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Note 18 - Business Segments
 9 Months Ended
Dec. 31, 2025
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

18. 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.

 

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 and nine months ended December 31, 2025 and 2024 (in thousands):

 

   

Three Months Ended December 31, 2025

    

Nine Months Ended December 31, 2025

  
   

Grid

    

Wind

    

Unallocated

    

Total

    

Grid

    

Wind

    

Unallocated

    

Total

  

Segment operating income:

                                                                

Revenues

   $ 63,187     $ 11,342     $ -     $ 74,529     $ 177,616     $ 35,133     $ -     $ 212,749  
                                                                 

Less (a)

                                                                

Segment other operating expenses (b)

     61,156       10,014       -       71,170       170,152       30,630       -       200,782  

Segment operating income

   $ 2,031     $ 1,328     $ -     $ 3,359     $ 7,464     $ 4,503     $ -     $ 11,967  

(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 December 31, 2024

    

Nine Months Ended December 31, 2024

  
   

Grid

    

Wind

    

Unallocated

    

Total

    

Grid

    

Wind

    

Unallocated

    

Total

  

Segment operating income:

                                                                

Revenues

   $ 52,306     $ 9,097     $ -     $ 61,403     $ 131,578     $ 24,585     $ -     $ 156,163  
                                                                 

Less (a)

                                                                

Segment other operating expenses (b)

     52,072       8,016       -       60,088       130,006       22,198       6,689       158,893  

Segment operating income (loss)

   $ 234     $ 1,081     $ -     $ 1,315     $ 1,572     $ 2,387     $ (6,689 )   $ (2,730 )

(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 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.

 

The reconciliation of segment operating income (loss) to consolidated income (loss) before income taxes for the three and nine months ended December 31, 2025 and 2024 is as follows (in thousands):

 

   

Three Months Ended December 31,

    

Nine Months Ended December 31, 2025

  
   

2025

    

2024

    

2025

    

2024

  
                                 

Operating income (loss):

   $ 3,359     $ 1,315     $ 11,967     $ (2,730 )

Interest income, net

     1,997       802       5,198     $ 2,901  

Other (expense)/income, net

     77       272       57       (214 )

Income (loss) before income tax benefit

   $ 5,433     $ 2,389     $ 17,222     $ (43 )

 

Depreciation and amortization expense by segment for the three and nine months ended December 31, 2025 and 2024 is as follows (in thousands):

 

   

Three Months Ended December 31,

    

Nine Months Ended December 31, 2025

  
   

2025

    

2024

    

2025

    

2024

  

Grid

   $ 1,726     $ 1,567     $ 4,089     $ 3,920  

Wind

     63       22       95     $ 64  

Total

   $ 1,789     $ 1,589     $ 4,184     $ 3,984  

 

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  December 31, 2025 and  March 31, 2025, are as follows (in thousands):

 

   

December 31, 2025

    

March 31, 2025

  

Grid

   $ 558,431     $ 211,520  

Wind

     13,969       13,697  

Corporate assets

     147,134       85,304  

Total

   $ 719,534     $ 310,521