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EnerSys Announces Participation in Wells Fargo Industrials & Materials Conference on June 11, 2025

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4 days ago

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EnerSys Announces Participation in Wells Fargo Industrials & Materials Conference on June 11, 2025

READING, Pa., June 04, 2025--(BUSINESS WIRE)--EnerSys (NYSE: ENS), a global leader in stored energy solutions for industrial applications, announced today that Executive Vice President and Chief Financial Officer, Andrea Funk, is scheduled to present on Wednesday, June 11th, at the 2025 Wells Fargo Industrials & Materials Conference, being held in Chicago, Illinois. The fireside chat will begin at 2:15 pm CT. A live audio webcast and archived replay will be available to the public via this link. The webcast and archived replay for this event will also be available on the Events and Presentations page of the Investor Relations section of the EnerSys website at About EnerSys EnerSys is a global leader in stored energy solutions for industrial applications and designs, manufactures, and distributes energy systems solutions and motive power batteries, specialty batteries, battery chargers, power equipment, battery accessories and outdoor equipment enclosure solutions to customers worldwide. The company goes to market through four lines of business: Energy Systems, Motive Power, Specialty and New Ventures. Energy Systems, which combine power conversion, power distribution, energy storage, and enclosures, are used in the telecommunication, broadband and utility industries, uninterruptible power supplies, and numerous applications requiring stored energy solutions. Motive power batteries and chargers are utilized in electric forklift trucks and other industrial electric powered vehicles. Specialty batteries are used in aerospace and defense applications, portable power solutions for soldiers in the field, large over-the-road trucks, premium automotive, medical and security systems applications. New Ventures provides energy storage and management systems for various applications including demand charge reduction, utility back-up power, and dynamic fast charging for electric vehicles. EnerSys also provides aftermarket and customer support services to its customers in over 100 countries through its sales and manufacturing locations around the world. To learn more about EnerSys please visit View source version on Contacts Lisa HartmanVice President, Investor Relations and Corporate CommunicationsEnerSys610-236-4040E-mail: investorrelations@

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4 days ago

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EnerSys Announces Participation in Wells Fargo Industrials & Materials Conference on June 11, 2025

READING, Pa.--(BUSINESS WIRE)-- EnerSys (NYSE: ENS), a global leader in stored energy solutions for industrial applications, announced today that Executive Vice President and Chief Financial Officer, Andrea Funk, is scheduled to present on Wednesday, June 11 th, at the 2025 Wells Fargo Industrials & Materials Conference, being held in Chicago, Illinois. The fireside chat will begin at 2:15 pm CT. A live audio webcast and archived replay will be available to the public via this link. The webcast and archived replay for this event will also be available on the Events and Presentations page of the Investor Relations section of the EnerSys website at About EnerSys EnerSys is a global leader in stored energy solutions for industrial applications and designs, manufactures, and distributes energy systems solutions and motive power batteries, specialty batteries, battery chargers, power equipment, battery accessories and outdoor equipment enclosure solutions to customers worldwide. The company goes to market through four lines of business: Energy Systems, Motive Power, Specialty and New Ventures. Energy Systems, which combine power conversion, power distribution, energy storage, and enclosures, are used in the telecommunication, broadband and utility industries, uninterruptible power supplies, and numerous applications requiring stored energy solutions. Motive power batteries and chargers are utilized in electric forklift trucks and other industrial electric powered vehicles. Specialty batteries are used in aerospace and defense applications, portable power solutions for soldiers in the field, large over-the-road trucks, premium automotive, medical and security systems applications. New Ventures provides energy storage and management systems for various applications including demand charge reduction, utility back-up power, and dynamic fast charging for electric vehicles. EnerSys also provides aftermarket and customer support services to its customers in over 100 countries through its sales and manufacturing locations around the world. To learn more about EnerSys please visit

EnerSys (ENS) Q4 2025 Earnings Call Highlights: Record EPS and Revenue Growth Amid Tariff Challenges

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23-05-2025

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EnerSys (ENS) Q4 2025 Earnings Call Highlights: Record EPS and Revenue Growth Amid Tariff Challenges

Revenue: Fourth-quarter net sales of $975 million, up 7% from prior year. Full-Year Revenue: $3.6 billion, up 1% year over year. Adjusted Gross Margin: Q4 '25 adjusted gross margin of 31.2%, up 320 basis points versus prior year. Adjusted Operating Earnings: $152 million in Q4, up $43 million versus prior year. Adjusted EBITDA: $167 million in Q4, up $42 million versus prior year. Adjusted EPS: Q4 adjusted EPS of $2.97 per share, up 43% over prior year. Free Cash Flow: $105 million in Q4. Energy Systems Revenue: Increased 8% from prior year to $399 million in Q4. Motive Power Revenue: $392 million in Q4, flat compared to prior year. Specialty Revenue: Increased 21% from prior year to $178 million in Q4. Net Debt: $781 million as of March 31, 2025. Credit Agreement Leverage Ratio: 1.3 times EBITDA. Q1 Fiscal 2026 Guidance: Expected net sales of $830 million to $870 million with adjusted diluted EPS of $2.03 to $2.13 per share. Warning! GuruFocus has detected 3 Warning Sign with OLNCF. Release Date: May 22, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. EnerSys (NYSE:ENS) delivered a strong fourth quarter with a 7% revenue growth, marking the second highest revenue quarter in the company's history. The company achieved record adjusted diluted EPS of $1.86, excluding 45X benefits, showcasing strong earnings power. Motive Power margins reached record levels, with maintenance-free products accounting for a record 29% of segment sales. EnerSys (NYSE:ENS) saw significant growth in Energy Systems, particularly in data centers and a moderate recovery in communications. The Bren-Tronics acquisition contributed positively to the company's performance, particularly in the Aerospace and Defense markets. EnerSys (NYSE:ENS) faces near-term friction due to tariff-related disruptions, with a direct tariff exposure of approximately $92 million. The company anticipates some short-term headwinds from stranded tariffs and shifting customer order patterns. Motive Power orders were pressured in Q4, with a 14% decline in Motive Power Americas orders year-on-year. The company has temporarily paused full-year guidance due to uncertainty around reciprocal tariffs and macroeconomic dynamics. EnerSys (NYSE:ENS) is experiencing slower recovery in Class 8 truck OEM volumes, with ongoing macro uncertainty affecting transportation markets. Q: Can you explain the EPS growth in the Q1 guidance despite flat revenues? A: Shawn O'Connell, President and COO, explained that the EPS growth is driven by favorable price/mix and the accretive benefit from the Bren-Tronics acquisition. Andrea Funk, CFO, added that despite lower volumes in Motive Power, the EPS is expected to be flat year-over-year due to these factors, offsetting pressures from FX and stranded tariff costs. Q: Why is EnerSys pausing full-year guidance despite order recovery? A: Andrea Funk, CFO, stated that the pause in guidance is due to the uncertainty surrounding reciprocal tariff negotiations. David Shaffer, CEO, added that they want to ensure clarity on these tariffs before providing full-year guidance, as they could have both positive and negative impacts. Q: What is the status of the Section 45X tax refund, and are there any delays? A: Andrea Funk, CFO, mentioned that other companies have received their refunds, and EnerSys is experiencing a delay due to IRS staffing issues. They expect to receive the refund soon, with interest accruing in the meantime. Q: What are EnerSys' plans for inorganic growth given the current economic environment? A: Shawn O'Connell, President and COO, stated that EnerSys is well-positioned with a strong balance sheet to pursue acquisitions. They see opportunities in Aerospace and Defense and are looking for targets that fit their ROIC model, despite current market uncertainties. Q: Can you provide more details on the Energy Systems segment and potential network expansions? A: Shawn O'Connell, President and COO, noted that there is a recovery in network expansions, driven by the need to address technical debt and AI traffic processing. Investments are being made in upgrading macro sites and central offices, although it's not yet at the scale of past major build-outs. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

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23-05-2025

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EnerSys (ENS) Q4 2025 Earnings Call Highlights: Record EPS and Revenue Growth Amid Tariff Challenges

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23-05-2025

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Q4 2025 EnerSys Earnings Call

Lisa Hartman; Vice President - Investor Relations; EnerSys David Shaffer; Chief Executive Officer, Director; EnerSys Shawn O'Connell; President, Chief Operating Officer; EnerSys Andrea Funk; Chief Financial Officer, Executive Vice President; EnerSys Noah Kaye; Analyst; Oppenheimer & Co., Inc. Brian Drab; Analyst; William Blair & Company, LLC Greg Lewis; Analyst; BTIG Chip Moore; Analyst; Roth Capital Partners, LLC Operator Good day, and thank you for standing by. Welcome to EnerSys fourth quarter and full year fiscal 2025 results. (Operator Instructions) Please be advised that these conferences are being recorded. I would not like to hand the conference over to your speaker today, Lisa Hartman, Vice President of Investor Relations, please go ahead. Lisa Hartman Good morning, everyone. Thank you for joining us today to discuss EnerSys' fourth quarter and full year fiscal 2025 results. On the call with me today are David Shaffer, EnerSys' Chief Executive Officer, Shawn O'Connell, EnerSys' President and Chief Operating Officer and incoming CEO; and Andrea Funk, EnerSys' Executive Vice President and Chief Financial evening, we published our fourth quarter and fiscal-year 2025 results under our 10-K with the SEC, which are available on our website. We also posted slides that we will be referencing during this call. The slides are available on the Presentations page within the Investor Relations section of our 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-K filed with the addition, we will be presenting certain non-GAAP financial measures 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 May 21, I'll turn the call over to EnerSys' CEO, Dave Shaffer. David Shaffer Thank you, Lisa, and good morning. Please turn to slide 4 for a review of our fourth quarter and full year performance. EnerSys delivered a very strong fourth quarter, demonstrating the earnings power of our balanced grew revenue 7%, our second highest revenue quarter ever, and delivered record adjusted diluted EPS of $1.86 excluding 45X benefits. Highlights included record Motive Power margins, significant margin expansion in Energy Systems and Specialty and strong contributions from the Bren-Tronics Energy Systems, we saw growth in data centers and continued moderate recovery in communications. Motive Power generated 15% earnings growth on similar volumes to prior year fourth quarter, with increased maintenance-free products reaching a record 29% of segment benefited from sustained strength in A&D markets and outperformance from Bren-Tronics. Full-year revenue was $3.6 billion, with meaningful gains in adjusted gross margin, adjusted operating earnings and adjusted earnings per share even before 45X made meaningful progress in fiscal-year 2025. We executed our strategy in a challenging environment. We expanded our share in the attractive and growing defense market through our higher-margin maintenance-free offerings, reduced costs, optimized our manufacturing footprint, invested in high speed, lower cost, flexible domestic production capacity and developed new product offerings, strengthening our foundation for future announced in November, today marks my final day as CEO. Shawn O'Connell takes the helm as CEO tomorrow. With deep industry experience and proven leadership across EnerSys, I am confident he will lead the company to continued has been an honor to serve as EnerSys' CEO, and I would like to thank our employees for their consistent hard work and dedication in supporting each other and our customers every day, our Board of Directors for their support and our shareholders for your trust. I will now turn it over to Shawn to take you through more detail on our results and business drivers. Shawn? Shawn O'Connell Thank you, Dave, for your leadership and for positioning EnerSys for future success. I know I speak for the entire EnerSys family and wishing you the very best in your next chapter. Please turn to slide 6. As I begin my remarks today, I would like to start with my perspective on our enjoys deep customer relationships and leading market share positions in diverse end markets. The key to our future growth is that our solutions help our valued customers address their shared mounting concerns in two main areas, energy security and labor products help our customers manage their energy costs and consumption while also making it possible for them to perform the same missions with fewer people through maintenance-free products and automation, enabled by intelligent stored energy the past six months, we have taken my strategic hypotheses, tested them with external advisers and are finalizing a focused road map to go deeper in helping our customers address these challenges while resetting our operations and reinforcing intense discipline on are opportunities for us to narrow our focus on select growth verticals, expand our service capabilities and achieve further operational efficiencies, which I will share more with you on our August call and upcoming the near term, our focus is on disciplined execution as we move through a transitional period shaped by evolving macro and policy dynamics. Before I get into the quarter, I'd like to take a step back to address the broader macroeconomic environment, our tariff exposure and our approach to mitigating associated risks. Please turn to slide March, we established a dedicated cross-functional tariff task force dedicated solely on analyzing, coordinating and mitigating tariff impacts, considering both supply chain and pricing actions. This team is also monitoring both the tertiary impact of tariffs on inflationary pressures as well as, and perhaps most importantly, market dynamics, both positive and negative from suppressed demand to opportunities where our global footprint offers competitive to our long-standing practices of producing in region for region onshoring from China, dual sourcing and footprint rationalization, we already have structural buffers in place. We are committed to fully mitigating any financial impact to our shareholders and see OpEx reductions as an effective lever for what cannot be offset by supply or pricing put our tariff exposure in perspective, about two-thirds of our global revenue comes from the US, in which 80% of our US supply is either domestic or USMCA trade compliant. Only 5% of this is sourced from China, where the highest tariff rates still exist. At current tariff levels, our direct tariff exposure is approximately $92 million, down from $160 million prior to the May 12 US administration intend to fully offset this impact, but expect some near-term friction in Q1 due to stranded tariffs that can't be passed on to customers and shifting customer order patterns. The biggest unknown to us is timing and the scope of broader inflation and/or slowdown effects across the industrial sector. That said, we are prepared for a range of outcomes, guided by our proven and refined playbook. We will remain well positioned to weather both tariffs and a potential downturn if one turn to slide 8. In addition to our resilient balance sheet and conservative capital structure, EnerSys has a number of structural advantages to help us mitigate economic downturns. First, a large portion, about 60% of our business, follows GDP independent cycles with limited sensitivity to general economic conditions as they follow their own investment time lines. This includes A&D and data centers, which are currently enjoying robust market momentum, as well as network communications, which is poised for further recovery and our global manufacturing footprint provides flexibility in our production and distribution capabilities which enable us to respond and leverage varying geopolitical dynamics by market better than many of our our primary operating capital investments have historically been a cash generator during recessionary periods. And finally, we maintain consistent OpEx discipline, enabling us to respond quickly when needed. While shifting conditions may temporarily affect market rhythm, we remain well positioned to expediently protect both earnings and cash turn to slide 9. I'd now like to turn your attention to current business performance. Our overall book-to-bill in the fourth quarter was just over one, with Energy Systems and Specialty above one, offset by Motive Power, below one. Energy Systems had positive order rates for the third consecutive quarter, driven both by data centers and Specialty, A&D projects and orders have been robust. It's worth noting that we did see some order moderation early in the first quarter as customers adjusted to tariff-related developments, but activity rebounded quickly when tariff actions were provide more visibility in what we are seeing today versus prior year, our first-quarter year-to-date order rates for Motive Power are up to 16%, Energy Systems are up 10%, and Specialty are up 33% with the Bren-Tronics add. While we anticipate demand signals to be variable in the coming months, we view this as temporary recalibration phase and not a structural change in market I'll provide some more detail on the business drivers behind our strong fiscal Q4 performance. In our Energy Systems business, I am pleased with the team's execution, nearly doubling adjusted operating improved results highlight the benefits of structural improvement actions, along with 22% year-on-year increase in quarterly data center revenue and continued signs of recovery in US communications spending. While we are encouraged by early project work and network expansion planning in US communications, particularly driven by AI-related data demand, many customers are selectively managing capital expenditures. As such, we expect the pace of network expansion to remain gradual and potentially uneven in the upcoming rates were sequentially higher, with particular strength in the Americas. Continued sequential order rate growth in EMEA is encouraging as a sign that the regional spend is increasing and off prior lows. It's important to note that while we are seeing strong order rates, lead times can extend the revenue conversion time line in this business. Further, although the segment is one most exposed to tariffs and supply chain disruptions, we have significantly improved our monitoring and ability to respond more quickly than in the as an additional future tailwind, our services revenues continue to be challenging for us is an increasing area of focus for [Keith]. We see this as a tremendous opportunity to add value to our customers and grow profitably in the Motive Power, our very strong AOE performance was driven by another quarter of favorable price/mix on increasing TPPL with charger mix despite relatively flat sales year over year on lower volumes in EMEA and Q4, sales of maintenance-free products were up 16% year over year, representing a record 29% of total Motive Power revenue, with customer enthusiasm over how our products help them address their labor challenges, as I had mentioned at the beginning of my estimates for lift trucks indicate calendar-year '25 may be down slightly over prior year, with continued expectations for a better recovery in calendar-year '26. We are receiving mixed signals on the near-term outlook for Motive April-May order book has been stable to promising, and April, ITA truck orders were up over 19% over last year's historical lows. Conversely, we have a lower starting backlog than both a year ago and last quarter, slower book and ship activity in the current quarter and anticipate disruption will continue to be impacted in the near term with major ports reporting dramatic fluctuations in container volumes over the past three months as importers drastically adjust shipments week by week in response to ongoing tariff a reminder, this business is largely correlated with GDP, but also has unique upside opportunities driven by macro trends of electrification and automation, as well as increasing market demand for our higher performing, higher value maintenance-free believe the market pulled in some shipments into our fiscal Q4 in anticipation of announced tariffs, which will reverse out in the first quarter, creating a temporary drag. That said, we also see potential upside opportunities as lithium pricing pressure from Chinese suppliers may drive increased customer interest in TPPL going forward. But it's difficult to predict how and when these market dynamics will play Specialty, we delivered significant year-over-year and quarter-over-quarter improvements in both revenue and adjusted operating earnings, driven by solid performance in Aerospace and Defense, supported by the continuing outperformance of our Bren-Tronics in Bren-Tronics was fueled by robust demand for chargers, soldier power and expeditionary power systems, as well as increased demand from the European defense market. The impressive A&D results were partially offset by slower Class 8 truck OEM volume recovery that we had initially and macro uncertainty have paused the Class 8 truck recovery we are expecting for early fiscal '26, and we are seeing slower and choppy order rates as major OEMs continue to revise forecasts. A&D markets remain robust and will be strengthened by the macro, although we have seen some near-term delays that we believe to be timing related with personnel reductions in the administration temporary clogging the flow of strong momentum in Bren-Tronics and broader A&D amid opportunities for improvement in transportation when markets come back and our Missouri plant investments come online, our Specialty business remains well positioned for continued growth and profit turn to slide 10. Our recent performance reflects a business not only built for resilience, but ready to adapt. As we transition leadership, we are sharpening our focus, executing with discipline, building operational momentum and listening closely to customers as their challenges made meaningful strides bringing new technologies to market, introducing cutting-edge products such as software-driven energy management systems, which will help our customers address their energy scarcity challenges that I had mentioned earlier. These advancements equip our customers with adaptable and efficient solutions that evolve alongside their preview of our Synova Sync charger and battery energy storage system, or BESS, for warehouse and distribution center customers generated a lot of excitement at recent trade shows. Synova Sync, our new generation battery charger, delivers high efficiency, IoT compatibility for remote monitoring and over-the-air firmware updates advancing our IoT in the development phase, our BESS resonated with our customers looking for a solution to tackle power continuity challenges, costly infrastructure upgrades, long lead times and limited flexibility, barriers that often slow electrification efforts. Engineered for rapid deployment and semi portability, customers were enthused by the enhanced flexibility and efficiency of our BESS and what they will offer their we're building on progress from fiscal '25 with a heightened focus on execution. The first new high-speed line in our Missouri Springfield [1] factory began production this quarter and is performing to expectations, with the second high-speed line on track to become operational in the the same time, we are actively reshaping our manufacturing footprint. As previously announced, we are closing our flooded lead-acid battery manufacturing facility in Monterrey, Mexico and transitioning production to our existing plant in Richmond, Kentucky. This move will enable us to optimize our cost structure as market demand continues to shift to our higher-performing TPPL transition will also allow us to maximize near-term IRC 45X tax benefits and aligns with our philosophy of producing in market. The restructuring is expected to deliver an estimated pretax benefit of $19 million annually beginning fiscal-year 2027, while ensuring continued product availability and customer further strengthen our focus on high-impact technology execution, as previously announced in March, Mark Matthews, President of our Specialty Global line of business, has been appointed Acting Chief Technology brings more than three decades of engineering and operational leadership, including deep technical expertise in lithium-ion chemistry. He currently leads our Aerospace and Defense business, which utilizes multiple distinct lithium chemistries across mission-critical experience, combined with his deep relationships across the Department of Defense and Department of Energy, positions him well to guide the next phase of our lithium strategy and align it with national is actively reviewing our lithium technology road map and investment plans to ensure they reflect evolving market demands and long-term supply needs. His dual role ensures commercial alignment with R&D and capacity planning as we position EnerSys for future growth in domestic lithium battery the funding of the DOE award for our domestic lithium plant remains pending, we are encouraged by recent engagement with the DOE and remain optimistic given the project's alignment with defense readiness, domestic supply assurance and American the meantime, we are taking a disciplined, risk-aware approach, adjusting our plans, maintaining flexibility and closely managing cost dynamics as we update our financial model for evolving cost and benefit assumptions to ensure our future path delivers an attractive return on investment for our remain well positioned to move with speed and confidence once greater policy clarity emerges. In closing, I want to express my deep confidence in the strength of our business, the relevance of our solutions and the dedication of the EnerSys are energized by the critical role we play in supporting the industries that keep data and products across the world moving. I look forward to sharing more about our evolving strategy and growth road map during our fiscal Q1 earnings call in I'll turn it over to Andy to discuss our financial results and outlook in greater detail. Andy? Andrea Funk Thank you, Shawn. Please turn to slide 12. Fourth-quarter net sales of $975 million were up 7% from prior year, the second highest revenue quarter for the company, driven by a 4% increase in organic volume, largely on Energy Systems communications continuing recovery and strength in data centers, as well as 1% positive price/mix across Motive Power and Energy Systems and a 4% positive impact from the Bren-Tronics acquisition, partially offset by 2% FX headwind. We achieved adjusted gross profit of $304 million, up $49 million year on year and up $41 million if you exclude 45X benefits.Q4 '25 adjusted gross margin of 31.2% was up 320 basis points versus prior year. And excluding 45X, adjusted gross margin was up 260 basis points despite the FX headwinds. Our adjusted operating earnings were $152 million in the quarter, up $43 million versus prior year with an adjusted operating margin of 15.6%. Excluding 45X benefits, adjusted operating earnings increased $35 million or 48%, with an adjusted operating margin of 11.1% on 7% revenue growth driving a 360 basis point margin improvement year on EBITDA was $167 million, an increase of $42 million versus prior year, while adjusted EBITDA margin was 17.1%, up 340 basis points versus prior year. Adjusted EPS for the fourth quarter came in above the high end of our guidance range at $2.97 per share, an increase of 43% over prior 45X, adjusted EPS was a record $1.86 per share, up $0.66 per share versus prior year, demonstrating the strong earnings power of our diversified business and more than $0.40 per share higher than our previous the fourth quarter of fiscal '25, our effective tax rate was 15.9% on an as-reported basis and 18.9% on an as adjusted basis before the benefit of 45X compared to 20.2% in Q4 of '24 and 23.3% in the prior quarter. Full-year net sales of $3.6 billion were up 1% year over year. We generated adjusted operating profit of $528 million, including $185 million benefit from IRC 45X tax the 45X benefits, we generated record adjusted profit of $343 million. Adjusted diluted EPS was $10.15 per share, an increase of 22%, and adjusted diluted EPS before 45X benefits was a record $5.58 per share, an increase of $0.53 from our prior me now provide some details by segment. Please turn to slide 13. In the fourth quarter, Energy Systems revenue increased 8% from prior year to $399 million, primarily driven by increased volumes as well as price/mix and partially offset by was up over $10 million sequentially, the third consecutive increase, as we continue to see steady improvement in these end markets. Adjusted operating earnings of $35 million grew for the fifth consecutive quarter, reflecting higher operating leverage through our optimized cost structure and were $17 million higher than prior operating margin of 8.7% increased an impressive 400 basis points versus prior year. We exited the quarter with encouraging order trends in this business and expect to deliver year-over-year margin expansion as revenue growth, and we continue with our structural improvement we remain fully confident in our ability to proactively mitigate tariffs and supply chain disruption when the macro environment stabilizes, we expect to absorb some short-term headwinds from stranded tariffs in the upcoming Shawn mentioned, although this segment is our most sensitive to tariffs and supply chain volatility, we have enhanced our visibility and responsiveness, allowing us to act with greater speed and precision than in prior turn to slide 14. Motive Power revenue was in line with the prior year at $392 million as FX headwinds and flat volumes were offset by positive price/mix. Motive Power again reported robust adjusted operating earnings this quarter, contributing $67 million, up 15% versus prior year on the flat revenue, largely on favorable price/mix as well as some lower commodity and manufacturing conversion continued its impressive trend at a record 29% of Motive Power revenue in Q4. Adjusted operating margins were 17.1%, up 240 basis points versus the prior year. Since the implementation of tariffs, a leading industry report indicates a significant decline in market sentiment, reflecting a more than 50% drop in confidence for both current and future business as the broader market is digesting this evolving market our products play a critical role in global supply chains, we expect a temporary short-term negative impact on new [lift] truck orders as companies reassess their investment strategies in response to the evolving trade see meaningful upside to this business once conditions settle, supported by long-term tailwinds from electrification and automation, along with growing customer preference for our higher-performing maintenance-free turn to slide 15. Specialty revenue increased 21% from prior year to $178 million, driven by a 22% positive impact from the Bren-Tronics acquisition and a 1% increase in organic volumes, partially offset by a 2% decrease in price/mix.Q4 '25 adjusted operating earnings of $15 million were nearly double prior year, with an adjusted operating margin of 8.5%, up 270 basis points. Specialty's performance reflects focused execution, with A&D and Bren-Tronics driving the current results. With additional leverage expected from our Missouri investments and longer-term transportation improvement, we anticipate further gains turn to slide 16. Positive operating cash flow of $135 million, offset by CapEx of $30 million, resulted in free cash flow of $105 million in the quarter. I would like to note that we have not yet received a $137 million US tax refund which we had expected in the fourth quarter. We fully attribute this delay to IRS staffing issues and anticipate receiving the refund with interest any had strong primary operating capital management, ending the year with $932 million on hand, up $79 million versus prior year as we built the business for future growth. As of March 31, 2025, we had $343 million of cash and cash equivalents on debt of $781 million represents an increase of approximately $270 million since the end of fiscal '24 as we made our acquisition of Bren-Tronics, returned $192 million to shareholders through share repurchases and dividends and continued to invest in our credit agreement leverage ratio was 1.3 times EBITDA. Our balance sheet remains strong and positions us to invest in growth and navigate the current economic environment. We anticipate maintaining our net leverage at or below the low end of our 2 to 3 times target range, providing us with ample dry powder for our capital allocation decisions and to absorb any macroeconomic dynamics that may impact turn to slide 17. During the fourth quarter, we paid $9.5 million in dividends and repurchased $40 million in shares. We currently have approximately $200 million remaining on our Board buyback continue to evaluate promising bolt-on acquisition opportunities like Bren-Tronics that align with our disciplined strategic and financial criteria and are focused on strengthening customer intimacy, expanding share of wallet with our leading positions in exciting end markets and making progress on our transformation journey. Given the strong cash flow generation of our business, we have the opportunity to be more aggressive in our opportunistic share buyback activity, particularly during these volatile market turn to slide 18. As Shawn mentioned, we remain very confident in our ability to effectively manage our business in the evolving macro environment and deliver strong earnings performance. We are committed to fully shielding our investors from the ongoing impact of tariffs, although we may have some short-term headwinds when uncertainty creates pockets of volume disruption and stranded fiscal first-quarter 2026 guidance reflects typical seasonal volume softness in Motive Power and transportation exacerbated by the short-term macro dynamics. For the first quarter of fiscal 2026, we expect net sales in the range of $830 million to $870 million with adjusted diluted EPS of $2.03 to $2.13 per share, which includes $35 million to $40 million of 45X benefits to gross largest driver of our anticipated Q1 sequential decline in revenue and EPS can be attributed to Motive Power volumes, which are expected to be pressured on seasonality and tariff disruptions, with Motive Power Americas Q4 orders down 14% year on year as well as, to a lesser extent, approximately $5 million of stranded tariff costs. Shawn and I are working on scenario plans to effectively respond to any and all outcomes as it relates to further tariff policy the evolving policy environment and pacing of demand normalization, we are temporarily pausing quantified full-year guidance. That said, we believe Q1 will be the low point of our fiscal year. We anticipate full-year adjusted operating earnings growth, excluding 45X benefits, to outpace revenue growth for the fiscal improvement in our order book during Q1 year-to-date, we expect revenue will be bolstered by our customers' enthusiasm for our maintenance-free offering, robust A&D and data center markets and ongoing improvements in our communication and transportation businesses, as well as ongoing improvements in our manufacturing costs, disciplined OpEx and reductions in our capital expenditures year on year, all of which will be tempered by macro proactively mitigate these market dynamics, we have implemented direct and indirect cost control and also are currently reviewing additional reductions in both OpEx and CapEx as part of Shawn's strategic business improvement road turn to slide 19. Before we move to Q&A, with the completion of our fiscal-year '25 results, I would like to provide an update on our progress towards the fiscal-year 2027 financial targets we set at Investor Day in June of 2023. In aggregate, we are on track towards our earnings targets, with strong performance on adjusted operating margin, EBITDA and EPS and future upside potential from the reinvestment of our excess cash with any multiyear plan, there are puts and takes. We are very pleased with our maintenance reconversions, realizing a richer mix of product sales across the business, our TPPL capacity investments, Energy Systems business optimization actions, the expanded 45X benefits and the accretive impact of our Bren-Tronics the flip side, our sales CAGRs have been below where we still believe our longer-term potential resides, largely on unforeseen market-wide disruptions. These outcomes have informed Shawn's strategy, which we will be updating you on in Shawn steps into the CEO role, he is advancing our strategic work aimed at deepening customer intimacy, accelerating our most high-impact new product initiatives that help our customers address their energy and labor challenges and enhancing our operational efficiencies, execution and return on invested efforts, combined with our strong foundation, position us to pursue the growth and margin expansion we know our business is capable of. We look forward to sharing further updates as the fiscal-year closing, global demand for our energy storage solutions continues to build, as our products and services remain essential to the industries that drive the global economy, from resilient grids and communications networks to secure data centers and national security as well as global material distribution and off of record shattering Q4, we are confident in the earnings power of our business and are optimistic about our ability to continue to expand margins, grow revenue and create long-term value for our this, let's open it up for questions. Operator? Operator Thank you. (Operator Instructions)Noah Kaye, Oppenheimer. Noah Kaye Hi, good morning. Thanks for taking the questions. Andrea Funk Hi, Noah. Noah Kaye So I guess, I just wanted to start first with understanding the 1Q guide, the revenue range. I think you gave some color on where we would see weakness in Motive, maybe a little bit of growth in Energy Systems and Specialty, you talked through that. But the EPS guide, about $0.20 higher year over year on kind of flat revenues at the midpoint. Can you help sort of bridge to that EPS growth with your expectations around operating margins and tax rate? Shawn O'Connell Yeah, good morning. Noah it's Shawn. Good to hear your voice, and thank you for the question. I'll provide a little color here on what we're seeing for Q1, and then I'll let Andy handle the EPS portion of it. But just to give you a little idea of what went on in anticipation of Liberation Day, our Motive customers just largely took a wait-and-see approach, which affected had some near-term effect on orders. But then we probably saw a little bit of pull in to get ahead of then we saw some pickup with improving news from the administration. And now overall, as we mentioned in the remarks, year-to-date orders are relatively flat, with current order rates broadly in line with normal cycles. So where we would expect to see in comparison to the last several cycles. So it's -- while we have this noise, it feels like we are trending back to normal. What we don't know is the effect of reciprocal have a -- some of these are still pauses and not settled science, but it feels like a strengthening for us. And so we anticipate that this blip that we saw was totally tariff shock-related and that the markets are largely getting back to then as you mentioned Energy Systems, we just continue to see activity coming in for network build-out. The carriers realize they have a deficit when it comes to passing AI traffic through their networks, and they're beginning to get active about solving those technical issues. So we feel very good about continued trajectory in ES and a rising comfort level in Motive, if you then we didn't see the -- you didn't ask about transportation, but we're kind of following the same trajectory there where we were on pace for a nice recovery. And then just like in the forklift, the transportation customers sort of hit pause to sort through this tariff that, I'll turn it over to Andy. Andrea Funk Yeah. Thanks, Shawn. So I think you covered the markets well. Now what might help is if we level set to last year. So largely within Q1 '26, it's really going to look a lot like Q1 of ' in line, if you look at our guide, but we're seeing lower volumes, mostly in Motive Power and some in transportation, as Shawn mentioned offset by the accretive benefit that we're having from Bren-Tronics and the really strong favorable price/mix we've been able to if I'm looking at EPS, EPS, our guide is up about midpoint, up about $0.10 year on year. But first normalize it, so pull out maybe $0.25 to $0.30 per share that we should have had of an uplift from Bren-Tronics in the 45X expanded EAM impact. But then add back, we probably are seeing about $0.15 per share from pressure from FX, and that gets you to really a flat EPS year on why flat? With lower volume, as Shawn mentioned, and that's really related mostly to Motive Power driving that and then a little bit of stranded tariff costs. And those items offset this really robust favorable price/mix gain that we've been able to achieve over the course of fiscal-year '25. So we are seeing our Q4 orders down on the tariff disruptions. But if you look full year, the orders are pretty much flat year on we'd expect, without a doubt, that Q1 is going to be the low point, and we should see recovery going on from there, absent additional kind of shocks. Noah Kaye Okay, thanks, Andy. Yeah, sorry, meant to say $0.10 higher year-over-year, but thank you for bridging that. I guess just maybe explain the decision process around kind of pausing guidance? Because I want to make sure we get that number again because there's a lot of numbers that you guys gave the 1Q-to-date order book is, year over year, up how much? And then just help us understand why pause full-year guidance if kind of to your point, we seem to be kind of experiencing some recovery in orders off of the early April uncertainty? Andrea Funk Yeah. So if we look at our Q4 orders -- and I think what we were referring to was within Motive Power Americas, we had that 14% pressure. If you look at orders overall, different -- the Energy Systems was up year on year. Obviously, we're during the recovery trends, basically flat to A&D, it's what we really saw is this big pause and then kind of a resurgence. So if we look at full year-to-date within Motive Power calendar year, our calendar year is flat year on year. So we saw a big decline during Q4, which we're going to feel the effects of that coming out into Q1, and then a resurgence in Q1 so far of what we're seeing as far as orders sale. David Shaffer Noah, this is Dave. Just for a little bit more clarification. If you look at Motive Power orders calendar year-to-date, they're very consistent with last year. So it's -- there was -- the cycles -- the normal cycle has been very disruptive as Shawn said, people took a wait-and-see the main reason we're just not in a position to provide annual guidance right now, it's just awaiting the final outcome of the reciprocal tariff negotiations and how that's all going to shake out. That could have both positive and negative impacts for we want to make sure we have that clarification and clarity before we go and provide a full annual guidance. As the situation rests today, it's all very manageable. We just want to make sure that, especially with Shawn coming on board, that we provide the best information we have going forward, and that's going to include fully understanding how these -- when these holds on the temporary and the reciprocal tariffs kind of wind down. So that's what we're waiting to see. Noah Kaye Thanks, Dave. That's helpful. I just -- I need to maybe get some clarification. Apologies for not understanding around what you were actually saying around order recovery in this quarter to date, the current quarter. I thought you gave some color on that and some numbers overall. So can we just have it one more time, like what rebound you've seen since April? Andrea Funk Again, what we talked about was some -- we don't provide necessarily the full order book for Q1. Obviously, it's evolving as we speak right now. But what we were giving you, Noah, was when we talked about the decline in Q4, we saw it bounce back in Q1. So year-to-date, it's flat. So I think we gave a couple of stats on what we're seeing throughout the course of the year. But what we're looking at is just the bounce back that we're seeing in Q1, if that helps. Noah Kaye Got it. Okay, very helpful. Thank you. I'll turn it over. Operator Brian Drab, William Blair. Andrea Funk Good morning. Brian Drab Hey, good morning. Thanks for taking my questions. I'm always hesitant to use people's time to say things like thanks, Dave, for everything. And -- it's been great working with you, and good luck in the next chapter. And I'll leave it at -- so I first just wanted to ask, Andy, I mean, now you gave out a new number here in the Q&A, the calendar year-to-date orders for Motive. Could I ask you if you can give that same year-to-date order growth or decline for energy storage and for specialty, excluding Bren-Tronics for specialty? Andrea Funk Yes. The only thing, Brian, we -- this quarter was unfolding. Obviously, we're halfway through. There's a lot of actions that are going. What we -- the main message that we were trying to convey is Q4 orders were pressured, and we saw the rebound in Q1. And that's what's driving kind of that pressure that we're seeing in Q1. I think that's similar to the question that Noah was I look at my Q4 orders in general, though, just so you know versus prior year, I'm seeing a significant pickup in energy systems that's coming off the last year's pressure that -- last year was when it started that U-shaped recovery. So that recovery is continuing, although we do see some pull-ins from Energy Systems into Q4. So our Q1 volumes in Energy Systems might be more or less flat, but additional ongoing opportunity from year-on-year as the orders have been mostly flat to a little off of last year. But again, what we have talked about is on the Q3 call, you probably remember, we had like -- we've seen a 40% increase in sequential transportation as Shawn mentioned, we saw a big decline. The main story we're trying to get here is -- it's -- week by week, it's a little bit all over the place. The market is responding, especially things like Class 8 OEM trucks and forklifts as our capital products are essential to moving products and information globally. So a lot of this kind of one we could pause is next week, it's up, one week -- it's not sustainable. Things have to level out. And we know that our products solve critical -- provide a critical benefit in the global economy, but we're seeing just a lot of volatility as everyone is trying to digest what's happening in the landscape as a result of these tariff calls. Brian Drab Okay, thanks, and I'll follow up more later on that. But can you talk a little bit more about the Section 45X. And I guess, specifically, I'm wondering, have you seen anyone else in the industry? Because I know a lot of people are looking for these checks. Have you seen anyone else in the industry get that check cut to them? And are you in an active dialogue with the IRS regarding getting the cash? Andrea Funk Yeah, Brian, happy to take that one. Yeah, other companies or other lead-acid battery companies have received their check. With us being at [3/31] year-end, we're at a slight delay. There's been a lot of administrative changes in the IRS, and we have individuals just with our regular ongoing tax filings. We have contacts at the IRS who have said there's no holdup in particular on your refund, we're just short received no indication from both political connections we have as well as from agents at the IRS themselves that there is anything other than just staffing delays. And we will -- we expect -- I mean, any day, I thought maybe we'd even get it yesterday and have an update to this Q&A. We expect to get it any day and interest accrues as well. So we'll get an additional benefit from them also. Shawn O'Connell Yeah. Brian, it's Shawn. I don't know if you're watching the up-to-the-date news on all the happenings on the Hill. But as we have been socializing, there's just broad bipartisan support of 45X and the package that was passed, and it has to go to the Senate, and it's still open to final tweaks, but the package that was passed was largely in line with what we thought it would be. And nearly all of the tenets of 45X that were important to us are intact, if not a little bit of an increased sunset past 2031. And they removed some wind stuff that didn't apply to us anyway. But broadly, 45X appears to be moving in the direction we thought it would be and will continue. Brian Drab Yeah. I think everyone that's following EnerSys is following that closely. So yeah, thanks for that update. And I guess the last thing, if I could sneak in one more, is just -- I'm sorry if I missed this, but are you making any comments today regarding your latest thinking on the lithium plant? Shawn O'Connell Sure. I'll take that one, Brian. So we continue to have direct conversations with the administration. And we haven't seen in our talks with the DOE any wavering at all of their support of the lithium plant. And to remind you, the impetus for the funding was rooted in our -- largely our defense just for a bit of color, there's over 40 programs today for the Department of Defense that are sourced in Asia, and many of them from China for our national defense. And they're trying to consolidate those programs and bring them back again, the support has been very strong. And then we have Mark Matthews, who we mentioned on the call, who's been involved in the program since day one, who maintains these direct relationships. And we have Mark going through and just making sure that along with our finance team, we keep our model updated. We make sure we understand all of the changing cost inputs, if any. And then now with the 45X news, we'll add that into our thinking.I will tell you also that we have never slowed down our cell development program so that while we've been waiting to see what's happening with funding, we've been working with our development partner to advance our A samples and be ready to go when we get the right news. So -- we -- again, at this time, we feel very positive about that. But as we update the model and what that looks like, we'll keep you updated. Brian Drab Okay perfect. Thanks very much. Andrea Funk Thank you, Brian. Operator Thank you. Greg Lewis, BTIG. Greg Lewis Yeah, thank you and good morning everybody and thanks for taking my questions and Dave, I know I thanked you last quarter, but thanks again for all the help over the last few years and good luck. Andy and Shawn, I guess this question is for you we think about going forward, probably a couple questions inside this question. But as we look at the leverage target, you alluded to the tax refund you're going to get, that pushes it down even lower. So clearly, we're in a good position to kind of -- you mentioned the buyback or organic we look around the landscape over the next few quarters, how are you thinking about the potential for inorganic growth and just as a point of clarification in the prepared comments where we talked about sequential or year-over-year EPS growth? Just to clarify, there's no expectation of bolt-ons in that number, correct? Andrea Funk No. No bolt-ons at all in our number at all. Greg Lewis Okay. And then -- Andrea Funk I know -- it sounds like you have a bunch of other questions in there, Greg. So I just want to make sure that we can be succinct in getting to those. Greg Lewis Great. And so like as we look at today, what is the opportunities on the M&A front? Just given your balance sheet, as we look at previous cycles, is uncertainty that we're in right now, is that kind of going to keep people on the sidelines in terms of your ability to acquire additional companies? Or is it kind of -- from your side, is it still business as usual? Shawn O'Connell Greg -- let me take that, Andy. Greg, this is Shawn, and thank you for your question. Let me just say, we have a fantastic business. All of our macros are good. You have this whole situation happening in the world and particularly in the US, where the grid margin, that is the gap between the grid capacity and the load growth, is shrinking our customers are really looking for us to step in and help them manage that. And as you mentioned, we have this fantastic balance sheet with a lot of dry powder. And I think the inverse is true. We're not going to wait on the sidelines. I think probably some of this uncertainty will pressure some of the smaller players and probably actually increase our ability to go out and find good that said, we still see a very long runway in A&D, and along with a lot of synergies with our domestic lithium manufacturing. You saw the lift we're getting from Bren-Tronics. They're not the only target for us. So we're going to be very opportunistic with that dry powder and stay acquisitive. And as long as the -- those targets fit our ROIC model, and we're really going to be putting a lot of rigor around what that should look like for our shareholders. Andrea Funk Yes. And if I can add a little bit more to that, Greg. Early in Q4, we're wrapping up our budget, and this is before a lot of these tariff disruptions occurred. We had double-digit revenue growth built into our budget, low double-digit revenue growth, no acquisitions based business. We just had an outstanding was not an anomaly. That outstanding Q4 was even with comps and trends being slow, the opportunity for those to improve from there. That's the base we're building the strategy off of, and the business will improve from there. We've got growth verticals that Shawn is looking at efficiencies and execution. And all of that is before looking at any mergers and acquisitions, although with our deep, rich balance sheet that we have the ability to move fast, and we look at that on an ongoing basis. We do think Q1 is going to be the low point with the results trending back to this record Q4 and upside from there as we had done in our original budget before all of these tariff issues started to rise, but albeit, it's going to be tempered by the macro. So are we going to get back there this year, we could get back there earlier in this year? Or is it going to be later? It's going to the tariffs going to get negotiated and the tax rate cuts hold, will tariffs be expanded, will there be another Liberation Day kind of shock. That's all -- what we don't want to do is make promises things that we don't have full visibility of and are able to commit to you Q1 order book is improving. We mentioned that Motive Power was pressured in Q4, but year on year, it's flat. As Shawn mentioned, we expect revenue lift from our maintenance-free offerings, A&D and data center robustness, ongoing comps and trends recovery. And we know the strength of our balance sheet offers optionality for us to proactively mitigate whatever comes at know we're all over and ahead of tariffs. We can talk about that later. We've got a great playbook. We're committed to fully offsetting the impact. We've got a proven and effective refined playbook, and we know our products serve a critical role in these global real question is volatility. In a three-month span, our stock lost and regained $900 million in the marketplace. But the truth is nothing really changed. Our business potential is still there. Whatever -- wherever tariff ends up, we got it. Whatever happens to the macro, we've got a playbook. It's just the timing that we're struggling with. Greg Lewis Okay. And then you mentioned Motive and the orders -- the order intake. I guess -- and I think it might have been Dave that mentioned depending on how -- and realizing, hey, it's a house bill that needs to get through the Senate and there's a lot of work that needs to be done around that to change really there was a comment from somebody about it potentially being good. Is that related to all competition for TPPL from other -- whether it's electric -- battery electric or hydrogen or -- just if you could talk a little bit more about why changes to the IRA could be good? And does that also -- is that going to be an impact from tariffs as well, just given where some of your competition in Motive is sourced? Is that kind of a fair way to think about it? David Shaffer I can start, Greg, and then Shawn can add a little color. The comments I made were about the fundamentals of the business and the orders are very stable. In terms of the IRA, in terms of changing the competitive landscape, that's not really on the radar screen as much as that -- as the tariff, the tariff issues and how that's going to shake out. And depending on what the plant of origin is for our various competitors and us. And so that's really kind of what we're waiting to see is how all the tariffs land to see what that does in the competitive in terms of 45X or any -- that's really -- if that's what you heard from my comments, that wasn't meant to have any impact on that. And again, just to want to reiterate, I know there's some hesitancy for us to give out order data because we don't normally do that. We -- but the orders in Q1 year-to-date have been on very solid footing across all our order softness was in Q4, as Andy said, but things that really, if you look at it over a longer time period, things have normalized. And all indications from our order book are business as usual, pending what we see with these reciprocal do you want to add any color to that? Shawn O'Connell Yeah, I do. I think the other part of your question, Greg, was how we see the market and are there opportunities. And certainly, if you heard in the prepared remarks, we're now at 29% maintenance-free in Motive Power. And there's just so much meat on that bone to continue that conversion. If we talk about that energy scarcity and then the other side of that coin or energy security, the other side of that coin is labor our customers, not only do they not want to spend the money on the labor element to manage these systems, they can't get the people. And so the people that they do get, they want to dedicate towards revenue-facing opportunities in the warehouse or revenue-facing that maintenance-free conversion is going to continue. I'll tell you, we don't publish our quote rates, but our quote rates are far above that 29%. And so we know that that's resonating with customers. And at the same time, we're being added into more and more of the large OEM and customer programs. So we continue to see ourselves with share pickup then the one thing that may be influenced by tariff activity, relative to your question about competitive positioning, should tariffs continue to remain high for Asia-based lithium or incoming lithium cells, TPPL gets you most of the way of lithium without some of the downside risks and safety considerations. So we could actually see an uptick in our TPPL offering should that tariff environment stay robust on to your point, the macros that are giving us lift and allowing us on flat volumes to have the revenue and margin conversion that we've enjoyed, we expect -- fully expect to continue. And to Dave's point, we just need the market to settle down a bit on this tariff activity, which we believe we're beginning to see. Andrea Funk And I'll add one other item, Greg, just to make sure there's no confusion there. As Shawn mentioned, and I think this is important to keep in mind -- we do not allocate 45X into our LOBs at all. So no impact on pricing. The only thing that we do which has always been part of our strategy is to produce in region, so increase our domestic margins in Motive Power, 17.1% in the quarter, up 240 basis points. I mean, just phenomenal quarter for Motive Power. And going forward, other than this tariff disruption that we saw in our Q4 books that's going to play out in Q1, the higher conversion of maintenance-free Shawn mentioned, managing OpEx tightly, the NPI study is looking at -- we're talking about the Motive Power BESS, helping our customers manage their energy. There's a lot of enthusiasm on that, we should be launching that at the end of this also announced the closure of our Monterrey plant, transitioning production to Richmond. That also aligns with this strategy, gives us -- as maintenance-free adoption grows, rightsizes our footprint. We estimate that will save about $19 million beginning in fiscal-year '27. So while we know and we're as unhappy with the pressure that we're seeing temporarily in Q1, as I'm sure all of you are, I'm not worried about Motive Power at all going forward. Greg Lewis Thank you very much. Operator Chip Moore, The Roth Capital Partners. Andrea Funk Good morning (multiple speakers) -- Chip Moore Good morning, thanks for taking the question. Hey, I wanted to maybe dive deeper on Energy Systems. I guess, more -- any more color on sort of the green shoots you're seeing on potential network expansion and particularly anything around sort of this last mile communications? I think OpenAI is now talking about mobile hardware, these type of things. Are you seeing some of those discussions underway? Shawn O'Connell Yeah, hi, Chip. Good morning, it's Shawn. Thank you for your question. Listen, I think the -- what we're really seeing is we saw that pause as just as I was coming into the Energy Systems business and a little over 1.5 years ago, we saw that pause happening and coming out of that, there was a couple of issues that occurred. One, these things, these pauses are always, particularly in these systems that we support, they always just create technical one of those things that the operators can put off, but they can't forestall forever. So you're seeing part of the recovery is just solving for the technical debt issues that they created and keeping the network back up and running and handling the brake fix in that part of second part of it, what we're seeing directly from users relates to what we're talking about energy scarcity, but then also what I mentioned about processing AI center traffic. So a lot of the investment, we're seeing early investment, as you might imagine, are in upgrading macro also upgrading -- years ago, central offices were being decommissioned or even sold off because the land lines are being decommissioned. Now operators are seeing those -- that brick-and-mortar as small AI data centers, if you will. So you note the Verizon and Frontier, I would call it, remarriage. And so we're seeing some of those it's not -- it isn't yet. And I just want to stress, it's not the -- one of the -- we're not getting the lift of one of the GE build-outs of years past. But to your point, in green shoots, we are starting to see the backbone enhanced and some of that investment going in. Chip Moore Thanks. That's helpful. And maybe on sort of that more near-term rate fix in that segment. Just help us think about inventory dynamics and service utilization in some of those things? Shawn O'Connell Yeah. Most of -- I think most of the inventory pain that we saw with inventory oversupply, we've largely moved through that. We're seeing a lot of new equipment orders, and that's -- you bring up the service utilization always see equipment orders precede an uptick in service, and it's intuitive, right? Because materials being provisioned as site acquisitions are being done and site permitting, and then the service tends to follow. So I would tell you that our product performance has been robust over the past couple of quarters and service is gradually catching up to it, but we expect more upside in services as that materializes. Chip Moore Appreciate it. And maybe if I could sneak one last one in, maybe on the outlook. Any thoughts to what might give you comfort to resume full-year guidance at some point? Would that be sort of working through some of these temporary headwinds and see what happens on reciprocal tariffs, just how you're thinking about that? Thanks. Andrea Funk Yeah, I'll take that, Chip, and thanks for the question. We absolutely are committed to resuming full-year guidance as soon as there's a little more clarity on what's happening with the overall landscape. A lot of news even happening today, as you we'll be able to resume guidance next quarter, but it's going to depend on what happens in the macro. And I think we're just committed to making sure that what we give in our guide, we've got visibility into. Chip Moore Thank you. Appreciate it. Operator (multiple speakers) I'm not showing any further questions at this time. I'd like turn the call back over Dave for any closing remarks. David Shaffer Thank you, Kevin. In closing, I want to again express my deep appreciation to our investors for their continued confidence in EnerSys. It's been our privilege to help guide this company through its transformation into a global leader in energy solutions. With a strong team in place and clear momentum heading into fiscal-year '26, I'm excited to see what EnerSys will accomplish next under Shawn's leadership. Thank you, all. Operator Thank you ladies and gentlemen, that's conclude today's presentation. You may now disconnect, and have a wonderful day. Sign in to access your portfolio

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