American Superconductor Q3 2025 American Superconductor Corp Earnings Call | AllMind AI Earnings | AllMind AI
Q3 2025 American Superconductor Corp Earnings Call
Speaker #1: Good day and welcome to the AMSC third quarter fiscal 2025 financial results conference call. All participants Should you need assistance, please signal a conference specialist by pressing the will be in listen-only mode.
Speaker #1: star key followed by zero. After today's presentation, there will be an opportunity to ask you may press star then one on a touch-tone phone.
Speaker #1: To withdraw your ahead.
Nicol Golez: Thank you, Bailey. Good morning, everyone, and welcome to American Superconductor Corporation's third quarter of fiscal year 2025 conference call. I am Nicol Golez, AMSC's director of communications.
Speaker #2: Thank you, Bailey. Good morning, everyone, and welcome to American Superconductor Corporation's third quarter of fiscal year 2025 conference call. I am Nicole Golez, AMSC's Director of Communications.
Speaker #2: Joining me today are Daniel McGahn, Chairman, President, and John Kosiba, Senior Vice Chief Executive Officer; and President, Chief Financial Officer, and Treasurer. Yesterday, after market closed, American Superconductor issued its earnings release for the third quarter of fiscal year 2025.
Nicol Golez: Joining me today are Daniel McGahn, 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 third quarter of fiscal year 2025. A copy of this release 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 American Superconductor's future expectations, including expectations regarding the company's financial results, plans, and prospects, constitute forward-looking statements.
Nicol Golez: Joining me today are Daniel McGahn, 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 third quarter of fiscal year 2025. A copy of this release 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 American Superconductor's future expectations, including expectations regarding the company's financial results, plans, and prospects, constitute forward-looking statements.
Speaker #2: A copy of this release 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 American Superconductor's future expectations including expectations regarding the company's plans, and prospects financial results, constitute forward-looking statements.
Q3 2025 American Superconductor Corp Earnings Call
Nicol Golez: 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 American Superconductor's annual report on Form 10-K for the year ended 31 March 2025, which the company filed with the Securities and Exchange Commission on 21 May 2025, and the company's other reports filed with the SEC, 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, a non-GAAP financial measure. 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? Thanks, Nicol. Good morning, everyone.
Nicol Golez: 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 American Superconductor's annual report on Form 10-K for the year ended 31 March 2025, which the company filed with the Securities and Exchange Commission on 21 May 2025, and the company's other reports filed with the SEC, 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, a non-GAAP financial measure. 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?
Speaker #2: may differ materially Actual results 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 American Superconductor's annual report on Form 10-K for the year ended March 31st, 2025.
Speaker #2: Which the company filed with the Securities and Exchange Commission on May 21st, 2025. And the company's other reports filed with the available on our website.
Speaker #2: The company disclaims any obligation to update these forward-looking statements. On today's call, management will refer to non-GAAP net income. A non-GAAP financial measure. Tables of financial measures can be found in the company's earnings release.
Speaker #2: With that, I will now turn the call over to Chairman, President, and Chief Executive Officer Daniel McGahn.
Speaker #2: Daniel, Thanks, Nicole.
Daniel McGahn: Thanks, Nicol. Good morning, everyone.
Speaker #3: Good morning, everyone. I will begin today by providing an update and sharing a few remarks on our business. review of our financial results for the third fiscal quarter which ended December 31, provide guidance for the 2025, and will fourth fiscal quarter which will end March 31, 2026.
Nicol Golez: I will begin today by providing an update and sharing a few remarks on our business. John Kosiba will then provide a detailed review of our financial results for Q3, which ended 31 December 2025, and will provide guidance for Q4, which will end 31 March 2026. Following our comments, we'll open up the line to questions from our analysts. We are excited to share a quarter of outstanding financial results. Total revenue for Q3 of fiscal year 2025 exceeded our guidance range and came in at over $74 million. Revenue grew over 20% versus the year-ago period, driven by organic growth as well as a few weeks of contributions from the acquisition of Comtrafo, which we closed on 5 December 2025. The business outperformed this quarter.
Daniel McGahn: I will begin today by providing an update and sharing a few remarks on our business. John Kosiba will then provide a detailed review of our financial results for Q3, which ended 31 December 2025, and will provide guidance for Q4, which will end 31 March 2026. Following our comments, we'll open up the line to questions from our analysts. We are excited to share a quarter of outstanding financial results. Total revenue for Q3 of fiscal year 2025 exceeded our guidance range and came in at over $74 million. Revenue grew over 20% versus the year-ago period, driven by organic growth as well as a few weeks of contributions from the acquisition of Comtrafo, which we closed on 5 December 2025. The business outperformed this quarter.
Speaker #3: Following our comments, we'll open up the line to questions from our analysts. We are excited to share a quarter of outstanding financial results. Total revenue for the third quarter of fiscal year 2025 exceeded our guidance range and came in at over $74 million.
Speaker #3: Revenue grew over 20% versus the year-ago period. Driven by organic growth as well as a few weeks of contributions from the acquisition of Comprafo, which we closed on December 5th, 2025.
Speaker #3: The business outperformed this quarter we delivered our sixth consecutive quarter of profitability and our 10th consecutive quarter of non-GAAP profitability. Strong market demand drove bookings resulting in a robust 12-month backlog of over 250 million.
Nicol Golez: We delivered our sixth consecutive quarter of profitability and our 10th consecutive quarter of non-GAAP profitability. Strong market demand drove bookings, resulting in a robust 12-month backlog of over $250 million. Gross margins again topped 30%, and we closed the quarter with a strong balance sheet of over $145 million in cash after acquiring Comtrafo. Total revenue for the past nine months is nearly total revenue for the entire previous fiscal year. This means that most of what we do in the fourth quarter will contribute to year-over-year growth. Our grid revenue accounted for 85% of AMSC's total revenue and grew over 20% versus the year-ago period. Nearly 15% of the revenue came from our wind business, which grew by 25% versus the year-ago period. During our third quarter, we generated revenue across a diverse set of sectors. Traditional energy accounted for nearly 1/3 of shipments. Renewables represented about 1/4.
Daniel McGahn: We delivered our sixth consecutive quarter of profitability and our 10th consecutive quarter of non-GAAP profitability. Strong market demand drove bookings, resulting in a robust 12-month backlog of over $250 million. Gross margins again topped 30%, and we closed the quarter with a strong balance sheet of over $145 million in cash after acquiring Comtrafo. Total revenue for the past nine months is nearly total revenue for the entire previous fiscal year. This means that most of what we do in the fourth quarter will contribute to year-over-year growth. Our grid revenue accounted for 85% of AMSC's total revenue and grew over 20% versus the year-ago period. Nearly 15% of the revenue came from our wind business, which grew by 25% versus the year-ago period. During our third quarter, we generated revenue across a diverse set of sectors. Traditional energy accounted for nearly 1/3 of shipments. Renewables represented about 1/4.
Speaker #3: Gross margins again topped 30%. And we sheet of over closed the quarter with a strong balance $145 million in acquiring cash after Comprafo. Total revenue for the past nine months is nearly total revenue for the entire previous fiscal year.
Speaker #3: This means that most of what we do in the fourth quarter will contribute to year-over-year growth. Our grid revenue accounted for 85% of AMSC's total revenue, and grew over period.
Speaker #3: Nearly 15% of the revenue came from our wind business, which grew by 25% versus the 20% versus the year-ago year-ago period. During our third quarter, we generated revenue across a diverse set of sectors.
Speaker #3: Traditional energy accounted for nearly one-third of shipments. Renewables represented about one-quarter. Military and utility markets each contributed over 15%. And materials including semiconductors, made up more than 10% of revenue.
Nicol Golez: Military and utility markets each contributed over 15%, and materials, including semiconductors, made up more than 10% of revenue. Additionally, we delivered into a data center project this quarter. We've talked about this for the past couple of quarters. We believe this delivery marks an important milestone for additional potential opportunities in this market. We said we were going to deliver on a data center order, and we did. But please remember, these projects make up about 5% of total revenue. Our revenue mix is well diversified, and we expect our recent acquisition to strengthen our reach to utilities while expanding our overall end-market exposure. This quarter, we did record a significant tax benefit due in large part to our recent history of sustained profitability and our forecasted future earnings outlook.
Daniel McGahn: Military and utility markets each contributed over 15%, and materials, including semiconductors, made up more than 10% of revenue. Additionally, we delivered into a data center project this quarter. We've talked about this for the past couple of quarters. We believe this delivery marks an important milestone for additional potential opportunities in this market. We said we were going to deliver on a data center order, and we did. But please remember, these projects make up about 5% of total revenue. Our revenue mix is well diversified, and we expect our recent acquisition to strengthen our reach to utilities while expanding our overall end-market exposure. This quarter, we did record a significant tax benefit due in large part to our recent history of sustained profitability and our forecasted future earnings outlook.
Speaker #3: Additionally, we delivered into a quarter. We've talked about this for the past couple of quarters. We believe this delivery marks an important milestone for additional potential opportunities in this market.
Speaker #3: We said we were going to deliver on a data center order, and we did. But please remember, these projects make up about 5% of total revenue.
Speaker #3: Our revenue mix is, well, recent acquisition to strengthen our diversified. And we expect our expanding our overall end-market record a significant tax exposure. This quarter, we did benefit due in large part to our recent history of sustained profitability and our forecasted future earnings outlook.
Speaker #3: This is an important moment in the history of our company's financial details later in the call. Now I'll turn the call over to John Kosiba to review our financial results for the third quarter of fiscal year 2025 and progress.
Nicol Golez: This is an important moment in the history of our company's financial progress, and John will get into more details later in the call. Now I'll turn the call over to John Kosiba to review our financial results for the third quarter of fiscal year 2025 and provide guidance for the fourth quarter of fiscal year 2025, which will end 31 March 2026. John? Thanks, Daniel. And good morning, everyone. AMSC generated revenues of $74.5 million for the third quarter of fiscal 2025, compared to $61.4 million in the year-ago quarter. Our Grid business unit accounted for 85% of total revenues, while our Wind business unit accounted for 15%. Grid business unit revenues of $63.2 million increased by 21% in the third quarter versus the year-ago quarter.
Daniel McGahn: This is an important moment in the history of our company's financial progress, and John will get into more details later in the call. Now I'll turn the call over to John Kosiba to review our financial results for the third quarter of fiscal year 2025 and provide guidance for the fourth quarter of fiscal year 2025, which will end 31 March 2026. John?
Speaker #3: of fiscal year 2025, which will end March 31, 2026. And John will get into more John?
John Kosiba: Thanks, Daniel. And good morning, everyone. AMSC generated revenues of $74.5 million for the third quarter of fiscal 2025, compared to $61.4 million in the year-ago quarter. Our Grid business unit accounted for 85% of total revenues, while our Wind business unit accounted for 15%. Grid business unit revenues of $63.2 million increased by 21% in the third quarter versus the year-ago quarter.
Speaker #4: everyone. AMSC generated revenues of Thanks, Daniel. And good morning, $74.5 million for the third quarter of fiscal 2025, compared to $61.4 million quarter. Our grid business unit accounted for 85% of total in the year-ago revenues while our wind business unit accounted for 15%.
Speaker #4: Grid business unit revenues of $63.2 million increased by 21% in the third quarter versus the year-ago quarter. organic growth within our new energy product lines as well in revenue was primarily driven by as the addition of Comprafo revenues, which totaled $4.6 The increase million in the quarter.
Nicol Golez: The increase in revenue was primarily driven by organic growth within our New Energy product lines, as well as the addition of Comtrafo revenues, which totaled $4.6 million in the quarter. Please note that Comtrafo revenue and associated financial activity in the quarter was for a partial period from the date we closed on 5 December 2025, through the end of quarter. There were approximately 19 days of Comtrafo financial activity included in our Q3 results. Our Wind business unit revenues of $11.3 million increased by 25% over the same time period. The increase in revenue was primarily driven by additional shipments of Electrical Control Systems. Looking at the P&L in more detail, gross margin for the third quarter of fiscal 2025 was 31%, compared to 27% in the year-ago quarter. This marks the third sequential quarter with gross margins exceeding 30%.
John Kosiba: The increase in revenue was primarily driven by organic growth within our New Energy product lines, as well as the addition of Comtrafo revenues, which totaled $4.6 million in the quarter. Please note that Comtrafo revenue and associated financial activity in the quarter was for a partial period from the date we closed on 5 December 2025, through the end of quarter. There were approximately 19 days of Comtrafo financial activity included in our Q3 results. Our Wind business unit revenues of $11.3 million increased by 25% over the same time period. The increase in revenue was primarily driven by additional shipments of Electrical Control Systems. Looking at the P&L in more detail, gross margin for the third quarter of fiscal 2025 was 31%, compared to 27% in the year-ago quarter. This marks the third sequential quarter with gross margins exceeding 30%.
Speaker #4: associated financial activity in the quarter was for a partial period Please note that Comprafo revenue and 2025, through the end of the quarter. There were approximately 19 days December 5th, of Comprafo financial activity included in our Q3 results.
Speaker #4: Our wind business unit revenues of $11.3 million increased by 25% over the same time period. The increase in revenue was primarily driven by additional shipments of electrical control systems.
Speaker #4: Looking at the P&L in more detail, gross margin for was 31%, compared the third quarter of fiscal 2025 to 27% in the year-ago quarter.
Speaker #4: This marks the third sequential quarter with gross margins exceeding 30%. Included in cost of goods sold in the third quarter of fiscal 2025 is approximately $400,000 in non-cash adjustments related to the purchase and accounting for the acquisition of Comprafo.
Nicol Golez: Included in cost of goods sold in the third quarter of fiscal 2025 is approximately $400,000 in non-cash adjustments related to the purchase and accounting for the acquisition of Comtrafo. The year-over-year increase in gross margin was primarily driven by higher revenues, a favorable product mix, both within our Grid and Wind business units. Moving on to operating expenses, R&D and SG&A expenses for the third quarter of fiscal 2025 were $19 million, compared to $14.6 million in the year-ago quarter. The year-over-year increase includes the acquired operating expenses of our recent acquisition, Comtrafo. Additionally, there was approximately $1.2 million of acquisition-related expenses to complete the Comtrafo acquisition. Approximately 20% of R&D and SG&A expenses in the third quarter of fiscal 2025 were non-cash, compared to 19% in the year-ago quarter. Our net income for the third quarter of fiscal 2025 was $117.8 million, or $2.68 per share.
John Kosiba: Included in cost of goods sold in the third quarter of fiscal 2025 is approximately $400,000 in non-cash adjustments related to the purchase and accounting for the acquisition of Comtrafo. The year-over-year increase in gross margin was primarily driven by higher revenues, a favorable product mix, both within our Grid and Wind business units. Moving on to operating expenses, R&D and SG&A expenses for the third quarter of fiscal 2025 were $19 million, compared to $14.6 million in the year-ago quarter. The year-over-year increase includes the acquired operating expenses of our recent acquisition, Comtrafo. Additionally, there was approximately $1.2 million of acquisition-related expenses to complete the Comtrafo acquisition. Approximately 20% of R&D and SG&A expenses in the third quarter of fiscal 2025 were non-cash, compared to 19% in the year-ago quarter. Our net income for the third quarter of fiscal 2025 was $117.8 million, or $2.68 per share.
Speaker #4: The year-over-year increase in gross margin was primarily driven by higher revenues, a favorable product mix, both within our grid and wind business units. Moving on to operating SG&A expenses for the third quarter of fiscal 2025 were $19 million, compared to $14.6 million in the year-ago quarter.
Speaker #4: The year-over-year increase includes the acquired operating expenses of our recent acquisition of Comprafo, additionally there was approximately $1.2 million of acquisition-related expenses to complete the Comprafo acquisition.
Speaker #4: Approximately 20% of R&D and SG&A expenses in the third quarter of fiscal 2025 were non-cash. Compared to 19% in the year-ago quarter. Our net income for the third quarter of fiscal 2025 was $117.8 million, or $2.68 per share.
Nicol Golez: Our non-GAAP net income for Q3 of fiscal 2025 was $123.5 million, or $2.81 per share. Included in our Q3 net income and non-GAAP net income was a tax benefit of $113.1 million due to the release of valuation allowance on deferred tax assets. Excluding this tax benefit, net income in Q3 of fiscal 2025 was $4.7 million, or $0.11 per share. This compares to net income of $2.5 million, or $0.07 per share, in the year-ago quarter. Excluding the tax benefit, non-GAAP net income was $10.5 million, or $0.24 per share. This compares to a non-GAAP net income of $6 million, or $0.16 per share, in the year-ago quarter. Please see our press release issued last night for a reconciliation of GAAP to non-GAAP results.
John Kosiba: Our non-GAAP net income for Q3 of fiscal 2025 was $123.5 million, or $2.81 per share. Included in our Q3 net income and non-GAAP net income was a tax benefit of $113.1 million due to the release of valuation allowance on deferred tax assets. Excluding this tax benefit, net income in Q3 of fiscal 2025 was $4.7 million, or $0.11 per share. This compares to net income of $2.5 million, or $0.07 per share, in the year-ago quarter. Excluding the tax benefit, non-GAAP net income was $10.5 million, or $0.24 per share. This compares to a non-GAAP net income of $6 million, or $0.16 per share, in the year-ago quarter. Please see our press release issued last night for a reconciliation of GAAP to non-GAAP results.
Speaker #4: $123.5 Our non-gap net income for the third million, or $2.81 per share. Included in our third quarter net income and non-gap net income was a tax benefit of million, due to the release of a valuation allowance on deferred tax assets.
Speaker #4: Excluding this tax benefit, net income in the third quarter of fiscal 2025 was $4.7 million, or $0.11 per share. This compares to net income of $2.5 million, or quarter.
Speaker #4: Excluding the tax benefit, non-gap net income was $10.5 million, or $24 per share. This compares to a non-gap net income of $6 million, or $0.16 per share in the year-ago quarter.
Speaker #4: release issued last night for a reconciliation of Please see our press results. We ended the third $147.1 million in cash, cash equivalents, and restricted cash.
Nicol Golez: We ended Q3 of fiscal 2025 with $147.1 million in cash, cash equivalents, and restricted cash, which compares with $218.8 million on 30 September 2025. Included in the quarter was the acquisition of Comtrafo, which included cash consideration of $88.3 million. We generated $3.2 million of operating cash flow in Q3 of fiscal 2025. Our CapEx for the quarter was $900,000. I would like to note it would not be unusual for CapEx to exceed $1 million a quarter, and at times it may even exceed a couple million dollars in a quarter as we scale up production, particularly within our power transformer lines, which are seeing high levels of demand. Now, turning to our financial guidance for Q4 of fiscal 2025, we expect that our revenues will exceed $80 million.
John Kosiba: We ended Q3 of fiscal 2025 with $147.1 million in cash, cash equivalents, and restricted cash, which compares with $218.8 million on 30 September 2025. Included in the quarter was the acquisition of Comtrafo, which included cash consideration of $88.3 million. We generated $3.2 million of operating cash flow in Q3 of fiscal 2025. Our CapEx for the quarter was $900,000. I would like to note it would not be unusual for CapEx to exceed $1 million a quarter, and at times it may even exceed a couple million dollars in a quarter as we scale up production, particularly within our power transformer lines, which are seeing high levels of demand. Now, turning to our financial guidance for Q4 of fiscal 2025, we expect that our revenues will exceed $80 million.
Speaker #4: Which compares with $218.8 million on September 30th, 2025. Included in the quarter was the acquisition of Comprafo, which included cash consideration of $88.3 million.
Speaker #4: We generated $3.2 million of operating cash flow in the third quarter of fiscal 2025. Our CapEx for the quarter was $900,000. I would like to note it would not be unusual for CapEx to exceed $1 million a quarter, and at times it may even exceed a couple million dollars in a quarter as we scale up production, particularly within our power transformer lines, which are seeing high levels of demand.
Speaker #4: Now I'll turn it to our financial guidance for the fourth quarter of fiscal 2025. We expect that our revenues will exceed $80 million. Our net income is expected to exceed $3 million, or $0.07 per share.
Nicol Golez: Our net income is expected to exceed $3 million, or $0.07 per share. Our non-GAAP net income is expected to exceed $8 million, or $0.17 per share. With that, I'll turn the call back over to Daniel. Thanks, John. We're very pleased with this quarter's result and super excited about the rest of the fiscal year. We believe going forward the company has the capability to deliver consistent profit. We achieved two quarters of what I consider record-breaking revenue levels: one of over $72 million - that was our first quarter earlier this year - and now over $74 million in the quarter that just ended. We're guiding to another possible quarter that could become another record-breaking quarter for our fourth quarter. As we approach the final quarter of fiscal year 2025, total revenue for the past three quarters reached an impressive $212 million.
John Kosiba: Our net income is expected to exceed $3 million, or $0.07 per share. Our non-GAAP net income is expected to exceed $8 million, or $0.17 per share. With that, I'll turn the call back over to Daniel.
Speaker #4: And our non-gap net income is expected to exceed $8 million, or $0.17 per share. With that, I'll turn the call back over to Daniel.
Daniel McGahn: Thanks, John. We're very pleased with this quarter's result and super excited about the rest of the fiscal year. We believe going forward the company has the capability to deliver consistent profit. We achieved two quarters of what I consider record-breaking revenue levels: one of over $72 million - that was our first quarter earlier this year - and now over $74 million in the quarter that just ended. We're guiding to another possible quarter that could become another record-breaking quarter for our fourth quarter. As we approach the final quarter of fiscal year 2025, total revenue for the past three quarters reached an impressive $212 million.
Speaker #1: John. We're very pleased with this quarter's result and super excited about the rest of the fiscal year. We believe going forward the company has the capability to deliver consistent profit.
Speaker #1: We achieved two quarters of what I consider record-breaking revenue levels: one of over $72 million—that was our first quarter earlier this year—and now over $74 million in the quarter that guiding to another possible quarter that could become another just ended.
Speaker #1: record-breaking quarter for our fourth quarter. As we approach the final quarter of fiscal year 2025, total revenue for the past three quarters reached an impressive $212 And we're million.
Nicol Golez: With three quarters completed, our revenue nearly matches our total revenue for the entire prior fiscal year. The business has demonstrated growth both organically as well as through our recent acquisition. Let's discuss some additional benefits that we expect of the acquisition when combined. The team has done an excellent job of integrating and making the last several acquisitions work and work together. The acquisition of Comtrafo strengthens our utility position and positions us to capture opportunities in Brazil and the broader Latin American markets. Comtrafo brings 30 years of operating history, a manufacturing presence in Brazil, and deep relationships with utility customers across one of the world's fastest-growing electricity markets. Comtrafo expands our transformer offering to include distribution and large power transformers up to 250 MVA.
Daniel McGahn: With three quarters completed, our revenue nearly matches our total revenue for the entire prior fiscal year. The business has demonstrated growth both organically as well as through our recent acquisition. Let's discuss some additional benefits that we expect of the acquisition when combined. The team has done an excellent job of integrating and making the last several acquisitions work and work together. The acquisition of Comtrafo strengthens our utility position and positions us to capture opportunities in Brazil and the broader Latin American markets. Comtrafo brings 30 years of operating history, a manufacturing presence in Brazil, and deep relationships with utility customers across one of the world's fastest-growing electricity markets. Comtrafo expands our transformer offering to include distribution and large power transformers up to 250 MVA.
Speaker #1: completed, our revenue nearly matches With three quarters our total revenue for the entire prior fiscal year. The business has demonstrated growth, both both organically as well as acquisition.
Speaker #1: Let's discuss some through our recent additional benefits that we expect of the acquisition when combined. The team has done an excellent job of integrating and making the work and work together.
Speaker #1: The acquisition of Comprafo, strengthens our utility last several acquisitions position and positions us to capture opportunities in Brazil and the broader Latin American markets.
Speaker #1: Comprafo brings 30 years of operating history—a manufacturing presence in Brazil, and deep relationships with utility customers across one of the world's fastest-growing electricity markets.
Speaker #1: Comprafo expands our transformer offering to up to 250 MVA. With include distribution, their strong local demand, driven by government-led grid investment, we can now serve critical transmission and grid expansion needs that we address.
Nicol Golez: With their strong local demand driven by government-led grid investment, we can now serve critical transmission and grid expansion needs that we could not previously address. In closing, this was an exceptional quarter for our company. The results reflect the strength of our core business and the discipline of our operations. We delivered strong financial results and remained focused on execution. The business grew organically, and the addition of Comtrafo opens new possibilities. Overall, we are truly excited about this business. We are developing business opportunities in new areas with utilities, for data centers, and for pipelines for traditional energy. We are very well positioned as a company that has diversified and has been growing. I am personally very excited about the future of the company. We believe we are in a tremendous position to take advantage of our end markets.
Daniel McGahn: With their strong local demand driven by government-led grid investment, we can now serve critical transmission and grid expansion needs that we could not previously address. In closing, this was an exceptional quarter for our company. The results reflect the strength of our core business and the discipline of our operations. We delivered strong financial results and remained focused on execution. The business grew organically, and the addition of Comtrafo opens new possibilities. Overall, we are truly excited about this business. We are developing business opportunities in new areas with utilities, for data centers, and for pipelines for traditional energy. We are very well positioned as a company that has diversified and has been growing. I am personally very excited about the future of the company. We believe we are in a tremendous position to take advantage of our end markets.
Speaker #1: In closing, this was an exceptional quarter for our company. The results reflect the strength of our core business and the discipline of our operations.
Speaker #1: We delivered strong financial results and remain focused on execution. The business is growing organically, and the addition of Comprafo opens new possibilities. Overall, we are truly excited about this business.
Speaker #1: We are developing business opportunities in new areas with utilities, for data centers, and for energy. We are very well diversified and have been positioned as a company that is growing.
Speaker #1: I am personally very excited about the future of the company. our end markets. We are prepared to capitalize on the We believe we are in a growing demand for energy and the need for a stable grid to support it.
Nicol Golez: We are prepared to capitalize on the growing demand for energy and the need for a stable grid to support it. We have delivered another outstanding quarter, and we can see the fundamentals of our business are well grounded. This is an exciting and positive moment for us here at AMSC. 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. We're now focused not only on the American market but on the entire Americas. I look forward to reporting back to you at the completion of our Q4 and fiscal year end. Bailey will now take questions from our analysts. We will now begin the question-and-answer session. Please limit yourself to two questions. To ask a question, you may press star, then one on your touch-tone phone.
Daniel McGahn: We are prepared to capitalize on the growing demand for energy and the need for a stable grid to support it. We have delivered another outstanding quarter, and we can see the fundamentals of our business are well grounded. This is an exciting and positive moment for us here at AMSC. 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. We're now focused not only on the American market but on the entire Americas. I look forward to reporting back to you at the completion of our Q4 and fiscal year end. Bailey will now take questions from our analysts.
Speaker #1: Another outstanding quarter, and we have delivered. We can see the fundamentals of our business are well grounded. This is an exciting and positive moment for us here at AMSC.
Speaker #1: Our future-facing technologies help harmonize the world's desire for decarbonization and clean tremendous position to take advantage of reliable, effective, and efficient power delivery. We're now focused not only on the American market, but on the entire Americas.
Speaker #1: to reporting back to you at the completion of I look forward our fourth fiscal quarter and fiscal year end. Bailey, we'll now take questions from our
Speaker #1: analysts. We will now begin the
Operator: We will now begin the question-and-answer session. Please limit yourself to two questions. To ask a question, you may press star, then one on your touch-tone phone.
Speaker #2: question and answer session. Please limit yourself to two questions. To ask a question, you may press star then one on your touch-tone speakerphone, please pick up your handset before phone.
Nicol Golez: If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw the question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Justin Clare with Roth Capital Partners. Please go ahead. Hi. Good morning. Thanks for taking the time here. Good morning, John. Morning. So wanted to start out just on the data center opportunities. So you mentioned that you have delivered a solution to a data center project here. And so just wondering if you could speak to the scope of the engagements, which products were involved, and then just within your portfolio, which solutions do you see as kind of the strongest fit for the data center application at this point in time?
Operator: If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw the question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Justin Clare with Roth Capital Partners. Please go ahead.
Speaker #2: pressing the keys. If at any time your question has been addressed and you would If you are using a like to withdraw the question, please press star then two.
Speaker #2: At this time, we will pause momentarily to assemble our question comes from Justin Claire roster. Our first with Roth Capital Partners. Please go ahead.
Justin Clare: Hi. Good morning. Thanks for taking the time here. Good morning, John. Morning. So wanted to start out just on the data center opportunities. So you mentioned that you have delivered a solution to a data center project here. And so just wondering if you could speak to the scope of the engagements, which products were involved, and then just within your portfolio, which solutions do you see as kind of the strongest fit for the data center application at this point in time?
Speaker #3: Hi, good morning. Thanks for taking the time
Speaker #3: here. Just Good morning, John. morning. So why don't I start out just on the data center opportunities? So you mentioned that you have delivered a solution to a data center project here.
Speaker #3: And so, just wondering if you could speak to the scope of the engagement— which products were involved— and then, just within your portfolio, which solutions do you see as kind of the strongest fit for the data center application at this point in time?
Speaker #3: And then I guess just lastly, is the opportunity largely at
Nicol Golez: Then I guess just lastly, is the opportunity largely at the utility substation that you see at this point, or is this inside the data center facility? Yeah. Let me talk a little bit about what we're doing. So it represented about 5% of revenue in the quarter, so on the $74 to 75 that we did. So a significant project. It's something that we were telegraphing that we thought would happen. And really, the only reason we're talking about it is because I get asked a question wherever I go about data centers and what are you going to do. What we're finding is, as these data centers get bigger, particularly when they're areas where they have a weaker grid, what we can do is modulate the instantaneous change in voltage. And we do that through a very compact footprint.
Justin Clare: Then I guess just lastly, is the opportunity largely at the utility substation that you see at this point, or is this inside the data center facility?
Speaker #1: At substation that you see at this the point ? Or is this inside the data facility center ? utility
Daniel McGahn: Yeah. Let me talk a little bit about what we're doing. So it represented about 5% of revenue in the quarter, so on the $74 to 75 that we did. So a significant project. It's something that we were telegraphing that we thought would happen. And really, the only reason we're talking about it is because I get asked a question wherever I go about data centers and what are you going to do. What we're finding is, as these data centers get bigger, particularly when they're areas where they have a weaker grid, what we can do is modulate the instantaneous change in voltage. And we do that through a very compact footprint.
Speaker #2: Let me Yeah . about what talk a little bit we're doing . So it represented about 5% of revenue . Yeah . Let me talk a little bit about what doing .
Speaker #2: So it represented about 5% of revenue in the we're on did . So 7475 that we quarter . project . It's something that we were telegraphing that would we thought happen .
Speaker #2: really the significant it is because I reason get asked question wherever I a data centers and go about going to do ? what are you What we're is So these data , as centers get , particularly when bigger they're areas have a weaker grid where they , what we can is modulate instantaneous the finding in change .
Nicol Golez: So the more that they're loading equipment in for managing thermal load, HVAC, the more that they have higher computing power and they're worried about very small disruptions similar to what we do in a semiconductor fab, the more we think we fit. And we think that the footprint may be a unique competitive advantage that makes it easy for either the utility or the data center construction project to buy the equipment from us. So in this case, this is really our first win in the construction of a data center. Alongside this in this current quarter, we also helped a utility that has a lot of data centers and has some challenges coming from them. So I think the answer to part of your question, Justin, is yes to both.
Daniel McGahn: So the more that they're loading equipment in for managing thermal load, HVAC, the more that they have higher computing power and they're worried about very small disruptions similar to what we do in a semiconductor fab, the more we think we fit. And we think that the footprint may be a unique competitive advantage that makes it easy for either the utility or the data center construction project to buy the equipment from us. So in this case, this is really our first win in the construction of a data center. Alongside this in this current quarter, we also helped a utility that has a lot of data centers and has some challenges coming from them. So I think the answer to part of your question, Justin, is yes to both.
Speaker #2: Through voltage, we know that HVAC load and the power equipment do have thermal loading, and they're compact for that footprint, more so in that they...
Speaker #2: computing very about small And worried disruptions similar they're we do The . semiconductor we in a fit and more we we to what may footprint be a competitive unique that makes it easy for either the utility or think data center construction project to buy the equipment from us .
Speaker #2: in this So case , this is really our in the construction of a data center in . Alongside this , this current quarter , also we helped a utility that has a data lot of some challenges coming from them .
Nicol Golez: I think that there are opportunities for us going forward in data center construction projects, but also to help support challenges with the utility. That's no different than what we've seen in semiconductor. It's no different than what we see in mining. The market and the investment drives the need. And then the question is, where does the solution physically fit? Where does it fit within the grid? Is it on the pad that sits as part of the data center, or is it somewhere in the grid that's supporting that effort? So it's really no different application than what we do for semi, what we've done for a lot of other industrials. What we're finding is that there are changes in induction at the site that we can modulate what we think in a very unique way. It's one data point, however, right?
Daniel McGahn: I think that there are opportunities for us going forward in data center construction projects, but also to help support challenges with the utility. That's no different than what we've seen in semiconductor. It's no different than what we see in mining. The market and the investment drives the need. And then the question is, where does the solution physically fit? Where does it fit within the grid? Is it on the pad that sits as part of the data center, or is it somewhere in the grid that's supporting that effort? So it's really no different application than what we do for semi, what we've done for a lot of other industrials. What we're finding is that there are changes in induction at the site that we can modulate what we think in a very unique way. It's one data point, however, right?
Speaker #2: I think the So centers and has answer to your part of , Justin , is both . I think that yes to opportunities us going forward in data center construction projects , but to also help challenges support with utility .
Speaker #2: That's no different than what we've seen in semiconductor . It's no different than what we see in mining market and the investment drives the need .
Speaker #2: And then the the is , question the solution physically fit ? within Where does it fit grid ? the Is it on pad that sits the as part of the data center , or is it somewhere in the grid that that effort ?
Speaker #2: So it's supporting really no different application than what for semi . What we've done for we do a lot of other industrials . we're finding is that there What are changes in induction at the site that we can modulate what we think very unique way .
Nicol Golez: So it's hard for us to say, "This is the white paper, and here's how we're going to analyze the return on investment for the customers." Those are all things that we're going to figure out. But what we found is there are a number of data center operators and a number of data center builders that have approached us looking for exactly the type of solution that we uniquely offer. So I'm very opportunistic and optimistic that this could become a part of the business. But again, we like diversity in what we do. Did I get to all the different pieces, Justin? If I didn't, I apologize, and you can ask it again. Yeah. No, I think you got to everything there. So yeah, I definitely appreciate that explanation.
Daniel McGahn: So it's hard for us to say, "This is the white paper, and here's how we're going to analyze the return on investment for the customers." Those are all things that we're going to figure out. But what we found is there are a number of data center operators and a number of data center builders that have approached us looking for exactly the type of solution that we uniquely offer. So I'm very opportunistic and optimistic that this could become a part of the business. But again, we like diversity in what we do. Did I get to all the different pieces, Justin? If I didn't, I apologize, and you can ask it again.
Speaker #2: in a It's one data point . However . So it's hard to for us say , you know , this is paper how how we're going to white analyze the return on investment for the are all customers .
Speaker #2: things that the we're going to Those out . figure But we found is are a number and of there data center data center operators and a builders that have approached us exactly the type of number of solution that we uniquely So I'm opportunistic that an optimistic that could this become a offer .
Speaker #2: business . But the again , we part of like diversity do in what . Did I get to all the different pieces , Justin .
Justin Clare: Yeah. No, I think you got to everything there. So yeah, I definitely appreciate that explanation.
Speaker #2: didn't , I If I apologize and you can ask it again .
Nicol Golez: And I guess just thinking through it a little bit, just how significant do you think the growth opportunity might be here? And I'm just wondering, has your solution been installed and is now operating effectively with this project, or is that coming in the next few months? Just wondering if this kind of proves out that your solution is effective, and then others can see the effectiveness, and this could potentially lead to upside in your orders here. Yeah. I think the hardest part for people that follow us is to realize so much of what we do is industrial construction. So there's a pacing that things go through a year to be able to build. So I'm pleased to announce we got the order. I'm pleased to announce that we delivered on the order. But that's as far as we can take it.
Justin Clare: And I guess just thinking through it a little bit, just how significant do you think the growth opportunity might be here? And I'm just wondering, has your solution been installed and is now operating effectively with this project, or is that coming in the next few months? Just wondering if this kind of proves out that your solution is effective, and then others can see the effectiveness, and this could potentially lead to upside in your orders here. Yeah.
Speaker #1: Yeah . No , I think think you got to got to there . So yeah , everything I definitely appreciate that explanation that .
Speaker #1: And just I guess a little just how think thinking through it the you growth opportunity might be here ? And I just wondering , you know , has your solution been installed and is now effectively , you know , operating with this with this project or that , the next you know , if this kind of proves out that your solution is months ?
Daniel McGahn: I think the hardest part for people that follow us is to realize so much of what we do is industrial construction. So there's a pacing that things go through a year to be able to build. So I'm pleased to announce we got the order. I'm pleased to announce that we delivered on the order. But that's as far as we can take it.
Speaker #1: and wondering can see then others and this could the lead to , know , you upside in Just your orders here .
Speaker #2: this Yeah . At I think the hardest
Speaker #2: follow to is so much of what we realize industrial is construction . So do a effectiveness , year through a things go able to to be build .
Speaker #2: follow to is so much of what we realize industrial is construction . So do a effectiveness , year through a things go able to to be there's So I'm pacing announce we got the I'm pleased to order .
Nicol Golez: We're not at the point where it's going to operate, and we'll get all the learning out of it. That's all going to come. It's a customer that knows us well, that we know well, and we'll try to use that as best as we can to try to market having a bona fide solution in the wild that works. But again, simplistically, this is no different than what we do in all the other markets. I think that there's an interesting need. I think the form factor and the speed that we can go to market really becomes a critical advantage here. If I speak more broadly, we have a huge pipeline of larger orders. I keep talking about order expansion, and we used to talk about cross-selling. Now we just talk about selling.
Daniel McGahn: We're not at the point where it's going to operate, and we'll get all the learning out of it. That's all going to come. It's a customer that knows us well, that we know well, and we'll try to use that as best as we can to try to market having a bona fide solution in the wild that works. But again, simplistically, this is no different than what we do in all the other markets. I think that there's an interesting need. I think the form factor and the speed that we can go to market really becomes a critical advantage here. If I speak more broadly, we have a huge pipeline of larger orders. I keep talking about order expansion, and we used to talk about cross-selling. Now we just talk about selling.
Speaker #2: we announce that that , but as far as that's order we can take it . at the point We're not where it's the and we'll operate , learning out of it .
Speaker #2: get all the That's all to come going . It's a knows us well we know , that , and we'll well try to as best as we use that can to try to customer that know , having a bona solution in the wild works .
Speaker #2: But market . You again , simplistically , that this is no different than what we than what we the other think that there's an markets .
Speaker #2: interesting need . I think the form factor I and the do in all we can go to that market really becomes a critical advantage here .
Speaker #2: If more broadly , I speak a huge we have pipeline of larger orders . I keep talking about order expansion and we used about cross-selling .
Nicol Golez: We have $hundreds of millions of opportunity across all the different areas that we have tailwinds in. We have probably in a dozen or two projects that are very large; we have $several hundred million of potential business, not just for data centers, but for mines, for semiconductor, for traditional energy, that the business is really working. The business is expanding because we're relied on to deliver more content into larger projects. That's what we've been talking about for the past few years. That trend seems positioned to continue to grow. Data centers will be a part of it. I hope to not have to talk about it every conference call because it's a piece of the business, and it's something that people get excited about. But we're not a data center stock, and we shouldn't be thinking of ourselves as a play just in one area.
Daniel McGahn: We have $hundreds of millions of opportunity across all the different areas that we have tailwinds in. We have probably in a dozen or two projects that are very large; we have $several hundred million of potential business, not just for data centers, but for mines, for semiconductor, for traditional energy, that the business is really working. The business is expanding because we're relied on to deliver more content into larger projects. That's what we've been talking about for the past few years. That trend seems positioned to continue to grow. Data centers will be a part of it. I hope to not have to talk about it every conference call because it's a piece of the business, and it's something that people get excited about. But we're not a data center stock, and we shouldn't be thinking of ourselves as a play just in one area.
Speaker #2: to talk Now we just talk about selling . We have of hundreds millions of dollars of the opportunity different across all areas We in .
Speaker #2: tailwinds have , you know , probably a dozen or two projects in very that are large . have several We million of hundred that we not just business , for data but for mines , for semiconductor , traditional energy , that the business is really working .
Speaker #2: The expanding because we're relied being on business is to content deliver into larger projects . That's what we've been talking past few years .
Speaker #2: trend seems positioned to grow , and data centers will be a part That of continue to hope to not have to talk about it .
Speaker #2: Every conference call , because it's a piece of the business more and it's something that people get excited about . But we're data center we're not , you know , we shouldn't be thinking of ourselves as a play area .
Speaker #2: Every conference call , because it's a piece of the business more and it's something that people get excited about . But we're data center we're not , you know , we shouldn't be thinking of ourselves as a not a really diversified company that's focused on the problem is the grid energy , which design today , to with meet those needs and demands many uses and as many sources of require generation very reliable effective and and to have a grid resilient .
Nicol Golez: This is really a diversified company that's focused on the problem with energy, which is the grid designed today to be able to meet those needs and those demands that many uses and many sources of generation require to have a very effective, reliable, and resilient grid. Okay. Yep. Understood. Got it. Thank you. Our next question comes from Eric Stine with Craig-Hallum Capital Group. Please go ahead. Hi, everyone. Maybe we could just talk about traditional energy. I believe that was 1/3 of the quarter. And obviously, that's been a pretty increased focus here over the last year-plus. I mean, as we think about that, can you just talk to us about kind of where you're selling, where you play in there?
Daniel McGahn: This is really a diversified company that's focused on the problem with energy, which is the grid designed today to be able to meet those needs and those demands that many uses and many sources of generation require to have a very effective, reliable, and resilient grid.
Justin Clare: Okay. Yep. Understood. Got it. Thank you.
Operator: Our next question comes from Eric Stine with Craig-Hallum Capital Group. Please go ahead.
Speaker #1: Understood . Got Thank you it . . Okay . Yep .
Eric Stine: Hi, everyone. Maybe we could just talk about traditional energy. I believe that was 1/3 of the quarter. And obviously, that's been a pretty increased focus here over the last year-plus. I mean, as we think about that, can you just talk to us about kind of where you're selling, where you play in there?
Speaker #3: Our next question comes from Stein with a question for Eric Craig-Hallum. Go ahead.
Speaker #4: Hi everyone
Speaker #4: . Maybe we could about talk traditional just energy . I a third quarter . And obviously of the that's been a pretty increased Please focus year .
Nicol Golez: I mean, should we view that as cyclical, that it's more that swings in oil prices have an impact, or is it insulated because it's more tied to traditional infrastructure? That would be helpful for me to clarify my thinking. Yeah. I think it's more insulated in that it's persistent demand. General, I think what's changed in the American economy is that traditional energy is no longer considered something that people don't want to invest in.
Eric Stine: I mean, should we view that as cyclical, that it's more that swings in oil prices have an impact, or is it insulated because it's more tied to traditional infrastructure? That would be helpful for me to clarify my thinking.
Speaker #4: I mean , here over last think about that , can you talk to us just kind of where you're where selling , the you play in should we there ?
Speaker #4: view I mean , that as cyclical , that it's You know , know . more , you that swings in oil prices have an or is it impact insulated because more tied to traditional helpful for be would infrastructure ?
Daniel McGahn: Yeah. I think it's more insulated in that it's persistent demand. General, I think what's changed in the American economy is that traditional energy is no longer considered something that people don't want to invest in.
Speaker #4: Thinking—clarify my meaning to you.
Speaker #2: I think Yeah , it's more insulated in that it's persistent demand Are
Speaker #2: think what's changed in the That American economy that is traditional energy no is longer considered that people don't want to invest in something
Nicol Golez: But creating cleaner energy in a traditional way is something we can help, powering pipelines that move liquid natural gas and things like that are an area that we sit in, and as well as kind of general oil processing, being able to take from extraction at the source and then even downstream, midstream, and endstream, the types of processes that move and refine, that create other byproducts, all are becoming more and more energy-dependent. So you need energy to be able to move and process the traditional energy sources. And that's really where we come in. So we see it as a long-term kind of persistent trend for us. The climate is really more apropos there. We think there's a fit definitely in North America. We think there's a potential fit in Latin America as well as we look at the coming not necessarily quarters and years.
Daniel McGahn: But creating cleaner energy in a traditional way is something we can help, powering pipelines that move liquid natural gas and things like that are an area that we sit in, and as well as kind of general oil processing, being able to take from extraction at the source and then even downstream, midstream, and endstream, the types of processes that move and refine, that create other byproducts, all are becoming more and more energy-dependent. So you need energy to be able to move and process the traditional energy sources. And that's really where we come in. So we see it as a long-term kind of persistent trend for us. The climate is really more apropos there. We think there's a fit definitely in North America. We think there's a potential fit in Latin America as well as we look at the coming not necessarily quarters and years.
Speaker #2: clean , cleaner energy in a . way traditional is something we can help . pipelines move , that liquid , it's natural gas and things like Nature are an we fit area that in kind of well as general oil processing , being Powering extraction that .
Speaker #2: the source even and as and end The types of stream . processes that move and at the create other , that all byproducts , are becoming more and more energy dependent .
Speaker #2: So you need energy able to move and process the traditional energy sources . And that's really where we come in . we see it as a So long term kind of trend for .
Speaker #2: persistent The climate is really apropos more us fit definitely in North America . We think We think there's a potential in Latin America as we look at the not necessarily years .
Nicol Golez: The other part, I'll say, Eric, realize and take everything I say with a little bit of a grain of salt. Our lead times are 9, 12 months for many products, right? So anything that we're going to do today that we think is exciting is really going to affect the financials a year-plus out. Okay. Yeah. No, that's very helpful. That makes sense. Maybe just as you think about growth in the business, now you're guiding to $80 million-plus, a new level on a quarterly perspective. I know capacity is less of an issue than I think in the past. You've talked about labor. I mean, any updates you can share there, it clearly is an area which maybe is a bit of a pushpoint, but just that'd be great, an update. Yeah. I think the team's done very well at hiring.
Daniel McGahn: The other part, I'll say, Eric, realize and take everything I say with a little bit of a grain of salt. Our lead times are 9, 12 months for many products, right? So anything that we're going to do today that we think is exciting is really going to affect the financials a year-plus out.
Speaker #2: quarters and The other part , I'll necessarily know , As Eric , you realize and take everything I say , you say with a little bit of of salt .
Speaker #2: Our lead times are nine , 12 months for many know , products . Right ? So anything that going to do we're today that we think is exciting is really going to financials a year plus out
Eric Stine: Okay. Yeah. No, that's very helpful. That makes sense. Maybe just as you think about growth in the business, now you're guiding to $80 million-plus, a new level on a quarterly perspective. I know capacity is less of an issue than I think in the past. You've talked about labor. I mean, any updates you can share there, it clearly is an area which maybe is a bit of a pushpoint, but just that'd be great, an update.
Speaker #4: Yeah . Okay . No , very
Speaker #4: makes a grain sense that's . Maybe you . know just as you the business now you're guiding to 80 million plus level new on a quarterly perspective .
Speaker #4: know You know I is an think about past . You've talked about labor . any I any updates you mean , can share there .
Speaker #4: know , You it clearly is which a an bit of point , but just that'd be I think great . update .
Daniel McGahn: Yeah. I think the team's done very well at hiring.
Nicol Golez: I feel like all the factories are being utilized very well. We have a lot of demand. We have a lot of bigger demand. So we feel really good. I think the new wrinkle in our portfolio is Brazil and the very strong potential demand there and the need potentially for some more expansion. And John kind of almost directly said that, given his CapEx guidance, that we believe the business is positioned to ramp, and we may have to expand capability, particularly in Brazil, to be able to go meet all of that demand 2, 3, 4, 5 years out. So there's a longer-term plan that we want to be able to implement. We're at a point where the business really is driving us. We have a multiple set of very strong tailwinds that are pushing us, and we just need to be able to react to the market.
Daniel McGahn: I feel like all the factories are being utilized very well. We have a lot of demand. We have a lot of bigger demand. So we feel really good. I think the new wrinkle in our portfolio is Brazil and the very strong potential demand there and the need potentially for some more expansion. And John kind of almost directly said that, given his CapEx guidance, that we believe the business is positioned to ramp, and we may have to expand capability, particularly in Brazil, to be able to go meet all of that demand 2, 3, 4, 5 years out. So there's a longer-term plan that we want to be able to implement. We're at a point where the business really is driving us. We have a multiple set of very strong tailwinds that are pushing us, and we just need to be able to react to the market.
Speaker #2: Yeah , I think the team's done very well at
Speaker #2: We believe the business is positioned to—we may have to expand capability, particularly in demand, to be able to go meet that demand.
Speaker #2: You know , three , 4 or 5 years out . So there's a we want term longer plan that all of to be able to implement .
Speaker #2: We're we're at a point where the business is driving us . multiple really set of of strong very tailwinds are And we pushing to be able to react to the market .
Nicol Golez: If we do a good job for existing customers, they're going to come back again and again as they've had, and they come back with harder and bigger problems for us to solve. Got it. Maybe last one for me. I know, well, data center, I mean, is that something, as we think about that, similar to semiconductor, where potentially, if it's a large data center operator or EPC, that you potentially are specced in, or do you view it as it's a little more lumpy, and then it would be kind of not one-off projects, but it would be more based on different projects moving forward rather than a few key partners? Yeah. I don't think I have clear visibility on that.
Daniel McGahn: If we do a good job for existing customers, they're going to come back again and again as they've had, and they come back with harder and bigger problems for us to solve.
Speaker #2: we If do a good job existing they're going customers , back again and again as they've had , us . back with harder they come and bigger to problems for us solve that's .
Eric Stine: Got it. Maybe last one for me. I know, well, data center, I mean, is that something, as we think about that, similar to semiconductor, where potentially, if it's a large data center operator or EPC, that you potentially are specced in, or do you view it as it's a little more lumpy, and then it would be kind of not one-off projects, but it would be more based on different projects moving forward rather than a few key partners?
Speaker #4: we think that that , about similar semiconductor where potentially , you a know , if it's large data center operator or data EPC , that you potentially are specked in , or do it as a little lumpy , and more be kind it's projects , but it would be more , you one off based on know , different projects moving forward rather key partners .
Daniel McGahn: Yeah. I don't think I have clear visibility on that.
Nicol Golez: Our EPC customers tend to try to design us in, and we see a print that has our rectangle on it, and that's what we try to do. Obviously, doing one of these, we're not at that level yet. Do I think this has the potential for that? Yeah. If this market grows faster than other markets, we'll have to invest in them to make sure that they grow to be able to maintain the diversity part of the portfolio. That's tremendously valuable. It's a stabilizing effect on the business. It allows us to grow on multiple fronts in parallel. Okay. Thanks. Our next question comes from Tim Moore with Clear Street. Please go ahead. Thanks, and congratulations on your revenue growth and operating leverage. That was very nice to see. My first question for you is about the potential to cross-sell and bundle to customers.
Daniel McGahn: Our EPC customers tend to try to design us in, and we see a print that has our rectangle on it, and that's what we try to do. Obviously, doing one of these, we're not at that level yet. Do I think this has the potential for that? Yeah. If this market grows faster than other markets, we'll have to invest in them to make sure that they grow to be able to maintain the diversity part of the portfolio. That's tremendously valuable. It's a stabilizing effect on the business. It allows us to grow on multiple fronts in parallel.
Speaker #2: Yeah , I don't think I have clear
Speaker #2: visibility on that . You than a few our EPC to design us in know , see a tend to try print that and we has our it , and that's what we rectangle on do .
Speaker #2: try to Obviously , doing one customers of these , we're not at that level yet . Do I think this try to for that ?
Speaker #2: Yeah . If this market grows faster markets , we'll have to invest in them to make sure that be able to maintain the diversity the portfolio .
Eric Stine: Okay. Thanks.
Speaker #2: That's tremendously valuable . It's a stabilizing the effect on to grow a multiple in parallel fronts .
Operator: Our next question comes from Tim Moore with Clear Street. Please go ahead.
Speaker #4: Okay . Thanks . part of
Tim Moore: Thanks, and congratulations on your revenue growth and operating leverage. That was very nice to see. My first question for you is about the potential to cross-sell and bundle to customers.
Speaker #3: question comes Tim with Clear Moore Street . Please go ahead .
Speaker #5: congratulations on growth and operating leverage . That was very nice to see . revenue My first question is for you potential cross-sell to about the to customers .
Nicol Golez: You've done that extremely well on oil and gas to target upstream, midstream, and downstream power systems. I'm maybe curious if you can shed some light on maybe what end markets make the most sense to cross-sell near-term besides oil and gas. Is there potential in mining or chemicals? Or just your overall thoughts on end markets to really get that through. Yeah. It's pretty much everything, Tim. The way the business is now aligned is we no longer cross-sell. We just sell. So we have combined solutions that come from the family of acquisitions that we have that we're now presenting that in some cases, they're $10 million projects.
Tim Moore: You've done that extremely well on oil and gas to target upstream, midstream, and downstream power systems. I'm maybe curious if you can shed some light on maybe what end markets make the most sense to cross-sell near-term besides oil and gas. Is there potential in mining or chemicals? Or just your overall thoughts on end markets to really get that through.
Speaker #5: You've done that and bundle on oil upstream gas to and target , midstream extremely well power and systems . you can on light maybe what end Maybe markets make the most cross-sell near-term sense to besides gas ?
Daniel McGahn: Yeah. It's pretty much everything, Tim. The way the business is now aligned is we no longer cross-sell. We just sell. So we have combined solutions that come from the family of acquisitions that we have that we're now presenting that in some cases, they're $10 million projects.
Speaker #5: Overall thoughts—great. They're terrific. They've got a factory that you can expand, and our next organic growth is awesome. Thanks, and you there.
Speaker #2: everything .
Speaker #2: now aligned is longer cross-sell . We just sell . business is So we have solutions that come from the combined family of
Nicol Golez: In some cases, they're $25 million projects, where we're presenting a combined offering to be able to manage voltage, to be able to transform voltage, to be able to modulate AC/DC power flows, and to be able to do all of those features and functions for customers. So we no longer have to sell them as separate. We do because many of our customers think of them that way. But as for the larger projects, I'll say, more established customers, they like where we've headed with what we've added. And it's for mining. It's for traditional energy. It's for semiconductor. To some extent, it's even for renewable projects as we see them. Wherever we can, we want to be valuable to our customer.
Daniel McGahn: In some cases, they're $25 million projects, where we're presenting a combined offering to be able to manage voltage, to be able to transform voltage, to be able to modulate AC/DC power flows, and to be able to do all of those features and functions for customers. So we no longer have to sell them as separate. We do because many of our customers think of them that way. But as for the larger projects, I'll say, more established customers, they like where we've headed with what we've added. And it's for mining. It's for traditional energy. It's for semiconductor. To some extent, it's even for renewable projects as we see them. Wherever we can, we want to be valuable to our customer.
Speaker #2: to . Transform voltage we no able to to be able , to be modulate AC , the DC power flows , where we're be able to do all of those and for functions So we no features them as separate .
Speaker #2: We do , because many of our sell customers think of them longer But as for the larger presenting established more I'll say customers .
Speaker #2: We do , because many of our sell customers think of them longer But as for the larger presenting established more I'll say customers projects , like where we've had it with we've have to added it's for for traditional energy , it's it's semiconductor .
Speaker #2: To for some extent , it's even for renewable projects . As we see wherever we them can . We want to be customer , and if we can demonstrating that valuable to our , both what the and product does and what our engineers can , can help solve or de-risk for the customer .
Nicol Golez: And if we can keep demonstrating that value both from what the product does and what our engineers can help solve or de-risk for the end customer, that's where we win, and that's why we win. That's terrific color. Thanks for elaborating on that. Just switching gears to my second question. I mean, you're clearly busy integrating Comtrafo in Brazil. And I know some comments were made on CapEx there, and they've got a great factory that you can expand. The organic growth is awesome there, and the backlog is quite big. So can you maybe just give us a little bit more color on the near-term plan on increasing output there? And then just on the topic of acquisitions, how comfortable do you need to be with integration there?
Daniel McGahn: And if we can keep demonstrating that value both from what the product does and what our engineers can help solve or de-risk for the end customer, that's where we win, and that's why we win.
Tim Moore: That's terrific color. Thanks for elaborating on that. Just switching gears to my second question. I mean, you're clearly busy integrating Comtrafo in Brazil. And I know some comments were made on CapEx there, and they've got a great factory that you can expand. The organic growth is awesome there, and the backlog is quite big. So can you maybe just give us a little bit more color on the near-term plan on increasing output there? And then just on the topic of acquisitions, how comfortable do you need to be with integration there?
Speaker #2: That's where we win . And that's why win
Speaker #2: .
Speaker #5: Thanks . Thanks elaborating on that Color . . Switching gears to my second question , I mean , you're clearly busy in Brazil integrating know .
Speaker #5: And I know some comments were made on CapEx there, and
Speaker #5: And the backlogs is quite big . So maybe just give us a little bit more color on , you know , near-term increasing the there .
Speaker #5: output then just on the of acquisitions topic comfortable do you need to be with There ? Maybe integration ? how many quarters in until you maybe next consider doing your acquisition , given you're sitting a lot of cash right on really now ?
Nicol Golez: Maybe how many quarters in until you maybe consider doing your next acquisition, given you're sitting on a lot of cash right now? Yeah. It's hard, Tim, at this point to speculate. We're 19 days in plus the days we've had in January. So it's early days for us. It'll take us some time to be able to digest and leverage. We have a huge opportunity just in Brazil alone that we want to go after with everything that the company has to offer there. So I think we'll take our time, and we'll be as we have been with each of them. We want them to run as they've run because we like the culture. We like the financials. That's true of all the acquisitions we've done. And then over time, how do we do more together?
Tim Moore: Maybe how many quarters in until you maybe consider doing your next acquisition, given you're sitting on a lot of cash right now?
Speaker #5: And
Daniel McGahn: Yeah. It's hard, Tim, at this point to speculate. We're 19 days in plus the days we've had in January. So it's early days for us. It'll take us some time to be able to digest and leverage. We have a huge opportunity just in Brazil alone that we want to go after with everything that the company has to offer there. So I think we'll take our time, and we'll be as we have been with each of them. We want them to run as they've run because we like the culture. We like the financials. That's true of all the acquisitions we've done. And then over time, how do we do more together?
Speaker #2: Yeah, it's us. Some of it will take time to be able to digest and leverage. We have a huge opportunity in Brazil we want to go after, with the company and everything that they offer there.
Speaker #2: at hard this point to We're 19 speculate . days in . Plus the days we've had in January . So it's early days for us .
Speaker #2: know alone that I , we'll take time and we'll be as we have with each of think , you them . We just in want them to run been they've run because the culture , we like the financials .
Nicol Golez: And that becomes the question that helps affect things 2, 3 years out from now. So I don't anticipate we're going to turn around and do another acquisition right away. But we do have a lot of inbound. We do have a list. We are working. The business is evolving to we have an operation business and then an opportunistic part led by John here to say, "Okay. What can we add to the portfolio, and how do we do that?" We're also looking, and you can hear it in my tone, at combining product to basically come up with whole new sets of opportunities for us. And that's taken some R&D investment to be able to do all those things. So the company is evolving and maturing in all the right ways. That's great color and comforting that you won't rush into the next acquisition so you're ready.
Daniel McGahn: And that becomes the question that helps affect things 2, 3 years out from now. So I don't anticipate we're going to turn around and do another acquisition right away. But we do have a lot of inbound. We do have a list. We are working. The business is evolving to we have an operation business and then an opportunistic part led by John here to say, "Okay. What can we add to the portfolio, and how do we do that?" We're also looking, and you can hear it in my tone, at combining product to basically come up with whole new sets of opportunities for us. And that's taken some R&D investment to be able to do all those things. So the company is evolving and maturing in all the right ways.
Speaker #2: That's true we like acquisitions we've done . And over time , how do we do more together ? And that question then becomes the affect helps that things 2 or 3 years out from now .
Speaker #2: So I don't anticipate we're going to around and do another away , you know , . But a lot of we do have turn acquisition inbound .
Speaker #2: list . We are working . It's We do have a the becoming business is evolving to we operation And then business . opportunistic an part have led by here to say , okay , can we add to the portfolio and how do we do that ?
Speaker #2: looking and you We're can hear also it in John my at combining product to basically come up with whole what of , sets of opportunities tone us .
Speaker #2: looking and you We're can hear also it in John my at combining product to basically come up with whole what of , sets of opportunities an that's taken some R&D And investment to do So all those company is and maturing in all the right be able to ways .
Tim Moore: That's great color and comforting that you won't rush into the next acquisition so you're ready.
Nicol Golez: But thanks a lot. Thanks, Tim. Our next question comes from Colin Rusch with Oppenheimer. Please go ahead. Thanks so much, guys. I have a few. We'd love to just get a quick read on working capital and how that transitions over time. Obviously, with the acquisition, you've got a substantial amount of inventory and some receivables that grew in the core. We'd love to understand kind of how that trends over the next few quarters. Yeah. Good question, Colin. We have had a I don't want to call it a drain on working capital, but we have invested into the growth of the company over the last couple of quarters. To the extent we continue that growth, and if we can maintain elevated levels of growth, then we'll continue to invest in working capital.
Tim Moore: But thanks a lot.
Daniel McGahn: Thanks, Tim.
Speaker #5: that's great color and comforting that you into the
Speaker #5: that's great color and comforting that you into the And next acquisition . So won't rush But thanks a lot
Operator: Our next question comes from Colin Rusch with Oppenheimer. Please go ahead.
Speaker #5: .
Colin Rusch: Thanks so much, guys. I have a few. We'd love to just get a quick read on working capital and how that transitions over time. Obviously, with the acquisition, you've got a substantial amount of inventory and some receivables that grew in the core. We'd love to understand kind of how that trends over the next few quarters.
Speaker #2: .
Speaker #3: next question Our comes from Colin with Oppenheimer . Please go ahead . Thanks , Tom .
Speaker #6: Thanks so
Speaker #6: I have a few . We'd love to just quick read on working capital and how that transitions over time . the Obviously with got know , , you Rusch substantial amount of inventory and some for receivables that grew in the quarter .
Daniel McGahn: Yeah. Good question, Colin. We have had a I don't want to call it a drain on working capital, but we have invested into the growth of the company over the last couple of quarters. To the extent we continue that growth, and if we can maintain elevated levels of growth, then we'll continue to invest in working capital.
Speaker #6: Would love to see how that trends over the next few quarters.
Speaker #2: Yeah .
Speaker #2: Good question Colin . We have
Speaker #2: had a I don't want to call it a drain on working capital , but you've of the invested into company over couple the growth quarters to extent we the continue that and if we can we have growth levels elevated then we'll understand kind of maintain working capital .
Nicol Golez: If growth tapers, to call it single-digit growth, then we would see working capital probably turn favorable. So it's difficult to tell depending on our growth strategy. But if working capital is an investment, I can assure you it's to support growth. Okay. And then we haven't talked about some of the military opportunities. Certainly, there's an awful lot of activity in Washington right now around enhancing military capabilities. Can you just talk a little bit outside of the ships? You've talked about ports and infrastructure being a meaningful growth opportunity. In your sales pipeline, what are you seeing these days, and how do you see that starting to flow through into the P&L over the next couple of years? Yeah. I think just topically for the quarter, Colin, we had a good percentage in military, more than 15%. I think typically, it's closer to 10% quarter to quarter.
Daniel McGahn: If growth tapers, to call it single-digit growth, then we would see working capital probably turn favorable. So it's difficult to tell depending on our growth strategy. But if working capital is an investment, I can assure you it's to support growth.
Speaker #2: If growth tapers it single things . to call digit growth , then we would see capital working probably turn favorable . So it's tell depending on difficult to strategy .
Colin Rusch: Okay. And then we haven't talked about some of the military opportunities. Certainly, there's an awful lot of activity in Washington right now around enhancing military capabilities. Can you just talk a little bit outside of the ships? You've talked about ports and infrastructure being a meaningful growth opportunity. In your sales pipeline, what are you seeing these days, and how do you see that starting to flow through into the P&L over the next couple of years?
Speaker #2: if if But working capital is investment , I can you it's to support growth I
Speaker #6: And then the military about some of opportunities . Certainly .
Speaker #6: awful lot You know , enhancing , you know , military right now capabilities
Speaker #6: awful lot You know , enhancing , you know , military right now capabilities
Speaker #6: a little . you just talk Can bit outside of the ships you've about talked assure ports and infrastructure being a meaningful growth opportunity in your pipeline .
Speaker #6: sales What are you .
Daniel McGahn: Yeah. I think just topically for the quarter, Colin, we had a good percentage in military, more than 15%. I think typically, it's closer to 10% quarter to quarter.
Speaker #6: seeing these days ? there's starting see that flow through into the over the next couple of years ?
Speaker #7: Yeah , I think the last for Colin topically an , we had a good just more military , than 15% , I think percentage it's typically closer to 10% quarter to quarter .
Nicol Golez: And that was because we're doing a bunch of things at once within the quarter, which is good. And that helps strengthen quarters. I think longer term, we're kind of front and center in some of the critical problems that ships have and ports have. And those opportunities are going to be persistent and kind of long-term. But I'd say there's nothing I'll say specifically that's going to change the trajectory of that business in the next 2 to 4 quarters. Awesome. And then just a final one on the R&D roadmap. Your customer intimacy has improved. You're getting a look at what the real needs are for a bunch of these applications in a different way. And obviously, you guys have capabilities around customization for given applications.
Daniel McGahn: And that was because we're doing a bunch of things at once within the quarter, which is good. And that helps strengthen quarters. I think longer term, we're kind of front and center in some of the critical problems that ships have and ports have. And those opportunities are going to be persistent and kind of long-term. But I'd say there's nothing I'll say specifically that's going to change the trajectory of that business in the next 2 to 4 quarters.
Speaker #7: be . and kind of persistent term . But I'd there's say long I'll say that's going to specifically trajectory of change the the next in some of business in
Colin Rusch: Awesome. And then just a final one on the R&D roadmap. Your customer intimacy has improved. You're getting a look at what the real needs are for a bunch of these applications in a different way. And obviously, you guys have capabilities around customization for given applications.
Speaker #6: Awesome . just a one on R&D roadmap as your
Speaker #6: Intimacy has improved, getting a clearer look at what needs are for 2 to 4 quarters. Applications in a bunch of these have capabilities for customization given applications.
Nicol Golez: But we'd love to understand how you're thinking about the cadence of evolving the product suite and just the leverage that you have out of the existing designs to meet all of the opportunities that you're seeing with your customers these days? Yeah. I'll speak by example. So we're working towards a project for a very large mine, and there's opportunities at the site, but there's also opportunities with the utility that the grid's going to need to be improved. So I think our capability has matured now to the point where we really understand the problems that capital investment will cause in capacity from an electricity standpoint. So we try to just start with that as the premise and then work backwards and say, "Okay.
Colin Rusch: But we'd love to understand how you're thinking about the cadence of evolving the product suite and just the leverage that you have out of the existing designs to meet all of the opportunities that you're seeing with your customers these days?
Speaker #6: But around understand thinking about how you're of of evolving the suite . just the And leverage that you have out channel meet designs to all the opportunities that you're seeing with your customers these days .
Speaker #6: we'd love to
Daniel McGahn: Yeah. I'll speak by example. So we're working towards a project for a very large mine, and there's opportunities at the site, but there's also opportunities with the utility that the grid's going to need to be improved. So I think our capability has matured now to the point where we really understand the problems that capital investment will cause in capacity from an electricity standpoint. So we try to just start with that as the premise and then work backwards and say, "Okay.
Speaker #7: I think by So example .
Speaker #7: we're towards a existing for a very project large mine opportunities , and there's site at the , but there's
Speaker #7: improved . So working I think our capability has matured now to the we point really the understand problems that capital investment will cause in capacity electricity from we try to just that as start with the premise and then standpoint .
Nicol Golez: What are going to be all the electrical challenges that this CapEx investment for this end customer is going to create, not just locally, but more broadly in the utility?" So being able to combine our capabilities into products that are more proprietary, more defensible, more valuable to customers, that's where we're trying to push things as much as we can. Okay. Thanks, guys. This concludes our question-and-answer session. I'd like to turn the conference back over to Daniel McGahn for closing remarks. Thanks, Bailey. As we look forward to the future, it's clear that the opportunities ahead are vast. We stand ready to capitalize on the rising demand for energy and the critical need for a dependable grid to support it. We reached another recent record quarter with revenue levels of over $70 million, and we guide it for our next quarter to potentially exceed $80 million.
Daniel McGahn: What are going to be all the electrical challenges that this CapEx investment for this end customer is going to create, not just locally, but more broadly in the utility?" So being able to combine our capabilities into products that are more proprietary, more defensible, more valuable to customers, that's where we're trying to push things as much as we can.
Speaker #7: backwards and say , okay , what are going to be all the So work challenges that CapEx investment for this this end going to create , is more customer broadly in utility .
Speaker #7: the So not just being able to combine our our capabilities guys into products that are more proprietary , more defensible , more valuable to trying to push things as much what we're can
Colin Rusch: Okay. Thanks, guys.
Operator: This concludes our question-and-answer session. I'd like to turn the conference back over to Daniel McGahn for closing remarks.
Speaker #6: Thanks ,
Speaker #6: .
Daniel McGahn: Thanks, Bailey. As we look forward to the future, it's clear that the opportunities ahead are vast. We stand ready to capitalize on the rising demand for energy and the critical need for a dependable grid to support it. We reached another recent record quarter with revenue levels of over $70 million, and we guide it for our next quarter to potentially exceed $80 million.
Speaker #8: This concludes question and answer session . turn the I'd like to conference back over to customers , that's Daniel McGahn for closing remarks .
Speaker #7: the rising energy critical need for the a dependable support to and it . We reached another record quarter with revenue of recent over and $70 million , we guide it for our next quarter to potentially exceed $80 million .
Nicol Golez: The business has already demonstrated a strong year through the first 9 months into the fiscal year. We see more traditional energy and utility projects, including those driven by data-centered demand, on the horizon. In the longer term, we have a very strong pipeline of materials and semiconductor projects as well. I look forward to talking to you again when we report our full year results. Thank you, everybody, for your support and attention, and have a great day. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Daniel McGahn: The business has already demonstrated a strong year through the first 9 months into the fiscal year. We see more traditional energy and utility projects, including those driven by data-centered demand, on the horizon. In the longer term, we have a very strong pipeline of materials and semiconductor projects as well. I look forward to talking to you again when we report our full year results. Thank you, everybody, for your support and attention, and have a great day.
Speaker #7: The business has demonstrated a strong through the nine first already the fiscal year . We see more energy and utility projects year those driven by data center demand on , including in the term , we horizon have a the pipeline of materials traditional semiconductor and projects , as well .
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Speaker #7: talking to you I look again when report we our full year Thank forward to you , everybody for your support and results . great have a day .
