Advanced Energy Reports Record Revenue of $696.4 Million in the Third Quarter
Key Facts
Advanced Energy Industries reported on November 2, 2026, results for the quarter ended September 30, with revenue of $696.4 million and non-GAAP diluted earnings per share of $3.65. The company said revenue and earnings per share exceeded the high end of its previous guidance for the quarter. It had forecast revenue of $640 million, plus or minus $20 million, and earnings per share of $3, plus or minus $0.25. Analyst consensus figures associated with the story could not be verified, while comparing results with company guidance provides a measure of performance against its stated range. The results were driven by growth in the company's markets, led by semiconductor equipment and data center computing.
Semiconductor equipment revenue reached a record $322.2 million, up 63.9% year over year. The company attributed the increase to improved demand for advanced manufacturing process equipment. The category was the largest of the revenue drivers cited in the report, with its growth coinciding with expanding customer demand for advanced manufacturing technologies. Data center computing also posted record revenue of $256.2 million, up 49.3% from the third quarter of 2025. The company linked growth in the business to increased AI investment by hyperscale computing customers, along with additional revenue from designs it had won earlier.
Growth extended to other units: industrial and medical revenue rose 27.1% year over year to $90.5 million. Communications and networking revenue increased 15.1% to $27.5 million. These figures show revenue growth broadening across the company's markets during the quarter, alongside strong increases in the semiconductor and data center businesses. On a quarterly and annual basis, the chief executive said revenue grew in all of the company's markets. He added that new products are expected to contribute more in 2027 as the Thailand facility continues to ramp up.
Year over year, revenue rose from $463.3 million in the third quarter of 2025 to $696.4 million in the third quarter of 2026, after reaching $574.1 million in the second quarter of 2026. Non-GAAP net income was about $150 million in the third quarter, compared with $112 million in the second quarter and $66 million in the same period of 2025. Adjusted earnings per share rose to $3.65, from $2.74 in the previous quarter and $1.74 a year earlier. Chief Executive Steve Kelley said the company delivered "a record third quarter for revenue and earnings, with results above the high end of guidance." He added that "strong execution in our factories enabled us to meet increased customer demand."
The company's stock moved in the opposite direction to the results during the November 2 session, falling 2.19% in regular trading to $217.19 before rising 10.95% after the close to $240.98 following the results announcement. The reversal reflects the stock's response to the disclosure after the regular session ended. On the earnings call, management said it expects fourth-quarter revenue of about $735 million, plus or minus $25 million, and non-GAAP earnings per share of $3.90, plus or minus $0.30. It also raised its forecast for total revenue growth in 2026 to about 40%, from the low-to-mid-30s range. The company expects fourth-quarter gross margin to be between 42% and 42.5%.
Management expects data center computing revenue to rise further in the fourth quarter and raised its estimate for growth in the business's revenue during 2026 to the high-50s range. On its second-quarter earnings call, it had raised its 2026 data center revenue growth forecast from the mid-30s range to at least 50%, citing accelerating investment by hyperscale customers and the start of next-generation programs. Looking to 2027, management said revenue growth could be about 30% based on its directional estimate. The Thailand facility has begun shipping products to two data center customers, while the company aims to qualify two large semiconductor customers within two to three months. These steps are part of a plan to increase the contribution of new products as the facility continues to ramp up.