NVEC

NVE stock ripped higher on Friday, jumping about 8% to US$73.71 by mid‑session after its Q2 FY2027 report, even though the last month had been tough with the share price sliding roughly 37% over 30 days. Traders are reacting to a semiconductor company that just printed US$5.83m in quarterly revenue and US$0.66 in earnings per share, while still running trailing net profit margins above 50%. In the short term, the bounce grabs the headlines. A bigger question is whether those rich margins and the discounted P/E can sustain investor confidence beyond this week's pop. Love NVE's strong net margins but uneasy about the recent 37% slide and what that implies for quality at this price? Compare it with our curated list of list of solid balance sheet and fundamentals stocks (26 results) to see how it stacks up on durability and fundamentals. - Revenue (Q2 2027 vs. Q2 2026): US$5.83m vs. US$6.35m (down about 8%) - Net Income (Q2 2027 vs. Q2 2026): US$3.17m vs. US$3.31m (slightly lower) - Basic EPS (Q2 2027 vs. Q2 2026): US$0.66 vs. US$0.68 (slightly lower) - Net Margin (Q2 2027 vs. prior year trailing margin): 54.4% vs. 55.8% (remains high, modestly lower than the latest 12 month level of 58.1%) Earnings tell you what NVE reported this quarter, but investors who care about what they are paying for the business usually focus on the cash flowing through the operation. Looking at NVE's cash flows alone, the stock could be a slight 10% overvalued. NVE leans on a quality story and the latest figures broadly back that up. Revenue for the quarter slipped about 8%, yet net margin stayed high at 54.4% with gross margin near 78%. Six month sales rose to US$16.9m and operating cash flow reached US$11.1m, alongside slightly lower receivables and inventories. A rising cash and securities pile at US$44.4m and ongoing dividends suggest the balance sheet comfortably supports product launches in sensors and couplers. For a thesis built on resilient profitability and cash generation, this set of numbers is directionally friendly. Concerns around cyclicality and customer concentration do find some support here. Quarterly product revenue fell 9% as a large medical buyer adjusted orders and defense sales dropped sharply, producing the 8% top line decline. Distributor revenue rising 67% and management framing the medical impact as timing related point to demand that is uneven rather than broken. Six month results still show higher total revenue and income, which suggests current risks look more about quarter to quarter swings than a clear deterioration in NVE's spintronics business model. After a quarter where one large medical customer pulled back and defense demand softened, it is fair to ask whether this is just normal lumpiness or the early sign of a deeper shift in NVE's order book. Before assuming the latest bounce has fully priced that in, review an independent risk analysis for NVE which shows 4 important warning signs to see whether these issues sit alongside other structural red flags that are easier to miss in the headline numbers. NVE just showed how a strong margin story can withstand a sharp share price swing. The real opportunity is hunting for stocks that could be undervalued before the market closes that gap. - Company 1 - 41% below our estimate - uses trade in programs and refurbishment tech to convert device recycling into recurring recommerce transactions. - Company 2 - 23% below our estimate - expands an obesity and cardiometabolic drug portfolio that payers are increasingly reimbursing as manufacturing capacity and access agreements scale. - Company 3 - 27% below our estimate - designs power and liquid cooling systems that data center builders need for dense AI racks where air cooling fails. Three companies from the same screener. Open the full list of 29 companies trading below our fair value estimates → This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NVEC. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Shares of NVE Corporation NVEC have fallen 33% since reporting second-quarter fiscal 2027 results. This compares with the S&P 500's 0.5% return over the same period. Over the past month, the stock has lost 35.9%, while the S&P 500 inched up 0.4%. NVEC reported second-quarter fiscal 2027 revenues of $5.83 million, down 8% from $6.35 million in the year-ago quarter. The decline reflected weaker product sales, partially offset by higher contract research and development revenues. Net income decreased 4% year over year to $3.17 million from $3.31 million in the prior-year quarter. Earnings per share declined to 65 cents from 68 cents in the prior-year period. NVE Corporation price-consensus-eps-surprise-chart | NVE Corporation Quote Product sales decreased 9% to $5.58 million from $6.14 million in the prior-year quarter. Management attributed the decline primarily to a temporary inventory adjustment at a major medical device customer and a 95% reduction in defense product sales. Principal financial officer Daniel Nelson explained that medical device customers' inventory adjustments can create short-term ordering fluctuations, while defense revenues remain sensitive to government procurement cycles. However, distributor sales surged 67% year over year, supported by improving industry conditions, and demand for new and existing commercial products. Management indicated that distributor sales growth accelerated during the quarter. Contract research and development revenues increased 25% to approximately $259,000 from $208,000 in the prior-year quarter, reflecting progress on existing contracts. Gross profit decreased to $4.56 million from $4.97 million in the year-ago quarter. Nevertheless, the gross margin remained strong at approximately 78%. Operating expenses increased 4% year over year to $1.36 million. Selling, general and administrative expenses rose 44% to approximately $630,000 due to higher director option grant-date stock prices. Research and development expenses declined 17% to approximately $727,000, reflecting staffing redeployment. Operating income decreased to $3.21 million from $3.66 million in the prior-year quarter, resulting in an operating margin of approximately 55%. The effective income tax rate declined to 14% from 20%, primarily benefiting from favorable tax law changes. This reduction helped cushion the impacts of lower operating earnings, supporting a net profit margin of approximately 54%. Despite second-quarter weakness, NVEC's first-half fiscal 2027 revenues increased 36% year over year to $16.9 million from $12.5 million. Product sales increased 35%, while contract research and development revenues advanced 38%. Net income climbed 39% to $9.57 million, with earnings increasing to $1.97 per share from $1.42. The operating cash flow reached $11.1 million during the first six months compared with $8 million a year earlier. Cash and marketable securities totaled $44.4 million at September-end, up from $43.5 million at March-end. Management noted that operating cash generation exceeded dividend payments and capital expenditure. President and CEO Peter Eames emphasized opportunities in robotics, industrial automation and power conversion. During the quarter, NVEC introduced miniature wafer-level chip-scale sensors measuring 0.55 millimeters square and a family of seven gear sensor variants designed for precision motion applications. Eames highlighted early design wins and growing customer interest, although initial orders remain relatively small. Management expects medical device and defense sales to recover in the third quarter, with revenues returning to growth. Second-half fiscal 2027 revenues are expected to remain broadly consistent with the first-half levels. Nelson also projected an effective tax rate of 14-16% for at least the remainder of fiscal 2027. NVEC completed a leadership transition in August, appointing Peter Eames president and CEO. Former CEO Dan Baker became chairman, replacing Terry Glarner. The company also appointed Carolyn Valentine to its board, expanding membership from five to seven directors. Separately, NVEC declared a quarterly cash dividend of $1 per share, payable Nov. 30, 2026, to shareholders of record as of Nov. 2, 2026. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NVE Corporation (NVEC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

- Interested in NVE Corporation? Here are five stocks we like better. - Second-quarter revenue fell 8% year over year as product sales declined, including a 95% drop in defense-related sales and a temporary inventory adjustment by a major medical-device customer. Net income decreased modestly to $3.17 million, though the company maintained a 54% net margin. - Management expects the medical-device disruption to be temporary, with medical-device and defense sales recovering in the current quarter and second-half fiscal 2027 revenue roughly matching the first half. Contract R&D revenue rose 25%, while first-half revenue increased 36% to $16.9 million. - Distributor sales surged 67% amid stronger demand for automation, robotics and power-conversion products. NVE also introduced new wafer-level and gear sensors targeting industrial and humanoid robotics, supported by strong cash generation and $44.4 million in cash and marketable securities. - Will Fed Rate-Hike Pause Lead To Small-Cap Outperformance? NVE (NASDAQ:NVEC) reported second-quarter fiscal 2027 revenue that declined 8% from a year earlier, as lower product sales offset growth in contract research and development revenue. The company said the product-sales decline reflected a short-term inventory adjustment by a large medical-device customer and a sharp drop in defense-related product sales. Net income for the quarter ended Sept. 30, 2026, was $3.17 million, or $0.65 per diluted share, compared with $3.31 million, or $0.68 per share, in the prior-year quarter. Despite the revenue decline, NVE reported a 54% net margin, supported by a lower effective tax rate. → The AI Sell-Off Continues—These 3 Stocks Keep Raising Guidance Anyway Principal Financial Officer Daniel Nelson said total product sales declined 9% year over year, while contract R&D revenue increased 25% due to progress on existing contracts. Defense product sales fell 95%, which Nelson attributed to the variability of government procurement cycles. Management characterized the medical-device order disruption as temporary. Nelson said the variability was primarily related to orders being pulled into the fiscal first quarter from the second quarter, rather than an indication of continuing demand weakness. → Tesla's Roadster Reveal Hints at 2 Much Bigger Moves "We do not see any further disruptions looking forward," management said during the question-and-answer session. NVE expects medical-device and defense sales to recover in the current quarter and expects revenue in the second half of fiscal 2027 to be consistent with the first half. For the first six months of fiscal 2027, revenue totaled $16.9 million, up 36% from the comparable period a year earlier. Net income for the six-month period was $9.57 million, or $1.97 per diluted share. → Luxury's Middle Market Is Cracking—These 3 Stocks Could Win Nelson said revenue increased toward the end of the September quarter, with September stronger than August. He added that receivables declined 12% due to the timing of customer payments, while inventory fell 3% because of higher first-half product sales. While direct medical-device sales were affected by the timing adjustment, NVE said distributor sales rose 67% year over year in the second quarter. The company attributed the increase to strengthening industry conditions and demand for both newer and legacy commercial products. Management said distributor sales grew by approximately 40% for the first half of the fiscal year, indicating that the growth rate accelerated in the second quarter. Distributor sales can vary as a percentage of total revenue from quarter to quarter, particularly when direct sales fluctuate, but management said the channel typically represents between roughly one-third and two-thirds of total revenue. President and CEO Pete Eames said NVE is seeing strong growth in power-conversion and robotics applications. The company said its high-isolation products could benefit as voltages increase in power supplies and power-conversion systems, including data-center applications. NVE also said it has been seeing growing interest and increasing order sizes from newer customers, particularly in robotics, factory automation and humanoid-robotics applications. Management described several design wins for wafer-level chip-scale products as small and early stage, beginning with samples and low-thousand-unit purchases before potentially developing into larger orders. Eames said NVE can produce millions of sensors and has capacity to scale to tens of millions of sensors. For humanoid robotics, he said a typical NVE sensor has an average selling price of about $1 to $2 and that a robot could use sensors "in the tens" for precision-motion applications. NVE introduced two product lines during the quarter. The first was a new wafer-level chip-scale sensor designed to provide analog information, including position, based on motion or changes in external magnetic fields. The company said the sensor measures 0.55 millimeters square and is intended for precision-motion uses in medical devices, industrial automation and robotics. The company also released a family of gear sensors for motion speed and position sensing in industrial automation and robotics. The sensors use a small magnet and detect gear teeth as they pass the device, with seven versions intended to match common gear sizes. NVE said the products are designed for linear and rotational encoders and closed-loop servo systems. Eames said the gear sensors are intended for both industrial and humanoid robotics and that the company is seeing strong interest in those applications. NVE is also developing more precise robotics sensors, along with more power-efficient isolators and power-conversion products. NVE's gross margin was 78% in the quarter, while operating margin was 55% and pretax margin was 63%. Operating expenses rose 4%, as a 44% increase in selling, general and administrative expense was partially offset by a 17% decrease in R&D expense. Nelson said R&D expense declined because of staffing redeployment, while SG&A increased due to higher director option grant-date stock prices. The company's effective tax rate declined to 14% from 20% a year earlier, primarily because of favorable tax-law changes. NVE expects its effective tax rate to range from 14% to 16% for at least the remainder of the fiscal year. Operating cash flow was $11.1 million for the first six months of fiscal 2027, compared with $8 million a year earlier. Cash and marketable securities increased to $44.4 million from $43.5 million. The company paid a $1-per-share quarterly dividend during the quarter and declared another dividend for payment at the end of November. Separately, Eames said he was elected a director and appointed president and CEO at NVE's August annual shareholders meeting. Former CEO Dan Baker replaced Terry Glarner as board chairman, and Carolyn Valentine joined the board, expanding it from five to seven directors. NVE Corporation (NASDAQ: NVEC) develops and manufactures spintronic devices that use electron-spin properties to acquire, transmit, and store data. The company's technology is designed to provide high sensitivity, low power consumption, and electrical isolation in applications that require the transfer or detection of digital signals. Its product portfolio includes magnetic sensors, digital isolators, and couplers. These components are used in industrial equipment, factory automation, medical devices, energy systems, transportation, and other applications that require sensing, signal isolation, or communication between electrically separated circuits. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "NVE Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

This article first appeared on GuruFocus. - Total Revenue (Q2 FY2027): Decreased 8% year over year; product sales down 9%, partially offset by 25% increase in contract R&D revenue. - Distributor Sales: Increased 67% due to strengthening industry conditions and strong demand for new and legacy commercial products. - Defense Product Sales: Decreased 95%, attributed to variable government procurement cycles. - Total Operating Expenses: Increased 4% year over year; SG&A up 44%, R&D down 17% due to staffing redeployment. - Effective Tax Rate: Decreased to 14% from 20%, driven by favorable tax law changes; expected 14%16% for at least the remainder of the fiscal year. - Net Income (Q2 FY2027): $21.7 million, or $0.65 per diluted share, versus $3.31 million, or $0.68 per share, in the prior year quarter. - Net Margin: 54%. - Gross Margin: 78%. - Operating Margin: 55%. - Pre-Tax Margin: 63%. - Total Revenue (First Six Months FY2027): $16.9 million, up 36% over the same period in fiscal 2026. - Net Income (First Six Months FY2027): $9.57 million, or $1.97 per diluted share. - Cash Flows from Operations: $11.1 million for the first six months of fiscal 2027, versus $8 million in the prior-year period. - Cash Plus Marketable Securities: Increased from $43.5 million to $44.4 million. - Receivables: Decreased 12% due to timing of customer payments. - Inventories: Decreased 3% due to increased product sales in the first half of the fiscal year. - Dividend: $1 per share quarterly dividend paid in the past quarter; another dividend declared, payable at the end of November. - Warning! GuruFocus has detected 4 Warning Signs with NVEC. - Is NVEC fairly valued? Test your thesis with our free DCF calculator. Release Date: October 21, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Distributor sales increased 67% year-over-year in Q2, indicating strengthening industry conditions and strong demand for new and legacy commercial products. - Net margin increased to 54% due to a lower effective tax rate, and profitability metrics remain strong with gross margin at 78% and operating margin at 55%. - NVE Corp launched innovative new products, including wafer-level chip-scale sensors and gear sensors, targeting high-growth markets like robotics, automation, and humanoid robotics. - The company expects medical device and defense sales to recover in the current quarter, with second-half revenue consistent with the first half. - NVE Corp has a strong patent portfolio and trade secrets in Spintronics, providing significant barriers to entry and competitive advantages. - Total revenue decreased 8% year-over-year in Q2, driven by a 9% decrease in product sales and a 95% decrease in defense product sales. - Product sales were negatively impacted by a short-term inventory adjustment at a large medical device customer, creating order volatility. - Operating expenses increased 4% year-over-year, with SG&A up 44% due to higher director option grant date stock prices. - NVE Corp relies on several large customers for a significant percentage of revenue, posing concentration risk. - The company does not track backlog, which may limit visibility into future revenue streams. Q: Can you give more color on the rescheduled orders? Were they pushed into H2 rather than the next fiscal year, and were they roughly the size of the shortfall? A: CEO Peter Eames explained that the order variability was primarily from orders being pulled into Q1 from Q2, so the company does not see further disruptions looking forward and views the effect as relatively short-term. Q: You said second-half top line should be similar to the first half. Is that correct, and what could drive upside to those expectations? A: CEO Peter Eames confirmed that H2 revenue should be consistent with H1, viewing the order disruptions as temporary and expecting a return to growth next quarter. He noted the market continues to accelerate, citing Abbott's projected 10% year-over-year increase, and said long-term growth is supported by impressive products and important customers. Q: Are NVE's sensors applicable to gears for humanoid robots, and are you having conversations there? A: CEO Peter Eames said yesthe new gear sensors are especially intended for robotics, both industrial and humanoid, targeting advanced encoders and servo systems. He called the timing of the introduction perfect given growth in humanoid robotics and noted strong interest already. Q: What is your long-term vision for the company over the next two to three years, and how does it differ from your predecessor's approach? A: CEO Peter Eames said his main focus is taking advantage of the recent expansion and leveraging it toward new products in fast-growing markets. He described this as a continuation of the trajectory started under former CEO Dan Baker's leadership. Q: Can you speak to capacity expansionhas it moved into volume production in earnest? A: CEO Peter Eames said there has been some shift toward production capacity with the additional resources from the expansion, though the shift is relatively small now. He noted important design wins in wafer-level chip-scale products, with that capacity primarily coming from the expansion, and said the company will continue transitioning capacity as order flow increases. Q: On power conversion, can you give color on progress as data centers transition to 800-volt? A: CEO Peter Eames highlighted that NVE provides the highest isolation in the industry, which favors its products as application voltages increase in power supplies and power conversion. He said trends favor NVE's technology and the company expects continued growth there. Q: Would you give color on design wins that could drive growth through H2 and into the next fiscal year? A: CEO Peter Eames said there are important small design wins for wafer-level chip-scale parts. These typically start with samples and move to low-thousand-unit purchases while customers work out system-level integration, then scale by factors of 10. He said the company is within that cycle with several products, which supports its optimism. Q: Would you be able to size the relative dollar content per humanoid robot, even as a range? A: CEO Peter Eames said a typical NVE product is perhaps $1 to $2 per sensor, and several sensors are used in precision motion applications for humanoid robotscertainly in the tens of sensors per robot. He sees that as providing significant revenue potential and a big upside. Q: On the medical device portion of revenue, is there a focus on diversifying beyond Abbott? A: CEO Peter Eames said the company works to expand its products throughout the medical device industry. While cardiac rhythm management is an important customer area, other implantable devices such as neurostimulators are important growth areas, driven by NVE's advantages in small size and low power. Q: Can you talk about the distributor sales increaseshould it be viewed as a higher-mix, lower-margin way to flex revenue? A: CEO Peter Eames said that is a safe assumption. Distributors leverage sales across the broadest product portfolio, so growth there is a good sign for revenue in general. He noted distributor sales typically range between one-third and two-thirds of total revenue and vary quarter to quarter. Q: Did distributor sales grow 67% year over year, and is that for Q2 or H1? A: CEO Peter Eames confirmed the 67% year-over-year increase was for Q2. He placed the H1 distributor sales growth somewhat lower, perhaps in the 40% range, indicating distributor sales accelerated in Q2 versus Q1. Q: Is the H2 mix going to be similar to H1 with mostly a few large customers, or will growth come from additional customers? A: CEO Peter Eames said the company expects revenue to increasingly come from new customers as the market continues to accept its new products. He cited short-term optimism from wafer-level chip-scale products, new gear sensors, and others becoming more representative of total revenue. Q: What is the biggest barrier to entry or competitive advantage of NVE's Spintronic technology? A: CEO Peter Eames cited NVE's patent portfolio, which prevents competitors from operating in its space, along with trade secrets and internal expertise that make it difficult to copy NVE's advantages. He described Spintronics as a unique technology offering a benefit proposition unlike any other. Q: Do you have any more expansion plans, such as moving admin off-site to free up space for production? A: CEO Peter Eames confirmed that is the option the company evaluates, though no further expansion plans beyond the current space have been discussed. He said NVE will continue to expand as needed, potentially moving some admin off-site and leveraging existing infrastructure. Q: Is there any color you can give on backlog or backlog coverage? A: CEO Peter Eames said NVE typically does not track backlog. He noted the company typically has strong order flow and plenty of inventory to satisfy expected orders. Q: Are your humanoid robotics customers planning to enter production volumes in 2027 or late 2026? A: CEO Peter Eames said it is hard to say, though NVE talks with robotics customers regularly and there is definitely a forecast for growth. He said NVE is increasing production on its side and For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Total revenue for the quarter decreased 8% primarily due to a short-term inventory adjustment at a major medical device customer and variability in defense procurement cycles. - Management attributed the product sales decline to order timing, specifically noting that some orders were pulled forward into the first quarter from the second quarter. - Distributor sales surged 67% in the quarter, which management views as a leading indicator of broad-based market acceptance for both legacy and new commercial products. - The company is pivoting its R&D strategy toward 'high-value' markets, specifically targeting advanced automation, robotics, and data center power conversion. - Profitability remains a core focus, with net margins reaching 54% supported by a decrease in the effective tax rate to 14% due to favorable tax law changes. - Management highlighted the competitive moat provided by their spintronic patent portfolio and trade secrets, which they believe prevent competitors from replicating their high-sensitivity, small-form-factor sensors. - Management expects revenues in the second half of the fiscal year to be consistent with the first half, implying a normalization of the order flow disruptions seen in Q2. - The company anticipates a recovery in both medical device and defense sales during the current quarter as short-term inventory adjustments conclude. - The effective tax rate is projected to remain between 14% and 16% for at least the remainder of the fiscal year. - Strategic growth is expected to be driven by new 'wafer-level chip scale' sensors and gear sensors specifically designed for the humanoid and industrial robotics markets. - Capacity expansion efforts are gradually shifting from R&D support toward volume production to accommodate anticipated growth in new product design wins. - The company underwent a leadership transition with Peter G. Eames appointed as CEO and former CEO Daniel Baker moving to Chairman of the Board. - The Board of Directors was expanded from 5 to 7 members to strengthen corporate governance and support growth efforts. - SG&A expenses increased 44% during the quarter, driven primarily by higher stock prices affecting director option grants. - Management acknowledged a continued reliance on several large customers, noting that medical inventory shifts can create significant short-term revenue volatility. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Management clarified that the Q2 shortfall was a 'short-term effect' caused by orders being pulled into Q1, and they do not see further disruptions ahead. - Revenue velocity reportedly increased toward the end of September, with September being the strongest month of the quarter. - NVE sees significant upside in humanoid robotics, estimating a potential for 'tens of sensors' per robot at an average selling price of $1 to $2 per sensor. - The company is already seeing strong interest from both Western and global OEMs for their new gear sensors used in advanced encoders and servo systems. - Management described current design wins as 'small,' meaning they are in the sampling and prototyping phase (low thousand-unit quantities). - These wins typically take a few quarters to transition into production orders, which can be 10x larger than the initial sample volumes. - As data centers transition to 800-volt systems, NVE expects increased dollar content because their technology provides the 'highest isolation in the industry' required for higher voltages. - Management remains optimistic that the industry trend toward higher voltage power supplies directly favors NVE's technical advantages.

Image source: The Motley Fool. Wed, Oct. 21, 2026 - President and Chief Executive Officer - Peter G. Eames - Principal Financial Officer - Daniel Nelson Operator: Good afternoon. And welcome to the NVE Corporation conference call for the quarter ended September 30, 2026. Peter G. Eames: I am Peter G. Eames, NVE's President and CEO. With me on the call is Daniel Nelson, our Principal Financial Officer. This call is being webcast live on YouTube and Google Meet and being recorded. Replay is available through our website, nve.com, our YouTube channel, youtube.com/nvecorporation. All participants are currently in a listen-only mode. After our presentation, there will be a question-and-answer session. After my opening comments, Daniel Nelson will present our financial results. Then I will cover the business. I will also cover the recent leadership transition and board expansion then we will open the call to questions. We issued our press release with summary financial results and filed our quarterly report on Form 10-Q in the past hour. Following the lows of March. Links to the press release and 10 Q are available through our website, the SEC's website, and X. Formerly known as Twitter. Please refer to the safe harbor statement on your screen. Comments we may make that relate to future plans, events, financial results or performance are forward looking statements that are subject to certain risks and uncertainties, including among others such factors as our reliance on several large customers for a significant percentage of revenue uncertainties related to the economic environments and the industries we serve, uncertainties related to future sales and revenues as well as risk factors listed from time to time in our filings with the SEC including our annual report on Form 10 ks for the year ended 03/31/2026. Actual results could differ materially from the information provided and we undertake no obligation to update forward looking statements we may make. We are pleased to report solid revenue and earnings for the quarter, driven by a 67% increase in distributor sales, Net margins increased to 54% due to a decrease in our effective tax rate. Daniel Nelson will cover the details of the financials. Daniel? Daniel Nelson: Thanks, Peter. Total revenue for the quarter decreased 8% compared to the prior year quarter. The decrease was due to a 9% decrease in product sales partially offset by a 25% increase in contract R&D revenue. The decrease in product sales was due to a short-term inventory adjustment at 1 of our large medical device customers. And a 95% decrease in defense product sales. Inventory adjustments by medical device customers can create short-term auto volatility for us. Defense product sales can be highly variable because of government procurement cycles. Looking forward, we expect medical device and defense sales to recover in the current quarter and we expect revenues in the second half of the fiscal year to be consistent with the first half. Aside from the short-term order flow adjustments in medical, we saw a 67% increase in distributor sales due to strengthening industry conditions and strong demand for our new and legacy commercial products. The increase in contract R&D revenue in the past quarter was due to progress on existing contracts. Total operating expenses increased 4% for the second quarter of fiscal 2027 compared to the second quarter of fiscal 2026 due to a 44% increase in selling, general, and administrative expense partially offset by a 17% decrease in R&D expense. The decrease in R&D was due to staff and redeployment. The increase in SG&A was due to higher director option granted stock prices. Our effective tax rate, which is the provision for income taxes, as a percentage of income before taxes, decreased to 14% from 20% in the prior year quarter, primarily due to favorable tax law changes. The decrease is consistent with our previous estimates we expect our effective tax rate to be between 14% and 16% for at least the remainder of the fiscal year. Net income for the second quarter of fiscal 2027 was $3.17 million or $0.65 per diluted share compared to $3.3 million or $0.68 per share in the prior year quarter. Our profitability metrics for the quarter remained strong. In addition to the 54% net margin Peter mentioned previously, gross margin was 78%. Operating margin was 55%, and pretax margin was 63%. For the first 6 months of fiscal 2027, total revenue was $16.9 million. Up 36% over the same period in fiscal 2026. The increase in revenue was due to strong sales across our product portfolio as well as increases in both direct and distributor sales. Net income was $9.57 million or $1.97 per diluted share for the first 2 quarters of fiscal 2027. Turning to cash flow items. Cash flows from operations was $11.1 million for first 6 months of fiscal 2027 compared to $8 million for the first 6 months of fiscal 2026. Cash plus marketable securities increased from $43.5 million to $44.4 million as operating cash flow more than cover our dividends and purchases of fixed assets for the first half of the fiscal year. Receivables decreased 12% due to timing of customers' payment. Inventories decreased 3% due to increased product sales in the first half of the fiscal year. And we paid our $1.00 per share quarterly dividend the past quarter and declare another dividend to be paid at the end of November. Now I will turn the call back over to Peter Eames to cover the business. Peter? Peter G. Eames: Thanks, Daniel. Our R&D strategy is to transition the world's best technology into the world's best products for high value markets such as advanced automation and robotics, data centers, and a highly automated fourth wave factories using the artificial intelligence of things. This quarter, we announced 2 new products, The first is a new design in our series of wafer level chip scale sensors. The new sensor provides analog information such as position, from the motion or changes of external magnetic fields. These sensors are the smallest products we have ever made at NVE measuring just 0.55 mm square. Combined with a small size is an extremely high sensitivity This combination enables unmatched spatial sensitivity for precision motion applications including medical devices industrial automation, robotics. We are promoting our new products on YouTube with videos showing the sensor detecting tiny motions of minute magnets. You can view these videos on our website. We also released a family of gear sensors in the past quarter, for precise motion, speed, and position sensing in industrial automation and robotics. These sensors are biased by a small magnet and detect the motion of ear teeth as they pass the sensor. 7 different versions of these sensors match common gear sizes in a newly available sensor form factor. The new sensors provide large low distortion signals allowing more precise control in linear and rotational encoders and closed loop servo systems that are ubiquitous in factory automation and robotics. We have videos of these new products on our website and YouTube channel showing the incredible small size, high precision and versatility of our new sensors. Addition to these new product launches, we are developing several new products including even more precise sensors for robotics and more power efficient isolators and power conversion. Next, I will cover our recent leadership transition and board expansion. I was elected director and appointed president and CEO at our annual shareholders meeting in August. Former CEO Daniel Baker replaced Terry Glarner as chairman We also elected a new director, Carolyn Valentine, expanding the board from 5 to 7 directors. The larger board strengthens our governance. I am honored to lead NVE as CEO We have a talented team strong customer relationships, and many exciting opportunities ahead. Look forward to building on our momentum to create long term value for our shareholders through profitable growth and expansion in attractive markets. We see significant opportunities in robotics, power conversion, and the artificial intelligence of things. Operator: Now we would like to open the call for questions via Google Meet. To ask a question, from Google Meet, click raise my hand icon at the bottom of the screen and unmute yourself to speak. From a phone, press *6 to unmute. Please state your name and affiliation before your question, and to prevent background noise, please mute your line after asking your question. Kaden: Hey, Peter. Am I able to ask the question here? Operator: Just unmute. Hi, Kaden. Go ahead. Kaden: Great. Thank you. Love if you can give some more color on the rescheduled orders here. So you guys attribute the decline to customer rescheduling orders. Were those pushed out into H2 and not necessarily into, like, next fiscal year? Were they roughly the size of the shortfall? Or smaller? The quarter over quarter shortfall or smaller than that? Peter G. Eames: Yeah. Sure, Kaden. The order variability was primarily from orders being pulled in to quarter 1 from quarter 2. So we do not see any further disruptions looking forward. And as Daniel said in the prepared remarks, it is a relatively short term effect. Kaden: Okay. And following up there, it seems just like from a. From your AR, shipments look weighted. Toward September. Would you say that September was the strongest month of the quarter? And do you do you guys have any other commentary around H2's velocity versus H1? Peter G. Eames: Sure. Maybe Daniel can comment on receivables. Daniel Nelson: Yeah. So in response to that question, we did see revenue increase towards the end of the September quarter. And, yes, we did see increase in September compared to the immediate month, which was August. Peter G. Eames: Got it. Kaden: Got it. I will jump in the queue. I have other questions, but I will let others ask before me. Operator: Great. Thanks, Kaden. Other questions? If there is not, I will ask more. Yeah. Please go ahead. Kaden: Great. So would you guys give some color around the growth you are seeing in the automation market and then as well as the power-conversion markets versus your core medical sales? In H1? And can you also give comment. Commentary about how that is how that is looking into H2? Peter G. Eames: Yep. We are definitely seeing strong growth in both power conversion and in robotics applications. We highlighted some important products in the prepared remarks especially focused on autumn automation and new sensors that go into robotics applications. So the spatial sensitivity that we are providing with those devices is unmatched in the industry, and we are optimistic partly because of that. We also have excellent we also have a high level of inventory, and we think the for robotics applications and power conversion applications. So it is driving overall optimism on our part. Great. Could you give some color on maybe any design wins or design ins that you have that could be driving the growth through h 2 and even into the next fiscal year? Yes. For the wafer level chip scale parts that we talked about in the prepared remarks, and on the previous investor calls as well, we do have some important small design wins for those products. So it is still early there, but I think the feedback from the industry has been very positive. And we are expecting growth long term from those parts and those technologies in general. Okay. When you say small design wins, is that small in terms of revenue, or is that, like, can you maybe describe the size of the customers? it is a mix. So when we say small design wins, it is usually in markets that start small with samples and then later move into low thousand type quantity purchases. While they work out system level integration challenges. That can take some time. Sometimes it takes a couple quarters, sometimes less for those to then translate into larger orders, such as factors of 10x larger than the sample orders I described. So it does take some time to ramp and I would say that we are certainly within that cycle with and that is why we are optimistic. Okay. So those costs. When you say small, it is simply given that it is more sampling and prototyping volumes. Would you give any color on customer size, like who these customers are? There any directional understanding of, like, on the robotics side? Are these top 5 OEMs on the. Like, maybe factory arms or humanoid side. Do you have any, you know, additional color you can give on the size of these potential customers? Yeah. it is unusual for us to comment, specifically on customers, but I can say that there is a variety of customers interested in the technology. That spans customers in the robotics space, of course, but also spanning beyond that. And we like the potential for very high volumes there. Would you size very high volumes? Certainly. Yep. We are we are certainly chasing very high volumes. Would you be able to put, like, any like, directional numbers to that? Like, what you guys are targeting? Well, we are certainly not unfamiliar with producing millions of sensors and tens of millions of sensors or certainly well within our capacity here. We can easily scale well beyond that as well in the short term and certainly within the time scale that we expect these customers to ramp up. Got it. Okay. On the on the power conversion side, you know, on the 800-volt, you have discussed that, you know, step ups in voltage kind of raise your dollar content. And many of the PSUs, you know, if you if you look, you would see NVE's parts to some degree. Would you be able to give more color on the power conversion side on the progress as data centers are transitioning to 800-volt. And your progress with your with your customers there. Yep. Happy to and happy to highlight the advantages that NVE provides as the voltages continue to increase. We provide the highest isolation in the industry. As voltages increase in power supplies and power conversion applications, that continues to favor NVE's products and we are we are continually optimistic for that reason. So we see the trends favoring NVE's technology, and we are we are expecting continued growth there as well. Operator: Okay. I am, like, the only person that is gonna ask you questions, I guess, Peter. I like to ask the question. Great. I will get off for a while. So, hi, Peter. Pete: This is Peter Prevot, calling from Florida. Great job on your continued success there. My question is the are NVE sensors applicable to gears for humanoid robots? You mentioned robotic it could be arms in automation factories. But what about humanoid robots? Is that something where your sensors can be used? And is that are you having any conversations there? Peter G. Eames: Yep. Definitely. The new gear sensors that I talked about on the call are especially intended towards robotics both industrial and humanoid robotics. They are intended for advanced encoders and servo systems, and those are exactly what are being used in humanoid robotics and elsewhere. So we think that the timing of that introduction is perfect with the growth in the humanoid robotics industry and we are seeing some strong interest there already. So as I said previously, we are optimistic about those applications. Great. Great. Thank you very much. Appreciate it. Operator: Hey, Peter. Ittai Eden: This is Ittai Eden from Principal. Operator: Hi, Ittai. Ittai Eden: I just wanted to ask just so I heard you right. You basically said that the second half in terms of top line should be similar to the first half of the year. Is that correct? Peter G. Eames: that is correct. that is what we said in the prepared remarks We do we do see the order disruptions as a temporary situation. And we expect to return to growth in the next quarter. Ittai Eden: Got it. And so, my follow-up would be how do these new products and the secular growth market fit in to those expectations, if you will? Is this you know, are you guys forecasting the back half based on existing orders, or is there still orders to go get from these new products? And new use cases. Peter G. Eames: Yeah. We are definitely seeing more orders come in. And as Daniel said in the prepared remarks, the growth is across our product portfolio, including distributors and direct sales and legacy products and also our new product so we are happy with the growth there and we expect that to continue. Ittai Eden: Got it. So I guess asked another way. What would be call it, upside to those internal expectations of a similar second half? Like, what are some things you think could drive upside there? Peter G. Eames: Well, generally, I think the market we are seeing is continuing to accelerate We just got Abbott's numbers this morning, for example, and they project a 10% year-over-year increase. So short term, we are not seeing any further disruptions in our in our current sales, and I think long term, we have impressive product and important customers and long term growth for those types of customers. Ittai Eden: Got it. Thank you. Is there any co. Color you can give on backlog or backlog coverage? Or any metrics you could share there, that would be helpful. Peter G. Eames: Yeah. We typically do not track a backlog. I would say we typically have a strong order flow, and we have plenty of inventory to satisfy those expected orders. And I think we are in good shape there. Ittai Eden: Alrighty. And then last 1 for me would be can you speak to the capacity expansion and how that is going? I recall last quarter, you mentioned it was mostly R&D for the time being. Has that moved into, you know, volume production in earnest? Or any color around that would be helpful. Peter G. Eames: Yeah. There certainly has been some shift towards production capacity with the additional resources from the expansion. I would say the shift is relatively small now, but as I mentioned previously, there are some important design wins in our wafer level chip scale products. And that capacity is primarily from the we have added from the expansion. So that is a good news, and we will continue to transition that capacity in that direction as the order flows increase here. Ittai Eden: Alright. I will jump back in the queue. Thanks, guys. Operator: Hi. Do you mind if I go now? Yeah. Go ahead. Analyst: Hi. I remember last quarter, you mentioned that there was a bunch of new customers that start out small. I was just wondering if there was any growth in those new customers. Peter G. Eames: Yeah. In general, I think the trends are definitely moving in the right direction. And as I described earlier, it is common for some of those new customers to start with relatively small orders and grow over time. And we are definitely seeing that, and it is specifically in the products that I mentioned in the prepared remarks and in the wafer level chip scale products, We are seeing a continual increase in the interest and increases in order sizes. So it is definitely moving in the right direction. Got it. And these new customers are mostly in the new industries you were talking about, like robotics? Correct. Yeah. Robotics and automation and factory automation and humanoid robotics are 2 important areas where we are seeing that interest. Awesome. Thank you. Operator: Hey, Peter. Are you there? Yeah. Go ahead. Analyst: Hi. I am a relatively new independent investor. And just congratulations on your new role and curious to know in terms of the long term horizon of the company over the next 2 to 3 years, what is your sort of vision for the company? Is it gonna defer? Is it gonna be a little bit different from what your predecessor was doing? And how should investors think about company going forward? Peter G. Eames: I would say, the main focus for me is taking advantage of the recent expansion and leveraging that towards new products and new products in fast growing markets. So it is a continuation of our previous effort and my efforts on the expansion in general, but I would say it is a continuation in the trajectory that was started under Daniel's leadership and moving to take advantage of that expansion. Okay, that sounds good. And then on the medical device portion of the revenue, I know that, you know, a, you know, sort of strong point percentage of that is coming from Abbott right now. Is there a focus on sort of diversifying that out, or how do how do you think about that? We definitely work to expand our products throughout the medical device industry. So cardiac rhythm management and Abbott obviously is an important customer of ours, but we see growth in other areas as well. Other implantable medical devices such as neurostimulators are important growth areas for NVE's product as well. it is because we have the advantages of small size and low power makes us a perfect technology for implantable medical devices. Got it. Okay. Well, thanks a lot, and all the best to you in the future. Thank you very much. Kaden: Peter, final question here for me. Would you say that your humanoid robotics customers are planning to be entering production volumes in 2027 or. Or even in 2026 at the tail end of this year. Peter G. Eames: You know, it is hard to say. We talked to our robotics customers regularly, and there is definitely a forecast for growth there. it is hard to speak directly to what their plans are. But we do see increasing production on our side, and we are happy to report that those are moving into those types of applications. So automation and humanoid robotics. So generally, I think we are aligned well with the industry. And the specific needs for the robotics market and we will. We will continue to see things move in that direction. Kaden: Right. And my final, I guess, question on the humanoid robotics front, 2 pronged here. Would you say most of your humanoid robotics customers are Western OEMs? And would you be able to, like, size the relative dollar content per robot that you guys are expecting even if it is a range? Peter G. Eames: Sure. Yeah. So we have a global distribution network for our robotics customers and our and our subsystem customers in the robotics marketplace. So we are servicing both western customers and global customers to answer the first part of your question. The second part of your question in terms of the dollar content and the. For a typical NV product, the ASP is perhaps $1 to $2 per sensor. And, obviously, there is several sensors used in the precision motion application of human robotics. We see the potential for several NVE sensors per robot there, and that drives a significant revenue from our perspective. So I think there is a big upside. Kaden: And by several, do you. Would you say in the tens of cents or in the hundreds of sensors? Like, just scale 20 to 50,, Can you give, like, a rough range? Peter G. Eames: Certainly in the tens of centers, I think, is fair. Okay. Kaden: Got it. Alright. Thank you so much, Peter. I will let others ask. Peter G. Eames: Yep. Thanks, Kaden. Operator: Hi, Peter. Hi. Go ahead. Analyst: Yeah. Just had 1 question. So with the short term disruption, with respect to the second quarter, and some of that revenue getting pulled into the first. Is it fair to is it really fair to say when you think about your second half estimates being kind of in line with the first half, that you would normalize those first 2 quarters. In other words, it would be somewhere along the midpoint. On a quarter by quarter basis going forward of the first 2 quarters, Yeah. Peter G. Eames: that is certainly 1 way to look at it. I think the year to date numbers are appropriate and that is kind of where the estimates came from. Okay. Great. Thank you. Pete: Peter, this is Peter Prevot again. Do you have any more expansion plans? I mean, the. I remember when I was there a few years ago, the new area that you guys expanded, sounds like you have got equipment filling that area. Is there a need for additional space Do you. or have you secured any additional buildings where you moved admin into that, and then you are gonna use that area in the existing building for production? Peter G. Eames: that is right, Peter. A good memory. That is the option that we evaluate. We have not discussed further expansion plans beyond the space that you saw when you visited. However, that is something, obviously, that we keep in mind, and we will continue to expand as needed. And we would follow the strategy that you mentioned, is to move some of the admin off-site and continue to expand by leveraging the infrastructure that we have here within our within our current building. So we, yeah, we definitely keep those plans fresh, and we will adapt to them as we need to. Pete: Okay. Great. And it seems like you have a phenomenal board of directors. Are you guys meeting quarterly, and how do you feel they are in supporting your efforts, your growth efforts, and any needs that you have in order to continue to grow the company. Peter G. Eames: Yeah. We have an excellent board, as you mentioned. And we are happy to draw from experience throughout the industry. We expanded our board to 7, and I think that makes them even stronger. And, yeah, we meet on a quarterly basis and happy to get the feedback and direction that the board provides. Very valuable to the company. Great. Thank you. Kaden: Peter, can you just talk quickly about the distributor sales increase? Should I view this as effectively. Well, first of all, how has it changed? And from last quarter, and should I view that as an increase in distributor sales mix being the ability to flex revenue higher but coming at lower margin. Peter G. Eames: I think that is a safe assumption. We have a global distribution network, as I mentioned earlier, and they leverage they leverage sales for us. So this is our sort of broadest estimate of the sales of the company. It covers the broadest product portfolio for us. And when we see growth there, that is a very good sign for revenue in general. And so we are very happy to see distributor sales increasing, and it is a sign of continued attraction of NVE's products in general growing gaining in the market. Kaden: But you are saying as a percent of mix, distributor sales had increased quarter over quarter? Peter G. Eames: It has. It does bob around a little bit and vary from quarter to quarter as you might expect. So Certainly, when we have a lower direct customer sales as we did in the last quarter, then our percentage of distributor sales increases. it is it is common for it to vary somewhat throughout the year. But in general, it is it is fairly steady usually between something like 1/3 and 2/3 of total revenue. Kaden: Thank you. Peter G. Eames: Operator: Hi, Peter. Analyst: I just have 2 questions. And first off, congratulations on the new role. Peter G. Eames: Thank you. I had a yes, I had a question in regards to specifically the distributor sales growth. Year over year and how you see those trends going forward. And then a little bit more color on the first half of the year. Related to nonmedical sales growth. Stripping out Abbott and all those medical sales growth. If you could give any color on that. Sure. As I mentioned, distributor sales is a pretty broad representation of NVE's product portfolio and when we see growth there, that is a good sign because it is sort of a more general reflection of products and sales, and we see that as a very good sign. And then in terms of the in terms of the distributor sales in general, we are we are we are pleased to see that increasing and I think overall, the growth that we have seen year to date and going forward will be a continuation of some of the things we said in the first quarter, and that is growth broadly, generally, and across NVE's products. Great. Thank you. Okay. Any other questions? Kaden: Did I did I hear correctly that distributor sales grew 67% year over year? Did you guys say that in the in the initial remarks, or was I mishearing something? Peter G. Eames: No. that is correct, Kaden. Kaden: Is that for h 1 or is that for Q2? that is for Q2. Peter G. Eames: Kaden: Do you have an h 1 figure for distributor sales year over year? Peter G. Eames: it is somewhat less than that. I would I would place it a little bit lower perhaps in the 40% range. Kaden: Okay. So it is. So distributor sales has accelerated in Q2 versus Q1. Peter G. Eames: Correct. Understood. Kaden: Alright. Thank you, Peter. Operator: Hi, Peter. Spencer: I have 1 more question. Operator: Sure. Go ahead, Spencer. Spencer: About my question earlier about I guess, customer diversification, and then you were saying how the end of year or the second half of the year's earnings are gonna be similar to the first half. Is that correct? Peter G. Eames: Correct. Yep. Spencer: Is that mix gonna be similar to the first half where it is mostly a few large customers? Or do you believe that the growth is gonna come from additional customers, like the additional ones that were gained in the first half of the year. Peter G. Eames: Yep. We certainly expect revenue to increasingly come from new customers. And that is because the market is continuing to accept our new products, and we will continue to see a growth for that reason. And so I think there is some short term optimism as our wafer level chip scale products, new gear sensors, and others that we have talked about previously continue to grow and become more representative of the of the total revenue numbers. Spencer: Got it. Thank you. Peter G. Eames: Good. Any other questions? I guess I have 1 more general question. Yeah. If no 1 else has any questions. You know, You know, given that, obviously, NVE has very, you know, I guess, you could say niche technology that is not very easily replicated and has many applications that obviously are growing in fields like robotics and automation. What would you say is the biggest barrier to entry or, I guess, the biggest, you know, competitive advantage that NVE and, more specifically,, the spintronic technology has. And I guess why other new entrants cannot come in and take over in a sense. Yeah. Barriers to entry include NVE's patent portfolio, and that prevents competitors from operating in our space. So we have excellent patent coverage in spintronics, and we think that it provides that coverage. We also have trade secrets and expertise within the company that make it very difficult for competitors to do what NVE does. And to try to copy the advantages that NVE provides with spintronics. it is a unique technology. We provide a benefit proposition to our customers that is unlike any others, and we think our company is reflective of those advantages. Thank you so much. Operator: Okay. Well, with that, we are pleased to report strong increases in distributor sales in the second quarter and excellent growth in revenue for the first half of the year. Our next earnings call will be in January to discuss third quarter results. A replay of this call will be available on the Investor Events page of our website www.nve.com, and our YouTube channel. Youtube.com/nvecorporation. Before you buy stock in Nve, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nve wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $370,440!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,330,110!* Now, it's worth noting Stock Advisor's total average return is 924% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of October 21, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Nve. The Motley Fool has a disclosure policy. NVE (NVEC) Q2 2027 Earnings Call Transcript was originally published by The Motley Fool

EDEN PRAIRIE, Minn., October 21, 2026--(BUSINESS WIRE)--NVE Corporation (Nasdaq: NVEC) announced financial results today for the quarter ended September 30, 2026. Total revenue for the second quarter of fiscal 2027 decreased 8% to $5.83 million from $6.35 million for the prior-year quarter. The decrease was due to a 9% decrease in product sales, partially offset by a 25% increase in contract research and development revenue. Net income for the second quarter of fiscal 2027 decreased 4% to $3.17 million, or $0.65 per diluted share, compared to $3.31 million, or $0.68 per share, for the prior-year quarter. For the first six months of fiscal 2027, total revenue increased 36% to $16.9 million from $12.5 million for the first six months of the prior year. The increase was due to a 35% increase in product sales and a 38% increase in contract research and development revenue. Net income increased 39% to $9.57 million, or $1.97 per diluted share, from $6.89 million, or $1.42 per share, for the first half of fiscal 2026. The company also announced a quarterly cash dividend to shareholders of $1.00 per share of common stock, payable November 30, 2026 to shareholders of record as of November 2, 2026. "We're pleased to report a 36% increase in revenue for the six months ended September 30, 2026, compared to the prior-year period, despite an 8% decrease in revenue for the second quarter of fiscal 2027 compared to the prior-year quarter," said NVE President and Chief Executive Officer Peter G. Eames, PhD. NVE is a leader in the practical commercialization of spintronics, a nanotechnology that relies on electron spin rather than electron charge to acquire, store, and transmit information. The company manufactures high-performance spintronic products including sensors and couplers that are used to acquire and transmit data. Statements used in this press release that relate to future plans, events, financial results, or performance are forward-looking statements that are subject to certain risks and uncertainties including, among others, such factors as our reliance on several large customers for a significant percentage of revenue, uncertainties related to the economic environments in the industries we serve, uncertainties related to future sales and revenues, risks and uncertainties related to tariffs, customs, duties, and other trade barriers, as well as the risk factors listed from time to time in our filings with the SEC, including our Annual Report on Form 10-K for the fiscal year ended March 31, 2026. NVE CORPORATION STATEMENTS OF INCOME QUARTERS AND SIX MONTHS ENDED SEPTEMBER 30, 2026 AND 2025(Unaudited) | Quarter Ended September 30, | 2026 | | 2025 Revenue | | | Product sales | $ | 5,575,282 | | | $ | 6,138,772 | Contract research and development | | 259,420 | | | | 208,220 | Total revenue, net | | 5,834,702 | | | | 6,346,992 | Cost of sales | | 1,270,805 | | | | 1,378,494 | Gross profit | | 4,563,897 | | | | 4,968,498 | Expenses | | | | | | | Research and development | | 727,345 | | | | 873,470 | Selling, general, and administrative | | 630,314 | | | | 436,919 | Total expenses | | 1,357,659 | | | | 1,310,389 | Income from operations | | 3,206,238 | | | | 3,658,109 | Interest income | | 474,727 | | | | 484,330 | Other income | | - | | | | 3,094 | Income before taxes | | 3,680,965 | | | | 4,145,533 | Provision for income taxes | | 507,806 | | | | 834,695 | Net income | $ | 3,173,159 | | | $ | 3,310,838 | Net income per share – basic | $ | 0.66 | | | $ | 0.68 | Net income per share – diluted | $ | 0.65 | | | $ | 0.68 | Weighted average shares outstanding | | | | | | | Basic | | 4,842,050 | | | | 4,837,166 | Diluted | | 4,850,910 | | | | 4,839,243 | | Six Months Ended Sept. 30, | 2026 | | 2025 Revenue Product sales | $ | 16,310,017 | | | $ | 12,047,342 | Contract research and development | | 558,742 | | | | 404,294 | Total revenue, net | | 16,868,759 | | | | 12,451,636 | Cost of sales | | 3,336,850 | | | | 2,561,017 | Gross profit | | 13,531,909 | | | | 9,890,619 | Expenses | | | | | | | Research and development | | 1,673,927 | | | | 1,593,701 | Selling, general, and administrative | | 1,385,908 | | | | 855,559 | Total expenses | | 3,059,835 | | | | 2,449,260 | Income from operations | | 10,472,074 | | | | 7,441,359 | Interest income | | 924,647 | | | | 982,538 | Other income | | - | | | | 3,905 | Income before taxes | | 11,396,721 | | | | 8,427,802 | Provision for income taxes | | 1,829,371 | | | | 1,541,146 | Net income | $ | 9,567,350 | | | $ | 6,886,656 | Net income per share – basic | $ | 1.98 | | | $ | 1.42 | Net income per share – diluted | $ | 1.97 | | | $ | 1.42 | Weighted average shares outstanding | | | | | | | Basic | | 4,839,621 | | | | 4,837,166 | Diluted | | 4,848,187 | | | | 4,839,049 | NVE CORPORATION BALANCE SHEETS SEPTEMBER 30 AND MARCH 31, 2026 | | (Unaudited)September 30, 2026 | | | March 31, 2026 | ASSETS | | | | | | | | Current assets | | | | | | | | Cash and cash equivalents | | $ | 3,969,958 | | | $ | 1,714,040 | Marketable securities, short-term | | | 19,678,659 | | | | 18,125,060 | Accounts receivable, net of allowance for credit losses of $15,000 | | | 3,005,928 | | | | 3,408,941 | Inventories, net | | | 6,860,310 | | | | 7,082,821 | Prepaid expenses and other assets | | | 1,541,483 | | | | 1,860,415 | Total current assets | | | 35,056,338 | | | | 32,191,277 | Fixed assets | | | | | | | | Machinery and equipment | | | 13,925,767 | | | | 13,843,799 | Leasehold improvements | | | 2,059,853 | | | | 2,059,853 | | | | 15,985,620 | | | | 15,903,652 | Less accumulated depreciation and amortization | | | 12,652,165 | | | | 12,187,643 | Net fixed assets | | | 3,333,455 | | | | 3,716,009 | Marketable securities, long-term | | | 20,739,953 | | | | 23,678,452 | Right-of-use asset – operating lease | | | 732,004 | | | | 793,794 | Total assets | | $ | 59,861,750 | | | $ | 60,379,532 | | | | | | | | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | Current liabilities | | | | | | | | Accounts payable | | $ | 252,399 | | | $ | 278,599 | Accrued payroll and other | | | 751,695 | | | | 697,611 | Operating lease | | | 202,612 | | | | 165,116 | Total current liabilities | | | 1,206,706 | | | | 1,141,326 | Deferred tax liabilities | | | 9,990 | | | | 248,284 | Long-term operating lease liability | | | 668,708 | | | | 740,423 | Total liabilities | | | 1,885,404 | | | | 2,130,033 | | | | | | | | | Shareholders' equity | | | | | | | | Common stock | | | 48,441 | | | | 48,372 | Additional paid-in capital | | | 20,175,512 | | | | 19,914,769 | Accumulated other comprehensive loss | | | (452,080 | ) | | | (32,010 | ) Retained earnings | | | 38,204,473 | | | | 38,318,368 | Total shareholders' equity | | | 57,976,346 | | | | 58,249,499 | Total liabilities and shareholders' equity | | $ | 59,861,750 | | | $ | 60,379,532 | View source version on businesswire.com: https://www.businesswire.com/news/home/20261021066652/en/ Contacts Contact: [email protected]

NVE Corporation recently reported first-quarter 2026 results, with revenue rising to US$11.03 million and net income reaching US$6.39 million, and confirmed a quarterly cash dividend of US$1.00 per share payable on August 31, 2026. An interesting angle for investors is that NVE’s earnings growth came alongside the completion of a long-running share repurchase program, while the company continues to return cash through dividends. We’ll now look at how the combination of stronger earnings and the affirmed US$1.00 dividend shapes NVE’s investment narrative. Invest in the nuclear renaissance through our list of 90 elite nuclear energy infrastructure plays powering the global AI revolution. To own NVE, you have to believe in a niche, highly profitable spintronics business that can keep monetizing its intellectual property in industrial, medical, and IIoT applications while running a tightly controlled balance sheet. The latest quarter’s jump in revenue and earnings, alongside another US$1.00 dividend, reinforces the near term story of strong margins and disciplined capital return, and the completion of the long-running buyback removes a small but lingering overhang about incremental repurchases. In the short term, the main catalysts now look more operational than financial: how new CEO Peter Eames steers product development, and whether distribution moves like the Semitech deal translate into sustained demand. Against a share price that has already moved sharply, the bigger risk is that expectations have simply run ahead of what NVE can consistently deliver. However, one key risk around sustainability of those generous dividends is easy to overlook. NVE's shares are on the way up, but could they be overextended? Uncover how much higher they are than fair value. Only one Simply Wall St Community fair value estimate exists at about US$35, far below recent trading levels. Set against NVE’s rapid share price gains and leadership transition, it shows how sharply views can diverge and why it is worth weighing multiple perspectives. Explore another fair value estimate on NVE - why the stock might be worth less than half the current price! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your NVE research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision. Our free NVE research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate NVE's overall financial health at a glance. Early movers are already taking notice. See the stocks they're targeting before they've flown the coop: Explore 26 top quantum computing companies leading the revolution in next-gen technology and shaping the future with breakthroughs in quantum algorithms, superconducting qubits, and cutting-edge research. Outshine the giants: these 16 early-stage AI stocks could fund your retirement. We've uncovered the 9 dividend fortresses yielding 5%+ that don't just survive market storms, but thrive in them. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NVEC. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Make better investment decisions with Simply Wall St's easy, visual tools that give you a competitive edge. NVE (NVEC) is drawing attention after reporting first quarter revenue of US$11.03 million and net income of US$6.39 million, with earnings per share of US$1.32 from continuing operations. See our latest analysis for NVE. Following these results, NVE’s share price has been volatile, falling 12.41% in the last day but posting a 36.20% 7 day share price return and a 96.22% 1 year total shareholder return. This combination signals strong underlying momentum despite short term swings. If earnings driven moves in NVE have your attention, this could be a good time to scan other semiconductor related plays through our AI infrastructure stocks screener 55 AI infrastructure stocks After that sharp 7 day surge in NVE following its latest earnings, the real tension now is straightforward: pay up at today’s price, or wait and risk missing out if the valuation already reflects the good news? Valuation for NVE currently hinges on its P/E of 31.6x at a last close of $117.55. This sits below both direct peers and the wider US semiconductor group. The P/E ratio compares NVE's share price to its earnings per share and is a common way investors weigh what they are paying for each dollar of current profit. For a profitable semiconductor company like NVE, this gives a quick read on how the market is pricing its earnings today versus other listed options. According to the latest data, NVE trades on a P/E of 31.6x, which is slightly below the specific peer average of 33x and far below the broader US semiconductor industry average of 57.9x. That gap suggests the market is applying a more restrained earnings multiple to NVE than to many semiconductor stocks, even though the company reports high quality earnings and a return on equity of 30.1%, which is described as high in the dataset. See what the numbers say about this price — find out in our valuation breakdown. Result: Price-to-Earnings of 31.6x (ABOUT RIGHT) However, NVE’s relatively small US$568.6m market cap and reliance on a single electronic components segment mean that any demand shock or product disruption could quickly challenge today’s valuation. Find out about the key risks to this NVE narrative. While NVE looks reasonably placed on a 31.6x P/E, our DCF model presents a different perspective, with an estimated value of $35.32 per share versus the current $117.55. That gap points to potential overvaluation based on cash flow assumptions, which raises the question of which analytical lens may be more relevant for your assessment. To see exactly how this cash flow based view is constructed, and what would need to change for the numbers to align more closely, take a closer look at the SWS DCF model output for NVE Look into how the SWS DCF model arrives at its fair value. Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out NVE for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 49 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. With NVE showing both potential strengths and clear question marks, now is a good time to review the full picture yourself and decide what really matters. To balance the upside story with the concerns that have been flagged, take a close look at the 1 key reward and 3 important warning signs. If NVE has sharpened your focus, do not stop here. Use proven filters to surface other stocks that could fit your goals before the next move passes you by. Target potential value opportunities early by scanning companies that combine quality metrics with appealing valuations through the 49 high quality undervalued stocks. Strengthen your income focus by finding companies that offer substantial yields through the 9 dividend fortresses. Prioritize resilience by reviewing companies with steadier risk profiles using the 78 resilient stocks with low risk scores. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NVEC. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]