NVE Corporation

Good afternoon and welcome to the NVE Corporation conference call for the quarter ended June 30th, 2026. I'm Dan Baker, NVE's President and CEO. I'm joined by Daniel Nelson, our Principal Financial Officer, and Peter Eames, Vice President of Advanced Technology and Successor CEO. This call is being webcast live via YouTube and Google Meet and being recorded. A replay will be available through our website, nve.com, and our YouTube channel, youtube.com slash 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, and I'll cover sales and marketing. I'll also cover our upcoming leadership transition and board expansion, and then we'll open the call to questions. We issued our press release with summary 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. 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 our reliance on several large customers for a significant percentage of revenue, uncertainty, Uncertainties related to the economic environments and the industries we serve, uncertainties related to future sales and revenues, 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, 2026. 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 exceptional results. Our growth accelerated with an 81% increase in revenue and a 79% increase in net income driven by new product sales and a strong semiconductor market. Daniel Nelson will cover details of the financials. Daniel? Thanks Dan.

As Dan said, first quarter total revenue increased 81% to $11 million from $6.1 million for the prior year quarter. The increase was due to an 82% increase in product sales and a 53% increase in contract R&D revenue. Product sales increased across defense and non-defense product lines, as well as distributor and direct channels. Higher volumes helped boost gross margin for the quarter to 81.3% of revenue compared to 80.6% the prior year quarter. Total expenses increased 49% due to a 31% increase in research and development expense and an 81% increase in selling, general and administrative expense. The increase in research and development expense was due to increased staffing, and New Product Development Activities. The increase in selling general and administrative expenses was primarily due to increased performance-based compensation. The increase in expenses was less than a revenue increase, so expenses as a percentage of revenue decreased from 19% to 15%. Interest income decreased 10% due to decrease in our marketable securities portfolio as proceeds from bond maturities partially funded dividends and fixed asset purchases in the prior fiscal year. Net income for the quarter increased 79% to $6.39 million of $1.32 per diluted share from $3.58 million or $0.74 per share. The increase was primarily due to increased revenue partially offset by increased operating expenses and decreased interest income. Earnings more than coverable our $1 per share quarterly dividend for the second consecutive quarter. Our profitability metrics for the quarter was strong. Operating margin was 66%, pre-tax margin was 78%, and net margin was 58%. Inventors decreased by 6% in the quarter due to increased product sales. Fixed asset purchases were $57,000 for the quarter, compared to $1.06 million in the same quarter last year. The decrease was due to the completion of our two-year multi-million dollar expansion. We expect fixed asset purchases this fiscal year to be significantly less than the prior year with the completion of our expansion. Our balance sheet is strengthening in the quarter, with earnings more than covering our dividends. Cash plus marketable securities increased $391,000 to $43.9 million as of June 30th, compared to $43.5 million as of March 31st. Now I'll turn the call over to Pete Eames to cover new products and research and development. Pete?

Thanks, Daniel. I'll cover new products and R&D. Our R&D strategy is to transition the world's best technologies into the world's best products for high-value markets, such as advanced humanoid robotics, data centers, and highly automated fourth-wave factories using the artificial intelligence of things. Just this week, we launched two new wafer-level chip scale sensors for implantable medical devices. The new parts are about one-third of the area of the conventionally packaged versions, which are already quite small. The even smaller sensors allow miniaturized implantable medical devices. These are our first wafer-level drip-scale sensors with a unique and important MRI-safe feature. The sensor functions as a magnetic switch in a normal magnetic field, and the sensors are stable to very high magnetic fields of over 9 Tesla, which is more than the fields produced by the strongest MRI machines. MRI safety ensures that the medical device that uses the sensor doesn't fail if the patient needs an MRI. We have a video on our website and YouTube channel showing how we verify this feature using ultra-high field magnets. In addition to the new product launches, we're developing several new products including more precise sensors for robotics and more power efficient isolators for power conversion. Now I'll turn it back over to Dan Baker.