Advanced Energy Q4 Earnings Beat Estimates, Revenues Up Y/Y

Core Insights - Advanced Energy Industries (AEIS) reported Q4 2025 non-GAAP earnings of $1.94 per share, exceeding the Zacks Consensus Estimate by 9.61%, with a year-over-year increase of 49.2% and a sequential increase of 11.5% [1] - Revenues reached $489.4 million, surpassing the Zacks Consensus Estimate by 2.98% and showing a year-over-year growth of 17.8% [1] Revenue Breakdown - Semiconductor Equipment revenues, accounting for 43.2% of total revenues, decreased by 6.7% year over year to $211.6 million, but increased 7.6% sequentially [2] - Industrial & Medical revenues, making up 16% of total revenues, rose by 1.8% year over year to $78.2 million, with a sequential increase of 9.8% [2] - Data Center Computing revenues, which represent 36.4% of total revenues, surged by 100.6% year over year to $177.9 million, with a sequential increase of 3.7% [2] - Telecom & Networking revenues, comprising 4.4% of total revenues, fell by 6.1% year over year to $21.7 million, and decreased 9.2% sequentially [3] Operating Results - The non-GAAP gross margin for Q4 2025 was 39.7%, an increase of 170 basis points year over year and 60 basis points sequentially, benefiting from factory closures in China and lower tariff costs [4] - Non-GAAP operating expenses were $107.4 million, up 5.5% year over year and 3.9% sequentially, but as a percentage of revenues, it declined to 21.9% [4] - The non-GAAP operating margin improved to 23.2%, compared to 13.7% in the same quarter last year, with a sequential expansion of 240 basis points [5] Balance Sheet & Cash Flow - As of December 31, 2025, cash and cash equivalents stood at $791.2 million, up from $758.6 million as of September 30, 2025 [6] - Cash flow from operations in Q4 2025 was $235 million, a significant increase from $79 million in Q3 2025 [6] - The company made dividend payments of $15.6 million during the reported quarter [6] Q1 Guidance - For Q1 2026, AEIS expects revenues of $500 million, with a variance of +/- $20 million, and non-GAAP earnings of $1.94 per share, with a variance of +/- 25 cents [7][8] Zacks Rank - AEIS currently holds a Zacks Rank 2 (Buy), indicating a positive outlook [9]