Q2 2025 Vicor Corp Earnings Call
Hello and welcome to Vicor second quarter earnings conference call.
At this time, all participants are in a listen-only mode.
After the speaker's presentation, there will be a question and answer session to ask the question during the session, you will need to press star 1 on your telephone.
You will then hear automated message advising. Your hand is raised.
To withdraw your question. Please press star 1 1 again.
I will now like to turn the conference over to Jim Smith. Chief Financial Officer. You may begin.
Thank you.
Speaker Change: Good afternoon and welcome to Vicor corporation's earnings, call for the second quarter ended, June 30th 2025.
Jim Schmidt: Jim Schmidt Chief Financial Officer and I am an Andover with Patricio. Vinciarelli chief executive officer in Phil Davies, corporate vice president, Global sales and marketing.
Jim Schmidt: After the markets closed today, we issued a press release summarizing our financial results for the free and 6 months ended June 30th.
This press release has been posted on the investment relations page of our website.
Jim Schmidt: Www.vpower.com.
Jim Schmidt: We also filed a Form 8K today, related to the issue of this. This release.
Speaker Change: Mine listeners. This conference call will be recorded and as the copyrighted property of Life inspiration.
Speaker Change: I hope to remind you various remarks, we make during this call May constitute forward-looking statements for purposes of Safe. Harbor. Provisions under the private security, litigation Reform, Act of 1995
Speaker Change: Except for historical information contained in this. Call the matters, discussed on this call including any statements regarding current and planned products.
Speaker Change: Current and potential customers, potential Market opportunities, expected events, and announcements, and our capacity expansion. As those Management's, expectations for sales growth spending and profitability,
Forward-looking statements involving risk and uncertainty.
Speaker Change: in light of these risks and uncertainties we can offer no assurance that any forward-looking statement will in fact
Speaker Change: This may differ materially.
Speaker Change: From those.
Speaker Change: Remarks today.
Speaker Change: The Western uncertainty we Face are discussed in item 1. A of our 2024 form 10 K if we filed with the SEC on March 3rd 2025
Speaker Change: Our system on the sec's website.
Speaker Change: Please note the information provided during this conference call is accurate. Only as of today, Tuesday, July 22 2025
like we're undertakes. No obligation to update any statement.
Speaker Change: Including forward-looking statements made during this call and you should not rely upon such statements after the conclusion of this call.
The webcast replay of today's call.
Speaker Change: Will be available shortly on the investigation page of our website.
Speaker Change: I'll now turn to a review of our Q2 financial performance.
Speaker Change: After which bill will will review recent Market, developments and Patricia and I will take your questions.
In my remarks, I will focus mostly on the sequential quarterly changes for p&l and balance sheet items.
Speaker Change: And refer you to our press release.
Speaker Change: For additional information.
as stated in today's press release, like we're recorded product, revenues licensing income, and a patent litigation settlement for the second quarter of 141 million
Speaker Change: About 50.1% sequentially from the first quarter of 2025 total of 94 million.
Speaker Change: 64 64.3% in the second quarter of the 24 total of 85.9 million.
Speaker Change: Advanced products.
Speaker Change: 2.6 million and brick products Revenue, increased 4%, sequentially to 35.5 million.
Speaker Change: Shipments to stocking Distributors, including 2.9%, sequentially, and decreased 14.3%. Year-over-year.
Speaker Change: As a percentage of total revenue.
Speaker Change: Percent from the prior quarter 60.8.
Speaker Change: For Q2 Advanced product share of total revenue, decreased to 533.1%, compared to 63.7% for the first quarter of 2025.
With Brit, with British products, share correspondingly, increasing to 36.9% of total revenue.
Speaker Change: Turning to Q2 gross. Margins. We recorded a Consolidated gross profit, margin of 65.3%.
Speaker Change: Which is an 1810 basis point increase for the fair quarter.
Speaker Change: Primarily due to pet litigation settlement within the quarter. Tariff expense was approximately $2 million
Speaker Change: I'll now turn to Q2 operating expenses total operating expense. Increased 5% sequentially from the first quarter of 2025 to 46.7 million.
Speaker Change: Sequential increase is primarily due to selling General and administrative expenses which was primarily attributable to 5.1 5.1 million of incentive legal fees associated with the patent litigation settlement.
The amount of total equity.
Speaker Change: Q2 included.
Speaker Change: Was 900,000 1,790,000 and 1,020,000 respectively, totaling approximately 3.7 million.
Speaker Change: Turning to income taxes, we recorded a tax provision for 3 to approximately 7.8 million dollars.
Representing an effective tax rate for the quarter of 16%.
Speaker Change: Net income for Q2 total 41.2 million.
Speaker Change: Gap. Diluted income per share was 91 cents. Based on the fully diluted share count of 45 million 777,000 shares.
Well, royalties legal expenses, and income from patent. Litigation have become part of vors ordinary course of business.
Speaker Change: And we'll point out that without the patent litigation settlement, net, Q2 Revenue would have increased by approximately 2 million dollars.
Speaker Change: Gross margin would have increased by approximately 200 basis points.
Speaker Change: Operating expenses would have declined by approximately 3 million.
Speaker Change: And income before taxes would have increased from approximately 3 million dollars in q1 to approximately 9 million dollars in Q2.
Speaker Change: Turning to our cash flow and balance sheet, cash and cash, equivalents total 338.5 million in Q2.
An increase of 42.4 million sequentially.
Speaker Change: And net of approximately 17.5 million in share repurchases during the quarter.
Speaker Change: accounts, receivable at a reserves in 55.1 million in Korean
With the Asos for trade receivables at 31 days.
Speaker Change: Inventory is not a reserve, decreased 3.1% sequentially to 95.5 million.
Speaker Change: 5.2 million for the quarter.
Speaker Change: Capital expenditures for Q2 total 6.2 million.
Speaker Change: When we entered the quarter with a construction and progress balance primarily for manufacturing equipment of approximately 11.8 million,
Speaker Change: And with approximately 3.1 million, to be spent.
Speaker Change: I'll now address bookings and backlog.
Speaker Change: 22 book. The bill came in below 1 and 1 year. Backlog decreased 9.6% for the third quarter closing at 155.2 billion.
Speaker Change: as we said on last quarter, earnings fall,
Speaker Change: 25 is a year of uncertainty and opportunity.
Speaker Change: As of today, the quarterly and annual outcome in terms of Top Line. And bottom line is subject to a relatively wide range of scenarios.
Speaker Change: Given the wide range of possible. Outcomes. We are unable to provide quarterly guidance until we are further along resolving uncertainties and capitalizing on opportunities.
Speaker Change: With that, we will provide an overview of the market developments and then Patrice, you'll feel and I will take your questions.
Speaker Change: I ask that you limit yourselves to 1 question and a related follow-up so that we can respond to as many of you as possible and a limited time available.
Speaker Change: If you have more than 1 topic to address, please get back in the queue.
Phil, thank you, Jim.
our second quarter book, The Bill ratio came in below 1 due to order cancellations from customers in China and widespread order placement hesitancy around tariffs
Speaker Change: Lico has instituted a 10% tariff, surcharge applicable to all new orders and customer backlog shipping after July, 2nd.
Speaker Change: This tariff search is now in effect.
Speaker Change: Earlier this year, we brought to fruition our first ITC action, which has resulted in cease and desist orders against the name respondents, and an exclusion order against their customers, both OEM and hyperscalers.
Speaker Change: we have pursuing additional actions against companies who are knowingly infringing, our IP while playing a game of Catch Me If You Can
Speaker Change: Call this meeting on June 20th. I presented an update on our business strategy, his fundamentally centered around our top 100 customers enabling high-performance modular power delivery Networks.
Speaker Change: At the meeting, we showcased Next Generation products, providing significant advances in power and current density at levels. Far beyond our nearest competitors.
Speaker Change: These next Generation products are being sampled to lead customers across our 4 Target markets and customer engagements are expected to expand in Q3 Q4.
Speaker Change: I am pleased to announce that our Gen 5, vertical power delivery solution to a lead, customer is coming to fruition with a current density exceeding its original Target specification.
Speaker Change: Higher current density thermally adapt and scalable vtd will enable us to engage with hyperscalers. AI processor and network processor companies to deliver Solutions with Superior performance and cost defectiveness.
Speaker Change: These engagements will begin with the delivery of VPD, evaluation boards, and online selection, and simulation tools.
Speaker Change: As discussed at the ASM. We're also focused on the future AI megawatt rack.
Speaker Change: Which will require 800 volt, DC power delivery and conversion to 48 volts.
Speaker Change: Reiko has pioneered high density. Non-isolated 400 volt to 800 volt and isolated 800 volt to 48 volt bus converters to Automotive applications.
A new 800 volt power module, which will deliver 10 kilowatts at 48 volts in a package smaller than an iPhone. Will begin. Sampling 8 Q4
Speaker Change: micro will be uniquely positioned to offer. Front-end 800 volt to 48 volt bus converters and direct VPD 48. Volt to sub 1 volt Solutions, enabling a high efficiency high density, power delivery Network for our customers.
Speaker Change: The market s for these Solutions is expected to exceed, 5 billion dollars by 2027.
Speaker Change: Opportunities continue to grow in our Automotive business. We have just concluded a successful audit with a large, European OEM for initial low volume project. And we are now preparing for an audit by a large Asian OEM and Q3
Speaker Change: It is very clear that 48 volt. Zonal architectures are the highest growth opportunity in automotive followed by 800 volt to 48 volt conversion.
Speaker Change: Allow us to scale and leverage Technologies across our Ai and Automotive Market.
The pipelines in our industrial and Aerospace and defense. Businesses are healthy and growing.
Speaker Change: Our new product, introductions will strengthen these businesses and put them firmly on a path to doubling in 4 to 6 years respectively.
Speaker Change: As presented at the ASM, we remain confident in our business strategy of innovation.
Speaker Change: Customer focus Market, focus, and a successful technology licensing practice.
Speaker Change: Thank you. We will now take your question.
Speaker Change: Thank you.
Speaker Change: As a reminder, ladies and gentlemen to ask the question, please press star 111 on your telephone then wait for your name to be announced.
Speaker Change: To withdraw your question. Please press star 1 1 1 again.
Please limit yourself to 1 question and 1 follow-up. You may return to the queue for additional questions.
Speaker Change: Please stand by while we compile the Q&A roster.
Quinn Bolton: Our first question comes from the line of Quinn Bolton with needleman company. Your line is open.
Quinn Bolton: Hey guys, um, congratulations on the patent litigation settlement. That's a, it's a very nice amount wanted to kind of start there and at the annual shareholder meeting in in late June. You guys talked about, you know, a return on the money spent on the ITC case, um, somewhere in the in the, you know, round number 200, million dollar range. And I'm just kind of curious, you know, as you look at that, you know, kind of return. I assume that that's, uh, includes the patent litigation settlement that you just announced. But also just wanted to check does that include the royalties from the OEM the hyperscaler licenses.
Quinn Bolton: Just in 2025 and 26th or does that include what you also recognized in 2024, just want to make sure I've got the time frame right on. That 200 is Million Dollar return, and then I've got a follow-up.
Quinn Bolton: So that's the approximate amount that we have locked in so far.
Quinn Bolton: At 2:26.
Quinn Bolton: Okay. 3:26. Yeah.
Speaker Change: Got it. Okay. Perfect. And then um uh, either Patricia or Phil, um, booked to bill was, was below. 1 in the June quarter. I think you mentioned some hesitancy, um, around the Tariff surcharge and just general tariff uncertainty in the business. Um, as well as some cancellations in China. Do you sort of feel like the bookings activity, has reached a minimum has, have you seen any improvements in?
Speaker Change: July um, on the bookings Trend and and any evidence that book to Bill might be getting back above 1 to 1 in the September quarter. Or do you see this tariff uncertainty continuing? I know August 1st is a important day for reciprocal tariffs. So just kind of wondering if if that tariff uncertainty has continued. Um, here in the in the July time frame.
So Quinn, this is Phil. So we we think that the hesitancy around Paris is now behind us, it's very clear. Now, what we're doing uh customers are working with that expectation and uh I think that as I said that's that's behind us now and it's on to Future quarters.
Speaker Change: Perfect. I'll get back in the queue. Thank you.
Speaker Change: Thank you.
Speaker Change: Please stand by for our next question.
John Kane: Our next question comes from the line of John Kane. Wanting with CJs yolen is open
John Kane: Hi, good afternoon. Thank you for taking my question and um, congratulations on my settlement. Um, I was wondering if you could talk a little bit more about the cancellations that you saw with what M markets, those are in with that HPC or something else, industrial Automotive Aerospace. Uh, any help that would be um, appreciated
Speaker Change: The most Jesus Phil, um, mostly from the industrial Market in in China. We have, uh, customers there for many, many years using a lot of older products, as well as some of our Advanced products. It was, it was widespread came through distribution channels, sort of across the board because the Tariff there was pretty high, uh, initially. So, uh, we had some, some order push-ups and some cancellations, it was a mix. Um, so that's the color on that.
Speaker Change: Understood and second just on the royalty streams that you're seeing. Are you expecting to continue growing those uh licensing streams into the future quarters. Is that part of the engagement that you're talking about or is that mostly stable for now?
Speaker Change: so, we completed, um,
Speaker Change: the first aid DC case with
Speaker Change: um, the season. This is an order that that um, the NDC should earlier this year.
Speaker Change: Ripping through.
Speaker Change: Uh, the supply chain.
Speaker Change: Uh, we are uh, aggressively pursuing.
Speaker Change: Um, in fingers that are still trying to improve products that are subject to exclusion.
Speaker Change: uh, what also preparing additional actions in the fall,
Speaker Change: so, as evidenced by,
Speaker Change: The traffic of today.
Uh we are uh very serious about protecting our intellectual property and our body should have any doubt.
That we're going to go to whatever land is necessary.
Speaker Change: Not to preclude, uh, infringement.
Speaker Change: Uh, I believe, uh, the message is getting around.
Speaker Change: uh, but um, yes to say
even the track record of the industry and Industry in which
Speaker Change: your podcast suppliers have been
Speaker Change: Earth by oems, you know time signals to um
Speaker Change: copy successful products. Um,
Speaker Change: This is a a practice that's going to take some time.
Speaker Change: It change but we have the what we know to make it happen and we are very determined to make it so so far so good. I was going to be a lot more or what has happened.
Speaker Change: Okay, great. Thank you. I'll jump back in to you.
Speaker Change: Thank you.
Speaker Change: Please stand by for our next question.
Speaker Change: Our next question comes from the line of Richard Shannon with Craig Hallam, the line is open.
Richard Shannon: Well, thanks guys. For letting me ask you a question. Um my first 1 is going to be on this new license settlement. Congratulations on what seems like a very nice win here. Maybe you can describe this in a few different ways for us to the extent, you're allowed or able to um, is this settlement? Will we see any ongoing royalties from this customer? Or is it fully paid up in any manner? Can you describe who this is either by name or you know you know kind of a company OEM hyperscaler Etc. Um I guess let's just start with that 1 please. Thanks.
Speaker Change: So I I cannot disclose any of the details that you looking for. Uh, I, I can only say, it says it, uh, at the shoulders meeting that, um, there's been no license, uh, in connection with this particular,
Richard Shannon: Action. So you should not assume.
Speaker Change: That the, the parties were involved the gal license. And by visual license, they're able to keep
Richard Shannon: What?
Richard Shannon: um,
Richard Shannon: the subject conclusion order and um, potentially other actions coming,
Okay. Uh, just as a heads up for actually, for all of you, I'm getting a little bit of, uh, scratchiness from the line here. I'm not sure. I'm hearing everything here, but I think I caught most of it with that. Set off all of my second question here, which is to, to kind of understand the Dynamics. Going forward regarding the licensing and certainly understand that you're not able to fully lay out your strategy here. But as I think Phil said is prepared remarks about, uh, trying to play. The infringer's are, are, are, you know, providing a or or doing a Catch Me If You Can strategy here. And obviously it seems like this patent settlement is 1 example of success there. Um, I guess I'd love to understand the degree to which you think this is an example of that and we'll stop others or are we going to see some back and forth here? Like what we saw last quarter with the licence e coming off?
Speaker Change: Thank you.
Speaker Change: So I can describe the strategy and I think we've uh we may not know history of it. Strategy is to protect the IP
Speaker Change: if watching it, uh, selectively smartly
Speaker Change: by fundamentally going after the supply chain that in the price industry. As, as I mentioned earlier, relied
Speaker Change: on copying successful products. Uh, that's been part of what some people call the ecosystem.
Speaker Change: Uh, it's an ecosystem.
That for the most part in all players that don't innovate, they tend to copy each other.
Speaker Change: and when a successful product, uh, can Market,
Speaker Change: and hyperscalers or, uh, oems won't have it and will have commodity
Speaker Change: Uh, these players will jump in office.
Speaker Change: And so, the supply chains start to talk with the enablers.
They enable copica products, then there are copper and captures incorporate them in.
Speaker Change: Higher value assemblies. I speaking much higher value assemblies.
Speaker Change: and then uh, further down in supply chain OEM
Speaker Change: That in a way where the history dating, this kind of practice, we are committed to bringing this practice at least in so far as Igor and P is concerned.
Speaker Change: To an abrupt time and and they will entail.
Speaker Change: It's an instance it's confidence going lying down. Um because they know
Speaker Change: uh, about their IP, they should respect it and if they don't, they are still consequences to buy infringement 1 of the software is is is enjoyment or um,
Speaker Change: Exclusion about this. And, um, and that's what's happened with our first action is more of that coming.
So the strategy is Crystal Clear, everybody understand.
Speaker Change: Thank you.
Speaker Change: Please stand by for our next question.
Our next question comes from the line of John Dillon with DNB Capital, your line is open.
John Dillon: Hi guys. Congratulations. On a nice settlement. Really nice to see.
Speaker Change: Phil, my question for you is, um, at the annual shareholder meeting, you presented a chart that showed a timeline, when you can be delivering Gen 5, vertical to your lead customer. So I'm wondering, is that still on target? Are you still going to need all those dates? Uh, to still look. Does it still look solid? And I have a follow-up question after that.
John: so, John
John: Um, the car multiplier piece that has been you know, challenging because of this very very high Crown density as well as the other building blocks. So we're still as you know, as these cars are showing this meeting.
John: Very much focused on.
John: Addressing the needs of our lead customer. We're keeping our power dry with respect to engaging uh with other Venture customers. Uh, but uh, shortly after satisfying, the way I kind of necessary need of our lead customer that will be ready as feel, um, pointed out earlier with demo system boards, right? Your tools
To see database scalable. Uh, add option side.
John Dillon: So I think the question, sorry the question was on the the slide that we show. We're still on target with that slide that we showed John. Yeah. Okay. So did you deliver the 83% solution then?
John: Yes.
John: we have, um,
John: Provided, uh, relatively significant quantities of the, um, as percent solution which, by the way was, um, the back stop agreed upon with the customer to begin with. And and we're not our way, making good progress with respect to to 100% And 130%.
Speaker Change: Excellent. Then my follow-up question would be. When do you expect to have a fully productized product that you can, you can produce in quantities for the General Market?
I'm going to not spell that out again. I suggested earlier John we want to stay very very focused on taking care of our lead customer first. Uh, and that's
Speaker Change: 100% of ours at this point in time. That's not to say that we're not preparing for a General market introduction. As I mentioned earlier, we made great sides with demo system, balls tools and, and General market, uh, capabilities. But we're only going to pull the figure on that once we're done.
Speaker Change: With 100%, Uh, current level. Uh, there was initiate targeted. Um, just before we get started 30%, uh, uh Rich. Uh
Speaker Change: Goal.
Speaker Change: Excellent. Okay. I I got you.
Speaker Change: so, let me ask
Speaker Change: that to that.
Speaker Change: Just a little bit.
Speaker Change: Generation processes, networking chips, um, so forth. So, so, it's not that there's not any work going on. It's just that the front end team isn't involved in. If you like the development of the product for the, the lead customer. So we're able to have the resources available to talk and gather information. Such that when we do launch that out to the General market, you know, we're ready to hit those customers, you know, very, very quickly with solutions that they need. So, so there's that work is ongoing and we've got a lot of Engagement with anybody looking at it right now.
Speaker Change: Will you lead customer be able to ship the product that you're shipping them and to their customers is it is, it is, it is a quality uh going to be good enough that they can actually use it to ship to their customers. Are they still in the kind of evaluation stage?
Speaker Change: so I I can't give you the details from you, so, but I can say this that
Speaker Change: You know, the the the customer is, considering notiz the platform that we started to ship.
Speaker Change: But our objective is to enable a higher, uh, level of accountability and improve performance and to do so.
Speaker Change: Uh, I had of the customer uh target market introduction date.
Speaker Change: Okay, excellent. Thank you very much. It's very helpful and again, congratulations.
Thank you.
Please stand by for our next question.
Speaker Change: We have a follow-up question from the line of Quinn Bolton with needleman company. Your line is open.
Uh, he Patricia at the annual shareholders meeting you were asked, you know, is is your outlook for 2025 to be, uh, still a record year. I think, at the annual shareholder meeting you had, you know, reference some increased uncertainty around terrorists, but she still thought you got there, obviously with the June quarter results and the 45 million dollar patent litigation settlement. Um, it it certainly looks like you're tracking to a record year in 2025, but wondering if you had any updated thoughts on whether 2025 is a record year for revenue and then I've got a another follow-up.
Yeah, it's suggested. Um, I think for a couple of quarters we do expect
Speaker Change: Uh, 25 to be at every year.
Speaker Change: Excellent. Okay. And then the, the follow-up question, I know you don't provide quarterly guidance. But just wondering if, if you could directly, um, you know, give some comments, your royalty Revenue was on a very nice upward trajectory through 2024 in March and June, you sort of pulled back to
Speaker Change: To the roughly 10 million, dollar level. And I think you'd mentioned that 1 of the OEM licenses wasn't paying on a new generation product. But it, it looks like that. Royalty income level has has stabilized. I'm just wondering if you look into the back half of the year, would you generally expect royalty to begin to increase again or does it stay in this tennis million dollar range? Could you give any sort of qualitative?
Comment on how you think the royalty portion of the revenue stream might Trend over the next couple of quarters.
Speaker Change: In Q2.
Speaker Change: Uh I think it's 6 to say that in any 1 Quality that there is a great deal of upside.
Speaker Change: On a bigger scale.
Speaker Change: Than, uh, without sending you to.
Speaker Change: So, and that's the reason frankly, why?
Speaker Change: We can't uh, provide a reliable forecasts that there's a great deal of variance through different scenarios.
and this would say, uh, even a strategy and commitment to enforce the IP
Speaker Change: we don't want to be in effect uh whom hooked on any particular Target in any 1 quarter, lasted drivers to The Leverage we need in order to the successful in bringing about
Speaker Change: the right up.
Speaker Change: so that as you can imagine, create some certainty, which is at this point in time, you know, part of
Speaker Change: our, um,
Speaker Change: You know, IP business.
We progress.
Speaker Change: More Diversified the licensee place.
Speaker Change: The uh the licensee business is going to become more predictable at that point in time.
Speaker Change: The kinds of challenging forecasting that we presently place will no longer be there.
Speaker Change: Maybe just Patricia. I understand that. That like, patent litigation settlements are difficult to to forecast timing and, uh, probably the, uh, signing of new licenses, to the extent. They include a license. Uh, payment is, is a little bit less predictable, but royalty payments. I would think on existing licenses might be a little bit more predictable and I guess that's what I was asking about. I know you had again talked about some, you know, sort of headwinds in that royalty income, uh, with the OEM license. And I'm just kind of wondering at this level. Do you think that those headwinds are now largely behind the company on on the existing licenses? I'm I'm not trying to get you to comment on new licenses or or you know patent uh litigation settlement, you know, in the future just more kind of wondering if that um, OEM license had 1 that you had previously talked about might be behind you at this point.
Speaker Change: uh, it's not behind this, you know, we are enforcing the existing exclusion order and and we're looking at the Champs actions, uh, for
Speaker Change: um, you know, set making sure that uh, uh, the
Speaker Change: Use of our IP, uh, it does not go. Um,
Speaker Change: Without, uh, appropriate routes or penalties for not paying relatives when they were due.
Speaker Change: Understood. Okay, thank you.
Speaker Change: Thank you.
Speaker Change: Please stand by for our next question.
Our next question comes from the line of James. Liberman with American Trust Investment Services Giannis, open.
Speaker Change: Thank you, great results. It's good to see the licensing.
Speaker Change: And the settlement income coming in, you mentioned the automotive area and an event with a company in Europe, in Asia. And in the past, you've mentioned you're seeing some continuing strengths in the electric vehicle Market in China. Can you give a a little bit better overall color to how you see that playing out the
Speaker Change: Yeah, so, uh, the automotive Market, I mentioned that the, uh, the annual shareholders meeting. Um, this pretty obvious to people that have dealt with the automotive Market, you you don't just enter that market. It's a, it's a hard slog, It's a Grind. You, you have to really prove yourself as a, as a supplier. So typically starting out with lower volume, uh, programs and platforms, uh, and then expanding the business from there. Once you, you know, proven yourself, um, the critical steps to that. Um,
Speaker Change: Uh, I sort of collaborations on on different, um, you know, power delivery networks with tier 1s and oems, which we've established. We're now going through the audit phase with a number of customers, that's a very critical step where they have teams that come in and look at all our Quality Systems and Manufacturing Systems and product development systems. So we're we're going through those now. So we're we're well on the journey. No pun intended to, you know, becoming established at least um as a as a lower volume platform supplier, but those do expand then fairly quickly after that. So. So we're very early days still um I think there's still a ways to go before that becomes a significant piece of our Revenue, probably out in the 29th, 30 2030 time frame. Uh, but we are excited about, you know, the, uh, the activity that's going on there.
Speaker Change: Thank you very much for that at this time.
Speaker Change: Thank you.
Speaker Change: Please stand by for our next question.
John Tang: Our next question comes from the line from a follow-up question. From John 10, 101. Tang with CJs, your line is open.
Speaker Change: Hi, thanks for the follow-up. Um, a couple months ago that the largest chip designer in the AI space. Um, you know, disclosed their, uh, plans, for 800 volt servers, and the architectures. They plan to use. They named a lot of Partners in the press release their. Um, and I was wondering, uh, since you weren't on the list, that was announced if there's an opportunity there at all. Does that shut you out? Um, or is there still a way to participate in that ecosystem? Uh, either with this designer or, or with others, um, with the products that you have?
Speaker Change: So I think, as mentioned in the fields, prepare remarks, um,
Speaker Change: We have a history of pioneering, uh, high voltage bus conversion with, or without isolation with the l. I p a a levels
Speaker Change: Uh, I think anybody uh, now pursuing high density.
Speaker Change: Uh, from aandra Vault 40 volt uh, or in the general Realm.
um, is going to be
Speaker Change: um,
Speaker Change: needing our IP, um,
Speaker Change: or, you know, in effect, um, suffering consequences in terms of, uh,
Uh, inferior power density. Uh, as Phil mentioned, uh, we're bringing it to vision is a new uh, higher power module. That is uh, um, a good fit for a lot of these requirements. Uh, you know, 10 kilowatt a block, which is very, very small. It's a small fraction.
Uh, of the size of any uh competitive alternative that to our knowledge is being developed.
Speaker Change: So here again, we have a leading technology lead leading. Um
Speaker Change: uh, Power density capability and last but not least a lot of significant uh IP that we think is going to
Become necessary, uh, for high performance solutions.
Speaker Change: John, there's a long way between having a high voltage discrete Gan or a silicon carbide product to a 800 volt multi kilowatt, uh, you know, rack power system. So yeah, there's a lot of announcements there but there's a long way from that to having a a real high performance high efficiency solution. So we shall see and also a lot of misconceptions you know just frankly there is a idea or maybe T when it comes to some of these things.
Speaker Change: So we've been making, um, it undervolt bus converters for many, many years.
Speaker Change: Uh, we know it takes and we're doing it in ways.
Speaker Change: That, um, uh, as measured as an example, in terms of switching frequency or an order on Monday, or greater than what can be done with the gunfights, or, uh, City on cut by fast.
Jim Schmidt: Great, thank you for that color. That's that's much appreciated. Um, last 1 for Jim. Uh if you could just any thoughts on Opex, going forward, uh, compared to the current quarter that you just ended
Jim: well, I think
Jim: Results that if you exclude the the uh, 54.1 million instead of legal fee. Um, a lot back fully back, we drop sequentially. Um, that would be because in part and primarily because of a low on the other legal expenses, we had to incur on some of these cases. So I think uh,
Jim: Um, we're in a good state right now. Relative to a nice balance of operating expense and and revenue. Um, I think as things heat up and we go forward, whether other, uh, actions then we'll, we'll see and it'll be lumpy. I think an Opex and we've said that is going to be the case.
Jim: That's the first action in terms of contingency, we are kept out. So we've been out all the time.
Speaker Change: Understood. Good luck.
Jim: Thank you.
Please stand by for our next question.
Our next question comes from the line of Don McKenna with DB McKenna and Company. Your line is open.
Thank you. I wanted to ask about the settlement payment if that represents the entirety of the settlement. Or if that's an initial payment,
Jim: And secondly, uh, Jim, I thought I heard you say there was some stock repurchases during the quarter, if that was the case. Uh, can you like, you know, expand on that, a little bit, the numbers of shares and price.
Jim: How that on the settlement?
Jim: Yeah, so I cannot comment on the specifics for settlement.
Jim: So I think on the, on the share, we purchase I mentioned in the prepared remarks, you know, on the order of 17.5 Million worth of share repurchases, last quarter,
Jim: um, and on the order of 400,000 or is shares, repurchased During the period,
Jim: Thank you.
Thank you.
Jim: Please stand by for our next question.
Speaker Change: We have a follow-up from the line of John Dillon with DMB Capital Yin is open.
Speaker Change: My question was, uh, was answered sir. Thank you very much.
Speaker Change: Thank you.
Please stand by for our next question.
Speaker Change: Whoever follow-up question, from the line of Richard Channon with Craig Callum. Your line is open.
Speaker Change: And past calls as well as the shareholders meeting. Uh, the first 1 is talking about record results of the year and I heard your answer today. And then he also talked about a wide range of outcomes.
Speaker Change: Uh, as we look at your results today here, obviously a very large settlement, uh, obviously it creates a very wide range here, um, but as we if we just look at your product Revenue, um, how do we think about what can create these wide range of outcomes?
Speaker Change: Um, and I'd like to take the tariffs off the table. You've talked about that today. But how about maybe discussing and kind of give you some sense of where you see some of these positive outcomes by product as we go through the year, that could create uh you know, record year even better. Thank you.
Speaker Change: yeah, so to be clear, um,
Speaker Change: The, the major source of uncertainty in the short term is with respect to licensing and litigation practice.
Speaker Change: with respect to to
The, the product Revenue.
Speaker Change: The New York home.
Speaker Change: Uh, sees us steal.
Speaker Change: Making.
Speaker Change: Poor use in terms of the session of our first half.
Speaker Change: Uh which represents obviously burden with respect to margins. Uh and for level profitability, even though we've been making good progress on that front primarily because
Speaker Change: Of, um, the efficiencies associated with the shortest at a time. And, uh, and gather yields and that August is on hold, but on the profound, which is, as I think, I know that in, um, um, my quotes, um, associated with the press release, the problem is obviously very important. We're very much focused on that, uh, We've made tremendous investments in advancing sell the art.
Um, and that's
Speaker Change: All, uh, being reflected in our IV Pro capability, um, with in particular AI, the central opportunities, you know, point of load as well as as as earlier.
Speaker Change: Passing uh, through critical Habs world.
Speaker Change: And they undervolt um is that kind of product superiority and Technology lead?
Speaker Change: That will heal the app.
Speaker Change: Uh, it's not going to happen overnight, it's something that will take some time.
Speaker Change: But it needs to say we're very much focused on that part.
Speaker Change: Of the Salvage as well.
Speaker Change: But that's not what the New York uncertainty, which is like to to quarterly, upline and bottom line numbers.
Okay, and I guess just following up on that, uh, Patricio. Um,
Speaker Change: Certainly would obviously been talking about uh, second gen VPD and some of the newer products here but relative to talking about the, the record year here. It doesn't seem like there's enough time for those new products to have that much of an effect to benefit this year but I just want to make sure that was implied in your your comment there. Thank you. Uh, they are not going to move the needle big time but there's going to be progress and certainly a contribution on the second half of the year.
Speaker Change: Okay, fair enough, I will jump on the line again. Thank you guys. Thank you.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen, as a reminder to ask the question, please press star 1 on your telephone.
Speaker Change: I'm showing no further questions in the queue.
Thank you, ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect
Speaker Change: Thank you.