Release Date: April 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Vicor Corp (NASDAQ:VICR) reported a 12% year-over-year increase in total revenue for Q1 2025, reaching $94 million.
• Advanced products revenue increased by 2.7% sequentially, indicating strong demand in this segment.
• The company's book-to-bill ratio was above 1, suggesting strong future demand and order growth.
• Vicor Corp (NASDAQ:VICR) is well-positioned in the high-performance computing (HPC) market, with new orders for NBMs from a hyperscalar licensee.
• The company is making significant progress in developing its second-generation high-density VPD for AI applications, which is expected to set new performance standards.

Negative Points

• Total revenue decreased by 2.3% sequentially from the fourth quarter of 2024.
• Gross profit margin declined by 520 basis points from the prior quarter, impacted by ERP system transition costs and other factors.
• Brick product revenue decreased by 10% sequentially, indicating challenges in this product line.
• Shipments to stocking distributors decreased significantly, both sequentially and year-over-year.
• The company faces uncertainties related to tariffs, with a 10% tariff surcharge to be added to invoices, potentially impacting demand.

Q & A Highlights

• Warning! GuruFocus has detected 4 Warning Sign with VICR.

Q: Can you elaborate on the revenue and gross margin decline due to a licensee transitioning to unlicensed products? A: (Unidentified_5) I cannot elaborate on the specifics, but it's a short-term impact. We remain confident in our licensing business as a growth driver contributing to both top and bottom lines.

Q: What are the impacts of tariffs on your business, and how are you addressing them? A: (Unidentified_5) We've assessed the impact on our bill of materials and instituted a 10% tariff surcharge starting in Q3. We don't expect this to significantly impact demand. Reciprocal tariffs in China have led to some program impacts, but they are not significant enough to alter our revenue outlook.

Q: Is there any change in the timeline for ramping your 2nd generation VPD products? A: (Unidentified_5) We feel confident about bringing the development to fruition, focusing on our lead customer. We expect to ship production-quality units in the second half of this year.

Q: Can you provide an update on the ITC case and its implications? A: (Unidentified_5) The ITC case concluded with an exclusion order preventing the import of infringing products. We are appealing certain aspects of the determination. The licensing business is expected to grow as more OEMs and sellers take licenses.

Q: How do you see product growth across different markets for the rest of the year? A: (Unidentified_3) HPC is a growth area, with significant interest in 800-volt systems. Defense and aerospace markets are also growing due to new applications. Industrial markets are seeing growth from targeted applications like ATE test equipment. Automotive is still developing but will contribute in the future.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.