NVE Q3 2026 NVE Corp Earnings Call | AllMind AI Earnings | AllMind AI
Q3 2026 NVE Corp Earnings Call
Speaker #4: Good afternoon, and welcome to the NVE Corp earnings conference call for the quarter ended December 31, 2025. I'm Dan Baker, NVE's President and CEO. I'm joined by Daniel Nelson, our Principal Financial Officer, and Pete Eames, Vice President of Advanced Technology.
Speaker #4: This call is being webcast live via YouTube and Amazon Chime and is being recorded. A replay will be available through our website, nve.com, and our YouTube channel.
Speaker #4: YouTube.com/NVECorporation. All participants are currently in listen-only mode. After our presentation, there will be a question-and-answer session. After my opening comments, Daniel Nelson will present our financial results; Pete will cover new products and R&D; I'll cover sales and marketing; and then we'll open the call to questions.
Operator: I'll cover sales and marketing, and then we'll open the call to questions. We issued our press release with financial results and filed our quarterly report on Form 10-Q in the past hour following the close of market. Links to the press release and 10-Q are available through our website, the SEC's website, and X, formerly known as Twitter. Please refer to the safe harbor statement on your screen.
I'll cover sales and marketing, and then we'll open the call to questions. We issued our press release with financial results and filed our quarterly report on Form 10-Q in the past hour following the close of market. Links to the press release and 10-Q are available through our website, the SEC's website, and X, formerly known as Twitter. Please refer to the safe harbor statement on your screen.
Speaker #4: We issued our press release with financial results and filed our quarterly report on Form 10-Q in the past hour, following the close of market.
Speaker #4: Links to the press release and 10-Q are available through our website, the SEC's website, and X, formerly known as Twitter. Please refer to the safe harbor statement on your screen.
Speaker #4: Comments we may make that relate to future plans, events, financial results, or performance are forward-looking statements that are subject to certain risks and uncertainties, including, among others, such factors as uncertainties related to the economic environments and the industries we serve; risks and uncertainties related to future sales and revenue; and risks and uncertainties related to tariffs, customs, duties, and other trade barriers, as well as the risk factors listed from time to time in our filings with the SEC, including our annual report on Form 10-K for the year ended March 31, 2025, as updated in our just-filed 10-Q.
Operator: Comments we may make that relate to future plans, events, financial results, or performance are forward-looking statements that are subject to certain risks and uncertainties, including, among others, such factors as uncertainties related to the economic environments and the industries we serve, risks and uncertainties related to future sales and revenue, and risks and uncertainties related to tariffs, customs, duties, and other trade barriers, as well as the risk factors listed from time to time in our filings with the SEC, including our annual report on Form 10-K for the year ended 31 March 2025, as updated in our just filed Form 10-Q. Actual results could differ materially from the information provided, and we undertake no obligation to update forward-looking statements we may make.
Comments we may make that relate to future plans, events, financial results, or performance are forward-looking statements that are subject to certain risks and uncertainties, including, among others, such factors as uncertainties related to the economic environments and the industries we serve, risks and uncertainties related to future sales and revenue, and risks and uncertainties related to tariffs, customs, duties, and other trade barriers, as well as the risk factors listed from time to time in our filings with the SEC, including our annual report on Form 10-K for the year ended 31 March 2025, as updated in our just filed Form 10-Q. Actual results could differ materially from the information provided, and we undertake no obligation to update forward-looking statements we may make.
Speaker #4: Actual results could differ materially from the information provided, and we undertake no obligation to update forward-looking statements we may make. We're pleased to report a 23% increase in revenue and an 11% increase in earnings for the third quarter of fiscal 2026 compared to the prior-year quarter.
Operator: We're pleased to report a 23% increase in revenue and an 11% increase in earnings for Q3 of fiscal 2026 compared to the prior year quarter, driven by broad-based growth across our revenue lines, including defense and non-defense sales, as well as distributor and direct channels. Daniel Nelson will cover details of the financials. Daniel. Thanks, Dan. As Dan said, revenue for Q3 of fiscal 2026 increased 23% year over year. The increase was due to a 16% increase in product sales and a 335% increase in contract R&D revenue. The increases were across most of our product lines and channels. Gross margin for Q3 of fiscal 2026 was 79% of revenue compared with 84% the prior year quarter. The decrease in gross margin percentage was due to a less profitable product mix and increased distributor sales for the quarter.
We're pleased to report a 23% increase in revenue and an 11% increase in earnings for Q3 of fiscal 2026 compared to the prior year quarter, driven by broad-based growth across our revenue lines, including defense and non-defense sales, as well as distributor and direct channels. Daniel Nelson will cover details of the financials. Daniel.
Speaker #4: Driven by broad-based growth across our revenue lines, including defense and non-defense sales, as well as distributor and direct channels. Daniel Nelson will cover details of the financials.
Speaker #4: Daniel?
Daniel Nelson: Thanks, Dan. As Dan said, revenue for Q3 of fiscal 2026 increased 23% year over year. The increase was due to a 16% increase in product sales and a 335% increase in contract R&D revenue. The increases were across most of our product lines and channels. Gross margin for Q3 of fiscal 2026 was 79% of revenue compared with 84% the prior year quarter. The decrease in gross margin percentage was due to a less profitable product mix and increased distributor sales for the quarter.
Speaker #5: Thanks, Dan. As Dan said, revenue for the third quarter of fiscal 2026 increased 23% year over year. The increase was due to a 16% increase in product sales and a 335% increase in contract R&D revenue.
Speaker #5: The increases were across most of our product lines and channels. Gross margin for the third quarter of fiscal 2026 was 79% of revenue, compared with 84% in the prior year quarter.
Speaker #5: The decrease in gross margin percentage was due to a less profitable product mix and increased distributor sales for the quarter. The increase in distributor sales is positive, although distributor sales typically have lower gross margin than direct sales.
Operator: The increase in distributor sales is positive, although distributor sales typically have lower gross margin than direct sales. Total operating expenses decreased 12% for Q3 of fiscal 2026 compared to Q3 of fiscal 2025 due to a 9% decrease in R&D expense and a 19% decrease in SG&A. The decrease in R&D was due to completion of some of our wafer level chip scale packaging activities and reassignment of some R&D resources to manufacturing. The decrease in SG&A was primarily due to the timing of selling and marketing activities and reassignment of some SG&A resources to manufacturing and new product development. Interest income decreased 3% due to decrease in our marketable securities portfolio as proceeds from bond maturity, partially funded dividends, and fixed asset purchases.
The increase in distributor sales is positive, although distributor sales typically have lower gross margin than direct sales. Total operating expenses decreased 12% for Q3 of fiscal 2026 compared to Q3 of fiscal 2025 due to a 9% decrease in R&D expense and a 19% decrease in SG&A. The decrease in R&D was due to completion of some of our wafer level chip scale packaging activities and reassignment of some R&D resources to manufacturing. The decrease in SG&A was primarily due to the timing of selling and marketing activities and reassignment of some SG&A resources to manufacturing and new product development. Interest income decreased 3% due to decrease in our marketable securities portfolio as proceeds from bond maturity, partially funded dividends, and fixed asset purchases.
Speaker #5: Total operating expenses decreased 12% for the third quarter of fiscal 2026, compared to the third quarter of fiscal 2025, due to a 9% decrease in R&D expense and a 19% decrease in SG&A.
Speaker #5: The decrease in R&D was due to completion of some of our wafer-level chip scale packaging activities and reassignment of some R&D resources to manufacturing.
Speaker #5: The decrease in SG&A was primarily due to the timing of selling and marketing activities, and the reassignment of some SG&A resources to manufacturing and new product development.
Speaker #5: Interest income decreased 3% due to a decrease in our marketable securities portfolio, as proceeds from bond maturity partially funded dividends and fixed asset purchases. Other income decreased by $135,000, which was primarily from reclaiming precious metals used in our manufacturing process in the prior-year quarter.
Operator: Other income decreased by $135,000, which was primarily from reclaiming precious metals used in our manufacturing process in the prior year quarter. Our effective tax rate, which is the provision for income taxes as a percentage of income before taxes, increased to 20% for the third quarter of fiscal 2026 compared to 15% for the third quarter of fiscal 2025. The increase in our effective tax rate was primarily due to the non-cash impact of tax law changes on certain tax deductions this fiscal year. We currently expect a full year tax rate of 16% to 17% in fiscal 2026 because we expect advanced manufacturing investment tax credits of between $700,000 and 1 million to offset the impact of other tax law changes. Net income increased 11% to $3.38 million or $0.70 per diluted share from $3.05 million or $0.63 per share.
Other income decreased by $135,000, which was primarily from reclaiming precious metals used in our manufacturing process in the prior year quarter. Our effective tax rate, which is the provision for income taxes as a percentage of income before taxes, increased to 20% for the third quarter of fiscal 2026 compared to 15% for the third quarter of fiscal 2025. The increase in our effective tax rate was primarily due to the non-cash impact of tax law changes on certain tax deductions this fiscal year. We currently expect a full year tax rate of 16% to 17% in fiscal 2026 because we expect advanced manufacturing investment tax credits of between $700,000 and 1 million to offset the impact of other tax law changes. Net income increased 11% to $3.38 million or $0.70 per diluted share from $3.05 million or $0.63 per share.
Speaker #5: Our effective tax rate, which is the provision for income taxes as a percentage of income before taxes, increased to 20% for the third quarter of fiscal 2026, compared to 15% for the third quarter of fiscal 2025.
Speaker #5: The increase in our effective tax rate was primarily due to the non-cash impact of tax law changes on certain tax deductions this fiscal year.
Speaker #5: We currently expect a full-year tax rate of 16% to 17% in fiscal 2026 because we expect advanced manufacturing investment tax credits of between $700,000 and $1 million to offset the impact of other tax law changes.
Speaker #5: And net income increased 11% to $3.38 million, or $0.70 per diluted share, from $3.05 million, or $0.63 per share. The increase was primarily due to increased revenue and decreased operating expenses, partially offset by decreased gross margin.
Operator: The increase was primarily due to increased revenue and decreased operating expenses partially offset by decreased gross margin, a decrease in other income, and an increase in our effective tax rate. Our profitability metrics remain strong. Operating margin was 60%, pre-tax margin was 68%, and net margin was 54%. For the first nine months of fiscal 2026, total revenue increased 0.4% to $18.7 million from $18.6 million for the nine months of the prior year as growth in the most recent quarter more than offset year over year decreases in the first two quarters of the fiscal year. The revenue increase for the first nine months was due to a 0.8% increase in product sales partially offset by an 8% decrease in contract R&D. Net income for the nine months decreased 8% to $10.3 million or $2.12 per diluted share. Turning to cash flow items.
The increase was primarily due to increased revenue and decreased operating expenses partially offset by decreased gross margin, a decrease in other income, and an increase in our effective tax rate. Our profitability metrics remain strong. Operating margin was 60%, pre-tax margin was 68%, and net margin was 54%. For the first nine months of fiscal 2026, total revenue increased 0.4% to $18.7 million from $18.6 million for the nine months of the prior year as growth in the most recent quarter more than offset year over year decreases in the first two quarters of the fiscal year. The revenue increase for the first nine months was due to a 0.8% increase in product sales partially offset by an 8% decrease in contract R&D. Net income for the nine months decreased 8% to $10.3 million or $2.12 per diluted share. Turning to cash flow items.
Speaker #5: The decrease in other income and an increase in our effective tax rate. Our profitability metrics remain strong. Operating margin was 60%, pre-tax margin was 68%, and net margin was 54%.
Speaker #5: For the first nine months of fiscal 2026, total revenue increased 0.4% to $18.7 million, from $18.6 million for the nine months of the prior year, as growth in the most recent quarter more than offset year-over-year decreases in the first two quarters of the fiscal year.
Speaker #5: Revenue increase for the first nine months was due to a 0.8% increase in product sales, partially offset by an 8% decrease in contract R&D.
Speaker #5: Net income for the nine months decreased 8% to $10.3 million, or $2.12 per diluted share. Turning to cash flow items, cash flow from operations was $12.2 million in the first nine months of the fiscal year.
Operator: Cash flow from operations was $12.2 million in the first nine months of the fiscal year. Accounts receivable decreased $1.1 million during the first nine months of fiscal 2026 primarily due to the timing of customer payments. Inventories decreased by $177,000 due to increased product sales. Prepaid expenses and other assets increased $323,000 primarily due to increased accrued bond interest, and a decrease in federal and state taxes due. The decrease in taxes due was because we deducted previously unamortized research and development expenses in the quarter ended 31 December 2025, as permitted under the Federal Budget Reconciliation Bill enacted 4 July 2025. We expect accelerated deductions of previously unamortized research and development expenses to reduce our cash taxes for the full fiscal year ending 31 March 2026, by approximately $1.1 million.
Cash flow from operations was $12.2 million in the first nine months of the fiscal year. Accounts receivable decreased $1.1 million during the first nine months of fiscal 2026 primarily due to the timing of customer payments. Inventories decreased by $177,000 due to increased product sales. Prepaid expenses and other assets increased $323,000 primarily due to increased accrued bond interest, and a decrease in federal and state taxes due. The decrease in taxes due was because we deducted previously unamortized research and development expenses in the quarter ended 31 December 2025, as permitted under the Federal Budget Reconciliation Bill enacted 4 July 2025. We expect accelerated deductions of previously unamortized research and development expenses to reduce our cash taxes for the full fiscal year ending 31 March 2026, by approximately $1.1 million.
Speaker #5: Accounts receivable decreased $1.1 million during the first nine months of fiscal 2026, primarily due to the timing of customer payments. Inventories decreased by $177,000 due to increased product sales.
Speaker #5: Prepaid expenses and other assets increased $323,000, primarily due to increased accrued bond interest and a decrease in federal and state taxes due. The decrease in taxes due was because we deducted previously unamortized research and development expenses in the quarter ended December 31, 2025, as permitted under the federal budget reconciliation bill enacted July 4, 2025.
Speaker #5: We expect accelerated deductions of previously unamortized research and development expenses to reduce our cash taxes for the full fiscal year ending March 31, 2026, by approximately $1.1 million.
Speaker #5: Accrued payroll and other current liabilities decreased $366,000, primarily due to the payments of federal and state taxes balanced due as of March 31, 2025, and decreased accrual for performance-based compensation.
Operator: Accrued payroll and other current liabilities decreased $366,000 primarily due to the payments of federal and state tax balances due as of 31 March 2025, and decreased accrual for performance-based compensation. Fixed asset purchases were $2.18 million for the first nine months of the fiscal year, including $1.05 million in the December quarter. We substantially completed spending on our two-year multi-million dollar expansion. We expect to put the equipment into service in the current quarter. Pete Eames will discuss the new equipment. Now I'll turn the call over to Pete Eames, our Vice President of Advanced Technology, to talk about our plans for the new equipment and to cover new products and R&D. Pete. Thanks, Daniel. I'll cover new equipment and R&D. New equipment in the past year has increased our capacity, increased our capabilities, and allowed us to do smaller and more precise wafer-level chip-scale package parts in-house.
Accrued payroll and other current liabilities decreased $366,000 primarily due to the payments of federal and state tax balances due as of 31 March 2025, and decreased accrual for performance-based compensation. Fixed asset purchases were $2.18 million for the first nine months of the fiscal year, including $1.05 million in the December quarter. We substantially completed spending on our two-year multi-million dollar expansion. We expect to put the equipment into service in the current quarter. Pete Eames will discuss the new equipment. Now I'll turn the call over to Pete Eames, our Vice President of Advanced Technology, to talk about our plans for the new equipment and to cover new products and R&D. Pete.
Speaker #5: Fixed asset purchases were $2.18 million for the first nine months of the fiscal year, including $1.05 million in the December quarter. We substantially completed spending on our two-year, multi-million-dollar expansion.
Speaker #5: We expect to put the equipment into service in the current quarter. PDMs will discuss the new equipment. Now I'll turn the call over to PDMs, our Vice President of Advanced Technology, to talk about our plans for the new equipment and to cover new products and R&D.
Speaker #5: Pete.
Peter Eames: Thanks, Daniel. I'll cover new equipment and R&D. New equipment in the past year has increased our capacity, increased our capabilities, and allowed us to do smaller and more precise wafer-level chip-scale package parts in-house.
Speaker #2: Thanks, Daniel.
Speaker #2: I'll cover new equipment and R&D. New equipment in the past year has increased our capacity, increased our capabilities, and allowed us to do smaller and more precise wafer-level chip scale package parts in-house.
Speaker #2: We completed installation and calibration of a new equipment cluster in the past quarter, in an expanded production area on the east end of our facility, enabling extremely precise control of spintronic materials deposition to well within one atomic layer.
Operator: We completed installation and calibration of a new equipment cluster in the past quarter in an expanded production area on the east end of our building. The new equipment allows extremely precise control of spintronic materials deposition to well within one atomic layer. This capability translates into more precise spintronic devices and expands our capacity with existing products. We've made good progress developing new advanced spintronic processes on the equipment, and as Daniel said, we expect to place new equipment into service by 31 March. Our R&D strategy is to make the world's best electronics for high-value markets such as medical devices, electric and autonomous vehicles, advanced factory and humanoid robotics, and highly automated fourth-wave factories using the artificial intelligence of things. We've had a continuous flow of new products as part of that strategy.
We completed installation and calibration of a new equipment cluster in the past quarter in an expanded production area on the east end of our building. The new equipment allows extremely precise control of spintronic materials deposition to well within one atomic layer. This capability translates into more precise spintronic devices and expands our capacity with existing products. We've made good progress developing new advanced spintronic processes on the equipment, and as Daniel said, we expect to place new equipment into service by 31 March. Our R&D strategy is to make the world's best electronics for high-value markets such as medical devices, electric and autonomous vehicles, advanced factory and humanoid robotics, and highly automated fourth-wave factories using the artificial intelligence of things. We've had a continuous flow of new products as part of that strategy.
Speaker #2: This capability translates into more precise spintronic devices and expands our capacity with existing products. We've made good progress developing new advanced spintronic processes on the equipment, and as Daniel said, we expect to place new equipment into service by March 31.
Speaker #2: Our R&D strategy is to make the world's best electronics for high-value markets such as medical devices, electric and autonomous vehicles, advanced factory and humanoid robotics, and highly automated fourth wave factories using the artificial intelligence of things.
Speaker #2: We've had a continuous flow of new products as part of that strategy, and just yesterday we announced a new wafer-level chip scale sensor, a part that's just 0.65 millimeters square—about the size of the period at the end of our quarterly report—and about as thick as the paper that it's printed on.
Operator: Just yesterday, we announced a new wafer-level chip scale sensor, a part that's just 0.65 mm², about the size of the period at the end of our quarterly report and about as thick as the paper that it's printed on. The sensor is about 1/3 the size of the conventionally packaged version, and this tiny size allows for unmatched miniaturization and spatial sensitivity. There are demonstrations of our new products on our website and our YouTube channel. Now I'll turn it back over to Dan Baker. Thanks, Pete. I'll cover customers, sales, and marketing. Starting with customers, we're proud to supply products to some of the world's most demanding customers, including Abbott Laboratories. Abbott is a leading supplier of implantable medical devices. In the past quarter, we executed an extension to our supplier partnering agreement with Abbott.
Just yesterday, we announced a new wafer-level chip scale sensor, a part that's just 0.65 mm², about the size of the period at the end of our quarterly report and about as thick as the paper that it's printed on. The sensor is about 1/3 the size of the conventionally packaged version, and this tiny size allows for unmatched miniaturization and spatial sensitivity. There are demonstrations of our new products on our website and our YouTube channel. Now I'll turn it back over to Dan Baker.
Speaker #2: The sensor is about one-third the size of the conventionally packaged version, and this tiny size allows for unmatched miniaturization and spatial sensitivity. There are demonstrations of our new products on our website and our YouTube channel.
Speaker #2: Now I'll turn it back over to Dan.
Speaker #2: Baker. Thanks,
Daniel Baker: Thanks, Pete. I'll cover customers, sales, and marketing. Starting with customers, we're proud to supply products to some of the world's most demanding customers, including Abbott Laboratories. Abbott is a leading supplier of implantable medical devices. In the past quarter, we executed an extension to our supplier partnering agreement with Abbott.
Speaker #1: Pete: I'll cover customer sales and marketing. Starting with customers. We're proud to supply products to some of the world's most demanding customers, including Abbott Laboratories.
Speaker #1: Abbott is a leading supplier of implantable medical devices. In the past quarter, we executed an extension to our supplier partnering agreement with Abbott. In recent years, the extensions have been for one year, but this extension is for two years, through December 31, 2027.
Operator: In recent years, the extensions have been for one year, but this extension is for two years through 31 December 2027. It provides for price increases for 2026 and 2027. The agreement was filed with Form 8-K, and there are links in our just filed 10-Q on our website and the SEC's website. Turning to sales and marketing, we exhibited at the Medical Design and Manufacturing Trade Show the past quarter. Medical devices are an important market for us. We have a convincing benefit proposition for medical devices with small size, low power, and superb reliability. At the show, we highlighted new wafer-level chip scale parts for miniaturization of implantable medical devices and surgical robots, high-field sensors to enable MRI-tolerant medical devices, high-sensitivity sensors for medical device navigation, and our best-in-class electrical isolators to ensure the safety of medical instruments.
In recent years, the extensions have been for one year, but this extension is for two years through 31 December 2027. It provides for price increases for 2026 and 2027. The agreement was filed with Form 8-K, and there are links in our just filed 10-Q on our website and the SEC's website. Turning to sales and marketing, we exhibited at the Medical Design and Manufacturing Trade Show the past quarter. Medical devices are an important market for us. We have a convincing benefit proposition for medical devices with small size, low power, and superb reliability. At the show, we highlighted new wafer-level chip scale parts for miniaturization of implantable medical devices and surgical robots, high-field sensors to enable MRI-tolerant medical devices, high-sensitivity sensors for medical device navigation, and our best-in-class electrical isolators to ensure the safety of medical instruments.
Speaker #1: It provides for price increases for 2026 and 2027. The agreement was filed with the Form 8-K, and there are links in our just-filed 10-Q, on our website, and the SEC's website.
Speaker #1: Turning to sales and marketing, we exhibited at the Medical Design and Manufacturing Trade Show the past quarter. Medical devices are an important market for us.
Speaker #1: We have a convincing benefit proposition for medical devices with small size, low power, and superb reliability. At the show, we highlighted new wafer-level chip scale parts for miniaturization of implantable medical devices and surgical robots.
Speaker #1: High field sensors to enable MRI tolerant medical devices. High sensitivity sensors for medical device navigation. And our best in class electrical isolators to ensure the safety of medical instruments.
Speaker #1: The show generated good leads, and we believe our investments in shows will pay off in future sales. With the success of that show, we'll also exhibit at Medical Device and Manufacturing West for the first time.
Operator: The show generated good leads, and we believe our investments in shows will pay off in future sales. With the success of that show, we'll also exhibit at Medical Design and Manufacturing West for the first time. The exhibition starts 3 February in Anaheim, California, and hosts attendees from all over the world. Now we'd like to open the call for questions. To ask a question from a phone, press star seven to unmute, or from a browser or the Chime app, click the raise my hand icon under the meeting chat. That's at the bottom of the left column, and unmute yourself to speak. Please state your name and affiliation before your question. To prevent background noise, please mute your line after asking your question. Hey, Dan, it's Jeff Bernstein from Silverberg Bernstein Capital. Hi, Jeff.
The show generated good leads, and we believe our investments in shows will pay off in future sales. With the success of that show, we'll also exhibit at Medical Design and Manufacturing West for the first time. The exhibition starts 3 February in Anaheim, California, and hosts attendees from all over the world. Now we'd like to open the call for questions. To ask a question from a phone, press star seven to unmute, or from a browser or the Chime app, click the raise my hand icon under the meeting chat. That's at the bottom of the left column, and unmute yourself to speak. Please state your name and affiliation before your question. To prevent background noise, please mute your line after asking your question.
Speaker #1: The exhibition starts February 3 in Anaheim, California, and hosts attendees from all over the world. Now we'd like to open the call for questions.
Speaker #1: To ask a question from a phone, press *7 to unmute. Or from a browser or the Chime app, click the Raise My Hand icon under the meeting chat.
Speaker #1: That's at the bottom of the left column, and unmute yourself to speak. Please state your name and affiliation before your question. And to prevent background noise, please mute your line after asking your question.
Speaker #3: Hey, Dan, it's Jeff Bernstein from Silverberg.
Hey, Dan, it's Jeff Bernstein from Silverberg Bernstein Capital.
Speaker #3: Bernstein Capital. Hi, so we talked during the
Daniel Baker: Hi, Jeff.
Speaker #1: Jeff.
Operator: So we talked during the quarter about this idea of magnetic navigation in GPS-compromised areas and whether your magnetometer sensors were appropriate for that kind of application. Can you just talk a little bit about that and if you made any contact with anybody in the DoD about this? Hi, Jeff. This is Pete Eames. I'm happy to answer that question. We have looked at MagNav, and for those who aren't familiar with it, this is a new technology that replaces GPS in defense applications that are susceptible to GPS jamming. So typically, NVE sensors are lower power and much smaller than the sensors that are used to detect the magnetic field anomalies in magnet systems. But it is an interesting application for us.
[Analyst 1]: So we talked during the quarter about this idea of magnetic navigation in GPS-compromised areas and whether your magnetometer sensors were appropriate for that kind of application. Can you just talk a little bit about that and if you made any contact with anybody in the DoD about this?
Speaker #3: Could you talk a bit about this idea of magnetic navigation in GPS-compromised areas, and whether your magnetometer sensors were appropriate for that kind of application? Can you just talk a little bit about that, and if you made any contact with anybody in the DOW about this?
Speaker #1: Hi, Jeff. This is Pete Eames. I'm happy to answer that question. We have looked at MagNav, and for those who aren't familiar with it, this is a new technology that replaces GPS in defense applications that are susceptible to GPS jamming.
Peter Eames: Hi, Jeff. This is Pete Eames. I'm happy to answer that question. We have looked at MagNav, and for those who aren't familiar with it, this is a new technology that replaces GPS in defense applications that are susceptible to GPS jamming. So typically, NVE sensors are lower power and much smaller than the sensors that are used to detect the magnetic field anomalies in magnet systems. But it is an interesting application for us.
Speaker #1: So, typically, NVE sensors are lower power and much smaller than the sensors that are used to detect the magnetic field anomalies in magnet systems.
Speaker #1: But it is an interesting application for us. It's evolving, and it's one of the things that we keep an eye on in the defense community to see how it evolves, and hopefully we have an opportunity there in the future.
Operator: It's evolving, and it's one of the things that we keep an eye on in the defense community to see how it evolves, and hopefully we have an opportunity there in the future. So do you have a part that you would deem appropriate for that application today or no? Not exactly. MagNav is pretty new. It's still a relatively nascent technology, and one of the problems with MagNav is that the maps that are being generated and used by sensors for this technology are still too imprecise. So it's not a mature enough technology that we would chase it, for example, but it's something that is interesting and fits within our defense systems and something that we think has a bright future. Gotcha. Thank you. Hey. Hey, Dan. This is Pete Pravid in Florida. How are you guys? A couple of quick questions.
It's evolving, and it's one of the things that we keep an eye on in the defense community to see how it evolves, and hopefully we have an opportunity there in the future. So do you have a part that you would deem appropriate for that application today or no? Not exactly. MagNav is pretty new. It's still a relatively nascent technology, and one of the problems with MagNav is that the maps that are being generated and used by sensors for this technology are still too imprecise. So it's not a mature enough technology that we would chase it, for example, but it's something that is interesting and fits within our defense systems and something that we think has a bright future.
Speaker #3: So, do you have a part that you would deem appropriate for that application today, or—
Speaker #3: So, do you have a part that you would deem appropriate for that application today, or no? Not exactly.
Speaker #1: MagNav is pretty new. It's still a relatively nascent technology, and one of the problems with MagNav is that the maps that are being generated and used by sensors for this technology are still too imprecise.
Speaker #1: So it's still not a mature enough technology that we would chase it, for example, but it's something that is interesting and fits within our defense systems, and something that we think has a bright future.
[Analyst 1]: Gotcha. Thank you.
Speaker #3: Gotcha. Thank you. Pete.
Hey. Hey, Dan. This is Pete Pravid in Florida. How are you guys? A couple of quick questions.
Speaker #2: Hey, Dan. This is Pete Previtt in Florida. How are you guys? A couple quick questions. Your new equipment up and running in March—I recall being at the shareholders' meeting in '24.
Operator: Your new equipment up and running in March? I recall being at the shareholders meeting in 2024, so it'll be almost two years. Is that pretty much on the expected schedule that you thought? It is. Thanks for the question, Pete. As you saw, we just had a blank space when you were here, and at the annual meeting in 2025, we had a much more finished blank space. And now we've got a piece of equipment that's up and running. And as Daniel and Pete both mentioned, we plan to deploy it in an accounting sense this quarter. So things are going well, and it was a complicated piece of set of equipment and a complicated process, but our guys have done a great job of getting it done on schedule. So we're pleased with how it's going. That's great. Great to hear.
Your new equipment up and running in March? I recall being at the shareholders meeting in 2024, so it'll be almost two years. Is that pretty much on the expected schedule that you thought?
Speaker #2: So it'll be almost two years. Is that pretty much on the expected schedule that you—
Speaker #2: So, it'll be almost two years. Is that pretty much on the expected schedule that you thought? It—
Speaker #1: Thanks for the question, Pete. As you saw, we just had a blank space when you were here, and at the annual meeting in 2025, we had a much more finished blank space.
Daniel Baker: It is.Thanks for the question, Pete. As you saw, we just had a blank space when you were here, and at the annual meeting in 2025, we had a much more finished blank space. And now we've got a piece of equipment that's up and running. And as Daniel and Pete both mentioned, we plan to deploy it in an accounting sense this quarter. So things are going well, and it was a complicated piece of set of equipment and a complicated process, but our guys have done a great job of getting it done on schedule. So we're pleased with how it's going.
Speaker #1: And now we've got a piece of equipment that's up and running, and, as Daniel and Pete both mentioned, we plan to deploy it in an accounting sense this quarter.
Speaker #1: So things are going well. And we were it was a complicated it's a complicated piece of a set of equipment, and a complicated process, but our guys have done a great job of getting it done on schedule.
Speaker #1: So we're pleased with how it's going.
[Analyst 2]: That's great. Great to hear.With that, is there an expectation that that new equipment will help with new product sales, like adding to new revenue and/or, I guess, better profitability because it's packaging, right? Some of it's for packaging, so you don't have to outsource the packaging.
Speaker #2: That's great. Great to hear. With that, is there an expectation that that new equipment will help with new product sales, like adding to new revenue?
Operator: With that, is there an expectation that that new equipment will help with new product sales, like adding to new revenue and/or, I guess, better profitability because it's packaging, right? Some of it's for packaging, so you don't have to outsource the packaging. Yeah. This is Pete Eames again. Yes, Pete, I think there is a lot of optimism surrounding the technology that we're developing with the new equipment. I talked about one of the sensors in our earlier remarks. We're definitely selling samples of those parts, and again, we're looking forward to continued sales there. So I think the optimism continues. And thanks, Pete. And do you guys see distributors building up inventory again? I know that that was an issue that they had lots of inventory and had to sell that down. Is that starting to pick up again? Yes, it is. It's very positive.
Speaker #2: And/or, I guess, better profitability because it's packaging, right? Some of it's for packaging, so you don't have to outsource the—
Speaker #2: packaging. Yeah.
Peter Eames: Yeah. This is Pete Eames again. Yes, Pete, I think there is a lot of optimism surrounding the technology that we're developing with the new equipment. I talked about one of the sensors in our earlier remarks. We're definitely selling samples of those parts, and again, we're looking forward to continued sales there. So I think the optimism continues.
Speaker #1: This is Pete Eames again. Yes, Pete, I think there is a lot of optimism surrounding the technology that we're developing with the new equipment.
Speaker #1: I talked about one of the sensors in our earlier remarks where it's definitely selling samples of those parts, and we're, yeah, again, we're looking forward to continued sales there.
Speaker #1: So I think the optimism
Speaker #1: continues. And thanks,
[Analyst 2]: And thanks, Pete. And do you guys see distributors building up inventory again? I know that that was an issue that they had lots of inventory and had to sell that down. Is that starting to pick up again?
Speaker #2: Pete. And do you guys see distributors building up inventory? Again, I know that that was an issue—that they had lots of inventory and had to sell that down.
Speaker #2: Is that starting to pick up?
Speaker #2: again? Yes, it is.
Daniel Baker: Yes, it is. It's very positive.
Speaker #1: It's very positive. And Daniel mentioned that in the prepared remarks—that our distributor sales are picking up and have been throughout the fiscal year.
Operator: Daniel mentioned that in the prepared remarks that our distributor sales are picking up and have been through the fiscal year. That's an indication that some of those inventories that had built up during the semiconductor slowdown the last fiscal year and prior to that have been depleted, burned off, and end-user demand is increasing. We feel like we have the wind at our backs, and we've got excellent products, and the inventory situation in the semiconductor industry as a whole is much better than it was. That's fantastic. Let me ask you about the other company or one of the other companies in your space, Everspin. There seems to be a lot of interest in them lately and some talk about their intellectual property being valuable for quantum computing, possibly. How does NVE's intellectual property compare to what they have?
Daniel mentioned that in the prepared remarks that our distributor sales are picking up and have been through the fiscal year. That's an indication that some of those inventories that had built up during the semiconductor slowdown the last fiscal year and prior to that have been depleted, burned off, and end-user demand is increasing. We feel like we have the wind at our backs, and we've got excellent products, and the inventory situation in the semiconductor industry as a whole is much better than it was.
Speaker #1: And that's an indication that some of those inventories that had built up during the semiconductor slowdown—the last fiscal year and prior to that—have been depleted, burned off, and end-user demand is increasing.
Speaker #1: So we feel like we have the wind at our backs, and we've got excellent products, and the inventory situation in the semiconductor industry as a whole is much better than it was.
[Analyst 2]: That's fantastic. Let me ask you about the other company or one of the other companies in your space, Everspin. There seems to be a lot of interest in them lately and some talk about their intellectual property being valuable for quantum computing, possibly. How does NVE's intellectual property compare to what they have?And have you had any discussions with other companies about licensing your IP?
Speaker #2: That's fantastic. And let me ask you about the other company, or one of the other companies in your space, Everspin. There seems to be a lot of interest in them lately.
Speaker #2: And some talk about their intellectual property being valuable for quantum computing, possibly. How does NVE's intellectual property compare to what they have? And have you had any discussions with other companies about licensing your IP?
Operator: And have you had any discussions with other companies about licensing your IP? We have had discussions about licensing from time to time over the years, including we had a license agreement with predecessors of Everspin Technologies, including Motorola, going way back. So we believe we have excellent intellectual property. We deploy it mostly for anti-tamper and TUFs. So we are in a different market than Everspin, but we do have technology that applies to MRAM. We continue to develop MRAM, and we've talked about it from time to time. Pete didn't talk about it on this call in the prepared remarks, but we continue to work on developing advanced MRAM, mostly for defense applications, defense and anti-tamper applications. And we believe that the intellectual property has significant value, and we'll look for opportunities to monetize that through licensing or other means.
Daniel Baker: We have had discussions about licensing from time to time over the years, including we had a license agreement with predecessors of Everspin Technologies, including Motorola, going way back. So we believe we have excellent intellectual property. We deploy it mostly for anti-tamper and TUFs. So we are in a different market than Everspin, but we do have technology that applies to MRAM. We continue to develop MRAM, and we've talked about it from time to time. Pete didn't talk about it on this call in the prepared remarks, but we continue to work on developing advanced MRAM, mostly for defense applications, defense and anti-tamper applications. And we believe that the intellectual property has significant value, and we'll look for opportunities to monetize that through licensing or other means.
Speaker #1: Oh, we have had discussions about licensing from time to time over the years, including—we had a license agreement with predecessors of Everspin Technology, including Motorola, going way back.
Speaker #1: So, we believe we have excellent intellectual property. We deploy it mostly for anti-tamper and PUFs. So, we are in a different market than Everspin, but we do have technology that applies to MRAM.
Speaker #1: We continue to develop MRAM, and we've talked about it from time to time. Pete didn't talk about it on this call in the prepared remarks, but we continue to work on developing advanced MRAM, mostly for defense applications—defense and anti-tamper applications.
Speaker #1: And we believe that the intellectual property has significant value, and we'll look for opportunities to monetize that through licensing or other means.
Speaker #1: means. And I don't know too much about
Operator: I don't know too much about it, but with flash memory, is MRAM a replacement of flash? I've talked to someone who mentioned something about that memory and MRAM being a lot better with spintronics. Is there anything you could talk about there? Yeah. In general, MRAM is a non-volatile memory, meaning it retains its information when the power is removed. And for some applications, that's a very powerful technology, and it's something that's already used in some embedded computing systems today. So it is very useful, and that's one of the things that, as Dan said, makes us believe that our IP is very valuable here. Okay. Great. And last question, Dan, we love your posts on Twitter. Do you employ or have a marketing company? Is there any plans to expand marketing?
[Analyst 2]: I don't know too much about it, but with flash memory, is MRAM a replacement of flash? I've talked to someone who mentioned something about that memory and MRAM being a lot better with spintronics. Is there anything you could talk about there?
Speaker #2: But with flash memory, is MRAM a replacement for flash? I've talked to someone who mentioned something about that memory and MRAM being a lot better with spintronics.
Speaker #2: Is there anything you can talk about there?
Peter Eames: Yeah. In general, MRAM is a non-volatile memory, meaning it retains its information when the power is removed. And for some applications, that's a very powerful technology, and it's something that's already used in some embedded computing systems today. So it is very useful, and that's one of the things that, as Dan said, makes us believe that our IP is very valuable here.
Speaker #1: Yeah. In general, MRAM is a non-volatile memory, meaning it retains its information when the power is removed. And for some applications, that's a very powerful technology, and it's something that's already used in some embedded computing systems today.
Speaker #1: So, it is very useful, and that's one of the things that, as Dan said, makes us believe that our IP is very valuable here.
Speaker #2: Okay, great. And last question, Dan, we love your posts on Twitter. Do you employ or have a marketing company? Are there any plans to expand marketing?
[Analyst 2]: Okay. Great. And last question, Dan, we love your posts on Twitter. Do you employ or have a marketing company? Is there any plans to expand marketing?
Speaker #2: Not that we don't love your videos and stuff, but just curious about how you guys look at marketing to promote the—
Operator: Not that we don't love your videos and stuff, but just curious about how you guys look at marketing to promote the company. Well, we've been spending more on marketing, doing more marketing. So we try to do more of what works. And what's been working, as I mentioned in the prepared remarks, our trade shows work very well for us, so we're going to more trade shows than we ever have. And we are working more and more on demonstrations. So the videos are one manifestation of demonstrations, but we also provide demonstrations at trade shows and for specific customer-targeted applications. The newsletters are also very effective. We have a very high click rate, a very high response rate. So we measure our marketing activities, and we continue to boost the ones that work. So those are the kinds of things that we've been doing.
Not that we don't love your videos and stuff, but just curious about how you guys look at marketing to promote the company.
Speaker #2: company. Well, we've been
Daniel Baker: Well, we've been spending more on marketing, doing more marketing. So we try to do more of what works. And what's been working, as I mentioned in the prepared remarks, our trade shows work very well for us, so we're going to more trade shows than we ever have. And we are working more and more on demonstrations. So the videos are one manifestation of demonstrations, but we also provide demonstrations at trade shows and for specific customer-targeted applications. The newsletters are also very effective. We have a very high click rate, a very high response rate. So we measure our marketing activities, and we continue to boost the ones that work. So those are the kinds of things that we've been doing.
Speaker #1: We're spending more on marketing, doing more marketing. So we try to do more of what works. And what's been working is, as I mentioned in the prepared remarks, our trade shows work very well for us, so we're going to more trade shows than we ever have.
Speaker #1: And we are working more and more on demonstrations, so the videos are one manifestation of demonstrations, but we also provide demonstrations at trade shows and for specific customer-targeted applications.
Speaker #1: The newsletters are also very effective. We have a very high click rate, a very high response rate. So we measure our marketing activities, and we continue to boost the ones that work.
Speaker #1: So those are the kinds of things that we've been doing. And we do get some response from Twitter. However, it's not a huge sales driver.
Operator: We do get some response from Twitter. However, it's not a huge sales driver. Some of that is more fun and content that we have from other sources or for other targets such as trade shows. Great. Thank you. Appreciate the time. Keep up the good work. Appreciate it. Thanks, Pete. Hey, Dan. It's Jeff Bernstein again. Just wanted to check in on the application for getting rid of rare earth magnets for position sensing and what kind of traction you've gotten there. And have we seen any revenue actually come through from any design wins? Or what's the design win situation looking like? Yeah. That's a good point. There's still a lot of concern in the supply chains about rare earth elements. And our sensors are uniquely positioned to use rare earth-free ferrite magnets because of their high sensitivity. And we continue to offer ferrite magnets.
We do get some response from Twitter. However, it's not a huge sales driver. Some of that is more fun and content that we have from other sources or for other targets such as trade shows. Great. Thank you. Appreciate the time. Keep up the good work.
Speaker #1: Some of that is more fun and content that we have from other sources or for other targets, such as trade shows.
Speaker #2: Great, thank you. I appreciate the time. Keep up the good work. Appreciate it.
[Analyst 2]: Appreciate it.
Thanks, Pete.
Speaker #1: Thanks,
Speaker #1: Pete. Hey, Dan is Jeff
[Analyst 1]: Hey, Dan. It's Jeff Bernstein again. Just wanted to check in on the application for getting rid of rare earth magnets for position sensing and what kind of traction you've gotten there. And have we seen any revenue actually come through from any design wins? Or what's the design win situation looking like?
Speaker #3: Bernstein again. Just wanted to check in on the application for getting rid of rare earth magnets for position sensing. And what kind of traction you've gotten there, and have we seen any revenue actually come through from any design wins, or what's the design win situation looking like?
Speaker #3: like?
Daniel Baker: Yeah. That's a good point. There's still a lot of concern in the supply chains about rare earth elements. And our sensors are uniquely positioned to use rare earth-free ferrite magnets because of their high sensitivity. And we continue to offer ferrite magnets.
Speaker #1: Yeah, that's a good point. There's
Speaker #1: There is still a lot of concern in the supply chains about rare earth elements. Our sensors are uniquely positioned to use rare earth-free ferrite magnets because of their high sensitivity.
Speaker #1: And we continue to offer ferrite magnets; they do not use rare earth elements. They use iron and oxygen, which are two of the most abundant elements in the Earth's crust.
Operator: They do not use rare earth elements. They use iron and oxygen, which are two of the most abundant elements in the Earth's crust. So we're well positioned in that, and we have gotten some sales, and we've gotten some interest in both the magnets and in the sensors that go with them. So we do see it as a promising application, and the concern about rare earth magnets has done nothing but increase. So it's hard to quantify exactly how many are targeted at rare earth replacement and how many we're getting or we wouldn't have gotten if it weren't for the concerns about rare earth, but it certainly helps us. Got it. Thank you. If there are other questions from a phone, press star 7 to unmute, or from a browser or the Chime app, click raise my hand icon under meeting chat. Hello. Can you hear me?
They do not use rare earth elements. They use iron and oxygen, which are two of the most abundant elements in the Earth's crust. So we're well positioned in that, and we have gotten some sales, and we've gotten some interest in both the magnets and in the sensors that go with them. So we do see it as a promising application, and the concern about rare earth magnets has done nothing but increase. So it's hard to quantify exactly how many are targeted at rare earth replacement and how many we're getting or we wouldn't have gotten if it weren't for the concerns about rare earth, but it certainly helps us.
Speaker #1: So we're well positioned in that, and we have gotten some sales, and we've gotten some interest in both the magnets and in the sensors that go with them.
Speaker #1: So, we do see it as a promising application. And the concern about rare earth magnets has done nothing but increase. So it's hard to quantify exactly how many are our targeted rare earth replacement.
Speaker #1: And how many we're getting, or we wouldn't have gotten if it weren't for the concerns about rare earth. But it certainly helps us.
[Analyst 1]: Got it. Thank you.
Speaker #3: Got it. Thank you.
Speaker #1: If there are other questions, from a phone, press star 7 to unmute, or from a browser or the Chime app, click the raise my hand icon under Meeting.
Peter Eames: If there are other questions from a phone, press star 7 to unmute, or from a browser or the Chime app, click raise my hand icon under meeting chat.
Speaker #1: chat. Hello, can you hear
[Analyst 3]: Hello. Can you hear me?
Speaker #3: me?
Speaker #1: Yes.
Operator: Yes. Hello. This is Christopher Chovsky from private investor. I was just wondering if there's any comments you can make on the current quarter, especially, I'm wondering about your defense business, which happens to be a little bit more volatile. Yeah. I can try to add a little bit there, Christopher. I think we've talked fairly about some of the past quarters and explained that things have been relatively weak there. And in general, I think we're optimistic going forward. I think it's safe to say that we'll be returning to somewhat of a more normal flow there if that's of any help. Yes. That's very helpful. And the rise in NRE revenues, does that prepare for additional future non-defense business? That's certainly the goal. We invest in R&D. We invest heavily in R&D. Pete talked about some of the programs.
Operator: Yes. Hello. This is Christopher Chovsky from private investor. I was just wondering if there's any comments you can make on the current quarter, especially, I'm wondering about your defense business, which happens to be a little bit more volatile.
Speaker #3: Hello, this is Christopher Chovsky from a private investor. I was just wondering, are there any comments you can make on the current quarter? Especially, I'm wondering about your defense business, which happens to be a little bit more—
Speaker #3: volatile. Yeah, I
Peter Eames: Yeah. I can try to add a little bit there, Christopher. I think we've talked fairly about some of the past quarters and explained that things have been relatively weak there. And in general, I think we're optimistic going forward. I think it's safe to say that we'll be returning to somewhat of a more normal flow there if that's of any help.
Speaker #1: Can try to add a little bit there, Christopher. I think we've talked fairly about some of the past quarters and explained that things have been relatively weak there.
Speaker #1: And in general, I think we're optimistic going forward. I think it's safe to say that we'll be returning to somewhat of a more normal flow there.
Speaker #1: If that's of any help.
[Analyst 3]: Yes. That's very helpful. And the rise in NRE revenues, does that prepare for additional future non-defense business?
Speaker #3: Yeah, that's very helpful. And the rise in NRE revenues, does that portend additional future non-defense business?
Daniel Baker: That's certainly the goal. We invest in R&D. We invest heavily in R&D. Pete talked about some of the programs.
Speaker #1: That's certainly the goal. We invest in R&D; we invest heavily in R&D. Pete talked about some of the programs. We talked about some of the things that we're doing in the medical space for new products and for advancements, especially in miniaturization.
Operator: We talked about some of the things that we're doing in the medical space for new products and for advancements, especially in miniaturization. So that's been a significant portion of our R&D. And we've been pleased with the response of customers and prospects to those products. And we believe they're going to pay off in future sales, and that's why we make the R&D investments. Okay. And your two-year agreement with Abbott, are there any market gains in that? Are you in any new devices? Unfortunately, we can't talk about what devices they use our parts in. They use our sensors in. We're bound by confidentiality. However, they make some remarkable devices, medical devices, and we're pleased to be a partner with them. We've been a partner with them for many years, and we're proud of the role that we play in making devices that can change people's lives.
We talked about some of the things that we're doing in the medical space for new products and for advancements, especially in miniaturization. So that's been a significant portion of our R&D. And we've been pleased with the response of customers and prospects to those products. And we believe they're going to pay off in future sales, and that's why we make the R&D investments. Okay. And your two-year agreement with Abbott, are there any market gains in that? Are you in any new devices? Unfortunately, we can't talk about what devices they use our parts in. They use our sensors in. We're bound by confidentiality. However, they make some remarkable devices, medical devices, and we're pleased to be a partner with them. We've been a partner with them for many years, and we're proud of the role that we play in making devices that can change people's lives.
Speaker #1: So that's been a significant portion of our R&D, and we've been pleased with the response of customers and prospects to those products. And we believe they're going to pay off in future sales, and that's why we make the R&D.
Speaker #1: So that's been a significant portion of our R&D, and we've been pleased with the response of customers and prospects to those products. And we believe they're going to pay off in future sales, and that's why we make the R&D investments.
Speaker #3: Okay. And your two-year agreement with Abbott—is that still there? Are there any market gains in that? Are you in any new
Speaker #3: devices? Unfortunately, we can't talk
Speaker #1: About what devices they use our parts in. They use our sensors in—we're bound by confidentiality. However, they make some remarkable devices, medical devices, and we're pleased to be a partner with them.
Speaker #1: We've been a partner with them for many years, and we're proud of the role that we play in making devices that can change people's lives.
Speaker #1: We also have other medical customers that sometimes we can't talk about. And we're promoting and meeting more of them, promoting our products and meeting more of those prospects and customers.
Operator: We also have other medical customers that sometimes we can't talk about, and we're promoting and meeting more of them, promoting our products and meeting more of those prospects and customers at trade shows such as MDM here in Minneapolis recently, and in early February, MDM West. All right. Thank you. Good luck. Thank you. Dan, this is Pete again. Just one last question. The company obviously has been very, very solid over many years of delivering good performance. Can you talk a little bit about the potential of customers being recurring, right? So rather than kind of sawtooth revenues quarter after quarter, year after year, where you're going to eventually have recurring orders from the same customers, and then revenues might hit $6, $8, $10, $12 million per quarter because you've got repeat orders from the same customers.
We also have other medical customers that sometimes we can't talk about, and we're promoting and meeting more of them, promoting our products and meeting more of those prospects and customers at trade shows such as MDM here in Minneapolis recently, and in early February, MDM West.
Speaker #1: At trade shows such as MDM here in Minneapolis recently, and in early February, MDM West.
[Analyst 3]: All right. Thank you. Good luck.
Speaker #3: All right. Thank you, and good—
Speaker #3: luck. Thank
[Analyst 2]: Thank you. Dan, this is Pete again. Just one last question. The company obviously has been very, very solid over many years of delivering good performance. Can you talk a little bit about the potential of customers being recurring, right? So rather than kind of sawtooth revenues quarter after quarter, year after year, where you're going to eventually have recurring orders from the same customers, and then revenues might hit $6, $8, $10, $12 million per quarter because you've got repeat orders from the same customers.
Speaker #1: You. Dan, this is Pete again.
Speaker #2: Just one last question. The company obviously has been very, very solid over many years of delivering good performance. Can you talk a little bit about the potential of customers being recurring, right?
Speaker #2: So rather than kind of sawtooth revenues, quarter after quarter, year after year, where you're going to eventually have recurring orders from the same customers, and then revenues might hit $6, $8, $10, $12 million per quarter because you've got repeat orders from the same customers.
Speaker #2: Can you just give some clarity as to what the product mix looks like, and if there’s potential for that type of expectation from these customers that would order consistently?
Operator: Can you just give some clarity as to what the product mix looks like and if there's potential of that type of expectation from these customers that would order consistently? So all new customers are just adding on to revenues quarter after quarter. Yeah. That's a good point and a good question, Pete. So we look to increase our sales to our current customers with existing products, and then we look to add new products to existing customers because we feel like our existing customers are our best prospects. They know us. They've seen the quality of the product we produce and the quality of the support that we provide. So we work on both. Our goal is to grow faster than our customers. So we have to add customers. We have to continue to add products and expand the products that we sell to existing customers.
Can you just give some clarity as to what the product mix looks like and if there's potential of that type of expectation from these customers that would order consistently? So all new customers are just adding on to revenues quarter after quarter.
Speaker #2: So all new customers are just adding on to revenues, quarter after quarter.
Speaker #2: So all new customers are just adding on to revenues quarter after quarter. Yeah.
Peter Eames: Yeah. That's a good point and a good question, Pete. So we look to increase our sales to our current customers with existing products, and then we look to add new products to existing customers because we feel like our existing customers are our best prospects. They know us. They've seen the quality of the product we produce and the quality of the support that we provide. So we work on both. Our goal is to grow faster than our customers. So we have to add customers. We have to continue to add products and expand the products that we sell to existing customers.
Speaker #1: That's a good point and a good question, Pete. So we look to increase our sales to our current customers with existing products, and then we look to add new products to existing customers because we feel like our existing customers are our best prospects.
Speaker #1: They know us; they've seen the quality of the product we produce and the quality of the support that we provide. So we work on both.
Speaker #1: Our goal is to grow faster than our customers. So, we have to add customers. We have to continue to add products and expand the products that we sell to existing customers.
Speaker #1: So I just mentioned Abbott, which is a great example of a customer that we've had for 20 years, at least. And they continue to buy our products, and they've expanded over the years the number of products that they use.
Operator: So I just mentioned Abbott, which is a great example of a customer that we've had for 20 years at least, and they continue to buy our products, and they've expanded over the years the number of products that they use. So that we see is driving growth, and then we've added additional new customers, and then we add products for existing customers, new products for existing customers. Great. Thank you. Hey, Dan. This is Ty. Can you hear me? Yes. Hey, Dan. Yes. All right. Jeff Bernstein, just a follow-up question. As far as you guys have talked about in the past at Abbott, you have exposure in the cardiac rhythm management area. You have exposure in the, I guess, neuromodulator area. In terms of the other medical customers that you're talking to, are these very similar kinds of applications, or are there other applications?
So I just mentioned Abbott, which is a great example of a customer that we've had for 20 years at least, and they continue to buy our products, and they've expanded over the years the number of products that they use. So that we see is driving growth, and then we've added additional new customers, and then we add products for existing customers, new products for existing customers.
Speaker #1: So, that we see as driving growth. And then we've added additional new customers, and then we add products for existing customers—new products for existing.
Speaker #1: customers. Great.
[Analyst 2]: Great. Thank you.
Speaker #2: Thank you.
[Analyst 4]: Hey, Dan. This is Ty. Can you hear me? Yes. Hey, Dan. Yes. All right. Jeff Bernstein, just a follow-up question. As far as you guys have talked about in the past at Abbott, you have exposure in the cardiac rhythm management area. You have exposure in the, I guess, neuromodulator area. In terms of the other medical customers that you're talking to, are these very similar kinds of applications, or are there other applications?
Speaker #4: Hey, Dan. This is Tai. Can you hear me?
Speaker #4: Hey, Yes. Dan.
Speaker #4: Jeff Bernstein: Yes, just a follow-up question. As far as you guys have talked about in the past, at Abbott, you have exposure in the cardiac rhythm management area.
Speaker #4: You have exposure in the, I guess, neuromodulator area. In terms of the other medical customers that you're talking to, are these very similar kinds of applications, or are there other applications?
Speaker #4: I think you discussed medical robots, and I'm kind of curious about why a big piece of equipment like that would need tiny parts like yours, unless it's a sensitivity issue.
Operator: I think you discussed medical robots, and I'm kind of curious about why a big piece of equipment like that would need tiny parts like yours unless it's a sensitivity issue. But can you just flash through that a little bit? Yeah. So we cover a variety of medical products. We cover life support medical devices, which are the types of pacemakers and ICDs that Abbott makes. We cover non-life support medical devices, and we cover medical instruments. We sell products for medical instruments, which would be monitors, pumps, and things of that nature. They require different types of products. They have different design cycles, but they share a common goal of miniaturization, low power, high sensitivity, high accuracy.
Operator: I think you discussed medical robots, and I'm kind of curious about why a big piece of equipment like that would need tiny parts like yours unless it's a sensitivity issue. But can you just flash through that a little bit?
Speaker #4: But can you just flesh that out a little bit?
Speaker #1: Yeah, so we cover a variety of medical products. We cover life support medical devices, which are the types of pacemakers and ICDs that Abbott makes.
Daniel Baker: Yeah. So we cover a variety of medical products. We cover life support medical devices, which are the types of pacemakers and ICDs that Abbott makes. We cover non-life support medical devices, and we cover medical instruments. We sell products for medical instruments, which would be monitors, pumps, and things of that nature. They require different types of products. They have different design cycles, but they share a common goal of miniaturization, low power, high sensitivity, high accuracy.
Speaker #1: We cover non-life-support medical devices. And we cover medical instruments, sell products for medical instruments, which would be monitors, pumps, and things of that nature.
Speaker #1: They require different types of products. They have different design cycles, but they share a common goal of miniaturization, low power, high sensitivity, and high accuracy.
Speaker #1: As far as the medical robots, which we talked about before, Pete touched on that with our wafer-level chip scale parts, that the smaller parts while you're right, they might not need them because it's a relatively the robots are relatively large, but they offer more spatial sensitivity, which means that the robot can detect smaller displacement more precisely.
Operator: As far as the medical robots, which we talked about before, Pete touched on that with our wafer-level chip scale parts, that the smaller parts, well, you're right, they might not need them because it's a relatively the robots are relatively large, but they offer more spatial sensitivity, which means that the robot can detect smaller displacement more precisely. And for medical robots, being able to do delicate operations is a key benefit, and our sensors enable that. That's great. Thank you. Hi, Dan. This is Ty Adams from Principal Global. I just wanted to come back to the MRAM point. I'm curious if you can talk a little bit more if that's really just kind of an IP opportunity or if the added capacity can actually help you sell into some of MRAM's customers as well. And then I have one more. Okay. Thanks for the question, Ty.
As far as the medical robots, which we talked about before, Pete touched on that with our wafer-level chip scale parts, that the smaller parts, well, you're right, they might not need them because it's a relatively the robots are relatively large, but they offer more spatial sensitivity, which means that the robot can detect smaller displacement more precisely. And for medicalrobots, being able to do delicate operations is a key benefit, and our sensors enable that.
Speaker #1: And for medical robots, being able to do delicate operations is a key benefit. And our sensors enable that.
Speaker #4: That's great. Thank
[Analyst 4]: That's great. Thank you.
Speaker #4: you. Hi, Dan.
[Analyst 5]: Hi, Dan. This is Ty Adams from Principal Global. I just wanted to come back to the MRAM point. I'm curious if you can talk a little bit more if that's really just kind of an IP opportunity or if the added capacity can actually help you sell into some of MRAM's customers as well. And then I have one more.
Speaker #5: This is Tai again from Principal Global. I just wanted to come back to the MRAM point. I'm curious if you can talk a little bit more about whether that's really just kind of an IP opportunity, or if the added capacity can actually help you sell into some of MRAM's end customers as well.
Speaker #5: And then I have one
Speaker #5: more. Okay.
Daniel Baker: Okay. Thanks for the question, Ty.
Speaker #1: Thanks for the question, Tai. Our strategy has been not to make large-scale memories. That often requires multi-billion-dollar fabs. So what we've been doing is specializing in high-value-added memories that are used in specialized applications, such as crypto keys for anti-tamper devices.
Operator: Our strategy has been not to make large-scale memories. That often requires multi-billion-dollar fabs. So what we've been doing is specializing in high-value added memories that are used in specialized applications such as crypto keys for anti-tamper devices. But we believe that the intellectual property is applicable to larger MRAMs that would have broader applications. So that's how we would participate in that market by licensing intellectual property that we've developed over the years. Got it. That's super helpful. Thank you. And then my second question is, on the new capacity, I'm curious if you could give us a high-level view on the current mix shift in terms of end market and how the new capacity might change the end market mix. Right.
Operator: Our strategy has been not to make large-scale memories. That often requires multi-billion-dollar fabs. So what we've been doing is specializing in high-value added memories that are used in specialized applications such as crypto keys for anti-tamper devices. But we believe that the intellectual property is applicable to larger MRAMs that would have broader applications. So that's how we would participate in that market by licensing intellectual property that we've developed over the years. Got it. That's super helpful. Thank you. And then my second question is, on the new capacity, I'm curious if you could give us a high-level view on the current mix shift in terms of end market and how the new capacity might change the end market mix. Right.
Speaker #1: But we believe that the intellectual property is applicable to larger MRAMs that would have broader applications. So that's how we would participate in that market, by licensing intellectual property that we've developed over the—
Speaker #1: years. Got
Speaker #5: It. That's super helpful, thank you. And then my second question is, on the new capacity, I'm curious if you could give us a high-level view on the current mix shift in terms of end market and how the new capacity might change the end market mix.
Speaker #1: Right. So the new capacity is targeted at applications such as the Internet of Things and the artificial intelligence of things, which are emerging markets for industrial automation, merging the Internet of Things with artificial intelligence.
Operator: So the new capacity is targeted at applications such as the Internet of Things and the Artificial Intelligence of Things, which are emerging markets for industrial automation, merging the Internet of Things with artificial intelligence. So we see those as tremendous opportunities. They require inputs, which is what we do. We make sensors, and the future appears to have ubiquitous sensors, many very small sensors distributed in many robots and other locations in order to provide the information for smart factories that are self-optimizing. So we see a historic opportunity there, and that's part of the reason why we were confident in making such a large investment. Got it. Thanks so much, Dan, and congrats on the results. Thanks to Ty. Well, if there are no other questions, we were pleased to report strong increases in revenue and earnings driven by broad-based growth.
So the new capacity is targeted at applications such as the Internet of Things and the Artificial Intelligence of Things, which are emerging markets for industrial automation, merging the Internet of Things with artificial intelligence. So we see those as tremendous opportunities. They require inputs, which is what we do. We make sensors, and the future appears to have ubiquitous sensors, many very small sensors distributed in many robots and other locations in order to provide the information for smart factories that are self-optimizing. So we see a historic opportunity there, and that's part of the reason why we were confident in making such a large investment. Got it.
Speaker #1: So we see those as tremendous opportunities. They require inputs, which is what we do. We make sensors. And the future appears to have ubiquitous sensors—many very small sensors distributed in many robots and other locations in order to provide the information for smart factories that are self-optimizing.
Speaker #1: So we see a historic opportunity there, and that's part of the reason why we were confident making such a large investment.
Speaker #1: investment.
Speaker #5: Got
Speaker #5: It. Thanks so much, Dan. And congrats on the results.
[Analyst 5]: Thanks so much, Dan, and congrats on the results.
Thanks to Ty. Well, if there are no other questions, we were pleased to report strong increases in revenue and earnings driven by broad-based growth.
Speaker #1: Thanks, Tai. Well, if there are no other questions, we were pleased to report strong increases in revenue and earnings, driven by broad-based growth. We look forward to speaking with you again in early May for our fiscal year-end call.
Operator: We look forward to speaking with you again in early May for our fiscal year-end call. A replay of this call will be available on the Investor Events page of our website, that's nve.com, and our YouTube channel, that's youtube.com/NVE Corporation. Thank you for participating in this call. This meeting is no longer being recorded.
We look forward to speaking with you again in early May for our fiscal year-end call. A replay of this call will be available on the Investor Events page of our website, that's nve.com, and our YouTube channel, that's youtube.com/NVE Corporation. Thank you for participating in this call.
Speaker #1: A replay of this call will be available on the Investor Events page of our website that's NVE.com. And our YouTube channel that's YouTube.com/NVECorporation. Thank you for participating in this
Operator: This meeting is no longer being recorded.
