American Superconductor Corporation (NASDAQ:AMSC), a leading energy solutions provider, reported a strong performance in its second quarter fiscal 2024 earnings call on October 30, 2024. The company announced a 60% increase in revenues year-over-year, reaching over $54 million, primarily driven by the acquisition of NWL and increased shipments in its new Energy Power Systems.
AMSC ended the quarter with a healthy cash balance of nearly $75 million and a significant backlog exceeding $300 million. Looking ahead, the company expects to capitalize on macroeconomic tailwinds in the semiconductor and wind energy sectors, with projected revenues between $55 million and $60 million for the third quarter and non-GAAP net income exceeding $2 million.
Key Takeaways
- AMSC's Q2 revenues surged to over $54 million, marking a 60% increase year-over-year.
- The growth was largely due to the NWL acquisition and strong shipments in new Energy Power Systems.
- The company reported a non-GAAP net income of $9.9 million, turning around from a loss the previous year.
- AMSC forecasts Q3 revenues between $55 million and $60 million, with non-GAAP net income expected to exceed $2 million.
- Significant opportunities are seen in industrial, renewable, and semiconductor markets, supported by U.S. government initiatives like the CHIPS Act.
- The company has a strong focus on military contracts, including five SPS contracts for the U.S. Navy and a new mine countermeasure system.
- Inox Wind, AMSC's partner in India, has a backlog of over 3 gigawatts, promising future orders.
Company Outlook
- Revenue from the Canadian Navy contract is expected to increase in fiscal 2025, with initial deliveries in 2026.
- AMSC aims to grow revenues while improving margins through increased scale and a favorable product mix.
- The company sees macroeconomic tailwinds supporting growth in semiconductor and wind markets.
Bearish Highlights
- Challenges such as grid congestion are being addressed to maintain growth and efficiency.
- High-temperature superconducting wire's financial impact may take over a year to materialize.
Bullish Highlights
- AMSC reported consistent non-GAAP net income and positive cash flow over the past five quarters.
- The company secured almost $60 million in new orders, contributing to a solid backlog for future growth.
Misses
- There were no significant misses reported in the earnings call.
Q&A Highlights
- Executives discussed the potential for gross margin expansion as revenue increases.
- The company is focused on leveraging macro trends, particularly in the semiconductor sector.
American Superconductor Corporation (NASDAQ: AMSC) has demonstrated a strong financial performance in the second quarter of fiscal 2024, with a significant increase in revenue and net income. The company's strategic acquisitions and focus on emerging markets such as AI data centers, transportation electrification, and renewable energy have positioned it for sustained growth. AMSC's robust backlog and positive cash flow indicate a solid foundation for future expansion. With the U.S. government's support for semiconductor and renewable energy initiatives, AMSC is well-placed to take advantage of these macroeconomic trends. The company's leadership expressed confidence in their strategy and execution, which is reflected in the positive guidance for the upcoming quarter.
InvestingPro Insights
American Superconductor Corporation's (AMSC) strong financial performance in Q2 fiscal 2024 is further supported by recent data from InvestingPro. The company's revenue growth of 46.93% over the last twelve months aligns with the reported 60% increase in Q2 revenues. This growth trajectory is expected to continue, as InvestingPro Tips indicate that analysts anticipate sales growth in the current year.
The company's improving financial health is evident from its cash position. An InvestingPro Tip highlights that AMSC holds more cash than debt on its balance sheet, which corroborates the healthy cash balance of nearly $75 million reported in the earnings call. This strong liquidity position is further reinforced by another tip stating that AMSC's liquid assets exceed short-term obligations.
AMSC's market performance has been remarkable, with a 291.38% price total return over the past year. This significant return aligns with the company's positive outlook and growing backlog. The stock's recent momentum is also noteworthy, with an 8.3% return over the last week, indicating continued investor confidence.
While AMSC was not profitable over the last twelve months, InvestingPro Tips suggest that analysts predict the company will be profitable this year. This aligns with AMSC's guidance of expected non-GAAP net income exceeding $2 million in the upcoming quarter.
For investors seeking more comprehensive insights, InvestingPro offers 15 additional tips for AMSC, providing a deeper analysis of the company's financial health and market position.
Full transcript - American Superconductor Corporation (AMSC) Q2 2025:
Operator: Good day, and welcome to the AMSC Second Quarter Fiscal 2024 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Nicol Golez, AMSC's Director of Communications. Please go ahead.
Nicol Golez: Thank you, Keith. Good morning, everyone, and welcome to American Superconductor Corporation's second quarter of fiscal year 2024 conference call. I am Nicol Golez, AMSC's Director of Communications. On today's call, I am joined by Daniel McGahn, Chairman, President and Chief Executive Officer; and John Kosiba, Senior Vice President, Chief Financial Officer and Treasurer. American Superconductor issued its earnings release for the second quarter of fiscal year 2024 yesterday after the market closed. For those who have not seen the release, a copy is available in the Investor page of the company's website at www.amsc.com. The earnings press release contains forward-looking statements with respect to future financial results. These statements are not guarantees of future performance. The company's actual results may differ materially from the anticipated events, performance or results expressed or implied by these forward-looking statements, including due to the risk factors detailed in the SEC filings, which can also be accessed through the company's website. The company disclaims any obligation to update these forward-looking statements. Also, on today's call, management will refer to non-GAAP net income, a non-GAAP financial measure. Tables of reconciliation of GAAP to adjusted financial measures can be found in the company's earnings press release. With that, I will now turn the call over to Chairman, President and Chief Executive Officer, Daniel McGahn. Daniel?
Daniel McGahn: Thanks, Nicol, and good morning, everybody. We're really excited to have this call today. We're meeting some milestones, I know many of you have really hoped the company would see. So we're really, really enthusiastic about where we are today. I'll begin today by providing an update and sharing a few remarks on our business. John Kosiba will then provide a detailed review of our financial results for the second fiscal quarter, which ended September 30, 2024, and provide guidance for the third fiscal quarter, which will end December 31, 2024. Following our comments, we'll open up the line to questions from our analysts. Today, we're reporting revenue of over $54 million for the September ending quarter. Total revenue for the second quarter came in at the high end of our updated guidance range and grew by 60% versus the year ago period. Grid was driven by the acquisition of NWL and strong new energy power system shipments. When I talk about new Energy Power today, assume that, that does not include the acquisition of NWL. The remainder of the revenue came from our wind business, which grew nearly 40% from the year ago period. Both grid and wind grew. Grid also grew organically, again, without the addition of NWL. We ended the second quarter with nearly $75 million in cash. We booked nearly $60 million of new orders with new Energy Power Systems orders coming in stronger than we had previously demonstrated. Our new Energy Power Systems orders represent strong contributions from industrials, renewables, utilities, semiconductors and mining. Industrials accounted for about 40% of total orders, followed by renewables at about 30% and the remaining 30% came from semiconductors, mining, utilities and some other applications. We ended the quarter with a 12-month backlog of over $200 million and a total backlog of more than $300 million. Our backlog is really very strong. We see lead times for the newly acquired products starting at about six months. Other products take about 12 to 15 months or potentially more depending upon the project. Our second quarter results exceeded our forecast with recent record revenue and a fifth consecutive quarter of non-GAAP net income. Our ability to generate cash through the improved operating leverage is now built into our business at these revenue levels. We believe our company is in a much stronger growth, operating and cash-generative position, and we have demonstrated the ability to generate cash. This is a tremendous milestone, and we're very proud of this accomplishment. We are pleased with these results and encouraged by our orders momentum. Now I'll turn the call over to John Kosiba to review our financial results for the second quarter of fiscal 2024 and provide guidance for the third quarter of fiscal 2024, which will end December 31, 2024. John?
John Kosiba: Thanks, Daniel, and good morning, everyone. AMSC generated revenues of $54.5 million for the second quarter of fiscal 2024 compared to $34 million in the year ago quarter. Our grid business unit accounted for 86% of total revenues, while our wind business unit accounted for 14%. Grid business unit revenues increased by 65% in the second quarter versus the year ago quarter. The increase in revenue was primarily driven by the acquisition of NWL and increased shipments of new energy power systems. Wind business unit revenues increased 37% versus the same period. The increase in revenue was primarily driven by additional shipments of electrical control systems. Looking at the P&L in more detail, gross margin for the second quarter of fiscal 2024 was 29% compared to 25% in the year ago quarter. The increase in gross margin was due to higher revenues, a favorable product mix and the positive impacts of price increases across our product lines. Now moving on to operating expenses. R&D and SG&A expenses in the second quarter of fiscal 2024 were $13.2 million compared to $9.6 million in the year ago quarter. This increase is primarily driven by the inherited operating costs of NWL as well as the onetime acquisition-related expenses in the quarter. Approximately 7% of R&D and SG&A expenses in the second quarter of fiscal 2024 were noncash. We generated non-GAAP net income for the second quarter of fiscal 2024 of $9.9 million or $0.27 per share compared with a non-GAAP net income of less than $100,000 or $0.00 per share in the year ago quarter. Our net income in the second quarter of fiscal 2024 was $4.9 million or $0.13 per share. This compares to a net loss of $2.5 million or $0.09 per share in the year ago quarter. Included in both net income and non-GAAP net income was the release of a $5.1 million valuation allowance due to the recording of the deferred tax liability from the acquisition of NWL. This was a non-cash expense reduction in the quarter. Additionally included in net income was $2.8 million in contingent consideration expense related to the NEPSI and NWL acquisitions. This contingent consideration for NEPSI and NWL were retired in the second quarter, and we do not anticipate any further contingent consideration related to our recent acquisitions. Please see our press release issued last night for a reconciliation of GAAP to non-GAAP results. We ended the second quarter of fiscal 2024 with $74.8 million in cash, cash equivalents and restricted cash, which compares with $95.5 million on June 30, 2024. Included in the quarter was the acquisition of NWL, which included a total cash consideration of $33.6 million. That cash consideration concluded our financial obligations under the SPA for the acquisition of NWL. We generated operating cash flow in the second quarter of fiscal 2024 of $12.7 million. Cash flow exceeded our guidance range due to a large grid milestone payment that was received in the quarter ahead of schedule. In addition to that milestone, we generated positive operating cash flow through the strength of our operating results across both our grid and wind segments. We believe the acquisition of NWL further strengthens our already strong balance sheet, and we continue to be debt-free. Now turning to financial guidance for the third quarter of fiscal 2024. We expect that our revenues will be in the range of $55 million to $60 million. Our net loss on that revenue is expected not to exceed $1 million or $0.03 per share, and our non-GAAP net income is expected to exceed $2 million or $0.05 per share. As the company transitions to the next phase of maturity, we will shift our focus and guide on revenue and profitability metrics. Due to the nature of our milestone billing mechanisms on new orders, we do not anticipate any significant changes to our working capital demands of the business. Lastly, I've been asked from time to time about our capital expenditure requirements as the business expands. As a reminder, most of our business is light assembly with minimal capital expenditure requirements. We believe that the historical run rate of capital expenditures sufficiently supports our current operating needs. As our business scales over time, we could see a need to increase our capital requirements in areas such as ERP software upgrades or possible plant expansions. Neither of those scenarios are in our near-term plans. As we reach levels of increased capital expenditure requirements, I plan to provide guidance when appropriate. With that, I'll turn the call back over to Daniel.
Daniel McGahn: Thanks, John. We delivered an outstanding second quarter. We reported higher revenue. We generated greater net income. We showed significant positive operating cash flow, and we had another quarter of strong orders. This was a remarkable and exceptionally strong quarter. I'd like to discuss a few historical years of operational results to give you a sense of where we've come from and lay the groundwork for where we intend to go. Our annual revenue back in 2017 was under $50 million annually, not quarterly. Fast forward four years to fiscal year 2021, and we doubled annual revenue to over $100 million. This is the first time in recent history that we reported revenue of over $50 million for a quarter. We're halfway through fiscal year 2024 and total revenue for the past two quarters is nearly $95 million. This means we're close to doubling revenue from our fiscal year 2021 level. It's 2024, so it's only three years later. When looking at our compound annual growth rate, this means that we grew at nearly 20% from the years 2017 to 2021 and now over 25% over the past three years. In addition, we see significant macro tailwinds for power requirements driving our growth. In fact, in the industrial space, we see demand from the reshoring of domestic industrial production and upgrading of existing industrial manufacturing. Our newly acquired products help us further expand our industrial market penetration. NWL provides immediate access to customers we did not have access to. This customer expansion in the industrial side largely resides at the factory. In the renewable space, maintaining grid resiliency for renewable connectivity and increased electrification is paramount. We serve a broad range of customers at the substation level in the renewables market. We also see opportunities for our products and services as utilities address the changing landscape of the electric grid. We are seeing this more and more. The growing power demand for AI data centers and the electrification of transportation has energized utilities and led to unprecedented power agreements. They're now even talking about bringing back power generation from nuclear power plants. Equally, we see investments in domestic mining as well as in semiconductor manufacturing, driven in part by the CHIPS and Science Act or the CHIPS Act. The CHIPS Act has allocated over $36 billion in proposed funding across multiple states and propose to invest billions more in research and innovation. Multiple companies have already signed agreements and are set to benefit from funding under the CHIPS Act. According to the Semiconductor Industry Association, we've seen 90 new semiconductor ecosystem projects announced across the US. These projects include the construction of new semiconductor manufacturing facilities, expansion of existing sites and facilities that supply the materials as well as the equipment used in chip manufacturing. To date, semiconductor and electronics companies have announced nearly $450 billion in private investments across dozens of states. Just last week, the government announced a $325 million investment to commission a new semiconductor facility in Michigan. This is great for America. We see significant investments going into Arizona, Idaho, New York and Texas as well as a handful of other states. Increased fab construction drives investments by suppliers of materials, chemicals and equipment. As a result, companies that supply the equipment and materials used to produce chips, including chemical, specialty gases and wafers, announced plans to invest in several facilities to support increased domestic manufacturing capacity. Industrial manufacturers of these essential materials must be able to power their factories in ways that add scale without adding complexity or size. This is where we believe AMSC's products are uniquely well positioned to address market demand. We began and remain focused on strong execution for fiscal year 2024. We have solid orders momentum and robust financial results. We believe that our strong balance sheet and the addition of new customers and new opportunities position us nicely for continued growth, profitability, and cash flow generation. We believe the business is positioned to benefit from a large and growing end market driven by significant macro tailwinds. We've generated non-GAAP net income and positive operating cash flow consistently over the past five quarters. We have exceeded our notion of getting to $50 million a quarter of revenue and potentially generating net income. We only said this a few months ago that it was possible, and now it has already happened. The addition of NWL, coupled with our strong financial performance, changes the scale of our business and should place us in a strong position for continued diversified growth. We have several tailwinds generated by U.S. policies and momentum in our wind and ship businesses that hopefully will continue to drive our company's growth. We are diligently working with Urban Shipbuilding, the Canadian supplier who's constructed most of Canadian Navy at sea today to deliver our first SPS system in 2026. We're really grateful to be contracted to provide world-class mine protection to the Canadian surface combatant as well as the U.S. platform that we're designed into. We do have a total of five SPS contracts for the U.S. Navy's San Antonio Class LPD, and we're working on our next product for our ship business, our proprietary mine countermeasure system. We see expanding opportunities, especially in the military business. Our wind partner in India, Inox Wind, is reporting their largest order book with over 3 gigawatts of wind capacity coming online in the coming years. We believe Inox is in a good position to start expanding its business with the 3-megawatt class wind turbine, which we expect will translate into an expanded order book for us. I hope to be able to talk more about that soon. This is truly an exciting time for us here at AMSC, and you can see the growing domestic investments in semiconductors may be a new near-term growth driver for us, more wind and more chips. Our future-facing technologies help harmonize the world's desire for decarbonization and clean energy with the need for more reliable, effective and efficient power delivery. I look forward to reporting to you again following the completion of our third quarter fiscal 2024. Keith will now take questions from our analysts.
Operator: Yes, thank you. We will now begin the question-and-answer session. [Operator Instructions] And the first question comes from Eric Stine with Craig-Hallum.
Eric Stine: Hi Daniel, hi John.
Daniel McGahn: Hey Eric, good to hear your voice.
Eric Stine: Yes, good morning. So maybe just sticking with wind, you touched on Inox's backlog at over 3 gigawatts. When I look back here, I think in fiscal 2015, your wind revenues were close to $70 million. And I think Inox's backlog was just a little over 1 gigawatt. So, I'm just curious, I mean, is there any reason why your business in wind can't be dramatically larger? Obviously, you need to see the orders and there are reasons to be quite optimistic about more orders potentially near-term. But I mean, is that the right way to think about it that this -- you're really just kind of getting started with supply for the 3 megawatts. And look, this business could be a lot larger.
Daniel McGahn: I think that's a great analysis, Eric. I think you kind of nailed it. I think that's what people are going to hope. I think what we're trying to do is follow the money. I think as the customer starts to ramp, we want to make sure that they're paying, they're doing timely. They've been a great customer for us. We've been a very patient partner and supplier. We think that their business is well poised for growth. It looks like it's just about to start. And as I said in the remarks, stay tuned. I think we have more to report on this relatively soon.
Eric Stine: Got it. Okay. That's great. And then maybe just on the new acquisition. I guess you've had it for what -- or it showed up in results for two months, but just curious, market feedback, early impressions, maybe some things that have surprised you versus your expectations when you made the deal.
Daniel McGahn: I think the surprises and the positive things are we knew it was a great company, but we hear that over and over again from the customers. It's really a well-run operation. They have a great team. It really extends our team with what they're doing there. And we think it presents some great opportunities for us in the future with -- I didn't talk a lot about military today, because I really think in the near term, we're really going to see a run here on the industrial side driven by chips. But that doesn't mean in the longer term, we won't see more military business coming. Those things are longer cycle, but we think the combined effort really what we have in military now should help make that part of our business be a relatively substantial part in the coming years. But in the coming quarters, I think we see wind and we see chips helping to drive that. And that's across the entire business, right? We do things in renewables across many of the product lines. We do things in semiconductor across many of the product lines. So, I think so far, we're only two months in. There's -- we've accomplished a lot in those two months. It will take some more time to digest them. But we're very pleased with what we see. We're very happy with what we know, and we think that the team is operating and executing very well.
Eric Stine: And your -- I mean, are you, in fact, seeing those new customers, the doors that are now opening, I mean, has there been a -- how has the reaction been from those new customers to your offering, which obviously they didn't have access to or weren't accessing?
Daniel McGahn: Yes. I guess it's only been two months in. So I'd love to be able to give you food for father, coming out in the coming quarters to say, here's an example of what we saw. I'd rather show you what we see than tell you what we see. I think our investors at least like our approach that we're kind of under-promise, over-deliver kind of group. I think that there are areas there where combined we can be more than these are separate offerings. But let me show you more proof. And I think I'm hinting at it pretty strongly with what I'm talking about in semiconductor.
Eric Stine: Yes. Understood. Thank you.
Daniel McGahn: Thanks Eric.
Operator: Thank you. And the next question comes from Colin Rusch with Oppenheimer.
Colin Rusch: Thanks so much, guys. Can you talk a little bit about the IP within the power quality space and where you're winning? Some of this has been around kind of density of power management and some of it has been around performance. I just want to get a better sense from where you're winning and why?
Daniel McGahn: Yes. I think if you get into the heart of the IP and you include superconductors in this, we can make things less complicated and smaller. So we can fit equipment into areas that's easier. We can replace things more easily to focus on a fab. We can do a retrofit of an existing or an expansion relatively easy. So time to delivery, cost of permitting, all those types of things become an advantage. And really, it's around the heart of the IP is we work a lot on thermal management. We work a lot on system-level controls. We want to find things that are probably priced at a premium, but deliver premium value to that customer because it's just easier for them to do it with us than doing it other ways. And that really -- those are kind of both sides of the coin. The proprietary nature of what we do is why we win, and then we want to continue to invest to make sure we can win on more and more proprietary technology.
Colin Rusch: That's super helpful. And then again just as you now are a little bit bigger business, can you talk a little bit about how the mix shifts within grid and how we should think about margins as you see a little bit of growth, coupled with some mix shift from quarter-to-quarter?
Daniel McGahn: Yes. I think at the revenue levels that we're at now presenting, there is some potential variability in gross margin depending upon exactly the right revenue level and exactly the right product mix. In general, the margins in the business are all very similar with the only outlier really significant outlier being the ship systems business because -- we're not quite at scale. I think with the addition of revenue coming in the future quarters with Canada, that will help fix a lot of that problem, maybe not fully, but it will contribute more nicely than certainly it does today at the current scale. So I see this level of revenue and these kinds of margins where we've been kind of to be expected. I think, John, if you want to comment further on that, do that. I know my mission is how do we continue to grow revenues at these margins and get better leverage to improve margin with additional scale.
John Kosiba: Yes. No, I think you're right, Dan. As revenue scales up and we get more scale, we should have less volatility within any one or two projects. Back in the old days, one or two projects could impact margins more substantially than say today. But you do have mix issues this last quarter. We had a very strong mix of the products that generate the most gross margin for us. So that was an example of a good -- a really good mix. But I think the volatility you'll see in the company performance will shrink over time as we have more projects and it just gets smooth out.
Colin Rusch: Fantastic, guys. Thanks so much.
Operator: Thank you. And next question comes from Justin Clare with ROTH Capital Partners.
Justin Clare: Hi. Good morning. Thanks for taking out questions. Good morning.
Justin Clare: So I just wanted to follow up on the last question here in terms of the Navy business. Can you update us on when you think the revenue from the Canadian contract will start ramping? I think we had been expecting sometime in fiscal 2025, but if you could help us understand the ramp there?
Daniel McGahn: Yes. No, I think that's exactly right. What we said before is basically zooming starts in 2025. We're delivering in 2026, the first system. There are further systems contracted for the 75, and we said basically, once we start delivering, which I think is probably the second half of next year. You can basically take the 75 and linearize it by quarters. I went through at the time, the number of years it was to deliver in the contract. I don't have that right in front of me to remind you of that. But I think the assumptions specifically, Justin, I think what you have is probably right and what you presented to us. And the market in your models. I think what we have to do is now go execute on those things. So the challenge with the Canadian contract is there is development in it. The challenge with the mine countermeasure project that we have is there is development in it. And those things if there are challenges that present themselves, that may change the timetables. But we feel really good about both those programs where we are now, what our customers are pushing to do. The timetables seem to be intact. So we feel as strongly as we did when we announced that a few months ago that those timetables will come to bear.
Justin Clare: Okay. Got it. Appreciate it. And so just thinking through this a little bit, next year, it's possible that we see wins, revenue ramp up. And then if you add this contracting for the Navy business, it seems like you have an opportunity for margin uplift in both of those different areas. Is that a fair way to characterize it?
Daniel McGahn: I think there is potential. We do have to be sensitive of the overall project mix. And when we talk about project mix, some of it relates to service, some of it relates to customer type. It becomes more about the scale of the project. It comes more about competition than it does about a specific product. But I think as I tried to say, and I tried to get John's help to say it more cleanly, which I think he did is that, as revenue scales, we think there'll be gross margin expansion opportunities.
Justin Clare: Got it. Okay. And then I wanted to ask, it seems like grid congestion is becoming an increasingly challenging problem here. Transmission is a key constraint. I was wondering, if you see potential opportunities to address this challenge. Could you look at using your high-temperature superconducting wire for transmission? Is that something you're exploring? Or are there other solutions that you can bring to the market that could address these challenges?
Daniel McGahn: I think a superconductor solution is probably a year or more away to have any impact on what we're doing financially. So I think a lot of what we're trying to focus on is the macro trend. Yes, there's more investment. Utilities are going to be challenged to do more. And I think we're going to be able to supply them with what we do in new energy. NWL really is more industrial. So it's really new energy being able to solve those problems. And we think we're in a very interesting situation. The grid has to evolve over the next years to be able to allow either reclassification of traditional power sources, trying to invest in bringing plants like that back online or you think on the demand side, what semiconductor is going to drive, what data centers and AI are going to drive. This is another disruption for the grid that we think we're in a great position to solve those systematic grid problems in a way that's comfortable for be it the industrial customer or the utility. So I've said this a few times, a rising tide lifts all boats. Our tide is rising, and which means our boat will be lifted as these markets move forward. We're in a wonderful situation. Things we've talked about now for many years are now really starting to happen in the market, and we're well positioned with our sales efforts and our business development efforts to try to take advantage of those.
Justin Clare: Okay. Great, I appreciate it.
Operator: Thank you. And this concludes our question-and-answer session. I would like to turn the conference back over to Dan McGahn, for any closing comments.
Daniel McGahn: Thanks, Keith. We delivered a really remarkable second quarter. I don't want that to be lost on anybody. These are recent record revenue getting to $50 million. We were really happy a few -- only a few quarters ago getting to $30 million and getting to $40 million. This is driven by strong organic growth from New Energy as well as the acquisition of NWL. We want to make sure you understand the business is doing extremely well and the addition of NWL sets us up for what we think is going to come hopefully in the future. We generated greater net income than we've been, right, almost $5 million. We delivered significant operating cash flow, nearly $13 million in the quarter. We booked nearly $60 million in new orders. We reported a growing 12-month backlog of over $200 million, and we have a total backlog of about $300 million, I think, slightly north of $300 million. We have a cash balance of nearly $75 million. So we're starting from a point where we go into these significant macro tailwinds where we really can take advantage of it. There's significant investment in semiconductor domestically. We're targeting that, and we see that as something that can drive growth for us in the coming quarters and the coming years. We do see more wind coming as well, and I mentioned we hope to be able to talk about that in the future. And for those of you who are looking at growth, a lot of times, people want to challenge you, where are you going to grow? Let me talk about what our growth has happened over the past year. So just over the past three years, it was about 25%, and that accelerated from the previous few years at about 20%. This is a nice platform that we think can continue to grow. And then I don't like to comment on the guidance that John talks about, but we're talking about revenues now approaching $60 -- and only a couple of quarters ago, we were excited about the chance of getting to 50, right? A year ago, we were really excited we broke through 30 and eventually got to 40, right? This is the first time I can really remember, we're guiding to non-GAAP to be positive. We're really in a great situation. I want you guys to hear that. I want you to feel it. And we'll see where things go with the market and the election and all those things. But this company is really in a great position. Thank you all for your attention, your support. And we look forward to talking to you again in a few months' time. Thank you.
Operator: Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.
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