Generac Reports Third Quarter 2025 Results

WAUKESHA, Wisc., Oct. 29, 2025 (GLOBE NEWSWIRE) -- 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 third quarter ended September 30, 2025 and provided an update on its outlook for the full-year 2025.

Third Quarter 2025 Highlights

“Home standby and portable generator shipments grew sequentially in the quarter but were below expectations as a result of a power outage environment that was significantly below baseline average and the lowest third quarter of total outage hours since 2015,” said Aaron Jagdfeld, President and Chief Executive Officer. “This softer seasonal demand was partially offset by robust growth in our shipments of residential energy technology products and a strong increase in global C&I product sales. The third quarter also included initial shipments of our new large-megawatt generators to the data center market, and we continue to rapidly develop a pipeline of opportunities with our backlog for these products doubling over the last 90 days.”

Jagdfeld continued, “The mega-trends that support our future growth potential remain intact as lower power quality and higher power prices will be an ongoing challenge given the more frequent and severe weather patterns and broader electrification trends. Importantly, the massive increase in data center power demand is expected to further stress the already fragile power grid by amplifying the growing electricity supply/demand imbalance. As a leading energy technology company, we believe Generac is uniquely positioned at the center of these numerous mega-trends that have the potential to drive substantial and sustainable growth in the years ahead.”

Additional Third Quarter 2025 Consolidated Highlights

Gross profit margin was 38.3% as compared to 40.2% in the prior-year third quarter. The decrease in gross margin was primarily due to unfavorable sales mix together with the impact of higher tariffs and lower manufacturing absorption, partially offset by increased price realization.

Operating expenses increased $20.2 million, or 6.7%, as compared to the third quarter of 2024 as a result of certain legal and regulatory charges in the current year, as disclosed in the accompanying reconciliation schedules.

Provision for income taxes for the current year quarter was $11.8 million, or an effective tax rate of 15.0%, as compared to $33.5 million, or a 22.7% effective tax rate, for the prior year. The decrease in effective tax rate was primarily driven by certain favorable discrete tax items in the current-year quarter that did not occur in the prior year.

Cash flow from operations was $118.4 million during the third quarter, as compared to $212.3 million in the prior year. Free cash flow, as defined in the accompanying reconciliation schedules, was $96.5 million as compared to $183.7 million in the third quarter of 2024. The change in free cash flow was primarily driven by an increase in inventory levels during the current year quarter and lower operating income.

Business Segment Results

Domestic Segment

Domestic segment total sales (including inter-segment sales) decreased approximately 8% to $938.1 million as compared to $1.02 billion in the prior year, including an approximate 1% benefit from acquisitions. The core total sales decrease was primarily driven by weaker home standby and portable generator sales as a result of the significantly lower power outage environment in the current year quarter together with a strong prior year comparison which included multiple major landed hurricanes. This was partially offset by robust growth in residential energy technology shipments and an increase in C&I product sales to the telecom and industrial distributor channels.

Adjusted EBITDA for the segment was $165.8 million, or 17.7% of domestic segment total sales, as compared to $211.6 million, or 20.7% of total sales, in the prior year. This decline was primarily driven by unfavorable sales mix together with the impact of incremental tariffs 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 11% to $185.5 million from $166.7 million in the prior year quarter, including an approximate 3% favorable impact from foreign currency. The core total sales growth for the segment was primarily driven by strength in C&I product shipments to European markets as well as initial shipments of large-megawatt generators to data center customers.

Adjusted EBITDA for the segment, before deducting for noncontrolling interests, was $27.4 million, or 14.8% of international segment total sales, as compared to $20.3 million, or 12.2% of total sales, in the prior year. This margin increase was primarily driven by favorable sales mix.

2025 Outlook

As a result of the significantly weaker power outage environment in recent months impacting seasonal demand for home standby and portable generators, the Company is lowering its full-year net sales growth guidance to be approximately flat as compared to the prior year. This compares to the previous guidance range of an increase between 2 to 5%.

Additionally, net income margin, before deducting for non-controlling interests, is now projected to be approximately 6.0% for the full-year 2025 compared to the previous guidance range of 7.5 to 8.5%. The corresponding adjusted EBITDA margin is now expected to be approximately 17.0% compared to the previous guidance range of 18.0 to 19.0%.

Free cash flow conversion from adjusted net income is now expected to be approximately 80% as compared to the previous guidance range of 90 to 100%.

Conference Call and Webcast

Generac management will hold a conference call at 10:00 a.m. EDT on Wednesday, October 29, 2025 to discuss third quarter 2025 operating results. A webcast of the conference call can be accessed at the following link: https://edge.media-server.com/mmc/p/kmbm6pxu

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 serving the residential, light commercial, data & telecom, and industrial markets. Generac introduced the first affordable backup generator and later created the automatic home standby generator category. The Company continues to expand its energy technology offerings for homes and businesses in its mission to Power a Smarter World and lead the evolution to more resilient, efficient, and sustainable 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 before noncontrolling interests adjusted for the following items: interest expense, depreciation expense, amortization of intangible assets, income tax expense, 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 not part of the ordinary routine litigation or regulatory matters incidental to the Company’s business, including but not limited to class action lawsuits, government inquiries, and certain intellectual property litigation. The adjustments to net income 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 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