NVE Q1 2027 Earnings Call: Complete Transcript

NVE (NASDAQ: NVEC ) reported first-quarter financial results on Wednesday. The transcript from the company's first-quarter earnings call has been provided below. This content is powered APIs. For comprehensive financial data and transcripts, visit The full earnings call is available at Summary NVE Corporation reported an 81% increase in revenue to $11 million, primarily driven by an 82% increase in product sales and a 53% rise in contract R&D revenue.

32, supported by higher volumes and a strong semiconductor market. Research and development expenses increased by 31% due to staffing and new product development, while SG&A expenses rose 81% due to performance-based compensation. The company launched new wafer-level chip-scale sensors for medical devices and is developing precise sensors for robotics and efficient isolators for power conversion. NVE completed a significant capacity expansion, primarily for R&D, but also for new product production, positioning for future growth.

Leadership transitions were announced, with Pete Eames succeeding Dan Baker as CEO, and the Board expanding to strengthen corporate governance. The company is optimistic about future growth, particularly in the robotics and AIoT markets, and sees a potential increase in the revenue run rate. Full Transcript Daniel A. Baker, President and CEO Good afternoon and welcome to the NVE Corporation conference call for the quarter ended June 30, 2026.

I'm Dan Baker, NVE's President and CEO. I'm joined by Daniel Nelson, our Principal Financial Officer, and Pete Eames, Vice President of Advanced Technology and successor CEO. This call is being webcast live via YouTube and Google Meet and being recorded. com NVE Corporation.

All participants are currently in listen-only mode. After our presentation there will be a question and answer session. After my opening comments, Daniel Nelson will present our financial results. Pete will cover new products and R&D, and I'll cover sales and marketing.

I'll also cover our upcoming leadership transition and board expansion, and then we'll open the call to questions. We issued our press release with summary financial results and filed our quarterly report on Form 10-Q in the past hour following the close of market. Links to the press release and 10-Q are available through our website, the SEC's website, and X, formerly known as Twitter. Please refer to the Safe Harbor statement on your screen.

Comments we may make that relate to future plans, events, financial results, or performance are forward-looking statements that are subject to certain risks and uncertainties, including, among others, such factors as our reliance on several large customers for a significant percentage of revenue, uncertainties related to the economic environments and the industries we serve, uncertainties related to future sales and revenues, as well as the risk factors listed from time to time in our filings with the SEC, including our annual report on Form 10-K for the year ended March 31, 2026.

Actual results could differ materially from the information provided and we undertake no obligation to update forward-looking statements we may make. We're pleased to report exceptional results. Our growth accelerated with an 81% increase in revenue and a 79% increase in net income, driven by new product sales and a strong semiconductor market. Daniel Nelson will cover details of the financials.

Daniel Nelson, Principal Financial Officer Thanks, Dan. 1 million for the prior-year quarter. The increase was due to an 82% increase in product sales and a 53% increase in contract R&D revenue. Product sales increased across defense and non-defense product lines as well as distributor and direct channels.

6% of the prior-year quarter. Total expenses increased 49% due to a 31% increase in research and development expense and an 81% increase in selling, general and administrative expense. The increase in research and development expense was due to increased staffing and new product development activities. The increase in selling, general and administrative expenses was primarily due to increased performance-based compensation.

The increase in expenses was less than the revenue increase, so expenses as a percentage of revenue decreased from 19% to 15%. Interest income decreased 10% 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. 74 per share. The increase was primarily due to increased revenue, partially offset by increased operating expenses and decreased interest income.

Earnings more than cover our $1 per share quarterly dividend for the second consecutive quarter. Our profitability metrics for the quarter were strong: operating margin was 66%, pre-tax margin was 78%, and net margin was 58%. Inventories decreased by 6% in the quarter due to increased product sales. 06 million in the same quarter last year.

The decrease was due to the completion of our two-year, multi-million-dollar expansion. We expect fixed asset purchases this fiscal year to be significantly less than the prior year. With the completion of our expansion, our balance sheet strengthened in the quarter, with earnings more than covering our dividend. 5 million as of March 31.

Now I'll turn the call over to Pete Eames to cover new products and research and development. Peter Eames, President and CEO Thanks, Daniel. I'll cover new products and R&D. Our R&D strategy is to transition the world's best technologies into the world's best products for high-value markets such as advanced humanoid robotics, data centers, and highly automated fourth-wave factories using the artificial intelligence of things.

Just this week we launched two new wafer-level chip-scale sensors for implantable medical devices. The new parts are about one-third of the area of the conventionally packaged versions, which are already quite small. The even smaller sensors allow miniaturized implantable medical devices. These are our first wafer-level chip-scale sensors with a unique and important MRI-safe feature.

The sensor functions as a magnetic switch in a normal magnetic field, and the sensors are stable to very high magnetic fields of over 9 Tesla, which is more than the fields produced by the strongest MRI machines. MRI safety ensures that the medical device that uses the sensor doesn't fail if the patient needs an MRI. We have a video on our website and YouTube channel showing how we verify this feature using ultra-high-field magnets. In addition to the new product launches, we're developing several new products, including more precise sensors for robotics and more power-efficient isolators for power conversion.

Now I'll turn it back over to Dan Baker. Daniel A. Baker, President and CEO Thanks, Pete. I'll cover sales and marketing and our upcoming leadership transition.

In the past quarter we exhibited at two trade shows focused on sensors. In May we were at Sensors Converge in Silicon Valley, which is North America's largest event of its type, where we focused on robotics and the artificial intelligence of things, or AIoT. We have a strong benefit proposition for those markets, including small size for precise motion and smart sensor edge computing for easy integration with AI. In June, we exhibited at Sensor+Test in Germany, which is billed as the leading international trade fair for sensors, measuring, and testing technology.

In addition to robotics and AIoT, the German show was a good opportunity for us to highlight our power conversion products. Videos of several new demos are on our website and our YouTube channel. The show has generated some good leads and we believe our investments in shows will pay off in future sales. Last month we announced that I'm retiring as President and CEO, effective as of our annual meeting in August.

The Board appointed Pete to succeed me. Subject to shareholder approval, I'll remain on the Board as Chairman. Current Chairman Terry Glarner will remain on the Board and Pete will join the Board. In addition to the incumbent directors and Pete, the Board has nominated a new director, Carolyn Valentine.

Pending shareholder approval, the Board will expand from five to seven directors. The larger Board will strengthen our corporate governance and we already have the highest possible ISS governance score. Leading NVE has been a privilege. I'm proud of what our team has accomplished and confident the company is well positioned for continued success.

The Board conducted a thoughtful succession planning process and unanimously chose Pete as the company's next CEO. Pete brings extraordinary experience, dedication, and judgment, and I know our shareholders will be well served by his leadership in the years ahead. Peter Eames, President and CEO Dan, on behalf of employees, customers, and shareholders, I thank you for many dedicated years of service and pioneering leadership with spintronics at NVE. We will continue to benefit from your guidance as Board Chairman.

I'm honored to lead NVE as CEO. We have a talented team, strong customer relationships, and many exciting opportunities ahead. I look forward to building on our momentum, creating long-term value for our shareholders through profitable growth, strong shareholder returns, and continued spintronic product excellence. Daniel A.

Baker, President and CEO Thanks for the kind words, Pete. Now we'd like to open the call for questions via Google Meet. To ask a question from Google Meet, click the Raise My Hand icon at the bottom of the screen and unmute yourself. To speak from a phone, press star six to unmute.

Please state your name and affiliation before your question. And to prevent background noise, please mute your line after asking your question. Itai Adan, Analyst at Principal Financial Hey Dan, this is Itai Adan from Principal Financial. Congrats on the latest results.

I wanted to ask, based on the sequential increase you saw in the past quarter, I'm curious if you could attribute, or how much you could attribute, to the capacity expansion versus market demand, if possible. Peter Eames, President and CEO Hi Itai, this is Pete. Thanks for the question. We see both as factors.

We've recently completed the expansion that you mentioned, and we started using that capacity primarily for R&D activities. But we also see the market conditions as important factors. We have excellent new products out there now in important new markets, and we're excited about the growth. Itai Adan, Analyst at Principal Financial Awesome.

And just as a quick follow-up, if I may. So it sounds like volume production remains in the existing or the legacy manufacturing facility. And so is it the plan that eventually the expanded capacity will be used for volume production as well, or is it the plan that it'll stay for R&D use cases? Peter Eames, President and CEO Yep, the expanded capacity is used for R&D largely now, but it's also being used for production, especially for some of our new products.

And it'll continue to phase over as production shifts and the new products ramp up. So we really do see the investment paying off for the long term there. Itai Adan, Analyst at Principal Financial Great. Thanks, guys.

Arjen, Analyst at Delta Research Hi, can you hear me? Daniel A. Baker, President and CEO Please go on. Arjen, Analyst at Delta Research Hi, this is Arjen from Delta Research.

Just want to say great work on the quarter. I did have one question. So the release cites new product sales. I was wondering if you could provide any color whether these new products are going to new customers or are existing customers adopting the newer parts.

Peter Eames, President and CEO The new products, most of the volume was in existing customers. But we also had new customers, and they tend to start out a little bit more slowly so they don't move the top line an awful lot. But they bode very well for the future. So we were very pleased with the results of having some of our existing customers design in our newer products and new customers looking at newer products as well.

Arjen, Analyst at Delta Research All right, awesome. Thank you so much. Mike Ostermaier, Individual Investor This is Mike Ostermaier. Can you hear me?

Daniel A. Baker, President and CEO Yes, hi Mike. Mike Ostermaier, Individual Investor Hi. Just a quick question.

I noticed your accounts receivable went up, not quite double. Some color on that? Daniel Nelson, Principal Financial Officer Hi Mike, this is Daniel Nelson, and thanks for the question. So you're right, accounts receivable did increase, and most of that increase is driven by increased sales in the past quarter.

Timing of customer payments as well contributed to some of that, but mostly driven by increased sales in the past quarter. Mike Ostermaier, Individual Investor Okay, so does that mean that, like, I don't know what the terms are for payments and so forth, but it sounds like maybe a lot of your increase in sales came on the back end of the quarter versus the front end, or how does that work? Daniel Nelson, Principal Financial Officer Yeah, some of the sales did happen in the third month of the quarter, and most of those invoices were still outstanding as of the end of the month. But as we speak, most of those have already been collected on.

Mike Ostermaier, Individual Investor Okay, okay, great. Thank you very much. Daniel A. Baker, President and CEO Yes, go ahead please.

Bill, Technical Support Analyst Hello, my name is Bill. Thank you. Dr. Eames, Mr.

Nelson, I've got a question coming from the fact that I've worked with the insurance industry for quite a number of years. I'm a technical support analyst, and I was looking at some of the technology that's offered through NVE, and I'm especially interested if there's any pursuing cases using drift-free TMR sensor infrastructures in the field for enhancement of AI, which is only going to grow with agriculture exponentially as with everything else. What is your idea on that, sir? Peter Eames, President and CEO Yeah, great question.

So there are some opportunities there, and particularly the features of NVE products make that an interesting market. We have very low-power sensors for unattended networks and unattended sensor nodes. That's particularly powerful for crop insurance because we're able to monitor crop conditions directly and then respond quickly as well with our sensor technologies. So we're doing sensing and data transmission, and both of those areas are important for monitoring the data of crops remotely and responding adequately.

Bill, Technical Support Analyst If I have some other... If I have some other ideas—I'm sorry—if I came back. If I have some other ideas, because I have been in the industry for so long, I'm specializing in remote support. I was wondering, could I send them to a place with NVE, like for RS-485 wired edge frameworks and other things like that, where you cross-pattern node displacements so that it doesn't follow within neighborhood lines so you don't lose whole patterns of fields—stuff like that.

Is there any way of doing that, sir? Peter Eames, President and CEO Absolutely. We've got some of the best customer service in the industry and we're ready to respond to your inquiries. If you go to our website, there's a sensor apps email address available and you can submit your questions directly to that.

Bill, Technical Support Analyst Thank you. Thank you very much, sir. That's all. Thank you very much.

Daniel A. Baker, President and CEO Thanks for your question. Again from Google Meet. Itai Adan, Analyst at Principal Financial Hey guys, it's Itai again.

I was wondering—understandably, don't give customers by name—but if you could detail any incremental momentum you're seeing by end market, whether that be robotics and humanoids or industrial automation or data centers or medical. I would just be curious to hear maybe how you kind of rank the end markets and the change in momentum lately. Peter Eames, President and CEO Thanks, Itai. Yeah, there's important opportunities, particularly in robotics that we see.

We've talked a lot about wafer-level chip-scale products, including the announcement on the call today and in previous calls last quarter as well. And we do see some distinct advantages in both low power, but particularly the precision that our products offer in automation and robotics. We'd say that's probably the strongest growing area and the most promising for our technology. Itai Adan, Analyst at Principal Financial That's great to hear.

Thanks again and congratulations. Daniel A. Baker, President and CEO Thank you. Are there any other questions?

Raise your hand on Google Meet. Star six to unmute from the phone. Walter Morris, Long-term Shareholder Walter Morris. As you know, we've been very long-term shareholders in your company.

Congratulations on a great quarter. Certainly the right kind of way to wrap up your long tenure at the company. So kudos. Daniel A.

Baker, President and CEO Thank you. Walter Morris, Long-term Shareholder Would you talk about—I mean, this was an explosive quarter.