Advanced Energy(AEIS) - 2025 Q2 - Quarterly Results

Financial Performance Overview Second Quarter 2025 Financial Results Advanced Energy reported strong Q2 2025 results, exceeding guidance due to robust AI data center demand and early market recovery Q2 2025 Key Financial Metrics | Financial Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Revenue | $441.5M | $404.6M | $364.9M | | GAAP Net Income (cont. ops) | $25.5M | $24.9M | $15.4M | | GAAP EPS (cont. ops) | $0.67 | $0.65 | $0.41 | | Non-GAAP Net Income | $56.6M | $46.9M | $32.0M | | Non-GAAP EPS | $1.50 | $1.23 | $0.85 | - The strong quarterly results were driven by high customer demand for AI data center solutions[3] - Data Center Computing revenue achieved a quarterly record, nearly doubling on a year-over-year basis[6] Third Quarter 2025 Guidance The company projects Q3 2025 revenue between $420 million and $460 million, with Non-GAAP EPS ranging from $1.20 to $1.70 Q3 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Revenue | $440M +/- $20M | | GAAP EPS (cont. ops) | $0.82 +/- $0.25 | | Non-GAAP EPS | $1.45 +/- $0.25 | Shareholder Returns Advanced Energy generated $46.5 million in Q2 cash flow from operations, returning capital via $3.9 million in dividends and $22.8 million in stock repurchases Q2 2025 Cash Flow and Capital Allocation | Activity | Amount (in millions) | | :--- | :--- | | Cash Flow from Continuing Operations | $46.5M | | Quarterly Dividends Paid | $3.9M | | Common Stock Repurchased | $22.8M | Consolidated Financial Statements Condensed Consolidated Statements of Operations Q2 2025 revenue increased to $441.5 million, with gross margin improving to 37.0%, driving operating income to $31.6 million Statement of Operations Highlights (Q2 2025 vs. Q2 2024) | Metric (in millions) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue, net | $441.5 | $364.9 | | Gross profit | $163.4 | $127.7 | | Gross margin % | 37.0% | 35.0% | | Operating income | $31.6 | $12.9 | | Income from continuing operations | $25.5 | $15.4 | Condensed Consolidated Balance Sheets Total assets grew to $2.38 billion by June 30, 2025, driven by receivables and inventories, with liabilities at $1.12 billion and equity at $1.26 billion Balance Sheet Summary (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $713.5 | $722.1 | | Total current assets | $1,459.5 | $1,389.3 | | Total assets | $2,379.6 | $2,261.9 | | Total liabilities | $1,117.0 | $1,055.3 | | Total stockholders' equity | $1,257.3 | $1,203.1 | Condensed Consolidated Statement of Cash Flows Net cash from operating activities significantly improved to $74.1 million for H1 2025, with $43.6 million used in investing and $42.8 million in financing Cash Flow Summary - Six Months Ended June 30 (in millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $74.1 | $14.0 | | Net cash from investing activities | $(43.6) | $(47.6) | | Net cash from financing activities | $(42.8) | $(23.2) | | Net change in cash | $(8.6) | $(58.5) | Supplemental Information and Non-GAAP Reconciliations Net Revenue by Market Data Center Computing revenue nearly doubled to $141.6 million in Q2 2025, while Industrial & Medical and Telecom & Networking segments declined Net Revenue by Market (in millions) | Market Segment | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Semiconductor Equipment | $209.5 | $188.3 | +11.3% | | Industrial and Medical | $68.6 | $79.1 | -13.3% | | Data Center Computing | $141.6 | $73.0 | +94.0% | | Telecom and Networking | $21.8 | $24.5 | -11.0% | | Total | $441.5 | $364.9 | +21.0% | Reconciliation of Non-GAAP Measures Reconciliations from GAAP to non-GAAP measures exclude non-cash and non-operational items, providing a clearer view of core performance - Management uses non-GAAP measures to evaluate business performance, excluding non-cash charges and non-operational items like stock-based compensation, amortization, and acquisition costs[12][13] Reconciliation of Operating Income and Margin Q2 2025 Non-GAAP operating income was $64.5 million (14.6% margin), significantly higher than GAAP due to adjustments for non-cash items GAAP vs. Non-GAAP Operating Margin (Q2 2025) | Metric | GAAP | Non-GAAP | | :--- | :--- | :--- | | Gross Margin | 37.0% | 38.1% | | Operating Income | $31.6M | $64.5M | | Operating Margin | 7.2% | 14.6% | Reconciliation of Net Income and EPS Q2 2025 Non-GAAP net income reached $56.6 million ($1.50 per share), exceeding GAAP due to adjustments for amortization and other costs GAAP vs. Non-GAAP Net Income & EPS (Q2 2025) | Metric | GAAP (cont. ops) | Non-GAAP | | :--- | :--- | :--- | | Net Income | $25.5M | $56.6M | | Diluted EPS | $0.67 | $1.50 | Reconciliation of Q3 2025 Guidance Q3 2025 GAAP EPS guidance is adjusted for items like stock-based compensation and amortization to derive the Non-GAAP EPS range Q3 2025 EPS Guidance Reconciliation (Midpoint) | Metric | Per Share Amount | | :--- | :--- | | GAAP EPS | $0.82 | | Stock-based compensation | $0.38 | | Amortization of intangible assets | $0.15 | | Restructuring & other costs | $0.24 | | Tax effects | $(0.14) | | Non-GAAP EPS | $1.45 | Other Information Forward-Looking Statements This section cautions that forward-looking statements are subject to risks including industry volatility, global economic conditions, and supply chain disruptions - The report contains forward-looking statements regarding the company's beliefs, expectations, and plans, which are not historical facts[14] - Identified risks include business fluctuations, ability to meet customer demand, global economic conditions, supply chain disruptions, and integration of acquisitions[15][16] About Advanced Energy Advanced Energy is a global leader in precision power conversion, measurement, and control solutions for mission-critical applications across diverse industries - Advanced Energy is a global leader in highly engineered, precision power conversion, measurement, and control solutions for mission-critical applications[9]