EnerSys (ENS) Q1 2027 earnings summary

Executive summary

• Achieved record Q1 FY2027 results with net sales of $936 million, up 4.8%–5% year-over-year, driven by favorable price mix, higher volumes, and strong performance in data centers, communications, and aerospace & defense, offsetting softness in material handling.

• Adjusted diluted EPS rose to $3.66, up 64%–65% year-over-year, with significant margin expansion and strong free cash flow conversion.

• Advanced strategic growth initiatives, including a new U.S. lithium manufacturing facility in South Carolina, supported by DOE grants and state/local incentives.

• Returned $59.6 million to shareholders through $50 million in share repurchases and $9.6 million in dividends, with a 10% dividend increase and expanded buyback authorization.

• Board approved restructuring actions, including facility closures and shifting production to U.S. sites, with U.S. battery production to reach 50% of total.

Financial highlights

• Gross profit reached $313 million, up 23.8%–24%, with gross margin at 33.5%, up 510 bps year-over-year; excluding one-time items, gross margin rose to 25.2%–28.5%.

• Adjusted operating earnings increased 47% to $179 million; adjusted EBITDA up 50% to $196 million; adjusted diluted EPS up 64%–65%.

• Free cash flow was $218 million, a turnaround from a prior year outflow, with free cash flow conversion at 187%.

• Cash and equivalents increased to $531 million; net debt reduced to $522 million; net leverage ratio improved to 0.8x.

• Received $115 million U.S. federal tax refund and $30.9 million in tariff refunds, boosting cash flow.

Outlook and guidance

• Q2 FY27 net sales expected between $955 million and $995 million; adjusted diluted EPS guidance: $3.15–$3.25 (including IRC 45X), $1.95–$2.05 (excluding IRC 45X), up 21%–25% year-over-year.

• FY27 capital expenditures projected at ~$70 million; margin expansion expected to drive earnings growth in 1H, with topline growth in 2H.

• Stronger revenue growth anticipated in the second half of fiscal 2027, driven by material handling recovery and continued momentum in key markets.