ADVANCED ENERGY INDUSTRIES INC (AEIS)

CIK: 0000927003. SIC: 3679 Electronic Components, NEC. Latest 10-K as of: 2026-02-13.

SIC breadcrumb: Manufacturing > Electronic And Other Electrical Equipment And Components, Except Computer Equipment > SIC 3679 Electronic Components, NEC

SEC company page: https://www.sec.gov/edgar/browse/?CIK=927003. Latest filing source: 0001104659-26-014731.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-13. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000927003.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-04. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000927003.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0000927003-26-000014.

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high. Filing date: 2026-05-04. Report date: 2026-03-31.

ITEM 2.       MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This management discussion and analysis should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the Securities and Exchange Commission (the “SEC”) on February 13, 2026 (the “2025 Form 10-K”).

Special Note on Forward-Looking Statements

This Quarterly Report on Form 10-Q (this “report”) contains, in addition to historical information, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements in this report that are not historical information are forward-looking statements. For example, statements relating to our beliefs, expectations, and plans are forward-looking statements, as are statements that certain actions, conditions, events, or circumstances will continue. The inclusion of words such as “anticipate,” “expect,” “estimate,” “can,” “may,” “might,” “continue,” “enable,” “plan,” “intend,” “should,” “could,” “would,” “will,” “likely,” “potential,” “believe,” and similar expressions and the negative versions thereof indicate forward-looking statements; however, not all forward-looking statements may contain such words or expressions.

These forward-looking statements are based upon information available as of the date of this report and management’s current estimates, forecasts, and assumptions. Although we believe that our expectations reflected in or suggested by these forward-looking statements are reasonable, we may not achieve the results, performance, plans, or objectives expressed or implied by such forward-looking statements. Forward-looking statements involve risks and uncertainties, which are difficult to predict and many of which are beyond our control.

Risks and uncertainties to which our forward-looking statements are subject include:

●

volatility and cyclicality, economic conditions, and business fluctuations in the industries in which we compete;

●

risks associated with availability and price of certain semiconductor and other components which may be in limited supply relative to global demand;

●

risks related to global economic and political conditions, such as the impact of tariffs and export regulations, escalating global conflicts on macroeconomic conditions, including recent developments in the Middle East, economic uncertainty, market volatility, rising interest rates, inflation, lack of growth in our markets, fluctuations in commodity prices and currency exchange rates, or recession;

●

our ability to achieve design wins with new and existing customers;

●

our ability to accurately forecast and meet customer demand;

●

risks associated with scaling our manufacturing capacity and securing sufficient critical components to meet customer demand;

●

pricing pressure from customers and competitors;

●

concentration of our customer base;

●

risks associated with potential breach of our information security measures— either external breach or internal data theft;

●

difficulties with the implementation of our enterprise resource planning and other enterprise-wide information technology system applications;

●

our loss of or inability to attract and retain key personnel;

●

risks associated with our manufacturing footprint optimization and movement of manufacturing locations for certain products;

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●

disruptions to our manufacturing operations or those of our customers or suppliers;

●

our ability to successfully identify, close, integrate and realize anticipated benefits from our acquisitions or divestitures;

●

quality issues, unanticipated costs in fulfilling our warranty obligations or adequacy of our warranty reserves, claims outside of warranty, or product liability claims;

●

our ability to enforce, protect and maintain our proprietary technology and intellectual property rights and avoid claims alleging infringement of the intellectual property rights of others;

●

legal matters, claims, investigations, and proceedings;

●

changes to tax laws and regulations or our tax rates;

●

changes to and maintaining compliance with U.S. federal, state, local and foreign regulations, including with respect to trade compliance, privacy and data protection, supply chain, and environmental, health and safety regulation;

●

effect of our debt obligations and restrictive covenants on our ability to operate our business;

●

risks related to our unfunded pension obligations;

●

our estimates of the fair value of intangible assets;

●

the potential impact of dilution and counterparty default risk related to our convertible debt, hedge, and warrant transactions;

●

risks relating to ownership of our common stock; and

●

the risks and uncertainties described in Part I, Item 1A in the 2025 Form 10-K.

These risks and uncertainties could cause actual results to differ materially and adversely from those expressed in any forward-looking statements, and readers are cautioned not to place undue reliance on forward-looking statements. We assume no obligation to update any forward-looking statements or provide reasons why our actual results may differ.

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BUSINESS AND MARKET OVERVIEW

Company Overview

Advanced Energy provides highly engineered, critical, precision power conversion, measurement, and control solutions to our global customers. We design, manufacture, sell, and service precision power products that transform, refine, and modify the raw electrical power coming from either the utility or the building facility and convert it into various types of highly controllable, usable power that is predictable, repeatable, and customizable to meet the necessary requirements for powering a wide range of complex equipment. Many of our products enable customers to reduce or optimize their energy consumption through increased power conversion efficiency, power density, power coupling, and process control across a wide range of applications.

We are organized on a global, functional basis and operate as a single segment of power electronics conversion products. Within this segment, our products are sold in the Semiconductor Equipment, Data Center Computing, Industrial and Medical, and Telecom and Networking markets.

Product and Services

Our precision power products and solutions are designed to enable process technologies, improve productivity, lower the cost of ownership, and/or provide critical power capabilities for our customers.

Our plasma power products enable innovation in complex semiconductor and thin film plasma processes such as dry etch and deposition. Our broad portfolio of high and low voltage power products is used in a wide range of applications, such as semiconductor equipment, data center computing, industrial production, medical and life science equipment, aerospace and defense, networking, and telecommunications.

Our network of global service support centers provides repair services, calibration, conversions, upgrades, refurbishments, and used equipment to companies that use our products.

End Markets Summary and Trends

We continue to monitor developments related to tariffs and trade policy, including recent court rulings affecting certain U.S. tariffs. While the tariff impact was not material to our results, we remain focused on potential governmental responses and development of potential future recoveries to adjust our mitigation strategies with our customers. In addition, heightened geopolitical instability, including the conflicts in the Middle East, has contributed to volatility in energy markets, disruptions to global shipping, and broader macroeconomic uncertainty. Increased demand relative to supply for AI-related equipment and semiconductors is extending lead times and increasing prices of certain components, impacting both timing of some customer demand and many of our suppliers. We continue to take actions to procure strategic supply of materials and recover increased costs through pricing actions. While these factors were not material to our results in the current quarter, they could become material in future periods and adversely affect our costs such as higher energy and supply chain costs, as well as negatively impact our ability to sell our products and provide services.

Advanced Energy generates revenue from the sale of a broad range of advanced and system power products and services to global original equipment manufacturers (“OEMs”), distributors, and end customers. Our customers select our products based on various performance metrics such as high power conversion efficiency, high power density, low noise emission, and lower power consumption as well as our ability to tailor our solutions to meet the unique requirements of their critical applications. The future growth and demand for our products is driven by a combination of factors within each of the end markets we serve, as follows:

Semiconductor Equipment Market

The Semiconductor Equipment market supports and enables the long-term need for production capacity and new process technologies to meet demand for semiconductor devices across many applications driven by megatrends such as artificial intelligence (“AI”), energy efficiency, automobile electrification, and Internet of things.

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Our portfolio of power conversion and related products sold into this market includes plasma power, high-voltage power, system power, and adjacent sensing solutions. Our plasma power solutions are used to create plasma-based etch and deposition processes. Our semiconductor market products are incorporated into a wide range of applications, including dry etch and strip, deposition, ion implant, inspection and metrology, thermal, epitaxy, and back-end test and packaging.

The Semiconductor Equipment market continues to be driven by demand for leading-edge devices in logic and memory used in AI applications, partially offset by lower trailing-edge demand due to capacity underutilization, particularly in China, U.S. export restrictions to China, and the impact of tariffs. However, end market conditions started to improve in the fourth quarter of 2025. We expect these improving conditions to continue in 2026 and to accelerate demand for our products in the remainder of the year.

Data Center Computing Market

The Data Center Computing market is being driven by the rapid growth of AI and related investments. The accelerated power rating of next-generation AI processors and increased density of AI processors in IT racks have significantly increased the power requirements for AI-based servers and racks which, in turn, increased the importance of high power efficiency, density, and reliability for server rack power solutions.

Our products are designed into data center server and storage systems and are also used by cloud service providers and their partners in their custom designed server racks and power shelves.

Due to increased investments in AI applications by leading hyperscale customers, along with adoption of our next-generation high-power solutions, revenue in the Data Center Computing market more than doubled in the first quarter of 2026 compared to the same quarter in the previous year.

We expect these trends to continue supporting healthy demand in the remainder of the year.

Industrial and Medical Market

The Industrial and Medical market is fueled by continued investment in complex manufacturing processes, increased adoption of new industrial technologies such as automation and clean energy, and increased breadth and precision requirements of medical devices and life science equipment.

​

We supply this market with critical, precision power conversion products that deliver precise and highly reliable, low noise and/or differentiated power. In addition, our sensing, control, and instrument

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-13. Report date: 2025-12-31.

ITEM 7.            MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements set forth below under this caption constitute forward-looking statements. See “Special Note Regarding Forward-Looking Statements” in this annual report on Form 10-K for additional factors relating to such statements and see “Risk Factors” in Part I, Item 1A for a discussion of certain risks applicable to our business, financial condition, and results of operations.

The following section discusses our results of operations for 2025 and 2024 and year-to-year comparisons between those periods.

Company Overview

Advanced Energy provides highly engineered, critical, precision power conversion, measurement, and control solutions to our global customers. We design, manufacture, sell and service precision power products that transform, refine, and modify the raw electrical power coming from either the utility or the building facility and convert it into various types of highly controllable, usable power that is predictable, repeatable, and customizable to meet the necessary requirements for powering a wide range of complex equipment. Many of our products enable customers to reduce or optimize their energy consumption through increased power conversion efficiency, power density, power coupling, and process control across a wide range of applications.

We are organized on a global, functional basis and operate as a single segment of power electronics conversion products. Within this segment, our products are sold in the Semiconductor Equipment, Data Center Computing, Industrial and Medical, and Telecom and Networking markets.

Business Environment and Trends

2025 Summary Results and Key Activities

For the year ended December 31, 2025, our revenue was $1,798.8 million, representing an increase of 21.4% as compared to 2024. The increase was primarily attributable to more than doubling of revenue from the Data Center Computing market. For more details on the trends in our end markets, see “End Markets Summary and Trends” below.

In 2025, we increased gross margin and gross profit largely as a result of executing our manufacturing cost improvement program and higher revenue. We reported higher operating expenses of $509.4 million, an increase of $16.7 million from 2024 primarily attributable to higher research and development program costs, higher compensation costs related to stock-based compensation and annual merit increases, partially offset by lower restructuring charges driven by the timing of our restructuring plan decisions.

Throughout 2025 we managed tariffs affecting AE announced by the U.S. government and continue to evaluate the impact of any additional tariffs or other trade policy measures on our supply chain or on our customers. While the tariff impact was not material to our results in 2025, the effects could be material in future periods as any further tariff, export control, trade restrictions, policy measures, and retaliatory responses to the U.S. trade policy announcements, or any related macroeconomic effects could adversely impact our product demand, production costs, or ability to sell our products and provide services.

During 2025, we continued to execute the 2024 Plan. Manufacturing operations in Zhongshan ceased during the second quarter of 2025. Final site closure activities are in progress and are expected to conclude in 2026. During the second quarter of 2025, we also approved actions related to consolidating our research and development, sales, and administrative functions in connection with our manufacturing and footprint consolidation. We expect these actions to be substantially complete during 2027 and do not expect to incur significant additional charges. See Note 11. Restructuring, Asset Impairments, and Other Charges in Part II, Item 8 “Financial Statements and Supplementary Data.” We also continued progress on a new factory in Thailand.

​

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During the second quarter of 2025, we terminated our prior credit agreement, dated as of September 10, 2019 (and subsequently amended) and entered into a new credit agreement consisting of a senior unsecured term loan and a senior unsecured revolving facility, both maturing on May 8, 2030. See Note 7. Long-Term Debt in Part II, Item 8 “Financial Statements and Supplementary Data” and Liquidity and Capital Resources below.

End Markets Summary and Trends

Advanced Energy generates revenue from the sale of a broad range of advanced and system power products and services to global original equipment manufacturers (“OEMs”), distributors, and end customers. Our customers select our products based on various performance metrics such as high power conversion efficiency, high power density, and low noise emission, and lower power consumption, as well as our ability to tailor our solutions to meet the unique requirements of their critical applications. The future growth and demand for our products is driven by a combination of factors within each of the end markets we serve, as follows:

Semiconductor Equipment Market

The Semiconductor Equipment market supports and enables the long-term need for production capacity and new process technologies to meet demand for semiconductor devices across many applications driven by megatrends such as artificial intelligence (“AI”), energy efficiency, automobile electrification, and Internet of things.

Our portfolio of power conversion and related products sold into this market includes plasma power, high-voltage power, system power, and adjacent sensing solutions. Our plasma power solutions are used to create plasma-based etch and deposition processes. Our semiconductor market products are incorporated into a wide range of applications, including dry etch and strip, deposition, ion implant, inspection and metrology, thermal, epitaxy, and back-end test and packaging.

In 2025, the Semiconductor Equipment market continued to be driven by demand for leading-edge devices in logic and memory used in AI applications, partially offset by lower trailing-edge logic demand due to capacity underutilization, particularly in China, U.S. export restrictions to China, and the impact of tariffs. However, end market conditions started to improve in the fourth quarter of 2025. We expect these improving conditions to continue into 2026 and to accelerate demand for our products in the second half of the year.

Data Center Computing Market

The Data Center Computing market is being driven by the rapid growth of AI and related investments. The accelerated power rating of next-generation AI processors and increased density of AI processors in each IT rack have significantly increased the power requirements for AI-based servers and racks which, in turn, increased the importance of high power efficiency, density, and reliability for server rack power solutions.

Our products are designed into data center server and storage systems and are also used by cloud service providers and their partners in their custom designed server racks and power shelves.

Due to increased investments in AI applications by leading hyperscale customers, along with adoption of our next- generation high-power solutions, our revenue in the Data Center Computing market more than doubled in 2025.

We expect continued investments and adoption of newer, higher power solutions for AI-related applications will continue to support robust demand in 2026.

​

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Industrial and Medical Market

The Industrial and Medical market is fueled by continued investment in complex manufacturing processes, increased adoption of new industrial technologies such as automation and clean energy, and increased breadth and precision requirements of medical devices and life science equipment.

We supply this market with critical, precision power conversion products that deliver precise and highly reliable, low noise and/or differentiated power. In addition, our sensing, control, and instrumentation products complement our power solutions. Our products are used in a wide variety of applications, such as advanced material fabrication, medical devices, life science, test and measurement equipment, robotics, industrial production, defense, aerospace, and large-scale lighting applications.

We believe that the Industrial and Medical market began to recover starting in the second quarter of 2025 following a major industry downturn as a result of macroeconomic conditions and supply chain disruptions from prior years. The positive trend continued in the second half of 2025 as customer inventories approached normalized levels. We expect this trend to continue in 2026, paced by overall economic conditions.

Telecom and Networking Market

Demand in the Telecommunication and Networking market is driven by adoption of more advanced mobile standards, such as 5G technologies, networking investments by telecommunication service providers, enterprises upgrading their communication networks, and data centers investing in their networks for AI-driven increased bandwidth.

We serve this market by providing application-specific power conversion products to many leading OEMs of wireless infrastructure equipment and computer networking equipment.

End demand in the Telecom and Networking market remained stable in 2025, and we expect current market conditions to continue in 2026, with some potential for improvement driven by AI-related demand.

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Results of Continuing Operations

The analysis presented below is organized to provide the information we believe will be helpful for understanding of our historical performance and relevant trends going forward and should be read in conjunction with our consolidated financial statements, including the notes thereto, in Part II, Item 8 “Financial Statements and Supplementary Data” of this annual report on Form 10-K. Also included in the following analysis are measures that are not in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). A reconciliation of the non-GAAP measures to U.S. GAAP is provided below.

The following table summarizes our Consolidated Statements of Operations and as a percentage of revenue:

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​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

​

​

2025

​

​

2024

​

​

​

(in millions)

​

Revenue

  ​

$

1,798.8

  ​

100.0

%

  ​

$

1,482.0

  ​

100.0

%

Gross profit

​

677.4

​

37.7

​

​

529.3

​

35.7

​

Operating expenses

​

509.4

​

28.3

​

​

492.7

​

33.2

​

Operating income from continuing operations

​

168.0

​

9.3

​

​

36.6

​

2.5

​

Interest income

​

​

26.6

​

1.5

​

​

​

42.9

​

2.9

​

Interest expense

​

​

(16.7)

​

(0.9)

​

​

​

(25.1)

​

(1.7)

​

Other expense, net

​

(9.2)

​

(0.5)

​

​

(2.0)

​

(0.1)

​

Income from continuing operations, before income tax

​

168.7

​

9.4

​

​

52.4

​

3.5

​

Income tax provision (benefit)

​

19.4

​

1.1

​

​

(3.9)

​

(0.3)

​

Income from continuing operations

​

$

149.3

​

8.3

%

​

$

56.3

​

3.8

%

​

​

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Revenue

The following tables summarize net revenue and percentages of revenue by markets:

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​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

​

Change 2025 v. 2024

​

​

​

2025

​

  ​ ​ ​

2024

  ​

  ​

Dollar

  ​ ​ ​

Percent

​

​

​

(in millions)

Semiconductor Equipment

​

$

839.9

  ​ ​ ​

46.7

%

​

$

792.5

  ​ ​ ​

53.5

%

​

$

47.4

6.0

%

Data Center Computing

​

​

587.3

​

32.6

​

​

​

284.2

​

19.2

​

​

​

303.1

106.7

%

Industrial and Medical

​

282.3

​

15.7

​

​

316.2

​

21.3

​

​

(33.9)

(10.7)

%

Telecom and Networking

​

89.3

​

5.0

​

​

89.1

​

6.0

​

​

0.2

0.2

%

Total

​

$

1,798.8

​

100.0

%

​

$

1,482.0

​

100.0

%

​

$

316.8

21.4

%

​

Revenue by Market

Sales in the Semiconductor Equipment market increased $47.4 million, or 6.0%, to $839.9 million, as compared to $792.5 million in the prior year. The increase was primarily due to increased demand for platforms used in leading-edge process tools and incremental revenue generated from new products in this market, partially offset by lower trailing-edge logic demand.

Sales in the Data Center Computing market increased $303.1 million, or 106.7%, to $587.3 million, as compared to $284.2 million in the prior year. The increase was due to growing hyperscale investments in new, AI-driven platforms and growth associated with new design wins secured in 2024.

Sales in the Industrial and Medical market decreased $33.9 million, or 10.7%, to $282.3 million, as compared to $316.2 million in the prior year. The decrease was primarily due to lower demand as a result of ongoing customer inventory rebalancing and continued slow demand environment in 2025.

Sales in the Telecom and Networking market remained relatively flat compared to the prior year due to fairly stable end demand in this market.

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Gross Profit and Gross Margin

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​

​

​

​

​

​

Year Ended December 31, 

​

Change 2025 v. 2024

​

​

​

2025

  ​ ​ ​

2024

  ​

Dollar

  ​ ​ ​

Percent

​

​

​

(in millions)

Gross profit

​

$

677.4

​

$

529.3

​

$

148.1

​

28.0

%

Gross margin

​

​

37.7

%

​

35.7

%

​

​

​

​

​

​

The increase in gross profit was largely due to increase in revenue and manufacturing cost improvements. Gross margin improved mainly due to the impact of higher volume, and approximately 140 basis points resulting from manufacturing cost reduction programs.

Operating Expenses

The following table summarizes our operating expenses:

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​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

​

  ​ ​ ​

2025

​

​

2024

​

​

​

(in millions)

Research and development

  ​ ​ ​

$

232.4

  ​ ​ ​

​

12.9

%

​

$

211.8

  ​ ​ ​

14.3

%

Selling, general, and administrative

​

242.4

​

​

13.5

​

​

224.6

​

15.2

​

Amortization of intangible assets

​

​

22.1

​

​

1.2

​

​

​

26.0

​

1.8

​

Restructuring, asset impairments, and other charges

​

12.5

​

​

0.7

​

​

30.3

​

2.0

​

Total operating expenses

​

$

509.4

​

​

28.3

%

​

$

492.7

​

33.3

%

​

Research and Development

Research and development expenses increased $20.6 million to $232.4 million, as compared to $211.8 million in the prior year. The increase is related to higher compensation costs, related to stock-based compensation and annual merit increases, and higher engineering program and materials costs.

Selling, General and Administrative

Selling, general and administrative expenses increased $17.8 million to $242.4 million, as compared to $224.6 million in the prior year. The increase is mainly due to higher compensation costs, related to stock-based compensation and annual merit increases.

Amortization of Intangible Assets

Amortization expense decreased $3.9 million to $22.1 million, as compared to $26.0 million in the prior year. The decrease is primarily due to certain intangible assets reaching the end of their estimated useful life. This was partially offset by amortization of intangible assets acquired in the Airity acquisition in 2024. For additional information, see Note 2. Acquisition and Note 5. Intangible Assets and Goodwill in Part II, Item 8 “Financial Statements and Supplementary Data.”

​

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Restructuring, Asset Impairments and Other Charges

Restructuring, asset impairment and other charges decreased $17.8 million to $12.5 million, as compared to $30.3 million in the prior year, primarily driven by the timing of our restructuring plan decisions.

During the second quarter of 2025, we approved actions related to consolidating our research and development, sales, and administrative functions in connection with our manufacturing and footprint consolidation. We expect these actions to be substantially complete during 2027 and do not expect to incur significant additional charges.

For additional information about this and prior-year restructuring plans, see Note 11. Restructuring, Asset Impairments, and Other Charges in Part II, Item 8 “Financial Statements and Supplementary Data.”

​

Interest Income, Interest Expense, and Other Expense, Net

We experienced a decrease in interest income and expense caused by lower cash and debt balances as a result of using cash on hand to fully prepay our prior senior unsecured term loan facility in the prior year.

Other expense, net was $9.2 million in 2025, as compared to $2.0 million of expense in the prior year. Other expense, net consists primarily of foreign exchange gains and losses and other miscellaneous items. During 2025, we recorded a $9.7 million increase in unrealized foreign exchange losses, while the prior year included $3.0 million of expense related to nonrecurring foreign currency translation adjustments. These prior-year adjustments related to the liquidation of certain foreign operations as well as the write-off of debt discount fees associated with the early repayment of our prior senior unsecured term loan facility. See Note 7. Long-Term Debt in Part II, Item 8 “Financial Statements and Supplementary Data” for information regarding our debt.

​

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Income Tax Provision (Benefit)

The following table summarizes tax provision (benefit) and the effective tax rate for our income from continuing operations:

​

​

​

​

​

​

​

​

​

​

Years Ended December 31,

​

​

​

2025

  ​ ​ ​

2024

  ​ ​ ​

​

​

(in millions)

​

Income from continuing operations, before income tax

​

$

168.7

​

$

52.4

​

Income tax provision (benefit)

​

$

19.4

​

$

(3.9)

​

Effective tax rate

​

​

11.5

%

​

(7.4)

%

​

Our effective tax rates differ from the U.S. federal statutory rate of 21% for the years ended December 31, 2025 and 2024, primarily due to valuation allowance releases partially offset by the impact of non-US tax law changes in 2025, and the intercompany transfer of intellectual property among certain of our subsidiaries in 2024. Additionally, both 2025 and 2024 included the benefit of earnings in foreign jurisdictions which are subject to lower tax rates, as well as tax credits, partially offset by net U.S. tax on foreign operations and the net effect of Pillar II top-up taxes.

Our future effective income tax rate depends on various factors, such as changes in tax laws, regulations, accounting principles, or interpretations thereof, and the geographic composition of our pre-tax income. We carefully monitor these factors and adjust our effective income tax rate accordingly.

As of December 31, 2025, certain countries in which the Company operates have implemented or are in the process of implementing the Pillar II minimum global effective tax rate regime as put forth by the Organization for Economic Cooperation and Development (“OECD”). Specifically, the OECD released prospective “Side-by-Side” guidance in early 2026 which is generally beneficial to U.S. parented organizations, but will require adoption by member countries to implement. As countries continue to make revisions to their legislation and release additional guidance with respect to the global minimum tax, we continue to determine any potential cash tax expense and tax rate impact in the countries in which we operate.

On July 4, 2025, the One Big Beautiful Bill (“OBBB”) Act, which includes a broad range of elective tax law items available in 2025 and prescribed tax law changes in 2026, was signed into law in the United States. The Company has reflected the impact of the OBBB’s elective tax law items in its financial statements for the year ended December 31, 2025.

Non-GAAP Results

Management uses non-GAAP net income, non-GAAP operating income, and non-GAAP earnings per share (“EPS”) to evaluate business performance without the impacts of certain non-cash charges and other charges which are not part of our usual operations. We use these non-GAAP measures to assess performance against business objectives, and make business decisions, including developing budgets and forecasting future periods. In addition, management’s incentive plans include certain of these non-GAAP measures as criteria for achievements. These non-GAAP measures are not prepared in accordance with U.S. GAAP and may differ from non-GAAP methods of accounting and reporting used by other companies. However, we believe these non-GAAP measures provide additional information that enables readers to evaluate our business from the perspective of management. The presentation of this additional information should not be considered a substitute for results prepared in accordance with U.S. GAAP.

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The non-GAAP results presented below exclude the impact of non-cash related charges, such as stock-based compensation, amortization of intangible assets, and long-term unrealized foreign exchange gains and losses. In addition, we exclude discontinued operations and other items such as acquisition-related costs, facility, infrastructure, and other transition costs, and restructuring expenses, as they are not indicative of future performance. The tax effect of our non-GAAP adjustments represents the anticipated annual tax rate applied to each non-GAAP adjustment after consideration of their respective book and tax treatments. Non-GAAP results also exclude non-recurring discrete tax expenses or benefits. Finally, non-GAAP diluted weighted-average common shares are adjusted to reflect the dilutive impact of our convertible notes based on the higher note hedge strike price instead of the initial conversion price.

​

​

​

​

​

​

​

​

​

Reconciliation of non-GAAP measures

​

​

​

​

​

​

Non-GAAP gross profit, gross margin, operating expenses,

​

Years Ended December 31, 

operating income, and operating margin

  ​ ​ ​

2025

  ​ ​ ​

2024

​

​

(in millions)

Gross profit from continuing operations, as reported

​

$

677.4

​

$

529.3

Adjustments to gross profit:

​

​

​

  ​

Stock-based compensation

​

4.9

​

4.0

Facility, infrastructure, and other transition costs

​

14.7

​

4.5

Non-GAAP gross profit

​

697.0

​

537.8

​

​

​

​

​

​

​

GAAP gross margin

​

​

37.7%

​

​

35.7%

Non-GAAP gross margin

​

38.7%

​

36.3%

​

​

​

​

​

​

​

Operating expenses from continuing operations, as reported

​

​

509.4

​

​

492.7

Adjustments:

​

​

​

​

Amortization of intangible assets

​

(22.1)

​

(26.0)

Stock-based compensation

​

(50.8)

​

(41.9)

Acquisition-related costs

​

(5.8)

​

(6.0)

Facility, infrastructure, and other transition costs

​

(5.2)

​

(1.2)

Restructuring, asset impairments, and other charges

​

(12.5)

​

(30.3)

Non-GAAP operating expenses

​

​

413.0

​

​

387.3

Non-GAAP operating income

​

$

284.0

​

$

150.5

​

​

​

​

​

​

​

Operating income, as reported

​

$

168.0

​

$

36.6

Adjustments to gross profit

​

​

19.6

​

​

8.5

Adjustments to operating expenses

​

​

96.4

​

​

105.4

Non-GAAP operating income

​

$

284.0

​

$

150.5

​

​

​

​

​

​

​

Income from continuing operations, as reported

​

​

​

​

​

​

GAAP operating margin

​

​

9.3%

​

​

2.5%

Non-GAAP operating margin

​

15.8%

​

10.2%

​

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​

​

​

​

​

​

​

​

​

​

​

​

​

​

Reconciliation of non-GAAP measure

​

Years Ended December 31, 

Non-GAAP income, net of income tax

​

2025

  ​ ​ ​

2024

​

​

(in millions)

Income from continuing operations, net of income tax

​

$

149.3

​

$

56.3

Adjustments:

​

  ​

​

  ​

Amortization of intangible assets

​

22.1

​

26.0

Acquisition-related costs

​

5.8

​

6.0

Facility, infrastructure, and other transition costs

​

19.9

​

5.7

Restructuring, asset impairments, and other charges

​

12.5

​

30.3

Unrealized foreign currency loss (gain)

​

​

5.2

​

​

(3.4)

Other costs included in other expense, net

​

​

0.2

​

​

2.8

Stock-based compensation

​

​

55.7

​

​

45.9

Tax effect of non-GAAP adjustments, including certain discrete tax benefits

​

(25.7)

​

(29.2)

Non-GAAP income, net of income tax

​

$

245.0

​

$

140.4

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Reconciliation of non-GAAP measure

​

Years Ended December 31, 

Non-GAAP diluted weighted-average common shares

​

2025

​

2024

​

​

(in millions)

Diluted weighted-average common shares outstanding

​

​

38.6

​

​

37.8

Dilutive effect of convertible notes

​

​

(0.4)

​

​

—

Non-GAAP diluted weighted-average common shares outstanding

​

​

38.2

​

​

37.8

​

​

​

​

​

​

​

​

Reconciliation of non-GAAP measure

Year Ended December 31, 

Non-GAAP earnings per share

  ​ ​ ​

2025

  ​ ​ ​

2024

Diluted earnings per share from continuing operations, as reported

$

3.87

​

$

1.49

Add back:

​

​

​

​

​

​

Per share impact of non-GAAP adjustments, net of tax

​

​

2.54

​

​

2.22

Non-GAAP earnings per share

​

$

6.41

​

$

3.71

​

​

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Table of Contents

​

​

​

​

​

​

​

​

Reconciliation of non-GAAP measure

​

Year Ended December 31, 

Non-GAAP provision for income taxes

  ​ ​ ​

2025

  ​ ​ ​

2024

​

​

(in millions)

Provision (benefit) for income taxes, as reported

​

$

19.4

​

$

(3.9)

Adjustment:

​

  ​

​

​

Non-GAAP items and other discrete tax items excluding stock-based compensation

​

14.0

​

19.6

Tax effect of stock-based compensation

​

11.7

​

9.6

Non-GAAP provision for income taxes

​

$

45.1

​

$

25.3

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Reconciliation of non-GAAP measure

​

Year Ended December 31, 

Non-GAAP income before income taxes

  ​ ​ ​

2025

  ​ ​ ​

2024

​

​

(in millions)

Income from continuing operations, before income tax

​

$

168.7

​

$

52.4

Adjustments:

​

  ​

​

​

Amortization of intangible assets

​

​

22.1

​

​

26.0

Stock-based compensation

​

​

55.7

​

​

45.9

Acquisition-related costs

​

​

5.8

​

​

6.0

Facility, infrastructure, and other transition costs

​

​

19.9

​

​

5.7

Restructuring, asset impairments, and other charges

​

​

12.5

​

​

30.3

Unrealized foreign currency loss (gain)

​

​

5.2

​

​

(3.4)

Other costs included in other expense, net

​

0.2

​

2.8

Non-GAAP income before income taxes

​

$

290.1

​

$

165.7

Effective tax rate, as reported

​

​

11.5%

​

​

(7.4)%

Non-GAAP effective tax rate

​

​

15.5%

​

​

15.3%

​

Liquidity and Capital Resources

Liquidity

Adequate liquidity and cash generation are important to the execution of our strategic initiatives. Our ability to fund our operations, acquisitions, capital expenditures, and product development efforts may depend on our ability to generate cash from operating activities, which is subject to future operating performance, as well as general economic, financial, competitive, legislative, regulatory, and other conditions, some of which may be beyond our control. Our primary sources of liquidity continue to be our available cash, cash generated from operations, and available borrowing capacity under the Revolving Facility (refer to Note 7. Long-Term Debt in Part II, Item 8 “Financial Statements and Supplementary Data”).

As of December 31, 2025, our cash and cash equivalents totaled $791.2 million, and our available funding under our undrawn Revolving Facility is $600.0 million. Additionally, we generated $234.7 million of cash flow from continuing operations in 2025. We believe our sources of liquidity will be adequate to meet operational needs, including capital expenditures, as well as anticipated debt service, share repurchase programs, dividends, and strategic investments. During the ordinary course of business, we evaluate our cash requirements and, if necessary, adjust our expenditures to reflect the current market conditions and our projected revenue and demand. Our capital expenditures are primarily directed towards manufacturing and operations and can materially influence our available cash for other initiatives. In the recent year, our capital expenditures increased as we are investing in our factories to expand capacity and in our new ERP system.

In addition, we may seek additional debt or equity financing from time to time; however, such additional financing may not be available on acceptable terms, if at all.

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Debt

See Note 7. Long-Term Debt in Part II, Item 8 “Financial Statements and Supplementary Data” for information regarding the Credit Agreement.

As of December 31, 2025, our only outstanding debt is the $575.0 million Convertible Notes, which mature on September 15, 2028 and carry a 2.5% interest rate. As of December 31, 2025, our common stock traded above the conversion price for at least 20 trading days during a 30 consecutive trading-day period, which resulted in the Convertible Notes becoming convertible at the option of the holders. Accordingly, the Convertible Notes balance was reclassified from long-term to current debt as of December 31, 2025. Exclusive of any early conversion elections by the convertible noteholders, there are no scheduled debt maturities until 2028. See Note 7. Long-Term Debt in Part II, Item 8 “Financial Statements and Supplementary Data” for information regarding the Convertible Notes.

Should we have future borrowings under our Term Loan Facility or Revolving Facility, those borrowings would be subject to a variable rate.

As of December 31, 2025, no amounts were outstanding under the Revolving Facility, and we had $600.0 million in available funding.

In addition to the available capacity on the Revolving Facility, prior to the maturity date of the Credit Agreement, we may request an increase to the financing commitments in either the Term Loan Facility or Revolving Facility by an aggregate amount not to exceed $250.0 million. Any requested increase is subject to lender approval.

Dividends

During 2025, we paid quarterly cash dividends of $0.10 per share, totaling $15.6 million. We currently anticipate that a cash dividend of $0.10 per share will continue to be paid on a quarterly basis, although the declaration of any future cash dividend is at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, business conditions, and other factors.

Share Repurchases

To repurchase shares of our common stock, we periodically enter into share repurchase agreements. During the year we repurchased $30.4 million of shares and during 2024, we repurchased $1.8 million of shares. At December 31, 2025, the remaining amount authorized by the Board for future share repurchases was $166.9 million with no time limitation.

Cash Flows

A summary of our cash from operating, investing, and financing activities was as follows:

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

​

  ​ ​ ​

2025

  ​ ​ ​

2024

​

​

​

(in millions)

​

Net cash from operating activities from continuing operations

​

$

234.7

​

$

133.0

​

Net cash used in operating activities from discontinued operations

​

(1.4)

​

(2.2)

​

Net cash from operating activities

​

233.3

​

130.8

​

Net cash used in investing activities

​

(109.8)

​

(73.6)

​

Net cash used in financing activities

​

(56.1)

​

(377.1)

​

Effect of currency translation on cash and cash equivalents

​

1.7

​

(2.6)

​

Net change in cash and cash equivalents

​

69.1

​

(322.5)

​

Cash and cash equivalents, beginning of period

​

722.1

​

1,044.6

​

Cash and cash equivalents, end of period

​

$

791.2

​

$

722.1

​

​

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Table of Contents

Net Cash From Operating Activities

Net cash from operating activities from continuing operations was $234.7 million, an increase of $101.7 million, compared to $133.0 million in the prior year. The increase was primarily due to higher net income from continuing operations driven by growth in the Data Center Computing and Semiconductor Equipment markets. Additionally, we had unfavorable changes in working capital from accounts receivable, inventories, and other assets which was partially offset by timing of payments.

Net Cash From Investing Activities

Net cash used in investing activities in 2025 was $109.8 million, an increase of $36.2 million, compared to $73.6 million in the prior year. The increase was primarily due to an increase of $50.6 million in purchases of property and equipment, which was largely driven by continued investments in our manufacturing footprint and capacity, our new ERP system, and investments in other capabilities across multiple sites.

Net Cash From Financing Activities

Net cash used in financing activities in 2025 was $56.1 million, compared to a cash outflow of $377.1 million in the prior year. In 2024, we used existing cash on hand to make payments towards our prior senior unsecured term loan facility for $355.0 million, including $10.0 million in principal payment made in the first half of the year and the September prepayment of the remaining $345.0 million outstanding principal balance, and repurchased common stock for $1.8 million. In 2025, we repurchased $30.2 million of our common stock.

Critical Accounting Estimates

The preparation of consolidated financial statements and related disclosures in conformity with U.S. GAAP requires us to make judgments, assumptions, and estimates that affect the amounts reported. Note 1. Summary of Operations and Significant Accounting Policies and Estimates in Part II, Item 8 “Financial Statements and Supplementary Data” describes the significant accounting policies used in the preparation of our consolidated financial statements. The accounting positions described below are significantly affected by critical accounting estimates. Such accounting policies and estimates require significant judgments and assumptions to be used in the preparation of the consolidated financial statements and actual results could differ materially from the amounts reported based on variability in factors affecting these estimates.

Inventories

We value inventories at the lower of cost or net realizable value, computed on a first-in, first-out basis. General market conditions, as well as our design activities, can cause certain products to become obsolete and we adjust our inventory carrying value for estimated excess and obsolescence equal to the difference between the cost of inventory and the estimated net realizable value based on projected end-user demand, which is determined by considering historical usage, customer orders and forecast, and qualitative considerations such as market and economic conditions. The determination of projected end-user demand requires the use of estimates and assumptions related to projected unit sales for each product. Demand for our products can fluctuate significantly. A significant decrease in demand could result in an increase in the charges for excess inventory quantities on hand.

Income Taxes

We follow the liability method of accounting for income taxes under which deferred tax assets and liabilities are recognized for future tax consequences. A deferred tax asset or liability is computed for both the expected future impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carryforwards. Tax rate changes are reflected in the period such changes are enacted.

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We assess the recoverability of our net deferred tax assets and the need for a valuation allowance on a quarterly basis. Our assessment includes several factors, including historical results and taxable income projections for each jurisdiction. The ultimate realization of deferred income tax assets is dependent on the generation of taxable income in appropriate jurisdictions during the periods in which those temporary differences are deductible. We consider the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in determining the amount of the valuation allowance. Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred income tax assets are deductible, we determine if we will more likely than not realize the benefits of these deductible differences.

Due to uncertainties in any tax audit outcome, our estimates of the ultimate settlement of our unrecognized tax positions may change and the actual tax benefits may differ significantly from the estimates. We regularly assess the likelihood of favorable or unfavorable outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit, and new audit activity.

For more details see Note 14. Income Taxes in Part II, Item 8 “Financial Statements and Supplementary Data.”

Business Combinations

We record the assets acquired and liabilities assumed in a business combination at their acquisition date fair values. Fair values of assets acquired, and liabilities assumed are based upon available information and may involve engaging an independent third party to perform an appraisal. Estimating fair values can be complex and subject to significant business judgment. We must also identify and include in the allocation all acquired tangible and intangible assets that meet certain criteria, including assets that were not previously recorded by the acquired entity. The estimates most commonly involve intangible assets. The excess of the purchase price over the net fair value of acquired assets and assumed liabilities is recorded as goodwill, which is not amortized but instead is evaluated for impairment at least annually. Pursuant to U.S. GAAP, an entity is allowed a reasonable period of time (not to exceed one year) to obtain the information necessary to identify and measure the fair value of the assets acquired and liabilities assumed in a business combination.

Off-Balance Sheet Arrangements

As of December 31, 2025, we did not have any off-balance sheet arrangements pursuant to Regulation S-K.

Contractual Obligations

In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future. Information regarding our obligations relating to income taxes, lease obligations, pension liabilities, and debt is provided in Note 14. Income Taxes, Note 6. Leases, Note 12. Employee Retirement Plans and Postretirement Benefits, and Note 7. Long-Term Debt, respectively, in Part II, Item 8 “Financial Statements and Supplementary Data.”

Recent Accounting Pronouncements

From time to time, updates to the Accounting Standards Codification are communicated through issuance of an Accounting Standards Update. Unless otherwise discussed, we believe that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on our consolidated financial statements upon adoption.

To understand the impact of recently issued guidance from the Financial Accounting Standards Board (“FASB”) or other standards setting bodies, whether adopted or to be adopted, please review the information provided in Note 1. Summary of Operations and Significant Accounting Policies and Estimates in Part II, Item 8 “Financial Statements and Supplementary Data.”

​

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