Advanced Energy’s fourth quarter saw a positive market response, reflecting outperformance in key segments and operational execution. Management identified rising demand in the semiconductor, industrial, and medical markets as the primary contributors to the strong results, with particular emphasis on the company’s success in data center computing. CEO Steve Kelley highlighted that data center revenue more than doubled year over year, attributing it to the adoption of Advanced Energy’s customized power solutions by hyperscalers for AI rack applications. Kelley also pointed to the benefits of the company’s diversification strategy and recent operational capacity expansions in the Philippines, Mexico, and Thailand.
Is now the time to buy AEIS? Find out in our full research report (it’s free for active Edge members).
Advanced Energy (AEIS) Q4 CY2025 Highlights:
- Revenue: $489.4 million vs analyst estimates of $473.7 million (17.8% year-on-year growth, 3.3% beat)
- Adjusted EPS: $1.94 vs analyst estimates of $1.78 (8.8% beat)
- Adjusted EBITDA: $96.7 million vs analyst estimates of $92.36 million (19.8% margin, 4.7% beat)
- Revenue Guidance for Q1 CY2026 is $500 million at the midpoint, above analyst estimates of $474.8 million
- Adjusted EPS guidance for Q1 CY2026 is $1.94 at the midpoint, above analyst estimates of $1.68
- Operating Margin: 11.6%, up from 8.2% in the same quarter last year
- Market Capitalization: $11.86 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Advanced Energy’s Q4 Earnings Call
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Brian Chin (Stifel): Asked about Advanced Energy’s ability to outpace industry growth in semiconductor equipment. CEO Steve Kelley responded that structural share gains are expected, driven by recent technology adoption and an expanding installed base.
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Krish Sankar (TD Cowen): Inquired whether the greater than 30% data center growth outlook was conservative. Kelley explained that the forecast only includes existing customers and supply chain constraints, particularly in processors and memory, may limit upside.
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Mehdi Hosseini (SIG): Questioned the revenue mix and capacity planning for the new Thailand facility. Kelley indicated that initial volumes would focus on data center products, with future capacity allocated for semiconductor and industrial medical products as demand evolves.
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Joe Quatrochi (Wells Fargo): Sought clarity on why semiconductor business growth could not exceed current forecasts. Kelley replied that while upside exists, timing issues related to wafer fab readiness make precise forecasts challenging.
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Scott Graham (Seaport Research Partners): Asked about Advanced Energy’s expectations for outperforming industrial and medical markets. Kelley attributed potential outperformance to a robust design win pipeline and sustained R&D investment during prior market downturns.
Catalysts in Upcoming Quarters
Looking forward, our analysts will be closely monitoring (1) the pace at which new data center and semiconductor design wins convert into production revenue, (2) further gross margin improvements as the Thailand facility ramps and product mix evolves, and (3) continued recovery in industrial and medical segments as customer inventories normalize. Additionally, we will watch for updates on supply chain dynamics and the impact of potential acquisitions.
Advanced Energy currently trades at $311.91, up from $279.04 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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