Executive Summary

Q1 FY2025 net sales were $145.2M (+2.3% YoY) with organic sales down 0.8%; diluted and adjusted EPS were both $0.40, up 21% GAAP and 3% adjusted YoY .
Gross margin was 51.4% (-90 bps YoY) and adjusted EBITDA margin was 23.6% (-100 bps YoY), reflecting lower Americas product sales and higher mix of lower-margin service .
Management maintained FY2025 guidance: net sales $610–$625M, adjusted EBITDA $150–$160M, free cash flow $85–$95M; net debt was $62.6M with leverage at 0.5x adjusted EBITDA .
Integration of DTA is progressing; Q1 delivered >$3M revenue and ~$5M orders, with a full-year expectation of ~€20M from DTA and commercial expansion beyond Europe .
Regional trends: EMEA sustained growth against tough comps; APAC returned to growth; Americas remained soft in standard tools; price increases in Americas/EMEA effective early January provide a near-term earnings lever .

What Went Well and What Went Wrong

What Went Well

Service revenue grew organically +5.6% while IT&S net sales rose +2.3% YoY; DTA contributed and Cortland Biomedical improved YoY .
EMEA showed continued growth despite macro weakness in Germany and France; wind, petrochemical, and nuclear markets were strong .
DTA integration is on track, delivering >$3M revenue and ~$5M order volume in Q1; Enerpac plans to leverage its global network to expand DTA sales outside Europe .
“We believe Enerpac can continue to outperform the market given our global brand leadership, targeted growth strategy, customer-driven innovation, and continuous improvement” — CEO Paul Sternlieb .

What Went Wrong

Gross margin fell 90 bps to 51.4% due to lower Americas sales, higher service mix, and normalization at Cortland .
Product organic sales declined 2.7% YoY; adjusted operating margin declined 130 bps YoY to 21.5% (company-wide), and IT&S adjusted operating margin fell 90 bps to 27.2% .
Service mix is margin-dilutive (labor-intensive onsite services); while rentals are attractive, management noted practical ceilings on labor rates, though avenues exist to improve service margins .

Financial Results

Consolidated trend comparison (oldest → newest)

Metric	Q3 FY2024	Q4 FY2024	Q1 FY2025
Revenue ($USD Millions)	$150.389	$158.714	$145.196
Operating Margin %	22.2%	18.9%	21.4%
Adjusted Operating Margin %	24.6%	22.5%	21.5%
Adjusted EBITDA ($USD Millions)	$39.672	$38.618	$34.311
Adjusted EBITDA Margin %	26.4%	24.3%	23.6%
Diluted EPS ($)	$0.41	$0.43	$0.40
Adjusted Diluted EPS ($)	$0.47	$0.50	$0.40
Cash from Operations ($USD Millions)	$30.306	$44.361	$8.649
Free Cash Flow ($USD Millions)	$28.488	$37.920	$2.792

Segment performance (YoY, Q1 FY2024 → Q1 FY2025)

Segment Metric	Q1 FY2024	Q1 FY2025
IT&S Net Sales ($USD Millions)	$137.035	$140.134
IT&S Operating Profit ($USD Millions)	$35.6	$38.0
IT&S Operating Margin %	26.0%	27.1%
IT&S Adjusted Operating Profit ($USD Millions)	$38.5	$38.1
IT&S Adjusted Operating Margin %	28.1%	27.2%
Other (Cortland Biomedical) Net Sales ($USD Millions)	$4.935	$5.062

Product vs Service mix (YoY, Q1 FY2024 → Q1 FY2025)

Line	Q1 FY2024 Net Sales ($USD Millions)	Q1 FY2025 Net Sales ($USD Millions)	Organic Growth %
Product	$109.856	$111.149	-2.7%
Service	$32.114	$34.047	+5.6%
Total	$141.970	$145.196	-0.8%

Balance sheet / cash KPIs

KPI	Q1 FY2025
Cash ($USD Millions)	$130.733
Debt ($USD Millions)	$193.3
Net Debt ($USD Millions)	$62.6
Net Debt / Adj EBITDA (x)	0.5x
Share Repurchases ($USD Millions)	$4.379
Dividend Paid ($USD Millions)	$2.167
Effective Tax Rate (%)	~22.0%

Versus Wall Street consensus

S&P Global/Capital IQ consensus data was unavailable at the time of this report due to API limits; estimate comparisons are therefore omitted. Attempt made to retrieve quarterly Revenue and EPS consensus for Q1 FY2025 and Q2 FY2025, but SPGI returned “Daily Request Limit Exceeded” [SPGI].

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales ($USD Millions)	FY2025	$610–$625	$610–$625	Maintained
Adjusted EBITDA ($USD Millions)	FY2025	$150–$160	$150–$160	Maintained
Free Cash Flow ($USD Millions)	FY2025	$85–$95 (corrected)	$85–$95	Maintained
Cash from Ops ($USD Millions)	FY2025	$61–$76	$61–$76	Maintained
Capital Expenditures ($USD Millions)	FY2025	$19–$24	$19–$24	Maintained
Other Expense, net ($USD Millions)	FY2025	~($1)	~($1)	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 FY2024 and Q4 FY2024)	Current Period (Q1 FY2025)	Trend
Macro/Industrial demand	Focus on outpacing a soft industrial market; sequentially slower growth; margin expansion via efficiency (Q3) . FY2025 set with expected decline in general industrial market (Q4) .	“Sluggish industrial macro”; Americas softer in standard tools; optimism building for CY2025 demand .	Cautious near term; constructive medium term.
Pricing actions	Ongoing pricing underpinning margin expansion (Q3) .	Low-single-digit price increases announced for Americas and EMEA effective early January; competitors usually follow .	Positive lever for margins in H1 FY2025.
Service vs Product mix	Service strength and product flat (Q3) .	Service +5.6% organic; product -2.7% organic; services margin dilutive vs product .	Mix pressure near term.
Regional performance	EMEA resilient; APAC mixed; Americas cautious (Q3/Q4) .	EMEA growth despite Germany/France; APAC returned to growth; Americas soft in tools but HLT and services up .	EMEA/APAC improving; Americas lagging.
DTA integration / HLT	Acquisition announced post FY-end (Q4) .	Integration well underway; >$3M revenue and ~$5M orders in Q1; full-year ~€20M expected; expanding beyond Europe .	Strong early execution; incremental growth driver.
Continuous improvement (ASCEND → PEP) & ECX	ASCEND drove margin expansion; guidance midpoint raised (Q3) . FY2025 margin framework maintained (Q4) .	PEP continues; sourcing optimization and SG&A standardization/automation; ECX rollout in EMEA .	Ongoing efficiency/margin accretion.
Tariffs/regulatory	Macro/tariff caution flagged (Q4) .	Limited exposure: <~$20M China imports; negligible Canada/Mexico; playbook to mitigate via dual sourcing/price .	Manageable risk.
Infrastructure projects	Secular tailwinds anticipated (Q4) .	Early pipeline activity; timing-dependent; Enerpac participates late in project lifecycle .	Building for H2/CY2025+ tailwind.

Management Commentary

“We enter fiscal 2025 mindful of a continued sluggish industrial macro environment... Overall, we believe Enerpac can continue to outperform the market given our global brand leadership, targeted growth strategy, customer-driven innovation and continuous improvement” — CEO Paul Sternlieb .
“Results for the first quarter included nearly a full quarter of revenue from DTA… delivered more than $3 million in revenue and $5 million in order volume… maintaining expectation of full year 2025 sales of EUR 20 million from DTA” — CFO Darren Kozik .
“On a geographic basis… EMEA continued to generate positive year-over-year growth… service revenue strong in petrochemical and nuclear… APAC returned to growth… Americas environment remains cautious” — CEO .
“We just announced price increases in both the Americas and EMEA effective at the beginning of January… low single digits… we typically tend to be the price leader” — CEO .
“Imports from China into the U.S. represent less than $20 million of value… we have a good playbook… dual sourcing… price if needed” — CEO .
“PEP… continuation of ASCEND… we see continued opportunity… rolling out ECX in EMEA in fiscal ’25” — CEO .

Q&A Highlights

Macro trajectory: Q1 played out as expected; guidance embeds better top-line for the rest of the year; customers and partners increasingly optimistic for CY2025 .
Tariff exposure: Minimal direct exposure (<$20M China imports); negligible Canada/Mexico; actionable mitigation (sourcing/pricing) .
EMEA outperformance: Share gains driven by commercial execution, leadership/process changes, and new product success despite tough macro .
Services: Growth drivers include scheduled maintenance; margins dilutive vs product due to labor component, but improvement levers include efficiency, project selection, and prior 80/20 pruning in Middle East .
Pricing cadence: Low-single-digit increases in January; intra-year increases possible if inflation/tariffs warrant .
Infrastructure pipeline: Activity building; Enerpac’s late lifecycle participation tempers near-term revenue timing; inventory/lead times positioned to respond .
CFO priorities: Culture of continuous improvement; monetize brand/pricing power; confidence in team and strategy .

Estimates Context

S&P Global/Capital IQ Wall Street consensus estimates for Q1 FY2025 and Q2 FY2025 could not be retrieved at the time of analysis due to API rate limits; as a result, quantitative comparisons to consensus are not included in this recap [SPGI].
Given maintained FY2025 guidance and observed Q1 margins, sell-side models may need to reflect: mix-driven near-term margin pressure (higher services), Americas tool softness, and pricing actions effective in January that may support H2 margin recovery .

Key Takeaways for Investors

Mix matters: Service strength offset product softness, pressuring margins; expect margin recovery potential from January price increases and sourcing/PEP initiatives; Americas tool demand is the swing factor .
DTA adds incremental growth: Early traction (>$3M revenue, ~~$5M orders in Q1) supports FY plan (~~€20M); cross-selling via Enerpac’s network should broaden geographic reach and support HLT growth .
Guidance intact: FY2025 net sales $610–$625M, adjusted EBITDA $150–$160M, FCF $85–$95M; balance sheet capacity (0.5x ND/Adj EBITDA, $529M liquidity per call) enables disciplined M&A and buybacks .
Regional divergence: Positioning stronger in EMEA/APAC; monitor U.S. infrastructure execution timelines and potential rate/policy clarity for demand reacceleration in Americas .
Pricing power: Premium brand supports regular price actions; January increases are a near-term lever; competitors typically follow, aiding industry pricing rationality .
Risk manageable: Tariff exposure modest; prior playbook and dual sourcing/pricing capacity reduce downside risk if trade policies tighten .
Tactical setup: Near-term: watch Americas order trends, service/project mix, and impact of price increases on margins. Medium-term: DTA integration scaling, ECX/PEP benefits, infrastructure tailwinds, and continued share gains in core tools .

[SPGI] S&P Global/Capital IQ consensus request failed with “Daily Request Limit Exceeded” when attempting to fetch quarterly estimates via GetEstimates.

ENERPAC TOOL GROUP CORP (EPAC)·Q1 2025 Earnings Summary