NVE Corporation (NVEC) grows Q3 earnings while full-year margins tighten

Rhea-AI Filing Summary

NVE Corporation’s quarterly report shows solid third-quarter growth but softer results for the fiscal year to date. For the quarter ended December 31, 2025, revenue rose to $6.2 million from $5.1 million, driven by higher product sales and a sharp increase in contract research and development revenue. Quarterly net income increased to $3.4 million, or $0.70 per diluted share, compared with $3.0 million and $0.63 a year earlier.

For the first nine months of fiscal 2026, revenue was nearly flat at $18.7 million, while net income declined to $10.3 million from $11.2 million as gross margin slipped from 85% to 79% due to a less profitable product mix and more distributor sales. The company remained highly liquid, with $3.4 million in cash and $43.6 million in marketable securities, representing about 73% of total assets, and shareholders’ equity of $58.3 million against minimal liabilities.

NVE continued an aggressive cash-return policy, paying $3.00 per share in dividends during the first nine months and declaring another $1.00 per share dividend payable February 27, 2026. The report adds a new risk factor on higher employment costs from Minnesota’s paid leave law and notes that a key Supplier Partnering Agreement with Abbott Laboratories now runs through December 31, 2027.

Insights

Equity research analyst

Q3 growth is strong, but full-year margins and earnings are under pressure.

NVE delivered a robust third quarter, with revenue increasing to $6,224,776 and net income climbing to $3,384,642. The mix shift toward distributors and certain products reduced gross margin to 79% from 84%, but lower operating expenses still pushed quarterly operating income and EPS higher.

Over the first nine months, revenue held at about $18.7 million while net income declined to $10,271,298, mainly because gross margin fell six percentage points and other income dropped. Cash generation remained strong, with operating cash flow of $12,172,141, funding $14,511,498 of dividends and $2,179,694 of equipment spending while leaving $43,589,864 in marketable securities at December 31, 2025.

The extension of the Supplier Partnering Agreement with Abbott Laboratories through December 31, 2027 provides multi‑year visibility on an important customer relationship, though the company notes renewal terms remain uncertain. A new risk factor highlights higher employment costs from Minnesota’s paid leave law. Future filings for fiscal 2026 and beyond will clarify how the margin mix, tax law changes, and state-level cost pressures balance against ongoing dividend payments and capital investment.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended   December 31, 2025

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                    to                                     

Commission File Number: 000-12196

 

NVE CORPORATION

(Exact name of registrant as specified in its charter)

Minnesota		41-1424202
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
11409 Valley View Road, Eden Prairie, Minnesota		55344
(Address of principal executive offices)		(Zip Code)
(952) 829-9217
(Registrant’s telephone number, including area code)

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.

☒ Yes  ☐ No

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).

☒ Yes  ☐ No

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.

	Large accelerated filer ☐	Accelerated filer ☐
	Non-accelerated filer ☒	Smaller reporting company ☒
		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).     ☐ Yes  ☒ No

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	NVEC	The NASDAQ Stock Market, LLC

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, $0.01 Par Value – 4,837,166 shares outstanding as of December 31, 2025.

Table of Contents

NVE CORPORATION

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Balance Sheets

Statements of Income for the Quarters Ended December 31, 2025 and 2024

Statements of Comprehensive Income for the Quarters Ended December 31, 2025 and 2024

Statements of Income for the Nine Months Ended December 31, 2025 and 2024

Statements of Comprehensive Income for the Nine Months Ended December 31, 2025 and 2024

Statements of Shareholders’ Equity for the Nine Months Ended December 31, 2025

Statements of Shareholders’ Equity for the Nine Months Ended December 31, 2024

Statements of Cash Flows for the Nine Months Ended December 31, 2025 and 2024

Notes to Financial Statements

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

Item 4. Controls and Procedures

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Item 1A. Risk Factors

Item 4. Mine Safety Disclosures

Item 6. Exhibits

SIGNATURES

2

Table of Contents

PART I–FINANCIAL INFORMATION

Item 1. Financial Statements.

NVE CORPORATION

BALANCE SHEETS

		(Unaudited) Dec. 31, 2025				March 31, 2025		*
ASSETS
Current assets
Cash and cash equivalents		$	3,408,531			$	8,036,564
Marketable securities, short-term (amortized cost of $17,137,942 as of December 31, 2025, and $13,730,266 as of March 31, 2025)			17,156,488				13,691,593
Accounts receivable, net of allowance for credit losses of $15,000			2,483,045				3,589,268
Inventories, net			7,271,798				7,449,083
Prepaid expenses and other assets			756,715				433,414
Total current assets			31,076,577				33,199,922
Fixed assets
Machinery and equipment			13,834,355				11,758,205
Leasehold improvements			2,059,853				1,956,309
			15,894,208				13,714,514
Less accumulated depreciation and amortization			11,996,423				11,727,615
Fixed assets, net			3,897,785				1,986,899
Deferred tax assets			722,602				1,867,069
Marketable securities, long-term (amortized cost of $23,310,800 as of December 31, 2025, and $26,353,692 as of March 31, 2025)			23,441,471				26,304,623
Right-of-use asset – operating lease			824,631				917,349
Total assets		$	59,963,066			$	64,275,862
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	226,856			$	214,691
Accrued payroll and other			504,710				871,169
Operating lease			160,413				83,010
Total current liabilities			891,979				1,168,870
Long-term operating lease liability			773,996				838,221
Total liabilities			1,665,975				2,007,091
Shareholders’ equity
Common stock, $0.01 par value, 6,000,000 shares authorized; 4,837,166 issued and outstanding as of December 31, 2025 and March 31, 2025			48,372				48,372
Additional paid-in capital			19,904,513				19,821,106
Accumulated other comprehensive income (loss)			116,569				(68,544	)
Retained earnings			38,227,637				42,467,837
Total shareholders’ equity			58,297,091				62,268,771
Total liabilities and shareholders’ equity		$	59,963,066			$	64,275,862

*The March 31, 2025 Balance Sheet is derived from the audited financial statements contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025.

See accompanying notes.

3

Table of Contents

NVE CORPORATION

STATEMENTS OF INCOME

(Unaudited)

		Quarter Ended December 31,
		2025				2024
Revenue
Product sales		$	5,778,674			$	4,960,488
Contract research and development			446,102				102,557
Total revenue, net			6,224,776				5,063,045
Cost of sales			1,332,679				797,622
Gross profit			4,892,097				4,265,423
Expenses
Research and development			795,585				869,677
Selling, general, and administrative			352,136				434,783
Total expenses			1,147,721				1,304,460
Income from operations			3,744,376				2,960,963
Interest income			461,954				474,180
Other income			-				135,057
Income before taxes			4,206,330				3,570,200
Provision for income taxes			821,688				521,790
Net income		$	3,384,642			$	3,048,410
Net income per share – basic		$	0.70			$	0.63
Net income per share – diluted		$	0.70			$	0.63
Cash dividends declared per common share		$	1.00			$	1.00
Weighted average shares outstanding
Basic			4,837,166				4,835,262
Diluted			4,839,257				4,839,124

STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

		Quarter Ended December 31,
		2025				2024
Net income		$	3,384,642			$	3,048,410
Unrealized gain (loss) from marketable securities, net of tax			26,403				(226,848	)
Comprehensive income		$	3,411,045			$	2,821,562

See accompanying notes.

4

Table of Contents

NVE CORPORATION

STATEMENTS OF INCOME

(Unaudited)

		Nine Months Ended December 31,
		2025				2024
Revenue
Product sales		$	17,826,016			$	17,680,780
Contract research and development			850,396				924,199
Total revenue, net			18,676,412				18,604,979
Cost of sales			3,893,696				2,720,370
Gross profit			14,782,716				15,884,609
Expenses
Research and development			2,389,286				2,595,808
Selling, general, and administrative			1,207,695				1,543,428
Total expenses			3,596,981				4,139,236
Income from operations			11,185,735				11,745,373
Interest income			1,444,492				1,432,568
Other income			3,905				135,057
Income before taxes			12,634,132				13,312,998
Provision for income taxes			2,362,834				2,140,856
Net income		$	10,271,298			$	11,172,142
Net income per share – basic		$	2.12			$	2.31
Net income per share – diluted		$	2.12			$	2.31
Cash dividends declared per common share		$	3.00			$	3.00
Weighted average shares outstanding
Basic			4,837,166				4,834,382
Diluted			4,839,120				4,839,247

STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

		Nine Months Ended December 31,
		2025				2024
Net income		$	10,271,298			$	11,172,142
Unrealized gain from marketable securities, net of tax			185,113				482,279
Comprehensive income		$	10,456,411			$	11,654,421

See accompanying notes.

5

Table of Contents

NVE CORPORATION

STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

														Accumulated
										Additional				Other
		Common Stock								Paid-In				Comprehensive				Retained
		Shares				Amount				Capital				Income (Loss)				Earnings				Total
Balance as of March 31, 2025*			4,837,166			$	48,372			$	19,821,106			$	(68,544	)		$	42,467,837			$	62,268,771
Comprehensive income:
Unrealized gain on marketable securities, net of tax															75,362								75,362
Net income																			3,575,818				3,575,818
Total comprehensive income																							3,651,180
Stock-based compensation											6,838												6,838
Cash dividends paid ($1.00 per share of common stock)																			(4,837,166	)			(4,837,166	)
Balance as of June 30, 2025			4,837,166			$	48,372			$	19,827,944			$	6,818			$	41,206,489			$	61,089,623
Comprehensive income:
Unrealized gain on marketable securities, net of tax															83,348								83,348
Net income																			3,310,838				3,310,838
Total comprehensive income																							3,394,186
Stock-based compensation											66,312												66,312
Cash dividends ($1.00 per share of common stock)																			(4,837,166	)			(4,837,166	)
Balance as of September 30, 2025			4,837,166			$	48,372			$	19,894,256			$	90,166			$	39,680,161			$	59,712,955
Comprehensive income:
Unrealized gain on marketable securities, net of tax															26,403								26,403
Net income																			3,384,642				3,384,642
Total comprehensive income																							3,411,045
Stock-based compensation											10,257												10,257
Cash dividends ($1.00 per share of common stock)																			(4,837,166	)			(4,837,166	)
Balance as of December 31, 2025			4,837,166			$	48,372			$	19,904,513			$	116,569			$	38,227,637			$	58,297,091

*Balances as of March 31, 2025 are derived from the audited financial statements contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025.

See accompanying notes.

6

Table of Contents

NVE CORPORATION

STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

														Accumulated
										Additional				Other
		Common Stock								Paid-In				Comprehensive				Retained
		Shares				Amount				Capital				Income (Loss)				Earnings				Total
Balance as of March 31, 2024*			4,833,676			$	48,337			$	19,554,812			$	(777,637	)		$	46,743,005			$	65,568,517
Comprehensive income:
Unrealized gain on marketable securities, net of tax															28,710								28,710
Net income																			4,097,587				4,097,587
Total comprehensive income																							4,126,297
Stock-based compensation											18,442												18,442
Cash dividends ($1.00 per share of common stock)																			(4,833,676	)			(4,833,676	)
Balance as of June 30, 2024			4,833,676			$	48,337			$	19,573,254			$	(748,927	)		$	46,006,916			$	64,879,580
Exercise of stock options			344				3				(32	)											(29	)
Comprehensive income:
Unrealized gain on marketable securities, net of tax															680,417								680,417
Net income																			4,026,145				4,026,145
Total comprehensive income																							4,706,562
Stock-based compensation											105,203												105,203
Cash dividends ($1.00 per share of common stock)																			(4,833,676	)			(4,833,676	)
Balance as of September 30, 2024			4,834,020			$	48,340			$	19,678,425			$	(68,510	)		$	45,199,385			$	64,857,640
Exercise of stock options			3,146				32				114,159												114,191
Comprehensive income:
Unrealized loss on marketable securities, net of tax															(226,848	)							(226,848	)
Net income																			3,048,410				3,048,410
Total comprehensive income																							2,821,562
Stock-based compensation											14,261												14,261
Cash dividends ($1.00 per share of common stock)																			(4,835,166	)			(4,835,166	)
Balance as of December 31, 2024			4,837,166			$	48,372			$	19,806,845			$	(295,358	)		$	43,412,629			$	62,972,488

*Balances as of March 31, 2024 are derived from the audited financial statements contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025.

See accompanying notes.

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Table of Contents

NVE CORPORATION

STATEMENTS OF CASH FLOWS

(Unaudited)

		Nine Months Ended December 31,
		2025				2024
OPERATING ACTIVITIES
Net income		$	10,271,298			$	11,172,142
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			268,808				241,816
Bonds discount amortization			(255,802	)			(212,554	)
Stock-based compensation			83,407				137,906
Deferred income taxes			1,092,621				(371,436	)
Non-cash operating lease expense (credit)			105,896				(63,322	)
Changes in operating assets and liabilities:
Accounts receivable			1,106,223				1,789,769
Inventories			177,285				(629,039	)
Prepaid expenses and other assets			(323,301	)			(47,132	)
Accounts payable			12,165				27,529
Accrued payroll and other			(366,459	)			(217,626	)
Net cash provided by operating activities			12,172,141				11,828,053
INVESTING ACTIVITIES
Purchases of marketable securities			(10,108,982	)			(11,279,773	)
Proceeds from maturities of marketable securities			10,000,000				10,205,000
Purchases of fixed assets			(2,179,694	)			(1,162,790	)
Net cash used in investing activities			(2,288,676	)			(2,237,563	)
FINANCING ACTIVITIES
Payment of dividends to shareholders			(14,511,498	)			(14,502,518	)
Net proceeds from exercise of stock options			-				114,162
Net cash used in financing activities			(14,511,498	)			(14,388,356	)
Decrease in cash and cash equivalents			(4,628,033	)			(4,797,866	)
Cash and cash equivalents at beginning of period			8,036,564				10,283,550
Cash and cash equivalents at end of period		$	3,408,531			$	5,485,684
Supplemental disclosures of cash flow information:
Cash paid during the period for income taxes		$	1,694,659			$	2,782,289

See accompanying notes.

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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, 2025. Sales, expenses, cash flows, assets, and liabilities can and do vary throughout the year, therefore are not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2026.

Significant accounting policies

A description of our significant accounting policies and estimates is provided in Note 2 to the Financial Statements in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025. As of December 31, 2025, there were no changes to our significant accounting policies or estimates.

NOTE 3. NEW ACCOUNTING STANDARDS NOT YET ADOPTED

In July 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2025-05, Financial Instruments—Credit Losses (Topic 326)—Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025-05 aims to reduce the cost and complexity of estimating credit losses while maintaining decision-useful information for financial statement users. The guidance allows a practical expedient of assuming current conditions as of the balance sheet date remain unchanged for the remaining life of the assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim periods within those annual reporting periods, which will be for fiscal 2027 for us, with early adoption permitted. We are not currently planning early adoption. Adoption of ASU 2025-05 will result in disclosure changes, however we do not currently expect the adoption to have a material impact on our financial statements.

In November 2024, the FASB issued Accounting Standards Update (ASU) No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). ASU 2024-03 aims to enhance transparency for users of financial statements by requiring public business entities to disaggregate specific expense categories. In January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date for non-calendar year-end entities such as us. ASU 2024-03 mandates disclosures in the notes to financial statements detailing the composition and trends of key expense categories within major income statement captions. These enhanced disclosures are intended to help investors more effectively assess the entity’s performance, understand its cost structure, and make more accurate forecasts of future cash flows. For public business entities, ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, which for us will be for fiscal 2028 and for interim reporting periods beginning with the first quarter of fiscal 2029. The adoption will result in disclosure changes only.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires additional quantitative and qualitative income tax disclosures to enable financial statements users to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. For public business entities, ASU 2023-09 is effective for annual periods beginning after December 15, 2024, which is fiscal 2026 for us. The adoption will result in disclosure changes only in our next Annual Report on Form 10-K.

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.

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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 exercise of all stock options. The following tables show the components of diluted shares:

	Quarter Ended December 31,
	2025		2024
Weighted average common shares outstanding – basic	4,837,166		4,835,262
Dilutive effect of stock options	2,091		3,862
Shares used in computing net income per share – diluted	4,839,257		4,839,124

	Nine Months Ended December 31,
	2025		2024
Weighted average common shares outstanding – basic	4,837,166		4,834,382
Dilutive effect of stock options	1,954		4,865
Shares used in computing net income per share – diluted	4,839,120		4,839,247

NOTE 5. MARKETABLE SECURITIES

The following table shows the major categories of our marketable securities and their contractual maturities as of December 31, 2025:

		Total			<1 Year			1–3 Years			3–4 Years
Money market funds		$	2,991,905		$	2,991,905		$	-		$	-
Treasury securities			4,731,027			-			4,731,027			-
Corporate bonds			35,866,932			17,156,488			14,695,231			4,015,213
Total		$	43,589,864		$	20,148,393		$	19,426,258		$	4,015,213

Total marketable securities and money market funds represented approximately 73% of our total assets as of December 31, 2025. Marketable securities as of December 31, 2025, had remaining maturities between three weeks and 40 months.

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, long term.” Accrued interest receivables were $382,896 as of December 31, 2025, and $340,241 as of March 31, 2025, and are included in the balance sheets in “Prepaid expenses and other assets.”

We monitor the credit ratings of our marketable securities at least quarterly as reported by Standard & Poor’s. The following table summarizes the fair values of our marketable securities as of December 31, 2025, aggregated by credit rating:

Credit Rating		Fair Value
AAA	$	7,722,932
AA+		3,970,369
AA		4,952,313
AA-		13,808,329
A+		13,135,921
Total	$	43,589,864

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 December 31, 2025												As of March 31, 2025
		Level 1				Level 2				Total				Level 1				Level 2				Total
Money market funds		$	2,991,905			$	-			$	2,991,905			$	7,905,042			$	-			$	7,905,042
Treasury securities			-				4,731,027				4,731,027				-				4,715,238				4,715,238
Corporate bonds			-				35,866,932				35,866,932				-				35,280,978				35,280,978
Total		$	2,991,905			$	40,597,959			$	43,589,864			$	7,905,042			$	39,996,216			$	47,901,258

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Our available-for-sale securities as of December 31 and March 31, 2025, aggregated into classes of securities, were as follows:

		As of December 31, 2025																As of March 31, 2025
		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		$	2,991,905			$	-			$	-			$	2,991,905			$	7,905,042			$	-			$	-			$	7,905,042
Treasury securities			4,699,812				31,215				-				4,731,027				4,699,686				15,552				-				4,715,238
Corporate bonds			35,748,930				134,856				(16,854	)			35,866,932				35,384,272				55,858				(159,152	)			35,280,978
Total		$	43,440,647			$	166,071			$	(16,854	)		$	43,589,864			$	47,989,000			$	71,410			$	(159,152	)		$	47,901,258

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 December 31 and March 31, 2025.

		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 December 31, 2025
Corporate bonds		$	-			$	-			$	8,233,807			$	(16,854	)		$	8,233,807			$	(16,854	)
Total		$	-			$	-			$	8,233,807			$	(16,854	)		$	8,233,807			$	(16,854	)
As of March 31, 2025
Corporate bonds		$	7,323,059			$	(31,808	)		$	21,020,717			$	(127,344	)		$	28,343,776			$	(159,152	)
Total		$	7,323,059			$	(31,808	)		$	21,020,717			$	(127,344	)		$	28,343,776			$	(159,152	)

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 on our marketable securities and their tax effects are as follows:

		Quarter Ended December 31,
		2025				2024
Unrealized gain on marketable securities		$	33,798			$	(290,384	)
Tax effects			(7,395	)			63,536
Unrealized gain (loss) on marketable securities, net of tax		$	26,403			$	(226,848	)

		Nine Months Ended December 31,
		2025				2024
Unrealized gain on marketable securities		$	236,960			$	617,665
Tax effects			(51,847	)			(135,386	)
Unrealized gain on marketable securities, net of tax		$	185,113			$	482,279

NOTE 6. INVENTORIES

Inventories are shown in the following table:

		Dec. 31, 2025			March 31, 2025
Raw materials	$	1,615,202		$	1,608,632
Work in process		3,222,657			3,609,273
Finished goods		2,433,939			2,231,178
Total inventories	$	7,271,798		$	7,449,083

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NOTE 7. STOCK-BASED COMPENSATION

Stock-based compensation expense was $10,257 for the third quarter of fiscal 2026, $14,261 for the third quarter of fiscal 2025, $83,407 for the first nine months of fiscal 2026, and $137,906 for the first nine months of fiscal 2025. We calculate share-based compensation expense using the Black-Scholes-Merton standard option-pricing model.

	Quarter Ended December 31,					Nine Months Ended December 31,
	2025			2024		2025			2024
Stock options grant		-		-			6,500		6,500
Stock options exercised		-		8,000			-		9,000

NOTE 8. INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. As of December 31, 2025, federal estimated tax overpayments of $181,860 were included in the balance sheet in “Prepaid expenses and other assets” and a state tax balance due of $809 was included in “Accrued payroll and other.”

We had no unrecognized tax benefits as of December 31, 2025 and March 31, 2025, and we do not expect any significant unrecognized tax benefits within 12 months of the reporting date. We recognize interest and penalties related to income tax matters in income tax expense. As of December 31, 2025, we had no accrued interest related to uncertain tax positions. The tax years ended March 31, 2021 through March 31, 2025 remain open to examination by the major taxing jurisdictions to which we are subject.

NOTE 9. LEASES

We conduct our operations in a leased facility under a non-cancellable operating lease expiring May 31, 2031. Our lease does not provide an implicit interest rate, so we used our incremental borrowing rate to determine the present value of lease payments. Lease expense is recognized on a straight-line basis over the lease term. Effective November 4, 2024 we executed an Amendment extending our lease, which would have expired March 31, 2026 without the Amendment. Details of our lease are as follows:

	Quarter Ended Dec. 31					Nine Months Ended Dec. 31
	2025			2024		2025			2024
Operating lease cost	$	48,214		44,727		$	144,643		120,235
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for leases	$	46,249		45,341		$	38,746		136,023
Right-of-use assets obtained in exchange for new lease liabilities
Operating lease	$	710,665		710,665		$	710,665		710,665
Remaining lease term		65 months		78 months			65 months		78 months
Discount rate		7.8%		7.8%			7.8%		7.8%

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The following table shows the maturities of lease liabilities as of December 31, 2025:

Year Ending March 31,	Operating Lease Liabilities
2026		46,249
2027		172,142
2028		213,284
2029		220,216
2030		227,373
2031		234,762
2032		40,399
Total lease payments		1,154,425
Imputed lease interest		(220,016	)
Total lease liabilities	$	934,409

NOTE 10. STOCK REPURCHASE PROGRAM

On January 21, 2009, we announced that our Board of Directors authorized the repurchase of up to $2,500,000 of our Common Stock from time to time in open market, block, or privately negotiated transactions. The timing and extent of any repurchases depend on market conditions, the trading price of the company’s stock, and other factors, and subject to the restrictions relating to volume, price, and timing under applicable law. On August 27, 2015, we announced that our Board of Directors authorized up to $5,000,000 of additional repurchases. Our repurchase program does not have an expiration date and does not obligate us to purchase any shares. The Program may be modified or discontinued at any time without notice. We intend to finance any stock repurchases with cash provided by operating activities or maturing marketable securities. The remaining authorization was $3,520,369 as of December 31, 2025. We have not repurchased any of our Common Stock during fiscal 2026.

NOTE 11. INFORMATION AS TO EMPLOYEE STOCK PURCHASE, SAVINGS, AND SIMILAR PLANS

All of our employees are eligible to participate in our 401(k) savings plan the first quarter after reaching age 18. Employees may contribute up to the Internal Revenue Code maximum. We make matching contributions of 100% of the first 3% of participants’ salary deferral contributions. Our matching contributions were $24,462 for the third quarter of fiscal 2026, $22,375 for the third quarter of fiscal 2025, $77,037 for the first nine months of fiscal 2026, and $72,442 for the first nine months of fiscal 2025.

NOTE 12. SUBSEQUENT EVENTS

On January 21, 2026, we announced that our Board of Directors had declared a cash dividend of $1.00 per share of Common Stock, to be paid on February 27, 2026, to shareholders of record as of the close of business on February 2, 2026.

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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, 2025 as updated in Part II, Item 1A of this report.

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, 2025. As of December 31, 2025, our critical accounting policies and estimates continued to include marketable securities valuation, inventory valuation, and deferred tax assets estimation.

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Quarter ended December 31, 2025, compared to quarter ended December 31, 2024

The table shown below summarizes the percentage of revenue and quarter-to-quarter changes for various items:

	Percentage of Revenue Quarter Ended December 31,						Quarter- to-Quarter
	2025			2024			Change
Revenue
Product sales	92.8	%		98.0	%		16.5	%
Contract research and development	7.2	%		2.0	%		335.0	%
Total revenue	100.0	%		100.0	%		22.9	%
Cost of sales	21.4	%		15.8	%		67.1	%
Gross profit	78.6	%		84.2	%		14.7	%
Expenses
Research and development	12.8	%		17.2	%		(8.5	) %
Selling, general, and administrative	5.6	%		8.6	%		(19.0	)%
Total expenses	18.4	%		25.8	%		(12.0	)%
Income from operations	60.2	%		58.4	%		26.5	%
Interest income	7.4	%		9.4	%		(2.6	) %
Other income	-	%		2.7	%		-
Income before taxes	67.6	%		70.5	%		17.8	%
Provision for income taxes	13.2	%		10.3	%		57.5	%
Net income	54.4	%		60.2	%		11.0	%

Total revenue for the quarter ended December 31, 2025 (the third quarter of fiscal 2026) increased 23% compared to the quarter ended December 31, 2024 (the third quarter of fiscal 2025). The increase was due to a 16% increase in product sales and a 335% 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 new research and development contracts.

Gross margin for the third quarter of fiscal 2026 was 79% of revenue compared to 84% the prior-year quarter. The decrease in gross margin percentage was due to a less profitable product mix and increased distributor sales for the quarter. Distributor sales typically have lower gross margin than direct sales.

Total expenses decreased 12% for the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025, due to a 9% decrease in research and development expense and a 19% decrease in selling, general, and administrative expense. The decrease in research and development expense was due to the completion of some of our wafer-level chip scale packaging activities and reassignment of some research and development resources to manufacturing. The decrease in selling, general, and administrative expenses was primarily due to the timing of marketing activities and reassignment of some selling, general and administrative resources to manufacturing and new product development.

Interest income decreased 3% due to decrease in our marketable securities portfolio as proceeds from bond maturities partially funded dividends and fixed asset purchases. Other income decreased by $135,057, which was primarily from reclaiming precious metals used in our manufacturing process in the prior-year quarter.

Our effective tax rate, which is the provision for income taxes as a percentage of income before taxes, increased to 20% for the third quarter of fiscal 2026 from 15% for the third quarter of fiscal 2025. The increase in our effective tax rate was primarily due to the unfavorable non-cash impact of tax law changes on certain tax deductions this fiscal year.

We currently expect a full-year tax rate of 16% to 17% for fiscal 2026. This expectation includes the unfavorable impact of tax law changes and the favorable impact of $700,000 to $1,000,000 in anticipated advanced manufacturing investment tax credits.

The increase in net income in the third quarter of fiscal 2026 compared to the prior-year quarter was primarily due to increased revenue and decreased expenses, partially offset by decreased gross margin, decreased interest and other income, and an increase in our effective tax rate.

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Nine months ended December 31, 2025, compared to nine months ended December 31, 2024

The table shown below summarizes the percentage of revenue and year-to-year changes for various items:

	Percentage of Revenue Nine Months Ended Dec. 31,						Period- to-Period
	2025			2024			Change
Revenue
Product sales	95.4	%		95.0	%		0.8	%
Contract research and development	4.6	%		5.0	%		(8.0	)%
Total revenue	100.0	%		100.0	%		0.4	%
Cost of sales	20.8	%		14.6	%		43.1	%
Gross profit	79.2	%		85.4	%		(6.9	) %
Expenses
Research and development	12.8	%		14.0	%		(8.0	)%
Selling, general, and administrative	6.5	%		8.2	%		(21.8	)%
Total expenses	19.3	%		22.2	%		(13.1	)%
Income from operations	59.9	%		63.2	%		(4.8	) %
Interest income	7.7	%		7.7	%		0.8	%
Other income	0.0	%		0.7	%		(97.1	)
Income before taxes	67.6	%		71.6	%		(5.1	)%
Provision for income taxes	12.6	%		11.6	%		10.4	%
Net income	55.0	%		60.0	%		(8.1	)%

Total revenue for the nine months ended December 31, 2025 increased 0.4% compared to the nine months ended December 31, 2024. The increase was due to a 0.8% increase in product sales, partially offset by an 8% decrease in contract research and development revenue. The decrease in contract research and development revenue was primarily due to the timing of revenue recognition and fewer research and development contracts for the nine months ended December 31, 2025, compared to the prior-year period.

Gross margin for the first nine months of fiscal 2026 was 79% of revenue, compared to 85% for the first nine months of fiscal 2025. The decrease in gross margin percentage was due to a less profitable product mix and increased distributor sales for the nine months ended December 31, 2025, compared to the prior-year period. Distributor sales typically have lower gross margin than direct sales.

Total expenses decreased by 13% for the first nine months of fiscal 2026 compared to the first nine months of fiscal 2025, due to an 8% decrease in research and development expense and a 22% decrease in selling, general, and administrative expense. The decrease in research and development expense was due to the completion of some of our wafer-level chip scale packaging activities and reassignment of some research and development resources to manufacturing. The decrease in selling, general, and administrative expenses was primarily due to the timing of marketing activities, and reassignment of some selling, general and administrative resources to manufacturing and new product development.

Our effective tax rate increased to 19% for the first nine months of fiscal 2026 compared to 16% for the first nine months of fiscal 2025. The increase in our effective tax rate was primarily due to the non-cash impact of tax law changes on certain tax deductions this fiscal year.

Net income for first nine months of fiscal 2026 decreased 8% from the prior-year period to $10.3 million, or $2.12 per diluted share. The decrease was primarily due to decreased gross margin, decreased other income, and an increase in our effective tax rate, partially offset by decreased expenses.

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Liquidity and Capital Resources

Overview

Cash and cash equivalents were $3,408,531 as of December 31, 2025, compared to $8,036,564 as of March 31, 2025. The $4,628,033 decrease in cash and cash equivalents during the first nine months of fiscal 2026 was due to $2,288,676 of net cash used in investing activities and $14,511,498 of cash used in financing activities, partially offset by $12,172,141 in net cash provided by operating 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 periods.

Non-cash operating lease expenses increased by $105,896 primarily due to our receipt of a $100,000 leasehold improvement allowance.

Accounts receivable decreased by $1,106,223 during the first nine months of fiscal 2026 primarily due to the timing of customer payments.

Inventories decreased by $177,285 due to increased product sales.

Prepaid expenses and other assets increased by $323,301 primarily due to increased accrued bond interest and a decrease in federal and state taxes due. The decrease in taxes due was because we deducted previously unamortized research and development expenses in the quarter ended December 31, 2025 as permitted under the Federal budget reconciliation bill enacted July 4, 2025. We expect accelerated deductions of previously unamortized research and development expenses to reduce our cash taxes for the full fiscal year ending March 31, 2026 by approximately $1,100,000.

Accrued payroll and other current liabilities decreased by $366,459 primarily due to the payment of federal and state taxes balance due as of March 31, 2025 and decreased accrual for performance-based compensation.

Investing Activities

Cash used by investing activities during the nine months ended December 31, 2025, consisted of $10,108,982 of marketable securities purchases and $2,179,694 of fixed asset purchases, partially offset by $10,000,000 in proceeds from maturities of marketable securities. Fixed asset purchases were primarily production equipment.

Financing Activities

Cash used in financing activities during the nine months ended December 31, 2025, consisted of $14,511,498 of cash dividends paid to shareholders.

In addition to cash dividends paid to shareholders in the first nine months of fiscal 2026, on January 21, 2026, we announced that our Board of Directors had declared a cash dividend of $1.00 per share of Common Stock, or $4,837,166 based on shares outstanding as of December 31, 2025, to be paid on February 27, 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 December 31, 2025, our disclosure controls and procedures were effective.

Changes in Internal Controls

During the quarter ended December 31, 2025, 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, 2025 except the following risk factor is added:

Changes in state regulatory requirements may materially and adversely affect our financial condition, results of operations, and cash flows.

Minnesota state legislation effective January 1, 2026 mandates paid leave, which has increased our employment costs and expenses. The provisions may also increase our risk of employee absences. Future changes in state regulatory requirements, such as paid leave, mandatory healthcare coverage, or unemployment insurance, may adversely impact our financial results.

Additionally, the following risk factor is replaced in its entirety by the following to reflect an amendment to our Supplier Partnering Agreement with Abbott Laboratories that extended the term of the Agreement through December 31, 2027:

“We may lose revenue if we are unable to renew customer agreements

We have agreements with certain customers, including a Supplier Partnering Agreement, as amended, with Abbott Laboratories, which expires December 31, 2027. We cannot predict if these agreements will be renewed, or if renewed, under what terms. Although it is possible we could continue to sell products to these customers without formal agreements, an inability to agree on mutually acceptable terms could have a significant adverse impact on our revenue or profitability.”

Item 4. Mine Safety Disclosures.

None.

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Item 6. Exhibits. 

Exhibit # 10	Description Amendment No. 12 to Supplier Partnering Agreement between Abbott and the company (incorporated by reference to the Form 8-K/A filed December 17, 2025).*
31.1	Certification by Daniel A. Baker pursuant to Rule 13a-14(a)/15d-14(a).
31.2	Certification by Daniel Nelson pursuant to Rule 13a-14(a)/15d-14(a).
32	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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)
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*Certain confidential portions redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The omitted information is (i) not material and (ii) would likely cause us competitive harm if publicly disclosed. We agree to furnish supplementally an unredacted copy of the exhibit to the Securities and Exchange Commission on its request.

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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.

		NVE CORPORATION
		(Registrant)
January 21, 2026		/s/ DANIEL A. BAKER
Date		Daniel A. Baker
		President and Chief Executive Officer
January 21, 2026		/s/ DANIEL NELSON
Date		Daniel Nelson
		Principal Financial Officer

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FAQ

How did NVE Corporation (NVEC) perform in the quarter ended December 31, 2025?

For the quarter ended December 31, 2025, NVE Corporation reported total revenue of $6.2 million, up from $5.1 million a year earlier. Net income increased to $3.4 million, or $0.70 per diluted share, compared with $3.0 million and $0.63 per diluted share in the prior-year quarter.

What are the year-to-date fiscal 2026 results for NVE Corporation (NVEC)?

For the nine months ended December 31, 2025, NVE generated total revenue of $18.7 million, slightly above $18.6 million in the prior-year period. Net income declined to $10.3 million, or $2.12 per diluted share, from $11.2 million, or $2.31 per diluted share, mainly due to lower gross margins and reduced other income.

What is NVE Corporation’s (NVEC) current dividend policy and recent dividend actions?

During the first nine months of fiscal 2026, NVE paid cash dividends totaling $3.00 per share of common stock. On January 21, 2026, the Board declared an additional cash dividend of $1.00 per share, payable on February 27, 2026 to shareholders of record on February 2, 2026. The company plans to fund dividends with operating cash flow and maturities of marketable securities, subject to ongoing Board approval.

What does the NVE Corporation (NVEC) 10-Q say about its financial position and liquidity?

As of December 31, 2025, NVE reported total assets of $60.0 million and shareholders’ equity of $58.3 million. Cash and cash equivalents were $3.4 million, and marketable securities and money market funds totaled about $43.6 million, representing roughly 73% of total assets. The company has modest liabilities, primarily lease obligations.

How did NVE Corporation’s (NVEC) margins and expenses change year over year?

For the third quarter of fiscal 2026, gross margin was 79% of revenue, down from 84% a year earlier, due to a less profitable product mix and higher distributor sales. For the first nine months, gross margin declined from 85% to 79%. Total operating expenses fell 13% for the nine-month period, driven by lower research and development and selling, general, and administrative costs.

What new or updated risk factors does NVE Corporation (NVEC) highlight in this 10-Q?

The report adds a risk factor noting that Minnesota’s paid leave law effective January 1, 2026 has increased employment costs and may raise the risk of employee absences. It also updates a risk factor on key customer agreements, stating that the Supplier Partnering Agreement with Abbott Laboratories now expires on December 31, 2027 and that an inability to renew on acceptable terms could significantly affect revenue or profitability.

What does the 10-Q disclose about NVE Corporation’s (NVEC) tax rate and upcoming tax changes?

For the third quarter of fiscal 2026, NVE’s effective tax rate rose to 20% from 15% in the prior-year quarter, and for the nine months it increased to 19% from 16%, primarily due to non-cash effects of tax law changes on certain deductions. The company currently expects a full-year fiscal 2026 tax rate of 16%–17%, reflecting both unfavorable law changes and anticipated advanced manufacturing investment tax credits.