NVEC Corporation (NVEC) reported total revenues of $6.22 million for the third quarter of fiscal 2026, representing a 23% increase from $5.06 million in the year-ago quarter. Growth was driven by a 16% increase in product sales and a sharp 335% jump in contract research and development revenue.Net income rose 11% year over year to $3.38 million, or 70 cents per diluted share, compared with $3.05 million, or 63 cents per share, in the prior-year period. While revenues and earnings both advanced, gross margin ...

The common wisdom is that analog semiconductor companies stand to benefit from the rise in robotics demand (in factories and, more recently, humanoids and consumer robotics). ABI research estimates the robotics market growing at 14% annually, reaching $110 billion by 2030-2035, upBashar is a contributing writer at Seeking Alpha, focusing on Long/Short investment ideas, with a geographic focus in North America. Before that, Bashar worked at an Investment Fund in the United Kingdom. He has a Master's degree i ...

Core Insights - NVE Corporation's stock surged 14.7% after reporting fiscal Q3 2026 earnings, indicating positive market reaction despite lack of analyst coverage [1][3] Financial Performance - NVE reported $5.8 million in sales for the quarter, reflecting a 23% year-over-year increase [3] - Earnings per share grew 11% to $0.70, reversing a trend of declining sales and earnings in the first half of the fiscal year [3] - The company announced a quarterly dividend of $1, exceeding its earnings for the quarter [3] Valuation and Growth Potential - NVE stock is priced at 25 times earnings, which may not seem expensive if sales and profit margins were expanding, but earnings growth is only 11% for the quarter and remains negative for the fiscal year to date [6] - Free cash flow was strong, covering about 87% of reported net profit, and the company has substantial cash reserves [7] - The spintronic technology developed by NVE is noted as interesting, suggesting potential for future growth [7] Market Position - NVE Corporation remains largely unnoticed on Wall Street, despite its strong sales growth and profitability [5] - The company is considered worth monitoring due to its unique technology and lack of analyst attention [7]

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Operating expenses fell 12% year over year, including a 9% reduction in R&D and a 19% decrease in SG&A. Nelson said R&D declined due to the completion of some wafer-level chip scale packaging activities and the reassignment of some R&D resources to manufacturing. SG&A fell due to timing of selling and marketing activities as well as reassignment of some SG&A resources to manufacturing and new product development.Gross margin was 79% of revenue, down from 84% in the prior-year quarter. Nelson said the declin ...

Financial Data and Key Metrics Changes - Revenue for the third quarter of fiscal 2026 increased by 23% year over year, driven by a 16% increase in product sales and a 335% increase in contract R&D revenue [3][4] - Net income increased by 11% to $3.38 million or $0.70 per diluted share, compared to $3.05 million or $0.63 per share in the prior year [6] - Gross margin decreased to 79% from 84% due to a less profitable product mix and increased distributor sales [4][6] - Total operating expenses decreased by 12% due to a 9% decrease in R&D expenses and a 19% decrease in SG&A [4] Business Line Data and Key Metrics Changes - Product sales increased by 16%, while contract R&D revenue saw a significant increase of 335% [4] - For the first nine months of fiscal 2026, total revenue increased by 0.4% to $18.7 million, with a 0.8% increase in product sales offset by an 8% decrease in contract R&D [7] Market Data and Key Metrics Changes - Distributor sales have been increasing, indicating a recovery from previous inventory build-up during the semiconductor slowdown [21] - The company is optimistic about returning to a more normal flow in its defense business, which had been relatively weak in past quarters [30] Company Strategy and Development Direction - The company aims to develop the world's best electronics for high-value markets, including medical devices and autonomous vehicles, focusing on miniaturization and low power consumption [11] - New equipment has been installed to enhance production capabilities, allowing for more precise manufacturing of spintronic devices [10] - The company is actively participating in trade shows to promote its products and generate leads, with plans to exhibit at more events [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future sales growth driven by R&D investments and new product developments, particularly in the medical sector [31] - The effective tax rate is expected to be between 16%-17% for the full fiscal year, influenced by advanced manufacturing investment tax credits [6] Other Important Information - The company has completed significant investments in equipment and expects to place new equipment into service by March 31st [8][10] - The company is well-positioned to capitalize on the growing demand for rare earth-free ferrite magnets due to supply chain concerns [27] Q&A Session Summary Question: Discussion on magnetic navigation in GPS-compromised areas - Management acknowledged the potential of their magnetometer sensors for this application but noted that the technology is still evolving and not yet mature enough to pursue aggressively [15][17] Question: Status of new equipment and its impact on sales - Management confirmed that the new equipment is on schedule and is expected to enhance product sales and profitability by reducing outsourcing [18][19] Question: Inventory levels among distributors - Management indicated that distributor inventory levels are improving, suggesting increased end-user demand [21] Question: Comparison of intellectual property with competitors - Management stated that while they have had discussions about licensing their IP, they focus on different markets than competitors like Everspin [22] Question: Applications of MRAM technology - Management clarified that MRAM is a non-volatile memory technology with potential applications in specialized areas, and they plan to monetize their IP through licensing [44] Question: Marketing strategies and effectiveness - Management highlighted increased marketing efforts, particularly through trade shows and digital content, which have shown positive results [25]

Financial Data and Key Metrics Changes - Revenue for the third quarter of fiscal 2026 increased by 23% year over year, driven by a 16% increase in product sales and a 335% increase in contract R&D revenue [3][4] - Gross margin decreased to 79% from 84% in the prior year quarter due to a less profitable product mix and increased distributor sales [4] - Net income increased by 11% to $3.38 million or $0.70 per diluted share, up from $3.05 million or $0.63 per share [6][7] - Total operating expenses decreased by 12% compared to the third quarter of fiscal 2025 [4] Business Line Data and Key Metrics Changes - Product sales increased by 16%, while contract R&D revenue saw a significant increase of 335% [4] - The decrease in R&D expenses was attributed to the completion of certain projects and resource reallocation [5] Market Data and Key Metrics Changes - For the first nine months of fiscal 2026, total revenue increased by 0.4% to $18.7 million, with a 0.8% increase in product sales offset by an 8% decrease in contract R&D [8] - Accounts receivable decreased by $1.1 million, indicating improved customer payment timing [8] Company Strategy and Development Direction - The company aims to develop advanced electronics for high-value markets, including medical devices and autonomous vehicles, focusing on miniaturization and high sensitivity [12] - New equipment has been installed to enhance production capabilities, allowing for more precise manufacturing of spintronic devices [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to a more normal flow in the defense business, which had been relatively weak [35] - The company is focused on increasing sales to existing customers while also adding new products to their portfolio [40] Other Important Information - The effective tax rate increased to 20% due to non-cash impacts of tax law changes, with an expected full-year tax rate of 16%-17% [6] - The company has made significant investments in marketing and trade shows, which are expected to yield positive results in future sales [27][28] Q&A Session Summary Question: Discussion on magnetic navigation in GPS-compromised areas - Management acknowledged the potential of their sensors for this application but noted that the technology is still evolving and not yet mature [18][19] Question: Status of new equipment and its impact on sales - Management confirmed that the new equipment is on schedule and is expected to enhance product sales and profitability [20][21] Question: Inventory levels of distributors - Management indicated that distributor sales are picking up, suggesting that previous inventory issues have been resolved [23] Question: Comparison of intellectual property with competitors - Management stated that while they operate in a different market than Everspin, they believe their intellectual property has significant value and are open to licensing opportunities [24] Question: Potential for recurring customer orders - Management emphasized the importance of existing customers and the goal to increase sales through new products and repeat orders [40]

Financial Data and Key Metrics Changes - Revenue for Q3 2026 increased by 23% year-over-year, driven by a 16% increase in product sales and a 335% increase in contract R&D revenue [3][4] - Gross margin decreased to 79% from 84% in the prior year due to a less profitable product mix and increased distributor sales [4] - Net income increased by 11% to $3.38 million or $0.70 per diluted share, up from $3.05 million or $0.63 per share [6] - Operating margin was 60%, pre-tax margin was 68%, and net margin was 54% [6] Business Line Data and Key Metrics Changes - Product sales increased by 16%, while contract R&D revenue saw a significant increase of 335% [4] - Total operating expenses decreased by 12%, attributed to a 9% decrease in R&D expenses and a 19% decrease in SG&A [4][5] Market Data and Key Metrics Changes - For the first nine months of fiscal 2026, total revenue increased by 0.4% to $18.7 million, with a 0.8% increase in product sales offset by an 8% decrease in contract R&D [7] - Accounts receivable decreased by $1.1 million, indicating improved customer payment timing [7] Company Strategy and Development Direction - The company aims to develop advanced electronics for high-value markets, including medical devices and autonomous vehicles, focusing on miniaturization and low power consumption [11] - New equipment has been installed to enhance production capabilities, allowing for more precise manufacturing of spintronic devices [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to a more normal flow in the defense business, which had been relatively weak [29] - The company anticipates that investments in R&D and new products will pay off in future sales, particularly in the medical device sector [30] Other Important Information - The company has extended its supplier agreement with Abbott Laboratories for two years, which includes price increases for 2026 and 2027 [12] - The company is actively participating in trade shows to promote its products and generate leads [13] Q&A Session Summary Question: Discussion on magnetic navigation in GPS-compromised areas - Management acknowledged interest in MagNav technology for defense applications but noted it is still in a nascent stage [15][17] Question: Status of new equipment and its impact on sales - Management confirmed that new equipment is on schedule and expected to enhance product sales and profitability [18][19] Question: Inventory levels among distributors - Management reported that distributor sales are increasing, indicating a recovery from previous inventory build-up [20][21] Question: Comparison of intellectual property with competitors - Management stated that while they operate in a different market than Everspin, their intellectual property remains valuable and applicable to MRAM [22][23] Question: Marketing strategies and effectiveness - Management highlighted increased marketing efforts, particularly through trade shows and digital content, which have shown positive results [24][25] Question: Concerns about rare earth magnets and design wins - Management confirmed ongoing interest in rare earth-free ferrite magnets and noted some sales have been generated from this initiative [26][27] Question: Insights on the defense business volatility - Management expressed optimism about returning to a more stable flow in the defense sector [28][29] Question: Recurring customer orders and revenue expectations - Management emphasized the goal of increasing sales to existing customers and adding new products to drive consistent revenue growth [33][34]

Revenue Performance - Total revenue for the quarter ended December 31, 2025, increased by 23% compared to the same quarter in 2024, driven by a 16% increase in product sales and a 335% increase in contract research and development revenue [60]. - Contract research and development revenue represented 7.2% of total revenue for the quarter ended December 31, 2025, compared to 2.0% in the prior-year quarter [60]. Gross Margin and Expenses - Gross margin for the third quarter of fiscal 2026 was 79% of revenue, down from 84% in the prior-year quarter, attributed to a less profitable product mix and increased distributor sales [61]. - Total expenses decreased by 12% for the third quarter of fiscal 2026, with research and development expenses down by 9% and selling, general, and administrative expenses down by 19% [62]. Net Income and Tax Rate - Net income for the first nine months of fiscal 2026 decreased by 8% to $10.3 million, or $2.12 per diluted share, primarily due to decreased gross margin and increased effective tax rate [71]. - The effective tax rate increased to 20% for the third quarter of fiscal 2026 from 15% in the prior-year quarter, primarily due to unfavorable non-cash impacts of tax law changes [64]. - The company expects a full-year tax rate of 16% to 17% for fiscal 2026, factoring in anticipated advanced manufacturing investment tax credits [65]. Cash Position and Dividends - Cash and cash equivalents were $3,408,531 as of December 31, 2025, a decrease of $4,628,033 from March 31, 2025, due to net cash used in investing and financing activities [73]. - Cash dividends paid to shareholders during the first nine months of fiscal 2026 totaled $14,511,498, with an additional dividend of $1.00 per share announced for payment on February 27, 2026 [79]. Other Income - Interest income decreased by 3% due to a reduction in the marketable securities portfolio, while other income decreased significantly by $135,057 [63].

EDEN PRAIRIE, Minn.--(BUSINESS WIRE)--NVEC plans to release its financial results on Wednesday, January 21, 2026 after the close. ...