Generac (GNRC) Q2 2026 earnings summary

Executive summary

• Net sales for Q2 2026 rose 11% year-over-year to $1.17 billion, driven by strong C&I segment growth, robust data center demand, and favorable impacts from acquisitions and currency.

• C&I segment sales surged 29% to $556 million, while Residential segment sales declined 2%, with home standby generator sales offsetting declines in portable generators and energy storage.

• Net income attributable to shareholders more than doubled to $143 million ($2.40 per share), with adjusted net income at $174 million ($2.91 per share).

• Secured two multi-year global supply agreements with hyperscale data center customers, increasing backlog for data center products to $1.6 billion, with $1 billion in new orders in the last 90 days.

• Significant investments made to expand production and packaging capacity, including new facilities and acquisitions such as Enercon, aiming to triple large megawatt generator capacity within 12 months.

Financial highlights

• Adjusted EBITDA reached $291 million (24.8% margin), up from $188 million (17.7%) year-over-year, driven by $71 million in tariff refunds.

• Gross profit margin improved to 44.5% from 39.3%, primarily due to tariff refunds.

• GAAP net income: $143 million, up from $74 million; adjusted net income: $174 million ($2.91/share), up from $97 million ($1.65/share).

• Free cash flow: $63 million, up from $14 million in Q2 2025; cash and cash equivalents at $264.9 million.

• Operating income increased 88.2% to $210.4 million.

Outlook and guidance

• Full-year 2026 consolidated net sales expected to increase mid to high teens percent, with C&I segment net sales growth raised to low 30s% range.

• Residential segment net sales now expected to grow at a high single-digit rate, slightly reduced from prior guidance.

• Adjusted EBITDA margin guidance for 2026: 18.5%-19.5% (excluding tariff refunds), 20%-21% (including refunds).

• Gross margins for 2026 expected near low end of 38.5%-39.5% range (excluding tariff recovery); including tariff refunds, gross margin expected around 40%.

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