Vicor's Q1 2025: Navigating Revenue Hits and Tariff Challenges Amidst Gen 5 Product Hurdles

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Revenue and Gross Margin Decline:
- Vicor Corporation reported total revenue of $94 million for Q1 2025, down 2.3% sequentially from Q4 2024.
- The gross margin declined by 520 basis points, attributed to factors such as the transition from a legacy ERP system, royalty revenue decline, and increased compensation and consulting expenses.

Book-to-Bill Ratio and Backlog Increase:
- The company's Q1 book-to-bill ratio exceeded 1, and the one-year backlog increased by 10.4%, closing at $171.7 million.
- The increase in bookings and backlog was driven by new orders for NBMs in the HPC business from hyperscalers and expectations of increased licensing income.

Product Revenue and Segment Performance:
- Advanced Products revenue increased by 2.7% to $59.9 million, while Brick Products revenue decreased by 10% to $34.1 million.
- The performance was influenced by a shift from royalty-based to in-house production for certain customers, and an increase in sales to hyperscalers despite a decline in royalty revenue from one major customer.

Tariff Impact and Strategic Adjustments:
- Vicor announced a 10% tariff surcharge on invoices effective after July 2, to offset tariff costs.
- The decision was made as a response to the changing tariff landscape, particularly reciprocal tariffs affecting Chinese-based customers, to maintain profitability.