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Advanced Energy Industries Inc (NASDAQ:AEIS) reported strong year-over-year growth in its Q1 2025 financial results presentation on April 30, 2025, with revenue increasing 24% and non-GAAP earnings per share more than doubling compared to the same period last year. The company’s Data Center Computing segment achieved record quarterly revenue, while the Semiconductor Equipment segment continued to show robust performance.
Quarterly Performance Highlights
Advanced Energy reported Q1 2025 revenue of $404.6 million, up 24% year-over-year but down slightly by 2.6% from the previous quarter. Non-GAAP earnings per share reached $1.23, representing a substantial 112% increase from Q1 2024, though down 5.4% sequentially from Q4 2024’s $1.30.
The company’s profitability metrics showed significant improvement, with non-GAAP gross margin expanding to 37.9%, up 280 basis points year-over-year. Operating margin on a non-GAAP basis reached 13.5%, representing a substantial 700 basis point improvement compared to the same period last year.
As shown in the following financial highlights from the presentation:
"Q1 2025 revenue and non-GAAP EPS approached the high end of guidance," the company noted in its presentation, attributing the strong performance to "a record quarter in Data Center Computing and strength in Semi."
Segment Performance Analysis
Advanced Energy’s performance varied significantly across its four market segments, with Data Center Computing emerging as the standout performer. The segment generated $96.2 million in revenue, representing a remarkable 129.6% year-over-year increase and 8.5% sequential growth. The company attributed this exceptional performance to "multiple hyperscale design wins ramping to volume."
The Semiconductor Equipment segment, which remains the company’s largest revenue contributor, delivered $222.2 million in revenue, up 23.5% year-over-year but down 2% sequentially. The company highlighted "strong demand in AI-related leading-edge foundry logic and memory" as key drivers.
In contrast, the Industrial & Medical (TASE:BLWV) segment experienced significant weakness, with revenue declining 22.9% year-over-year and 16.3% sequentially to $64.3 million. The company explained this was "due to customer inventory reduction and lower turns revenue." The Telecom (BCBA:TECO2m) & Networking segment remained relatively stable at $21.9 million, down just 1.8% year-over-year.
The following chart illustrates the revenue breakdown by market segment:
The detailed quarterly comparison across segments shows the divergent performance trends:
Strategic Initiatives & Outlook
Advanced Energy expressed optimism about exceeding previous expectations for 2025, citing share gains and margin expansion opportunities. A key strategic initiative is the planned closure of the company’s China factory by the end of June, which is expected to provide margin uplift in the second half of the year.
The company also addressed its positioning in the current tariff environment, noting limited direct exposure to the highest tariff rates and its ability to leverage factories in low-tariff countries. "We have not seen downward revisions in demand forecasts of major customers," the company stated, adding that it expects "to make price adjustments to cover costs when possible."
Advanced Energy is continuing to invest in growth initiatives, increasing its 2025 capital expenditure target to 5-6% of revenue based on expected share gains in Data Center and next-generation Semiconductor products. The company also disclosed that it took "advantage of market volatility in April to repurchase over $22.7 million at an average price of $83.78 per share."
The company’s income statement shows the substantial year-over-year improvements in both revenue and profitability:
Financial Position & Guidance
Advanced Energy maintained a strong financial position at the end of Q1 2025, with total cash of $723 million and net cash of $158 million. Operating cash flow from continuing operations was $29 million, while capital expenditures totaled $13.9 million.
The company’s inventory turns decreased slightly quarter-over-quarter to 2.7x, with days inventory increasing from 126 to 132 days as the company "added critical parts to support growth." Days sales outstanding increased from 57 to 62 days, while days payable outstanding rose from 50 to 56 days.
The following table provides a detailed view of the company’s balance sheet metrics:
Looking ahead, Advanced Energy provided guidance for Q2 2025, projecting revenue of $420 million (±$20 million) and non-GAAP earnings per share of $1.30 (±$0.25). This guidance suggests continued strong performance, with expected sequential revenue growth of approximately 3.8% at the midpoint.
The company’s Q2 2025 guidance is summarized below:
The guidance for Q2 2025 indicates management’s confidence in continued growth, particularly in the Data Center Computing segment, where the company expects "continued ramp of new programs for AI investments driving growth in Q2 and into 2H 2025." For the Semiconductor segment, the company anticipates "revenue to grow around 10% in 2025 on a stronger 1H and initial production of new products."
Advanced Energy’s stock closed at $97.23 on April 30, 2025, and showed no change in after-hours trading. The company’s shares have traded between $75.01 and $132.16 over the past 52 weeks, according to available market data.
Full presentation:
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