EnerSys faced a challenging fourth quarter, as the company’s revenue growth lagged behind Wall Street expectations. Management cited ongoing weakness in its Motive Power and Transportation segments, which were affected by delayed customer spending and continued softness in capital investments. CEO Shawn O’Connell described the environment as "dynamic," emphasizing that while end markets such as data centers and defense remained resilient, the near-term softness in core industrial sectors weighed on overall performance.
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EnerSys (ENS) Q4 CY2025 Highlights:
- Revenue: $919.1 million vs analyst estimates of $932 million (1.4% year-on-year growth, 1.4% miss)
- Adjusted EPS: $2.77 vs analyst estimates of $2.72 (1.8% beat)
- Adjusted EBITDA: $159.7 million vs analyst estimates of $147.2 million (17.4% margin, 8.5% beat)
- Revenue Guidance for Q1 CY2026 is $980 million at the midpoint, roughly in line with what analysts were expecting
- Adjusted EPS guidance for Q1 CY2026 is $3 at the midpoint, above analyst estimates of $2.92
- Operating Margin: 13.5%, down from 15.7% in the same quarter last year
- Sales Volumes fell 4% year on year (2% in the same quarter last year)
- Market Capitalization: $6.40 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 Q4 Earnings Call
- Noah Kaye (Oppenheimer) asked about scaling the data center pipeline and the timing for lithium product entry. CEO Shawn O’Connell explained that customer trials are set, but a "steady growth" path is more likely than a rapid ramp, given long planning cycles.
- Noah Kaye (Oppenheimer) inquired about normalization of Energy Systems margins. CFO Andrea Funk clarified that project timing and mix shifts would cause some quarter-to-quarter margin variability, but the improvement trajectory should continue.
- Alfred Moore (ROTH Capital) sought an update on the lithium cell factory and government grant status. O’Connell said discussions with the Department of Energy were in final stages, with a focus on secure supply chains and military priorities, but the timeline remains uncertain.
- Brian Drab (William Blair) questioned the drivers behind softness in telecom and broadband. O’Connell and Funk stated that demand signals are positive overall, but quarter-to-quarter results are volatile due to customer budgeting cycles and project phasing.
- Gregory Lewis (BTIG) asked about competitive dynamics and ramp expectations for the lithium UPS solution. O’Connell emphasized a customer-driven trial phase and gradual adoption, noting "there are really only 1 to 2 other credible lithium providers in the space today."
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be monitoring (1) the adoption and scaling of EnerSys’s lithium battery solutions in data centers, (2) the pace of recovery in Motive Power and Transportation demand as delayed customer investments potentially resume, and (3) sustained backlog growth in defense and specialty markets. Progress on operational efficiencies and the finalization of the lithium cell factory plan will also be important to watch.
EnerSys currently trades at $173.70, down from $185.03 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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