Advanced Energy Industries Q3 Earnings Beat Estimates, Revenues Up Y/Y

Advanced Energy Industries AEIS reported third-quarter 2025 non-GAAP earnings of $1.74 per share, beating the Zacks Consensus Estimate by 18.37%. The bottom line jumped 77.6% year over year and 16% sequentially. 

Revenues of $463.3 million beat the Zacks Consensus Estimate by 5.14% and increased 23.8% year over year. Sequentially, revenues increased 5%.

AEIS’ Q3 Top-Line in Detail

Semiconductor Equipment revenues (42.4% of total revenues) decreased 0.5% year over year to $196.6 million. Sequentially, segment revenues fell 6.2%.

Industrial & Medical revenues (15.4% of the total revenues) fell 7.4% year over year to $71.2 million. Sequentially, segment revenues increased 3.8%. 
 

Advanced Energy Industries, Inc. Price, Consensus and EPS Surprise

Advanced Energy Industries, Inc. price-consensus-eps-surprise-chart | Advanced Energy Industries, Inc. Quote

Data Center Computing revenues (37% of the total revenues) were $171.6 million, up 113% year over year. Sequentially, segment revenues jumped 21.2%.

Telecom & Networking revenues (5.2% of the total revenues) were $24 million, up 24.5% year over year. Sequentially, segment revenues increased 9.6%.

AEIS’ Q3 Operating Results

In the third quarter of 2025, the non-GAAP gross margin was 39.1%, up 280 basis points (bps) on a year-over-year basis and 100 bps sequentially. Gross margin benefited from China factory closure, better factory loading, and lower near-term tariff costs.

Non-GAAP operating expenses were $103.4 million, up 6.8% year over year but down 0.2% sequentially. As a percentage of revenues, the figure declined 360 bps year over year and 110 bps quarter over quarter to 22.3% in the reported quarter.

The non-GAAP operating margin was 20.8% compared with 9.6% AEIS reported in the year-ago quarter. Sequentially, non-GAAP operating margin expanded 360 bps.

AEIS’ Balance Sheet & Cash Flow

As of Sept. 30, 2025, cash and cash equivalents were $758.6 million compared with $713.5 million as of June 30.

In the third quarter of 2025, cash flow from operations was $79 million, up from $46.5 million in the second quarter of 2025.

Advanced Energy made dividend payments of $3.9 million in the reported quarter.

AEIS Offers Positive Q4 Guidance

For the fourth quarter of 2025, Advanced Energy expects non-GAAP earnings of $1.75 per share (+/- 25 cents). Tariffs are expected to increase in the current quarter and will have a negative impact of 100 bps. Fourth-quarter 2025 gross margin is expected between 39% and 40%. Operating expenses are expected to increase to roughly $107 million. 

The company anticipates revenues of $470 million (+/- $20 million), up sequentially. Semiconductor revenues are expected to decline slightly on a sequential basis. Data center computing revenues are expected to increase modestly on a sequential basis. Industrial & Medical revenues are expected to grow modestly on a sequential basis. AEIS expects sequential growth in the Telecom and Networking end-market in the current quarter. 

Advanced Energy expects overall 2025 revenue growth to be approximately 20% with Data Center revenues to double. 

AEIS expects 2025 capital expenditure to be at the high end of its 5% to 6% of sales range and to remain high over the next few quarters due to investments in expanding data center capacity and infrastructure capability, as well as the factory consolidation strategy.

Zacks Rank and Upcoming Earnings to Note

Advanced Energy currently carries a Zacks Rank #2 (Buy).

Fair Isaac FICO, StoneCo STNE and Simulations Plus SLP are some other top-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector.

Fair Isaac shares have dropped 19.3% year to date. This Zacks Rank #1 (Strong Buy) company is scheduled to release fourth-quarter fiscal 2025 results on Nov. 5. You can see the complete list of today’s Zacks #1 Rank stocks here.

StoneCo shares have returned 136.2% year to date. StoneCo is scheduled to release third-quarter 2025 results on Nov. 6. StoneCo sports a Zacks Rank #1.  
 
Simulations Plus shares have dropped 39% year to date. Simulations Plus is set to report its fourth-quarter fiscal 2025 results on Dec. 1. Simulations Plus currently flaunts a Zacks Rank #1. 

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