AMERICAN SUPERCONDUCTOR CORP /DE/

Previous wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For this purpose, any statements contained herein that relate to future events or conditions, including without limitation, the statements in Part II, “Item 1A. Risk Factors” and in Part I under “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and located elsewhere herein regarding industry prospects, our addressable markets, our competitive position, macroeconomic conditions and their anticipated effect on our business, the benefits of our acquisitions, financial results and financial condition, expectations for our products, capabilities and potential uses of our products, steps taken to enhance liquidity, or our prospective results of operations or financial position, may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” and similar expressions are intended to identify forward-looking statements. Such forward-looking statements represent management’s current expectations and are inherently uncertain. There are a number of important factors that could materially impact the value of our common stock or cause actual results to differ materially from those indicated by such forward-looking statements. These important factors include, but are not limited to: If we fail to implement our business strategy successfully, our financial performance could be harmed; We may not realize all of the sales expected from our backlog of orders and contracts; We rely upon third-party suppliers for the components and subassemblies of many of our Grid and Wind products, making us vulnerable to supply shortages and price fluctuations, which could harm our business; We may acquire additional complementary businesses or technologies, which may require us to incur substantial costs for which we may never realize the anticipated benefits; Our business and operations may be materially adversely impacted in the event of a failure or security breach of our or any critical third parties' IT Systems or Confidential Information; Our contracts with the U.S. and Canadian governments are subject to audit, modification or termination by such governments and include certain other provisions in favor of the governments. The continued funding of such contracts may remain subject to annual legislative appropriation, which, if not approved, could reduce our revenue and lower or eliminate our profit; Changes in U.S. government defense spending could negatively impact our financial position, results of operations, liquidity and overall business; Our performance on contracts with the U.S. Department of Defense may result in restrictions to our ability to repurchase our common stock or U.S. government denial of Foreign Military Sales or ceasing of assistance for international Direct Com…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For this purpose, any statements contained herein that relate to future events or conditions, including without limitation, the statements in Part II, “Item 1A. Risk Factors” and in Part I under “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and located elsewhere herein regarding industry prospects, our addressable markets, our competitive position, macroeconomic conditions and their anticipated effect on our business, the benefits of our acquisitions, future financial results and financial condition and capabilities and potential uses of our products, may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” and similar expressions are intended to identify forward-looking statements. Such forward-looking statements represent management’s current expectations and are inherently uncertain. There are a number of important factors that could materially impact the value of our common stock or cause actual results to differ materially from those indicated by such forward-looking statements. These important factors include, but are not limited to: If we fail to implement our business strategy successfully, our financial performance could be harmed; We may not realize all of the sales expected from our backlog of orders and contracts; We rely upon third-party suppliers for the components and subassemblies of many of our Grid and Wind products, making us vulnerable to supply shortages and price fluctuations, which could harm our business; We may acquire additional complementary businesses or technologies, which may require us to incur substantial costs for which we may never realize the anticipated benefits; Our business and operations may be materially adversely impacted in the event of a failure or security breach of our or any critical third parties' IT Systems or Confidential Information; Our contracts with the U.S. and Canadian governments are subject to audit, modification or termination by such governments and include certain other provisions in favor of the governments. The continued funding of such contracts may remain subject to annual legislative appropriation, which, if not approved, could reduce our revenue and lower or eliminate our profit; Changes in U.S. government defense spending could negatively impact our financial position, results of operations, liquidity and overall business; Our performance on contracts with the U.S. Department of Defense may result in restrictions to our ability to repurchase our common stock or U.S. government denial of Foreign Military Sales or ceasing of assistance for international Direct Commercial Sales; Failure to comply with evolving data privacy and data protection laws, regulations, and other obligation…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

The preparation of the unaudited condensed consolidated financial statements requires that we make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ under different assumptions or conditions.

Current wording

The preparation of the unaudited condensed consolidated financial statements requires that we make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ under different assumptions or conditions. Our critical accounting policies and estimates have not materially changed from those disclosed in our Form 10-K for the fiscal year ended March 31, 2026.

Previous wording

Total revenues increased 30% to $94.1 million for the three months ended June 30, 2026 compared to $72.4 million for the three months ended June 30, 2025. Our revenues are summarized as follows (in thousands):

Current wording

Total revenues increased 43% to $94.0 million for the three months ended September 30, 2026 and total revenues increased 36% to $188.1 million for the six months ended September 30, 2026 compared to $65.9 million and $138.2 million for the three and six months ended September 30, 2025, respectively. Our revenues are summarized as follows (in thousands):

Previous wording

Our Grid business segment accounted for 81% of total revenues for the three months ended June 30, 2026 comparedto 83% forthe three months ended June 30, 2025. Our Grid business segment revenues increased 27% to $76.3 million in the three months ended June 30, 2026, from $60.1 million in the three months ended June 30, 2025. The increase in the Grid business segment revenues in the three months ended June 30, 2026, compared to the three months ended June 30, 2025, was driven by the addition of Comtrafo revenues.

Current wording

Our Grid business segment accounted for 82% of total revenues for both the three and six months ended September 30, 2026, compared to 83% for both the three and six months ended September 30, 2025. Our Grid business segment revenues increased 41% to $76.7 million in the three months ended September 30, 2026, from $54.3 million in the three months ended September 30, 2025. Our Grid business segment revenues increased 34% to $153.0 million in the six months ended September 30, 2026, from $114.4 million in the six months ended September 30, 2025. The increase in the Grid business segment revenues in the three and six months ended September 30, 2026, compared to the three and six months ended September 30, 2025, was driven by the addition of Comtrafo revenues along with organic revenue growth.

Previous wording

Our Wind business segment accounted for 19% of total revenues for the three months ended June 30, 2026, comparedto 17% for the three months ended June 30, 2025. Revenues in the Wind business segment increased 45% to $17.8 million in the three months ended June 30, 2026, from $12.3 million in the three months ended June 30, 2025. The increase during the three months ended June 30, 2026, compared to the three months ended June 30, 2025, was driven by additional shipments of electrical control systems ("ECS").

Current wording

Our Wind business segment accounted for 18% of total revenues for both the three and six months ended September 30, 2026, compared to 17% for both the three and six months ended September 30, 2025. Our Wind business segment revenues increased 51% to $17.4 million in the three months ended September 30, 2026, from $11.5 million in the three months ended September 30, 2025. Our Wind business segment revenues increased 48% to $35.1 million in the six months ended September 30, 2026, from $23.8 million in the six months ended September 30, 2025. The increase in the Wind business segment revenues in the three and six months ended September 30, 2026, compared to the three and six months ended September 30, 2025, was driven by additional shipments of electrical control systems ("ECS").

Previous wording

Cost of revenues increased by 45% to $69.3 million for the three months ended June 30, 2026, compared to $47.9 million for the three months ended June 30, 2025. Gross margin was 26% for the three months ended June 30, 2026, compared to 34% for thethree months ended June 30, 2025. Cost of revenues includes total amortization expense of $0.5 million in the three months ended June 30, 2026 as a result of Comtrafo acquired backlog intangible assets. In addition, $0.7 million related to a fair value adjustment for the step-up basis assigned to acquired inventory to properly reflect the fair value in purchase accounting was charged to cost of revenues in the three months ended June 30, 2026. The decrease in gross margin in the three months ended June 30, 2026 was due to a less favorable product mix and the impact of Comtrafo purchase accounting items.

Current wording

Cost of revenues increased by 49% to $67.5 million for the three months ended September 30, 2026, compared to $45.4 million for the three months ended September 30, 2025. Cost of revenues increased by 47% to $136.9 million for the six months ended September 30, 2026, compared to $93.3 million for the six months ended September 30, 2025. Gross margin was 28% and 27% for the three and six months ended September 30, 2026, respectively, compared to 31% and 33% for the three and six months ended September 30, 2025, respectively. Cost of revenues includes total amortization expense of $0.5 million and $1.0 million in the three and six months ended September 30, 2026, respectively, as a result of Comtrafo acquired backlog intangible assets. In addition, $0.7 million related to a fair value adjustment for the step-up basis assigned to acquired inventory to properly reflect the fair value in purchase accounting was charged to cost of revenues in the six months ended September 30, 2026. The decrease in gross margins in the three and six months ended September 30, 2026 was due to a less favorable product mix and the impact of Comtrafo purchase accounting items.

Previous wording

Selling, general and administrative ("SG&A") expenses increased 31% in the three months ended June 30, 2026, to $18.6 million from $14.2 million in the three months ended June 30, 2025. The increase in SG&A expense in thethree months ended June 30, 2026 was driven primarily by the addition of Comtrafo expenses, higher overall compensation expense, and additional stock-based compensation expense.

Current wording

Selling, general and administrative ("SG&A") expenses increased 36% in the three months ended September 30, 2026, to $18.3 million from $13.4 million in the three months ended September 30, 2025. SG&A expenses increased 34% in the six months ended September 30, 2026 to $36.9 million from $27.6 million in the six months ended September 30, 2025. The increase in SG&A expense in the three and six months ended September 30, 2026 was driven primarily by the addition of Comtrafo expenses, higher total compensation expense, and additional stock-based compensation expense.

Previous wording

We recorded amortization expense related to our core technology and know-how and customer relationships of $0.5 million in the three months ended June 30, 2026, and $0.3 million in the three months ended June 30, 2025. The increase in amortization expense in the three months ended June 30, 2026, was a result of additional amortization related to the Comtrafo acquisition, as well as ongoing activity from NEPSI and Neeltran which are using the economic consumption method as the basis to amortize the acquired customer relationships intangible assets.

Current wording

We recorded amortization expense related to our core technology and know-how and customer relationships of $0.5 million in the three months ended September 30, 2026, and $0.3 million in the three months ended September 30, 2025. We recorded amortization expense related to our core technology and know-how and customer relationships of $0.9 million in the six months ended September 30, 2026, and $0.7 million in the six months ended September 30, 2025. The increase in amortization expense in the three and six months ended September 30, 2026 was a result of additional amortization related to the Comtrafo acquisition, as well as ongoing activity from NEPSI and Neeltran, which are using the economic consumption method as the basis to amortize the acquired customer relationships intangible assets.

Previous wording

The change in fair value of our contingent consideration for the earnout payment on the acquisition of Comtrafo resulted in a gain of $8.1 million from a decrease in fair value of the contingent consideration driven by changes in the forecast in the three months ended June 30, 2026. There was no activity in the three months ended June 30, 2025 related to the change in fair value of contingent consideration.

Current wording

The change in fair value of our contingent consideration for the earnout payment on the acquisition of Comtrafo resulted in a gain of $1.3 million and $9.4 million from changes in fair value of the contingent consideration driven by changes in the forecast in the three and six months ended September 30, 2026, respectively. There was no activity in the three or six months ended September 30, 2025 related to the change in fair value of contingent consideration.

Previous wording

Our Grid business segment generated operating loss of $2.2 million in thethree months ended June 30, 2026, compared to an operating income of $4.2 million in thethree months ended June 30, 2025. The decrease in the Grid business segment operating income in the three months ended June 30, 2026 was due to lower gross margins and Comtrafo purchase accounting expense.

Current wording

Our Grid business segment generated operating losses of $0.2 million and $2.3 million in the three and six months ended September 30, 2026, respectively, compared to operating income of $1.3 million and $5.4 million in thethree and six months ended September 30, 2025, respectively. The decrease in the Grid business segment operating income in the three and six months ended September 30, 2026 was due to lower gross margins and Comtrafo purchase accounting expense.

Previous wording

Our Wind business segment generated operating income of $3.9 million in thethree months ended June 30, 2026, compared to operating income of $1.5 million in thethree months ended June 30, 2025. The increase in the Wind business segment operating income in the three months ended June 30, 2026 was due to higher revenues and gross margins from increased sales of ECS units.

Current wording

Our Wind business segment generated operating income of $4.2 million and $8.1 million in the three and six months ended September 30, 2026, compared to operating income of $1.7 million and $3.2 million in thethree and six months ended September 30, 2025, respectively. The increase in the Wind business segment operating income in the three and six months ended September 30, 2026 was due to higher revenues and gross margins from increased sales of ECS units.

Previous wording

Interest income, net, was $1.5 million in the three months ended June 30, 2026, compared to $0.9 million in the three months ended June 30, 2025. The increase in interest income, net, in the three months ended June 30, 2026 was due to higher cash balances in the current year.

Current wording

Interest income, net was $1.4 million and $3.0 million in thethree and six months ended September 30, 2026, respectively, compared to $2.3 million and $3.2 million in the three and six months ended September 30, 2025, respectively. The decrease in interest income, net, in the three and six months ended September 30, 2026 was due to lower cash balances in the current year.

Previous wording

Other expense, net, was $0.6 million in thethree months ended June 30, 2026, compared to other income, net of $0.3 million in the three months ended June 30, 2025. The decrease in other income, net, during the three months ended June 30, 2026, was driven by unfavorable fluctuations in foreign currencies.

Current wording

Other expense, net, was $0.4 million and $1.0 million in the three and six months ended September 30, 2026, respectively, compared to other expense, net of $0.4 million and less than $0.1 million in the three and six months ended September 30, 2025, respectively. The increase in other expense, net, during the three and six months ended September 30, 2026, was driven by unfavorable fluctuations in foreign currencies.

Previous wording

Income tax expense was $1.3 million in the three months ended June 30, 2026, compared to income tax expense of $0.2 million in the three months ended June 30, 2025. The increase in our income tax expense was primarily due to taxes in foreign jurisdictions.

Current wording

Income tax expense was $3.4 million and $4.7 million in thethree and six months ended September 30, 2026, respectively, compared to income tax expense of $0.1 million and $0.3 million in the three and six months ended September 30, 2025, respectively. The increase in our income tax expense was primarily due to the existence of a valuation allowance against our net U.S. deferred tax assets in the prior year, a majority of which was released during the three months ended December 31, 2025, and taxes in foreign operations in the current year.

Previous wording

Net income was $9.5 million in thethree months ended June 30, 2026, compared to $6.7 million in thethree months ended June 30, 2025. The increase in net income for the three months ended June 30, 2026 was driven primarily by the change in fair value of contingent consideration.

Current wording

Net income was $3.0 million and $12.5 million in the three and six months ended September 30, 2026, respectively, compared to $4.8 million and $11.5 million in thethree and six months ended September 30, 2025, respectively. The decrease in net income for the three months ended September 30, 2026 was driven primarily by additional tax expense. The increase in net income for thesix months ended September 30, 2026 was driven primarily by the change in fair value of contingent consideration.

Previous wording

We generated non-GAAP net income of $7.6 million, or $0.17 per share, for thethree months ended June 30, 2026, compared to a non-GAAP net income of $11.6 million, or $0.30 per share, for thethree months ended June 30, 2025. For the three months ended June 30, 2026, the decrease in non-GAAP net income was a result of lower gross margins.

Current wording

We generated non-GAAP net income of $9.1 million and $16.8 million, or $0.20 and $0.36 per share, for thethree and six months ended September 30, 2026, respectively, compared to a non-GAAP net income of $8.9 million and $20.4 million, or $0.20 and $0.50 per share, for thethree and six months ended September 30, 2025, respectively. For the three months ended September 30, 2026, the increase in Non-GAAP net income was primarily driven by higher revenues and operating income. For the six months ended September 30, 2026, the decrease in Non-GAAP net income was a result of lower gross margins.

Previous wording

The Company’s primary sources of liquidity are internally generated cash provided by operating activities, our cash and cash equivalents on hand, along with access to capital markets, including through our currently effective Registration Statements on Form S-3. We believe that these sources of liquidity are sufficient to meet both our short-term and reasonably foreseeable long-term requirements and obligations. As of June 30, 2026, we had cash, cash equivalents and restricted cash of $153.1 million, compared to $147.6 million as of March 31, 2026, an increase of $5.5 million. As of June 30, 2026, we had $22.8 million in cash, cash equivalents, and restricted cash in foreign bank accounts. Our cash, cash equivalents, and restricted cash are summarized as follows (in thousands):

Current wording

The Company’s primary sources of liquidity are internally generated cash provided by operating activities, our cash and cash equivalents on hand, along with access to capital markets, including through our currently effective Registration Statements on Form S-3. We believe that these sources of liquidity are sufficient to meet both our short-term and reasonably foreseeable long-term requirements and obligations. As of September 30, 2026, we had cash, cash equivalents and restricted cash of $181.9 million, compared to $147.6 million as of March 31, 2026, an increase of $34.3 million. As of September 30, 2026, we had $24.0 million in cash, cash equivalents, and restricted cash in foreign bank accounts. Our cash, cash equivalents, and restricted cash are summarized as follows (in thousands):

Previous wording

For the three months ended June 30, 2026, net cash provided by operating activities was $16.0 million, compared to $4.1 million for the three months ended June 30, 2025. The increase in cash flows provided by operating activities in the three months ended June 30, 2026 was due primarily to changes in deferred revenue, inventory, prepaid expenses and other current assets, and changes in fair value consideration.

Current wording

For the six months ended September 30, 2026, net cash provided by operating activities was $48.7 million, compared to $10.6 million for the six months ended September 30, 2025. The increase in cash flows provided by operating activities in the six months ended September 30, 2026 was due primarily to changes in deferred revenue, inventory, prepaid expenses and other current assets, and changes in fair value consideration relating to contingent consideration.

Previous wording

For the three months ended June 30, 2026, net cash used in investing activities was $10.5 million, compared to $0.7 million for the three months ended June 30, 2025. The increase in net cash used in investing activities was primarily due to cash paid for the purchase of property, plant and equipment in the current year.

Current wording

For the six months ended September 30, 2026, net cash used in investing activities was $14.5 million, compared to $2.1 million for the six months ended September 30, 2025. The increase in net cash used in investing activities was primarily due to cash paid for the purchase of property, plant and equipment in the current year.

Previous wording

For the three months ended June 30, 2026, there was no cash provided by or used in financing activities. For the three months ended June 30, 2025, net cash provided by financing activities was $124.6 million. The decrease in net cash provided by financing activities was due primarily to the equity raise in June 2025.

Current wording

For the six months ended September 30, 2026, net cash provided by financing activities was $0.2 million. For the six months ended September 30, 2025, net cash provided by financing activities was $124.8 million. The decrease in net cash provided by financing activities was due primarily to the equity raise in June 2025.

Previous wording

As of June 30, 2026, we had $5.6 million of restricted cash included in long-term assets and $3.8 million of restricted cash included in current assets. At March 31, 2026, we had $3.3 million of restricted cash included in long-term assets and $3.5 million of restricted cash in current assets. These amounts included in restricted cash primarily represent collateral deposits to secure surety bonds and letters of credit for various customer contracts. These deposits are held in interest bearing accounts.

Current wording

As of September 30, 2026, we had $4.7 million of restricted cash included in long-term assets and $7.3 million of restricted cash included in current assets. At March 31, 2026, we had $3.3 million of restricted cash included in long-term assets and $3.5 million of restricted cash in current assets. These amounts included in restricted cash primarily represent collateral deposits to secure surety bonds and letters of credit for various customer contracts. These deposits are held in interest bearing accounts.

Previous wording

We believe we have sufficient available liquidity to fund our operations and capital expenditures for at least the next twelve months and into the future. We raised $124.6 million, net of offering expenses, through an equity raise in June 2025, of which $88.3 million was used for the Comtrafo Acquisition. In addition, we may seek to raise additional capital, which could be in the form of loans, convertible debt or equity, to fund our operating requirements and capital expenditures. There can be no assurance that we will be able to raise additional capital on favorable terms or at all or execute on any other means of improving our liquidity as described above. Additionally, the impact of global sources of instability, including the ongoing war between Russia and Ukraine, tariffs, trade restrictions and resulting trade conflicts, instability of financial institutions and political instability in the United States, on the global financial markets may reduce our ability to raise additional capital, if necessary, which could negatively impact our liquidity.

Current wording

We believe we have sufficient available liquidity to fund our operations and capital expenditures for at least the next twelve months and into the future. We may seek to raise additional capital, which could be in the form of loans, convertible debt or equity, to fund our operating requirements and capital expenditures. There can be no assurance that we will be able to raise additional capital on favorable terms or at all or execute on any other means of improving our liquidity as described above. Additionally, the impact of global sources of instability, including the ongoing conflicts between Russia and Ukraine and in the Middle East, tariffs, trade restrictions and resulting trade conflicts, instability of financial institutions and political instability in the United States, on the global financial markets may reduce our ability to raise additional capital, if necessary, which could negatively impact our liquidity.

Previous wording

In September 2025, the FASB issued ASU 2025-06,Intangibles—Goodwill and Other—Internal-Use Software. The amendments in ASU 2025-06 remove all references to software development project stages and requires entities to start capitalizing software costs when both of the following occur: (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. Following the release of ASU2024-05 in September 2025, the effective date will be annual reporting periods beginning after December 15, 2027. We are evaluating the impact on our consolidated financial statements.

Current wording

In September 2025, the FASB issued ASU 2025-06,Intangibles—Goodwill and Other—Internal-Use Software. The amendments in ASU 2025-06 remove all references to software development project stages and requires entities to start capitalizing software costs when both of the following occur: (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. Following the release of ASU2025-06 in September 2025, the effective date will be annual reporting periods beginning after December 15, 2027. We are evaluating the impact on our consolidated financial statements.