Vicor (VICR) Q4 2025 earnings summary

Executive summary

• Q4 2025 product revenue rose 4.5% sequentially and 15.3% year-over-year to $92.7M; full-year product revenue grew 12.1% to $350.3M.

• Royalty revenue for Q4 was $14.5M, down 33.1% sequentially due to a Q3 catch-up; full-year royalty revenue increased 23.2% to $57.4M.

• Including a $45M patent litigation settlement, total 2025 revenue reached $452.7M, up 26.1% year-over-year.

• Net income for Q4 was $46.5M ($1.01 per diluted share), up from $10.2M a year ago, aided by a $27.3M tax benefit; full-year net income surged to $118.6M ($2.61 per diluted share) from $6.1M ($0.14) in 2024.

• 2026 is expected to bring record bookings, revenues, and profitability, with fab utilization approaching 80% run rate.

Financial highlights

• Q4 consolidated gross margin was 55.4%, down 2.1% sequentially but up year-over-year; full-year gross margin improved to 57.3% from 51.2%.

• Q4 operating income was $15.7M (14.6% margin); full-year operating income reached $81.8M (18.1% margin), reversing a prior-year operating loss.

• Q4 tax benefit of $27.3M led to an effective tax rate of -142%; full-year tax benefit was $41M, with a -25.4% effective rate.

• Q4 diluted EPS was $1.01; full-year diluted EPS rose to $2.61 from $0.14.

• Cash and equivalents at Q4 end were $402.8M, up 11.2% sequentially; operating cash flow for Q4 was $15.7M.

Outlook and guidance

• 2026 is projected to see record bookings, revenues, and profitability, with fab utilization expected to reach 80% run rate, implying a potential $800M product revenue run rate.

• Management expects record product revenues in 2026, driven by demand in high-performance compute, test equipment, industrial, aerospace, and defense.

• IP licensing revenues are projected to reach record levels in 2026 due to enforcement actions and new licensing opportunities.

• No formal quarterly guidance provided due to unpredictability in licensing outcomes.

• Licensing revenue is expected to expand significantly, with hundreds of millions in potential annual revenue.