Good day, and thank you for standing by. Welcome to the VICOR 4th Quarter 2025 Earnings Conference Call. At this time, all participants are in 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 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please advise that today's conference is being recorded. I'll now hand the conference over to your first speaker today, Jim Smith. Chief Financial Officer. Please go ahead.
Good afternoon, and welcome to Bicor Corporation's earnings call for the fourth quarter and year-ended. December 31, 2015, Jim Schmidt, Chief Financial Officer. And I'm in Andover with Patricio Vinciarelli, Chief Executive Officer. After the market's closed today, we issued a press release summarizing the financial results for the three months and year-ending. This press release has been posted on the Investor Relations page of our website, W-W-8K today. relating to the issuance of my listeners. This conference call is being recorded and is the copyrighted property of Vicor Corporation. I also remind you very effort under the Private Security and Litigation Reform Act of 1990, except the historical information contained in this call, matters discussed on this call, including any statements regarding products, potential customers, potential market opportunities, expected events and announcements, and our capacity expectations for sales growth, spending, and profitability, certainties, or we're looking to say, will in fact prove to be correct. Actual results may differ materially, those explicitly set forth in or implied by, and they have our remarks today. Risk and uncertainty in space are discussed in item 1A. This document is available the action provided during this conference call is accurate only as of today for undertakes no obligation to update any statements including forward-looking statement you should not rely upon such statements after the conclusion shortly on the investor relations page of our website turn to a review of our q4 and full year financial report Phil and I will take fully change the P&L and balance sheet items as well as full year-on-year changes and refer you to a form 10k for additional information. Stated in today's press release, Michael recorded product revenue for the fourth quarter of $92.7 million, totaled $14.5 million, a 33-point catch-up amount that was included in the Q3. Revenues for the year to $350.3 million from $312.5 million for the prior year. Royalty revenue for the year ended December 31, 2025, totaled $57.4 million, a 23.2% increase from $6 million for the year ended December 31, 2024. Total product revenue and royalty revenue, including a $45 million capital litigation settlement received for the year ended December 31, 2025, increased 26.1% to $452.7 million dollars from 359.1 million to the prior year. Advanced product revenue, which includes royalty revenue, decreased 4.8% sequentially, which was the result of the catchable amount of royalty revenue. Brick product revenue declined 0.6% in the third quarter. Revenues for advanced products for the year ending 2025 increased 26.26% to 297.3 million the year before, decreased 1.6% to 159.1 million, 161.7 million the year before. Stocking distributors decreased sequentially but increased 5.3% year-over-year. Exports for the fourth quarter increased sequentially as a percentage of total revenue to approximately 49.3 percent from the prior quarter on a year-over-year basis as a percentage of total revenue to approximately 50.8 percent from the prior year's 48.2 percent. In Q4, advanced product share total revenue, including royalty revenue, decreased to 58.1 percent compared to 59.2 percent for the third quarter, increasingly increasing to 42.4 gross margin. We recorded a consolidated gross profit margin of 55.4%, approximately 2.1% less as a result of the year 2025 to 57.3% from 51.3%. Full year 2025, total operating expenses, percent of revenue, and patent litigation settlement decreased to 39.2% from 51.6%. For Q4, we recorded operating income of $15.7 million, representing an operating margin of 14.6%. For the full year 2025, operating income totaled $81.8 million, or 18.1% of revenue in patent litigation settlement, compared to operating loss of $1.3 million, or minus 0.4% of revenue in the prior year. Turning to income taxes, we recorded a tax benefit of Q4 of approximately $1.7 million, three million dollars representing an effective tax rate for the quarter when it's 142 percent. As a result of the tax benefit there's a partial recognition of certain default tax assets in the period. The tax benefit for the full year 2025 was approximately an effective tax rate for the year minus 25. Net income for Q blue totaled forty six point five million dollars. That diluted earnings per share was $1.01 based on a fully diluted share count of $46,297,000 for the full year 2020 to $118.6 million from $6.1 million of the prior earnings per share increased to $2.61. turning to our cash flow and balance sheet cash and cash equivalents to net of reserve with DSOs for trade receivable with 1% sequentially to 91.3 million annualized inventory current will cut line six for Q full total 5.5 million we ended the quarter with a construction in progress balance primarily for manufacturing equipment of approximately seven point eight million dollars, with approximately 6.9 million remaining to be spent. Q4 booked the bill, improving sequentially, came in well above one and with one year backlog increasing 15.8% from the prior quarter, closing at 170.26 is a year of great opportunity for Vicol. We are working to deliver on the opportunities. We cannot predict with certainty the timing or amounts of outcomes relating to our licensing practice we will not provide quarterly guidance. With that, Phil will propose and then Patricio, Phil and I will take your questions. I ask that you limit yourself to one question and a related follow-up so that we can respond to as many of you as we can in the limited time development. If you have more than one topic
to address please get back in the field. At the beginning of 2025 we talked about the year ahead And being one of challenge improvements in product bookings and revenues in QP licensing practice, a major contributor to our top and bottom lines. In 2025, the bill ratio increased over 1.2 and has continued to increase in part of 2026. We can say that this will be a year of different challenges and greater. should result in record bookings, revenues, and profitability, and significantly higher utilization. As you commented in today's press release, the United States International Trade Commission has instituted a second investigation into illegal importation of power modules and computing systems, infringing WICO's IP to non-isolate it. It should be clear that DICOR will methodically add intellectual property to the many inventions it pioneered and that suppliers of infringing systems are putting themselves and their customers at risk, including unlicensed OEMs. And following the example set by licensed OEMs and hyperscalers, companies with an ethical backbone should do the right thing, avoiding infringement by taking a license to secure their supply chain. A lead customer for VPD Solutions is ramping a Gen 4 factorized power system before transitioning to a Gen 5-based solution with higher current density and performance. This transition is expected to start in the second half of this year, while production of the Gen 4 system will continue to ramp at a steep rate at the end of 2026. Engagement with other Gen 5 VPD customers will be selected, as capacity in our existing first chip tab is getting earmarked for strategic customers, and additional capacity from our second chip tab may not be available until 2028. The defense business outlook for 2026 is strong, particularly in the automatic test equipment market, which is seeing substantial growth and projecting high growth for last the next several years. Given our power density advantage, which is of paramount importance to our customers, I am confident that we can double the revenues in these markets over the next four to six years. As we approach high utilization of our first chip lab, we are beginning to engage customers in capacity reservation agreements to secure their supply needs. While in the planning stages of a second chip fab to expand the market opportunity, we are having discussions with candidates who are an alternate source of high current density Gen 5 VPD solutions. An alternate source will give licensed OEMs better access to best-in-class power system technology. In view of these developments, we remain confident in our business strategy of innovation, customer focus and market focus. With that, we'll now take your question.
Thank you. At this time, we'll conduct a question and answer session. As a reminder to ask a question, you'll need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. And our first question comes from the line of Gwen Bolton of Needham & Company. Your
guys um congratulations on on 2025 and the record outlook for 2026 um patricio or phil i wanted to start with with your lead customer it sounds like you're seeing a pretty strong ramp from that customer and you mentioned that uh andover is getting uh filled can you talk is andover being filled largely from your lead customer or do you have other significant um you know gen 4 gen 5 customers that are contributing to that growing utilization in in the Andover facility it's a
combination of demand increasing demand or a number of fronts not just hand computing where There is a multiplicity of factors at play with respect to increased demand on capacity, but also in test equipment, as Phil mentioned in his previous remarks, and some of the other
Okay. Thank you. And then I guess maybe follow up on the IP licensing in the press release. you talked about um seeing record revenue from the ip licensing business this year just wanted to clarify does that include or exclude the 45 million dollar patent litigation settlement that was part of the 2025 revenue stream um as we think about 2026 we see our licensing business
expanding as Jim suggested earlier the timing of elements contributing to the expansion is some of them predictable but as we look at you know the predicament that OEMs and hyperscalers face in terms of you know potential a a major opportunity for us. As we have discussed in our last corporate call, we see that business expanding greatly in the last couple of years. I think
Wodez suggests that those are conservative estimates. And Quinn, just to clarify the number for you the royalty 57.4 million in 2025 does not include that litigation settlement that's royalty revenue was up 23.2 percent from 46.6 million in 2020. just just to clarify jim when
when the the comment in the press release about the the business the licensing business will expand And are you looking at the 57.4 as the 2025 base, or should we be thinking about that base being $102 million, which would include that $45 million patent settlement as part of the base?
So for one thing, there's going to be more patent settlements. from last year, in terms of the artwork for licensing business, it doesn't really make substantial difference with respect to the upside with respect to this part of our business. We expect hundreds of millions of dollars worth of revenues from the Latin thing, and And the 47 million events are up in the back, to be sure, but not of that significant.
Okay, thank you.
Thank you. One moment for our next question. Our next question comes from the line of John Tenwentang of CGA Securities. The line is now open.
Hi, thank you for taking my questions, and also congratulations on a good year. I was wondering if you could give us a little bit more detail on the launched customer for VPT. You mentioned that they were going with a Gen 4 product. Could you talk about the decision that went into that and why they aren't starting with Gen 5 and kind of how that happened?
Well, so expanding in terms of its opportunity. In order to get to the next international system, mature design, it's not just the power systems, the system as a whole needs to be quite there yet. It will be there soon, and that will lead to the next set of opportunities. But to be clear, with our lead customer, we're seeing a significant share of our capacity being utilized as we get towards the end of this year on the early generational system. And the next generational system will provide an additional layer of user capacity as we get into next year.
Understood. Thank you. And then when you start, sorry, you're considering a new facility. I was just wondering if you're planning to build that yourself or you're still planning to work with partners to do that perhaps in a capital-like fashion. And, you know, just wondering what kind of capacity a new facility would have.
So we've made to build a facility. The lead time associated with that, though, is one and a half to three years when everything is said and done. We are also looking at existing buildings within the north and the west, and we haven't decided yet which of these alternatives we're going to close on. But two offers, no deal done yet, but I would expect that something on this general fund.
Okay, great. I'll jump back in queue.
Thank you. And our next question comes from the line of Rich Chan of Craig Allen Capital Group. Your line is now open.
Well, thanks, Patrizio, Phil, and Jim for taking my questions. Also, I have my congratulations on a really good last year. My first question is on royalties and licensing here. As you mentioned, there are some questions here in the Q&A about growth in this business. I guess I wanted to triangulate it differently from how you've talked about in the past, where you're hoping to get a roughly $300 million revenue stream. I know that's not entirely royalties, maybe some product in there, but talking about $300 million bogey between 24 and 26. And by my numbers, at least, I require a fair amount of growth, like doubling or so of your royalty revenues from 25 to 26. But you didn't talk about it that way this quarter. Can you maybe talk about it in those terms here? Is that a number that we should continue to expect, better or worse, just to help us triangulate those things?
Yeah. So we have two major licensees. We expect to have a lot more. And future contribution from those two should become quite a bit larger. So we're looking at it in IAM computing AI systems require, from the power system perspective, RIP. And to accept that in order to be able to deploy those systems become necessary, that defines the opportunity. As you can see, the opportunity far exceeds what we've harnessed thus far. There's a lot more to be captured in years to come. So the zero million number, we would see a point that involves contributions of royalties and business licenses is not a long-term goal, it is relatively near-term goal, not for this year to be clear, but as we have said last year in a couple of years timeframe, but you
can see growing.
My follow-on question is on second-gen BPD engagements. You already talked about your lead customer today and in past quarters, but last quarter you also mentioned engagements that didn't seem to be early-stage ones with a hyperscaler and an OEM. And I did hear any comments on the prepared remarks, although I was a little bit late. So I'm wondering if you can comment on the progress of those and any other ones you've added to the pipeline.
Yeah, so Richard, this is Phil. So maybe I can get a little bit more granular on that. So the next step for us is over the next couple of weeks, we're bringing in our global, you know, FAE team that is dedicated to supporting customers in different locations. We have target microscalers and OEM chip companies located. So they will be going through, if you like, a boot camp on Gen 5 VPD using the demo boards and tools that central applications group here and and over have developed for the market and so so that's happening in the next couple of weeks after we get that in place as we talked about we're going to be fairly selective and we're going to be engaging with um it's very important we do that and uh so that's that's the next step after that so we'll uh you know that if you're here next couple of weeks and we're on the way okay thanks for that detail i'll jump in line thank
you guys. Thank you. One moment for our next question. Our next question comes from the line of Justin Clare of Roth Capital Partners. Your line is now open. Hi. Thanks for the time here.
First, I just wanted to follow up on the potential for capacity expansion here. So, given the plan to add a second fab, I was just wondering how we should think about the ramp in utilization for your existing facility, how we think about that over the next couple of years, and kind of, you know, what utilization threshold you anticipate reaching, you know, that is necessitating the additional fab here. And then just if you could talk about, you know, when do you anticipate kind of approaching that optimal utilization for the first fab?
Ramps in different markets with a strong contribution from my end computing, we see existing fab being well utilized within a year. And that's obviously prompting the initiative to secure additional capacity, both by bringing up a second fab, and by having discussions with potential alternate sources that could provide customers using their own capabilities and our technology. In terms of the fabs, as I mentioned earlier, we started exploring the opportunity of a large piece of real estate, the flexibility to increment capacity, you know, this would be an example that could support, to say things in perspective, facilities around 300,000. So it would be substantially more in terms of the real estate available. Also, what we've done, we think we can . Thinking of late has evolved, though, and, you know, there's been no decision one or the other yet. It could go that way. It would be on the same scale, though, in terms with the second .
Okay, got it. That's helpful. And then just when you think through this, if you're reaching, you know, close to kind of optimal utilization within a year, I think historically you've talked about, you know, your FAB being able to support a billion dollars in product revenue. So within a year, could you be, you know, close to that level where you're getting to a run rate of a billion dollars in product revenue? and then just just curious on the second fab how much in capex spending you might anticipate in terms of what's required there yes so to be clear felt feet well
is a capacity even dollars per panel and the number of panels they can process million at a time, to do slightly above the billion dollars in revenues. But you wouldn't want to use 100% of their capacity, because by definition, they will leave no room for hour, right? So 80% capacity is the kind of number that you want to think of in terms of, you know, the test or fundamentally having achieved a very good capacity. Now in terms of the next facility, whether it's backfiring land, putting up a building and then equipping it, what is necessary in order to be about relative increment of capacity, This is more in a proposition of the order of $250,000,000, something that VIGO has the world in the low cap position.
Okay. I appreciate it. Thanks for the detail.
Thank you. One moment for our next question. And our next question comes from the line of John Dillon of DMB Capital. Your line is now open.
Hi, guys. Thanks a lot for taking my call, and again, congratulations on a good year. Phil, I wanted to go back to the customers you talked about before in Q3 and Q4. I kind of got the impression that you had design wins, and these customers couldn't find alternative ways to power their new AR processors. So I'm wondering, are those customers still working with you, or have they gone to other customers, or are you going to be able to meet their time schedule for their new products?
They never need a VPD solution in particular that has more of the right trade. And the corporate landscape, it doesn't have that. And that's constrained the market opportunity for VPD to a very limited set of the rationally while incurring a deal of pain because of the shock ambience of the power system. Doing about with a second-gen VPD and first-generation modules, a solution that has a much greater level of manufacturing quality in terms of the assembly. It doesn't require it. It's much easier to work. It has a number of benefits for it. So, as Phil suggested, we're going to be seeking those customers that strategically we have a good deal of interest. As an example, we were out in the Valley just a few weeks ago, met in the morning with a customer with a good deal of interest in, you know, our VPD capability. I haven't decided yet where I know we're going to engage in that particular case. We will be in a situation that exists in fact before we get another five in place. I also say a lead company is one that we prioritize. There's going to be more in that league, in that end market. A tremendous opportunity.
Got it. So I just want to make sure I understand. So the customers that you mentioned before, they're still on the hook, they're still talking to you, they're still engaged with you, they still can't find an alternative source to power their new A processors, but it sounds like it just slipped a bit.
They say that they will find a solution, whether or not LIGOR exists, right? Nobody will, not the real world, that's not what we're suggesting. There's always some way of getting something done, but to be clear, that way of getting it done is problematic in terms of the technical trade-offs and technical challenges, whether it's cooling or manufacturing ability. And then it may also be very much challenged from the IP perspective. It's a complex landscape.
It sounds like it's still a competitive situation then. Yeah, got it. So my following question is, are you seeing any AI processor designs with horizontal or horizontal vertical besides your lead customer?
If you look at, as Patricio actually said, there's one very, very large company that's using vertical power delivery today in very high volume, and that's increasing year on year. In terms of anybody else really in high-volume production, with vertical power delivery, John, it's fairly limited right now. They're all trying to get Gen 1 VPD to work in some fashion, But to date, I'm not hearing anybody that's supplying that in volume. They're trying. They're working on it. But I think when we come out with our Gen 5 and launch it and selectively launch it, as we've talked about, we're going to have some winners on our hands.
Got it. I saw a picture of a new AI processor that's coming out that had a – it looked like a gold bar on the top. And that's why I asked about horizontal. I'm wondering if you have any upcoming horizontals or horizontal verticals besides your lead customer, because I know they're different.
I don't think we're going to make comments specifically about that stuff. I think, you know, what do you want to say about that?
We do have Gen 4 customers using our gold bars as it relates to a gold bar.
It's really, you know, what's fundamentally an issue at this point, and we have the technology that matches the needs of the marketplace. Again, going back to the earlier question, it's not that if our solution didn't exist, there wouldn't be a solution. but the authentic solution, which is really a common denominator for the same thing without really slight differences, they look over each other's shoulder. It's a technique and when it comes to repeat.
Okay, listen, thank you very much. I might get back in the queue. Thank you again.
Thank you. One moment for our next question. And our next question comes from the line of John Tangwentang of CJS Security. Your line is now open.
Hi, thank you for taking my follow-up. Earlier, you mentioned that you were taking capacity reservations for your facility. I was wondering what the financials of that look like. Is there an upfront payment? Are there contract terms for minimums or something like that? Just how are you approaching those reservations?
In terms of revenue recognition, that would happen as it takes place. There's a cash that, you know, but there's no acceleration of revenue that comes from revenues that get regarded as product ship covered by that reservation.
Okay, got it. And then can you talk a little bit more about the 800-volt data center opportunity and if you are seeing any traction there or are you seeing any orders ahead of that? And I'm specifically talking about, you know, products that are outside, you know, the vertical or lateral power or the NBMs that you have today.
We have in the pipeline that will come out later this year. Frankly, though, I would say that there is quite a bit of hype about this. I think that it's, to some degree, issues are it's a diversion. The reason why generations of GPUs have not been able to meet expectations with having to do with the policy. It hasn't evolved. They've had to do with what goes on at the point of law. and in fact that so in a 100-volt bus, but that value, if you measure in terms of efficiency, it's measured in a few percent. A lot of low-low solution is, you know, so you wonder why anybody would worry about capturing the 3% improvement in another 20% in the point-of-load. They can't call or deliver the power they need, you know, to achieve the level of, especially about this, we got the AP, and we're going to make the most of the opportunity, but frankly, I think there's going to be a lot of height related to an undergrowth. And that could lead to problems, because problem, which is not really much of a problem, they are going to be solved in real problems.
Thank you for that insight.
Thank you. One moment for our next question. And our next question comes from the line of Gwen Bolton of Neal & Company.
your line is now open um hey guys thanks for taking my follow-up um patricia i guess i just wanted to sort of make sure everybody on the line is sort of thinking about the revenue ramp the same way you you haven't obviously guided revenue for 26 but you've given us sort of three you know kind of guideposts, which are you expect Andover to become, you know, or to approach full utilization over the next year. You've sort of said full utilization, you know, would be around 80%. Otherwise, you know, you don't leave a lot of room for error. And you've said at 100% utilization, the fab would be able to produce a billion in revenue. And so when I put all that together it sort of sounds like you're pointing revenue could approach an 800 million product revenue could approach an 800 million dollar run rate over the next year and that would be more than double what you did on a product revenue front in in calendar 25. I know you're not giving guidance but but some of those guideposts you know point to to very significant revenue growth and I I just wanna make sure to the extent that you think that interpretation of the comments you've made is too aggressive, I just wanted to see if you would correct any of those thoughts or if that's the right way to be thinking about sort of the data points you've suggested.
I think your analysis is on point. Obviously, key to that is run rate, right? is distinct from revenues for this year, 26. So we see the demand getting to a run rate that would utilize 80% or so of the capacity in the end of the facility. Another way of, in fact, tagging this is that we see this year as being one major increase in product revenue of the rate of last year and at a level that we haven't enjoyed for quite some time. And that's pretty much baked in at this point based on the bookings that we've received and additional both of the year progresses.
Got it. Thank you very much.
Thank you. One moment for our next question. Again, as a reminder to ask a question, you'll need to press star 1-1 on your telephone. And our next question comes from the line of Richard Chan of Greg Holland Capital Group. Your line is now open.
Well, hey, guys, thanks for letting me ask a couple follow-on questions here. My first one is on licensing here. Patricia, following up on an answer to one of the prior questions here, you mentioned about having a couple or specifically two licensees so far. As we think about growing the licensing revenue stream this year, and if you can comment beyond that, that'd be great in terms of your general expectations. But how do we think about adding to the customer list here versus number of licensees or licenses per licensee or other dynamics that help us think about this? And I guess specifically if you could address, you know, if things went well for you, what's the kind of number of major licensees would you have? I don't know if this is three or five or eight, but if you can just characterize that in any way, that'd be helpful. Thanks.
In the AI market, basic financial licensees, it would be offered up as many as we currently have in that market. And by the way, the focus has been, and the actions of the ATC thus far have been focused on IAM computing, but there's infringement going on in other markets as well. So there's a lot of opportunity, the MDM technology, but for other technology that I've pioneered.
My follow-on question is wondering if there's any way that you can help us think about, specifically about your second-gen VPD technology, how do we think about content per XPU? And I'm going to offer a couple ways maybe to think about this. I know you're not going to quantify in a specific way, but I think a lot of us who cover this name for a while have a decent idea of what that content looked like a few years ago in your last really high volume or potential high volume win that you had in point of load. But also since that time, the level of power and the level of current in leading XPUs, particularly getting to radical limit, are increasing a lot here. So do we think about the kind of the content opportunity now as kind of being proportional to power or current? And how do we think – how would you have somebody think about what that might look like on a per-unit basis?
So, as I look back, you know, a far-to-high-spark system for GPUs a number of years ago, that was, in one way of looking at it, about $100 million per year type of opportunity, and you know, there are money.
Mine was really more on content per XPU, but the way you characterize it is also helpful. But anyways, you might think about it on a per XPU basis would be helpful, too.
Yeah, so, Phil, do you want to take that? Yeah, I think, Richard, to your point, it really depends on the current of that XPU, the number of rails, that type of thing. So I think that the opportunity for us would be somewhere between $200 to $400 per XPU.
Very much depends. Take that with a grain of salt.
Understood. Getting us a half order magnitude is very helpful. So thank you very much for that.
So, Richard, just to clarify, it's about like a 2,000 amp up to a 4,000 amp. Okay. Great. Thank you.
Thank you. One moment for our next question. Our next question comes from the line of AHICS of AMC Capital Management. Your line is now open.
Yeah. Good afternoon. I just wanted to confirm that it's a billion dollars capacity now. Hello?
I think we lost part of your question. I think the question was you wanted confirmation of the billion dollar capacity
of Fab 1. Was that a question? Yeah. Yeah. Just for advanced products, nothing else.
Yes. We are very confident that we can generate upwards of a billion dollars worth of revenue out of royalties. Okay. Because I'm looking at what your sales
were for just for advanced products, not without royalties for the year was around 200 million. is that for 2025? Yes. Okay, so you're saying within a year or so you could be at 800 million
in advanced products? It is suggested in an earlier question and confirmed by me,
that would be a brown rate. Okay, and then on the BRICS, the original BRICS fab, could that be converted in the future to advanced products I know the bricks you
know much older products they've got a very stable if you like customer base so some of those customers are moving to advanced products and we've had a bit of success of that in recent years in some higher volume and markets but aerospace and defense and some very broad based industrial they like the bricks, they're going to stay with the bricks, so the brick piece will be fairly stable over the next few years, I believe.
Capacity is, they become, you know, well, they present this kind of business, they become.
Okay. But you're also adding capacity to this first fab. Is that correct also?
Yes, we are. Yeah, so that's right. We're adding capacity and chronically to the existing footprint.
Okay.
And then did you say you're in discussions with a partner to have them produce products themselves?
Yeah, so we are having discussions, so this may take some time because it's an important decision selection. We have customers that want us to have an out-of-their source. We see the benefit of an out-of-the-source in terms of expanding the market opportunity. If you just look, there is so much of a market opportunity that, frankly, there is no way that fiber alone could do that, even with the second and third fab. So we need to, in effect, look at making the most out of the opportunity, you know, as opposed to limiting the scope of the opportunity by wanting to do it.
Then I was just kind of curious. How many panels can you produce in a day out of the factory you have now?
I'm not going to quantify that for a competitive reason. I will just say that in terms of the revenue opportunity of the FAB, FAB 1 is slightly up over a billion dollars a year.
Okay. Thank you very much.
Thank you.
Thank you. One moment for our next question. Our next question comes from the line of John Dillon of DMV Capital. Your line is now open.
Hi, guys. I'll make this quick because I know we're up against the timeline. First of all, Patricio, thank you for answering Quinn. question. That was one of my follow-up questions also, and I appreciated that answer. Another one is just a quick one. We're halfway through the quarter, and I'm just wondering how bookings are looking so far this quarter.
I mentioned in my prepared remarks, John, that book the bill was 1.2 and we're above that already in Q1.
Excellent. Thank you very much. Congratulations, guys. Thank you.
Thank you. This concludes the question and answer session. Thank you for your participation in today's conference. This concludes the program. You may now disconnect.