Release Date: February 20, 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 sequential revenue increase of 3.2% in Q4 2024, reaching $96.2 million.
• Advanced product revenue increased by 18% sequentially, indicating strong demand in this segment.
• The company's gross profit margin improved to 52.4% in Q4, up 3.3% from the previous quarter.
• Vicor Corp (NASDAQ:VICR) successfully ramped up its new vertically integrated chip factory, achieving short cycle times and high yield goals.
• The company secured a significant license agreement with a hyperscaler, enhancing its intellectual property portfolio and potential royalty revenue.

Negative Points

• Full-year 2024 revenues decreased by 11.4% compared to the prior year, indicating a challenging year overall.
• Operating expenses as a percentage of revenue increased significantly to 51.6% for the full year 2024, up from 37.9% in the prior year.
• Vicor Corp (NASDAQ:VICR) reported an operating loss of $1.3 million for the full year 2024, compared to an operating income of $51.4 million in the prior year.
• Net income for the full year 2024 decreased sharply to $6.1 million from $53.6 million in the prior year.
• The company faces uncertainties in 2025, particularly related to AI and high-performance computing markets, impacting its ability to provide quarterly guidance.

Q & A Highlights

• Warning! GuruFocus has detected 5 Warning Signs with VICR.

Q: Can you provide more details on the delay in the VPT product and when you expect it to ship in volume? A: The delay was due to the need for a new ASIC to achieve performance goals. This ASIC is expected by the end of February, and we aim to support customer ramping needs in the second half of the year. The extra time taken is seen as worthwhile for its significance in AI and computing. Patrizio Vinciarelli, CEO

Q: Regarding your second licensee to the patent portfolio, how will this impact future royalty revenue? A: While we can't disclose specific details, it's a significant license with a hyperscaler. We value our licensee relationships and maintain confidentiality. Patrizio Vinciarelli, CEO

Q: How are uncertainties and opportunities for 2025 distributed across your markets, particularly AI and HPC? A: The uncertainties and opportunities are primarily around AI and HPC. Other markets like automotive, industrial, and aerospace are more predictable and continue to grow. Phil Davies, VP Global Sales and Marketing

Q: Can you elaborate on the impact of the ITC action on your licensing strategy and potential litigation costs? A: The ITC action has prompted other companies to discuss licensing. Our goal is not adversarial; we aim to foster relationships with licensees. The action was meant to highlight the risks of infringing on our IP. Phil Davies, VP Global Sales and Marketing

Q: Are there any viable workarounds from infringers to your NBM patents? A: There is no known NBM alternative that doesn't infringe on our patents. Some suppliers claim non-infringement, but they either misunderstand their products or mislead customers. Patrizio Vinciarelli, CEO

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