Q2 2026 NVE Corp Earnings Call Transcript
Key Points
- NVE Corp (NVEC) reported a 4% sequential increase in revenue, driven by strong distributor and non-defense sales.
- The company successfully installed new production equipment, which is expected to increase capacity and capabilities, including in-house wafer level chip scale packaging.
- NVE Corp (NVEC) launched three new products in the past quarter, targeting high-value markets such as medical devices and robotics.
- The company reported strong profitability metrics with an operating margin of 58%, pre-tax margin of 65%, and net margin of 52%.
- Distributor sales increased both sequentially and year over year, indicating a recovery in this segment.
- Year-over-year revenue decreased by 6%, primarily due to a 68% decrease in contract R&D revenue.
- 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.
- Defense sales decreased by 64% year over year, highlighting the volatility in this segment due to defense procurement cycles.
- Net income for the second quarter decreased to $3.31 million from $4.03 million in the prior year quarter, impacted by decreased revenue, lower margins, and a higher tax rate.
- The company's tax rate increased to 20% from 17% in the prior year quarter, primarily due to non-cash impacts of tax law changes.
Good afternoon and welcome to the NVE Corporation conference call for the quarter ended September 30, 2025. I'm Dan Baker and Vice President and CEO. I'm joined by Daniel Nelson, our principal financial officer, and Pete Eames, Vice President of Advanced Technology.
(Operator instructions). After my opening comments, Daniel Nelson will present our financial results. Pete will cover new products and 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 in the past hour following the close of market. Links to the press release in 10Q are available through our website, the SEC's website, and X, formerly known as Twitter.
Please refer to the safe harbour 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
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