InTest's Semi Orders Surge as New Leadership Chases Margin Mix
Back-end test demand finally converts to orders, but margin mix and control issues complicate the turnaround.
INTT · Earnings Call · 2026-08-10
The Semi Wave Finally Converts
For InTest, Q2 2026 was the quarter when the long-awaited semi recovery stopped being a forecast and became a book of orders. Revenue rose 26% year-over-year to $35.3 million, the third straight sequential gain, and the company raised its full-year guide to $135–140 million, implying ~21% growth. The real headline, though, is order intake: semi orders jumped 56% sequentially, the strongest in six quarters, and grew 64% year-over-year. As CEO Rich Rogoff put it, “the semi wave that we referenced in our Q1 call is now converting into orders” — Richard Rogoff, President and Chief Executive Officer · 2026-08-10. That wave is being driven by a familiar pair of forces—memory shortages and the AI aspect of demand for high-power device testing—both of which were prominently absent from the company's own keyword trajectory only a few quarters ago. The shift is also visible in the market's tape: global 90-day advancers are dominated by data-center and high-bandwidth themes, and InTest's thermal and test portfolios sit squarely in that path.
What's notable is that this is not a broad cyclical uptick; it's a pickup in order activity concentrated in the back-end test segment, where InTest has historically commanded premium margins. CFO Duncan Gilmour confirmed the mix story on the call: “our back-end semi business... margins there higher towards the, let's say, sort of mid-50s kind of range” — Duncan Gilmour, Chief Financial Officer and Treasurer · 2026-08-10. That's roughly 10 points above the corporate average right now, and it's the key to the margin expansion baked into Q3 guidance (gross margin ~44%, up from 40.5% in Q2).
that change of mix as we go into the second half, a real driver of the margin shift that we see in the second half versus the first half.
A Margin Mix Shift Set to Reshape the Model
Q2's gross margin of 40.5% was a disappointment—down 280 bps sequentially—but entirely explained by the surge in Auto/EV shipments of high-revenue, low-margin Alfamation projects. That segment's order intake fell 67% sequentially, which should naturally rotate the mix back toward semi and other higher-margin businesses. The company is also actively managing the shape of its portfolio: CEO Rogoff mentioned new products like the EKOHEAT induction heater and advanced high-powered chillers, both aimed at the power-conversion architectures that sit at the heart of electrification and AI infrastructure. These are exactly the expanding funnel of opportunities that the market is watching.
On the margin front, the trajectory is encouraging if management executes. Historical gross margins have ranged from the high-40s to low-50s, and the current 45% level is below that—so mix normalization alone could add 300–500 bps of expansion. The company's own end market diversification, which spread revenue across auto, life sciences, and defense, has been a drag on margins; a return to semi concentration will reverse that. As Gilmour noted, "if that comes back in a strong fashion at some point, then we would expect margin to tick up."
But there are execution risks. The Q1 revision at Alfamation and the subsequent material weakness in internal controls are a fresh blemish on a company that was already working to rebuild credibility under new leadership. That may explain why the stock—down 38% from its May peak, even after a strong print—has not responded as the fundamentals would suggest. The market is punishing not the revenue growth but the reliability of the story.
Execution Discipline Under New Leadership
Rich Rogoff, who took the CEO seat in Q1, is wasting no time. He opened the call with a promise: “we have ample opportunities for growth in our end markets and profitability has further to go” — Richard Rogoff, President and Chief Executive Officer · 2026-08-10. He then outlined an operational review covering manufacturing footprint, cross-collaboration across business units, and purchasing consolidation—the kind of cost-leverage work that, if delivered, would make the margin expansion story even more compelling. The prior administration had been more cautious. In February, Nick Grant (then CEO) told analysts, “we just wanted to make sure we are providing the guidance we are confident we are able to achieve” — Nick Grant, President and Chief Executive Officer · 2026-02-27. That conservatism has given way to a more aggressive posture: full-year revenue guidance raised, and a Q3 revenue band that implies continued sequential growth despite the Auto/EV pullback.
The risk, of course, is that Rogoff's focus on cost and the material weakness will distract from the growth opportunity. Investors will want to see the semi order momentum persist through the back half, and they'll be watching the 10-Q and year-end control remediation closely. The keyword history shows Operating expenses as a recurring top-three theme for the company—so the new CEO's promise of operating leverage is not just a nice-to-have; it's a central part of the bull case.
InTest is at an inflection point: the semi cycle has turned in its favor, but the company must now prove it can convert that into margin expansion without stumbling on controls or execution. The next two quarters will be telling.