EnerSys (ENS) Q4 2025 Earnings Call Highlights: Record EPS and Revenue Growth Amid Tariff Challenges
Full-Year Revenue: $3.6 billion, up 1% year over year.
Adjusted Gross Margin: Q4 '25 adjusted gross margin of 31.2%, up 320 basis points versus prior year.
Adjusted Operating Earnings: $152 million in Q4, up $43 million versus prior year.
Adjusted EBITDA: $167 million in Q4, up $42 million versus prior year.
Adjusted EPS: Q4 adjusted EPS of $2.97 per share, up 43% over prior year.
Free Cash Flow: $105 million in Q4.
Energy Systems Revenue: Increased 8% from prior year to $399 million in Q4.
Motive Power Revenue: $392 million in Q4, flat compared to prior year.
Specialty Revenue: Increased 21% from prior year to $178 million in Q4.
Net Debt: $781 million as of March 31, 2025.
Credit Agreement Leverage Ratio: 1.3 times EBITDA.
Q1 Fiscal 2026 Guidance: Expected net sales of $830 million to $870 million with adjusted diluted EPS of $2.03 to $2.13 per share.
Warning! GuruFocus has detected 3 Warning Sign with OLNCF.
Release Date: May 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
EnerSys (NYSE:ENS) delivered a strong fourth quarter with a 7% revenue growth, marking the second highest revenue quarter in the company's history.
The company achieved record adjusted diluted EPS of $1.86, excluding 45X benefits, showcasing strong earnings power.
Motive Power margins reached record levels, with maintenance-free products accounting for a record 29% of segment sales.
EnerSys (NYSE:ENS) saw significant growth in Energy Systems, particularly in data centers and a moderate recovery in communications.
The Bren-Tronics acquisition contributed positively to the company's performance, particularly in the Aerospace and Defense markets.
EnerSys (NYSE:ENS) faces near-term friction due to tariff-related disruptions, with a direct tariff exposure of approximately $92 million.
The company anticipates some short-term headwinds from stranded tariffs and shifting customer order patterns.
Motive Power orders were pressured in Q4, with a 14% decline in Motive Power Americas orders year-on-year.
The company has temporarily paused full-year guidance due to uncertainty around reciprocal tariffs and macroeconomic dynamics.
EnerSys (NYSE:ENS) is experiencing slower recovery in Class 8 truck OEM volumes, with ongoing macro uncertainty affecting transportation markets.
Q: Can you explain the EPS growth in the Q1 guidance despite flat revenues? A: Shawn O'Connell, President and COO, explained that the EPS growth is driven by favorable price/mix and the accretive benefit from the Bren-Tronics acquisition. Andrea Funk, CFO, added that despite lower volumes in Motive Power, the EPS is expected to be flat year-over-year due to these factors, offsetting pressures from FX and stranded tariff costs.
Q: Why is EnerSys pausing full-year guidance despite order recovery? A: Andrea Funk, CFO, stated that the pause in guidance is due to the uncertainty surrounding reciprocal tariff negotiations. David Shaffer, CEO, added that they want to ensure clarity on these tariffs before providing full-year guidance, as they could have both positive and negative impacts.
Q: What is the status of the Section 45X tax refund, and are there any delays? A: Andrea Funk, CFO, mentioned that other companies have received their refunds, and EnerSys is experiencing a delay due to IRS staffing issues. They expect to receive the refund soon, with interest accruing in the meantime.
Q: What are EnerSys' plans for inorganic growth given the current economic environment? A: Shawn O'Connell, President and COO, stated that EnerSys is well-positioned with a strong balance sheet to pursue acquisitions. They see opportunities in Aerospace and Defense and are looking for targets that fit their ROIC model, despite current market uncertainties.
Q: Can you provide more details on the Energy Systems segment and potential network expansions? A: Shawn O'Connell, President and COO, noted that there is a recovery in network expansions, driven by the need to address technical debt and AI traffic processing. Investments are being made in upgrading macro sites and central offices, although it's not yet at the scale of past major build-outs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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