Generac (GNRC) Q2 2026 earnings summary

Executive summary

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

• C&I segment sales surged 29% to $556 million, while Residential segment sales declined 2% to $621 million.

• Secured two multi-year hyperscale supply agreements, increasing data center backlog to $1.6 billion and adding $1 billion in new orders over the last 90 days.

• Completed the acquisition of Enercon and expanded packaging capacity with a new facility in Illinois.

• Residential segment showed resilience, with home standby generator sales returning to growth despite a soft power outage environment.

Financial highlights

• Adjusted EBITDA reached $291 million (24.8% margin), up from $188 million (17.7%) in Q2 2025, driven by $71 million in tariff refunds and operating leverage.

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

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

• Free cash flow increased to $63 million from $14 million year-over-year.

• Operating expenses rose 2% to $311 million, mainly from investments in C&I growth and higher intangible amortization.

Outlook and guidance

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

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

• 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%.

• Adjusted EBITDA margin guidance for 2026 raised to 20.0–21.0% (from 18.5–19.5%), reflecting a 1.5% benefit from tariff refunds.

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