A maker of precision equipment that helps electronics and semiconductor manufacturers test their products, InTest builds robotic manipulators, docking hardware, and thermal systems (like its ThermoStream temperature testers) used in chip-making and other industries. Founded in 1981, it started out serving the semiconductor world and has since grown through acquisitions such as its 2024 purchase of Italy's Alfamation, with plants in the U.S., Canada, and Italy. The name is simply a play on "in test" — describing exactly what the company does — and it even runs an induction-heating business that cooks nothing you'd eat.
Intest returned to covenant compliance and grew revenue 25.5% to $35.3M, but gross margin fell 210 bps to 40.5% on product mix.
Intest is back in compliance with its debt covenants for the first time in over a year. rose 25.5% to $35.3 million, driven by a 129.3% increase in Auto/EV sales, but fell 210 to 40.5% as the product mix shifted. The company is growing again, but the mix that drove the growth is also compressing profitability.
Key takeaways
rose 25.5% to $35.3 million, led by Auto/EV sales up 129.3% to $13.4 million, while semiconductor revenue fell 11.1% to $9.1 million.
fell 210 to 40.5%, which management attributed to changes in product mix, even as selling, engineering, and G&A expenses all increased on higher commissions, merit increases, and .
The company was in compliance with all debt covenants at June 30, 2026, after the waiver expired on March 31, 2026.
Section summaries
Management's Discussion and Analysis
Q2 FY2026 revenue rose 25.5% to $35.3M, led by Auto/EV, while gross margin fell 210 bps on product mix.
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Total Q2 increased 25.5% to $35.3M, driven by Auto/EV growth of 129.3% to $13.4M, partially offset by a 11.1% decline in Semi revenue to $9.1M.
By , Electronic Test rose 55.9% to $21.4M, Process Technologies rose 12.6% to $8.1M, and Environmental Technologies fell 19.3% to $5.8M.
Cash and cash equivalents rose to $22.1 million from $14.2 million at year-end, and financing activities swung to a $2.3 million inflow on increased stock option exercises.
Orders rose 4.0% to $28.9 million, with semiconductor orders up 63.9% and Defense/Aerospace up 69.5%, but Auto/EV orders fell 49.8%; stood at $45.4 million, up from $37.9 million a year earlier.
The company disclosed a in internal control over financial reporting as of June 30, 2026, creating a reasonable possibility that a material misstatement would not be prevented or detected on a timely basis.
What changed
The breach that persisted through FY2025 and Q1 FY2026 has been resolved: the waiver expired March 31, 2026, and the company was in compliance at June 30, 2026, with cash rising to $22.1 million from $14.2 million at year-end.
The 25.4% order growth and $51.8 million flagged in Q1 FY2026 did not fully sustain momentum: Q2 orders rose only 4.0% to $28.9 million, and backlog fell to $45.4 million from $51.8 million.
reversed from the 45.5% reported in Q1 FY2026 — the highest in over two years — falling 210 to 40.5% as the product mix shifted, undoing the margin recovery that had been flagged as a key watch item.
The $3.3 million operating cash outflow in Q1 FY2026 did not persist: net cash provided by operating activities was $3.0 million for the first half, though this was still down $1.8 million .
The CEO transition and associated $0.7 million in restructuring costs flagged in Q1 FY2026 do not appear as a driver in Q2 results, suggesting those charges were largely contained to the prior quarter.
What to watch
Whether can recover from 40.5% as the Auto/EV-heavy product mix evolves, or whether the mix that drove Q2 growth establishes a lower margin baseline.
Whether the 63.9% increase in semiconductor orders and 69.5% increase in Defense/Aerospace orders convert to in Q3 FY2026, and whether Auto/EV orders recover from their 49.8% decline.
Whether the in internal control over financial reporting is remediated, and whether any restatement or regulatory action follows.
Whether the company maintains compliance now that the waiver has expired, particularly if weakens or the $22.1 million cash balance is drawn down.
declined 210 to 40.5% due to changes in product mix, while selling, engineering, and G&A expenses all increased on higher commissions, merit increases, and .
Q2 orders rose 4.0% to $28.9M, with Semi orders up 63.9% and Defense/Aerospace up 69.5%, but Auto/EV orders fell 49.8%; was $45.4M at June 30, 2026, up from $37.9M a year earlier.
Cash and cash equivalents rose to $22.1M from $14.2M at year-end, and the company was in compliance with all debt covenants at June 30, 2026 after the waiver expired.
Net cash provided by operating activities was $3.0M for the first half, down $1.8M , while financing activities swung to a $2.3M inflow on increased stock option exercises.
From time to time, we may be a party to legal proceedings occurring in the ordinary course of business. We are not currently involved in any material legal proceedings.
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From time to time, we may be a party to legal proceedings occurring in the ordinary course of business. We are not currently involved in any material legal proceedings.
Only material change: a material weakness in internal control over financial reporting as of June 30, 2026.
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The company concluded its was not effective as of the six months ended June 30, 2026, due to a .
The weakness creates a reasonable possibility that a material misstatement of annual or interim consolidated financial statements would not be prevented or detected on a timely basis.
Potential consequences include financial restatements, SEC enforcement actions, litigation, loss of investor confidence, and impaired ability to report accurately and on time.
Reputational harm, strained business relationships, reduced access to capital, regulatory compliance issues, NYSE listing risk, and stock price declines are cited as possible downstream effects.
The company cannot assure that remediation measures will be sufficient or that additional material weaknesses or significant deficiencies will not arise.
Business changes, acquisitions, growth, personnel turnover, system implementations, transaction complexity, and new market expansion could further strain the control environment.