Generac Reports Fourth Quarter and Full-Year 2025 Results

Data center opportunities and assumed recovery in power outage environment support expectations for strong sales growth in 2026

WAUKESHA, WISCONSIN (February 11, 2026) – Generac Holdings Inc. (NYSE: GNRC) (“Generac” or the “Company”), a leading global designer and manufacturer of energy technology solutions and other power products, today reported financial results for its fourth quarter and full-year ended December 31, 2025 and initiated its outlook for the full-year 2026.

Fourth Quarter 2025 Highlights

Full-Year 2025 Highlights

2026 Highlights

“Although our fourth quarter results reflect a softer outage environment and lower shipments of home standby and portable generators, our momentum in the data center end market has further accelerated as we continue to develop our position as a key supplier to multiple hyperscale customers which are expected to add significant volumes to our backlog over the next several quarters,” said Aaron Jagdfeld, President and Chief Executive Officer. “As a result, we are focused on dramatically increasing our capacity and capabilities for large megawatt generators, including the purchase of an additional manufacturing facility in Wisconsin in the fourth quarter and ongoing investments in our existing facilities around the world. These opportunities and investments put us well on our way to doubling our C&I product sales in the years ahead.”

Additional Fourth Quarter 2025 Consolidated Highlights

Gross profit margin was 36.3% as compared to 40.6% in the prior-year fourth quarter. The decrease in gross margin was primarily driven by unfavorable sales mix and a certain inventory provision in the current year quarter, as disclosed in the reconciliation schedules attached to this release. In addition, higher input costs and lower manufacturing absorption were mostly offset by increased price realization.

Operating expenses increased to $405.4 million, or 34%, as compared to the fourth quarter of 2024. The increase was primarily driven by a $104.5 million provision for the settlement of a legal matter, as disclosed in the reconciliation schedules attached to this release.

The Company had a ($3.7) million tax benefit for the current year quarter, or an effective tax rate of 13.4%, compared to a $27.3 million tax expense for the prior year, or an 18.9% effective tax rate. The lower effective tax rate was driven primarily by the impact of certain favorable discrete tax items and their impact on a lower pre-tax income in the current year.

Cash flow from operations was $189 million during the fourth quarter, as compared to $339 million in the prior year. Free cash flow, as defined in the accompanying reconciliation schedules, was $130 million as compared to $286 million in the fourth quarter of 2024. The change in free cash flow was primarily driven by a significant reduction in net working capital in the prior year which did not repeat and lower operating income in the current year, partially offset by lower cash tax payments.

Fourth Quarter Business Segment Results

Domestic Segment

Domestic segment total sales (including inter-segment sales) decreased approximately 17% to $889 million as compared to $1.07 billion in the prior year. This sales decrease was primarily driven by weaker home standby and portable generator shipments as a result of the lower power outage environment in the current year together with a strong prior year comparison which included multiple major landed hurricanes. This was partially offset by strength in residential energy technology sales and increased revenue from products sold to data center customers.

Adjusted EBITDA for the segment was $151.5 million, or 17.0% of domestic segment total sales, as compared to $242.8 million, or 22.7% of total sales, in the prior year. This decline was primarily driven by unfavorable sales mix, higher input costs, and operating deleverage on lower sales volumes, partially offset by increased price realization.

International Segment

International segment total sales (including inter-segment sales) increased approximately 12% to $209.2 million from $187.5 million in the prior year quarter, including an approximate 6% favorable impact from foreign currency. The core total sales growth for the segment was primarily driven by higher revenue for data center customers and an increase in global shipments for our controls product offering, partially offset by lower inter-segment sales.

Adjusted EBITDA for the segment, before deducting for noncontrolling interests, was $33.7 million, or 16.1% of international segment total sales, as compared to $22.5 million, or 12.0% of total sales, in the prior year. This margin increase was primarily driven by favorable sales mix and improved price/cost realization.

2026 Outlook

The Company is initiating guidance for full-year 2026 that anticipates strong net sales growth in the mid-teens percent range as compared to the prior year, which includes a 1% favorable impact from the net effect of foreign currency and completed acquisitions and divestitures. C&I product sales are expected to increase in the 30% range during the year, primarily due to increased revenue from products sold to data center customers and the recent acquisition of Allmand. Residential product sales are projected to increase in the 10% range from the prior year, driven by higher home standby generator price realization and increased shipments assuming a return to power outage activity in line with the longer-term baseline average for the remainder of the year.

Additionally, the Company expects net income margin, before deducting for non-controlling interests, to be approximately 8.0 to 9.0% for the full-year 2026. The corresponding adjusted EBITDA margin is expected to be approximately 18.0 to 19.0%.

Conference Call and Webcast

Generac management will hold a conference call at 10:00 a.m. EST on Wednesday, February 11, 2026 to discuss 2025 operating results. A webcast of the conference call can be accessed at the following link: https://edge.media-server.com/mmc/p/n5idfpix

The webcast of the conference call is also available on Generac's website (http://www.generac.com), accessed under the Investor Relations link. The webcast link will be made available on the Company’s website prior to the start of the call within the Events section of the Investor Relations website.

Following the live webcast, a replay will be available on the Company’s website for 12 months.

About Generac

Generac is a total energy solutions company that empowers people to use energy on their own terms. Founded in 1959, Generac is a leading global designer, manufacturer, and provider of a wide range of energy technology solutions. The Company provides power generation equipment, energy storage systems, energy management devices & solutions, and other power products and services serving the residential, commercial, data center, telecom, rental, and industrial markets. Generac introduced the first affordable backup generator and later created the automatic home standby generator category. The Company’s broad portfolio of energy technology offerings for homes and businesses enables its mission to Power a Smarter World and lead the evolution to more resilient, efficient, and innovative energy solutions.

Forward-looking Information

Certain statements contained in this news release, as well as other information provided from time to time by Generac Holdings Inc. or its employees, may contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Forward-looking statements give Generac's current expectations and projections relating to the Company's financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate," "estimate," "expect," "forecast," "project," "plan," "intend," "believe," "confident," "may," "should," "can have," "likely," "future," "optimistic" and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events.

Any such forward-looking statements are not guarantees of performance or results, and involve risks, uncertainties (some of which are beyond the Company's control) and assumptions. Although Generac believes any forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect Generac's actual financial results and cause them to differ materially from those anticipated in any forward-looking statements, including:

Should one or more of these risks or uncertainties materialize, Generac's actual results may vary in material respects from those projected in any forward-looking statements. A detailed discussion of these and other factors that may affect future results is contained in Generac's filings with the U.S. Securities and Exchange Commission (“SEC”), particularly in the Risk Factors section of the Annual Report on Form 10-K and in its periodic reports on Form 10-Q. Stockholders, potential investors and other readers should consider these factors carefully in evaluating the forward-looking statements.

Any forward-looking statement made by Generac in this press release speaks only as of the date on which it is made.  Generac undertakes no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Non-GAAP Financial Metrics

Core Sales

The Company references core sales to further supplement Generac's consolidated financial statements presented in accordance with U.S. GAAP. Core sales excludes the impact of acquisitions and fluctuations in foreign currency translation. Management believes that core sales facilitates easier and more meaningful comparison of net sales performance with prior and future periods.

Adjusted EBITDA

To supplement Generac’s consolidated financial statements presented in accordance with U.S. GAAP, the Company provides the computation of Adjusted EBITDA attributable to the Company, which is defined as net income (loss) before noncontrolling interests adjusted for the following items: interest expense, depreciation expense, amortization of intangible assets, income tax expense (benefit), certain non-cash gains and losses including certain purchase accounting adjustments and contingent consideration adjustments, share-based compensation expense, certain transaction costs and credit facility fees, business optimization expenses, provision for certain legal and regulatory charges, certain specific provisions, mark-to-market gains and losses on a minority investment, and Adjusted EBITDA attributable to noncontrolling interests. The provision for legal and regulatory charges adjusts for matters that are significant and not part of the ordinary routine litigation or regulatory matters incidental to the Company’s business, such as large suits and settlements, class action lawsuits, government inquiries and certain intellectual property litigation. The adjustments to net income (loss) in computing Adjusted EBITDA are set forth in the reconciliation table below. The computation of Adjusted EBITDA is based primarily on the definition included in our Credit Agreement.

Adjusted Net Income

To further supplement Generac's consolidated financial statements presented in accordance with U.S. GAAP, the Company provides a summary to show the computation of adjusted net income attributable to the Company. Adjusted net income attributable to the Company is defined as net income (loss) before noncontrolling interests adjusted for the following items: amortization of intangible assets, amortization of deferred financing costs and original issue discount related to the Company's debt, intangible impairment charges, certain transaction costs and other purchase accounting adjustments, business optimization expenses, provision for certain legal and regulatory charges, certain specific provisions, mark-to-market gains and losses on a minority investment, other non-cash gains and losses, and adjusted net income attributable to non-controlling interests.

Free Cash Flow

In addition, the Company references free cash flow to further supplement Generac's consolidated financial statements presented in accordance with U.S. GAAP. Free cash flow is defined as net cash provided by operating activities, plus proceeds from beneficial interests in securitization transactions, less expenditures for property and equipment, and is intended to be a measure of operational cash flow taking into account additional capital expenditure investment into the business.

The presentation of this additional information is not meant to be considered in isolation of, or as a substitute for, results prepared in accordance with U.S. GAAP.  Please see the accompanying Reconciliation Schedules and our SEC filings for additional discussion of the basis for Generac's reporting of Non-GAAP financial measures, which includes why the Company believes these measures provide useful information to investors and the additional purposes for which management uses the non-GAAP financial information.

SOURCE: Generac Holdings Inc.

CONTACT:

Kris Rosemann

Director – Corporate Finance & Investor Relations
(262) 506-6064
InvestorRelations@generac.com

(1) Includes (gains)/losses on the disposition of assets other than in the ordinary course of business, (gains)/losses on sales of certain investments, unrealized mark-to-market adjustments on commodity contracts, certain foreign currency related adjustments, and certain purchase accounting and contingent consideration adjustments. A full description of these and the other reconciliation adjustments contained in these schedules is included in Generac's SEC filings. 

(2) Represents share-based compensation expense to account for stock options, restricted stock, and other stock awards over their respective vesting periods.

(3) Represents transaction costs incurred directly in connection with any investment, as defined in our credit agreement, equity issuance or debt issuance or refinancing, together with certain fees relating to our senior secured credit facilities, such as administrative agent fees and credit facility commitment fees under our Amended Credit Agreement.

(4) Represents severance and other restructuring charges related to the consolidation of certain operating facilities and organizational functions.

(5) Represents the following litigation, regulatory, and other matters that are not indicative of our ongoing operations:

(6) Represents non-cash losses primarily from changes in the fair value of the Company's investment in Wallbox N.V. warrants and equity securities.

(7) For the full year ended December 31, 2025, the loss represents the third-party costs and the write-off of certain deferred financing costs in connection with the refinancing of the Tranche A Term Loan Facility and Revolving Debt Facility.  For the full year ended December 31, 2024, the loss represents fees paid to creditors and the write-off of the unamortized original issue discount and deferred financing costs in connection with the refinancing of the Tranche B Term Loan Facility.

(8) Represents transaction costs incurred directly in connection with any investment, as defined in our credit agreement, equity issuance or debt issuance or refinancing, and certain purchase accounting and contingent consideration adjustments.

(9) The pre-tax loss for the full year 2025 relates primarily to the sale of our immaterial Tank Utility fleet business during the second quarter of 2025.