NVE CORPORATION - Form 10-Q SEC filing
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2026
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 000-12196
NVE CORPORATION
(Exact name of registrant as specified in its charter)
Minnesota
41-1424202
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
11409 Valley View Road , Eden Prairie , Minnesota
55344
( Address of principal executive offices )
(Zip Code)
( 952 ) 829-9217
( Registrant’s telephone number, including area code )
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐
Accelerated filer ☐
Non-accelerated filer ☒
Smaller reporting company ☒
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $ 0.01 par value
NVEC
The NASDAQ Stock Market, LLC
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common Stock, $ 0.01 Par Value – 4,844,079 shares outstanding as of September 30, 2026
Table of Contents
NVE CORPORATION
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets
Statements of Income for the Quarters Ended September 3 0 , 202 6 and 202 5
Statements of Comprehensive Income for the Quarters Ended September 30 , 202 6 and 20 2 5
Statements of Income for the Six Month s Ended September 30 , 202 6 and 202 5
Statements of Comprehensive Income for the Six Month s Ended September 30 , 202 6 and 202 5
Statements of Shareholders’ Equity for the Six Months Ended September 30 , 202 6
Statements of Shareholders’ Equity for the Six Months Ended September 30 , 202 5
Statements of Cash Flows for the Six Months Ended September 30 , 202 6 and 202 5
Notes to Financial Statements
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 4. Controls and Procedures
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 4. Mine Safety Disclosures
Item 6. Exhibits
SIGNATURES
2
Table of Contents
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
NVE CORPORATION
BALANCE SHEETS
(Unaudited)
Sept. 30, 2026
March 31, 2026
*
ASSETS
Current assets
Cash and cash equivalents
$
3,969,958
$
1,714,040
Marketable securities, short-term
19,678,659
18,125,060
Accounts receivable, net of allowance for credit losses of $ 15,000
3,005,928
3,408,941
Inventories, net
6,860,310
7,082,821
Prepaid expenses and other assets
1,541,483
1,860,415
Total current assets
35,056,338
32,191,277
Fixed assets
Machinery and equipment
13,925,767
13,843,799
Leasehold improvements
2,059,853
2,059,853
15,985,620
15,903,652
Less accumulated depreciation and amortization
12,652,165
12,187,643
Net fixed assets
3,333,455
3,716,009
Marketable securities, long-term
20,739,953
23,678,452
Right-of-use asset – operating lease
732,004
793,794
Total assets
$
59,861,750
$
60,379,532
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable
$
252,399
$
278,599
Accrued payroll and other
751,695
697,611
Operating lease
202,612
165,116
Total current liabilities
1,206,706
1,141,326
Deferred tax liabilities
9,990
248,284
Long-term operating lease liability
668,708
740,423
Total liabilities
1,885,404
2,130,033
Shareholders’ equity
Common stock, $ 0.01 par value, 6,000,000 shares authorized; 4,844,079 issued and outstanding as of September 30, 2026 and 4,837,166 as of March 31, 2026
48,441
48,372
Additional paid-in capital
20,175,512
19,914,769
Accumulated other comprehensive loss
( 452,080
)
( 32,010
)
Retained earnings
38,204,473
38,318,368
Total shareholders’ equity
57,976,346
58,249,499
Total liabilities and shareholders’ equity
$
59,861,750
$
60,379,532
*The March 31, 2026 Balance Sheet is derived from the audited financial statements contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026.
See accompanying notes.
3
Table of Contents
NVE CORPORATION
STATEMENTS OF INCOME
(Unaudited )
Quarter Ended September 30,
2026
2025
Revenue
Product sales
$
5,575,282
$
6,138,772
Contract research and development
259,420
208,220
Total revenue, net
5,834,702
6,346,992
Cost of sales
1,270,805
1,378,494
Gross profit
4,563,897
4,968,498
Expenses
Research and development
727,345
873,470
Selling, general, and administrative
630,314
436,919
Total expenses
1,357,659
1,310,389
Income from operations
3,206,238
3,658,109
Interest income
474,727
484,330
Other income
-
3,094
Income before taxes
3,680,965
4,145,533
Provision for income taxes
507,806
834,695
Net income
$
3,173,159
$
3,310,838
Net income per share – basic
$
0.66
$
0.68
Net income per share – diluted
$
0.65
$
0.68
Cash dividends declared per common share
$
1.00
$
1.00
Weighted average shares outstanding
Basic
4,842,050
4,837,166
Diluted
4,850,910
4,839,243
STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
Quarter Ended September 30,
2026
2025
Net income
$
3,173,159
$
3,310,838
Unrealized gain (loss) from marketable securities, net of tax
( 379,287
)
83,348
Comprehensive income
$
2,793,872
$
3,394,186
See accompanying notes.
4
Table of Contents
NVE CORPORATION
STATEMENTS OF INCOME
(Unaudited )
Six Months Ended September 30,
2026
2025
Revenue
Product sales
$
16,310,017
$
12,047,342
Contract research and development
558,742
404,294
Total revenue, net
16,868,759
12,451,636
Cost of sales
3,336,850
2,561,017
Gross profit
13,531,909
9,890,619
Expenses
Research and development
1,673,927
1,593,701
Selling, general, and administrative
1,385,908
855,559
Total expenses
3,059,835
2,449,260
Income from operations
10,472,074
7,441,359
Interest income
924,647
982,538
Other income
-
3,905
Income before taxes
11,396,721
8,427,802
Provision for income taxes
1,829,371
1,541,146
Net income
$
9,567,350
$
6,886,656
Net income per share – basic
$
1.98
$
1.42
Net income per share – diluted
$
1.97
$
1.42
Cash dividends declared per common share
$
2.00
$
2.00
Weighted average shares outstanding
Basic
4,839,621
4,837,166
Diluted
4,848,187
4,839,049
STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
Six Months Ended September 30,
2026
2025
Net income
$
9,567,350
$
6,886,656
Unrealized gain (loss) from marketable securities, net of tax
( 420,070
)
158,710
Comprehensive income
$
9,147,280
$
7,045,366
See accompanying notes.
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Table of Contents
NVE CORPORATION
STATEMENTS OF SHAREHOLDERS ’ EQUITY
(Unaudited)
Accumulated
Additional
Other
Common Stock
Paid-In
Comprehensive
Retained
Shares
Amount
Capital
Income (Loss)
Earnings
Total
Balance as of March 31, 2026*
4,837,166
$
48,372
$
19,914,769
$
( 32,010
)
$
38,318,368
$
58,249,499
Comprehensive income:
Unrealized loss on marketable securities, net of tax
( 40,783
)
( 40,783
)
Net income
6,394,191
6,394,191
Total comprehensive income
6,353,408
Stock-based compensation
14,049
14,049
Cash dividends paid ($ 1.00 per share of common stock)
( 4,837,166
)
( 4,837,166
)
Balance as of June 30, 2026
4,837,166
$
48,372
$
19,928,818
$
( 72,793
)
$
39,875,393
$
59,779,790
Exercise of stock options
6,913
69
( 237
)
( 168
)
Comprehensive income:
Unrealized loss on marketable securities, net of tax
( 379,287
)
( 379,287
)
Net income
3,173,159
3,173,159
Total comprehensive income
2,793,872
Stock-based compensation
246,931
246,931
Cash dividends ($ 1.00 per share of common stock)
( 4,844,079
)
( 4,844,079
)
Balance as of September 30, 2026
4,844,079
$
48,441
$
20,175,512
$
( 452,080
)
$
38,204,473
$
57,976,346
*Balances as of March 31, 2026 are derived from the audited financial statements contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026.
See accompanying notes.
6
Table of Contents
NVE CORPORATION
STATEMENTS OF SHAREHOLDERS ’ EQUITY
(Unaudited)
Accumulated
Additional
Other
Common Stock
Paid-In
Comprehensive
Retained
Shares
Amount
Capital
Income (Loss)
Earnings
Total
Balance as of March 31, 2025*
4,837,166
$
48,372
$
19,821,106
$
( 68,544
)
$
42,467,837
$
62,268,771
Comprehensive income:
Unrealized gain on marketable securities, net of tax
75,362
75,362
Net income
3,575,818
3,575,818
Total comprehensive income
3,651,180
Stock-based compensation
6,838
6,838
Cash dividends paid ($ 1.00 per share of common stock)
( 4,837,166
)
( 4,837,166
)
Balance as of June 30, 2025
4,837,166
$
48,372
$
19,827,944
$
6,818
$
41,206,489
$
61,089,623
Comprehensive income:
Unrealized gain on marketable securities, net of tax
83,348
83,348
Net income
3,310,838
3,310,838
Total comprehensive income
3,394,186
Stock-based compensation
66,312
66,312
Cash dividends ($ 1.00 per share of common stock)
( 4,837,166
)
( 4,837,166
)
Balance as of September 30, 2025
4,837,166
$
48,372
$
19,894,256
$
90,166
$
39,680,161
$
59,712,955
*Balances as of March 31, 2025 are derived from the audited financial statements contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025.
See accompanying notes.
7
Table of Contents
NVE CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended September 30,
2026
2025
OPERATING ACTIVITIES
Net income
$
9,567,350
$
6,886,656
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation
464,522
174,451
Bonds discount amortization
( 44,753
)
( 175,895
)
Stock-based compensation
260,980
73,150
Deferred income taxes
( 120,640
)
742,885
Non-cash operating lease expense
27,571
103,931
Changes in operating assets and liabilities:
Accounts receivable
403,013
1,148,412
Inventories
222,511
30,240
Prepaid expenses and other assets
318,932
( 729,679
)
Accounts payable
( 26,200
)
14,835
Accrued payroll and other
54,084
( 285,774
)
Net cash provided by operating activities
11,127,370
7,983,212
INVESTING ACTIVITIES
Purchases of fixed assets
( 81,968
)
( 1,128,981
)
Purchases of marketable securities
( 8,108,071
)
( 10,108,982
)
Proceeds from maturities of marketable securities
9,000,000
10,000,000
Net cash provided by (used in) investing activities
809,961
( 1,237,963
)
FINANCING ACTIVITIES
Payments on exercise of stock options
( 168
)
-
Payment of dividends to shareholders
( 9,681,245
)
( 9,674,332
)
Net cash used in financing activities
( 9,681,413
)
( 9,674,332
)
Increase (decrease) in cash and cash equivalents
2,255,918
( 2,929,083
)
Cash and cash equivalents at beginning of period
1,714,040
8,036,564
Cash and cash equivalents at end of period
$
3,969,958
$
5,107,481
Supplemental disclosures of cash flow information:
Cash paid during the period for income taxes
$
1,641,360
$
1,680,555
See accompanying notes.
8
Table of Contents
NVE CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. DESCRIPTION OF BUSINESS
We develop and sell devices that use spintronics, a nanotechnology that relies on electron spin rather than electron charge to acquire, store, and transmit information.
NOTE 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited financial statements of NVE Corporation are prepared consistent with accounting principles generally accepted in the United States and in accordance with Securities and Exchange Commission rules and regulations. In the opinion of management, these financial statements reflect all adjustments, consisting only of normal and recurring adjustments, necessary for a fair presentation of the financial statements. Although we believe that the disclosures are adequate to make the information presented not misleading, certain disclosures have been omitted as allowed, and the Notes to Financial Statements have been condensed as permitted. It is suggested that these unaudited financial statements be read in conjunction with the audited financial statements and Notes included in our latest Annual Report on Form 10-K for the fiscal year ended March 31, 2026. Sales, expenses, cash flows, assets, and liabilities can and do vary throughout the year, therefore they are not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2027 .
Significant Accounting Policies
A description of our significant accounting policies and estimates is provided in Note 2 to the Financial Statements in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026. As of September 30, 2026, there were no changes to our significant accounting policies or estimates.
NOTE 3. NEW ACCOUNTING STANDARDS
Recently Adopted Accounting Standards
In July 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2025-05, Financial Instruments—Credit Losses (Topic 326)—Measurement of Credit Losses for Accounts Receivable and Contract Assets . ASU 2025-05 aims to reduce the cost and complexity of estimating credit losses while maintaining decision-useful information for financial statement users. The guidance allows a practical expedient of assuming current conditions as of the balance sheet date remain unchanged for the remaining life of the assets. We adopted this practical expedient as permitted by ASU 2025-05. ASU 2025-05 was effective for fiscal years beginning after December 15, 2025, and interim periods within those annual reporting periods, which was fiscal 2027 for us. Adoption of ASU 2025-05 has not had a material impact on our Financial Statements.
New Accounting Standards Not Yet Adopted
In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). ASU 2024-03 aims to enhance transparency for users of financial statements by requiring public business entities to disaggregate specific expense categories. In January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date , which clarified the effective date for non-calendar year-end entities such as us. ASU 2024-03 mandates disclosures in the notes to financial statements detailing the composition and trends of key expense categories within major income statement captions. These enhanced disclosures are intended to help investors more effectively assess the entity’s performance, understand its cost structure, and make more accurate forecasts of future cash flows. For public business entities, ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, which for us will be for fiscal 2028 and for interim reporting periods beginning with the first quarter of fiscal 2029. The adoption will result in disclosure changes only.
We do not expect the adoption of other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date to have a material impact on our financial statements when they are adopted.
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Table of Contents
NOTE 4. NET INCOME PER SHARE
Net income per basic share is computed based on the weighted-average number of common shares issued and outstanding during each period. Net income per diluted share amounts assume the exercise of all stock options. The following tables show the components of diluted shares:
Quarter Ended September 30,
2026
2025
Weighted average common shares outstanding – basic
4,842,050
4,837,166
Dilutive effect of stock options
8,860
2,077
Shares used in computing net income per share – diluted
4,850,910
4,839,243
Six Months Ended September 30,
2026
2025
Weighted average common shares outstanding – basic
4,839,621
4,837,166
Dilutive effect of stock options
8,566
1,883
Shares used in computing net income per share – diluted
4,848,187
4,839,049
NOTE 5. MARKETABLE SECURITIES
The following table shows the major categories of our marketable securities and their contractual maturities as of September 30, 2026:
Total
<1 Year
1–3 Years
3–5 Years
Money market funds
$
3,663,146
$
3,663,146
$
-
$
-
Treasury securities
4,697,185
4,697,185
-
-
Corporate bonds
35,721,427
14,981,474
12,888,258
7,851,695
Total
$
44,081,758
$
23,341,805
$
12,888,258
$
7,851,695
Total marketable securities and money market funds represented approximately 74 % of our total assets as of September 30, 2026. Marketable securities as of September 30, 2026, had remaining maturities between seven weeks and 53 months.
Money market funds are included on the balance sheets in “Cash and cash equivalents.” Corporate bonds are included in “Marketable securities, short term” and “Marketable securities, long term.” Treasury securities are included in “Marketable securities, short-term.” Accrued interest receivables were $ 485,332 as of September 30, 2026, and $ 455,566 as of March 31, 2026, and are included in the balance sheets in “Prepaid expenses and other assets.”
We monitor the credit ratings of our marketable securities at least quarterly as reported by Standard & Poor’s.
The following table shows the estimated fair value of our marketable securities, aggregated by fair value hierarchy inputs used in estimating their fair values:
As of September 30, 2026
As of March 31, 2026
Level 1
Level 2
Total
Level 1
Level 2
Total
Money market funds
$
3,663,146
$
-
$
3,663,146
$
1,121,096
$
-
$
1,121,096
Treasury securities
-
4,697,185
4,697,185
-
4,714,688
4,714,688
Corporate bonds
-
35,721,427
35,721,427
-
37,088,824
37,088,824
Total
$
3,663,146
$
40,418,612
$
44,081,758
$
1,121,096
$
41,803,512
$
42,924,608
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Our available-for-sale securities as of September 30 and March 31, 2026, aggregated into classes of securities, were as follows:
As of September 30, 2026
As of March 31, 2026
Amortized
Cost
Gross
Unrealized
Holding
Gains
Gross
Unrealized
Holding
Losses
Estimated
Fair
Value
Amortized
Cost
Gross
Unrealized
Holding
Gains
Gross
Unrealized
Holding
Losses
Estimated
Fair
Value
Money market funds
$
3,663,146
$
-
$
-
$
3,663,146
$
1,121,096
$
-
$
-
$
1,121,096
Treasury securities
4,699,937
-
( 2,752
)
4,697,185
4,699,853
14,835
-
4,714,688
Corporate bonds
36,297,374
-
( 575,947
)
35,721,427
37,144,634
16,583
( 72,393
)
37,088,824
Total
$
44,660,457
$
-
$
( 578,699
)
$
44,081,758
$
42,965,583
$
31,418
$
( 72,393
)
$
42,924,608
The following table shows the gross unrealized holding losses and estimated fair value of our marketable securities, aggregated by category of securities and length of time that individual securities had been in a continuous unrealized loss position as of September 30 and March 31, 2026.
Less Than 12 Months
12 Months or Greater
Total
Estimated
Fair
Value
Gross
Unrealized
Holding
Losses
Estimated
Fair
Value
Gross
Unrealized
Holding
Losses
Estimated
Fair
Value
Gross
Unrealized
Holding
Losses
As of September 30, 2026
Treasury Securities
4,697,185
( 2,752
)
-
-
4,697,185
( 2,752
)
Corporate bonds
$
31,232,244
$
( 571,453
)
$
4,489,184
$
( 4,494
)
$
35,721,428
$
( 575,947
)
Total
$
35,929,429
$
( 574,205
)
$
4,489,184
$
( 4,494
)
$
40,418,613
$
( 578,699
)
As of March 31, 2026
Corporate bonds
$
23,221,061
$
( 51,668
)
$
4,447,243
$
( 20,725
)
$
27,668,304
$
( 72,393
)
Total
$
23,221,061
$
( 51,668
)
$
4,447,243
$
( 20,725
)
$
27,668,304
$
( 72,393
)
None of the securities were impaired at acquisition, and subsequent declines in fair value are attributable to interest rate increases. We do not intend to sell, and it is not more likely than not that we will be required to sell, these securities before recovery of their amortized cost basis. The issuers continue to make timely interest payments on these securities.
Unrealized gains (losses) on our marketable securities and their tax effects are as follows:
Quarter Ended September 30,
2026
2025
Unrealized gain (loss) on marketable securities
$
( 485,518
)
$
106,692
Tax effects
106,231
( 23,344
)
Unrealized gain (loss) on marketable securities, net of tax
$
( 379,287
)
$
83,348
Six Months Ended September 30,
2026
2025
Unrealized gain (loss) on marketable securities
$
( 537,724
)
$
203,162
Tax effects
117,654
( 44,452
)
Unrealized gain (loss) on marketable securities, net of tax
$
( 420,070
)
$
158,710
NOTE 6. INVENTORIES
Inventories are shown in the following table:
Sept. 30, 2026
March 31, 2026
Raw materials
$
1,469,938
$
1,357,842
Work in process
3,419,079
3,282,430
Finished goods
1,971,293
2,442,549
Total inventories
$
6,860,310
$
7,082,821
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NOTE 7. STOCK-BASED COMPENSATION
Stock-based compensation expense was $ 246,931 for the second quarter of fiscal 2027 , $ 66,312 for the second quarter of fiscal 2026, $ 260,980 for the first six months of fiscal 2027, and $ 73,150 for the first six months of fiscal 2026. We calculate share-based compensation expense using the Black-Scholes-Merton standard option-pricing model.
Quarter Ended
September 30,
Six Months Ended
September 30,
2026
2025
2026
2025
Stock options grant
5,000
4,000
7,500
6,500
Stock options exercised
16,500
-
16,500
-
NOTE 8. INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. As of September 30, 2026, federal and state estimated tax overpayments of $ 883,203 were included in the balance sheet in “Prepaid expenses and other assets.”
We had no unrecognized tax benefits as of September 30, 2026, and we do not expect any significant unrecognized tax benefits within 12 months of the reporting date . We recognize interest and penalties related to income tax matters in income tax expense. As of September 30, 2026, we had no accrued interest related to uncertain tax positions. The tax years ended March 31, 2023 through March 31, 2026 remain open to examination by the major taxing jurisdictions to which we are subject.
The One Big Beautiful Tax law enacted on July 4, 2025 allows companies to exclude U.S. research and development expenses from its Foreign-Derived Deduction Eligible Income (FDDEI) calculation for tax years beginning after December 31, 2025. This resulted in a $466,000 increase in our FDDEI deduction and a $ 98,000 decrease in our income tax provision for the quarter ended September 30, 2026. For the six months ended September 30, 2026, the more favorable tax treatment of FDDEI resulted in a $1,100,000 increase in our FDDEI deduction and a $ 224,000 decrease in our tax provision.
NOTE 9. LEASES
We conduct our operations in a leased facility under a non-cancellable lease expiring May 31, 2031 . Our lease does not provide an implicit interest rate, so we used our incremental borrowing rate to determine the present value of lease payments. Lease expense is recognized on a straight-line basis over the lease term. Details of our operating lease are as follows:
Quarter Ended Sept. 30
Six Months Ended Sept. 30
2026
2025
2026
2025
Operating lease cost
$
48,214
48,214
$
96,429
96,429
Cash paid for amounts included
in the measurement of lease liabilities
Operating cash flows for leases
$
( 51,643
)
( 53,751
)
$
( 68,857
)
( 7,502
)
Remaining lease term
56 mos.
68 mos.
56 mos.
68 mos.
Discount rate
7.8 %
7.8 %
7.8 %
7.8 %
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The following table shows the maturities of lease liabilities as of September 30, 2026:
Year Ending March 31,
Operating Lease Liabilities
2027
103,285
2028
213,284
2029
220,216
2030
227,373
2031
234,762
2032
40,399
Total lease payments
1,039,319
Imputed lease interest
( 167,999
)
Total lease liabilities
$
871,320
NOTE 10. STOCK REPURCHASE PROGRAM
On January 21, 2009, we announced that our Board of Directors authorized the repurchase of up to $ 2,500,000 of our Common Stock from time to time in open market, block, or privately negotiated transactions. The timing and extent of any repurchases depend on market conditions, the trading price of the company’s stock, and other factors, and are subject to the restrictions relating to volume, price, and timing under applicable law. On August 27, 2015, we announced that our Board of Directors authorized up to $ 5,000,000 of additional repurchases. Our repurchase program does not have an expiration date and does not obligate us to purchase any shares. The Program may be modified or discontinued at any time without notice. We intend to finance any stock repurchases with cash provided by operating activities or maturing marketable securities. The remaining authorization was $ 3,520,369 as of September 30, 2026. We did not repurchase any of our Common Stock in the first six months of fiscal 2027.
NOTE 11. INFORMATION AS TO EMPLOYEE STOCK PURCHASE, SAVINGS, AND SIMILAR PLANS
All of our employees are eligible to participate in our 401(k) savings plan the first quarter after reaching age 18. Employees may contribute up to the Internal Revenue Code maximum. We make matching contributions of 100 % of the first 3 % of participants’ salary deferral contributions. Our matching contributions were $ 20,818 for the second quarter of fiscal 2027, $ 23,742 for the second quarter of fiscal 2026, $ 48,896 for the first six months of fiscal 2027, and $ 52,575 for the first six months of fiscal 2026.
NOTE 12. SUBSEQUENT EVENTS
On October 21, 2026 , we announced that our Board of Directors had declared a quarterly cash dividend of $ 1.00 per share of Common Stock to be paid November 30, 2026 , to shareholders of record as of the close of business on November 2, 2026 .
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Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-looking statements
Some of the statements made in this Report or in the documents incorporated by reference in this Report and in other materials filed or to be filed by us with the Securities and Exchange Commission (“SEC”) as well as information included in verbal or written statements made by us constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to the safe harbor provisions of the reform act. Forward-looking statements may be identified by the use of terminology such as may, will, expect, anticipate, intend, believe, estimate, should, or continue, or the negatives of these terms or other variations on these words or comparable terminology. To the extent that this Report contains forward-looking statements regarding the financial condition, operating results, business prospects, or any other aspect of NVE, you should be aware that our actual financial condition, operating results, and business performance may differ materially from that projected or estimated by us in the forward-looking statements. We have attempted to identify, in context, some of the factors that we currently believe may cause actual future experience and results to differ from their current expectations. These differences may be caused by a variety of factors, including but not limited to risks related to our reliance on several large customers for a significant percentage of revenue, uncertainties related to the economic environments in the industries we serve, uncertainties related to future sales and revenues, risks and uncertainties related to tariffs, customs, duties, and other trade barriers, risks and uncertainties related to future stock repurchases and dividend payments, and other specific risks that may be alluded to in this Report or in the documents incorporated by reference in this Report.
Further information regarding our risks and uncertainties is contained in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026.
General
NVE Corporation, referred to as NVE, we, us, or our, develops and sells devices that use spintronics, a nanotechnology that relies on electron spin rather than electron charge to acquire, store, and transmit information. We manufacture high-performance spintronic products including sensors and couplers that are used to acquire and transmit data.
Critical accounting policies
A description of our critical accounting policies is provided in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026. As of September 30, 2026, our critical accounting policies and estimates continued to include marketable securities valuation, inventory valuation, and deferred tax estimation.
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Table of Contents
Quarter ended September 30, 2026, compared to quarter ended September 30, 2025
The table shown below summarizes the percentage of revenue and quarter-to-quarter changes for various items:
Percentage of Revenue
Quarter Ended September 30,
Quarter-
to-Quarter
2026
2025
Change
Revenue
Product sales
95.6
%
96.7
%
(9.2
)%
Contract research and development
4.4
%
3.3
%
24.6
%
Total revenue
100.0
%
100.0
%
(8.1
)%
Cost of sales
21.8
%
21.7
%
(7.8
)%
Gross profit
78.2
%
78.3
%
(8.1
)%
Expenses
Research and development
12.5
%
13.8
%
(16.7
)%
Selling, general, and administrative
10.8
%
6.8
%
44.3
%
Total expenses
23.3
%
20.6
%
3.6
%
Income from operations
54.9
%
57.7
%
(12.4
)%
Interest income
8.1
%
7.6
%
(2.0
)%
Other income
-
0.0
%
(100.0
)%
Income before taxes
63.0
%
65.3
%
(11.2
)%
Provision for income taxes
8.6
%
13.1
%
(39.2
)%
Net income
54.4
%
52.2
%
(4.2
)%
Total revenue for the quarter ended September 30, 2026 (the second quarter of fiscal 2027) decreased 8% compared to the quarter ended September 30, 2025 (the second quarter of fiscal 2026). The decrease was due to a 9% decrease in product sales, partially offset by a 25% increase in contract research and development revenue. The decrease in product sales was due to certain customer’s orders rescheduling and a decrease in defense industry product sales. The orders rescheduling was due to a temporary change to a certain customer’s inventory requirements. Defense sales depend on Government procurement cycles and can be highly variable. The increase in contract research and development revenue was due to progress on existing contracts.
Total operating expenses increased 4% for the second quarter of fiscal 2027 compared to the second quarter of fiscal 2026, due to a 44% increase in selling, general, and administrative expense, partially offset by a 17% decrease in research and development expense. The decrease in research and development expense was due to staffing redeployment. The increase in selling, general and administrative expense was primarily due to larger stock-based compensation expense related to director stock option grants, because of a higher grant-date stock price.
Interest income decreased 2% due to a decrease in our marketable securities portfolio as proceeds from bond maturities partially funded dividends and fixed asset purchases in the prior fiscal year, and lower interest rates on securities purchased in the past year.
Our effective tax rate, which is the provision for income taxes as a percentage of income before taxes, decreased to 14% for the quarter ended September 30, 2026 (the second quarter of fiscal 2027), compared to 20% for the quarter ended September 30, 2025 (the second quarter of fiscal 2026). The decrease was primarily due to more favorable tax treatment of Foreign-Derived Deduction Eligible Income. We currently expect a tax rate of 13% to 15% for the remaining two remaining quarters of fiscal 2027.
The 4% decrease in net income for the second quarter of fiscal 2027 compared to the prior-year quarter was primarily due to decreased revenue and increased operating expenses, partially offset by a decreased income tax provision.
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Table of Contents
Six months ended September 30, 2026, compared to six months ended September 30, 2025
The table shown below summarizes the percentage of revenue and year-to-year changes for various items:
Percentage of Revenue
Six Months Ended Sept. 30,
Quarter-
to-Quarter
2026
2025
Change
Revenue
Product sales
96.7
%
96.8
%
35.4
%
Contract research and development
3.3
%
3.2
%
38.2
%
Total revenue
100.0
%
100.0
%
35.5
%
Cost of sales
19.8
%
20.6
%
30.3
%
Gross profit
80.2
%
79.4
%
36.8
%
Expenses
Research and development
9.9
%
12.8
%
5.0
%
Selling, general, and administrative
8.2
%
6.9
%
62.0
%
Total expenses
18.1
%
19.7
%
24.9
%
Income from operations
62.1
%
59.7
%
40.7
%
Interest income
5.5
%
7.9
%
(5.9
)%
Other income
-
0.0
%
(100.0
)%
Income before taxes
67.6
%
67.6
%
35.2
%
Provision for income taxes
10.9
%
12.3
%
18.7
%
Net income
56.7
%
55.3
%
38.9
%
Total revenue for the six months ended September 30, 2026 increased 36% compared to the six months ended September 30, 2025. The increase was due to a 35% increase in product sales and a 38% increase in contract research and development revenue. The increase in product sales was due to increases in both defense and non-defense sales, as well as increases in sales through both direct and distributor channels. The increase in contract research and development revenue was due to progress on existing contracts.
Total operating expenses increased 25% for the first six months of fiscal 2027 compared to the first six months of fiscal 2026, due to a 5% increase in research and development expense and a 62% increase in selling, general, and administrative expense. The increase in research and development expense was due to increased new product development activities. The increase in selling, general, and administrative expenses was primarily due to increased performance-based compensation and an increase in the estimated value of directors’ stock-based compensation.
Interest income decreased 6% due to a decrease in our marketable securities portfolio as proceeds from bond maturities partially funded dividends and fixed asset purchases in the prior fiscal year.
Our effective tax rate, which is the provision for income taxes as a percentage of income before taxes, decreased to 16% for the first six months of fiscal 2027, from 18% for the first six months of fiscal 2026. The decrease was primarily due to more favorable tax treatment of Foreign-Derived Deduction Eligible Income.
The 39% increase in net income for the first six months of fiscal 2027 compared to the prior-year period was primarily due to increased revenue and a decrease in our effective tax rate, partially offset by increased operating expenses and decreased interest income.
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Table of Contents
Liquidity and Capital Resources
Overview
Cash and cash equivalents were $3,969,958 as of September 30, 2026, compared to $1,714,040 as of March 31, 2026. The $2,255,918 increase in cash and cash equivalents during the first six months of fiscal 2027 was due to $11,127,370 of net cash provided by operating activities and $809,961 of net cash provided by investing activities, partially offset by $9,681,413 of cash used in financing activities.
Operating Activities
Net cash provided by operating activities related to product sales and research and development contract revenue was our primary source of working capital for the current and prior-year quarters.
Accounts receivable decreased $403,013 during the first six months of fiscal 2027 primarily due to the timing of customer payments. Inventories decreased $222,511 primarily due to increased sales. Prepaid expenses and other assets decreased $318,932 due to decreased estimated taxes because of favorable tax law changes.
Investing Activities
Cash provided by investing activities during the six months ended September 30, 2026, consisted $9,000,000 in proceeds from maturities of marketable securities, partially offset by $8,108,071 of marketable securities purchases and $81,968 of fixed asset purchases. We currently expect fixed asset purchases in the fiscal year ending March 31, 2027 to be significantly less than for the year ended March 31, 2026 with the completion of our expansion in the past fiscal year.
Financing Activities
Cash used in financing activities during the six months ended September 30, 2026, consisted of $9,681,245 of dividends and $168 paid for fractional shares on the exercise of stock options.
In addition to cash dividends paid to shareholders in the first six months of fiscal 2027, on October 21, 2026, we announced that our Board of Directors had declared a cash dividend of $1.00 per share of Common Stock, or $4,844,079 based on shares outstanding as of September 30, 2026, to be paid on November 30, 2026.
We plan to fund dividends through cash provided by operating activities and proceeds from maturities of marketable securities. All future dividends will be subject to Board approval and subject to the company’s results of operations, cash and marketable security balances, estimates of future cash requirements, and other factors the Board may deem relevant. Furthermore, dividends may be modified or discontinued at any time without notice.
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Table of Contents
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
Management, with the participation of the Chief Executive Officer and Principal Financial Officer, has performed an evaluation of our disclosure controls and procedures that are defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”) as of the end of the period covered by this Report. This evaluation included consideration of the controls, processes, and procedures that are designed to ensure that information required to be disclosed by us in the reports we file under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Our management concluded that, as of September 30, 2026, our disclosure controls and procedures were effective.
Changes in Internal Controls
During the quarter ended September 30, 2026, there was no change in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
In the ordinary course of business, we may become involved in litigation. At this time, we are not aware of any material pending or threatened legal proceedings or other proceedings contemplated by governmental authorities that we expect would have a material adverse impact on our future results of operation and financial condition.
Item 1A. Risk Factors.
There have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026.
Item 4. Mine Safety Disclosures.
None.
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Table of Contents
Item 6. Exhibits.
Exhibit #
Description
31.1
Certification by Peter G . E a m e s pursuant to Rule 13a-14(a)/15d-14(a).
31.2
Certification by Daniel Nelson pursuant to Rule 13a-14(a)/15d-14(a).
32
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
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Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
NVE CORPORATION
(Registrant)
October 21, 2026
/s/ PETER G. EAMES
Date
Peter G. Eames
President and Chief Executive Officer
October 21, 2026
/s/ DANIEL NELSON
Date
Daniel Nelson
Principal Financial Officer
20
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.