Advanced Energy’s first quarter was well received by the market, driven by robust year-over-year revenue growth and margin expansion. Management attributed the strong results to heightened demand in the data center computing and semiconductor segments, where new product introductions and multiple design wins accelerated revenue growth and market share gains. CEO Steve Kelley highlighted that “multiple design wins are going into production this year driving revenue growth and share gain.” Despite persistent softness in its industrial and medical business, the company benefited from operational efficiency improvements and a favorable product mix, which helped offset challenges in slower segments.
Is now the time to buy AEIS? Find out in our full research report (it’s free).
Advanced Energy (AEIS) Q1 CY2025 Highlights:
- Revenue: $404.6 million vs analyst estimates of $390.1 million (23.6% year-on-year growth, 3.7% beat)
- Adjusted EPS: $1.23 vs analyst estimates of $1.06 (16.1% beat)
- Adjusted EBITDA: $65.4 million vs analyst estimates of $59.31 million (16.2% margin, 10.3% beat)
- Revenue Guidance for Q2 CY2025 is $420 million at the midpoint, above analyst estimates of $398.4 million
- Adjusted EPS guidance for Q2 CY2025 is $1.30 at the midpoint, above analyst estimates of $1.11
- Operating Margin: 7.6%, up from 0.2% in the same quarter last year
- Market Capitalization: $4.99 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Advanced Energy’s Q1 Earnings Call
-
Brian Chin (Stifel) asked about Advanced Energy’s ability to outperform the semiconductor equipment market. CEO Steve Kelley explained that new product traction and strong positions in leading-edge logic and DRAM are driving above-market growth.
-
Scott Graham (Seaport Research) questioned whether market share gains are occurring within the power segment of wafer fab equipment. Kelley responded that the success of new products should allow expansion beyond conductor etch into dielectric etch, projecting significant share gains in coming years.
-
Robert Mertens (TD Cowen) inquired about the recovery outlook for industrial and medical, especially after a weak March. Kelley and Oldham confirmed that distributor inventory destocking is nearing an end, but customers remain cautious amid tariff uncertainty.
-
Steve Barger (KeyBanc Capital Markets) asked about the scale of high-volume production for new plasma power products. Kelley indicated that once in full production, unit shipments could more than double, with higher content per system boosting dollar share.
-
Mark Miller (Benchmark) sought clarity on margin expansion and whether new design wins carry above-average profitability. CFO Paul Oldham stated that while margins are improving and could approach 40% by year-end, results will depend on product mix and continued cost control.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will focus on (1) sustained momentum in data center and semiconductor design wins and production ramps, (2) measurable improvement in gross margins following the China factory closure and operational upgrades, and (3) stabilization or recovery in the industrial and medical segment as inventory levels normalize. Progress in mitigating tariff impacts and successful execution of new product introductions will also be key factors to watch.
Advanced Energy currently trades at $139.13, up from $97.53 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
High-Quality Stocks for All Market Conditions
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
