Vicor Corporation (VICR) | The Buildout — AI Infrastructure
The Verdict
Vicor designs and manufactures modular power components, including Factorized Power Architecture modules and Vertical Power Delivery units that feed power to AI accelerators, wafer-scale engines, and future chiplet packages. It also builds conventional Brick converters and licenses its power-delivery IP. The AI infrastructure role is physical: as compute density rises, power delivery must supply more current in less space with higher current gain, and Vicor's products are designed for that tightening envelope.
| Market Cap | — |
| Revenue (TTM) | $474M |
| Revenue Growth | +11.7% |
| EBITDA Margin (TTM) | 23.1% |
| Net Cash | $446M |
| Earnings Beats | 6 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- One-year backlog roughly doubled in two quarters, from $176.9M in Q4 2025 to $300.6M in Q1 and $379.7M in Q2 2026.
- Advanced Products rose 45% sequentially to $94.2M and became 65.7% of Q2 revenue, up from 57.5% in Q1.
- Management raised FY2026 revenue guidance to over $600 million and long-term objectives to $2.5 billion revenue, 70% gross margin, and 40% operating income.
- A two-year, $60 million license closed in Q2, with $15M recognized, $5M guided for Q3, and $10M per quarter for the following four quarters.
- Cash and equivalents reached $453.6M as of June 30, 2026 against total debt of $7.6M; a $14.3M CHIPS Act refund was received July 13, 2026.
What We’re Watching
- Book-to-bill decelerated from above 2 in Q1 to above 1 in Q2; management calls bookings lumpy, so next quarter's intake re-tests that explanation.
- The second fab site decision was still pending as of July 21, 2026, with offers made but none accepted; the $2.5B objective depends on this site.
- Q2 net income included a $10.9M stock-option tax benefit and a -27.9% effective tax rate, making reported net income a less clean read on operating economics.
- Lead customer concentration remains unresolved; the CFO deferred whether the lead customer was a 10% customer to the Q2 10-Q.
The thesis is strengthening on product and licensing evidence but still hinges on capacity execution. Vicor beat its Q2 guide, raised FY26 to over $600 million, and closed a license deal ahead of its own assumption. At the same time, book-to-bill slowed from above 2 to above 1, the second fab is not yet sited, and lead-customer concentration is still unresolved. The key open question is whether second-gen VPD engagements convert into follow-on production ramps in late 2027 while the second fab is built on schedule.
Earnings Beat
Vicor reported Q2 2026 total product and royalty revenue of $143.4 million, up 26.9% sequentially and 1.6% year over year against a prior-year quarter that included a $45 million patent litigation settlement. Gross margin was 58.0%, up 280 basis points sequentially. Advanced Products revenue rose 45% sequentially to $94.2 million, and net income was $49.8 million with a $10.9 million tax benefit from stock option exercises.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $143M | $113M | $141M | +1.7% |
| Gross margin | 58.0% | 55.2% | 65.3% | -730bps |
| EBITDA | $40M | $22M | $51M | −20.4% |
| EPS | $1.04 | $0.44 | $0.91 | +14.3% |
| One-year backlog | $379.7M | $300.6M | n/a | — |
As we bring on incremental capacity, we expect a nearly 10% increase in Q3 revenue and over $600 million in 2026 revenue. To achieve these growth objectives, we are planning for double-digit sequential increases in product revenue for advanced products.— Vicor management, July 21, 2026
Management tone: Management moved from providing no quarterly guidance in February 2026 to initiating FY2026 guidance in April and raising it plus its long-term targets in July. On the Q2 call, executives were direct on capacity and operational numbers, while deflecting customer-identity and design-win questions and remaining candid about technical challenges.
Management Guidance
Management guided Q3 2026 revenue to a nearly 10% sequential increase and FY2026 revenue to over $600 million, with double-digit sequential increases planned for Advanced Products product revenue. The guide still assumes no new licensing agreements until the second ITC case reaches its final determination in 2027, even though a two-year, $60 million license closed in Q2.
Trajectory
The topline moved from $107.3M in Q4 2025 to $113.0M in Q1 and $143.4M in Q2 2026. Q2's sequential gain was led by Advanced Products up 45% sequentially, while Brick Products rose 2.4% to $49.2M. Gross margin expanded 280 basis points sequentially to 58.0% despite a one-time factory reconfiguration cost, with management citing utilization and absorption as drivers; the newest license added $15M of royalty revenue in Q2.
The Model
The model's locked projections call for FY+1 revenue of $575 million and EBITDA of $155 million, a 27.0% margin, and FY+2 revenue of $875 million and EBITDA of $312 million, a 35.7% margin. The near term is anchored by the capacity-constrained ramp toward management's over-$600 million FY2026 guide, while FY+2 steps up on second-generation VPD production and licensing. The FY+2 revenue spread across the five runs is 16%, with a range of $810 million to $950 million.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $453M | $575M | $875M |
| YoY Growth | — | +27.0% | +52.2% |
| EBITDA | $103M | $155M | $312M |
| EBITDA Margin | 22.7% | 27.0% | 35.7% |
Projections are the median of 5 independent model runs. The model’s revenue sits 6.0% below analyst consensus.
Management guided Q3 2026 revenue to a nearly 10% sequential increase and FY2026 revenue to over $600 million, with double-digit sequential increases planned for Advanced Products product revenue. The guide still assumes no new licensing agreements until the second ITC case reaches its final determination in 2027, even though a two-year, $60 million license closed in Q2.
What Could Go Right — and Wrong
- A second fab site is selected and construction begins, converting the $2.5B target into a dated physical asset.
- New license agreements close before the 2027 ITC final determination, adding high-margin royalty revenue beyond the $60M deal.
- Hyperscaler and OEM second-gen VPD engagements convert into disclosed design wins and production ramps in late 2027.
- The lead customer's second-gen VPD ramp begins before the end of 2026 on the completed 3 A/mm² baseline.
- Vicor demonstrates current density beyond 3 A/mm² toward the 5 A/mm² target in late 2026 or early 2027.
- No second fab site is selected after the next-few-weeks window, delaying the late 2027/2028 capacity ramp.
- Book-to-bill falls below 1, reversing the backlog growth that supports the current guide.
- The lead customer's wafer-scale ramp slows, its architecture shifts, or its deployment stalls on data-center space.
- An adverse ITC ruling or unsuccessful customs action weakens the enforcement lever behind the licensing practice.
- Tariff, freight, or component-allocation pressures recur beyond the $2.219M net Q1 cost and compress gross margin.
Looking Ahead
The next 12 months are dominated by capacity and product conversion. VPD demo systems are being completed and broader customer engagement is expected over the rest of 2026; the second 3Di line is planned to install in Q3/Q4 2026; and the lead customer's second-gen VPD ramp is expected to begin before the end of 2026. The second fab site decision is expected in the next few weeks from July 21, 2026, and broader follow-on hyperscaler and OEM production ramps are guided for late Q3/Q4 2027.
- Next few weeks from July 21, 2026Second fab site decision — Tests whether the capacity expansion behind the $2.5B target moves forward.
- Rest of 2026VPD demo systems and customer engagement — Demo systems are being completed; broader customer engagement expected over the rest of 2026.
- Q3 2026Q3 revenue report — Tests nearly 10% sequential growth against a $10M royalty step-down.
- Q3/Q4 2026Second 3Di line install — Tests near-term Fab 1 capacity expansion and tool qualification.
- Before end of 2026Lead customer Gen5 VPD ramp — Tests production shipment of next-gen VPD for the lead customer.
- Late Q3/Q4 2027Follow-on VPD production ramps — Tests hyperscaler and OEM second-gen VPD conversion into revenue.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $359M | $453M | $474M | +26.0% |
| Gross Margin | 51.3% | 56.4% | 56.6% | +508bps |
| EBITDA | $17M | $103M | $464M | +493.1% |
| EBITDA Margin | 4.8% | 22.7% | 23.1% | +1,785bps |
| Net Income | $6M | $118M | $145M | +1842.6% |
| Free Cash Flow | $27M | $119M | $180M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)56.6%
- EBITDA Margin (TTM)23.1%
- Net Margin (TTM)30.6%
- ROIC18.0%
- FCF Conversion46.9%
- SBC / Revenue3.6%
The Company
Vicor designs, develops, manufactures, and markets modular power components and power systems for converting electrical power. Its Advanced Products implement the company's Factorized Power Architecture and include Vertical Power Delivery modules that power AI accelerators, wafer-scale engines, and future multi-die and CoWoS chiplet packages; Brick Products are largely integrated converters for conventional architectures. Management positions second-generation VPD and IP licensing as the core growth path.
Operations are vertically integrated around an Andover, Massachusetts chip fab with 3D interconnect processes, supported by a limited number of third-party wafer foundries and packaging and test providers. The company also licenses power-delivery IP to a roster of OEM licensees and one hyperscaler, and its newest license carries a scheduled royalty recognition path.
Business Segments
Competitive Landscape
Vicor does not name competitors on its calls. Management states that competitive solutions are barely capable of delivering slightly over 1 amp per square millimeter, while AI market requirements are already above that and rising; Vicor's second-generation VPD is at 3 A/mm² now and targets up to 5 A/mm² late 2026 or early 2027. In automatic test equipment, management says competitors cannot match Vicor's signal-to-noise performance and package thinness.
Supply Chain
Vicor sits between a limited set of third-party wafer foundries, packaging and test providers, and component suppliers upstream, and AI accelerator, industrial, and licensed systems customers downstream, while also operating its own Andover fab. The intel file's neighbor transcripts do not mention Vicor by name.
More on VICR: Earnings recap