In This Article:
Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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NVE Corp (NASDAQ:NVEC) reported a 3% year-over-year increase in revenue and a 44% sequential revenue growth for the quarter.
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Gross margin increased to 79% from 76% due to a more profitable product mix and a larger portion of direct sales.
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Net income for the fourth quarter increased by 2% to $3.89 million, indicating improved profitability.
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The company has a strong operating margin of 58% and a net margin of 54% for the quarter.
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NVE Corp (NASDAQ:NVEC) has successfully expanded its manufacturing capacity and capabilities, including new equipment deployment.
Negative Points
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Total expenses increased by 17% for the fourth quarter, driven by a 28% increase in R&D expenses.
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For the fiscal year, revenue decreased by 13% due to declines in the first three quarters.
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Net income for the fiscal year was down 12% to $15.1 million, reflecting a challenging industry environment.
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The company plans significant capital expenditures of $2 to $3 million for fiscal 2026, which could impact cash flow.
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Accounts receivable increased by $444,000, indicating potential delays in customer payments.
Q & A Highlights
Q: Can you explain how much of this quarter's revenue improvement was due to channel replenishment versus new business? A: It was a combination of both. We saw customers replenishing inventories and buying more for their end use, alongside significant interest in our new products. This resulted in high-quality revenues for the past quarter. (Respondent: CEO Dan Baker)
Q: What end markets or capabilities are your new products targeting? A: Our new products focus on medical devices, industrial control, and the industrial internet of things. The advanced magnetic sensors we introduced are omnidirectional, providing flexibility for industrial controls and advanced robotics. We aim to lead the industry in performance, accuracy, size, and power efficiency of sensors. (Respondent: CEO Dan Baker)
Q: How do your isolators perform in high voltage environments? A: Our isolators have the highest isolation voltage in the industry, up to 7 kilovolts, and the best common mode transient immunity, allowing faster switching at higher voltages. This makes them ideal for interfacing with wide band gap transistors in high voltage systems. (Respondent: CEO Dan Baker)
Q: What gives you confidence in earning a return on your planned CapEx investments? A: We have received excellent feedback on prototype and sample devices from customers, which gives us optimism that these investments will open significant new markets for us. (Respondent: CEO Dan Baker)