• Revenue: $54.5 million for Q2 FY2024, up from $34 million in the year-ago quarter.
• Grid Business Revenue: 86% of total revenues, increased by 65% year-over-year.
• Wind Business Revenue: 14% of total revenues, increased by 37% year-over-year.
• Gross Margin: 29% for Q2 FY2024, up from 25% in the year-ago quarter.
• R&D and SG&A Expenses: $13.2 million for Q2 FY2024, up from $9.6 million in the year-ago quarter.
• Non-GAAP Net Income: $9.9 million or $0.27 per share for Q2 FY2024.
• Net Income: $4.9 million or $0.13 per share for Q2 FY2024, compared to a net loss of $2.5 million or $0.09 per share in the year-ago quarter.
• Cash Position: $74.8 million at the end of Q2 FY2024.
• Operating Cash Flow: $12.7 million for Q2 FY2024.
• 12-Month Backlog: Over $200 million.
• Total Backlog: More than $300 million.
• Q3 FY2024 Revenue Guidance: Expected to be in the range of $55 million to $60 million.
• Q3 FY2024 Net Loss Guidance: Not expected to exceed $1 million or $0.03 per share.
• Q3 FY2024 Non-GAAP Net Income Guidance: Expected to exceed $2 million or $0.05 per share.

• Warning! GuruFocus has detected 3 Warning Signs with AMSC.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• American Superconductor Corp (NASDAQ:AMSC) reported a significant revenue increase of over $54 million for the second quarter, marking a 60% growth compared to the previous year.
• The company achieved a 65% increase in grid business unit revenues, primarily driven by the acquisition of NWL and increased shipments of new energy power systems.
• AMSC ended the quarter with a strong cash position of nearly $75 million and a 12-month backlog of over $200 million, indicating robust future demand.
• The company generated a non-GAAP net income of $9.9 million, marking the fifth consecutive quarter of positive non-GAAP net income.
• AMSC's acquisition of NWL has expanded its customer base and market penetration, particularly in the industrial sector, providing new growth opportunities.

Negative Points

• Operating expenses increased to $13.2 million from $9.6 million in the previous year, primarily due to the inherited costs from the NWL acquisition and one-time acquisition-related expenses.
• The company experienced a decrease in cash reserves from $95.5 million to $74.8 million, partly due to the $33.6 million cash consideration for the NWL acquisition.
• Despite strong revenue growth, AMSC anticipates a net loss not exceeding $1 million for the third quarter of fiscal 2024.
• The integration of NWL and the realization of its full potential benefits may take additional time, as the acquisition is still in its early stages.
• The company's ship systems business is not yet at scale, which affects its contribution to overall margins, though future quarters may see improvement with new contracts.

Q & A Highlights

Q: With Inox's backlog at over 3 gigawatts, is there potential for your wind business to grow significantly larger, given past performance? A: Yes, there is potential for significant growth. We are closely monitoring Inox's ramp-up and are optimistic about future orders. We believe their business is well-positioned for growth, and we expect to report more on this soon. (Daniel McGahn, CEO)

Q: Can you share early impressions and market feedback on the new acquisition? A: The acquisition has been positively received. Customers appreciate the well-run operation and the extended team. We see great opportunities, especially in the industrial sector driven by semiconductor demand. While military business is a longer cycle, we expect it to become a substantial part of our business in the coming years. (Daniel McGahn, CEO)

Q: How is the HART-IP technology performing in the power quality space, and where are you winning? A: We excel in making systems less complicated and smaller, which allows for easier retrofits and expansions. Our focus is on premium-priced solutions that deliver premium value, leveraging proprietary technology for thermal management and system-level controls. (Daniel McGahn, CEO)

Q: Can you update us on the revenue ramp from the Canadian Navy contract? A: Revenue from the Canadian contract is expected to start ramping in fiscal '25, with deliveries beginning in '26. Once deliveries start, revenue can be linearized over the contract period. We are confident in the timetables and are focused on execution. (Daniel McGahn, CEO)

Q: With grid congestion becoming a challenge, are there opportunities for your high-temperature superconducting wire in transmission? A: While superconducting solutions are a year or more away from financial impact, we are well-positioned to address grid challenges with our new energy solutions. The grid's evolution presents opportunities for us to solve systematic problems, and we are actively pursuing these opportunities. (Daniel McGahn, CEO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.