Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
☑
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2026
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________________
Commission File Number 0-18277
VICOR CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
04-2742817
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
25 Frontage Road, Andover, Massachusetts 01810
(Address of Principal Executive Offices) (Zip Code)
(978) 470-2900
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value
$0.01 per share
VICR
The NASDAQ Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Smaller reporting company
Accelerated filer
Emerging growth company
Non-accelerated filer
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
The number of shares outstanding of each of the issuer’s classes of Common Stock as of April 23, 2026 was:
Common Stock, $.01 par value
33,863,689
Class B Common Stock, $.01 par value
11,717,718
INDEX
Page
Part I — Financial Information:
Item 1 - Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets at March 31, 2026 and December 31, 2025
1
Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025
2
Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2026 and 2025
3
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025
4
Condensed Consolidated Statements of Equity for the three months ended March 31, 2026 and 2025
5
Notes to Condensed Consolidated Financial Statements
6
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations
15
Item 3 — Quantitative and Qualitative Disclosures About Market Risk
22
Item 4 — Controls and Procedures
23
Part II — Other Information:
24
Item 1 — Legal Proceedings
Item 1A — Risk Factors
Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds
Item 5 — Other Information
Item 6 — Exhibits
25
Signatures
26
Part I – Financial Information
Item 1 – Financial Statements
Condensed Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)
March 31, 2026
December 31, 2025
Assets
Current assets:
Cash and cash equivalents
$
404,245
402,805
Accounts receivable, net
67,402
60,716
Inventories
94,830
91,340
Other current assets
32,992
32,502
Total current assets
599,469
587,363
Long-term deferred tax assets, net
27,798
27,463
Long-term investment, net
2,508
2,462
Property, plant and equipment, net
154,637
147,690
Other assets
20,469
20,853
Total assets
804,881
785,831
Liabilities and Equity
Current liabilities:
Accounts payable
16,733
12,290
Accrued compensation and benefits
13,456
12,031
Accrued litigation
—
28,275
Accrued expenses
4,425
3,691
Short-term lease liabilities
1,433
1,568
Sales allowances
3,661
3,136
Income taxes payable
71
904
Short-term deferred revenue and customer prepayments
2,155
3,426
Total current liabilities
41,934
65,321
Long-term income taxes payable
3,109
3,086
Long-term lease liabilities
5,713
5,608
Total liabilities
50,756
74,015
Commitments and contingencies (Note 11)
Equity:
Vicor Corporation stockholders’ equity:
Class B Common Stock: 10 votes per share, $.01 par value, 14,000,000 shares authorized, 11,717,718 shares issued and outstanding in 2026 and 11,726,718 shares issued and outstanding in 2025
118
Common Stock: 1 vote per share, $.01 par value, 62,000,000 shares authorized 45,955,940 shares issued and 33,835,864 shares outstanding in 2026; 45,910,601 shares issued and 33,532,377 shares outstanding in 2025
460
Additional paid-in capital
467,638
462,227
Retained earnings
442,023
421,359
Accumulated other comprehensive loss
(1,697
)
(1,672
Treasury stock at cost: 12,120,076 shares in 2026 and 12,378,224 shares in 2025
(154,682
(170,935
Total Vicor Corporation stockholders’ equity
753,860
711,557
Noncontrolling interest
265
259
Total equity
754,125
711,816
Total liabilities and equity
See accompanying notes.
-1-
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
Three Months Ended
March 31,
2026
2025
Product revenue
98,004
83,206
Royalty revenue
14,965
10,762
Total net revenues
112,969
93,968
Cost of product revenues
50,603
49,603
Gross margin
62,366
44,365
Operating expenses:
Selling, general and administrative
23,192
25,137
Research and development
22,290
19,377
Total operating expenses
45,482
44,514
Income (loss) from operations
16,884
(149
Other income (expense), net:
Total unrealized gains on available-for-sale securities, net
46
Less: portion of gains recognized in other comprehensive income
(46
(23
Net credit gains recognized in earnings
Other income (expense), net
3,519
3,134
Total other income (expense), net
Income before income taxes
20,403
2,985
Less: (Benefit) provision for income taxes
(273
424
Consolidated net income
20,676
2,561
Less: Net income attributable to noncontrolling interest
12
Net income attributable to Vicor Corporation
20,664
2,539
Net income per common share attributable to Vicor Corporation:
Basic
0.45
0.06
Diluted
0.44
Shares used to compute net income per common share attributable to Vicor Corporation:
45,470
45,217
47,254
45,495
-2-
Condensed Consolidated Statements of Comprehensive Income
(In thousands)
Foreign currency translation (losses) gains, net of tax (1)
(77
173
Unrealized gains on available-for-sale securities, net of tax (1)
Other comprehensive (loss) income
(31
196
Consolidated comprehensive income
20,645
2,757
Less: Comprehensive income attributable to noncontrolling interest
35
Comprehensive income attributable to Vicor Corporation
20,639
2,722
-3-
Condensed Consolidated Statements of Cash Flows
Operating activities:
Adjustments to reconcile consolidated net income to net cash (used for) provided by operating activities:
Depreciation and amortization
5,337
5,189
Stock-based compensation expense
3,852
4,349
Provision for doubtful accounts
7
Litigation payment
(28,557
Decrease in other assets
101
480
Deferred income taxes
(337
(2
Increase in long-term income taxes payable
74
Change in current assets and liabilities, net
(5,037
7,470
Net cash (used for) provided by operating activities
(3,942
20,128
Investing activities:
Additions to property, plant and equipment and internal-use software
(12,387
(4,550
Net cash used for investing activities
Financing activities:
Proceeds from employee stock plans
17,812
3,166
Net cash provided by financing activities
Effect of foreign exchange rates on cash
(43
82
Net increase in cash and cash equivalents
1,440
18,826
Cash and cash equivalents at beginning of period
277,273
Cash and cash equivalents at end of period
296,099
Supplemental disclosure:
Purchases of property, plant and equipment and internal-use software incurred but not yet paid
742
2,990
-4-
Condensed Consolidated Statements of Equity
Total
Accumulated
Vicor
Class B
Additional
Other
Corporation
Common
Paid-In
Retained
Comprehensive
Treasury
Stockholders’
Noncontrolling
Stock
Capital
Earnings
Loss
Equity
Interest
Three Months Ended March 31, 2026
Balance on December 31, 2025
Issuance of Common Stock under employee stock plans
1,559
16,253
Components of comprehensive income, net of tax:
Net income
Other comprehensive loss
(25
(6
Total comprehensive income
Balance on March 31, 2026
Income (Loss)
Three Months Ended March 31, 2025
Balance on December 31, 2024
452
407,617
302,803
(1,495
(139,424
570,071
220
570,291
3,165
Other comprehensive income
183
13
Balance on March 31, 2025
453
415,131
305,342
(1,312
580,308
255
580,563
-5-
(unaudited)
1. Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements of Vicor Corporation and its consolidated subsidiaries (collectively, the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, these interim financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for any other interim period or the year ending December 31, 2026. The balance sheet at December 31, 2025 presented herein has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed by the Company with the SEC on March 2, 2026.
2. Inventories
Inventories were as follows (in thousands):
Raw materials
69,890
69,596
Work-in-process
19,384
14,954
Finished goods
5,556
6,790
3. Investments
As of March 31, 2026 and December 31, 2025, the Company held one auction rate security with a par value of $3,000,000 and an estimated fair value of approximately $2,508,000 and $2,462,000, respectively, purchased through and held in custody by a broker-dealer affiliate of Bank of America, N.A., that has experienced failed auctions (the “Failed Auction Security”) since February 2008. The Failed Auction Security held by the Company is Aaa/AA+ rated by major credit rating agencies, is collateralized by student loans, and is guaranteed by the U.S. Department of Education under the Federal Family Education Loan Program. Management is not aware of any reason to believe the issuer of the Failed Auction Security is presently at risk of default. Through March 31, 2026, the Company has continued to receive interest payments on the Failed Auction Security in accordance with the terms of its indenture. Management believes the Company ultimately should be able to liquidate the Failed Auction Security without significant loss primarily due to the overall quality of the issue held and the collateral securing the substantial majority of the underlying obligation. However, current conditions in the auction rate securities market have led management to conclude the recovery period for the Failed Auction Security exceeds 12 months. As a result, the Company continued to classify the Failed Auction Security as long-term as of March 31, 2026.
-6-
Details of our investments are as follows (in thousands):
Cash and Cash
Long-Term
Equivalents
Investment
Measured at fair value:
Available-for-sale securities:
Money market funds
360,758
Failed Auction Security
Other measurement basis:
Cash on hand
43,487
367,340
35,465
The following is a summary of the available-for-sale securities (in thousands):
Gross
Estimated
Unrealized
Fair
Cost
Gains
Losses
Value
3,000
492
538
As of March 31, 2026, the Failed Auction Security had been in an unrealized loss position for greater than 12 months.
The amortized cost and estimated fair value of the available-for-sale securities on March 31, 2026, by type and contractual maturities, are shown below (in thousands):
Fair Value
Failed Auction Security:
Due in sixteen years
-7-
4. Fair Value Measurements
The Company accounts for certain financial assets at fair value, defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions market participants would use in pricing an asset or liability. A three-level hierarchy is used to show the extent and level of judgment used to estimate fair value measurements.
Assets and liabilities measured at fair value on a recurring basis included the following as of March 31, 2026 (in thousands):
Using
Significant
Quoted Prices
in Active
Observable
Unobservable
Total Fair
Markets
Inputs
Value as of
(Level 1)
(Level 2)
(Level 3)
Cash equivalents:
Long-term investment:
Assets and liabilities measured at fair value on a recurring basis included the following as of December 31, 2025 (in thousands):
The change in the estimated fair value calculated for the investment valued on a recurring basis utilizing Level 3 inputs (i.e., the Failed Auction Security) for the three months ended March 31, 2026 was as follows (in thousands):
Balance at the beginning of the period
Gain included in Other comprehensive income
Balance at the end of the period
Management utilized a probability weighted discounted cash flow model to determine the estimated fair value as of March 31, 2026.
-8-
5. Segment Information
The Company has determined its Chief Operating Decision Maker (“CODM”) to be the Chief Executive Officer ("CEO"). The CEO reviews financial information presented on a consolidated basis for purposes of managing the business, allocating resources, making operating decisions and assessing financial performance. The Company is organized and operates as a single operating and reportable segment. The CODM assesses performance for the segment and decides how to allocate resources based on consolidated net income. The CODM manages the business using consolidated expense information for the single operating segment. All expense categories on the Condensed Consolidated Statements of Operations are significant and there are no other significant segment expenses that would require disclosure.
The Company offers a comprehensive range of modular building blocks enabling rapid design of a power system specific to a customer’s precise needs. Based on design, performance, and form factor considerations, as well as the range of evolving applications for which the products are appropriate, the Company categorizes its product portfolios as either Advanced Products or Brick Products, which constitute one segment. Both product lines are built in the Company’s manufacturing facility in Andover, Massachusetts employing similar processing and production techniques, and are supported by the same sales and marketing organizations. The measure of segment assets is reported on the balance sheet as total consolidated assets.
The following tables present the Company’s net revenues disaggregated by geography with respect to the Company’s single operating segment for the three months ended March 31, 2026 and 2025 (in thousands):
Three Months Ended March 31,
United States
57,713
36,842
Europe
13,600
9,873
Asia Pacific
41,222
47,087
All other
434
166
The Company's long-lived tangible assets, as well as the Company's operating lease right-of-use assets recognized on the Condensed Consolidated Balance Sheets were located as follows:
(in thousands)
152,171
140,700
International
2,466
6,990
-9-
See the condensed consolidated financial statements and footnotes for other financial information regarding the Company’s operating segment.
6. Revenues
The following tables present the Company’s net revenues disaggregated by geography based on the location of the customer, by product line (in thousands):
Brick Products
Advanced Products
23,215
34,498
10,271
3,329
14,502
26,720
61
373
48,049
64,920
13,535
23,307
7,773
2,100
12,801
34,286
164
34,111
59,857
The following tables present the Company’s net revenues disaggregated by the category of revenue, by product line (in thousands):
Direct customers, contract manufacturers and non-stocking distributors
24,905
40,092
64,997
Stocking distributors, net of sales allowances
23,059
8,362
31,421
Non-recurring engineering
85
1,501
1,586
Royalties
18,282
43,488
61,770
15,364
3,846
19,210
465
1,401
1,866
360
-10-
The following table presents the changes in certain contract liabilities (in thousands):
Change
(2,155
(3,426
1,271
(3,661
(3,136
(525
The Company records deferred revenue, which represents a contract liability, when cash payments are received or due in advance of performance under a contract with a customer. The Company recognized revenue of $0 and $1,326,000 for the three months ended March 31, 2026 and 2025, respectively, that was included in deferred revenue at the beginning of the respective period.
7. Stock-Based Compensation
The Company uses the Black-Scholes option pricing model to calculate the fair value of stock option awards, whether they possess time-based vesting provisions or performance-based vesting provisions, and awards granted under the Vicor Corporation 2017 Employee Stock Purchase Plan (“ESPP”), as of their grant date. Stock-based compensation expense was as follows (in thousands):
836
967
1,959
2,194
1,057
1,188
Total stock-based compensation
Compensation expense by type of award was as follows (in thousands):
Stock options
3,527
4,077
ESPP
325
272
8. Rental Income
Income, net under the Company’s operating lease agreement, for its owned facility leased to a third party in California, was approximately $284,000 for each of the three-month periods ended March 31, 2026 and 2025. The initial term of the lease agreement expired on May 31, 2024 and was extended for an additional eighty-four months, commencing June 1, 2024 and ending May 31, 2031.
9. Income Taxes
The (benefit) provision for income taxes is based on the estimated annual effective tax rate for the year which includes estimated federal, state and foreign income taxes on the Company's projected pre-tax income (loss).
-11-
The (benefit) provision for income taxes and the effective income tax rates were as follows (dollars in thousands):
(Benefit) provision for income taxes
Effective income tax rate
(1.3
)%
14.2
%
The effective tax rates differ from the statutory tax rates for the three months ended March 31, 2026 primarily due to excess deductions related to share-based compensation, and for the three months ended March 31, 2025 primarily due to the Company’s full valuation allowance position against net domestic deferred tax assets as of March 31, 2025. The (benefit) provision for income taxes for the three months ended March 31, 2026 and 2025 included estimated federal, state, and foreign income taxes in jurisdictions in which the Company does not have sufficient tax attributes.
The Company released its valuation allowance on the majority of its deferred tax assets as of December 31, 2025. The Company maintained a valuation allowance of $17,500,000 related primarily to state tax attributes as of March 31, 2026. On a periodic basis, the Company reassesses any valuation allowances that it maintains on its deferred tax assets, weighing positive and negative evidence to assess the recoverability of the deferred tax assets.
10. Net Income per Share
The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share amounts):
Numerator:
Denominator:
Denominator for basic net income per share – weighted average shares (1)
Effect of dilutive securities:
Employee stock options (2)
1,784
278
Denominator for diluted net income per share – adjusted weighted-average shares and assumed conversions
Basic net income per share
Diluted net income per share
-12-
11. Commitments and Contingencies
Capital Expenditure Commitments
At March 31, 2026, the Company had approximately $25,309,000 of cancelable and non-cancelable capital expenditure commitments, principally for manufacturing equipment.
SynQor Litigation and Payment of Final Judgment Amount
As previously reported in its Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K, the Company is the defendant in a patent infringement lawsuit originally filed on January 28, 2011 by SynQor, Inc. (“SynQor”) in the U.S. District Court for the Eastern District of Texas (the “District Court”). SynQor alleged that certain Vicor products infringed certain United States Patents owned by SynQor.
On October 26, 2022, after a trial in the District Court, the jury returned a verdict finding that the Company willfully infringed one SynQor patent, and awarding SynQor damages in the amount of $6,500,000.
On May 20, 2024, the District Court issued an Amended Corrected Final Judgment, awarding SynQor actual damages of $6,500,000, enhanced damages of $4,500,000, costs in the amount of approximately $87,000, attorney fees in the amount of $9,500,000, and pre-judgment interest of approximately $5,400,000, for a total judgment of approximately $26,000,000. In addition, the District Court ordered that post-judgment interest would accrue at an amount of $2,323 per day starting on April 24, 2024 until the judgment is paid, compounded annually, and that additional post-judgment interest in the amount of $1,351 per day would accrue starting on May 20, 2024 until the judgment is paid, compounded annually.
On May 22, 2024, the Company filed an appeal of the District Court’s judgment to the United States Court of Appeals for the Federal Circuit. On February 13, 2026, the United States Court of Appeals for the Federal Circuit affirmed the District Court’s judgment. On March 18, 2026, the Company paid SynQor $28,557,256, representing the full amount due under the District Court's judgment, inclusive of post-judgment interest.
Class Action Litigation in the U.S. District Court for the Northern District of California
On July 11, 2024, purported short sellers of the Company’s stock filed a putative class action lawsuit in the U.S. District Court for the Northern District of California styled Benjamin Pouladian et al. v. Vicor Corporation et al., case number 3:24-cv-04196. The suit was brought against the Company and the Company’s Chief Executive Officer, President, and Chairman (the "Defendants"). The plaintiffs alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5(b) promulgated thereunder, due to allegedly false and misleading statements during earnings calls in 2023 about the Company’s commercial relationship with an existing customer. The complaint sought damages, interest and attorneys’ fees and costs. The court appointed lead plaintiffs on October 24, 2024 and restyled the case as In re Vicor Securities Litigation. An amended complaint was filed on November 22, 2024 which similarly alleged purported violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5(b) promulgated thereunder. The Defendants filed their motion to dismiss the amended complaint on January 20, 2025 and, on June 6, 2025, the U.S. District Court for the Northern District of California granted the motion to dismiss with leave to amend.
Settlement of Certain Intellectual Property Claims
On May 1, 2025, the Company entered into various settlement agreements to resolve lawsuits, arbitrations, and appeals related to certain intellectual property claims between the Company and certain parties, pursuant to which a total of $45,000,000 was paid to the Company in May 2025 (collectively, the “patent litigation settlement”). The Company incurred $5,100,000 in legal fees in connection with the patent litigation settlement, which were paid in June 2025.
Other Proceedings
In addition, the Company is involved in certain other litigation and claims incidental to the conduct of its business, both as a defendant and a plaintiff. While the outcome of such other lawsuits and claims against the Company cannot be predicted with
-13-
certainty, management does not expect such litigation or claims will have a material adverse impact on the Company’s financial position or results of operations.
12. Impact of Recently Issued Accounting Standards
In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"), requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.
In December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities ("ASU 2025-10"), which establishes authoritative guidance on the recognition, measurement, presentation, and disclosure of government grants. Under ASU 2025-10, government grants are recognized when it is probable that the entity will both comply with the conditions of the grant and the grant will be received. The ASU provides specific accounting models for grants related to assets and grants related to income, including options to recognize government grants as deferred income or as a reduction of the asset’s cost basis. The ASU also requires enhanced disclosures regarding the nature of government grants, significant terms and conditions, accounting policies applied, and amounts recognized in the financial statements. ASU 2025-10 is effective for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-10.
Other new pronouncements issued but not effective until after March 31, 2026 are not expected to have a material impact on the Company’s consolidated financial statements.
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Management’s Discussion and Analysis of
Financial Condition and Results of Operations
Cautionary Note Regarding Forward-Looking Statements
The Company’s consolidated operating results are affected by a wide variety of factors that could materially and adversely affect revenues and profitability, including the risk factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. As a result of these and other factors, the Company may experience material fluctuations in future operating results on a quarterly or annual basis, which could materially and adversely affect its business, consolidated financial condition, operating results, and the share price of its Common Stock. This document and other documents filed by the Company with the Securities and Exchange Commission (“SEC”) include forward-looking statements regarding future events and the Company’s future results that are subject to the safe harbor afforded under the Private Securities Litigation Reform Act of 1995 and other safe harbors afforded under the Securities Act of 1933 and the Securities Exchange Act of 1934. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Forward-looking statements are based on our current beliefs, expectations, estimates, forecasts, and projections for the future performance of the Company and are subject to risks and uncertainties. Forward-looking statements are identified by the use of words denoting uncertain, future events, such as “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “future,” “goal,” “if,” “intend,” “may,” “plan,” “potential,” “project,” “prospective,” “seek,” “should,” “target,” “will,” or “would,” as well as similar words and phrases, including the negatives of these terms, or other variations thereof. Forward-looking statements also include, but are not limited to, statements regarding: our ability to address certain supply chain risks; our ongoing development of power conversion architectures, switching topologies, materials, packaging, and products; the ongoing transition of our business strategically, organizationally, and operationally from serving a large number of relatively low-volume customers across diversified markets and geographies to serving a small number of relatively large volume customers; our intent to enter new market segments; the levels of customer orders overall and, in particular, from large customers and the delivery lead times associated therewith; anticipated new and existing customer wins; the financial and operational impact of customer changes to shipping schedules; the derivation of a portion of our sales in each quarter from orders booked in the same quarter; our intent to expand the percentage of revenue associated with licensing our intellectual property to third parties; our plans to invest in expanded manufacturing capacity, including the implementation of new manufacturing processes; our belief that cash generated from operations together with our available cash and cash equivalents will be sufficient to fund planned operational needs and capital equipment purchases, for the foreseeable future; our outlook regarding tariffs and the impact thereof on our business; our belief that we have limited exposure to currency risks; our intentions regarding the declaration and payment of cash dividends; our intentions regarding protecting our rights under our patents; and our expectation that no current litigation or claims will have a material adverse impact on our financial position or results of operations. These forward-looking statements are based upon our current expectations and estimates associated with prospective events and circumstances that may or may not be within our control and as to which there can be no assurance. Actual results could differ materially from those implied by forward-looking statements as a result of various factors, including but not limited to those described above, as well as those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 under Part I, Item 1 — “Business,” under Part I, Item 1A — “Risk Factors,” under Part I, Item 3 — “Legal Proceedings,” and under Part II, Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and those described in this Quarterly Report on Form 10-Q, particularly under Part I, Item 2 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The discussion of our business contained herein, including the identification and assessment of factors that may influence actual results, may not be exhaustive. Therefore, the information presented should be read together with other documents we file with the SEC from time to time, including our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K, which may supplement, modify, supersede, or update the factors discussed in this Quarterly Report on Form 10-Q. Any forward-looking statement made in this Quarterly Report on Form 10-Q is based on information currently available to us and speaks only as of the date on which it is made. We do not undertake any obligation to update any forward-looking statements as a result of future events or developments, except as required by law.
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Overview
We design, develop, manufacture, and market modular power components and power systems for converting electrical power for use in electrically-powered devices. Our competitive position is supported by innovations in product design and achievements in product performance, largely enabled by our focus on the research and development of advanced technologies and processes, often implemented in proprietary semiconductor circuitry, materials, and packaging. Many of our products incorporate patented or proprietary implementations of high-frequency switching topologies enabling power system solutions that are more efficient and much smaller than conventional alternatives. Our strategy emphasizes demonstrable product differentiation and a value proposition based on competitively superior solution performance, advantageous design flexibility, and a compelling total cost of ownership. While we offer a wide range of alternating current (“AC”) and direct current (“DC”) power conversion products, we consider our core competencies to be associated with 48V DC distribution, which offers numerous inherent cost and performance advantages over lower distribution voltages. However, we also offer products addressing other DC voltage standards (e.g., 380V for power distribution in data centers, 110V for rail applications, 28V for military and avionics applications, and 24V for industrial automation).
Based on design, performance, and form factor considerations, as well as the range of evolving applications for which our products are appropriate, we categorize our product portfolios as either “Advanced Products” or “Brick Products.” The Advanced Products category consists of our more recently introduced products, which are largely used to implement our proprietary Factorized Power Architecture™ (“FPA”), an innovative power distribution architecture enabling flexible, rapid power system design using individual components optimized to perform a specific conversion function.
The Brick Products category largely consists of our broad and well-established families of integrated power converters, incorporating multiple conversion stages, used in conventional power systems architectures. Given the growth profiles of the markets we serve with our Advanced Products line and our Brick Products line, our strategy involves a continuing transition in organizational focus, emphasizing investment in our Advanced Products line and targeting high growth market segments with a low-mix, high-volume operational model, while maintaining a profitable business in the mature market segments we serve with our Brick Products line with a high-mix, low-volume operational model.
The applications in which our Advanced Products and Brick Products are used are typically in the higher-performance, higher-power segments of the market segments we serve. With our Advanced Products, we generally serve large Original Equipment Manufacturers (“OEMs”), Original Design Manufacturers (“ODMs”), and their contract manufacturers, with sales currently concentrated in the data center and hyperscaler segments of enterprise computing, in which our products are used for power delivery on server motherboards, in server racks, and across datacenter infrastructure. We have established a leadership position in the emerging market segment for powering high-performance processors used for acceleration of applications associated with artificial intelligence (“AI”). Our customers in the AI market segment include the leading innovators in processor and accelerator design, as well as early adopters in cloud computing and high performance computing. We also serve applications in aerospace and aviation, defense electronics, satellites, factory automation, instrumentation, test equipment, transportation, telecommunications and networking infrastructure, and vehicles (notably in the autonomous driving, electric vehicle, and hybrid vehicle niches of the vehicle segment). With our Brick Products, we generally serve a fragmented base of large and small customers, concentrated in aerospace and defense electronics, industrial equipment, instrumentation and test equipment, and transportation (notably in rail and heavy equipment applications). With our strategic emphasis on larger, high-volume customers, we expect to experience over time a greater concentration of sales, including from intellectual property licensing, among relatively fewer customers.
Our quarterly consolidated operating results can be difficult to forecast and have been subject to significant fluctuations. We plan our production and inventory levels based on management’s estimates of customer demand, customer forecasts, and other information sources. Customer forecasts, particularly those of OEM, ODM, and contract manufacturing customers to which we supply Advanced Products in high volumes, are subject to scheduling changes on short notice, contributing to operating inefficiencies and excess costs. In addition, external factors such as supply chain uncertainties, which are often associated with the cyclicality of the electronics industry, regional macroeconomic and trade-related circumstances, and force majeure events, have caused our operating results to vary meaningfully. Supply chain disruptions, including those associated with our reliance on outsourced package process steps that are essential in the production of some of our Advanced Products, and those relating, for example, to the procurement of raw material, have in the past negatively impacted and may in the future negatively impact our operating results. We have taken steps to mitigate the impact of supply chain disruptions by, among other things and in varying degrees, moving outsourced manufacturing steps in-house to the Company, ordering supplies with extended lead times, paying higher prices for certain supplies or outsourced production, and expediting deliveries at a cost premium. The resulting impact of the steps taken to mitigate supply chain disruptions
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have, to varying degrees and at different times, reduced our revenue, gross margin, operating profit and cash flow and may continue to do so in the future. Our quarterly gross margin as a percentage of net revenues may vary, depending on production volumes, licensing income, average selling prices, average unit costs, the mix of products sold during that quarter, and the level of importation of raw materials subject to tariffs. Our quarterly operating margin as a percentage of net revenues also may vary with changes in revenue and product level profitability, but our operating costs are largely associated with compensation and related employee costs, which are not subject to sudden or significant changes.
Summary of First Quarter 2026 Financial Performance Compared to Fourth Quarter 2025 Financial Performance
The following summarizes our financial performance for the first quarter of 2026, compared to the fourth quarter of 2025:
Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
Total net revenues for the first quarter of 2026 were $112,969,000, an increase of $19,001,000, or 20.2%, as compared to $93,968,000 for the first quarter of 2025. Net revenues, by product line, for the three months ended March 31, 2026 and 2025 were as follows (dollars in thousands):
Increase
Advanced Products including Royalty Revenue
5,063
8.5
13,938
40.9
19,001
20.2
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The increase in net revenues for Advanced Products was primarily due to higher royalty revenue and improved market demand. The increase in net revenues for Brick Products was primarily due to improved market demand.
Gross margin for the first quarter of 2026 increased $18,001,000, or 40.6%, to $62,366,000, from $44,365,000 for the first quarter of 2025. Gross margin, as a percentage of total net revenues, increased to 55.2% for the first quarter of 2026, compared to 47.2% for the first quarter of 2025. The increase in gross margin dollars and gross margin percentage was primarily attributable to the favorable impact from higher sales volume and improved sales mix on that revenue, including higher royalty revenue, and the favorable impact of production efficiencies offset by increased freight-in and tariff spending of $2,219,000 (net of approximately $193,000 in duty drawback recovery in the first quarter of 2026 and $0 in duty drawback recovery in the first quarter of 2025 of previously paid tariffs).
Selling, general and administrative expenses were $23,192,000 for the first quarter of 2026, a decrease of $1,945,000, or 7.7%, from $25,137,000 for the first quarter of 2025. Selling, general and administrative expenses as a percentage of total net revenues decreased to 20.5% for the first quarter of 2026 from 26.8% for the first quarter of 2025. The components of the $1,945,000 decrease in selling, general and administrative expenses for the first quarter of 2026 compared to the first quarter of 2025 were as follows (dollars in thousands):
(Decrease) Increase
Legal fees
(2,134
(53.2
(1
Outside services
(462
(28.9
Information technology expense
(192
(18.8
(3
Compensation
686
5.0
(4
Other, net
157
3.3
(1,945
(7.7
Research and development expenses were $22,290,000 for the first quarter of 2026, an increase of $2,913,000, or 15.0%, compared to $19,377,000 for the first quarter of 2025. As a percentage of total net revenues, research and development expenses decreased to 19.7% for the first quarter of 2026 from 20.6% for the first quarter of 2025. The components of the $2,913,000 increase in research and development expenses for the first quarter of 2026 compared to the first quarter of 2025 were as follows (dollars in thousands):
Increase (decrease)
Project and pre-production materials
2,440
162.2
863
123.5
526
4.4
Equipment set-up and calibration
(345
(41.5
Waste disposal
(380
(47.5
(5
Supplies
(420
(41.8
229
8.8
2,913
15.0
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The significant components of ''Other income (expense), net'' for the three months ended March 31, 2026 and 2025 and the changes between the periods were as follows (in thousands):
Interest income, net
3,272
2,714
558
Rental income
284
Foreign currency (losses) gains, net
(123
133
(256
Gain on disposal of equipment
80
385
Our exposure to market risk fluctuations in foreign currency exchange rates relates to the operations of Vicor Japan Company, Ltd. (“VJCL”), for which the functional currency is the Japanese Yen, and all other subsidiaries in Europe and Asia, for which the functional currency is the U.S. Dollar. These subsidiaries in Europe and Asia experienced unfavorable foreign currency exchange rate fluctuations in the first quarter of 2026 compared to the first quarter of 2025.
Income before income taxes was $20,403,000 for the first quarter of 2026, as compared to $2,985,000 for the first quarter of 2025.
The (benefit) provision for income taxes and the effective income tax rates for the three months ended March 31, 2026 and 2025 were as follows (dollars in thousands):
The effective tax rates differ from the statutory tax rates for the three months ended March 31, 2026 primarily due to excess deductions related to share-based compensation, and for the three months ended March 31, 2025 primarily due to the Company’s full valuation allowance position against net domestic deferred tax assets as of March 31, 2025. The (benefit) provision for income taxes for the three months ended March 31, 2026 and 2025 included estimated federal, state and foreign income taxes in jurisdictions in which the Company does not have sufficient tax attributes.
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We reported net income for the first quarter of 2026 of $20,664,000, or $0.44 per diluted share, compared to net income of $2,539,000, or $0.06 per diluted share, for the first quarter of 2025.
As of March 31, 2026, we had $404,245,000 in cash and cash equivalents. The ratio of total current assets to total current liabilities was 14.3:1 as of March 31, 2026 and 9.0:1 as of December 31, 2025. Working capital, defined as total current assets less total current liabilities, increased $35,493,000 to $557,535,000 as of March 31, 2026 from $522,042,000 as of December 31, 2025.
The changes in working capital from December 31, 2025 to March 31, 2026 were as follows (in thousands):
Increase(decrease)
Accounts receivable
6,686
3,490
490
(4,443
(1,484
(675
Short-term deferred revenue
443
35,493
The primary source of cash for the three months ended March 31, 2026 was $17,812,000 received in connection with the exercise of options to purchase our Common Stock awarded under our stock option plans and the issuance of Common Stock under our 2017 Employee Stock Purchase Plan. The primary uses of cash during the three months ended March 31, 2026 were for the purchase of equipment of $12,387,000 and operating activities of $3,942,000, which is net of a payment made to SynQor, Inc. in the amount of $28,557,000. See Note 11 for additional information regarding the payment made to SynQor.
In July 2024, our Board of Directors authorized the repurchase of up to $100,000,000 of our Common Stock (the “Repurchase Authorization”). As of March 31, 2026, we had approximately $64,327,000 remaining available for repurchases of our Common Stock under the Repurchase Authorization.
The timing and amounts of Common Stock repurchases under the Repurchase Authorization are at the discretion of the Company’s President and Chief Executive Officer based upon economic and financial market conditions.
As of March 31, 2026, we had a total of approximately $25,309,000 of cancelable and non-cancelable capital expenditure commitments, principally for manufacturing and production equipment, which we intend to fund with existing cash, and approximately $742,000 of capital expenditure items and internal-use software which had been received and included in Property, plant and equipment, net in the accompanying Condensed Consolidated Balance Sheets, but not yet paid for. Our primary needs for liquidity are for making continuing investments in manufacturing and production equipment. We believe cash generated from operations together with our available cash and cash equivalents will be sufficient to fund planned operational needs and capital equipment purchases, for both the short and long term.
We do not consider the impact of inflation or fluctuations in the exchange rates for foreign currency transactions to have been significant during the last three fiscal years.
Critical Accounting Policies and Estimates
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There have been no material changes in our judgments and assumptions associated with the development of our critical accounting estimates during the period ended March 31, 2026. Refer to the section entitled “Critical Accounting Policies and Estimates” in Part II, Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
The Company licenses its intellectual property under right to use licenses, in which royalties due to the Company are generally based upon a percentage of the licensee’s sales. For these licensing transactions, the Company utilizes the exception under the revenue recognition guidance for the recognition of sales- or usage-based royalties, in which the royalties are not recognized until the later of when 1) the customer’s subsequent sales or usages occur, or 2) the performance obligation to which some or all of the sales- or usage-based royalty has been allocated is satisfied or partially satisfied. In certain right to use licenses where payment is not based on sales-or-usage-based royalties, the Company estimates consideration it expects to be entitled to considering minimum expected payments and potential price concessions. Revenue for these licenses is recognized in an amount that is probable that a significant reversal in the cumulative amount of revenue recognized would not occur. In certain right-to-use license arrangements, the Company recognizes revenue upon receipt of payment, consistent with the alternative revenue recognition model prescribed by Accounting Standards Codification 606, Revenue from Contracts and Customers. This policy is re-evaluated periodically based on the facts and circumstances of each licensee.
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Vicor Corporation
We are exposed to a variety of market risks, including changes in interest rates affecting the return on our cash and cash equivalents, our short-term investments and fluctuations in foreign currency exchange rates. As our cash and cash equivalents and short-term investments consist principally of cash accounts, money market securities, and U.S. Treasury securities, which are short-term in nature, we believe our exposure to market risk on interest rate fluctuations for these investments is not significant. As of March 31, 2026, our long-term investment portfolio, recorded on our Condensed Consolidated Balance Sheet as “Long-term investment, net”, consisted of a single auction rate security with a par value of $3,000,000, purchased through and held in custody by a broker-dealer affiliate of Bank of America, N.A., that has experienced failed auctions (the “Failed Auction Security”) since February 2008. While the Failed Auction Security is Aaa/AA+ rated by major credit rating agencies, collateralized by student loans and guaranteed by the U.S. Department of Education under the Federal Family Education Loan Program, continued failure to sell at its periodic auction dates (i.e., reset dates) could negatively impact the carrying value of the investment, in turn leading to impairment charges in future periods. Periodic changes in the fair value of the Failed Auction Security attributable to credit loss (i.e., risk of the issuer’s default) are recorded through earnings as a component of “Other income (expense), net”, with the remainder of any periodic change in fair value not related to credit loss (i.e., temporary “mark-to-market” carrying value adjustments) recorded in “Accumulated other comprehensive income (loss)”, a component of Stockholders’ Equity. Should we conclude a decline in the fair value of the Failed Auction Security is other than temporary, such losses would be recorded through earnings as a component of “Other income (expense), net”. We do not believe there was an “other-than-temporary” decline in value of this security as of March 31, 2026.
Our exposure to market risk for fluctuations in foreign currency exchange rates relates to the operations of VJCL, for which the functional currency is the Japanese Yen, and changes in the relative value of the Yen to the U.S. Dollar. The functional currency of all other subsidiaries in Europe and other subsidiaries in Asia is the U.S. Dollar. While we believe the risk of fluctuations in foreign currency exchange rates for these subsidiaries is generally not significant, they can be subject to substantial currency changes, and therefore foreign exchange exposures.
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As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), management, with the participation of our Chief Executive Officer (“CEO”) (who is our principal executive officer) and Chief Financial Officer (“CFO”) (who is our principal financial officer), conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the last fiscal quarter (i.e., March 31, 2026). The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure information required to be disclosed by a company in the reports it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2026, our CEO and CFO concluded, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Accordingly, management, including the CEO and CFO, recognizes our disclosure controls or our internal control over financial reporting may not prevent or detect all errors and all fraud. The design of a control system must reflect the fact there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any control’s effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended March 31, 2026, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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Part II – Other Information
See Note 11. Commitments and Contingencies in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 – “Financial Statements.”
There have been no material changes in the risk factors described in Part I, Item 1A – “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Issuer Purchases of Equity Securities
First Quarter 2026
TotalNumber ofSharesPurchased
Average PricePaid per Share
Total Number ofShares Purchasedas Part of Publicly AnnouncedPlans or Programs
Approximate DollarValue of SharesThat May Yet Be Purchased Under the Plans or Programs
January 1 - 31, 2026
64,327,067
February 1 - 28, 2026
March 1 - 31, 2026
In July 2024, our Board of Directors authorized the repurchase of up to $100,000,000 of our Common Stock (the “Repurchase Authorization”). The timing and amounts of Common Stock repurchases pursuant to the Repurchase Authorization are at the discretion of the Company’s President and Chief Executive Officer based upon economic and financial market conditions. The Repurchase Authorization does not expire.
Except as set forth below, during the three months ended March 31, 2026, no director or Section 16 officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
On February 26, 2026, Patrizio Vinciarelli, Chairman of the Board, President and Chief Executive Officer of the Company, adopted a Rule 10b5-1 trading arrangement providing for the sale, pursuant to the terms of the arrangement, of an aggregate of up to 1,000,000 shares of the Company’s common stock in tranches of 10,000 shares at $2 price increments ranging from $202 to $400 per share. The number of shares that can be sold in one day is capped at 20,000. Mr. Vinciarelli’s trading arrangement is intended to satisfy the affirmative defense in Rule 10b5-1(c). The duration of Mr. Vinciarelli’s trading arrangement is estimated to be from May 28, 2026 until December 31, 2028.
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Exhibit Number
Description
3.1
Restated Certificate of Incorporation, dated February 28, 1990 (1)
3.2
Certificate of Ownership and Merger Merging Westcor Corporation, a Delaware Corporation, into Vicor Corporation, a Delaware corporation, dated December 3, 1990 (1)
Certificate of Amendment of Restated Certificate of Incorporation, dated May 10, 1991 (1)
3.4
Certificate of Amendment of Restated Certificate of Incorporation, dated June 23, 1992 (1)
3.5
Bylaws, as amended (2)
31.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act.
31.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act.
32.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents.
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
(1) Filed as an exhibit to the Company’s Annual Report on Form 10-K filed on March 29, 2001 (File No. 000-18277) and incorporated herein by reference.
(2) Filed as an exhibit to the Company’s Current Report on Form 8-K filed on June 4, 2020 (File No. 000-18277) and incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: April 30, 2026
By:
/s/ Patrizio Vinciarelli
Patrizio Vinciarelli
Chairman of the Board, President and
Chief Executive Officer
(Principal Executive Officer)
/s/ James F. Schmidt
James F. Schmidt
Vice President, Chief Financial Officer
(Principal Financial Officer)
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