NVE (NVEC) Q3 2026 earnings summary

Executive summary

• Revenue for Q3 FY2026 increased 23% year-over-year to $6.22 million, driven by 16% growth in product sales and a 335% surge in contract R&D revenue, with broad-based growth across defense, non-defense, distributor, and direct channels.

• Net income for Q3 FY2026 rose 11% year-over-year to $3.38 million, or $0.70 per diluted share, up from $3.05 million in the prior-year quarter.

• For the first nine months of FY2026, revenue grew 0.4% to $18.7 million, with net income declining 8% to $10.3 million, or $2.12 per diluted share.

• Operating margin was 60%, pre-tax margin 68%, and net margin 54% for Q3 FY2026.

Financial highlights

• Quarterly gross margin declined to 79% from 84% due to less profitable product mix and higher distributor sales.

• Operating expenses fell 12% year-over-year, with R&D down 9% and SG&A down 19%.

• Quarterly gross profit increased to $4.89 million from $4.27 million year-over-year.

• Interest income decreased 3% due to a smaller marketable securities portfolio; other income dropped by $135,000.

• Cash and cash equivalents at quarter-end were $3.41 million, down from $8.04 million at March 31, 2025.

Outlook and guidance

• Full-year tax rate expected at 16%-17% for FY2026, aided by $700,000–$1 million in advanced manufacturing investment tax credits.

• Accelerated R&D expense deductions expected to reduce cash taxes by $1.1 million for FY2026.

• Optimism for a return to more normal flow in defense business and future sales from R&D investments.

• Dividends to be funded through operating cash flow and maturing securities; future dividends subject to board approval and business conditions.