Generac | 8-K: FY2026 Q2 Revenue Misses Estimate at USD 1.174 B

Revenue: As of FY2026 Q2, the actual value is USD 1.174 B, missing the estimate of USD 1.178 B.

EPS: As of FY2026 Q2, the actual value is USD 2.4, beating the estimate of USD 1.6489.

EBIT: As of FY2026 Q2, the actual value is USD 223.66 M.

Net Sales

Total net sales for Generac Holdings Inc. increased by 11% to $1.17 billion in the second quarter of 2026, up from $1.06 billion in the prior year second quarter, with acquisitions, divestitures, and foreign currency having a net favorable impact of 2% on sales growth.

• Commercial & Industrial (C&I) Segment External Net Sales: Increased approximately 29% to $556 million in Q2 2026, compared to $431 million in the prior year, including an approximate 6% net favorable impact from acquisitions, divestitures, and foreign currency. The core growth was primarily driven by ramping revenue from products sold into the global data center market, with increased shipments to rental and telecom channel customers partially offset by a decrease in shipments to the domestic industrial distributor channel.
• Residential Segment External Net Sales: Decreased approximately 2% to $617 million in Q2 2026, compared to $631 million in the prior year, mainly due to lower energy storage system and portable generator shipments, largely offset by growth in home standby generator sales.

Net Income

Net income attributable to Generac Holdings Inc. was $143 million in the second quarter of 2026, compared to $74 million for the same period in 2025.

Adjusted Net Income

Adjusted net income attributable to Generac Holdings Inc. was $174 million in the second quarter of 2026, compared to $97 million in the second quarter of 2025.

Adjusted EBITDA

Adjusted EBITDA was $291 million, or 24.8% of net sales, in the second quarter of 2026, compared to $188 million, or 17.7% of net sales, in the prior year.

• C&I Segment Adjusted EBITDA: Was $81.5 million, or 14.6% of C&I total sales, compared to $53.3 million, or 12.4% of total sales, in the prior year.
• Residential Segment Adjusted EBITDA: Was $215.4 million, or 34.7% of Residential segment total sales, compared to $146.4 million, or 23.1% of Residential sales, in the prior year.

Tariff Refunds Impact

Net income, adjusted net income, and adjusted EBITDA all include a pre-tax impact of approximately $71 million related to tariff refunds recorded during the current year quarter. These tariff refunds contributed approximately 6% to the gross margin, approximately 2% to the C&I segment’s Adjusted EBITDA margin, and approximately 9% to the Residential segment’s Adjusted EBITDA margin.

Gross Profit Margin

Gross profit margin was 44.5% in the second quarter of 2026, compared to 39.3% in the prior year second quarter, with the increase primarily driven by tariff refunds contributing approximately 6% to gross margin.

Operating Expenses

Operating expenses increased by $6.4 million, or 2%, in the second quarter of 2026 compared to the second quarter of 2025, mainly due to increased operating expense investments supporting future C&I growth and higher intangible amortization, partially offset by lower legal expenses.

Income from Operations

Income from operations was $210,433 thousand for the three months ended June 30, 2026, compared to $111,789 thousand for the same period in 2025.

Provision for Income Taxes

Provision for income taxes for the current year quarter was $46.7 million, resulting in an effective tax rate of 24.6%, compared to $15.4 million, or a 17.2% effective tax rate, for the prior year. The increase in the effective tax rate was primarily related to a non-recurring favorable discrete item in the prior year period that did not repeat.

Cash Flow from Operations

Cash flow from operations was $121 million in the second quarter of 2026, compared to $72 million in the prior year. For the six months ended June 30, 2026, net cash provided by operating activities was $240,496 thousand, compared to $130,341 thousand for the six months ended June 30, 2025.

Free Cash Flow

Free cash flow was $63 million in the second quarter of 2026, compared to $14 million in the second quarter of 2025, driven by higher operating earnings and cash receipts from tariff refunds. For the six months ended June 30, 2026, free cash flow was $152,809 thousand, compared to $41,688 thousand for the six months ended June 30, 2025.

Unique Operational Metrics

Generac Holdings Inc. signed a global supply agreement with a leading hyperscale data center operator, committing nearly $700 million of volume for 2027. The company also secured a global supply agreement with a second hyperscale customer on June 24th and is currently negotiating product-specific terms for 2027 and 2028 volumes. The company’s backlog for products serving the data center market has increased to approximately $1.6 billion, not including committed volumes from the second hyperscale customer.

Outlook / Guidance

Generac Holdings Inc. is maintaining its full-year 2026 net sales growth guidance in the mid-to-high teens percent range compared to the prior year, including an approximate 2% favorable impact from foreign currency, acquisitions, and divestitures. C&I segment sales are now expected to grow in the low 30% range, and Residential segment sales are projected to increase in the high-single digit range. The adjusted EBITDA margin for the full year is now expected to be approximately 20.0% to 21.0%, an increase from the previous guidance of 18.5% to 19.5%, reflecting an approximate 1.5% impact from tariff refunds.