Vicor (NASDAQ:VICR) Corporation reported a modest 1% quarterly revenue increase to $107.8 million in its Q3 2023 earnings call, marking a 4.6% rise from the same quarter last year. The company, however, saw a mixed performance across its product categories, with Advanced Products revenue falling by 13.5% sequentially, while Brick Products revenue surged by 26%. Vicor also reported an operating income of $15.7 million and a net income of $16.6 million for the quarter.
Key takeaways from the call include:
- The company experienced a significant 50.5% sequential increase in shipments to stocking distributors, marking an 81.5% year-over-year growth.
- Despite the mixed performance, Vicor maintained a strong gross profit margin of 51.8%, though operating expenses rose by 7.7% sequentially.
- Vicor's cash and cash equivalents stood at a healthy $227.8 million, though bookings and backlog decreased, leading the company to project a flat sequential performance in Q4 2023.
- The company emphasized its strategic focus on high-performance computing and the development of its Gen 4 and Gen 5 power point-of-load products.
- Vicor expressed confidence in its Gen 5 vertical power delivery solutions, aiming to capture a dominant share of the AI power system market.
- The company highlighted progress and new opportunities in the automotive, industrial, aerospace, defense, Korean, and Asia Pacific markets.
Vicor's future plans include collaborations with OEMs and Tier 1 suppliers for design wins in 2026 and beyond, with demand strengthening in industrial, aerospace, and defense markets, particularly in Korea and the Asia Pacific region. The company's new sales and marketing team in Japan is making progress in developing new opportunities.
Vicor also discussed its motherboard business and MBM bus converter technology. The company has licensed the technology, and some OEMs are paying royalties for it. However, Vicor believes that the MBM is not a long-term solution and that their Gen 5 technology, to be introduced next year, will cause customers to reevaluate the 2-stage approach.
The company is prepared to invest heavily in legal expenses to protect its technology, including the ongoing ITC complaints against Delta. Vicor expressed enthusiasm for their Gen 5 VPD (Voltage Transformation and Power Delivery) technology, noting its higher current density and the positive reactions they have received from major customers in the data center, AI, and networking sectors.
Vicor also emphasized the value proposition of vertical-only solutions in terms of performance, power savings, reliability, and cost-effectiveness. The company also highlighted the importance of power savings in data centers and the potential for significant savings in megawatts through their technology.
The company acknowledged that its 4G technology has a lower current density compared to 5G. However, they highlighted that their systems with 5G MCMs will go into production in late 2024 or early 2025, offering new capabilities and enabling more cost-effective solutions. The company also mentioned the challenges of powering large data centers and the importance of power savings in the face of increasing compute demands and the need for carbon neutrality.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.