NVE Q1FY27 Results: Net profit rises 79% to $6.39 million
- Revenue rose 81% YoY to $11 million, driven by an 82% increase in product sales
- Net income grew 79% to $6.39 million ($1.32 EPS), with gross margin improving to 81.3%
- Expense ratio contracted from 19% to 15% of revenue despite 49% total expense growth
- Cash plus marketable securities reached $43.9 million; fixed asset purchases fell to $57,000
- Pete Eames appointed successor CEO; Board expands to seven directors
*this image is generated using AI for illustrative purposes only.
NVE Corporation (NASDAQ: NVEC) reported an 81% revenue increase to $11 million for the quarter ended June 30, 2026, marking the start of FY27. Net income rose 79% to $6.39 million, or $1.32 per diluted share, supported by strong semiconductor market demand and new product sales.
Financial Performance
Total revenue climbed from $6.1 million in the prior-year quarter, driven by an 82% jump in product sales and a 53% rise in contract R&D revenue. Product sales expanded across defense and non-defense lines as well as distributor and direct channels.
| Metric | Q1FY27 | Q1FY26 | Change |
|---|---|---|---|
| Revenue | $11 million | $6.1 million | +81% |
| Net Income | $6.39 million | $3.58 million | +79% |
| EPS (Diluted) | $1.32 | $0.74 | +78% |
| Gross Margin | 81.3% | 80.6% | +70 bps |
Gross margin improved to 81.3% from 80.6% in the prior-year period, aided by higher volumes. Total expenses increased 49%, which was significantly lower than the revenue growth rate. Consequently, expenses as a percentage of revenue fell from 19% to 15%. This operational leverage contributed to a net margin expansion to 58%, up from a lower base implied by the prior year's figures.
What the Numbers Show
The divergence between the 81% revenue growth and the 49% expense growth highlights significant operating leverage. While R&D expenses rose 31% due to staffing and new product development, and SG&A expenses surged 81% primarily due to performance-based compensation, the overall expense ratio contracted sharply. This indicates that top-line volume gains are currently outweighing the cost of scaling sales and development efforts.
Balance Sheet and Cash Flow
Cash plus marketable securities increased by $391,000 to $43.9 million as of June 30, compared to $43.5 million at the end of March 2026. Fixed asset purchases dropped to $57,000 for the quarter from $1.06 million in the same period last year, reflecting the completion of a two-year, multi-million-dollar capacity expansion. Inventories decreased by 6% due to increased product sales.
Interest income declined 10% due to a reduction in the marketable securities portfolio, as proceeds from bond maturities in the prior fiscal year partially funded dividends and fixed asset purchases. Despite this, earnings more than covered the $1 per share quarterly dividend for the second consecutive quarter.
Strategic Updates
Pete Eames succeeds Dan Baker as CEO, effective August following the annual meeting. Baker will remain on the Board as Chairman. The Board also nominated Carolyn Valentine, expanding its size from five to seven directors to strengthen corporate governance.
New product launches include wafer-level chip-scale sensors for implantable medical devices, featuring MRI-safe capabilities stable up to over 9 Tesla. The company is also developing precise sensors for robotics and efficient isolators for power conversion, targeting high-growth markets such as humanoid robotics and AIoT.
How will the leadership transition from Dan Baker to Pete Eames impact NVE Corporation's strategic focus on emerging markets like humanoid robotics and AIoT?
What is the expected timeline and revenue contribution from the newly launched MRI-safe wafer-level chip-scale sensors for implantable medical devices?
Can NVE Corporation sustain its 81% gross margin as it scales production for high-growth sectors, or will increased competition in power conversion isolators pressure profitability?
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