Nve Stock Earnings Reports

NVE reported a solid quarter despite a 10% year-over-year revenue decline driven by an 11% drop in product sales (primarily defense/PUF-related) that was partially offset by a 17% increase in contract R&D revenue and improving distributor/nondefense sales. Gross margin fell to 81% (from 86%) due to a less profitable product mix and higher distributor sales. Operating expense control reduced total expenses 20% (R&D down 18%, SG&A down 23%), but net income declined 13% to $3.58 million ($0.74 diluted). Profitability remains strong (operating margin 62%, pretax 70%, net margin 59%). Capital expenditure activity continues: a cluster of wafer-fabrication equipment arrived and is being installed to support wafer-level chip scale sensors and advanced packaging; a roughly $1 million milestone payment is due this quarter to largely complete the multi-year expansion. Management expects sequential growth in defense PUF sales in upcoming quarters and a return to more historical defense levels next fiscal year. Management also highlighted market opportunities for rare-earth-free ferrite magnets paired with NVE’s high-sensitivity sensors, design wins and customer sampling for wafer-level chip-scale devices (targets: medical implants, industrial controls/robotics). Cash flow covered the $1.00 per share quarterly dividend; operating cash flow was $5.19 million and accounts receivable decreased. NVE expects to realize a 25% advanced manufacturing investment tax credit (estimated $700k–$800k) if planned equipment is deployed in fiscal 2026, and will benefit from recent tax law changes allowing immediate deductibility of previously unamortized R&D. Annual shareholders meeting scheduled for August 7.