EnerSys delivered a positive third quarter, with results that outpaced Wall Street’s expectations and a share price increase following the announcement. Management attributed the performance to robust growth in data center and aerospace and defense markets, as well as continued strength in its Energy Systems segment. CEO Shawn O’Connell highlighted operational improvements from the company’s EnerGize strategic framework, noting, “We are reallocating resources to higher impact projects, and we are focusing on where we have a right to win.” The company also benefited from cost initiatives and new Centers of Excellence, which improved manufacturing agility and reduced validation times for new components.
Is now the time to buy ENS? Find out in our full research report (it’s free for active Edge members).
EnerSys (ENS) Q3 CY2025 Highlights:
- Revenue: $951.3 million vs analyst estimates of $890.3 million (7.6% year-on-year growth, 6.9% beat)
- Adjusted EPS: $2.56 vs analyst estimates of $2.35 (8.8% beat)
- Adjusted EBITDA: $146 million vs analyst estimates of $132.3 million (15.3% margin, 10.3% beat)
- Revenue Guidance for Q4 CY2025 is $940 million at the midpoint, above analyst estimates of $927.1 million
- Adjusted EPS guidance for Q4 CY2025 is $2.76 at the midpoint, above analyst estimates of $2.55
- Operating Margin: 9.7%, down from 11.2% in the same quarter last year
- Sales Volumes rose 3% year on year (-3% in the same quarter last year)
- Market Capitalization: $5.11 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 Q3 Earnings Call
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Sherif Elmaghrabi (BTIG) asked about the impact of tariffs and customer order patterns by end market. CEO Shawn O’Connell clarified that the communications sector saw front-loaded orders unrelated to tariffs, while Motive Power is returning to pre-pandemic order cycles.
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Brian Drab (William Blair & Company) questioned the sustainability of gross margins and the outlook for margin recovery. CFO Andrea Funk explained gross margins have stabilized, with ongoing improvements expected, though lithium ramp and tariffs will create near-term pressure.
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Brian Drab (William Blair & Company) also asked about data center revenue specifics and product mix. Funk noted 29% year-over-year growth, led by lead-acid batteries, while O’Connell highlighted future expansion into lithium and advanced products.
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Alfred Moore (ROTH Capital Partners) inquired about the communications segment outside of a major customer and network build-out trends. O’Connell said demand is driven by network refreshes and higher power needs, with ongoing but measured growth.
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Noah Kaye (Oppenheimer) asked how restructuring and productivity gains will impact operating margins. Funk responded that margin expansion is expected as cost actions ramp and demand in key segments remains healthy.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be focused on (1) evidence that cost-saving measures and Centers of Excellence deliver sustained margin improvement, (2) ongoing momentum in data centers and aerospace and defense as secular tailwinds persist, and (3) signs of Motive Power volume recovery alongside successful mitigation of lithium cost pressures. Updates on the lithium cell factory and further product introductions will also be closely watched.
EnerSys currently trades at $138.50, up from $126.85 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members).
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