Generac (GNRC) investor relations material

Executive summary

• Net sales for Q2 2025 rose 6%–6.3% year-over-year to $1.06 billion, driven by strong residential energy technology, C&I product sales, and portable generators, with both domestic and international segments contributing.

• Net income attributable to shareholders increased 25% to $74 million ($1.25/share), with adjusted EBITDA up to $188 million (17.7% margin), reflecting margin improvements across segments.

• Residential product sales grew 6.6%–7%, C&I product sales up 5%–5.2%, and international sales increased 7% year-over-year.

• Strong momentum in the data center market, with a global backlog over $150 million for large megawatt generators and initial traction in digital infrastructure.

• Share repurchases totaled $50 million in Q2, with $200 million remaining authorized.

Financial highlights

• Gross profit margin improved to 39.3% from 37.6% year-over-year, driven by favorable pricing and lower input costs.

• Adjusted EBITDA was $188 million (17.7% of net sales), up from $165 million (16.5%) last year.

• GAAP net income rose to $74 million from $59 million, with diluted EPS at $1.25 versus $0.97 year-over-year.

• Adjusted net income was $97 million ($1.65/share), up from $82 million ($1.35/share) last year.

• Free cash flow was $14 million, down from $50 million year-over-year, mainly due to higher working capital and capex.

Outlook and guidance

• Full-year 2025 net sales expected to grow 2%–5% year-over-year, with 1% benefit from FX and acquisitions.

• Gross margin guidance raised to 39.5% at midpoint, up 50–100 bps from 2024.

• Adjusted EBITDA margin guidance increased to 18%–19% (from 17%–19%), with free cash flow conversion forecasted at 90%–100%.

• Residential product sales outlook slightly lowered due to tariff-related pricing; C&I sales outlook modestly higher.

• Management notes growth opportunities from grid instability, electrification, and AI/data center demand, but data center market growth is difficult to project.