You can find today's press release and earnings presentation on our website at ir.advancedenergy.com. Any targets beyond the current quarter presented today should not be interpreted as guidance. Revenue of nearly $490 million was at the high end of our guidance. Strengthening demand in the semiconductor, industrial, and medical markets drove the outperformance.
Gross margin came in just shy of 40%, our best performance in five years. For 2025, we grew total revenue over 20%, increased earnings per share by over 70%, and significantly improved our gross and operating margins. We deploy our best-in-class technologies across multiple high-value markets, allowing us to deliver healthy revenue, profitability, and cash flow through market cycles. In 2025, we grew revenue in two of our three target markets.
Data center computing revenue more than doubled year-on-year and increased sequentially in every quarter of 2025. Semiconductor revenue grew 6% year-on-year to the second-highest level in company history. New products began contributing incremental revenue in 2025 as some of our design wins moved into early production. Although industrial medical revenue declined year-on-year, we were encouraged by three-quarters of sequential revenue growth after reaching a bottom in the first quarter.
| Metric | Period | Current guidance |
|---|---|---|
| Revenue | Q1 2026 | ~$500 million ±$20 million (new) |
| Gross margin | Q1 2026 | 39.5%–40% range (new) |
| Non-GAAP EPS | Q1 2026 | ~$1.94 ±$0.25 (new) |
| Tax rate | Q1 2026 / forward | 16%–17% (new) |
| Other income | Q1 2026 | ~$1 million (new) |
| Data center revenue growth | FY 2026 | more than 30% (raised) |
| Total revenue growth | FY 2026 | high teens (new) |
| Gross margin (40% target) | FY 2026 | expect to achieve above 40% within 2026 (new) |
| EPS share count | Q1 2026 | 39.7 million shares (new) |
| Metric | YoY | Note |
|---|---|---|
| Total revenue | +18% | Strengthening demand in semiconductor, industrial, and medical markets plus record data center revenue. |
| Semiconductor revenue | +8% sequentially (Q4); +6% full year to $840 million | Customer demand strengthened in Q4 ahead of guidance; full-year was second-strongest after 2022 peak as new products began contributing. |
| Data center computing revenue | +101% (Q4 to $178M); +107% full year to $587 million | AI data center investment and hyperscaler adoption of customized power solutions in AI rack applications. |
| Industrial medical revenue | +2% (Q4 to $78M); -11% full year | Recovery after inventory correction bottomed in Q1; customers and distributors worked through excess inventories; backlog and distribution metrics improving. |
| Telecom and networking revenue | down slightly to $22 million | Mainly program timing. |
| Gross margin | +240 bps full year to 38.7% | Leverage on higher revenue and footprint optimization including closure of last China factory, despite tariffs. |
| Operating margin | +430 bps (Q4 to 17.8%); +560 bps full year to 15.8% | Leverage in the financial model on higher revenue and disciplined spending. |
| EPS | +73% full year to $6.41 | Revenue growth and margin expansion. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Data center / AI power | guided 25%-30% FY26 growth | raised to more than 30%; record Q4; engaging second wave of cloud/enterprise customers and 800-volt projects | Improving |
| Semiconductor recovery | Q4 expected down 2%-3% | Q4 grew 8%; stronger customer forecasts increasing confidence in strong second half 2026 and 2027 | Improving |
| Industrial medical normalization | multiple quarters of decline, bottomed Q1 2025 | three quarters of sequential growth, returned to YoY growth, market largely normalized | Improving |
| Gross margin expansion | initial 40% target | 39.7% in Q4, expect above 40% within 2026, long-term goal 43% | Improving |
| Capacity expansion (Thailand) | — | new $1B+ Thailand factory fit-up complete; total network capacity $3.5B+; can ramp data center as soon as Q4 2026 | Expanding |
| New products (Everest, eVoS, NavX) | — | delivered double-digit millions of revenue in 2025, expected higher in 2026 as sub-2nm nodes ramp | Improving |
| M&A pipeline | — | active pipeline; Airity acquisition successful; opportunities in industrial medical as valuations normalize | Active |