Advanced Energy Industries reported third‑quarter 2025 revenue of $463.3 million, up 24% year‑over‑year and 5% quarter‑over‑quarter, driven by a 113% surge in its Data Center Computing segment to $172 million. Non‑GAAP earnings per share rose to $1.74, beating the consensus estimate of $1.47 by $0.27 (an 18% beat). GAAP EPS of $1.21 also surpassed the $1.01 estimate, reflecting the company’s ability to convert higher‑margin sales into solid earnings.
Gross margin expanded to 39.1% non‑GAAP, up 280 basis points from 35.8% in Q3 2024. The prior quarter’s margin of 38.1% was higher, but the current increase is attributed to cost savings from the China factory closure, improved factory loading, and lower tariff costs. These operational efficiencies offset the modest rise in raw‑material expenses and support the company’s margin trajectory.
Segment analysis shows the Data Center Computing unit as the primary growth engine, with revenue more than doubling year‑over‑year, while the Semiconductor Equipment segment remained flat. The company’s focus on high‑density power solutions for AI servers has translated into higher‑margin contracts, reinforcing its competitive position in the AI‑driven market.
For the fourth quarter, Advanced Energy guided revenue of $470 million ± $20 million, consistent with the prior guidance. However, GAAP EPS guidance of $0.87 to $1.37 and non‑GAAP EPS guidance of $1.50 to $2.00 reflect a more cautious outlook, signaling management’s concern about potential operating‑expense increases and a less favorable product mix. The mixed guidance contributed to a 5% decline in after‑hours trading, as investors weighed the strong Q3 performance against the lower EPS expectations.
CEO Steve Kelley emphasized the company’s “record data‑center revenue, which more than doubled year‑over‑year,” and highlighted the “second best quarterly EPS performance in our history” as a result of cost savings. CFO Paul Oldham noted that third‑quarter revenue exceeded guidance due to “investments in operational capacity and flexibility that captured higher data‑center demand.” These comments underscore the company’s confidence in sustaining growth while managing headwinds.
The market reaction, a 5% after‑hours decline, was driven primarily by the mixed EPS guidance. Investors focused on the lower-than‑expected profitability outlook despite the robust revenue and margin gains, illustrating the importance of forward‑looking metrics in valuation assessments.
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