Interlink Electronics(LINK) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights Interlink Electronics reported strong Q2 2025 results, driven by growth in key product lines, strategic wins, and a focus on M&A Q2 2025 and Recent Highlights Interlink Electronics achieved strong Q2 2025 results with 18% revenue growth, improved gross margins, and positive net income, driven by strategic wins and M&A focus - Revenue increased 18% year-over-year to $3.4 million[1][6] - Gross margin improved to 45%, driving $323,000 of adjusted EBITDA (non-GAAP) and positive net income of $100,000[1][6] - Secured an integrated sensing solution program with a division of a top-10 global company, with approximately $1 million of revenue expected in 2026[1][6] - Received a $280,000 SBIR Phase 1 award from the National Institute of Environmental Health Sciences (NIEHS) to develop a high-resolution, hyper-local air quality monitoring system[1][6] - The Company is actively evaluating a growing pipeline of strategic acquisition opportunities that align with long-term goals and enhance shareholder value[5][6] Management Commentary CEO Steven N. Bronson emphasized progress towards sustainable, profitable growth, driven by strong product lines and strategic M&A, anticipating continued improvements into 2026 - Revenue increased 18% year-over-year, driven by higher gas-sensor shipments, stronger printed electronics demand through Calman Technology, and contributions from the Conductive Transfers acquisition[4] - Sequential gross margin improved to 45%, reflecting disciplined execution and a favorable product mix[4] - Management expects continued year-over-year revenue and gross margin improvements in the second half of 2025 and into 2026[4] - Momentum in gas-sensor and printed electronics product-lines is encouraging, with an anticipated rebound in the force-sensing business[5] - The company is actively evaluating a robust M&A pipeline and believes 2026 will be a defining year characterized by accelerating top-line growth, expanding gross margins, and consistent profitability[5][6] Consolidated Financial Performance Interlink Electronics demonstrated significant financial improvements in Q2 2025, marked by revenue growth, improved profitability, and positive Adjusted EBITDA Q2 2025 Financial Results Summary Interlink Electronics achieved strong Q2 2025 financial improvements, with revenue growing 17.8% to $3.414 million, returning to profitability with $100,000 net income and positive Adjusted EBITDA Q2 2025 Financial Results (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | $ Change | % Change | | :--------------------------- | :---------------------------------------------- | :---------------------------------------------- | :------- | :------- | | Revenue | $3,414 | $2,898 | $516 | 17.8% | | Gross profit | $1,538 | $1,305 | $233 | 17.9% | | Gross margin | 45.0% | 45.0% | 0.0% | 0.0% | | Income (loss) from operations | $66 | $(313) | $379 | N/A | | Net income (loss) | $100 | $(307) | $407 | N/A | | Adjusted EBITDA | $323 | $(80) | $403 | N/A | - The year-over-year revenue growth was driven by higher shipments of gas-sensor products, increased sales of printed electronics through Calman Technology (benefiting in part from a stronger Pound Sterling), and contributions from the recently acquired Conductive Transfers subsidiary, partially offset by lower sales of force-sensor products[7] Gross Margin and Net Income Analysis Q2 2025 gross margin remained strong at 45.0%, with sequential improvement, and net income reached $100,000, driven by higher revenue and reduced operating expenses - Gross margin for the quarter was 45.0%, flat compared to the second quarter of last year, and up from 35.6% in the first quarter of 2025[8] - The sequential improvement in gross margin primarily reflects higher revenue and favorable product mix[8] - Net income totaled $100,000, compared to a net loss of $307,000 in the year-ago period[8] - The improvement in net income was driven by higher revenue and lower operating expenses, reflecting reduced headcount and related compensation costs[8] Adjusted EBITDA Performance Interlink Electronics reported a positive Adjusted EBITDA of $323,000 for Q2 2025, a significant turnaround reflecting improved operational efficiency and profitability - Adjusted EBITDA, a non-GAAP financial measure, was $323,000, compared to $(80,000) in the prior-year period[9] Company Overview Interlink Electronics is a global leader in sensor and printed electronic solutions, operating internationally with specialized expertise and manufacturing capabilities About Interlink Electronics, Inc. Interlink Electronics is a 40-year leader in sensor and printed electronic solutions, delivering mission-critical technologies across diverse markets through specialized expertise - Interlink Electronics is a leading provider of sensors and printed electronic solutions, boasting 40 years of success in delivering mission-critical technologies[10] - Products and solutions span various markets, including medical, industrial, automotive, wearables, IoT, and other specialty markets[10] - Expertise in materials science, manufacturing, embedded electronics, firmware, and software enables the creation of custom solutions tailored to customer needs[10] Global Operations Interlink Electronics operates globally with headquarters in Fremont, California, a development center in Camarillo, and manufacturing facilities across China and the UK - The company's corporate headquarters and proprietary gas sensor production and product development facility are located in Fremont, California[11] - A Global Product Development and Materials Science Center and distribution and logistics center are in Camarillo, California[11] - Advanced printed-electronics manufacturing facilities are located in Shenzhen, China; Irvine, Scotland; and Barnsley, England[11] Forward-Looking Statements & Non-GAAP Measures This section addresses the inherent uncertainties of forward-looking statements and clarifies the definition, use, and limitations of non-GAAP financial measures Forward-Looking Statements Forward-looking statements are subject to inherent uncertainties and risks that may cause actual results to differ materially, with no obligation for public updates - Forward-looking statements are identified by phrases such as 'thinks,' 'anticipates,' 'believes,' 'estimates,' 'expects,' 'intends,' 'plans,' and similar words[13] - These statements are not guarantees of future performance and are inherently subject to uncertainties and other factors which could cause actual results to differ materially[13] - Risks and uncertainties include success in predicting new markets, efficient infrastructure management, technological developments, changes in customer ordering patterns, product quality, intellectual property protection, raw material availability, disruptions in manufacturing, risks of international sales and operations, and compliance with regulatory requirements[13] - The company expressly disclaims any obligation to publicly update or revise any forward-looking statements[13] Non-GAAP Financial Measure Definition and Use Adjusted EBITDA is a non-GAAP measure used by management and investors to assess core performance, supplementing GAAP statements for financial and operational decisions - Adjusted EBITDA is a non-GAAP financial measure used to supplement condensed consolidated financial statements prepared in accordance with GAAP[14] - Adjusted EBITDA is defined as net income (loss) before interest, taxes, depreciation and amortization, and as further adjusted for stock-based compensation expense[15] - This non-GAAP measure is used for financial and operational decision-making, period-to-period comparisons, and to evaluate performance by excluding items not indicative of core business operating results, such as amortization expense related to recent acquisitions[16] - It provides greater transparency with respect to key metrics used by management and helps investors analyze the health of the business[16] Limitations of Non-GAAP Financial Measures The company acknowledges non-GAAP measure limitations, providing GAAP exclusions and emphasizing their evaluation alongside relevant GAAP financial measures - There are a number of limitations related to the use of non-GAAP financial measures[17] - The company compensates for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures[17] - Non-GAAP financial measures are evaluated together with their relevant financial measures in accordance with GAAP[17] Financial Statements This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and reconciliation of net loss to Adjusted EBITDA Condensed Consolidated Balance Sheets This section presents the unaudited condensed consolidated balance sheets for Interlink Electronics as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $2,329 | $2,950 | | Accounts receivable, net | $2,022 | $1,612 | | Inventories | $1,651 | $2,009 | | Total current assets | $6,424 | $6,899 | | Total assets | $12,510 | $13,116 | | Accounts payable | $501 | $573 | | Total current liabilities | $1,422 | $1,390 | | Total liabilities | $2,471 | $2,623 | | Total stockholders' equity | $10,039 | $10,493 | Condensed Consolidated Statements of Operations This section provides the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $3,414 | $2,898 | $6,078 | $6,022 | | Cost of revenue | $1,876 | $1,593 | $3,591 | $3,464 | | Gross profit | $1,538 | $1,305 | $2,487 | $2,558 | | Engineering, research and development | $363 | $510 | $797 | $1,086 | | Selling, general and administrative | $1,109 | $1,108 | $2,473 | $2,536 | | Total operating expenses | $1,472 | $1,618 | $3,270 | $3,622 | | Income (loss) from operations | $66 | $(313) | $(783) | $(1,064) | | Net income (loss) | $100 | $(307) | $(705) | $(1,048) | | Earnings (loss) per common share – diluted | $0.00 | $(0.04) | $(0.09) | $(0.13) | Reconciliation of Consolidated Net Loss to Consolidated Adjusted EBITDA This section provides the unaudited reconciliation of consolidated net loss to consolidated Adjusted EBITDA for the three and six months ended June 30, 2025, and 2024 Reconciliation of Consolidated Net Loss to Consolidated Adjusted EBITDA (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $100 | $(307) | $(705) | $(1,048) | | Interest (income) | $(7) | $(14) | $(13) | $(32) | | Income tax expense (benefit) | $(9) | $10 | $(48) | $32 | | Depreciation expense | $47 | $37 | $94 | $77 | | Amortization expense | $185 | $189 | $358 | $378 | | EBITDA | $316 | $(85) | $(314) | $(593) | | Stock-based compensation expense | $7 | $5 | $14 | $5 | | Adjusted EBITDA | $323 | $(80) | $(300) | $(588) |