inTEST (INTT) 2026年第3四半期決算説明会：過去最高の受注高と2027年の受注残高

主なポイント

• 2026年第3四半期の売上高は前年同期比34%増の3,510万ドルとなり、経営陣のガイダンス予想レンジの上限に達した。
• 受注額は前年同期比31%増の4,940万ドルと過去最高を記録し、四半期売上高を41%上回った。受注残高は6月から32%増の5,970万ドルと過去最高に達し、その約60%が2027年に出荷される見込みである。
• 半導体後工程の受注額は前年同期の約4倍となる2,390万ドルと過去最高を記録した。半導体全体の受注額は前四半期比で2倍以上の2,510万ドルに達した。
• 売上総利益率は、主に良好な製品構成を背景に、前四半期比で720ベーシスポイント、前年同期比で580ベーシスポイント上昇し、47.7%に拡大した。
• 純利益は190万ドル（希薄化後1株当たり利益0.15ドル）へと改善し、調整後EBITDAは440万ドルに増加、調整後EBITDAマージンは12.6%となった。
• 経営陣は第4四半期の売上高を3,400万〜3,600万ドル、売上総利益率を約45%と予想している。同社は、過去最高の受注残高が2027年の堅調なスタートを支えていると述べた。

主要財務データ

事業および営業の業績動向

半導体需要が受注の主な牽引役となった。半導体全体の受注額は2,510万ドルに達し、そのほぼ全額を後工程テストが占めた。経営陣は、電力変換機器や通信機器向けの需要に一部支えられ、ミックスドシグナル、アナログ、高出力パワー半導体の顧客による生産能力増強が進んだことを要因に挙げた。

同社によると、一部の半導体顧客においてパッケージングや完成デバイスのテストが制約となっている。テスターのリードタイムが長期化し、場合によっては18カ月に達することもあるため、顧客はinTESTのマニピュレーターやドッキングハードウェア、インターフェースをより前もって発注するようになっている。

2024年と2025年にEVの勢いが鈍化した後、新型車の投入が通常のスケジュールに戻りつつあることから、自動車・EV向けの受注額は前四半期比で2倍以上の940万ドルに急増した。大手自動車メーカーからinTESTの機能テストシステムを初めて受注したほか、EV関連の顧客に対してバッテリーテストシステムをさらに2台出荷した。

防衛・航空宇宙向けの受注額は、新規顧客の獲得と誘導加熱システムの受注が2四半期連続で成長したことに支えられ、第2四半期比で43%増加した。産業向け受注は前四半期比9%増となり、これには同製品ラインを追加して以来、インサーキットテストシステムとしては最大規模となる産業用受注が含まれている。

経営陣はまた、inTESTが買収した各事業を統合プラットフォームとして運営することに取り組んでおり、商業機会の獲得、コストシナジー、製造効率の向上、部門間での研究開発（R&D）の共有推進を目指している。

経営陣のガイダンス

2026年第4四半期について、経営陣は以下の見通しを示した。

• 売上高：3,400万〜3,600万ドル。
• 売上総利益率：約45%。
• 営業費用：1,420万〜1,470万ドル。
• 営業費用に含まれる無形資産償却費：50万ドル。

この見通しには、潜在的な買収や事業再編、事業再編関連費用は含まれていない。また、年末までのマクロ経済環境に対する経営陣の見解が変わらないことを前提としている。

第3四半期の製品構成が特に良好であったため、経営陣は第4四半期の売上総利益率が第3四半期から幾分低下すると予想している。費用については、inTESTが空席となっている幹部ポストの採用を進め、2027年に向けた計画を開始することから、小幅に増加する見込みである。

同社によると、過去最高の受注残高の約60%が2027年に出荷される予定であり、第3四半期の半導体受注は主に同年前半に売上高へ転換される見通しである。2027年通期のガイダンスは第4四半期決算発表時に公表される予定である。

リスクと注視点

• サプライチェーンのリードタイムが長期化している。経営陣は、現在特に深刻な供給制約は見られないものの、特定の部品について在庫や運転資本への投資を増やす可能性があると述べている。
• 製品構成は依然として利益率の重要な変動要因である。一般的に半導体前工程製品は、後工程製品群に比べて利益率が低い。
• 経営陣は半導体前工程の回復は初期段階にあると説明し、3〜4年前に記録した水準までは戻らない可能性があると警戒感を示した。
• 税率の高い法域で創出される利益の割合が高まっているため、第2四半期に計上された一時的な税務上の利益を含め、通期の予想実効税率は約20%に上昇した。
• 2027年初頭にかけて半導体のモメンタムは力強く推移するとみられるものの、経営陣はその後の市場動向を判断することは依然として困難であると述べた。

アナリスト質疑応答の主なポイント

経営陣は、半導体の好調維持に加え、自動車・EVおよび防衛市場での前向きな動きにより、第4四半期の受注構成は第3四半期と比較的類似した水準を維持するとの見通しを示した。第3四半期の記録的な受注にもかかわらず、第4四半期入りの商談パイプラインは第3四半期初めの水準とほぼ同等であった。

機能テストについて、経営陣は自動車・EV向けが事業の大半を占め続けていると述べた。自動車・EV以外でも初期の受注を獲得しているものの、産業向けやその他の最終市場への展開はまだ初期段階にある。

半導体前工程の事業活動は改善しているが、経営陣はその回復を初期的なものと位置づけている。稼働率は上昇しているものの、前工程製品は他の装置メーカー向けに販売されることが多いため、利益率は通常、半導体後工程装置を下回る。

防衛・航空宇宙の需要は、プリント基板（PCB）検査用フライングプローブシステム、誘導加熱装置、プロセスチラー、特定のカメラ製品など、inTESTの複数の事業に及んでいる。サービス売上高は四半期売上高の14%強を占め、同社の通常の水準と概ね一致した。

決算説明会トランスクリプト全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Greetings. Welcome to inTEST Corporation's third quarter 2026 Financial Results Conference Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to Sanjay Hurry, Investor Relations. Thank you, and you may begin.

Unknown Speaker

Good morning, everyone, and thank you for joining us. With me on the call are Rich Rogoff, President and Chief Executive Officer, and Duncan Gilmour, Chief Financial Officer and Treasurer.

Our earnings press release was issued this morning, as well as the slides that management will reference during today's call. Both can be found in the Investor Relations section of the intest.com website. Please refer to Slide 2 for a review of the Safe Harbor statement.

During this call, management may make some forward-looking statements about their current plans, beliefs, and expectations. These statements apply to future events that are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from what is stated here today. These risks, uncertainties, and other factors are detailed in the earnings press release, as well as in other documents filed by the company with the Securities and Exchange Commission. These documents can be found on the inTEST website or on SEC.gov.

Also, as covered on Slide 3, management will refer to some non-GAAP financial measures. We believe these will be useful in evaluating the company's performance. However, you should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. You can find reconciliations of non-GAAP measures with comparable GAAP measures in the tables that accompany today's release and slides.

With that said, I will now turn the call over to our first speaker, Rich Rogoff, President and CEO. Please go ahead, Rich.

Unknown Speaker

Thank you, Sanjay. Good morning, everyone. On today's call, I will review our third quarter performance, including the record orders we pre-announced on October 5. Duncan will then take you through the financial results and our outlook for the fourth quarter. I will come back to discuss how we are positioning inTEST for 2027 before we open the call to questions.

To begin with, the semiconductor demand we told you to expect arrived in the third quarter. Let me frame our performance around 2 points.

First, demand is here and it extends into 2027. Orders were a record at $49.4 million, exceeding our revenue by 41%, and up 31% from a year ago. The driver was a record $23.9 million in back-end semiconductor orders, nearly 4x the level of a year ago. Non-semi orders of $24.3 million rose 44% from the second quarter. Year over year, they were lower than a strong prior year quarter that was driven by auto EV. Backlog at quarter end was also a record at $59.7 million, up 32% since June, and approximately 60% of it is expected to ship in 2027.

Second, we continue to grow. Revenue of $35.1 million came in at the high end of our guidance range, up 34% from $26.2 million a year ago. This was our third consecutive quarter of year-over-year growth above 25%. Gross margin of 47.7% was above our guidance and driven by favorable mix.

Turning to Slide 5, total semi orders were $25.1 million, representing about half of the quarter's total orders and more than double the Q2 level. Back-end tests accounted for almost all the semi orders. Customers in the mixed signal, analog, and high-power device markets are adding back-end test capacity, fueled in part by the demand for power conversion and communications devices. Our newer products played a meaningful role in capturing those orders.

What semi customers tell us is that the constraint has moved from building wafers to packaging and testing finished devices fast enough. Every tester they add needs a manipulator, docking hardware, and interface. Beyond total orders, the quarter showed the breadth of our semi momentum. We grew with existing customers and added new ones. We were selected for new test sites at existing customers, received the first order from a customer that had not purchased from us in a decade, added a data storage customer serving the data center market, and received an order for our high-voltage interface hardware, ordered for a customer's evaluation of a new silicon carbide wafer test platform.

Customers are also ordering further ahead of need than they used to. Testers often carry lead times of 18 months, so customers are placing orders for our accompanying equipment well ahead of the delivery. This gives us better visibility than we typically have.

Outside of semi, auto EV orders of $9.4 million more than doubled Q2's level as new model releases get back to a normal schedule after a slowdown in the EV momentum from 2024 through 2025. Year-over-year auto EV orders were lower against an exceptionally strong third quarter of 2025. However, we view this sequential improvement as encouraging.

In Q3, a major automaker placed its first order for our functional test systems, which will be used to test power management systems. We also received repeat orders from existing functional test customers and shipped 2 more battery test systems to an EV customer.

In defense aerospace, orders grew 43% compared to Q2. We added new aerospace and defense customers, and orders for induction heating systems from this market rose for a second consecutive quarter.

In industrials, orders were up 9% sequentially. A customer placed the largest industrial order we have received for our in-circuit test systems since adding this product line to our portfolio.

Here's what this means for the next several quarters. First, stronger orders give us an improved visibility over the next 2 to 3 quarters. Second, the sales funnels refilled. Even after capturing record orders in Q3, our funnel as we entered Q4 was roughly comparable to the start of Q3. Our opportunity set is intact, giving us confidence and continued order momentum in Q4.

Third, technology wins are opening new doors. As customers and new end markets wrestle with how to design, test, and deliver high-power and energy conversion products, it increasingly means we get the call for our solutions to their toughest challenges. We are excited to see our technologies and expertise in handling heat become more critically valued in so many new applications. Today's engagement on customers' toughest challenges becomes tomorrow's funnel opportunity and, in time, tomorrow's orders.

Together, these factors position us to close 2026 at the high end of our revenue guidance and gives us a solid start to 2027.

One note on our supply chain. As we noted on our release, lead times are expanding. Our supply chain and engineering teams are adapting accordingly and are managing the situation.

With that, I will turn it over to Duncan. Duncan?

Duncan Gilmour

Thank you, Rich. Starting on Slide 6, on a sequential basis, revenue in Q3 was essentially flat, down $0.2 million from $35.3 million in Q2 to $35.1 million. Higher defense aerospace, semi, industrial, and other revenue largely offset a $6.8 million decline in auto EV following Q2's shipment of high-revenue, lower-margin auto EV projects from backlog. Defense aerospace increased $3.6 million, semi increased $2.5 million, industrial contributed $0.8 million, and other contributed $0.7 million. Partially offsetting these gains, in addition to the auto EV decline, was a $0.8 million decrease in life sciences.

Compared to Q3 2025, revenue increased $8.8 million or 34% from $26.2 million. The net increase was driven by defense aerospace, which more than tripled on higher program activity, together with growth in auto EV, semi, and industrial. Together, these 4 markets contributed $9.9 million of growth, which more than absorbed declines in life sciences and safety security.

Turning to Slide 7, Q3 gross profit was $16.7 million, up 52% year over year, and gross margin was 47.7%. Sequentially, gross margin expanded by 720 basis points from 40.5%, reflecting a large positive shift in product mix. Compared with the prior year period, gross margin increased 580 basis points from 41.9%, reflecting the same positive shift in mix.

Moving on to Slide 8, operating expenses for the third quarter were $14 million, up $0.1 million sequentially, as higher general administrative expenses were largely offset by lower amortization of intangibles. On a year-over-year basis, we generated $8.8 million of incremental revenue while absorbing only $1.8 million of incremental operating expenses. This reduced operating expenses as a percentage of revenue to 39.9% from 46.4% in the prior year period.

The $1.8 million or 14.8% increase reflects higher selling, general administrative, and engineering expenses, primarily higher payroll and payroll-related costs and higher commissions associated with higher volume, partially offset by lower amortization and restructuring costs.

Slides 9 and 10 collectively measure our profitability. On Slide 9, net margin expanded by 400 basis points sequentially and 890 basis points year over year to 5.3%. And adjusted EBITDA margin expanded by 640 basis points sequentially and over 1,000 basis points year over year to 12.6%.

For Q3, net earnings were $1.9 million compared with $0.5 million in the second quarter and a net loss of $0.9 million in Q3 2025. Adjusted EBITDA was $4.4 million, up from $2.2 million in the second quarter and $0.4 million in Q3 2025.

On Slide 10, net earnings were $0.15 per diluted share compared with a net loss of $0.08 per diluted share in the prior year period. Adjusted EPS, which adds back tax-affected acquired intangible amortization and restructuring charges, was $0.18 per diluted share, compared with an adjusted net loss of $0.02 per diluted share in Q3 2025.

One item to note, since it affected per share results this quarter, is on the tax line. Our effective tax rate in Q3 was approximately 30%. This brings our year-to-date tax rate up to an increased expected full-year rate of approximately 20%, including the discrete benefit recorded in Q2. The higher expected rate is driven by a higher proportion of profitability being generated in our higher-tax jurisdictions.

Slide 11 shows our capital structure and cash flow. We ended Q3 with cash and cash equivalents of $20.9 million, a decline of $1.2 million from the end of Q2. Operating activities used $0.3 million of cash in the quarter. Net earnings and non-cash charges contributed approximately $4.4 million, which was more than offset by a $3.6 million increase in accounts receivable and a $1 million reduction in customer deposits and deferred revenue.

After $0.4 million of capital expenditures, free cash flow was negative $0.6 million. We also reduced the term debt by $1 million during the quarter.

At September 30, 2026, we had approximately $61 million in total liquidity, including $20.9 million of cash and equivalents and $40 million of available borrowing capacity, consisting of $30 million under our delayed draw term loan facility and the full $10 million under our undrawn revolving credit facility.

On August 14, we amended the facility to extend our ability to draw on the term note through August 28, 2028. Total debt was $5.5 million and our leverage ratio was 0.5x trailing 12-month adjusted EBITDA. We were in compliance with all covenants at quarter end.

Turning to Slide 12 and our financial guidance. Q3 came in at or better than our August guidance on revenue, gross margin, and operating expenses. Our Q4 guidance maintains that steady incremental progression with 2 factors to keep in mind. First, Q3's product mix was particularly favorable. Second, we expect some modest expense increases in Q4 as well as we fill open leadership positions and start planning for 2027.

Looking beyond Q4, we are positioned for a solid start to 2027. Our record backlog, roughly 60% of which ships in 2027, together with Q3 semiconductor orders converting largely in the first half, supports that outlook. We will provide full-year 2027 guidance with our fourth quarter results, as is our practice.

For Q4, we project revenue of $34 million to $36 million, gross margin of approximately 45%, operating expenses of $14.2 million to $14.7 million, and within operating expenses, amortization of $0.5 million.

This guidance excludes any potential acquisitions and restructuring and restructuring-related costs and assumes our view of macroeconomic conditions remains unchanged through the end of the year.

One housekeeping note, after the market closes today, we intend to file our Form 10-Q. We will also file a Form S-3 to refresh our existing shelf registration before it expires.

Now, if you turn to Slide 13, I will turn the call back over to Rich. Rich?

Unknown Speaker

Yes. Thanks, Duncan. Before we open the call to questions, I want to walk you through how electronification connects our end markets, how it is shaping our R&D and our new product priorities, and how it is creating new opportunities for inTEST.

Electronification is making customer testing more complex and essential, which is increasing demand for our solutions. Our portfolio is positioned well to meet these changing needs.

In semi, our advanced manipulators and high-power chillers address customers' growing power and thermal and testing requirements. The same trend is reshaping our flying probe business. These systems were originally built to check circuit board continuity and perform basic probing, but now they must meet more demanding test requirements as customers add electronics to their products. Battery testing is a clear example as it requires longer, more complex routines than flying probe systems have traditionally run.

We are expanding these systems from single-purpose testers into broader test platforms. Each new application adds test content per system, increasing the value for both the customers and to inTEST.

Our functional test systems are following a similar path. First developed for auto EV, they now also serve other end markets. Our teams are also working more closely to win customers. As an example, in Q3, an industrial customer for an in-circuit test system placed a separate order for one of our functional test systems.

In European markets where new regulations are restricting the usage of certain refrigerants, we will launch a first-of-a-kind new product next week that conforms to the new legislation that we believe equals or exceeds the performance of its predecessor.

Collaboration like this helps us grow revenue, but that's only half the job. The other half is making sure more of that growth reaches the bottom line consistently and through the cycle.

On my first call as CEO, I stated I would develop an operational plan for inTEST and share it with you. In our Q2 call, I outlined where I was focused and that work is well underway.

Over the past 2 quarters, I have examined the business through 5 lenses: our product levers that drive profitability, including product cost, mix, and supply chain; how efficiently we deploy our operating expenses; how we optimize our manufacturing footprint; how we can share R&D more effectively across our divisions.

Over that time, I have visited our facilities, met with our teams, and worked with my direct reports to develop detailed actions.

inTEST has grown through acquisitions, and our businesses have largely been run and managed separately. inTEST's next phase is to operate our business as a coordinated platform, capturing commercial opportunities, cost synergies, and a sharing of ideas.

To help execute this plan, Scott Taylor joined inTEST on October 1 as Vice President and General Manager of ITS, reporting to me. Scott brings more than 20 years of multi-site P&L responsibility, including leading North American operations of a thermal management manufacturer and a deep background in lean manufacturing and operational excellence. He will help ensure we deliver on the plan.

The plan is as much about where we direct our dollars as it is about where we take them out. As we plan for 2027, we will put our spending where it earns the best return. In our operations, that means continued efficiency gains. In our product, it means a disciplined engineering spend because the demands our customers are bringing us, such as the test applications I described a moment ago, make that the best investment inTEST can make.

To summarize, as we see it today, we are entering 2027 with a promising momentum and with our operational plan aimed squarely at profitability, efficiency, and inTEST's long-term success.

With that, operator, please open the call to questions.

Operator

[Operator Instructions] Our first question is from Max Michaelis with Lake Street Capital Markets. Please proceed.

質疑応答

Maxwell Michaelis

Hey guys, congrats on the quarter. First one for me, if we look at the Q3 order book, obviously really solid. Sounds like that funnel's filled back up for Q4. I assume semi's a big part of that, but I'll let you answer it for me. Is the mix going to be relatively similar in terms of order or the order book for Q4 as we saw in Q3?

Unknown Speaker

Yes, thanks Max. Good to speak with you. Certainly semi is maintaining strength, but as noted, we're pretty positive about the activities in the other markets like auto EV and military as well.

Duncan Gilmour

Right. So I would just add Max, in terms of the mix, similar mix. Our guide does take margin down a little bit, as you probably saw. So we do see some small shifts to drive that, but certainly relatively positive mix there.

Maxwell Michaelis

Versus the way we were, for example, in Q2? Yes, and the Q4 gross margin guide makes sense. I mean, just given your commentary around Q3 orders from semi largely converting in Q3, first half of '27, but I'm curious to know, a lot of these guys are ordering ahead of time. I mean, conversations you're having with your customers going into 2027 is, what we saw in Q3 and Q4, was that largely pull-forwards from these customers, or do you expect to see that order book continue to see solid strength heading into the first few quarters of 2027?

Unknown Speaker

Certainly, we'll guide to 2027 later, but the momentum seems pretty strong right now. I think it's hard to tell what the market's going to do, but we do see strength in semi for sure, seemingly to go into the early part of 2027 at least.

Maxwell Michaelis

All right, guys. Thanks for taking my questions.

Operator

Our next question is from Ted Jackson with Northland Securities. Please proceed.

Edward Jackson

Again, congrats on the quarter. It's nice to see everything turning and business humming. So I want to touch base on supply chain. You know you've made a comment with regards to increased lead times. It's not the first company I've listened to this cycle make those types of observations. And so I guess what I wanted to dig into on this was, where are those pinch points? What kind of materials? How should we think about that? As we think about your working capital, really kind of, let's call it the coming 6, 12 months or whatever you want to put to it. I mean, I'd assume a lot of companies are actually taking inventory up relative to kind of historic norms because of these kind of issues and just kind of building more of a buffer. Is any of that kind of effort being driven by your customer base? That's kind of my first topic.

Duncan Gilmour

Yes, let me take that, Ted. So I don't think we're seeing any unusual supply chain challenges with large bumps in demand that we're obviously seeing. There's going to be some, and there certainly are bits and pieces, as we would typically expect. But that's part and parcel of managing the ups and downs of the business.

So nothing that we can't... We do manage it in some cases a little bit more investment in working capital and inventory, depending on the pieces and parts, but there's nothing out of the ordinary today. There's always battles, but nothing particularly unusual that we're highlighting.

Edward Jackson

And then, I almost said it was in my head, now I just went back out. Let's talk about Alfamation. You commented on this a little bit in the past that you had an air pocket with sort of the restructuring, if you would, of vehicle manufacturing and the shift off of EVs and reposition themselves and you're now starting to see some strength in there and you also have talked about your efforts to and success in extending the markets that some of those solutions go beyond auto and EV.

When you look into the opportunity funnel in front of you and maybe even the orders that you booked in the third quarter, can you provide some color with regards to the mix between auto EV and other markets and kind of how that's changed in the last 12 months?

Unknown Speaker

Yes, sure, Ted. So I would say generally, the majority is still in the auto EV space. That's certainly their strength. And as that market seems to be settling back into its normal cycles, we're seeing our continued strength in there, but as we mentioned, we had industrial customers and some other customers outside of the space looking at our functional test systems.

We've had some continued wins. I would say it's early phase of growing that market. It's building our name in that market and growing for the products and getting some of those wins that will drive the future of the growth in those spaces.

Edward Jackson

Okay, and then my last question, I just wanted to touch over on semi, on the front end. You know, the back end turn, you're feeling really good about where you stand. You had good order momentum in this quarter. You think it's going to continue at least into the first half of 2027. You know, those cycles can be 12, 18 months long. So you've got a good runway there.

What's going on on the front-end side? What are you seeing in terms of activity, pipeline opportunity, sort of the next leg, if you would, that might lift that segment higher as much?

Unknown Speaker

Yes, I think, as we've mentioned before, there's some signs of life activity growing in that space. I would say it's maybe a bit more active than it was a month ago when we pre-announced our orders. But it's still early stages in my opinion.

I think as we go forward, we're certainly hoping that that market comes back again. I'll caution, I don't think it's going to come back to what it did 3 or 4 years ago. But the capacity seems to be being utilized, and that's a good sign. The activity level is certainly picking up, and we're going to stay on top of that.

Edward Jackson

And then is that a margin structure similar to the back end or how would you compare it?

Duncan Gilmour

Yes, margin-wise, it's typically not quite as good. Those product lines, quite often we're selling to other manufacturers of equipment. So generally, the margins aren't quite as high as the back-end semi space that we've touted as being generally our highest margin product lines.

Edward Jackson

Okay. All right. Hey, thanks for taking the questions. Congrats. Thanks, Duncan.

Operator

[Operator Instructions] Our next question is from Dick Ryan with Oak Ridge Financial. Please proceed.

Richard Ryan

Thank you. Say, Rich, question on the defense side. In the slide deck, you said the induction heating had 2 quarters now of business there. How are your divisions hitting the defense cycle, or the defense industry? I mean, it's good to see that Embraer is participating in that, but how else are you hitting the defense side?

Unknown Speaker

It's a good question, Dick, thanks. Many of our businesses, I would say almost all of them, with the exception of maybe our EMS business, which is, you know, almost exclusively semi, all participate in the defense cycle to some degree with varying, you know, mostly with the prime contractors. We don't directly go to the government very often, but usually through the big prime contractors.

Duncan Gilmour

Yes, I mean, I can add a little bit as well. We do sell across our business units there, Dick. The in-circuit flying probe testers are used for PCB type testing across a number of primes and so forth. The induction heating equipment we reference in manufacturing processes. The environmental business with process chillers, for example, does some significant business with, again, a number of the larger primes. And Videology as well. Some of the cameras, we have some small lines there that are also going into that space. So it really cuts across the business.

Richard Ryan

That's good to see. One of the goals, obviously, say, Duncan, on the service side, I don't know if I caught what service represented in the quarter. What's your thoughts on that?

Duncan Gilmour

Yes, service is running just over 14%, which is a fairly typical number for us. You know, that percentage drops sometimes as revenues increase. The dollar is fairly stable, but we've been running reasonably stable numbers there in our service business.

Richard Ryan

Okay, thank you and congratulations on the quarter.

Duncan Gilmour

Thanks.

Operator

There are no further questions at this time. I would like to turn the conference back over to Rich for closing remarks.

Unknown Speaker

Thank you, operator, and thank you all for joining us. Demand has arrived. It is in our expanding backlog, and we are executing on our operational plan to convert it consistently.

Please reach out to our Investor Relations team to coordinate our continued dialogue. On Slide 14, please note the details regarding the replay of this call, as well as our upcoming investor event schedule. We hope to see you at one of the conferences we will be attending.

Thank you again for participating today, and have a great day.

Operator

Thank you. This concludes today's conference. Thank you for participating. You may disconnect at this time.

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