Vicor Revenue Down for Q2, but Bright Outlook Aided by 12V to 48V Transition for Data Centers
Vicor Corporation reported financial results for the Q2 of 2019 and six months that ended June 30, 2019. The company posted revenues for Q2 of 2019, which ended June 30, 2019, totaling $63.4 million, a 14.6% decrease from $74.2 million for the corresponding period of the previous year, and a 3.6% sequential decrease from the $65.7 million posted for Q1 of 2019.
The company's gross margin decreased to $29.1 million for Q2 compared to $35.9 million for the corresponding period a year ago, and it decreased sequentially from $31.1 million for Q1 of 2019. Gross margin, as a percentage of revenue, decreased 46.0% for the Q2 of 2019, compared to 48.4% for the Q2 of 2018, and it decreased from 47.3% for the Q1 of 2019.
Net income for the Q2 was $2.6 million, or $0.06 per diluted share, compared to net income of $7.9 million or $0.19 per diluted share, for the corresponding period of 2018 and net income of $4.3 million, or $0.10 per diluted share, for the Q1 of 2019.
Revenues for the six months that ended June 30, 2019, decreased 7.4% to $129.1 million from $139.5 million for the corresponding six-month period a year ago.
The company reported net income for the six month period of $6.8 million, or $0.17 per diluted share, compared to net income of $11.8 million, or $0.29 per diluted share, for the period a year ago.
The company's cash and cash equivalents increased sequentially by $4.9 million to about $71.5 million at the end of the second quarter of 2019 from $66.6 million at the end of the first quarter of 2019. Capital expenditures for Q2 2019 totaled $2.5 million, down from the $3.3 million that the company reported for the first quarter of 2019 and up from $1.7 million for Q2 a year ago.
Q2 bookings dropped 31.1% to $60.2 million, from $87.4 million for the corresponding period a year ago, and declined sequentially 9.6% from $66.7 million for the Q1 of 2019.
Vicor'stotal backlog at the end of the Q2 of 2019 was $100.7 million, down 3.1% from $103.8 million at the end of the first quarter of 2019, and down 2.2% from $103.0 million at the end of 2018.
Vicor faced Similar challenges in Q2 and Q1, according to Dr. Patrizio Vinciarelli, Vicor CEO.
"Second quarter financial performance reflected challenges similar to those experienced in the first quarter, as shipment delays requested by contract manufacturers limited revenue from the datacenter market. Growing hyperscale infrastructure spending and design wins for next generation 48V servers, AI accelerators, and supercomputers are keys to near term revenue growth from Advanced Products. Resolution of the Chinese trade dispute would reopen Chinese order flow which has slowed significantly and undo the impact of inbound tariffs on gross margins," stated Dr. Patrizio Vinciarelli, Vicor Chief Executive Officer.
Financial Outlook
Dr. Vinciarelli continued, "Despite challenging conditions, our outlook is bright. The 12V to 48V transition in datacenter and automotive applications is underway and we are winning every demanding AI ASIC application with lateral or vertical Power-on-Package solutions. Our domestic business is healthy, customer design activity with Advanced Products is robust, and our opportunity pipeline across major segments continues to expand. In coming weeks, we expect to close the purchase of land abutting our Andover manufacturing facility to facilitate capacity expansion. Our outlook for the second half reflects steady demand for Brick Products and a resumption of strong demand for Advanced Products from an expanding list of AI applications for which there is no viable competitive alternative."
