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Why Is Advanced Energy (AEIS) Down 5.5% Since Last Earnings Report?
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A month has gone by since the last earnings report for Advanced Energy Industries (AEIS - Free Report) . Shares have lost about 5.5% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Advanced Energy due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Advanced Energy Industries, Inc. before we dive into how investors and analysts have reacted as of late.
AEIS Q3 Earnings Beat Estimates, Revenues Up Year Over Year
Advanced Energy Industries 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%.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates revision.
The consensus estimate has shifted 19.05% due to these changes.
VGM Scores
Currently, Advanced Energy has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a score of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Advanced Energy has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Why Is Advanced Energy (AEIS) Down 5.5% Since Last Earnings Report?
A month has gone by since the last earnings report for Advanced Energy Industries (AEIS - Free Report) . Shares have lost about 5.5% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Advanced Energy due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Advanced Energy Industries, Inc. before we dive into how investors and analysts have reacted as of late.
AEIS Q3 Earnings Beat Estimates, Revenues Up Year Over Year
Advanced Energy Industries 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%.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates revision.
The consensus estimate has shifted 19.05% due to these changes.
VGM Scores
Currently, Advanced Energy has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a score of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Advanced Energy has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.