Company Overview - EnerSys shares have increased by approximately 2.8% since the last earnings report, outperforming the S&P 500 [1] - Recent estimates for EnerSys have trended downward, with a consensus estimate shift of -13.23% [2] Performance Metrics - EnerSys has a Growth Score of B and a Momentum Score of C, while it received an A grade for value, placing it in the top 20% for this investment strategy [3] - The overall VGM Score for EnerSys is A, indicating strong performance across multiple investment strategies [3] Outlook - The downward trend in estimates suggests a negative outlook for EnerSys, reflected in its Zacks Rank of 4 (Sell), indicating expectations of below-average returns in the coming months [4] Industry Comparison - EnerSys is part of the Zacks Manufacturing - Electronics industry, where Emerson Electric has seen a 9.6% increase in shares over the past month [5] - Emerson Electric reported revenues of $4.43 billion for the last quarter, with a year-over-year change of +1.3% and an EPS of $1.48, up from $1.36 a year ago [5] - For the current quarter, Emerson Electric is expected to post earnings of $1.51 per share, reflecting a +5.6% change from the previous year [6]

Core Viewpoint - EnerSys (NYSE: ENS) presents a significant valuation discrepancy between analyst ratings, which suggest a "Strong Buy," and quant ratings, which indicate a "Sell" [1] Company Analysis - EnerSys is not considered a flashy stock, yet it warrants closer examination due to the contrasting opinions on its valuation [1] Analyst Background - The analyst has a strong foundation in financial modeling, valuation, and data analysis, holding certifications from the Corporate Finance Institute (CFI) in Canada [2] - The focus is on technology, infrastructure, and internet services sectors, emphasizing companies with strong fundamentals and growth potential [2]

Core Insights - The Battery Cyclers Market is projected to grow from USD 1.2 Billion in 2024 to USD 1.9 Billion by 2030, with a CAGR of 8.10% [1][14]. Market Drivers - The increasing adoption of electric vehicles (EVs) and renewable energy storage systems is driving demand for efficient battery testing solutions, as battery cyclers are essential for simulating real-world charge-discharge scenarios [2][6]. - The establishment of battery manufacturing facilities, especially in the Asia-Pacific region, is amplifying the demand for high-capacity and multi-channel cyclers [3]. - Advancements in battery chemistries, such as solid-state and lithium-sulfur, necessitate sophisticated testing systems, further boosting market demand [3][7]. Market Challenges - The high capital investment required for advanced battery cyclers and testing infrastructure poses a significant challenge, particularly for smaller companies and research institutions [9][10]. - Additional costs related to supporting infrastructure and maintenance increase the total cost of ownership, which can hinder innovation in emerging economies [10]. Market Trends - The integration of advanced technologies like AI, IoT, and data analytics is enhancing battery testing outcomes, enabling predictive maintenance and remote monitoring [11][12]. - Cloud-based platforms are facilitating centralized access to performance data, promoting collaboration across R&D teams and transforming battery cyclers into intelligent, networked platforms [12]. Key Market Players - Notable companies in the battery cyclers market include Kikusui Electronics, EnerSys, Arbin Instruments, MTI Instruments, National Instruments, BIT BUDDY, Neware Technology, and Zhengzhou Dazhong Machinery [16].

Enersys (ENS) reported fourth-quarter fiscal 2025 (ended March 31, 2025) adjusted earnings of $2.97 per share, which surpassed the Zacks Consensus Estimate of $2.78. The bottom line increased 43% year over year.Enersys’ net sales of $974.8 million missed the consensus estimate of $975 million. The top line increased 7% year over year, driven by strength in the specialty and communications markets.  While organic sales increased 4%, acquisitions boosted sales by 4% and pricing had a positive impact of 1%. Fo ...

Core Insights - EnerSys reported Q4 FY2025 results with a 7% year-over-year revenue increase to $975 million and adjusted diluted EPS of $1.86, marking a record high [1] - The company experienced significant margin expansion across all segments and resilient order trends despite tariff challenges, alongside a leadership transition for strategic execution [1] Margin Expansion - Adjusted gross margin increased by 320 basis points to 31.2%, while adjusted operating margin improved by 360 basis points to 11.1% [2] - Motive Power achieved a record 29% sales mix from maintenance-free products, and the Specialty segment benefited from the Brentronics acquisition, contributing a 22% positive revenue impact [2][3] Tariff Mitigation - Direct tariff exposure was reduced to $92 million from $160 million following a U.S. administration update, with only 5% of U.S. supply sourced from China [4][5] - The company established a cross-functional task force for risk management and aims for full mitigation through pricing, sourcing, and operational expense reductions [4][5] Capital Allocation - EnerSys ended the year with $343 million in cash and equivalents, a leverage ratio of 1.3x EBITDA, and free cash flow of $105 million [6] - The company repurchased $40 million in shares and has approximately $200 million remaining on its buyback authorization, while seeking bolt-on acquisitions [6][7] Future Outlook - For Q1 FY2026, management projects net sales between $830 million and $870 million and adjusted diluted EPS of $2.03 to $2.13, identifying this quarter as the likely revenue and EPS trough for the year [9] - Full-year guidance for FY2026 is suspended pending clarity on tariff policy, but adjusted operating earnings growth is expected to outpace revenue growth [9]

Financial Data and Key Metrics Changes - EnerSys reported fourth quarter net sales of $975 million, a 7% increase from the prior year, driven by a 4% increase in organic volume and a 4% positive impact from the Brentronics acquisition [33][34] - Adjusted diluted EPS for the fourth quarter was a record $1.86 per share, up $0.66 from the prior year, demonstrating strong earnings power [35][36] - Full year net sales reached $3.6 billion, up 1% year over year, with adjusted diluted EPS increasing by 22% to $10.15 per share [35][36] Business Line Data and Key Metrics Changes - Energy Systems revenue increased 8% year over year to $399 million, with adjusted operating earnings growing for the fifth consecutive quarter [36][37] - Motive Power revenue remained flat at $392 million, with adjusted operating earnings up 15% to $67 million, driven by favorable price mix despite flat volumes [38][39] - Specialty revenue increased 21% year over year to $178 million, with adjusted operating earnings nearly doubling from the prior year [40][41] Market Data and Key Metrics Changes - Energy Systems saw positive order rates for three consecutive quarters, driven by data centers and communications [18][19] - Motive Power orders were stable to promising, with April ITA truck orders up over 19% compared to last year's historical lows [22][23] - Specialty markets, particularly aerospace and defense, showed robust demand, although Class eight truck OEM volume recovery was slower than anticipated [25][26] Company Strategy and Development Direction - The company is focusing on energy security and labor scarcity, aiming to help customers manage energy costs and consumption through maintenance-free products and automation [11][12] - EnerSys is committed to optimizing its manufacturing footprint and investing in high-speed, lower-cost production capacity [9][28] - The company is also enhancing its lithium strategy in alignment with national priorities, particularly in defense readiness and domestic supply assurance [30][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to weather tariff impacts and potential economic downturns, citing a resilient balance sheet and operational flexibility [15][17] - The company anticipates Q1 will be the low point of the fiscal year, with expectations for revenue recovery driven by maintenance-free offerings and strong demand in A&D and data center markets [46][47] - Management is closely monitoring macroeconomic dynamics and adjusting operational strategies to mitigate risks associated with tariffs and supply chain disruptions [12][47] Other Important Information - The company has established a dedicated tariff task force to analyze and mitigate tariff impacts on its operations [12][13] - EnerSys is actively reshaping its manufacturing footprint, including closing a flooded lead acid battery facility in Mexico to optimize costs [28][29] - The company has a strong cash position, with $932 million on hand, and plans to continue evaluating acquisition opportunities [42][44] Q&A Session Summary Question: Clarification on Q1 guidance and EPS growth - Management explained that Q1 is expected to reflect lower volumes in Motive Power, with EPS guidance up about $0.10 year on year, influenced by favorable price mix and tariff impacts [54][60][62] Question: Order recovery and full year guidance pause - Management noted that while orders in Motive Power were down 14% year on year, overall orders were flat, and the decision to pause full year guidance was due to awaiting clarity on reciprocal tariff negotiations [64][68] Question: Updates on Section 45X and IRS interactions - Management confirmed that other companies have received their Section 45X checks, and they expect to receive their refund soon, attributing delays to IRS staffing issues [81][82] Question: Thoughts on lithium plant funding - Management remains optimistic about the lithium plant funding, emphasizing strong support from the administration and ongoing development of cell technology [85][87]

Financial Data and Key Metrics Changes - EnerSys reported fourth quarter net sales of $975 million, a 7% increase year-over-year, driven by a 4% increase in organic volume and a 4% positive impact from the Brentronics acquisition [30][34] - Adjusted diluted EPS for the fourth quarter was a record $1.86 per share, up $0.66 per share versus the prior year, demonstrating strong earnings power [32][33] - Full year net sales reached $3.6 billion, up 1% year-over-year, with adjusted diluted EPS increasing by 22% to $10.15 per share [33][34] Business Line Data and Key Metrics Changes - Energy Systems revenue increased 8% year-over-year to $399 million, with adjusted operating earnings growing for the fifth consecutive quarter [34][35] - Motive Power revenue remained flat at $392 million, with adjusted operating earnings up 15% year-over-year, driven by a favorable price mix [36] - Specialty revenue increased 21% year-over-year to $178 million, significantly benefiting from the Brentronics acquisition [37] Market Data and Key Metrics Changes - Energy Systems saw a 22% year-on-year increase in quarterly data center revenue, indicating strong market momentum [17][34] - Motive Power experienced a 14% year-over-year decline in orders, reflecting the impact of tariff disruptions [60][62] - Specialty markets, particularly aerospace and defense, showed robust demand, although Class eight truck OEM volume recovery was slower than anticipated [22][37] Company Strategy and Development Direction - The company is focusing on energy security and labor scarcity, aiming to help customers manage energy costs and consumption through maintenance-free products and automation [10][11] - EnerSys is committed to optimizing its manufacturing footprint and investing in high-speed, lower-cost production capacity to strengthen its foundation for future growth [7][26] - The company plans to deepen customer relationships and expand service capabilities while maintaining operational efficiencies [10][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic challenges and tariff impacts, emphasizing a disciplined approach to operations [11][43] - The outlook for the first quarter of fiscal 2026 anticipates typical seasonal volume softness in Motive Power, with expectations for recovery in subsequent quarters [43][44] - Management is awaiting clarity on reciprocal tariff negotiations before providing full-year guidance, indicating a cautious but optimistic approach to future performance [64][65] Other Important Information - The company has established a tariff task force to analyze and mitigate tariff impacts, with a focus on maintaining operational flexibility [11][12] - EnerSys is actively reshaping its manufacturing footprint, including closing a facility in Mexico and transitioning production to Kentucky, which is expected to optimize costs [26][27] - The company is optimistic about its domestic lithium battery manufacturing plans, with ongoing discussions with the Department of Energy [28][83] Q&A Session Summary Question: Clarification on Q1 guidance and EPS growth - Management explained that the Q1 guidance reflects lower volumes in Motive Power, with EPS growth driven by favorable price mix and operational efficiencies [51][59] Question: Order recovery and full-year guidance pause - Management noted that while there has been a rebound in orders, the pause in full-year guidance is due to uncertainty surrounding tariff negotiations [61][64] Question: Section 45X tax credits and IRS interactions - Management confirmed that other companies have received their tax credits and they expect to receive their refund soon, attributing delays to IRS staffing issues [78][79] Question: Opportunities for inorganic growth - Management indicated that the current economic uncertainty may create opportunities for acquisitions, emphasizing a proactive approach to identifying targets that fit their strategic criteria [94]

Core Insights - EnerSys reported revenue of $974.8 million for the quarter ended March 2025, reflecting a 7% increase year-over-year, with EPS at $2.97 compared to $2.08 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate by -0.06%, while the EPS exceeded the consensus estimate by +6.83% [1] Financial Performance Metrics - Specialty Net Sales reached $177.80 million, surpassing the estimated $164.85 million, marking a +21.4% change year-over-year [4] - Motive Power Net Sales were reported at $392.30 million, slightly below the average estimate of $396.19 million, indicating a -0.6% change year-over-year [4] - Energy Systems Net Sales totaled $398.80 million, compared to the average estimate of $415.83 million, reflecting an +8% change year-over-year [4] - Operating Earnings for Energy Systems were $27 million, below the estimated $30.23 million [4] - Operating Earnings for Motive Power were $57.90 million, compared to the average estimate of $61.79 million [4] - Operating Earnings for Specialty were reported at $10.20 million, below the average estimate of $12.40 million [4] Stock Performance - EnerSys shares have returned +19.4% over the past month, outperforming the Zacks S&P 500 composite's +12.7% change [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Core Insights - EnerSys reported quarterly earnings of $2.97 per share, exceeding the Zacks Consensus Estimate of $2.78 per share, and showing an increase from $2.08 per share a year ago, representing an earnings surprise of 6.83% [1] - The company posted revenues of $974.8 million for the quarter ended March 2025, slightly missing the Zacks Consensus Estimate by 0.06%, but up from $910.7 million year-over-year [2] - EnerSys has outperformed the S&P 500 with a 6.2% increase in shares since the beginning of the year, compared to the S&P 500's 1% gain [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.36, with expected revenues of $904.23 million, and for the current fiscal year, the EPS estimate is $10.19 on revenues of $3.78 billion [7] - The estimate revisions trend for EnerSys is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Manufacturing - Electronics industry, to which EnerSys belongs, is currently ranked in the top 28% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

Q4'25 & FY'25 Earnings MAY 21, 2025 May 2025 2 Q4'25 & FY'25 Overview D AV E S H A F F E R Forward Looking Statements As a reminder, we will be presenting certain forward-looking statements on this call that are based on Management's current expectations and views regarding future events and operating performance and are subject to uncertainties and changes in circumstances. Our actual results may differ materially from the forward- looking statements for a number of reasons. Our forward-looking statements ...