EnerSys (NYSE:ENS) Posts Q1 Sales In Line With Estimates But Quarterly Revenue Guidance Misses Expectations

Battery manufacturer EnerSys (NYSE:ENS) met Wall Street’s revenue expectations in Q1 CY2025, with sales up 7% year on year to $974.8 million. On the other hand, next quarter’s revenue guidance of $850 million was less impressive, coming in 7% below analysts’ estimates. Its non-GAAP profit of $2.97 per share was 6.8% above analysts’ consensus estimates.

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"EnerSys ended Fiscal Year 2025 with a strong fourth quarter, demonstrating the earnings power of our balanced business," said David M. Shaffer, EnerSys Chief Executive Officer.

Company Overview

Supplying batteries that power equipment as big as mining rigs, EnerSys (NYSE:ENS) manufactures various kinds of batteries for a range of industries.

Sales Growth

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Regrettably, EnerSys’s sales grew at a sluggish 3.2% compounded annual growth rate over the last five years. This was below our standard for the industrials sector and is a tough starting point for our analysis.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. EnerSys’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 1.2% annually. EnerSys isn’t alone in its struggles as the Renewable Energy industry experienced a cyclical downturn, with many similar businesses observing lower sales at this time.

We can dig further into the company’s revenue dynamics by analyzing its number of units sold. Over the last two years, EnerSys’s units sold averaged 3.6% year-on-year declines. Because this number is lower than its revenue growth, we can see the company benefited from price increases.

This quarter, EnerSys grew its revenue by 7% year on year, and its $974.8 million of revenue was in line with Wall Street’s estimates. Company management is currently guiding for flat sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 5.4% over the next 12 months. While this projection suggests its newer products and services will fuel better top-line performance, it is still below average for the sector.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

EnerSys has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 8.8%, higher than the broader industrials sector.

Analyzing the trend in its profitability, EnerSys’s operating margin rose by 5.6 percentage points over the last five years, as its sales growth gave it operating leverage.

In Q1, EnerSys generated an operating profit margin of 13.5%, up 4.6 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

EnerSys’s EPS grew at a spectacular 16.8% compounded annual growth rate over the last five years, higher than its 3.2% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into EnerSys’s earnings to better understand the drivers of its performance. As we mentioned earlier, EnerSys’s operating margin expanded by 5.6 percentage points over the last five years. On top of that, its share count shrank by 5.5%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For EnerSys, its two-year annual EPS growth of 38% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q1, EnerSys reported EPS at $2.97, up from $2.08 in the same quarter last year. This print beat analysts’ estimates by 6.8%. Over the next 12 months, Wall Street expects EnerSys’s full-year EPS of $10.19 to stay about the same.

Key Takeaways from EnerSys’s Q1 Results

We enjoyed seeing EnerSys beat analysts’ EBITDA expectations this quarter. We were also happy its EPS outperformed Wall Street’s estimates. On the other hand, its revenue guidance for next quarter missed and its EPS guidance for next quarter fell short of Wall Street’s estimates as well. Overall, this was a mixed quarter with guidance weighing on shares. The stock traded down 1.7% to $93.75 immediately after reporting.

EnerSys’s latest earnings report disappointed. One quarter doesn’t define a company’s quality, so let’s explore whether the stock is a buy at the current price. If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.