Financial Data and Key Metrics Changes - Vicor recorded product revenues and licensing income for Q3 2025 of $110.4 million, down 21.7% sequentially from Q2 2025, which was $141 million, but up 18.5% from Q3 2024, which was $93.2 million [5] - Gross profit margin for Q3 was 57.5%, a decrease of 780 basis points from the prior quarter, primarily due to a $45 million patent litigation settlement in Q2 [6] - Net income for Q3 totaled $28.3 million, with GAAP-diluted income per share at $0.63 based on a fully diluted share count of 44,930,000 shares [8] - Cash and cash equivalents increased to $362.4 million at Q3, up $23.8 million sequentially [8] Business Line Data and Key Metrics Changes - Advanced product revenue increased 8.2% sequentially to $65.5 million, while brick product revenue increased 26.6% sequentially to $44.9 million [5] - Advanced product share of total revenue decreased to 59.3% compared to 63.1% in Q2 2025, with brick product share increasing to 40.7% [5] - Book-to-bill ratio for Q3 was 0.98, and one-year backlog increased 1.5% from the prior quarter, closing at $152.8 million [9] Market Data and Key Metrics Changes - Shipments to stocking distributors increased 39% sequentially and 46% year over year [5] - Exports as a percentage of total revenue decreased to approximately 42.8% from 51.9% in the prior quarter [5] Company Strategy and Development Direction - Vicor aims to substantially expand its licensing business over the next two years, particularly in AI applications, with a licensing revenue run rate of nearly $90 million per year [10] - The company is focused on innovation and customer engagement, particularly in the AI and data center markets, where power delivery networks are critical [12][17] - The second-generation vertical power delivery (VPD) solution is expected to meet the specifications of major customers and is progressing towards production launch in Q1 2026 [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving record results in 2025, despite uncertainties in the timing of additional license deals [11] - The company highlighted the challenges faced by conventional power distribution technologies and the need for innovative solutions to meet the demands of AI processors [13][14] - Management noted that the current economic environment presents both uncertainty and opportunity for growth [10] Other Important Information - The effective tax rate for Q3 was negative 21.4%, positively impacted by the One Big Beautiful Bill Act, allowing for immediate expensing of domestic R&D investments [8] - Total operating expenses decreased 8.9% sequentially to $42.6 million, primarily due to a reduction in selling, general, and administrative expenses [6] Q&A Session Summary Question: What drove the increase in IP licensing revenue? - Management indicated that the increase was due to a compromise with an existing licensee who took an additional license for two years, including catch-up payments for previous months [20] Question: Are there other licensees contributing to the sequential jump in revenue? - Management confirmed that there were multiple factors, including a substantial hyperscaler signed in January and a settlement with a respondent in the ITC case [27] Question: How many customers are currently licensed, and what are the expectations for future licenses? - Management expects to sign up each OEM and hyperscaler in the AI and data center space over the next couple of years, leveraging their comprehensive patent portfolio [34] Question: What is the expected tax rate for Q4 and next year? - Management indicated that the fourth quarter would have a low single-digit tax rate expectation [64] Question: Are there concerns about not having a second source for production? - Management acknowledged the issue but stated they are prepared to address it through flexible licensing arrangements and potential shared ownership of fabs [56]

[Third Quarter 2025 Financial Highlights](index=1&type=section&id=1.%20Third%20Quarter%202025%20Financial%20Highlights) Vicor reported increased Q3 2025 revenues, improved gross margin, and significant net income growth, supported by strong operational cash flow [Key Financial Results](index=1&type=section&id=1.1.%20Key%20Financial%20Results) Vicor Corporation reported Q3 2025 product revenues and licensing income of **$110.4 million**, an **18.5%** YoY increase, with gross margin at **57.5%** and net income of **$28.3 million** Total Product Revenues and Licensing Income | Metric | Q3 2025 (in millions) | Q3 2024 (in millions) | YoY Change | Q2 2025 (in millions) | QoQ Change | | :----- | :------ | :------ | :--------- | :------ | :--------- | | Total Product Revenues & Licensing Income | $110.4 | $93.2 | +18.5% | $141.0 | -21.7% | Gross Margin Performance | Metric | Q3 2025 (in millions) | Q3 2024 (in millions) | YoY Change | Q2 2025 (in millions) | QoQ Change | | :----- | :------ | :------ | :--------- | :------ | :--------- | | Gross Margin (absolute) | $63.5 | $45.7 | +38.9% | $92.1 | -31.0% | | Gross Margin (% of revenue) | 57.5% | 49.1% | +8.4 pp | 65.3% | -7.8 pp | Operating Expenses | Metric | Q3 2025 (in millions) | Q3 2024 (in millions) | YoY Change | Q2 2025 (in millions) | QoQ Change | | :----- | :------ | :------ | :--------- | :------ | :--------- | | Operating Expenses | $42.6 | $40.4 | +5.4% | $46.7 | -8.8% | Net Income and Diluted EPS | Metric | Q3 2025 (in millions, except EPS) | Q3 2024 (in millions, except EPS) | YoY Change | Q2 2025 (in millions, except EPS) | QoQ Change | | :----- | :------ | :------ | :--------- | :------ | :--------- | | Net Income | $28.3 | $11.6 | +144.0% | $41.2 | -31.3% | | Diluted EPS | $0.63 | $0.26 | +142.3% | $0.91 | -30.7% | [Operational Metrics](index=1&type=section&id=1.2.%20Operational%20Metrics) Cash flow from operations significantly increased to **$38.5 million**, while capital expenditures decreased, and cash and equivalents grew **7.0%** sequentially Cash Flow from Operations | Metric | Q3 2025 (in millions) | Q3 2024 (in millions) | YoY Change | Q2 2025 (in millions) | QoQ Change | | :----- | :------ | :------ | :--------- | :------ | :--------- | | Cash Flow from Operations | $38.5 | $22.6 | +70.4% | $65.2 | -40.9% | Capital Expenditures | Metric | Q3 2025 (in millions) | Q3 2024 (in millions) | YoY Change | Q2 2025 (in millions) | QoQ Change | | :----- | :------ | :------ | :--------- | :------ | :--------- | | Capital Expenditures | $4.0 | $8.4 | -52.4% | $6.2 | -35.5% | Stock Repurchases | Metric | Q3 2025 (in millions) | Q2 2025 (in millions) | QoQ Change | | :----- | :------ | :------ | :--------- | | Stock Repurchases | $15.6 | $17.5 | -11.0% | Cash and Cash Equivalents | Metric | Sept 30, 2025 (in millions) | June 30, 2025 (in millions) | QoQ Change | | :----- | :------------ | :------------ | :--------- | | Cash and Cash Equivalents | $362.4 | $338.5 | +7.0% | Backlog | Metric | Sept 30, 2025 (in millions) | Sept 30, 2024 (in millions) | YoY Change | June 30, 2025 (in millions) | QoQ Change | | :----- | :------------ | :------------ | :--------- | :------------ | :--------- | | Backlog | $152.8 | $150.6 | +1.5% | $155.2 | -1.5% | [Management's Commentary](index=1&type=section&id=2.%20Management's%20Commentary) CEO highlighted record Q3 licensing revenue from a settlement, anticipating substantial IP licensing growth and improved margins from ChiP foundry utilization - Licensing revenue reached a **record rate in Q3** following the litigation settlement for prior infringement recorded in Q2[7](index=7&type=chunk) - Vicor expects its IP licensing practice to grow substantially as high-density power systems (NBMs and VPD) are critical for high-performance computing, requiring OEMs and hyper-scalers to obtain or renew licenses[7](index=7&type=chunk) - The company's high-density power module business leverages its first ChiP foundry, which delivers **98% final test yields** and has a capacity exceeding **$1 billion per year**, with higher margins expected from greater absorption of this capacity[7](index=7&type=chunk) [Company Overview](index=2&type=section&id=3.%20Company%20Overview) Vicor Corporation designs and markets modular power components for diverse markets, providing investor information via its website and CFO [About Vicor Corporation](index=2&type=section&id=3.1.%20About%20Vicor%20Corporation) Vicor Corporation specializes in designing, manufacturing, and marketing modular power components and systems for various high-performance markets - Vicor Corporation designs, develops, manufactures, and markets modular power components and complete power systems based on patented technologies[11](index=11&type=chunk) - The company's products are sold to various power systems markets, including enterprise and high-performance computing, industrial equipment and automation, telecommunications and network infrastructure, vehicles and transportation, and aerospace and defense electronics[11](index=11&type=chunk) [Investor Information](index=2&type=section&id=3.2.%20Investor%20Information) Investors can find product information on Vicor's website and contact the Chief Financial Officer for further inquiries - Company website for product information: **www.vicorpower.com**[8](index=8&type=chunk) - Investor contact: James F. Schmidt, Chief Financial Officer, Office: **(978) 470-2900**, Email: **invrel@vicorpower.com**[12](index=12&type=chunk) [Condensed Consolidated Financial Statements](index=3&type=section&id=4.%20Condensed%20Consolidated%20Financial%20Statements) This section presents Vicor Corporation's detailed condensed consolidated statements of operations and balance sheets for the reported periods [Condensed Consolidated Statement of Operations](index=3&type=section&id=4.1.%20Condensed%20Consolidated%20Statement%20of%20Operations) The statement details Q3 and YTD 2025 revenues, costs, and profitability, showing significant increases in net income and EPS YoY Condensed Consolidated Statement of Operations (Thousands except for per share amounts) | | | QUARTER ENDED | | | YEAR ENDED | | | --- | --- | --- | --- | --- | --- | --- | | | | (Unaudited) | | | (Unaudited) | | | | SEPT 30, | | SEPT 30, | | SEPT 30, | SEPT 30, | | | 2025 | | 2024 | | 2025 | 2024 | | Product revenue | $ 88,698 | | $79,796 | | $257,597 | $ 232,071 | | Royalty revenue | 21,725 | | 13,370 | | 42,840 | 30,821 | | Patent litigation settlement | — | | — | | 45,000 | — | | Total product revenue, royalty revenue and patent litigation settlement | 110,423 | | 93,166 | | 345,437 | 262,892 | | Cost of product revenues | 46,910 | | 47,422 | | 145,431 | 129,254 | | Gross margin | 63,513 | | 45,744 | | 200,006 | 133,638 | | Operating expenses: | | | | | | | | Selling, general and administrative | 22,747 | | 23,398 | | 75,836 | 72,715 | | Research and development | 19,859 | | 16,960 | | 58,027 | 51,938 | | Litigation-contingency expense | — | | — | | — | 19,500 | | Total operating expenses | 42,606 | | 40,358 | | 133,863 | 144,153 | | Income (loss) from operations | 20,907 | | 5,386 | | 66,143 | (10,515) | | Other income (expense), net | 2,407 | | 3,713 | | 9,198 | 9,244 | | Income (loss) before income taxes | 23,314 | | 9,099 | | 75,341 | (1,271) | | Less: (Benefit) provision for income taxes | (4,988) | | (2,455) | | 3,278 | 2,832 | | Consolidated net income (loss) | 28,302 | | 11,554 | | 72,063 | (4,103) | | Less: Net income attributable to noncontrolling interest | 10 | | 2 | | 40 | 14 | | Net income (loss) attributable to Vicor Corporation | $ 28,292 | | $11,552 | | $ 72,023 | ($ 4,117) | | Net income (loss) per share attributable to Vicor Corporation: | | | | | | | | Basic | $ 0.63 | | $ 0.26 | $ | 1.60 | ($ 0.09) | | Diluted | $ 0.63 | | $ 0.26 | $ | 1.59 | ($ 0.09) | | Shares outstanding: | | | | | | | | Basic | 44,734 | | 45,117 | | 44,986 | 44,829 | | Diluted | 44,930 | | 45,174 | | 45,167 | 44,829 | [Condensed Consolidated Balance Sheet](index=4&type=section&id=4.2.%20Condensed%20Consolidated%20Balance%20Sheet) The balance sheet presents Vicor Corporation's financial position as of September 30, 2025, showing increased total assets and stockholders' equity Condensed Consolidated Balance Sheet (Thousands) | | SEPT 30. | DEC 31. | | --- | --- | --- | | | 2025 (Unaudited) | 2024 (Unaudited) | | Assets | | | | Current assets: | | | | Cash and cash equivalents | $ 362,382 | $ 277,273 | | Accounts receivable, net | 53,252 | 52,948 | | Inventories | 92,294 | 106,032 | | Other current assets | 25,985 | 26,781 | | Total current assets | 533,913 | 463,034 | | Long-term deferred tax assets | 275 | 261 | | Long-term investment, net | 2,406 | 2,641 | | Property, plant and equipment, net | 152,526 | 152,705 | | Other assets | 21,127 | 22,477 | | Total assets | $ 710,247 | $ 641,118 | | Liabilities and Equity | | | | Current liabilities: | | | | Accounts payable | 15,391 | 8,737 | | Accrued compensation and benefits | 13,438 | 10,852 | | Accrued expenses | 5,437 | 6,589 | | Accrued litigation | 27,919 | 26,888 | | Sales allowances | 2,569 | 1,667 | | Short-term lease liabilities | 1,584 | 1,716 | | Income taxes payable | 154 | 0 | | Short-term deferred revenue and customer prepayments | 4,197 | 5,312 | | Total current liabilities | 70,689 | 61,820 | | Long-term income taxes payable | 3,430 | 3,387 | | Long-term lease liabilities | 5,775 | 5,620 | | Total liabilities | 79,894 | 70,827 | | Equity: | | | | Vicor Corporation stockholders' equity: | | | | Capital stock | 429,542 | 408,187 | | Retained earnings | 374,826 | 302,803 | | Accumulated other comprehensive loss | (1,561) | (1,495) | | Treasury stock | (172,728) | (139,424) | | Total Vicor Corporation stockholders' equity | 630,079 | 570,071 | | Noncontrolling interest | 274 | 220 | | Total equity | 630,353 | 570,291 | | Total liabilities and equity | $ 710,247 | $ 641,118 | [Additional Disclosures](index=2&type=section&id=5.%20Additional%20Disclosures) This section provides details on the upcoming earnings conference call and important forward-looking statement disclaimers [Earnings Conference Call](index=2&type=section&id=5.1.%20Earnings%20Conference%20Call) Vicor will host an investor conference call on October 21, 2025, to discuss Q3 results, requiring registration for participants - Date and Time: **Tuesday, October 21, 2025, at 5:00 p.m. Eastern Time**[9](index=9&type=chunk) - Registration is required for participants intending to ask questions, providing dial-in info and a unique PIN[9](index=9&type=chunk) - A listen-only webcast will be available on the Investor Relations page of Vicor's website, with a replay also accessible after the live call[9](index=9&type=chunk) [Forward-Looking Statements](index=2&type=section&id=5.2.%20Forward-Looking%20Statements) This press release contains forward-looking statements subject to risks and uncertainties, with actual results potentially differing materially from projections - The press release contains forward-looking statements identified by words like 'expects,' 'anticipates,' and 'plans,' covering aspects such as revenue, profitability, and manufacturing capacity[10](index=10&type=chunk) - Actual results may differ materially due to various economic, business, operational, and financial factors, as detailed in Vicor's Form 10-K and other SEC filings[10](index=10&type=chunk) - Vicor does not undertake any obligation to update any forward-looking statements as a result of future events or developments[10](index=10&type=chunk)

Core Insights - Vicor Corporation reported financial results for Q3 2025, showing an 18.5% year-over-year increase in product revenues and licensing income, totaling $110.4 million, but a 21.7% sequential decrease from Q2 2025 due to a prior patent litigation settlement [2][4]. Financial Performance - Gross margin for Q3 2025 was $63.5 million, up from $45.7 million year-over-year, but down from $92.1 million sequentially. The gross margin percentage increased to 57.5% compared to 49.1% a year ago, but decreased from 65.3% in Q2 2025 [3]. - Operating expenses rose to $42.6 million in Q3 2025 from $40.4 million a year ago, but decreased from $46.7 million in Q2 2025 [3]. - Net income for Q3 2025 was $28.3 million, or $0.63 per diluted share, compared to $11.6 million or $0.26 per diluted share a year ago, and down from $41.2 million or $0.91 per diluted share in Q2 2025 [4]. - Cash flow from operations was $38.5 million in Q3 2025, up from $22.6 million year-over-year, but down from $65.2 million in Q2 2025 [5]. Backlog and Market Position - The backlog for Q3 2025 was $152.8 million, a 1.5% increase from $150.6 million year-over-year, but a 1.5% sequential decrease from $155.2 million at the end of Q2 2025 [6]. - CEO Dr. Patrizio Vinciarelli highlighted that licensing revenue reached a record rate in Q3 2025 following a litigation settlement, indicating strong growth potential in Vicor's IP licensing practice [7]. Capital and Investments - Capital expenditures for Q3 2025 totaled $4.0 million, down from $8.4 million year-over-year and $6.2 million in Q2 2025 [5]. - Cash and cash equivalents increased by 7.0% sequentially to approximately $362.4 million as of September 30, 2025, compared to approximately $338.5 million as of June 30, 2025 [5]. Company Overview - Vicor Corporation designs, develops, manufactures, and markets modular power components and complete power systems, serving various markets including high-performance computing, industrial equipment, telecommunications, and aerospace [11].

Group 1 - The article does not provide any specific content or key points related to a company or industry [1]

Core Insights - Vicor Corporation's intellectual property (IP) is crucial for performance in high-growth markets such as AI, automotive, and industrial sectors, with licensing being essential for supply chain resilience and scalability [1][2] Licensing and Revenue Impact - The International Trade Commission issued a Limited Exclusion Order (LEO) in 2025, banning the importation of infringing bus converters and related computing systems, which is expected to contribute nearly $300 million to Vicor's revenues through 2026 [2] - Vicor's licensing revenues in Q3 surpassed its quarterly investment in R&D, indicating a strong focus on innovation compared to competitors who rely on copying [4] Growth Strategy - Vicor is enhancing its IP licensing practice, led by General Counsel Andrew D'Amico, supported by an in-house team and external legal partners [3] - The company anticipates that its IP licensing practice will grow to represent a larger portion of its module business, driven by the demand from OEMs and hyperscalers for licenses and renewals [5] Product Development and Market Position - Vicor's high-density power systems, including bus converters and Vertical Power Delivery (VPD), are critical for high-performance computing, positioning the company favorably in the market [5] - The company designs and manufactures modular power components and complete power systems, serving various sectors including enterprise computing, industrial automation, telecommunications, and aerospace [6]

Core Insights - Vicor Corporation (NASDAQ: VICR) exemplifies the challenge of translating technical superiority into commercial success, having been ahead of its time in high-efficiency modular power conversion [1] Company Overview - Vicor was recognized for its innovative Factorized Power architecture, which has been a significant advancement in power conversion technology [1] Investment Perspective - The article highlights the importance of disciplined, fundamentals-driven investing, emphasizing capital preservation and long-term growth strategies [1]

Core Points - Vicor Corporation will hold its third quarter 2025 earnings conference call on October 21, 2025, at 5:00 p.m. Eastern Time [1] - The financial results for the third quarter will be released at the close of the NASDAQ Market Session on the same day [2] - Investors and analysts wishing to ask questions during the call must register with Notified to receive dial-in information [3] - A listen-only mode will be available via a webcast link posted on Vicor's Investor Relations page [4] - A replay of the conference call will be accessible on the Investor Relations page for those unable to attend live [5] Company Overview - Vicor Corporation specializes in designing, developing, manufacturing, and marketing modular power components and complete power systems [6] - The company is headquartered in Andover, Massachusetts, and serves various markets including enterprise computing, industrial equipment, telecommunications, and aerospace [6]

Core Insights - The Brown Capital Management Small Company Fund experienced an 8.59% return in Q2 2025, underperforming the Russell 2000® Growth index which returned 11.97% [1] - The underperformance was noted to occur in the last few weeks of the quarter [1] Fund Performance - Small-cap US stocks rebounded in Q2 2025 after a challenging first quarter [1] - The fund's top five holdings were highlighted as key picks for 2025 [1] Company Focus: Vicor Corporation - Vicor Corporation (NASDAQ:VICR) was mentioned as a notable stock, developing modular power components and systems [2] - Vicor's one-month return was 5.49%, but it experienced a significant decline of 38.15% over the past 52 weeks [2] - As of September 12, 2025, Vicor's stock closed at $50.77 per share, with a market capitalization of $2.281 billion [2] Fund Adjustments - In Q2 2025, there were no new additions to the Small Company Fund, but three stocks were removed: Helios Technologies (HLIO), Enfusion (ENFN), and Vicor Corporation (NASDAQ:VICR) [3]

Part I — Financial Information [Financial Statements (Unaudited)](index=4&type=section&id=Item%201%20-%20Financial%20Statements%20(Unaudited)) Unaudited statements for the period ended June 30, 2025, show significant financial improvement driven by a patent settlement and revenue growth [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $693.5 million, primarily from an increase in cash, while total liabilities and equity also rose compared to year-end 2024 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$693,509** | **$641,118** | | Cash and cash equivalents | $338,541 | $277,273 | | Inventories | $95,493 | $106,032 | | **Total Liabilities** | **$84,643** | **$70,827** | | Total current liabilities | $73,840 | $61,820 | | **Total Equity** | **$608,866** | **$570,291** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a net income of $41.2 million for Q2 2025, a significant turnaround driven by a $45 million patent settlement Q2 and H1 2025 vs 2024 Performance (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total net revenues and patent litigation settlement | $141,046 | $85,854 | $235,014 | $169,726 | | Patent litigation settlement | $45,000 | $— | $45,000 | $— | | Gross Margin | $92,128 | $42,771 | $136,493 | $87,894 | | Income (loss) from operations | $45,385 | $214 | $45,236 | $(15,901) | | Net income (loss) attributable to Vicor | $41,192 | $(1,196) | $43,731 | $(15,669) | | Diluted EPS | $0.91 | $(0.03) | $0.97 | $(0.35) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations substantially increased to $85.4 million for the first six months of 2025, boosted by higher net income Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $85,353 | $18,148 | | Net cash used for investing activities | $(10,754) | $(13,411) | | Net cash (used for) provided by financing activities | $(13,469) | $5,138 | | **Net increase in cash and cash equivalents** | **$61,268** | **$9,665** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail a $45 million patent settlement, revenue growth in Asia Pacific, and an accrued $26 million liability for ongoing litigation - The company received a **$45 million payment** in May 2025 from the settlement of various lawsuits, arbitrations, and appeals related to certain intellectual property claims[66](index=66&type=chunk) Revenue by Product Line (Six Months Ended June 30, in thousands) | Product Line | 2025 | 2024 | | :--- | :--- | :--- | | Advanced Products | $120,423 | $89,648 | | Brick Products | $69,591 | $80,078 | | **Total** | **$190,014** | **$169,726** | - The company is appealing a judgment in the SynQor patent infringement lawsuit totaling approximately **$26 million**, which has been fully accrued as a litigation liability[59](index=59&type=chunk)[63](index=63&type=chunk) - The company operates as a **single operating and reportable segment**, with performance assessed on a consolidated basis by the CEO[36](index=36&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202%20%E2%80%94%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong Q2 2025 results to a $45 million patent litigation settlement and an 11.9% increase in net revenues [Overview](index=26&type=section&id=Overview) Vicor designs modular power components, focusing investment on its high-growth Advanced Products line for markets like AI and data centers - The company's strategy emphasizes investment in its **Advanced Products line** for high-growth markets, while maintaining its profitable Brick Products business[78](index=78&type=chunk) - Vicor has established a leadership position in the emerging market for powering **high-performance processors used for AI acceleration**[79](index=79&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Q2 2025 net revenues rose 11.9% year-over-year, with gross margin surging to 65.3% due to the patent settlement Q2 Revenue by Product Line (in thousands) | Product Line | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Advanced Products | $60,566 | $46,368 | $14,198 | 30.6% | | Brick Products | $35,480 | $39,486 | $(4,006) | (10.1)% | | **Total** | **$96,046** | **$85,854** | **$10,192** | **11.9%** | - Gross margin for Q2 2025 increased to **65.3%** of total net revenues and settlement, up from 49.8% in Q2 2024, primarily due to the **$45 million patent litigation settlement**[87](index=87&type=chunk) - SG&A expenses in Q2 2025 increased by **$4.6 million (19.9%)** YoY, mainly due to **$5.1 million in legal fees** associated with the patent litigation settlement[88](index=88&type=chunk) - For H1 2025, the company reported **net income of $43.7 million** ($0.97 per diluted share) compared to a **net loss of $(15.7) million** ($(0.35) per diluted share) for H1 2024[111](index=111&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong financial position with $338.5 million in cash and equivalents, sufficient for operational and capital needs - As of June 30, 2025, the company had **$338.5 million in cash and cash equivalents** and a current ratio of 7.0:1[112](index=112&type=chunk) - In H1 2025, primary cash uses included **$17.6 million for Common Stock repurchases** and **$10.8 million for property and equipment purchases**[114](index=114&type=chunk) - The company has approximately **$82.0 million remaining available for stock repurchases** under its New Repurchase Authorization as of June 30, 2025[115](index=115&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203%20%E2%80%94%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risks from interest rate changes and foreign currency fluctuations are identified but not considered significant at this time - The company's long-term investment portfolio consists of a single failed auction rate security with a par value of $3.0 million and an estimated fair value of approximately **$2.6 million** as of June 30, 2025[122](index=122&type=chunk) - Exposure to foreign currency exchange rate risk is primarily related to the operations of its **Japanese subsidiary (VJCL)**, whose functional currency is the Japanese Yen[123](index=123&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204%20%E2%80%94%20Controls%20and%20Procedures) Disclosure controls and procedures were deemed effective, and a new ERP system implementation modified internal controls over financial reporting - Management concluded that **disclosure controls and procedures were effective** as of June 30, 2025[126](index=126&type=chunk) - A new enterprise resource planning (ERP) system was implemented in the first half of 2025, leading to **changes in internal controls over financial reporting**[128](index=128&type=chunk) Part II — Other Information [Legal Proceedings](index=43&type=section&id=Item%201%20%E2%80%94%20Legal%20Proceedings) This section directs readers to Note 11 for details on legal matters, including ongoing litigation and a recent $45 million settlement - For details on legal proceedings, the report refers to **Note 11** of the Condensed Consolidated Financial Statements[130](index=130&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A%20%E2%80%94%20Risk%20Factors) The company reports no material changes to the risk factors previously disclosed in its 2024 Annual Report on Form 10-K - There have been **no material changes in the risk factors** from those described in the company's 2024 Annual Report on Form 10-K[130](index=130&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202%20%E2%80%94%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q2 2025, the company repurchased 412,219 shares of its common stock for approximately $17.7 million Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 1 - 30, 2025 | 72,400 | $42.86 | | May 1 - 31, 2025 | 258,536 | $42.24 | | June 1 - 30, 2025 | 81,283 | $44.31 | | **Total** | **412,219** | **$43.00** | [Other Information](index=43&type=section&id=Item%205%20%E2%80%94%20Other%20Information) No director or Section 16 officer adopted or terminated a Rule 10b5-1 trading arrangement during the second quarter of 2025 - During Q2 2025, **no director or Section 16 officer adopted or terminated a Rule 10b5-1 trading arrangement**[133](index=133&type=chunk) [Exhibits](index=45&type=section&id=Item%206%20%E2%80%94%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including required CEO and CFO certifications - The filing includes **certifications from the CEO and CFO** pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[134](index=134&type=chunk)

Group 1 - Vicor Corporation's power-chip technology is positioned to be essential for future data centers, electric vehicles (EVs), and aerospace equipment [1] - The latest quarterly results were positively impacted by a one-time legal gain of $45 million, but the company is facing a declining order book [1] - The focus on artificial intelligence (AI) and the company's strategy is to produce objective, data-driven research primarily on small- to mid-cap companies, while occasionally analyzing large-cap companies for a broader market perspective [1]