Ladies and gentlemen, thank you for standing by. Welcome to the second quarter 2026 Vicor Corporation earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Jim Schmidt, Chief Financial Officer. Please go ahead. Thank you. Good morning and welcome to Vicor Corporation's earnings call for the second quarter ended June 30, 2026. I'm Jim Schmidt, Chief Financial Officer, and I'm in Andover with Patrizio Vinciarelli, Chief Executive Officer, and Phil Davies, Corporate Vice President, Global Sales and Marketing. Earlier this morning, we issued a press release summarizing our financial results for the three and six months ended June 30, 2026. This press release has been posted on the investor relations page of our website, www.vicorpower.com. We also filed a Form 8-K today related to the issuance of this press release. I remind listeners this conference call is being recorded and is the copyrighted property of Vicor Corporation. I also remind you various remarks we make during this call may constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Except for historical information contained in this call, the matters discussed on this call, including any statements regarding current and planned products, current and potential customers, potential market opportunities, expected events and announcements, and our capacity expansion, as well as management's expectations for sales growth, spending, and profitability, are forward-looking statements involving risk and uncertainties. In light of these risks and uncertainties, we can offer no assurance that any forward-looking statement will in fact prove to be correct. Actual results may differ materially from those explicitly set forth in or implied by any of our remarks today. The risks and uncertainties we face are discussed in Item 1A of our 2025 Form 10-K, which we filed with the SEC on March 2, 2026. This document is available via the EDGAR system on the SEC's website. Please note the information provided during this conference call is accurate only as of today, Tuesday, July 21, 2026. Vicor undertakes no obligation to update any statements, including forward-looking statements made during this call. You should not rely upon such statements after the conclusion of this call. A webcast replay of today's call will be available shortly on the investor relations page of our website. I'll now turn to review of our Q2 financial performance, after which Phil will review recent market developments, and Patrizio, Phil, and I will take your questions. In my remarks, I will focus mostly on the sequential quarterly changes for P&L and balance sheet items and refer you to our press release or our upcoming Form 10-Q for additional information. As stated in today's press release, Vicor recorded product and royalty revenue for the second quarter of $143.4 million, up 26.9% sequentially from the first quarter of 2026 total of $113 million, and up 1.6% from the second quarter of 2025 total of $141 million, which included a $45 million patent litigation settlement. Advanced products revenue increased 45% sequentially to $94.2 million, and brick products revenue increased 2.4% sequentially to $49.2 million. Shipments to stocking distributors increased 4.2% sequentially and increased 38.8% year-over-year. Exports for the second quarter decreased sequentially as a percentage of total revenue to approximately 46% from the prior quarter's 48.9%. For Q2, advanced products share of total revenue increased to 65.7%, compared to 57.5% for the first quarter of 2026, with brick product share correspondingly decreasing to 34.3% of total revenue. Royalty income from our most recent license agreement, which provides for four $5 million quarterly payments in its first year and $10 million quarterly payments in its second year, contributed $15 million to Q2 revenue. In view of its accounting treatment, this license agreement is expected to contribute $5 million in Q3 and $10 million per quarter for the following four quarters. Turning to gross margin, we recorded a consolidated gross profit margin of 58%, a 280 basis point increase from the prior quarter. Q1 gross margin decreased 730 basis points from the same quarter last year, which included the previously mentioned $45 million patent litigation settlement. I'll now turn to Q2 operating expenses. Total operating expense increased 6.1% sequentially from the first quarter of 2026 to $48.2 million. A substantial increase in operating expenses was due to a substantial increase in contingent legal expenses paid out to the law firms partnering with Vicor for the license deal reached in Q2. The amounts of total equity-based compensation expense for Q2 included in cost of goods, SG&A, and R&D was $897,000, $2,085,000, and $1,198,000 respectively, totaling approximately $4.2 million. Turning to income taxes, we recorded a tax benefit for Q2 of approximately $10.9 million, representing an effective tax rate for the quarter of -27.9%. The company's tax provision and effective tax rate for the quarter ended June 30, 2026, was positively impacted by stock options exercised in the quarter. Net income for Q2 totaled $49.8 million. GAAP diluted income per share was $1.4 based on a fully diluted share count of 47,708,000 shares. Turning to our cash flow and balance sheet, cash and cash equivalents totaled $453.6 million at Q2, an increase of $49.4 million sequentially. We're pleased to report that last Monday, July 13, we received a payment from the IRS relating to our application for CHIPS Act investment tax credit in the amount of $14.3 million as a refund from our 2023 tax return. This amount and other tax credit amounts we expect from subsequent tax returns will add to our cash balance in Q3 and beyond. Accounts receivable net of reserves totaled $78.9 million at quarter end, with DSOs for trade receivables at 37 days. Inventories net of reserves increased 10.2% sequentially to $104.5 million. Annualized inventory turns were 2.1x. Cash flow provided by operating activities totaled $34 million for the quarter. Capital expenditures for Q2 totaled $11.2 million. We ended the quarter with a construction in progress balance primarily for manufacturing equipment of approximately $18.2 million, and with approximately $23.5 million remaining to be spent. I'll now address bookings and backlog. Q2 book-to-bill came in above one, and one-year backlog increased 26% from the prior quarter, closing at $379.7 million. 2026 is the year in which Vicor's innovative products and technology licensing practice came into focus within the industry. As we bring on incremental capacity, we expect a nearly 10% increase in Q3 revenue and over $600 million in 2026 revenue. To achieve these growth objectives, we are planning for double-digit sequential increases in product revenue for advanced products. As we said last quarter, this guidance is based on conservative assumptions about our licensing practice. Specifically, the new licensing agreements may not result until our second ITC case gets to its final determination in 2027. Additional exclusion orders further restricting importation of infringing computing systems may provide motivation to close new licensing deals on favorable terms. Along with revenue growth, we expect margin expansion. Phil? Thank you, Jim. At our recent annual shareholders meeting, I presented an update on our company's strategy and objectives. Our financial objectives of $2.5 billion in revenues at 70% gross margins supersede the $1 billion and 65% gross margin targets set in 2023, which we are on our way to achieving. Our updated objectives are based on a two-pronged strategy, leveraging synergy between our power module sales and IP licensing practice. As discussed at the ASM, our power module business is focused on a set of 100 customers across four markets and four regions globally. Within each of the four markets of HPC, industrial, automotive, and aerospace and defense, we have customers who are on the cutting edge of high-growth applications with the most demanding requirements for power and current density with high efficiency and signal integrity. A perfect example of this is Vertical Power Delivery. AI data center hyperscalers and OEMs need Vertical Power Delivery to meet compute density requirements and AI data center performance. The market opportunity is growing rapidly, and competitors are challenged to deliver on two key specifications, current gain and current density. With current gains greater than 40 x and current density up to 5 A per millimeter squared, Vicor's 2nd Generation VPD is way ahead of all Generation 1 competitive solutions. As discussed at the annual meeting, we will engage with selected customers with development systems and tools starting this quarter. Our objectives for our 2nd Generation VPD solutions over the next few quarters will be to expand our business opportunities with OEMs and hyperscalers wanting to be long-term strategic partners. Major new product introductions are also underway in our industrial and aerospace and defense businesses. With market expansion now occurring outside of lead top 100 customer opportunities that drove initial module development. As stated at our ASM a few weeks ago, we are very focused on the successful execution of our business strategy, which leverages our vertically integrated chip fab in Andover as the first of a multiplicity of foundries supporting our new financial targets of $2.5 billion in revenues with 70% gross margins and 40% operating income. With that, we'll take your questions. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Our first question is going to come from Quinn Bolton with Needham & Company. Your line is now open. Hey, guys. Congratulations on the nice results and outlook. I guess I wanted to start with the second gen VPD and just maybe an update on how you're progressing with the lead customer, but also, Phil mentioned starting to more broadly sample second gen VPD to a broader customer base. Do you still feel like you're on track to secure ramp designs, with either a hyperscaler or other OEM customers for a second gen VPD over, say, the next 12 to 18 months? Yes. We've completed development with respect to a baseline of 3 A per square millimeter current density with initial chipset for our lead customer. We are now completing demo systems, including a dedicated VPD demo system to showcase with other customers. We're on our way to raising the bar past amps per square millimeter late this year, beginning of next year. I'm delighted with the progress we made within the last several months, in terms of reaching initial targets. We have a roadmap to expand on that. Beyond the lead customer, Patrizio, would you expect design wins to sort of ramp maybe at this point, second half of 2027 for Vertical Power Delivery? I'm not going to make commitments with respect to specific days. I will say that, I was in the Valley, for visits just last week. There's a great deal of interest in our capabilities. We've been approached by two companies wishing us to provide a building block that is critical to deployment of IVRs. We look at that as an incremental opportunity. The reality of these capabilities, competitive capabilities that is, as you look at the migration of VRs from 12 V to 6 V, to 1.8 V inputs, is that they're barely capable of delivering the real world slightly over 1 A per square millimeter. That's the message we're getting consistently from people in the know. When you look at all the factors at play, thermal derating, other factors, the competitive capability is quite limited, barely above 1 amp per square millimeter. The market need, particularly with respect to wafer -scale engines, other advanced HPC system, is already above those levels and projected to become much higher in a matter of a few years. Frankly, the industry has no solution for these requirements. Got it. Patrizio, just any updates on securing a site with or without building for your second chip fab? We have several options at this point. We made some offers. None of them was taken up yet, but we have the investment of choice at this point. We'll probably be making decisions in the next few weeks. Excellent. Thank you very much. Thank you. The next question will come from Richard Shannon with Craig-Hallum. Your line is now open. Great, guys. Thanks for taking my questions. I guess the first one is, Jim, I'd love for you to repeat the numbers regarding royalties with, I think it was a new licensee or something. Those went by pretty quickly here. If you could follow up with just kind of general expectations of how to think about royalties in the current quarter as you within the context of the guidance you just gave us of revenues up 10%, please. Okay. Richard, I'll reread that paragraph for everyone. Royalty income from our most recent license agreement, which provides for four $5 million quarterly payments in its first year and $10 million quarterly payments in its second year, that's a total of $60 million, contributed $15 million in Q2 revenue. In view of its accounting treatment, this license agreement is expected to contribute $5 million in Q3 and $10 million per quarter for the following four quarters. The revenue is different than the cash collections, Richard, because of the GAAP accounting treatment. The $15 million recognized in Q2 was a result of the termination clauses in the agreement. We could account for $15 million of the deal in this quarter. Because of the accounting treatment, that will drop to $5 million of revenue recognition in Q3, and then back up to $10 million for the balance of the agreement per quarter. Okay. I think that answered my question also about the implied guidance there. Maybe I'll just ask Patrizio following up on this on, characterizing this customer here, OEM, hyperscaler, et cetera, and whether this has been a past customer as well, please. I can't comment with respect to the identity of licensees. I think what we have publicly disclosed, which I can reiterate here, is that we have a multiplicity of OEM licensees, one hyperscaler as of now. Okay, fair enough. My follow-on question is partially based on what I see in the press release, and then also Patrizio, I think in your response to one of the past questions here about IVRs. The statement here in the press release about feeding IVRs with current multipliers an incremental opportunity for Vicor. Would love for you to help me understand that a little bit better here. It seems like you could interpret as an incremental opportunity or could be displacing a pull to a 2nd Gen VPD solution here. I'd love for you to help us understand that a little better, please. Our technology lends itself to supporting either alternative. Without question, a pure Factorized Power system is capable of considerably more current density, several times more, with considerably better efficiency. That doesn't mean that all applications would go in that direction for a variety of reasons. One thing that IVRs do have, to be fair, is that they have flexibility. In applications with a large multiplicity of nodes, highly fragmented set of nodes, there's something to be said for IVRs in that they do provide a great deal of flexibility and configurability. That comes at significant expense in terms of insertion loss. 15%, maybe 10%, but then if you try to get it down to a 10% loss, they need to run at a lower frequency, and they still have transient issues, which a Factorized Power system no longer has. We have a huge efficiency advantage relative to these competitive alternatives, but that doesn't mean we can't play a support role for those alternatives and capture significant business. Okay, great. Thank you. Thank you. The next question is going to come from Justin Clare with ROTH Capital. Your line is open. Hey, good morning. Thanks for taking our questions here. Wanted to touch on the guidance. Updated your 2026 guide to over $600 million here. It looks like the update is primarily related to the additional royalty payments that you had laid out. Wondering if there are any other notable changes relative to the initial guide related to shipment expectations, or related demands. Just on the new licensing agreement, wondering if you could share just how that's structured. Is that only royalty payments that you're anticipating from that, or could you also see greater demand from your fab as a result of that licensing agreement? The total revenue growth comes, to your point, from a combination of new licensing deals, the ones we closed on, specifically the one that was closed in the second quarter, and product revenue growth. The initial license agreement that was closed in Q2 does not, for the first couple of years, provide for a sourcing relationship. That's understood to be part of the relationship going forward, in conjunction with our 2nd Gen VPD capabilities. That's going to be the nature of these relationships going forward, with OEMs and hyperscalers. Got it. Great. Thanks. Just wanted to touch on the expansion underway at your first fab here. Just wondering if you could share an update on the progress, when you anticipate the expansion being completed, and then you had previously talked about being able to reach $1.5 billion in revenue after that, or at least $1.5 billion in revenue could be supported by the expansion. I think that's sensitive to product mix. Just wondering if you could also share just how product mix might affect whether or not you could deliver either above or below that $1.5 billion. As reported, we are expanding capacity but also absorbing that expanded capacity. As time progresses, we're inevitably getting close to full capacity utilization with the first chip fab, and that's why we're working to close on a second facility. The specific number at which the first fab will top out is, I think, yet TBD. To your point, that target as of a year ago was a lot lower than it has been. Our operations team is continuing to work to expand it to the extent possible. We are in a privileged position that with limited capacity, we have the opportunity to select those engagements that make sense strategically for the long term, and that's what we're doing. We're not sold out, but we're approaching capacity utilization. As we get closer, at least to the timeframe before the second fab comes up, we're going to be very selective in our engagements. Got it. Okay, appreciate it. Thank you. Thank you. Thank you. The next question comes from [John Dillon] with DMB Capital. Your line's open. Hi, thank you very much. Guys, congratulations on a great quarter. I've got a follow-up to the last question, and that's you've stayed your goals of $2.5 billion in revenue coming up here. I'm wondering, are you planning on getting there with your existing factory, or is it going to take a second fab to get there, along with revenue plus the royalty income? Can you get to $2.5 billion with your existing facility? No. Okay. That's a definitely no. It's going to take a second fab to get that. Okay. Well, that kind of leads into my follow-up. My channel checks are saying that you guys have Avago, Google, and AMD. AMD, we've seen pictures of gold bars in their new processor. How big are these going to be in the next year, and how are you going to have the capacity to serve them? I'm not going to comment about sightings of gold bars anywhere. Needless to say, we have a very distinctive product. It's distinctive in that it's manufactured uniquely in a fab with three-dimensional interconnect processes that give it its golden look. To be clear, while it's got a golden look, it doesn't carry the cost of gold with it. To the contrary, among other things, we are going to have the lowest cost card. I think we got exciting years ahead with respect to raising the bar on the revenue line, on the profitability, along the lines of what Phil was suggesting earlier. It is going to take a second fab to get to those levels. How big will that second fab be? Will it be able to do $1.5 billion, or do you expect it to be able to do more in revenue? We are down selecting two sites that have what we told to support a considerable expansion. As much as 2x, potentially 3x the first fab. Thank you very much. I'll get back in the queue. Thank you. Thank you. Our next question will come from Richard Shannon with Craig-Hallum Capital. Your line is open. Great, guys. Thanks for taking the follow-up here. I am going to follow up on the last answer here for two, just to make sure I understand it here. Your first model of $1 billion was just with the first fab, as we just heard from your answers here, the $2.5 billion requires a second fab here. If I heard you correctly, the second fab is going to be 2x-3x the first fab. Seems like you would have the ability to do a lot more than $2.5 billion with both those fabs, plus any licensing here. Wonder if you could rationalize the disconnect here, please. With the second site and the second fab, there is going to be a series of steps. This is not all going to be built out on day one. Needless to say, we do not want to create unnecessary or premature depreciation. We are going to have a couple of steps to begin with. We are looking to essentially double capacity, but we are selecting sites that have the requisite expansion flexibility so that without having to go to a third site, we can further increase capacity. Okay. That is helpful. Thanks for that. My follow-on question is on product gross margins. I am assuming all the royalty revenue is 100% here, and if I back that out, calculate a product gross margin, it is actually down a couple of 100 basis points from the last couple of quarters here. I wonder if you could help us understand the dynamics there and whether that trend will reverse itself here in the near future. I think Jim commented the potentials of increasing margins. Yes. We. There will be lift in the GM, product GM going forward, Richard, as we get utilization to go higher and absorption to go higher. I will say that there was sort of a, maybe one-time, but an important event here in the second quarter relative to moving equipment around in the first fab, to make space for the equipment that is coming in. That was incremental expense and cost of sales in the period that did not get capitalized and cannot be capitalized. That did weigh on product gross margins as well. You can imagine what had to happen in the factory to make the space really optimized for the new equipment coming in. It was not cheap to do that. Okay, thanks for that explanation. That's all for me. Thank you. Thank you. The next question will come from Neil Gore, stockholder. Your line is open. Your goal of $2.5 billion, within that goal, will royalties be at 50% of revenue at that time? I don't think we're in a position to make a specific prediction with respect to the mix. I think there's a lot to happen on the AP front. Vicor is enabling technology on all of the areas where the industry needs for increased current density or increased power density. This will play itself out over a number of years, and the outcome of this campaign is still to undergo the steps we're going to need to take and the effect of those steps. I think all that I can say is that we see a significant expansion in licensing income in years to come. We do expect a crossing of the chasm within the industry by hyperscalers, balanced OEMs, recognizing that playing a game of catch me if you can will result in significant issues in terms of the supply chain. If they're using our technology, the only ethical, legal thing to do is to pay for it by way of a license. That, before too long, may apply to the industry as a whole. Thank you. Thank you. Our next question is going to come from Quinn Bolton with Needham & Company. Your line's open. Thanks for taking my follow-up. Patrizio, I wanted to come to the licensing side of the business. I think the second license with your first licensee as well as your most recent license looks like those were, I think, just a couple of years in duration, which probably means you need to re-sign licenses as you get close to the end of 2027. Can you just, from a big picture level, talk about your strategy with sort of new licenses? Would you look to expand to include more of the Vertical Power Delivery content or sourcing agreements, but can you provide any high-level thoughts on re-signing those licenses as the current licenses come due? Yeah. We have a well-defined, mature licensing practice. It has got flexibility where needed. It is not, though, up for grabs, in terms of flexibilities that don't make sense. It does involve any OEM, any hyperscaler. It does not involve competitors. The competitors can participate, in terms of without infringing our IP, by sourcing their products, otherwise infringing products into OEMs or hyperscalers that have a license from Vicor. The licensing model has involved already two kinds of licenses. One, you might call a proportional license, which provides for royalties, unit royalties, in direct proportion to actual usage. We also, in more recent years, have done two-year deals that are, in effect, all-inclusive. With these deals, we understand, given the limited timeframe, what the current usage by the licensee is going to be. Needless to say, given the rate of expansion with hyperscalers and OEMs in the AI market in particular, it would be very difficult, if not impossible, to predict their level of business five, 10 years down the road. With all-inclusive licenses, by necessity, we have to have a short timeframe and then negotiate the new license depending on how the business by the licensee evolves during the two-year period. Understood. Thank you, Patrizio. Thank you. Thank you. The next question comes from [John Dillon] with DMB Capital. Your line is open. Hi. Thanks for taking my follow-up. Hey, Phil, I just wanted to check with you. How are the bookings looking for this quarter? As I mentioned, I think it mentioned in the press release, [John], the bookings are great. Our bookings tend to be lumpy. Sometimes, we know we've reported book-to-bills of close to 2x. This one was a little bit lower, I don't see any weakness at all going forward. Aerospace & Defense is strong. Industrial is very strong. High Performance Compute is strong. Yeah, no, things look good. Excellent. In the last press release, you talked about an OEM, you said they had a capability of being a second source. My question is, will they be a second source? If not, how's a second source coming along for you guys? As commented at the shareholders meeting, our strategy in the short term has evolved with a focus on bringing on additional capacity through a second facility, a second chip fab, that we can totally control. We've had discussions with respect to potential alternate sources. There will likely be more discussions, but the nature of these engagements, both in terms of predictability, timeline, is such that it would not put us in the position we need to be in terms of expanding capacity for key customers in the next couple of years. A shift with respect to relative focus, not a change with respect to long-term strategy. I expect there's going to be alternate sources, not just in support of applications in AI, but potentially in other markets. That's consistent with, in fact, making the most out of a very comprehensive IP portfolio that spans across a number of key power system technologies. Excellent. Do you still expect 25%-30% of your business from Cerebras next year? I'm not going to make specific comments with respect to customers for obvious reasons. We enjoy a very strong relationship, and I think these and other customers are doing very well in their own space. Thank you very much. Thank you. The next question comes from Richard Shannon with Craig-Hallum Capital. Your line is open. Thanks, Ashley, taking my follow-up again here. At the risk of asking a very similar question to the last one here, instead of asking about Cerebras going forward here, can you tell us whether Cerebras is a 10% customer in the second quarter? Are we at liberty to say? I think we'll disclose that in the Q, I don't know that it would have been, Richard. I don't know that I can comment right now, let's take a look at the Q. Okay. I'll look forward to reading that. My follow-on question here is looking at the next customers for 2nd Gen VPD here, and love to get a sense of how you expect the sales cycle to go. Patrizio also, if you could comment on the degree to which any changes in architectures in whatever way that you would deem important to convey to us here, how those will affect that sales cycle here, just generally speaking, please. Let me take the second part first, then Phil will address the first part of your question. As suggested earlier, we see the industry with its usual traits of looking over each other's shoulder and paralleling each other's initiative. To keep going down a path that is characterized by continued tall dependency on a voltage or a [audio distortion] engine at the point of load. That's fundamentally a flawed strategy. It's not going to work. As suggested in the earlier comments, it's a strategy where you can only get some incremental current density well below what's going to be needed before too long, at the expense of giving up on current gain. That doesn't solve the problem, a problem which requires a combination of high enough current density with overall high enough current gain. Now, if you don't have the current gain, as suggested earlier, that's been the catalyst for being approached by a couple of companies, you can use IVRs to stretch somewhat the current density capability, but still short of what's going to be needed, at the expense of requiring a still very high current bus converter at 1.8 V. That's a strategy that's got trade-offs, as suggested earlier. It's got some good redeeming features, flexibility in terms of partitioning domains. It's great at that, but not far from ideal in terms of overall power system figures of merit. We see a different approach, it's reflected in the power system technology that we developed, patented. It's reflected in a ChiP, as in Converter Housed in Package, packaging technology that can only be made in chip fabs that are heavily protected by Vicor IP. That's the strategy we're pursuing. Richard, this is Phil. With regards to the cycle, the development cycle, if you like. If you go back just a few months to the APEC conference in San Antonio, Texas, you had a number of big OEMs and a few hyperscalers almost sort of lobbying the semiconductor audience on their AI product development in terms of saying, "Here's what we need from you guys with regards to current density," which they were asking for something around 3 A per millimeter squared, and package heights, in terms of thermal management and just assembly and yield issues of less than 3 mm. Now you look at what's being developed and delivered to these OEMs and hyperscalers today is Generation 1 VPD that comes nowhere near that request. You can imagine the excitement that's out there to engage with Vicor that has three amps per millimeter squared now moving to 5 A per millimeter squared next year, early next year, and a 1.5 mm package with very easy thermal management techniques. There's a lot of companies that want to engage because they're sort of making do with the current Gen 1 VPD solution. What we expect is engagement with a hyperscaler and a couple of OEMs now the rest of this year. I believe that those programs will start to, if you like, evolve into production systems sort of, I would say, late third quarter, fourth quarter of next year in terms of the ramps that are needed. Which then, as Patrizio mentioned, allows us to move into our first fab, and then as we bring on the second fab in late 2027, 2028, you've now got the ramp that follows through into that new facility with its expanded capacity. That's what we expect to see. Okay, great. Thanks for all that detail, guys. Thank you. Our next question comes from Don McKenna with DB McKenna. Your line is open. Hi, guys. Congratulations. My question deals with the backlog, and I was wondering how much of the significant increase there is attributed to the new licensing agreement, if any. Relatively little. I'm sorry? Relatively little. We have, as Phil pointed out, strengths coming from a number of different end markets. Take as an example the A&D market. Our level of business with key customers there is a larger multiple of what it has been in past years, and that's the result of the build-out with respect to AI. That's just one example of growing demand coming from a multiplicity of end markets, which we need to address. Just a comment on the automatic test equipment market. That's a great story because it's also a Factorized Power Architecture that relies on low noise performance and thin package technology. We've had a number of competitors come up to us in different shows saying, "We just can't get Vicor out of there because of the low performance, low signal-to-noise ratios that we are able to deliver and also the thinness of the packages. We can't get anywhere near that." It's a great market for us, and we're firmly entrenched in some of the biggest ATE companies, and that market is also growing with new entrants in overseas markets that we're also designing in our FPA solutions into. That's going to continue to be a good growth story for us going forward. Great. I think what I'm hearing you say is it's existing customers with increased needs- Yep. As for where the bulk of this is coming from. Do you also see any of it being just the fact that as you're nearing capacity, people are putting in their orders for farther out deliveries? Yes. Lead times have stretched out a little bit. They're, generally speaking, consistent with industry trends. Nowadays, whether it's semiconductors, PC boards, some of the key components within the industry have lead times that reflect the realities of demand exceeding capacity in a number of key areas, not just ours. Good. Thank you very much. Thank you. Thank you. As a reminder, to ask a question, please press star one one on your telephone. The next question comes from [Joe DeBabny] with Individual Investor. Your line is open. Hey, guys. Thanks for taking my question. I was just wondering if you could speak a little bit about how the next generation advanced packaging architectures are going to help proliferate Gen 2 VPD across the industry. It's just got by far the biggest current density, the lowest thermal resistance, the lowest noise. Phil pointed out earlier that in the A&D arena, we've had longstanding, when I say longstanding, I mean 40 years track record of dominance because of the unique signal integrity capabilities of our product. Those are also differentiators, believe it or not, in AI, in computing capabilities that more and more are relying on nodes with FinFET lithography operating at lower and lower voltages, where signal integrity becomes more and more of a key differentiator. We are unique in these capabilities. Again, that uniqueness is not limited to one facet of the overall challenge. It involves many different facets, all of which are heavily protected in terms of the IP we've been developing over the last 10 years. We feel very good about our opportunities going forward for all those reasons. Great. Thanks. One more about the recent licensee that signed in May. Can you kind of speak on what would have happened to the supply chain if that license was not negotiated by them? We have a well thought out strategy with respect to protecting intellectual property, enforcing our IP. As you know, in the U.S., a pat holder has a monopolistic right to the IP that is protected by patents. That right is a right to exclude, among other things, importation of infringing products. Infringing products are now limited to power modules copied by unscrupulous competitors. It does involve the competitor's customers, the contract manufacturers, and those customers' customers, OEM hyperscalers. It's incumbent on them to make sure in the supply chain that intellectual property is respected. Inventors deserve to have their IP respected in the marketplace, and we've been very focused on a very comprehensive strategy to make sure that our IP gets the respect it deserves. I think we have made strides in that direction. There is more strides coming. As I mentioned earlier, I believe there's going to be a crossing of the chasm in the industry taking place in the next couple of years. I appreciate that, Patrizio. Thank you. Thank you. This does conclude today's question and answer session. This will also conclude today's conference call. Thank you so much for your participation, and you may now disconnect.