Enerpac Tool Group delivered a solid fourth quarter and an improved full-year 2024 backdrop despite a soft general industrial market. In Q4 2024, revenue was $158.7 million with a gross margin of 48.8% and operating margin of 18.9%, driven by a mix shift toward services in ITS and ongoing efficiency gains. For the full year, Enerpac achieved organic revenue growth of 2.2% with ITS at 2.7% and a gross margin expansion of 180 basis points to 51.1%, aided by ASCEND-related improvements and a favorable product/service mix. Adjusted EBITDA rose 8% year over year to 25.0% margin, and free cash flow reached $70 million (conversion of 82% of net earnings), highlighting strong cash generation as the company completes the ASCEND transformation. Management introduced a disciplined growth and efficiency roadmap (PEP) to continue margin expansion, cost discipline, and higher shareholder value, while signaling growth potential from the DTA acquisition, which complements Enerpac’s heavy lifting technology with horizontal movement capabilities, capacity expansion outside Europe, and aftermarket revenue opportunities.
For fiscal 2025, the company guided to organic revenue growth of 0% to 2% and total net sales of $610–625 million including full-year DTA contributions (midpoint +5% vs. FY2024). Adjusted EBITDA is guided to $150–160 million (midpoint ~25.1% margin). Excluding DTA, the margin target implies a ~25.5% EBITDA margin for the base business. Free cash flow is projected at $85–95 million with capex of $19–24 million, reflecting higher onetime HQ build costs. The combination of continued margin discipline (PEP), selective pricing, product launches, and geographic expansion (APAC and Europe via ECX) underpins the investment thesis, though DTA introduces initial margin dilution in year one. Investors should monitor demand in wind and rail verticals, infrastructure project pipelines (noting permitting and labor constraints), DTA integration progress, and the cadence of share repurchases versus deleveraging needs.