Generac (GNRC) Q1 2026 earnings summary

Executive summary

• Net sales increased 12.4% year-over-year to $1.06 billion, driven by strong C&I segment growth, robust data center demand, and stable residential performance.

• C&I segment sales surged 28% year-over-year, led by data center demand and the Allmand acquisition.

• Net income attributable to shareholders rose 67.1% to $73 million ($1.24 per diluted share), with adjusted EBITDA margin expanding to 18.3% from 15.9% last year.

• Completed Allmand acquisition in January and Enercon acquisition in April, enhancing C&I capabilities and vertical integration.

• Backlog increased to over $700 million, providing visibility through 2027, excluding a $600 million notice to proceed from a hyperscale customer.

Financial highlights

• Consolidated net sales: $1.06 billion (+12% YoY); C&I: $510 million (+28% YoY); Residential: $552 million (+1% YoY).

• Gross margin: 38.7% (down from 39.5% YoY) due to higher C&I mix, partially offset by favorable price/cost.

• Adjusted EBITDA: $193 million (18.3% of sales), up from $150 million (15.9%) YoY.

• GAAP net income: $73 million vs. $44 million prior year; Adjusted net income: $106 million ($1.80/share) vs. $75 million ($1.26/share) YoY.

• Free cash flow: $90 million, up from $27 million YoY; cash flow from operations was $119 million, up from $58 million.

Outlook and guidance

• Full-year 2026 net sales expected to increase mid-to-high teens percent YoY, driven by C&I segment.

• C&I segment net sales projected to grow mid-to-high 20% range; residential segment sales expected to grow ~10% YoY.

• Gross margin guidance raised by 50 bps to 38.5%-39.5% for 2026; adjusted EBITDA margin guidance increased to 18.5%-19.5%.

• Free cash flow for 2026 projected at ~$350 million.

• Net income margin before non-controlling interests expected at 8.0–9.0% for 2026.