Interlink Swings to Profit on Strong Q2 Revenue Growth

TL;DR

**LINK's Q2 profit turnaround is a green shoot, but sustained profitability is still a long-term play.**

AI Summary

INTERLINK ELECTRONICS INC (LINK) reported a net income of $100,000 for the three months ended June 30, 2025, a significant improvement from a net loss of $307,000 in the prior-year quarter. Revenue increased by 17.8% to $3.414 million for the quarter, up from $2.898 million in Q2 2024. However, for the six months ended June 30, 2025, the company posted a net loss of $705,000, though this was an improvement from a $1.048 million net loss in the same period last year. Total assets decreased to $12.510 million as of June 30, 2025, from $13.116 million at December 31, 2024, primarily due to a reduction in cash and cash equivalents by $621,000 to $2.329 million. Operating expenses decreased by 9% to $1.472 million for the quarter, contributing to the improved operating income of $66,000 compared to an operating loss of $313,000 in Q2 2024. The company continues to invest in R&D, with expenses at $797,000 for the six months ended June 30, 2025, down from $1.086 million in the prior year, reflecting a strategic adjustment in development activities.

Why It Matters

This filing shows INTERLINK ELECTRONICS (LINK) is making strides towards profitability, with a positive net income in Q2 2025, which could signal a turning point for investors. The revenue growth of 17.8% in the quarter, driven by product sales, suggests increasing demand for their HMI and IoT sensor solutions, potentially strengthening their competitive position against rivals in the sensor market. For employees, improved financial performance could lead to greater job security and potential for growth. Customers benefit from a more stable supplier, while the broader market sees a small but growing player in the critical sensor technology space.

Risk Assessment

Risk Level: medium — The company reported a net loss of $705,000 for the six months ended June 30, 2025, and cash and cash equivalents decreased by $621,000 to $2.329 million. While Q2 2025 showed a net income, the overall year-to-date loss and declining cash position indicate ongoing financial challenges and a reliance on future revenue growth to achieve sustained profitability.

Analyst Insight

Investors should monitor LINK's next few quarters closely for continued revenue growth and a sustained trend towards profitability, especially in net income and cash flow from operations. Consider this a speculative 'watch list' stock rather than an immediate buy, given the mixed year-to-date results and declining cash balance.

Financial Highlights

debt To Equity

0.25

revenue

$3.414M

operating Margin

1.9%

total Assets

$12.510M

total Debt

$2.471M

net Income

$100K

eps

$0.00

gross Margin

45.0%

cash Position

$2.329M

revenue Growth

+17.8%

Key Numbers

• $100K — Net Income (Q2 2025) (Swung from a $307K loss in Q2 2024, indicating improved quarterly performance.)
• $3.41M — Revenue (Q2 2025) (Increased 17.8% from $2.898M in Q2 2024, showing strong top-line growth.)
• -$705K — Net Loss (YTD June 30, 2025) (Improved from a -$1.048M loss in the prior year, but still negative year-to-date.)
• $2.329M — Cash and Cash Equivalents (Decreased by $621K from December 31, 2024, highlighting cash burn.)
• $66K — Income from Operations (Q2 2025) (Positive, compared to a -$313K loss in Q2 2024, driven by revenue growth and expense control.)
• 17.8% — Q2 Revenue Growth (Percentage increase in revenue from Q2 2024 to Q2 2025.)
• $797K — R&D Expenses (YTD June 30, 2025) (Reduced from $1.086M in prior year, indicating a shift in R&D strategy or efficiency.)
• $12.51M — Total Assets (Decreased from $13.116M at December 31, 2024, reflecting asset utilization or divestment.)

Key Players & Entities

• INTERLINK ELECTRONICS INC (company) — Registrant
• $100,000 (dollar_amount) — Net income for Q2 2025
• $307,000 (dollar_amount) — Net loss for Q2 2024
• $3.414 million (dollar_amount) — Revenue for Q2 2025
• $2.898 million (dollar_amount) — Revenue for Q2 2024
• $705,000 (dollar_amount) — Net loss for six months ended June 30, 2025
• $1.048 million (dollar_amount) — Net loss for six months ended June 30, 2024
• $621,000 (dollar_amount) — Decrease in cash and cash equivalents
• $2.329 million (dollar_amount) — Cash and cash equivalents at June 30, 2025
• Nasdaq Stock Market LLC (regulator) — Exchange where common stock is registered

FAQ

Risk Factors

• Cash Burn and Liquidity Concerns [medium — financial]: The company's cash and cash equivalents decreased by $621,000 to $2.329 million as of June 30, 2025. While the company reported net income for the quarter, the year-to-date net loss of $705,000 indicates ongoing cash consumption. This reduction in cash reserves could impact the company's ability to fund operations and future investments.
• Dependence on Key Products/Technologies [medium — operational]: While not explicitly detailed in this excerpt, companies in the electronics sector often rely on specific product lines or technological innovations. A downturn in demand for these core offerings or failure to innovate could significantly impact revenue and profitability.
• Competitive Market Landscape [medium — market]: The electronics industry is highly competitive, with rapid technological advancements and price pressures. Interlink Electronics Inc. faces competition from numerous players, which could affect market share and pricing power.
• Accumulated Deficit [high — financial]: The company has an accumulated deficit of $52.752 million as of June 30, 2025. This indicates a history of net losses, which could raise concerns about long-term financial sustainability and the ability to achieve consistent profitability.
• Supply Chain Disruptions [medium — operational]: As an electronics manufacturer, the company is susceptible to disruptions in its supply chain, which could impact production schedules, costs, and the ability to meet customer demand. Global events or specific supplier issues can exacerbate this risk.

Industry Context

Interlink Electronics Inc. operates in the highly competitive electronics sector, characterized by rapid technological advancements and evolving consumer demands. The industry requires continuous innovation and efficient manufacturing to maintain market share and profitability. Companies often face challenges related to supply chain management, component costs, and the need to adapt to new technologies.

Regulatory Implications

As a publicly traded company, Interlink Electronics Inc. must comply with SEC regulations and accounting standards. Any misstatements or failures in financial reporting could lead to regulatory scrutiny and penalties. The company's disclosures on market risk and risk factors are crucial for investor protection and regulatory compliance.

What Investors Should Do

1. Monitor cash flow and liquidity closely.
2. Analyze the sustainability of the quarterly revenue growth.
3. Evaluate the strategic shift in R&D spending.
4. Assess the impact of the accumulated deficit on future growth.

Key Dates

• 2025-06-30: End of Second Quarter 2025 — Reported net income of $100,000 and revenue of $3.414 million, showing quarterly improvement.
• 2025-06-30: End of First Half 2025 — Reported a net loss of $705,000, an improvement from the prior year, but still indicating year-to-date losses.
• 2024-06-30: End of Second Quarter 2024 — Reported a net loss of $307,000 and revenue of $2.898 million, providing a basis for year-over-year comparison.

Glossary

Accumulated deficit

The total net losses of a company since its inception that have not been offset by net income. (Indicates the company's historical profitability and cumulative losses, standing at $52.752 million as of June 30, 2025.)

Right-of-use assets

Assets representing a lessee's right to use an underlying asset for the lease term, recognized under ASC 842. (These assets, valued at $931,000 as of June 30, 2025, reflect the company's lease obligations for property and equipment.)

Goodwill

An intangible asset that arises when a company acquires another company for a price greater than the fair value of its net assets. (Represents a significant intangible asset of $2.626 million as of June 30, 2025, likely from past acquisitions.)

Net income (loss) applicable to common stockholders

The portion of net income or loss available to common shareholders after accounting for preferred stock dividends or other adjustments. (Shows the net result for common shareholders, which was a loss of $905,000 for the six months ended June 30, 2025.)

Earnings (loss) per common share – basic and diluted

The net income or loss attributable to each outstanding share of common stock. (Indicates the profitability on a per-share basis for common stockholders, reported as a loss of $0.09 for the six months ended June 30, 2025.)

Year-Over-Year Comparison

Compared to the prior year, Interlink Electronics Inc. has shown significant improvement in quarterly performance, with net income swinging from a $307,000 loss to a $100,000 gain in Q2 2025, driven by a 17.8% revenue increase to $3.414 million and a 9% reduction in operating expenses. However, the year-to-date results still show a net loss of $705,000, albeit an improvement from $1.048 million in the same period last year. Total assets have decreased, primarily due to a reduction in cash, and R&D spending has been curtailed, indicating a strategic adjustment.

Key Financial Figures

• $0.001 — ange on which registered Common stock, $0.001 par value per share LINK The Nasdaq

Filing Documents

• link-20250630x10q.htm (10-Q) — 1841KB
• link-20250630xex31d1.htm (EX-31.1) — 11KB
• link-20250630xex31d2.htm (EX-31.2) — 11KB
• link-20250630xex32d1.htm (EX-32.1) — 8KB
• 0001410578-25-001738.txt ( ) — 7086KB
• link-20250630.xsd (EX-101.SCH) — 35KB
• link-20250630_cal.xml (EX-101.CAL) — 52KB
• link-20250630_def.xml (EX-101.DEF) — 118KB
• link-20250630_lab.xml (EX-101.LAB) — 358KB
• link-20250630_pre.xml (EX-101.PRE) — 252KB
• link-20250630x10q_htm.xml (XML) — 1332KB

-- FINANCIAL INFORMATION

PART I -- FINANCIAL INFORMATION Item 1.

Financial Statements (unaudited)

Financial Statements (unaudited) 3 Condensed Consolidated Balance Sheets 3 Condensed Consolidated Statements of Operations 4 Condensed Consolidated Statements of Comprehensive Income (Loss) 5 Condensed Consolidated Statements of Stockholders' Equity 6 Condensed Consolidated Statements of Cash Flows 7 Notes to Condensed Consolidated Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 22 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 28 Item 4.

Controls and Procedures

Controls and Procedures 29

-- OTHER INFORMATION

PART II -- OTHER INFORMATION Item 1A.

Risk Factors

Risk Factors 30 Item 5. Other Information 30 Item 6. Exhibits 31

Signatures

Signatures 32 2 Table of Contents

: FINANCIAL INFORMATION

PART I: FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements INTERLINK ELECTRONICS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) June 30, December 31, 2025 2024 (in thousands, except par value) ASSETS Current assets Cash and cash equivalents $ 2,329 $ 2,950 Accounts receivable, net 2,130 1,612 Inventories 1,651 2,009 Prepaid expenses and other current assets 314 328 Total current assets 6,424 6,899 Property, plant and equipment, net 552 411 Intangible assets, net 1,723 1,874 Goodwill 2,626 2,658 Right-of-use assets 931 1,064 Deferred tax assets 160 82 Other assets 94 128 Total assets $ 12,510 $ 13,116 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 501 $ 573 Accrued liabilities 312 377 Lease liabilities, current 353 352 Accrued income taxes 256 88 Total current liabilities 1,422 1,390 Long-term liabilities Lease liabilities, long term 641 777 Deferred tax liabilities 408 456 Total long-term liabilities 1,049 1,233 Total liabilities 2,471 2,623 Commitments and contingencies (Note 9) — — Stockholders' equity Preferred stock, $ 0.01 par value: 1,000 shares authorized, 200 shares of Series A Convertible Preferred Stock issued and outstanding at both June 30, 2025 and December 31, 2024 ( $ 5.0 million liquidation preference) 2 2 Common stock, $ 0.001 par value: 30,000 shares authorized, 9,864 shares issued and outstanding at both June 30, 2025 and December 31, 2024 10 10 Additional paid-in-capital 62,327 62,313 Accumulated other comprehensive income 452 15 Accumulated deficit ( 52,752 ) ( 51,847 ) Total stockholders' equity 10,039 10,493 Total liabilities and stockholders' equity $ 12,510 $ 13,116 See accompanying notes to these unaudited condensed consolidated financial statements. 3 Table of Contents INTERLINK ELECTRONICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaud

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