NVE (NVEC) Q3 2025 earnings summary

Executive summary

• Reported a 25% year-over-year revenue decline for the quarter ended December 31, 2024, driven by a 22% drop in product sales and a 74% decline in contract R&D revenue.

• Net income for the quarter decreased 27% year-over-year, primarily due to lower revenue and higher operating expenses, partially offset by improved gross margin and other income.

• For the nine months ended December 31, 2024, revenue fell 18% year-over-year, with net income down 16% over the same period.

• Direct sales remained resilient and contributed to higher margins, while distributor channels experienced inventory gluts and reductions.

• Introduced new wafer-level chip-scale products targeting medical devices and robotics, and launched a new evaluation platform compatible with Arduino.

Financial highlights

• Quarterly revenue was $5.1M, down from $6.8M year-over-year; nine-month revenue was $18.6M, down from $22.7M.

• Quarterly net income was $3.0M, down from $4.2M; nine-month net income was $11.2M, down from $13.3M.

• Gross margin improved to 84% for the quarter and 85% for the nine months, up from 80% and 78% respectively.

• EPS was $0.63 for the quarter and $2.31 for the nine-month period.

• Cash and cash equivalents at quarter-end were $5.5M, down from $10.3M at March 31, 2024.

Outlook and guidance

• Management remains optimistic about future demand, with customers and distributors seeing improving industry conditions, though recovery is slower than desired.

• Fundamentals are described as strong, with expectations that consumption is outpacing current sales into the channel as distributors reduce inventory.

• Management anticipates increased fixed asset purchases in fiscal 2025 and 2026 to support production capacity and new product development.

• Dividends are planned to be funded through operating cash flow and maturities of marketable securities; future dividends remain subject to Board approval and business conditions.