0001376474-25-000658
SEC filingFiscal Q1 revenue declined 10% YoY due to lower defense product sales, partially offset by higher R&D contract revenue.
For the first quarter of fiscal 2026 ended June 30, 2025, NVE Corporation reported total revenue of $6.10 million, a 10% decrease compared to $6.78 million in the same quarter of fiscal 2025. The decline was primarily driven by an 11% drop in product sales to $5.91 million, attributed to lower defense industry sales, which management notes can be highly variable due to procurement cycles. Partially offsetting this was a 17% increase in contract research and development revenue to $0.20 million, reflecting new R&D contracts.
Gross profit decreased 15.2% to $4.92 million, with gross margin contracting to 80.6% from 85.6% in the prior-year quarter. The 500-basis-point margin compression was driven by a less profitable product mix and an increase in distributor sales.
Total operating expenses fell 20% to $1.14 million, driven by an 18% decline in R&D expense (completion of wafer-level chip scale packaging activities and reallocation to manufacturing) and a 23% decline in selling, general, and administrative expense (timing of sales/marketing activities and resource reallocation). Income from operations decreased 13.8% to $3.78 million, while operating margin narrowed to 61.9% from 64.7%.
Net income declined 12.7% to $3.58 million ($0.74 per diluted share) from $4.10 million ($0.85 per diluted share). The effective tax rate rose to 17% from 16% due to changes in the timing and amounts of federal tax credits and deductions.
NVE operates primarily through two revenue streams: product sales and contract R&D. Product sales accounted for 96.8% of total revenue in the quarter, down from 97.5% a year ago. The defense-driven decline in product sales was the primary segment headwind. Contract R&D revenue improved but remains a small portion of total revenue at 3.2% (up from 2.5% in the prior year). No segment-level operating income data is separately disclosed in the MD&A.
Management expects to realize advanced manufacturing investment tax credits of between $700,000 and $800,000 in fiscal 2026 if equipment is deployed as planned. The company continues to pay a quarterly dividend of $1.00 per share ($4.84 million based on shares outstanding), with funding expected from operating cash flow and maturing marketable securities. No explicit revenue or earnings guidance was provided. The remaining stock repurchase authorization stands at $3.52 million as of June 30, 2025, with no repurchases executed during the quarter.
No balance sheet data was provided in the Notes section.
No commitments or contractual obligations were disclosed.
No capital allocation details were available.
No segment information was included.
No cash flow figures were provided in the filing excerpt. The document only lists headings for the Statements of Cash Flows for the quarters ended June 30, 2025 and 2024, without any numerical data. Therefore, no analysis of cash flow quality, capex intensity, or capital returns can be performed.