EnerSys posted a resilient Q2 2025 in a mixed macro environment, delivering revenue of $883.7 million and a net income of $82.3 million, with adjusted gross margins expanding to 28.7% (up 210 bps year over year). Management cited strength in Motive Power and the accretive Bren-Tronics integration as key drivers of margin expansion, while Energy Systems faced softer demand in communications and Class 8 OEM markets. Despite a 2% YoY revenue decline, the company achieved sequential revenue growth in Energy Systems for the first time in six quarters and reported meaningful progress on strategic initiatives, including the fast-charge/storage pilot and the planned lithium‑ion gigafactory. Management maintained a constructive view into the second half of fiscal 2025, albeit with modestly lower full-year revenue guidance to account for macro headwinds and project delays in fast charge and storage.
The quarter featured material strategic milestones: a $200 million Department of Energy award to partially fund EnerSys' planned lithium giga factory in Greenville, SC; Bren-Tronics integration delivering elevated revenue and improved margins; and the first fast-charge storage system installation at a launch customer site. EnerSys remains focused on product-mix optimization, automation, and scaling high-margin growth platforms (lithium solutions, data center applications, and energy management software). Near-term guidance is calibrated to reflect a slower pace in Class 8 OEM spending and continued but easing headwinds in communications, with the company expecting improvement in energy systems and motive power through H2 2025.
Overall, EnerSys presents a differentiated growth profile within the Industrials/Electrical Equipment space: a diversified portfolio across Energy Systems, Motive Power, and Specialty, a constructive backlog trajectory in key segments, strong liquidity with a cash balance of about $408 million and net debt around $825 million, and a capital-allocation plan that includes ongoing buybacks and selective bolt-on acquisitions. The combination of earnings leverage from cost actions, Bren-Tronics synergies, and DoD/DOE programs supports an improving earnings trajectory into fiscal 2026, though near-term execution risks around UL certification timing, regulatory developments, and macro volatility warrant close monitoring.