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- **Revenue Growth**: 4% QoQ from distributor and non-defense sales, despite 6% YoY decline.
- **Margin Challenges**: Gross margin 78% (vs. 86%) due to distributor mix; net income down 17% YoY.
- **New Products**: Wafer-level packaging, medical sensors, and industrial IoT solutions launched.
- **Market Focus**: Medical devices, electric vehicles, and domestic defense supply chain.
- **Financial Outlook**: 16-17% tax rate with $0.7-1M credits; R&D investments to fuel future growth.

**【CEO Opening Remarks】**
- Q2 2026 revenue increased 4% sequentially, driven by strong distributor and non-defense sales (+21%), offsetting a 64% decline in defense sales.
- Highlighted new product launches: rotation sensor, data coupler, and wafer-level chip scale voltage regulator.
- Emphasized medical device market growth through miniaturization and low-power solutions for implantable devices and surgical robots.

**【CFO Financial Commentary】**
- Revenue $12.5M (FYTD), down 6% YoY due to 68% drop in contract R&D revenue.
- Gross margin 78% (vs. 86% prior year), impacted by lower-margin distributor sales.
- Operating expenses decreased 7%: +3% R&D, -23% SG&A (timing of marketing activities).
- Net income $3.31M ($0.68/share) vs. $4.0M ($0.83/share) YoY, driven by lower revenue and margins.
- Tax rate 20% (FY26: 16-17% expected with $0.7-1M manufacturing credits).

**【VP of Advanced Technology】**
- Installed new production equipment enabling wafer-level chip scale packaging in-house.
- R&D focus on medical devices, electric vehicles, and industrial IoT.
- New products include sensors for robotics, energy conversion, and harsh environment power management.

**【Sales & Marketing】**
- Exhibited at medical design shows, showcasing ultra-low power sensors for implantables.
- Annual shareholder meeting featured new production capabilities and live demos.
- Distributor sales recovery offset defense volatility.

**【Q&A Highlights】**
- New equipment to drive industrial IoT and medical device growth within 12 months.
- Domestic supply chain for wafer-level packaging reduces tariff risk.
- Targeting 800V DC data centers and eVTOLs with high-isolation voltage products.
- Defense R&D contracts (6% revenue) balance IP development with commercial opportunities.
- Rare earth-free magnet sensors gaining design wins in robotics and EVs.

NVE Corporation (NVEC) Q2 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

NVEC

NVEC fundamentals

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