VICR - Earnings call transcript Q3 2019

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Operator

Good day, and welcome everyone to the Vicor earnings results for the third quarter ended September 30, 2019 conference call, hosted by Dr. Patrizio Vinciarelli, CEO; and Jamie Simms, CFO. [Operator Instructions]. I'd like to remind all parties that this conference call is being recorded for replay purposes.

Now with that, firstly, I would like to hand the call over to Jamie. sir. ahead, go Please

James Simms

Good for and September the Chris. Corporation's XX, to earnings call third afternoon, you, welcome everyone, Vicor XXXX. Thank quarter ended

on with has summarizing is nine XX. I'm Investor here of close Officer. months the today, stated, Jamie and a Chief months been results market's Officer; As This our press for issued release three Simms, After the September in financial page press Vinciarelli, Patrizio www.vicorpower.com. and Andover posted we Chief our release Executive ended Relations Financial website, me the

an issuance filed release. also X-K this We today related the of to press

I may remind you, Reform this call forward-looking of purposes constitute remind make harbor various of property and is being may listeners statements the under Litigation for copyrighted is Securities also safe the conference Private Corporation. the Act remarks call I provisions XXXX. this Vicor of we recorded during

call, and statement including expectations well we assurance planned to discussed and events for in matters market opportunities, as planned on historical and and current the regarding expected announcements, growth, call, spending and this capacity this risks products, risks customers, statements and potential offer profitability can management's expansion be will, forward-looking uncertainties. in In for contained fact, that of correct. information these forward-looking as any statements potential no light Except are current sales involving uncertainties prove any

with implied we of the our filed by XX, Actual results face of or XA XX-K, in may and differ discussed Item February Form on our which any forth those materially today. XXXX. set are The from SEC remarks XXXX explicitly we risks uncertainties

and to accurate no of should during of not upon conclusion this note XX, Thursday, statements any statements this including as such rely Please only forward-looking obligation statements XXXX. call the during today, Vicor made call. information conference after call this you October provided is undertakes update the

replay XXXX. dial-in through in set by followed forth number midnight dial-in will the available today's A beginning This is passcode also The call X, release. replay of are November at XXXXXXXX. XXX-XXX-XXXX press tonight be the passcode and

In with the of Investor call along addition, transcript available a page webcast replay our will of website. shortly be today's on Relations the

I'll today's start stated with third million third lower but quarter and our after with in nine which his the months revenue release, second million, quarter Patrizio and for performance of afternoon's financial for of discussion will quarter third the year-to-date, consolidated review questions. million, with $XX.X your revenue we'll record total the Vicor as recorded results, follow XXXX. recorded this remarks the Beginning than for quarter of X.X% $XX.X XX.X% up of $XX of our press revenue take from

reflecting stands year. million half $XXX the shipments of right from trough this of in total center XXXX's the Year-to-date at $XXX.X first X-month revenue off of million data

manufacturers a reflected after behalf pause existing growth revenue past of to shipments quarter of Third is an resuming center data contract on two the of resumption customer. quarters. the Production

We also of their for to preproduction activities. in customers preproduction own shipped Products Advanced use volumes

in declines was Products trade-related Europe. weakness sequentially double-digit ongoing economic and -- China tariff as Brick unchanged from revenue Kong by Quarterly as domestic has growth offset well Hong as was and in

For Brick, the XX% the XX% to Advanced split Brick-Advanced In Advanced. was quarter. contrast second third XX% Brick, quarter, XX% the for revenue

rose charges, the by to mix. gross higher increase XX%. XX.X% positive exports for offset for a XX% from sequentially, reserves revenue impact production International reflecting steady shipped sequentially absorption manufacturers, International prior revenue slight revenue from contract rising and in a offset offshore Products. rose volume Consolidated to as by of XX.X% slightly the of Brick percentage XX% increase increased Advanced in was on of quarter's margin Products to of tariff aforementioned quarter's QX. decline QX The revenue the was

compared to lower the absorption XX.X% consolidated our period, the XXXX figure year-to-date attributable period with X-month the tariffs. For XX.X% profit higher lower to coincidently for at and gross stands primarily margin

drawback now a quarter backlog last in of but of the program, discussed customs processed occur we development given by believe U.S. applications any tariffs our being XXXX authorities. We the duty paid recovery will of

to pursue opportunities use continue not vendor to of are completion and Import that subject Tariffs XXX also certain We to suppliers important in XXXX. changes anticipate Section

from operating Quarterly Noncash quarter quarter's the prior the and expense operating of million, representing on operating $X.X $X.X were expenses margins basis. with income X.X% Quarterly $XXX,XXX compensation and flat rose year-to-date both quarters. respectively. line for a sequentially in stock to totaled million X.X%, prior

Year-to-date, operating year-to-date of XXXX margin stands figure XX.X%. X.X% the to contrast in at

fully Net is rate Vicor GAAP $X.X totaled for tax as contrast stands to income from X.X% for rate third on diluted figure unchanged was effective $X.X essentially $X.XX. This in quarter representing the rate second million X.X%, diluted third XX. attributable year-to-date The for of EPS calculated QX down X.X% basis of June GAAP a representing fully quarter quarter. of from at the the similarly Our $X.XX. the effective EPS tax 'XX net of a million income to stand-alone

neither was QX XX.X the share and listed approximately B nor registered Class fully of approximately EPS for stock million common Our count listed sum million $XX,XXX,XXX, classes of and XX.X approximately is diluted million consisting options. both which X.X shares, diluted which calculation registered the common common share are shares,

million at the sequentially stands decreased up Trade today X. finished a sheet. hope and of with in DSOs to was last are in shipment quarter days, balance at due end, shipped to sequentially by balances A finished decline achieve Inventories rose cash metric, and with our the but of with million of chain in be of improved $XX.X annualized raw further all goods supply originally conditions. XX inventory with other million scheduled million, at management shift and net materials turns sequentially portion improved $XX.X slight reductions We associated receivables totaled improvement to $X.X a quarter, positive planning sequentially, X% efficiencies to $XX.X net goods. with reserves primarily working improving declines reserves associated Cash which our X%, to to equivalents Turning capital. recurring.

expenditures for of Capital totaled an sequentially. million, QX $X.X increase XX%

to count. Turning head

XX from of stood X,XXX, at quarter's the September as employee Our X up prior X,XXX. total

expansion, capacity our facility land the be the the to Andover fourth will to the during such we as like. Construction announced winter complete current Regarding months activities of adjacent grading, and limited over to our quarter. previously purchase paving excavation, expect

begin occupancy expect to Street spring Federal and construction wing in in We to of of the our new the complete factory XXXX.

the planned installation. stated construction internally we funding before, equipment phases both the two As of and anticipate

fourth Turning to the quarter.

cautious our recovery broader of timing We about near-term are regarding prospects of AI positive the acceleration center a spending. but and supercomputing, in data

of we to disclosed, wins QX in the XXXX. previously a delivered first across and of for volumes orders production expect design multiplicity As be have half

With turn that, over Patrizio. call the I'll to

Patrizio Vinciarelli

bookings U.S.-China trade micro demand current Jamie for weak third As customer. XX%. uncertainty in by forecasted and unchanged over server to continue QX, by about increase the Products prior are from booking resumption XX% quarter. to suggested, the bookings the visibility. a of essentially in tariffs, sequentially million, reflect Fourth Advanced totaled quarter production quarter major Bookings rose patterns $XX driven slightly by

orders We from customers. these expect further substantial

initial customer. also from builds next-generation orders GPUs of We another major received for

this platform. customer Additional next-generation accelerates of its orders expected rollout are as

wins beginning mentioned, expect we other QX. with also Jamie associated As design orders

enable positioned until in given XXXX. offering well advances However, computing leading these innovators with not shipments solutions lead will in intelligence, power occur times, We're artificial that power. from orders system

beginning XXXX. these in We provide will growth innovations expect

compute ASICS to wins volt system to automotive use necessary of the power XX-volt full XX-volt planning converting Current systems solutions and with activity to levels the X,XXX enable Autonomous driving improve autonomous EV notable Turning safe. amps from mild-hybrid sub-X design power to to includes driving make approaching OEMs performance intelligence automotive. and to booking also vehicles. power are current to

investment them Vicor evidence differentiated a and our solutions solutions. to our commitment to proprietary long-term As repayments. these orders We involves substantial see of in as through highly

As performance growth clearly that and solutions. and for to system system for remarks supercomputing, Vicor key are positioned architects the of profitability differentiates with this has superior since long-term Prepared power last products. with and automotive AI enabling having markets by about in faced end conditions itself performance turning the uniquely year, turn Vicor challenging time penetrating unmatched power

questions. your take now We'll Operator?

Operator

we And our line have Jon. first the question from Instructions]. [Operator coming of

Jonathan Tanwanteng

bit bookings what orders on XXXX? ramping? see to that some be out track Do new they will indicate this get that My on question growth Nice generating expected designs the seen. into quarter Or you a the previously up to bit pushed little you've is fourth quarter. things that with and your is back little first some a

Patrizio Vinciarelli

I So in suggested to to business but number do predict. with actual about give for will remarks, that we which we prepared at up not the my quarter, want the which respect this willing are to by turns within because fourth quarter, guidance expect significant be be respect bookings, to to provide degree revenues is not XX%, point with we easy revenue guidance affected to the a to by

respect guidance we last you might as So with to. up to provided quarter, revenue, made recall which have we lived or

This quarter to respect to to with harder revenues. do we're that it's guidance with bookings, providing but respect

Jonathan Tanwanteng

Okay. factors relieved? to because China? this customers their some out other product transition quarter, was was such large resumed -- being your Understood. CPU the of that And contract something shortages then the data taking patterns, manufacturer of for Or that as center that a do spending with

Patrizio Vinciarelli

all above. of the think I

industry year, go at I everything time key a that factor. of back I given in there a a demand times what part think, think been we I time, may some of because long very time, have of was mean, if respect combination climate has this as lead that of to in point mentioned the you -- last ahead needed shortages, the of barring function lot gotten clearly, a was with components. serious to

of delays. Taiwan appraisal then that by So absorbed. their over in fundamentally inventory companies had including have your other issues to in the what saw lines lack instances delayed several availability quarters of some organizing more China been and get some that at factors was that be to production from terms they a or got there to next ahead relocating I point, we many certain contraction think needed that But processes caused the had driven orders actually of of and recently, play

Jonathan Tanwanteng

Great. Okay.

those Is mentioned new if this customer ordering more product. it orders or happens is that up? is major now for a to related that new that to last orders old You coming took year a And generation one? you what a GPU

Patrizio Vinciarelli

for point orders coming And start to on all ramping significant at the to this the the generation can and forecast started expect few new that's new say are these receive that next time. we based So over I in and generation, we months. up

Jonathan Tanwanteng

Jamie, one expected was Last the material? tariff, it quarter, in guess, that me. you the for Okay. you was What refunds amount I or clawbacks. some may mentioned have

Patrizio Vinciarelli

refunds similar but have the queue there are coming. we're with through to effect, get multimillion it companies we expect that are we didn't we seeking anticipating because this that we deal refund Well, that quarter, in dollar when that to going a have are

James Simms

our expectation. That's

Jonathan Tanwanteng

Okay. status one Great. one. growth? secure future may I'm last be the sorry you of any more to partnerships about you talk Can pursuing manufacturing

Patrizio Vinciarelli

So discussions. we're having

prior calls, want As I under respect we're taking the mentioned to right long-term a We conditions. in the work with this. look very right licensee to with

to anything once I it. you know today let say don’t we'll something So about to comes fruition, have but

Operator

is question Next line coming Jeff. of the from

Unidentified Analyst

James, question. I a had

to going like to about XX improved the the we're we what of roughly of going even start and being that take the top kind OpEx the What's about you've What now start XXX to QX fall year-over-year. line really down was pull more see Are made but line. to a to talked are it new investment given going contributor you going Power-on-Package started to to OpEx the how You in of Advanced Or flat substantially percentage this as products? now to be points sounds reramp there? add sequentially back moving Products products to to was given that starting investments in bottom lower the able the seeing basis these the has sale over be sequentially line new to QX, quite the company winning a line? up it are is going

Patrizio Vinciarelli

Let that. me take

can are but a with not scale of the of line. discussed in element because our of future to all is Power-on-Package in R&D, the we've we we With but the support players we percentage the only the in accomplished, to believe as continue top for not below in to to, respect position with of that advancement obviously grow, in far that good power a will in dollars. come down. as system scaling that power industry growth, operating leverage case, succeed. infrastructure fixed performance expenses, raise that as line, of bar products, revenues believe cost to will past, first the to in significant products, the in OpEx of levels So infrastructure system revenue the and accomplish expense with R&D, all, necessary which without in the respect front-end those production We the particular, rates economies percentages And significant whole is of also growth in bottom operating terms proportion

expense gross that a got be large We see to percent we're gross have going by line. fixed. with gross element that of is to the believe terms So operating bottom of as a very as a will driven Most of and significantly increased that margin and front, line model point, will production revenue. as is component on to that has percentage your too discussed the in better expanding that OpEx bottom reduced reducing rates margins margins an there the contribute, the revenue contributing we we past, a cost in

commerce to to expenses will that proportion line. the other in apply not similar top operating scale Somewhat

Unidentified Analyst

are kind to given was gross the we gross be those in in levels of improvement need just utilization that improvement kind on I factor wondering utilization start on -- margin? levels seeing cost of the leverage fixed nature assumptions of the the margin? to the of at in fixed where of your cost the what fixed terms at What's the

Patrizio Vinciarelli

no magic is there So threshold.

I fundamentally and incremental production with rates contribute line. the to bottom incremental to the think margins revenues contribute

been going to we're and rising see the some we've because [indiscernible]. we've in contributing again, margin of above have as for tariffs. a back XX%, of late China that. back. we more impact margins reporting so to alternate not expect of I moment on fact expect of those think sources in because we mitigated to and that's the the tariffs cost and initiatives what able of that reflected forward, money Jamie's impact claw rates prepared been with to those talked of XX%, the beyond significantly forth, be what gotten respect neighborhood to are about of XX% that We've But we suggested remarks now production outside in we terms well ago in taken Obviously, and so see increased seeing to of elements expect

Unidentified Analyst

And of the supply just is here. a quick I'll X that? follow we up, couple of ones moving of and I'll Okay. -- quick just into then to in chain How are process or try activity customers here. at off you ones is much And in right been where step in How some to get I'll where the Taiwan, engaged And has backlog to of M&A now due it they in this there the be impact of leave time? your represented by may there. Advanced to any Products? any point that

Patrizio Vinciarelli

Okay.

remember Let me all see can those I questions. if

as supply changes China that moving chain first respect the I comment to from our the think our So supply outside activity, anything. some respect chain do Taiwan. have with though do even already to to in other our with with Jamie, be had contract instances there to of chain the in place. been manufacturers supply some to clear, we one taken words, you? ship to not relocations to. or the opposed china With customers To I'm of that had of aware In M&A are suppliers

James Simms

did what you Jeff, have in mind? Yes,

Unidentified Analyst

there had you things accelerators in largest could the planned. there that even And the out in come if about that just suggest and substantially on, or of I what now don't may it be go my is technology -- you as And that working some things bookings? I an is is if be follow-up you hiccups -- someone not be through that customers. think -- or Products cloud, the the the then in on research just kind may in don't through. make go I portion Well, background want of make may not with guys just in terms may you're to I'm comments working I and acquisition answer that Advanced can of

Patrizio Vinciarelli

startup if or is in the we're space Particularly, two. mergers we getting in some up that or of doesn't business space. next extent, me in Products that name, accelerators, with these everybody really with it So acquired the taking their visibility potential business companies, to particularly year it end playing one that us acquiring or from doing my because doing companies already still that business Advanced the be comes in place are the when if complex the take may has company they let change acquisitions essentially and And it that accelerator perspective, about in doing space. but to will to be got matter business that going to that affiliation, with

with say, our technology unique story. to is and significant, very a accelerators, potentially attributes technical needs would dominant space. respect the So computing in we I the in that different given of position are Cloud a

to confront a want be reliable solutions a them to about truly being that which limited source, without in We enabling accept that time history concerns business some company, very a like are that do that potential long standards have the space. with towards confront they we'll didn't us, was to Vicor for and are that they having question, for penetration with had have do the happening is date being space with variety a their small signal relatively can is event products which XX-volt by of commit handicap we'll resisted dilemma, of with Vicor a or customers evolving to supplier. XX-volt, respect But in reasons, us to now or of that

in out. more itself Certainly significantly bodes center prospects I has for computing, that the to But space. general automotive the convergence go going our for to in latter. in that data and play well XX-volt to in think cloud got they're space obviously

Unidentified Analyst

ones the two and the majority been And since it the to on bookings Just bookings, their understand occurred place you, just bit. demand end vast end that understand again better is correction the just customer the last into to at new what a back year coming the inventory Advanced then sorry. is James, current for the just the of have And quick little Okay. put year coming What's the -- is? mix you Products? trying for from in of visibility

Patrizio Vinciarelli

August Everybody and their be have of very that mean, would to to if to happen, of end I year all customers realistically on for So but So worrying cannot that. our time. don't expect time our forecast was their first from very space, think when last point, much was bouyant. at regard. customers from changed was us go in realistically extremely order there that business, mood last reasonable periodically and better know changed get or I rely components I don't predict other think, Can to don't of July of it do very can that their the we starting further could components, year. positive is some to contraction and this? year unfortunately to brought contraction better about that I predicted of The come I quickly dramatically. right? we mood happen we I things the get as forecast being could, some our semiconductors suddenly and that level back your September feedback, I in particularly, think kinds quickly, at the power August, them, can in changed, mood, predict able imagined we we this last do that they about these

to ability turns progress kinds we market. the made that these the afraid I'm forecast substantial of So in to with respect haven't

Operator

of The line next Quinn. the question is coming from

Quinn Bolton

of to GPU wanted just you follow that this on up mentioned. generation I new

limited customer. target that I'm first with broader you that be GPU customer that the fairly you set seem feel at a think I could just won of if wondering you've the second-generation that design generation application. to won applications

Patrizio Vinciarelli

the for did achieve the that variety first-generation So without not that say of a reasons, customer would we getting do that market level too specific, I of GPU, penetration anticipated. agree the

take that well think this the I founded true. is and again, based on dependent our that the believe and we'll representations likely both But respect expectations the on and visibility well so attitude come second with -- answer to other because to time reason are around to most earlier largely inputs see question, visibility. we to customer just wait have the for customer as in

time have penetration we'll So what greater understand happens. taken ensure see much around been steps what we this is that and to

Quinn Bolton

are to Second if technology could bringing power question you updates production? you the how I wondering is, give on towards had any vertical us application high-volume progressing and that

Patrizio Vinciarelli

So I Bay week. I actually in were customers. last -- visited of eight Area Couple was we days, the visiting

demands need FPGA eight, in reasons in get be very In other. over think Power one the Delivery meet of -- realization I ranging its Delivery customer six another the other in there Vertical GPU, proximity that AI, each close ASIC, to that in wafer that to ASICs ASICs the entirety various customers, need that for the to or cases future some amps above proximate in radicals, were Vertical Power we we an is because is in up future their to so each array out X,XXX only it's order devices customer time of of visiting their effect, it. going of there. at a relationship are with of radicals solutions way to latency in array and to to the i.e., current potentially some if an beyond efficiently of these look was

traction. So we seeing are getting it

enable as seeing this We're critical next-generation solutions. order to need in it

and month Some already which system company on approaching, the been of for about current a limited with with are production an there's that to very solutions production, that will respect developing say, advanced a more double them made large-scale Vertical Power I ago startup announcement, are we already but I capability. relies Delivery not advanced one think,

amperes need within a on in effect, see essentially dependent very computing delivering, in on footprint, in the thousands there's of is that capacity So clearly small dominator a space site. food functionality we cases, where, of some common tens

Quinn Bolton

to in you do something that you half in that volume or timing? of an XXXX terms out a production application think is second think of that's the goes bit -- is is little higher further that And

Patrizio Vinciarelli

depends it the So on and the application. company

with I There's involves, called of these another volume an other that application, go so due is base GCMs, into application FGPA-type on that -- startup in least at companies production in is XXXX were solutions to one are which So XXXX. that think of involved XXXX. production for

So I you to got but to visit kinds we're Silicon terms that range a the of Valley going common time for back these week intellectual what from capable denominator of a there property learned of lines, in is demand last and support uniquely in equipped uniquely our is kinds these of solutions solutions. and

Quinn Bolton

advantages data then markets is power other last therefore, have in losses similar wondering, market? suppliers do are solution. your just -- the of more me, the have what that you pretty a the discuss your I'm these better significantly current zero And can data you can the with lower switching the traditional just supplies automotive also automotive you for question voltage distribution Just MCMs may management and -- get you zero what's switching, in to advantage how automotive you of have Or than understanding trying applications? sort you advantage are have power I'm get what high-performance of some processor on in-house? your Do in architectures advantages it and in think center? it's market to your seeing you is the the computing closer where I clear center to

Patrizio Vinciarelli

stage got one my hybrid design I'll to body of all, conversion in win it but of recent names, it bus down which back normally XXX-volt EVs normally that to of XXX-volt, provides, our first mentioning higher lower stack from bus, that an we to full first two eventually solution make order the a initially, vehicles in go -- into relates that's It a reference XX-volt. mind is from which conversion without can involves a for for development XXX-volt, go solution recently a -- than where XXX-volt solution. So can than,

bus us competitors. think XX-volt again sets once infrastructure the apart I intermediate aspiring that from it's So

level our the So bus-converted a track in and landscape. that involving it's there XX-volt. to a competitive above which then which down on followed up that at can converter it is a within stage is vehicle is take bus technology, regulators regulates that pack else first stage, by anything of and battery way the state of the voltage the distribute second a charge And regulated depending PRM

the go is to XX-volt from to part we legacy, to are down then there. that power where XX-volt system XX-volt down provide take going another We There loads to the the for to for because, there of be still in It overnight. that's not longstanding will a quite type for be that some will solution some supplanted vehicles time obviously, continue live quite time.

loads But number to years going XX-volt supplying XX-volt at XX-volt, operate they fit how question, to first power until to that of away. converting for do fit your we a go Well, regulating to XXX-volt we it there? legacy core by all, continue from back of at and then it selectively

extremely in is our going power application, car. the of In efficient the XX we're this solution kilowatts, levels, So and to is cost-effective. dense, even maybe very one infrastructure and higher about talking extremely

So value that's proposition. the

that through to buses ASIC We're I'll give It's earlier your another application. consuming automotive needs. Power presume with voltage Vertical driving XX-volt. their another powering proposition, high it has in customer instead an And don't a got It's I from working current-hungry isn't powering amps, case, example. In but Delivery I value source. very XX-volt autonomous XXX ASIC, point, exactly, know instance, to conversion a another from the presumably, X-nanometer

Operator

line from coming is of question John. Next the

Unidentified Analyst

and center that wins that some fourth the the on should large how give more you'll that can quarter, XX% wins bookings growing us you second confidence be in-house. a you in we quarter? design fourth start that And give if wondering seeing detail you in along your line, the bookings have I'm you hyper before these for design mentioned

Patrizio Vinciarelli

resumption the by design quarter that, to over high of XX%, for about able going of obvious out but coming demand bottoms-up I'm some forecast. So a it's a to we that's fourth going details the older programs. grow confidence be combination wins you, of have bookings to reasons, new from that and in we're not give

at makes give leave way and of it's you together. So I'm I'm to that the confident specifics But the play, combination of for but going that's going to a forecast of it what come it not factors being. time we're the

Unidentified Analyst

people those Can we -- you mentioned center had are that ordering bit on acceleration product still hyper I'm volts. possibility? And in that, had you're you taking of little in another wondering at one a you any the for and to give seems that that? hyper time, if centers seeing start just the -- centers over XX there It talk a about might longer of And fourth more than along quarter? expected wings? the data like kind us hyper if it's switch Is details that lines, can to an

James Simms

in within systems diverse ultimately, other usage the of of scale the -- standards, ways economies. think, automotive conversion with center again, drives, also think in ago, to than to to discussing don't but has XX-volt other -- that, put way, and so And room we're think a of is I here and electrification I in just that the everybody in in speak, of even automotive. automotive common in industry evident common that elephant is space, let's than coming in point this our happening, a see. because really at of -- competitors become the automobiles think I and the it's not content, the any for as moment any this year, acknowledge that this also accelerators, industries supercomputing variety that meaning

this clearly say said relatively words, debate think recognized there end limitations of any away So XX-volt different we that of going it universal to is becoming that because have I longer these don't with And be can in standard. point all to markets. is XX-volt respect in any

earlier. at away be So loads The be some market suggesting was it's without our for as quite There's is to to market. but be overnight go going to XX-volt, going not growth I And is peers. time, XX-volt. technology growth not to going legacy going a that's

Unidentified Analyst

we're one a get that. had what the see So chunk data like at been has I it of or And quarter thought really I guess, seems expect that wing. outside, couple from had in there trying to taking large last you quarters maybe is large it center that to more I'm another that see was going would I production your the you some mentioned and a one was ago, of shortly.

just you've onboard the larger guy when coming I'm the hyper center extent product. taking seeing got larger centers really other that current we So might hyper to wondering start

Patrizio Vinciarelli

the or here pretty the the it things, is I the past. I that in saying to have the been going but make about, come future structure I'll I think I've nature the happens, about persevere very kinds references, at when conversions of is going with so is coming. of ahead may to our And happening. think these knowledge, times things I'll of to respect in I'm said XX future not repeat been reliable I've specific to that

isn't going that for There wins. going the in happening verge for isn't It to developments that is I adoption. having space, talking think us design much a us further. with target for And today asking are of no accelerate customer for the are developments, GPU next-generation to accelerating, GPU requirements. instance, their on marquee proposals, is XX-volt. intended, solutions pun or to trend. automotive It's we a The broader

So customers In out than our there. far else to really to solutions And anything only are solutions are superior many way enable what the we are need our cases, there. do. the

of we've on all this see Other the in those some again, look in inevitable a year. out. development. Vicor cases, bit somewhat had I But customers of a unfortunately been at years quite In it's going the customers dependent limited, major still we some it's to long fact be some next that couple acknowledged time, too key of see customers, I to I years I Valley the cases, number last week, for becoming limited but as very come. So business

So of that as innovator happens, aspiring think role in having the to a that that statistical unfortunate. the to that's are get. been I the can part of going we've And business play. to playing as I mentioned base past, continuing to we're it But not been lead performance, and lumpy it's we've get

to I be see able my year respect next this, passionate very accuracy it or and two. I'm the very predictions in So coming to with determined, the of you'll gauge

Unidentified Analyst

very is a all of wins. XX% in I'm pretty That lumpy increase that very quarter I long confident hearing we're you're What sounds and down different the this good. the there's -- bookings a Is fourth as we the design a in as having had where think runway can revenue shouldn't that base, bookings with before. and And see statistical be continued we growth summary? we road good

Patrizio Vinciarelli

characterize as summary. pretty may I a it I somewhat words, I good but have different used think, I would think,

happening the that things we next going more through into phase. programs in more design the going starting and production quarter expanding see and and fourth are year good So gestation with into wins

Unidentified Analyst

nice congrats And on Excellent. flow, was that cash really see. the to

Patrizio Vinciarelli

Thank you.

Operator

coming next the The one is Richard. line from of

Richard Shannon

to ones you're of the you other here this little GPU the quarter, referred driven some Or largely between that on about as more customer, in balanced the by talking is just bookings Maybe to it think, a off a single of fourth a with couple the dynamics well? bit is for start space? clarify quick I to

Patrizio Vinciarelli

No. It balanced. is

fourth that the all. the the There ramp may be we fact, on front, is QX. I in at coming quarter booking from In in in anticipate QX. think in some GPU start not single space bookings that should But the real biggest

last came that list the is obviously end the business may design way growing be week. There coming our our year. recent part front a the that example there So was of of coming next also is wins up within There a in just opportunities way.

to coming diverse, it's existing not directions. a So coming few it's It's point, major from different one customer. from your

Richard Shannon

quick the A on commentary quarter. for revenues just question Perfect. regarding Okay. this

Is the difficulty coming Brick assuming business. is You said -- this fair? predict. from largely is I the difficult it that am to was

Patrizio Vinciarelli

it Well, not that that. just I'm sure is

our Products ability on the the I placed as and quarter, progresses. also the Advanced are capacity to given quarter turn orders think depending within within it's where from the quarter

So we're a not to this quarter. with providing guidance with forecast respect revenue making comfortable to respect

comfortable We the guidance to level. respect are giving bookings with more

Richard Shannon

Okay. Fair enough.

of with regarding power commentary -- here, as well train the good traditional the automotive as space powering the traditional some both kind had in You the autonomous driving.

years, If per be? your what Patrizio, do you vehicle look content you think could at opportunity few

Patrizio Vinciarelli

type which we're Well, it of about. vehicle very much talking depends on particular

Richard Shannon

autonomous What full a EV capability? if it's with driving

Patrizio Vinciarelli

the not By the full scenario. is necessarily best Yes. EV way,

through hybrid lot power of let's is hybrid conversion stages conversion the downstream of dollars think XX-volt, a a I that. select couple with with then of -- worth XX-kilowatt there's in some say, to

have doesn't So EV be scenario. a to case it good represent to full

number can So XX-volt kilowatts, content. not giving is I'd level what in loads watt, to substantial going it's a from going pack I'm not terms of distribution proposition complete of substantial the But a some to VI/VE XX-volt is infrastructure per I be away to say the XX is the do. distribution, say that, including very if what a It's safe it because is value a legacy which I'm cost at of conversion there to power content. to say

Richard Shannon

Okay.

enabling. are those And think customers We forward of set last of of still can time. will above seeing fully in that you you have have solution over is, a to do chosen also, or level with amperes My are? look competition. a who you no kind effective quick question of what questions competition. seen kind guys, not they here characterize engaged that you if And have words, Patrizio, maybe you on your

Patrizio Vinciarelli

one that an and forgot exact So couldn't in we've solution I make tried customers, power it example, deploy of I think can Japan as application. instances that to of the level of competitive work. a And had

regulators with amp delivering than they are because on in of In a limitations, they are advertise one the that XX more you very to competitive technical relies little is I regulators. as of to capable as thermal of used amperes. be something at back what much -- reality, they consistent, respect stage capable are that. less it bit These give may been think so-called To category. have it in this, landscape color so the XXX

can of devices it. real take the you in So XX if one of world, amperes XX or get out you these

If you basis XXX amps, consumes steady an state them. of a on need you to dozen that need XXX, ASIC support a

with milliseconds, a which got you requirements, what if solution that loads on or that so-called the of double you caster long Then on it. if add is freebie, then current steady-state peak up turbo for this ASICs, enough number the time consumption. scale competitive the draw And which do a to current the we transient the ASIC is TDC having of pay an whereas more hardware can to go to is will, instantaneous and double without of our support has on with basis need regulators, modes the solution, have Xx,

loads preferable that involves, that as that A running lot noise. a single Vertical up XXX, may require our these going phases don't multiplier solution imagine So "competitive when voltages is amps, X,XXX we core ASICs be a level XXX the amps XX could on far They alternative". advanced can to get with to of to of peak XXX a you Delivery, low Power amps or XX, of generate are noise fit, very quite sensitive. lot with

following the the dilemma competitive got with you've So solution.

somehow the metal ASIC. be shielding, with with switch enough regulators well generate To soft bottom-up do there's if able else large may worry you of limit to packaging, first power deployed room solution, to you've a to to the then as about losses, close all, But needs Well, And and noise. lot our operate there's can the because is then distribution is our that, they of be that. multi-VCL something not against which a ASIC of can to ASIC, fully as noise. nearly is which not there it the

If So it the fundamentally, challenges line, would very of very still the say band a solution present of bright predictable, going fit from and think question, are at it. And in gets as there relatively the visually impossible it's there one noise the the that another It on doesn't is into to environments. is a XXX compete. that hundred high-performance And is It demarcation to where competition I I threshold, say, level the a both of becomes possible we're both I Otherwise, probably lot alternative. would amps, that's not take couple application XXX ASICs a hour a we'll amps. competitive a you line, progress hard many of level. it. for

Operator

next. And do Doug have we we questions Yes, two more actually. have

Unidentified Analyst

won't lot late. know running I of we're I a take time.

feel second seen, of in one converter, next your amplitude a an on of question recently report a that questions. -- I correct are it's communicate it are Is you that up pushbacks guy. what don't customer, quick as I you you customer, read to product they price? to to we your investors Is and feel as fearful -- clearly, getting? particular is feel an pronounced part you any sine us Because in superior. try expires about expires, as that investor, significant are completely which to other Why would you of the two only fail, talk it that's And go the then to is have was know inferior back If have again? year. two patents like XXXX if doubts new conversion? XX-volt you the my a somebody that questions. production said, that product, completely that Just new a it come converter issued Do it potential or follows I way? capacity? they the Those When

Patrizio Vinciarelli

Okay.

one. first Let me take the

that And There be of that have our there patents converters diligent at The XXX Advanced the are to way way having our operate our in innovations. been -- to today with in patents. been all intellectual that innovations is because and haven't right? sitting terms is fact our may least can few is property, you about a it our other be far very patents, gone we've of one relevant still, be So in expiring we will patents next used that about have of a very operate continued difference. amplitude back innovations. in make -- XXXX may our But sure of been with years. to Products, there IP they sine So protecting you of the can sure, particular products protecting to very area. be world we of be significant There XXXX since respect our X,XXX couple the

is limbs to analogy in it, -- I one abuse off confront be being but or and tries. a technology there's to Any minefield crossing can guess blow of minefield. planting going that's maybe other has the that fundamentally, competitor the a of like happen Well, inoperative, So in anybody got that that the it by... the mines it way I at to to the that's minefield. look follow our usurp wishes plenty if of old, mines And what is

Unidentified Analyst

I I ask. just to that. wanted did know

Patrizio Vinciarelli

seeing this frankly not we're but and technology, something we're when technology, that's I And of it think our the literally of we're and industry keeping very the dollars in We're technology, IP. very to but why that developing this mainstream millions it's seeing, carefully. we're fringes hundreds car the understands to on watching that, comes good, eye and -- Yes. invested close a We we're not Vicor we're assert on very acknowledged. -- ready

to the So think got has anybody try. I guts don't

to With respect -- nowadays is happens they to us what mostly with customers we looking implement come is advanced to an solution.

fear, system, their I system enabling system discussed product to to have past, power Vicor by allows superior with that that it's the appeal think in and I solution. the that a advanced the game town the a as is -- will misplaced their mind, of through end is in single-source single-source attributes, what more we respect say goes solution, fear, a only a and but the

customers there delivery, handicap few the that or for a we're of record the supplier, but multi-source appeal the very a believes -- us or with and side and so has track large that, over can us the fence capacity, having a not for get in quality other everybody doesn't a a for to do know of to "commodity key on honest for solution". hump who demonstrates and the rely we're our of abundantly on Now reliable customers supplying number very supplier. price, Customers

So dilemma customers the face. that's the

project commodity get were solution multiplicity can I largely it get are the price going choice can against solution their But with from multiplicity to attracted enabling. "diminished engineering managers there to would knock a team, if vendors that lower our can the risk". other And me because each and I it's of to team buy be, the sourcing and management of vendors a the I and give

the do. obvious I with of their seeing with can't multisource So more a and do ability that Vicor. that's what the them single week solution against they it commodity customer, to with their the with Valley, enabling important important alternative addressed something -- that's concerns that gives effectively the product saw, in this that capability And a I'm respect last is -- for to be end compete because competitors can reasons, to the sourcing to more than what

have that to they come have, visit the come we control impressed in place. customers we capabilities the world-class facility, away consistently So state-of-the-art manufacturing our with systems

they or respect our single-source sleep nature them reassure the fact customers customers capabilities potential some Our to do. over. that something of But isn't should the solutions with

is competitive can of the tension effect, I we alternatives and level our the with between, that think have. in capabilities natural this keep commodity product up the

Unidentified Analyst

their you If fear? So educating I understand you correctly, just real quick. them sort overcome to it's of

Patrizio Vinciarelli

that had fence in I I aware going commit the say we for of think, that at least them restraints can have or their important. large some solutions very In similar to succeed. the historically to system edict customers a single crosses and an Other source. fence. that very customers that's have they're can't have edict adopts had not that crossed the I'm an integrators their our instances past solution.

a with our it going in size of be favor the get grow think obviously, are I So the Without it, dissipated. we I tide turning progress would is also as and is concerns respect greater. our larger, consideration. to to mean But some

keep leaving respect further with we're bar this. We freshen what the in the to our up we dust. to to level I And continue of just need that's So performance advance competition to doing. the think raising need and

Operator

Alan. last coming of the question is from the line And

Unidentified Analyst

new question. on Is completed that you How RFM Just are power technology? XG tablet? doing one on new the the

Patrizio Vinciarelli

so specific very the is a to volumes RFM next being just there It's for significant that comment remarkably about in referenced a I -- moving about it customer the without us forward talked RFM week, but within last year. indirectly

we'll and wait see. So

coming that's next-generation kinds our on products of also are working the completing XG of We nicely these along. based on control system

the with going tablet. the the lower question, performance earlier we're of I just bar, last So suggest the raising be to to bar able to the as to raise the respect in answer

be the raise of in else order density, of terms and competitive bar along will importantly, achieve anything lower tablet, than factor, magnitude, landscape, we're efficiency by cost. another respect far competitors which that smaller is performance of to in while in starting most a with solution the next-generation literally, to significant So the both may

Unidentified Analyst

so And yet? Or is still XG completed coming? that is the

Patrizio Vinciarelli

We the is which is yet, completed products. The to relevant shipping. completed RFM recently but approaching what's AC are actually We quite or PFC, not some converter, that's XG XG any of to qualification DC completion.

So get we few expect on the have the a prototypes matter bench we line and to of in a to finish months.

Unidentified Analyst

tablet, is power the that yet? of version XG the But Okay. completed

Patrizio Vinciarelli

So converters on power AC the footprint. or metal smaller of an you from prototypes a RFM, shell. to we panels. tablet, in a out the are other as is PFMs in our have assembly our website, DC on The RFMs, have might bench much right words, seen to going come Future molded

cost-effective itself more the than slice them lot RFM that and is So other to them we're dice going panels, make to a and is. them in going

progressing along. that's So

few prototypes bench, It's you, with quite talking have to product We thank months. to still not looking you on the months few but is a time. prime in ready we a the And forward away. for that, and

Operator

call for Thank you. Everyone, that today. concludes your

much joining, disconnect. You have for now day. Goodbye. Thank so may you great and a

James Simms	CFO, Corporate VP, Treasurer, Corporate Secretary & Director
Patrizio Vinciarelli	Founder, Chairman, CEO & President
Jonathan Tanwanteng	CJS Securities
Quinn Bolton	Needham & Company
Richard Shannon	Craig-Hallum Capital Group

Vicor (VICR) 18 Oct 192019 Q3 Earnings call transcript