Vicor (VICR) shares drop on Q4 results

Vicor Corp, recognized for its advanced modular power components and power system solutions, disclosed its financial achievements in the fourth quarter and the entirety of 2023 on February 22, 2024. Despite facing market headwinds, the company demonstrated its resilience by managing a strategic course towards sustained growth and innovation.

The fourth quarter saw Vicor experiencing a 12.2% dip in revenue to $92.7 million year-over-year, with a sequential decline from the third quarter's $107.8 million. Nevertheless, the company's focus on efficiency and profitability was evident, as gross margin as a percentage of revenue climbed to 51.1%, up from 46.6% in the previous year, showcasing an adept management of operational costs.

Net income marginally increased to $8.7 million, or $0.19 per diluted share, from the prior year's $8.1 million, or $0.18 per diluted share, reflecting steady profitability amidst challenging conditions.

For the annual perspective, Vicor reported a modest revenue growth of 1.5% to $405.1 million, with net income surging impressively to $53.6 million, or $1.19 per diluted share, from $25.4 million, or $0.57 per diluted share, in 2022. This performance underlines Vicor's capability to enhance its financial health over time.

Operational cash flow was notably strong in the quarter, amounting to $22.1 million, a significant leap from the previous year's $0.9 million, signifying robust operational efficiency and financial stewardship. With capital expenditures of $7.7 million, Vicor continues to invest in its future growth, supported by a solid cash and equivalents reserve of approximately $242.2 million.

However, a reduced backlog of $160.8 million from the previous year's $304.4 million suggests potential revenue challenges ahead. CEO Dr. Patrizio Vinciarelli expressed optimism, emphasizing strategic long-term focus and Vicor's advantageous position in addressing AI power system demands.

Dr. Vinciarelli highlighted, We've made strategic choices to prioritize our long-term vision, even at the expense of short-term opportunities. Our leadership in AI power systems, underpinned by our 5G product line and ChiP foundry, positions us strongly for future market expansion.