NVE Q2 FY2027 revenue falls 8.1% to $5.83M
Six-month revenue rose 35.5% and net income rose 38.9%; the quarter's revenue fell 8.1% year over year.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
NVE Corporation (NVEC), which develops and sells spintronic sensors and couplers, reported second-quarter fiscal 2027 revenue of $5.83 million, down 8.1% from a year earlier. Product sales declined 9.2% as some customer orders were rescheduled and defense-industry sales decreased; contract research and development revenue increased 24.6% as work progressed on existing contracts. Net income was $3.17 million, compared with $3.31 million.
For the six months ended September 30, 2026, revenue rose 35.5% to $16.87 million, and net income increased 38.9% to $9.57 million. Operating activities provided $11.13 million in cash; cash and equivalents were $3.97 million at September 30, and marketable securities and money market funds represented approximately 74% of total assets. NVE declared a $1.00-per-share quarterly dividend payable November 30, 2026, to shareholders of record November 2, 2026. Management expects a 13% to 15% tax rate for the remaining two quarters of fiscal 2027.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointSix-month revenue increased 35.5% to $16.87 million.
- Moderate pointSix-month net income increased 38.9% to $9.57 million.
Negative
- Moderate pointQuarterly revenue declined 8.1% year over year to $5.83 million.
Filing Explained
At
Key Figures
Key Terms
spintronics technical
dilutive effect of stock options financial
available-for-sale securities financial
Foreign-Derived Deduction Eligible Income financial
incremental borrowing rate financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue and net income did NVEC report for the six months ended September 30, 2026?
What dividend did NVEC declare?
Why did NVEC's revenue decline in the September 2026 quarter?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
or
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
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(I.R.S. Employer Identification No.) |
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(Zip Code) |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Smaller reporting company |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common Stock, $
Table of Contents
NVE CORPORATION
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION |
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Item 1. Financial Statements |
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Balance Sheets |
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Statements of Income for the Quarters Ended September 30, 2026 and 2025 |
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Statements of Comprehensive Income for the Quarters Ended September 30, 2026 and 2025 |
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Statements of Income for the Six Months Ended September 30, 2026 and 2025 |
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Statements of Comprehensive Income for the Six Months Ended September 30, 2026 and 2025 |
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Statements of Shareholders’ Equity for the Six Months Ended September 30, 2026 |
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Statements of Shareholders’ Equity for the Six Months Ended September 30, 2025 |
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Statements of Cash Flows for the Six Months Ended September 30, 2026 and 2025 |
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Notes to Financial Statements |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 4. Controls and Procedures |
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PART II. OTHER INFORMATION |
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Item 1. Legal Proceedings |
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Item 1A. Risk Factors |
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Item 4. Mine Safety Disclosures |
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Item 6. Exhibits |
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SIGNATURES |
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2
Table of Contents
PART I–FINANCIAL INFORMATION
Item 1. Financial Statements.
NVE CORPORATION
BALANCE SHEETS
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March 31, 2026 |
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ASSETS |
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Current assets |
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Cash and cash equivalents |
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Accounts receivable, net of allowance for credit losses of $ |
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Inventories, net |
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Prepaid expenses and other assets |
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Fixed assets |
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Less accumulated depreciation and amortization |
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Net fixed assets |
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Right-of-use asset – operating lease |
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Total assets |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Accounts payable |
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Operating lease |
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Total current liabilities |
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Deferred tax liabilities |
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Long-term operating lease liability |
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Total liabilities |
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Shareholders’ equity |
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Accumulated other comprehensive loss |
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Total shareholders’ equity |
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Total liabilities and shareholders’ equity |
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See accompanying notes.
3
Table of Contents
NVE CORPORATION
STATEMENTS OF INCOME
(Unaudited)
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Quarter Ended September 30, |
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2026 |
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2025 |
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Revenue |
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Product sales |
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Contract research and development |
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Total revenue, net |
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Cost of sales |
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Gross profit |
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Expenses |
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Research and development |
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Selling, general, and administrative |
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Total expenses |
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Income from operations |
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Interest income |
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Other income |
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Income before taxes |
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Provision for income taxes |
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Net income |
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Net income per share – basic |
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Net income per share – diluted |
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Cash dividends declared per common share |
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Weighted average shares outstanding |
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Diluted |
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STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
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Quarter Ended September 30, |
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2026 |
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2025 |
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Net income |
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$ |
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Unrealized gain (loss) from marketable securities, net of tax |
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Comprehensive income |
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$ |
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See accompanying notes.
4
Table of Contents
NVE CORPORATION
STATEMENTS OF INCOME
(Unaudited)
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Six Months Ended September 30, |
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2026 |
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2025 |
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Revenue |
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Product sales |
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$ |
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Contract research and development |
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Total revenue, net |
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Cost of sales |
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Gross profit |
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Expenses |
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Research and development |
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Selling, general, and administrative |
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Total expenses |
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Income from operations |
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Interest income |
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Other income |
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Income before taxes |
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Provision for income taxes |
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Net income |
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$ |
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$ |
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Net income per share – basic |
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$ |
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$ |
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Net income per share – diluted |
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$ |
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$ |
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Cash dividends declared per common share |
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$ |
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Weighted average shares outstanding |
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Basic |
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Diluted |
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STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
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Six Months Ended September 30, |
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2026 |
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2025 |
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Net income |
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$ |
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$ |
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Unrealized gain (loss) from marketable securities, net of tax |
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Comprehensive income |
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$ |
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$ |
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See accompanying notes.
5
Table of Contents
NVE CORPORATION
STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)
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Accumulated |
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Additional |
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Other |
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Common Stock |
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Paid-In |
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Comprehensive |
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Retained |
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Shares |
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Amount |
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Capital |
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Income (Loss) |
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Earnings |
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Total |
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Balance as of March 31, 2026* |
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$ |
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$ |
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$ |
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$ |
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$ |
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Comprehensive income: |
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Unrealized loss on marketable securities, net of tax |
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( |
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Net income |
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Total comprehensive income |
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Stock-based compensation |
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Cash dividends paid ($ |
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( |
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( |
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Balance as of June 30, 2026 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Exercise of stock options |
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Comprehensive income: |
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Unrealized loss on marketable securities, net of tax |
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( |
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Net income |
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Total comprehensive income |
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Stock-based compensation |
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Cash dividends ($ |
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( |
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Balance as of September 30, 2026 |
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$ |
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$ |
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$ |
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$ |
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$ |
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See accompanying notes.
6
Table of Contents
NVE CORPORATION
STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)
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Accumulated |
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Additional |
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Other |
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Common Stock |
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Paid-In |
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Income (Loss) |
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Earnings |
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Total |
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Balance as of March 31, 2025* |
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$ |
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Comprehensive income: |
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Unrealized gain on marketable securities, net of tax |
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Net income |
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Total comprehensive income |
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Stock-based compensation |
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Cash dividends paid ($ |
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( |
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Balance as of June 30, 2025 |
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$ |
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$ |
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$ |
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$ |
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Comprehensive income: |
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Unrealized gain on marketable securities, net of tax |
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Net income |
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Total comprehensive income |
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Stock-based compensation |
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Cash dividends ($ |
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Balance as of September 30, 2025 |
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$ |
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$ |
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$ |
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$ |
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See accompanying notes.
7
Table of Contents
NVE CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)
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Six Months Ended September 30, |
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2026 |
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2025 |
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OPERATING ACTIVITIES |
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Net income |
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$ |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation |
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Bonds discount amortization |
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Stock-based compensation |
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Deferred income taxes |
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|
|
Non-cash operating lease expense |
|
|
|
|
|
|
||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
|
|
|
|
||
Inventories |
|
|
|
|
|
|
||
Prepaid expenses and other assets |
|
|
|
|
|
( |
) |
|
Accounts payable |
|
|
( |
) |
|
|
|
|
Accrued payroll and other |
|
|
|
|
|
( |
) |
|
Net cash provided by operating activities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
Purchases of fixed assets |
|
|
( |
) |
|
|
( |
) |
Purchases of marketable securities |
|
|
( |
) |
|
|
( |
) |
Proceeds from maturities of marketable securities |
|
|
|
|
|
|
||
Net cash provided by (used in) investing activities |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Payments on exercise of stock options |
|
|
( |
) |
|
|
|
|
Payment of dividends to shareholders |
|
|
( |
) |
|
|
( |
) |
Net cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
|
|
Cash paid during the period for income taxes |
|
$ |
|
|
$ |
|
||
See accompanying notes.
8
Table of Contents
NVE CORPORATION
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, 2026. Sales, expenses, cash flows, assets, and liabilities can and do vary throughout the year, therefore they are not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2027.
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, 2026. As of September 30, 2026, there were no changes to our significant accounting policies or estimates.
NOTE 3. NEW ACCOUNTING STANDARDS
Recently Adopted Accounting Standards
New Accounting Standards Not Yet Adopted
We do not expect the adoption of other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date to have a material impact on our financial statements when they are adopted.
9
Table of Contents
NOTE 4. NET INCOME PER SHARE
Net income per basic share is computed based on the weighted-average number of common shares issued and outstanding during each period. Net income per diluted share amounts assume the exercise of all stock options. The following tables show the components of diluted shares:
|
Quarter Ended September 30, |
||
|
2026 |
|
2025 |
Weighted average common shares outstanding – basic |
|
||
Dilutive effect of stock options |
|
||
Shares used in computing net income per share – diluted |
|
||
|
Six Months Ended September 30, |
||
|
2026 |
|
2025 |
Weighted average common shares outstanding – basic |
|
||
Dilutive effect of stock options |
|
||
Shares used in computing net income per share – diluted |
|
||
NOTE 5. MARKETABLE SECURITIES
The following table shows the major categories of our marketable securities and their contractual maturities as of September 30, 2026:
|
|
Total |
|
<1 Year |
|
1–3 Years |
|
3–5 Years |
|
||||
Money market funds |
|
$ |
|
$ |
|
$ |
- |
|
$ |
- |
|
||
Treasury securities |
|
|
|
|
|
|
- |
|
|
- |
|
||
Corporate bonds |
|
|
|
|
|
|
12,888,258 |
|
|
7,851,695 |
|
||
Total |
|
$ |
|
$ |
|
$ |
12,888,258 |
|
$ |
7,851,695 |
|
||
Total marketable securities and money market funds represented approximately
Money market funds are included on the balance sheets in “Cash and cash equivalents.” Corporate bonds are included in “Marketable securities, short term” and “Marketable securities, long term.” Treasury securities are included in “Marketable securities, short-term.” Accrued interest receivables were $
We monitor the credit ratings of our marketable securities at least quarterly as reported by Standard & Poor’s.
The following table shows the estimated fair value of our marketable securities, aggregated by fair value hierarchy inputs used in estimating their fair values:
|
|
As of September 30, 2026 |
|
|
As of March 31, 2026 |
||||||||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Total |
||||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
||||||
Treasury securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Corporate bonds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
||||||
10
Table of Contents
Our available-for-sale securities as of September 30 and March 31, 2026, aggregated into classes of securities, were as follows:
|
|
As of September 30, 2026 |
|
|
As of March 31, 2026 |
||||||||||||||||||||||||||
|
|
Amortized Cost |
|
|
Gross Unrealized Holding Gains |
|
|
Gross Unrealized Holding Losses |
|
|
Estimated Fair Value |
|
|
Amortized Cost |
|
|
Gross Unrealized Holding Gains |
|
|
Gross Unrealized Holding Losses |
|
|
Estimated Fair Value |
||||||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
||||||||
Treasury securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Corporate bonds |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
||||||
The following table shows the gross unrealized holding losses and estimated fair value of our marketable securities, aggregated by category of securities and length of time that individual securities had been in a continuous unrealized loss position as of September 30 and March 31, 2026.
|
|
Less Than 12 Months |
|
|
12 Months or Greater |
|
|
Total |
|
|||||||||||||||
|
|
Estimated Fair Value |
|
|
Gross Unrealized Holding Losses |
|
|
Estimated Fair Value |
|
|
Gross Unrealized Holding Losses |
|
|
Estimated Fair Value |
|
|
Gross Unrealized Holding Losses |
|
||||||
As of September 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Treasury Securities |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Corporate bonds |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|||
None of the securities were impaired at acquisition, and subsequent declines in fair value are attributable to interest rate increases. We do not intend to sell, and it is not more likely than not that we will be required to sell, these securities before recovery of their amortized cost basis. The issuers continue to make timely interest payments on these securities.
Unrealized gains (losses) on our marketable securities and their tax effects are as follows:
|
|
Quarter Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Unrealized gain (loss) on marketable securities |
|
$ |
( |
) |
|
$ |
|
|
Tax effects |
|
|
|
|
|
( |
) |
|
Unrealized gain (loss) on marketable securities, net of tax |
|
$ |
( |
) |
|
$ |
|
|
|
|
Six Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Unrealized gain (loss) on marketable securities |
|
$ |
( |
) |
|
$ |
|
|
Tax effects |
|
|
|
|
|
( |
) |
|
Unrealized gain (loss) on marketable securities, net of tax |
|
$ |
( |
) |
|
$ |
|
|
NOTE 6. INVENTORIES
Inventories are shown in the following table:
|
|
Sept. 30, 2026 |
|
|
March 31, 2026 |
Raw materials |
$ |
|
$ |
||
Work in process |
|
|
|
||
Finished goods |
|
|
|
||
Total inventories |
$ |
|
$ |
11
Table of Contents
NOTE 7. STOCK-BASED COMPENSATION
Stock-based compensation expense was $
|
Quarter Ended |
|
Six Months Ended |
|
||||||
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||
Stock options grant |
|
|
|
|
|
|
||||
Stock options exercised |
|
|
|
|
|
|
||||
NOTE 8. INCOME TAXES
We had
The One Big Beautiful Tax law enacted on July 4, 2025 allows companies to exclude U.S. research and development expenses from its Foreign-Derived Deduction Eligible Income (FDDEI) calculation for tax years beginning after December 31, 2025. This resulted in a
NOTE 9. LEASES
We conduct our operations in a leased facility under a non-cancellable lease expiring May 31, 2031.
|
Quarter Ended Sept. 30 |
|
|
Six Months Ended Sept. 30 |
|
||||||
|
2026 |
|
2025 |
|
|
2026 |
|
2025 |
|
||
Operating lease cost |
$ |
|
|
|
$ |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for amounts included |
|
|
|
|
|
|
|
|
|
|
|
Operating cash flows for leases |
$ |
( |
) |
( |
) |
|
$ |
( |
) |
( |
) |
Remaining lease term |
|
56 mos. |
|
68 mos. |
|
|
|
56 mos. |
|
68 mos. |
|
Discount rate |
|
|
|
|
|
|
|
||||
12
Table of Contents
The following table shows the maturities of lease liabilities as of September 30, 2026:
Year Ending March 31, |
Operating Lease Liabilities |
|
|
2027 |
|
|
|
2028 |
|
|
|
2029 |
|
|
|
2030 |
|
|
|
2031 |
|
|
|
2032 |
|
|
|
Total lease payments |
|
|
|
Imputed lease interest |
|
( |
) |
Total lease liabilities |
$ |
|
|
NOTE 10. STOCK REPURCHASE PROGRAM
On January 21, 2009, we announced that our Board of Directors authorized the repurchase of up to $
NOTE 11. INFORMATION AS TO EMPLOYEE STOCK PURCHASE, SAVINGS, AND SIMILAR PLANS
NOTE 12. SUBSEQUENT EVENTS
On
13
Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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 may be identified by the use of terminology such as may, will, expect, anticipate, intend, believe, estimate, should, or continue, or the negatives of these terms or other variations on these words or comparable terminology. To the extent that this Report contains forward-looking statements regarding the financial condition, operating results, business prospects, or any other aspect of NVE, you should be aware that our actual financial condition, operating results, and business performance may differ materially from that projected or estimated by us in the forward-looking statements. We have attempted to identify, in context, some of the factors that we currently believe may cause actual future experience and results to differ from their current expectations. These differences may be caused by a variety of factors, including but not limited to risks related to 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, risks and uncertainties related to future stock repurchases and dividend payments, and other specific risks that may be alluded to in this Report or in the documents incorporated by reference in this Report.
Further information regarding our risks and uncertainties is contained in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026.
General
NVE Corporation, referred to as NVE, we, us, or our, develops and sells devices that use spintronics, a nanotechnology that relies on electron spin rather than electron charge to acquire, store, and transmit information. We manufacture high-performance spintronic products including sensors and couplers that are used to acquire and transmit data.
Critical accounting policies
A description of our critical accounting policies is provided in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026. As of September 30, 2026, our critical accounting policies and estimates continued to include marketable securities valuation, inventory valuation, and deferred tax estimation.
14
Table of Contents
Quarter ended September 30, 2026, compared to quarter ended September 30, 2025
The table shown below summarizes the percentage of revenue and quarter-to-quarter changes for various items:
|
Percentage of Revenue Quarter Ended September 30, |
Quarter- to-Quarter |
|||||||
|
2026 |
|
2025 |
|
Change |
||||
Revenue |
|
|
|
|
|
|
|
|
|
Product sales |
95.6 |
% |
|
96.7 |
% |
|
(9.2 |
)% |
|
Contract research and development |
4.4 |
% |
|
3.3 |
% |
|
24.6 |
% |
|
Total revenue |
100.0 |
% |
|
100.0 |
% |
|
(8.1 |
)% |
|
Cost of sales |
21.8 |
% |
|
21.7 |
% |
|
(7.8 |
)% |
|
Gross profit |
78.2 |
% |
|
78.3 |
% |
|
(8.1 |
)% |
|
Expenses |
|
|
|
|
|
|
|
|
|
Research and development |
12.5 |
% |
|
13.8 |
% |
|
(16.7 |
)% |
|
Selling, general, and administrative |
10.8 |
% |
|
6.8 |
% |
|
44.3 |
% |
|
Total expenses |
23.3 |
% |
|
20.6 |
% |
|
3.6 |
% |
|
Income from operations |
54.9 |
% |
|
57.7 |
% |
|
(12.4 |
)% |
|
Interest income |
8.1 |
% |
|
7.6 |
% |
|
(2.0 |
)% |
|
Other income |
- |
|
|
0.0 |
% |
|
(100.0 |
)% |
|
Income before taxes |
63.0 |
% |
|
65.3 |
% |
|
(11.2 |
)% |
|
Provision for income taxes |
8.6 |
% |
|
13.1 |
% |
|
(39.2 |
)% |
|
Net income |
54.4 |
% |
|
52.2 |
% |
|
(4.2 |
)% |
|
Total revenue for the quarter ended September 30, 2026 (the second quarter of fiscal 2027) decreased 8% compared to the quarter ended September 30, 2025 (the second quarter of fiscal 2026). The decrease was due to a 9% decrease in product sales, partially offset by a 25% increase in contract research and development revenue. The decrease in product sales was due to certain customer’s orders rescheduling and a decrease in defense industry product sales. The orders rescheduling was due to a temporary change to a certain customer’s inventory requirements. Defense sales depend on Government procurement cycles and can be highly variable. The increase in contract research and development revenue 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 research and development expense. The decrease in research and development expense was due to staffing redeployment. The increase in selling, general and administrative expense was primarily due to larger stock-based compensation expense related to director stock option grants, because of a higher grant-date stock price.
Interest income decreased 2% due to a decrease in our marketable securities portfolio as proceeds from bond maturities partially funded dividends and fixed asset purchases in the prior fiscal year, and lower interest rates on securities purchased in the past year.
Our effective tax rate, which is the provision for income taxes as a percentage of income before taxes, decreased to 14% for the quarter ended September 30, 2026 (the second quarter of fiscal 2027), compared to 20% for the quarter ended September 30, 2025 (the second quarter of fiscal 2026). The decrease was primarily due to more favorable tax treatment of Foreign-Derived Deduction Eligible Income. We currently expect a tax rate of 13% to 15% for the remaining two remaining quarters of fiscal 2027.
The 4% decrease in net income for the second quarter of fiscal 2027 compared to the prior-year quarter was primarily due to decreased revenue and increased operating expenses, partially offset by a decreased income tax provision.
15
Table of Contents
Six months ended September 30, 2026, compared to six months ended September 30, 2025
The table shown below summarizes the percentage of revenue and year-to-year changes for various items:
|
Percentage of Revenue Six Months Ended Sept. 30, |
Quarter- to-Quarter |
||||||
|
2026 |
|
2025 |
|
Change |
|||
Revenue |
|
|
|
|
|
|
|
|
Product sales |
96.7 |
% |
|
96.8 |
% |
|
35.4 |
% |
Contract research and development |
3.3 |
% |
|
3.2 |
% |
|
38.2 |
% |
Total revenue |
100.0 |
% |
|
100.0 |
% |
|
35.5 |
% |
Cost of sales |
19.8 |
% |
|
20.6 |
% |
|
30.3 |
% |
Gross profit |
80.2 |
% |
|
79.4 |
% |
|
36.8 |
% |
Expenses |
|
|
|
|
|
|
|
|
Research and development |
9.9 |
% |
|
12.8 |
% |
|
5.0 |
% |
Selling, general, and administrative |
8.2 |
% |
|
6.9 |
% |
|
62.0 |
% |
Total expenses |
18.1 |
% |
|
19.7 |
% |
|
24.9 |
% |
Income from operations |
62.1 |
% |
|
59.7 |
% |
|
40.7 |
% |
Interest income |
5.5 |
% |
|
7.9 |
% |
|
(5.9 |
)% |
Other income |
- |
|
|
0.0 |
% |
|
(100.0 |
)% |
Income before taxes |
67.6 |
% |
|
67.6 |
% |
|
35.2 |
% |
Provision for income taxes |
10.9 |
% |
|
12.3 |
% |
|
18.7 |
% |
Net income |
56.7 |
% |
|
55.3 |
% |
|
38.9 |
% |
Total revenue for the six months ended September 30, 2026 increased 36% compared to the six months ended September 30, 2025. The increase was due to a 35% increase in product sales and a 38% increase in contract research and development revenue. The increase in product sales was due to increases in both defense and non-defense sales, as well as increases in sales through both direct and distributor channels. The increase in contract research and development revenue was due to progress on existing contracts.
Total operating expenses increased 25% for the first six months of fiscal 2027 compared to the first six months of fiscal 2026, due to a 5% increase in research and development expense and a 62% increase in selling, general, and administrative expense. The increase in research and development expense was due to increased new product development activities. The increase in selling, general, and administrative expenses was primarily due to increased performance-based compensation and an increase in the estimated value of directors’ stock-based compensation.
Interest income decreased 6% due to a decrease in our marketable securities portfolio as proceeds from bond maturities partially funded dividends and fixed asset purchases in the prior fiscal year.
Our effective tax rate, which is the provision for income taxes as a percentage of income before taxes, decreased to 16% for the first six months of fiscal 2027, from 18% for the first six months of fiscal 2026. The decrease was primarily due to more favorable tax treatment of Foreign-Derived Deduction Eligible Income.
The 39% increase in net income for the first six months of fiscal 2027 compared to the prior-year period was primarily due to increased revenue and a decrease in our effective tax rate, partially offset by increased operating expenses and decreased interest income.
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Liquidity and Capital Resources
Overview
Cash and cash equivalents were $3,969,958 as of September 30, 2026, compared to $1,714,040 as of March 31, 2026. The $2,255,918 increase in cash and cash equivalents during the first six months of fiscal 2027 was due to $11,127,370 of net cash provided by operating activities and $809,961 of net cash provided by investing activities, partially offset by $9,681,413 of cash used in financing activities.
Operating Activities
Net cash provided by operating activities related to product sales and research and development contract revenue was our primary source of working capital for the current and prior-year quarters.
Accounts receivable decreased $403,013 during the first six months of fiscal 2027 primarily due to the timing of customer payments. Inventories decreased $222,511 primarily due to increased sales. Prepaid expenses and other assets decreased $318,932 due to decreased estimated taxes because of favorable tax law changes.
Investing Activities
Cash provided by investing activities during the six months ended September 30, 2026, consisted $9,000,000 in proceeds from maturities of marketable securities, partially offset by $8,108,071 of marketable securities purchases and $81,968 of fixed asset purchases. We currently expect fixed asset purchases in the fiscal year ending March 31, 2027 to be significantly less than for the year ended March 31, 2026 with the completion of our expansion in the past fiscal year.
Financing Activities
Cash used in financing activities during the six months ended September 30, 2026, consisted of $9,681,245 of dividends and $168 paid for fractional shares on the exercise of stock options.
In addition to cash dividends paid to shareholders in the first six months of fiscal 2027, on October 21, 2026, we announced that our Board of Directors had declared a cash dividend of $1.00 per share of Common Stock, or $4,844,079 based on shares outstanding as of September 30, 2026, to be paid on November 30, 2026.
We plan to fund dividends through cash provided by operating activities and proceeds from maturities of marketable securities. All future dividends will be subject to Board approval and subject to the company’s results of operations, cash and marketable security balances, estimates of future cash requirements, and other factors the Board may deem relevant. Furthermore, dividends may be modified or discontinued at any time without notice.
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Item 4. Controls and Procedures.
Disclosure Controls and Procedures
Management, with the participation of the Chief Executive Officer and Principal Financial Officer, has performed an evaluation of our disclosure controls and procedures that are defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”) as of the end of the period covered by this Report. This evaluation included consideration of the controls, processes, and procedures that are designed to ensure that information required to be disclosed by us in the reports we file under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Our management concluded that, as of September 30, 2026, our disclosure controls and procedures were effective.
Changes in Internal Controls
During the quarter ended September 30, 2026, there was no change in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II–OTHER INFORMATION
Item 1. Legal Proceedings.
In the ordinary course of business, we may become involved in litigation. At this time, we are not aware of any material pending or threatened legal proceedings or other proceedings contemplated by governmental authorities that we expect would have a material adverse impact on our future results of operation and financial condition.
Item 1A. Risk Factors.
There have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026.
Item 4. Mine Safety Disclosures.
None.
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Item 6. Exhibits.
Exhibit #
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Description
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31.1 |
Certification by Peter G. Eames pursuant to Rule 13a-14(a)/15d-14(a). |
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31.2 |
Certification by Daniel Nelson pursuant to Rule 13a-14(a)/15d-14(a). |
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32 |
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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101.INS |
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) |
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101.SCH |
Inline XBRL Taxonomy Extension Schema Document |
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101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
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101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
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101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document |
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101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
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104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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NVE CORPORATION |
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(Registrant) |
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October 21, 2026 |
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/s/ PETER G. EAMES |
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Date |
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Peter G. Eames |
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President and Chief Executive Officer |
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October 21, 2026 |
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/s/ DANIEL NELSON |
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Date |
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Daniel Nelson |
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Principal Financial Officer |
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20