Financial Data and Key Metrics Changes - Vicor recorded product revenues, licensing income, and a patent litigation settlement for Q2 of $141 million, up 50.1% sequentially from $94 million in Q1 2025 and up 64.3% from $85.9 million in Q2 2024 [8] - The gross profit margin for Q2 was 65.3%, an increase of 1810 basis points from the prior quarter, primarily due to the patent litigation settlement [8] - Net income for Q2 totaled $41.2 million, with GAAP diluted income per share at 91 cents based on a fully diluted share count of 45,077,000 shares [9] Business Line Data and Key Metrics Changes - Advanced products revenue increased 1.2% sequentially to $60.6 million, while Brick Products revenue increased 4% sequentially to $35.5 million [8] - Advanced Products' share of total revenue decreased to 63.1% from 63.7% in Q1 2025, with Brick Products' share increasing to 36.9% [8] Market Data and Key Metrics Changes - Shipments to stocking distributors increased 18.9% sequentially but decreased 14.3% year over year [8] - Exports as a percentage of total revenue decreased to approximately 51.9% from 60.8% in the prior quarter [8] Company Strategy and Development Direction - The company is focused on its top 100 customers and enabling high-performance modular power delivery networks, showcasing next-generation products with significant advances in power and current density [14][15] - The Gen five vertical power delivery solution is expected to engage with hyperscalers and AI processor companies, with a market SAM for these solutions expected to exceed $5 billion by 2027 [16][17] - The automotive market is seen as a high growth opportunity, with ongoing audits and collaborations with tier one OEMs [18] Management's Comments on Operating Environment and Future Outlook - Management indicated that 2025 is a year of uncertainty and opportunity, with a wide range of possible outcomes for quarterly and annual results [11] - The company expects 2025 to be a record year for revenue, despite uncertainties around tariffs and licensing [58] Other Important Information - The company undertook share repurchases totaling approximately $17.5 million during the quarter, with around 200,000 shares repurchased [83] - The book-to-bill ratio came in below one due to order cancellations from customers in China and hesitancy around tariffs [13] Q&A Session Summary Question: Inquiry about the patent litigation settlement and its implications - Management confirmed that the approximate return from the ITC case includes the patent litigation settlement and extends through 2026 [21][23] Question: Book-to-bill ratio and future bookings trend - Management believes the hesitancy around tariffs is now behind them, and customers are adapting to the new expectations [26] Question: Cancellations in end markets - Cancellations were primarily from the industrial market in China, affecting both older and advanced products [30] Question: Future of royalty streams - Management is actively pursuing infringers and expects to see continued growth in licensing streams, although challenges remain [31][63] Question: Dynamics of the new license settlement - Management could not disclose specifics but indicated that there are no ongoing royalties from the recent settlement [36] Question: Automotive market engagement - The company is in the audit phase with several customers, indicating a long-term strategy to establish itself as a supplier in the automotive market [68] Question: Future product delivery timelines - Management confirmed that they are on target with the delivery timelines for the Gen five vertical power delivery solution [46] Question: Operating expenses outlook - Management indicated that operating expenses may fluctuate but are currently balanced with revenue [75]

Financial Data and Key Metrics Changes - Vicor recorded product revenues, licensing income, and a patent litigation settlement for Q2 of $141 million, up 50.1% sequentially from $94 million in Q1 2025 and up 64.3% from $85.9 million in Q2 2024 [7] - The gross profit margin for Q2 was 65.3%, an increase of 1810 basis points from the prior quarter, primarily due to the patent litigation settlement [7] - Net income for Q2 totaled $41.2 million, with GAAP diluted income per share at 91 cents based on a fully diluted share count of 45,077,000 shares [9] Business Line Data and Key Metrics Changes - Advanced products revenue increased 1.2% sequentially to $60.6 million, while Brick Products revenue increased 4% sequentially to $35.5 million [7] - Advanced Products' share of total revenue decreased to 63.1% from 63.7% in Q1 2025, with Brick Products' share increasing to 36.9% [7] Market Data and Key Metrics Changes - Shipments to stocking distributors increased 18.9% sequentially but decreased 14.3% year over year [7] - Exports as a percentage of total revenue decreased sequentially to approximately 51.9% from 60.8% in the prior quarter [7] Company Strategy and Development Direction - The company is focused on its top 100 customers and enabling high-performance modular power delivery networks, with next-generation products being sampled to lead customers across four target markets [14] - The strategy includes pursuing additional actions against companies infringing on its intellectual property while continuing to innovate and expand customer engagements [16][19] Management's Comments on Operating Environment and Future Outlook - Management indicated that 2025 is a year of uncertainty and opportunity, with a wide range of possible outcomes for quarterly and annual results [11] - The company expects 2025 to be a record year for revenue, despite uncertainties related to tariffs and market conditions [56][58] Other Important Information - The company reported a cash and cash equivalents total of $338.5 million in Q2, an increase of $42.4 million sequentially [10] - The one-year backlog decreased by 9.6% from the prior quarter, closing at $155.2 million [11] Q&A Session Summary Question: Clarification on the patent litigation settlement and its financial implications - The settlement amount is part of the expected return through 2026, which includes royalties from OEM and hyperscaler licenses [22][24] Question: Book to bill ratio and future bookings trends - Management believes the hesitancy around tariffs is now behind them, and they expect improvements in bookings moving forward [27] Question: Details on order cancellations and affected markets - Cancellations were primarily from the industrial market in China, affecting both older and advanced products [31] Question: Future royalty streams and licensing growth - The company is actively pursuing infringers and expects to see growth in royalty streams as they enforce existing licenses [32] Question: Dynamics of the new licensing settlement - The settlement does not include ongoing royalties, and the company is focused on enforcing its intellectual property rights [39] Question: Progress on Gen five vertical power delivery solutions - The company is on target with the delivery timeline for Gen five solutions to lead customers, with significant progress reported [46][48] Question: Expectations for operating expenses going forward - Operating expenses are expected to remain balanced, with potential lumpiness due to ongoing legal actions [77]

[Executive Summary & Financial Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Financial%20Highlights) Vicor's Q2 2025 financial performance demonstrated robust growth, complemented by the CEO's insights on strategic initiatives and legal achievements [Second Quarter 2025 Financial Performance Overview](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Performance%20Overview) Vicor Corporation reported robust financial results for the second quarter ended June 30, 2025, demonstrating significant year-over-year and sequential growth across key financial metrics, including total revenues, gross margin, net income, and cash flow from operations. Backlog experienced a modest year-over-year increase but a sequential decline Key Financial Performance Highlights (Q2 2025) | Metric | Q2 2025 | Q2 2024 | Q1 2025 | | :-------------------------------- | :---------- | :---------- | :---------- | | Total Revenues | $141.0 million | $85.9 million | $94.0 million | | Gross Margin | $92.1 million | $42.8 million | $44.4 million | | Gross Margin (% of revenue) | 65.3% | 49.8% | 47.2% | | Operating Expenses | $46.7 million | $42.6 million | $44.5 million | | Net Income (Loss) | $41.2 million | ($1.2) million | $2.5 million | | Diluted EPS | $0.91 | ($0.03) | $0.06 | | Cash Flow from Operations | $65.2 million | $15.6 million | $20.1 million | | Capital Expenditures | $6.2 million | $6.1 million | $4.6 million | | Cash & Cash Equivalents (period end) | $338.5 million | N/A | $296.1 million | | Backlog (period end) | $155.2 million | $153.8 million | $171.7 million | - Total revenues increased by **64.3% year-over-year** and **50.1% sequentially**[2](index=2&type=chunk) - Gross margin as a percentage of revenue significantly improved to **65.3% in Q2 2025**, up from 49.8% a year ago and 47.2% in the prior quarter[3](index=3&type=chunk) - Net income shifted from a loss of **($1.2) million in Q2 2024** to a profit of **$41.2 million in Q2 2025**, and increased substantially from $2.5 million in Q1 2025[4](index=4&type=chunk) - Cash and cash equivalents increased **14.3% sequentially** to approximately **$338.5 million**[5](index=5&type=chunk) - Backlog increased **0.9% year-over-year** but decreased **9.6% sequentially**[6](index=6&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Dr. Patrizio Vinciarelli highlighted the successful execution of the company's first ITC action against infringing products and the ongoing efforts to curb unauthorized imports. He also emphasized the strategic focus on developing advanced ChiPs and 2nd generation VPD for AI applications, anticipating increased product revenues and manufacturing utilization - Successfully brought to fruition the first ITC action, resulting in cease-and-desist and exclusion orders against infringing power and computing systems[7](index=7&type=chunk) - Pursuing additional actions to curtail importation of infringing power and computing systems by unlicensed OEMs and Hyper-scalers[7](index=7&type=chunk) - Developing high-performance ChiPs and 2nd generation VPD for AI applications, expected to increase product revenues and utilization of the first ChiP fab[7](index=7&type=chunk) [Corporate Information](index=2&type=section&id=Corporate%20Information) This section provides essential corporate details, including earnings call information, forward-looking statement disclaimers, a company overview, and investor contact [Earnings Conference Call Details](index=2&type=section&id=Earnings%20Conference%20Call%20Details) Vicor will host its investor conference call on July 22, 2025, at 5:00 p.m. Eastern Time. Participants intending to ask questions must register with Notified, while a listen-only webcast and replay will be available on the company's Investor Relations website - Conference call scheduled for **Tuesday, July 22, 2025, at 5:00 p.m. Eastern Time**[8](index=8&type=chunk) - Investors and analysts asking questions are encouraged to register with Notified for dial-in information and a unique PIN[8](index=8&type=chunk) - Listen-only mode available via webcast on the Investor Relations page of Vicor's website, with a replay also accessible[8](index=8&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements, identifiable by specific terminology, covering various aspects of the company's future performance and operations. These statements are based on management's current expectations and are subject to risks and uncertainties detailed in Vicor's SEC filings, particularly the Form 10-K for December 31, 2024. Vicor explicitly states it does not undertake any obligation to update these statements - Forward-looking statements are identified by terms such as "believes," "expects," "anticipates," "intends," "estimates," "plans," "assumes," "may," "will," "would," "should," "continue," "prospective," "project," and similar expressions[9](index=9&type=chunk) - Topics covered include bookings, shipments, revenue, profitability, targeted markets, manufacturing capacity and utilization, future products, and capital resources[9](index=9&type=chunk) - Actual results may differ materially due to various factors, including economic, business, operational, and financial considerations outlined in Vicor's Annual Report on Form 10-K for the year ended December 31, 2024, and other SEC filings[9](index=9&type=chunk) - Vicor does not undertake any obligation to update any forward-looking statements as a result of future events or developments[9](index=9&type=chunk) [Company Description](index=2&type=section&id=Company%20Description) Vicor Corporation, headquartered in Andover, Massachusetts, specializes in the design, development, manufacture, and marketing of modular power components and complete power systems. The company leverages a portfolio of patented technologies to serve diverse markets, including high-performance computing, industrial, telecommunications, transportation, and aerospace/defense - Vicor Corporation designs, develops, manufactures, and markets modular power components and complete power systems[10](index=10&type=chunk) - Products are based upon a portfolio of patented technologies[10](index=10&type=chunk) - Key markets include enterprise and high-performance computing, industrial equipment and automation, telecommunications and network infrastructure, vehicles and transportation, and aerospace and defense electronics[10](index=10&type=chunk) [Investor Contact](index=2&type=section&id=Investor%20Contact) For additional information, inquiries can be directed to James F. Schmidt, Chief Financial Officer, via phone or email - Contact: **James F. Schmidt, Chief Financial Officer**[11](index=11&type=chunk) - Office Phone: **(978) 470-2900**[11](index=11&type=chunk) - Email: **invrel@vicorpower.com**[11](index=11&type=chunk) [Condensed Consolidated Financial Statements](index=3&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents Vicor's condensed consolidated statement of operations and balance sheet, detailing financial performance and position [Condensed Consolidated Statement of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations) The Condensed Consolidated Statement of Operations for Q2 2025 and the year-to-date period shows substantial increases in total revenues, gross margin, and a significant turnaround from net losses to net income, largely influenced by a patent litigation settlement. Operating expenses also saw changes, with a notable decrease in litigation-contingency expense year-to-date Condensed Consolidated Statement of Operations (Quarter Ended June 30, 2025 vs. 2024, in Thousands) | Metric | Q2 2025 (Thousands) | Q2 2024 (Thousands) | | :--------------------------------------- | :------------------ | :------------------ | | Product revenue | $ 85,693 | $ 76,583 | | Royalty revenue | 10,353 | 9,271 | | Patent litigation settlement | 45,000 | — | | **Total product revenue, royalty revenue and patent litigation settlement** | **141,046** | **85,854** | | Cost of product revenues | 48,918 | 43,083 | | **Gross margin** | **92,128** | **42,771** | | Selling, general and administrative | 27,952 | 23,318 | | Research and development | 18,791 | 16,939 | | Litigation-contingency expense | — | 2,300 | | **Total operating expenses** | **46,743** | **42,557** | | **Income (loss) from operations** | **45,385** | **214** | | Other income (expense), net | 3,657 | 2,807 | | Income (loss) before income taxes | 49,042 | 3,021 | | Less: Provision for income taxes | 7,842 | 4,216 | | **Consolidated net income (loss)** | **41,200** | **(1,195)** | | Less: Net income attributable to noncontrolling interest | 8 | 1 | | **Net income (loss) attributable to Vicor Corporation** | **$ 41,192** | **($ 1,196)** | | **Net income (loss) per share attributable to Vicor Corporation: Diluted** | **$ 0.91** | **($ 0.03)** | | Shares outstanding: Diluted | 45,077 | 44,855 | Condensed Consolidated Statement of Operations (Year Ended June 30, 2025 vs. 2024, in Thousands) | Metric | YTD Q2 2025 (Thousands) | YTD Q2 2024 (Thousands) | | :--------------------------------------- | :--------------------- | :--------------------- | | Product revenue | $168,899 | $152,275 | | Royalty revenue | 21,115 | 17,451 | | Patent litigation settlement | 45,000 | — | | **Total product revenue, royalty revenue and patent litigation settlement** | **235,014** | **169,726** | | Cost of product revenues | 98,521 | 81,832 | | **Gross margin** | **136,493** | **87,894** | | Selling, general and administrative | 53,089 | 49,317 | | Research and development | 38,168 | 34,978 | | Litigation-contingency expense | — | 19,500 | | **Total operating expenses** | **91,257** | **103,795** | | **Income (loss) from operations** | **45,236** | **(15,901)** | | Other income (expense), net | 6,791 | 5,531 | | Income (loss) before income taxes | 52,027 | (10,370) | | Less: Provision for income taxes | 8,266 | 5,287 | | **Consolidated net income (loss)** | **43,761** | **(15,657)** | | Less: Net income attributable to noncontrolling interest | 30 | 12 | | **Net income (loss) attributable to Vicor Corporation** | **$ 43,731** | **($ 15,669)** | | **Net income (loss) per share attributable to Vicor Corporation: Diluted** | **$ 0.97** | **($ 0.35)** | | Shares outstanding: Diluted | 45,286 | 44,686 | [Condensed Consolidated Balance Sheet](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) As of June 30, 2025, Vicor's Condensed Consolidated Balance Sheet reflects an increase in total assets, primarily driven by a significant rise in cash and cash equivalents. Total liabilities also increased, while total equity grew, supported by higher retained earnings and capital stock Condensed Consolidated Balance Sheet (Thousands) | Metric | Jun 30, 2025 | Dec 31, 2024 | | :-------------------------------- | :----------- | :----------- | | **Assets** | | | | Cash and cash equivalents | $ 338,541 | $ 277,273 | | Accounts receivable, net | 55,085 | 52,948 | | Inventories | 95,493 | 106,032 | | Other current assets | 25,662 | 26,781 | | **Total current assets** | **514,781** | **463,034** | | Long-term deferred tax assets | 281 | 261 | | Long-term investment, net | 2,584 | 2,641 | | Property, plant and equipment, net | 154,285 | 152,705 | | Other assets | 21,578 | 22,477 | | **Total assets** | **$ 693,509** | **$ 641,118** | | **Liabilities and Equity** | | | | Accounts payable | $ 16,805 | $ 8,737 | | Accrued compensation and benefits | 13,351 | 10,852 | | Accrued expenses | 3,351 | 6,589 | | Accrued litigation | 27,563 | 26,888 | | Sales allowances | 2,639 | 1,667 | | Short-term lease liabilities | 1,699 | 1,716 | | Income taxes payable | 2,926 | — | | Short-term deferred revenue and customer prepayments | 5,506 | 5,312 | | **Total current liabilities** | **73,840** | **61,820** | | Long-term income taxes payable | 4,809 | 3,387 | | Long-term lease liabilities | 5,994 | 5,620 | | **Total liabilities** | **84,643** | **70,827** | | **Equity:** | | | | Capital stock | 420,385 | 408,187 | | Retained earnings | 346,534 | 302,803 | | Accumulated other comprehensive loss | (1,291) | (1,495) | | Treasury stock | (157,033) | (139,424) | | **Total Vicor Corporation stockholders' equity** | **608,595** | **570,071** | | Noncontrolling interest | 271 | 220 | | **Total equity** | **608,866** | **570,291** | | **Total liabilities and equity** | **$ 693,509** | **$ 641,118** |

Core Viewpoint - Vicor Corporation reported strong financial results for the second quarter of 2025, showcasing significant growth in revenues and net income compared to the previous year and the first quarter of 2025 [2][4]. Financial Performance - Total revenues for the second quarter reached $141.0 million, marking a 64.3% increase from $85.9 million in the same period last year and a 50.1% sequential increase from $94.0 million in the first quarter of 2025 [2]. - Gross margin increased to $92.1 million, up from $42.8 million year-over-year and from $44.4 million sequentially, with gross margin percentage rising to 65.3% from 49.8% year-over-year and 47.2% sequentially [3]. - Operating expenses rose to $46.7 million, compared to $42.6 million a year ago and $44.5 million in the first quarter of 2025 [3]. Profitability - The net income for the second quarter was $41.2 million, or $0.91 per diluted share, a significant turnaround from a net loss of $1.2 million or $0.03 per diluted share in the same period last year and an increase from $2.5 million or $0.06 per diluted share in the first quarter of 2025 [4]. Cash Flow and Capital Expenditures - Cash flow from operations totaled $65.2 million, compared to $15.6 million in the same period last year and $20.1 million in the first quarter of 2025 [5]. - Capital expenditures for the second quarter were $6.2 million, slightly up from $6.1 million year-over-year and from $4.6 million in the first quarter of 2025 [5]. Backlog and Future Outlook - The backlog for the second quarter was $155.2 million, a 0.9% increase from $153.8 million year-over-year but a 9.6% sequential decrease from $171.7 million at the end of the first quarter of 2025 [6]. - The CEO highlighted ongoing efforts to enhance product offerings, particularly in AI applications, which are expected to drive future revenue growth [7]. Balance Sheet Highlights - As of June 30, 2025, cash and cash equivalents increased by 14.3% sequentially to approximately $338.5 million from $296.1 million as of March 31, 2025 [5]. - Total assets as of June 30, 2025, were $693.5 million, up from $641.1 million at the end of 2024 [14][15]. Equity Position - Vicor Corporation's stockholders' equity totaled $608.6 million as of June 30, 2025, compared to $570.3 million at the end of 2024 [15].

Company Announcement - Vicor Corporation will hold its second quarter 2025 earnings conference call and webcast on July 22, 2025, at 5:00 p.m. Eastern Time [1] - The financial and operational results for the three and six months ended June 30, 2025, will be discussed during the call [1] Financial Results Release - Results for the second quarter will be released over GlobeNewswire at the close of the NASDAQ Market Session on July 22, 2025 [2] - A press release and summary of the company's financial statements will be available shortly thereafter on the Investor Relations page of Vicor's website [2] Conference Call Participation - Investors and analysts wishing to ask questions during the conference call must register with Notified, the service provider hosting the call [3] - Registration can be completed at any time prior to 5:00 p.m. on July 22, 2025 [3] Webcast Information - The conference call will be available in listen-only mode via a webcast link posted on the Investor Relations page of Vicor's website [4] - Participants are advised to access the website at least 15 minutes prior to the call to register and download any necessary software [4] Replay Availability - A webcast replay of the conference call will be available on the Investor Relations page of Vicor's website for those unable to participate live [5] Company Overview - Vicor Corporation designs, develops, manufactures, and markets modular power components and complete power systems based on patented technologies [6] - The company is headquartered in Andover, Massachusetts, and serves various markets including enterprise computing, industrial equipment, telecommunications, and aerospace [6]

Investment Strategy - A well-diversified portfolio should be constructed with a core foundation of a high-quality low-cost S&P 500 fund [1] - For those who can tolerate short-term risks, an over-weight position in the technology sector is recommended, as it is believed to be in the early stages of a long-term secular bull market [1] - Large oil and gas companies that provide strong dividend income and growth are suggested for dividend income, reflecting the author's background in the oil and gas industry [1] Portfolio Management Approach - A top-down capital allocation approach is recommended, tailored to each investor's personal situation, including factors such as age, retirement status, risk tolerance, income, net worth, and goals [1] - Suggested investment categories include S&P 500, technology, dividend income, sector ETFs, growth, speculative growth, gold, and cash [1]

Core Viewpoint - Vicor's shares plummeted over 23% following a disappointing quarterly earnings report, despite a generally positive day for the stock market overall [1] Financial Performance - Vicor reported first-quarter revenue of nearly $94 million, which is a 12% increase compared to the same period in 2024, but fell short of the average analyst estimate of over $97 million [2] - The company's GAAP net income was $2.5 million ($0.06 per share), a significant improvement from a $14.5 million loss in the same quarter last year, yet it missed the consensus estimate of $0.29 per share profit [3] Operational Challenges - CEO Patrizio Vinciarelli noted that revenue and gross margins declined sequentially, attributed to reduced income from a licensee transitioning to new unlicensed products [4] - The ongoing trade war raises concerns for device makers like Vicor, who may face increased component costs, adding to investor anxiety [4]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________________________ Commission File Number 0-18277 VICOR CORPORATION (Exact name of registrant as specified in its charter) Delaware 04-2742817 (Stat ...

Financial Data and Key Metrics Changes - Vicor recorded total revenue of $90.4 million for Q1 2025, down 2.3% sequentially from Q4 2024's $96.2 million, but up 12% from Q1 2024's $83.9 million [6] - Advanced products revenue increased 2.7% sequentially to $59.9 million, while product revenue decreased 10% sequentially to $34.1 million [6] - Gross profit margin for Q1 was 47.2%, a decrease of 520 basis points from the prior quarter [7] - Net income for Q1 totaled $2.5 million, with GAAP diluted earnings per share at $0.06 based on a fully diluted share count of 45.5 million shares [11] Business Line Data and Key Metrics Changes - Shipments to stocking distributors decreased 16.9% sequentially and 33.8% year over year [7] - Advanced product share of total revenue increased to 63.7% compared to 60.6% in Q4 2024, while Brick product share decreased to 36.3% [7] - Total operating expenses increased 8.2% sequentially to $44.5 million, primarily due to increased research and development expenses [10] Market Data and Key Metrics Changes - Exports as a percentage of total revenue increased to approximately 60.8% from 56.9% in the prior quarter [7] - The one-year backlog increased 10.4% from the prior quarter, closing at $171.7 million [12] Company Strategy and Development Direction - Vicor is focusing on developing complete front-end to point-of-load solutions centered on a 48-volt hub, which is proving effective as evidenced by strong engagements across top customers [20] - The company is navigating a changing tariff landscape and has informed customers of a 10% tariff surcharge for shipments after July [18] - Vicor is positioned to offer high-efficiency, high-density power delivery networks, with a market expected to exceed $5 billion by 2028 [17] Management's Comments on Operating Environment and Future Outlook - Management views 2025 as a year of uncertainty and opportunity, unable to provide quarterly guidance until uncertainties are resolved [13] - The company remains confident in its licensing business as a growth area, despite short-term impacts from a licensee transitioning to unlicensed products [25] - Management expects continued growth in product revenues and licensing income, with a focus on new product introductions [52] Other Important Information - The transition to a new ERP system (SAP) contributed to the decline in gross margin due to increased production and consulting expenses [9] - Capital expenditures for Q1 totaled $4.6 million, with a construction and progress balance of approximately $9.9 million for manufacturing equipment [12] Q&A Session Summary Question: Can you elaborate on the impact of Vicor's licensing business? - Management acknowledged a short-term impact from a licensee transitioning to unlicensed products but remains confident in the growth potential of the licensing business [25] Question: What are the expected impacts of tariffs on supply and demand? - Management assessed the impact of tariffs on the bill of materials and instituted a 10% tariff surcharge, not expecting significant negative impacts on demand [29] Question: What is the timeline for ramping second-generation VPD products? - Management expects to bring development to fruition for lead customers soon, targeting power production in the second half of the year [34] Question: How does the company view the NBM business going forward? - Management expects the NBM business to grow, driven by demand following the ITC win and concerns from OEMs and hyperscalers [67] Question: What is the status of the ITC case? - The ITC case concluded with a final determination, and management is confident in overcoming the commission's position regarding licensing [54] Question: What is the expected pricing after implementing tariff surcharges? - A 10% tariff surcharge will be applied across the board, with expectations to maintain margins despite varying impacts on different products [61]

Financial Data and Key Metrics Changes - Vicor recorded total revenue of $90.4 million for Q1 2025, down 2.3% sequentially from Q4 2024's $96.2 million, but up 12% from Q1 2024's $83.9 million [7] - Advanced products revenue increased 2.7% sequentially to $59.9 million, while product revenue decreased 10% sequentially to $34.1 million [8] - Gross profit margin for Q1 was 47.2%, a decrease of 520 basis points from the prior quarter [9] - Net income for Q1 totaled $2.5 million, with GAAP diluted earnings per share at $0.06 based on a fully diluted share count of 45.5 million shares [12] Business Line Data and Key Metrics Changes - Shipments to stocking distributors decreased 16.9% sequentially and 33.8% year over year [9] - Advanced product share of total revenue increased to 63.7% compared to 60.6% in Q4 2024, while Brick product share decreased to 36.3% [9] Market Data and Key Metrics Changes - Exports as a percentage of total revenue increased to approximately 60.8% from 56.9% in the prior quarter [9] - The one-year backlog increased 10.4% from the prior quarter, closing at $171.7 million [14] Company Strategy and Development Direction - Vicor is focusing on high-density power delivery solutions, particularly in the AI and HPC markets, with expectations for significant growth in these areas [17][20] - The company is navigating a changing tariff landscape and has implemented a 10% tariff surcharge on shipments after July [18] - Vicor's strategy includes developing complete front-end to point-of-load solutions centered on a 48-volt hub, which is proving effective across its target business segments [20] Management's Comments on Operating Environment and Future Outlook - Management views 2025 as a year of uncertainty and opportunity, with a wide range of possible outcomes for revenue and profitability [14] - The company remains confident in its licensing business as a growth driver, despite short-term impacts from a licensee transitioning to unlicensed products [26] - Management expects continued growth in product revenues and licensing income, with a focus on strengthening relationships with top customers [54] Other Important Information - Operating expenses increased 8.2% sequentially to $44.5 million, primarily due to increased R&D expenses [11] - Capital expenditures for Q1 totaled $4.6 million, with a construction and progress balance of approximately $9.9 million for manufacturing equipment [13] Q&A Session Summary Question: Can you elaborate on the impact of Vicor regarding the transition to unlicensed products? - Management acknowledged a short-term impact on Q1 results but remains confident in the growth potential of the licensing business [26] Question: What are the indirect and direct impacts of tariffs? - Management assessed the impact on the bill of materials and instituted a 10% tariff surcharge, expecting minimal negative impact on demand [30] Question: What is the timeline for ramping second-generation VPD products? - Management is focused on delivering to lead customers first, with expectations for production in the second half of the year [32] Question: How do you expect licensing income to grow? - Management anticipates growth from both existing licensees and potential new agreements, though specifics are difficult to predict [72] Question: What is the status of the ITC case? - The ITC case concluded with an exclusion order, and management is appealing aspects of the determination [58] Question: What is the expected impact of the new fab on margins? - Management expects improvements in product margins as capacity utilization increases later in the year [79] Question: How is customer interest in 800 volts to 48 volts technology? - There is significant interest from hyperscalers, with expectations for orders to ramp up in the coming months [113]