American Superconductor Q1 2026 Earnings Report

American Superconductor EPS Results

• Actual EPS: N/A
• Consensus EPS: $0.12
• Beat/Miss: N/A
• One Year Ago EPS: N/A

American Superconductor Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $64.97 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

American Superconductor Announcement Details

• Quarter: Q1 2026
• Date: 7/30/2025
• Time: After Market Closes
• Conference Call Date: Thursday, July 31, 2025
• Conference Call Time: 10:00AM ET

American Superconductor (NASDAQ:AMSC), together with its subsidiaries, provides megawatt-scale power resiliency solutions worldwide. The company operates through Grid and Wind segments. The Grid segment offers products and services that enable electric utilities, industrial facilities, and renewable energy project developers to connect, transmit, and distribute power under the Gridtec Solutions brand. It provides transmission planning services, which identify power grid congestion, poor power quality, and other risks; grid interconnection solutions for wind farms and solar power plants, power quality systems, and transmission and distribution cable systems; D-VAR systems used for controlling power flow and voltage in the AC transmission system; actiVAR system, a fast-switching medium-voltage reactive compensation solution; armorVAR system installed for reactive compensation, power factor correction, loss reduction, utility bill savings, and mitigation of common power quality concerns related to power converter-based generation and load devices; and D-VAR volt var optimization (VVO) that serves the distribution power grid market. This segment also offers ship protection systems, which reduce a naval ship's magnetic signature; and ON board power delivery systems, power generation systems, and propulsion systems; and transformers and rectifiers systems. The Wind segment designs wind turbine systems and licenses these designs to third parties under the Windtec Solutions brand. It also supplies power electronics and software-based control systems, engineered designs, and support services; and provides customer support services to wind turbine manufacturers. This segment's design portfolio comprises a range of drivetrains and power ratings of 2 megawatts and higher. American Superconductor Corporation was incorporated in 1987 and is headquartered in Ayer, Massachusetts.

American Superconductor Q1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: AMSC reported Q1 revenue of $72.4 million, up 80% year-over-year, with grid revenue +85% and wind +55%, delivering a fourth consecutive profitable quarter with net income of $6.7 million and 34% gross margin.
• Positive Sentiment: The company closed Q1 with a 12-month backlog above $200 million (total backlog >$300 million) and secured $63 million in new orders, maintaining an average near $70 million in orders per quarter, ahead of trailing averages.
• Positive Sentiment: Growth in the materials sector, driven by semiconductor capacity expansion for AI and data centers, was a key contributor, and management expects continued strength and more semiconductor orders in coming quarters.
• Positive Sentiment: AMSC ended the quarter with a $213 million cash position and highlighted robust tailwinds across traditional energy, renewables, defense, mining and data center infrastructure, positioning the company for sustained growth.
• Positive Sentiment: Management noted sustainable operating leverage with gross margins above 30% at current revenue levels and indicated capacity expansion via labor hiring and light CapEx, while exploring strategic acquisitions to broaden offerings.

Presentation

[Operator]

Good day, and welcome to the AMSC First Quarter Fiscal twenty twenty five Financial Results Conference Call. All participants will be in a listen only mode. Please note this event is being recorded. I would now like to turn the conference over to Ms. Nicole Golaz, Director of Communications at AMSC. Please go ahead, ma'am.

[Nicol Golez, Director - Communications at American Superconductor]

Thank you, Chuck. Good morning, everyone, and welcome to American Superconductor Corporation's first quarter of fiscal year twenty twenty five conference call. I am Nicole Golez, AMSC's Director of Communications. Joining me today are Daniel McGann, Chairman, President and Chief Executive Officer and John Kosiba, Senior Vice President, Chief Financial Officer and Treasurer. Yesterday, after market closed, American Superconductor issued its earnings release for the 2025.

[Nicol Golez, Director - Communications at American Superconductor]

A copy of the release is available on the Investors page of the company's website at www.amsc.com. During today's call, remarks that management may make regarding American Superconductor's future expectations, including financial results, plans and prospects, constitute forward looking statements. Actual results may differ materially from those indicated by such forward looking statements due to various factors, including those outlined on Form 10 ks for the year ended 03/31/2025, which the company filed with the Securities and Exchange Commission on May 21, as well as their other filings, all of which are available on our website. The company disclaims any obligation to update these forward looking statements. On today's call, management will refer to non GAAP net income, non GAAP financial measures.

[Nicol Golez, Director - Communications at American Superconductor]

Tables of reconciliation of GAAP to adjusted financial measures can be found in the company's earnings release. With that, I will now turn the call over to Chair, President and Chief Executive Officer, Daniel McGann. Daniel?

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

Thanks, Nicole, and good morning, everybody. I'll begin today by providing an update and sharing a few remarks on our business. John Kasiba will then provide a detailed review of our financial results for the first fiscal quarter, which ended 06/30/2025, and provide guidance for the second fiscal quarter, which will end 09/30/2025. Following our comments, we'll open the line up to questions from our analysts. We kicked off fiscal twenty twenty five with accelerated growth.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

Our results surpassed expectations, highlighting the strength and discipline fueling our business. This was our strongest quarter in years, a clear signal that our strategy is delivering consistent positive results, and that the financial leverage we've talked about can happen. One of the key highlights for the quarter was a request from a customer who asked us to accelerate delivery for a specific project. This boosted our results, reflects the strong relationship we have with our customers, and demonstrates the rising demand across multiple markets, especially in the materials sector. We crossed a major milestone this quarter.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

Revenue exceeded $70,000,000 for the first quarter. This is the acceleration we've been signaling over the past month. Total revenue came in above our guidance range, growing by 80% versus the year ago period, significantly driven by organic growth. Our grid revenue led the way, accounting for over 80% of AMSC's total revenue, and growing over 85% versus the year ago period. Meanwhile, our wind business posted extremely strong growth as well, up nearly 55% from the year ago quarter.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

We delivered net income of over $6,000,000 marking our fourth consecutive quarter of profitability. Gross margins topped 30%, driven by a combination of higher revenues and increased operating leverage through a near ideal product mix. A key thing to note is that this quarter truly showcased the margin profile and operating leverage we've been working towards. In many ways, it was a near perfect quarter, one the team feels very proud of, and one made possible by the relationships we have with our customer. We closed the quarter with a strong balance sheet of over $210,000,000 in cash.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

Simply put, the business really is thriving. This quarter, the material sector was a main growth driver, driven directly by semiconductor capacity expansion. We believe this sector growth is fueled by demand for artificial intelligence applications and data center infrastructure. We closed the quarter with a twelve month backlog of over $200,000,000 up from a $160,000,000 the year ago quarter, and a total backlog of over $300,000,000 Over the past two quarters, we brought in an average of just under $70,000,000 in new orders each quarter. This is above the trailing four quarter average of over $60,000,000 of new orders per quarter.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

We continue to see strength across a range of industry. Revenue this quarter came from a diverse set of sectors. About one quarter of our sales came from traditional energy projects, with another quarter from renewable energy projects. Materials projects driven by semiconductor accounted for nearly 25%, while military and other industrial sectors made up the remaining portion. First quarter orders exceeded $63,000,000 and reflected demand across renewables, traditional energy, materials, specifically semiconductors and mining, as well as industrials and utility.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

Notably, the semiconductor industry is in the midst of a major capital expenditure cycle, and we are seeing the benefits of this. We see more semiconductor orders on the horizon, and more broadly in the material sector. I'm including semiconductors in the material sector along with mining metals and other specialty materials. Traditional energy appears to be robust in the coming quarters as well. We feel encouraged by our strong momentum and believe the business is exceptionally well positioned for the future.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

Now I'll turn the call over to John Kasiba to review our financial results for the 2025 and provide guidance for the second quarter, which will end 09/30/2025. John?

[John Kosiba, CFO, SVP & Treasurer at American Superconductor]

Thanks, Daniel, and good morning, everyone. AMSC generated revenues of 72,400,000.0 for the 2025 compared to 40,300,000.0 in the year ago quarter. Our grid business unit accounted for 83% of total revenues, while our wind business unit accounted for 17%. Grid business unit revenues increased by 86% in the first quarter versus the year ago quarter. This year over year increase was led by organic growth and the contribution of NWL revenue.

[John Kosiba, CFO, SVP & Treasurer at American Superconductor]

Wind business unit revenues increased by 54% in the first quarter versus the year ago quarter. This year over year change was driven by increased ECS shipments. Looking at the P and L in more detail, gross margin for the 2025 was 34%. This is up from 30% in the year ago quarter. Gross margin for the quarter was favorably impacted by increased revenues, a favorable product, project, and market mix, which includes beneficial impacts across the business due to pricing increases across our product lines.

[John Kosiba, CFO, SVP & Treasurer at American Superconductor]

And lastly, we continued to experience high levels of factory utilization. This was an ideal combination of events that yielded these elevated gross margins. Moving on to operating expenses. R and D and SG and A expenses for the 2025 were 18,500,000.0 compared to 11,200,000.0 in the year ago quarter. Approximately 23% of R and D and SG and A expenses in the 2025 were noncash.

[John Kosiba, CFO, SVP & Treasurer at American Superconductor]

Our net income in the 2025 was 6,700,000.0 or 17¢ per share. This compares to a net loss of 2,500,000.0 or 7¢ per share in the year ago quarter. Our non GAAP net income for the 2025 was 11,600,000.0 or 30¢ per share, compared with non GAAP net income of 3,000,000 or $09 per share in the year ago quarter. Please see our press release issued last night for a reconciliation of GAAP to non GAAP results. We ended the 2025 with 213,400,000.0 in cash, cash equivalents, and restricted cash.

[John Kosiba, CFO, SVP & Treasurer at American Superconductor]

This compares with 85,400,000.0 on 03/31/2025. In June, we completed a public offering generating total net proceeds of 124,600,000.0, including the follow on option. We generated 4,100,000.0 of operating cash flow in the 2025. Now turning to our financial guidance for the 2025. We expect our revenues will be in the range of 65 to 70,000,000.

[John Kosiba, CFO, SVP & Treasurer at American Superconductor]

Our net income on that revenue is expected to exceed 2,000,000 or $05 per share. We expect our non GAAP net income to exceed $6,000,000 or $0.14 per share. With that, I'll turn the call back over to Daniel.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

Thanks, John. During the first fiscal quarter, the business accelerated faster than projected, and the results speak for themselves. The business outperformed. We saw revenue grow sequentially, now for the past five quarters. We reported our fourth consecutive quarter of net income.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

We achieved our eighth consecutive quarter of non GAAP profitability, with more than $10,000,000 this quarter, outpacing even our internal scenarios for the quarter. We showed significant gross margin expansion, and our backlog continues to be very healthy. This was a remarkable and exceptionally strong quarter. We have sustained an average quarterly revenue above $65,000,000 for the past three quarters, elevating our business to a higher performing level. And you can see we are bullish about our expectations that this trend could continue next quarter.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

We are growing. We are ahead of schedule. And we are executing with discipline and focus. These results reflect our progress in scaling the business, diversifying revenue, and driving outstanding financial performance. We see major tailwinds and long term opportunities across our core sectors.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

In 2025, traditional energy led by oil and gas will see over $1,000,000,000,000 in capital expenditures. Mining projects have over a $1,000,000,000,000 global pipeline. Defense spending nears $3,000,000,000,000. Renewables will attract over three quarters of a trillion dollars. And global data centers are set to exceed half a trillion dollars in capital investment.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

Semiconductors driven by AI and data demand will see approximately $160,000,000,000 in investments in 2025. Our footprint outside The United States, particularly in renewables, positions us well to benefit from international investment. In India, for example, wind capacity is set to double by 2,030. These are massive, durable tailwinds, and we believe we are well positioned to benefit. So what's next?

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

We see a strong business continuing in materials, driven by semiconductors. This quarter was exceptionally strong, because as previously mentioned, one key customer pulled in systems earlier than expected, highlighting our ability to execute. Even with that pull forward, our outlook remains strong with revenue levels over $65,000,000 a quarter. The guide for our second quarter is better than we communicated for our first quarter. We also see continued strength and a healthy pipeline in traditional energy.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

We're making inroads into data center infrastructure projects, which we believe could become a meaningful growth driver going forward. It is early days for us here. Looking further ahead to next year, we see increasing potential in the renewables market, particularly in India, where the ramp is projected to continue. We anticipate continued strength in materials and expect traditional energy to accelerate even further. We also believe our military business could expand.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

As a reminder, we now serve military needs in three key ways, protecting ships, powering critical onboard systems, and supporting essential manufacturing capacity at shipyards. Stay tuned for some potential progress here. In summary, the momentum we've generated has set a strong foundation. We're excited about the future, and we're exceptionally well positioned to capitalize on the opportunities ahead. Our backlog remains robust.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

Our orders pipeline shows some large potential orders on the horizon. We do feel several tailwinds potentially pushing the business more rapidly. There is a robust pipeline of acquisition targets that we might be able to add to our product portfolio. We're actively looking at how to best expand our business. We've been looking at both our grid and military offerings.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

We are in discussion with several targets, and we plan to remain disciplined in our approach. Our future facing technologies help harmonize the world's desire for decarbonization and clean energy with the need for more reliable, effective, and efficient power delivery. I look forward to reporting to you again following the completion of our 2025. Chuck, we'll now take questions from our analysts.

[Operator]

Thank you. We will now begin the question and answer session. And the first question will come from Eric Stine with Craig Hallum. Please go ahead.

[Eric Stine, Senior Research Analyst at Craig-Hallum Capital Group LLC]

Hi, Daniel. Hi, John. Good morning.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

Hey, happy Thursday.

[Eric Stine, Senior Research Analyst at Craig-Hallum Capital Group LLC]

Hey, happy Thursday. So maybe just to start on the gross margin number, mean, I believe that's your all time high number. But I mean, it sure seems like from your commentary that while I think you said nearly perfect, there were no one time items in there that skewed that. So I guess, first, I'd like to confirm that. But then second, kind of your confidence level that this can be given the momentum in the business, a 30% plus gross margin business going forward.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

Yeah, we've been talking about getting to 30 and above. We've posted 30, I think, before, but I think you're right, maybe not this high. We've talked about getting in the mid-30s, and as you can see, at this revenue level, with this mix, it's possible. So my hope is a lot of the times when you have these conversations on what the potential of the business is, having the proof point, I think is extremely valuable. John, if you wanna dig into any of the puts and takes in the margin, feel free.

[John Kosiba, CFO, SVP & Treasurer at American Superconductor]

Yeah, hi Greg.

[John Kosiba, CFO, SVP & Treasurer at American Superconductor]

So to answer your question directly, there are no, what I would say, one time, you know, call it non recurring events like that, special events. We did have a very strong product mix within our product portfolios and our market mix, we had, for lack of a better term, an ideal mix within our products, but not per se like a, call it an inventory correction or something unique in an accounting calculation. No, would say this was just a remarkably strong quarter with, you know, and I gave you the four bullets, You know, when you have an ideal, first you could have strong revenue, which gets the factories full. Second, you've got have a good mix, and we had both of those. So it was a great quarter all around when it comes to contribution margin of the business.

[Eric Stine, Senior Research Analyst at Craig-Hallum Capital Group LLC]

Yep, no, that's great, thanks for that. Maybe turning to wind then, I think last quarter, Daniel, I believe the direct quote was that Inox was on the cusp of a historic volume ramp. Curious, I mean, another step up in wind. I mean, does this kind of give you the confidence that that historic volume ramp is underway? Or maybe the trends you see there, I guess, on the order front but also throughout the remainder of fiscal twenty twenty five?

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

Yes, I tried to be deliberate in what I said, that this is something that we expect maybe as early as next year. And why I'm saying that is it gets down to the lead time on product, and the demand that Inox is seeing from their customers appears to be growing, which should improve their cash position, which should then translate into the demand to us. But we try to be very careful and not overly optimistic that something dramatically in their behavior is going to change. But their business seems to be doing very well. They have a tremendous amount of backlog that they're able to either maintain or grow, and they're in a really good position to be able to ramp for their customers.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

A lot of what their effort right now is in construction, so getting things constructed and then connected and banded over to their customers is important. And we're there trying to support them as the best partner we possibly can be. We love the relationship with them. It's a well run company, a great family that's involved in it, and we think that they're really in a great position, not just for the next quarters or year, but for the coming years, we hope. At least that's what it looks like from how they talk about their business.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

Things can always change, but it feels really strong at this point.

[Eric Stine, Senior Research Analyst at Craig-Hallum Capital Group LLC]

Right, and just to confirm, when you talk about a potential ramp early next year, are you talking calendar year or fiscal year?

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

To me, they're almost the same, It's only a quarter off, so Yeah. Try to think in general trend, I don't know what specific quarter we're gonna start to see the change happening, but we're at a level now, we've been much healthier than we've been, and their backlog's commensurate with the potential higher revenue level for us in that business. But I think the best part of the whole conversation about American Superconductor is they're one of a series of great customers. They're a piece of the puzzle and a piece of the business. It's not the main driver for the business quarter to quarter or for growth year to year, It's a business that we wanna be able to be present with, that we feel a great responsibility to them to help make their business go, and we're in a much healthier position to do that today than we've ever been.

[Eric Stine, Senior Research Analyst at Craig-Hallum Capital Group LLC]

Okay, thank you.

[Operator]

The next question will come from Colin Rusch with Oppenheimer. Please go ahead.

[Colin Rusch, MD, Senior Research Analyst & Head - Sustainable Growth & Resource Optimization at Oppenheimer & Co. Inc.]

Thanks so much guys. You know, as you look at the growth in the business and you know, the fact that you had high utilization rates here this quarter, can you talk a little bit about how you're thinking about capacity expansion, the capabilities that you might want to weave into that incremental capacity either from a design or manufacturing flexibility perspective as you look at taking another step function with the business over the next three to five?

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

Yeah, we're looking pretty seriously at how we can expand capacity, and that could be bringing labor in, it could be adding some additional tooling. As we've said kind of consistently, our manufacturing model is pretty CapEx light, so nothing that we're thinking is a huge capital investment. But I think as we're mindful of the potential targets for acquisition that we look at, maybe there's some leverage there that could be done where we could also think about expanding maybe in a different way than we've done in some of the most recent acquisitions. Not that that would be a driver for it, but certainly we've got to look at any and all options. I feel very comfortable, and John, please comment how you feel.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

Incrementally expanding labor, we've been able to do it in the markets that we're We've talked about expanding beyond this level of revenue in the past, and I think the capability is still there.

[John Kosiba, CFO, SVP & Treasurer at American Superconductor]

Yeah. Just to add to that, Colin, so when you look at capacity, you have to call it labor capacity, and then secondly, you have space capacity. For us, we're still in the labor capacity constraint, not in the space, so we're really, for most of our plants, we're very well utilized on one shift, and that's an important note. So we stick, you know, and we carefully monitor that to not go to a second shift, because then you hit a different level of utilization if you trip into the second shift. But we're still on one shift in almost all of our plants, so the good thing for us is we keep on hiring people within one shift, and we're able to keep it in the existing footprint.

[John Kosiba, CFO, SVP & Treasurer at American Superconductor]

At some point we go to a second shift, and then if that second shift becomes fully utilized, then we would look at, call it, plant expansions.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

And it gives us the leverage like we had this quarter where a customer says, hey, can you do it faster? And we want to service our customers as best we can, so we had that instance here with this quarter. It's something we tried to get ahead as quickly as we could, and I think it's really a testament to the team that they were able to accelerate some shipments of pretty large systems, which changed the financial profile of the company. But we try to let our customers dictate what they need, and our financials are an output as opposed to a driver for these things. So we have a benefit of great quarter, but it's really because of some great customers.

[Colin Rusch, MD, Senior Research Analyst & Head - Sustainable Growth & Resource Optimization at Oppenheimer & Co. Inc.]

Excellent. And then if you look at ways to drive revenue growth, could you talk a little bit about the potential for geographic expansion, if that's a consideration or the potential for increased pricing monetization of the value creation that you guys are providing? Because it looks to me like, particularly in some of the higher tech areas, you you guys are providing power quality solution that saves not only CapEx but also reduces the risk on operations for the facility.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

Yeah, I think both of those levers can be pulled on. So to go to the second one, what we're seeing is the value creation of the combined offering post the series of the multiple acquisitions is greater than the sum of the parts. So we're able to do more, I think, today with what we have than we could have done separately as the different entities. If the value is higher and you can convince customers that it is, then obviously pricing can scale with that. So we try to do that as best we can.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

It's not always the case, but we're finding more and more in projects, we're bidding in a lot more content per order than we were even a couple years ago. And then the second one is international, something strategically we look at and examine. We've kind of made a purposeful pivot back to The US a long time ago when we were trying to reconstitute the business in grid and really focused on execution at home and build a business, get the nation business and the military going, and I talked about the multiple shots on goal there with that one. So it feels like I think there's more expansion potentially in The US and North America, but there obviously is a lot of fertile ground globally that we could go into in Europe or even Latin America or geographies that we participated in, but maybe haven't really had a full offering from an operational standpoint there. So that's something strategically you look at, but you kind of need the right situation, and that might be something that through acquisitions help kind of get us there quicker.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

But that all remains to be seen. I don't want to tell you, Colin, definitely that's where we're going to head, but it definitely is something that we need to look and consider. And it really then continues to expand the markets we can participate in. But I think the team has done a really good job of proving what we can do here in The US, proving how we can be responsive to customers, proving the value of the technical expertise and the technology itself. And if we can expand the market globally, you know, we'll we'll certainly look at that in the coming years.

[Colin Rusch, MD, Senior Research Analyst & Head - Sustainable Growth & Resource Optimization at Oppenheimer & Co. Inc.]

Excellent. Thanks so much, guys.

[Operator]

Your next question will come from Justin Clear with Roth Capital Partners. Please go ahead.

[Justin Clare, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Good morning, guys. Thanks for the questions, Pierre. So wanted to just follow-up on the gross margin. Wanted to see if you could share maybe a little bit more detail on potentially what end markets or particular product lines might have driven the higher gross margins in the quarter? For example, does the semi business tend to have higher margins than the corporate average?

[Justin Clare, MD & Senior Research Analyst at Roth Capital Partners, LLC]

And then just as we think through as you scale revenues here, if you are delivering revenues, let's say, $70,000,000 or above, would you anticipate gross margins at 30% plus? Is that kind of a fair assumption here? I might have lost you guys.

[Operator]

Pardon me. This is the operator. It seems that our speaker line has disconnected. Please hold while we reconnect. Pardon me, we have our speaker line to reconnect. Please proceed.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

That was a fun little glitch. Can you hear us okay, Justin?

[Justin Clare, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Yeah I got you. Did you hear my question?

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

Yeah I got through all but I started to answer and then I started to hear music again. Sorry about that. I guess it's so good that there's music in the air for everything that we're doing today. To get specifically to the margin, part of it is materials and semiconductor. There was an acceleration in that for some key projects that we had. And to be very blunt, the content, I won't say the pricing is different, but the content that we shipped was things that, as you put in the period, have a higher margin. But on the total project and you look at them, they're similar to the rest of the business. So it was a little bit of maybe an anomaly or a one time kind of thing from that standpoint.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

But I don't want you to feel like the semiconductor business is substantially different. Most of our projects are about the same margin. So the challenge we have sometimes is there'll be either a push or a pull on a part or a full project, and that may change, and that's partly what we put into the range of the guidance there. So we feel really good about the material part of the business, and we feel great about Grid. You want to comment more specifically, John?

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

You said you talked about $70,000,000 plus in revenue and 30% gross margin.

[John Kosiba, CFO, SVP & Treasurer at American Superconductor]

Yeah, I mean, you saw this quarter on north of 70, we were in, call it the upper low 30s, 34, right? Given a normal mix, I mean of course there's going be scenarios where, call it the opposite happens, a really bad mix, we could be in the upper 20s maybe. But I would say when you're looking at, if we had to call it a normal mix, just normal, call it, run of the mill mix, would say 30 is a number we should be very comfortable with when we're approaching $70,000,000 in

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

And we purposely didn't put out a target like that because we knew it was going to happen, and we figured for the audience that the proof is in the pudding. It's better to do it than talk about it. So we don't talk about the targets and where we can go. And sometimes people get particularly annoyed with me when they ask those questions. A lot of it is let's just show you.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

The business really has come a long way from $40,000,000 $55,000,000 a quarter to now, we're guiding to above the mid-60s. So it's really a robust business, the operating leverage is there. And we don't have to say it will be there. We can show now that it is.

[John Kosiba, CFO, SVP & Treasurer at American Superconductor]

If you just look at last year, we averaged $55,000,000 a quarter in revenue and we were at 28% gross margin. So all the evidence is there. I don't get too worked over any one quarter. This was a great quarter, we're proud of it. But when you look at the business over a longer period of time, when you look at this business at the end of the year, you know, we were pushing $70,000,000 a quarter for all four quarters, I mean, we're going have a good result, no question.

[Justin Clare, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Yeah, certainly. Yeah, and yeah, it's definitely good to see. I guess then maybe just shifting over, you had talked about inroads into data center infrastructure projects. Just wondering if you could give us an update on how you're pursuing that market. Are you in conversations with data center developers or is it primarily with utilities or EPCs?

[Justin Clare, MD & Senior Research Analyst at Roth Capital Partners, LLC]

And then just trying to think through, would your products be more likely to be suited at the substation or do you think there are opportunities within the data center infrastructure within the building that are areas that you could pursue?

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

I don't want to be trident so the answer to everything you said is yes, but I think the answer is yes and we're trying to figure it out. What we're finding is that the EPCs, the end customers, they're clamoring for capacity. And I think what we figured out is I think we have something that works for them at the substation level. Do we have something that fits inside? It looks like we might, but ask me when we'll see realizable revenue for that.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

It's not in the coming quarters. So I want to be careful. I don't want people to get overly excited that, hey, this is gonna impact you in the next six weeks. We're now thinking in the next six quarters or so, how can we further impact the business? Could this have some meaningful piece to it?

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

Yeah, but again, just like we try to toot our horn with diversity, we're trying to build in all these markets in parallel. I think there is a tailwind on the grid side with data centers and AI, and we're trying to do our best way to navigate it and try to sell what we think is some value some to critical customers need today. Some of these are EPCs and know us really well, which makes the conversations very straightforward. I'll leave it at that. Don't feel like this is going to dramatically change quarter on quarter.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

The kind of acceleration that we had this quarter is really just trying to help a customer with their immediate demand and getting their project to meet a certain timetable. So most of our lead times on products are nine months plus. In some cases, it can be fifteen months plus.

[Justin Clare, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Got it. Okay. And then just one more. Wanted to just check-in, you know, what do you see as the key factors that are enabling your success in the semiconductor market? Is this proprietary technology?

[Justin Clare, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Is it the breadth of the portfolio that you have? Are you able to put together a solution that is unique here given the wider portfolio that you have? Maybe you could just speak to what's enabling you to win there.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

Yeah, I think again, just to answer yes to all the different pieces that you're saying there, think it's more content, it's more valuable content, it's more proprietary content. I think we have something that is unique in the market. I think that we've been able to hone our chops getting projects and bigger projects, and now you're starting to see more significant capital spend in the semi space, but also broader in materials and mining and metals and the processing of all those materials. Most of those processes are very electrically intensive, which means power quality, power resiliency, and power supply are all critical to the operation. We're now able to sell, I'll say, a more complete solution and we're benefiting from that.

[Justin Clare, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Okay, well it's good to see. All right, thanks guys.

[Operator]

The next question will come from Tim Moore with Clear Street. Please go ahead.

[Tim Moore, Managing Director, Senior Research Analyst at Clear Street]

Thanks and impressive execution on your strategy and the profit margin expansion. Part of our investment thesis when we launched Covers recently was really your operating leverage step up of absorbing the fixed costs and adding acquisitions helped to really drive higher incremental margin seen in the June you just reported. So one question I actually have is, if I back out our rough estimate of possible sales contribution from acquisitions, I mean, growth, it just seems phenomenally strong, maybe 35% in the quarter, the June. What do you think is looking at your backlog and the lead times you mentioned in conversion and where they stand, what do you think might be a realistic organic sales growth piece for this year? Is 20% possible on the organic growth side as university acquisitions?

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

You asked fantastic questions, Tim. So I think your thesis got proved pretty quickly in the leverage. So kind of kudos to you to come in and say that's what you thought could happen to us and now it's happening. And then you're doing the reverse math, and I had the answer in case. And we grew quarter by quarter by almost 15%.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

So I don't want to say I simply don't know. We've been growing at 20%, 25% when we look at kind of the organic business. Some quarters it might be 15%. Some years it might be 15%. It feels like today that we're going into a bigger market.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

It feels like there's a lot more investment in the areas that we're seeing benefit from. And I tried to go through a bit of that in the prepared remarks. We're just trying to hang in here with key customers and be able to deliver as rapidly as we can. And that's why John can answer the questions about capacity pretty succinctly, because these are things that we're thinking about every day. I don't want to dodge your question totally, Tim, but I don't really know how much it could be, but we've demonstrated we can do 20% to 25%.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

Organic, I guess we're now demonstrating we can do 35%. If the markets continue to hold, the business wants to be able to respond with the growth that the customers drive us to. But again, it really comes down to what the offering is, the proprietary nature to it, and these key customer relationships. We've gotten designed in with so many industries now that it gives us multiple shots on goal and more diversification in the markets that can drive us.

[Tim Moore, Managing Director, Senior Research Analyst at Clear Street]

That was actually very helpful. I appreciate the color. Another question that we have is, obviously, the strengthening of The U. S. Electrical grid has been a theme in last couple of years.

[Tim Moore, Managing Director, Senior Research Analyst at Clear Street]

But from what we're seeing in some of our coverage, it's really accelerating more since the April executive order maybe by the administration. Have you seen kind of any more incoming calls or inquiries just for better awareness of your brand and your solutions out there for grid reliability and efficiency? Have you kind of seen an uptick on that the last couple of months?

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

Yeah, in general, I'll say yes. I think what you're seeing is a signal in the market that maybe there's a bit more stability in the policy that can help drive solve some of the problems that have been with the grid now for us for the better part, I'll say, of a decade that are becoming more exacerbated as our general thesis on why we're so relevant is that the grid is not designed to do what we're asking it to do. And in many ways, we try to step in and fix incrementally the existing grid to make the next project work, be it on the power generation side or be it on power consumption side or just in the grid itself, hardening the grid, making it more robust and making it more resilient. So in a lot of ways I think the thesis is our time has kind of come here. This is the investment in the grid that people have thought needs to happen, should happen.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

And I think the demand for electricity is really what's ultimately driving that investment. And as long as that continues to persist for the coming years, we want to be in position to take its best advantage of that that we can.

[Tim Moore, Managing Director, Senior Research Analyst at Clear Street]

Great, Dan. That's really helpful. Thanks for sharing that color. That's it for my question.

[Operator]

This concludes our question and answer session. I would like to turn the conference back over to Mr. Daniel McGahn for any closing remarks. Please go ahead, sir.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

This quarter really has been exceptional. Our first quarter performance confirms we're growing faster, more profitably, and with greater scale than ever before. Our growth reflects the strength of our business and the market demand for our products and services. We are prepared to capitalize on the growing demand for energy and the need for a stable grid to support it. We've delivered another outstanding quarter and we can see that the fundamentals of our business are well grounded.

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

The acquisition of NWL has exceeded our expectations. This is truly an exciting time here at

[Daniel McGahn, Chairman, President & CEO at American Superconductor]

AMSC. We approach the remainder of fiscal twenty twenty five with confidence in our team and business. And thank you all for listening today.

[Operator]

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Participants

Executives

• Nicol Golez, Director - Communications
• Daniel McGahn, Chairman, President & CEO
• John Kosiba, CFO, SVP & Treasurer

Analysts

• Eric Stine, Senior Research Analyst at Craig-Hallum Capital Group LLC
• Colin Rusch, MD, Senior Research Analyst & Head - Sustainable Growth & Resource Optimization at Oppenheimer & Co. Inc.
• Justin Clare, MD & Senior Research Analyst at Roth Capital Partners, LLC
• Tim Moore, Managing Director, Senior Research Analyst at Clear Street