Power resiliency solutions provider American Superconductor (NASDAQ: AMSC) missed Wall Street’s revenue expectations in Q1 CY2025, but sales rose 58.6% year on year to $66.66 million. Its non-GAAP EPS of $0.12 per share was 24.1% above analysts’ consensus estimates.
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American Superconductor (AMSC) Q1 CY2025 Highlights:
- Revenue: $66.66 million vs analyst estimates of $60.27 million (58.6% year-on-year growth, 10.6% beat)
- Adjusted EPS: $0.12 vs analyst estimates of $0.10 (24.1% beat)
- Adjusted EBITDA: $6.09 million vs analyst estimates of $2.3 million (9.1% margin, significant beat)
- Revenue Guidance for Q2 CY2025 is $66 million at the midpoint, above analyst estimates of $60.65 million
- Adjusted EPS guidance for Q2 CY2025 is $0.10 at the midpoint, below analyst estimates of $0.11
- Operating Margin: 2.5%, up from -0.8% in the same quarter last year
- Free Cash Flow Margin: 7.9%, up from 4.6% in the same quarter last year
- Market Capitalization: $1.1 billion
StockStory’s Take
American Superconductor's first quarter results were driven by significant expansion in both its Grid and Wind businesses. CEO Daniel McGahn credited the nearly 60% year-over-year revenue growth to surging demand from semiconductor manufacturing projects and traditional power generation customers. Management noted diversification across renewables, industrials, military, utility, and semiconductor sectors, with Grid revenue growing by more than 60% and Wind revenue by over 40%. McGahn highlighted a notable ramp-up in order bookings, particularly from the semiconductor and energy sectors, as a key factor behind the business’s recent momentum. The company also emphasized its ability to maintain profitability and operational cash flow for consecutive quarters, attributing this to product diversity and disciplined execution.
Looking ahead, American Superconductor’s guidance reflects expectations of continued high demand for its power resiliency solutions, especially from the semiconductor, data center, and traditional energy industries. McGahn stated, "We are at the center of some of the most important transformations of our time from defense to industrial growth from renewable integration to grid modernization." Management outlined a strong backlog and a growing pipeline of orders as evidence of sustained momentum, and suggested that new opportunities in data center power quality and grid modernization projects are likely to support further growth. CFO John Kosiba echoed this, describing the company’s expanding portfolio and geographic reach as foundational for supporting larger, more complex customer projects.
Key Insights from Management’s Remarks
Management attributed the quarter’s performance to strong order intake from semiconductors, diversified customer demand in power and defense, and expanded capabilities from recent acquisitions.
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Semiconductor demand accelerates: The company saw a pronounced uptick in orders from semiconductor manufacturing facilities, with management describing the pipeline as “huge” and noting that project sizes are increasing as global chip capacity expands. These orders contributed to a $75 million quarter in bookings, a sharp increase from prior periods.
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Grid business diversification: The Grid segment benefited from broad-based demand across renewables, traditional energy, utilities, and military customers. Management emphasized that no single industry now dominates, with renewables and traditional power each expected to comprise around 25% of future business.
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Expansion in defense sector: American Superconductor secured its first international contract for ship protection systems with the Royal Canadian Navy, in addition to continued deliveries for the U.S. Navy. This marks a strategic milestone, signaling traction for its technology in global defense applications.
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Wind business gains with Inox: The Wind segment’s growth was driven by increased shipments of electrical control systems (ECS) to Inox in India, particularly for 3-megawatt turbines. Management described the wind business as stable and responsive, with rapid conversion of orders to revenue and a partnership model tailored to Inox’s ramp-up plans.
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Integrated portfolio and margin progression: Management reported that cross-selling between acquired product lines has evolved to unified solution selling, allowing customers in industries like semiconductors and data centers to adopt comprehensive power quality systems. This integration, along with operational efficiencies, contributed to improved gross margins year-over-year.
Drivers of Future Performance
Looking forward, management expects semiconductor expansion, grid modernization, and data center power needs to shape results, while maintaining a focus on diversified end markets and operational efficiency.
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Semiconductor and industrial pipeline: Management sees ongoing U.S. and global investment in semiconductor fabrication as a primary growth engine, with orders from chipmakers expected to remain strong. Increased demand for reliable power in energy-intensive sectors like data centers and materials processing is driving further backlog expansion.
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Defense and traditional energy tailwinds: The company anticipates continued momentum in defense, supported by multi-year contracts with allied navies and new product applications for military power systems. Management is also positioning to capture opportunities in traditional energy, including upstream, midstream, and downstream projects requiring resilient power infrastructure.
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Margin improvement and supply chain: Management highlighted opportunities for incremental margin gains through scale, platform integration, and supply chain optimization. However, they acknowledged that changes in trade policy, tariffs, and input costs could present future headwinds, though a largely U.S.-based customer base provides some insulation.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be watching (1) the scale and timing of new semiconductor and data center orders, (2) progress on international defense contracts and their contribution to revenue diversification, and (3) margin trends as the company executes on operational efficiencies and supply chain management. Expanding into new industrial verticals and converting backlog into revenue will also be important markers to track.
American Superconductor currently trades at a forward P/E ratio of 52.6×. At this valuation, is it a buy or sell post earnings? The answer lies in our full research report (it’s free).
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