NVE Corporation's Q4 2024: Revenue Plunge Amidst Inventory Challenges and R&D Investments
Wednesday, Jan 22, 2025 9:13 pm ET
1min read Revenue Decline and Inventory Build-up:
- NVE Corporation reported a 25% decrease in total revenue for the quarter ended December 31, 2024, primarily due to a 22% decline in product sales and a 74% decrease in contract research and development revenue.
- The revenue decline was attributed to continued inventory lots, particularly in the distributor channels, driven by weak chip demand and a slow recovery in industry sectors and markets served.
Increased R&D and Direct Sales:
- The company increased its investment in R&D, spending 17% of revenue in the past quarter on R&D.
- Direct sales held up relatively well despite challenges in the semiconductor industry, as these customers tend not to buy through distribution, contributing to higher margins.
Gross Margin Improvement:
- Gross margin for the quarter improved to 84% compared to 80% in the prior year quarter.
- The increase in gross margin was primarily due to a more profitable product mix and a larger portion of direct rather than distributor sales.
Expansion and Lease Extension:
- NVE reached an agreement to extend its building lease an additional 62 months, including a $100,000 improvement allowance.
- This expansion was aimed at increasing capacity and capabilities, including the ability to manufacture wafer-level chip scale parts in high volume.
- NVE Corporation reported a 25% decrease in total revenue for the quarter ended December 31, 2024, primarily due to a 22% decline in product sales and a 74% decrease in contract research and development revenue.
- The revenue decline was attributed to continued inventory lots, particularly in the distributor channels, driven by weak chip demand and a slow recovery in industry sectors and markets served.
Increased R&D and Direct Sales:
- The company increased its investment in R&D, spending 17% of revenue in the past quarter on R&D.
- Direct sales held up relatively well despite challenges in the semiconductor industry, as these customers tend not to buy through distribution, contributing to higher margins.
Gross Margin Improvement:
- Gross margin for the quarter improved to 84% compared to 80% in the prior year quarter.
- The increase in gross margin was primarily due to a more profitable product mix and a larger portion of direct rather than distributor sales.
Expansion and Lease Extension:
- NVE reached an agreement to extend its building lease an additional 62 months, including a $100,000 improvement allowance.
- This expansion was aimed at increasing capacity and capabilities, including the ability to manufacture wafer-level chip scale parts in high volume.
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