NVE Corporation Stock price
Compare with Peer Group
📊 Peer Group
📈 What is it?
The peer group consists of the companies with the most similar business model. They serve as a benchmark for putting a stock into context.
🧮 How is it selected?
Based on similarity of business model, meaning companies from the same industry with comparable products and a similar customer base. That's the only way to compare apples to apples.
🏛️ Why does it matter?
Whether a stock is cheap or expensive is best judged by comparison. A P/E of 18 or an EV/FCF of 20 can look cheap or expensive depending on the yardstick. The peer group gives you the most accurate one: companies with a similar business model that operate under the same conditions.
🎯 What does it mean for investors?
When a metric sits below the peer average, the stock is valued more cheaply relative to its competitors, and above the average more expensively. A discount to the peer group can be an opportunity, but it can also have a reason (for example lower growth). The comparison is a starting point, not a verdict.
Is NVE Corporation a Top Scorer Stock based on the Dividend, High-Growth-Investing or Leverman Strategy?
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $351.87m | Revenue (TTM) = $24.91m
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $330.10m | Revenue (TTM) = $24.91m
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF) | ex SBC
📈 What is it?
EV/FCF compares a company’s enterprise value with its free cash flow. The metric therefore shows the multiple of current free cash flow at which a company is valued. EV/FCF ex SBC additionally accounts for stock-based compensation (SBC). While SBC does not represent a direct cash outflow, issuing shares as compensation can dilute existing shareholders. Therefore, SBC is deducted from free cash flow in this adjusted version.
🧮 How is it calculated?
EV/FCF ex SBC = Enterprise Value ÷ (Free Cash Flow (TTM) − SBC)
🏛️ Why is it important?
EV/FCF provides a valuation based on free cash flow and therefore complements earnings-based valuation metrics such as the P/E ratio. The ex SBC version additionally accounts for the economic impact of stock-based compensation and provides a more conservative view from a shareholder perspective.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF means that enterprise value is low relative to current free cash flow. The reasons should always be considered in the context of the company and its industry.
- A high EV/FCF means that enterprise value is high relative to current free cash flow. This can, for example, reflect high growth expectations or temporarily weak cash generation.
- When SBC is positive and adjusted free cash flow remains positive, EV/FCF ex SBC is generally higher than the standard EV/FCF.
- The metric is particularly useful for companies with relatively stable and predictable cash flows.
- If free cash flow is negative or very low, EV/FCF has limited usefulness and should not be interpreted like a standard valuation multiple.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Dividend per Share (DPS)
📈 What is it?
Dividend per Share shows how much cash a company pays out to shareholders for each share they own – usually on an annual or quarterly basis.
🧮 How is it calculated?
🏛️ Why is it important?
DPS is the absolute value of the payout per share – crucial for income-focused investors and dividend strategies.
🧮 Calculation
🎯 What does this mean for investors?
- A stable or growing DPS often signals a strong, shareholder-friendly business.
- DPS alone doesn’t tell you how attractive the payout is – the stock price also matters (→ see Dividend Yield).
- Long-term dividend growth is often a hallmark of high-quality companies – like the dividend aristocrats.
📘 Dividend Yield
📈 What is it?
Dividend yield shows how large a company’s dividend is in relation to its current share price.
🧮 How is it calculated?
🏛️ Why is it important?
It allows investors to compare dividend payouts across stocks, regardless of price or payout size.
🧮 Calculation
🎯 What does this mean for investors?
- A stable yield can reflect reliable distributions.
- Comparing 1Y and 5Y yield shows whether dividend growth keeps pace with stock price appreciation.
- A low yield isn’t always negative – it can signal strong past performance or growth focus.
📘 Dividend Growth
📈 What is it?
Dividend growth shows how much a company has increased its dividend per share over time.
🧮 How is it calculated?
5Y: Compound Annual Growth Rate (CAGR)
🏛️ Why is it important?
Consistently rising dividends are often a sign of financial strength and shareholder orientation – especially relevant for long-term investors.
🧮 Calculation
🎯 What does this mean for investors?
- Stable dividend growth is a sign of sustainable earning power.
- High dividend growth can significantly boost your total return:
- If a company pays $1 in dividends and increases it by 15% annually over 5 years, you’ll receive $2 per share in year 5 – twice as much as at the start!
📘 Payout Ratio
📈 What is it?
The payout ratio shows what percentage of a company’s earnings (per share) is distributed to shareholders as dividends.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess whether the dividend is sustainable – especially in relation to the company’s profitability.
🧮 Calculation
🎯 What does this mean for investors?
- A low payout ratio means the company retains more earnings for reinvestment – typical for growth companies.
- A moderate payout (e.g. 25–50%) indicates a healthy balance between returns and reinvestment.
- High payout ratios may seem attractive but can carry risk if earnings decline.
📘 Consecutive Dividend Increases
📈 What is it?
This metric shows how many consecutive years a company has raised its dividend per share – without any cuts or pauses.
🧮 How is it calculated?
(Special dividends are not considered.)
🏛️ Why is it important?
A long track record of increases reflects financial strength, consistency, and shareholder commitment.
🎯 What does this mean for investors?
- A long dividend increase streak builds confidence – especially in volatile markets.
- Such companies are seen as reliable and income-friendly investments.
- The longer the streak, the stronger the company’s dividend discipline.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF) | ex SBC
📈 What is it?
Free cash flow shows how much cash remains after a company has covered its operating and capital expenditures. FCF ex SBC additionally deducts stock-based compensation (SBC) to adjust the cash flow for the effect of non-cash SBC.
🧮 How is it calculated?
Free Cash Flow ex SBC = Operating Cash Flow − SBC − Capital Expenditures (CAPEX)
🏛️ Why is it important?
FCF reflects a company’s actual financial strength – independent of reported accounting earnings. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction. FCF ex SBC also deducts stock-based compensation and shows how much cash generation remains after SBC.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow indicates that a company has strong financial strength – independent of reported earnings.
- It is often a solid basis for sustainable dividends and share buybacks.
- Declining FCF can be a warning sign, even if reported earnings remain stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net Margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free Cash Flow Margin | ex SBC
📈 What is it?
The Free Cash Flow Margin shows how much free cash flow a company generates relative to its revenue. In simplified terms, free cash flow is calculated as operating cash flow minus capital expenditures. The Free Cash Flow Margin ex SBC additionally accounts for stock-based compensation (SBC). While SBC does not represent a direct cash outflow, issuing shares as compensation can dilute existing shareholders. Therefore, SBC is deducted from free cash flow in this adjusted metric.
🧮 How is it calculated?
Free Cash Flow Margin ex SBC = (Free Cash Flow − SBC) ÷ Revenue × 100
🏛️ Why is it important?
The Free Cash Flow Margin shows how efficiently a company converts its revenue into free cash flow. Strong free cash flow can provide financial flexibility for dividends, share buybacks, debt repayment, or further investments. The ex SBC version additionally accounts for the economic impact of stock-based compensation and therefore provides a more conservative view of cash generation from a shareholder perspective.
🧮 Calculation
🎯 What does this mean for investors?
- A high Free Cash Flow Margin shows that a company converts a high proportion of its revenue into free cash flow.
- This can provide greater financial flexibility for dividends, share buybacks, debt repayment, or investments.
- The Free Cash Flow Margin ex SBC additionally accounts for potential shareholder dilution from stock-based compensation.
- The long-term trend is particularly important. Declining margins can, for example, result from higher investments, changes in working capital, or weaker operating performance.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 SBC | in % Revenue
📈 What is it?
SBC (Stock-Based Compensation) refers to equity-based compensation granted by a company to its employees and executives. The percentage shows SBC relative to revenue.
🧮 How is it calculated?
SBC as % of Revenue = (SBC ÷ Revenue) × 100
🏛️ Why is it important?
Stock-based compensation is a real cost factor for shareholders. It can increase the number of shares outstanding and therefore dilute existing shareholders. The percentage of revenue shows how heavily a company relies on equity-based compensation and how significant this form of compensation is relative to the size of the business.
🧮 Calculation
🎯 What does this mean for investors?
- A lower figure is generally positive: Stock-based compensation is relatively small compared with the company's revenue.
- A high figure can indicate greater reliance on stock-based compensation and a higher potential risk of dilution. However, it is also important to consider whether the company offsets dilution through share buybacks.
- The trend over time should also be considered. A high but declining percentage presents a different picture from a persistently high or increasing percentage.
- A single-digit SBC-to-revenue ratio is not unusual among many growth-oriented and technology companies.
📘 SBC as % of FCF
📈 What is it?
SBC (Stock-Based Compensation) refers to equity-based compensation granted by a company to its employees and executives. The percentage shows SBC relative to free cash flow (FCF).
🧮 How is it calculated?
SBC as % of FCF = (SBC ÷ Free Cash Flow) × 100
🏛️ Why is it important?
Stock-based compensation is a real cost factor for shareholders. It can increase the number of shares outstanding and therefore dilute existing shareholders. The percentage of free cash flow shows how significant SBC is relative to the cash generated by the company. Since SBC is non-cash compensation, it is typically not deducted as a cash outflow when calculating FCF.
🧮 Calculation
🎯 What does this mean for investors?
- A lower value is generally favorable. Stock-based compensation is relatively small compared with the company's cash generation.
- A high value means that SBC represents a significant portion of the company's reported free cash flow, even though SBC itself is non-cash.
- The higher the value, the more significant SBC can be as an economic cost to shareholders, particularly when it results in share dilution.
📘 SBC Growth 1Y
📈 What is it?
SBC Growth 1Y shows how much a company's stock-based compensation has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
SBC Growth shows whether stock-based compensation is becoming more or less significant for shareholders. If SBC increases significantly, it can lead to greater shareholder dilution over time. At the same time, SBC is a non-cash expense that reduces earnings on the income statement but is added back in the cash flow statement.
🧮 Calculation
🎯 What does this mean for investors?
- A high positive value is generally negative, as rising SBC can increase the burden on shareholders, particularly through potential dilution.
- What matters is whether the development of SBC is sustainable over the long term. Some level of SBC is common among many growth and technology companies.
📘 Share Count Growth 1Y
📈 What is it?
Share Count Growth 1Y shows how much the number of shares outstanding has increased or decreased over a one-year period.
🧮 How is it calculated?
🏛️ Why is it important?
The number of shares determines how many shares the company's earnings and assets are distributed across. If the share count decreases, existing shareholders' relative ownership increases. If it increases, existing shareholders are diluted. The metric therefore makes dilution and share buybacks directly visible.
🧮 Calculation
🎯 What does this mean for investors?
- A negative value is generally positive, as the number of shares outstanding is decreasing.
- A positive value indicates dilution of existing shareholders.
- A declining share count is not automatically positive: It also matters at what price the shares are repurchased and how the buybacks are financed.
📘 Shareholder Yield
📈 What is it?
Shareholder Yield measures how much capital a company returns to shareholders or uses to reduce debt relative to its market capitalization. It goes beyond dividend yield by also including share buybacks and debt reduction.
🧮 How is it calculated?
🏛️ Why is it important?
Dividend yield only tells part of the story. Companies can also return capital through share buybacks, while reducing debt can strengthen the balance sheet. Shareholder Yield combines all three components into one metric, giving investors a broader view of how a company uses its capital.
🧮 Calculation
🎯 What does this mean for investors?
- A higher Shareholder Yield generally indicates more capital being returned to shareholders or used to reduce debt.
- The mix matters: dividends, buybacks, and debt reduction can affect shareholders in different ways.
- Share buybacks are most beneficial when shares are repurchased at attractive valuations.
- Investors should also consider whether dividends, buybacks, and debt reduction are sustainable over time.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Revenue per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
NVE Corporation Stock Analysis
Analyst Opinions
6 Analysts have issued a NVE Corporation forecast:
Analyst Opinions
6 Analysts have issued a NVE Corporation forecast:
NVE Corporation Events
Past Events
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OCT
21
Q2 2027 Earnings Call
5 days ago
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JUL
22
Q1 2027 Earnings Call
3 months ago
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MAY
6
Q4 2026 Earnings Call
6 months ago
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JAN
21
Q3 2026 Earnings Call
9 months ago
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OCT
22
Q2 2026 Earnings Call
about one year ago
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StocksGuide Free
NVE Corporation — Q2 2027 Earnings Call
1. Management Discussion
Good afternoon, and welcome to the NVE Corporation conference call for the quarter ended September 30, 2026. I'm Pete Eames, NVE's President and CEO. With me on the call is Daniel Nelson, our Principal Financial Officer. This call is being webcast live on YouTube and Google Meet and being recorded. A replay is available through our website, nve.com, and our YouTube channel, uube.com/nveorpor. After my opening comments, Daniel Nelson will present our financial results, then I'll cover the business. I'll also cover the recent leadership transition and Board expansion, and then we'll open the call to questions. We issued our press release with summary financial results and filed our quarterly report on Form 10-Q in the past hour following the close of market.
Links to the press release and 10-Q are available through our website, the SEC's website. NX, formerly known as Twitter. Please refer to the safe harbor statement on your screen Comments we may make that relate to future plans, events, financial results or performance are forward-looking statements that are subject to certain risks and uncertainties, including, among others, such factors as our reliance on several large customers for a significant percentage of revenue, uncertainties related to the economic environments in the industries we serve, uncertainties related to future sales and revenues as well as risk factors listed from time to time in our filings with the SEC, including our annual report on Form 10-K for the year ended March 31, 2026.
Actual results could differ materially from the information provided, and we undertake no obligation to update forward-looking statements we may make. We're pleased to report solid revenue and earnings for the quarter, driven by a 67% increase in distributor sales. Net margins increased to 54% due to a decrease in our effective tax rate. Daniel Nelson will cover the details of the financials. Daniel?
Thanks, Pete. Total revenue for the quarter decreased 8% compared to the prior year quarter. The decrease was due to a 9% decrease in product sales, partially offset a 25% increase in contract R&D revenue. The decrease in product sales was due to a short-term inventory adjustment at one of our large medical device customers. Inventory adjustments by medical device customers can create short-term auto because of government procurement cycles. Looking forward, -- we expect medical device and defense sales to recover in the current quarter, and we expect revenues in the second half of the fiscal year to be consistent with the first half.
Aside from the short-term order flow adjustment in Medical, we saw a 67% increase in distributor sales due to strengthening industry conditions and strong demand for our new and legacy commercial products. The increase in contract R&D revenue in the past quarter was due to progress on existing contracts. Total operating expenses increased 4% for the second quarter of fiscal 2017 compared to the second quarter of fiscal 2026 due to a 44% increase in selling, general and administrative expense, partially offset by a 17% decrease in R&D expense. The increase in SG&A was due to higher director option granted stock prices.
Our effective tax rate, which is the provision for income taxes as a percentage of income before taxes decreased to 14% from 20% in the prior year quarter, primarily due to favorable tax law changes. The decrease is consistent with our previous estimates, and we expect our effective tax rate to be between 14% and 16% for at least the remainder of the fiscal year. Net income for the second quarter of fiscal 2027 was $3.17 million or $0.65 per diluted share compared to $3.31 million or $0.68 per share in the prior year quarter. Our profitability metrics for the quarter remained strong. In adjoin to the 54% net margin, Pete mentioned previously, gross margin was 78% -- for the first 6 months of fiscal 2027, total revenue was $16.9 million, up 36% over the same period in fiscal 2026.
The increase in revenue was due to strong sales across our product portfolio as well as increases in both direct and distributor sales. Net income was $9.57 million, or $1.97 per diluted share for the first 2 quarters of fiscal 2027. Turning to cash flow items. Cash flow from operations was $11.1 million for the first 6 months of fiscal 2020 compared to $8 million for the first 6 months of fiscal 2026. Cash plus marketable securities increased from $43.5 million to $44.4 million as operating cash flow more than cover our dividends and purchases of fixed assets for the first half of the fiscal year.
Receivables decreased 12% due to timing of customers' payments. Inventories decreased 3% due to increased product sales in the first half of the fiscal year and we pay our $1 per share quarterly dividend in the past quarter and declared another dividend to be paid at the end of November. Now I'll turn the call back over to PDM to cover the business, Pete?
Thanks, Daniel. Our R&D strategy is to transition the world's best technology into the world's best products for high-value markets such as advanced automation and robotics, data centers and highly automated fourth wave factories using the artificial intelligence of things. This quarter, we announced 2 new products. The first is a new design in our series of wafer level chip scale sensors. The sensor provides analog information such as position from the motion or changes of external magnetic fields. These sensors are the smallest products we've ever made at NVE, measuring just 0.55 millimeter square combined with a small size is an extremely high sensitivity -- this combination enables unmatched spatial sensitivity for precision motion applications, including medical devices, industrial automation and robotics.
We are promoting our new products on YouTube with video showing the sensor detecting tiny motions of minute magnets. And you can view these videos on our website. We also released a family of gear sensors in the past quarter for precise motion speed and position sensing in industrial automation and robotics. These sensors are biased by a small magnet and detect the motion of gear teeth as they pass the sensor. 7 different versions of these sensors match common gear sizes in a newly available sensor form factor. The new sensors provide large it in factory automation and robotics, we have videos of these new products on our website and YouTube channel show incredible small size, high precision and versatility of our new sensors.
In addition to these new product launches, we're developing several new products, including even more precise answers for robotics and more power addition isolators and power conversion. Next, I'll cover our recent leadership transition and Board expansion. I was elected Director and appointed President and CEO at our Annual Shareholders' Meeting in August. Former CEO, Dan Baker, replaced Terry Glarner, Chairman. We also elected a new Director, Carolyn Valentine, expanding the board from 5 to 7 directors. The larger Board strengthens our governance. I'm honored to lead NVE as CEO. And -- we have a talented team to customer relationships and many exciting opportunities ahead.
I look forward to building on our momentum to create long-term value for our shareholders through profitable growth and expansion in attractive markets. We see significant opportunities in robotics, power conversion and the artificial intelligence of things. Now we'd like to open the call for questions via Google Meet.
2. Question Answer
I'd love if you can give some more color on the rescheduled orders here. So you guys attribute the decline to customer rescheduling orders. Were those pushed out into H2 and not necessarily into like next fiscal year. Were they roughly the size of the shortfall or smaller? The quarter-over-quarter shortfall are smaller than that?
Yes. Sure, Ketan. The order variability was primarily from orders being pulled into quarter 1 from quarter 2. So we don't see any further disruptions looking forward. And as Daniel said in the prepared remarks, it's a relatively short-term effect.
Okay. And following up there, -- it seems just like from shipments look weighted towards September. Would you say that September was the strongest month of the quarter? And do you guys have any other commentary around H2 velocity versus H1?
Sure. Maybe Daniel can comment on receivables. .
Yes. So in response to that question, we did see revenue increased towards the end of the September quarter. And yes, we did see increase in September compared to the immediate month, which was August.
Got it. Got it. I'll jump back in the queue. I have other questions, but I'll let others ask before me.
If there's not, I'll ask more.
Please go ahead.
Great. So would you guys give some color around the growth we're seeing in the automation market and then as well as the power conversion markets versus your core medical sales in H1, and can you also give commentary about how that's looking into H2?
Yes, we're definitely seeing strong growth in both power conversion and in robotics applications. We highlighted some important products in the prepared remarks, especially focused on automation and new sensors that go into robotics applications. So the special sensitivity that we're providing with those devices is unmatched in the industry. And we're optimistic partly because of that -- we also have excellent -- we have a high level of inventory, and we think the market is time right for robotics applications and power conversion applications. So it's driving overall optimism on our part.
Great. Could you give some color on maybe any design wins or design ins that you have that could be driving the growth through H2 and even into the next fiscal year?
Yes. For the wafer-level chip scale parts that we talked about in the prepared remarks and on the previous investor calls as well, we do have some important small design wins for those products. So it's still early there, but I think the feedback from the industry has been very positive, and we're expecting growth long term from those parts and those technologies in general.
Okay. When you say small design wins, is that small in terms of revenue? Or is that like -- can you maybe describe the size of the customers?
So when we say small design wins, it's usually in markets that start small with samples and then later move into low 1,000 quantity purchases while they work out system-level integration challenges. That can take some time. Sometimes it takes a couple of quarters, sometimes less -- for those to then translate into larger orders, factors of 10 larger than than the sample orders I described. So it does take some time to ramp up. And I would say that we're certainly within that cycle with several products. And that's why we're we're optimistic.
Okay. So those costs -- when you say small, it's simply given that it's more sampling and prototyping volumes. Would you give any color on customer size, like who these customers are -- is there any directional understanding of like on the robotics side, are these top 5 OEMs on the maybe factory arms or humanoid side? Do you have any additional color you can give on the size of these -- of these potential customers?
Yes. It's unusual for us to comment specifically on customers, but I can say that there's a variety of customers interested in the technology that spans beyond that, and we like the potential for very high volumes there.
Would you size very high volumes?
Certainly, yes. We're certainly chasing very high volumes.
Would you be able to put like any like directional numbers to that, like what you guys are targeting?
Well, we're certainly not unfamiliar with producing millions of sensors and tens of millions of sensors or certainly well within our capacity here, we can easily scale well beyond that as well in the short term and certainly within the time scale that we expect these customers to ramp up.
Got it. Okay. On the power conversion side, on the 800-volt you've discussed that step-ups in voltage kind of raise your dollar content -- and many of the PSUs, if you look, you'd see NDs parts to some degree. Would you be able to give more color on the power conversion side on the progress as data centers are transitioning to 800-volt and your progress with your customers there?
Happy and happy to highlight the advantages that NV provides as the application voltages continue to increase. We provide the highest isolation in the industry and as voltages increase in power supplies and power conversion applications, that continues to favor NVE's products, and we're continually optimistic for that reason. So we see the trends favoring NVE's technology and we're expecting continued growth there as well.
I like the only person that's going to ask you questions. So Pete, this is Peter calling from Florida. I did a great job on your continued success there. My question is that are NVE sensors applicable to gears for humanoid robots. You mentioned robotics. It could be armed in automation and factories. But what about humanoid robots? Is that something where your sensors can be used? And is that -- are you having any conversations there?
Yes. Definitely, the new gear sensors that I talked about on the call are especially intended towards robotics -- both industrial and humanoid robotics. They're intended for advanced encoders and servo systems. And those are exactly what are being used in humanoid robotics and elsewhere. So we think that the timing of that introduction is perfect with the growth in the humanoid robotics industry, and we're seeing some strong interest there already. So as Hinesaid previously, we're optimistic about those applications.
I just wanted to ask -- just so I heard you right, you basically said that the second half in terms of top line should be similar to the first half of the year. Is that correct?
That's correct. That's what we said in the prepared remarks. We do see the order disruptions as a temporary situation and we expect to return to growth in the next quarter.
Got it. And so my follow-up would be, how do these new products and the secular growth market fit into those expectations, if you will. Is this are you guys forecasting the back half based on existing orders? Or is there still orders to go get from these new products and new use cases.
Yes. We're definitely seeing more orders come in. And as Daniel said in the prepared remarks, the growth is across our product portfolio, including distributors and direct sales and legacy products and also our new products. So we're happy with the growth there, and we expect that to continue.
So I guess asked another way, what would be, call it, upside to those internal expectations of a similar second half? Like what are some things you think could drive upside there?
Well, generally, I think the market we're seeing is continuing to accelerate. We just got Abbott's numbers this morning, for example, and they project a 10% year-over-year increase. So short term, we're not seeing any further disruptions in our current sales. And I think long term, -- we have impressive products and important customers and long-term growth for those types of customers.
Is there any color you can give on backlog or backlog coverage or any metrics you could share there, that would be helpful.
Yes. We typically don't track backlog. I'd say we typically have a strong order flow, and we have plenty of inventory to satisfy those expected orders, and I think we're in good shape there.
And then last one for me would be and you'd speak to the capacity expansion and how that's going. I recall last quarter, you mentioned it was mostly R&D for the time being, has that moved into volume production in earnest? Or any color on that would be helpful.
Yes. There certainly has been some shift towards production capacity with the additional resources from the expansion. I'd say the shift is relatively small now, but as a mentioned previously, there are some important design wins in our wafer level chip scale products. And that capacity is primarily from what we've added from the expansion. So that's good news, and we'll continue to transition capacity in that direction as the order flows increase here.
I remember last quarter, you mentioned that -- there was a bunch of new customers that start out small. I was just wondering if there is any growth in those new customers?
Yes. In general, I think the trends are definitely moving in the right direction. And as I described earlier, it's common for some of those new customers to start with relatively small orders and grow over time. And we're definitely seeing that. And specifically, in the products that I mentioned in the prepared remarks and in the wafer level chip scale products. We're seeing a continual increase in the interest and increases in order size. So it's definitely moving in the right direction.
And these new customers are mostly in the new industries you were talking about like robotics, correct?
Yes. Robotics and automation and factory automation and humanoid robotics are 2 important areas where we're seeing that interest.
I am among relatively new independent investor. I just congratulations on your new role and Curious to know, in terms of the long-term horizon of the company over the next 2 to 3 years. What is your sort of vision now for the company? Is it going to defer? Is it going to be a little bit different from what your predecessor was doing? And how should investors think about the company going forward?
I would say the main focus for me is taking advantage of the recent expansion and leveraging that towards new products and new products in fast-growing markets. So it's a continuation of our previous efforts and my efforts on the expansion in general. But I'd say it's a continuation in the trajectory that was started under Dan's leadership and moving to take advantage of that expansion.
And then on the medical device portion of the revenue, I know that sort of strong percentage of that is coming from Abbott right now. Is there a focus on sort of diversifying that out? Or how do you think about that?
We definitely work to expand our products throughout the medical device industry. So cardiac rhythm management and Abbott obviously is an important a customer of ours, but we see growth in other areas as well, other implantable medical devices such as neurostimulators, are important growth areas for NV's products as well. And it's because we have the advantages of small size and low power makes us a perfect technology for implantable medical devices.
Final question here for me. Would you say that your humanoid robotics customers are planning to be entering production volumes in 2027 or even in 2026 at the tail end of this year?
It's hard to say. We talk to our robotics customers regularly, and there is definitely a forecast for growth there. It's hard to speak directly to what their plans are. But we do see increasing production on our side, and we're happy to report that those are moving in to those types of applications, so automation and humanoid robotics. So generally, I think we're aligned well with the industry and the specific needs for the robotics market. And we'll continue to see things move in that direction.
And my final, I guess, question on the human on robotics front, two-pronged here. Would you say most of your humanoid robotics customers are Western OEMs? And would you be able to like size the relative dollar content per robot that you guys are expecting, even if it's a range?
Sure. Yes. So we have a global distribution network for our robotics customers and our subsystem customers in the robotics marketplace. So we're sort of saying both Western customers and global customers to answer the first part of your question. The second part of your question in terms of the dollar content and there, a typical NV product ASP is perhaps 1 to 2 per sensor. And obviously, there's several sensors used in the precision motion application of human robotics. So we see a potential for several NVE sensors per robot there and that drives a significant revenue from our perspective. So I think there's a big upside.
And by several, do you -- would you say in the tens of sensors or in the hundreds of sense, like just a scale of 20 to 50, like a rough range?
Certainly, in the tens of centers, I think is fair.
I just had one question. So with the short-term disruption with respect to the second quarter, and some of that revenue getting pulled into the first. Is it fair to -- is it really fair to say when you think about your second half estimates being kind of in line with the first half that you would normalize those first 2 quarters, in other words, it would be somewhere along the midpoint on a quarter-by-quarter basis going forward of the first 2 quarters.
Yes. That's certainly 1 way to look at it. I think the year-to-date numbers are appropriate, and that's kind of where the estimates came from.
Pete, this is Pete Prevent again. Do you have any more expansion plans? I mean I remember when I was there a few years ago of the new area that you guys expanded. It sounds like you've got equipment selling in that area. Is there a need for additional space? Do you haven't secured any additional buildings where you moved admin into that, and then you're going to use that area in the existing building for production.
That's right, Pete. Good memory. That is the opt-in that we evaluate. We haven't discussed further expansion plans beyond the space that you saw when you visited. However, that is something obviously that we keep in mind, and we will continue to expand as needed and we'd follow the strategy that you mentioned, which is to move some of the admin off-site and continue to expand by leveraging the infrastructure that we have here within our current building. So we definitely keep those plans of fresh and we'll adapt to them as we need to.
Okay. Great. And it seems like you have a phenomenal Board of Directors are you guys meeting quarterly? And how do you feel they are in supporting your efforts, your growth efforts and any needs that you have in order to continue to grow the company.
Yes. We have an excellent board, as you mentioned, and we're happy to draw from experience throughout the industry. We expanded our Board to 7. And I think that makes them even stronger. And yes, we meet on a quarterly basis and happy to get the feedback and direction that the Board provides very valuable for the company.
Can you just talk quickly about the contributor sales as effectively -- well, first of all, how has it changed from last quarter? And should I view that as an increase in distributor sales mix being the ability to flex revenue higher but coming at lower margin?
I think that's a safe assumption. We have a global distribution network, as I mentioned earlier, and they leverage sales for us. So this is a sort of broadest estimate of the sales of the company. It covers the broadest product portfolio for us. And when we see growth there, that's a very good sign for revenue in general. And so we're very happy to see distributor sales increasing and it's a sign of continued attraction of entries products in general, growing -- gaining in the market.
But you're saying as a percent of mix distributor sales had increased quarter-over-quarter?
It has. It does bob around a little bit and vary from quarter-to-quarter, as you might expect. Certainly, when we have a lower direct customer sales as we did in the last quarter than just our percentage of distributor sales increases. It's common for it to vary somewhat throughout the year. But in general, it's fairly steady usually between something like 1/3 and 2/3 of total revenue.
I just have 2 questions. And first off, congratulations on the new role. I had a question in regards to specifically the distributor sales growth year-over-year and how you see those trends going forward? And then a little bit more color on the first half of the year related to nonmedical sales growth, stripping out Abbott and all those medical sales growth. If you could give any color on that?
Well, as I mentioned, distributor sales is a pretty broad representation of NVE's product portfolio and when we see growth there, that's a good sign because it's sort of a more general reflection of envies products and sales. And we see that as a very good sign. And then in terms of the distributor sales in general, we're pleased to see that increasing. And I think overall, the growth that we've seen year-to-date and going forward will be a continuation of some of the things we said in the first quarter, and that's growth broadly generally and across NVE's products?
Did I hear correctly that distributor sales grew 67% year-over-year. Did you guys say that in the initial remarks? Or was I mishearing something?
No, that's correct, Kevin.
Is that for H1? Or is that for Q2?
That's for Q2.
Do you have an H1 figure for distributor sales year-over-year?
It's somewhat less than that. I would place it a little bit lower, perhaps in the 40% range.
Okay. So it's -- so distributor sales has accelerated in Q2 versus Q1.
Correct. Understood. All right. Thank you, Pete.
I have 1 more question. About my question earlier about, I guess, customer diversification. And you were saying how the end of year or the second half of the year's earnings are going to be similar to the first half. Is that correct?
Correct. Yes.
Is that mix going to be similar to the first half, where it's mostly a few large customers? Or do you believe that the growth is going to come from additional customers like the additional ones that were gained in the first half of the year?
Yes. We certainly expect revenue to increasingly come from the new customers. And -- that's because the market is continuing to accept our new products, and we'll continue to see growth for that reason -- and so I think there's some short-term optimism as our wafer level chip scale products, new gear centers and others that we've talked about previously continue to grow and and become more representative of the total revenue numbers.
I guess this -- given that, obviously, NVE has very -- I guess, you could say in each technology that isn't very easily replicated and has many applications the biggest barrier to entry or I guess the biggest competitive advantage that NVE and more specifically, the spintronic technology has. And I guess, why other new entrants can't come in and take over in a sense.
Yes. Barriers to entry include patent portfolio and that prevents competitors from operating in our space. So we have excellent patent coverage in spintronics and -- we think that provides that coverage. We also have trade secrets and expertise within the company that make it very difficult for competitors to do what NVE does and to try to copy the advantages that NVE provides with spintronics. It's a unique technology, we provide benefit using to our customers that's unlike any others. And we think our company is reflective of those advantages.
Okay. Well, the second quarter and excellent growth in revenue for the first half of the year. Our next earnings call will be in January to discuss third quarter results. A replay of this call will be available on the investor events page of our website, www.nve.com and our YouTube channel, youtube.com/nvecorporation.
NVE Corporation — Q1 2027 Earnings Call
1. Management Discussion
Good afternoon, and welcome to the MD Corporation conference call for the quarter ended June 30, 2026. I'm Dan Baker. The President and CEO. I'm joined by Daniel Nelson, our Principal Financial Officer; and Pete Eames, Vice President of Advanced Technology and [indiscernible] This call is being webcast live by YouTube and Google Meet and being reported. A replay will be available for our website, nve.com and our [indiscernible] [Operator Instructions] After my opening comment, Daniel Nelson will present our financial results. He will cover new products and R&D, and I'll cover sales mark. I'll also cover our oncoming leadership position and Board expansion. And then we'll open the call to questions.
We include our press summary financial results and filed our quarterly report on Form 10-Q in the past hour following the close of Martin. Links to the press release and 10-Q are available through our website, the SEC's website and as formerly known as [indiscernible] please refer to the safe harbor statement on your screen.
Comments we may make that relate to future plans, events, financial results or performance are forward-looking statements subject to certain risks and uncertainties, including, among others, such factors as our reliance on several large customers significant uncertainties related to the economic environments in the industries we serve uncertainties related to future sales and revenue as well as the risk factors listed from time to time in our filings with the including our annual report on Form 10-K for the year ended March 31, 2026.
Actual results could differ materially from the information provided, and we undertake no obligation to update forward-looking statements we may make. We're pleased to report exceptional results our growth accelerated with an 81% increase in revenue and a 79% increase in net income, driven by new product sales and a strong semiconductor market. Daniel Nelson will cover details of the financials. Daniel?
Thanks, Dan. As Dan said, first quarter total revenue increased 81% to $11 million from $6.1 million for the prior year quarter. The increase was due to an 82% increase in product sales and a 53% increase in contract R&D revenue. Product sales increased across defense and nondefense product lines, as well as distributor and direct channels.
Higher volumes helped boost gross margin for the quarter to 81.3% of revenue compared to 8.6% in the prior year quarter. Total expenses increased 49% due to a 31% increase in research and development expense and an 81% increase in selling, general and administrative expense. The increase in research and development expense was due to increased staffing and new product development activities. The increase in selling, general and administrative expenses was primarily due to increased performance-based compensation.
The increase in expenses was less than a revenue increase. So expenses as a percentage of revenue decreased from 19% to 15%. Interest income decreased 10% and due to decrease in our marketable securities portfolio as proceeds from bond maturities partially funded dividends and fixed asset purchases in the prior fiscal year.
Net income for the quarter increased 79% to $6.39 million, or $1.32 per diluted share from $3.8 million or $0.74 per share. The increase was primarily due to increased revenue, partially offset by increased operating expenses and decreased interest income.
Earnings more than cover above $1 [indiscernible] for the quarter was strong. Operating margin was 66%, Pretax margin was 78% and net margin was 58%. Inventories decreased by 6% in the quarter due to increased product sales.
Fixed asset purchases were $57,000 for the quarter compared to $106 million in the same quarter [indiscernible] was due to the completion of our 2-year multimillion dollar expansion. We expect fixed asset purchases this fiscal year to be significantly less than the prior year with the completion of our expansion.
Our balance sheet strengthened in the quarter, with earnings more than covering our dividend. Cash plus marketable securities increased $391,000 to $43.9 million as of June 30 compared to $43.5 million as of March 31. Now I'll turn the call over to Pete Eames to cover new products and research and development. Pete?
Thanks, Daniel. I'll cover new products and R&D. Our R&D strategy is to transition the world's best technologies into the world's best products for high-value markets such as advanced humanoid robotics, data centers and highly automated fourth wave factories using artificial intelligence of things. Just this week, we launched 2 new wafer-level chip scale sensors for implantable medical devices.
The new parts are about 1/3 of the area of the conventionally packaged versions, which are already quite small. The even smaller sensors allow miniaturized implantable medical devices. These are our first wafer-level chip scale sensors with a unique and important MRI-safe feature. The sensor functions as a magnetic switch in a normal magnetic field and the sensors are stable to very high magnetic fields of over 9 Tesla, which is more than the fields produced by the strongest MRI machines.
MRI safety ensures that the medical device that uses the sensor doesn't fail if the patient needs an MRI. We have a video on our website and YouTube channel showing how we verify this feature using ultra-high-field magnets. In addition to the new product launches, we're developing several new products, including more precise sensors for robotics and more power-efficient isolators for power conversion.
Now I'll turn it back over to Dan Baker.
Thanks, Pete. I'll cover sales and marketing and our upcoming leadership transition. In the past quarter, we exhibited at 2 trade shows focused on sensors. In May, we were at Sensors Converge in Silicon Valley -- which is North America's largest event of its type where we focused on robotics and the artificial intelligence of things or AIoT. We have a strong benefit proposition for those markets, including small size for precise motion and smart sensor edge computing for easy integration with AI.
In June, we exhibited a sensor plus test in Germany, which is built as the leading international trade fair for sensors, measuring and testing technology.
In addition to robotics and AIoT, the German show was a good opportunity for us to highlight our power conversion products. Videos of several new demos are on our website and our YouTube channel. The shows generated some good leads, and we believe our investments in shows will pay off in future sales.
Last month, we announced that I'm retiring as President and CEO, effective as of our annual meeting in August. The Board appointed Pete to succeed me, subject to shareholder approval, I'll remain on the board as Chairman. Current Chairman, Terry Glarner, will remain on the Board, and Pete will join the Board.
In addition to the incumbent directors in Pete, the Board has nominated a new Director, Carolyn Valentine, pending shareholder approval, the Board will expand from 5 to 7 directors. The larger Board will strengthen our corporate governance, and we already have the highest possible ISS governance score. Leading NVE has been a privilege. I'm proud of what our team has accomplished and confident the company is well positioned for continued success. The Board conducted a thoughtful succession planning process and unanimously chose Pete as the company's next CEO.
He brings extraordinary experience. dedication and judgment, and I know our shareholders will be well served by his leadership in the years ahead.
Dan, on behalf of employees, customers and shareholders, I thank you for many dedicated years of service and pioneering leadership with [ Spintronics ] at NVE. We will continue to benefit from your guidance as Board Chairman. I'm honored to lead NVE as CEO. We have a talented team, strong customer relationships and many exciting opportunities ahead. .
I look forward to building on our momentum, creating long-term value for our shareholders through profitable growth, strong shareholder returns and continued Spintronic product excellence.
Thanks for the kind words, Pete. Now we'd like to open the call for questions via Google Meet. [Operator Instructions]
2. Question Answer
Dan, this [indiscernible] from Principal Financial. Congrats on the latest results. I wanted to ask based on the sequential increase you saw in the past quarter, I'm curious if you could attribute or how much you could attribute to the capacity expansion versus market demand as possible.
This is Pete. Thanks for the question. We see both those factors. We've recently completed the expansion that you mentioned, and we started using that capacity primarily for R&D activities. But we also see the market conditions as important factors. We have excellent new products out there now in important new markets, and we're excited about the growth. .
Awesome. And just as a quick follow-up, if I may. So it sounds like volume production remains in the existing or the legacy manufacturing facility. And so is it the plan that eventually the expanded capacity will be used for volume production as well? Or is it the plan that it will stay for R&D use cases?
The existing capacity is used for R&D largely now, but it's also being used for production, especially for some of our new products. And it will be continued to phase over as production shifts and the new products ramp up. So we really do see the investment paying off for long term there.
This is Aran from Delta Research. I just want to say great work on the quarter. I did have one question. So the release sites new product sales. I was wondering if you could provide any color whether if these new products are going to new customers or are existing customers adopting the newer parts.
The new products that most of the volume was in existing customers, but we also had new customers and they tend to start out a little bit more slowly. So they don't move the top line an awful lot, but they bode very well for the future. So we were very pleased with the results of having some of our existing customers, design in our newer products and new customers looking at newer products as well.
And just a quick question. I noticed your accounts receivable went up not quite double. Some color on that.
Mike, this is Daniel Nelson, thanks for the question. So you're right, accounts receivable did increase and most of that increase is driven by increased sales in the past quarter. Timing of customer payments as well contributed to some of that but mostly driven by increased sales in the past quarter.
Okay. So does that mean like I don't know what the terms are for payments and so forth. But it sounds like maybe a lot of your increase in sales came on the back end of the quarter versus the front end? Or how does that look?
Yes. Some of the sales did happen in the third month of the quarter. And most of those invoices are still outstanding as of the end of the month. But as we speak, most of those have already been collected on.
Hello. My name is Dell. I've got a question coming from the fact that I've worked with the insurance crop insurance industry for quite a number of years on metical support analysts and I was looking at some of the technology that topic you NVE, and I'm especially interested if there's any pursuing cases going using DRIP-free-TMIr sensor infrastructures on the field for enhancement of AI, which is only going to grow with agricultural exponentially as with everything else. What is your idea on that, sir?
Yes. Great question. So there are some opportunities there, and particularly the features of NVE products make that an interesting market. We have very low power sensors for unattended networks and unattended sensor nodes that's particularly powerful for crop insurance because we're able to monitor crop conditions directly and then respond quickly as well with our sensor technologies as well.
So we're doing sensing and data transmission and both of those areas are important for monitoring the data of crops remotely and responding adequately.
If I have some of the ideas, I'm sorry, if I can to agreements -- if I have some other ideas because I've been in the industry for so long, I specialized with remote support. I was wondering could I send them to a place within NVE like for RS 48 wired edge frameworks and other things like that where your cross pattern, node displacements so that it doesn't follow within neighborhood line, so you don't lose whole patents of fields stuff like that. Is there any way of doing that?
Absolutely. We've got some of the best customer service in the industry, and we're ready to respond to your inquiries. If you go to our website, there's a sensor apps e-mail address available, and you can submit your questions directly to that.
I was wondering, understandably don't give customers by name, but if you could detail any incremental momentum you're seeing by end market, whether that be robotics and humanoids or industrial automation or data centers or medical. I would just be curious to hear maybe how you kind of rank the end markets and the change in momentum lately.
Sure. Thanks, [indiscernible] Yes, there's important opportunities, particularly in robotics that we see -- we talked a lot about wafer level chip scale products, including the announcement on the call today. in the previous calls last quarter as well.
And we do see some distinct advantages in both low power, but particularly the precision that our products offer in automation and robotics. We'd say that's probably the strongest growing area and the most promising for our technology.
Walter Morris, as you know we've been very long-term shareholders in your company. Congratulations on a great quarter. Certainly, the right kind of way to wrap up your long tenure at the company. So kudos. Would you talk about -- I mean, this was an explosive quarter.
Now we've had over the years, breakout quarters where revenue run rate, which is consistently over many years, on a quarterly basis, we're on it $6 million to $7 million. And then periodically, we'll have a high single-digit, low double-digit revenue quarter. But at least up to now, there's been a reversion to the kind of $25 million annualized revenue run rate in your business?
Very importantly, can you speak to the possibility or the likelihood that this represents a new higher, meaningfully higher plateau and over the next 3 to 5 years, a major increase, hopefully, in strong double digits in the company's secular revenue growth rate.
Absolutely, Walter. We see this as evidence and validation of the strategy that we put in place to target some of these very high-growth markets that we've been talking about. Pete mentioned the growth in robotics, which is a fast-growing market where we have a convincing benefit proposition.
So while you're right, things might have taken a little longer than we had hoped, we're confident that we have the right strategy. We have products in place. We have a dedicated sales force and distribution network and we have unique products and capacity that we just added. So we're very bullish about the future.
So if I just might parities that to make sure I understand it, this current quarter's revenue run rate represents in general, give or take, million, let's say, a new and consistently higher revenue run rate off of which you hope top line grows at healthy double-digit rates going forward. Is that fair?
Well, Walter, I think you know us well enough to know that we aren't able to give forward-looking guidance but I will -- and particularly with specific numbers that you just alluded to. But I will say we're very optimistic and extremely pleased with [indiscernible] we have.
Final question, has the momentum of the June quarter continued at least so far into the September quarter?
Walter, it's hard to comment on the numbers for the current quarter. I think the primary factor among the others that Dan mentioned is the improvement in the semiconductor industry, and that's producing a lot of optimism in general.
So I think for that reason alone, we're optimistic going forward. And also, as Dan said, we have great products excellent distribution and sales, and we're very excited.
Well, there are no further questions. So I'd sum up with saying we were pleased to report a blowout quarter with an 81% increase in revenue, a 79% increase in net income and $1.32 earnings per share.
We look forward to meeting some of you at our Annual Shareholders Meeting August 6 here at NVE. Our next earnings call will be in October. A replay of this call will be available on the investor events page of our website at nve.com and our YouTube channel that's youtube.com/nvecorporation.
NVE Corporation — Q4 2026 Earnings Call
1. Management Discussion
Good afternoon, and welcome to the NVE Corporation conference call for the quarter and fiscal year ended March 31, 2026. I'm Dan Baker, NVE's President and CEO. I'm joined by Daniel Nelson, our Principal Financial Officer; and Pete Eames, Vice President of Advanced Technology.
This call is being webcast live by YouTube and Google Meet and being recorded. A replay will be available through our website, nve.com, and our YouTube channel, youtube.com/nvecorporation. [Operator Instructions]
After my opening comments, Daniel Nelson will present our financial results. Pete will cover new products and R&D. I'll cover sales and marketing, and then we'll open the call to questions. Note that we're using a new call-in service this quarter with a different phone number. The call-in number and PIN are in our press release and in the Investor Events section of our website.
We issued our press release with summary financial results and filed our annual report on Form 10-K in the past hour, following the close of market. The press release has financial results for the quarter in addition to the fiscal year. Links to the press release and 10-K are available through our website, the SEC's website and X, formerly known as Twitter. Also, this afternoon, we posted a new Sustainability Report on our website. The new report replaces and supersedes our Task Force on Climate-related Financial Disclosures, or TCFD report.
The new report covers climate, employees and governance. And we also highlight the positive impact of our products on people and the environment. Please refer to the safe harbor statement on your screen. Comments we may make that relate to future plans, events, financial results or performance are forward-looking statements that are subject to certain risks and uncertainties, including, among others, such factors as our reliance on several large customers for a significant percentage of revenue, uncertainties related to the economic environments in the industries we serve, uncertainties related to future sales and revenue as well as the risk factors listed from time to time in our filings with the SEC, including our just filed annual report on Form 10-K.
Actual results could differ materially from the information provided, and we undertake no obligation to update forward-looking statements we may make.
We're pleased to report a 27% increase in net income for the quarter driven by a 34% increase in our core nondefense sales, which more than offset a decrease in defense sales.
Daniel Nelson will cover details of the financials. Daniel?
Thanks, Dan. Fourth quarter total revenue increased 5% year-over-year to $7.65 million. The increase was due to a 6% increase in product sales, partially offset by a 19% decrease in contract R&D revenue. The increase in product sales was due to a 34% increase in nondefense product sales, as Dan Baker noted, partially offset by a 79% year-over-year decrease in defense sales, which can be volatile because of defense procurement cycles.
Sales increased across most of our nondefense product lines and channels. Total revenue increased 23% from the prior quarter. We see a continued bright outlook for product sales with favorable semiconductor industry conditions in our new products. We have ample inventories to support increased demand. The defense business has been steadily recovering over the past year, and we currently expect defense sales to increase significantly this fiscal year, the year ending March 31, 2027.
Contract R&D is primarily defense and government related, and those revenues can also be uneven, but we currently expect contract R&D to increase this fiscal year. Gross margin for the quarter was 78% of revenue compared to 79% in the prior year quarter. Total operating expenses decreased 19% for the fourth quarter of fiscal 2026 compared to the fourth quarter of fiscal 2025, due to a 26% decrease in R&D expense and a 5% decrease in SG&A. The decrease in R&D was due to completion of some of our wafer-level chip-scale packaging activities and reassignment of some R&D resources to manufacturing. The decrease in SG&A was primarily due to the timing of selling and marketing activities and reassignment of some SG&A resources to manufacturing and new product development.
Interest income in the quarter decreased 6% due to a decrease in our marketable securities portfolio as proceeds from bond maturities help us pay generous dividends. Our effective tax rate, which is the provision for income taxes as a percentage of income before taxes, decreased to 5% for the fourth quarter of fiscal 2026 compared to 18% for the fourth quarter of fiscal 2025. The decrease was primarily due to advanced manufacturing investment tax credit on equipment we put into service in the past quarter. Net income for the quarter increased 27% to $4.9 million or $1.02 per diluted share from $3.89 million or $0.80 per diluted share.
The increase was primarily due to increased revenue, decreased operating expenses and a decrease in our effective tax rate. This was our highest earnings since the chip semiconductor shortages 3 years ago. Earnings more than cover our $1 per share dividend for the past quarter. Our profitability metrics for the quarter were strong. Operating margin was 62%, pretax margin was 68% and net margin was 64%. For the fiscal year, total revenue increased 2% to $26.3 million from $25.9 million as revenue increases in the past 2 quarters more than offset decreases in the first 2 quarters.
The increase in product sales was due to a 21% increase in nondefense product sales, partially offset by a 67% decrease in defense sales, which can be volatile because of defense procurement cycles. Our full year tax rate decreased to 15% for fiscal 2026 compared to 16% for fiscal 2025. The decrease was primarily due to an increase in advanced manufacturing investment tax credits, partially offset by a decrease in foreign derived intangible income deductions.
The fiscal 2026 provision for income taxes included $1.07 million in advanced manufacturing investment tax credits. We expect such credits to decrease significantly in fiscal 2027 since we expect manufacturing equipment purchases to decrease significantly with the completion of our expansion. Prior year unamortized R&D expenses write-off allowed under the new tax law reduced our fiscal 2026 quarterly estimated tax payments by $1.4 million. We also expect a $1.3 million Dallas federal tax refund as a result of research and development and advanced manufacturing investment tax credits claimed in the fourth quarter of fiscal 2026.
Net income for the year increased to $3.14 per diluted share from $3.11 per diluted share. The increase was primarily due to increased revenue, decreased operating expenses and a decrease in our effective tax rate, partially offset by decreased gross margin and decreased other income. For the year, operating margin was 60%, pretax margin was 68% and net margin was 58%. Cash flow from operations was $16.7 million in the fiscal year, an increase of 16% from the prior year. Cash flow was $1.5 million more than net income, showing the high quality of our earnings.
Highlighting 2 cash flow items. Inventories decreased by 5% due to increased product sales. Raw materials and WIP inventory decreased, but finished goods inventory increased. New equipment helped us convert raw materials and WIP efficiently. We've increased finished goods inventory to support increased product demand. Fixed asset purchases were $2.19 million for the fiscal year, which is unusually large for us. We substantially completed spending on our 2-year multimillion dollar expansion.
We put the last major equipment cluster for that expansion into service in the past quarter as planned. Pete Eames will discuss the new equipment. We expect fixed asset purchases to decrease significantly in fiscal 2027 with the completion of our expansion.
Now I'll turn the call over to Pete Eames, our Vice President of Advanced Technology, to discuss the new equipment and to cover new products and R&D. Pete?
Thanks, Daniel. I'll cover new equipment and R&D. We completed a significant expansion in the past quarter. New equipment in the past year has increased our capacity, increased our capabilities and allowed us to do smaller and more precise wafer-level chip-scale package parts in-house. The new equipment allows extremely precise control of spintronic materials deposition to well within one atomic layer. This capability translates into more precise spintronic devices and expands our capacity with existing products.
As Daniel said, we placed the new equipment into service in the past quarter as planned. It's building products, and we're confident the new equipment will pay back with more revenue. In the past quarter, the new equipment helped us fill orders for new high-performance TMR sensors. Our R&D strategy is to transition the world's best technology into the world's best products for high-value markets such as medical devices, electric and autonomous vehicles, advanced humanoid robotics and highly automated fourth wave factories using the Artificial Intelligence of Things. We have a continuous flow of new products as part of that strategy.
In the past quarter, we announced a new wafer-level chip-scale sensor for medical and industrial applications. The new part is 0.65 millimeters on the side. And as you can see in the slide, the sensor is about 1/3 the area of the conventionally packaged version, which allows smaller medical devices and especially precise robotics.
In addition to the new sensor launches in the past fiscal year, we've also invested in advanced R&D initiatives with the potential to drive future growth, including next-generation MRAM for anti-tamper applications, next-generation sensors for hearing aids and medical devices and extremely sensitive TMR sensors.
Now I'll turn it back over to Dan Baker.
Thanks, Pete. I'll cover sales and marketing. In sales, last week, we announced a new distributor for our isolator products, Semitech Incorporated. They specialize in supporting electronics contract manufacturers, which is a good market for us. In the past quarter, we exhibited at Medical Design and Manufacturing West in Anaheim, California, for the first time. It's one of the largest and most influential business-to-business medical device and advanced manufacturing trade shows in North America with attendees from all over the world.
Medical devices are an important market for us. Our product advantages for medical devices include small size, low power and superb reliability. At the show, we highlighted wafer-level chip-scale parts for miniaturization of implantable medical devices and surgical robots, MRI-safe and MRI-tolerant sensors for medical devices, high-sensitivity sensors for medical device navigation and our best-in-class electrical isolators to ensure the safety of medical instruments. A video of several new demos is on our website and our YouTube channel. The show generated some good leads, and we believe our investment in shows will pay off in future sales.
We're exhibiting at 2 trade shows focused on sensors this quarter. Today and tomorrow, we're at Sensors Converge in Silicon Valley, which is North America's largest event of its type, where we're focused on robotics and the Artificial Intelligence of Things, or AIoT. We have a strong benefit proposition for those markets, including small size for precise motion and smart sensor edge computing for easy integration with AI. Next month, we'll exhibit at Sensor+Test in Germany, which is billed as the leading international trade fair for sensors, measuring and testing technology. In addition to robotics and AIoT, the German show is a chance for us to highlight our power conversion products for cars and charging stations.
In addition to trade shows under our own banner, some of our distributor partners will be at those and other trade shows for the spring trade show season.
Now we'd like to open the call for questions. We switched to Google Meet for questions since Amazon Chime has been discontinued. The instructions have changed slightly. [Operator Instructions]
2. Question Answer
It's Jeff Bernstein from Silverberg Bernstein Capital. Nice to see the revenue growth this quarter. Congratulations on that. I had a couple of questions. First, the call quality at first wasn't great. And I just want to make sure I got the numbers right on the increase in nondefense sales and the decrease in defense sales in the quarter?
Daniel, do you have those?
Yes, the decrease in defense sales was 67% as per our prepared remarks, and the increase in product sales was 21%.
Okay. That's great. And then, Dan, I had a question. You talked about getting some new distribution in isolators. And I was wondering, your isolators work very differently than the photonic isolators that other people use. And I would assume that they have a better mean time between failure, but also use less power and dissipate less heat, which are becoming very important in data centers. How applicable are they for the kind of power regimes that they're moving into in the new AI data centers? And what do you think the power and heat dissipation savings would be from using your isolators?
Jeff, this is Pete Eames. I can try to answer this question for you. Typically, our power conversion products operate at higher frequency than our competitors. And this higher frequency produces an improved efficiency. As you hinted, overall efficiency is very important, but it tends to be a small percentage, maybe a few percent. But again, this adds up to be a very important benefit. Data centers use a lot of power, and the small efficiency improvements can make a big difference.
Is Semi the kind of guy who is in a position to get you into some rack designs and things of that nature that go into the AI infrastructure?
You mean the new distributor, Jeff?
Yes.
Yes, they are. They service EMSs, electronic manufacturing services. And so that's a lot of high-volume manufacturing for new designs. So that's one of the reasons why we thought it was a very good fit.
That's great. And then you guys put out some marketing materials during the quarter which talked about some end-of-lifing of parts by Texas Instruments and ADI. And I just want to understand what that was all about?
Well, unlike conventional semiconductor manufacturers, we're committed to long-term support of our customers and our products. So for us, it isn't just a financial decision where we would haul a product if it doesn't have enough volume. We believe that our -- if our customers design our parts in, that -- they have an expectation that we're going to be in it with them for the long haul.
So when some of the conventional semiconductor manufacturers discontinue parts, in many cases, we can offer alternatives. So that was -- you're probably referring to one of our customer newsletters where we referred to some of those parts, some of those packages that were being discontinued by conventional semiconductor manufacturers where we could offer a better part, better stability and better supply [Technical Difficulty].
Can you hear me?
Yes.
This is Ittai Eden from Principal. Congrats on the quarter. I'm curious if we should be expecting next year given the capacity effectively doubled as of the end of this quarter, whether we should be expecting revenue to more or less double as well?
Yes. Good question, Ittai. Our goal is to grow. We don't give -- as you know, we don't give specific guidance, but we're optimistic. The global semiconductor market is improving. We have ample inventories. We have exciting new products. And as you mentioned, we have quite a bit more capacity. So we see a bright future.
That's helpful. And if I heard it correctly, the data center opportunity, while, call it, zero today is somewhat building. Can you describe or put any numbers to what you see the opportunity as a percent of the business or when or how you see it shaping up over time? That would be helpful.
Yes, I can jump in on this one, Ittai. Yes, it's difficult to quantify something like this. So we don't sell directly to data centers. We sell to subassembly manufacturers who build the systems in data centers. So it's difficult to directly connect the data center growth to isolator volumes.
Got it. And then maybe if you can discuss any anecdotal wins or examples of maybe pipeline or backlog, specifically in robotics and how that's trended, that would also be great.
Well, we had a number of customers that are in robotics and other emerging markets or high-growth markets such as energy conversion. So some of the places where our sensors get used in robotics is on the, what's called the end effectors which are the hands or fingers of the robot, if you will, because we offer the smallest sensors available and much more precision. So for delicate operations, those are the sorts of things where our sensors shine. Those would be delicate operations for end effectors and also things like surgical medical robots that typically work on much smaller scales than other types of robots.
[Operator Instructions] Any other questions?
Well, if there are no other questions, we were pleased to report a 27% increase in earnings for the quarter, driven by a 34% increase in nondefense product sales as industry conditions improve and new products gain traction. We also completed a major expansion and deployed new equipment. We look forward to speaking with you again in July for our first quarter fiscal 2027 earnings call. A replay of this call will be available on the Investor Events page of our website at nve.com and on our YouTube channel at youtube.com/nvecorporation.
NVE Corporation — Q3 2026 Earnings Call
1. Management Discussion
Good afternoon, and welcome to the NVE Corporation Conference Call for the quarter ended December 31, 2025. I'm Dan Baker, NVE's President and CEO. I'm joined by Daniel Nelson, our Principal Financial Officer; and Pete Eames, Vice President of Advanced Technology.
This call is being webcast live via YouTube and Amazon Chime and being recorded. A replay will be available through our website, nve.com, and our YouTube channel, youtube.com/nvecorporation. [Operator Instructions]
After my opening comments, Daniel Nelson will present our financial results. Pete will cover new products and R&D. I'll cover sales and marketing and then we'll open the call to questions. We issued our press release with financial results and filed our quarterly report on Form 10-Q in the past hour following the close of market. Links to the press release and 10-Q are available through our website, the SEC's website and X, formerly known as Twitter.
Please refer to the safe harbor statement on your screen. Comments we may make that relate to future plans, events, financial results or performance are forward-looking statements that are subject to certain risks and uncertainties, including, among others, such factors as uncertainties related to the economic environments in the industries we serve, risks and uncertainties related to future sales and revenue and risks and uncertainties related to tariffs, customs duties and other trade barriers as well as the risk factors listed from time to time in our filings with the SEC, including our annual report on Form 10-K for the year ended March 31, 2025, as updated in our just filed 10-Q.
Actual results could differ materially from the information provided, and we undertake no obligation to update forward-looking statements we may make. We're pleased to report a 23% increase in revenue and an 11% increase in earnings for the third quarter of fiscal 2026 compared to the prior year quarter, driven by broad-based growth across our revenue lines, including defense and nondefense sales as well as distributor and direct channels.
Daniel Nelson will cover details of the financials. Daniel?
Thanks, Dan. As Dan said, revenue for the third quarter of fiscal 2026 increased 23% year-over-year. The increase was due to a 16% increase in product sales and a 335% increase in contract R&D revenue. The increases were across most of our product lines and channels.
Gross margin for the third quarter of fiscal 2026 was 79% of revenue compared with 84% in the prior year quarter. The decrease in gross margin percentage was due to a less profitable product mix and increased distributor sales for the quarter. The increase in distributor sales is positive, although distributor sales typically have lower gross margin than direct sales.
Total operating expenses decreased 12% for the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025 due to a 9% decrease in R&D expense and a 19% decrease in SG&A. The decrease in R&D was due to completion of some of our wafer level chip scale packaging activities and reassignment of some R&D resources to manufacturing. The decrease in SG&A was primarily due to the timing of selling and marketing activities and reassignment of some SG&A resources to manufacturing and new product development.
Interest income decreased 3% due to a decrease in our marketable securities portfolio as proceeds from bond maturity, partially funded dividends and fixed asset purchases. Other income decreased by $135,000, which is primarily from reclaiming precious metals used in our manufacturing process in the prior year quarter.
Our effective tax rate, which is the provision for income taxes as a percentage of income before taxes increased to 20% for the third quarter of fiscal 2026 compared to 15% for the third quarter of fiscal 2025. The increase in our effective tax rate was primarily due to the noncash impact of tax law changes on certain tax deductions this fiscal year. We currently expect a full year tax rate of 16% to 17% in fiscal 2026 because we expect advanced manufacturing investment tax credits of between $700,000 and $1 million to offset the impact of other tax law changes.
And net income increased 11% to $3.38 million or $0.70 per diluted share from $3.05 million or $0.63 per share. The increase was primarily due to increased revenue and decreased operating expenses, partially offset by decreased gross margin, a decrease in other income and an increase in our effective tax rate.
Our profitability metrics remained strong. Operating margin was 60%. Pretax margin was 68% and net margin was 54%. For the first 9 months of fiscal 2026, total revenue increased 0.4% to $18.7 million from $18.6 million for the 9 months of the prior year as growth in the most recent quarter more than offset year-over-year decreases in the first 2 quarters of the fiscal year. The revenue increase for the first 9 months was due to a 0.8% increase in product sales, partially offset by an 8% decrease in contract R&D. Net income for the 9 months decreased 8% to $10.3 million or $2.12 per diluted share.
Turning to cash flow items. Cash flow from operations was $12.2 million in the first 9 months of the fiscal year. Accounts receivable decreased $1.1 million during the first 9 months of fiscal 2026 primarily due to the timing of customer payments. Inventories decreased by $177,000 due to increased product sales.
Prepaid expenses and other assets increased $323,000 primarily due to increased accrued bond interest and a decrease in federal and state taxes due. The decrease in taxes due was because we deducted previously unamortized research and development expenses in the quarter ended December 31, 2025, and as permitted under the federal budget reconciliation bill enacted July 4, 2025. We expect accelerated deductions of previously unamortized research and development expenses to reduce our cash taxes for the full fiscal year ending March 31, 2026 by approximately $1.1 million.
Accrued payroll and other current liabilities decreased $366,000 primarily due to the payments of federal and state taxes balance due as of March 31, 2025, and decreased accrual for performance-based compensation. Fixed asset purchases were $2.18 million for the first 9 months of the fiscal year, including $1.05 million in the December quarter. We substantially completed spending on our 2-year multimillion dollar expansion. We expect to put the equipment into service in the current quarter.
Pete Eames will discuss the new equipment. Now I'll turn the call over to Pete Eames, our Vice President of Advanced Technology to talk about our plans for the new equipment and to cover new products and R&D. Pete?
Thanks, Daniel. I'll cover new equipment and R&D. New equipment in the past year has increased our capacity, increased our capabilities and allowed us to do smaller and more precise wafer-level chip scale package parts in-house. We completed installation and calibration of a new equipment cluster in the past quarter in an expanded production area on the east end of our building.
The new equipment allows extremely precise control of spintronic materials deposition to well within 1 atomic layer. This capability translates into more precise spintronic devices and expands our capacity with existing products. We've made good progress developing new advanced spintronic processes on the equipment. And as Daniel said, we expect to place new equipment into service by March 31.
Our R&D strategy is to make the world's best electronics for high-value markets such as medical devices, electric and autonomous vehicles, advanced factory and humanoid robotics in highly automated Fourth Wave Factories using the artificial intelligence of things. We've had a continuous flow of new products as part of that strategy. Just yesterday, we announced a new wafer-level chip scale sensor a part that's just 0.65 millimeter square, about the size of the period at the end of our quarterly report and about as thick as the paper that it's printed on. The sensor is about 1/3 the size of the conventionally packaged version, and this tiny size allows for unmatched miniaturization and special sensitivity. There are demonstrations of our new products on our website and our YouTube channel.
Now I'll turn it back over to Dan Baker.
Thanks, Pete. I'll cover customers sales and marketing. Starting with customers. We're proud to supply products to some of the world's most demanding customers, including Abbott Laboratories. Abbott is a leading supplier of implantable medical devices. In the past quarter, we executed an extension to our supplier partnering agreement with Abbott. In recent years, the extensions have been for 1 year, but this extension is for 2 years through December 31, 2027. It provides for price increases for 2026 and 2027. The agreement was filed with the Form 8-K and their links in our just filed 10-Q on our website and the SEC's website.
Turning to sales and marketing. We exhibited at the Medical Design & Manufacturing Trade Show in the past quarter. Medical devices are an important market for us. We have a convincing benefit proposition for medical devices with small size, low power and superb reliability. At the show, we highlighted new wafer-level chip scale parts for miniaturization of implantable medical devices and surgical robots, high-field sensors to enable MRI-tolerant medical devices, high-sensitivity sensors for medical device navigation and our best-in-class electrical isolators to ensure the safety of medical instruments.
The show generated good leads, and we believe our investments and shows payoff and future sales. With the success of that show, we'll also exhibit at Medical Device & Manufacturing West for the first time. The exhibition starts February 3 in Anaheim, California and host attendees from all over the world.
Now we'd like to open the call for questions.
[Operator Instructions]
2. Question Answer
Dan, it's Jeff Bernstein from Silverberg Bernstein Capital. So we talked during the quarter about this idea of magnetic navigation in GPS compromised areas and whether you're magnetometer sensors were appropriate for that kind of application. Can you just talk a little bit about that and if you made any contact with anybody in the BOW about this?
Jeff, this is Pete Eames. I'm happy to answer that question. We have looked at MagNav. And for those who aren't familiar with it, this is a new technology that replaces GPS in the defense applications that are susceptible to GPS jamming. So typically, NVE sensors are lower power and much smaller than the sensors that are used to detect the magnetic field anomalies and magnet systems. But it is an interesting application for us. It's evolving and it's one of the things that we keep an eye on in the defense community to see how it evolves. And hopefully, we have an opportunity there in the future.
So do you have a part that you would deem appropriate for that application today or now?
Not exactly. MagNav is pretty new. It's still a relatively nascent technology. One of the problems with MagNav is that the maps that are being generated and used by sensors for this technology are still too imprecise. So it's still -- it's not a mature enough technology that we would chase it for example. But it's something that is interesting and fits within our defense systems and something that we think has a bright future.
Dan, this is [ Pete Prevett ] in Florida, how you guys. A couple of quick questions. Your new equipment up and running in March, I recall being at the shareholders meeting in '24, it'll be almost 2 years. Is that pretty much on the expected schedule that you thought?
It is. Thanks for the question, Pete. As you saw, we just had a blank space when you were here and at the annual meeting in 2025, we had a much more finished blank space. And now we've got a piece of equipment that's up and running, and as Daniel and Pete both mentioned, we plan to deploy it in an accounting sense this quarter. So things are going well, and we were -- it's a complicated piece of -- set of equipment and a complicated process, but our guys have done a great job of getting it done on schedule. So we're pleased with how it's going.
That's great to hear. With that, is there an expectation that, that new equipment will help with new product sales like adding to new revenue and/or I guess, better profitability because it's packaging, right? Some of it's for packaging, so you don't have to outsource the packaging?
Yes. This is Pete Eames again. Yes, Pete, I think there is a lot of optimism surrounding the technology that we're developing with the new equipment. I talked about one of the sensors in our earlier remarks. We're definitely selling samples of those parts. And we're -- again, we're looking forward to continued sales there. So I think the optimism continues.
And do you guys see the distributors building up inventory? Again, I know that, that was an issue that they had lots of inventory and had sell that down. Is that starting to pick up again?
Yes, it is. It's very positive. And Daniel mentioned that in the prepared remarks that our distributor sales are picking up and have been through the fiscal year. And that's an indication that some of those inventories that had built up during the semiconductor slowdown the last fiscal year and prior to that, have been depleted, burned off and end user demand is increasing. So we feel like we have the wind at our backs and we've got excellent products. and the inventory situation in the semiconductor industry as a whole is much better than it was.
That's fantastic. And let me ask you about the other company or one of the other companies in your space, Everspin. There seems to be a lot of interest in them lately and some talk about their intellectual property being valuable for quantum computing, possibly. How does NVE's intellectual property compare to what they have? And have you had any discussions with other companies about licensing your IP?
We have had discussions about licensing from time to time over the years, including we had a license agreement with predecessors of Everspin technology, including Motorola going way back. So we believe we have excellent intellectual property. We deploy it mostly for anti-tamper and HUF. So we are in a different market than ever spin, but we do have technology that applies to MRAM. We continue to develop MRAM.
And we've talked about it from time to time. Pete didn't talk about it on this call in the prepared remarks, but we continue to work on developing advanced MRAM mostly for defense applications, defense and anti-tamper applications. And we believe that the intellectual property has significant value, and we'll look for opportunities to monetize that through licensing or other means.
And I don't know too much about it, but with Flash memory, is MRAM a replacement of Flash? I on someone who mentioned something about memory and MRAM being a lot better with spintronics. Is there anything you could talk about there?
Yes. In general, MRAM is a nonvolatile memory, meaning it retains its information when the power is removed. And for some applications, that's a very powerful technology, and it's something that's already used in some embedded computing systems today. So it is very useful, and that's one of the things that, as Dan said, makes us believe that our IP is very valuable here.
Okay. Great. And last question. Dan, we love your post on Twitter. Do you employ or have a meeting company? Is there any plans to expand marketing? Not that we don't love your videos and stuff, but just curious about how you guys look at marketing to promote the company.
Well, we've been spending more on marketing, doing more marketing. So we try to do more of what works and what's been working, as I mentioned in the prepared remarks, our trade shows work very well for us. So we're going to more trade shows than we ever have. And we are working more and more on demonstrations. So the videos are one manifestation of demonstrations, but we also provide demonstrations at trade shows and for a specific customer targeted applications.
The newsletters are also very effective. We have a very high click rate, a very high response rate. So we measure our marketing activities, and we continue to boost the ones that work. So those are the kinds of things that we've been doing and we do get some response from Twitter. However, it's not a huge sales driver. Some of that is more fun and content that we have from other sources or for other targets such as trade shows.
Keep up the good work. I appreciate it.
Dan, it's Jeff Bernstein again. Just wanted to check in on the application for rare earth magnets for position sensing? And what kind of traction you've gotten there? And have we seen any revenue actually come through from any design wins? Or what's the design win situation looking like?
Yes, that's a good point. There's still a lot of concern in the supply chains about rare earth elements. And our sensors are uniquely positioned to use rare earth free ferrite magnets because of their high sensitivity. And we continue to offer ferrite magnets they do not use rare earth elements. They use iron and oxygen, which are 2 of the most abundant elements in the earth's crust. So we're well positioned in that, and we have gotten some sales, and we've gotten some interest in both the magnets and in the sensors that go with them.
So we do see it as a promising application. And the concern about rare earth magnets has done nothing but increase. So it's hard to quantify exactly how many are targeted at rare earth replacement and how many we're getting or we wouldn't have gotten, if it were for the concerns about rare earth, but it certainly helps us.
[Operator Instructions]
Can you hear me?
Yes.
This is [ Christopher Chevski ], a private investor. I was just wondering if there's any comments you can make on the current quarter, especially I'm wondering about your defense business, which happens to be a little bit more volatile?
Yes. I can try to add a little bit there, Christopher. I think we've talked fairly about some of the past quarters and explained that things have been relatively weak there. And in general, I think we're optimistic going forward. I think it's safe to say that we'll be returning to somewhat of a more normal flow there if that's of any help.
Yes. That's very helpful. And the rise in NRE revenues, does that pretend for additional future nondefense business?
That's certainly the goal. When we invest in R&D. We invest heavily in R&D. Pete talked about some of the programs. We talked about some of the things that we're doing in the medical space for new products and for advancements especially in miniaturization. So that's been a significant portion of our R&D, and we've been pleased with the response of customers and prospects to those products. And we believe they're going to pay off in future sales, and that's why we make the R&D investments.
Okay. And your 2-year agreement with Abbott, are there any market gains in that? Are you in any new devices?
Unfortunately, we can't talk about what devices they use our parts in, they use our sensors and we're bound by confidentiality. However, they make some remarkable devices, medical devices, and we're pleased to be a partner with them. We've been a partner with them for many years. And we're proud of the role that we play in making devices that can change people's lives. We also have other medical customers that sometimes we can't talk about. And we're promoting and meeting more of them, promoting our products and meeting more of those prospects and customers at the trade shows such as MDM here in Minneapolis recently and in early February, MDM West.
Dan, this is Pete again. Just one last question. The company, obviously, has been very, very solid over many years of delivering good performance. Can you talk a little bit about what the potential of customers being recurring, right? So rather than kind of sawtooth revenues quarter after quarter, year after year, where you're going to eventually have recurring orders from the same customers and then revenues might hit $6 million, $8 million, $10 million, $12 million per quarter because you've got repeat orders from the same customers, can you just give some clarity as to what the product mix looks like and if there's potential of that type of expectation from these customers that would order consistently so all investments are just adding on to revenues quarter after quarter?
Yes, that's a good point and a good question, Pete. So we look to increase our sales to our current customers with existing products and then we look to add new products to existing customers because we feel like our existing customers are our best prospects. They know us. They've seen the quality of the product we produce and the quality of the support that we provide. So we work on both. Our goal is to grow faster than our customers. We have to add customers we have to continue to add products and expand the products that we sell to existing customers.
And so I just mentioned Abbott, which is a great example of a customer that we've had for 20 years at least and they continue to buy our products, and they've expanded over years, the number of products that they use. So that we see is driving growth. And then we've added additional new customers, and then we add products for existing customers, new products for existing customers.
Jeff Bernstein. Just a follow-up question. As far as you guys have talked about in the past that at Abbott, you have exposure in the cardiac rhythm management area. You have exposure in the, I guess, neuromodulator area. In terms of the other medical customers that you're talking to, are these very similar kinds of applications? Or are there other applications I think you discussed medical robots and I'm kind of curious about why a big piece of equipment like that would need tiny parts like yours unless it's a sensitivity issue. But can you just flesh through that a little bit?
Yes. So we cover a variety of medical products. We cover life support medical devices, which are the types of pacemakers and ICDs that Abbott makes. We cover non-life support medical devices, and we cover medical instruments. We sell products for medical instruments, which would be monitors, pumps and things of that nature. They require different types of products. They have different design cycles, but they share a common goal of miniaturization of low power high sensitivity, high accuracy.
As far as the medical robots, which we talked about before, Pete touched on that with our wafer-level chip scale parts that the smaller parts Well, you're right, they might not need them because it's a relatively -- the robots are relatively large, but they offer more special sensitivity, which means that the robot can detect smaller displacement more precisely. And for medical robots, being able to do delicate operations is a key benefit, and our sensors enable that.
This is [ Ittai Abraham] from [ Principal Global ]. I just wanted to come back to the MRAM point. I'm curious if you can talk a little bit more if that's really just kind of an IP opportunity or if the added capacity can actually help you sell into some of MRAM and customers as well? And then I have one more.
Okay. Thanks for the question, Ittai. Our strategy has been to not make large-scale memories. That often requires multibillion-dollar fabs. So what we've been doing is specializing in high value-added memories that are used in specialized applications such as crypto keys for anti-tamper devices but we believe that the intellectual property is applicable to larger MRAMs that would have broader applications. So that's how we would participate in that market by licensing intellectual property that we've developed over the years.
Got it. That's super helpful. And then my second question is on the new capacity, I'm curious if you could give us a high-level view on the current mix shift may shift in terms of end market and how the new capacity might change the end market mix?
Right. So the new capacity is targeted at applications such as the Internet of Things and the artificial intelligence of things, which are emerging markets for industrial automation, merging the Internet of Things with artificial intelligence. So we see those as tremendous opportunities. They require inputs, which is what we do. We make sensors. And the future appears to have ubiquitous sensors, many very small sensors distributed in many robots and other locations in order to provide the information for smart factories that are that are self optimizing. So we see a historic opportunity there, and that's part of the reason why we were confident making such a large investment.
Got it. And congrats on the results.
Well, if there are no other questions, we were pleased to report strong increases in revenue and earnings driven by broad-based growth. We look forward to speaking with you again in early May for our fiscal year-end call. A replay of this call will be available on the Investor Events page of our website, that's nve.com and our YouTube channel, that's youtube.com/nvecorporation. Thank you for participating in this call.
NVE Corporation — Q2 2026 Earnings Call
1. Management Discussion
Good afternoon, and welcome to the NVE Corporation Conference Call for the quarter ended September 30, 2025. The I'm Dan Baker, NVE's President and CEO.
I'm joined by Daniel Nelson, our Principal Financial Officer; and Pete Eames, Vice President of Advanced Technology.
This call is being webcast live by YouTube and Amazon Chime and being recorded. A replay will be available through our website, nve.com, and our YouTube channel, youtube.com/nvecorporation. [Operator Instructions]
After my opening comments, Daniel Nelson will present our financial results. Pete will cover new products in R&D I'll cover the business, and then we'll open the call to questions. We issued our press release with financial results and filed our quarterly report on Form 10-Q in the past hour following the close of market. Links to the press release and 10-Q are available through our website, the SEC's website and X, formerly known as Twitter.
Please refer to the safe harbor statement on your screen. Comments we may make that relate to future plans, events, financial results or performance are forward-looking statements that are subject to certain risks and uncertainties, including, among others, such factors as uncertainties related to the economic environments in the industries we serve, risks and uncertainties related to future sales and revenue, and risks and uncertainties related to tariffs, customs duties and other trade barriers as well as the risk factors listed from time to time in our filings with the SEC, including our annual report on Form 10-K for the year ended March 31, 2025.
Actual results could differ materially from the information provided, and we undertake no obligation to update forward-looking statements we may make. We're pleased to report a 4% sequential increase in revenue driven by strong increases in distributor and nondefense sales despite an expected decrease in defense sales.
Daniel Nelson will cover details of the financials. Daniel?
Revenue increased 4% quarter-over-quarter sequentially and decreased 6% year-over-year. The year-over-year decrease was due to a 68% decrease in contract R&D revenue, partially offset by a 1% increase in product sales. Contract R&D was 3% of revenue.
The year-over-year increase in product sales was due to a 21% increase in nondefense sales, partially offset by a 64% decrease in defense sales which can be volatile because of defense procurement cycles. Defense products sales were 8% of revenue in the past quarter. Contract R&D is primarily defense or government related and those revenues can also be uneven.
Our defense business is primarily anti-tamper products that protect U.S. technology. It's important to our country, and is profitable business, although it's not part of our growth strategy. The defense business has been steadily recovering this fiscal year and as expected, defense industries sales increased sequentially in the past quarter. Distributor sales also increased nicely both sequentially and year-over-year.
Gross margin decreased to 78% from 86% in the prior year quarter due to a less profitable product mix and strong distributor sales, which tend to have lower margins than direct sales. Total expenses decreased 7% for the second quarter of fiscal 2026 compared to the second quarter of fiscal 2025 due to a 3% increase in R&D expense and a 23% decrease in SG&A.
The increase in R&D was due to increased new product development. The decrease in SG&A was primarily due to the timing of sales and marketing activities and reassignment of some SG&A resources to manufacturing and new product development.
Our tax rate increased to 20% for the second quarter of fiscal 2026 compared to 17% for the second quarter of fiscal 2025. primarily due to the noncash impact of tax law changes on certain tax deductions this fiscal year. We currently expect a full year tax rate of between 16% and 17% this fiscal year because we expect advanced manufacturing investment tax credits of between $700,000 and $1 million to offset the effect of other tax law changes. The advanced manufacturing and investment tax credit was extended in a tax bill enacted in July and increases from 25% to 30% in calendar 2026.
We currently expect our effective tax written next fiscal year to also be approximately 16% to 17%. More importantly, the tax law changes will reduce our cash taxes by approximately $1 million over 3 quarters, starting this quarter, the December quarter by allowing us to accelerate the deduction of previously unamortized R&D expenses.
After taxes, net income for the second quarter of fiscal 2026 was $3.31 million or $0.68 per diluted share compared to $4.03 million or $0.83 per share for the prior year quarter. The decrease in net income for the quarter was primarily due to decreased revenue, lower margins and a higher tax rate compared to a year ago, partially offset by decreased expenses.
Our profitability metrics remained strong. Operating margin was 58%, pretax margin was 65% and net margin was 52%. For the first 6 months of fiscal 2026, total revenue was $12.5 million, and net income was $6.89 million or $1.42 per diluted share adding in approximately $159,000 in unrealized gain on our marketable securities for the fiscal year. Comprehensive income for the first half was $7.05 million.
Turning to cash flow items. Cash flow from operations was $7.98 million in the first 6 months of the fiscal year. Accounts receivable decreased $1.1 million, primarily due to the timing of customer payments. Prepaid expenses and other assets increased by $730,000 primarily due to an increase in accrued bond interest and a decrease in federal and stick taxes due.
The decrease in taxes due was because we deducted previously unamortized research and development expenses in the past quarter as permitted under the federal budget reconciliation bill enacted July 4, 2025. Accrued payroll and other current liabilities decreased $286,000, primarily due to the payments of federal and state taxes balance due as of March 31, 2025.
Fixed asset purchases were $1.13 million for the first half of the fiscal year. Most of that was for cluster of production equipment, which arrived in July. We successfully installed the equipment in the past quarter and hope to complete deployment by the end of this fiscal year. We currently expect to spend an additional $1 million to $1.5 million on fixed assets in the last 6 months of the fiscal year to complete our production expansion. Pete Eames will discuss that equipment shortly.
Now I'll turn the call over to Pete Eames , our Vice President of Advanced Technology to talk about our plans for the new equipment and to cover new products and R&D. Pete?
Thanks, Daniel. I will cover new equipment and R&D. New equipment in the past year will increase our capacity, increase our capabilities and allow us to do wafer-level chip scale packaging in-house.
As Daniel said, we completed installation of a new equipment cluster in the past quarter and an expanded production area on the east end of our building. We've begun developing advanced spintronic processes on the new equipment and wafer-level chip scale packaging makes our parts smaller and more precise. Our R&D strategy is to make the world's best electronics for high-value markets such as medical devices, electric and autonomous vehicles, advanced factory and humanoid robotics in highly automated fourth wave factories using artificial intelligence of things.
Executing on that strategy, we launched 3 new products in the past quarter. Rotation sensor for applications such as network utility meters and robotics, a new type of data coupler for motor control and energy conversion and a new wafer-level chip scale voltage regulator for ultra miniature and ultra robust power conversion in harsh environments. There are demonstrations of the new products on our website and on our YouTube channel.
Going forward, with the ingenuity of our engineers and scientists, the new equipment will continue to accelerate product development and fuel growth.
Now I'll turn it back over to Dan.
Thanks, Pete. I'll cover sales and marketing in our annual meeting.
We exhibited at the medical design and manufacturing trade show the past 2 days in Minneapolis, part of the advanced manufacturing event. Minnesota is a health care industry hub and medical devices are an important market for us. We have a convincing benefit proposition for medical devices with small size, low power and superb reliability.
At the show, we highlighted new wafer-level chip scale parts for miniaturization of implantable medical devices and surgical robots, high-sensitivity sensors for medical device navigation, our best-in-class electrical isolators to ensure the safety of medical instruments and nano power sensors for battery-powered medical devices.
We gave away working sensor circuit boards with permanently connected batteries at the show to demonstrate ultra-low power performance. It was a popular promotion. We've been following up on some good leads from the show, and we believe our investments in trade shows will pay off in future sales.
We held our Annual Shareholders Meeting in the past quarter here at NVE proxy advisory firms recommend in-person annual meetings for good governance. All of our directors and officers attended along with our auditors. We had a chance to meet shareholders, answer questions, do live demos and provide tours. Shareholders had a chance to see our expanded production area and our new equipment.
We set up a compressor and compressed air tank to demonstrate pneumatic cylinder sensors. Pneumatic cylinders are the muscles of many robots and our sensors are their eyes. Visitors could try out our new wafer level chip scale sensors and advanced proximity sensors for advanced robotics. Visitors could try out our new wafer level chip scale sensors and advanced proximity sensors for advanced robotics.
In the formal meeting, each director was reelected named executive officer compensation was approved, and the selection of our independent registered public accounting firm was ratified. We filed the final vote counts in a current report on Form 8-K. There's a replay of the annual meeting and demonstrations on our website and YouTube channel.
Now we'd like to open the call for questions. [Operator Instructions]
2. Question Answer
Hello. Am I on?
You are.
Okay. Well, I have a quick question. It's great that you're selling out this new equipment. Are we -- should we expect to see growth in revenues for this new equipment? Or is it just growth in capabilities?
No. Part of our goal, as Pete said in the prepared remarks, is to use the new equipment to develop advanced products and to fuel our future growth. So it's both to increase our capabilities and to develop new products.
Right. And when should we see that future growth?
Well, our goal is always to grow. And in our core market, we grew we had strong growth in the past quarter. So we're starting to see -- we're starting to see the results of our R&D and our expansion plans already.
So you're referring to the sequential growth and also to the nonmilitary growth. Is that correct?
Exactly.
Okay. Okay. All right. and the chip level scale packaging, when should -- when would that ramp up?
Well, we've been sampling the products for several quarters now. We have customer interest, and we're continuing to expand that product line. So we expect it to be a significant growth driver going forward.
Going forward, meaning as soon as this current quarter?
Yes, conceivably. In certain markets in industrial markets, that's certainly possible. Our goal is to is to make a design in process as fast as possible. In the medical markets, which is one of our core markets, sometimes the development cycle can be a long time because of regulatory issues. But in the industrial markets, our goal is to get design wins.
Can you tell us again what would the advantages of chip level scale packaging be?
So the advantages are that the parts are smaller, more precise, they're more precise because they're smaller and so they have more spatial specificity. And then the other business advantage is that we can do that in-house. So we're less susceptible to supply chain risks and, of course, the costs associated with those, especially in an environment with uncertain tariffs.
Okay. This is all great to hear. This is all for me, and I apologize, could you remind me how to get off the call, how to mute my line while remaining on the call?
[Operator Instructions]
Dan, it's Jeff Bernstein.
Hi, Jeff.
A couple of questions for you. I'm curious is wafer scale packaging now allowing you to have a fully domestic supply chain for those parts?
And part 2, do you have a fully domestic supply chain for any of your other parts?
We have -- I think it's fair to say a mostly domestic supply chain. We do buy materials from overseas as most companies do, of course, but we are uniquely well situated in the tariff environment because we're quite self-sufficient. We do the key operations, including front end, which is wafer deposition and back end, which is which is test. And with the addition of wafer-level chip scale that will eliminate -- that will bring in-house one of the key elements of the supply chain, which is packaging our parts, most of our traditional parts are packaged overseas as our most semiconductors. But we are uniquely independent .
Got you. But okay. So -- but it does sound like these new parts will make you 100% domestic?
Well, I wouldn't want to quite say 100%, Jeff, just because there are other materials and chemicals and things that we're relying on supply -- but in terms of...
I really mean just -- yes, fabrication takes place in the...
Right. Yes. That's true.
Okay. Okay. That's great. And then I was curious, can you just remind us, you did mention a couple of things about the focus that you guys provide in medical devices. Can you remind us on hearing aids? I know Starkey, I think, now has a brand-new, very high-end hearing aid product coming out. I would guess that usually this stuff happens in cycles and that probably Sonova is probably doing the same thing. But just remind us what you do in that market and then also in the medical device market in terms of the part functions that you offer?
So in general, we enable communications between the device and the outside world for uploading and downloading data and the uniqueness of our type of solution is that it's very secure and difficult to hack. We probably shouldn't get into the specifics of what our customers do just because it's confidential to them. But the advantages that we offer that are important in those markets are that our parts are small. They are very low power because these are battery devices, battery-powered devices, and they're extremely reliable, which for medical device is, of course, critical.
Got you. I seem to remember that in hearing aids is really sort of detecting if somebody is holding a handset by their ear. Is that still kind of the main thing?
That's been reported, yes.
Got you. Okay. And then in cardiac rhythm management, where your customer Abbott has this sort of revolutionary or pacemakers. And now they have them for dual implantation. So 2 at a time or in each chamber of the heart. Is that a product location thing? Or is it a communication? Or what is it exactly in those kinds of CRM applications?
Jeff, this is Pete Eames. I can try to answer that question for you. Of course, we can't get into the specifics, but yes, we provide some unique capabilities for implanted medical devices in general. So we're small size and low power, as Dan mentioned, and that's a deal for small applications and battery-powered applications, among others.
Okay. That's all I'm going to get, I guess. All right.
And then you guys -- you mentioned the isolator business and some new products, I think, there. You've got this major move in data centers to 800-volt DC. I think we've talked about before you guys being compatible with some of the silicon carbide very high-power density and high switching speed, ICs that are sets that are coming out now. Are you applicable in these data center applications? And just talk a little bit about that.
Yes. We have some of the highest isolation voltage ratings in the industry, Jeff. And the voltages that you mentioned for data centers as well within our sweet spot for those applications. So it is a good application for NVE and it's something that we're excited about.
And it seems like there's probably not a huge amount of touch points in that industry to have to go after. You don't have the same problem of every engineer having their analog devices or Texas Instruments sort of website on their browser. How do you guys try to go to market to try and get into that arena?
You're right, Jeff. It's a concentrated market, which is well suited to us because we can reach those folks. And we reach them through direct outreach, through distributors that specialize in those types of energy conversion markets and through demonstrating our capabilities through our various marketing collaterals such as newsletters, application notes and videos that show the unique capabilities that we have to convert energy extremely efficiently using those new wideband gap devices that you mentioned.
Got you. And I would guess you could say the same thing for the eVTOL market. There's not a ton of players there. Is that basically the same story there? And have you actually gotten any design wins in that market?
So you're right, that's a concentrated market as well. We target the Tier 1 and Tier 2 suppliers. So those are the companies that make modules to the -- that go into the cars. So we're not targeting the nameplate car manufacturers because they are buying these sorts of modules generally from other companies.
So we target those customers. Again, we reach them through the marketing means that I mentioned, direct outreach, distributors -- face-to-face distributors and bulletins and newsletters. We can point to a number of -- or several automotive adjacent market design wins, automotive adjacent, I mean by that charging stations trucks and trains. Cars have a unique qualification process, and we've engaged with companies to go through that process.
So we're optimistic that we can add considerable value to next-generation cars, hybrid electric vehicles and autonomous vehicles.
Got you. Got you. And I'm sorry, I was meaning to ask about eVTOLs, the vertical takeoff and landing electric vehicles, which is sort of a very small opportunity of players there.
We have significant advantages in that type of power control. Obviously, there's a premium on efficiency in that market on small size and on reliability. So those are the type types of markets that we feel have the high value added that make them good markets for us.
Got you. Okay. And then I take it, Dan, that you are not a gamer, but I was really interested in that TDK press release about TMR sensors for game controllers to give the gamer an advantage over other players. And I actually think that's a really premium market because there are people who will pay anything to have the best NVIDIA chips for their systems and these kinds of game controllers. So I don't know if that's a market that you guys are able to go after, but...
I can jump in here again, Jeff. We have looked closely at consumer electronics and in this case, gaming markets. We found the devices much less demanding than our target markets and robotics, industrial Internet of Things and medical. We even did a couple of demos last year, you might have seen showing the precision and speed of our sensors in comparison to some alternatives.
Gamers look for millisecond responses. We demonstrated microsecond responses, thousands of times faster in our promotional video, so you can find all this on our YouTube site.
Got you. Okay. All right. That's great. And then I'm sorry, I think I got on a minute or 2 late. Did you say anything about the PUF market in the quarter? Did it recover? Or did it not recover in this quarter?
Yes. So the PUF market, so that's -- for us, that's a physical unclonable function. That is something that we work actively in. Many of our anti-tamper products used PUF technology. We're currently selling these into military systems, and there's many potential commercial applications as well. I think we alluded to the financials on that earlier, and I think Daniel was clear that there's quite a bit of volatility in those sales.
Got you. And so were they -- did they recover in this quarter from the prior quarter? Or were they still down?
So we talked about sequential growth, but not year-over-year.
Got you. Okay...
And as we've said, that's not -- well, and as you know, that's not one of the markets. It's an important market to us, and we're proud to be a part of that. But -- it's not really a key part of our growth strategy. We were very pleased to see the nondefense sales grow so strongly.
Got you. And lastly, Dan, we talked last quarter about your application of very high sensitivity sensors to allow people to get rid of rare earth metal magnets. And I think you guys had said that you had some design wins.
I'm just wondering kind of how long the turnaround time is to actual production of those kinds of systems and if anything has happened in the quarter since in terms of design win pace and/or getting to production on some of those design wins?
Yes. We've been pleased with the reaction to our sensors. And of course, there's been a spotlight on rare earth magnets and materials, materials such as neodymium and dysprosium which virtually all come from China and have risky supply chains and the threat of tariffs. So we've long offered rare earth free magnets as well as high-sensitivity sensors to detect them.
We've been promoting those. We promote them at every trade shows, and we have customers that are interested. And customers that remark, I can use one of these regular ferrite magnets on an advanced sensor system and indeed they can. So I think it's already translated into sales. It's difficult to characterize how many of them are replacing rare earth magnets. But I'm sure it's some of them. [Operator Instructions]
Dan, this is [ Pete Previte ] down in Florida. I'm sorry, I wasn't able to make the shareholder meeting this year, but I'm going to try to get there next year.
I was excited to hear about the progress you made over the last year. I remember touring and you guys are doing a little demo of the East side, and it sounds like you've got that all set up and you got your equipment going.
Can you talk a little bit about space? I know space is a premium there and you were looking at maybe additional buildings for future expansion? What's the situation with the space that you have there?
Well, Pete and his team did a fabulous job of freeing up the space that you saw. Of course, you saw it unfinished when you were here a little more than a year ago, and it's packed right now. But it's working for us. We renewed our lease in order to make it economically viable to expand in this building, and we have additional plans to expand if need be.
So we think this building will hold us, and we also have contingency plans that we hope to be able to execute that would involve moving certain groups into a different building in order to expand our production and other areas. So we have a plan, and it didn't involve having to move a lot of equipment from our current building, which would have been expensive and potentially disruptive.
Okay. That's great to hear. And it's great about to hear about the new products certainly getting into the robotic market. Can you talk a little bit about, is there any potential in the future? I know it might be a little bit lower margin, but are you able to potentially target the Hall Effect sensor market at any point where maybe your price at your cost structure can be reduced where you can be more competitive? Or is that just not a target market at all?
The high end of that market is a target market. So for folks unfamiliar, Hall Effect is a type of semiconductor magnetic switch. We make spintronic non-semiconductor switches. So we have a number of advantages that we've talked about repeatedly in terms of the small size, the high reliability, the low power and the ability to provide smart connections for sophisticated systems.
But it's not our goal to compete with commodity switches. But we talked about, for example, Jeff brought up the gaming market, which is a high-end market that's currently Hall Effect Sensors. And if there is a need for folks who have reaction times in the microseconds rather than milliseconds, we believe that, that's the type of market that perhaps we could look at.
And there are other types of markets like that, where they're using Hall Effect Sensors now, and they can improve the performance significantly using our sensors. Where there are -- the markets where Hall Effect Sensor is good enough and they're really cheap versions. Those are not markets that we would typically target.
Great. And I think there was an announcement today by Amazon where they want to start replacing a lot of people in their distribution centers with robots. Are those the types of robotic applications where NVE parts would potentially be used?
They are. Those are the types of industrial robots, the Industrial Internet of Things and the artificial intelligence of things that are the markets where we have a great benefit proposition.
So smart factory, smart warehouses where they need sensor inputs and they need precision and speed. That's where we can add a lot of value. So those are the types of markets that we are targeting.
Dan, this is [ Mike Ostermeyer ].
Hi, Mike.
Quick, I think, I believe a couple of calls back, you folks were thinking of breaking out your product sales by segments, defense, in particular, is my memory correct on that in your reports?
Well, we don't break out segments. We do try to give some additional context and color on these calls, which Daniel did. And so this was a quarter where our underlying core business, the nondefense business was extremely strong.
So we wanted to provide that level of detail to you, our investors. So that you can see what's going on here. So we'll continue to do that. formally putting it into reports and things, that's a little bit tougher.
Okay. And then the final -- the other question is how much comes -- your distributor sales obviously said have lower margins. What's the percent of distributor sales versus direct sales for you guys?
So we don't have a breakdown percentage-wise, but both are important, both distributor and direct sales are important to us. The direct sales tend to be more large target -- large customers in targeted markets such as medical devices, and distributor sales go to -- well, they're distributed. They go to a lot of different customers and tend to have lower order volumes.
So we consider them both important, but the uniqueness of the distributor market is that they have a lot of inventory. That's part of the value added that they provide. So when there's an industry downturn, the distributor sales as there was a couple of years ago, distributor sales tend to be depressed because they want to lead down their inventories.
And so we are very gratified to see the recovery in distributor sales that Daniel talked about, Daniel Nelson talked about in the prepared remarks.
Okay. So that tends to be somewhat -- okay. Roller coaster kind of things possibly by the industry -- the macro background of it seems.
Okay. And then the final -- I have one other thing. Is there an issue -- in the past, I used to get e-mails and things about the conference calls and so forth and for some reason and all of a sudden that's got shut down. Even having problems sending out report...
No, not that I know of, but I will -- our IT team is here, and they were making -- they're severely making notes to make sure that you get your e-mails.
Okay. Because I mean I knew it was coming, but I saw it through other newer sites...
Okay. We'll check on that. But we know who you are, Mike, and we'll keep you informed.
Dan, this is [ Don Ger ]. I'm a co-founder and retired CIO of a large wealth management firm.
I'm just curious, looking through the past reports on the contract R&D, it's been really lumpy over time. But kind of looking through the expense ratio, you're dropping a good part of that to the bottom line, it looks like. Could you just give a little bit of color on your approach to contract R&D, the amount of time that it takes and maybe takes away from other projects along the way?
Right. So contract R&D tends to be mostly defense-related and can be, as you say, lumpy and cyclical. But we view it primarily as a way to facilitate future sales and build our intellectual property portfolio. So particularly for government or government-sponsored R&D contracts, we typically own the resultant intellectual property.
So it's a way to build our intellectual property portfolio without a direct expense hitting the bottom line because as you implied in the case of contract R&D, the expenses associated with that R&D are considered cost of sales and so we make a profit on -- generally on contract R&D. It's not the main reason we do it. The main reason we do it is to develop new products where we have potential customers, particularly in the Defense segment and to build our intellectual property portfolio.
But we consider our R&D team extremely valuable. So we look at that and we look at balancing the opportunity cost of deploying valuable resources on contracts versus in-house R&D. And so that pet mix can change depending on depending on the contracts available and our internal opportunities.
Okay. So basically, they're subsidizing your internal R&D growth taking away from some of the other expenses you might have incurred and they're using it as a stocking horse for future sales. As you go into periods such as we're in right now with the government shutdown, is that affecting the upcoming months and the current period of time? Or are you structured that the contract is in place and it just keeps rolling over like an annuity?
Yes, I can address that, Don. The shutdown is probably going to be much shorter term than the typical cycles for contract R&D work. So we're not too concerned about what looks to be a relatively prolonged shutdown. And so you're expecting a bounce back in the current quarter? Or are we kind of flattening out on a quarter-by-quarter basis or quarter-over-quarter basis?
Are you talking about revenues or...
Yes.
Well, our goal is always to grow. And I think we feel fairly confident that we can grow in the current quarter. Now that's the December quarter. And part of that is because, frankly, last year is a little easier to compare than we sometimes have.
But also, we're -- we feel that we have a good pipeline in most areas of our business and the industry has recovered. So we're very optimistic about the future and certainly the long-term prospects for growth, we're very optimistic.
Okay. And the reason I was asking is it looks like any type of bounce back or had you not seen that 1/3 basically on a comparison basis year-over-year. your drop in earnings was pretty much coming from that segment. So looking into the next quarter or so, any sort of bounce back should be positive on a sequential basis to help the underlying earnings.
Yes.
And then just one kind of a little bit off-the-wall question, but looking at the interest income, which went up year-over-year despite, I believe, cash coming down overall, your marketable securities and cash and when you add them all together, at least if I did it properly, we're in a period of declining rates. Did you extend your portfolios?
So this is Daniel here, Don. So the increase in interest income in the past quarter is primarily due to the new security purchases, and those securities were purchased at higher interest rates than the ones that matured in the prior year quarter. and the decrease in our cash and cash equivalents is primarily because we paid more in cash dividends that we generate in cash flows from operations.
Well, we're about out of time. We appreciate -- was there 1 more question?
There is, if it's open, it's [ Chip Really at Rui ] Asset Management. I appreciate the discussion on the contract R&D. And just following up on that to confirm that doesn't really have any correlation with product revenue growth over the next year or so, it's really targeted just to the DoD? And that's one question.
The second question would be, clearly, the medical and sensor and robotic markets are great, but you've mentioned a couple of times the defense market is not a target market for you. Just curious on your thinking on that. If I heard that correctly, and kind of what are your thoughts? It seems to be there's a lot of spending in areas that it seems you could take advantage of there.
So just kind of those 2 clarifying questions.
Yes. Thank you for the question. So on your first question, most of contract R&D, as we said in the prepared remarks, is defense related. So the other part of your question is that we do consider defense an important part of our business, and we seek those contracts and those product sales. However, we don't see it as part of our long-term growth engine. It's not a fast-growing market.
But we believe that it also indirectly, as I alluded to in one of the prior questions, it indirectly helps our long-term product sales by building our intellectual property portfolio in a number of areas, some of which have commercial applications for larger markets.
In terms of the defense contracts relating to defense products, that can be -- sometimes we'll finish in R&D contract. And if it's successful, and Pete and his team do a great job, it usually is. Then there's often product sales that are tied to that contract. So it's not always blue sky research or long-term research as one might say. It can be targeted research at a particular problem. And if we can come up with solutions to that problem, we can sell products relatively near term.
Got it. And just for clarity, I understand the other markets, especially like robotics and things like that. Are all white space and big growth. But given your current revenue level, and again, I don't -- I'm not an expert in your company, so it's kind of a one-on-one question and thank you for indulging. It seems to me if you got spec in on weapons program missile drone or something like that or even radar or something like that, the product sales there could be enormous versus your current revenue level, too. So again, I know the defense market doesn't grow as fast as the other markets. So just help me clarify that. Is it revenue you would take or revenue you're not seeking?
Right. So that's a good point. No, we do seek the revenues, and we seek large contracts, and we invest in that market. But -- and it does have potential, as you say, but we also look at markets that are just historic with their opportunities such as the industrial Internet of Things and the artificial intelligence of things that we really see is once-in-a-lifetime opportunities. And so those are what we tend to prioritize. But we also look at defense opportunities and, in particular, larger volume defense opportunities.
I think that's all the time we have for today. Again, we were pleased to report strong increases in distributor and nondefense sales. We launched 3 new products, and we continue to deploy new equipment to fund and drive future growth.
We look forward to speaking with you in January for our next quarterly call. A replay of this call will be available on the investor events page of our website, that's nve.com and our YouTube channel at youtube.com/nvecorporation.
Thank you again.
Financial data from NVE Corporation
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 25 25 |
1%
1%
100%
|
|
| - Direct Costs | 6.48 6.48 |
46%
46%
26%
|
|
| Gross Profit | 25 25 |
19%
19%
99%
|
|
| - Selling and Administrative Expenses | 1.99 1.99 |
5%
5%
8%
|
|
| - Research and Development Expense | 3.39 3.39 |
3%
3%
14%
|
|
| EBITDA | 16 16 |
4%
4%
66%
|
|
| - Depreciation and Amortization | 0.61 0.61 |
85%
85%
2%
|
|
| EBIT (Operating Income) EBIT | 16 16 |
2%
2%
63%
|
|
| Net Profit | 18 18 |
24%
24%
72%
|
|
In millions USD.
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NVE Corporation Stock News
Company Profile
NVE Corp. engages in the development and sale of devices that use spintronics, a nanotechnology that relies on electron spin rather than electron charge to acquire, store, and transmit information. The firm manufactures spintronic products including sensors and couplers that are used to acquire and transmit data in industrial, scientific, and medical applications. It licenses its spintronic magnetoresistive random access memory technology, commonly known as MRAM. The company was founded by James M. Daughton in 1989 and is headquartered in Eden Prairie, MN.
StocksGuide Premium
| Head office | United States |
| CEO | Dr. Baker |
| Employees | 41 |
| Founded | 1989 |
| Website | www.nve.com |


