Vicor Corporation

What they do

Vicor designs, develops, manufactures and markets modular power components and power systems that convert electrical power for electrically-powered devices. Products are split into Advanced Products, largely implementing the proprietary Factorized Power Architecture, and Brick Products, integrated power converters used in conventional architectures such as CPA, DPA and IBA. Manufacturing is in Andover, Massachusetts, with Vicor Custom Power subsidiaries in Cedar Park, Texas and Milwaukie, Oregon, and sales/support subsidiaries including 92.5%-owned Vicor Japan Company, Ltd. The company also licenses intellectual property, generating royalty revenue.

Revenue drivers

• Advanced Products — Recently introduced products implementing proprietary Factorized Power Architecture; serve large OEMs, ODMs and contract manufacturers, with sales concentrated in data center and hyperscaler enterprise computing and AI-processor power.
• Brick Products — Broad, established families of integrated power converters used in conventional architectures; serve a fragmented base of large and small customers in aerospace and defense electronics, industrial equipment, instrumentation and test equipment, and transportation, run on a high-mix, low-volume model.
• Royalty revenue — Licensing arrangements with customers; royalty revenue was $45.4 million in the six months ended June 30, 2026, versus $21.1 million a year earlier, and $30.4 million in Q2 2026 alone.
• Patent litigation settlement — A one-time $45.0 million settlement included in the second quarter of 2025, which lifted reported total revenues that period but is not a recurring revenue source.

Recent performance

For Q2 2026, product and royalty revenues totaled $143.4 million, up 26.9% sequentially from $113.0 million in Q1 2026, versus $141.0 million in Q2 2025 which included a $45.0 million patent litigation settlement. Gross margin rose sequentially to $83.1 million, or 58.0% of revenue, from $62.4 million and 55.2% in Q1 2026, and was down from $92.1 million and 65.3% a year ago. Net income was $49.8 million, or $1.04 per diluted share, versus $20.7 million, or $0.44, in Q1 2026 and $41.2 million, or $0.91, in Q2 2025. Cash flow from operations was $34.0 million, compared with $(3.9) million in Q1 2026, which included a $28.6 million litigation award payment, and $65.2 million a year ago. Backlog was $380 million, up 26% sequentially from $301 million and up 145% from $155 million a year earlier.

Strategy

Vicor is shifting organizational focus and investment toward the Advanced Products line, targeting high-growth market segments with a low-mix, high-volume operational model, while maintaining the Brick Products line as a profitable high-mix, low-volume business. Core competencies are centered on 48V DC distribution, with products also addressing 380V data center distribution, 110V rail, 28V military and avionics, and 24V industrial automation. Management states that rising demand across high-performance compute, automatic test equipment, and industrial, aerospace and defense applications is absorbing increased capacity in its first ChiP fab, and it is taking steps toward a second fab for high current density 2nd Gen VPD ChiPs. The company expects greater sales concentration over time among fewer large customers, including intellectual property licensing.

Risks

• Customer concentration — The strategic focus on higher-volume OEM, ODM and contract manufacturing customers means the actions of a relatively few customers disproportionately influence results, and unanticipated order delays have produced lower-than-expected revenue.
• Demand and forecast volatility — Customer forecasts, particularly from high-volume Advanced Products customers, are subject to short-notice scheduling changes, causing operating inefficiencies and excess costs and making quarterly results difficult to forecast.
• Supply chain and supplier reliance — Vicor depends on a relatively few suppliers of proprietary circuits and materials and on outsourced package process steps essential to some Advanced Products, exposing it to supply disruptions, delays and cost increases.
• Product transition execution — The company must coordinate changes in product mix while managing the ongoing transition in organizational focus and manufacturing infrastructure from Brick Products to Advanced Products.

Outlook

Management points to rising demand across high-performance compute, automatic test equipment, and industrial, aerospace and defense applications absorbing capacity in the first ChiP fab, and says steps are being taken toward a second fab for high current density 2nd Gen VPD ChiPs. The earnings release cites AI OEMs and hyperscalers facing current density and power delivery network limitations with 1st Gen VPD systems, and states Vicor is uniquely equipped with 2nd Gen VPD IP to address power challenges in future TPUs, GPUs and wafer scale engines. No specific revenue or earnings guidance figures are provided in the source material.