WAUKESHA, Wis., July 30, 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 second quarter ended June 30, 2025 and provided an update on its outlook for the full-year 2025.

Second Quarter 2025 Highlights

• Net sales increased 6% to $1,061 million during the second quarter of 2025 as compared to $998 million in the prior-year second quarter. The effect of acquisitions and foreign currency had a slight favorable impact during the quarter.
  • Residential product sales increased approximately 7% to $574 million as compared to $538 million last year.
  • Commercial & Industrial (“C&I”) product sales increased approximately 5% to $362 million as compared to $344 million in the prior year.
• Net income attributable to the Company during the second quarter was $74 million, or $1.25 per share, as compared to $59 million, or $0.97 per share, for the same period of 2024.
• Adjusted net income attributable to the Company, as defined in the accompanying reconciliation schedules, was $97 million, or $1.65 per share, as compared to $82 million, or $1.35 per share, in the second quarter of 2024.
• Adjusted EBITDA before deducting for noncontrolling interests, as defined in the accompanying reconciliation schedules, was $188 million, or 17.7% of net sales, as compared to $165 million, or 16.5% of net sales, in the prior year.
• Cash flow from operations was $72 million as compared to $78 million in the prior year. Free cash flow, as defined in the accompanying reconciliation schedules, was $14 million as compared to $50 million in the second quarter of 2024.
• The Company repurchased 392,521 shares of its common stock during the second quarter for approximately $50 million. There is approximately $200 million remaining under the current repurchase program as of June 30, 2025.
• The Company is updating its overall net sales growth guidance for the full-year 2025 to be 2 to 5% over the prior year as compared to the previous guidance range of 0 to 7%. Adjusted EBITDA margin, before deducting for non-controlling interests, is now expected to be 18.0 to 19.0% as compared to the previous expectation of 17.0 to 19.0%.
  
  

“Agile execution in a dynamic operating environment helped drive second quarter results ahead of our expectations with outperformance across both Residential and C&I product sales,” said Aaron Jagdfeld, President and Chief Executive Officer. “Sales of residential energy technology solutions exceeded expectations and increased at a dramatic rate from the prior year as we ramped shipments of energy storage systems to Puerto Rico, and ecobee continued to see significant growth with their home energy management solutions. In addition, we continued to take share in the portable generator market while also holding a new and higher baseline level of demand for home standby generators following strong outage activity in the second half of last year.”

Jagdfeld continued, “Second quarter sales of Domestic C&I products also outperformed expectations and increased from the prior year as we saw strong growth in shipments to our industrial distributor and telecom customers. Additionally, we experienced a strong initial reception to our formal entrance into the data center market during the second quarter as we developed a significant global pipeline of opportunities and began building backlog for our new high-output diesel generator product offering. We expect this large and rapidly expanding market to provide meaningful secular growth for our C&I products in the years ahead given the substantial level of investment going into data centers and the accelerating adoption of artificial intelligence.”

Additional Second Quarter 2025 Consolidated Highlights

Gross profit margin was 39.3% as compared to 37.6% in the prior-year second quarter. The increase in gross margin was primarily driven by favorable pricing and lower input costs, partially offset by unfavorable sales mix.

Operating expenses increased $32.6 million, or 12.0%, as compared to the second quarter of 2024. The growth in operating expenses was primarily driven by higher variable costs due to higher shipment volumes, increased employee costs to support future growth across the business, and ongoing operating expenses related to recent acquisitions.

Provision for income taxes for the current year quarter was $15.4 million, or an effective tax rate of 17.2%, as compared to $19.6 million, or a 25.0% effective tax rate, for the prior year. The decrease in effective tax rate was primarily driven by a favorable discrete tax item related to an immaterial business disposition in the current-year quarter.

Cash flow from operations was $72.2 million during the second quarter, as compared to $77.7 million in the prior year. Free cash flow, as defined in the accompanying reconciliation schedules, was $14.5 million as compared to $49.7 million in the second quarter of 2024. The change in free cash flow was primarily driven by an increase in working capital during the current year quarter and higher capital expenditures, partially offset by higher operating earnings.

On July 1^st, the Company amended and extended its existing term loan A and revolving credit facility resulting in a new maturity date of July 1, 2030. This agreement updated the term loan A credit facility outstanding principal balance to $700 million and reduced the revolving facility borrowing capacity to $1.0 billion.

Business Segment Results

Domestic Segment

Domestic segment total sales (including inter-segment sales) increased approximately 7% to $884.5 million as compared to $827.1 million in the prior year, including an approximate 1% benefit from acquisitions. The core total sales increase was primarily driven by strong growth in sales of residential energy technology solutions, portable generators, and C&I products to industrial distributors and national telecom customers. This growth was partially offset by continued softness in C&I product shipments to national rental accounts.

Adjusted EBITDA for the segment was $158.1 million, or 17.9% of domestic segment total sales, as compared to $139.7 million, or 16.9% of total sales, in the prior year. This margin improvement was primarily driven by favorable price realization and lower input costs, partially offset by unfavorable sales mix and increased operating expense investments to support future growth.

International Segment

International segment total sales (including inter-segment sales) increased approximately 7% to $197.2 million from $184.5 million in the prior year quarter, including an approximate 1% favorable impact from foreign currency. The core total sales growth for the segment was primarily driven by higher inter-segment sales and strength in C&I product shipments in Europe, partially offset by softer shipments in other regions.

Adjusted EBITDA for the segment, before deducting for noncontrolling interests, was $29.5 million, or 15.0% of international segment total sales, as compared to $25.0 million, or 13.6% of total sales, in the prior year. This margin increase was primarily driven by favorable price and cost dynamics, partially offset by unfavorable sales mix.

2025 Outlook

Given increased visibility to expected full year 2025 net sales, including the second quarter outperformance, and lower than previously anticipated price increases in the second half primarily resulting from lower tariff assumptions, the Company is narrowing its full-year net sales growth guidance range to be 2 to 5% as compared to the prior year. This compares to the previous guidance range of 0 to 7%.

Due to the factors above, net income margin, before deducting for non-controlling interests, is now projected to be approximately 7.5 to 8.5% for the full-year 2025 compared to the previous guidance range of 6.5 to 8.5%. The corresponding adjusted EBITDA margin is now expected to be approximately 18.0 to 19.0% compared to the previous guidance range of 17.0 to 19.0%.

As a result of the impact of the One Big Beautiful Bill Act on federal income tax payments, the Company is increasing its outlook for free cash flow conversion from adjusted net income to be 90 to 100% as compared to the previous guidance range of 70 to 90%.

Conference Call and Webcast

Generac management will hold a conference call at 10:00 a.m. EDT on Wednesday, July 30, 2025 to discuss second quarter 2025 operating results. A webcast of the conference call can be accessed at the following link: https://edge.media-server.com/mmc/p/5sz656e4

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, 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, such as 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

Source: Generac Holdings Inc