Advanced Energy reported 21% revenue growth last year, with its industrial and medical divisions recovering from a tough start by delivering sequential growth each quarter, including a 10% increase in Q4. Management noted markets have largely normalized, with year-over-year growth resuming in the most recent quarter.

Data center revenue more than doubled as new product launches and a revised strategy for differentiated applications drove demand. The semiconductor segment also saw a second consecutive year of growth, with management anticipating stronger wafer fab equipment spending in the second half of this year and into next.

The company is advancing toward a 40% gross margin target, up from around 35% at the start of 2024, with new product mix expected to contribute 200–300 basis points. A 100-basis-point tariff headwind has emerged, while operating expenses grew approximately 7% against 21% revenue growth, maintaining discipline to support margin expansion.

Capital expenditures are being accelerated over the next four to six quarters to meet faster-than-expected data center demand and higher power requirements. A new Thailand manufacturing facility, 100% incremental to current $2.5 billion capacity, is essentially completed and slated to begin production in early 2027.