NVE Q3 Earnings Call Highlights

Core Insights - NVE Corporation reported a 23% increase in quarterly revenue and an 11% rise in net income, driven by strong product sales and a significant increase in contract R&D revenue [3][6][7] Financial Performance - Operating expenses decreased by 12% year over year, with R&D expenses down by 9% and SG&A expenses down by 19% [1] - Gross margin fell to 79% from 84% due to a less profitable product mix and a higher proportion of distributor sales [2][6] - Net income for the quarter was $3.38 million, or $0.70 per diluted share, compared to $3.05 million, or $0.63 per share, in the prior-year quarter [7] Revenue Breakdown - Revenue growth was attributed to a 16% increase in product sales and a remarkable 335% increase in contract R&D revenue [3][6] - For the first nine months of fiscal 2026, total revenue increased by 0.4% to $18.7 million, driven by a 0.8% rise in product sales, despite an 8% decline in contract R&D [12] Operational Developments - The company has nearly completed a multi-year expansion, with new equipment expected to be operational by March 31, enabling the production of smaller and more precise wafer-level chip scale sensors [5][15][17] - NVE extended its supplier agreement with Abbott through December 31, 2027, which includes price increases [4][19] Market and Product Strategy - The company is focusing on high-value MRAM opportunities through licensing rather than building large fabs [4][26] - NVE is targeting high-value markets with new wafer-level chip scale sensors measuring 0.65 millimeters square, enhancing miniaturization and spatial sensitivity [18][26] Customer and Distributor Insights - Distributor sales have been increasing, indicating that inventories built during the semiconductor slowdown have been depleted, leading to rising end-user demand [21][22] - The company participated in the Medical Design and Manufacturing Trade Show, generating positive leads for its products [20]