Earnings Call: Vicor’s Q3 2023 Results Show Combined Performance and Strategic Focus on High-Performance Computing by Investing.com

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In its Q3 2023 earnings report, Vicor Inc. (NASDAQ:) reported a 1% increase in average quarterly revenue to $107.8 million, up 4.6% from the same quarter last year. However, the company saw mixed performance across its product groups, with Advanced Products revenue falling 13.5% sequentially, while Brick Products revenue rose 26%. Vicor also reported operating income of $15.7 million and net income of $16.6 million for the quarter.

Key points of contact are:

  • The company experienced a significant 50.5% sequential increase in shipments to stocking distributors, representing an 81.5% year-over-year growth.
  • Despite the mixed performance, Vicor maintained a strong gross margin of 51.8%, although operating expenses rose 7.7% sequentially.
  • Vicor’s cash and cash equivalents came in at $227.8 million, although bookings and backlogs declined, leading the company to forecast flat sequential performance in the fourth quarter of 2023.
  • The company emphasized its strategic focus on high-performance computing and the development of its 4th and 5th generation generator products at the load point.
  • Aiming to capture a major share of the AI ​​power systems market, Vicor expressed confidence in its 5th generation vertical power delivery solutions.
  • The company highlighted progress and new opportunities in the automotive, industrial, aerospace, defense, Korean and Asia Pacific markets.

Vicor’s future plans include working with OEMs and Tier 1 suppliers to win design in 2026 and beyond, with demand strengthening in the 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 talked about its motherboard business and MBM bass converter technology. The company has licensed the technology, and some OEMs pay royalties for it. However, Vicor believes that MBM is not a long-term solution and that their Gen 5 technology, due to be introduced next year, will cause customers to re-evaluate the 2-step approach.

The company is prepared to invest in legal fees to protect its technology, including the ongoing ITC complaint against Delta. Vicor expressed enthusiasm for its 5th generation VPD (voltage conversion and power delivery) technology, citing the higher current density and positive feedback it has received from major customers in the data center, artificial intelligence and networking sectors.

Vicor also highlighted the value proposition of vertical solutions in terms of performance, energy savings, reliability and affordability. The company also emphasized the importance of energy conservation in data centers and the potential for significant megawatt savings through their technology.

The company acknowledged that its 4G technology has lower current density compared to 5G. However, they emphasized 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 pointed to the challenges of powering large data centers and the importance of saving electricity in the face of increasing computing demand and the need for carbon neutrality.

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