Vicor's Q4 2024 Earnings Call: Navigating VPD Delays, ITC Licensing Challenges, and ASIC Re-Spin Implications

These are the key contradictions discussed in Vicor's latest 2024Q4 earnings call, specifically including: VPD product delays and expectations, impact of ITC process on licensing activity, and the impact of ASIC re-spin on broader AI space:



Revenue Growth and Product Segmentation:
- Vicor Corporation reported total revenue for the fourth quarter of $96.2 million, up 3.2% from the third quarter and 3.8% from the fourth quarter 2023.
- The growth was driven by a 18% sequential increase in Advanced Products revenue, while Brick Products revenue decreased 13% from the third quarter, and a 6.9% increase in exports as a percentage of total revenue.

Operating Income and Margin Improvement:
- Vicor achieved an operating income of $9.2 million, representing a 9.6% operating margin in Q4, compared to a -0.4% operating loss for the full year 2024.
- This improvement was due to a consolidated gross profit margin of 52.4%, a 3.3% increase from the previous quarter, primarily due to increased royalty income and reduced supply chain costs.

Capacity Expansion and Fab Utilization:
- The company's new vertically integrated ChiP fab achieved short cycle times and high yields, enabling an efficient operation and improved customer responsiveness.
- The fab is now producing Advanced Products, supporting a 60.6% share of total revenue in Q4, with plans to build out the top 100 customer operational excellence program in 2025 to further improve capacity utilization.

Intellectual Property and Licensing Success:
- Vicor secured an exclusion order and cease and desist orders for infringing power modules, resulting in a significant license to a hyperscaler.
- This success is attributed to the company's strategic pursuit of patent enforcement, which is expected to increase future royalty revenue and drive capacity utilization at the ChiP fab.