Advanced Energy Industries, Inc.

Greetings and welcome to the Advanced Energy First Quarter 2026 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow a 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 Ma, Senior Vice President of Strategic Marketing and Investor Relations. Please go ahead.

Thank you, operator. Good afternoon, everyone. Welcome to Advanced Energy first quarter 2026 earnings conference call. With me today are Steve Kelly, our president and CEO, and Paul Odom, our executive vice president and CFO. You can find today's press release and presentation on our website at ir.advancedenergy.com. Before we begin, let me remind you that today's call contains forward-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, May 4, 2026, 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. Detailed reconciliation between our GAAP and non-GAAP results can be found in today's press release. 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. First quarter revenue came in above the midpoint of guidance, driven by record data center revenue. Total revenue increased 26 percent year on year, and gross margin exceeded 40 percent. In the second quarter, we expect to deliver record revenue, largely due to strength in semiconductor. Looking into the second half of 2026, we see increased demand in all of our markets. We are particularly well-positioned to benefit from AI-related capacity investments in data centers and wafer fabs. We are also seeing steady improvement in the industrial medical market, as evidenced by a 14 percent sequential increase in bookings and a growing backlog. We delivered over 40 percent gross margin in the first quarter, the culmination of a multi-year effort to improve our manufacturing efficiency and product differentiation. Our investments in leadership technology and world-class manufacturing are paying off. Looking forward, we believe that we can further increase gross margin as high-value products ramped to volume and manufacturing efficiency continues to improve. Given our progress over the last few years, We are confident that we can achieve the longer-term goal of greater than 43% gross margin. Given the strong demand environment, we are executing our capacity expansion plans in Malaysia, the Philippines, and Mexico. Moving forward, we will focus on building out capacity at our new 500,000 square foot facility in Thailand. Qualification builds for semiconductor and data center products are kicking off this quarter, with initial production slated for late 26 or early 27. Exiting the year, we expect to have over $2.5 billion in revenue generating capacity. The addition of Thailand will bring total capacity to over $3.5 billion once it is fully built out. Now let me provide some color on each of our markets. Semiconductor revenue increased quarter over quarter and was flattish year on year. In the first quarter, customer forecast strengthened considerably, which we believe will drive record performance in 2026 and continued growth in 2027. We are delighted by the widespread customer acceptance of our EVOS, Everest, and NAVX plasma power technologies. These technologies enable significant improvements in throughput and yield at the leading edge and are expected to drive market share gains into the next decade. In addition, we are seeing wider adoption of these technologies across multiple generations of processes and device types. We are also benefiting from an uptick in demand for our system power products, largely due to recent wins in test and wafer fab equipment applications. In data center computing, we delivered record revenue in the first quarter. Overall demand in the data center market remains very strong. Based on customer forecasts, we expect second half revenue to be stronger than first half. We continue to make solid progress developing next generation technology, including 800-volt solutions. We are working closely with multiple customers who view AE as a technology leader in this space. The attributes which have fueled our success in the data center market, power density, efficiency, reliability, and development speed, will be equally critical to our success in next generation platforms. In the first quarter, leveraging our technology expertise and product portfolio, we secured multiple new wins with second wave data center customers. Factory qualifications should be completed this year ahead of production ramps in 2027. Industrial medical revenue was up year on year, but down sequentially. Although demand is improving, factory priorities in the first quarter limited our output. We expect to increase our factory output in the short term, which should enable I&M revenue to track bookings moving forward. In medical, we secured multiple wins in therapeutic, diagnostic, and life science applications. In industrial, we won key designs in test and measurement, factory automation, and battery backup applications. We secured many of these wins by adding custom features to best-in-class technology platforms, enabling us to meet customers' unique requirements. We have won a number of opportunities with new customers, many of whom discovered AE products on our website. Some of these wins have been quite large, reinforcing our view that the new website is acting as a force multiplier in the I&M space. Telecom and networking revenue grew to its highest level since 2023, driven by the production ramp of several AI-related wins in the networking space. Now I'd like to provide an update to our 2026 view. Based on strengthening demand and new product momentum, we are now expecting year-on-year revenue growth in the low to mid 20% range. This outlook represents the second consecutive year of greater than 20% growth for advanced energy. In semiconductor, we expect demand to start accelerating in the second quarter, supporting a stronger outlook for 2026. With some of our new products moving into high volume production later this year, we believe that we are well positioned to drive further growth in 2027 and beyond. In data center, based on strong customer adoption of our high power AI solutions, we are raising our full year revenue growth expectation to the mid 30% range. In the industrial medical market, we expect sequential revenue growth over the next few quarters. Supported by improved market conditions, and their production ramps of several key design wins. Now for some closing thoughts. First, demand across all of our markets is strong. We are raising our growth target for the year. While supply and cost challenges have begun to surface, we are well prepared to navigate a dynamic environment. Second, we continue to see strong pull for our new products across all target markets. Our design wind pipeline is growing and is expected to drive higher revenue and profits in the coming years. Third, we're proud to have achieved 40% gross margin in the first quarter, but we are not done. We have line of sight to 43% based on the success of our new products and efficiency gains. Finally, we have a solid pipeline of potential acquisitions. and will continue to actively pursue opportunities which make strategic and financial sense. Paul will now provide more detailed financial information.