NVE (NasdaqCM:NVEC) Q2 2026 Earnings Call October 22, 2025 05:00 PM ET Company ParticipantsPeter Eames - VP of Advanced TechnologyDaniel Nelson - CFODan Baker - President and CEOConference Call ParticipantsNone - Analyst 4None - Analyst 6None - Analyst 5None - Analyst 1None - Analyst 2None - Analyst 3Dan BakerGood afternoon and welcome to the NVE Corporation Conference call for the quarter ended September 30, 2025. I'm Dan Baker, NVE's President and CEO. I'm joined by Daniel Nelson, our Principal Financial ...

NVE (NasdaqCM:NVEC) Q2 2026 Earnings Call October 22, 2025 05:00 PM ET Company ParticipantsPeter Eames - VP of Advanced TechnologyDaniel Nelson - CFODan Baker - President and CEOConference Call ParticipantsNone - Analyst 4None - Analyst 6None - Analyst 5None - Analyst 1None - Analyst 2None - Analyst 3Dan BakerGood afternoon and welcome to the NVE Corporation conference call for the quarter ended September 30, 2025. I'm Dan Baker, NVE's President and CEO. I'm joined by Daniel Nelson, our Principal Financial ...

Financial Data and Key Metrics Changes - Revenue increased by 4% sequentially but decreased by 6% year over year, primarily due to a 68% decrease in contract R&D revenue, partially offset by a 1% increase in product sales [4][9] - Gross margin decreased to 78% from 86% in the prior year quarter due to a less profitable product mix and strong distributor sales [6] - Net income for the quarter was $3,310,000 or $0.68 per diluted share, down from $4,030,000 or $0.83 per share in the prior year quarter [9] - Operating margin was 58%, pretax margin was 65%, and net margin was 52% [10] Business Line Data and Key Metrics Changes - Contract R&D revenue was 3% of total revenue, primarily defense-related, with a 68% year-over-year decrease [4][5] - Non-defense product sales increased by 21%, while defense sales decreased by 64%, accounting for 8% of revenue [4][6] Market Data and Key Metrics Changes - Distributor sales increased both sequentially and year over year, indicating a recovery in the distributor market [6][80] - The defense business has been recovering steadily this fiscal year, with sequential increases in defense industry sales [6] Company Strategy and Development Direction - The company aims to develop advanced products and fuel future growth through new equipment and R&D strategies targeting high-value markets such as medical devices and autonomous vehicles [14][72] - The focus remains on non-defense markets, with the defense sector viewed as important but not a primary growth engine [97][102] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing a strong pipeline in most business areas and a recovery in the industry [91][102] - The company expects to see growth from new products and capabilities developed through recent equipment investments [21][22] Other Important Information - The tax rate increased to 20% for the fiscal year, primarily due to noncash impacts of tax law changes [7][8] - The company plans to spend an additional $1,000,000 to $1,500,000 on fixed assets in the last six months of the fiscal year to complete production expansion [12] Q&A Session Summary Question: Will the new equipment lead to revenue growth or just increased capabilities? - Management indicated that the goal is to use the new equipment to develop advanced products and fuel future growth, implying both increased capabilities and revenue growth [21] Question: When should growth be expected from the new equipment? - Management stated that growth is expected to begin in the current quarter, particularly in industrial markets [22][24] Question: Is wafer scale packaging allowing for a fully domestic supply chain? - Management confirmed a mostly domestic supply chain, with the addition of wafer level chip scale packaging bringing in-house a key element of the supply chain [32][36] Question: What role does contract R&D play in the company's strategy? - Management explained that contract R&D is primarily defense-related and serves to build the intellectual property portfolio, although it is not the main growth driver [85][97] Question: How does the company view the defense market? - While the defense market is important, it is not seen as a primary growth engine; the company prioritizes markets with higher growth potential [97][102]

NVE (NasdaqCM:NVEC) Q2 2026 Earnings Call October 22, 2025 05:00 PM ET Speaker1Good afternoon and welcome to the NVE Corporation Conference call for the quarter ended September 30, 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, youtu ...