Key Points Exited 340,102 shares in American Superconductor, reducing position value by $12.48 million Post-trade stake is zero shares, or $0 value The position was previously 3.3% of the fund's AUM as of the prior quarter These 10 stocks could mint the next wave of millionaires › HEIGHTS Capital Management recently disclosed that it sold out its entire position in American Superconductor, a move that reduced exposure by about $12.48 million. What happened HEIGHTS Capital Management reported in ...

Core Insights - Shares of American Superconductor Corp. (AMSC) dropped approximately 40% following the release of third-quarter results, which were consistent with previously issued guidance, indicating that elevated investor expectations were not met [1] Financial Performance - The third-quarter results of AMSC were largely in line with prior guidance, suggesting that the company's performance did not significantly deviate from expectations [1] Market Reaction - The significant decline in AMSC's share price reflects a market reaction to high expectations set earlier in the year, which were not fulfilled by the company's latest results [1]

Core Insights - Shares of American Superconductor Corp. (AMSC) fell approximately 40% following the release of third-quarter results, which met previously issued guidance but did not meet elevated investor expectations for the year [1] Financial Performance - The third-quarter results of AMSC were largely in line with prior guidance, indicating that the company performed as expected but failed to exceed market expectations [1] Market Reaction - The significant drop in AMSC's share price reflects a disconnect between investor expectations and the company's actual performance, highlighting the impact of market sentiment on stock valuation [1]

Core Viewpoint - American Superconductor (NASDAQ: AMSC) experienced a significant stock decline of 31.5% following the release of mixed earnings results, with earnings beating expectations but sales missing forecasts [1][7]. Earnings Performance - Analysts had predicted AMSC would earn $0.15 per share on sales of $67.2 million, but the company reported a profit of $0.20 per share, exceeding earnings expectations, while sales were only $65.9 million [2][4]. - Year-over-year sales growth was nearly 21%, but the reported profit of $0.20 was a non-GAAP figure; under GAAP, the profit was only $0.11 per share, a decline of 15% from the previous year's $0.13 [4]. Future Outlook - CEO Daniel P. McGahn indicated strong order demand in energy and military markets, predicting Q3 sales to be between $65 million and $70 million, although GAAP earnings are expected to drop to about $0.05 per share [5]. Valuation Concerns - Despite the sales growth, the stock is considered overvalued, trading at over $1.8 billion with a trailing earnings multiple of nearly 120 times and a price-to-free cash flow ratio of about 95 times, raising concerns about the sustainability of its valuation given declining profits [6].

Core Insights - American Superconductor Corporation (AMSC) reported second-quarter fiscal 2025 earnings of 20 cents per share, exceeding the Zacks Consensus Estimate by 33.3% [1][11] - AMSC's revenues increased by 20.9% year over year to $65.86 million, but fell short of the Zacks Consensus Estimate by 3.1% [2][11] Financial Performance - AMSC's Grid revenues were $54.34 million, accounting for 82.5% of total revenues, and increased by 16% year over year [3] - Wind segment revenues reached $11.52 million, representing 17.5% of total revenues, and grew by 52.9% year over year [4] - Gross profit for the quarter was $20.44 million, up from $15.61 million in the year-ago quarter, resulting in a gross margin of 31% [5] - Operating expenses totaled $17.47 million, leading to an operating income of $2.96 million compared to an operating loss of $7.53 million in the previous year, with an operating margin of 4.5% [6] Balance Sheet and Cash Flow - AMSC ended the quarter with cash and cash equivalents of $212.89 million, an increase from $207.89 million in the prior quarter, and reported no debt [7] - The company generated an operating cash flow of $10.61 million and spent $2.21 million on capital expenditures during the quarter [7] Guidance - AMSC provided guidance for Q3 fiscal 2025, projecting revenues between $65 million and $70 million, with the Zacks Consensus Estimate at $68.4 million, indicating an 11.4% year-over-year rise [8] - Expected GAAP net income for Q3 is over $2 million (5 cents per share), while non-GAAP net income is projected to exceed $6 million (14 cents per share) [9]

Financial Data and Key Metrics Changes - Revenue for Q2 fiscal 2025 was nearly $66 million, representing over 20% year-over-year growth, marking the third consecutive quarter at this revenue level [4][8] - Gross margins exceeded 30% for the second consecutive quarter, reaching 31% compared to 29% in the year-ago quarter [9] - Non-GAAP net income for Q2 fiscal 2025 was $8.9 million, or $0.20 per share, down from $10 million, or $0.27 per share in the prior year [9][10] - The company ended the quarter with $218.8 million in cash and generated operating cash flow of $6.5 million [10] Business Line Data and Key Metrics Changes - The grid business unit accounted for 83% of total revenues, with a 16% increase in revenue year-over-year [8] - The wind business unit saw a 53% increase in revenue, primarily due to additional shipments of electrical control systems [8] Market Data and Key Metrics Changes - Approximately 65% of total orders came from traditional energy and renewables, with military orders making up about 15% [13] - Significant capital spending is projected in various sectors, including over $1 trillion in traditional energy and more than $750 billion in renewables for 2025 [13] Company Strategy and Development Direction - The company is diversifying its revenue streams across power electronics, grid infrastructure, and military systems, positioning itself to benefit from growing demand in these sectors [14][17] - There is a focus on expanding into data center construction projects, leveraging existing relationships with utilities and engineering procurement construction companies [51] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about sustained revenue growth, with expectations for Q3 fiscal 2025 revenues to be in the range of $65-$70 million [11] - The company is experiencing strong order demand across energy and military markets, with a robust pipeline of opportunities and a backlog exceeding $200 million [14][17] Other Important Information - The company has won a new contract with the U.S. Navy for the design of a new class of product, which is expected to have a significant long-term impact [56][58] - Management highlighted the importance of lead times and timely delivery as competitive advantages in the current market environment [27] Q&A Session Summary Question: Thoughts on order front and next steps for revenue growth - Management indicated that the next steps depend on the cadence of orders and highlighted an expected acceleration in military orders and semiconductor build-out [24][25] Question: Data center opportunities and engagement with developers - Management confirmed engagement with both utilities and data center developers, emphasizing the importance of managing power variability for data centers [50][51] Question: Competitive advantages in the data center market - Management noted the significance of compact form factors and the ability to handle high voltage and noisy power as key competitive advantages [33][39] Question: Progress on military business and new contracts - Management discussed the potential for growth in military business, particularly in powering ship systems and port infrastructure, while cautioning that new contracts will take time to develop [41][56]

Market Overview - US stock index futures are all up ahead of the market opening on November 6, with Dow futures up 0.02%, S&P 500 futures up 0.09%, and Nasdaq futures up 0.06% [1] - European indices show a decline, with Germany's DAX down 0.08%, UK's FTSE 100 down 0.37%, France's CAC40 down 0.44%, and the Euro Stoxx 50 down 0.04% [2][3] - WTI crude oil is up 0.64% at $59.98 per barrel, while Brent crude is up 0.49% at $63.83 per barrel [3][4] Market Sentiment - A report from SentimenTrader indicates that despite recent market stability, there are ominous signs suggesting potential weakness ahead, with the "Titanic Syndrome" appearing four times in the last five trading days [5] - Deutsche Bank is exploring ways to hedge its exposure to data center risks, including shorting a basket of AI-related stocks, amid concerns of a potential AI bubble [6] Economic Indicators - Federal Reserve Governor Milan emphasizes that current interest rates are too high and suggests further cuts may be necessary, citing limited job growth and declining wage increases [7] - The ongoing US government shutdown is impacting the airline industry, with plans to cut 10% of flights at 40 major airports due to air traffic control safety concerns [7] Company News - Tesla is facing a critical vote on Elon Musk's compensation plan, which could lead to significant stock price volatility depending on the outcome [8][9] - Arm reported a 34% increase in revenue to $1.14 billion for Q2, with a 155% increase in operating profit, exceeding market expectations [9] - Qualcomm's Q4 sales reached $11.27 billion, driven by demand for high-end smartphones, with a forecast for Q1 sales also above market expectations [10] - Snap's Q3 revenue grew 10% to $1.51 billion, with a significant partnership with Perplexity AI valued at $400 million [11] - AppLovin's Q3 revenue increased by 8.9% to $1.41 billion, with a strong cash flow and a $3.2 billion share buyback plan [12] - Robinhood's Q3 net revenue doubled to $1.274 billion, with a 271% increase in net profit, although cryptocurrency revenue fell short of expectations [12] - DoorDash's Q3 revenue grew 27% to $3.45 billion, but rising costs led to a decline in profit, causing a nearly 10% drop in pre-market trading [13] - IonQ's Q3 revenue surged 221.5% to $39.87 million, but the company reported significant losses due to acquisitions [14] - American Superconductor's Q2 revenue increased over 20% but fell short of expectations, leading to a drop in pre-market trading [15] - Fortinet's Q3 core business revenue growth hit a decade low, with a 14% increase in total revenue [15] Upcoming Events - Key speeches from Federal Reserve officials are scheduled, including remarks from New York Fed President Williams and Cleveland Fed President Mester [16]

Core Insights - The company reported Q2 2025 revenue of approximately $66 million, a year-over-year increase of over 20%, although slightly below analyst expectations of $67.85 million [1] - Net profit under GAAP was $4.8 million, translating to earnings per share of $0.11, a slight decrease from $4.9 million ($0.13 per share) in the same quarter of the previous fiscal year [1] - Non-GAAP net profit reached $8.9 million, corresponding to earnings per share of $0.20, down from $10 million ($0.27 per share) year-over-year, primarily due to costs associated with the acquisition of NWL Inc. [1] - This performance marks the fifth consecutive quarter of profitability for the company, breaking a streak of losses from 2011 to 2024, with 2025 expected to be the first profitable year since 2010 [1] Financial Performance - The gross margin exceeded 30%, with a gross profit of $20.4 million on revenues of $65.9 million, indicating an optimized cost structure as revenue scales up [2] - The grid business was the main growth driver, contributing $54.34 million in revenue, while the wind power segment added $11.52 million [2] - Free cash flow for the quarter was $5.4 million, with operating cash flow reaching $10.6 million, and cash and cash equivalents increased to $218.8 million from $85.4 million as of March 31, 2025, strengthening the balance sheet for future investments or acquisitions [2] Management Commentary - The CEO expressed confidence in the company's performance, citing strong demand in the energy and military markets, driven by the robust growth of U.S. manufacturing and the urgent need for reliable power in key industries [2] Future Outlook - For Q3 2025, the company expects revenue to be between $65 million and $70 million, with GAAP net profit anticipated to exceed $2 million ($0.05 per share) and Non-GAAP net profit expected to exceed $6 million ($0.14 per share) [2] Market Reaction - Prior to the earnings release, the company's stock rose by 5.56% to $59.42, reflecting investor confidence in the turnaround from years of losses; however, the stock fell over 20% in after-hours trading [3]

Core Insights - American Superconductor (NASDAQ: AMSC) reported its FY26 Q2 earnings after the market close on November [1] Financial Performance - The company’s earnings report includes key financial metrics that indicate its performance during the second quarter of FY26 [1] - Specific revenue figures and profit margins were highlighted, showcasing the company's financial health and operational efficiency [1] Market Reaction - The market's response to the earnings report is crucial, as it may influence investor sentiment and stock performance moving forward [1] - Analysts and investors will likely assess the implications of the earnings results on the company's future growth prospects [1]

Revenue Performance - Total revenues increased 21% to $65.9 million for the three months ended September 30, 2025, and increased 46% to $138.2 million for the six months ended September 30, 2025, compared to $54.5 million and $94.8 million for the same periods in 2024[126]. - The Grid business segment accounted for 83% of total revenues for both the three and six months ended September 30, 2025, down from 86% and 84% in the same periods of 2024[126]. - Grid business segment revenues increased 16% to $54.3 million for the three months ended September 30, 2025, and increased 44% to $114.4 million for the six months ended September 30, 2025, compared to $46.9 million and $79.3 million in 2024[126]. - Wind business segment revenues increased 53% to $11.5 million for the three months ended September 30, 2025, and increased 53% to $23.8 million for the six months ended September 30, 2025, compared to $7.5 million and $15.5 million in 2024[126]. - The Wind business segment accounted for 17% of total revenues for both the three and six months ended September 30, 2025, up from 14% and 16% in the same periods of 2024, with revenues increasing 53% to $11.5 million for the three months and 54% to $23.8 million for the six months[127]. Cost and Expenses - Cost of revenues increased by 17% to $45.4 million for the three months ended September 30, 2025, and by 39% to $93.3 million for the six months, while gross margin improved to 31% and 33% for the respective periods, compared to 29% in 2024[128]. - Research and development expenses rose 41% to $3.7 million for the three months and 63% to $8.0 million for the six months ended September 30, 2025, driven by higher compensation and stock-based compensation expenses[129]. - Selling, general, and administrative expenses increased 27% to $13.4 million for the three months and 42% to $27.6 million for the six months ended September 30, 2025, primarily due to higher compensation expenses[130]. Profitability - Operating income for the Wind business segment was $1.7 million and $3.2 million for the three and six months ended September 30, 2025, respectively, compared to $0.4 million and $1.3 million in the same periods of 2024[134]. - Net income was $4.8 million and $11.5 million for the three and six months ended September 30, 2025, compared to $4.9 million and $2.4 million in 2024, with the improvement driven by increased revenues and gross margins[140]. - Non-GAAP net income was $8.9 million and $20.4 million for the three and six months ended September 30, 2025, compared to $10.0 million and $13.2 million in 2024, reflecting higher revenues and gross margins[142]. Cash Flow and Liquidity - As of September 30, 2025, the company had cash and cash equivalents of $212.9 million, a significant increase from $79.5 million as of March 31, 2025[147]. - Net cash provided by operating activities was $10.6 million for the six months ended September 30, 2025, down from $16.1 million in the same period of 2024[148]. - For the six months ended September 30, 2025, net cash provided by financing activities was $124.8 million, a significant increase from cash used in financing activities of $0.1 million for the same period in 2024, primarily due to an equity raise in June 2025[149]. - The company believes it has sufficient liquidity to fund operations and capital expenditures for the next twelve months, having raised $124.6 million net of offering expenses through an equity raise in June 2025[152]. Acquisitions and Business Segments - On August 1, 2024, the company acquired Megatran, Industries, Inc. for an aggregate consideration of $61.4 million, enhancing its Grid business segment capabilities[123]. - The company operates under two market-facing business segments: Grid and Wind, allowing it to better meet the needs of power generation project developers and electric utilities[119]. - The increase in Grid business segment revenues was driven by the acquisition of NWL, increased shipments of new energy power systems, and additional ship protection systems revenues compared to prior year periods[126]. Risk Factors and Controls - There have been no material changes to the risk factors disclosed in the Annual Report for the fiscal year ended March 31, 2025[167]. - Management concluded that the disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2025[164]. - There were no changes to internal control over financial reporting during the quarter ended September 30, 2025, that materially affected the internal control[165]. Foreign Currency and Accounting - Foreign currency exchange risk is present, particularly with AMSC Austria, where a 10% fluctuation in the Euro would have an immaterial effect on consolidated financial statements[162]. - Foreign currency gains were $0.3 million for both the three and six months ended September 30, 2025, compared to losses of $0.3 million and $0.5 million for the same periods in 2024[163]. - The company is evaluating the impact of recent accounting pronouncements on its consolidated financial statements, including ASU 2023-09 and ASU 2024-02[154][155]. - The company has not made any stock repurchases during the three months ended September 30, 2025, and no shares were purchased in connection with stock-based compensation plans[168].