Advanced Energy Industries, Inc.

and welcome to the Advanced Energy Third Quarter 2025 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Edwin Mock, Senior Vice President of Marketing and Investor Relations. Please go ahead.

Thank you, operator. Good afternoon, everyone. Welcome to the Advanced Energy Third Quarter 2025 Earnings Conference Call. With me today are Steve Kelly, our President, CEO, and Paul Odom, our Executive Vice President and CFO. You can find today's earnings press release and presentation on our website at ir.advancedenergy.com. Before we begin, let me remind you that today's call contains four looking statements. that are subject to risks and uncertainties that could cause actual results to differ materially and are not guarantees of future performance. Information concerning these risks can be found in our SEC filings. All forward-looking statements are based on management estimates as of today, November 4th, 2025, and the company assumes no obligation to update them. Any targets beyond the current quarter presented today should not be interpreted as guidance. On today's call, our financial results are presented on a non-GAAP financial basis unless otherwise specified. Exclued from our non-GAAP results are stock compensation, amortization, acquisition-related costs, facility infrastructure and other transition costs, restructuring and asset impairment charges, unrealized foreign exchange gain or loss, and the dilutive effect of convertible note, due to the higher no-hatch strike price versus the initial conversion price. Detailed recommendations between our GAAP and non-GAAP results can be found in today's press release. Please note that this quarter, we added a new recommendation for non-GAAP income tax and tax rate. With that, let me pass the call to our President and CEO, Steve Kelly.

Thanks, Edwin. Good afternoon, everyone, and thanks for joining the call. Third quarter revenue and earnings exceeded the high end of guidance, largely due to record data center revenue, which more than doubled year on year. Total company revenue increased 24% from last year, our fourth consecutive quarter of year over year growth. Strong revenue, solid execution, and cost savings from our China factory closure pushed gross margin higher. As a result, we delivered the second best quarterly EPS performance in our history. This year's financial performance demonstrates the value of our market diversification strategy. By selling our industry-leading power technologies into a variety of high-end markets, we are able to generate more consistent profits and cash flow. Our markets don't generally move in sync, So there's a good chance that one or more of our markets will be strong at any given point in time. This financial stability has allowed us to continuously increase our investments in new technology, products, infrastructure, and production capacity. These are the key enablers of our future growth. Sharing best-in-class technologies across our portfolio is accelerating our time to market. As an example, high efficiency, high density technology blocks created for data center applications have already been incorporated into several new semiconductor and industrial products. Another example is liquid cooling, a technology we perfected for plasma power applications. This know-how gives us an advantage in the data center market. which will eventually shift to liquid cooled solutions as power levels increase. Our strong balance sheet allowed us to increase capital investment this year to capture upside demand. The payback on this incremental investment will be measured in months, not years. In addition, our new flagship factory in Thailand, where we broke ground in 2023, is now ready to start production within months of a go signal. We believe that this factory will be able to deliver more than $1 billion in incremental yearly revenue. On the new product front, we are seeing a high level of customer interest in our new technology platforms and in our ability to quickly develop custom products based on those platforms. Now let me provide some color on each of our markets. In semiconductor, third quarter revenue was down sequentially, but about flat year over year. Despite some near-term market choppiness, we expect 2025 to be our second best year ever in semiconductor. Looking forward, we expect demand for both leading edge logic and memory to accelerate in the second half of 2026, moving into 2027. The leading edge is where our EVOS and Everest technologies have taken root. So we expect to see both revenue growth and share gain as the market strengthens. Customers have validated the yield and throughput benefits of our EVOS and Everest platforms and continue to incorporate them into next-generation equipment. At Semicon West, we showcased multiple versions of our Everest platform, each tailored to a customer-specific application. In addition to our success in plasma power, we are also winning in system power applications, adapting our latest industrial power technologies to the needs of semiconductor equipment makers. Multiple wins have begun ramping to volume. In data center computing, revenue more than doubled year on year and reached another record. Our technology leadership, superior execution, and accelerated capital investment have enabled this increase in profitable revenue. We expect AI-driven demand to remain robust in the coming quarters, and to drive year-on-year growth in 2026. New program wins secured over the past year are beginning to go into production later this quarter, with further high-volume ramps beginning in the first quarter of 2026. In addition, we are deeply engaged with our customers in the development of next-generation power solutions, including more efficient high-voltage DC power architectures. We expect most of our current design engagements to ramp to volume in 2027, with more to come in 2028. At the recent OCP Global Summit, we unveiled several new high-power platforms geared to meet the next generation needs of our customers. In fact, several of our partners featured our products on the show floor. In addition, we are seeing strong interest from emerging cloud and enterprise customers seeking proven, reliable, efficient, and compact solutions for their AI racks. Leveraging in-house technology blocks, we believe that we can quickly customize solutions for many of these customers. In industrial medical, revenue and backlog again grew sequentially in the third quarter as customer inventories continued to normalize. In the distribution channel, resales grew sequentially and inventories declined for the sixth consecutive quarter. Looking forward, we expect steady revenue improvement in the coming quarters. In Q3, we secured important design wins in aerospace and defense and in several medical applications. We are delighted with the customer enthusiasm for our new technology platforms. such as the high-power density Evergreen series and the NeoPower line of configurable power solutions. Acceptance of these and other new platforms will help to drive market share gains beginning next year. In addition, our opportunity funnel continues to grow, benefiting from our strong digital marketing efforts, robust distribution partnerships, and a focused sales and applications team. In telecom and networking, revenue grew sequentially. We also expect sequential growth in the current quarter driven by AI-related programs. Now for a few closing thoughts. Due to our technology leadership, development speed, and operational execution, we now expect overall 2025 revenue to grow approximately 20%. Since our analyst day a year ago, infrastructure investments in artificial intelligence have increased substantially. These investments are driving increased demand for differentiated data center power solutions. In addition, high performance AI systems are stimulating investments in leading edge logic and memory processes, which in turn will drive demand for our latest plasma power technologies. In semiconductor, We believe the customer acceptance of our EVOS and Everest technologies is laying the foundation for meaningful share gain. In data center, we now expect revenue to more than double in 2025, with further growth in 2026. And in I&M, we believe that our design wind pipeline will drive market share gains in the coming quarters. Our manufacturing strategy and execution have enabled us to consolidate our factory footprint and meet growing demand. Looking forward, we are taking additional actions to further improve manufacturing efficiency, enable scale, and achieve our long-term gross margin goals. In addition, we now have our 500,000 square foot Thailand factory available to ramp on short notice. Finally, with a strong balance sheet, We continue to pursue acquisitions which meet our strategic and financial goals. Paul will now provide more detailed financial information.