Vicor Q2 Earnings Call Highlights AI Power and Fab Push

Vicor Leans on Licensing and Advanced Products

The company posted second-quarter revenues of $143.4 million, representing a 26.9% sequential gain and beating the Zacks Consensus Estimate of $138.7 million. Earnings per share (EPS) came in at $1.04, comfortably surpassing the Zacks Consensus Estimate of $0.62.

Advanced Products’ revenues climbed 45% from the first quarter to $94.2 million, lifting that business to 65.7% of total revenues. Brick Products’ revenues increased 2.4% sequentially to $49.2 million.

Chief financial officer James Schmidt highlighted a key licensing contribution. Royalty income from the most recent agreement added $15 million in second-quarter revenues, though he said accounting treatment will make that contribution uneven, with $5 million expected in the third quarter and $10 million per quarter for the following four quarters.

VICR Raises the Stakes in AI Power Delivery

Global sales and marketing head Philip Davies said Vicor’s updated long-term targets now call for $2.5 billion in revenues, 70% gross margin and 40% operating income, replacing the company’s earlier $1 billion revenues and 65% gross margin goals. He tied that shift to a two-pronged strategy built on power modules and IP licensing.

Davies put the heaviest emphasis on second-generation vertical power delivery, or VPD, for AI data centers. He said hyperscalers and OEMs need higher current gain and current density, and argued Vicor’s second-generation offering is ahead of current first-generation alternatives.

Chief executive officer Patrizio Vinciarelli reinforced that point in the Q&A. He said the company has completed development around a 3 amps-per-square-millimeter baseline for its lead customer and is working toward more than 4 amps per square millimeter late this year or early next year.

Vicor Points to a Stronger 2026 Setup

Schmidt said book-to-bill was above 1 in the second quarter, while one-year backlog rose 26% sequentially to $379.7 million. The press release put the year-over-year backlog increase at 145%, showing how quickly demand has built.

Management used that demand picture to raise the near-term bar. Schmidt said Vicor expects nearly 10% sequential revenue growth in the third quarter and more than $600 million in 2026 revenues, supported by double-digit sequential increases in Advanced Products revenues.

Vinciarelli told analysts the 2026 uplift reflects both product revenue growth and new licensing deals. He added that the initial license signed in the second quarter does not include a sourcing relationship for the first couple of years, though that is expected to become part of the relationship alongside second-generation VPD capabilities.

VICR Ties Capacity Expansion to Strategy

Management also made clear that capacity is becoming a strategic constraint. Vinciarelli said the first chip fab is moving closer to full utilization, which is why the company is now working to secure a second facility. He told analysts VICR has several site options and expects to make decisions in the coming weeks.

Later in the call, Vinciarelli said the second fab will be necessary to support the path to $2.5 billion in revenues. He added that the selected site could support a facility two to three times the size of the first fab, though build-out would happen in stages. That response gave investors a more practical framework for how Vicor plans to scale without overbuilding too early.

Vicor Faces Margin and Timing Questions

A Craig-Hallum analyst pressed management on product gross margin, noting that royalty revenues flattered the consolidated result. Schmidt responded that product margin should improve as utilization and cost absorption rise. He also said second-quarter product gross margin was weighed down by factory reconfiguration costs tied to moving equipment and preparing space for new tools. Those costs ran through cost of sales rather than being capitalized.

Q&A also sharpened the timetable around second-generation VPD. Davies said management expects engagement with a hyperscaler and a couple of OEMs through the rest of 2026, with those programs moving toward production systems in the late third quarter or the fourth quarter of 2027.

VICR Leaves the Call With a Bigger Agenda

The clearest takeaway from management’s tone was that Vicor no longer wants investors to view the story as a niche power-module supplier with episodic upside. Executives repeatedly linked licensing, AI power architecture and fab expansion into one broader growth framework.

At the same time, management stayed measured on customer-specific disclosures and exact design-win timing. That kept the call grounded in what the company says it can control now: adding capacity, expanding Advanced Products revenues and widening industry adoption of its IP.

Vicor’s Zacks Signals

Vicor currently carries a Zacks Rank #2 (Buy), which points to favorable earnings estimate revision trends and generally signals stronger near-term performance potential than lower-ranked stocks. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Style Scores are more mixed. The stock has a Value Score of F, Growth Score of D and VGM Score of F, but a Momentum Score of A. That combination points to stronger momentum characteristics than value or growth appeal, while also underscoring that the Zacks Rank can change as estimate revisions adjust after the quarter’s results.

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