ENS

A month has gone by since the last earnings report for EnerSys (ENS). Shares have lost about 9.3% in that time frame, underperforming the S&P 500. But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is EnerSys due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Enersys before we dive into how investors and analysts have reacted as of late. EnerSys reported its first-quarter fiscal 2027 results on Aug. 12.  Its adjusted earnings came in at $3.66 per share, beating the Zacks Consensus Estimate of $2.82 by 29.8%. The bottom line increased 64.1% year over year, aided by margin expansion, IRC 45X benefits and a $30.9 million tariff refund.Net sales of $936 million topped the consensus estimate of $923 million by 1.4% and increased 4.8% year over year. Pricing contributed 3%, foreign currency translation added 1% and organic volume rose 1%. Backlog was flat year over year but increased 2% sequentially. Network & Infrastructure Solutions (NIS) sales rose 9.4% year over year to $428.3 million. Favorable volume and mix reflected strength in power electronics and data-center demand. Volume contributed 5%, price/mix added 4% and currency translation provided a 1% lift.Precision Power Solutions (PPS) sales surged 23.6% to $100.5 million. Volume advanced 16%, price/mix added 7% and acquisitions contributed 1%. Aerospace and defense demand, particularly counter-drone and missile-defense applications, supported the increase. Industrial Mobility Solutions (IMS) sales fell 3.2% year over year to $406.8 million. Volume declined 5% as material-handling demand remained soft, partly offset by recovery in Transportation and improved price/mix.Adjusted operating earnings for IMS declined 10.5% to $37.7 million, with adjusted operating margin contracting 70 basis points to 9.3%. This contrasted with NIS and PPS, where adjusted operating margins expanded 280 and 300 basis points, respectively. Gross profit increased to $313.4 million from $253.2 million, while gross margin expanded 510 basis points to 33.5%. Excluding IRC 45X benefits, gross margin improved 440 basis points to 28.5%.Adjusted operating earnings advanced 47.2% to $178.8 million, with the margin rising 550 basis points to 19.1%. Excluding 45X benefits and tariff refunds, adjusted operating earnings increased 21% and the related margin improved 140 basis points to 10.8%, highlighting underlying operating leverage. First-quarter orders increased 7% year over year, driven by NIS, though they declined 9% sequentially on seasonality. The total book-to-bill ratio was 1.06, with NIS at 1.15, IMS at 1.04 and PPS at 0.73.EnerSys also advanced targeted growth initiatives. Its Fortix 172-kWh battery energy storage system received UL and NFPA 855 approval, while the DataSafe Noir lithium offering launched in June. The company also secured a revised roughly $150 million Department of Energy grant for its planned U.S. lithium cell manufacturing campus. Cash from operating activities totaled $230.2 million, while free cash flow was $217.8 million and free cash flow conversion reached 187%. Cash and cash equivalents stood at $530.7 million at quarter-end, with net debt at $521.5 million and net leverage at 0.8.The company returned $59.6 million to shareholders, including $50 million through share repurchases and $9.6 million through dividends. The board also raised the quarterly dividend 10% to 28.75 cents per share for the second quarter of fiscal 2027. For the second quarter of fiscal 2027, EnerSys expects net sales of $955-$995 million. At the midpoint, this represents 2% year-over-year growth. IRC 45X benefits to cost of sales are projected at $42-$47 million.Adjusted earnings are projected at $3.15-$3.25 per share, with adjusted earnings excluding 45X benefits at $1.95-$2.05. The company expects first-half earnings growth to be driven primarily by margin expansion, followed by greater top-line growth later in fiscal 2027 as material handling recovers and strength continues in data centers, communications, aerospace and defense, and transportation. It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 7.75% due to these changes. At this time, EnerSys has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock has a score of B on the value side, putting it in the second quintile for value investors. Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise EnerSys has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Enersys (ENS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Wall Street closed on a mixed note on Aug. 24, 2026, highlighting a sharp sector divergence. The S&P 500 and Nasdaq were dragged down by heavy sell-offs in tech stocks ahead of NVIDIA’s NVDA highly anticipated fiscal second-quarter earnings report. However, the Dow Jones Industrial Average managed to inch higher as investors rotated out of high-valuation growth names and into defensive blue-chip stocks. With persistent pressure from elevated bond yields and sticky inflation lingering in the background, this market shift underscores a growing preference for stability. Amid this backdrop, steady dividend-growth stocks offer a prudent balance of consistent income, lower volatility, and reliable long-term returns compared to their high-growth counterparts. These dividend-growth stocks boast a consistent track record of raising payouts, underscoring the balance-sheet strength and cash-flow resilience required to navigate a period in which the traditional growth narrative is being reassessed. Stocks with a strong history of year-over-year dividend growth can help build a resilient portfolio with greater potential for capital appreciation compared to simple dividend-paying or high-yield stocks. We have selected five dividend growth stocks — Dell Technologies DELL, Taiwan Semiconductor TSM, Enersys Inc. ENS, Cheesecake Factory CAKE and Hewlett Packard HPE — that could be solid choices for your portfolio. Stocks with a strong history of dividend growth are typically associated with mature companies that are less prone to sharp market swings, allowing them to serve as a hedge against economic or political uncertainty as well as broader market volatility. Their steadily rising payouts provide some measure of downside protection. These companies are generally backed by solid fundamentals, making them attractive long-term dividend-growth investments. Key strengths include durable business models, consistent profitability, expanding cash flows, healthy liquidity, strong balance sheets and attractive valuations. A consistent history of dividend growth underscores the potential for continued growth ahead. Although these stocks do not necessarily have the highest yields, they have outperformed the broader stock market or any other dividend-paying stock for an extended period. As a result, selecting dividend-growth stocks appears to be a winning strategy when other key parameters are taken into account. 5-Year Historical Dividend Growth Greater Than Zero: This selects stocks with a solid dividend growth history. 5-Year Historical Sales Growth Greater Than Zero: This represents stocks with a strong record of growing revenues. 5-Year Historical EPS Growth Greater Than Zero: This represents stocks with a solid earnings growth history. Next 3-5 Year EPS Growth Rate Greater Than Zero: This represents the rate at which a company’s earnings are expected to grow. Improving earnings should help companies sustain dividend payments. Price/Cash Flow Less Than M-Industry: A ratio lower than the industry median indicates that a stock is undervalued within its industry, meaning an investor would pay less for the company’s cash flow. 52-Week Price Change Greater Than S&P 500 (Market Weight): This ensures that a stock has appreciated more than the S&P 500 over the past year. Top Zacks Rank: Stocks with a Zacks Rank #1 (Strong Buy) or 2 (Buy) generally outperform their peers in all types of market environments. Growth Score of B or better: Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best upside potential. These few criteria alone narrowed the universe from more than 7,700 stocks to just five. Here are the five stocks that fit the bill: Texas-based Dell Technologies is a leading provider of servers, storage and personal computers. The company’s IT solutions support customers in traditional infrastructure and multi-cloud environments. The Zacks Consensus Estimate for DELL’s fiscal 2027 revenues suggests a year-over-year improvement of 54.6%. The stock boasts a long-term (three-to-five years) earnings growth rate of 26.40%. It has an annual dividend yield of 0.57%. DELL currently carries a Zacks Rank #2 and has a Growth Score of A. Headquartered in Taiwan, Taiwan Semiconductor is the world's largest dedicated integrated circuit (IC) foundry. The Zacks Consensus Estimate for TSM’s 2026 revenues suggests a year-over-year improvement of 35.7%. The stock boasts a long-term earnings growth rate of 26.50% and an annual dividend yield of 0.71%. TSM currently sports a Zacks Rank #1 and a Growth Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here. Pennsylvania-based EnerSys manufactures, markets, and distributes industrial batteries and related stored-energy products. It also develops battery chargers and accessories, power electronics, power equipment and outdoor cabinet enclosures. The Zacks Consensus Estimate for ENS’ fiscal 2027 revenues suggests a year-over-year improvement of 3.7%. The stock boasts a long-term earnings growth rate of 15% and has an annual dividend yield of 0.55%. ENS currently sports a Zacks Rank #1 and a Growth Score of A. Headquartered in California, Cheesecake Factory is a restaurant and bakery company that owns and operates hundreds of upscale, full-service dining locations. The Zacks Consensus Estimate for CAKE’s 2026 revenues suggests a year-over-year improvement of 6.8%. The stock boasts a long-term earnings growth rate of 12.50% and an annual dividend yield of 1.06%. CAKE currently holds a Zacks Rank #2 and a Growth Score of B. California-based Hewlett Packard is a leader in essential enterprise technology. The Zacks Consensus Estimate for HPE’s fiscal 2026 revenues suggests a 31.7% year-over-year improvement. The stock boasts a long-term earnings growth rate of 32% and has an annual dividend yield of 1.07%. HPE currently carries a Zacks Rank #2 and a Growth Score of A. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dell Technologies Inc. (DELL) : Free Stock Analysis Report The Cheesecake Factory Incorporated (CAKE) : Free Stock Analysis Report Taiwan Semiconductor Manufacturing Company Ltd. (TSM) : Free Stock Analysis Report Enersys (ENS) : Free Stock Analysis Report Hewlett Packard Enterprise Company (HPE) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide. EnerSys stock has more than doubled over the past five years, and after the latest earnings-driven jump the key question for you is whether the current price still lines up with what the valuation work suggests. The 131.2% total return over five years shows EnerSys has already rewarded long term holders, so any new position needs a closer look at what is already priced in. Recent profit margins and revenue trends can support the case for solid future cash flows. However, any slip in execution or demand could quickly change what investors are willing to pay for those earnings. EnerSys scores 4 out of 6 on the broader valuation checks, which points to a mixed picture rather than a clear bargain or clear overvaluation. You can see the detail behind that score at 4 out of 6. The issue now is whether the recent rally leaves EnerSys roughly fairly valued on intrinsic value estimates or still attractively priced on earnings based multiples. EnerSys delivered 100.1% returns over the last year. See how this stacks up to the rest of the Electrical industry. The Discounted Cash Flow model estimates what EnerSys could be worth today based on its projected future cash generation. For EnerSys, the latest twelve month free cash flow is about $678.7 million, and the model assumes that cash flows grow in the near term and then ease back toward more modest levels rather than accelerating sharply. On these assumptions, the DCF points to an estimated intrinsic value of about $180 per share. That is roughly 7.8% above the current share price, which suggests the stock is about fairly valued rather than offering a clear discount. Because EnerSys recently reported stronger than expected Q2 CY2026 results and the stock jumped 14.1%, the current price already reflects a lot of optimism around its cash generation. Overall, the DCF work indicates EnerSys stock currently looks about fairly valued on intrinsic value grounds. EnerSys is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for EnerSys. The P/E ratio is a useful yardstick for EnerSys because earnings are a key focus for how the stock is discussed and valued. EnerSys currently trades on about 19.8x earnings, which is below the Electrical industry average of roughly 35.4x and also below the broader peer group average of about 52.7x. On simple comparisons, the market is paying a lower price for each dollar of EnerSys earnings than for many similar companies. A more tailored “fair” P/E for EnerSys that factors in its sector, profitability profile, size and risks is estimated at about 26.5x. That is meaningfully higher than the current 19.8x multiple, which implies the stock would need a higher P/E before it lined up with this fair ratio. For you as an investor, the gap suggests the recent share price reaction has not fully erased the apparent discount on an earnings basis. On this P/E yardstick, EnerSys stock appears undervalued compared with what the fair ratio implies. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives take the valuation puzzle around EnerSys and turn it into a set of clear, testable stories about the company’s future growth, margins and earnings that would need to hold for the stock to be worth materially more or less than today’s price, and they live on the Community page. Rather than focusing on a single multiple or DCF output, each narrative lays out the assumptions behind its view of fair value so you can compare them with actual results over time. One of the top community narratives on EnerSys: roughly fairly valued Read one of the top narratives on EnerSys Do you think there's more to the story for EnerSys? Head over to our Community to see what others are saying! For EnerSys, the Discounted Cash Flow (DCF) work points to intrinsic value that is close to the current share price, so the stock no longer looks obviously cheap after the recent move. The P/E comparison still flags EnerSys as undervalued relative to its tailored fair ratio, which keeps some upside case alive if sentiment or sector multiples improve. The broader checks remain mixed. The key question from here is whether earnings and cash generation can hold at levels that convince the market to keep paying up rather than marking the stock back down. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ENS. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Thursday, Aug. 13, 2026 at 9:00 a.m. ET Vice President, Investor Relations and Corporate Communications - Lisa Hartman Langell President and Chief Executive Officer - Shawn O'Connell Executive Vice President and Chief Financial Officer - Andrea Funk Operator: Hello, everyone. Thank you for joining us, and welcome to the Q1 Financial Year '27 EnerSys Earnings Conference Call. [Operator Instructions] I will now hand the conference over to Lisa Hartman Langell, Vice President, Investor Relations and Corporate Communications. Lisa, please go ahead. Lisa Langell: Good morning, everyone. Thank you for joining us today to discuss EnerSys First Quarter fiscal 2027 results. On the call with me are Shawn O'Connell, EnerSys' President and Chief Executive Officer; and Andi Funk, EnerSys' Executive Vice President and Chief Financial Officer. Last evening, we published our first quarter fiscal year 2027 results with the SEC, which are available on our website. We also posted slides that we will be referring to during this call. The slides are available on the Presentations page within the Investor Relations section of our website. As a reminder, we will be presenting certain forward-looking statements on this call that are subject to uncertainties and changes in circumstances. Our actual results may differ materially from these forward-looking statements for a number of reasons. These statements are made only as of today. For a list of forward-looking statements and factors which could affect our future results, please refer to our recent Form 8-K and 10-Q filed with the SEC. In addition, we will be presenting certain non-GAAP financial metrics, particularly concerning our adjusted consolidated operating earnings performance, free cash flow, adjusted diluted earnings per share and adjusted EBITDA, which excludes certain items. For an explanation of the difference between the GAAP and non-GAAP financial metrics, please see our company's Form 8-K, which includes our press release dated August 12, 2026. Now I'll turn the call over to EnerSys' CEO, Shawn O'Connell. Shawn O'Connell: Thank you, Lisa, and good morning. Please turn to Slide 4. During today's call, we will review our strong first quarter results, share progress advancing our long-term growth initiatives, discuss our recently announced U.S. lithium manufacturing facility and close with second quarter guidance. Please turn to Slide 5. In the first quarter of fiscal '27, we again delivered record financial results, which were driven by favorable price/mix, higher volumes, ongoing OpEx discipline and stock buybacks enabled by our exceptional free cash flow conversion. Our Network & Infrastructure Solutions and Precision Power Solutions businesses both performed very well during the quarter, supported by strength across our key growth markets, including data center, communications and defense. At the same time, the Industrial Mobility Solutions business saw initial recovery in the transportation market, while material handling demand is expected to improve in the back half of this fiscal year. Our overall performance demonstrates the value of our end market diversification and the positive impact of our energized strategic framework. Please turn to Slide 6. At our Investor Day in June, we outlined how we are focusing on markets where we have the right to win while applying our differentiated technologies to address our customers' energy and labor challenges. As a reminder, we compete in a variety of diverse end markets that are collectively growing faster than GDP. We expect EnerSys top line growth to outpace these end markets through targeted growth initiatives that will expand our share of wallet, leveraging our leading market positions and deep customer relationships. Our 3 large growth bets, battery energy storage systems for warehouses, lithium batteries and data centers and aerospace and defense investments build on our established capabilities and customer relationships. I would like to share recent proof points of the progress we are making, which we expect will accelerate our growth beginning next fiscal year. In Industrial Mobility Solutions, we are pleased to share our Fortix 172-kilowatthour BESS received UL and NFPA 855 approval. This represents an important step in the permitting process required for commercial deployment. The Fortix system extends our material handling position from powering forklift trucks to optimizing energy across the warehouse. EnerSys forklift batteries, Synova chargers and Fortix BESS will create an integrated energy ecosystem that delivers peak shaving and enhanced uptime. This synergistic relationship and deep existing installed base uniquely positions us to bring the BESS solution to the material handling space while also strengthening the value proposition of our forklift batteries to our customers. Within Network & Infrastructure Solutions, momentum in our service offerings was a meaningful contributor to the division's top line growth and margin improvement this quarter. The capabilities and operating model we are building in NIS will support broader aftermarket service opportunities across EnerSys, including our BESS warehouse deployments. In data centers, we continue to enjoy solid growth with Q1 top line expanding in the low teens year-over-year, in line with our expectations of high single-digit to low teens growth for fiscal '27. We look forward to expanding our share of wallet with these same customers in the faster-growing lithium portion of this market. We progressed the commercialization of our DataSafe Noir lithium offering, which has been met with strong customer enthusiasm since the official launch in June, particularly for its energy density and cost competitive advantages and that it will be coupled with our established service performance. This differentiated lithium solution will begin to have a meaningful impact on our revenue growth beginning in our next fiscal year, expanding our opportunities with customers who already know us, trust us and rely on our global service network. And last but certainly not least, we are very excited to announce the finalization of our Department of Energy grant, an important milestone in our aerospace and defense growth strategy. The planned facility will expand our ability to support mission-critical defense applications with a secure U.S.-based supply chain. I will discuss this opportunity in greater detail on the following 2 slides. Please turn to Slide 7. Aerospace and Defense represents one of our most compelling long-term growth and margin expansion opportunities with our recent segment realignment, providing enhanced visibility and focus on the strategic portion of our business. Defense platforms increasingly require greater mobility, mission duration and power density, driven by demand for advanced batteries in drones, counter-drone munitions, missile defense and soldier power. The origin of these advanced batteries is of crucial importance as the United States and allied nations look to reduce reliance on components sourced from foreign entities of concern or FEOC. EnerSys has been the leading provider of integrated systems, application engineering, reliability and life cycle support to these demanding applications over 9 chemistries of lithium batteries currently manufactured in our 6 U.S. CMMC and ITAR-compliant production facilities today. We expect this steep demand growth to be more durable as geopolitical priorities evolve. The economics of warfare have transformed and higher volume, lower-cost battery reliant technologies such as drones and counter-drone systems are driving mounting demand for incremental energy storage capacity that doesn't exist today. We conservatively expect annual market growth in the range of 9% to 11% with above-market opportunity in front of us as we expand our offerings in this space. Aerospace and defense contributes to the unique value that the diversification of our business model provides to our investors and is a key area of strategic growth for us, including our planned DOE-supported lithium and advanced technologies campus, which I'll discuss next. Please turn to Slide 8. In July, we reached an important milestone with the U.S. Department of Energy, securing financial support for our refined defense-focused lithium cell manufacturing plant in Greenville, South Carolina, which will also serve as a campus for our lithium and advanced technologies center of excellence. This investment will strengthen our domestic lithium strategy while helping support customers that increasingly require U.S.-based and FEOC-compliant supply chains for critical applications. Rather than investing in lithium battery capacity for broad commercial consumption, we chose to focus this facility on the applications where domestic production creates the greatest customer value and where we believe EnerSys has the strongest competitive position. In addition to dramatically derisking the offtake of our planned incremental capacity, this focused direction enables us to preserve flexibility to the most efficiently sourced technologies that best meet our customers' needs in markets where FEOC compliance is not a priority. Our new lithium plant will produce high energy density cells to support manned platforms, soldier power, space and autonomous systems, further supporting the electrification of the battlefield. Importantly, it will also enable a closed-loop ecosystem for drone powering and recharging. Consider a system with Bren-Tronics drone battery packs and chargers powered by Rebel hybridized power systems, which in turn are powered by Bren-Tronics batteries with the cells of all those batteries produced in our new plant. We expect our new lithium plant to have an initial annual production capacity of approximately 1 gigawatt hour, purpose-built for the unique requirements of defense applications. This level of energy production reflects a high quantity of small format cells and precision requirements for these applications. The production of these cells require specialized equipment and security protocols that meet national defense requirement, which is a very different scope than a commercial or other specialized lithium cell manufacturing facility. While measured in gigawatts, the plant appears considerably smaller than our initial plans. We will actually be producing a higher quantity of these smaller batteries than the quantity of larger batteries contemplated in our original scope. In addition, the campus will provide us expansion opportunities for future growth, footprint optimization and the specialized requirements of lithium and other advanced chemistries across all our end markets where we manufacture or source the cells. We have not yet included the value of these incremental opportunities in our financial modeling. The revised DOE grant provides approximately $150 million towards the facility's estimated $650 million cost. We expect EnerSys net investment of approximately $500 million to be funded entirely through operating cash flow. In addition, and as previously announced, EnerSys has been awarded a comprehensive incentive package through South Carolina and Greenville County valued at approximately $200 million, which includes a combination of short-term and long-term incentives that will help support ongoing operations of the plant. We believe this disciplined investment will meet critical customer needs and generate compelling long-term returns. Construction is planned to begin in the first half of fiscal 2028 with full production expected approximately 3 years after construction begins. We expect to generate an internal return in the mid-20s for this investment. With DOE support now secured, we are moving into the next phase of the project. Our near-term priorities include advancing local grant process, completing NEPA and permitting requirements, refining capital timing and establishing the appropriate execution governance. We look forward to providing additional updates as key milestones are achieved. Please turn to Slide 9. Across our markets, demand for our solutions is building, and our teams are focused on delivering for our customers. Q1 '27 orders were up 7% versus prior year with our book-to-bill at 1.06 and backlog relatively flat versus prior year and up 2% sequentially. For IMS, our collective end markets are showing areas of resilience that support a measured look at growth. Versus prior year, Q1 '27 transportation orders nearly doubled, while material handling orders were down high single digits. We maintain a high degree of confidence that material handling demand will improve later this fiscal year and pent-up demand will drive IMS to full year growth versus prior year. We also expect to recognize the first revenue from our next-gen lithium offering in the second half of the year, bolstering our optimism. In NIS, Communications delivered strong demand and record shipments again as DOCSIS 4.0 upgrades are driving additional power needs and network powering refreshes, a trend we anticipate continuing as these upgrades are essential to support growing data traffic and connectivity needs. We also received very strong data center orders in the quarter, up over 80% versus prior year with deliveries extending into the future, increasing our visibility in this project-based business and reinforcing the multiyear demand opportunities for our lead-based offerings. As market discussions are increasingly focused on resilience, energy efficiency, deployment speed and life cycle support rather than lowest acquisition cost, our TPPL solutions are well positioned to continue to deliver on these demands and will only be supplemented by the addition of our new DataSafe Noir lithium offering as we expand our share of wallet with our existing customers in this high-growth space. In PPS, our aerospace and defense bookings are not as meaningful given the project award basis of this business. Our 24% year-on-year revenue growth was driven by increases across our A&D products particularly our counter-drone powering liquid reserve batteries and missile defense powering thermal batteries. Demand for these offerings is projected to continue to accelerate at least through 2030, driven by stockpile depletions and the evolution of battery-dependent drones and counter-drones and modern-day warfare. In conclusion, we delivered a strong start to the year. We remain focused on executing against the priorities we outlined at the Investor Day with speed and discipline. We are already seeing the benefits of our more focused organization through progress in key areas of growth, stronger cost control and improved cash discipline. I want to thank the entire EnerSys team for their dedication, innovation and unwavering commitment to delivering to our customers every day. Now I'll turn it over to Andi to discuss our financial results and outlook in greater detail. Andi? Andrea Funk: Thanks, Shawn. Please turn to Slide 11. Net sales came in at $936 million, up 5% from prior year, driven by a 3% benefit from price/mix, a 1% benefit from volumes and a 1% benefit from foreign currency translation. During the quarter, we realized $31 million or $0.63 per share of tariff refunds related to previously paid IEEPA tariffs, creating a onetime positive impact on our results. As a reminder, tariff refunds were not included in our Q1 '27 guidance and are not included in the operational results presented for our lines of business. We achieved gross profit of $313 million, up $60 million or 24% versus prior year period. Our Q1 '27 gross margin of 33.5% was up 510 basis points. Excluding the tariff refunds I just mentioned, gross profit increased 12%, and gross margin was up 180 basis points over Q1 '26. We also enjoyed [ $9 million ] of expanded 45X benefits in the quarter, largely driven by the closure of our Monterrey, Mexico plant and transfer of production to our Richmond, Kentucky facility. Excluding the tariff refunds that our 45X benefits, we delivered gross margin of 25.2%, up 110 basis points versus the prior year. Beginning this quarter, we made the decision to exclude noncash stock-based compensation expense from our adjusted operating earnings, adjusted EBITDA and adjusted diluted EPS metrics in order to better reflect the underlying performance of the business and align more closely with our technology peers. Prior year periods have been recast to reflect this change in this presentation. So all metrics I will provide to you today reflect the results excluding stock comp expense in both periods for an apples-to-apples comparison. These adjustments were $7.6 million for Q1 '27 and $7.2 million for Q1 '26 and provided a lift to our adjusted EPS of $0.16 and $0.15 per share in Q1 '27 and Q1 '26, respectively. Our adjusted operating earnings were up 47% versus the prior year with adjusted operating margin improvement of 550 basis points. After normalizing for the onetime impact of the tariff refund, adjusted operating earnings were up 22% with 45X and up 21%, excluding 45X, with margin improvement of 220 basis points and 140 basis points, respectively. Adjusted EBITDA was up 50% versus prior year with adjusted EBITDA margin up 630 basis points. After excluding the tariff refunds, adjusted EBITDA was up 27% with 45X and 26%, excluding 45X, with margin improvement of 300 basis points and 230 basis points, respectively. Adjusted diluted EPS increased 65% over prior year. After excluding the tariff refunds, adjusted EPS was up 36% of 45X and 42% excluding 45X. Our Q1 '27 effective tax rate was 13.7% on an as-reported basis and 21.8% on an as-adjusted basis before the benefit of 45X compared to 21.4% in Q1 '26 and 20.4% in the prior quarter. We expect our full year tax rate on an as-adjusted basis before the benefit of 45X for fiscal year 2027 to be in the range of 21.5% to 23.5%. In summary, our core results, excluding tariff refunds, normalizing for stock-based compensation accounting changes and both with and without 45X benefits broke Q1 records across net sales, gross profit, adjusted operating earnings, adjusted EBITDA and adjusted EPS, further demonstrating how the underlying earnings power of our business continues to improve. Please turn to Slide 12. As previously mentioned, our 45X benefits in the quarter increased as we realized the benefit of proactively transitioning production from Mexico to our existing facilities in the U.S. We received a $115 million U.S. federal tax refund in the quarter, which further bolstered our strong cash flow. In Q1 '27, we also recognized $31 million in tariff refunds, of which we received approximately $16 million in cash with the remaining cash receipts expected in upcoming quarters. Our estimated annual tariff exposure remains materially unchanged despite the continuously evolving tariff policy environment, and we remain confident in our ability to manage that exposure through the pricing, sourcing and operational actions that we've already implemented and continue to monitor and proactively mitigate. These actions and the work of our tariff task force position us well to manage changes in the trade environment. Let me now provide details by segment. Please turn to Slide 13. In the first quarter, Network & Infrastructure Solutions revenue increased 9% from prior year to $428 million, driven by strong volume growth and favorable price/mix. Adjusted operating earnings of $45 million increased 50% (sic) [ 51% ] from prior year, reflecting the benefits of favorable price/mix, higher volumes and disciplined expense management. Adjusted operating margin of 10.5% increased 280 basis points versus prior year, primarily driven by continued high demand for power electronics, robust data center demand and both volume and margin expansion in our service offerings. Industrial Mobility Solutions revenue decreased 3% from prior year to $407 million, with lower volumes from material handling market activity, partially offset by transportation volume recovery as well as favorable price/mix and FX. IMS adjusted operating earnings were $38 million, down 11% from prior year, resulting in adjusted operating margins of 9.3%, down 70 basis points versus the prior year. Price/mix and cost improvements were temporarily offset by loss leverage on our lower volumes. Longer term, electrification, automation and demand for maintenance-free batteries and chargers support the IMS growth opportunity. We remain confident that these important industrial end markets will see notable improvement in demand trends in the coming quarters, and our confidence is corroborated by customer conversations and industry data. Precision Power Solutions revenue increased 24% from prior year to $101 million, primarily driven by strong volume growth and favorable price/mix. PPS adjusted operating earnings were $18 million, up 48% versus prior year, driven by favorable price/mix and higher volumes. Adjusted operating margin of 18.2% increased 280 (sic) [ 300 ] basis points year-over-year on ongoing A&D strength, particularly counter-drone and missile defense. We continue to have confidence in robust top line growth and incremental margin expansion within this important and strategic segment. Please turn to Slide 14. This was just an outstanding cash flow quarter. Operating cash flow of $230 million, offset by CapEx of only $12 million resulted in free cash flow of $218 million in the quarter versus negative $32 million in prior year Q1. Cash flow was strengthened by the receipt of our U.S. federal tax refund of $115 million as well as increased earnings, elevating free cash flow conversion in the quarter to 187%. Even excluding the benefit of 45x earnings in cash, free cash flow conversion was still an impressive 140%, largely attributable to the enhanced focus on working capital optimization by our centers of excellence. Primary operating capital decreased to $858 million versus $993 million in the prior year on both the benefits of our expanded receivables purchasing agreement, which we executed in the third quarter of last year as well as the team's continued focus on working capital improvements. Our working capital efficiency measured internally by POC as a percentage of annualized sales improved an exceptional 490 basis points versus prior year. This is yet another example of energizing action and the enhanced approach to cost and cash discipline across the organization as we execute on optimizing our core. As of July 5, 2026, we had $531 million of cash and cash equivalents on hand. Net debt of $522 million represents a decrease of over $160 million since the end of fiscal '26. Our leverage ratio remains well below our target range at 0.8x EBITDA, providing us more than ample dry powder for capital allocation flexibility. Please turn to Slide 15. We remain committed to a disciplined capital allocation strategy that balances organic and inorganic investment in the business with consistent returns to shareholders, including a competitive dividend that grows with earnings, excluding 45X benefits and share repurchases under expanded Board authorization. Capital expenditures were $12 million in the quarter versus $33 million in Q1 '26. As Shawn shared earlier, we anticipate construction on the lithium plant to begin in the first half of fiscal year 2028. As such, our expectation for $70 million in CapEx for fiscal year 2027 remains unchanged. During the first quarter, we purchased 219,000 shares for $50 million at an average price of approximately $229 per share and have nearly $900 million remaining in our buyback authorization. Additionally, the Board has increased our quarterly dividend by 10% to $0.2875 per share for the second quarter of fiscal 2027. Our buybacks, in addition to our consistent and growing dividend, underscore our long-standing commitment to returning value to our shareholders. We continue to evaluate accretive bolt-on acquisition opportunities that align with our disciplined strategic and financial criteria and that would strengthen our customer intimacy, enhance technical capabilities, expand our share of wallet and accelerate our strategy in areas where we have a right to win. Please turn to Slide 16. Our second quarter outlook reflects continued strength across data centers, communications and aerospace and defense as well as the recovery in transportation that is underway. Note that our prior year revenue had an unusually high proportion of sales phased in the second quarter, impacting year-over-year comparisons. We expect stronger year-on-year revenue growth in the second half of the fiscal year, supported by the start of a recovery in material handling on top of robust momentum across our other key end markets. In line with our previous communications, as we progress through fiscal 2027, we expect to see our earnings growth to be primarily driven from margin expansion in the first half with the shift to higher top line growth towards the end of fiscal year '27. For the second quarter of fiscal 2027, we expect net sales in the range of $955 million to $995 million, with adjusted diluted EPS of $3.15 to $3.25 per share, growing 21% versus prior year at the midpoint, which includes $42 million to $47 million of 45X benefits to cost of sales. Excluding 45X, we expect adjusted diluted EPS of $1.95 to $2.05 per share, up in the 25% range versus prior year. We remain confident in our ability to generate strong cash flow, invest in growth and return capital to our shareholders. With this, let's open it up for questions. Operator? Operator: [Operator Instructions] Your first question from the line of Noah Kaye with Oppenheimer. Noah Kaye: Maybe I'll start with a 2-parter on the data center business. You mentioned orders are up 80% year-over-year this quarter. I know orders in this business can be lumpy. Maybe can you put some context around that trailing 12-month orders growth or backlog growth? That's the first part. And then, Shawn, I thought you sounded pretty firm on the newly launched lithium-ion products contributing to revenues next year. Should we take that to mean you already have orders in hand or visibility to orders materializing short term? Shawn O'Connell: Yes, I'll start, Noah, and then I'll turn it over to Andi for order backlog history. But we knew going in, as we've socialized previously, that we had an open -- a wide open door to step through for just introducing this technology relatively through our same customers and sales channels because these are high-trust environments. So we were sort of just playing catch-up to get the product ready, and we've been going through the validations and approvals as we socialized. But yes, I think our quote activity and our market activity is robust. And as a result, we've already got the first 100 systems on the water, priming the pump in the supply chain. So we've spent a lot of time while we were doing the approvals, getting the supply chain set up, getting the service technicians trained, getting the sales channel ready. So we are fairly confident that the timeline we socialized is going to materialize in that way for us. Andrea Funk: And I'll take the question on the data center orders. No, it's a good one. Obviously, we were really pleased, strong increase, 80% year-on-year. That said, a lot of these -- we continue to say that we expect our lead acid revenue on data centers to be up in the high single to low teens growth. A lot of these orders extend out 12 to 36 months. The real positive to me with that, Noah, is that lead has a long tail. It's got staying power. Our TPPL data center revenue will continue for some time. We've got a lot of visibility into it. We've made a lot of progress with our Noir. We have 100 orders or so in place with our supplier. We've had over 110,000 campaign impressions. We have over 500 units in active quotation. So there's a lot of excitement and enthusiasm. We don't think that's going to be anything until fiscal '28 story from a revenue standpoint. But the lead will continue. We're getting visibility into a long-time demand signals and then the Noir lithium will be incremental on top of that. I hope that helps. It does. Noah Kaye: It does. And then on the lithium plant, you shared that assumption of mid-20s ARR (sic) [ IRR ] for the plant economics. Possible to understand, at least at a high level, the assumptions driving that target IRR. And then how should we be modeling net CapEx related to the plant for fiscal '28 because that will certainly drive CapEx increase versus '27. Andrea Funk: Yes. I think part of the challenge to think about with this now, we didn't get payback on it yet. There's some requirements that we have in the fact that we're getting the DOE grants, which we're very pleased with the trust that the Department of Energy and Department of [ Work ] placed with us. And your customers investing that amount of money for you to build capacity for them. It's very encouraging. But that said, there's some upfront requirements on things like environmental and that will pace the timing of when we're able to get started. We're saying that we think it's going to be mid next year that the CapEx starts -- the actual construction starts. And there is reimbursement that comes. It looks like it's going to be coming on a 1 quarter lag. Again, some of that is a little bit outside of our control. That said, we have no doubt we're going to be able to handle the CapEx requirements of the plant with our ongoing cash flow. It's not going to have any impact on leverage other than leverage wouldn't continue to go down because of the plant. So we don't have more information at this time, but I hope that helps to explain some of the timing. Noah Kaye: It does. And then just look at the first part of that, any color on the IRR rather, just because that would assume, I think, a nice amount of growth really coming from that plant and its ability to support the growth that you've talked about in PPS? Andrea Funk: Yes. I mean there is a real value for FEOC compliant cells in the A&D space. This is of critical importance for national security. So I think there's a couple of things that says, we've got a long history of receiving grants from the A&D and receiving grants from the government for our A&D business. We've worked very closely with them. I think we mentioned we've got 6 plants in the U.S. currently manufacturing A&D plants, much of the growth of which has been funded through investments. And this will allow us to have very valuable products that have this FEOC compliance. So I think there is a pricing that comes along with that. And this also allows us to continue to grow with and expand into new areas in A&D that were not as active like the large diameter drone batteries continuing with our drone counters. So there's both incremental revenue and margin expansion associated with this plan. And we've not built into the modeling, but we've received a lot of interest in expanding this even further and in discussions on that going forward. That would just further increase the return on this plan. Operator: Your next question comes from the line of Trevor Sahr with William Blair. Trevor Sahr: This is Trevor on for Brian here. I was hoping to get a little bit more detail if we can, on implied margin expansion sequentially in the second quarter. It looks like the revenue growth at the midpoint, again, sequentially is about 2.5%, but EPS growth at the midpoint is about 12% sequentially. Can you just kind of shed some light on how we should think about margin and expansion into the second quarter? Andrea Funk: Yes, I'll be happy to take that one as well, Trevor. As we talked about both on our last call as well as on Investor Day, we see that early in this fiscal year, a lot of our earnings growth is going to be driven more by margin expansion. And then as we get towards the end of this fiscal year, you'll start to see some of our growth kick in. It's going to begin with recovery in material handling. The transportation recovery is already beginning to be overweigh or a lot of our other markets continue to have growth like A&D and data centers. But the new product introductions aren't going to start to kick in mostly till fiscal '28. And as you look through the balance of this fiscal year, you're going to see a lot of the items we talked about like the annualization of the adjustments we made with our RIF last year. You see the beginning of our 45x benefits from closing our plant in Monterrey. We might see a little bit of some of the benefits from closing our Tijuana plant. We also had announced 2 other facility rationalizations this quarter with our Bellingham facility, our Brazil closure. So those items and then just this company is being managed differently, a lot more cost discipline and strong operational initiatives as part of our energized strategy. So you'll continue to see that growth as well as mix improvements. So we're going to be launching our Gen 2 lithium in our material handling business, which I'm very excited about. You see within our NIS business, an increase in the power electronics. Keith with Dan leading it, is doing a tremendous job with our service business that had been headwinds in the past. Now it's starting to turn into tailwinds. And it's also a real critical component to a lot of our strategy on what makes EnerSys unique, things like data center. It is our service network, our ability with [ BAS, ] having that service teams out there. So that growth in both top line and margin of service is not just something that is impacting our current results, which we're excited about, but it's going to be an enabler of a lot of the growth initiatives that Shawn has kicked out. So I hope that helps to explain some of the things we're seeing. If you need more color or any more questions, happy to take those as well. Shawn O'Connell: Trevor, it's Shawn. I would just add one thing. Andi explained it very well. On the 2% top line growth, we always have some summer seasonality during this period in spite of the material handling pressure that we've seen over the last couple of cycles. So that's fairly typical for us in a normal year. Trevor Sahr: Makes sense. That's helpful. If I could ask one more actually, just on that service business. Could you give us a little more detail on the size, growth and margin contribution in that? And maybe what you've done and the work you've done in the background to turn that from what you just said Andi into a headwind into a big contributor? Shawn O'Connell: Yes. Trevor, I'll start, and then I'll turn it over to Andi. So I'll start on what we've done and the importance of the business. If you look at our strategic framework that we talked about at Investor Day, the 2 things we're trying to solve for customers are energy security and labor scarcity. And it's along that adage of we're going to run out of electricians before electrons. So we've been building the plumbing over the past year of putting in very disciplined project management and upskilling our labor force. So if you look at what we do, you can kind of -- we call it service, which kind of invokes ideas of attach rates and repetitive aftermarket and that kind of thing. There's a big component of our business that is actually on the implementation side, electrical, very specialized electrical construction. And as you might imagine, you can get that very right or very wrong in the details. So what they've done, and Keith and Andi mentioned Dan Cohee in that business, is put all of that plumbing in place that high level of discipline. We've invested in new project management software, and the teams are just doing a remarkable job upskilling that entire segment for us. With that, I'll turn it over to Andi for some of the numbers. Andrea Funk: Yes. When I look, Trevor, at services, what we're referring to primarily here is our Network Information Systems services. You can see our total services revenue and margin in our Q, and you can see the improvement there. But really, the turnaround that we're looking at is in the NIS business where we had some headwinds and it's such a key aspect to the growth and the value proposition that we have to customers and is a differentiating factor. If you look in our Network Information Systems, and I'll always give specifics down to this level, but you're talking revenue up around 20% in the quarter year-on-year. So really nice improvement in revenue as well as total EnerSys margins in -- with our services area being up about 100 bps. I would say, even more in the NIS division. And a lot of that is just, again, really disciplined management. Keith is an extraordinary operator, and he's putting that kind of discipline into the NIS business under Shawn's leadership. We're managing it tighter and making sure that we're ready for a lot of the opportunities in our headlights, things like that NIS services department division helping our BAS installation. So it's an exciting and very strategic area for us going forward. Operator: [Operator Instructions] Your next question comes from the line of Jeff Osborne with TD Cowen. Jeffrey Osborne: Just a couple of quick ones on my side. Maybe just starting with Motive Power. It's been weak for a while. I know you've seen cycles in the past. How do you ascertain sort of where we are in the cycle? You felt comfortable that things were rebounding. Are you looking at substitution effects? We're just getting a lot more questions from investors on sort of the sustained weakness in that core segment. Shawn O'Connell: Yes, Jeff, I'll start. We have a lot of leading indicators that we look at. We get the truck order data from the forklift market, both internationally and domestically in the Americas market. We have that. Then we have -- we typically lag our forklift customers between half a quarter to a quarter when they start seeing the truck orders and when we see the battery orders. And so we look at that. We, of course, have conversations with those same customers. Most of them don't split out and report publicly the individual results of the forklift division. So if you're looking at one of the larger OEMs that are embedded in a bigger company, they don't give you that color. But we do have some public ones like HY that just released their results. And you can see that they -- in spite of being down, I think, 16% year-on-year, they had a 2% increase, but their truck orders are way up, and they're seeing those green shoots now. And we're -- that's kind of consistent with what we're hearing across the board in the industry. And obviously, between the 3 classes of forklifts, people are positioned differently depending upon the OEM they are. So the markets haven't been totally even. But we look to those things and all of those indications for us and those customer conversations are positive. And so we -- it gives us a high degree of confidence. We always -- also, we have data going back to the '90s, very solid data about what happens after an economic recession period, material handling. There's only been 3 of them. And this one is a little goofy because of coming out of COVID, supply chain shocks and buildups and normalizing. But typically, those recoveries for us, when we see these indicators, they are -- they follow fairly quickly. So that's giving us some confidence there. Andrea Funk: Yes. I'll give a little bit of more data behind that as well. And Shawn mentioned the Hyster-Yale report. They also did note that first half calendar year '26 would mark the financial low point for them. They had the strongest booking quarter in 3 years this last quarter. So all really good signals. Our customers also continue to give us great signals. That said it's choppy. Industry data showed positive order trends for our Q4 '26 and then dropped to negative 8% with shipments this past quarter. So there's a lot of volatility. If you recall in the last quarter, we had called out that we thought Q1 could look very similar to Q4, which is unusual. And of course, that didn't materialize. We -- so the lag is frustrating for us. We do build a risk factor into our guidance because we knew that market recovery is outside of our control. We track our performance versus market. We are in line with market. But I think it's a positive sign that we have this record quarter despite that continuing to feel the pressure. We are seeing signals that it's coming back. When it's going to come back, that's the question, whether it's going to be our Q2 or we're thinking it's more a Q3 story. Another aspect to it, which I think is an exciting element to this as well, we have some great new products on the horizon, both with chargers and Gen 2 lithium. So as we are depleting our stock of our old offerings and our customers are waiting for those products to come out, which will be a second half story. That might be impacting a little bit for us as well. Nice thing is our Gen 2 lithium, which is an LFP solution versus the NMC we had in our previous version has a much more attractive price point for our customers, which we feel will allow us to get -- pick up a lot more volume there and is at significantly higher margins. So I think there's a lot of good news in front of us. I'd be lying if I didn't say we weren't a little frustrated that it's taken as long as it has. But overall, I'm not concerned at all the outlook here. Our products are necessary to move goods around the world, and it can't stay down longer. Jeffrey Osborne: Perfect. Just one -- I appreciate the detail there, Andi. One follow-up on Motive and then I have one on data center. On the material handling side, are you seeing since you brought up lithium, any acceleration in the shift from lead to lithium? Shawn O'Connell: I would tell you that we're seeing the same conversion rate we've seen. And I would just reiterate that this is pent-up demand on the forklift side. They can't -- these are typically leases, they can extend the lease. But what it starts to happen is you start to see a lot of breakdown of maintenance items. So it can't go on forever. But our typical maintenance-free conversion, which fortunately for us, we're uniquely positioned. We have our TPPL offering and lithium offering. That's been fairly steady for us. So there's no big movements there. We're just seeing really market effects at the moment. Andrea Funk: One other thing worth mentioning, too, Shawn, I know we've talked about this. We believe there's a correlation, which is why we did the re-segmentation between the transportation and the forklifts. These are large capital purchases. They both experienced this downturn coming out of a lot of the macro volatility. And transportation is starting to come back really strong. We were 20% revenue growth in the quarter. Orders that we had year-on-year in transportation were up 91%. Now of course, it's off a low point with orders as it was declining last year. And there's great momentum there. So that's just another signal that gives us confidence that the capital markets for forklift trucks are going to start to turn as well. Jeffrey Osborne: Good stuff. And just very quickly, on the data center side, a lot has been answered there, but just 2 clarifications. One, are we still shooting for UL certification either late this year or early next calendar year? Is part one of the question. And then part two, now that you've socialized with customers, you have the units coming in for training and whatnot and testing, do you have any further comments that you can share about expectations for margins, just given you have a third-party manufacturing it for you folks? Shawn O'Connell: Yes. I would tell you that we are right on track with our plans for UL and our validations. We feel very good about that. And we -- if you look at how our product delivery has been going, and it's a close parallel with the -- how quickly we were able to get UL and NFPA certification on our BESS system, which is a more complex system. It just speaks to how we're operating differently. So we have a high degree of confidence in our UL journey on the data center and war side. And on the second part of the question? Andrea Funk: Yes, on the margins. So go ahead, Shawn. Shawn O'Connell: Yes. We expect margins in line with our -- sort of our TPPL and higher-margin offerings than lead. And early indications from customers, we think we're going to have a high degree of confidence achieving that. The other issue and the other real benefit that we have is not comparing lithium to lead, but lithium to lithium, we're releasing a system that can do in 2 cabinets, what the competitor's lithium battery now does in 5. So we have a real value conversion opportunity from that 5 to 2 that is a big differentiator in the market and as well as saving a premium on that data center space. Andrea Funk: Not to mention our service network, can turn it back around. Operator: Your next question comes from the line of Greg Lewis with BTIG. Gregory Lewis: Shawn, I was hoping you could talk a little bit more about the A&D opportunity. You mentioned the factory, the facility being built and just the relationship EnerSys has with the U.S. government. I'm kind of curious how also just given a lot of headlines about drone is accelerating drone warfare, drone -- anti-drones. Beyond the U.S. and realizing that's a big opportunity, how should we be thinking about that over the next couple of years, even maybe as we think about NATO and the broader opportunity? Shawn O'Connell: Yes. So Greg, thanks for joining us. Look, it's -- we have an extraordinary opportunity in front of us. And if I had one big takeaway from Investor Day, I got a lot of comments that we haven't talked enough about our position there. But our position with the defense apparatus is strong. And one of the reasons is if you look at what we've done with TPPL that powers nuclear submarines and how we've taken the developments out of one technology and expanded that into a commercial basis. So we don't tend to rely totally on the government apparatus, and we've been successful in doing that across end markets, including leveraging defense markets to sell back into commercial areas. So they like that. They like our stability. They like our balance sheet. We have a lot of permanence that they can rely on and trust. And then because of the fact that we've stayed very active in places like liquid reserve and thermal batteries, I mean that's a very narrow field, and it really well positions us. The Bren-Tronics acquisition added to that and of course, what we're doing in our space business. So if you look across what's happening in the world with the drone powering ecosystem, the Ukraine conflict showed everybody that the future of the battlefield is going to be much different. You had a very small army hold off a 3 million person army because of these cheap drones in the supply chain. And so that has woken up all of the governments around the world. And I think that extends into the second part of your question. Some of our most compelling growth in A&D this year has come from our European business. And we've had segments of our allied countries in Europe, NATO allies outpace for the first time in our evolution, our Americas business. And it just speaks to our reach and what we're able to do. So we're actually expanding capabilities in places like Northern France in our Arras facility to support what Bren-Tronics is doing there, for example, with the French government and the French Ministry of Defense. So we see a lot of runway internationally with not just the U.S. but with allied countries as well. Andrea Funk: Yes. Just to give some data behind Shawn's answer, our growth rate in Europe in '26 versus '25 was 2x. It's probably going to be pretty close, it's off a smaller base. We mentioned our 6 plants in the U.S. in our prepared remarks. But as Shawn mentioned, we also produce A&D batteries for our allied nations in both the U.K. and in France as well. And there's opportunities around the world. Gregory Lewis: Okay. Great. And then realizing -- I guess I want to have a question around data center, but I guess a little different. As the architecture evolves, I guess they've started rolling out or converting some data centers to [ 800 volt. ] And if that changes, I guess, the legacy way a UPS system was kind of -- I guess, it was big and now they're going to be, I guess, more smaller focused on rack. How does that change or I should say, does that change the revenue opportunity however you guys spend per megawatt or per location? Is that an opportunity to actually drive more revenue out of a data center as this switch happens for kind of the same product? Shawn O'Connell: Unequivocally. Just one point of clarification. We are seeing a lot of movement towards very large systems, centralized systems. And it's just without getting too technical on this call, maybe we do a tech talk later or something, but it depends on what type of data center it is, whether it's large language training model, whether it's inference, whether it's storage. So it depends on what they're trying to achieve will influence the architecture. As I said before, 800 volts, we love that because for us, it doesn't change much. It may give us the opportunity in a centralized system to just sell more cells as we put more cells in parallel. We have a long history in managing these voltage ranges. And so we're quite used to that. And then to your point about distributed rack systems and what we think of -- we use the term BBU business. We've historically not played there because of -- it's typically been these packs that involve small cells that are put into those packs in our rack system. We see that there could be some potential future opportunity for us out of the Greenville plant when we're manufacturing our own cells to have a compelling offering in the BBU space, which gets back to our -- my answer to your last question about the Defense Department loves us because we tend to commercialize what we develop -- co-develop or develop with them or for them. And we see data centers as a big opportunity for offtake in Greenville downstream. Operator: There are no further questions at this time. I will now turn the call back to Shawn O'Connell, President and CEO, for closing remarks. Shawn O'Connell: Thank you, Ben, and thank you all for joining us today. We look forward to speaking with you again soon, and want you to have a great day. Operator: This concludes today's call. Thank you for attending. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends EnerSys. The Motley Fool has a disclosure policy. EnerSys (ENS) Q1 2027 Earnings Call Transcript was originally published by The Motley Fool

EnerSys delivered a positive Q2, with results surpassing Wall Street’s expectations and a strong market reaction. Management credited robust performance in both Network & Infrastructure Solutions and Precision Power Solutions, highlighting demand in data centers, communications, and defense. CEO Shawn O’Connell pointed to favorable product mix, disciplined cost control, and early signs of transportation market recovery as key drivers behind the quarter’s operating margin expansion. Is now the time to buy ENS? Find out in our full research report (it’s free). Revenue: $935.6 million vs analyst estimates of $927.9 million (4.8% year-on-year growth, 0.8% beat) Adjusted EPS: $3.66 vs analyst estimates of $2.83 (29.5% beat) Adjusted EBITDA: $209.3 million vs analyst estimates of $162.8 million (22.4% margin, 28.5% beat) Revenue Guidance for Q3 CY2026 is $975 million at the midpoint, roughly in line with what analysts were expecting Adjusted EPS guidance for Q3 CY2026 is $3.20 at the midpoint, above analyst estimates of $2.96 Operating Margin: 16.2%, up from 9.7% in the same quarter last year Sales Volumes rose 1% year on year, in line with the same quarter last year Market Capitalization: $7.23 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is 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. Noah Kaye (Oppenheimer) probed the durability of data center orders and the timeline for lithium product contributions. CEO Shawn O’Connell confirmed robust quote activity and stated that initial shipments and customer interest support near-term revenue ramp as planned. Noah Kaye (Oppenheimer) asked about the economics and assumptions behind the new lithium plant. CFO Andrea Funk explained that Department of Energy support and customer commitments underpin targeted returns, with incremental revenue and margin expansion not fully captured in current modeling. Trevor Sahr (William Blair) inquired about drivers of margin expansion into the next quarter, noting sequential EPS growth. Funk detailed that margin gains are expected from restructuring actions, cost discipline, and mix improvements, particularly in service and new product introductions. Jeffrey Osborne (TD Cowen) questioned the timing of recovery in material handling and the pace of transition from lead to lithium batteries. O’Connell acknowledged persistent volatility but cited leading indicators and customer conversations as reasons for optimism about a second-half rebound. Gregory Lewis (BTIG) sought clarity on the scale of defense opportunities, including international demand. O’Connell emphasized EnerSys’ strong position with U.S. and allied governments, expansion in Europe, and the strategic importance of compliance-driven battery supply. Looking ahead, the StockStory team will be tracking (1) progress on commercial deployment and customer adoption of the DataSafe Noir lithium solution, (2) construction milestones and customer commitments tied to the new South Carolina lithium plant, and (3) signs of recovery in material handling demand, especially as new Gen 2 lithium products are introduced. The impact of ongoing cost discipline and service business growth will also be key indicators. EnerSys currently trades at $202.50, up from $186.72 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). ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies. Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

EnerSys (ENS) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company. The upward trend in estimate revisions for this maker of industrial batteries reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core. The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008. For EnerSys, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year. The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate: For the current quarter, the company is expected to earn $3.07 per share, which is a change of +19.9% from the year-ago reported number. Over the last 30 days, the Zacks Consensus Estimate for EnerSys has increased 7.86% because two estimates have moved higher compared to no negative revisions. For the full year, the earnings estimate of $13.00 per share represents a change of +23.1% from the year-ago number. In terms of estimate revisions, the trend for the current year also appears quite encouraging for EnerSys. Over the past month, three estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 7.4%. Thanks to promising estimate revisions, EnerSys currently carries a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500. While strong estimate revisions for EnerSys have attracted decent investments and pushed the stock 5.2% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Enersys (ENS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

EnerSys ENS reported its first-quarter fiscal 2027 results on Aug .12.  Its adjusted earnings came in at $3.66 per share, beating the Zacks Consensus Estimate of $2.82 by 29.8%. The bottom line increased 64.1% year over year, aided by margin expansion, IRC 45X benefits and a $30.9 million tariff refund.Net sales of $936 million topped the consensus estimate of $923 million by 1.4% and increased 4.8% year over year. Pricing contributed 3%, foreign currency translation added 1% and organic volume rose 1%. Backlog was flat year over year but increased 2% sequentially. Network & Infrastructure Solutions (NIS) sales rose 9.4% year over year to $428.3 million. Favorable volume and mix reflected strength in power electronics and data-center demand. Volume contributed 5%, price/mix added 4% and currency translation provided a 1% lift.Precision Power Solutions (PPS) sales surged 23.6% to $100.5 million. Volume advanced 16%, price/mix added 7% and acquisitions contributed 1%. Aerospace and defense demand, particularly counter-drone and missile-defense applications, supported the increase. Enersys price-consensus-eps-surprise-chart | Enersys Quote Industrial Mobility Solutions (IMS) sales fell 3.2% year over year to $406.8 million. Volume declined 5% as material-handling demand remained soft, partly offset by recovery in Transportation and improved price/mix.Adjusted operating earnings for IMS declined 10.5% to $37.7 million, with adjusted operating margin contracting 70 basis points to 9.3%. This contrasted with NIS and PPS, where adjusted operating margins expanded 280 and 300 basis points, respectively. Gross profit increased to $313.4 million from $253.2 million, while gross margin expanded 510 basis points to 33.5%. Excluding IRC 45X benefits, gross margin improved 440 basis points to 28.5%.Adjusted operating earnings advanced 47.2% to $178.8 million, with the margin rising 550 basis points to 19.1%. Excluding 45X benefits and tariff refunds, adjusted operating earnings increased 21% and the related margin improved 140 basis points to 10.8%, highlighting underlying operating leverage. First-quarter orders increased 7% year over year, driven by NIS, though they declined 9% sequentially on seasonality. The total book-to-bill ratio was 1.06, with NIS at 1.15, IMS at 1.04 and PPS at 0.73.EnerSys also advanced targeted growth initiatives. Its Fortix 172 kWh battery energy storage system received UL and NFPA 855 approval, while the DataSafe Noir lithium offering launched in June. The company also secured a revised roughly $150 million Department of Energy grant for its planned U.S. lithium cell manufacturing campus. Cash from operating activities totaled $230.2 million, while free cash flow was $217.8 million and free cash flow conversion reached 187%. Cash and cash equivalents stood at $530.7 million at quarter-end, with net debt at $521.5 million and net leverage at 0.8.The company returned $59.6 million to shareholders, including $50 million through share repurchases and $9.6 million through dividends. The board also raised the quarterly dividend 10% to $0.2875 per share for the second quarter of fiscal 2027. For the second quarter of fiscal 2027, EnerSys expects net sales of $955-$995 million. At the midpoint, this represents 2% year-over-year growth. IRC 45X benefits to cost of sales are projected at $42-$47 million.Adjusted earnings are projected at $3.15-$3.25 per share, with adjusted earnings excluding 45X benefits at $1.95-$2.05. The company expects first-half earnings growth to be driven primarily by margin expansion, followed by greater top-line growth later in fiscal 2027 as material handling recovers and strength continues in data centers, communications, aerospace and defense, and transportation. The company currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks are discussed below:Flowserve Corporation FLS carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Flowserve’s earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 11.2%.  In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2026 bottom line has increased 1%.Graco GGG presently carries a Zacks Rank of 2. Graco’s earnings surpassed the consensus estimate in the last reported quarter by 12.4%. In the past 60 days, the Zacks Consensus Estimate for Graco’s 2026 earnings has increased 5.5%.Helios Technologies HLIO currently carries a Zacks Rank of 2. Helios Technologies’ earnings topped the consensus estimate in each of the trailing four quarters. The average earnings surprise was 13.1%. In the past 60 days, the Zacks Consensus Estimate for HLIO’s 2026 earnings has increased 6.9%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Enersys (ENS) : Free Stock Analysis Report Flowserve Corporation (FLS) : Free Stock Analysis Report Graco Inc. (GGG) : Free Stock Analysis Report Helios Technologies, Inc (HLIO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Net Sales: $936 million, up 5% from prior year, driven by a 3% benefit from price mix, a 1% benefit from volumes, and a 1% benefit from foreign currency translation. Gross Profit: $313 million, up $60 million or 24% versus prior year period. Gross Margin: 33.5%, up 510 basis points; excluding tariff refunds, gross margin was up 180 basis points over Q1 2026. Adjusted Operating Earnings: Up 47% versus prior year, with adjusted operating margin improvement of 550 basis points. Adjusted EBITDA: Up 50% versus prior year, with adjusted EBITDA margin up 630 basis points. Adjusted Diluted EPS: Increased 65% over prior year; after excluding tariff refunds, adjusted EPS was up 36% with 45X, and 42% excluding 45X. Free Cash Flow: $218 million for the quarter versus negative $32 million in prior year Q1. Operating Cash Flow: $230 million, offset by CapEx of only $12 million. Network Infrastructure Solutions Revenue: Increased 9% from prior year to $428 million, with adjusted operating margin of 10.5%, up 280 basis points. Industrial Mobility Solutions Revenue: Decreased 3% from prior year to $407 million, with adjusted operating margins of 9.3%, down 70 basis points. Precision Power Solutions Revenue: Increased 24% from prior year to $101 million, with adjusted operating margin of 18.2%, up 280 basis points. Orders: Q1 2027 orders were up 7% versus prior year, with book-to-bill at 1.06x. Data Center Orders: Up over 80% versus prior year. Transportation Orders: Nearly doubled versus prior year in Q1 2027. Material Handling Orders: Down high single digits versus prior year. Capital Expenditures: $12 million in the quarter versus $33 million in Q1 2026. Share Repurchases: Purchased 219,000 shares for $50 million at an average price of approximately $229 per share. Dividend: Increased quarterly dividend by 10% to $0.2875 per share for the second quarter of fiscal 2027. Warning! GuruFocus has detected 6 Warning Signs with INRLF. Is ENS fairly valued? Test your thesis with our free DCF calculator. Release Date: August 13, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record Q1 FY2027 results with net sales up 5% and adjusted EPS up 65% year-over-year, driven by strong price mix, higher volumes, and disciplined cost management. Exceptional free cash flow of $218 million in Q1, with a 187% conversion rate, supported by a $115 million tax refund and improved working capital efficiency. Strong growth in key markets: data center orders up over 80% year-over-year, aerospace and defense revenue up 24%, and communications delivering record shipments. Secured a $150 million DOE grant for a new US lithium manufacturing facility, expected to generate a mid-20% IRR and strengthen FEOC-compliant supply chain for defense applications. Successful launch of DataSafe Noir lithium offering with strong customer enthusiasm, 100 systems in supply chain, and over 500 units in active quotation, positioning for revenue growth in FY2028. Improved gross margin by 510 basis points (or 180 bps excluding tariff refunds) and adjusted operating margin by 550 basis points, reflecting operational efficiency and favorable mix. Capital returns to shareholders: repurchased $50 million in shares and increased quarterly dividend by 10%, with nearly $900 million remaining in buyback authorization. Positive leading indicators for material handling recovery, including transportation orders nearly doubling and industry data suggesting a rebound in the back half of FY2027. Industrial Mobility Solutions revenue declined 3% year-over-year due to continued weakness in material handling demand, with adjusted operating margin down 70 basis points. Material handling orders were down high single digits in Q1, and the recovery is expected to be delayed, with confidence in improvement only in the back half of FY2027. Q2 FY2027 guidance implies modest sequential revenue growth of ~2.5%, impacted by summer seasonality and a high prior-year revenue base, with stronger growth expected only in H2. The new lithium plant requires a significant net investment of ~$500 million, with construction starting in FY2028 and full production not expected until ~3 years later, delaying returns. Ongoing tariff exposure remains a risk, despite receiving $31 million in refunds, and the company continues to manage through a volatile trade policy environment. The company's adjusted EPS growth in Q1 was significantly boosted by one-time tariff refunds ($0.63 per share) and 45X tax benefits, which are not part of core operational performance. The transition to new products (e.g., Gen 2 lithium in Motive Power) may be causing customers to delay orders, potentially impacting near-term volumes in IMS. Q: Can you provide context around the 80% year-over-year increase in data center orders and confirm if the newly launched lithium-ion product already has orders in hand?A: Shawn O'Connell (CEO) confirmed that the company has already placed the first 100 systems with its supplier to prime the supply chain, and the sales channel and service technicians are fully prepared. CFO Andrea Funk added that while lead-acid data center revenue is expected to grow in the high single to low teens, the strong order intake extends 12 to 36 months out, providing long-term visibility. For the DataSafe Noir lithium offering, there are over 500 units in active quotation and 110,000 campaign impressions, though revenue is not expected to materialize until fiscal 2028. Q: What are the key assumptions driving the mid-20% IRR for the new lithium plant, and how should we model net CapEx for fiscal 2028?A: CFO Andrea Funk explained that the high IRR is driven by the premium pricing available for FEOC-compliant cells in the aerospace and defense market, which is critical for national security. The plant will enable expansion into new areas like large-diameter drone batteries. Regarding CapEx, construction is expected to begin in the first half of fiscal 2028, with DOE grant reimbursements arriving on a one-quarter lag. The company is confident it can fund the approximately $500 million net investment entirely through operating cash flow without impacting its leverage ratio. Q: Can you explain the implied margin expansion in Q2, given the modest sequential revenue growth but strong EPS growth?A: CFO Andrea Funk noted that earnings growth in the first half of fiscal 2027 is driven primarily by margin expansion, shifting to top-line growth later in the year. Key drivers include the annualization of last year's restructuring actions, benefits from the Monterrey plant closure and 45X credits, additional facility rationalizations (Bellingham and Brazil), and improved cost discipline under the EnerGize framework. The service business, particularly in NIS, has turned from a headwind to a tailwind, contributing to both revenue and margin growth. Q: How do you ascertain where we are in the material handling cycle, and what gives you confidence in a recovery?A: CEO Shawn O'Connell cited leading indicators such as forklift truck order data and customer conversations. He noted that Hyster-Yale, a public OEM, reported its strongest booking quarter in three years, signaling green shoots. CFO Andrea Funk added that industry data is choppy but positive, and the company tracks its performance in line with the market. She also highlighted that the upcoming Gen 2 lithium offering (LFP vs. NMC) at a more attractive price point could stimulate demand. The company expects recovery to begin in Q3 of fiscal 2027. Q: Are you seeing any acceleration in the shift from lead to lithium in the material handling market?A: CEO Shawn O'Connell stated that the conversion rate from lead to lithium remains steady and consistent with historical trends. The current weakness in material handling is attributed to market effects and pent-up demand rather than substitution effects. CFO Andrea Funk added that the transportation market, which experienced a similar downturn, is now recovering strongly (revenue up 20% in Q1, orders up 91% year-over-year), providing a positive signal for the forklift market to follow. Q: Are you still on track for UL certification for the DataSafe Noir lithium product, and what are your margin expectations given third-party manufacturing?A: CEO Shawn O'Connell confirmed the company is on track for UL certification and validations, citing the speed at which they achieved UL and NFPA 855 approval for the more complex Fortix BESS system. He expects margins in line with TPPL offerings, which are higher than lead-acid. The key differentiator is that the DataSafe Noir system can replace a competitor's five-cabinet lithium solution with just two cabinets, offering significant value and space savings to data center customers. Q: Can you elaborate on the aerospace and defense opportunity, particularly regarding international demand beyond the US?A: CEO Shawn O'Connell highlighted the company's strong position with the US defense apparatus, built on its history of commercializing defense-developed technologies. The Ukraine conflict has demonstrated the critical role of drones, waking up governments worldwide. Notably, European A&D growth outpaced the Americas for the first time, with expansion underway at the Arras facility in France to support Bren-Tronics' work with the French Ministry of Armed Forces. CFO Andrea Funk added that European growth in 2026 was 2x that of 2025, with production also occurring in the UK and France for allied nations. Q: How does the evolution of data center architecture, such as the shift to 800-volt systems, change the revenue opportunity per megawatt?A: CEO Shawn O'Connell stated that the shift to 800-volt systems is a positive development, as it allows the company to sell more cells in centralized systems. He also noted that the new Greenville plant could enable a compelling offering in the battery backup unit (BBU) space for distributed rack systems, a market EnerSys has historically not played in. This aligns with the company's strategy of commercializing defense-developed technologies for commercial applications, with data centers seen as a significant future offtake opportunity for the Greenville facility. Q: Can you provide more detail on the service business, including its size, growth, and margin contribution?A: CEO Shawn O'Connell explained that the service business, particularly in NIS, involves specialized electrical construction and implementation. The company has invested in project management software and upskilled its labor force to improve discipline. CFO Andrea Funk noted that NIS services revenue grew around 20% year-over-year in Q1, with margins up approximately 100 basis points for total EnerSys services and even more within the NIS division. This service capability is a key differentiator and enabler for future growth initiatives, including BESS installations. Q: What is the status of the Fortix BESS system, and how does it fit into the warehouse energy ecosystem?A: CEO Shawn O'Connell announced that the Fortix 172 kWh BESS received UL and NFPA 855 approval, a critical step in the permitting process for commercial deployment. The system extends EnerSys' position from powering forklifts to optimizing energy across the warehouse. Combined with forklift batteries and Synova chargers, it creates an integrated energy ecosystem offering peak shaving and For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Enersys? Here are five stocks we like better. EnerSys reported record fiscal Q1 2027 results, with sales up 5% to $936 million and adjusted diluted EPS up 65%. Profitability was boosted by a $31 million tariff refund and $9 million in 45X manufacturing tax credits, though earnings excluding those benefits also improved. Growth was led by Network & Infrastructure Solutions and Precision Power Solutions, supported by data-center, communications, aerospace and defense demand. Industrial Mobility Solutions declined as weaker material-handling volumes offset an early transportation recovery. EnerSys forecast fiscal Q2 sales of $955 million to $995 million and adjusted EPS of $3.15 to $3.25, while advancing plans for a $650 million DOE-supported lithium-cell plant in South Carolina focused on defense applications. 3 Battery Stocks to Buy and Hold for the Rest of the Decade EnerSys (NYSE:ENS) reported record first-quarter fiscal 2027 results, with sales rising 5% from a year earlier to $936 million as favorable price mix, higher volumes and foreign-currency translation supported growth. The company said its Network & Infrastructure Solutions and Precision Power Solutions businesses performed strongly, while Industrial Mobility Solutions continued to face weaker material-handling demand despite an early recovery in transportation. President and CEO Shawn O'Connell said the quarter reflected strength in data centers, communications and defense markets, along with operating-expense discipline and stock repurchases supported by cash generation. First-quarter orders rose 7% year over year, while book-to-bill was 1.06 times. Backlog was relatively flat from the prior year and increased 2% sequentially. → AST SpaceMobile Earnings Just Reminded Investors How Risky Space Can Be Chief Financial Officer Andi Funk said the quarter included a $31 million, or $0.63-per-share, one-time benefit from refunds of previously paid IEEPA tariffs. The refunds were not included in the company’s guidance or its operational segment results. Gross profit increased 24% year over year to $313 million, and gross margin expanded 510 basis points to 33.5%. Excluding the tariff refunds, gross profit rose 12% and gross margin improved 180 basis points. The company also received $9 million in expanded 45X manufacturing tax-credit benefits, largely related to moving production from its Monterrey, Mexico, plant to its Richmond, Kentucky, facility. → Nebius’ Q2 Beat Shows the AI Bottleneck Is Capacity, Not Demand Adjusted operating earnings rose 47% from the prior-year period, while adjusted EBITDA increased 50% and adjusted diluted earnings per share climbed 65%. Excluding tariff refunds, adjusted operating earnings increased 22% with 45X benefits and 21% without them, according to the company. EnerSys also changed its adjusted-metric presentation beginning this quarter to exclude non-cash stock-based compensation expense from adjusted operating earnings, adjusted EBITDA and adjusted diluted EPS. Prior-year figures were recast for comparability. Network & Infrastructure Solutions: Revenue increased 9% to $428 million, while adjusted operating earnings rose 50% to $45 million. Adjusted operating margin improved 280 basis points to 10.5%. The company cited demand for power electronics, data-center products and service offerings. Industrial Mobility Solutions: Revenue declined 3% to $407 million, and adjusted operating earnings fell 11% to $38 million. The segment’s 9.3% adjusted operating margin was down 70 basis points, as lower material-handling volumes offset price mix and cost improvements. Precision Power Solutions: Revenue grew 24% to $101 million, with adjusted operating earnings increasing 48% to $18 million. Adjusted operating margin rose 280 basis points to 18.2%, driven by aerospace and defense demand, particularly for counter-drone and missile-defense applications. → On Holding's Price Stumble May Be an Opening for a Company Built to Run O'Connell said data-center revenue grew in the low teens during the quarter, while data-center orders increased more than 80% from a year earlier. Funk noted that such orders can extend 12 to 36 months, providing visibility into demand for the company’s lead-based offerings. The company expects its recently launched DataSafe Noir lithium offering for data centers to begin contributing meaningfully to revenue in fiscal 2028. O'Connell said the product has generated customer interest due to its energy density, cost competitiveness and the ability to pair it with EnerSys’ service network. In Industrial Mobility, management said transportation orders nearly doubled year over year in the first quarter, while material-handling orders declined by a high-single-digit percentage. EnerSys expects material-handling demand to improve later in fiscal 2027 and said it plans to begin recognizing revenue from its next-generation lithium offering in the second half. EnerSys finalized a U.S. Department of Energy grant for a planned lithium-cell manufacturing facility in Greenville, South Carolina. The facility will focus on defense applications and serve as a Lithium and Advanced Technologies Center of Excellence. The plant is expected to have initial annual production capacity of approximately 1 gigawatt-hour and will manufacture high-energy-density cells for manned platforms, soldier power, space and autonomous systems. O'Connell said the facility is designed for specialized defense applications requiring smaller-format cells, specialized equipment and security protocols rather than broad commercial lithium production. The revised DOE grant will provide approximately $150 million toward the project’s estimated $650 million cost. EnerSys expects its approximately $500 million net investment to be funded entirely through operating cash flow. The company also cited an approximately $200 million state and local incentive package from South Carolina and Greenville County. Construction is planned to begin in the first half of fiscal 2028, with full production expected about three years after construction begins. Management expects the investment to generate an internal return in the mid-20% range. Operating cash flow was $230 million and capital expenditures totaled $12 million, producing $218 million in free cash flow compared with negative $32 million a year earlier. The result was aided by a $115 million U.S. federal tax refund and tariff-refund receipts. As of July 5, EnerSys held $531 million in cash and cash equivalents, while net debt totaled $522 million. During the quarter, the company repurchased 219,000 shares for $50 million at an average price of about $229 per share. It had nearly $900 million remaining under its repurchase authorization. The board also increased the quarterly dividend 10% to $0.2875 per share for the second quarter of fiscal 2027. For the fiscal second quarter, EnerSys forecast net sales of $955 million to $995 million and adjusted diluted EPS of $3.15 to $3.25, including $42 million to $47 million of 45X benefits to cost of sales. Excluding 45X benefits, it expects adjusted diluted EPS of $1.95 to $2.05, representing growth of about 25% at the midpoint from the prior-year period. Enersys, headquartered in Reading, Pennsylvania, is a global leader in stored energy solutions, specializing in manufacturing and distributing industrial batteries, battery chargers, power equipment, and related accessories. The company serves a diverse range of end markets, including telecommunications, data centers, medical, aerospace, defense, electric vehicle motive power, and utility outcomes. Its products are engineered to deliver critical reserve power and motive power applications across key infrastructure and industrial sectors. The company's product portfolio encompasses lead-acid batteries, lithium-ion energy storage systems, chargers, inverters, power management software, and a broad array of battery accessories. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Enersys Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

EnerSys recently reported past first-quarter results for fiscal 2027, with revenue of US$935.64 million and net income of US$116.45 million, alongside a 10% increase in its quarterly dividend to US$0.2875 per share payable on October 2, 2026. The company also delivered earnings and revenue above analyst expectations, issued sales guidance of US$955 million to US$995 million for the next quarter, and continued share repurchases, underscoring management’s confidence in cash generation and capital return. We’ll now examine how EnerSys’ earnings beat and higher dividend reshape its investment narrative built around efficiency gains and energy storage growth. The future of work is here. Discover the 39 top robotics and automation stocks leading the charge in AI-driven automation and industrial transformation. To own EnerSys, you need to believe its efficiency push and exposure to energy storage demand can offset tariff uncertainty, uneven Motive Power volumes, and project delays. The latest earnings beat and dividend increase support the near term catalyst around margin improvement and cash generation, but do not remove the core risk that organic growth in traditional markets could stay muted if new products and end markets fail to scale quickly. The most relevant piece of news here is EnerSys’ guidance for next quarter sales of US$955 million to US$995 million. That outlook sits alongside higher dividends and ongoing buybacks, and together they frame how management is balancing investment needs with returning capital at a time when tariff policy, trade friction, and the still on hold lithium cell factory all remain key swing factors for the story. Yet beneath the strong quarter, investors should also be aware of the risk that continued delays to the Greenville lithium cell project could... Read the full narrative on EnerSys (it's free!) EnerSys' narrative projects $4.2 billion revenue and $523.7 million earnings by 2029. This requires 4.0% yearly revenue growth and a $230.1 million earnings increase from $293.6 million today. Uncover how EnerSys' forecasts yield a $247.29 fair value, a 25% upside to its current price. Some of the most optimistic analysts were already assuming revenue near US$4.4 billion and earnings of about US$548 million by 2029, which is a much brighter scenario than the baseline view and leans heavily on data center storage growth that may or may not accelerate further after this latest earnings and dividend news. Explore 5 other fair value estimates on EnerSys - why the stock might be worth as much as 42% more than the current price! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your EnerSys research is our analysis highlighting 5 key rewards that could impact your investment decision. Our free EnerSys research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate EnerSys' overall financial health at a glance. Early movers are already taking notice. See the stocks they're targeting before they've flown the coop: AI is about to change healthcare. These 44 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early. The latest GPUs need a type of rare earth metal called Neodymium and there are only 28 companies in the world exploring or producing it. Find the list for free. We've uncovered the 11 dividend fortresses yielding 5%+ that don't just survive market storms, but thrive in them. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ENS. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Record financial results were driven by favorable price/mix, higher volumes, and operational discipline across Network & Infrastructure and Precision Power segments. The company is leveraging its 'Energized' strategic framework to focus on markets with high energy and labor challenges, specifically targeting data centers and aerospace and defense. Data center revenue grew in the low teens year-over-year, supported by strong demand for lead-based TPPL solutions and the launch of the DataSafe Noir lithium offering. Aerospace and Defense (A&D) performance was bolstered by geopolitical shifts, driving demand for counter-drone munitions, missile defense, and soldier power systems. Industrial Mobility Solutions faced temporary headwinds in material handling, though management expects a recovery in the second half of the fiscal year as truck orders begin to rebound. Strategic facility rationalizations, including closures in Mexico and Brazil, are successfully shifting production to U.S. facilities to capture 45X tax benefits. The company finalized a $150 million DOE grant for a new lithium cell manufacturing plant in South Carolina, focused on secure, domestic supply chains for defense applications. Management expects earnings growth in the first half of fiscal 2027 to be driven by margin expansion, with top-line growth accelerating in the second half. The new Greenville lithium plant is projected to begin construction in the first half of fiscal 2028, with full production expected approximately three years later. Data center growth is projected to remain in the high single-digit to low teens range for fiscal 2027, with lithium offerings becoming a meaningful revenue contributor in fiscal 2028. Internal return for the $500 million net investment in the new lithium facility is expected to be in the mid-20s, supported by high-density cell demand for manned and autonomous platforms. Q2 fiscal 2027 guidance assumes continued strength in communications and defense, alongside an initial recovery in the transportation market. Q1 results included a one-time $31 million ($0.63 per share) benefit from IEEPA tariff refunds, which was excluded from operational segment reporting. The company transitioned to excluding non-cash stock-based compensation from adjusted metrics to better align with technology industry peers. A $115 million U.S. federal tax refund significantly bolstered Q1 free cash flow, contributing to a 187% conversion rate. Management noted that while material handling demand is currently lagging, historical data suggests a rapid recovery following economic normalization periods. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Orders increased 80% year-over-year, with visibility extending 12 to 36 months for lead-acid products. Management confirmed the first 100 DataSafe Noir lithium systems are already in the supply chain, with over 500 units in active quotation. The lithium offering is expected to be a 'fiscal '28 story' for revenue, providing incremental growth on top of the existing lead-acid tail. The mid-20s IRR is supported by the critical need for FEOC-compliant (non-foreign entity of concern) cells in national security applications. The plant will focus on high-value, small-format cells for drones and soldier power rather than broad commercial lithium markets. Management has not yet modeled the value of potential future expansions or commercial offtake for data centers, which could further increase returns. Recovery is expected to be a Q3 story, supported by Hyster-Yale reporting its strongest booking quarter in three years. Management noted a typical lag of half a quarter to a full quarter between forklift truck orders and battery orders. The upcoming Gen 2 lithium LFP solution is expected to offer a more attractive price point and higher margins than previous NMC versions. NIS service revenue grew approximately 20% in the quarter with a 100 basis point margin improvement. The business has shifted from a headwind to a tailwind due to disciplined project management and upskilling for complex electrical construction. Service capabilities are viewed as a key differentiator for large-scale BESS and data center deployments where labor is scarce.