NVE Corporation (NVEC) Cash Flow Statement

The dispersion is wide: 2025Q2 converted only 0.53 of net income into cash while 2027Q2 converted 1.83, and the direction of each swing appears to track the working capital line rather than any shift in accrual quality. Cumulative conversion slightly above 1.0 argues the earnings are real cash, but the pattern implies collections are lumpy and quarter-level OCF should be smoothed over multiple periods before being annualized.

Free cash flow of $5.8M in 2027Q2 was achieved alongside the ~47% sequential revenue drop previously identified in the income statement work, which suggests the quarter's cash generation owes more to a $2.2M working capital inflow than to underlying trading strength. Across the full ten quarters, FCF of roughly $38.5M tracked net income of $39.8M closely, indicating the long-run trajectory is flat-to-modestly-up rather than the high-margin profile the most recent print implies.

Cumulative capex of ~$3.6M ran well ahead of cumulative depreciation of ~$1.25M, so the company appears to be expanding or refreshing its asset base rather than simply replacing consumption, even though capital intensity remains low in absolute terms for a semiconductor manufacturer. The lumpy pattern means the near-zero capex of 2027Q1 and 2027Q2 should not be extrapolated; investors should assume another double-digit-of-revenue spending quarter could recur without warning.

With no share repurchase activity and no disclosed acquisition spending across the period, the dividend is the sole capital return channel, and its rigid $4.8M cadence contrasts with operating cash flow that ranged from $2.1M to $5.9M per quarter. That gap of roughly $9–10M against period FCF may indicate the board is prioritizing payout stability over funding it from current earnings, a stance that warrants monitoring if the revenue volatility flagged in prior work persists.