EnerSys delivered second quarter results that were well received by the market, as management pointed to contributions from recent acquisitions, operational restructuring, and resilient demand in key end markets. CEO Shawn O’Connell described the EnerGize strategic framework as central to recent progress, citing early recovery in U.S. communications and data center deployments. Management acknowledged that volume softness, particularly in transportation and forklift segments, was primarily driven by tariff-related uncertainty, but highlighted progress in shifting to more agile operating models and product mixes. Executive Vice President and CFO Andrea Funk noted, “We expect new lift truck demand to improve, though Q2 will remain impacted as customers continue to navigate this trade uncertainty.”
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EnerSys (ENS) Q2 CY2025 Highlights:
- Revenue: $893 million vs analyst estimates of $848.1 million (4.7% year-on-year growth, 5.3% beat)
- Adjusted EPS: $2.08 vs analyst estimates of $2.05 (1.3% beat)
- Adjusted EBITDA: $123.3 million vs analyst estimates of $127.6 million (13.8% margin, 3.4% miss)
- Revenue Guidance for Q3 CY2025 is $890 million at the midpoint, below analyst estimates of $901.1 million
- Adjusted EPS guidance for Q3 CY2025 is $2.38 at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 9.7%, down from 10.7% in the same quarter last year
- Sales Volumes fell 1% year on year (-3% in the same quarter last year)
- Market Capitalization: $3.69 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From EnerSys’s Q2 Earnings Call
- Alfred Shopland Moore (ROTH Capital): Asked about the pace and sustainability of the recovery in communications. CEO Shawn O’Connell highlighted that broadband and telecom upgrades are underway, with DOCSIS 4.0 rollouts requiring more power and driving incremental demand.
- Noah Duke Kaye (Oppenheimer & Co): Inquired about the margin uplift from cost savings and segment mix. CFO Andrea Funk explained $80 million in savings should yield significant margin expansion, but emphasized these changes are strategic rather than just cost-driven.
- Brian Paul Drab (William Blair): Questioned the intentions behind the large share buyback authorization. O’Connell clarified that the buyback is opportunistic and does not signal a shift away from investing in core and adjacent growth initiatives such as the lithium plant.
- Noah Duke Kaye (Oppenheimer & Co): Sought details on early wins from the new strategic framework. O’Connell cited supply chain specialization via centers of excellence and initial IoT-enabled battery shipments as examples of progress in efficiency and product development.
- Brian Paul Drab (William Blair): Asked about the expected gross margin progression for the next quarter. Funk noted all business lines should see margin improvement as policy uncertainty abates, with Motive Power closing the gap to prior year levels.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) the realization of targeted cost savings from EnerGize and the centers of excellence, (2) stabilization and recovery in tariff-sensitive Motive Power and transportation segments, and (3) the growth trajectory of specialty and defense offerings following recent acquisitions. Execution on new product launches and the company’s ability to offset tariff headwinds will also be important indicators.
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