InTest's record order quarter left out gross margin, and the stock dropped 10%
Record Q3 orders of $48 million to $50 million and a book-to-bill above 1.3x, announced with no gross margin figure after Q2's miss, dropped InTest shares 10.2% in premarket trade. The margin question now rides into a October 13 investor summit and a November 6 earnings print.
Vincent Jiang · 3 min read
Record orders, 10% off the price
On Monday October 5, InTest said third-quarter orders would reach $48 million to $50 million, the most in its history and up 28% to 33% year over year, on a book-to-bill above 1.3x 1. Backlog should end September at $58 million to $60 million 1. CEO Rich Rogoff tied the demand to customer capacity expansions "fueled in part by AI-driven data center demand" 1. The shares fell 10.2% in premarket trade the next morning, to $13.50 2.
The number the release left out
The update carried no gross margin figure 2. That is the line InTest just missed on: Q2 gross margin printed 40.5%, down 210 basis points year over year and, per one account of the quarter, roughly 500 basis points under the company's own guidance 23. On August 10 management guided Q3 margin to approximately 44% 3. A record order quarter that declined to repeat that promise is the silence the tape priced. The fine print is no quieter: a material weakness in internal controls at the Alfamation division, disclosed with a July 31 revision of Q1 results and detailed in the 10-Q filed August 10, sits in the risk factors of the very release announcing the record 136.
The boom is booked, not shipped
Revenue "at the high end" of the $33 million to $35 million range is about $35 million, slightly under the $35.3 million InTest printed in Q2, so the record order quarter implies sequentially flat sales 13. The demand is parked in backlog, roughly 1.7x a quarter's revenue, and the release itself notes contracts may include cancellation, termination or suspension at the customer's discretion 1. Mix is the margin problem: semiconductor, the mid-50s-margin line, was $9.1 million of Q2 revenue, down 11%, while lower-margin automotive and EV projects carried the quarter 3.
Gross margin slid to 40.5% in Q2; the Oct 5 update said nothing about the 44% Q3 guide
- Gross margin, % of revenue
- Estimate
Data
| Gross margin, % of revenue | |
|---|---|
| Q3 2025 | 41.9% |
| Q4 2025 | 45.4% |
| Q1 2026 | 45.5% |
| Q2 2026 | 40.5% |
| Q3 2026 guide (estimate) | 44% |
The bulls still have the mix
The bull case is not empty. Back-end semiconductor margins run in the mid-50s, the revenue mix shifts toward semi into the second half, and full-year guidance was raised to $135 million to $140 million at roughly 43% gross margin 3. Rogoff expects a back-end order cycle, typically nine to 12 months of elevated capacity spending, to stretch into 2027 3. Against that stands a tape already paid: the shares closed October 9 at $14.55, up 94.8% this year from a $7.07 low, at 208 times trailing earnings 4.
The 44% test on November 6
Rogoff takes the record book to invited accredited investors at the CEO Investor Summit on October 13, inside SEMICON West in San Francisco 1. The reading that settles it comes November 6: Q3 gross margin against the 44% guide 34. Orders are the promise. Margin is the print.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
