Vicor Corporation (VICR) Earnings & Analysis

Latest quarter

Vicor reported Q3 FY2026 revenue of $197.1 million, above the consensus estimate of $187.2 million. Adjusted earnings per share of $1.33 missed the consensus estimate of $1.39. Revenue rose from $110.4 million a year earlier, while diluted earnings per share increased from $0.63 to $1.33.

In its filing, Vicor attributed Advanced Products growth to higher royalties from a new license agreement and improved demand. The company also said Brick Products revenue rose as demand increased. Royalty revenue reached $66.6 million in the quarter.

Vicor reported a gross margin of 68.3%, up from 57.5% a year earlier, and an operating margin of 36.6%, up from 18.9%. The filing attributed the gross-margin increase primarily to higher sales volume, including royalties, and production efficiencies, partly offset by sales mix and freight and tariff costs. Free cash flow was $34.1 million, compared with $34.5 million a year earlier.

The company’s sequential revenue growth exceeded the nearly 10.0% increase CFO Jim Schmidt had expected on the Q2 call. The filing said backlog rose from the end of Q2, as Vicor built inventory in anticipation of fulfilling orders.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Vicor’s latest available earnings call covered Q2 FY2026, before the Q3 results. On that call, CEO Patrizio Vinciarelli said demand was growing across several end markets. He said lead times had stretched somewhat and pointed to demand exceeding capacity in several component markets.

Vinciarelli said Vicor had completed development of an initial chipset for its lead customer and was preparing demonstration systems for other customers. Sales and marketing executive Phil Davies said the company expected engagement with a hyperscaler and several equipment makers, with those programs potentially moving into production systems in the latter part of the following year.

Asked about manufacturing strategy, Vinciarelli said Vicor was focusing on adding a second chip fab it could control. He said discussions about alternative sources would likely continue, but their timing and predictability would not meet the company’s need to expand capacity for key customers over the next couple of years.

Vinciarelli described two licensing models: royalties tied to actual usage and shorter, all-inclusive agreements. In response to a question about the recent agreement, CFO Jim Schmidt explained that revenue recognition differs from cash collection because of its accounting treatment. He said termination clauses affected how much revenue Vicor could recognize in Q2.

On competition, Vinciarelli said Vicor’s technology could support both its Factorized Power approach and integrated voltage regulators. He said the latter offered flexibility in some applications, while describing an efficiency advantage for Vicor’s approach. Asked about the future mix, he said he could not make a specific prediction, though he expected licensing income to expand over time.

For the quarter ahead, Schmidt said Vicor expected sequential revenue growth as capacity increased. He also expected margin expansion alongside revenue growth.

Guidance

Vicor expects Q4 FY2026 royalty revenue of at least $43.0 million, even without additional licensing agreements. On the earlier Q2 call, CFO Jim Schmidt expected the recent license agreement to contribute $10.0 million in Q4 FY2026 revenue and the same amount in each of the following three quarters.