NVE Corporation Reports Third Quarter Results and Announces Quarterly Dividend

Rhea-AI Summary

NVE (NVEC) reported financial results for Q3 fiscal 2025. Total revenue decreased 25% to $5.06 million compared to $6.76 million in the prior-year quarter, attributed to a 22% decline in product sales and a 74% drop in contract research and development revenue.

Net income fell 27% to $3.05 million, or $0.63 per diluted share, versus $4.18 million ($0.87 per share) in the prior-year quarter. For the first nine months of fiscal 2025, total revenue decreased 18% to $18.6 million, while net income declined 16% to $11.2 million ($2.31 per diluted share).

The company declared a quarterly dividend of $1.00 per share, payable February 28, 2025, to shareholders of record as of February 3, 2025.

Positive

• Maintained substantial quarterly dividend of $1.00 per share
• Remained profitable despite industry challenges with $3.05M quarterly net income
• 72% increase in contract research and development revenue for the nine-month period

Negative

• 25% decrease in quarterly revenue to $5.06M
• 27% decline in quarterly net income to $3.05M
• 22% decrease in product sales in Q3
• 74% drop in quarterly contract research and development revenue
• 18% decrease in nine-month revenue to $18.6M

Insights

Financial Analyst

NVE 's Q3 FY2025 results reveal substantial business headwinds, with revenue declining 25% to $5.06 million and net income dropping 27% to $3.05 million. Despite these challenges, the company's profit margins remain remarkably resilient - maintaining a net margin above 60%, which is exceptional for a technology hardware company.

The revenue mix shift is particularly noteworthy. The 74% decline in contract R&D revenue suggests potential challenges in securing new development projects, while the 22% drop in product sales indicates broader market weakness in their core spintronic sensor and coupler business. However, the year-to-date figures show some offsetting effects, with R&D revenue actually increasing 72% over the nine-month period.

The maintained $1.00 quarterly dividend, representing an annualized yield of approximately 5%, appears sustainable in the near term given the company's strong margins and historically stable cash flow generation. However, if revenue declines persist, this could pressure the dividend policy in future quarters.

The spintronics technology sector is experiencing cyclical headwinds, typical in specialized semiconductor segments. NVE's performance should be viewed in the context of its niche market position and the broader industry slowdown. The company's ability to maintain high profit margins despite revenue pressure demonstrates strong operational efficiency and pricing power, though the declining top-line warrants close monitoring by investors.

EDEN PRAIRIE, Minn.--(BUSINESS WIRE)-- NVE Corporation (Nasdaq: NVEC) announced today financial results for the quarter ended December 31, 2024.

Total revenue for the third quarter of fiscal 2025 decreased 25% to $5.06 million from $6.76 million for the prior-year quarter. The decrease was due to a 22% decrease in product sales and a 74% decrease in contract research and development revenue. Net income for the third quarter of fiscal 2025 decreased 27% to $3.05 million, or $0.63 per diluted share, compared to $4.18 million, or $0.87 per share, for the prior-year quarter.

For the first nine months of fiscal 2025, total revenue decreased 18% to $18.6 million from $22.7 million for the first nine months of the prior year. The decrease was due to a 20% decrease in product sales, partially offset by a 72% increase in contract research and development revenue. Net income decreased 16% to $11.2 million, or $2.31 per diluted share, from $13.3 million, or $2.75 per share, for the first nine months of fiscal 2024.

The company also announced a quarterly cash dividend to shareholders of $1.00 per share of common stock, payable February 28, 2025, to shareholders of record as of February 3, 2025.

“We are pleased to report solid earnings for the quarter and first nine months of the fiscal year, despite challenging industry conditions,” said NVE President and Chief Executive Officer Daniel A. Baker, Ph.D.

NVE is a leader in the practical commercialization of spintronics, a nanotechnology that relies on electron spin rather than electron charge to acquire, store, and transmit information. The company manufactures high-performance spintronic products including sensors and couplers that are used to acquire and transmit data.

Statements used in this press release that relate to future plans, events, financial results, or performance are forward-looking statements that are subject to certain risks and uncertainties including, among others, such factors as our reliance on several large customers for a significant percentage of revenue, uncertainties related to the economic environments in the industries we serve, uncertainties related to future sales and revenues, risks and uncertainties related to future dividend payments, as well as the risk factors listed from time to time in our filings with the SEC, including our Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

NVE CORPORATION STATEMENTS OF INCOME QUARTERS AND NINE MONTHS ENDED DECEMBER 31, 2024 AND 2023 (Unaudited)
		Quarter Ended December 31,
		2024				2023
Revenue
Product sales		$	4,960,488			$	6,366,009
Contract research and development			102,557				390,251
Total revenue			5,063,045				6,756,260
Cost of sales			797,622				1,355,067
Gross profit			4,265,423				5,401,193
Expenses
Research and development			869,677				540,895
Selling, general, and administrative			434,783				389,311
Total expenses			1,304,460				930,206
Income from operations			2,960,963				4,470,987
Interest income			474,180				491,671
Other income			135,057				-
Income before taxes			3,570,200				4,962,658
Provision for income taxes			521,790				778,236
Net income		$	3,048,410			$	4,184,422
Net income per share – basic		$	0.63			$	0.87
Net income per share – diluted		$	0.63			$	0.87
Cash dividends declared per common share		$	1.00			$	1.00
Weighted average shares outstanding
Basic			4,835,262				4,833,401
Diluted			4,839,124				4,837,230
		Nine Months Ended December 31,
		2024				2023
Revenue
Product sales		$	17,680,780			$	22,183,223
Contract research and development			924,199				537,727
Total revenue			18,604,979				22,720,950
Cost of sales			2,720,370				5,034,556
Gross profit			15,884,609				17,686,394
Expenses
Research and development			2,595,808				1,920,095
Selling, general, and administrative			1,543,428				1,298,211
Provision for credit losses			-				9,514
Total expenses			4,139,236				3,227,820
Income from operations			11,745,373				14,458,574
Interest income			1,432,568				1,440,289
Other income			135,057				-
Income before taxes			13,312,998				15,898,863
Provision for income taxes			2,140,856				2,587,145
Net income		$	11,172,142			$	13,311,718
Net income per share – basic		$	2.31			$	2.75
Net income per share – diluted		$	2.31			$	2.75
Cash dividends declared per common share		$	3.00			$	3.00
Weighted average shares outstanding
Basic			4,834,382				4,832,992
Diluted			4,839,247				4,839,725

NVE CORPORATION BALANCE SHEETS DECEMBER 31 AND MARCH 31, 2024
		(Unaudited) December 31, 2024				March 31, 2024
ASSETS
Current assets
Cash and cash equivalents		$	5,485,684			$	10,283,550
Marketable securities, short-term (amortized cost of $14,993,163 as of December 31, 2024, and $12,283,630 as of March 31, 2024)			14,907,252				11,917,779
Accounts receivable, net of allowance for credit losses of $15,000			1,355,064				3,144,833
Inventories			7,787,624				7,158,585
Prepaid expenses and other assets			736,481				689,349
Total current assets			30,272,105				33,194,096
Fixed assets
Machinery and equipment			11,663,886				10,501,096
Leasehold improvements			1,956,309				1,956,309
			13,620,195				12,457,405
Less accumulated depreciation and amortization			11,645,199				11,403,383
Net fixed assets			1,974,996				1,054,022
Deferred tax assets			1,689,207				1,453,704
Marketable securities, long-term (amortized cost of $29,996,231 as of December 31, 2024, and $31,417,890 as of March 31, 2024)			29,704,367				30,788,301
Right-of-use asset – operating lease			947,889				289,910
Total assets		$	64,588,564			$	66,780,033
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	154,683			$	127,154
Accrued payroll and other			511,589				729,215
Operating lease			84,838				179,372
Total current liabilities			751,110				1,035,741
Operating lease			864,966				175,775
Total liabilities			1,616,076				1,211,516
Shareholders’ equity
Common stock			48,372				48,337
Additional paid-in capital			19,806,845				19,554,812
Accumulated other comprehensive loss			(295,358	)			(777,637	)
Retained earnings			43,412,629				46,743,005
Total shareholders’ equity			62,972,488				65,568,517
Total liabilities and shareholders’ equity		$	64,588,564			$	66,780,033

 

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NVE Investor Relations

investor@nve.com

Source: NVE Corporation

FAQ

What was NVEC's revenue decrease in Q3 2025?

NVEC's total revenue decreased 25% to $5.06 million in Q3 fiscal 2025 compared to $6.76 million in the prior-year quarter.

How much is NVEC's quarterly dividend payment for February 2025?

NVEC announced a quarterly dividend of $1.00 per share, payable February 28, 2025, to shareholders of record as of February 3, 2025.

What was NVEC's earnings per share for Q3 2025?

NVEC reported earnings of $0.63 per diluted share for Q3 fiscal 2025, down from $0.87 per share in the prior-year quarter.

How did NVEC's product sales perform in Q3 2025?

NVEC's product sales decreased by 22% in Q3 fiscal 2025 compared to the prior-year quarter.

What was NVEC's net income for the first nine months of fiscal 2025?

NVEC's net income for the first nine months of fiscal 2025 was $11.2 million, or $2.31 per diluted share.