NVE Corporation (NVEC) reported a revenue decrease of 25% year-over-year (YoY) for Q3 2025, primarily driven by substantial reductions in product and contract research revenue amidst ongoing inventory glut challenges across the semiconductor industry. Despite this decline, NVE sustained an impressive gross margin of 84%, a reflection of a more profitable product mix and reduced distributor sales. Management emphasizes significant investments in research and development (R&D), allocating 17% of revenue to new product innovations, indicating a strong commitment to future growth.
Net income also fell by 27%, totaling $3.05 million for the quarter, but the focus on profitable direct sales has maintained robust operating and net margins of 58% and 60%, respectively. This performance underscores NVE's operational durability even in a contracting sector, setting a foundation for potential recovery as market conditions improve.