Vicor NASDAQ: VICR reported first-quarter 2026 results that included higher sequential revenue, a sharp year-over-year improvement in gross margin, and a significant jump in backlog as demand strengthened across high-performance computing, industrial, and aerospace and defense markets.
First-quarter revenue rises; advanced products remain the majority
Chief Financial Officer James Schmidt said Vicor recorded product and royalty revenue of $113.0 million for the quarter ended March 31, 2026, up 5.3% sequentially from $107.3 million in the fourth quarter of 2025 and up 20.2% from $94.0 million in the first quarter of 2025.
Schmidt said advanced products revenue increased 3.7% sequentially to $64.9 million, while brick products revenue rose 7.7% to $48.0 million. Advanced products represented 57.5% of total revenue, down from 58.4% in the prior quarter, with bricks rising correspondingly to 42.5%.
Shipments to stocking distributors increased 0.5% sequentially and rose 63.6% year-over-year, Schmidt said. Exports declined slightly as a share of total revenue to about 48.9% from 49.3% in the prior quarter.
Margins, expenses, and earnings
Vicor posted a consolidated gross margin of 55.2%, down 20 basis points sequentially but up 800 basis points from the year-ago quarter, Schmidt said.
Total operating expense increased 4% sequentially to $45.5 million, which Schmidt attributed in part to “higher legal expenses related to enforcement of our IP.” He also detailed equity-based compensation expense totaling approximately $3.9 million across cost of goods sold, SG&A, and R&D.
Vicor recorded a tax benefit of about $0.3 million, reflecting an effective tax rate of -1.3%. Schmidt said the quarter’s tax rate was “positively impacted by stock options exercised in the quarter.” Net income totaled $20.7 million, and GAAP diluted EPS was $0.44 on a fully diluted share count of 47.254 million shares.
On a follow-up question about taxes, Schmidt said the company’s planning assumption going forward is “more in line with a 20% kind of a rate,” while noting that stock option exercises created a one-time discrete benefit in Q1.
Cash, cash flow, and capital spending
Schmidt said cash and cash equivalents ended the quarter at $404.2 million, up $1.4 million sequentially. Accounts receivable (net of reserves) totaled $67.4 million, with DSOs of 42 days. Inventories increased 3.8% sequentially to $94.8 million, with annualized inventory turns of 2.1.
Cash flow used for operating activities was $3.9 million for the quarter, which Schmidt said was net of a $28.6 million litigation settlement payment. Capital expenditures were $12.4 million. Vicor ended the quarter with construction in progress of about $10.7 million—primarily manufacturing equipment—and Schmidt said roughly $33.9 million remained to be spent.
Bookings, backlog, and guidance
Schmidt said first-quarter book-to-bill was above 2, and one-year backlog increased 70% sequentially to $300.6 million. In response to analyst questions, Philip Davies, corporate vice president of global sales and marketing, said the backlog and bookings figures the company quotes are within a “12-month window” and that backlog “rolls pretty much over the next 12 months.”
Looking ahead, Schmidt guided to Q2 revenue of nearly $126 million and full-year 2026 revenue of nearly $570 million, while also signaling expectations for “margin expansion” alongside revenue growth.
Management said the full-year guidance reflects conservative assumptions for licensing. Schmidt said the outlook is based on an assumption that Vicor will not enter new licensing agreements until its “second ITC case gets to its final determination in 2027,” though he added that additional exclusion orders could motivate new deals. CEO Patrizio Vinciarelli said royalties should increase “somewhat based on existing licensing agreement,” while emphasizing the company set aside any “early deals” in guidance even though agreements could occur earlier than 2027.
VPD technology focus and capacity expansion plans
Davies said bookings were strong across Vicor’s high-performance computing, industrial, and aerospace and defense markets. In computing, he said the company’s lead customer is continuing “a steep production ramp of its wafer-scale engine with best-in-class AI inference performance,” and argued that wafer-scale engines and future advanced packages “are uniquely enabled by vertical power delivery.” He added that Vicor’s second-generation VPD solution is expected to enable further advances, describing a package with “3 amps per sq mm current density” and a “current multiplication factor of up to 40” in a “1.5 mm thin package.”
Vinciarelli told analysts the next generational transition for the lead customer’s VPD platform will be “enabled in the second half of this year,” with a ramp expected to begin before year-end. He said engagement with additional customers for second-generation VPD is expected to follow that transition, while also stressing that Vicor expects to remain capacity-constrained for “a substantial timeframe,” driving a selective approach to customer additions.
On manufacturing capacity, Vinciarelli said Vicor has identified “elasticity” for expansion within its leased Andover facility, providing flexibility in timing and location decisions for a second fab. He said the company now sees an opportunity to support as much as 50% above what had been planned for annual revenue output at the leased facility, and said Vicor has “come around to focusing on existing buildings as opposed to a piece of land” to execute more rapidly.
Vinciarelli also said Vicor had previously “earmarked capacity out of Fab One at roughly a $1 billion per year run rate,” but now sees “a way to get that to at least $1.5 billion,” citing shorter cycle time and increased capacity in historically limiting process steps, along with redeploying some less critical steps into a nearby building under Vicor control. He said this approach could support margin expansion by reducing incremental equipment and depreciation requirements.
Addressing capacity additions, Vinciarelli said Vicor purchased “a second 3Di (three-dimensional interconnect) line” that is expected to be installed in the Q3/Q4 timeframe, and said the company is also engaged in discussions that “could lead to an alternate source for our second-gen VPD technology.” He declined to provide a timeline for reaching the $1.5 billion capacity level, saying it would be “unwise” to get overly specific given multiple scenarios beyond 2026.
In the industrial market, Davies said Vicor’s top 100 industrial OEMs in automated test and semiconductor manufacturing equipment “continue to benefit from the AI data center build-out with strong order placement,” and he highlighted Vicor’s “current multipliers” for ASIC and memory test applications as remaining “unchallenged” on key attributes. In aerospace and defense, Davies said geopolitical developments have been driving growth, citing increased spending as a percentage of GDP and replenishment of systems. When asked about meeting defense needs, Davies said Vicor “can meet the needs of the defense market with the capacity that we have,” while also noting the company does not break out defense or semiconductor test revenue as a percentage of total sales.
On licensing strategy, Vinciarelli reiterated confidence in the company’s “licensing practice,” calling it a high-growth, high-margin business and saying Vicor expects that “OEMs and hyperscalers will be Vicor licensees with only perhaps rare exceptions” in the not-too-distant future. He also noted that some licensing outcomes involve expense recognition tied to partners: Vicor has partnered with law firms that share in outcomes “subject to caps,” and the company records operating expenses related to those shares when licensing income is recorded.
About Vicor NASDAQ: VICR
Vicor Corporation is a designer and manufacturer of modular power components and systems, serving a wide range of industries that demand high performance and efficiency. Headquartered in Andover, Massachusetts, the company develops power conversion solutions that help customers optimize energy delivery in applications from telecommunications and data centers to industrial and automotive systems.
The company's product portfolio includes high-density DC-DC converters, AC-DC front-end modules, point-of-load regulators and complete power systems that combine multiple conversion stages in a single package.
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