American Superconductor Q4 2025 Earnings Report

American Superconductor EPS Results

• Actual EPS: $0.12
• Consensus EPS: $0.10
• Beat/Miss: Beat by +$0.02
• One Year Ago EPS: N/A

American Superconductor Revenue Results

• Actual Revenue: $66.66 million
• Expected Revenue: $60.27 million
• Beat/Miss: Beat by +$6.39 million
• YoY Revenue Growth: +58.60%

American Superconductor Announcement Details

• Quarter: Q4 2025
• Date: 5/21/2025
• Time: After Market Closes
• Conference Call Date: Thursday, May 22, 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 Q4 2025 Earnings Call Transcript

Key Takeaways

• Record quarterly performance: Q4 revenue exceeded $65 million, up 59% year-over-year, marking the third consecutive quarter of GAAP profitability and seventh of non-GAAP profit with positive operating cash flow.
• Robust order momentum drove Q4 bookings to $75 million and fiscal 2024 orders to ~$320 million, leaving a 12-month backlog above $200 million compared to $140 million a year ago.
• Significant semiconductor opportunity accelerated in Q4 as fabs under construction drove a surge in orders, with management expecting this segment to represent roughly 25% of future revenue globally.
• Defense business milestone achieved with a ~$75 million multi-year ship protection system contract from the Royal Canadian Navy and delivery of three systems to the US Navy, underscoring expanding military demand.
• First-quarter fiscal 2025 guidance targets revenue of $64–68 million, GAAP net income above $1 million, and non-GAAP net income over $4 million, reflecting confidence in sustained profitability.

Presentation

[Operator]

Good morning, and welcome to the AMSC Fourth Quarter Fiscal twenty twenty four Financial Results Conference Call. All participants will be in listen only mode. Please note this event is being recorded. I would now like to turn the conference over to Nicole Golas, AMSC's Director of Communications. Please go ahead.

[Nicol Golez, Director - Communications at American Superconductor]

Thank you, MJ. Good morning, everyone, and welcome to American Superconductor Corporation's fourth quarter and full fiscal year twenty twenty four 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 Kasiba, Senior Vice President, Chief Financial Officer, and Treasurer. Yesterday, after market closed, American Superconductor issued its earnings release for the fourth quarter and full fiscal year 2024.

[Nicol Golez, Director - Communications at American Superconductor]

A copy is available on the Investors page of the company's website at www.amsc.com. Remarks that management may make during today's call about future expectations, including expectations regarding the company's financial results, plans and prospects constitute forward looking statements. Actual results may differ materially from those indicated by such forward looking statements as a result of various important factors, including those set forth in the Risk Factors section of our annual report on Form 10 ks for the year ended 03/31/2025, which the company filed with the Securities and Exchange Commission on 05/21/2025, and the company's other reports filed with the SEC, which are also available on our website. The company disclaims any obligation to update these forward looking statements. Also, on today's call, management will refer to non GAAP net income, a non GAAP financial measure.

[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 Chairman, President and Chief Executive Officer, Daniel McGahn. Daniel?

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

Thanks, Nicole. Good morning, everyone, and thank you for joining us. We're really excited to share some great news about the company and not only where we are, but where we're headed. 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 fourth quarter and full fiscal year 2024.

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

He will also provide guidance for the first quarter of fiscal twenty twenty five, which will end 06/30/2025. And following our remarks, we'll open up the line to questions from our analysts. AMSC delivered its strongest reported performance in years for both the quarter and for the fiscal year. During our fourth quarter, we outperformed expectations across nearly every key metric. We saw revenue grow sequentially quarter over quarter and by nearly 60% against the year ago period as we reached a recent record level of revenue surpassing the $65,000,000 mark.

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

Our Grid business revenue grew substantially by more than 60% over the year ago quarter, while our Wind business revenue increased significantly by more than 40% for the same period. We achieved our third consecutive quarter of GAAP profitability, our seventh consecutive quarter of non GAAP profitability, as well as our seventh consecutive quarter of generating operating cash flow. We believe this record quarterly revenue and continued profitability reflect the strong momentum we've built and the discipline behind our success. For the full fiscal year, I'm proud to say that it was a year of exceptional execution and strong growth across our business. We saw total revenue grow over 50% to $222,000,000 We saw revenue diversity across renewables, industrials, military, utility and the semiconductor sector.

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

Over a third of our sales were for renewable projects, manufacturing and traditional energy projects represented also nearly a third, military was about 15% and utility came in just over 10%. A significant part of our strong performance was driven by our core business, where we achieved nearly 20% organic growth for the fiscal year. Nearly 70% of our revenue came from The United States market. We see this as a very important hedge against the changing American trade policy and tariff landscape. We ended the year with over $85,000,000 in cash.

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

Let's now take a look at our order bookings for the quarter, which were extremely strong. Fourth quarter orders grew to $75,000,000 We are seeing a significant acceleration in our business driven by semiconductors as well as traditional energy projects. We booked nearly $320,000,000 of new orders for fiscal twenty twenty four. We closed the year with a robust twelve month backlog of over $200,000,000 This was $140,000,000 a year ago. The business has expanded and orders appear to be accelerating, albeit we are now booking some products for delivery already in fiscal twenty twenty six.

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

We successfully expanded into Allied Navies for the first time with an order from the Royal Canadian Navy, marking a key milestone in our global defense business strategy. Additionally, we successfully delivered three ship protection systems for the US Navy. These accomplishments highlight the growing demand for our solutions, as well as our position as a trusted partner domestically and abroad. We expanded our product portfolio through an acquisition, positioning us to capitalize on opportunities in both the military and industrial sectors. In our wind business, we showed year over year growth as Inox's business prospects strengthened and our three megawatt ECS demonstrated its capabilities.

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

We believe all parts of the business are now aligned and poised to deliver improvement. Now I'll turn the call over to John Casiba to review our financial results for the fourth quarter and full fiscal year 2024 and provide guidance for the first quarter of fiscal twenty twenty five, which will end 06/30/2025. John?

[John Kosiba, CFO, Senior VP & Treasurer at American Superconductor]

Thanks, Daniel, and good morning, everyone. Total revenues for the fourth quarter of fiscal twenty twenty four were 66,700,000.0. This is an increase of 59% compared to the year ago quarter of 42,000,000. Grid business revenues of 55,600,000.0 increased by 62% versus the year ago quarter, while our wind business revenues of 11,100,000.0 increased by 42% versus the year ago quarter. Moving on to the full fiscal year.

[John Kosiba, CFO, Senior VP & Treasurer at American Superconductor]

Our total revenue in fiscal twenty twenty four were 222,800,000.0. This is an increase of 53% compared to fiscal year twenty twenty three revenues of 145,600,000.0. Grid business revenues of 187,200,000.0 increased 53% in fiscal twenty twenty four and represented 84% of total revenue. The year over year increase is a result of organic growth within our new energy product lines accompanied by the addition of NWL. Wind business revenues of 35,600,000.0 increased 51% in fiscal twenty twenty four and represented 16% of total revenue.

[John Kosiba, CFO, Senior VP & Treasurer at American Superconductor]

The year over year increase is a result of increased ECS shipments to Inox for our two megawatt and three megawatt class ECS systems. Gross margin for the fourth quarter of fiscal twenty twenty four was 27% compared to 25% in the year ago quarter. For the full fiscal year 2024, AMSC generated gross margins of 28%. This was up from 24% in fiscal twenty twenty three. We saw a full year gross margin expansion of three fifty three basis points over the prior year.

[John Kosiba, CFO, Senior VP & Treasurer at American Superconductor]

Now moving on to operating expenses. Research and development and SG and A expenses for the fourth quarter of fiscal twenty twenty four totaled 15,600,000.0. This was up from 10,300,000.0 in the year ago quarter. Approximately 17% of R and D and SG and A expenses in the fourth quarter were noncash. For the full fiscal year, research and development and SG and A expenses totaled 54,500,000.0 in fiscal twenty twenty four compared with 39,600,000.0 in fiscal twenty twenty three.

[John Kosiba, CFO, Senior VP & Treasurer at American Superconductor]

Approximately 14% of r and d and s g and a expenses in fiscal twenty twenty four were noncash. Our net income in the fourth quarter of fiscal twenty twenty four was 1,200,000.0 or 3¢ per share compared to one compared to a $1,600,000 loss or 5¢ per share in the year ago quarter. Our non GAAP net income for the fourth quarter of fiscal twenty twenty four was 4,800,000.0 or 13¢ per share compared with non GAAP net income of 1,900,000.0 or 6¢ per share in the year ago quarter. For the full fiscal year twenty twenty four, our net income was 6,000,000 or $0.16 per share. This compares to a net loss of 11,100,000.0 or $0.37 per share in fiscal twenty twenty three.

[John Kosiba, CFO, Senior VP & Treasurer at American Superconductor]

For full for the full fiscal year twenty twenty four, our non GAAP net income was 24,000,000 or 65¢ per share. This compares to non GAAP net income of 600,000 or 2¢ per share in fiscal twenty twenty three. We ended fiscal year twenty twenty four with 85,400,000.0 in cash, cash equivalents, and restricted cash. In the fourth quarter of fiscal twenty twenty four, we generated 6,300,000.0 in operating cash flow. For the full fiscal year, we generated operating cash flow of 28,300,000.0.

[John Kosiba, CFO, Senior VP & Treasurer at American Superconductor]

Now turning to our financial guidance for the first quarter of fiscal twenty twenty five, we expect that our revenues will be in the range of 64,000,000 to $68,000,000 Our net income on that revenue is expected to exceed $1,000,000 or $03 per share. And our non GAAP net income is expected to exceed $4,000,000 or $0.10 per share. With that, I'll turn the call back over to Daniel.

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

Thanks, John. It really is a different business now. AMSC delivered a terrific year of operational performance, an outcome that reflects our efforts to build a more resilient company. I think this is the first time we're guiding to net income, and we're talking about strong revenue and non GAAP net income as well. We've cultivated growing relationships with our customers across multiple projects that have increased in size, scope and technical complexity.

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

Today, we're delivering greater volumes to repeat customers. We believe our diverse bookings, strong balance sheet and operational success in fiscal twenty twenty four have set the stage for long term improvement in the business. Over the past three years, we've managed well through a sharp increase in revenue. Back in fiscal twenty seventeen, our annual revenue was under $50,000,000 That was annually, not quarterly. By 2021, we had doubled that.

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

And by 2024, we doubled it again. Our quarterly revenues now exceed that annual level from fiscal year twenty seventeen. We delivered operating leverage without requiring major capital investment. The business really is in the strongest position in over a decade, and we believe it's still getting better. We enter fiscal twenty twenty five confident in our ability to continue building a more resilient and profitable company.

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

We are guiding to another quarter of expected high revenue levels for our first quarter of fiscal twenty twenty five. Again, seeing this $65,000,000 revenue level as possible, the guidance range always depends on customer timing of milestones on many of our projects. It's certainly nice to be talking about 65,000,000 when we were talking about $30,000,000 per quarter only two years ago. With that, let's turn our focus to fiscal twenty twenty five, starting with the growing opportunities in our power solutions. Demand for reliable power is rising.

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

Defense priorities dictate a stronger Navy. We see demand for our power quality products across the evolving energy landscape, where reliability and performance become more critical than ever. The grid is under pressure. Distributed energy and two way power flows are adding complexity. The need for smarter, more resilient and dynamic systems is only increasing.

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

Data centers alone could double global power demand by as early as 2026. Semiconductor fabs in The United States are projected to more than triple by 02/1932. We've seen a ramp up in our orders pipeline this quarter, securing multiple orders driven by semiconductor fabs under construction. These orders, as well as orders from traditional power customers, are the main reason that we see such a dramatic increase in our order intake rate. Traditional power production is also making a resurgence, driving industrial growth and grid strain.

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

The US is reshoring advanced manufacturing in many factories where resilient power supply is critical. Our aging infrastructure just can't keep up. Last month, the administration issued an executive order to strengthen grid reliability and security. The Department of Energy is now authorized to use all available power resources to ensure reliable electricity delivery. That's where we come in.

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

Our power solutions, capacitor banks, harmonic filters and static synchronous compensators are built for energy intensive industries like artificial intelligence, data centers, steel in a variety of metals, automotive, chemicals and semiconductors. Our products are designed to maintain reliability, maximize output and enhance power quality in distribution networks impacted by industrial loans. We are uniquely positioned to enable industrials to power facilities in ways that scale without adding complexity or size. In fiscal twenty twenty four, we expanded our offerings with power supplies and military grade solutions that strengthen our overall product portfolio. These solutions help industries cut emissions, power critical systems, and boost the performance of their plant, as well as powering critical military systems.

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

In each case, these are critical power solutions that need to operate in harsh environments. We have orders and backlog generated from the demand across industrial utility and military sectors, where these products are making a significant impact. We're not just responding to grid changes, we're enabling them. We're focused on capturing the many opportunities ahead in both power and defense. We see growth from wind in India.

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

We design and supply electrical control systems or ECS that make wind turbines more competitive and efficient. In fiscal twenty twenty four, we secured nearly $35,000,000 in orders for our two megawatt and three megawatt ECS from Inox as they ramp up to service their growing demand. About half of these shipments occurred during the year. Our proprietary technology is helping Inox scale, supporting what they've called their strongest backlog in recent memory with over three gigawatts of orders. Let's now turn to our growing presence in the Navy sector.

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

Our Ship Protection Systems, or SPS, help naval vessels by reducing their visibility to enemy threats. This year marked a major milestone as we expanded our ship protection systems internationally with a breakthrough contract from the Royal Canadian Navy, our first Allied Navy customer. We secured a multiyear, multiunit contract worth about $75,000,000 with Irving Shipbuilding, the leading builder of Canada's naval fleet. We believe this order represents a strong signal of global demand for our defense systems. We're now preparing to deliver our proprietary solutions to support the US Navy and the Royal Canadian Navy.

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

To date, we've secured five SPS contracts from the US Navy for the San Antonio Class ship. We've delivered on three out of the five systems to the following vessels, the USS Fort Lauderdale, the USS Harrisburg, and the USS Pittsburgh. We anticipate delivering our fourth system soon. We're also actively pursuing opportunities beyond The US platforms, including other allied navies. In summary, our progress reflects a company that is delivering strong, consistent results.

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

As we look ahead, we believe AMSC is in a better position than it's ever been. We've delivered consistent profitability, higher revenue and increased cash generation. We closed fiscal twenty twenty four with a twelve month backlog of over $200,000,000 and over $85,000,000 in cash, which is critical for supporting larger orders and future growth opportunities. We grew our product portfolio and extended a key solution to an international defense customer. We significantly expanded gross margins year over year.

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

None of these accomplishments would be possible without the incredible dedication of our team. I want to thank each and every one of our team members for truly delivering an outstanding year. We are focused, well capitalized and committed to creating long term value for our customers, our partners, as well as our shareholders. We closed a fantastic 2024 and are off to a very good start for fiscal twenty twenty five with tremendous opportunities ahead of us. We are at the center of some of the most important transformations of our time, from defense to industrial growth, from renewable integration to grid modernization.

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

Our solutions are helping power the evolution of a grid that is fit for the future, a more reliable and resilient grid built to support and incorporate a broad mix of energy sources. We believe specifically our American made products supported largely by a domestic supply chain and supplied to U. S. Customers, which account for 70% to 75% of our total revenue and our expanded exposure to recession resilient industries positions us strongly against tariff risks and global economic volatility. We are executing on our vision and believe that our creativity can meet today's challenges and help us progress to a better future.

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

This means using future facing technologies to harmonize the world's desire for decarbonization and clean energy with the need for more reliable, effective and efficient power delivery. We are committed to powering progress by designing, developing and deploying power control solutions that harmonize an increasingly complex energy system. Thank you for your continued trust and support. We look forward to sharing our progress with you in the months ahead. MJ, can we now open up the lines for any questions from our analysts?

[Operator]

Certainly. Today's first question comes 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, Eric. Good to hear your voice.

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

Hey, you too. So I do appreciate the commentary on semiconductors, but I'm wondering for orders if you could do, I think you've done this in the past, but just an order breakdown high level for the grid segment in the fourth quarter? And then what is your expectation, again, level for how that plays out in fiscal twenty twenty five?

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

Yes. So if I look longer term, I'll start there and then I can think about what the breakdown of the orders are. So if you think about the business really kind of as four or five parts, I think where we're headed in the business we're building, it's going to be about 25% materials including semiconductor. So all of kind of the industrial chemicals and material processing that we've talked about in the past. I think that what we're seeing is in traditional power generation, we have a unique product offering that we're just learning more and more about where that might be applicable.

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

And if we look at where spending is headed, that potentially could drive to as much as 25% of the business as well. I think renewables will continue to be strong for us, particularly in India and in Europe, which is really where we're focused. I think that'll be about 25%. And then the remaining quarter is probably on the order of, say, 15% military, maybe 10% utility. We're seeing some uptick in utility that could even be stronger.

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

So I think we have a very diverse business. In the past quarter, it was led driven by renewables. We have a number of projects, not only in India, but in Europe, where we see demand as well. Industrials was a big part of that as well. Utilities participated.

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

But I think the main accelerating factor, Eric, really was the demand change or inflection in semiconductor that we've been talking to for the past couple of quarters is now really beginning. So a big uptick in the orders going from about a $60,000,000 run rate to now delivering 75,000,000 of new orders really was a large part delivered by semiconductor. We see that continuing. We see that with the potential for future growth. Those projects are under construction.

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

So these are projects that are real, that are funded, that are happening. They've been on the plans of our partners for a number of years. And they've been funded and are going to happen. So they get our equipment kind of late in the cycle. So I'm really excited at the diversity that we have.

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

I'm excited that we're now talking not only about renewable power, but more traditional power. We're discovering that we have a very unique offering that can help the grid fix a lot of different problems for a lot of different industries.

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

That is great. I appreciate that color. And then you did mention wind and I believe this was your strongest quarter since I think fiscal twenty sixteen maybe in wind. And I know your orders have been quite good or were in fiscal twenty twenty four. I don't know if you did, might have missed it.

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

But did you break out wind, I mean just a percentage of what those were in Q4? And then based on that and based on the backlog of wind that you have, kind of what are your high level thoughts for fiscal twenty twenty five?

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

Yes, I think there's a couple of pieces in there to get at. So the first thing is, what is it? So we've grown from about eight at the beginning of the year. I think we were six the prior year, and now we're above ten, eleven. So the business with Inox is driving that ramp.

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

It's really the three megawatt that we see demand that's greater than what we're delivering today. I think the news I'm trying to make sure that people understand, Eric, is that the demand for what we have is not singularly going to be driven by wind. It's going to be driven by semiconductors, it can be driven by traditional power. Longer term, we'll see military, near term, we'll see some things with utilities as well. But I think this is probably the first call I'm really saying that we have not the potential of a number of tailwinds.

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

We're feeling those tailwinds now. The order book is driving it, the revenue is converting over a variety of these areas. So I think as we look forward with Inox, the one thing to have you understand and have the audience understand is they're a critical partner to us and a great customer. We love working with them. We love the relationship.

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

We try to do the best we can to support them. They're about to go through what we think is going to be another historic ramp up for their company. And we're really proud of what they've done. We're proud of how they've taken what's basically technology and really turned it into profit They've really done a fantastic job. We have changed the way and the pacing of that part of the business though.

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

When it was a larger fraction of our business, we wanted to have stability. So we worked very closely with Inox to have long term contracts. Today, we're more working on the short term because as we see their ramp, we wanna be responsive. So the thing that's different about particularly the backlog is there's not a lot of wind backlog in the twelve month number. And that's because we're converting it pretty fast in the revenue.

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

And then we're trying to get the next order in the next order for six months out, nine months out and continue to do that. So that's something that's different in the business in 2025 than it certainly has been in the past, right? We like to have stability in that business. Today, we see it as a stable business. We're trying to be a good partner and being able to provide product as fast as we can.

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

So that's why when you look at the backlog, there's not a significant amount of backlog. I said that the orders that in 2024 we delivered were about $35,000,000 We said about half of those were already delivered, right? So that's a very light backlog relative to what the demand could be from Inox. And that's because we want to be rapidly responsive to them, that they are going to go through a ramp and we to support that. Did that help with the color on the

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

absolutely helps. And I guess just it's a new setup that you're Because it is more kind of order to order and potentially orders in I don't want to say small orders, but just smaller orders that add up to a bigger number. Those are things that you will not announce.

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

I think the key is really is the pacing and the talk about that. And we'll try to highlight that in the call. I think when you look at the financials getting to the $65,000,000 in revenue and wind is representing $11,000,000 of that, I guess we're just north of 66. I try to look at it as a threshold. We broke through a certain threshold.

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

They're a great customer, but I don't think it's I think it doesn't behoove us to overemphasize that because the rest of the business, the growth through grid has happened, the diversification is happening, and all those pieces are put in place. And that's something that Inox really encourages us to do. We are a much better supplier today, I feel, because of the financial performance of the business, that we can react in ways a bit differently than maybe we could have even a few years ago.

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

Right, and absolutely, I mean, grid is the biggest part of the business by far, but this is the first time in a long, long time that I've heard you say that the confidence very high that both businesses are working, have tailwinds, etcetera.

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

Okay. Yes, the whole turn of the quarter thing, I think we've turned it, and we're not going to look back.

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

Okay. Thanks a lot.

[Operator]

Thank you. The next question comes from Colin Rusch with Oppenheimer. Please go ahead.

[Colin Rusch, Managing Director - Head of Sustainable Growth & Resource Optimization Research at Oppenheimer & Co. Inc.]

Thanks so much guys. Dan, can you talk a little bit about the effectiveness of the cross selling efforts that you've got now that you've got a couple of platforms integrated? I know you asked this repeatedly, but just want to get a sense of how that's impacting your win rate, order size and the contribution to the overall bookings at the $75,000,000 level.

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

Yeah, we're not cross selling anymore. We're just selling. We're selling the whole portfolio to everybody. We're trying to look at it and what do we have that meets the customer's demands and how do we present that as a full series of features that can be designed as their project. So that's something that the team has really worked on over the past eighteen months or so to get us to the point where we're not thinking, we're not positioning, we're not promoting it as a disparate group of energy control systems.

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

It's one system for a semiconductor fab. So we don't really talk to the customer about, hey, well, this is a D VAR, this comes from NEPSI or this is how it all works. It's here's how we mitigate SAG, right? Here's how we get the fab to have more uptime. And we have more dynamic and we have more static and persistent capability than we had before we made an improvement.

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

Each of these industries, that's what we're talking more and more about. So I don't even really see the business really as wind and grid so much anymore. It's a series of control solutions that we try to provide a certain set of customers. And there's a bunch of great industries that are going to drive the growth, not just one, it's many. So it's hard for me to delineate, hey, well, we got to win and we got extra because we have this offering.

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

Because now I mean, we're five years into this transformation in the business, and now we're really seeing the financial performance as a result of that.

[Colin Rusch, Managing Director - Head of Sustainable Growth & Resource Optimization Research at Oppenheimer & Co. Inc.]

Okay. That's actually super helpful. And then from a margin perspective, as you get a little bit more scale, you've got this common platform that you're selling across multiple applications. Can you talk a little bit about opportunities for driving cost reduction on the manufacturing side supply chain, just either through incremental design adjustments or from just leveraging some of the scale purchasing?

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

Yes, I think all those are available to us. It's something that we're working across the company. A lot of the ways the systems are built are very similar. So we're trying to look at learning and efficiency in how we produce, but also how we source. The team really learned a lot that is paying off today with supply chain, to be very flexible and to be very dynamic with how do we deal with if supply gets constrained or costs change.

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

So we're trying to do the best we can in managing those costs. And to date, we really haven't seen much that impacts the business. That isn't to say that we won't. That isn't to say that we'll talk to customers about how the world's going to change. I think we've done a very good job of being patient with our cost and passing pricing changes on to customers when it made sense, when the customer could accept it, all those things.

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

And I think that, again, we're going to head through another period of that, where there's a chance to reestablish the value with the customer and make sure that we're getting the appropriate value out of it. But we do work on supply chain all the time. I don't have today for you kind of goals or objectives, hey, we're gonna take this cost out on the product. We really are just trying to drive more through the factory, get efficiencies in buying and bundling purchasing as we can, and continue to move the needle with gross margin. Gross margin change year to year was pretty dramatic, right?

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

So now we're trying to incrementally improve as the business grows. And if I think we can do that, I think that'd be quite valuable.

[Colin Rusch, Managing Director - Head of Sustainable Growth & Resource Optimization Research at Oppenheimer & Co. Inc.]

Thanks so much, guys.

[Operator]

Thank you. The next question comes from Justin Clare with Roth Capital Partners. Please go ahead.

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

Hey, good morning. Thanks, guys. So wanted to follow-up on the semiconductor opportunity here. And just wanted to see if you could share a little bit more about the visibility you have into the pipeline of opportunities in semiconductor. And then if you could speak to are you primarily seeing the growth being driven by The U.

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

S. Market? Or are you also seeing healthy international growth? And then lastly, maybe if you could just speak to order sizes within semiconductors and how they might be trending.

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

Yeah, make sure I hit all those points because I think it's tremendous to get people to understand what we're seeing. I mean, the pipeline is huge. It's triple digit potential for us. And again, if we grow the business, it could be a triple digit part of the business. If it's really gets to a point where if materials and driven by semiconductor, not semiconductor alone, probably could get to that level.

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

And that's based upon projects that we know that are low risk that we feel that are either about to be constructed or in construction. It's global. So it's not just The US. There's definitely a drive in The US to reassure, to bring that capacity and capability here. But there's the broader issue, which is there's a need for more computational power, particularly small device computational power in a variety of applications that really fit into the fabs that we deliver our solution to.

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

Today, a fab order could be as small as 2,000,000. 1 time we were trying to get it up to a million, but today I think they're almost all over 2,000,000. And the larger ones can approach 8,000,000 to $10,000,000 I think we see things on the horizon where a single fab could be 10,000,000 to $15,000,000 in a few years, given where we're headed, where the size of fabs are going to grow and the level of static and dynamic capability that we provide to that business. So we're really pleased. And it's not just with one maker, it's several makers.

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

We're trying to get further and deeper in what our capability is for them so they can understand the value that they get from our offering. And again, as I kind of said a little bit earlier, we're just selling it as an AMSC solution. And the teams are working as one, not necessarily separately on these key accounts, specifically like semiconductor is a great example of that.

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

Okay, that's really helpful. And then I just guess more broadly on demand and the orders that you're seeing, fiscal Q4 was strong. Wondering if the implementation of the tariffs and then the pause, has that had any notable effect on the cadence of orders that you've seen from your customers? Wondering if you could just speak to how things have kind of evolved into your fiscal Q1 here.

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

Yes, I think in the short term, can say, if anything, it's helped. I think in the future, if anything, it's going to continue to help. The level of reassuring that we're seeing and the level of investment that's being considered, it's extraordinary. And I think we really sit at the center where there's a power quality problem or a power control problem, we have some unique offerings. And in some cases, we're the only American provider to be able to provide.

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

So I kind of saw this as the rhetoric was changing after the election, that this could present itself as an opportunity for the company. I see that today, and I hope to see that going forward as well.

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

Got it. Okay. And then maybe just shifting over to the Navy here. So you have delivered the three systems to the US Navy now. And wondering if you have any details on how those systems are performing.

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

Have they been in the field? And do you have kind of demonstrated performance that has advantages over legacy solutions that could help you to sell more of those systems? I know this information is fairly sensitive given that it's with the military, but to the extent that you have any detail there.

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

Yeah, all I can really say is yes to everything that you said. It is a differentiated solution. It works as well or better than advertised. The US Navy is excited about what we're doing, not just there, but in other parts. We've talked about the power continuum for them.

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

I think getting the Canadian Navy then reaffirms the whole technology again, that this is really valuable and viable. So I know, I had somebody tell me the other day that they like, did superconductors ever get commercialized? And I'm like, yeah, that happened years ago. This is real, it's effective, it works, they're happy. I don't wanna get into the differentiators because that gets into some classified stuff, but we're really happy.

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

It's a pleasure working with the Canadian Navy so far. It's been a very proud moment for us as a company to be able to provide real world systems for the US Navy. So the hope is we can go scale that and be able to bring that to other allies. It's a great offering that we have, and it's real.

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

Okay, sounds good. Thank you.

[Operator]

Thank you. At this time, there are no further questions in the queue. This concludes our question and answer session, And I would now like to turn the call back over to Mr. Gone for closing remarks.

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

Great. That was a wonderful articulation of my name. I just want to close-up on growth, because I think that the main question is we come out of a great year and position to continue to get better and better. I think the question on your mind might be, and I know that's what we're trying to drive the team is what's really going to drive our growth in the near term? I think it's semiconductors right here, right now.

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

I think it'll be followed up pretty quickly with traditional energy. I think we have a unique offering there. We're learning about it. We're working with partners to better understand that. And utilities, a lot of the kind of problems that we see are becoming more commonplace across different utilities.

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

We've really seen the beginning of an acceleration in these parts of our business. So semiconductors are expected to be a key driver for orders. And we're already seeing that impact with the acceleration to the 75,000,000 in orders this quarter. This momentum position us really to benefit from the continued expansion that's coming in the sector. As I commented in the questions, it's global, it's not just domestic, but there is a strong driver domestically for sure.

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

We're now really involved in seeing orders come from traditional energy. I've talked a little bit about it briefly, but I haven't really gotten into it. What we've learned is the combined offering of the different pieces that we've put together may be very uniquely positioned for traditional energy. And if you think about that market, it's really divided into kind of three main stages: upstream, midstream, and downstream. So upstream involves drilling and extraction.

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

Midstream refers to storage and transportation via pipelines. They're supported by compressors and pump stations. They all need critical power to ensure flow. So think about what we're doing is just like we would do with a semiconductor fab, just like we would do with a chemical plant, you're trying to power a pipeline. How do you do that in a resilient way?

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

Or how do you do that in an effective way? How do you drive all that equipment? It has to be in harsh and hardened environments. The other market we've seen some recent wins in is downstream, which handles the refining and distribution to users of the energy product. So we're really not just about renewables.

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

We've diversified now to energy in a broader sense. We're now involved in all three phases upstream, midstream and downstream. And our solutions mitigate power impacts from the equipment or processes at each stage, and we try to boost productivity and efficiency in each of these traditional energy operations. I think the third area I'd talk about is we're really involved in a variety of different utility projects that enhance grid resilience and support the energy transition. And now what we're seeing is a utility may do one of these, and now multiple utilities are doing many of these.

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

And again, these are projects that take a little bit longer to be able to deliver. The scope might be a bit higher as well. But we see, and I think this is a key one to highlight as we kind of close out the call, And this is new news for us. We're strengthening substation power quality to support the demand from data centers. We are seeing direct demand now.

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

I talked before we didn't have a direct solution. We're seeing the solution as we have now that we can directly add that into capital projects for data centers to support this rapid build out. It's new. We're excited. It's a big part of our future pipeline.

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

It's a whole kind of pivot where we're going. I had some hope and led some kind of indications that maybe we would get in that direction. And then now we're starting to see it. We have the proof that we've delivered, and we have the proof that we've been able to secure additional orders in that area. We're implementing reactive power systems for voltage stability.

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

You guys know about that. We've talked about that for years. But kind of one of the new applications is for the retirement of thermal plants. And we're seeing more and more of these plant where older plants are gonna be taken offline that provides disturbances on the grid that we can uniquely be able to mitigate and manage. We talk a lot historically, but to remind you about reinforcing transmission infrastructure to support industrial load growth.

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

Good example is large mining operations on vulnerable lines. We're seeing that globally as there's a drive to be able to process and refine materials. And semiconductors is a highly refined, highly processed material. That's really key here in the short term as well. So we're really trying to build a diverse business driven by materials like semiconductors, power and energy both from traditional and renewable sources.

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

So each of those three pieces really could represent about a quarter of our future business. The remaining quarter is probably going to come from military and utilities combined. Military might be a bit bigger. We'll see where utilities and data centers, where that goes, maybe that becomes a bigger part of it. But I think the business is clearly aligned for not only the energy transition, but also to support the reshoring of domestic manufacturing in America.

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

And I think that's different. It's a different business I talked to you today about than we did in 2017 or 2020 or even 2022. We're evolving, we're growing, we're trying to meet customer demands, we're trying to extend our product portfolio where we're capable. I'm really happy with what the team did. I think if you just recap big orders over the year that we had diversified, more navies involved.

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

I think a big part of it is really a testament to the overall team trying to drive this change in the company. And we're starting to see the manifestation of that now. So again, all these calls, everybody says, oh, you sound really excited. If I can't say it enough, I'm really excited not only about what we just did, but what we're going to go do. Thank you everybody for your trust, your patience with me.

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

We are really in a great position, and thanks for the time.

[Operator]

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

Participants

Executives

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

Analysts

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