Key Highlights

  • Revenue rose to USD 696.4 million from USD 463.3 million, an increase of about 50% year over year.
  • Gross profit was USD 289.1 million, a Margin of 41.5% by our calculation, and Operating Income was USD 143.2 million.
  • Net income was USD 115.6 million compared with USD 46.2 million, and cash rose to USD 1,424.6 million.
  • Semiconductor Revenue grew over 60% and Data Center computing revenue grew almost 50% year over year.

Quarter in Numbers

Advanced Energy Industries, Inc. (NASDAQ:AEIS), a maker of precision power conversion and control products, reported third-quarter 2026 revenue of USD 696.4 million, compared with USD 463.3 million a year earlier. Cost of revenue was USD 407.3 million, leaving Gross Profit of USD 289.1 million versus USD 174.4 million; by our calculation gross margin was 41.5% versus 37.6%. Operating expenses rose to USD 145.9 million from USD 125.2 million, with Research and Development at USD 67.1 million and selling, general and administrative expense at USD 73.8 million.

Operating income reached USD 143.2 million versus USD 49.2 million. Income from continuing operations was USD 115.8 million versus USD 46.4 million, after an income tax provision of USD 36.1 million, and Net Income was USD 115.6 million versus USD 46.2 million. Interest income rose to USD 11.6 million, and interest expense fell to USD 3.0 million.

For the nine months, revenue was USD 1,781.5 million versus USD 1,309.4 million, operating income was USD 306.6 million versus USD 111.4 million, and net income was USD 236.5 million versus USD 96.1 million. The nine-month results include a USD 31.8 million loss on induced conversion of Debt recorded earlier in the year.

Demand Commentary

Chief executive Stephen Kelley said the quarter was a record, with revenue and Earnings above the high end of guidance and total revenue up more than USD 120 million sequentially. Revenue grew in each Target market both sequentially and year over year, and Earnings Per Share more than doubled on Volume and operating leverage. He said semiconductor revenue grew over 60% year over year on leading-edge wafer capacity investment, with design wins in plasma power for advanced nodes and additional wins in semiconductor test. Data center computing revenue grew almost 50%, and the company showcased an 800-volt power distribution board and liquid-cooled power technology. Industrial and medical revenue posted a fourth consecutive quarter of year-over-year growth.

The company said its new flagship factory in Thailand is beginning to generate revenue, with several data center customers having qualified it, and that it aims to expand total revenue-generating capacity to over USD 5 billion by the end of 2028.

Balance Sheet

Cash and cash equivalents were USD 1,424.6 million at September 30, 2026, compared with USD 791.2 million at year end, and an undrawn revolving Facility provided a further USD 600 million of funding. Inventories rose to USD 645.7 million from USD 411.2 million and Accounts Receivable to USD 474.8 million from USD 325.2 million, consistent with the Investment in capacity and piece part inventory the company described. Long-term debt, net was USD 1,129.5 million, with a current portion of USD 136.4 million, versus a current portion of USD 567.5 million at year end. The company made no share repurchases in the quarter.

Capacity and Demand Signposts

Management said semiconductor and data center customers project demand strengthening through 2027 into 2028, and that second-wave data center customers add to hyperscale revenue beginning next year, according to management. Items to track include the ramp of the Thailand factory, inventory and receivables growth against revenue, the 800-volt product transition and tax rate movements after a quarter with a provision of USD 36.1 million.