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Advanced Energy Q1 Earnings Beat Estimates, Revenues Increase Y/Y
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Key Takeaways
AEIS beat Q1 estimates with EPS up 69.9% Y/Y and revenue rising 26.3% on AI-driven demand.
Advanced Energy saw data center revenue jump 101.9% Y/Y, driven by strong AI infrastructure spending.
AEIS raised its 2026 growth outlook to low-mid 20% and expects stronger momentum in the coming quarters.
Advanced Energy Industries (AEIS - Free Report) reported first-quarter 2026 non-GAAP earnings of $2.09 per share, beating the Zacks Consensus Estimate by 6.09%. The bottom line jumped 69.9% year over year and 7.7% sequentially.
Revenues of $511.0 million increased 26.3% from the year-ago quarter and came in marginally above the Zacks Consensus Estimate, with a 0.03% surprise. Growth was driven by strong demand for its high-power solutions. The company benefited from momentum tied to AI-related infrastructure spending and improved profitability.
AEIS’s Q1 Topline in Detail
Data Center Computing was the standout, with revenues of $194.2 million, up 101.9% year over year and 9.2% sequentially. Management said demand remained very strong, though quarterly shipments can move with customer delivery timing and downstream constraints. AEIS also pointed to multiple new wins with “second wave” data center customers and ongoing development of next-generation platforms, including 800-volt solutions.
Semiconductor Equipment revenues were $219.4 million, up 3.7% sequentially but down 1.3% from a year ago. The company cited broad customer acceptance of its eVoS, eVerest and NavX plasma power technologies, which are designed to improve throughput and yield at leading-edge nodes. AEIS also highlighted growing contributions from “system power” products used between the wall and the tool in test and wafer fab equipment, adding another avenue for growth.
Advanced Energy Industries, Inc. Price, Consensus and EPS Surprise
Industrial & Medical revenue came in at $72.0 million, down 7.9% sequentially but up 12.0% year over year. AEIS said improving demand was evident in bookings, which increased 14% sequentially, alongside higher distributor sell-through and further normalization of channel inventories. Output was constrained in the quarter as factories prioritized higher-demand programs, particularly in products built alongside data center offerings.
Telecom & Networking revenue rose to $25.4 million, up 16% year over year and 17.1% sequentially. The company attributed the strength primarily to production ramps tied to AI-driven networking programs, which also pushed the segment to its highest level since 2023.
AEIS’ Q1 Operating Results
In the first quarter of 2026, the non-GAAP gross margin was 40.1%, up 220 basis points (bps) year over year and 40 bps sequentially, even with ongoing tariff expenses and a less favorable mix than originally modeled.
Non-GAAP operating expenses were $107 million, up 8.5% year over year but declined 0.4% sequentially. As a percentage of revenues, the figure declined 340 bps year over year and 100 bps quarter over quarter to 20.9% in the reported quarter.
Non-GAAP operating income was $97.8 million, and non-GAAP operating margin expanded to 19.1%, supported by disciplined spending and higher gross profit.
AEIS’ Balance Sheet & Cash Flow
As of March 31, 2026, cash and cash equivalents were $699.5 million compared with $791.2 million as of Dec. 31, 2025.
In the first quarter of 2026, operating cash flow from continuing operations was an outflow of $6 million, down from $235 million in the prior quarter.
Advanced Energy made dividend payments of $3.8 million in the reported quarter and repurchased $0.3 million of shares.
Advanced Energy Raises 2026 Growth Target, Guides Q2
For the second quarter of 2026, AEIS expects revenues of about $540 million, plus or minus $20 million, and non-GAAP earnings of $2.18 per share, plus or minus $0.25. Management expects the bulk of sequential growth to come from Semiconductor and Industrial & Medical, while Data Center Computing moderates based on delivery timing.
The company raised its 2026 revenue growth target to the low-to-mid 20% range and increased its data center growth expectation to the mid-30% range. AEIS also lifted its 2026 capital spending outlook to $170-$180 million, partly to accelerate investments tied to its Thailand expansion, while still targeting free cash flow at or above 2025 levels.
AEIS Zacks Rank & Other Stocks to Consider
Advanced Energy currently carries a Zacks Rank #2 (Buy).
Shares of Analog Devices have gained 46.4% in the year-to-date period. Analog Devices is set to report the second quarter of fiscal 2026 results on May 20.
Applied Materials shares have gained 52.3% in the year-to-date period. Applied Materials is scheduled to report its second-quarter 2026 results on May 14.
Audioeye shares have lost 21.6% in the year-to-date period. Audioeye is set to report its first-quarter 2026 results on May 13.
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Advanced Energy Q1 Earnings Beat Estimates, Revenues Increase Y/Y
Key Takeaways
Advanced Energy Industries (AEIS - Free Report) reported first-quarter 2026 non-GAAP earnings of $2.09 per share, beating the Zacks Consensus Estimate by 6.09%. The bottom line jumped 69.9% year over year and 7.7% sequentially.
Revenues of $511.0 million increased 26.3% from the year-ago quarter and came in marginally above the Zacks Consensus Estimate, with a 0.03% surprise. Growth was driven by strong demand for its high-power solutions. The company benefited from momentum tied to AI-related infrastructure spending and improved profitability.
AEIS’s Q1 Topline in Detail
Data Center Computing was the standout, with revenues of $194.2 million, up 101.9% year over year and 9.2% sequentially. Management said demand remained very strong, though quarterly shipments can move with customer delivery timing and downstream constraints. AEIS also pointed to multiple new wins with “second wave” data center customers and ongoing development of next-generation platforms, including 800-volt solutions.
Semiconductor Equipment revenues were $219.4 million, up 3.7% sequentially but down 1.3% from a year ago. The company cited broad customer acceptance of its eVoS, eVerest and NavX plasma power technologies, which are designed to improve throughput and yield at leading-edge nodes. AEIS also highlighted growing contributions from “system power” products used between the wall and the tool in test and wafer fab equipment, adding another avenue for growth.
Advanced Energy Industries, Inc. Price, Consensus and EPS Surprise
Advanced Energy Industries, Inc. price-consensus-eps-surprise-chart | Advanced Energy Industries, Inc. Quote
Industrial & Medical revenue came in at $72.0 million, down 7.9% sequentially but up 12.0% year over year. AEIS said improving demand was evident in bookings, which increased 14% sequentially, alongside higher distributor sell-through and further normalization of channel inventories. Output was constrained in the quarter as factories prioritized higher-demand programs, particularly in products built alongside data center offerings.
Telecom & Networking revenue rose to $25.4 million, up 16% year over year and 17.1% sequentially. The company attributed the strength primarily to production ramps tied to AI-driven networking programs, which also pushed the segment to its highest level since 2023.
AEIS’ Q1 Operating Results
In the first quarter of 2026, the non-GAAP gross margin was 40.1%, up 220 basis points (bps) year over year and 40 bps sequentially, even with ongoing tariff expenses and a less favorable mix than originally modeled.
Non-GAAP operating expenses were $107 million, up 8.5% year over year but declined 0.4% sequentially. As a percentage of revenues, the figure declined 340 bps year over year and 100 bps quarter over quarter to 20.9% in the reported quarter.
Non-GAAP operating income was $97.8 million, and non-GAAP operating margin expanded to 19.1%, supported by disciplined spending and higher gross profit.
AEIS’ Balance Sheet & Cash Flow
As of March 31, 2026, cash and cash equivalents were $699.5 million compared with $791.2 million as of Dec. 31, 2025.
In the first quarter of 2026, operating cash flow from continuing operations was an outflow of $6 million, down from $235 million in the prior quarter.
Advanced Energy made dividend payments of $3.8 million in the reported quarter and repurchased $0.3 million of shares.
Advanced Energy Raises 2026 Growth Target, Guides Q2
For the second quarter of 2026, AEIS expects revenues of about $540 million, plus or minus $20 million, and non-GAAP earnings of $2.18 per share, plus or minus $0.25. Management expects the bulk of sequential growth to come from Semiconductor and Industrial & Medical, while Data Center Computing moderates based on delivery timing.
The company raised its 2026 revenue growth target to the low-to-mid 20% range and increased its data center growth expectation to the mid-30% range. AEIS also lifted its 2026 capital spending outlook to $170-$180 million, partly to accelerate investments tied to its Thailand expansion, while still targeting free cash flow at or above 2025 levels.
AEIS Zacks Rank & Other Stocks to Consider
Advanced Energy currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader Zacks Computer and Technology sector include Analog Devices (ADI - Free Report) , Applied Materials (AMAT - Free Report) and Audioeye (AEYE - Free Report) . Each stock currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Analog Devices have gained 46.4% in the year-to-date period. Analog Devices is set to report the second quarter of fiscal 2026 results on May 20.
Applied Materials shares have gained 52.3% in the year-to-date period. Applied Materials is scheduled to report its second-quarter 2026 results on May 14.
Audioeye shares have lost 21.6% in the year-to-date period. Audioeye is set to report its first-quarter 2026 results on May 13.