Release Date: July 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Vicor Corp (VICR, Financial) recorded total revenue of $85.9 million for Q2 2024, up 2.4% sequentially from Q1 2024.
- Advanced product revenue increased 7.1% sequentially to $46.4 million.
- Shipments to stocking distributors increased 33.1% year over year.
- Operating expenses decreased 30.5% sequentially, primarily due to a reduction in legal fees and expenses.
- The company ended Q2 with a strong cash position of $251.9 million.
Negative Points
- Total revenue was down 19.6% from Q2 2023.
- Brick products revenue decreased 2.7% sequentially to $39.5 million.
- Consolidated gross profit margin decreased by 400 basis points to 49.8%, primarily due to a change in product mix.
- Net loss for Q2 totaled $1.2 million, with a GAAP diluted loss per share of $0.03.
- The company is unable to provide quarterly guidance due to uncertainties and a wide range of possible outcomes.
Q & A Highlights
Q: At the Annual Shareholder Meeting, you mentioned the roadmap for the sampling of the gen 5 technology. Is everything still on track for first customer samples beginning to ship next month in August?
A: Demo system display to some select customers towards the end of August, that's what we currently expect. (Patrizio Vinciarelli, CEO)
Q: Can you give us a sense of the revenue split between your four targeted end markets: industrial, aerospace and defense, HPC, and automotive?
A: Aerospace and defense plus industrial is a larger share of our business today than HPC was going back a year and a half. (Philip Davies, VP of Global Sales and Marketing)
Q: Can you provide more color on the mix shift that impacted gross margins this quarter?
A: The shift in the mix had primarily to do with significant shipments within the past quarter of a legacy HPC system with relatively low margins. (Patrizio Vinciarelli, CEO)
A: Additionally, there was a higher A&D, high-margin revenue stream in Q1. (James Schmidt, CFO)
Q: Can you talk more about the mix of orders you saw in the quarter and where you saw the most strength?
A: Continued strength in industrial and aerospace and defense markets, which we are planning on doubling over the next five to seven years. (Philip Davies, VP of Global Sales and Marketing)
Q: What is the time frame by which customers make decisions on the gen 5 products, and are there any challenges in hitting their market timing windows?
A: The development is driven by where we see applications landing over the next few years. We believe our 5G chipset provides a unique capability well-aligned with developing market needs. (Patrizio Vinciarelli, CEO)
Q: Are other infringers now coming to the table and negotiating with you following the positive outcomes in the court cases against Delta?
A: We expect a favorable decision in October that should result in an exclusion order. We will be extremely hard-nosed about protecting our intellectual property. (Patrizio Vinciarelli, CEO)
Q: Can you break out more on the licensing and royalties business? Is the increase due to the number of licensees or the volumes from existing licensees?
A: We are not providing detailed visibility on this. The numbers will be reported in the 10-Q. (James Schmidt, CFO)
Q: What should be the tax rate we should be looking at going forward?
A: It's challenging to provide specific guidance due to the unique situation we find ourselves in, including the impact of Section 174 and the valuation allowance against deferred tax assets. (James Schmidt, CFO)
Q: Can you provide some sense of the automotive pipeline between EVs versus hybrids and any geographical concentration?
A: Out of the $1.3 billion pipeline, it's probably still 50-60% BEV, with the rest split between mild-hybrid, plug-in hybrid, and ICE on 48 volts. (Philip Davies, VP of Global Sales and Marketing)
Q: Are the bookings seen this quarter sustainable, or is this a one-quarter anomaly?
A: Aerospace and defense and industrial markets continue to show strength. The variable in bookings will be what happens in HPC. (Philip Davies, VP of Global Sales and Marketing)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
