AMERICAN SUPERCONDUCTOR CORP /DE/ 10-Q

ITEM 1. FINANCIAL STATEMENTS UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) June 30, 2026 March 31, 2026 ASSETS Current assets: Cash and cash equivalents $ 143,707 $ 140,693 Accounts receivable, net 80,736 69,381 Inventory, net 98,017 103,748 Prepaid expenses and other current assets 16,267 14,367 Restricted cash 3,785 3,548 Total current assets 342,512 331,737 Property, plant and equipment, net 98,755 89,775 Intangibles, net 12,680 13,548 Right-of-use assets 3,750 3,897 Goodwill 176,678 175,376 Restricted cash 5,621 3,312 Deferred tax assets, long-term portion 119,754 119,474 Equity-method investments 1,378 1,333 Other assets 1,089 1,029 Total assets $ 762,217 $ 739,481 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 50,698 $ 46,545 Lease liability, current portion 1,327 1,238 Contingent consideration, current portion 3,959 12,808 Deferred revenue, current portion 84,896 77,936 Total current liabilities 140,880 138,527 Deferred revenue, long-term portion 17,722 15,395 Lease liability, long-term portion 2,570 2,762 Contingent consideration, long-term portion 27,930 26,721 Other liabilities 641 629 Total liabilities 189,743 184,034 Commitments and Contingencies (Note 16) Stockholders' equity: Common stock, $ 0.01 par value, 75,000,000 shares authorized; 48,850,479 and 48,035,691 shares issued and 48,447,121 and 47,632,340 shares outstanding at June 30, 2026 and March 31, 2026, respectively 489 480 Additional paid-in capital 1,487,303 1,481,476 Treasury stock, at cost, 403,351 at June 30, 2026 and March 31, 2026 ( 3,765 ) ( 3,765 ) Accumulated other comprehensive income (loss) 5,773 4,072 Accumulated deficit ( 917,326 ) ( 926,816 ) Total stockholders' equity 572,474 555,447 Total liabilities and stockholders' equity $ 762,217 $ 739,481 The accompanying notes are an integral part of the unaudited condensed consolidated financial statements 3 AMERICAN SUPERCONDUCTOR CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three Months Ended June 30, 2026 2025 Revenues $ 94,073 $ 72,358 Cost of revenues 69,347 47,869 Gross margin 24,726 24,489 Operating expenses: Research and development 3,925 4,304 Selling, general and administrative 18,618 14,204 Amortization of acquisition-related intangibles 466 337 Change in fair value of contingent consideration ( 8,115 ) — Total operating expenses 14,894 18,845 Operating income 9,832 5,644 Interest income, net 1,537 932 Other (expense)/income, net ( 617 ) 347 Income before income tax expense 10,752 6,923 Income tax expense 1,262 199 Net income $ 9,490 $ 6,724 Net income per share of common stock Basic $ 0.21 $ 0.17 Diluted $ 0.20 $ 0.17 Weighted average number of shares of common stock outstanding Basic 45,995 38,875 Diluted 47,124 39,742 The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. 4 AMERICAN SUPERCONDUCTOR CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In thousands) Three Months Ended June 30, 2026 2025 Net income $ 9,490 $ 6,724 Other comprehensive income, net of tax: Foreign currency translation gain (loss) 1,701 ( 187 ) Total other comprehensive gain (loss), net of tax 1,701 ( 187 ) Comprehensive income $ 11,191 $ 6,537 The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. 5 AMERICAN SUPERCONDUCTOR CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE Three Months Ended June 30, 2026 AND 2025 (In thousands) Common Stock Additional Accumulated Other Total Number of Shares Par Value Paid-in Capital Treasury Stock Comprehensive Income (Loss) Accumulated Deficit Stockholders' Equity Balance at March 31, 2026 48,036 $ 480 $ 1,481,476 $ ( 3,765 ) $ 4,072 $ ( 926,816 ) $ 555,447 Issuance of common stock – restricted shares, net of forfeited shares 803 9 ( 9 ) — — — — Stock-based compensation expense — — 5,264 — — — 5,264 Issuance of common stock for 401(k) match 12 — 572 — — — 572 Cumulative translation adjustment — — — — 1,701 — 1,701 Net income — — — — — 9,490 9,490 Balance at June 30, 2026 48,851 $ 489 $ 1,487,303 $ ( 3,765 ) $ 5,773 $ ( 917,326 ) $ 572,474 6 Common Stock Additional Accumulated Other Total Number of Shares Par Value Paid-in Capital Treasury Stock Comprehensive Income (Loss) Accumulated Deficit Stockholders' Equity Balance at March 31, 2025 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 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 ) Net income — — — — — 6,724 6,724 Balance at June 30, 2025 45,564 $ 456 $ 1,388,948 $ ( 3,765 ) $ 1,378 $ ( 1,053,901 ) $ 333,116 The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. 7 AMERICAN SUPERCONDUCTOR CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Three Months Ended June 30, 2026 2025 Cash flows from operating activities: Net income $ 9,490 $ 6,724 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 2,647 1,229 Stock-based compensation expense 5,264 4,526 Provision for excess and obsolete inventory 1,073 711 Amortization of operating lease right-of-use assets 247 243 Deferred income taxes ( 272 ) 7 Earnings from equity method investments ( 46 ) ( 293 ) Change in fair value of contingent consideration ( 8,115 ) — Other non-cash items 12 140 Changes in operating asset and liability accounts: Accounts receivable ( 11,119 ) ( 8,512 ) Inventory 4,947 ( 1,046 ) Prepaid expenses and other assets ( 1,884 ) ( 5,084 ) Operating leases ( 203 ) ( 64 ) Accounts payable and accrued expenses 4,717 6,321 Deferred revenue 9,255 ( 777 ) Net cash provided by operating activities 16,013 4,125 Cash flows from investing activities: Purchases of property, plant and equipment ( 10,438 ) ( 814 ) Change in other assets ( 51 ) 79 Net cash used in investing activities ( 10,489 ) ( 735 ) Cash flows from financing activities: Proceeds from public equity offering, net of offering expenses — 124,577 Net cash provided by financing activities — 124,577 Effect of exchange rate changes on cash 36 71 Net increase in cash, cash equivalents and restricted cash 5,560 128,038 Cash, cash equivalents and restricted cash at beginning of period 147,553 85,381 Cash, cash equivalents and restricted cash at end of period $ 153,113 $ 213,419 Supplemental schedule of cash flow information: Cash paid for income taxes, net of refunds $ 43 $ 38 Non-cash investing and financing activities Right-of-use assets obtained in exchange for new lease obligations $ 102 $ 451 Issuance of common stock to settle 401k match liabilities $ 572 $ 362 The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. 8 AMERICAN SUPERCONDUCTOR CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Nature of the Business and Operations Nature of the Business and Operations American Superconductor Corporation (together with its subsidiaries, “AMSC®” or the “Company”) was founded on April 9, 1987. The Company is a leading provider of power control solutions that harmonize an increasingly complex energy system and enable customers to scale their operations without added complexity or size. The Company’s system level products leverage its proprietary “smart materials” and “smart software and controls” to provide enhanced resiliency and improved performance of megawatt-scale power flow. 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. All significant intercompany accounts and transactions are eliminated in consolidation. Investments in entities in which we do not have a controlling interest are accounted for under the equity method of accounting. The going concern basis of presentation assumes that the Company will continue operations and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. Certain information and footnote disclosures normally included in the condensed consolidated financial statements prepared in accordance with GAAP have been omitted pursuant to those instructions. 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 June 30, 2026 and 2025 and the financial position at June 30, 2026 ; 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 consolidated financial statements for the year ended March 31, 2026 , and notes thereto, included in the Company’s Annual Report on Form 10 -K for the year ended March 31, 2026 filed with the SEC on May 27, 2026 . 9 2. Acquisition Acquisition of Comtrafo On December 5, 2025 ( the "Comtrafo Acquisition Date"), the Company entered into a Stock Exchange Agreement (the “Stock Exchange Agreement”) with the selling stockholders named therein. Pursuant to the terms of the Stock Exchange Agreement and concurrently with entering into such agreement, the Company acquired all of the issued and outstanding shares of capital stock of Comtrafo Indústria de Transformadores Elétricos S.A. ("Comtrafo") (the "Comtrafo Acquisition"). Additionally, the Company has agreed to pay the selling stockholders of Comtrafo an additional amount up to 382.5 million Brazilian Real of cash upon the achievement of specified earnings before interest, taxes, depreciation, and amortization ("EBITDA") objectives during the three years following the Comtrafo Acquisition Date. This contingent consideration is recorded as a liability based on a Monte Carlo simulation to determine fair value at the time of issuance and on a recurring basis at each reporting period. Comtrafo is a Brazil-based manufacturer of large power and distribution transformers primarily for utility customers and also for industrial customers. The Comtrafo Acquisition has been accounted for under the purchase method of accounting in accordance with ASC 805, Business Combinations . The Company allocated the purchase price on a preliminary basis using the information available as of December 5, 2025 to the assets acquired and liabilities assumed at their estimated fair values as of the date of acquisition. Due to the timing of the completion of the acquisition, the purchase price and related allocation are preliminary and could be revised as a result of adjustments made to the purchase price, and revisions of provisional estimates of fair values of deferred taxes, contingent consideration and intangible asset balances. Changes to the purchase price allocation could be significant. The purchase price allocation will be finalized within the measurement period of up to one year from the acquisition. The excess of the purchase price paid by the Company over the estimated fair value of net assets acquired has been recorded as goodwill. The total purchase price of approximately $ 202.9 million includes the fair value of the Company’s common stock issued at closing, contingent consideration and cash paid, as follows (in millions): Cash payments $ 88.3 Issuance of 2,417,142 shares of Company’s common stock 79.8 Contingent consideration 34.8 Total consideration $ 202.9 At the Comtrafo Acquisition Date, in addition to the $ 88.3 million cash, the Company valued the Company’s common stock at $ 33.01 per share, which was the opening price on that date. Comtrafo Acquisition costs of $ 1.2 million were included in selling, general, and administrative (“SG&A”) for the fiscal year ended March 31, 2026. 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 Comtrafo Acquisition as of the Comtrafo Acquisition Date: (in millions) Cash and cash equivalents $ 12.8 Restricted cash 3.4 Prepaid expenses and other current assets 5.6 Accounts receivable 6.5 Inventory 28.6 Property, plant and equipment 49.9 Deferred tax asset 4.1 Accounts payable and accrued expenses ( 9.1 ) Debt, current and long-term ( 8.8 ) Deferred revenue ( 23.3 ) Net tangible assets/(liabilities) 69.7 Backlog 2.6 Customer relationships 7.9 Net identifiable intangible assets/(liabilities) 10.5 Goodwill 122.7 Total purchase consideration $ 202.9 The fair value of the financial assets acquired includes receivables with a fair value of $ 6.9 million. The gross amount due is $ 10.5 million, of which $ 3.6 million is expected to be uncollectible. The Company adjusted the fair value for receivables that exceeded a year. Inventory includes a $ 1.5 million adjustment to step-up the inventory balance to fair value consistent with the purchase price allocation. 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 $ 0.8 million in the fiscal year ended March 31, 2026, as the inventory was sold. The inventory step-up adjustment increased cost of revenue $ 0.7 million in the three months ended June 30, 2026 . The inventory step-up has been fully recognized to cost of revenue as of June 30, 2026 . As part of the Comtrafo Acquisition, the Company identified three debt agreements that Comtrafo had entered into prior to the Comtrafo Acquisition Date. The debt agreements totaling $ 8.8 million were subsequently paid off during the fiscal year ended March 31, 2026. Backlog of $ 2.6 million was evaluated using the multi period excess earnings method under the income approach. The contracts do not provide for any guarantees to source all future requirements from the Company. The amortization method being utilized is economic consumption estimated over a sixteen -month period with the expense being allocated to cost of revenues. Customer relationships of $ 7.9 million relate to customers currently under contract and was based on a multi period excess earnings method under the income approach. The method of amortization being utilized is the economic consumption over 5 years with the expense being allocated to SG&A. 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 Comtrafo Acquisition was assigned to the Company's Grid segment. Goodwill recognized in the Comtrafo Acquisition is not deductible for tax purposes. The $ 1.1 million of deferred tax asset is primarily related to basis difference of intangibles, inventory and property, plant, and equipment. 10 Unaudited Pro Forma Operating Results The unaudited pro forma condensed consolidated statement of operations for the three months ended June 30, 2025 presented as if the Comtrafo Acquisition had occurred on April 1, 2025, is as follows: Three Months Ended June 30, 2025 Net Revenue $ 83,129 Operating income 10,021 Net income $ 9,291 Net income per common share Basic $ 0.23 Diluted $ 0.22 Shares - basic 41,292 Shares - diluted 42,159 The pro forma amounts include the historical operating results of the Company and Comtrafo with appropriate adjustments that give effect to acquisition related costs, income taxes, intangible amortization resulting from the Comtrafo 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 Comtrafo Acquisition and related transactions had been completed at the beginning of the applicable period presented. In addition, the pro forma amounts are not necessarily indicative of operating results in future periods. Comtrafo contributed $ 19.4 million of revenue and $ 9.0 million in net income for the Company for the three months ended June 30, 2026 . Amortization expense of $ 0.7 million is included in the three months ended June 30, 2026 , as a result of the acquired intangible assets from the Comtrafo Acquisition. 3. Revenue Recognition 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. Navy. 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 months ended June 30, 2026 , 93 % 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, 2025 , 91 % 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 product sales, each contract with a customer summarizes each product sold to a customer, which typically represents distinct performance obligations. A contract's transaction price is allocated to each distinct performance obligation using the respective standalone selling price which is determined primarily using the cost plus expected margin approach and recognized as revenue when, or as, the performance obligation is satisfied. The majority of the Company’s product sales transfer control to the customer in line with the contracted delivery terms and revenue is recorded at the point in time when title and risk transfer to the customer, which is primarily upon delivery, as the Company has determined that this is the point in time that control transfers to the customer. For the three months ended June 30, 2026 , 94 % of revenue was recognized related to the sales of product, with the remainder being recognized based on the performance of service. For the three months ended June 30, 2025 , 93 % of revenue was recognized related to the sales of product, with the remainder being recognized based on the performance of service. Included in the Company's performance of services, there are several different types of transactions and each begins with a contract with a customer that summarizes each product sold to a customer, which typically represents distinct performance obligations. Included in the business segment line there are technology development transactions that are primarily for activities that have no alternative use and for which a profit can be expected throughout the life of the contract. In these cases, the revenue is recognized over time, but in the instances where the profit cannot be assured throughout the entire contract then the revenue is recognized at a point in time. Each contract's transaction price is allocated to each distinct performance obligation using the respective standalone selling price which is determined primarily using the cost plus expected margin approach. The ongoing service transactions are for service contracts that provide benefit to the customer simultaneously as the Company performs its obligations, and therefore this revenue is recognized ratably over time throughout the effective period of these contracts. The transaction prices on these contracts are allocated based on an adjusted market approach which is re-assessed annually for reasonableness. The field service transactions include contracts for delivery of goods and completion of services made at the customer's requests, which are not deemed satisfied until the work has been completed and/or the requested goods have been delivered, so all of this revenue is recognized at the point in time when the control changes, and at allocated prices based on the adjusted market approach driven by standard price lists. The royalty transactions are related to certain contract terms on transactions in the Company's equipment and systems product line based on activity as specified in the contracts. The transaction prices of these agreements are calculated based on an adjusted market approach as specified in the contract. The Company reports royalty revenue for usage-based royalties when the sales have occurred. In circumstances when collectability is not assured and a contract does not exist under ASC 606, revenue is deferred until a non-refundable payment has been received for substantially all the amount that is due and there are no further remaining performance obligations. 11 The Company's service contracts can include a purchase order from a customer for specific goods in which each item is a distinct performance obligation satisfied at a point in time at which control of the goods is transferred to the customer. This transfer occurs based on the contracted delivery terms or when the requested service work has been completed. The transaction price for these goods is allocated based on the adjusted market approach considering similar transactions under similar circumstances. Service contracts are also derived from ongoing maintenance contracts and extended service-type warranty contracts. In these transactions, the Company is contracted to provide an ongoing service over a specified period of time. As the customer is consuming the benefits as the service is being provided, the revenue is recognized over time ratably. The Company’s policy is not to accept volume discounts, product returns, or rebates and allowances within its contracts. In the event a contract was approved with any of these terms, it would be evaluated for variable consideration, estimated and recorded as a reduction of revenue in the same period the related product revenue was recorded. The Company provides assurance-type warranties on all product sales for a term of typically one to three years, and extended service-type warranties are available for purchase at the customer's option for an additional term ranging up to four additional years. The Company accrues for the estimated warranty costs for assurance warranties at the time of sale based on historical warranty experience plus any known or expected changes in warranty exposure. For all extended service-type warranties, the Company recognizes the revenue ratably over time during the effective period of the services. The Company records revenue net of sales tax, value added tax, excise tax and other taxes collected concurrent with revenue-producing activities. The Company has elected to recognize the cost for freight and shipping when control over the products sold passes to customers and revenue is recognized. 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 June 30, 2026 and March 31, 2026 , 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. The Company has elected to recognize revenue based on the as invoiced practical expedient if there is a right to consideration from a customer in an amount that corresponds directly with the value of the Company's performance. The Company’s contracts with customers do not typically include extended payment terms and may include milestone billing over the life of the contract. Payment terms vary by contract type and type of customer and generally range from 30 to 60 days from delivery. 12 The following tables disaggregate the Company’s revenue by shipment destination (in thousands): Three Months Ended Reportable June 30, Segment 2026 2025 Region: North America Grid 43,162 37,772 South America Grid 21,980 248 Asia Pacific Grid 4,197 18,304 EMEA Grid 6,984 3,763 Total Grid $ 76,323 $ 60,087 Region: Asia Pacific Wind 17,740 12,271 EMEA Wind 10 — Total $ 17,750 $ 12,271 As of June 30, 2026 and 2025 , 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. Changes in the Company’s contract assets, which are included in “Unbilled accounts receivable” and “Deferred program costs” (see Note 8, “Accounts Receivable” and Note 9, “Inventory” for a reconciliation to the condensed consolidated balance sheets) and “Contract liabilities”, which are included in the current portion and long-term portion of “Deferred revenue” in the Company’s condensed consolidated balance sheets, are as follows (in thousands): Unbilled Accounts Receivable Deferred Program Costs Contract Liabilities Beginning balance as of March 31, 2026 $ 14,875 $ 7,579 $ 93,331 Increases for costs incurred to fulfill performance obligations — 4,731 — Increase (decrease) due to customer billings ( 15,027 ) — 59,566 Decrease due to cost recognition on completed performance obligations — ( 6,290 ) — Increase (decrease) due to recognition of revenue based on transfer of control of performance obligations 9,742 — ( 50,423 ) Other changes and FX impact ( 30 ) 5 144 Ending balance as of June 30, 2026 $ 9,560 $ 6,025 $ 102,618 Unbilled Accounts Receivable Deferred Program Costs Contract Liabilities Beginning balance as of March 31, 2025 $ 6,376 $ 5,756 $ 76,133 Increases for costs incurred to fulfill performance obligations — 3,907 — Increase (decrease) due to customer billings ( 3,189 ) — 30,863 Decrease due to cost recognition on completed performance obligations — ( 4,093 ) — Increase (decrease) due to recognition of revenue based on transfer of control of performance obligations 6,876 — ( 32,108 ) Other changes and FX impact 20 46 1,003 Ending balance as of June 30, 2025 $ 10,083 $ 5,616 $ 75,891 13 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 June 30, 2026 , the Company had outstanding performance obligations on existing contracts under ASC 606 to be recognized in the next twelve months of approximately $ 301.8 million . There are also approximately $ 118.8 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 months ended June 30, 2026 and 2025 : Three Months Ended Reportable June 30, Segment 2026 2025 Inox Wind Limited Wind 19 % 21 % Fuji Bridex Pte Ltd Grid <10% 16 % 4. 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 months ended June 30, 2026 and 2025 (in thousands): Three Months Ended June 30, 2026 2025 Cost of revenues $ 343 $ 340 Research and development 605 687 Selling, general and administrative 4,316 3,499 Total 5,264 4,526 The Company issued 805,400 and 880,000 shares of restricted stock during the three months ended June 30, 2026 and 2025 , respectively. The Company issued 18,245 and 39,445 shares of immediately vested common stock during the three months ended June 30, 2026 and 2025 , respectively. These restricted stock awards generally vest over 2 - 3 years. Awards for restricted stock include both time-based and performance-based awards. For options and restricted stock awards that vest upon the passage of time, expense is being recorded over the vesting period. Performance-based awards are expensed over the requisite service period based on probability of achievement. The Company granted no stock options in the three months ended June 30, 2026 . The Company granted 2,112 stock options during the three months ended June 30, 2025 . 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 less than $ 0.1 million of unrecognized compensation costs for unvested stock options as of June 30, 2026 . This expense will be recognized over a weighted average period of approximately 0.9 years. The total unrecognized compensation cost for unvested outstanding restricted stock was $ 54.4 mi llion as of June 30, 2026 . This expense will be recognized over a weighted-average expense period of approximately 2.1 years. 14 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, 2025 Expected volatility 74.01 % Risk-free interest rate 4.19 % Expected life (years) 6.31 Dividend yield None 5. Computation of Net Income per Share of Common Stock Basic net income per share (“EPS”) is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Where applicable, diluted EPS is computed by dividing the net income by the weighted-average number of common shares and dilutive common equivalent shares outstanding during the period, calculated using the treasury stock method. Common equivalent shares include the effect of restricted stock, exercise of stock options and warrants and contingently issuable shares. 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 June 30, 2026 , 432,416 shares were not included in the calculation of diluted EPS. Of these, 273,822 were shares of performance-based restricted stock where the contingency was not met and 158,593 were shares of restricted stock that were considered anti-dilutive. 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 options that 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, 2026 and 2025 (in thousands, except per share data): Three Months Ended June 30, 2026 2025 Numerator: Net income $ 9,490 $ 6,724 Denominator: Weighted-average shares of common stock outstanding 47,926 40,863 Weighted-average shares subject to repurchase ( 1,931 ) ( 1,988 ) Shares used in per-share calculation ― basic 45,995 38,875 Shares used in per-share calculation ― diluted 47,124 39,742 Net income per share ― basic $ 0.21 $ 0.17 Net income per share ― diluted $ 0.20 $ 0.17 6. Goodwill and Other Intangibles Goodwill The guidance under ASC 805 - 30, Business Combinations , provides for the recognition of goodwill on the acquisition date measured as the excess of the aggregate consideration transferred over the net of the acquisition date amounts of net assets acquired and liabilities assumed. The Company's goodwill balance relates to the Comtrafo Acquisition in fiscal 2025, the NWL acquisition in fiscal 2024, the Neeltran acquisition in fiscal 2021, the NEPSI acquisition in fiscal 2020, and Infinia Technology Corporation acquisition in fiscal 2017 and is reported in the Grid business segment. Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net assets when accounted for using the purchase method of accounting. Goodwill is not amortized but reviewed for impairment. Goodwill is reviewed annually on February 28 and whenever events or changes in circumstances indicate that the carrying value of the goodwill might not be recoverable. Changes in the Company’s goodwill are as follows (in thousands): Goodwill March 31, 2025 $ 48,164 Balance acquired – Comtrafo 122,620 Measurement period adjustment 2,674 FX impact 1,918 March 31, 2026 $ 175,376 FX impact 1,302 June 30, 2026 $ 176,678 15 The Company did not identify any triggers to assess impairment in the three months ended June 30, 2026 or 2025 . Other Intangibles Intangible assets at June 30, 2026 and March 31, 2026 consisted of the following (in thousands): June 30, 2026 March 31, 2026 Gross Amount Accumulated Amortization Net Book Value Gross Amount Accumulated Amortization Net Book Value Estimated Useful Life Backlog 4,034 ( 2,542 ) 1,493 4,008 ( 2,038 ) 1,970 2 Trade name and trademarks 1,800 — 1,800 1,800 — 1,800 Indefinite Customer relationships 19,003 ( 10,146 ) 8,856 18,920 ( 9,795 ) 9,125 5 - 10 Core technology and know-how 5,970 ( 5,439 ) 531 5,970 ( 5,317 ) 653 5 - 10 Intangible assets $ 30,807 $ ( 18,127 ) $ 12,680 $ 30,698 $ ( 17,150 ) $ 13,548 The Company recorded intangible amortization expense related to customer relationship and core technology and know-how of $ 0.5 million and $ 0.3 million in the three months ended June 30, 2026 and 2025 , respectively. The Company recorded intangible amortization expense related to backlog of $ 0.5 million, in the three months ended June 30, 2026 and did not record any intangible amortization expense related to backlog in the three months ended June 30, 2025 . Expected future amortization expense related to intangible assets is as follows (in thousands): Years ending March 31, Total 2027 (remaining) 2,879 2028 3,472 2029 2,153 2030 1,219 2031 730 Thereafter 427 Total $ 10,880 The Company's intangible assets relate entirely to the Grid business segment operations in the United States and Brazil. The following table summarizes the Company’s intangibles by geography (in thousands): June 30, 2026 March 31, 2026 U.S. $ 4,264 $ 4,567 Brazil 8,416 8,981 Total $ 12,680 $ 13,548 16 7. Fair Value Measurements A valuation hierarchy for disclosure of the inputs to valuation used to measure fair value has been established. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). Level 3 - Unobservable inputs that reflect the Company’s assumptions that market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available, including its own data. The Company provides a gross presentation of activity within Level 3 measurement roll-forward and details of transfers in and out of Level 1 and 2 measurements. A change in the hierarchy of an investment from its current level is reflected in the period during which the pricing methodology of such investment changes. 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 months ended June 30, 2026 . 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. Valuation Techniques Cash Equivalents 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 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. Contingent Consideration Contingent consideration relates to the earnout payment set forth in the Stock Exchange Agreement governing the acquisition of Comtrafo that provides the selling stockholders may receive an additional sum of cash upon the achievement of certain specified EBITDA objectives during the three years following the Comtrafo Acquisition Date. See Note 14, “Contingent Consideration” for further discussion. The Company relied on a Monte Carlo method to determine the fair value of the contingent consideration on the closing of the acquisition of Comtrafo and continues to revalue the fair value of the contingent consideration using the same method at each subsequent balance sheet date until the contingencies are resolved and the cash to be paid is determined, with the change in fair value recorded in the current period operating income (loss). For the period ended June 30, 2026, the change in fair value was a decrease of $ 8.1 million. Contingent consideration is classified within the Level 3 valuation hierarchy. 17 The following table provides the assets and liabilities carried at fair value on a recurring basis, measured as of June 30, 2026 and March 31, 2026 (in thousands): Total Carrying Value Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) June 30, 2026: Assets: Cash equivalents $ 96,924 $ 96,924 $ — $ — Short-term cash instruments $ 1,585 $ — $ 1,585 $ — Current liabilities: Contingent consideration $ 3,959 $ — $ — $ 3,959 Long-term liabilities: Contingent consideration $ 27,930 $ — $ — $ 27,930 Total Carrying Value Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) March 31, 2026 Assets: Cash equivalents $ 101,525 $ 101,525 $ — $ — Short-term cash instruments $ 1,278 $ — $ 1,278 $ — Current liabilities: Contingent consideration $ 12,808 $ — $ — $ 12,808 Long-term liabilities: Contingent consideration $ 26,721 $ — $ — $ 26,721 The table below reflects the activity for the Company's contingent consideration derivative liability measured at fair value on a recurring basis (in thousands): Comtrafo Acquisition Contingent Consideration Balance at March 31, 2025 $ — Issuance of contingent consideration 34,815 Change in fair value 4,171 FX Impact 543 Balance at March 31, 2026 $ 39,529 Change in fair value ( 8,115 ) FX Impact 475 Balance at June 30, 2026 $ 31,889 8. Accounts Receivable Accounts receivable at June 30, 2026 and March 31, 2026 consisted of the following (in thousands): June 30, 2026 March 31, 2026 Accounts receivable (billed) $ 71,176 $ 54,506 Accounts receivable (unbilled) 9,560 14,875 Accounts receivable $ 80,736 $ 69,381 18 9. Inventory Inventory, net of reserves, at June 30, 2026 and March 31, 2026 consisted of the following (in thousands): June 30, 2026 March 31, 2026 Raw materials $ 54,835 $ 54,247 Work-in-process 20,503 26,873 Finished goods 16,655 15,049 Deferred program costs 6,025 7,579 Net inventory $ 98,017 $ 103,748 The Company recorded inventory write-downs of $ 1.1 million and $ 0.7 million f or the three months ended June 30, 2026 and 2025 , 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 June 30, 2026 and March 31, 2026 primarily represent costs incurred on programs where the Company needs to complete performance obligations before the related revenue and costs will be recognized. 19 10. Property, Plant and Equipment The cost and accumulated depreciation of property, plant and equipment at June 30, 2026 and March 31, 2026 are as follows (in thousands): June 30, 2026 March 31, 2026 Land $ 41,595 $ 37,770 Construction in progress – equipment 2,435 1,482 Buildings 34,894 30,989 Equipment and software 61,810 60,030 Furniture and fixtures 2,032 1,940 Leasehold improvements 8,286 8,276 Property, plant and equipment, gross 151,052 140,487 Less accumulated depreciation ( 52,297 ) ( 50,712 ) Property, plant and equipment, net $ 98,755 $ 89,775 Depreciation expense was $ 1.7 million and $ 0.9 million for the three months ended June 30, 2026 and 2025 , respectively. 11. Equity-Method Investments Investment in NWL Pacific Inc. Co., LTD The Company has a 50 % ownership in NWL Pacific Inc. Co., LTD ("NWL Pacific"). The investment represents the Company's interest in NWL Pacific. The investment is a joint venture in South Korea established on May 12, 1998. The Company treats the equity investment in the condensed consolidated financial statements under the equity method. Equity method investments are equity securities in entities the Company does not control but over which it has the ability to exercise significant influence. These investments are accounted for under the equity method of accounting in accordance with ASC 323, Investments — Equity Method and Joint Ventures . 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 June 30, 2026 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 $ 1.3 million as of June 30, 2026 and March 31, 2026, 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, Three Months Ended June 30, 2026 2025 Net revenue $ 1,140 $ 2,599 Gross profit 488 1,160 Income from operation 91 657 Net income $ 84 $ 745 12. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses at June 30, 2026 and March 31, 2026 consisted of the following (in thousands): June 30, 2026 March 31, 2026 Accounts payable $ 18,197 $ 13,015 Accrued inventories in-transit 1,796 1,104 Accrued other miscellaneous expenses 7,189 5,769 Advanced deposits 4,423 3,491 Accrued compensation 10,002 15,518 Income taxes payable 1,606 641 Accrued product warranty 4,801 4,684 Accrued commissions 2,685 2,323 Total $ 50,698 $ 46,545 The Company generally provides a one to three year warranty on its products, commencing upon delivery or installation where applicable. A provision is recorded upon revenue recognition to cost of revenues for estimated warranty expense based on historical experience. 20 Product warranty activity was as follows (in thousands): Three Months Ended June 30, 2026 2025 Balance at beginning of period $ 4,684 $ 3,033 Provisions for warranties during the period 593 549 Settlements during the period ( 476 ) ( 342 ) Balance at end of period $ 4,801 $ 3,240 13. Income Taxes The Company recorded income tax expense of $ 1.3 million in the three months ended June 30, 2026 , and income tax expense of $ 0.2 million in the three months ended June 30, 2025 . The Company's effective tax rate was 11.7 % and 2.9 % for the three months ended June 30, 2026 and 2025 , respectively. For three months ended June 30, 2026 the effective tax rate was lower than the statutory rate primarily as a result of excess tax benefits for the vesting of share-based compensation awards during the period. For the three months ended June 30, 2025 the effective tax rate was lower than the U.S. Statutory rate primarily due to the valuation allowance against U.S. deferred tax assets, a majority of which was subsequently released in fiscal 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. A tax valuation allowance is established, as needed, to reduce deferred tax assets to the amount expected to be realized. In the period in which it becomes more likely than not that some or all of the deferred tax assets will be realized, the valuation allowance will be adjusted. As of June 30, 2026 , the Company maintains a valuation allowance against certain deferred tax assets in the U.S. and Poland. Accounting for income taxes requires a two -step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if, based on the technical merits, it is more likely than not the position will be sustained upon audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company re-evaluates these uncertain tax positions on a quarterly basis. The evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit and new audit activity. 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 three months ended June 30, 2026 and did not have any gross unrecognized tax benefits as of June 30, 2026 . 21 14. Contingent Consideration Comtrafo Contingent Consideration On December 5, 2025, the Company entered into the Stock Exchange Agreement with the selling stockholders named therein. Pursuant to the terms of the Stock Exchange Agreement, the Company has agreed to pay the selling stockholders of the Comtrafo Acquisition an additional amount in cash upon the achievement of specified EBITDA objectives during the three years following the Comtrafo Acquisition Date. The Company evaluated the Comtrafo Acquisition earnout payment set forth in the Comtrafo Stock Exchange Agreement (See Note 2, "Acquisition" for further details), which will require settlement in cash, and determined the contingent consideration qualified for liability classification. As a result, for each period, the fair value of the contingent consideration will be remeasured, and the resulting gain or loss will be recognized until the cash amount is fixed. Following is a summary of the key assumptions used in a Monte Carlo simulation to calculate the fair value of contingent consideration related to the Comtrafo Acquisition: June 30, Fiscal Year 2026 2026 EBITDA Risk Premium (continuous) 1.40 % EBITDA Volatility 27.5 % Credit Spread (semiannual) 1.4 % EBITDA discount rate 15.4 % Payment delay (days) 89 Fair value (millions) $ 31.9 March 31, December 31, December 05, Fiscal Year 2025 2026 2025 2025 EBITDA Risk Premium (continuous) 1.40 % 2.10 % 2.10 % EBITDA Volatility 25.0 % 25.0 % 25.0 % Credit Spread (semiannual) 1.9 % 1.9 % 1.9 % EBITDA discount rate 14.7 % 15.0 % 15.0 % Payment delay (days) 89 89 89 Fair value (millions) $ 39.5 $ 34.8 $ 34.8 The Company performed an analysis on the change in fair value through June 30, 2026 and recorded a gain from the change in fair value of the contingent consideration for the three months ended June 30, 2026 of $ 8.1 million. The Company did not record any activity related to contingent consideration in the three months ended June 30, 2025 . 15. Leases Operating Leases All significant lease arrangements are recognized at lease commencement. Operating lease right–of-use assets and lease liabilities are recognized at commencement. The operating lease right-of-use asset includes any lease payments related to initial direct cost and prepayments and excludes any lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company enters into a variety of operating lease agreements through the normal course of its business, but primarily real estate leases to support its operations. The real estate lease agreements generally provide for fixed minimum rental payments and the payment of real estate taxes and insurance. Many of these real estate leases have one or more renewal options that allow the Company, at its discretion, to renew the lease for varying periods up to five years or to terminate the lease. Only renewal options or termination rights that the Company believed were likely to be exercised were included in the lease calculations. The Company also enters into leases for vehicles, IT equipment and service agreements, and other leases related to its manufacturing operations that are also included in the right-of-use assets and lease liability accounts if they are for a term of longer than twelve months. 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 sheets. 22 Supplemental balance sheet information related to leases at June 30, 2026 , and March 31, 2026 are as follows (in thousands): June 30, 2026 March 31, 2026 Leases: Right-of-use assets – Operating 3,750 3,897 Total right-of-use assets 3,750 $ 3,897 Lease liabilities – ST Operating 1,327 1,238 Lease liabilities – LT Operating 2,570 2,762 Total lease liabilities $ 3,897 $ 4,000 Weighted-average remaining lease term 4.10 4.26 Weighted-average discount rate 14.06 % 14.13 % The costs related to the Company's operating leases for the three months ended June 30, 2026 and 2025 are as follows (in thousands): Three Months Ended June 30, 2026 2025 Operating Leases: Operating lease costs – fixed $ 448 $ 416 Operating lease costs – variable 130 45 Short-term lease costs 44 41 Total lease costs $ 622 $ 502 23 The Company’s estimated minimum future lease obligations under the Company's leases are as follows (in thousands): Leases Year ending March 31, 2027 (remaining) $ 1,336 2028 1,484 2029 724 2030 423 2031 322 Thereafter 943 Total minimum lease payments 5,233 Less: interest ( 1,336 ) Present value of lease liabilities $ 3,897 16. Commitments and Contingencies Legal Contingencies From time to time, the Company is involved in legal and administrative proceedings and claims of various types. The Company records a liability in its condensed consolidated financial statements for these matters when a loss is known or considered probable and the amount can be reasonably estimated. The Company reviews these estimates each accounting period as additional information is known and adjusts the loss provision when appropriate. If a matter is both probable to result in a liability and the amounts of loss can be reasonably estimated, the Company estimates and discloses the possible loss or range of loss to the extent necessary to make the condensed consolidated financial statements not misleading. If the loss is not probable or cannot be reasonably estimated, a liability is not recorded in its condensed consolidated financial statements. Other The Company enters into long-term construction contracts with customers that require the Company to obtain performance bonds. The Company is required to deposit an amount equivalent to some or all the face amount of the performance bonds into an escrow account until the termination of the bond. When the performance conditions are met, amounts deposited as collateral for the performance bonds are returned to the Company. 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. AMSC Brazil, through Comtrafo, purchased additional real estate within the twelve months following the Comtrafo Acquisition Date for 37.2 million Brazilian Real in cash upon successful re-zoning classification of such real estate. As of June 30, 2026 , the Company had $ 5.6 million of restricted cash included in long-term assets and $ 3.8 million of restricted cash included in current assets. As of March 31, 2026 , the Company had $ 3.3 million of restricted cash included in long-term assets and $ 3.5 million of restricted cash included in current assets. These amounts included in restricted cash primarily represent deposits to secure letters of credit for various supply contracts and long-term projects or collateral deposits. These deposits are held in interest bearing accounts. 24 17. Business Segments The Company reports its financial results in two reportable business segments: Grid and Wind. 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. Through the Company’s power grid offerings, the Grid business segment enables electric utilities, industrial facilities, and renewable energy project developers to connect, transmit and distribute smarter, cleaner and better power through its transmission planning services, power electronics, and superconductor-based systems. The sales process is enabled by transmission planning services that allow it to identify power grid congestion, poor power quality and other risks, which helps the Company determine how its solutions can improve network performance. These services often lead to sales of grid interconnection solutions for wind farms and solar power plants, power quality systems, and transmission and distribution cable systems. The Company also sells ship protection products to the U.S. Navy through its Grid business segment. Through the Company’s wind power offerings, the Wind business segment enables manufacturers to field highly competitive wind turbines through its advanced power electronics and control system products, engineered designs, and support services. The Company supplies advanced power electronics and control systems, licenses its highly engineered wind turbine designs, and provides extensive customer support services to wind turbine manufacturers. The Company’s design portfolio includes a broad range of drive trains and power ratings of 2 megawatts ("MWs") and higher. 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. 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. 25 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, 2026 , and 2025 (in thousands): Three Months Ended June 30, 2026 Grid Wind Unallocated Total Segment operating income: Revenues $ 76,323 $ 17,750 $ — $ 94,073 Less (a) Segment other operating expenses (b) 78,489 13,867 ( 8,115 ) 84,241 Segment operating income (loss) $ ( 2,166 ) $ 3,883 $ 8,115 $ 9,832 (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, 2025 Grid Wind Unallocated Total Segment operating income: Revenues $ 60,087 $ 12,271 $ — $ 72,358 Less (a) Segment other operating expenses (b) 55,932 10,782 — 66,714 Segment operating income $ 4,155 $ 1,489 $ — $ 5,644 (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 gain on contingent consideration of $ 8.1 million in the three months ended June 30, 2026 . The reconciliation of segment operating income to consolidated income before income taxes for the three months ended June 30, 2026 , and 2025 is as follows (in thousands): Three Months Ended June 30, 2026 2025 Operating income: $ 9,832 $ 5,644 Interest income, net 1,537 932 Other (expense)/income, net ( 617 ) 347 Income before income tax expense $ 10,752 $ 6,923 Depreciation and amortization expense by segment for the three months ended June 30, 2026 , and 2025 is as follows (in thousands): Three Months Ended June 30, 2026 2025 Grid $ 2,604 $ 1,202 Wind 43 27 Total $ 2,647 $ 1,229 The accounting policies of the business segments are the same as those for the consolidated Company. The Company’s business segments have been determined in accordance with the Company’s internal management structure, which is organized based on operating activities. The Company evaluates performance based upon several factors, of which the primary financial measures are segment revenues and segment operating income (loss). The disaggregated financial results of the segments reflect allocation of certain functional expense categories consistent with the basis and manner in which Company management internally disaggregates financial information for the purpose of assisting in making internal operating decisions. 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). Total assets for the two business segments as of June 30, 2026 and March 31, 2026 , are as follows (in thousands): June 30, 2026 March 31, 2026 Grid $ 590,555 $ 574,195 Wind 18,416 17,572 Corporate assets 153,246 147,714 Total $ 762,217 $ 739,481 26 18. Recent Accounting Pronouncements In November 2024 , the FASB issued ASU 2024 - 03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures . The amendments in ASU 2024 - 03 address investor requests for more disclosure of disaggregated financial reporting information about expenses presented in the income statement. Following the release of ASU 2024 - 03 in November 2024 , the effective date will be annual reporting periods beginning after December 15, 2026 . The Company is evaluating the impact on its consolidated financial statements. In September 2025, the FASB issued ASU 2025 - 06, Intangibles — Goodwill and Other —Internal-Use Software. The amendments in ASU 2025 - 06 remove all references to software development project stages and requires entities to start capitalizing software costs when both of the following occur: (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. Following the release of ASU 2024 - 05 in September 2025, the effective date will be annual reporting periods beginning after December 15, 2027. The company is evaluating the impact on its consolidated financial statements. 19. Subsequent Events The Company has performed an evaluation of subsequent events through the time of filing this Quarterly Report on Form 10 -Q with the SEC and has determined that there are no such events to report. 27 AMERICAN SUPERCONDUCTOR CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS