Key Highlights

  • Sales in Q3 2026 came to $696.4 million, a 50.3% (calculated) rise over $463.3 million one year earlier.
  • Non-GAAP EPS reached $3.65, up from $1.74 a year ago.
  • Non-GAAP gross Margin landed at 42.1%, an improvement of 300 basis points over last year.
  • Fourth-quarter Revenue is pegged at about $735 million, with a $25 million band either way.
  • Cash and equivalents amounted to $1.42 billion as of Sep 30, 2026, plus $600.0 million of revolver capacity still undrawn.

Quarterly Sales Surpass the Top of Management's Forecast Range

Advanced Energy Industries (NASDAQ:AEIS) reported on Nov 2, 2026 for the three months that finished Sep 30, 2026. Revenue hit a record $696.4 million, up from $463.3 million a year before. Sales, gross margin and EPS each beat the top of guidance, management said.

On a GAAP basis, operating profit hit $143.2 million (versus $49.2 million), while net Earnings were $115.6 million compared with $46.2 million. Continuing-operations GAAP diluted EPS was $2.80, against $1.21 earlier. Non-GAAP EPS stood at $3.65, up from $2.74 the prior quarter and from $1.74 the year before.

Products convert grid electricity into controlled power for chipmaking tools, server farms, factory and healthcare devices, and telecom gear.

Semiconductor and Data Center Demand Lead Segment Growth

The semiconductor segment reached a record $322 million, rising 16% from the prior quarter and 64% over the prior year. Data center computing revenue also reached a peak, at $256 million, up 34% sequentially and 49% against a year ago as newer customer programs gained traction.

Industrial and medical revenue reached $91 million, rising 27% against last year, and telecom plus networking grew 15% to $28 million thanks to AI-related programs.

Gross margin on a non-GAAP basis was 42.1%, which is 300 basis points better than a year earlier and 140 basis points better after backing out a Tariff refund booked in the second quarter. Operating margin, also non-GAAP, came in at 24.4%; Operating Income set a record of $170 million, and adjusted EBITDA totaled $182 million.

Component Shortages, a Tax Write-Down and the Thailand Plant Ramp

Shortages affecting some chips, circuit boards and specialty ceramics remain, and management has factored them into fourth-quarter and 2027 projections. To cope, it relies on stockpiled parts and extra capacity, since scarce components usually arrive in the quarter's final month and a half.

A non-recurring, non-cash markdown of a deferred tax asset, linked to a lower long-term rate in one jurisdiction, pushed the reported tax rate to 23.6%, while the adjusted figure was 15.7%. Operating cash generation from continuing operations was $66 million, with inventory holding at 144 days.

The Thailand plant has started producing revenue. Shipments are going to two data center buyers, and two large chipmaker clients should complete qualification within two to three months.

Outlook Lifted to About 40% Growth for 2026 as Dividend and Buybacks Resume

The company now expects 2026 revenue to grow roughly 40%, a step up from its earlier low-to-mid 30% projection. For the fourth quarter, sales should be about $735 million, give or take $25 million, and non-GAAP EPS near $3.90, with a $0.30 cushion either way. Fourth-quarter gross margin is seen at 42% to 42.5%, with operating expenses between $126 million and $128 million. Management's directional view: 2027 growth could approach 30%, contingent on component supply.

The quarterly dividend remains $0.10 per share, and the buyback program restarted in October 2026 with about $30 million deployed. The company also retired the last $136.4 million Tranche of convertible notes maturing in 2028 on Oct 2, 2026.