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, especially in the data center market, and favorable impacts from acquisitions, currency, and tariff refunds.

• C&I segment sales surged 29% to $556 million, while Residential segment sales declined 2% to $621 million; home standby generator sales grew despite a soft power outage environment.

• 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 over 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, aided by $71 million in tariff refunds.

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

• Free cash flow increased to $63 million from $14 million year-over-year, driven by higher operating earnings and tariff refunds.

• Operating income increased 88.2% to $210.4 million.

• Cash and cash equivalents stood at $264.9 million at quarter-end, with $1.25 billion in long-term borrowings.

Outlook and guidance

• Full-year 2026 consolidated net sales expected to grow in the mid to high teens percent range, with C&I segment net sales growth guidance raised to low 30s% and Residential segment sales expected to increase at a high single-digit rate.

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

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

• Free cash flow for 2026 projected at ~$350 million; CapEx to be 4.5% of net sales, reflecting facility investments.

• Net income margin guidance increased to 9.0–10.0% for 2026.