Enerpac Tool Group (EPAC) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 FY25 rose 2.3% year-over-year to $145.2 million, with organic sales down 0.8% due to industrial macro softness and a 2.7% decline in product sales offset by 5.6% service revenue growth.

• Adjusted EBITDA decreased 2% to $34.3 million, while adjusted EPS increased 3% to $0.40; operating profit improved due to lower SG&A and restructuring costs.

• Gross profit margin declined 90 bps to 51.4% due to lower Americas sales and higher service mix.

• Integration of the DTA acquisition contributed to revenue and expanded the Heavy Lifting Technology portfolio, with strong initial order volume and commercial rollout beyond Europe.

• Continuous improvement initiatives (PEP, ECX, ASCEND) and supply chain optimization are driving operational efficiency and margin improvement.

Financial highlights

• IT&S segment net sales grew 2.3% to $140.1 million; organic sales declined 1.0%.

• Service revenue rose 5.6% while product sales declined 3%.

• Adjusted EBITDA margin fell 100 bps to 23.6%; adjusted SG&A held flat at 29% of revenue.

• Free cash flow improved by $11 million year-over-year, with $2.8 million generated in the quarter.

• Cash and equivalents at quarter-end were $130.7 million; total liquidity $529 million.

Outlook and guidance

• Fiscal 2025 guidance maintained: net sales of $610–$625 million, adjusted EBITDA of $150–$160 million, and free cash flow of $85–$95 million.

• Organic sales growth expected at 0–2%, with 5% total revenue and adjusted EBITDA growth at midpoint.

• Full-year 2025 sales from DTA expected at EUR 20 million.

• Guidance assumes no broad-based global recession and stable key FX rates.

• Focus remains on organic growth, margin expansion, and disciplined capital deployment.