NVE Corp's Q2 Net Income Dips 18% Amid R&D Revenue Drop

TL;DR

**NVE Corp's declining revenue and net income, despite stable product sales, makes it a cautious hold as R&D funding dries up.**

AI Summary

NVE Corp reported a decline in net income for the quarter ended September 30, 2025, falling to $3,310,838 from $4,026,145 in the prior year, a decrease of 17.76%. Total revenue also decreased by 6.17% to $6,346,992 from $6,758,690, primarily due to a significant drop in contract research and development revenue from $654,257 to $208,220. Product sales, however, saw a slight increase of 0.56% to $6,138,772. Gross profit decreased by 14.50% to $4,968,498. For the six months ended September 30, 2025, net income was $6,886,656, down from $8,123,732 in the same period last year, a 15.23% reduction. The company's total assets decreased to $61,490,218 from $64,275,862 as of March 31, 2025, largely driven by a reduction in cash and cash equivalents and marketable securities. Cash and cash equivalents decreased by $2,929,083 during the six-month period. The company continues to pay a cash dividend of $1.00 per common share. Risks include reliance on marketable securities for a significant portion of assets, with 74% of total assets in marketable securities as of September 30, 2025, and potential impacts from interest rate fluctuations.

Why It Matters

NVE Corp's declining net income and revenue, particularly in contract R&D, signals potential challenges in its core spintronics technology development, which could impact future innovation and market positioning. For investors, the consistent $1.00 cash dividend per share remains attractive, but the overall decrease in profitability and asset base might raise concerns about long-term value creation. Employees in R&D might face uncertainty given the significant reduction in contract research revenue. In a competitive tech landscape, a slowdown in R&D could allow rivals to gain an edge, affecting NVE's ability to deliver cutting-edge products to customers and potentially impacting its market share.

Risk Assessment

Risk Level: medium — The risk level is medium due to a significant decline in net income by 17.76% for the quarter and 15.23% for the six months ended September 30, 2025. This is coupled with a substantial 68.17% decrease in contract research and development revenue, indicating a potential slowdown in innovation or external funding for key projects. Additionally, 74% of total assets are held in marketable securities, exposing the company to interest rate and market volatility.

Analyst Insight

Investors should monitor NVE Corp's future R&D revenue and product sales growth closely. While the dividend is stable, the decline in profitability and R&D funding suggests a need for caution. Consider if the current dividend yield adequately compensates for the declining earnings trend.

Financial Highlights

debt To Equity

0.03

revenue

$6,346,992

operating Margin

57.64%

total Assets

$61,490,218

total Debt

$1,777,263

net Income

$3,310,838

eps

$0.68

gross Margin

78.27%

cash Position

$5,107,481

revenue Growth

-6.17%

Revenue Breakdown

Key Numbers

• $6.35M — Total Revenue (Decreased by 6.17% from $6.76M in Q2 2024 to $6.35M in Q2 2025)
• $3.31M — Net Income (Decreased by 17.76% from $4.03M in Q2 2024 to $3.31M in Q2 2025)
• $0.68 — Net Income Per Share (Basic) (Decreased from $0.83 in Q2 2024 to $0.68 in Q2 2025)
• $208,220 — Contract R&D Revenue (Decreased by 68.17% from $654,257 in Q2 2024)
• $6,138,772 — Product Sales (Slightly increased by 0.56% from $6,104,433 in Q2 2024)
• $5,107,481 — Cash and Cash Equivalents (Decreased from $8,036,564 as of March 31, 2025)
• $45,226,523 — Total Marketable Securities (Represents approximately 74% of total assets as of September 30, 2025)
• $1.00 — Cash Dividends Declared (Consistent per common share for both Q2 2025 and Q2 2024)
• 14.50% — Gross Profit Decrease (From $5,811,436 in Q2 2024 to $4,968,498 in Q2 2025)
• $61,490,218 — Total Assets (Decreased from $64,275,862 as of March 31, 2025)

Key Players & Entities

• NVE CORP /NEW/ (company) — Registrant
• NVE CORPORATION (company) — Company name in financial statements
• Securities and Exchange Commission (regulator) — Regulatory body for filing
• Financial Accounting Standards Board (regulator) — Issuer of accounting standards
• Standard & Poor's (company) — Credit rating agency
• NASDAQ Stock Market, LLC (company) — Exchange where NVEC is registered
• $6,346,992 (dollar_amount) — Total revenue for Q2 2025
• $3,310,838 (dollar_amount) — Net income for Q2 2025
• $1.00 (dollar_amount) — Cash dividends declared per common share
• 4,837,166 (dollar_amount) — Shares outstanding as of September 30, 2025

FAQ

Risk Factors

• Reliance on Marketable Securities [high — financial]: As of September 30, 2025, marketable securities constitute approximately 74% of total assets ($45,226,523 out of $61,490,218). This heavy reliance exposes the company to potential impacts from interest rate fluctuations and market volatility.
• Interest Rate Fluctuations [medium — financial]: The significant portion of assets held in marketable securities makes the company vulnerable to changes in interest rates. Fluctuations could impact the value of these investments and, consequently, the company's overall financial position.
• Dependence on Contract R&D Revenue [medium — operational]: The substantial decrease in contract research and development revenue from $654,257 to $208,220 in the quarter ended September 30, 2025, highlights a potential over-reliance on this segment. Such volatility can significantly affect overall revenue and profitability.
• Declining Cash Position [medium — financial]: Cash and cash equivalents decreased by $2,929,083 during the six-month period ended September 30, 2025, falling to $5,107,481 from $8,036,564 as of March 31, 2025. This reduction in liquidity warrants monitoring.

Industry Context

NVE Corporation operates in the specialized field of spintronics, a nanotechnology that leverages electron spin for data handling. This niche technology positions the company in a unique segment of the semiconductor and data storage industries, potentially facing competition from established players and emerging technologies.

Regulatory Implications

As a publicly traded company, NVE Corporation is subject to SEC regulations and accounting standards. The company is also monitoring new accounting standards, such as ASU 2025-05, which may impact future financial reporting, though currently not expected to have a material impact.

What Investors Should Do

1. Monitor contract R&D revenue trends.
2. Assess the impact of interest rate changes on marketable securities.
3. Evaluate the sustainability of the cash dividend.

Key Dates

• 2025-09-30: Quarterly Financial Reporting — Reported a 17.76% decrease in net income and a 6.17% decrease in total revenue compared to the prior year, driven by a sharp decline in contract R&D revenue.
• 2025-03-31: End of Fiscal Year — Previous fiscal year-end balance sheet data used for comparison of asset and liability changes.

Glossary

Spintronics

A field of nanotechnology that utilizes electron spin, in addition to electron charge, to acquire, store, and transmit information. (This is the core technology NVE Corporation develops and sells devices for.)

Amortized Cost

The cost of a financial asset, adjusted for amortization of any premium or discount, transaction costs, and impairment or bad debt allowances. (Used to value marketable securities on the balance sheet, indicating their carrying value.)

Accumulated Other Comprehensive Income (Loss)

A component of shareholders' equity that includes unrealized gains and losses on investments, foreign currency translation adjustments, and pension adjustments. (Shows a change from a loss of ($68,544) to a gain of $90,166, impacting total equity.)

Right-of-use asset – operating lease

An asset representing the lessee's right to use an underlying asset for the lease term under an operating lease. (Represents the company's leased assets, with a slight decrease from $917,349 to $854,529.)

Year-Over-Year Comparison

Compared to the prior year's quarter, NVE Corporation experienced a notable decline in financial performance. Total revenue decreased by 6.17% to $6,346,992, primarily due to a sharp 68.17% drop in contract research and development revenue. This led to a 14.50% decrease in gross profit and a 17.76% reduction in net income, which fell to $3,310,838. Total assets also saw a decrease, largely driven by a reduction in cash and cash equivalents and marketable securities.

Key Financial Figures

• $0.01 — nge on which registered Common Stock, $0.01 par value NVEC The NASDAQ Stock Mar
• $1.00 — n 6,838 6,838 Cash dividends paid ($1.00 per share of common stock) ( 4,837,166
• $5,000,000 — our Board of Directors authorized up to $5,000,000 of additional repurchases. Our repurcha

Filing Documents

• nvec-20250930_10q.htm (10-Q) — 765KB
• nve_ex31z1.htm (EX-31.1) — 9KB
• nve_ex31z2.htm (EX-31.2) — 9KB
• nve_ex32.htm (EX-32) — 4KB
• nve10q_1.jpg (GRAPHIC) — 10KB
• 0001376474-25-000857.txt ( ) — 3552KB
• nvec-20250930_cal.xml (EX-101.CAL) — 35KB
• nvec-20250930_def.xml (EX-101.DEF) — 54KB
• nvec-20250930_lab.xml (EX-101.LAB) — 169KB
• nvec-20250930_pre.xml (EX-101.PRE) — 148KB
• nvec-20250930.xsd (EX-101.SCH) — 31KB
• nvec-20250930_10q_htm.xml (XML) — 542KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Balance Sheets

Notes to Financial Statements

Notes to Financial Statements

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Controls and Procedures

Item 4. Controls and Procedures

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings

Risk Factors

Item 1A. Risk Factors

Mine Safety Disclosures

Item 4. Mine Safety Disclosures

SIGNATURES

SIGNATURES 2 Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. NVE CORPORATION BALANCE SHEETS (Unaudited) Sept. 30, 2025 March 31, 2025 ASSETS Current assets Cash and cash equivalents $ 5,107,481 $ 8,036,564 Marketable securities, short-term (amortized cost of $ 12,597,421 as of September 30, 2025, and $ 13,730,266 as of March 31, 2025) 12,640,185 13,691,593 Accounts receivable, net of allowance for credit losses of $ 15,000 2,440,856 3,589,268 Inventories, net 7,418,843 7,449,083 Prepaid expenses and other assets 1,163,093 433,414 Total current assets 28,770,458 33,199,922 Fixed assets Machinery and equipment 12,783,642 11,758,205 Leasehold improvements 2,059,853 1,956,309 14,843,495 13,714,514 Less accumulated depreciation and amortization 11,902,066 11,727,615 Net fixed assets 2,941,429 1,986,899 Deferred tax assets 1,079,733 1,867,069 Marketable securities, long-term (amortized cost of $ 27,771,414 as of September 30, 2025, and $ 26,353,692 as of March 31, 2025) 27,844,069 26,304,623 Right-of-use asset – operating lease 854,529 917,349 Total assets $ 61,490,218 $ 64,275,862 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 229,526 $ 214,691 Accrued payroll and other 585,395 871,169 Operating lease 155,800 83,010 Total current liabilities 970,721 1,168,870 Long-term operating lease liability 806,542 838,221 Total liabilities 1,777,263 2,007,091 Shareholders' equity Common stock, $ 0.01 par value, 6,000,000 shares authorized; 4,837,166 issued and outstanding as of September 30, 2025 and March 31, 2025 48,372 48,372 Additional paid-in capital 19,894,256 19,821,106 Accumulated other comprehensive income (loss) 90,166 ( 68,544 ) Retained earnings 39,680,161 42,467,837 Total shareholders' equity 59,712,955 62,268,771 Total liabilities and shareholders' equity $ 61,490,218 $ 64,275,862 * The March 31, 2025 Balance S

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE 1. DESCRIPTION OF BUSINESS We develop and sell devices that use spintronics, a nanotechnology that relies on electron spin rather than electron charge to acquire, store, and transmit information. NOTE 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited financial statements of NVE Corporation are prepared consistent with accounting principles generally accepted in the United States and in accordance with Securities and Exchange Commission rules and regulations. In the opinion of management, these financial statements reflect all adjustments, consisting only of normal and recurring adjustments, necessary for a fair presentation of the financial statements. Although we believe that the disclosures are adequate to make the information presented not misleading, certain disclosures have been omitted as allowed, and the Notes to Financial Statements have been condensed as permitted. It is suggested that these unaudited financial statements be read in conjunction with the audited financial statements and Notes included in our latest Annual Report on Form 10-K for the fiscal year ended March 31, 2025. Sales, expenses, cash flows, assets, and liabilities can and do vary throughout the year, therefore are not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2026. Significant accounting policies A description of our significant accounting policies and estimates is provided in Note 2 to the Financial Statements in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025. As of September 30, 2025, there were no changes to our significant accounting policies or estimates. NOTE 3. NEW ACCOUNTING STANDARDS NOT YET ADOPTED In July 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2025-05, Financial Instruments—Credit Losses (Topic 326)—Measurement o

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Forward-looking statements

Forward-looking statements Some of the statements made in this Report or in the documents incorporated by reference in this Report and in other materials filed or to be filed by us with the Securities and Exchange Commission ("SEC") as well as information included in verbal or written statements made by us constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to the safe harbor provisions of the reform act. Forward-looking statements

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