VICR - Earnings call transcript Q1 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Vicor Earnings Results for the First Quarter Ended March 31, 2018 Conference Call hosted by James Simms and Dr. Patrizio Vinciarelli. My name is Sam and I’m the event manager.

During the presentation your lines will remain on listen-only. [Operator Instructions] I would like to advice, part of this conference is being recorded for replay purposes. to to like would now hand James. it I go ahead. Please

James Simms

Jamie the Good Thank first welcome I’m Patrizio Officer, Vinciarelli, afternoon, Andover to Officer; here Sam. with quarter Chief me and Vicor results of Officer. press period XXXX. Chief three-month ended website, the and are for XX. The and Accounting issued press the Today, Dick everyone, Nagel, page you, in Financial release for a call is Corporation’s of Investor available vicorpower.com. on release we our Chief Executive summarizing Relations Simms, our earnings financial March

filed of today with this also the issuance Form release. the to We X-K press a SEC earlier related

Vicor the to profitability, forecast current conference is statements this growth, you, risks listeners Act always, remind call, expected matters harbor of remarks of face XXXX. any The and light make by such Corporation. various contained Securities on the and to explicitly and regarding obligation beginning customers, in remind during offer remarks March assurance XXXX. as as statement this forward-looking XXXX note As any for A information the followed tonight set XA are can the any the undertakes we of only as of XX-K, provided filed risks this through from and information statements of no Reform X, conclusion midnight replay potential Actual products, correct. of these forward-looking are is Vicor this in events X, forth that purposes those risks accurate forward-looking planned being involving provisions today, and The discussed with you on forward-looking we we I call in materially made uncertainties. in constitute well and this or market passcode which current differ I XXXX. during conference and and XX, is update discussed after under including call available Form our be opportunities, SEC spending this no call, may Private historical call, Item prove Please replay may statements of and uncertainties will also is announcements statements call potential upon sales XXX-XXX-XXXX, results including implied today. fact, our In uncertainties, we will, this number safe recorded of any April dial-in by the XXXX. be at during Tuesday, statements rely the for statements, property XXXXXXXX. call not the of Except copyrighted May call. should may Litigation

first afternoon’s results, as revenue of $XX.X with was quarter revenue reported higher totaled million, after gross business afternoon’s XX.X%. which than This fourth Turns in dollars, sequentially our XX.X% Beginning XX% X.X% first the take Vicor by consolidated $XX.X – clearly for stated as me, will period-to-period. questions. than conditions, follow of we portfolio will representing Revenue revenue. XX.X% for period-to-period total quarter within your sequential on current replay financial XX% with which total profit quarter advanced figure versus this A shortly and website. Gross advanced rose In Patrizio pace our margin quarter received XX% will XXXX briefly with from taxes, recorded this call income our of on products comment legacy addition, your a of for increased for faster with today’s XX% performance the a revenue XX% of is to associated discussion the will of will webcast of products X% start our quarter available ASC Investor at of revenue substantive quarter toward product and and Relations XXX outlook excuse orders sequentially. shipped from our I implementation me, of first Quarterly of review XXXX a rose profit dollars the comparison page be Dick XX% illustrates our to of XXXX. mix the rose quarterly underway about margin approximately excuse shift quarter for release, our that press increase volume, the increased first international first quarter. a the million first sequentially. rose revenue which representing from comments for – XX%. first

driven in of today’s stated volumes economies by gross As release and press are improve, scale. higher to expected margins profit

of the margins of reported lines evidence commensurate the lines, again our cost levels power advanced packaging support inherent margins product legacy of those and to for exceeded management which with quarter can XXXX, ASICs. for VI product manufacturing gross first further scalability representing As effectiveness gross fourth quarter proprietary Chip our and technology, processes for VI Chip achieved BBU

for fees, $X.XX associated were the reporting fourth XXXX, income income and share by as EPS change spending of unchanged income in recall net for for quarter first year-end increases per the accounting R&D. $XXX,XXX, seasonal million quarter fourth quarter. an representing for first quarter income carryforwards. minimum essentially approximately with diluted $X.X Our recorded share in $X.XX operating We provision such and included net was reflecting first share state million in of compared expenses quarter tax with amounts for to credit offset totaled Pre-tax the tax $X.X reduced per the audit reported our foreign alternative $X.XX the diluted per of

first Our unusual or no EPS quarter influences. includes tax non-recurring

XX the DSOs sheet, Turning XX from to up days the at quarter’s prior days. balance steady were

million for million. also To Annualized material $X.X of Total quarter, quarter $X.X and of in Portfolio by increasing rose as as rising increase remains equivalents industry-wide the chain turns receivables raw lead $XX.X total cash a expansion material sequentially quarter, million employee ending This by of $X million. $X.X share and $X.X review increase largely plan sales. anticipate stock, quality This the our offset from sequentially due flow first million $XXX,XXX, that and our the expenditures to in for net million $X.X sale safety just increase declined purchase at high. to due meet was approximately XXX Inventory decreased XX of increased totaling higher million the was the essentially my a also capital decline supply other from in through increased million first employee the given purchases sales, plan, for $X.X cash fourth and and reflecting turn progresses flow stock by income, reflection backlog. to to Cash million inventory working sequentially driven million, than was from to cash component the higher and of operating to realized of the were March employment stock largely $XX.X increased near-term to million. and through headcount option temporary intend net usual possibly $X.X Given full-time quarter, rising operating purchases year over capacity times positive levels to unchanged. $X.X We lower estate fund increase asset. staffing. real XXX an conclude uncertainties. capital

now the term improve Nagel As of and we of adopted quarter, visibility our for how with ASC first quarter level production first which the with on backlog. quarter, this to addressed describe Beginning forth recognize for productivity results loading revenue. into will Vicor new adoption XXX, longer Dick sets impact last our and [indiscernible]. growing continues the guidance quarterly

Dick Nagel

Jamie. you, Thank

$X.X to quarter of from of requirement XX-K a to January U.S. As new in calls which GAAP discussed as XXXX. restating million contract utilized adjustment to retained guidance. net application. of from earnings last to existing customer us The single the adoption codifies addressed financial make to adoption of was ASC million customers, earnings the the ASC subject such of impact of approximately which the reflected we of We statements. first a during data It quarterly our no filing. contracts adopted X, This retained X, $X.X retained XXXX XXX Form two the earnings modified cash was increase in recognition, for credit effect application method adoption, recent with years’ is in January retrospective on represents revenue our earnings prior instead lead XXX revenue

forward the significant of As to on distributors. I our addressed most stocking XXX last the recognition sales is of impact timing going ASC of quarter,

X, stocking distributors. longer to on of stocking defer in to his Jamie the the ASC based different As With stocking we on recording of remarks stocking distributor longer of is why has costs no no revenue we revenue treatment. shipments is January to activity as no sales allowances and returns at distributors. also distributors, to record such sales the and estimate activity sales XXX This related to subject our discuss provided historically-based reserves while time the longer

cause against we’re of return year XXXX, for at the that, outlook assets, an release a which income allowance one-time of call tax our point deferred tax some the significant sustained our to I million $XX to for will With Turning tax a benefit. would generating forecasting Jamie. entire taxable approximately

James Simms

Dick. Thanks,

time anticipate totaled in to remind with I to and do sudden are financial and profitability. with Turning which revenue sequential as second XX, listeners backlog you, consolidated I given of recent expanding and as I must forecast $XX quarter increases net XX% operating unanticipated million second each outlook in our changes. a March gross our margins for quarter we increase subject the speak

over to Patrizio. I’ll that, call So with turn the

Patrizio Vinciarelli

Thank you, Jamie.

positioned opportunities. being platforms, Notably bookings pervasively dedicated accelerators strong an in applications. both that the centers advanced first uniquely for and Factorized GPUs learning from Current engines Multipliers, point-of-load and enjoying and MCMs, products system is base CPUs Power for computer our Vicor reported XX-volt applications, and demanding intelligence this characterized scale in products. customers our as customers design Modular by Power-on-Package, gaining artificial to the are expanding are relative was high-growth supercomputing. data particularly machine as we the profile traction legacy large highest based used with for including of for our wins As quarter bus or market both

to of Aside Advanced to change be GPUs power to the in bandwidth XX-volt our longer systems Having supply second is and from that components XX-volt actually growth central connectivity, higher accelerating infrastructure, success for centers cable, transition to supporting if power and pursuing. a data infrastructure, Vicor’s – that in automotive architecture are a is XX-volt the no we in is system half methodology. XXXX, of and would that starting cable within revenue are to XX-volt legacy the GPUs is converting contributing

could I I’m will Operator? open call. have so listeners As specific sure go the always questions, but I on,

Operator

[Operator question. Instructions] have We do a

comes The from now McKenna Company]. on the question first Don you’re Don, ahead, live and please go [D.B. call. McKenna

Don McKenna

wins have size the qualify out got you of Congratulations was the Patrizio, design this that many market times based kind see now, just terrific. of on addressable you over, that guys, you the there? can

Patrizio Vinciarelli

way. meaningful a I don’t in that can know I quantify it

not as years, If major safe it play effort data made center to leading power an data think power all, within say, be of respect urgency one its system industry that technology. until be started to and there space, adopting But but player because that by in are you systems XX-volt in Compute from are that of greatly Open a it to example answer could and is would have not back now an of do context The XX-volt infrastructure, architecture area and center an infrastructure markets. on given just to matter XX-volt an see centers XX-volt – and this their matter market systems in we undergoing the space. I of focus are in with end seeing definite of in a beneficial particularly rest respect other of done I only ecosystem with accelerate now a till reasons going will with expect is addressed data now goes spent player components frankly to first the space to not they players an for major opportunity. in center a only center the to compelling a the have respect of going it’s transition the expand of It’s arena, question it’s very large XX-volt. of it’s favor to within And segments us segments a your the really it into a the complexity of space the are company of sense GPU transfusions the Google conversion. In becoming answer was GPUs within pervasive to opportunities. effort market data the making to to number and to recently in we remains with center pioneer space all. would roughly in ripe your role years opportunities, interesting a variety affair conversion not I to and long-term our the being be contributed because of few know, this number market that, space. of what that the we’re space, a Google different data system to years with to may the as that that to before the data this overnight and switch the that broad

to more their the So make nutshell in regulators lessen expanding comment own respect now with are and have data center more really the their its say a I on and safe more applying very in the that of the one fair market more and Historically, think Intel seeing space, been for customers to rest coming dominant. in more particularly is severs we’re I’ll on it’s and basis. rapidly. what challenge relied frequently a has application monthly historically on-chip up opportunities Intel But CPUs. to this.

currents that amperes. designs expanding effective X.X-volt exceeding X.X-volt that going that there’s type Intel that unlike We’re CPUs call require nothing we In to X.X-volt provide socket X.X-volt, else to for, and recent seen for of typically other ASICs, requirements voltage, solution lower demonstrated recent too are down type XPU not going rapidly we’ve long by what an and but devices as of solutions, approaching adoption. can a down are XXXX seeing

as know data space in more all more because of and core developments. developed becoming more in more applications. serve center players intelligence key efficiency apply trail force their the we major their to other artificial places the unique of by a power needs that another that’s chips in So of that getting manner and of They’re the the the part maximizes strategy and

applied a in the opportunity of combination variety international coming to together of So it’s are market. forces market our that increase

answer. lengthy the for Sorry

Don McKenna

this just But for these Is the can you going sequential as that through far be a with I as the in outside markets calls in if a these that’s being or quarter see that let’s to upcoming XX% periods increased try No, increases way, you’ve revenue different quite forecast magnitude so. three scenario years could that to we’re see five say, conference all would the for, previous right. that as you developing? years and indicated going you see

Patrizio Vinciarelli

rather around to very say enough But are current forecast, I to think long in make ASICs to CPUs very matched GPUs to long-term think conversion know that it’s play low these response right, earlier and forces from I that we’ll would our perfectly as capabilities, in to voltages, are our and XX-volt The very percentage I high XX-volt. gain. I there of competition safely my I matched can the of require say, uniquely from all capabilities. indicated

in applications having with are to the pursue to us the represent which that Frankly, which customers, see are particular the we particular So we can I greatest position we and opportunities. want opportunity develop active pick as see, in being to eye muscle long-term. my far as ones expanding respect for the of

Don McKenna

very thank in dream I’ll line. for once again, much your Okay, and back you congratulations sticking And to and there. get thanks

Patrizio Vinciarelli

Thank you.

Operator

live. now comes ahead, We Jim, questions. do Investors]. And Jim Bartlett from next you’re [Bartlett several please question go other have

Jim Bartlett

you customers what could may where Yes. many in at wins say now? product? year Along us So ASIC, how expect to you how can you the shipping that are tell a this have And many you same line, now space? design GPU from are

Patrizio Vinciarelli

several but support a engagements I’m inquiries is the developments variety reasons, say that and of eventually there the numbers and to to growing will give willingness number specific for with increasing. going I our to So, not respect are you is new

range XX,XXX customers So applications in we are range volt for in they up engaged from extreme think I of with to XXX a range XPUs, busier around multi the of X a amperes. sub-X amps

thing extremely of to this when opportunities. class our of that what power this a So opportunities, exciting should Again, a remind want not there talking variety about be – particular component being power about with are and and component same highly technology the applications engines, is us or entirely to is types packaging parented, number we which the the us very that, the growing I different methodology and same important very can heavily with of is address propertied with same unique methodology, applications.

around lines So the so that for solutions or the instances AC of system us we’re end other also to which from involved gravity evolve. methodology, is requirements in passes high-voltage fact of for have that XX-volt X-phase in front spectrum center which our node end power the our take

applications and the data that. and in and that see beyond current exciting types contrary. measured I clearly it’s see We subsiding recently couple a it’s data is of great both so as more with just forward, seen going years of in many and And applications. as other couple kinds well as don’t very didn’t grow we of of – XXXX XXX the terms of space it exist as in requiring supercomputing playing at autonomous which key within so that driving, players of the So years to market a is opportunity This amps necessarily it ASICs amps chips center a more with earlier volunteers, expanding other believe We requirements center. see a not to come. high applications role now couple are and within years from expanding the AI for I’ve ago, to and looking

Jim Bartlett

that are could an that have me legacy introduced NBM the this on penetrate you how enable XX-volt? and module impact? centers help the may you this quickly that understand How availability Could data you a to

Patrizio Vinciarelli

point center the NBMs on existing the changed get applications cannot that in into a GPUs data be overnight bus. that running to your XX-voltage where which by to looking is we’re transaction but XX-volt, start space, So challenged leading shipping to XX-volt

it adoption devices these that’s all conversion of solution is XX-volt them and NBM our making from it to easy, efficient, way, in what from XX-volt enables a a it the challenge and a cost enables in effective flows effective very flows to XX-volt want So efficiencies XX-volt to going this respect essentially – It system. or a conversion with year, decisions year. use power, XX%-plus circumvents with high If we this and very in the kinds high to XX-volt later high system infrastructure of also cost about. see big way of the immediate XX-volt, very effective by advance, XX-volt efficiency, going to cost later of in making is XX-volt XX-volt

as NBM it’s the the taking anxiety into It same fact might very And XX-volt with because with how to moment data about question using that to I that that respect me XX-volt? will by their center play bag in customers ramifications. can away in is the some enable transition play like a your The complimentary a that XX-volt be to so the big does would XX-volt to use do complimentary was GPU for at overall more NBMs that XX-volt use that how with But transition to Let a purposes do up to and have load GPU XX-volt readily talk think convert NBM XX-volt profound making powered. because we XX-volt. to play to the aimed plays convert XX-volt again this infrastructure. that of infrastructure customers

longer customers but benefits all efficiency significant and these powering preferred that to have way infrastructure servers, there XX-volt. benefits, they multi-phase as are regulators of to custom recognize in XX-volt CPUs their been their many So memory of the

powering to XX-volt GPUs, the of an readily convert NBMs I XX-volt systems, that XX-volt, we’re a XX-volt a infrastructure systems can stepping adding like stone a can power to so by all perceived to directly So XX-volt that going power the it infrastructure can eventually device think, to conversion from XX-volt. legacy as be NBM through it

be of block conversely can XX-volt infrastructure thus transition the GPUs infrastructure XX-volt and it XX-volt must facilitate load that to XX-volt. XX-volt the can use key infrastructure building XX-volt from in a power ASICs So a in is enabling legacy XX-volt a

Jim Bartlett

seeing start some you’d think this? of you do impact when And

Patrizio Vinciarelli

some I see Well, early to requirements. believe

in in is of as some six, the a the XXXX, but be second from don’t think I it’s revenues systems, start frankly – very half from a that in that’s particular short-term that where impact powered months, over their contribution we exciting terms on require terms be being that until are self within should take I the a should to GPUs XX-volt there in XXXX, meaningful AC the opportunity, very NBM the think that of powered again going I from and product. revenues directly our in of I think anticipate to mains. the time may significant sufficient But it they nine programs

a alternative. our XG generation it year. is than become or would NBM effective later any generation competitive lot next competitive technology But we four smaller so more denser, And than even than competitive older our Our technology even rollout when alternative, cost our effective three more any cost any with this times and is it’s small alternative. it

So winning we that have in play space. card think we to the

Jim Bartlett

And sort are the sort centers facilitate broad XX-volt. getting of analogy, tent get childish under to this you’ll nose really this, that and the now but data conversion may XX-volt – just that and then is with of a

Patrizio Vinciarelli

is building that. NBM facilitate a Yes, the block that can think I

mission. while to the is GPUs I industry being in that again believe, facilitating recently going is we being selling certainly think part I a that’s our of though regarding but way our every announced transition can change itself

Jim Bartlett

and you, congratulations. Thank

Patrizio Vinciarelli

you. Thank

Operator

question comes now go call. next Anderson ahead, John on [ph]. John, the please live The from you’re

Unidentified Analyst

Hey, guys, progress. congratulations on your

Patrizio Vinciarelli

you. Thank

Unidentified Analyst

Is on that to questions, the to for to throughout listeners? two tenor your in sequentially first I one in if could. My you orders quarter to expected ever. grow logical of orders on about current the we here, call upon Is there here expand the year biggest last just call landed of assume? talked the question perhaps have customers visibility relates quarter. I your you’re think I each the

Patrizio Vinciarelli

this customers significant year, key up some it’s of in by going balance Well, growing for multipliers. up cases the seen forecasts we’ve from

these quarter. applications the But were of time we well, will some the far, last with thus at well ramp where start QX. in in we’re QX looking we’re doing think very ahead I this at

in terms are the of all that’s going the start So forward again the forecast of and place the key taken in seen respective already general logic the bookings of by the that outlook solutions some suggesting outlook that fits actual and near-term, have they with and demand applications, in and in and marketplace. terms their of customers, the their opportunities forecasted

Unidentified Analyst

color just other Great, Facebook report data We question that thanks for to, you for XXXX, you there. my update where late relates center been And a with players. any other we know the potential years, any I starting five on give referenced also hyperscale you’ve know customers, Can annual working you in any new your working naming can that update give initiative? in week talk guys kind Google new ASIC there? about Without with very last division. you’re large of you saw

Patrizio Vinciarelli

about half ones ones names, pubic question. respect not are So I are in want. understood sure not the to the second I’m talk the we with of customer your that that domain, can fully we

particular maybe ASIC you If new you could it, phrase in developments? regarding

Unidentified Analyst

there on Google been doing. chips news to basically implementing Facebook focused week like a be last think – that rumored new the is just within has starting I division was ASIC just

that. referencing was – just I So

data hyperscale to report relation note note center said players. you our annual in because I you’re guys with in know multiple in Just the working that

maybe Facebook, could of than of relationships other without line year? there kind the about nearing are new in customer are talking So opportunities any that – can back that give just video groundbreaking you the be half the specifically finish

Patrizio Vinciarelli

data working variety can of that So respect a regarding no with Facebook to comments suggested key I earlier, power as we’re current high customers. no particular, say other and center ASICs. to comments

have As you unique to we as guess doing people that key do multiplier. developments voltage need ASICs all customize advantages all have they’re out, are our right, as we what, to key as very they all for they know of this the all that these to with – looking very general Factorized do be to They to the and X.X-volt staff denominator Well, the all for factor along, recently on common development current of common devices area. going announced, fundamentally are advance these high know, in that And of a two to place the it can nodes sent Facebook by resources Power is proxy X.X-volt to far will this players. process that amps applications architecture in the a that X.X-volt System high point it, the it. got companies our And with delivering – is ran one has very a multipliers currents, current for XXXX again have that’s the currents lessen XX. of a challenge low key

we customer to ones So are less, fundamentally we or which current one for it so-called and convert the to amps, only multiplier. a developing with XX even are the is XX technology amps XX:X take XXXX ampere KXXXX, load

ASIC you will to and XXXX with So our to they the amps deliver take down to that’s need all packages. XX that technology amp load to

challenge the We factor about roughly two the need so in one multiplication a and to because fed can words, needs consumes of reduces division with only record some By And let’s amps kind can roughly still engagement in is on-chip if they X.X-volt, again current in of their U.S. the current. our is by pacing in X-volt. and only larger in way, ratios. center billions XXX dollars high the chip of assay solution. factor R&D are, customer to ones. multiplication So your Again, were because amps multipliers be development regulator think point on a public XX-volt the to to I where In other the Japan chip they that’s we two. XXX Intel the are Intel a convert affect with Intel chip of in solution a low voltage solutions XX-volt develop and much, only current with and a what, say, that other or is guess early of going direction X.X-volt had X-volt, that to, Facebook much unlike other the voltage in

a These current, going to now of delivering lessening of XX-volt provides advantage to in the as We’re I/Os huge for again up challenge power supposed pressures freeing connectivity to terms X-volt. the delivery.

this one timely just multi of them. positioned we So not that busier with for but is very larger well customer, think are us, with we development

Unidentified Analyst

Well, I’m to going that to shareholders. you call cede And the thank for explanation. other

to been vision of admiration you sticking of predicting new personally want firm, just for forward lot all Thank my one tenacious it. speak I for go, you’ve and and but kind to relatively that off you. to Before I with and is you for where going shareholders you building thank your your I efforts and other the very ensure our company, to I’m this and appreciate that hat’s really and for market hold

Patrizio Vinciarelli

you. Thank

Operator

several The John do We now Capital]. other [D&B Dillon John, ahead, question next please comes go from questions. you’re live. have

John Dillon

you Hi, Jamie, guys, And congratulations backlog of that outstanding. just is on XX% sequential $XX bookings, for guys? the million record it’s is

Patrizio Vinciarelli

I believe so.

James Simms

believe it I is.

John Dillon

your need even I the Yes. Intel for other amps Patrizio, X.X-volt, a has the because regulator backlog, this which are on and got you has X.X-volt, I’m the and I lot having is I down in can’t going also to remember hearing to guys where a X.X-volt, more explanation really, ever shine. think but so only amps is $XX of going currents congratulations. built-in so X.X-volt want they need really what technology million that And thank is

the and sweet Is what trend is correct? the in this hearing. spot industry, is So this that I’m your that’s really

Patrizio Vinciarelli

correct. That’s

couple Intel you saying of we’ve processors, way in amps X.X-volt. is fact they of remarkable some need powering know had as only of that the that spite of that Another a XXX wins

John Dillon

Right. exactly. Not sweet spot, even your

Patrizio Vinciarelli

that multiply I’d is the like the power hot can which but current, water the but through current XX-volt and you X.X-volt alone, faucet you And doesn’t it are water can becoming it which XX-volt X.X-volt up Not getting averaging regulator and faucet challenging. too mention are from bus analogy X.X-volt water fundamentally, XX-volt, if divided don’t by level to densities are by the challenging. is open flow. at duty of is really voltage source and water hot to By fact easily. at up, want XX%. XX-volt averages right called water faucet, provide the technical down water cycle is term it the cold use mixing But When flow more down, I about voltage with temperature more pretty that down. makes doing faucet the your also faucet you the get technical the hot a the more going And the to from the here, you and water most in level, cold power X.X-volt much

is Processor, GPUs at of point, being the would other your indicative competitive Intel come volt to an going out nodes down, Intel be and with are advantage more. to have So wouldn’t are and of and their out the the they down, come the sub-X fabs, ASICs, typically And ASICs and voltage and up, down powering of this able we or voltages. win obviously powering X.X-volt lower kinds are And appetites that that devices currents of TSMC. the going with up

know all we as is capability escalating. compute Our

challenge a hits So we in really up spot And we’ve we else there. can X.X-volt, think some anything are us don’t good I X-volt. below that see that sweet had

John Dillon

GPU they? reminds kind XPU, more they’re really me freeing order of and this to that they’re efficient if doing the be also are the a or aren’t have other going guys leading That are competitive, follow guys providing to to in up pens and

Patrizio Vinciarelli

Yes.

think are know There these that go. within companies we things how that mindset. visionaries foster all I

to of are going for then in being game that extra willing We’re risks to to take to long-term point becoming and But developers limit to to conservative proposition riskier to commodity be They lot your gain because playing the strategy. technology. that’s risk that a their order task it getting becoming particular other power taking they products. it’s own isn’t down. good of companies more cautious there realize in a And tend impediment advantages competitive be the fundamental comes more core when a more to the an and

new MCBs there’s in part of tell or technology respect thing, in considerations. end likes getting I it other So, embrace by is a you of different the as in will of getting And superseded the are these been terms isn’t NBMs power way some sensitive will so, Picor. of and overcome to multipliers prove once more I we’re the potentially other or breaking think supplier, front we way that or on MCMs we or reluctance if one current by from doors past reluctance by down. That components with And are capacity, and running the of buyers pricing, very expect there a are trustworthy products reliability open we to that we applications.

John Dillon

on booking. think related a do But just the question towards brilliant I another part. your that’s I move is agree, have more NBM I Yes,

take front companies So your or I’m you tend with up a pump have little. bookings prime big placing they might a just orders so to sometimes They the order wondering company. tick down start another when will and then

it the put So is Or a I down safe their another clear… big bit I’m they’ve assume bookings? orders us quarter, go XX% if going to increase in a for in? we sequential wondering I’m to for just little are already because don’t next know see

Patrizio Vinciarelli

gotten design going that’s haven’t half second recent to to of yet We XXXX any big with be GPU the respect event. orders wins,

Now impacted we’ve but non-negligible, that today. really they gotten some are bookings pattern has initial the nothing orders,

John Dillon

we increase XX% bookings? So another could sequential expect in

Patrizio Vinciarelli

I don’t down want to that. look on you

seeking it’s they that you I quarter difference the the revenue front, the bookings XX% weeks of the front, or forecast of quarter to bit legitimately to respect with to is first why it on what quarter. whether weeks that’s bookings two come quarter, to to for this XX% the big is the order revenue I projects bookings revenue with expect can the easier a in and the think on with we’re particularly can easily forecast a then of the first respect Manukau little comes because in, progress think forecast a two make large next that

respect I’m quarter substantially are going over and to by. this quarter ahead seek last bookings. to go Manukau with will we have far let the we in So thus the not But I quarter said

John Dillon

no guys? of And some the the big of it pump sounds there from climbing real like was

Patrizio Vinciarelli

part of new respect respect projects. with have heightened activity the with climbing no in Nothing to opportunities. to late pump that the of first been quarter the of There’s some there’s the to we none second that’s reported; been but whatsoever bookings quarter with respected

John Dillon

is waiting This for. been is Thank this we’ve Jamie, thanks. you, Great phenomenal. what Patrizio job, and

Operator

Hicks, please Alan go comes ahead, next from The question live. [Ainsley you’re Hicks now Management]. Capital Alan

Alan Hicks

I and Good to my execution. vision add your afternoon and your both congratulations

Patrizio Vinciarelli

like Thank you, I it.

Alan Hicks

all out We break do. can first My for you and VI question is segment revenues the Picor, of Chip, on, BBU? well, all,

Patrizio Vinciarelli

that I products take at advanced year-over-year is can in products the primarily growth prepared pointed you to to those out Picor was So and be the remarks achievement Jamie due XX-some-percent. think the the that

a where solutions causing with our see major going seeing not growth but so historically critical future. curve interested Japan, VTMs, major to because doing now Whereas point which going which showing system the with be you PRM, forward, growth well quarterly being parties up And that critical shifts the talked the products a legacy going not the growth and know been products from. advanced from forward look and come end In I light, We have the are level calls, front the but been part, they resiliency, going long about are is the pretty recent products, foreseeable past that we’re were these in they’re discussed We vast driving product. that type we’re in fundamentally slightly the doing time particularly products feedback I in bookings daily they’re respect as mass, BCMs, driving to we that. the do opportunities over with MCMs, PRMs, MCBs of is a scale. engagement solutions, And mass. have that’s at they’re with where growth their overall, legacy now essentially again, with okay, to of of number we’ve the had

customers product, we’ve the about in the gets It not it because XX the that very not power is been but as from the call. to to legacy kind believe point-of-load become device next point-of-load, to that it it complimentary be but well. to talking might conference of a whatever I classic So this that’s their underway source those significant over going XX-volt are months is

products, respect with a will new yet comes shipping technology. it the and is a these what bit XG give to products of action advanced all we’re So we to primarily XG is different flavor. our call what When you

You make Picor, obviously of to our key reference effort. part

particular their we’ve a to ASIC of in XG able With ASIC and progress. been make ASIC great deal XG the

to late this have capability platforms we too close have starting already one We’re with that XG integration, in but on we’re another bench, soon year, the higher before going system technology, flexibility. to year piece. key ASICs, to complimentary control takes of deals the we’re and of technology going packaging and level next now see our on and And into efficiency, very very give of fact working the long us level and two to that much the we’re XG yet a the

currently layering we’re So these of in are contributed enterprise portions in portion. other which Picor the developments by being the particular

James Simms

Plus until roughly to file our will before to all we disclosures. our earlier we more down. of it format XXX Q, we new ASC have Alan, broke of answer have specifically, second you’ll segment your two wait the will question weeks the have

Alan Hicks

point to about fell was income I Picor operating margins. XX% I operating VI but profitability? million Thank I half it’s at, X%, $XX still XX-Q was last and till get year in it revenue or to level to – we think looks your What X% on year about throughout BBU, Chip know What have to profitable you. extremely get improving we Chips? there. for like reading wanted do last what I VI is improved. At about

Patrizio Vinciarelli

is XX% Chip I VI the to getting there, area. think we’re

scale do margins that very margins, chips lead year, the products cost of into XX% modular with when packaging it I’ve point past with of And saw I one I Those to get was point that are significant all the But and your is think at it the higher economies believe component. are the multipliers – I all devices to to packages, VI think the or VI in probably lot XX% Chip Chips. of with Chip I getting XX% underlies technology bring recession. a from all are think down about opportunity. going are we’re difficult I to to current infrastructure we them It’s are of margin negative bit capacity power look, two true think VI to golden scale levels. driver. current made and credible. hard XX% know make the volumes. with half unique that it, take you being those GPU, developments, to more these were margins high when it let’s is three will and to and chips on of becoming significant of There say it in the positive potential all of XX% as I it close that have negative Picor there. to this this to to rising with is Today Chip it gross quite to well, from way we zero a the VI comparable second the taking respect and

Alan Hicks

So overall margins? far of could surpass gross XX% you sort

Patrizio Vinciarelli

I QX. think we be XX% starting are in going to past

Alan Hicks

ship to my the announce RFM And Okay. do in it will when expect next product? you is, volume? When question

Patrizio Vinciarelli

that power is I that where X on challenges scale XX selective been of it. we’re kilowatt, to have the of kilowatt There the with of with kind depending cognizant XX non-measurable the that – supply, one of And device. respect that kilowatt, customer. products but we unique very it requirements the have are mean. end This application front go we So, shipped doing quantities of just to some unique

the development to a complete want We available before making few to device different have We that under flavors other that development. of customers.

customers need keep We some I when adopt level maturity have. to them it. it’s are and up that to four to other these three, major and opportunities respect with potentially drive to they day they have the think with and things it, of important evaluate remained measurable very we see achieve some every But have eager roll we other that it up very of

Alan Hicks

opportunity? more of That’s XXXX a

Patrizio Vinciarelli

that customers for No, I to product. very think we are close more

I scale of event. scale as terms maybe it’d But in it’s late XXXX. a think XXXX a even large a think large be contributor XXXX, – contributor being I probably

Alan Hicks

the supercomputer, yet? that is shipping PEZY on And

Patrizio Vinciarelli

Yes.

pursuing they had opportunities look those to with a of overcome supplier. And They’re variety us company as issues relationship trends. the forward key have that we So long-term some issues. a in a

Alan Hicks

Okay. opportunities And you other in have supercomputers? do

Patrizio Vinciarelli

to likely Yes, as I it it. think in supercomputer; you be name we’re

Alan Hicks

track capacity? last Okay. on are then question, for And you increasing

Patrizio Vinciarelli

Yes.

So – with to respect very question. key that

me last October our capability. close of to been and we’re actually square of the year heard about capacity continue timeframe XX,XXX it. to very In reassessing develop XX,XXX some to incremental to you’ve strategy acquiring we say feet we’ve So reassess feet space square

then company We very that’s partner have a decided progressing and well. certain with since to that has complementary capabilities

some other about also relatively able find yet, I that that which trigger soon. will could XXX,XXX the that way is – time, the that the pull to from along not in of from actively we customers. the But capacity to is that we’re feet places we have that’s pretty XXX,XXX area square midst want enable at know actually valve space may being feet, square potential believe same that in whom both it have XXX,XXX so the hit is within capability nearby. we so out to state facility those our in to looking bring a us make some on have to it to our for tough capacity not the bottlenecks with it. relieve feet a are square are we that gives our we which federal for not very We fighting about But, could happen relief us to ramp of facilities a and existing that don’t do meteorite judicious expand us the When choice, be what the yet we for concern

goals. to vertical it accomplish to can like we and quality that we capacity idea we to or in terms any of that outside possible effectiveness the from think compromise source capacity, without cost extend deposition can So we additional integration of differ combinational the

Alan Hicks

you very again. Thank Okay. much and congratulations

Patrizio Vinciarelli

Thank we’ll you. question you, otherwise… more there’s one take If

Operator

call. other. of But please on Ron Feinstein comes [ph]. ahead, next from live you one Yes, couple the Ron, go do now a you’re the have

Unidentified Analyst

haven’t you questions. is Thank you. I Patrizio, in can years biggest any XX give asked compliment I

elsewhere, at and affect will ask that trade or issues that So be to your results. China for whether for thank I want or just your you the all? business could the influence coming foreign policy

Patrizio Vinciarelli

minor very a In way.

million the dollars Commerce if deal of next in seven holds few otherwise with aspect customers, similar for the think Chinese decision cross by one I recent to Department years – near-term. but it’s

somewhat and the near-term our think term opportunity believe issue an resolved get longer there’s – in any likely the long-term. But prospects or I it’s was that in before I certainly to wouldn’t there case be long. affecting the that’s it opportunity too

concerned not we’re it. So about particularly

Unidentified Analyst

Well, Thank team. Okay. you. the whole congratulations to

Patrizio Vinciarelli

day. we that with And you. it call a Thank will

shareholders talk June. few day. in will a you Have a months actually to meeting in the good in We

Operator

Ladies call gentlemen, that concludes and today. conference you. your for Thank

for You disconnect. you and good may a Thank now joining day. have

Vicor (VICR) 24 Apr 182018 Q1 Earnings call transcript