Revenue Growth and Diversification
The company's revenue growth was driven by its product and royalty streams. The IP licensing business was a significant contributor, with revenue including a $45 million patent litigation settlement. As Phil Davies mentioned, "our IP licensing practice becoming a major contributor to our top and bottom lines." This diversification is expected to continue, with Patrizio Vinciarelli stating that they see their licensing business expanding.
Operational Highlights and Capacity Expansion
Vicor's operational performance was also notable, with bookings and backlog improving sequentially. The company is taking steps to expand its capacity, exploring the acquisition of a large piece of real estate for a new fab, which could support up to 0.5 million square feet of manufacturing space. The existing fab is expected to be well utilized within a year, and the new fab will require a CapEx spending of $250-300 million.
Valuation and Growth Expectations
Given the company's growth prospects, Vicor's valuation metrics are worth examining. The stock trades at a P/E Ratio of 65.5, P/S Ratio of 17.09, and EV/EBITDA of 70.45. Analysts estimate next year's revenue growth at 32.3%. With a strong track record and expanding IP licensing business, the company's growth trajectory appears promising. However, the high valuation multiples suggest that much of this growth is already priced in.
Future Outlook
Patrizio Vinciarelli expects a significant revenue ramp, with a run rate of around $800 million in product revenue, more than double what was achieved in 2025. The focus is on growing the licensing revenue stream, with the expectation of adding 3-5 new major licensees in the high-end computing AI market. With a book-to-bill ratio above 1.2 in Q1, exceeding the Q4 ratio, the company's momentum appears to be continuing into 2026.