EnerSys (ENS) Q3 2025 Earnings Report

- Revenue: $906.2m (+5% YoY; +2.5% QoQ via 4Q 2023–Q3 2025 trend)
- Gross profit: $298.2m; gross margin 32.9% (vs. 32.9% reported; YoY margin expansion driven by mix and pricing)
- Adjusted operating earnings: $155.0m; adj. operating margin 17.1% (YoY margin up ~60 bps ex-IRA)
- Adjusted EBITDA: $171.0m; adj. EBITDA margin 18.9% (up ~220–bp YoY)
- Net income: $114.8m; net income margin ~12.7%
- GAAP EPS: $2.92; Adjusted EPS: $3.12 (above high end of guidance)
- Free cash flow: $57.0m in the quarter; cash balance $463.2m; net debt $0.852b; leverage ~1.5x EBITDA
- Full-year guidance (FY2025): Revenue $3.603–$3.643b; Adjusted diluted EPS $9.97–$10.07; Capex ~$120m; Q4 net sales guided $0.96–$1.0b.

Key management themes and quotes from the conference call:
- Strategy and execution: Dave Shaffer emphasized a return-to-growth in Q3, margin expansion pre-IRA, and ongoing transformation to position EnerSys for growth at lower costs. Quote: "Q3 marked a return to growth. We executed well, increasing profitability, and improving but still mixed market conditions." (Speaker: David Shaffer)
- Brentronics integration: Shawn O’Connell highlighted Brentronics’ positive contribution to revenue and earnings and the completion of major U.S. integration milestones. Quote: "Brentronics acquisition is contributing to revenue and earnings above our expectations, and all major U.S. integration milestones are complete." (Speaker: Shawn O’Connell)
- End-market recovery dynamics: The team called out U.S. Communications demand recovering gradually, with early signals of Class 8 OEM transportation strength; evidence of improved book-to-bill and backlog, particularly in Motive Power and energy systems in the Americas. They also flagged FX headwinds and a one-time EMEA plant disruption as factors constraining near-term performance.
- Margin trajectory and guidance: ES margin expansion is a core driver; the company targeted 8–10% ES margin in the near term, with longer-term 12–15% for higher-end scenarios, contingent on absorption and cost controls. They also reinforced that Q4 could be one of EnerSys’ strongest quarters on record, supported by improving demand and structural cost improvements.
- Tariffs and policy: Leaders described a proactive, war-room approach to tariffs and supply chain risk, emphasizing pricing discipline, inventory optimization, and U.S. domestic-supply alignment (including potential TPPL transitions and a lithium Gigafactory).

EnerSys enters the next phase of its growth trajectory with a diversified, mission-critical product line, meaningful margin expansion, and a strategic M&A-driven growth engine (Brentronics) that should support higher profitability and cash generation over the next 12–24 months. Q3 reinforced a stepped-up path to growth, with YoY revenue up 5% and adj. EBITDA up 220 basis points YoY, while management guided for a robust Q4 and full-year earnings growth driven by improved end-market demand and structural cost improvements. The main thesis hinges on: (i) continued recovery in U.S. communications and data-center spending, (ii) accelerating motive power maintenance and TPPL conversions aided by tariff de-risking and product portfolio enhancements, (iii) strong contributions from Brentronics with opportunities for larger, longer-term orders, and (iv) meaningful margin expansion from Missouri plant optimizations and ongoing transformation efforts. Risks include FX volatility, macro demand uncertainty, and policy/tariff dynamics that could delay capex cycles. For investors, EnerSys offers a defensible, high-visibility revenue base with upside optionality from energy storage innovations, a disciplined capital plan, and a clear path to mid-to-high teens percent adjusted EBITDA margins as absorption improves and the Missouri efficiencies mature. Given the guidance and current trajectory, the stock warrants a modest premium to peers focused on industrial electrical equipment and energy storage, with key sensitivity to U.S./EMEA macro developments and policy timelines.