Advanced Energy Industries (AEIS) reported fourth-quarter 2024 non-GAAP earnings of $1.30 per share, surpassing the mid-point of its guidance and beating the Zacks Consensus Estimate by 19.27%. The bottom line rose 4.8% year over year.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Revenues of $415.4 million beat the Zacks Consensus Estimate by 6.45% and grew 2.5% year over year, driven by increased semiconductor demand and strength in data center computing.AEIS expects data center de ...

Advanced Energy Industries, Inc. (NASDAQ:AEIS) Q4 2024 Earnings Conference Call February 12, 2025 4:30 PM ET Company Participants Edwin Mok - VP of Strategic Marketing & IR Steve Kelley - President & CEO Paul Oldham - EVP and CFO Conference Call Participants Brian Chin - Stifel Krish Sankar - TD Cowen Scott Graham - Seaport Research James Ricchiuti - Needham & Company Rob Mason - Baird Joe Quatrochi - Wells Fargo Steve Barger - KeyBanc Capital Markets Mehwish Mehboob - Susquehanna Operator Greetings, and we ...

Advanced Energy Industries, Inc. (NASDAQ:AEIS) Q4 2024 Earnings Conference Call February 12, 2025 4:30 PM ET Company Participants Edwin Mok - VP of Strategic Marketing & IR Steve Kelley - President & CEO Paul Oldham - EVP and CFO Conference Call Participants Brian Chin - Stifel Krish Sankar - TD Cowen Scott Graham - Seaport Research James Ricchiuti - Needham & Company Rob Mason - Baird Joe Quatrochi - Wells Fargo Steve Barger - KeyBanc Capital Markets Mehwish Mehboob - Susquehanna Operator Greetings, and we ...

Advanced Energy Industries (AEIS) came out with quarterly earnings of $1.30 per share, beating the Zacks Consensus Estimate of $1.09 per share. This compares to earnings of $1.24 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 19.27%. A quarter ago, it was expected that this maker of power-conversion products would post earnings of $0.92 per share when it actually produced earnings of $0.98, delivering a surprise of 6.52%.Over ...

Financial Performance - Q4 2024 revenue was $415.4 million, up from $405.3 million in Q4 2023, marking a year-over-year growth [3]. - Full year 2024 revenue decreased by 10% to $1.48 billion from $1.66 billion in 2023 [8]. - Q1 2025 revenue guidance is set between $392 million and $412 million [13]. - The company provided Q1 2025 revenue guidance between $372 million and $412 million [34]. Net Income and Earnings Per Share - GAAP net income for Q4 2024 was $49.1 million or $1.29 per diluted share, compared to a net loss of $14.1 million in Q3 2024 [4]. - Non-GAAP net income for Q4 2024 was $49.4 million or $1.30 per diluted share, compared to $46.7 million or $1.24 per diluted share in Q4 2023 [7]. - Non-GAAP net income for the full year 2024 was $140.3 million or $3.71 per diluted share, down from $184.0 million or $4.88 per diluted share in 2023 [11]. - Income from continuing operations, net of income tax for Q4 2024 was $49,062 thousand, compared to $37,891 thousand in Q4 2023 [31]. - Non-GAAP income, net of income tax for Q4 2024 was $49,359 thousand, an increase from $46,677 thousand in Q4 2023 [31]. - Diluted earnings per share from continuing operations for Q4 2024 was $1.29, with non-GAAP earnings per share at $1.30 [33]. - GAAP EPS from continuing operations for Q1 2025 is projected to be $0.48, with a range of +/- $0.25 [13]. - Non-GAAP earnings per share guidance for Q1 2025 is projected to be between $0.78 and $1.28 [34]. Cash Flow and Assets - The company generated $132.9 million in cash flow from continuing operations for the full year 2024 [10]. - Cash and equivalents at year-end 2024 were $722.1 million, with outstanding debt of $564.7 million [10]. - Cash and cash equivalents at the end of 2024 were $722,086 thousand, down from $1,044,556 thousand at the end of 2023 [27]. - Total assets decreased to $2,261,894 thousand as of December 31, 2024, from $2,556,757 thousand in 2023 [26]. - Long-term debt decreased to $564,695 thousand as of December 31, 2024, from $895,679 thousand in 2023 [26]. Operating Performance - Gross profit for Q4 2024 was $154,705 thousand, resulting in a gross margin of 37.2%, compared to 35.3% in Q3 2023 [28]. - Reported gross profit from continuing operations for Q4 2024 was $154,705 thousand, an increase from $142,866 thousand in Q4 2023 [30]. - Non-GAAP gross profit for Q4 2024 was $157,852 thousand, compared to $144,528 thousand in Q4 2023, resulting in a non-GAAP gross margin of 38.0% [30]. - Non-GAAP operating income for Q4 2024 was $56,078 thousand, up from $49,659 thousand in Q4 2023, with a non-GAAP operating margin of 13.5% [30]. - Operating income for the year ended December 31, 2024, was $36,607 thousand, down from $113,694 thousand in 2023 [27]. - Research and development expenses increased to $211,834 thousand for the year ended December 31, 2024, compared to $202,439 thousand in 2023 [27]. - The company reported a decrease in operating expenses from continuing operations, as reported, to $120,695 thousand in Q4 2024 from $129,096 thousand in Q4 2023 [30]. - Stock-based compensation increased to $1,063 thousand in Q4 2024 from $472 thousand in Q4 2023 [30]. Revenue by Segment - Semiconductor equipment revenue for Q4 2024 was $226,838 thousand, up from $191,375 thousand in Q4 2023 [28]. - North America revenue for Q4 2024 was $187,382 thousand, slightly up from $187,240 thousand in Q4 2023 [29].

Core Viewpoint - Advanced Energy Industries (AEIS) reported mixed financial results for Q3 2024, with earnings beating estimates but revenues declining year-over-year, indicating challenges in certain sectors while showing growth in others [2][4][7]. Financial Performance - AEIS reported non-GAAP earnings of 98 cents per share, exceeding the Zacks Consensus Estimate by 6.52%, but down 23.4% year-over-year [2]. - Revenues totaled $374.22 million, slightly missing estimates by 0.09% and declining 8.7% year-over-year, primarily due to weakness in Industrial, Medical, and Telecom sectors [2]. - Sequentially, revenues increased by 3%, driven by strength in Semiconductor and Data Center Computing [3]. Segment Performance - **Semiconductor Equipment**: Revenues rose 6.7% year-over-year to $198 million, accounting for 52.8% of total revenues, and exceeded estimates by 2.98% [4]. - **Industrial & Medical**: Revenues fell 33.3% year-over-year to $77 million, representing 20.5% of total revenues, and missed estimates by 4.06% [5]. - **Data Center Computing**: Revenues increased 18.1% year-over-year to $80.65 million, making up 21.6% of total revenues, but missed consensus by 1.37% [7]. - **Telecom & Networking**: Revenues dropped 53.6% year-over-year to $19.23 million, constituting 5.1% of total revenues, and missed estimates by 17.02% [7]. Operating Results - Non-GAAP gross margin was 36.3%, up 20 basis points year-over-year [9]. - Non-GAAP operating expenses were $96.9 million, down 0.4% year-over-year, but as a percentage of revenues, it increased 220 basis points to 25.9% [9]. - Non-GAAP operating margin contracted 200 basis points year-over-year to 10.5% [10]. Balance Sheet & Cash Flow - As of September 30, 2024, cash and cash equivalents were $6.57 billion, a significant decrease from $9.86 million as of June 30, 2024 [11]. - Cash flow from operations was $35.4 million, down from $6.9 million in the previous quarter [11]. - Dividend payments made in the reported quarter totaled $3.9 million [12]. Q4 Guidance - For Q4 2024, AEIS expects non-GAAP earnings of $1.08 per share (+/- 25 cents) and revenues of $392 million (+/- $20 million) [13][14]. Market Sentiment - There has been an upward trend in estimates revision over the past month, indicating positive market sentiment [15]. - AEIS holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the coming months [17].

Group 1 - The company Advanced Energy Industries, Inc. (NASDAQ: AEIS) is navigating through cyclical downturns in its industry, leading to a cautiously bullish outlook [1] - The analysis reflects a long position in AEIS shares, indicating confidence in the company's future performance despite current challenges [1]

Core Insights - Advanced Energy Industries (AEIS) reported non-GAAP earnings of 98 cents per share in Q3 2024, exceeding the Zacks Consensus Estimate by 6.52%, but reflecting a year-over-year decline of 23.4% [1] - Revenues totaled $374.22 million, slightly missing the Zacks Consensus Estimate by 0.09% and down 8.7% year-over-year, primarily due to weakness in the Industrial, Medical, and Telecom sectors [1] Revenue Breakdown - Semiconductor Equipment revenues, accounting for 52.8% of total revenues, increased by 6.7% year-over-year to $198 million, surpassing the Zacks Consensus Estimate by 2.98% [3] - Industrial & Medical revenues, making up 20.5% of total revenues, fell 33.3% year-over-year to $77 million, missing the consensus estimate by 4.06% [4] - Data Center Computing revenues, representing 21.6% of total revenues, reached $80.65 million, up 18.1% year-over-year, but fell short of the consensus mark by 1.37% [5] - Telecom & Networking revenues, comprising 5.1% of total revenues, declined 53.6% year-over-year to $19.23 million, missing the Zacks Consensus Estimate by 17.02% [6] Operating Results - Non-GAAP gross margin was 36.3%, an increase of 20 basis points year-over-year [8] - Non-GAAP operating expenses were $96.9 million, down 0.4% year-over-year, but as a percentage of revenues, it increased by 220 basis points to 25.9% [8] - Non-GAAP operating margin contracted to 10.5%, down 200 basis points year-over-year [8] Cash Flow and Balance Sheet - As of September 30, 2024, cash and cash equivalents stood at $6.57 billion, a significant increase from $9.86 million as of June 30, 2024 [8] - Cash flow from operations was $35.4 million, a decrease from $6.9 million in the previous quarter [9] - Dividend payments made in the reported quarter amounted to $3.9 million [9] Q4 Guidance - For Q4 2024, AEIS expects non-GAAP earnings of $1.08 per share (+/- 25 cents) and revenues of $392 million (+/- $20 million) [10] Market Context - Despite strong demand in the semiconductor and data center markets, weakness in the Industrial, Medical, and Telecom sectors may negatively impact AEIS's top line [11] - Year-to-date, AEIS shares have declined by 1%, contrasting with a 27.6% growth in the Zacks Computer & Technology sector [11]

Core Insights - Advanced Energy Industries (AEIS) reported revenue of $374.22 million for Q3 2024, reflecting an 8.7% year-over-year decline and an EPS of $0.98 compared to $1.28 a year ago [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $374.54 million, resulting in a revenue surprise of -0.09%, while the EPS exceeded expectations by 6.52% against a consensus estimate of $0.92 [1] Revenue Breakdown - Net Sales from Semiconductor Equipment reached $197.50 million, surpassing the average estimate of $191.78 million from two analysts [3] - Net Sales from Telecom & Networking were $19.23 million, below the average estimate of $23.18 million [3] - Net Sales from Data Center Computing amounted to $80.65 million, slightly below the average estimate of $81.77 million [3] - Net Sales from Industrial & Medical totaled $76.84 million, also falling short of the average estimate of $80.09 million [3] Stock Performance - Over the past month, shares of Advanced Energy have returned +7.8%, outperforming the Zacks S&P 500 composite's +1.8% change [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [4]

Financial Data and Key Metrics Changes - Third quarter revenue was $374 million, slightly above the midpoint of guidance, with a 3% sequential increase but a 9% year-over-year decrease [25][27] - Gross margin improved by 100 basis points quarter-over-quarter to 36.3%, with expectations for further improvement in the fourth quarter [29][37] - Non-GAAP EPS for the third quarter was $0.98, beating guidance of $0.90, but down from $1.28 a year ago [31][35] Business Line Data and Key Metrics Changes - Semiconductor revenue reached $197 million, up 5% sequentially and 7% year-over-year, driven by increased demand in both leading and trailing edge logic process nodes [27][12] - Industrial and Medical revenue decreased to $77 million, down 3% sequentially and 33% year-over-year, attributed to ongoing inventory destocking [28][14] - Data center computing revenue grew 11% sequentially to $81 million, driven by strong demand from hyperscale customers for AI applications [28][18] - Telecom and networking revenue fell 22% sequentially to $19 million due to lower demand [28][20] Market Data and Key Metrics Changes - The semiconductor market showed a sequential revenue increase, with expectations for further growth in the fourth quarter [12][21] - Industrial and Medical markets are expected to stabilize as inventory levels normalize, with potential for growth from recent design wins [22][50] - Data center demand remains strong, particularly for AI applications, with expectations for continued revenue performance [19][63] Company Strategy and Development Direction - The company is focused on factory consolidation to reduce fixed costs and improve productivity, aiming for gross margins above 40% [11][23] - Continued investment in new product qualifications and a robust design win pipeline are expected to drive future growth [21][39] - The company is actively pursuing acquisitions to enhance growth opportunities [24][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue growth in 2024, particularly in the semiconductor and data center segments [21][35] - The company anticipates a return to growth in Industrial and Medical markets as inventory levels normalize [22][50] - Management noted that the influence of AI and new GPU technologies could extend the growth cycle in the data center market [63][64] Other Important Information - The company plans to host its 2024 Analyst Day on November 19, where it will discuss growth strategies and market views [6][6] - A restructuring charge of $28.5 million was recorded, primarily related to the planned closure of the last production site in China [31][26] Q&A Session Summary Question: What drove the upside on semiconductor equipment revenue in Q3? - Management noted that growth was driven by both leading and trailing edge logic nodes, with expectations for further growth in Q4 [42][44] Question: How does the company view the inventory destocking in Industrial and Medical? - Management indicated that inventory destocking has been ongoing since Q4 2023, with expectations for normalization by late Q4 or Q1 [49][50] Question: Can you quantify the design win activity and its impact? - Management reported a conversion rate of over one in three opportunities turning into design wins, indicating strong momentum [56][58] Question: What is the outlook for gross margins in Q4? - Management expects gross margins to improve to about 37% in Q4, considering ongoing manufacturing cost improvements [37][52] Question: How does the company view the sustainability of demand in the data center market? - Management expressed increased visibility due to compressed design cycles and noted that the current cycle could last longer than usual due to AI investments [62][63]