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NVE Corporation Reports Third Quarter Results and Announces Quarterly Dividend

1. NVE's Q3 revenue fell 25% to $5.06 million compared to last year. 2. Net income for the quarter dropped 27% to $3.05 million. 3. Decline attributed to reduced product sales and R&D revenue. 4. NVE declared a quarterly cash dividend of $1.00 per share. 5. Despite challenges, NVE reports solid earnings year-to-date.

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$81.9801/22 04:14 PM EDTEvent Start
$71.9201/23 10:42 PM EDTLatest Updated
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FAQ

Why Bearish?

The significant revenue and net income declines indicate underlying weaknesses. Past examples show sharp revenue drops have negatively affected stock prices.

How important is it?

The earnings report directly impacts investor perception and stock valuation. Declining revenue trends could raise concerns among investors.

Why Short Term?

Immediate investor reactions are likely due to recent poor earnings. Similar cases, like Q2 earnings drops, led to short-term stock declines.

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NVECAAPLTSLA
EDEN PRAIRIE, Minn.--(BUSINESS WIRE)--NVE Corporation (Nasdaq: NVEC) announced today financial results for the quarter ended December 31, 2024. Total revenue for the third quarter of fiscal 2025 decreased 25% to $5.06 million from $6.76 million for the prior-year quarter. The decrease was due to a 22% decrease in product sales and a 74% decrease in contract research and development revenue. Net income for the third quarter of fiscal 2025 decreased 27% to $3.05 million, or $0.63 per diluted share, compared to $4.18 million, or $0.87 per share, for the prior-year quarter. For the first nine months of fiscal 2025, total revenue decreased 18% to $18.6 million from $22.7 million for the first nine months of the prior year. The decrease was due to a 20% decrease in product sales, partially offset by a 72% increase in contract research and development revenue. Net income decreased 16% to $11.2 million, or $2.31 per diluted share, from $13.3 million, or $2.75 per share, for the first nine months of fiscal 2024. The company also announced a quarterly cash dividend to shareholders of $1.00 per share of common stock, payable February 28, 2025, to shareholders of record as of February 3, 2025. “We are pleased to report solid earnings for the quarter and first nine months of the fiscal year, despite challenging industry conditions,” said NVE President and Chief Executive Officer Daniel A. Baker, Ph.D. 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 future dividend payments, 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, 2024. NVE CORPORATION STATEMENTS OF INCOME QUARTERS AND NINE MONTHS ENDED DECEMBER 31, 2024 AND 2023 (Unaudited)   Quarter Ended December 31, 2024 2023 Revenue Product sales $ 4,960,488 $ 6,366,009 Contract research and development 102,557 390,251 Total revenue 5,063,045 6,756,260 Cost of sales 797,622 1,355,067 Gross profit 4,265,423 5,401,193 Expenses Research and development 869,677 540,895 Selling, general, and administrative 434,783 389,311 Total expenses 1,304,460 930,206 Income from operations 2,960,963 4,470,987 Interest income 474,180 491,671 Other income 135,057 - Income before taxes 3,570,200 4,962,658 Provision for income taxes 521,790 778,236 Net income $ 3,048,410 $ 4,184,422 Net income per share – basic $ 0.63 $ 0.87 Net income per share – diluted $ 0.63 $ 0.87 Cash dividends declared per common share $ 1.00 $ 1.00 Weighted average shares outstanding Basic 4,835,262 4,833,401 Diluted 4,839,124 4,837,230 Nine Months Ended December 31, 2024 2023 Revenue Product sales $ 17,680,780 $ 22,183,223 Contract research and development 924,199 537,727 Total revenue 18,604,979 22,720,950 Cost of sales 2,720,370 5,034,556 Gross profit 15,884,609 17,686,394 Expenses Research and development 2,595,808 1,920,095 Selling, general, and administrative 1,543,428 1,298,211 Provision for credit losses - 9,514 Total expenses 4,139,236 3,227,820 Income from operations 11,745,373 14,458,574 Interest income 1,432,568 1,440,289 Other income 135,057 - Income before taxes 13,312,998 15,898,863 Provision for income taxes 2,140,856 2,587,145 Net income $ 11,172,142 $ 13,311,718 Net income per share – basic $ 2.31 $ 2.75 Net income per share – diluted $ 2.31 $ 2.75 Cash dividends declared per common share $ 3.00 $ 3.00 Weighted average shares outstanding Basic 4,834,382 4,832,992 Diluted 4,839,247 4,839,725 NVE CORPORATION BALANCE SHEETS DECEMBER 31 AND MARCH 31, 2024   (Unaudited) December 31, 2024 March 31, 2024 ASSETS Current assets Cash and cash equivalents $ 5,485,684 $ 10,283,550 Marketable securities, short-term (amortized cost of $14,993,163 as of December 31, 2024, and $12,283,630 as of March 31, 2024) 14,907,252 11,917,779 Accounts receivable, net of allowance for credit losses of $15,000 1,355,064 3,144,833 Inventories 7,787,624 7,158,585 Prepaid expenses and other assets 736,481 689,349 Total current assets 30,272,105 33,194,096 Fixed assets Machinery and equipment 11,663,886 10,501,096 Leasehold improvements 1,956,309 1,956,309 13,620,195 12,457,405 Less accumulated depreciation and amortization 11,645,199 11,403,383 Net fixed assets 1,974,996 1,054,022 Deferred tax assets 1,689,207 1,453,704 Marketable securities, long-term (amortized cost of $29,996,231 as of December 31, 2024, and $31,417,890 as of March 31, 2024) 29,704,367 30,788,301 Right-of-use asset – operating lease 947,889 289,910 Total assets $ 64,588,564 $ 66,780,033 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities Accounts payable $ 154,683 $ 127,154 Accrued payroll and other 511,589 729,215 Operating lease 84,838 179,372 Total current liabilities 751,110 1,035,741 Operating lease 864,966 175,775 Total liabilities 1,616,076 1,211,516 Shareholders’ equity Common stock 48,372 48,337 Additional paid-in capital 19,806,845 19,554,812 Accumulated other comprehensive loss (295,358 ) (777,637 ) Retained earnings 43,412,629 46,743,005 Total shareholders’ equity 62,972,488 65,568,517 Total liabilities and shareholders’ equity $ 64,588,564 $ 66,780,033

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