What changed in this filing

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Item 1. Financial Statements

2025-07-30 compared with 2025-02-05 · 222 added, 322 removed, 542 unchanged (50% of the section changed)

2 unchanged sentences

(In thousands)

December 31, 2024

June 30, 2025

March 31, 2025

24 unchanged sentences

Lease liability, current portion

Debt, current portion

Contingent consideration

Deferred revenue, current portion

11 unchanged sentences

Common stock, $ 0.01 par value, 75,000,000 shares authorized;

39,863,084 and 37,343,812 shares issued and 39,459,733 and 36,946,181 shares outstanding at December 31, 2024 and March 31, 2024, respectively

45,564,273 and 39,887,536 shares issued and 45,160,922 and 39,484,185 shares outstanding at June 30, 2025 and March 31, 2025, respectively

Additional paid-in capital

1,388,948 1,259,540

Treasury stock, at cost, 403,351 and 397,631 at December 31, 2024 and March 31, 2024, respectively

Treasury stock, at cost, 403,351 at June 30, 2025 and March 31, 2025

( 3,765 ) ( 3,765 )

11 unchanged sentences

Three Months Ended

Nine Months Ended

$ 72,358 $ 40,290

Cost of revenues

47,869 28,065

24,489 12,225

Operating expenses:

3 unchanged sentences

Change in fair value of contingent consideration

Restructuring

Total operating expenses

18,845 15,516

Operating income (loss)

5,644 ( 3,291 )

Interest income, net

Other income (expense), net

Income (loss) before income tax expense (benefit)

Income tax (benefit) expense

Income (loss) before income tax expense

6,923 ( 2,331 )

Income tax expense

Net income (loss)

$ 6,724 $ ( 2,524 )

Net income (loss) per common share

$ 0.17 $ ( 0.07 )

Weighted average number of common shares outstanding

38,875 35,676

39,742 35,676

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

3 unchanged sentences

Three Months Ended

Nine Months Ended

Net income (loss)

$ 6,724 $ ( 2,524 )

Other comprehensive gain (loss), net of tax:

Foreign currency translation gain (loss)

Total other comprehensive gain (loss), net of tax

Foreign currency translation (loss) gain

Total other comprehensive (loss) gain, net of tax

Comprehensive income (loss)

$ 6,537 $ ( 2,509 )

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

1 unchanged sentence

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE Three and Nine Months Ended December 31, 2024 AND 2023

FOR THE Three Months Ended June 30, 2025 AND 2024

(In thousands)

7 unchanged sentences

Balance at March 31, 2025

Issuance of common stock – restricted shares

39,888 $ 399 $ 1,259,540 $ ( 3,765 ) $ 1,565 $ ( 1,060,625 ) $ 197,114

Issuance of common stock – restricted shares, net of forfeited shares

918 9 ( 9 ) — — — —

Stock-based compensation expense

— — 4,526 — — — 4,526

Issuance of common stock for 401(k) match

Repurchase of treasury stock

14 1 361 — — — 362

Issuance of common stock - equity offering, net of offering expenses

4,744 47 124,530 — — — 124,577

Cumulative translation adjustment

— — — — ( 187 ) — ( 187 )

— — — — — 6,724 6,724

Balance at June 30, 2025

Issuance of common stock – ESPP

Issuance of common stock - restricted shares

Stock-based compensation expense

Issuance of common stock for 401(k) match

Issuance of common stock - Megatran acquisition, net of offering expenses

Issuance of common stock to settle contingent consideration

Cumulative translation adjustment

Balance at September 30, 2024

Issuance of common stock – restricted shares

Stock-based compensation expense

Issuance of common stock for 401(k) match

Cumulative translation adjustment

Balance at December 31, 2024

Accumulated Other

Number of Shares

Paid-in Capital

Treasury Stock

Comprehensive Income (Loss)

Accumulated Deficit

Stockholders' Equity

45,564 $ 456 $ 1,388,948 $ ( 3,765 ) $ 1,378 $ ( 1,053,901 ) $ 333,116

Accumulated Other Total

Number of Shares Par Value Paid-in Capital Treasury Stock Comprehensive Income Accumulated Deficit Stockholders' Equity

Balance at March 31, 2024

37,343 $ 373 $ 1,212,913 $ ( 3,639 ) $ 1,582 $ ( 1,066,658 ) $ 144,571

Issuance of common stock – restricted shares

44 1 ( 1 ) — — — —

Stock-based compensation expense

— — 1,229 — — — 1,229

Issuance of common stock for 401(k) match

12 — 179 — — — 179

Repurchase of treasury stock

— — — ( 126 ) — — ( 126 )

Cumulative translation adjustment

— — — — 15 — 15

— — — — — ( 2,524 ) ( 2,524 )

Balance at June 30, 2024

Issuance of common stock – ESPP

Issuance of common stock – restricted shares

Stock-based compensation expense

Issuance of common stock for 401(k) match

Cumulative translation adjustment

Balance at September 30, 2023

Stock-based compensation expense

Issuance of common stock for 401(k) match

Issuance of common stock - stock offering

Cumulative translation adjustment

Balance at December 31, 2023

37,399 $ 374 $ 1,214,320 $ ( 3,765 ) $ 1,597 $ ( 1,069,182 ) $ 143,344

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Nine Months Ended December 31,

Three Months Ended June 30,

Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operations:

$ 6,724 $ ( 2,524 )

Adjustments to reconcile net income (loss) to net cash provided by operations:

Depreciation and amortization

8 unchanged sentences

Accounts receivable

( 8,512 ) 2,786

( 1,046 ) ( 3,799 )

Prepaid expenses and other assets

( 5,084 ) ( 3,099 )

Operating leases

( 64 ) ( 195 )

Accounts payable and accrued expenses

6,321 ( 1,734 )

Deferred revenue

Net cash provided by (used in) operating activities

( 777 ) 5,127

Net cash provided by operating activities

Cash flows from investing activities:

Purchases of property, plant and equipment

Cash paid to settle Megatran contingent consideration liability

Cash paid for Megatran Acquisition, net of cash acquired

( 814 ) ( 265 )

Change in other assets

Net cash used in investing activities

( 735 ) ( 20 )

Cash flows from financing activities:

Repurchase of treasury stock

Repayment of debt

Cash paid related to registration of common stock shares

Proceeds from exercise of employee stock options and ESPP

Net cash (used in) provided by financing activities

Employee taxes paid related to net settlement of equity awards

Proceeds from public equity offering, net of offering expenses

Net cash provided by (used in) financing activities

124,577 ( 142 )

Effect of exchange rate changes on cash

Net decrease in cash, cash equivalents and restricted cash

Net increase in cash, cash equivalents and restricted cash

128,038 3,243

Cash, cash equivalents and restricted cash at beginning of period

85,381 92,280

Cash, cash equivalents and restricted cash at end of period

$ 213,419 $ 95,523

Supplemental schedule of cash flow information:

1 unchanged sentence

Non-cash investing and financing activities

Issuance of common stock in connection with the purchase of Megatran

Issuance of common stock to settle contingent consideration

Right-of-use assets obtained in exchange for new lease obligations

$ 451 $ 1,730

Issuance of common stock to settle 401k match liabilities

2 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Nature of the Business and Operations and Liquidity

Nature of the Business and Operations

American Superconductor Corporation (together with its subsidiaries, “AMSC®” or the “Company”) was founded on April 9, 1987.

2 unchanged sentences

These unaudited condensed consolidated financial statements of the Company have been prepared on a going concern basis in accordance with United States generally accepted accounting principles (“GAAP”) and the Securities and Exchange Commission’s (“SEC”) instructions to Form 10 -Q.

Certain prior period amounts were reclassified to conform to the presentation in the current period.

All significant intercompany accounts and transactions are eliminated in consolidation.

3 unchanged sentences

The year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP.

The unaudited condensed consolidated financial statements, in the opinion of management, reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the results for the interim periods ended December 31, 2024 and 2023 and the financial position at December 31, 2024 ;

The unaudited condensed consolidated financial statements, in the opinion of management, reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the results for the interim periods ended June 30, 2025 and 2024 , and the financial position at June 30, 2025 ;

however, these results are not necessarily indicative of results which may be expected for the full year.

The interim condensed consolidated financial statements, and notes thereto, should be read in conjunction with the audited condensed consolidated financial statements for the year ended March 31, 2025 , and notes thereto, included in the Company’s Annual Report on Form 10 -K for the year ended March 31, 2025 filed with the SEC on May 21, 2025 .

The Company has historically experienced recurring operating losses and as of December 31, 2024 , the Company had an accumulated deficit of $ 1,061.8 million.

In addition, the Company has historically experienced recurring negative operating cash flows.

At December 31, 2024 , the Company had cash and cash equivalents of $ 75.2 million.

Cash provided by operations for the nine months ended December 31, 2024 was $ 22.0 million.

In January 2024, the Company filed a shelf registration statement on Form S- 3 that will expire three years from the date on which it was declared effective, March 15, 2027 ( the “First Form S- 3” ).

The First Form S- 3 allows the Company to offer and sell from time-to-time up to $ 250 million of common stock, debt securities, warrants or units comprised of any combination of these securities, with $ 250 million available for future offerings as of December 31, 2024 .

The First Form S- 3 is intended to provide the Company flexibility to conduct registered sales of its securities, subject to market conditions, in order to fund its future capital needs.

The terms of any future offering under the First Form S- 3 will be established at the time of such offering and will be described in a prospectus supplement filed with the SEC prior to the completion of any such offering.

On January 31, 2024, the Company entered into an underwriting agreement with Oppenheimer & Co.

Inc., as a representative of the several underwriters named therein, relating to the issuance and sale (the "2024 Offering") of 6,210,000 shares of the Company's common stock at a public offering price of $ 11.25 per share.

The net proceeds to the Company from the 2024 Offering were approximately $ 65.2 million, after deducting underwriting discounts and commissions and offering expenses payable by the Company.

The 2024 Offering closed on February 14, 2024.

Acquisition of NWL

On August 1, 2024 (the "Acquisition Date"), the Company entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with the selling stockholders named therein.

Pursuant to the terms of the Stock Purchase Agreement and concurrently with entering into such agreement, the Company acquired all of the issued and outstanding shares of Megatran Industries, Inc.

("Megatran") (the "Acquisition"), for aggregate consideration in an amount equal to $ 61.4 million (the “Purchase Price”), which consideration amount was subject to various adjustments set forth in the Stock Purchase Agreement (including those described below) and consisted of:

(a) (i) $ 25.0 million, minus (ii) the Indebtedness (as defined in the Stock Purchase Agreement) outstanding as of immediately prior to the closing, minus (iii) Company Expenses (as defined in the Stock Purchase Agreement) (collectively, the “Cash Purchase Price”);

(b) a number of restricted shares (rounded up or down to the nearest whole share, as applicable) (the “Company Shares”) of the Company’s common stock, $.

01 par value per share (“Common Stock”) equal to the quotient obtained by dividing ( x ) $ 31.4 million (the “Share Purchase Price”) by (y) the closing price per share of Common Stock on the Nasdaq Global Select Market on the last trading day immediately preceding the Acquisition Date;

and (c) an additional cash payment equal to $ 5.0 million, as adjusted pursuant to Sections 5.6 (c), (d), and (f) of the Stock Purchase Agreement (the “Additional Cash Purchase Price”).

Megatran is now a wholly-owned subsidiary of the Company and, together with its wholly-owned subsidiaries and affiliates, is operated and reported as a component of its Grid business segment.

On September 23, 2024, the Company paid $ 3.3 million to the selling stockholders, which was calculated based on the agreed upon formula set forth in the Stock Purchase Agreement.

This amount is reflected as the change in fair value of this contingent consideration in the nine months ended December 31, 2024 .

As of December 31, 2024 , there are no remaining obligations to the selling stockholders of Megatran.

In August 2024, the Company filed an automatically-effective shelf registration statement on Form S- 3 that will expire no later than August 12, 2027 ( the “Second Form S- 3” ).

The Second Form S- 3 allows the Company to offer and sell from time-to-time unspecified amounts of common stock, debt securities, warrants or units comprised of any combination of these securities and allows certain selling stockholders to offer and sell from time-to-time common stock.

The Second Form S- 3 assisted the Megatran selling stockholders in the resale of their common stock and is intended to provide the Company flexibility to conduct registered sales of its securities, subject to market conditions, in order to fund its future capital needs.

The terms of any future offering under the Second Form S- 3 will be established at the time of such offering and will be described in a prospectus supplement filed with the SEC prior to the completion of any such offering.

Changes in macroeconomic conditions arising from various reasons, such as the ongoing wars between Russia and Ukraine and Israel and Hamas, labor force availability, sourcing, material delays and global supply chain disruptions could have a material adverse effect on the Company’s business, financial condition and results of operations.

The Company believes that based on the information presented above and its quarterly management assessment, it has sufficient liquidity to fund its operations and capital expenditures for the next twelve months following the issuance of the unaudited condensed consolidated financial statements for the nine months ended December 31, 2024 .

The Company’s liquidity is highly dependent on its ability to increase revenues, its ability to control its operating costs, and its ability to raise additional capital, if necessary.

The impact of global sources of instability, including the wars between Russia and Ukraine and Israel and Hamas, on the global financing markets may reduce the Company's ability to raise additional capital, if necessary, which could negatively impact the Company's liquidity.

There can be no assurance that the Company will be able to continue to raise additional capital, on favorable terms or at all, from other sources or execute on any other means of improving liquidity described above.

Acquisition of Megatran

As described in Note 1, Nature of the Business and Operations and Liquidity, on the Acquisition Date, the Company acquired all of the issued and outstanding shares of capital stock of Megatran.

Pursuant to the terms of the Stock Purchase Agreement and concurrently with entering into such agreement, the Company acquired all of the issued and outstanding shares of capital stock of Megatran Industries, Inc.

("Megatran") (the "NWL Acquisition").

Megatran's wholly-owned subsidiary, NWL, Inc.

("NWL"), is a U.S.-based global provider of engineered power conversion solutions for demanding industrial and military applications.

Pursuant to the Stock Purchase Agreement, the Company acquired all of the issued and outstanding shares of Megatran, for aggregate consideration in an amount equal to $ 61.4 million, which consideration amount was subject to various adjustments set forth in the Stock Purchase Agreement (including those described below) and consisted of:

(b) a number of restricted shares (rounded up or down to the nearest whole share, as applicable) of Common Stock equal to the quotient obtained by dividing ( x ) $ 31.4 million by (y) the closing price per share of Common Stock on the Nasdaq Global Select Market on the last trading day immediately preceding the Acquisition Date;

and (c) an additional cash payment equal to $ 5.0 million, as adjusted pursuant to Sections 5.6 (c), (d), and (f) of the Stock Purchase Agreement.

Megatran is now a wholly-owned subsidiary of the Company and, together with its wholly-owned subsidiaries and affiliates, is operated and reported as a component of its Grid business segment.

On September 23, 2024, the Company paid $ 3.3 million to the selling stockholders, which was calculated based on the agreed upon formula set forth in the Stock Purchase Agreement.

This amount is reflected as the change in fair value of this contingent consideration in the nine months ended December 31, 2024 .

As of December 31, 2024 , there are no remaining obligations to the selling stockholders of Megatran.

The Acquisition has been accounted for under the purchase method of accounting in accordance with ASC 805, Business Combinations .

The Company allocated the purchase price to the assets acquired and liabilities assumed at their estimated fair values as of the date of acquisition.

(together with Megatran, "NWL"), is a U.S.-based global provider of engineered power conversion solutions for demanding industrial and military applications.

The NWL Acquisition has been accounted for under the purchase method of accounting in accordance with ASC 805, Business Combinations .

The Company allocated the purchase price to the assets acquired and liabilities assumed at their estimated fair values as of the Acquisition Date.

The excess of the purchase price paid by the Company over the estimated fair value of net assets acquired has been recorded as goodwill.

2 unchanged sentences

Issuance of 1,297,600 shares of Company’s common stock $ 31.4

At the Acquisition Date, in addition to the $ 30.0 million cash, the Company valued the Company’s common stock, using $ 24.16 per share, which was the closing price on the day prior to the day that the Company acquired Megatran.

Acquisition costs of less than $ 0.1 million and $ 1.1 million were included in s elling, general and administrative ("SG&A") for the three and nine months ended December 31, 2024 , respectively.

The following table summarizes the allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed and related deferred income taxes in connection with the Acquisition as of the Acquisition Date (in millions):

Acquisition costs of $ 1.1 million were included in selling, general and administrative ("SG&A") for the fiscal year ended March 31, 2025.

The following table summarizes the allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed and related deferred income taxes in connection with the NWL Acquisition as of the Acquisition Date and reflective of measurement period adjustments (in millions):

Cash and cash equivalents

14 unchanged sentences

The fair value was determined based on the estimated selling price of the inventory, less the remaining manufacturing and selling cost and a normal profit margin on those manufacturing and selling efforts.

The inventory step up adjustment increased cost of revenue $ 0.4 million and $ 0.7 million in the three and nine months ended December 31, 2024 , respectively, as the inventory was sold.

The inventory step up adjustment increased cost of revenue $ 0.7 million for the fiscal year ended March 31, 2025 as the inventory was sold.

Backlog of $ 0.7 million was evaluated using the multi period excess earnings method under the income approach.

4 unchanged sentences

Goodwill represents the value associated with the acquired workforce and expected synergies related to the business combination of the two companies.

Goodwill resulting from the Acquisition was assigned to the Company’s Grid business segment.

Goodwill recognized in the Acquisition is not deductible for tax purposes.

Goodwill resulting from the NWL Acquisition was assigned to the Company’s Grid business segment.

Goodwill recognized in the NWL Acquisition is not deductible for tax purposes.

This purchase price allocation is preliminary and has not been finalized as the analysis on the assets and liabilities acquired, primarily the tax related liability may require further adjustments to our purchase accounting that could result in a measurement period adjustment that would impact the Company's reported net assets and goodwill as of August 1, 2024.

Material changes, if any, to the preliminary allocation summarized above will be reported once the related uncertainties are resolved, but no later than August 1, 2025.

The $ 6.4 million of deferred tax liability is primarily related to basis difference of property, plant, and equipment.

Unaudited Pro Forma Operating Results

The unaudited pro forma condensed consolidated statement of operations for the three and nine months ended December 31, 2024 and 2023 presented as if the Acquisition had occurred on April 1, 2023, is as follows:

Three Months Ended December 31,

Nine Months Ended December 31,

$ 61,403 $ 58,874 $ 179,435 $ 158,789

The unaudited pro forma condensed consolidated statement of operations for the three months ended June 30, 2025, and 2024 presented as if the NWL Acquisition had occurred on April 1, 2024, is as follows:

Three Months Ended June 30, 2024

Operating income (loss)

1,577 116 ( 502 ) ( 7,077 )

Net income (loss)

$ 2,728 $ 668 $ 1,922 $ 35

Net income (loss) per common share

$ 0.07 $ 0.02 $ 0.05 $ -

Net income per common share

Shares - basic

37,661 30,390 37,347 30,026

Shares - diluted

38,463 30,726 38,037 30,405

The pro forma amounts include the historical operating results of the Company and Megatran with appropriate adjustments that give effect to acquisition related costs, income taxes, intangible amortization resulting from the Acquisition and certain conforming accounting policies of the Company.

The pro forma amounts are not necessarily indicative of the operating results that would have occurred if the Acquisition and related transactions had been completed at the beginning of the applicable periods presented.

The pro forma amounts include the historical operating results of the Company and NWL with appropriate adjustments that give effect to acquisition related costs, income taxes, intangible amortization resulting from the NWL Acquisition and certain conforming accounting policies of the Company.

The pro forma amounts are not necessarily indicative of the operating results that would have occurred if the NWL Acquisition and related transactions had been completed at the beginning of the applicable periods presented.

In addition, the pro forma amounts are not necessarily indicative of operating results in future periods.

In the unaudited consolidated results for the three and nine months ended December 31, 2024 , Megatran’s operations are included in the Company’s consolidated results from the date of Acquisition of August 1, 2024.

Megatran contributed $ 18.3 million of revenue and $ 1.9 million in net income for the Company for the three months ended December 31, 2024 .

Megatran contributed $ 32.4 million of revenue and $ 3.9 million in net income for the Company for the nine months ended December 31, 2024 .

Amortization expense of $ 0.3 million and $ 0.5 million is included in the three and nine months ended December 31, 2024 , respectively, as a result of the Megatran acquired intangible assets.

In addition, $ 0.4 million and $ 0.7 million for the step-up basis assigned to acquired inventory was charged to cost of revenues in the three and nine months ended December 31, 2024 , respectively.

NWL contributed $ 17.8 million of revenue and $ 2.5 million in net income for the Company for the three months ended June 30, 2025 .

Amortization expense of less than $ 0.1 million is included in the three months ended June 30, 2025 , as a result of the acquired intangible assets from the NWL Acquisition.

Revenue Recognition

The Company’s revenues in its Grid business segment are derived primarily through enabling the transmission and distribution of power, providing planning services that allow it to identify power grid needs and risks, and developing ship protection systems for the U.S.

The Company’s revenues in its Wind business segment are derived primarily through supplying advanced power electronics and control systems, licensing its highly engineered wind turbine designs, and providing extensive customer support services to wind turbine manufacturers.

The Company’s revenues in its Grid segment are derived primarily through enabling the transmission and distribution of power, providing planning services that allow it to identify power grid needs and risks, and developing ship protection systems for the U.S.

The Company’s revenues in its Wind segment are derived primarily through supplying advanced power electronics and control systems, licensing its highly engineered wind turbine designs, and providing extensive customer support services to wind turbine manufacturers.

The Company records revenue based on a five -step model in accordance with Accounting Standards Codification ("ASC") 606.

For its customer contracts, the Company identifies the performance obligations, determines the transaction price, allocates the contract transaction price to the performance obligations, and recognizes the revenue when (or as) control of goods or services is transferred to the customer.

For the three and nine months ended December 31, 2024 , 87 % and 88 % of revenue, respectively, was recognized at the point in time when control transferred to the customer, with the remainder being recognized over time.

For the three and nine months ended December 31, 2023 , 85 % and 80 % of revenue, respectively, was recognized at the point in time when control transferred to the customer, with the remainder being recognized over time.

For the three months ended June 30, 2025 , 91 % of revenue, was recognized at the point in time when control transferred to the customer, with the remainder being recognized over time.

For the three months ended June 30, 2024 , 88 % of revenue was recognized at the point in time when control transferred to the customer, with the remainder being recognized over time.

In the Company's equipment and system product line, each contract with a customer summarizes each product sold to a customer, which typically represents distinct performance obligations.

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The Company has elected to recognize incremental costs of obtaining a contract as expense when incurred except in contracts where the amortization period would exceed twelve months.

As of December 31, 2024 and March 31, 2024 , the Company's capitalized incremental contract costs were not material.

As of June 30, 2025 and March 31, 2025 , the Company's capitalized incremental contract costs were not material.

The Company has elected not to adjust the promised amount of consideration for the effects of a significant financing component if the period of financing is twelve months or less.

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The following tables disaggregate the Company’s revenue by product line and by shipment destination (in thousands):

Three Months Ended December 31, 2024

Nine Months Ended December 31, 2024

Three Months Ended June 30, 2025

Product Line:

5 unchanged sentences

$ 60,087 $ 12,271

2,293 9,080 4,280 24,562

2,276 17 5,602 22

$ 52,306 $ 9,097 $ 131,578 $ 24,585

Three Months Ended December 31, 2023

Nine Months Ended December 31, 2023

Three Months Ended June 30, 2024

Product Line:

4 unchanged sentences

$ 32,336 $ 7,954

$ 26,782 $ 45 $ 74,640 $ 102

3,704 5,660 8,832 15,587

3,117 45 4,382 68

$ 33,603 $ 5,750 $ 87,854 $ 15,757

As of December 31, 2024 and 2023 , the Company’s contract assets and liabilities primarily relate to the timing differences between cash received from a customer in connection with contractual rights to invoicing and the timing of revenue recognition following completion of performance obligations.

As of June 30, 2025 and 2024 , the Company’s contract assets and liabilities primarily relate to the timing differences between cash received from a customer in connection with contractual rights to invoicing and the timing of revenue recognition following completion of performance obligations.

The Company's accounts receivable balance is made up entirely of customer contract related balances.

5 unchanged sentences

$ 6,376 $ 5,756 $ 76,133

Increase for balance acquired

Increases for costs incurred to fulfill performance obligations

6 unchanged sentences

Other changes and FX impact

( 18 ) ( 11 ) ( 540 )

Ending balance as of December 31, 2024

Ending balance as of June 30, 2025

$ 10,083 $ 5,616 $ 75,891

8 unchanged sentences

Decrease due to cost recognition on completed performance obligations

— ( 3,518 ) —

Increase (decrease) due to recognition of revenue based on transfer of control of performance obligations

1 unchanged sentence

Other changes and FX impact

Ending balance as of December 31, 2023

( 2 ) ( 2 ) ( 50 )

Ending balance as of June 30, 2024

$ 4,918 $ 4,034 $ 62,913

The Company’s remaining performance obligations represent the unrecognized revenue value of the Company’s contractual commitments.

The Company’s performance obligations may vary significantly each reporting period based on the timing of major new contractual commitments.

As of December 31, 2024 , the Company had outstanding performance obligations on existing contracts under ASC 606 to be recognized in the next twelve months of approximately $ 204.2 million .

As of June 30, 2025 , the Company had outstanding performance obligations on existing contracts under ASC 606 to be recognized in the next twelve months of approximately $ 215.2 million .

There are also approximately $ 88.4 m illion o f outstanding performance obligations to be recognized over a period of thirteen to sixty months.

The remaining performance obligations are subject to customer actions and therefore the timing of revenue recognition cannot be reasonably estimated.

The following table sets forth customers who represented 10% or more of the Company’s total revenues for the three and nine months ended December 31, 2024 and 2023 :

The following table sets forth customers who represented 10% or more of the Company’s total revenues for the three months ended June 30, 2025 , and 2024:

Three Months Ended

Nine Months Ended

Fuji Bridex Pte Ltd

Inox Wind Limited

10 % 11 % 13 % 12 %

Innomotics LLC

14 % <10% <10% <10%

Stock-Based Compensation

The Company accounts for its stock-based compensation at fair value.

The following table summarizes stock-based compensation expense by financial statement line item for the three and nine months ended December 31, 2024 and 2023 (in thousands):

Three Months Ended December 31,

Nine Months Ended December 31,

The following table summarizes stock-based compensation expense by financial statement line item for the three months ended June 30, 2025 , and 2024 (in thousands):

Three Months Ended June 30,

Cost of revenues

$ 211 $ 62 $ 309 $ 230

Research and development

442 158 697 469

Selling, general and administrative

$ 4,526 $ 1,229

$ 2,861 $ 1,140 $ 4,933 $ 3,608

The Company issued 30,000 shares and 872,500 shares of restricted stock during the three and nine months ended December 31, 2024 , respectively.

The Company issued no shares and 19,200 shares of immediately vested common stock during the three and nine months ended December 31, 2024 , respectively.

The Company issued no shares and 681,500 shares of restricted stock during the three and nine months ended December 31, 2023 , respectively.

No shares of immediately vested common stock were issued during the three months ended December 31, 2023 and 53,675 shares of immediately vested common stock were issued during the nine months ended December 31, 2023 .

The Company issued 880,000 shares of restricted stock and 39,445 shares of immediately vested common stock during the three months ended June 30, 2025 .

The Company issued 25,000 shares of restricted stock and 19,200 shares of immediately vested common stock during the three months ended June 30, 2024 .

These restricted stock awards generally vest over 2 - 3 years.

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Performance-based awards are expensed over the requisite service period based on probability of achievement.

The Company granted 2,112 stock options during the three months ended June 30, 2025 .

The Company granted no stock options during the three months ended June 30, 2024.

The stock options granted during the three months ended June 30, 2025 will vest over 2 years.

The estimated fair value of the Company’s stock-based awards, less expected annual forfeitures, is amortized over the awards’ service period.

There were no unrecognized compensation costs for unvested stock options as of December 31, 2024 .

The total unrecognized compensation cost for unvested outstanding restricted stock was $ 18.2 mi llion as of December 31, 2024 .

There were less than $ 0.1 million of unrecognized compensation costs for unvested stock options as of June 30, 2025 .

This expense will be recognized over a weighted average period of approximately 1.9 years.

The total unrecognized compensation cost for unvested outstanding restricted stock was $ 31.4 mi llion as of June 30, 2025 .

This expense will be recognized over a weighted-average expense period of approximately 2.1 years.

The Company granted no stock options during the three and nine months ended December 31, 2024 and 2023 .

The weighted average assumptions used in the Black Scholes valuation model for stock options granted during the three months ended June 30, 2025 are as follows:

Three Months Ended June 30,

Expected volatility

Risk-free interest rate

Expected life (years)

Dividend yield

Computation of Net Income (Loss) per Common Share

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Stock options and warrants that are out-of-the-money with exercise prices greater than the average market price of the underlying common shares and shares of performance-based restricted stock where the contingency was not met are excluded from the computation of diluted EPS as the effect of their inclusion would be anti-dilutive.

For the three months ended December 31, 2024 , 475,971 shares were not included in the calculation of diluted EPS.

Of these, 475,971 were shares of performance-based restricted stock where the contingency was not met.

For the nine months ended December 31, 2024 , 471,985 shares were not included in the calculation of diluted EPS.

Of these, 471,768 were shares of performance-based restricted stock where the contingency was not met.

217 shares relate to outstanding stock awards that were considered anti-dilutive.

For each of the three and nine months ended December 31, 2023 , 336,206 shares were not included in the calculation of diluted EPS.

Of these, 300,000 relate to shares associated with the contingent consideration derivative liability for which the contingency had not yet been met, and 36,206 relate to outstanding stock options as they were considered anti-dilutive .

The following table reconciles the numerators and denominators of the earnings per share calculation for the three and nine months ended December 31, 2024 and 2023 (in thousands, except per share data):

Three Months Ended December 31,

Nine Months Ended December 31,

For the three months ended June 30, 2025 , 475,329 shares were not included in the calculation of diluted EPS.

Of these, 474,517 were shares of performance-based restricted stock where the contingency was not met and 812 shares relate to outstanding stock awards that were considered anti-dilutive.

For the three months ended June 30, 2024, 336,206 shares were not included in the calculation of diluted EPS.

Of these, 300,000 relate to shares associated with the contingent consideration derivative liability for which the contingency has not yet been met, and 36,206 relate to outstanding stock options as they were considered anti-dilutive.

The following table reconciles the numerators and denominators of the earnings per share calculation for the three months ended June 30, 2025 , and 2024 (in thousands, except per share data):

Three Months Ended June 30,

Net income (loss)

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Goodwill is not amortized but reviewed for impairment.

The Company's goodwill balance relates to the Megatran Acquisition in fiscal 2024, the Neeltran acquisition in fiscal 2021 , the Northeast Power Systems, Inc.

The Company's goodwill balance relates to the NWL Acquisition in fiscal 2024, the acquisition of Neeltran, Inc.

in fiscal 2021 , the Northeast Power Systems, Inc.

("NEPSI") acquisition in fiscal 2020 , and the acquisition of Infinia Technology Corporation in fiscal 2017 and is reported in the Grid business segment.

Goodwill is reviewed annually on February 28th and whenever events or changes in circumstances indicate that the carrying value of the goodwill might not be recoverable.

There were no changes to goodwill during the year ended March 31, 2024.

March 31, 2024

Megatran Acquisition

December 31, 2024

The Company did not record impairment in the three and nine months ended December 31, 2024 .

Goodwill increased by $ 4.7 million during the fiscal year ended March 31, 2025, related to the NWL Acquisition.

There were no changes to Goodwill during the three months ended June 30, 2025.

The Company did not identify any triggers to assess impairment in the three months ended June 30, 2025 or 2024.

Other Intangibles

Intangible assets at December 31, 2024 and March 31, 2024 consisted of the following (in thousands):

December 31, 2024

Intangible assets at June 30, 2025 and March 31, 2025 consisted of the following (in thousands):

June 30, 2025

March 31, 2025

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$ 20,031 $ ( 14,452 ) $ 5,579 $ 20,031 $ ( 14,116 ) $ 5,916

The Company recorded intangible amortization expense related to customer relationship and core technology and know-how of $ 0.4 million and $ 1.3 million in the three and nine months ended December 31, 2024 , respectively.

The Company recorded intangible amortization expense related to customer relationship and core technology and know-how of $ 0.5 million and $ 1.6 million in the three and nine months ended December 31, 2023 , respectively.

The Company recorded $ 0.3 million and $ 0.4 million of intangible amortization in cost of revenue related to backlog during the three and nine months ended December 31, 2024 , respectively.

The Company recorded no amortization expense related to backlog during the three months ended December 31, 2023 and less than $ 0.1 million related to backlog was reported in cost of revenues during the nine months ended December 31, 2023 .

The Company recorded intangible amortization expense related to customer relationship and core technology and know-how of $ 0.3 million in the three months ended June 30, 2025 .

The Company recorded intangible amortization expense related to customer relationship and core technology and know-how of $ 0.4 million in the three months ended June 30, 2024.

Expected future amortization expense related to intangible assets is as follows (in thousands):

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Disclosure of the transfer of securities from Level 1 to Level 2 or Level 3 is made in the event that the related security is significant to total cash and investments.

The Company did not have any transfers of assets and liabilities from Level 1, Level 2 or Level 3 of the fair value measurement hierarchy during the three or nine months ended December 31, 2024 .

The Company did not have any transfers of assets and liabilities from Level 1, Level 2 or Level 3 of the fair value measurement hierarchy during the three months ended June 30, 2025 .

A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

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Cash equivalents consist of highly liquid instruments with maturities of three months or less that are regarded as high quality, low risk investments and are measured using such inputs as quoted prices, and are classified within Level 1 of the valuation hierarchy.

Cash equivalents consist principally of certificates of deposits and money market accounts.

Contingent Consideration

Contingent consideration related to the earnout payment set forth in the NEPSI Stock Purchase Agreement governing the acquisition of NEPSI provided that the selling stockholders may have received up to an additional 1,000,000 shares of common stock of the Company upon the achievement of certain specified revenue objectives over varying periods of up to four years following the NEPSI acquisition date which must have occurred by September 30, 2024.

Contingent consideration related to the make whole payment set forth in the Megatran Stock Purchase Agreement provided that the selling stockholders would be made whole for any costs or taxes as a result of the orderly distribution process.

We classified contingent consideration related to certain acquisitions within level 3 of the fair value hierarchy because the fair value is derived using significant unobservable inputs, which include revenue risk premium and revenue volatility.

See Note 15 , "Contingent Consideration" for further discussion.

As of September 30, 2024, the Company had settled all outstanding contingent consideration.

The following table provides the assets and liabilities carried at fair value on a recurring basis, measured as of December 31, 2024 and March 31, 2024 (in thousands):

Cash equivalents consist principally of money market accounts.

Short-term Cash Instruments

Short-term cash instruments consist of highly liquid instruments with maturities of three months or less that are regarded as high quality, low risk investments and are measured using such inputs as quoted prices in markets that are not active, and are classified within Level 2 of the valuation hierarchy.

Short-term cash instruments consist principally of certificates of deposits.

The following table provides the assets and liabilities carried at fair value on a recurring basis, measured as of June 30, 2025 and March 31, 2025 (in thousands):

Total Carrying Value

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Significant Other Observable Inputs (Level 2)

Significant Unobservable Inputs (Level 3)

December 31, 2024:

Significant Unobservable Inputs

June 30, 2025:

Cash equivalents

$ 175,654 $ 175,654 $ — $ —

Short-term cash instruments

$ 1,401 $ — $ 1,401 $ —

Total Carrying Value Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)

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$ 51,230 $ 51,230 $ — $ —

Derivative liabilities:

Contingent consideration

$ 3,100 $ — $ — $ 3,100

The table below reflects the activity for the Company’s contingent consideration derivative liability measured at fair value on a recurring basis (in thousands):

NEPSI Acquisition Contingent Consideration

Megatran Acquisition Contingent Consideration

Balance at March 31, 2023

Change in fair value

Settlement of contingent consideration

Balance at December 31, 2023

Balance at March 31, 2024

Change in fair value

Settlement of contingent consideration

Short-term cash instruments

$ 1,404 $ — $ 1,404 $ —

Balance at December 31, 2024

Accounts Receivable

Accounts receivable at December 31, 2024 and March 31, 2024 consisted of the following (in thousands):

December 31, 2024

Accounts receivable at June 30, 2025 and March 31, 2025 consisted of the following (in thousands):

June 30, 2025

March 31, 2025

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$ 54,684 $ 46,186

Inventory, net of reserves, at December 31, 2024 and March 31, 2024 consisted of the following (in thousands):

December 31, 2024

Inventory, net of reserves, at June 30, 2025 and March 31, 2025 consisted of the following (in thousands):

June 30, 2025

March 31, 2025

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$ 71,602 $ 71,169

The Company recorded inventory write-downs of $ 0.4 million and $ 0.5 million f or the three months ended December 31, 2024 and 2023 , respectively.

The Company recorded inventory write-downs of $ 1.2 million and $ 1.5 million f or the nine months ended December 31, 2024 and 2023 , respectively.

The Company recorded inventory write-downs of $ 0.7 million and $ 0.5 million f or the three months ended June 30, 2025 and 2024 , respectively.

These write-downs were based on the Company's evaluation of its inventory on hand for excess quantities and obsolescence.

Deferred program costs as of December 31, 2024 and March 31, 2024 primarily represent costs incurred on programs where the Company needs to complete performance obligations before the related revenue and costs will be recognized.

Prepaid and Other Current Assets

During fiscal 2022, the Company conducted an analysis as to whether it was entitled to employee retention credits (“ERC”) under the CARES Act as amended by the Taxpayer Certainty and Disaster Tax Relief Act of 2020 and the American Rescue Plan Act of 2021.

Based on the analysis, the Company determined that it was entitled to an ERC of approximately $ 3.3 million related to payroll taxes paid in the first and second quarters of 2021 and the first quarter of 2020.

The Company determined it met all the criteria required under the gross receipts test of the applicable Internal Revenue Service regulations related to ERCs.

As accounting for payroll tax credits are not within the scope of ASC 740, Income Taxes , the Company has chosen to account for the ERCs by analogizing to the International Accounting Standards Board IAS 20, Accounting for Government Grants and Disclosure of Government Assistance .

In accordance with IAS 20, an entity recognizes government grants only when there is reasonable assurance that the entity will comply with the conditions attached to them and the grants will be received.

The Company evaluated its eligibility for the ERC and determined that it met all the criteria to claim a refundable tax credit against the employer portion of Social Security taxes for up to 70 % of the qualified wages the Company paid to employees for the three month periods ended March 31, 2021 and June 30, 2021 and for up to 50 % of the qualified wages the Company paid to employees for the three month period ended March 31, 2020.

The Company recorded a $ 3.3 million receivable in prepaid expenses and other current assets and a benefit of $ 1.8 million to cost of revenues, $ 0.8 million to selling, general, and administrative and $ 0.7 million to research and development in the fiscal year ended March 31, 2023 for the ERC that was expected to be received based on the amended filings.

During the year ended March 31, 2024, the Company received $ 3.0 million for the initial claims that were processed.

During the nine months ended December 31, 2024 , the Company did not receive any cash for the remaining $ 0.3 million balance of initial claims that were processed.

The remaining balance is expected to be received during fiscal 2025.

Deferred program costs as of June 30, 2025 and March 31, 2025 primarily represent costs incurred on programs where the Company needs to complete performance obligations before the related revenue and costs will be recognized.

Property, Plant and Equipment

The cost and accumulated depreciation of property, plant and equipment at December 31, 2024 and March 31, 2024 are as follows (in thousands):

December 31, 2024

The cost and accumulated depreciation of property, plant and equipment at June 30, 2025 and March 31, 2025 are as follows (in thousands):

June 30, 2025

March 31, 2025

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$ 38,521 $ 38,572

Depreciation expense was $ 0.9 million and $ 0.6 million for the three months ended December 31, 2024 and 2023 , respectively.

Depreciation expense was $ 2.3 million and $ 1.7 million for the nine months ended December 31, 2024 and 2023 , respectively.

The increase in land relates to the property added as part of the Megatran Acquisition.

Depreciation expense was $ 0.9 million and $ 0.6 million for the three months ended June 30, 2025 and 2024 , respectively.

Equity-Method Investments

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Equity method investments are measured at cost minus impairment, if any, plus or minus the Company’s share of an investee’s income or loss, less distributions received.

As of December 31, 2024 the Compa ny did not have material accounts receivable nor accounts payable balances wi th NWL Pacific.

The tables below present the summarized financial information from the date of acquisition through December 31, 2024 , as provided to the Company by the investee, for the unconsolidated company (in thousands):

Three Months Ended December 31,

Nine Months Ended December 31,

$ 1,368 $ 2,225

As of June 30, 2025 the Compa ny did not have material accounts receivable nor accounts payable balances wi th NWL Pacific.

The Company's investment in NWL Pacific was $ 1.4 million and $ 1.1 million as of June 30, 2025 and March 31, 2025, respectively.

The table below presents the summarized financial information for periods presented post acquisition, as provided to the Company by the investee, for the unconsolidated company (in thousands):

Three Months Ended June 30,

Income from operation

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses at December 31, 2024 and March 31, 2024 consisted of the following (in thousands):

December 31, 2024

Accounts payable and accrued expenses at June 30, 2025 and March 31, 2025 consisted of the following (in thousands):

June 30, 2025

March 31, 2025

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Accrued compensation

10,688 10,326

Income taxes payable

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Product warranty activity was as follows (in thousands):

Three Months Ended December 31,

Nine Months Ended December 31,

Three Months Ended June 30,

Balance at beginning of period

$ 3,033 $ 2,363

Acquired warranty obligations

Provisions for warranties during the period

348 360 1,122 1,212

Settlements during the period

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$ 3,240 $ 2,542

The Company recorded income tax benefit of $ 0.1 million and $ 4.9 million in the three and nine months ended December 31, 2024 , respectively, and income tax expense of $ 0.1 million $ 0.3 million in the three and nine months ended December 31, 2023 , respectively.

As a result of a difference in book and tax basis related to the intangible assets acquired in the Acquisition (see Note 2, "Acquisition"), the Company recorded a deferred tax liability of $ 6.4 million.

As a result, the Company was able to benefit from additional deferred tax assets and therefore released a corresponding valuation allowance of $ 5.2 million during the nine months ended December 31, 2024 .

The purchase price allocation is preliminary and has not been finalized as the analysis on the assets and liabilities acquired, primarily the tax related liability, may require further adjustments to the Company's purchase accounting that could result in measurement period adjustments that would impact the Company's reported net assets and goodwill as of August 1, 2024 .

Material changes, if any, to the preliminary allocation summarized in Note 2, "Acquisition" will be reported once the related uncertainties are resolved, but no later than August 1, 2025 .

Goodwill recognized in the Acquisition, is not deductible for tax purposes.

The Company recorded income tax expense of $ 0.2 million in both the three months ended June 30, 2025 and 2024.

On July 4, 2025, the reconciliation bill, commonly referred to as the One Big Beautiful Bill (OBBB) was signed into law, which includes a broad range of tax reform provisions that may affect the company's financial results.

The OBBB allows an elective deduction for domestic Research and Development (R&D), a reinstatement of elective 100% first -year bonus depreciation, and a more favorable tax rate on Foreign-derived Deduction Eligible Income and income from non-U.S.

subsidiaries (Net CFC Tested Income), among other provisions.

The Company is currently evaluating the impact of these provisions which could affect the Company's effective tax rate and deferred tax assets in 2025 and future periods.

A quantitative estimate of the specific financial effects cannot be reasonably determined at this time due to the complexity of the changes in the tax reform.

The impact of those tax provisions in the OBBB will depend on our facts in each year and anticipated guidance from the U.S.

Department of the Treasury.

Accounting for income taxes requires a two -step approach to recognizing and measuring uncertain tax positions.

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Any changes in these factors could result in the recognition of a tax benefit or an additional charge to the tax provision.

The Company did not identify any uncertain tax positions in the nine months ended December 31, 2024 and did not have any gross unrecognized tax benefits as of December 31, 2024 .

The Company did not identify any uncertain tax positions in the three months ended June 30, 2025 and did not have any gross unrecognized tax benefits as of June 30, 2025 .

On a quarterly basis, the Company reassesses the valuation allowance on deferred income tax assets, weighing positive and negative evidence to assess the recoverability of the deferred tax assets.

As of June 30, 2025, the Company continues to maintain a valuation allowance to reduce the U.S.

federal and state deferred tax assets to the amount that will more likely than not be realized.

Given the Company’s positive trend in earnings, the Company will assess during fiscal year 2025 whether sufficient positive evidence will exist to allow the Company to reach a conclusion that some or all of the U.S.

valuation allowance will no longer be needed.

A release of the valuation allowance would result in the recognition of deferred tax assets and a corresponding decrease to income tax expense in the period the release is recorded, the effect of which would be an increase in reported net income.

Contingent Consideration

NEPSI Contingent Considerations

NEPSI Contingent Consideration

On October 1, 2020 ( the "NEPSI Acquisition Date"), the Company entered into a Stock Purchase Agreement (the "NEPSI Stock Purchase Agreement") with the selling stockholders named therein.

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During the year ended March 31, 2024, the Company issued 399,999 shares of common stock and cash in lieu of a fractional share of common stock, related to the achievement of specified revenue objectives in connection with the NEPSI Acquisition.

One specified revenue objective, which would have earned the selling stockholders 300,000 shares of Company common stock, was not achieved.

NEPSI recognized revenues in excess of $ 120.0 million during the four years after the NEPSI Acquisition Date.

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The Company evaluated the NEPSI Acquisition earnout payment set forth in the NEPSI Stock Purchase Agreement, which was expected to require settlement in the Company's common stock, and determined the contingent consideration qualified for liability classification and derivative treatment under ASC 815, Derivatives and Hedging .

As a result, for the periods in which the Company had outstanding contingent consideration, the fair value of the contingent consideration was remeasured and the resulting gain or loss was recognized in operating expenses until the share amount is fixed.

Megatran Contingent Consideration

On August 1, 2024 , the Company entered into a Stock Purchase Agreement with the selling stockholders of Megatran named therein.

NWL Contingent Consideration

On August 1, 2024 , the Company entered into the Stock Purchase Agreement with the selling stockholders named therein.

Pursuant to the terms of the Stock Purchase Agreement and concurrently with entering into such agreement, the Company acquired all of the issued and outstanding shares of Megatran for aggregate consideration in an amount equal to $ 61.4 million which consideration amount was subject to various adjustments set forth in the Stock Purchase Agreement.

The value of the contingent consideration to make the sellers whole was determined to be de minimis at the time of the Acquisition.

The value of the contingent consideration to make the sellers whole was determined to be de minimis at the time of the NWL Acquisition.

On September 23, 2024, the Company paid $ 3.3 million to the selling stockholders, which was calculated based on the agreed upon formula set forth in the Stock Purchase Agreement.

This amount is reflected as the change in fair value of this contingent consideration in the three and six months ended September 30, 2024.

As of September 30, 2024, there were no remaining obligations to the selling stockholders of Megatran.

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Revenue risk premium

Revenue volatility

Payment delay (days)

Fair value (millions)

September 30,

Fiscal Year 2023

Revenue risk premium

5.50 % 5.50 %

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Payment delay (days)

80 80 80 80 80

Fair value (millions)

$ 3.1 $ 1.2 $ 3.5 $ 2.6 $ 1.3

During the nine months ended December 31, 2024 , the Company issued 300,000 shares of common stock related to the achievement of specified revenue objectives at a fair value of $ 6.5 million.

The Company recorded a loss of $ 3.4 million resulting from the increases in the fair value of the contingent consideration in the nine months ended December 31, 2024 .

The Company recorded losses of $ 0.9 million and $ 3.1 million resulting from the increases in the fair value of the contingent consideration in the three and nine months ended December 31, 2023 , respectively.

As part of the acquisition of Neeltran, the Company identified four equipment financing agreements that Neeltran had entered into prior to the acquisition of Neeltran on May 6, 2021.

The Company did not have a current debt balanc e as of December 31, 2024 and had a balance of less than $ 0.1 million as of March 31, 2024 .

The Company did not record any activity related to contingent consideration in the three months ended June 30, 2025 as the liability was settled in the prior fiscal year.

The Company recorded a loss of $ 3.9 million resulting from the increases in the fair value of the contingent consideration in the three months ended June 30, 2024.

Operating Leases

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However, many of these leases are either short-term in nature or immaterial.

The Company has made the policy election to exclude short-term leases from the condensed consolidated balance sheet.

Finance Leases

As of December 31, 2024 , the right-of-use asset related to the finance lease is fully amortized, and is included in the property and equipment, net on the Company's condensed consolidated balance sheet.

Finance lease right-of-use assets and lease liabilities are recognized similar to an operating lease, at the lease commencement date or the date the lessor makes the leased asset available for use.

Finance lease right-of-use assets are generally amortized on a straight-line basis over the lease term, and the carrying amount of the finance lease liabilities are ( 1 ) accreted to reflect interest using the incremental borrowing rate if the rate implicit in the lease is not readily determinable, and ( 2 ) reduced to reflect lease payments made during the period.

Amortization expense for finance lease right-of-use assets and interest accretion on finance lease liabilities are recorded to depreciation expense and interest expense, respectively in the Company's condensed consolidated statement of operations.

Supplemental balance sheet information related to leases at December 31, 2024 , and March 31, 2024 are as follows (in thousands):

December 31, 2024

The Company has made the policy election to exclude short-term leases from the condensed consolidated balance sheets.

Supplemental balance sheet information related to leases at June 30, 2025 , and March 31, 2025 are as follows (in thousands):

June 30, 2025

March 31, 2025

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14.57 % 14.94 %

The costs related to the Company's finance lease are not material.

The costs related to the Company's operating leases for the three and nine months ended December 31, 2024 and 2023 are as follows (in thousands):

The costs related to the Company's operating leases for the three months ended June 30, 2025 and 2024 , are as follows (in thousands):

Three Months Ended

Nine Months Ended

December 31, 2024

June 30, 2025

Operating Leases:

Operating lease costs – fixed

$ 407 $ 1,052

Operating lease costs – variable

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Total lease costs

$ 466 $ 1,278

Three Months Ended

Nine Months Ended

December 31, 2023

June 30, 2024

Operating Leases:

3 unchanged sentences

Total lease costs

$ 379 $ 1,047

The Company’s estimated minimum future lease obligations under the Company's leases are as follows (in thousands):

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In addition, the Company has various contractual arrangements in which minimum quantities of goods or services have been committed to be purchased on an annual basis.

As of December 31, 2024 , the Company had $ 3.5 million of restricted cash included in long-term assets and $ 1.3 million of restricted cash included in current assets.

As of June 30, 2025 , the Company had $ 4.2 million of restricted cash included in long-term assets and $ 1.3 million of restricted cash included in current assets.

As of March 31, 2025 , the Company had $ 4.3 million of restricted cash included in long term assets and $ 1.6 million of restricted cash included in current assets.

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Grid and Wind.

In accordance with ASC 280 , Segment Reporting , the Company aggregates five operating segments into the Grid reporting business segment for financial reporting purposes due to their similar operating and financial characteristics.

In accordance with ASC 280 , Segment Reporting , the Company has identified two operating segments.

The Company's operating segments reflect the way in which internally-reported financial information is used to make decisions and allocate resources.

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The Company provides a broad range of power electronics and software-based control systems that are highly integrated and designed for optimized performance, efficiency, and grid compatibility.

The operating results for the two business segments are as follows (in thousands):

Three Months Ended December 31,

Nine Months Ended December 31,

AMSC’s Chief Executive Officer Daniel McGahn is the chief operating decision maker.

The chief operating decision maker uses segment operating income (loss) to allocate resources (including employees, property, and financial or capital resources) for each segment predominantly in the annual budget and forecasting process.

The chief operating decision maker considers budget-to-actual variances on a monthly basis for segment operating income (loss) when making decisions about allocating capital and personnel to the segments.

The chief operating decision maker also uses segment operating income or loss to assess the performance for each segment by comparing the results and return on assets of each segment with one another and in the compensation of certain employees.

The following tables (i) summarize total sales by segment and (ii) reconcile each segment's sales to their respective segment operating income, including segment operating expenses, for each of the three months ended June 30, 2025 and 2024 (in thousands):

Three Months Ended June 30, 2025

Segment operating income:

$ 60,087 $ 12,271 $ - $ 72,358

Segment other operating expenses (b)

55,932 10,782 - 66,714

Segment operating income

$ 4,155 $ 1,489 $ - $ 5,644

Three Months Ended December 31,

Nine Months Ended December 31,

(a) The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker.

(b) Segment other operating expense includes cost of sales, research and development expense, selling general, and administrative expense, and amortization of acquisition related intangibles.

Three Months Ended June 30, 2024

Segment operating income:

$ 32,336 $ 7,954 $ - $ 40,290

Segment other operating expenses (b)

32,573 7,088 3,920 43,581

Segment operating income (loss)

$ ( 237 ) $ 866 $ ( 3,920 ) $ ( 3,291 )

(a) The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker.

(b) Segment other operating expense includes cost of sales, research and development expense, selling general, and administrative expense, amortization of acquisition related intangibles, and gain/loss on contingent consideration.

Unallocated corporate expenses included a net loss on contingent consideration $ 3.9 million in the three months ended June 30, 2024 .

The reconciliation of segment operating loss to consolidated income before income taxes for the three months ended June 30, 2025 , and 2024, respectively, is as follows (in thousands):

Three Months Ended June 30,

Operating income (loss):

$ 5,644 $ ( 3,291 )

Interest income, net

Other income (expense), net

Income (loss) before income tax expense

$ 6,923 $ ( 2,331 )

Unallocated corporate expenses

Depreciation and amortization expense by segment for the three months ended June 30, 2025 , and 2024, respectively, is as follows (in thousands):

Three Months Ended June 30,

$ 1,202 $ 987

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In addition, certain corporate expenses which the Company does not believe are specifically attributable or allocable to either of the two business segments have been excluded from the segment operating income (loss).

Unallocated corporate expenses consisted of net losses resulting from activity relating to both the NEPSI earnout and the Megatran make whole payment which resulted in $ 6.7 million in increases in the fair value of contingent consideration in the nine months ended December 31, 2024 .

Unallocated corporate expenses consisted of a loss on contingent consideration of $ 0.9 million and $ 3.1 million in the three and nine months ended December 31, 2023 , respectively.

Additionally, unallocated corporate expenses consisted of stock-based compensation expense of $ 2.9 million and $ 4.9 million in the three and nine months ended December 31, 2024 , respectively, and $ 1.1 million and $ 3.6 million in the three and nine months ended December 31, 2023 , respectively .

Total assets for the two business segments as of December 31, 2024 and March 31, 2024 , are as follows (in thousands):

December 31, 2024

Total assets for the two business segments as of June 30, 2025 and March 31, 2025 , are as follows (in thousands):

June 30, 2025

March 31, 2025

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Recent Accounting Pronouncements

In November 2023, the FASB issued ASU 2023 - 07, Segment Reporting (Topic 280 ):

Improvements to Reportable Segment Disclosures .

The amendments in ASU 2023 - 07 improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses.

Following the release of ASU 2023 - 07 in November 2023, the effective date will be annual reporting periods beginning after December 15, 2023.

As of December 31, 2024 , the Company is evaluating the impact on its condensed consolidated financial statements.

In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ):

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The amendments in ASU 2023 - 09 address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

Following the release of ASU 2023 - 09 in December 2023, the effective date will be annual reporting periods beginning after December 15, 2024.

As of December 31, 2024 , the Company is evaluating the impact on its condensed consolidated financial statements.

Following the release of ASU 2023 - 09 in December 2023, the effective date was annual reporting periods beginning after December 15, 2024.

As of June 30, 2025 , the Company is evaluating the impact on its condensed consolidated financial statements.

In March 2024, the FASB issued ASU 2024 - 02, Codification Improvements — Amendments to Remove References to the Concepts Statements .

The amendments in ASU 2024 - 02 contain amendments to the Codification that remove references to various FASB Concepts Statements.

Following the release of ASU 2024 - 02 in March 2024, the effective date will be annual reporting periods beginning after December 15, 2024.

As of December 31, 2024 , the Company is evaluating the impact on its condensed consolidated financial statements.

Following the release of ASU 2024 - 02 in March 2024, the effective date was annual reporting periods beginning after December 15, 2024.

As of June 30, 2025 , the Company is evaluating the impact on its condensed consolidated financial statements.

In November 2024, the FASB issued ASU 2024 - 03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures .

1 unchanged sentence

Following the release of ASU 2024 - 03 in November 2024, the effective date will be annual reporting periods beginning after December 15, 2026.

As of December 31, 2024 , the Company is evaluating the impact on its condensed consolidated financial statements.

As of June 30, 2025 , the Company is evaluating the impact on its condensed consolidated financial statements.

Subsequent Events

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements