Advanced Energy (AEIS) Q2 2025 Earnings Transcript

Motley Fool Transcribing, The Motley Fool

Mon, May 4, 2026 astatine 12:40 PM CDT 29 min read

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DATE

Tuesday, August 5, 2025 astatine 4:30 p.m. ET

CALL PARTICIPANTS

• President & Chief Executive Officer — Stephen D. Kelley

• Executive Vice President & Chief Financial Officer — Paul R. Oldham

Full Conference Call Transcript

Stephen D. Kelley: Thanks, Edwin. Good afternoon, everyone, and acknowledgment for joining the call. Second 4th gross exceeded the precocious extremity of our guidance range, driven by beardown request for Advanced Energy's information halfway powerfulness solutions. We besides benefited from accrued request successful concern and medical, posting our archetypal sequential maturation successful that marketplace since 2023. On a year-over-year basis, 2nd 4th gross grew 21%, our 3rd consecutive 4th of year-over-year growth. Earnings per stock besides came successful astatine the higher extremity of guidance. Our concern diversification strategy, which is focused connected 3 chiseled people markets, is driving much accordant profitability and currency flow. We person been mitigating rhythm hazard by participating successful aggregate maturation markets, each with its ain characteristics.

The strategy is playing retired nicely this twelvemonth with our occurrence successful information halfway compensating for softness successful concern and medical. Semiconductor has performed good for AE with mid-single-digit maturation expected this twelvemonth aft a maturation twelvemonth successful 2024. Our improved profitability and currency travel are allowing america to marque the exertion and capableness investments indispensable to substance semipermanent profitable growth. These investments springiness assurance to our customers that Advanced Energy has the exertion roadworthy representation and manufacturing expertise indispensable to enactment their semipermanent success. In Data Center, our high-efficiency, high-power density products person proven perfect for AI applications. This year, we person won a fig of next-generation programs, which are expected to enactment further maturation successful 2026.

In semiconductor, lawsuit involvement successful our eVoS, eVerest and NavX platforms is precise strong. We expect to much than treble gross from these platforms successful 2025 arsenic archetypal wins spell into aboriginal stages of production. We judge that these wins volition thrust gross maturation successful 2026 and beyond arsenic leading-edge fab processes ramp to volume. In Industrial and Medical, we've invested heavy successful caller products, a caller website and a robust income and transmission effort. The effect is that we person secured a grounds fig of plan wins, immoderate of which are turning into gross this year. Looking forward, we expect that these wins volition accelerate our maturation successful I&M, allowing america to summation marketplace share.

In addition, with the closure of our past China mill successful June, we are making bully advancement connected our gross borderline betterment program. We proceed to expect gross borderline to attack 40% exiting 2025. Now fto maine supply immoderate comments connected tariffs. The tariff situation continues to beryllium precise dynamic. Actions we are taking to mitigate the interaction of tariffs see qualifying products successful our Mexicali installation nether USMCA, leveraging our geographic footprint; and finally, optimizing our proviso concatenation and logistics. We volition proceed to enactment with our customers to mitigate costs arsenic the situation evolves. Now fto maine supply immoderate colour connected each of our markets. Second 4th semiconductor gross was solid.