"Despite defense sales' decline, we are encouraged by the stabilization in non-defensive sales, which highlights potential recovery as industry conditions improve."
— Dan Baker
03Detailed Report
NVEC
NVE Corporation
Period
Q1 2026
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedMay 14, 2026
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Executive Summary
NVE Corporation reported a substantial yet challenging first quarter of fiscal 2026, marked by a 10% decrease in revenue to $6.1 million, primarily attributed to a decline in product sales from the defense sector, which offset a noteworthy increase in contract research and development revenue by 17%. Despite these headwinds, management expressed optimism regarding the stabilization of non-defense sales and the potential growth of its distributor business amidst a recovering semiconductor market. The net income decreased by 13% year-over-year, reflecting lower margins partially offset by a 20% reduction in total expenses. The company's strong operating margin of 62% and pretax margin of 70% suggest robustness in core operational efficiencies while sustaining profitability given the fluctuating revenue base.
Key Performance Indicators
Revenue
Decreasing
6.10M
QoQ: -16.03% | YoY: -10.00%
Gross Profit
Decreasing
4.92M
80.63% margin
QoQ: -14.46% | YoY: -15.25%
Operating Income
Decreasing
3.78M
QoQ: -10.96% | YoY: -13.80%
Net Income
Decreasing
3.58M
QoQ: -8.13% | YoY: -12.73%
EPS
Decreasing
0.74
QoQ: -76.28% | YoY: -12.94%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue Performance:
- Total revenue fell by 10% year-over-year (YoY) and 16.03% quarter-over-quarter (QoQ) to $6,104,644.
- Product sales decreased by 11%, largely due to variabilities in defense contracts, indicating reliance on these contracts poses revenue risks.
- Contract R&D revenue grew by 17%, indicating diversification as a key strategy to mitigate fluctuations in product sales.
Profitability Metrics:
- Gross profit margin declined to 81% from 86% YoY due to a shift towards lower-margin products and increased distributor sales.
- Operating income stood at $3,783,250, maintaining an operating margin of 62%, which reflects solid operational management despite revenue challenges.
- Net income of $3,575,818 shows a 13% decline YoY but remains healthy as reflected in a net margin of 59%.
Cash Flow Insights:
- Operating cash flow remained healthy at $5,190,660, comfortably exceeding the dividend payout of $4,837,166, highlighting liquidity adequacy.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
6.10M
-10.00%
-16.03%
Gross Profit
4.92M
-15.25%
-14.46%
Operating Income
3.78M
-13.80%
-10.96%
Net Income
3.58M
-12.73%
-8.13%
EPS
0.74
-12.94%
-76.28%
Key Financial Ratios
Management Insights Available for Members
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