Welcome, and I'll dive right in. I do that, I'd just like to remind you of this presentation can include forward-looking statements. I'll let you read the disclaimers here, just keep that in mind as we go forward. inTEST Corporation is a company that's been around for quite a number of years. Our vision is clear. We provide leading-edge solutions for innovative test and process control systems for our customers. We'd like to be their partner for that development. We cover this in a multitude of markets, semiconductor, automotive, EV, defense, aero, industrial life sciences, et cetera. It's a diversified set of products that we cover in a diversified set of markets, we provide highly engineered solutions and custom solutions for our customers in often cases. We are currently divided in three divisions.
Our electronic test business focuses on advanced testing for electronic systems, providing automated solutions for that marketplace in everything from advanced semiconductor testing in the back end of the semiconductor market to autonomous vehicles, to displays, et cetera. Again, customizing the solution for the customer's needs. Our environmental technologies business focuses on temperature control and environmental controls. We are heavily involved in our automotive. Excuse me for a second. Anya asked a question. Okay. We are heavily involved in the high growth markets of automotive and defense aero, ultra-cold market there. We've been focusing on that business, expanding our channel partnerships and continuing to innovate new and different thermal platforms to help our customers' needs, especially as things like high-power vehicles, electronic high-powered semiconductors, et cetera, continue to expand.
Our final division is the Process Technologies Division, where we provide differentiated process technologies from everything from the front end of semiconductors, where we're supporting the growth of silicon carbide and gallium nitride, indium phosphide, both in the growth of the wafers as well as epitaxial layers. Diversifying that across different end markets, where we are heavy in automotive, as well as industrial applications. Our vision group actually has even further broadened into safety and leading-edge solutions for AI imaging and capturing. Our markets are attractive. We have about a $2 billion serviceable market. As you can see here, all of our businesses play in almost every single one of these leading markets, and they're all growing significantly over the series of years.
Our process technologies group has also got us into our safety and security market, which also has a large growth. We'll continue to explore opportunities there. Our customer base is very strong. A lot of blue-chip names here that we continue to grow and build, again, integrating our solutions with their needs and providing capabilities for them that enable them to be more successful. Some of the megatrends that we were experiencing today, as I mentioned earlier, electronification, which is advanced systems for autonomous vehicles, EVs, mobility, even industrial automation activities are heavily driving our businesses as we go forward. The more we do in those spaces or the more requirements in those spaces, testing requirements and process technologies are required to make them successful.
Power management is another big area that is driving our business today as we see the conversion from the power growth and higher power devices, either in storage from batteries to high-powered microchips. Those all require different types of testing, higher power testing, things that can handle higher voltages and amperages to temperature controls that are driven because of the power generating so much heat that we have to be able to control that. The last section that's driving us very heavily today is complexity and criticality. As things continue to advance, testing and testing requirements become more required and more advanced and more complicated. Those things are driving our innovative solutions, as well as making us integrate more with our customers to help grow the businesses.
We are currently spread out across the world where our customers are. We continue to focus on getting close to the customer, both with our manufacturing facilities, but also with our engineering capabilities. We have recently expanded in Malaysia to support the Asian market within the region for the region's type of strategy. We're doing both engineering and manufacturing in this site. We're focusing capitalizing on our position in Italy with Alfamation acquisition we made several years ago, and we're continuing to look out for what the next region might be, and that will be driven quite heavily by our customers and where we need to be close to them. Some of our key new products in the recent years, probing solutions for our electronic test systems from Acculogic.
Integration of things like oscilloscopes and RF measurement probes make our flying probe system not just a flying probe system, but a flying probe tester, integrated testing for multitude of different types of test. It's basically a test platform, which is doing quite well. Our environmental technologies recently launc hed a benchtop ThermoStream , which is an advancement on the technology to get into smaller spaces and provide temperature testing capabilities in all sorts of different types of labs and things like that. Our process technologies group launched the Compact EKOHEAT, which is a more powerful system in a smaller footprint. Savings of not only footprint space, but also performance improvements. What are we doing here? As I mentioned, I'm new to the role as CEO. I started about two months ago.
We're basically focused on the next phase of growth for inTEST. Continuing on our customer expansion and intimacy engagement, so we want to deepen our account penetration at existing customers, of course, expanding with new customers and new programs at the same time. We're going to continue to focus on that. Another area we're going to be spending more time focusing on is operating leverage. How do we get our supply chains, our factories more integrated and more efficient throughout the whole organization and apply that to converting it to top-line growth and bottom-line profitability? Last, maintain our disciplined focus on capital deployment. We're not going to stop M&A. We're still focused on finding the right acquisition targets to enhance the inTEST portfolio as they come up.
We're going to make sure that those continue to be the right solutions and have very synergistic, manageable fit with the organization. With that, I'll turn it over to Duncan to provide an outlook and some financial background.
Sure. Thanks, Rich. Kicking off here with our latest guidance. Q2 guidance, the latest guidance we published as presented here, projecting revenues in the $32 million-$34 million range, gross margins in the mid-40s, operating expenses as presented there, $13.8 million-$14.2 million. To help with some modeling efforts, amortization expense clarified there at $0.7 million. For the full year, we did bump our guidance up a little bit to the $130 million-$135 million top-line range. Gross margins holding in that mid-40, 45%. Operating expenses, $55 million-$57 million on a full year basis. The amortization there at $2.6 million for the full year. A couple of other elements, again, to assist with modeling interest expense, tax rates, et cetera. This outlook does exclude any potential acquisitions, as well as any major restructuring costs that may or may not occur.
In terms of a financial overview, just moving into that from an orders perspective, last reported quarter at Q1, our Q1 orders came in at just under $32 million. That was a decline from an extremely strong Q4 where we delivered $37 million of order activity. Q4, we did see particular strength in life sciences, auto, EV, some nice long lead time orders coming into our Alfamation subsidiary in particular. We did see our backlog holding above $50 million. We ended Q1 just under $52 million of backlog. We have seen a nice increase in backlog during the last two or three quarters after what was a relatively weak early 2025. From a revenue perspective, backlog relatively stable. As I mentioned, the revenue number in Q1 just under $34 million.
We have seen a nice quarter-over-quarter increase in our revenues. Looking back from Q1 of last year, Q1-over-Q1, really large step up, $27 million Q1 of 2025, just under $34 million Q1 of 2026. We have seen some nice recovery after early 2025. Late 2024, we did see some softness, particularly in our semiconductor sector. The semiconductor business, the pie charts at the bottom of the slide here, the large red portion represents our semiconductor business, just under 1/3 of our business. That is a particularly low point. We have seen semiconductor representing as much as 60% of the revenues of the business. Actually encouraging to see our most recent performance, even though our semiconductor contribution has been relatively low. Moving from revenue onto gross margins.
Gross margins we've been delivering in and around the mid-40% range. The last couple of quarters, Q1 of last year, that I referenced being a little bit lower on a revenue perspective, we did see margin as a result of that lower volume being below 42%, but with volumes back into the low 30s per quarter, we have seen that mid 40% margin range return, which is where the business has historically, on a consolidated basis, been running. In terms of operating expenses, again, as a percentage of revenue, with the revenues popping back up the last couple of quarters, we have seen those drop back into the low 40% range. Again, Q1 of last year, a large amount of relatively fixed elements in there, that percentage a little bit higher.
As that has come down, we have seen profitability increase, as we move on to the next couple of slides and touch more on profitability, we can see the impact of that positive leverage as we've seen those relatively stable operating expenses get married with those higher revenues. Net earnings on the left-hand side here, adjusted EBITDA on the right-hand side. You can see that Q4 and Q1 we did return to profitability after a loss-making quarter, Q1 of 2025. We have seen that turn back around, delivering just under 10% adjusted EBITDA on the right-hand side, both in Q4 and in Q1 of 2026. The next slide just presents really the same information on an EPS basis. We have seen positive EPS on a GAAP basis on the left-hand side.
On the right-hand side, our adjusted EPS, the only adjustment we make there is adding back the tax-affected impact of intangible amortization. Delivering around $0.16 there in Q1 of 2026. There was some restructuring expense as well that we did add back in Q1. From a capital structure cash flow perspective, we did use cash in Q1. We did see operating cash outflow. As we saw the uptick in our business, we have invested in working capital. We did see our AR inventory balances pop back up as expected. Last year, which was a softer top-line year, some losses in the beginning quarters of the year, as I referenced, we did actually generate cash. We're able to glean cash from our balance sheet as we did see a slight retraction.
We are investing back in that balance sheet again as we see things turning around. From an overall cash perspective, ended Q1 of 2026 with just under $16 million of cash on the balance sheet, with debt at just around $8 million, so net cash in that $8 million kind of range. We do anticipate our debt position to be down below a couple of million, $1 million to $2 million by the end of the year. We've been steadily paying down term debt since we entered into it in Q4 of 2021. By the end of the year, we'd anticipate our overall debt position to be down in the very low single digits. We do maintain about $56 million in liquidity made up of the cash on the balance sheet and some borrowing facilities.
We have a $10 million working capital facility that's available to us, as well as $30 million available for M&A activity with our commercial banking partner. Moving on to the next slide. We've touched on guidance, so I'm going to actually hand it back over to Rich just to wrap us up here.
Thanks, Duncan. Yeah, I'd like to wrap up the presentation with leaving you some highlights for investment opportunities. As Duncan mentioned, our semi business is probably, percentage-wise, at a lower portion of our percentage of business as it has been, which is an action that we've been taking over the last five years. Our diversification action has yielded its results. About 69% of our business has been from the non-semi business. Not to say we're not growing in semi, we are. We're staying focused in semi, but we'd like to spread the actions out across a multitude of markets. As mentioned, our markets are growing. We're in the right markets, I believe, for the future.
We've got a good competitive position, and we continue to improve and get closer to our customers, enabling us to maintain that competitive position. We're delivering some innovative new solutions in that market as we go forward and have demonstrated over the last couple of years. Those markets are continuing to open up for us with new opportunities. We're improving our reach across the globe. Mentioned the Malaysia growth, also focus in Europe and as we see customers' concentration pop up in areas, we will certainly be focusing on that. Lastly, our management of our financial position, as Duncan just laid out, is very strong. We're in a good position there to enhance our direction as we go forward.
I think we're well-positioned for growth, and with a potential for a semi market recovery. As we've mentioned, we're cautiously optimistic to the end of the year and the early part of next that we should see some recoveries in that market, which will only enhance our position even further. With that, I think that's our last slide, so I'll turn it back over to Anya maybe to open up for questions.
Okay. Yes. Thank you. That was a great overview. For the audience, if you have a question, you can submit it in the Q&A function at the bottom of your screen. We have a few questions here already populated. I'm going to start with the one about the semiconductor. I have a question here, why it's not on fire, and where are you more exposed to the CPU and not the GPU?
Yeah, it's a good question. I think the short answer is the semiconductor market is on fire. It's on fire in the front end. We are a testing company in the semi space, so we play more in the back end test space, which is usually trailing anywhere from six-12 months from the front end. That's why we're cautiously optimistic about the future. We're seeing signs of our funnel strengthening in that space. We are definitely optimistic about what's to come because the front end is very hot right now, and usually that's followed by the test market. Where do we play? We're actually more in the mixed-signal space than either the CPU or the GPU. That's again a market that's seeming to get some life back to it.
In the CPU and the GPU market, it's really on the leading edge areas that we're going to see the most growth for us, I believe, which is related to high power, thermal controls, et cetera, as those devices get more powerful.
Okay. Did you mention you've been growing that business? When it does come back, it will be more impactful. You should generate more revenue than when the last top cycle.
Yeah. Duncan probably may have the numbers, but I think as a 30% of the business is a growing number of a larger business, right? It's not something that we're shying away from. I don't want to leave that impression that because our diversification has reduced the percentage reliance on semis means that we're not interested in semis. No, we're absolutely interested in semis and want to continue to play in that space and grow in that space.
Okay, thank you. I'm sorry.
I was just going to add, I think there have been some new product introductions, some penetrations at customers and things like that, which would lead us to believe we can bring the back end semi piece of our business in particular can be as strong as it has been at peaks in the past. There are other parts of our business, our induction heating business that played more in the front end that benefited from some particular strength in the silicon carbide space, in particular a couple of years ago, that perhaps doesn't come back as strong as we saw a couple of years ago.
I think for our back end test business, I think we're well-positioned as, and again, the analog mixed-signal industrial auto space, which is on the slower side of the recovery process that we're seeing here, is where we really benefit. We are starting to see the kind of green shoots of that coming back.
Okay. Thank you. Another question here. What do you think will be the key drivers for generating more revenue within your current customer base?
I think there is again, focusing on our innovation and getting more engaged with our customers than we even are today in their needs. Becoming part of basically their engineering and R&D solutions. Continuing to get more intimate with them on those processes so that we can provide the solutions they need in the time that they need them, and help enable them. That's the big focus. It's not that we don't do it today, but we want to continue to improve and grow in that space.
How much opportunity do you have to expand with your current customers, and how dependent are you on adding new logos for growth?
Well, that's a good question. I think, with the stable of logos that we have, we have opportunities to certainly grow and expand probably significant enough more so than even adding new customers. Obviously we're going to continue on both fronts with that. Again, finding a way to get more engaged with our existing customers and expanding our, I'll call it our wallet share of their business, is more important to me and even than in growing new logos as we do have shown we have quite a few significant logos on that.
Okay. Can you just talk about capacity utilization and sort of the margin impact?
Yeah. From a capacity standpoint, we certainly can deliver considerably more revenue than we do today with our existing footprint. We have done in the past, in effect, from a volume perspective. Q1 of last year, as I mentioned, revenues were a lot lower. We can add significant top line without having to add footprint and add cost. The contribution benefit is there. I'm not going to throw out a specific number, but there's a fair amount of runway for us to grow that top line without having to add significant fixed cost base.
Okay. Thank you. We have a lot of questions here regarding the semi-cap market. There was someone who asked, could you expand more on the CFO's comment about the new products that are relevant to the semi front end?
The semi front end. Yeah. As Duncan mentioned as an example, our induction heating systems provide abilities for epi growth and even wafer boule growth for silicon carbide, gallium nitride, indium phosphide, sort of all of the III-V type materials where the demand is for much higher temperature and much more stable growth than maybe standard silicon. That's one area that we continue to evolve our products in. As Duncan said, I don't think it will come back to the level it was several years ago. It's more of a capacity issue and technology as it changes, but we do see signs of life of things recovering there. On the high-end GPU, CPU, high-power device side of things, a multitude of different things happen for us that continue to grow.
Everything from testing capabilities where the power requirements require our systems to be modified to handle the high power, high current, high temperatures, et cetera, is driving that technology there. The second piece would be in the temperature range and as the heat generation and management of heat generation is required, our thermal business is heavily involved there. Testing of all this, the complexities of single devices that get more complex to test, but also the integration of those devices and heterogeneous integration of multiple chip layers versus multiple chips, et cetera. Those test requirements become more and more complex, which require our in-circuit testing and our functional testing groups to improve. All of that is driving our innovation and driving our expansion capabilities.
Okay, thank you. I'm going to squeeze in one last question here. Are there any specific markets that you're most excited about the underlying growth prospects?
Yeah, that's a good question. I think our traditional markets of semi, mil-aero, and auto are exciting, and there's a lot of good growth opportunities there for us to expand not only our current products but future products development. I think an area that is maybe exciting that is opening up to us a little more as we go forward is the life sciences market. Specifically our example of our glucometer testing that we announced last year is opening up things that we haven't necessarily been exposed to before and has some good opportunities for the future.
Okay. Sounds exciting. With that, we're actually out of time, I'm going to hand it over to you guys for some closing remarks before we close it off. I also know you have a pretty full one-on-one schedule, if there's anyone in the audience who would like to catch up with you after this presentation, I'm sure we can fit you in somehow. You can reach out to us at Sidoti or the management team directly. With that, I'll hand it over to you for some closing remarks.
Yeah. Thank you, Anya. I appreciate everyone joining us today and spending some time of your morning with us. I look forward to meeting many of you over the next 24 hours or so. I think it's exciting times for inTEST. I look forward to the future growth that we can provide, and if there's any questions or things, feel free to always reach out to us or our IR people. We'd be happy to have a conversation with you. Thank you.
Great. Thank you. Thank you, everyone.