quarter.

Semiconductor Order Rebound Supports Raised Full-Year Guidance

Second quarter orders totaled $28.9 million, down 9 percent sequentially following three consecutive quarters above $30 million but up 4 percent year-over-year, with semiconductor orders standing out, increasing 56 percent sequentially and 64 percent year-over-year in the company's strongest semiconductor order intake in six quarters. Management said this reflects the semiconductor demand wave referenced on its first quarter call now converting into actual orders, driven by growing back-end test demand for high-power devices used in the electrified economy.

The company raised full-year 2026 revenue guidance to a range of $135 million to $140 million, representing approximately 21 percent growth over 2025's $113.8 million, with gross margin guidance of approximately 43 percent for the full year. Management said the increase reflects continued diversified demand supported by Backlog , which stood at $45.4 million at quarter end, down 12 percent sequentially on normalization from an elevated automotive and EV peak but up 20 percent year-over-year, with approximately 45 percent of backlog expected to ship beyond the third quarter.

Material Weakness at Alfamation Prompts Remediation Effort

Following a July 31 pre-announcement, inTEST revised its first quarter 2026 results for cost of revenues, Gross Profit , gross margin, income tax expense, net Earnings , and Earnings Per Share , with management and the audit committee subsequently concluding that control deficiencies underlying the revision at its Alfamation subsidiary constituted a material weakness in internal control over financial reporting. The company said it has implemented remediation plans and expects to demonstrate that these controls are operating effectively by fiscal year-end, with further detail included in its Form 10-Q.

Management said the second quarter's gross margin also reflected the previously disclosed unfavorable mix of high-revenue, low-margin Alfamation automotive projects, a dynamic the company expects to partially reverse in the third quarter as semiconductor's higher-margin mix, with legacy semiconductor gross margins in the mid-50 percent range, becomes a larger contributor to the overall revenue base.

Conclusion

inTEST's second quarter results and raised full-year guidance reflect a Business benefiting from a broadening set of end markets, with semiconductor demand now converting into orders after a multi-quarter wave the company had anticipated, even as reported gross margin remained pressured by a lower-margin automotive and EV revenue mix. The disclosed material weakness tied to the Alfamation subsidiary represents an execution risk investors should weigh, though management has articulated a remediation timeline targeting effectiveness by fiscal year-end alongside a broader operational review aimed at improving Manufacturing footprint efficiency. Continued conversion of the growing semiconductor funnel into shipped revenue, along with the pace of remediation progress at Alfamation, are likely to be the key variables shaping results into 2027.