Advanced Energy Industries, Inc. has recently released its 10-K report, providing detailed insights into its financial performance and operations. The company, headquartered in Denver, Colorado, specializes in precision power conversion, measurement, and control solutions. Its products are utilized in various industries, including semiconductor equipment, industrial production, medical equipment, data centers computing, networking, and telecommunications.
For the year ended December 31, 2024, Advanced Energy Industries reported a revenue of $1,482.0 million, reflecting a 10.5% decline from the previous year. This decrease was primarily attributed to lower revenue from the Industrial and Medical and Telecom and Networking markets due to customer inventory rebalancing, resulting in a lower demand environment. However, the Semiconductor Equipment market experienced modest recovery, contributing to higher revenues.
Operating expenses for 2024 totaled $492.7 million, representing an increase of $14.0 million from the previous year. This rise was primarily due to higher stock-based compensation expense, increased research and development program costs, and higher restructuring charges focused on optimizing manufacturing and support operations. The company also approved further manufacturing consolidation initiatives, including the closure of its Zhongshan, China manufacturing facility, resulting in a $29.6 million charge primarily associated with expected employment-related charges and facility exit costs.
In terms of revenue by market, the Semiconductor Equipment market saw a 6.6% increase, while the Industrial and Medical market experienced a significant decline of 33.4%. The Data Center Computing market reported a 13.7% growth, and the Telecom and Networking market faced a substantial decrease of 52.5% in revenue.
Gross profit for the year was $529.3 million, representing a 10.6% decrease from the previous year. The gross margin declined mainly due to the impact of lower volume, partially offset by lower manufacturing, material, and other costs.
The company's 10-K report also highlighted an increase in interest income due to higher cash balances, as well as an increase in interest expense associated with the Convertible Notes and a higher interest rate on the Term Loan Facility. Other expenses, net primarily comprised foreign exchange gains and losses, with unrealized foreign exchange losses reported in 2024.
Following these announcements, the company's shares moved -1.3%, and are now trading at a price of $122.65. For more information, read the company's full 10-K submission here.
