Executive Summary
EnerSys reported solid first-quarter results for fiscal 2025 (QQ1), with revenue of approximately $853 million and GAAP net income of $70.1 million ($1.74 basic EPS, $1.71 diluted). Adjusted metrics point to a margin-heavy, cost-conscious business benefiting from IRA-related adjustments and ongoing cost-reduction actions. Energy Systems revenue declined 15% year-over-year, constrained by communications and Class 8 OEM softness, while Motive Power grew 4% on higher volumes and stronger demand for maintenance-free offerings. Specialty revenue fell 6% as Class 8 OEM activity softened, but Aerospace & Defense opportunities and Bren-Tronics’ recent closing provide aerospace/defense upside and accretive earnings timing. Management stressed a multi-segment recovery cadence into the second half of fiscal 2025, highlighted by Energy Systems’ improving backlog, data-center resilience demand, and an anticipated ramp in Motive Power and Specialty volumes, aided by capacity expansions (Missouri TPPL) and new product lines (NexSys lithium, outdoor chargers) as well as the fast-charge storage venture. The company lifted full-year revenue guidance by $60 million and raised adjusted diluted EPS guidance by $0.25, signaling confidence in achieving the midpoint as Bren-Tronics contributions materialize and Energy Systems backlogs normalize. Near-term catalysts include data-center project monetization, resilience-driven network investments (Telco/HFC), and the planned lithium cell gigafactory contingent on DOE funding outcomes. Key risks include macro demand volatility in communications and trucking end markets, integration/timing risk from Bren-Tronics, supply chain dynamics, tariff impacts, and the pace of DOE grant decisions. Overall, EnerSys is positioned to benefit from secular trends in energy storage, electrification, and defense electronics, albeit with some quarterly cadence volatility.
Key Performance Indicators
Key Insights
Revenue: $853.0m (Q1 FY2025); YoY -6.13%, QoQ -6.35%
Gross profit: $239.8m; YoY -0.22%, QoQ -5.78%
Adjusted gross margin: 28.0% (up 120 bps YoY; ex-IRA benefits margin down ~50 bps YoY)
Operating earnings (adjusted): $106.0m; margin 12.4%; YoY margin down ~100 bps due to softness in comms and Class 8 OEM end markets
Adjusted EBITDA: $121.0m; margin 14.2%; YoY margin +70 bps due to IRA benefits
Net income (GAAP): $70.1m; EPS (GAAP basic) $1.74; EPS (diluted) $1.71; YoY EPS growth +6.75%, QoQ +15....
Financial Highlights
Revenue: $853.0m (Q1 FY2025); YoY -6.13%, QoQ -6.35%
Gross profit: $239.8m; YoY -0.22%, QoQ -5.78%
Adjusted gross margin: 28.0% (up 120 bps YoY; ex-IRA benefits margin down ~50 bps YoY)
Operating earnings (adjusted): $106.0m; margin 12.4%; YoY margin down ~100 bps due to softness in comms and Class 8 OEM end markets
Adjusted EBITDA: $121.0m; margin 14.2%; YoY margin +70 bps due to IRA benefits
Net income (GAAP): $70.1m; EPS (GAAP basic) $1.74; EPS (diluted) $1.71; YoY EPS growth +6.75%, QoQ +15.23%
Tax rate (adjusted): 20.8% (vs 17.6% in Q1 FY2024; 11.6% reported)
Backlog: Energy Systems backlog increased for the first time in eight quarters; book-to-bill Energy Systems >1.0 (1.09) in Q1; overall mixture still seasonally soft in Motive Power/ Specialty
Cash flow: Operating cash flow $10.4m; capex $36.1m; free cash flow -$25.7m; net change in cash +$10.7m; cash at end $344.1m; net debt $565m; leverage 1.1x EBITDA
Balance sheet: Cash and equivalents $344.1m; total assets $3.558b; total liabilities $1.747b; equity $1.808b; debt total $897m; long-term debt $867m
Capital allocation: Dividends paid $9.0m; share repurchases $12.0m; Bren-Tronics closed July 26, 2024; Verkor Series C investment; buyback authorization ~$121m remaining; Capex guidance $100-120m (FY2025)
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
852.92M |
-6.13% |
-6.35% |
| Gross Profit |
239.81M |
-0.22% |
-5.78% |
| Operating Income |
98.71M |
10.41% |
1.53% |
| Net Income |
70.11M |
4.96% |
15.10% |
| EPS |
1.74 |
6.75% |
15.23% |
Key Financial Ratios
operatingProfitMargin
11.6%
operatingCashFlowPerShare
$0.26
freeCashFlowPerShare
$-0.64
dividendPayoutRatio
12.9%
Management Commentary
- Demand backdrop evolving toward Energy Systems stabilization and data-center resilience investments, with ES order activity improving and backlog turning positive after eight-quarter lag. Management emphasizes resiliency, price/mix optimization, and cost reductions as near-term margin drivers.
- Bren-Tronics acquisition closed in July 2024, viewed as immediately accretive with defense-oriented expansion of lithium product offerings; integration plan underway to minimize disruption while capturing cross-sell opportunities and synergies in A&D and fast-charge/storage.
- Energy Systems backlogs and price mix actions (contract resets, tier pricing, IRA-related COGS reductions) contributed to a gross margin uplift, but overall ES profitability remains sensitive to high-margin power electronics and volume mix shifts.
- Motive Power remains a bright spot, with 4% revenue growth (volume-driven) and 15.3% adj. operating margin; maintenance-free offerings now represent ~24% of Motive Power sales, up from 19% YoY, supporting efficiency and cost reductions.
- The company is pursuing a second-half recovery in several end markets, including telecommunications, data centers, and private networks, while signaling continued progress on the Missouri TPPL plant and a fast-charge/storage product ramp that could drive material upside in FY2025 and beyond.
- Management highlighted the potential DOE grant for the lithium gigafactory, land acquisition in SC, and collaboration with Verkor as strategic catalysts, but emphasized near-term uncertainty around timing and scope of DOE funding.
This acquisition, which expands our presence in critical defense applications, broadens our lithium product offerings, strengthens our product development capabilities, provides incremental growth opportunities, and is immediately accretive to earnings.
— David Shaffer
We remain cautiously optimistic in our fiscal year 2025 financial targets and are increasing the midpoint of our full-year fiscal 2025 revenue guidance by $60 million and our full-year fiscal 2025 adjusted diluted earnings per share guidance by $0.25 per share to include the incremental benefits of our acquisition of Bren-Tronics.
— Andrea Funk
Forward Guidance
EnerSys raised its FY2025 guidance midpoint: revenue $3.735–$3.885 billion (up $60m from prior), adjusted diluted EPS $8.80–$9.20 (up $0.25), and Q2 revenue guide of $880–$920 million. Outlook drivers include: (1) Energy Systems recovery driven by wireless/datanetwork resilience and data-center demand, with continued benefit from power electronics margin expansion and higher-backlog execution; (2) Motive Power momentum supported by maintenance-free solutions and new NPIs (wireless, outdoor chargers) with expected margin expansion as cost absorption improves post-Missouri expansion; (3) Specialty stabilizing post-Bren-Tronics transition, with aerospace/defense tailwinds and industrial aftermarkets contributing as volumes recover in H2; (4) Bren-Tronics’ incremental revenue and earnings starting L2H FY2025 and accretion from the integration; (5) fast-charge and storage ventures providing near-term operating leverage and potential capex tradeoffs; (6) ongoing IRA credits and tariff considerations affecting cost structure and tax rate; (7) DOE-backed lithium gigafactory project, contingent on grant timing and requirements. Risks to watch include macro demand volatility (communications and Class 8 OEM), integration risk from Bren-Tronics, potential supply chain disruptions, tariffs and policy shifts, and the timing and magnitude of IRA monetization. Overall, management appears confident in achieving the full-year targets, with a path to ESG-driven growth and a favorable longer-term energy-storage cycle.