NVE Corporation Reports 25% Revenue Decline in Third Quarter, Net Income Down 27%

NVE Corporation reported a significant decline in financial performance for the quarter and nine months ended December 31, 2024, as detailed in its latest 10-Q filing. Total revenue for the third quarter decreased by 25% to $5.06 million, down from $6.76 million in the same period last year. This decline was primarily driven by a 22% drop in product sales, which fell to $4.96 million, and a 74% decrease in contract research and development revenue, which amounted to $102,557. For the nine-month period, total revenue decreased by 18% to $18.60 million, compared to $22.72 million in the prior year, with product sales down 20% and contract research revenue up 72%.

The company's net income for the third quarter was $3.05 million, a decrease of 27% from $4.18 million in the prior year. This decline was attributed to reduced revenue, increased operating expenses, and lower interest income, despite an improved gross profit margin of 84%, up from 80% in the previous year. For the nine-month period, net income also fell by 16% to $11.17 million, compared to $13.31 million in the same period last year. The increase in total expenses, which rose by 40% in the third quarter and 28% in the nine-month period, was largely due to heightened research and development activities and increased selling, general, and administrative costs.

Operationally, NVE's cash and cash equivalents decreased to $5.49 million as of December 31, 2024, from $10.28 million at the end of the previous fiscal year. The company reported a decrease in accounts receivable by $1.79 million, reflecting lower revenue and changes in customer payment timing. Inventories increased by $629,039, as the company anticipates a recovery in the semiconductor industry. The total number of shares outstanding as of December 31, 2024, was 4,837,166, a slight increase from 4,833,676 shares at the end of March 2024.

Looking ahead, NVE plans to increase fixed asset purchases significantly in fiscal 2025 and 2026 to support production capacity and new product development. The company has also declared a quarterly cash dividend of $1.00 per share, to be paid on February 28, 2025, reflecting its commitment to returning value to shareholders despite the recent financial challenges. Management remains cautious about future performance, citing reliance on a few large customers and market conditions as potential risks to revenue stability.