Vicor(VICR) - 2025 Q2 - Quarterly Results

Executive Summary & Financial Highlights 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 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] - 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] - 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] - Cash and cash equivalents increased 14.3% sequentially to approximately $338.5 million[5] - Backlog increased 0.9% year-over-year but decreased 9.6% sequentially[6] CEO Commentary 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] - Pursuing additional actions to curtail importation of infringing power and computing systems by unlicensed OEMs and Hyper-scalers[7] - Developing high-performance ChiPs and 2nd generation VPD for AI applications, expected to increase product revenues and utilization of the first ChiP fab[7] Corporate Information This section provides essential corporate details, including earnings call information, forward-looking statement disclaimers, a company overview, and investor contact Earnings Conference Call Details 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] - Investors and analysts asking questions are encouraged to register with Notified for dial-in information and a unique PIN[8] - Listen-only mode available via webcast on the Investor Relations page of Vicor's website, with a replay also accessible[8] Forward-Looking Statements 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] - Topics covered include bookings, shipments, revenue, profitability, targeted markets, manufacturing capacity and utilization, future products, and capital resources[9] - 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] - Vicor does not undertake any obligation to update any forward-looking statements as a result of future events or developments[9] Company Description 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] - Products are based upon a portfolio of patented technologies[10] - 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] Investor Contact 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] - Office Phone: (978) 470-2900[11] - Email: invrel@vicorpower.com[11] Condensed Consolidated Financial Statements This section presents Vicor's condensed consolidated statement of operations and balance sheet, detailing financial performance and position Condensed Consolidated Statement of Operations 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 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 |