Key Highlights

  • AEIS reported third-quarter 2026 Revenue of $696.4 million, up 50.3% (calculated) from $463.3 million a year earlier.
  • Non-GAAP Earnings Per Share reached $3.65, compared with $1.74 in the prior-year quarter.
  • Gross Margin was 42.1% on a non-GAAP basis, up 300 basis points from a year ago.
  • Fourth-quarter revenue is guided to about $735 million, plus or minus $25 million.
  • Cash and equivalents stood at $1.42 billion at Sep 30, 2026, with $600.0 million of undrawn revolver capacity.

Record Quarter Lands Above the High End of Guidance

Advanced Energy Industries (NASDAQ:AEIS) reported results for the third quarter ended Sep 30, 2026 on Nov 2, 2026, with record revenue of $696.4 million versus $463.3 million a year earlier. Management said revenue, gross margin and earnings per share all finished above the high end of guidance.

On a GAAP basis, Operating Income was $143.2 million, up from $49.2 million, and Net Income was $115.6 million versus $46.2 million. GAAP Diluted Earnings per Share from continuing operations were $2.80, compared with $1.21 a year ago. Non-GAAP earnings per share were $3.65, up from $2.74 in the second quarter and $1.74 a year earlier.

Advanced Energy designs and makes precision power conversion products that convert Utility power into controllable power for semiconductor tools, Data Center servers, industrial and medical equipment, and telecom gear.

Semiconductor and Data Center Power Drive the Growth

Semiconductor revenue set a record of $322 million, up 16% sequentially and 64% year over year. Data center computing revenue also hit a record $256 million, rising 34% from the prior quarter and 49% from a year ago, as new customer programs began to ramp.

Industrial and medical revenue was $91 million, up 27% from last year, while telecom and networking revenue rose 15% to $28 million on AI-related programs.

Non-GAAP gross margin was 42.1%, up 300 basis points year over year, and 140 basis points higher excluding a second-quarter Tariff refund benefit. Non-GAAP Operating Margin reached 24.4%, and non-GAAP operating income was a record $170 million, with adjusted EBITDA of $182 million.

Supply Constraints and a Tax Charge Temper the Headline Numbers

Management said shortages of certain integrated circuits, circuit boards and specialty ceramics persist and are built into the fourth-quarter and 2027 forecasts. The company has leaned on strategic parts inventory and surge capacity, since constrained components often arrive in the last four to six weeks of a quarter.

The GAAP tax rate was 23.6%, versus 15.7% on a non-GAAP basis, because of a one-time, non-cash write-down of a deferred tax asset tied to a lower future tax rate in one jurisdiction. Operating Cash Flow from continuing operations was $66 million, while inventory stood at 144 days.

The new Thailand factory has begun generating revenue, with products shipping to two data center customers and two large semiconductor customers expected to qualify within two to three months.

Raised Outlook Points to About 40% Growth in 2026 and a Dividend and Buyback Restart

Advanced Energy now expects 2026 revenue growth of about 40%, up from a prior low-to-mid 30% target, with fourth-quarter revenue of $735 million, plus or minus $25 million, and non-GAAP earnings per share of $3.90, plus or minus $0.30. Fourth-quarter gross margin is guided to 42% to 42.5%, and operating expenses to $126 million to $128 million. Management said 2027 growth could be about 30%, subject to component supply.

The company pays a quarterly dividend of $0.10 per share and resumed share repurchases in October 2026, buying about $30 million of stock. It redeemed the remaining $136.4 million of 2028 convertible notes on Oct 2, 2026.