Breaking Down Interlink Electronics, Inc. (LINK) Financial Health: Key Insights for Investors

You're looking at Interlink Electronics, Inc. (LINK) because you see a micro-cap sensor technology company in a pivotal moment, but you need to know if the financial foundation can support the growth story. Honestly, the third quarter 2025 results, released November 12, 2025, show a classic small-cap tug-of-war: solid operational momentum still battling for consistent profitability. The good news is revenue jumped 11% year-over-year to $3.0 million, marking their second consecutive quarter of double-digit growth, plus the gross margin ticked up nicely to 41.8%. Still, the company is not yet profitable, reporting a net loss of $336,000 for the quarter, though that is an improvement from the prior year. Here's the quick math: with a market capitalization around $63.32 million as of November 2025, management is clearly focused on strategic moves like the conversion of all Series A preferred stock to common and securing grants, including a $200,000 SBIR Phase 1 grant from the FDA, to fuel their push toward expected profitability in 2026.

Revenue Analysis

You want to know where Interlink Electronics, Inc. (LINK) is actually making its money, and the short answer is: their growth engine is shifting. For the third quarter of 2025 (Q3 2025), the company reported revenue of $3.0 million, an 11% year-over-year (YoY) increase, marking their second consecutive quarter of double-digit growth. This is a critical near-term trend, but you need to look closer at the product mix to see the real story.

The core revenue streams for Interlink Electronics, Inc. come from two main product categories: Force-Sensing Resistors (FSRs) and specialized printed electronics, and Gas and Environmental Sensors. The company's Trailing Twelve Months (TTM) revenue, as of September 30, 2025, stood at roughly $12.02 million. That's a small number for a public company, so every dollar matters.

Here's the quick math on what drove the Q3 2025 growth:

• Force-Sensing & Printed Electronics: Higher shipments of force-sensing products and printed electronics from the Calman Technology subsidiary were the primary growth drivers. This segment is defintely picking up steam.
• Gas-Sensor Products: Sales in the gas-sensor segment were lower, which partially offset the gains from the other products. This volatility is a recurring risk in their product mix.

The contribution of their acquisitions is also a factor. The 2023 acquisition of Calman Technology and the integration of Conductive Transfers (which added smart textiles and conductive inks) have been crucial in stabilizing and growing the overall top-line revenue, particularly in the printed electronics space. This diversification is a smart strategic move, and you can see more about their long-term focus here: Mission Statement, Vision, & Core Values of Interlink Electronics, Inc. (LINK).

Looking at the year-to-date, the revenue picture shows this segment shift clearly. While Q1 2025 revenue was down to $2.6 million (from $3.1 million in Q1 2024) due to reduced traditional sensor shipments, Q2 2025 revenue jumped to $3.4 million with 18% YoY growth, fueled by stronger gas-sensor shipments and printed electronics. This tells you that demand is lumpy, but the overall trend is positive in the second half of 2025.

The table below shows the recent quarterly revenue performance, highlighting the improving momentum:

What this estimate hides is the future opportunity. Interlink Electronics, Inc. has secured two competitive Small Business Innovation Research (SBIR) grants from the FDA and USDA for AI-powered food safety sensors, which are new revenue streams. Plus, a major design win with a top-10 global company is expected to start generating about $1 million in revenue in 2026. These are clear actions that point toward sustained, double-digit organic revenue growth into the next fiscal year.

Profitability Metrics

You're looking at Interlink Electronics, Inc. (LINK) to understand if their recent revenue growth is translating into real, sustainable profit, and that's defintely the right focus. The short answer is: the gross margin is strong and competitive, but the company is still struggling to convert that into a consistent bottom-line profit, reporting a net loss for the nine months ended September 30, 2025.

For the first nine months of the 2025 fiscal year, Interlink Electronics, Inc. recorded total revenue of $9.037 million. Here's the quick math on their core profitability ratios for that period, which gives us a clear picture of their financial health:

• Gross Profit Margin: Approximately 41.2%.
• Operating Profit Margin: Approximately -12.1% (a loss).
• Net Profit Margin: Approximately -11.5% (a loss).

This tells you they are excellent at making their product, but their operating expenses (OpEx) are still too high for their current sales volume. They're making a healthy gross profit, but they lose it all and more before they get to net income.

Gross Margin Trends and Industry Comparison

The gross profit margin is where Interlink Electronics, Inc. shows its strength, and it's a key indicator of their product value and manufacturing efficiency. At a 41.2% margin for the nine-month period, they are positioned well within the high-value segment of the electronics components industry.

To be fair, the industry average for passive electronic components typically sits around 30%, while more complex, active components like semiconductors average closer to 45%. Interlink Electronics, Inc.'s sensor and printed electronics solutions put them squarely in the middle, showing their pricing power is solid. Their gross margin is strong.

Still, this margin isn't static. We saw significant volatility throughout 2025, which is a critical trend to watch:

• Q1 2025: 35.6%
• Q2 2025: 45.0%
• Q3 2025: 41.8%

The management noted that the sequential drop from the Q2 peak to 41.8% in Q3 was mainly driven by product mix shifts, specifically lower sales of gas sensor products being partially offset by higher shipments of force-sensing products. This points to a reliance on a favorable mix of high-margin products to sustain that upper-40s margin.

Operational Efficiency and Path to Profit

The real challenge for Interlink Electronics, Inc. is operational efficiency (OpEx management). While they delivered a net income of $100,000 in Q2 2025, they slipped back to a net loss of $336,000 in Q3 2025. This highlights that profitability is not yet consistent.

What this estimate hides is the operational progress. The Q3 net loss was an improvement, narrowing from a $523,000 net loss in the prior-year period, driven by higher revenue and slightly lower operating expenses. The Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), a cleaner view of core operating cash flow, improved significantly to a loss of only $(62,000) in Q3 2025, up from a $(248,000) loss a year earlier.

Here's a snapshot of the operational results for the most recent quarter:

The company is demonstrating operating leverage-meaning revenue growth is outpacing the growth of operating costs-but they haven't crossed the breakeven point consistently. The next step is for you to dig into the Exploring Interlink Electronics, Inc. (LINK) Investor Profile: Who's Buying and Why? to see who is betting on this operational turnaround.

Debt vs. Equity Structure

You're looking at Interlink Electronics, Inc. (LINK) and wondering how they fund their growth-debt or equity? The answer is simple and quite rare in the technology sector: Interlink Electronics, Inc. is defintely a zero-debt company. This conservative approach means their balance sheet is almost entirely equity-funded, which cuts risk but may limit acquisition speed.

As of the third quarter of 2025 (Q3 2025), Interlink Electronics, Inc. reported having no outstanding debt, which is a powerful position to be in. While some minor, non-interest-bearing liabilities may exist, the total debt is essentially $0.0. This is backed by a strong liquidity position, with the company holding $3.0 million in cash and cash equivalents as of September 30, 2025. Here's the quick math: with total shareholder equity at approximately $9.63 million in November 2025, the company's reliance on internal funding is absolute.

The Debt-to-Equity (D/E) ratio is the clearest indicator of this strategy, showing how much debt a company uses to finance its assets relative to the value of its shareholders' equity. Interlink Electronics, Inc.'s D/E ratio is 0%. This is dramatically lower than the industry benchmarks for similar companies, which typically sit between 0.24 for Computer Hardware and 0.5124 for Electronic Manufacturing Services. A D/E ratio near zero is a huge safety buffer.

• Interlink Electronics, Inc.'s D/E Ratio: 0% (Q3 2025).
• Computer Hardware Industry Average: 0.24.
• Electronic Manufacturing Services Average: 0.5124.

What this estimate hides is the strategic choice to use equity to simplify the capital structure. In a significant move in November 2025, the company converted all outstanding Series A Convertible Preferred Stock into common stock and issued a 50% common-stock dividend. This action was not about raising new debt; it was about streamlining the existing capital base to improve liquidity and make the company more attractive to investors by simplifying the ownership structure. They are essentially saying: we will fund growth with cash and equity, not leverage.

Still, the company is a trend-aware realist. While they have no debt now, they remain open to seeking additional capital if needed, particularly for strategic acquisitions, which could come through new equity or debt financing arrangements. This flexibility is key, but for now, Interlink Electronics, Inc. is a low-risk, equity-centric play. If you want to dive deeper into the full picture, you can check out the rest of the analysis here: Breaking Down Interlink Electronics, Inc. (LINK) Financial Health: Key Insights for Investors.

Next Step: Review the company's Q4 2025 capital expenditure forecast to see if the $3.0 million cash position is sufficient for their stated acquisition pipeline.

Liquidity and Solvency

You need to know if Interlink Electronics, Inc. (LINK) can cover its near-term bills, especially as they pursue an aggressive growth strategy. The short answer is yes, their liquidity position is defintely strong, but the cash flow story is more complex. The company has a substantial cushion, but converting revenue growth into consistent operating cash flow remains the core challenge.

Assessing Interlink Electronics, Inc. (LINK)'s Liquidity

Interlink Electronics, Inc.'s balance sheet shows a robust ability to meet its short-term obligations. This is what we call a strong liquidity position. You can see this clearly in the two key ratios we use to measure immediate financial health: the Current Ratio and the Quick Ratio (or Acid-Test Ratio).

• Current Ratio: The most recent reported Current Ratio for Interlink Electronics, Inc. is a strong 4.20. This means the company holds $4.20 in current assets for every dollar of current liabilities. Anything over 2.0 is generally considered healthy, so 4.20 is excellent.
• Quick Ratio: The Quick Ratio, which strips out inventory-the least liquid current asset-is 2.84. This shows that even without selling a single piece of inventory, the company can cover its short-term debts nearly three times over. That is a significant buffer.

Here's the quick math on the working capital trend. Working capital (current assets minus current liabilities) has remained solid, though it saw a slight dip in the third quarter of 2025. The working capital stood at approximately $5.002 million as of the end of Q2 2025, which then slightly decreased to $4.9 million by September 30, 2025. This minor change isn't a concern, but it's a trend to monitor as the company ramps up its operations and inventory for future revenue growth, as detailed in the full analysis: Breaking Down Interlink Electronics, Inc. (LINK) Financial Health: Key Insights for Investors.

Cash Flow Statements Overview: Where the Money Moves

Looking at the cash flow statement tells us how the company is generating and using its cash, which is often more telling than the balance sheet alone. The Trailing Twelve Months (TTM) cash flow data ending around Q3 2025 paints a picture of a company investing for future growth while managing a tight operating margin.

• Operating Cash Flow (OCF): TTM OCF was a positive, but minimal, $21.00 thousand. This indicates that core business operations are barely generating cash after accounting for working capital changes. The company is not yet a cash-generating machine, which aligns with its recent net losses.
• Investing Cash Flow (ICF): The TTM ICF was a negative -$421.00 thousand. This negative number is generally a good sign for a growth-focused company, as it represents cash spent on capital expenditures (CapEx) or acquisitions to drive future revenue. They are putting money to work.
• Financing Cash Flow (FCF): Cash flow from financing has been relatively quiet in recent quarters, reflecting minimal new debt or equity issuance. However, the major non-cash financing event in Q3 2025 was the conversion of all outstanding Series A Convertible Preferred Stock into common stock. This move simplifies the capital structure and eliminates a potential overhang, which is a key strategic action.

Near-Term Risks and Opportunities

The primary liquidity strength is Interlink Electronics, Inc.'s high Current and Quick Ratios, which give them a massive safety net. They have no outstanding debt as of September 30, 2025, which is a major solvency strength. The near-term risk is the low level of OCF, which means they are relying on the existing cash balance of $3.0 million to fund the negative investing cash flow and any ongoing operating losses. The opportunity, however, is clear: the negative ICF shows management is actively investing in the business, and the capital structure simplification positions them well for a potential return to profitability in 2026, which is their stated goal.

Valuation Analysis

You're looking at Interlink Electronics, Inc. (LINK) and wondering if the current price reflects its true value. The short answer is: the market is sending mixed signals. The stock appears expensive on a Price-to-Book basis, but the analyst consensus suggests a significant upside, which is a classic micro-cap dilemma.

The core issue is that Interlink Electronics is currently unprofitable, which immediately complicates traditional valuation metrics. Here's the quick math on the key ratios for the 2025 fiscal year, which point to a company still in a growth and restructuring phase, not a mature cash cow.

• Price-to-Earnings (P/E) Ratio: The P/E ratio is negative at an estimated -40.1x for 2025 because the company is forecasting a loss per share of approximately $-0.1267. You can't use a negative P/E for comparison, so this metric is currently unhelpful for a buy/sell decision.
• Price-to-Book (P/B) Ratio: As of November 2025, the P/B ratio stands at around 6.13x. This is a defintely high multiple, suggesting the stock is trading at a premium of over six times its net asset value. This premium usually prices in a strong expectation for future earnings growth.
• Enterprise Value-to-EBITDA (EV/EBITDA): The 2025 estimate for EV/EBITDA is also negative, at roughly -119x, because the estimated Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is negative (around $-0.631 million). This confirms that Interlink Electronics is not yet generating positive operating cash flow, which is a near-term risk.

Stock Performance and Dividend Reality

The stock has been a wild ride. Over the last 12 months, Interlink Electronics' stock price has increased by roughly 35.51%, but it has seen significant recent volatility, dropping about 35.09% in the past month alone, trading near $4.02 as of late November 2025. The 52-week price range of $2.607 to $10.101 shows just how much this stock can swing.

Regarding income, Interlink Electronics does not pay a cash dividend. The dividend yield is N/A and the payout ratio is 0.00%. However, the company did issue a 50% common stock dividend in October 2025. This was a non-cash move to simplify the capital structure by converting preferred stock to common stock and boosting share liquidity, which is a strategic, not an income, benefit.

Analyst Consensus and Price Targets

Despite the current unprofitability, Wall Street analysts maintain a generally optimistic view, though coverage is limited. The consensus rating is varied, with some sources pointing to a 'Hold' and others a 'Buy' or 'Strong Buy' based on a small number of analysts.

The 12-month price targets show a wide range of optimism, which is typical for a volatile micro-cap stock:

What this estimate hides is the execution risk. The high targets are predicated on management successfully executing their strategic initiatives, like the recent UK acquisition Letter of Intent (LOI) and leveraging new SBIR grants. If they hit their marks, the upside is substantial; if they miss, the stock will correct hard. You need to read the full Breaking Down Interlink Electronics, Inc. (LINK) Financial Health: Key Insights for Investors to understand those risks.

Action: Use the P/B of 6.13x as your baseline for overvaluation, but only invest if you believe management can deliver the revenue growth needed to justify the analyst's average price target of at least $8.67. That's your minimum hurdle.

Risk Factors

You're looking at Interlink Electronics, Inc. (LINK) because you see the potential in their sensor technology, but the near-term risks are real and demand a clear-eyed view. The direct takeaway is this: while management is executing a smart strategic pivot-simplifying their capital structure and expanding globally-the company has not yet achieved consistent operational profitability, which is the primary financial risk.

Honestly, the biggest risk right now is converting top-line growth into bottom-line profit. In the third quarter of 2025, Interlink Electronics, Inc. reported revenue of $3.0 million, an increase of over 10.8% year-over-year, which is great. Still, they posted a net loss of $336,000 and negative Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of $(62,000). That's a significant improvement from the prior year, but it's still a loss. The company is burning cash to grow.

Here's a quick breakdown of the core risks we need to track:

• Operational Profitability: The firm must sustain its improved gross margin of 41.8% and control operating expenses (which were around $1.55 million in Q3 2025) to move Adjusted EBITDA into positive territory.
• Product Mix Volatility: Revenue is fragile. Gains from force-sensing products, especially from the Calman Technology subsidiary, are being partially offset by a recurring vulnerability: weaker sales in the gas-sensor segment.
• Acquisition Integration: The Letter of Intent for a U.K.-based engineering firm is a smart strategic move to bolster the European footprint, but cross-border acquisitions are tough. The risk is that the integration costs and efforts-the time and money spent merging the businesses-will not yield immediate returns, delaying consistent profitability well into 2026.

What this estimate hides is the inherent competition in the sensor market. Interlink Electronics, Inc. operates in niche markets for Human-Machine Interface (HMI) devices and Internet-of-Things (IoT) solutions, but those niches are getting crowded. If a larger competitor with deeper pockets decides to focus on force-sensing technology, Interlink Electronics, Inc.'s market share and pricing power could erode fast. You can see their strategic focus on innovation in their Mission Statement, Vision, & Core Values of Interlink Electronics, Inc. (LINK).

To be fair, management is not sitting still. They are taking clear actions to mitigate these risks. On the financial side, they simplified the capital structure by converting all Series A preferred stock into common stock and issuing a 50% common-stock dividend, which helps liquidity and reduces future financial overhang. On the strategic side, they are leveraging government funding, securing grants like the $375,000 from the FDA and USDA for food safety technology, which de-risks their R&D spending and opens up new, high-growth industrial sectors. This grant funding is defintely a key buffer.

The strategic risk is high, but the potential reward is too. The success of the U.K. acquisition and the monetization of the SBIR-funded innovations will be the critical test for 2026.

Growth Opportunities

You're looking at Interlink Electronics, Inc. (LINK) because the sensor market is hot, and you want to know if their niche plays can translate into real shareholder value. The direct takeaway is this: Interlink is defintely laying the groundwork for a transformative 2026, targeting a return to profitability driven by new government-backed sensor technology and strategic acquisitions. Their path to consistent bottom-line results is still a work in progress, but the top-line momentum is undeniable.

For the 2025 fiscal year, the consensus revenue estimate sits at approximately $12.38 million, which suggests a modest increase from the trailing twelve months' revenue of $11.73 million USD. This growth is being fueled by a strategic pivot toward higher-margin, specialized applications, moving beyond their traditional human-machine interface (HMI) focus.

Product Innovation and Market Expansion

The company's core growth drivers are shifting toward high-tech, high-impact sectors like food safety and environmental monitoring. This is where the real money is in scaling the new sensor applications. They are leveraging Small Business Innovation Research (SBIR) grants to fast-track product development, which is a smart way to de-risk R&D spending.

Key product and market expansions include:

• Securing a $200,000 FDA SBIR grant for electrochemical sensors to monitor food quality.
• Winning a $175,000 USDA SBIR grant to develop an AI-powered food safety monitoring system.
• Expanding the gas sensor product line with new offerings like industry-first odor sensors.
• Driving double-digit year-over-year revenue growth in Q3 2025, which totaled $2.96 million, primarily from force-sensing products and printed electronics.

Strategic Initiatives and Financial Trajectory

Management has been busy restructuring the capital base and expanding the geographic footprint. They are using M&A to bolster their European presence, evidenced by the Letter of Intent to acquire a U.K.-based engineering and manufacturing company. Plus, a major design win is already secured, expected to generate $1 million in revenue just in 2026.

On the financial side, while the company reported a net loss of $336,000 in Q3 2025, this was a significant improvement from the $523,000 loss in the prior-year period. They also simplified their capital structure by converting all Series A preferred stock into common stock and issuing a 50% common stock dividend, which enhances liquidity and should attract a wider investor base.

Competitive Advantages and 2026 Outlook

Interlink Electronics, Inc.'s primary competitive moat is its proprietary intellectual property (IP) in Force-Sensing Resistors (FSRs) and related sensor technologies, built over 40 years. This IP allows them to offer highly customized, mission-critical sensor solutions for OEMs across diverse markets like medical devices, automotive systems, and industrial controls.

The company is positioned for a pivotal 2026, with management projecting a return to profitability and sustained double-digit organic revenue growth. The key risk is execution-integrating the new U.K. asset and successfully scaling the SBIR-funded projects will be critical to turning that growth into sustainable profit. For a deeper dive into the numbers, you can read our full analysis at Breaking Down Interlink Electronics, Inc. (LINK) Financial Health: Key Insights for Investors.

Strategy Team: Model the UK acquisition's accretion/dilution impact on 2026 EPS by month-end.