Core Viewpoint - NVE Corporation (NVEC) demonstrated a mixed performance in fiscal Q4 2025, with a slight revenue increase but overall annual decline, indicating potential recovery signs amid strategic investments and product innovation [1][13]. Financial Performance - Fiscal Q4 revenues reached $7.27 million, marking a 3% year-over-year increase from $7.08 million, driven by a significant 558% rise in contract research and development revenues [2] - Product sales experienced a slight decline of 1% to $6.95 million [2] - Earnings per diluted share increased by 1.3% to 80 cents from 79 cents in the prior-year quarter, with net income rising to $3.89 million from $3.81 million [3] - The gross margin improved to 79% from 76%, attributed to a more profitable product mix and a shift towards direct sales [3] Operating Metrics & Profitability - Operating income for the quarter increased to $4.25 million from $4.06 million a year ago, with an operating margin of 58% [4] - Pre-tax margin stood at 65% and net margin at 54%, indicating continued profitability despite increased R&D spending, which rose by 28% year-over-year [4] - SG&A expenses declined by 2%, reflecting overall cost discipline [4] Annual Overview - For the fiscal year, revenues fell 13% to $25.87 million, primarily due to declines in the first three quarters [5] - Gross margin for the year rose to 84% from 77% in fiscal 2024, while net income declined 12% to $15.1 million, or $3.11 per diluted share [5] - Total annual expenses increased by 25%, driven by a 33% rise in R&D and a 13% growth in SG&A costs [5] Management Insights - CEO Dan Baker expressed confidence in the sustainability of revenue performance, highlighting replenishment in customer channels and demand for products [6] - Management remains optimistic about future returns from recent investments in R&D and capacity expansion [6] Product Development - The company noted growing interest in newly launched omnidirectional magnetic sensors, which cater to industrial automation and medical device markets, enhancing competitive positioning [7] - A sequential 44% increase in revenues from the prior quarter was attributed to a 40% rise in product sales and a 210% surge in contract R&D revenues [8] Operational Stability - Management pointed to stable manufacturing operations and adequate inventory levels as risk mitigants amid ongoing tariff and supply-chain concerns [9] - The company's unique tariff position, including exemptions in major export markets and domestic production capabilities, contributed to operational stability [9] Capital Expenditure & Future Guidance - NVEC plans to significantly increase capital spending in fiscal 2026, with projected fixed asset investments between $2 million and $3 million, compared to $1.26 million in fiscal 2025 [10] - The primary allocation is towards new wafer fabrication equipment, with management optimistic about the return on this investment [11] Strategic Partnerships - In the quarter, NVE Corp extended its supplier agreement with Abbott Laboratories, reinforcing its position as a long-term partner in the implantable medical device sector [12]