EnerSys delivered a resilient finish to fiscal year 2024, balancing a material year-over-year revenue decline with meaningful margin expansion driven by inflation-reduction-act (IRA) benefits and aggressive cost-improvement actions. Q4 net sales of $911 million were down 8% YoY, but the company highlighted diversified end markets helping offset telco/broadband softness. For the full year, revenue totaled $3.6 billion, down 3% YoY, yet adjusted gross margin expanded to 28.0% in Q4 (24.1% ex-IRA) and adjusted operating earnings rose to $109 million in the quarter (adjusted operating margin 12%), supported by $36 million of IRA-driven COGS reductions and disciplined pricing. Management underscored ongoing margin discipline through Energy Systems restructuring, cost actions, and a broader push into high-growth data-center and lithium ecosystems. EnerSys reaffirmed its long-range target framework, including a path to 2027 EPS of $11–$13 and a strategic emphasis on data-center power, maintenance-free motive power, and new ventures in fast charging and energy storage.
The company also signaled substantial near-term investments and protective measures: a $47 million hard annualized cost savings program for FY2025 within Energy Systems (versus ~$40 million already realized in FY2024), a planned Bren-Tronics acquisition to accelerate lithium product offerings and defense applications, and continued progress toward domestic lithium manufacturing readiness. While near-term revenue remains exposed to telecom/broadband cycles, EnerSys projects a trough-to-recovery trajectory in Energy Systems during 2025, with Motive Power and Specialty markets expected to remain healthy. The management team framed 2025 guidance around resilient volumes in Motive Power and Specialty, normalization of telecom/broadband spend, and ongoing margin expansion from Energy Systems. Investors should monitor telco/broadband spend recovery, the Bren-Tronics integration, and IRA-related tax refunds expected in FY2025.