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Shares of NVE Corporation NVEC have declined 16% since the company reported its earnings results for the third quarter of fiscal 2025. This compares to the S&P 500 index’s 0.9% growth over the same time frame. Over the past month, the stock has fallen 15.1% against the S&P 500’s 3.4% growth.
Key Performance Metrics
NVE Corp reported third-quarter fiscal 2025 earnings of 63 cents per diluted share, declining from 87 cents in the prior-year quarter.
The company’s total quarterly revenues dropped 25.1% to $5.06 million from $6.76 million in the third quarter of fiscal 2024. This decline was attributed to a 22.1% decrease in product sales, which accounted for 98% of total revenues, and a significant 73.7% reduction in contract research and development (R&D) revenues. The drop in R&D revenues was tied to the completion of certain contracts.
NVE Corporation Price, Consensus and EPS Surprise
NVE Corporation price-consensus-eps-surprise-chart | NVE Corporation Quote
Other Key Business Metrics
The company’s gross profit declined 21% to $4.27 million in the reported quarter from $5.4 million in the third quarter of fiscal 2024. However, the gross margin for the quarter rose to 84% from 80% in the third quarter of fiscal 2024, benefiting from a more profitable product mix and a larger share of direct sales.
For the quarter ended Dec. 31, 2024, NVE Corp’s income from operations was $2.96 billion, a decrease of 33.8% from $4.47 billion in the prior-year period.
Expenses
The company’s R&D expenses increased 60.8% to $0.9 million in the third quarter of fiscal 2025 from $0.5 million in the year-ago quarter, reflecting heightened investments in new technologies. Selling, general and administrative (SG&A) expenses rose 11.7% to $0.43 million from $0.39 million in the third quarter of fiscal 2024, driven by increased sales staff and marketing activities.
However, operating expenses increased 40% year over year in the third quarter of fiscal 2025, led by a 60.8% rise in R&D spending and an 11.7% increase in SG&A expenses. Higher R&D expenses reflected increased investment in product development.
Management attributed these increases to expanding its product portfolio and enhancing marketing initiatives to strengthen customer relationships.
Cash & Debt
As of Dec. 31, 2024, NVE Corp reported cash and cash equivalents of $5.49 million compared with $10.28 million as of March 31, 2024. The company continues to hold no long-term debt, highlighting a debt-free balance sheet.
The decline in cash was attributed to $14.39 million in cash used for dividends and other financing activities during the first nine months of fiscal 2025, partially offset by $11.83 million in cash generated from operating activities. NVE's strong cash flow generation supports ongoing shareholder returns, including quarterly dividends.