Third Quarter 2026
Filed Oct 28, 2026Generac Reports Third Quarter 2026 Results Further momentum in the C&I segment drives significant backlog increase; Residential segment returns to strong growth in the quarter supported by lower power quality mega-trends
Record net sales increased 16%, both segments grew, adjusted EBITDA margin expanded to 19.8%, operating cash flow and free cash flow increased, and the Company raised the low end of adjusted EBITDA margin guidance while maintaining sales growth guidance.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, three months ended September 30, 2026GAAP | $1.29B | – | 16% |
| Net sales, nine months ended September 30, 2026GAAP | $3.53B | – | – |
| Costs of goods sold, three months ended September 30, 2026GAAP | $778.7M | – | – |
| Costs of goods sold, nine months ended September 30, 2026GAAP | $2.08B | – | – |
| Gross profit, three months ended September 30, 2026GAAP | $516.0M | – | – |
| Gross profit, nine months ended September 30, 2026GAAP | $1.45B | – | – |
| Gross profit margin, three months ended September 30, 2026GAAP | 39.9% | – | – |
| Selling and service expense, three months ended September 30, 2026GAAP | $174.9M | – | – |
| Research and development expense, three months ended September 30, 2026GAAP | $63.83M | – | – |
| General and administrative expense, three months ended September 30, 2026GAAP | $88.13M | – | – |
| Amortization of intangibles, three months ended September 30, 2026GAAP | $28.62M | – | – |
| Total operating expenses, three months ended September 30, 2026GAAP | $355.5M | – | 10% |
| Total operating expenses, nine months ended September 30, 2026GAAP | $959.8M | – | – |
| Income from operations, three months ended September 30, 2026GAAP | $160.6M | – | – |
| Income from operations, nine months ended September 30, 2026GAAP | $488.3M | – | – |
| Income before provision for income taxes, three months ended September 30, 2026GAAP | $143.1M | – | – |
| Income before provision for income taxes, nine months ended September 30, 2026GAAP | $429.6M | – | – |
| Provision for income taxes, three months ended September 30, 2026GAAP | $34.20M | – | – |
| Effective tax rate, three months ended September 30, 2026GAAP | 23.9% | – | – |
| Provision for income taxes, nine months ended September 30, 2026GAAP | $104.5M | – | – |
| Net income, three months ended September 30, 2026GAAP | $108.9M | – | – |
| Net income attributable to Generac Holdings Inc., three months ended September 30, 2026GAAP | $109.2M | – | – |
| Net income attributable to Generac Holdings Inc., nine months ended September 30, 2026GAAP | $325.7M | – | – |
| Net income attributable to common shareholders per common share, basic, three months ended September 30, 2026GAAP | $ 1.86 | – | – |
| Net income attributable to common shareholders per common share, diluted, three months ended September 30, 2026GAAP | $ 1.83 | – | – |
| Net income attributable to common shareholders per common share, basic, nine months ended September 30, 2026GAAP | $ 5.55 | – | – |
| Net income attributable to common shareholders per common share, diluted, nine months ended September 30, 2026GAAP | $ 5.48 | – | – |
| Adjusted EBITDA, three months ended September 30, 2026non-GAAP | $256.2M | – | – |
| Adjusted EBITDA margin, three months ended September 30, 2026non-GAAP | 19.8% of net sales | – | – |
| Adjusted EBITDA, nine months ended September 30, 2026non-GAAP | $740.4M | – | – |
| Adjusted net income attributable to Generac Holdings Inc., three months ended September 30, 2026non-GAAP | $151.1M | – | – |
| Adjusted net income attributable to Generac Holdings Inc. per common share, diluted, three months ended September 30, 2026non-GAAP | $ 2.54 | – | – |
| Adjusted net income attributable to Generac Holdings Inc., nine months ended September 30, 2026non-GAAP | $431.5M | – | – |
| Adjusted net income attributable to Generac Holdings Inc. per common share, diluted, nine months ended September 30, 2026non-GAAP | $ 7.25 | – | – |
| Net cash provided by operating activities, three months ended September 30, 2026GAAP | $171.0M | – | – |
| Free cash flow, three months ended September 30, 2026non-GAAP | $131.7M | – | – |
| Net cash provided by operating activities, nine months ended September 30, 2026GAAP | $411.5M | – | – |
| Free cash flow, nine months ended September 30, 2026non-GAAP | $284.5M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Residential segment total sales, three months ended September 30, 2026Strong sales growth for home standby and portable generators compared to the prior year, partially offset by lower shipments of energy storage systems. | $744.1M | – | approximately 9% |
| Commercial & Industrial segment total sales, three months ended September 30, 2026Core total sales growth was primarily driven by ramping revenue from products sold into the global data center market. Broad-based regional growth internationally was offset by lower shipments to the domestic industrial distributor and telecom channels. | $553.0M | – | approximately 28% |
| Residential segment total sales, nine months ended September 30, 2026No nine-month segment sales driver was provided. | $1.92B | – | – |
| Commercial & Industrial segment total sales, nine months ended September 30, 2026No nine-month segment sales driver was provided. | $1.62B | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Full-year 2026 outlook
- Revenuenet sales growth in the mid-to-high teens percent range as compared to the prior year, including an approximate 2% favorable impact from the net effect of foreign currency, acquisitions, and divestitures
- NoteNet income margin, before deducting for non-controlling interests, of approximately 9.0 to 10.0%
- NoteAdjusted EBITDA margin of approximately 20.5 to 21.0%
What drove it
- C&I sales growth included an approximate 4% net favorable impact from acquisitions, divestitures, and foreign currency.
- C&I adjusted EBITDA was $69.3 million, or 12.5% of C&I total sales, compared with $43.8 million, or 10.1% of total sales, driven by operating leverage on higher shipments and the net favorable impact of acquisitions/divestitures.
- Residential adjusted EBITDA was $200.8 million, or 27.0% of Residential segment total sales, compared with $160.2 million, or 23.4% of Residential sales, driven by favorable price/cost impacts, operating leverage given higher shipment volumes, and lower operating expense investment in energy technology solutions.
- Consolidated gross margin increased primarily because of favorable price/cost impacts, including lower tariff costs, partially offset by unfavorable sales mix.
- The Company entered into a long-term supply agreement with Amazon.com, Inc. for backup power generators for Amazon data centers. Initial deliveries are expected to total a combined $2.4 billion in 2027 and 2028.
- Backlog for products to be sold to the data center market grew to approximately $4.5 billion.
Concerns
- Unfavorable sales mix partially offset favorable price/cost impacts in gross margin.
- The effective tax rate increased to 23.9% from 15.0%, primarily because certain favorable discrete tax items in the prior-year quarter did not repeat.
- C&I international growth was offset by lower shipments to the domestic industrial distributor and telecom channels.
- Residential energy storage system shipments were lower.
- Provision for legal, regulatory and other costs included $ 14,293 (U.S. Dollars in Thousands) of clean energy warranty related matters during the third quarter of 2026.
- The filing identifies data center contract risks, including cancellation rights, delivery requirements, and potential liability exposure tied to performance obligations or other claimed damages.
What to watch
- Execution of previously announced capacity expansion plans to support data center demand.
- Conversion and delivery timing of the approximately $4.5 billion data center backlog.
- Initial Amazon-related generator deliveries expected to total a combined $2.4 billion in 2027 and 2028.
- Whether Residential shipment growth in home standby and portable generators continues and whether energy storage system shipments recover.
- Delivery of full-year net sales growth in the mid-to-high teens percent range and adjusted EBITDA margin of approximately 20.5 to 21.0%.
Balance sheet and cash flow
- Cash and cash equivalents were $ 393,671 (U.S. Dollars in Thousands) at September 30, 2026, compared with $ 341,413 (U.S. Dollars in Thousands) at December 31, 2025.
- Short-term borrowings were $ 53,134 (U.S. Dollars in Thousands) at September 30, 2026, compared with $ 50,618 (U.S. Dollars in Thousands) at December 31, 2025.
- Current portion of long-term borrowings and finance lease obligations was $ 36,744 (U.S. Dollars in Thousands) at September 30, 2026, compared with $ 22,192 (U.S. Dollars in Thousands) at December 31, 2025.
- Long-term borrowings and finance lease obligations were $ 1,243,734 (U.S. Dollars in Thousands) at September 30, 2026, compared with $ 1,260,256 (U.S. Dollars in Thousands) at December 31, 2025.
- Expenditures for property and equipment were $ 39,250 (U.S. Dollars in Thousands) in the third quarter, compared with $ 21,881 (U.S. Dollars in Thousands) in the prior-year quarter.
- Expenditures for property and equipment were $ 126,937 (U.S. Dollars in Thousands) in the nine months ended September 30, 2026, compared with $ 110,534 (U.S. Dollars in Thousands) in the prior-year period.
- Acquisition of businesses, net of cash acquired, was $ 211,723 (U.S. Dollars in Thousands) in the nine months ended September 30, 2026; no prior-year comparative amount was reported on that line.
- Stock repurchases were - (U.S. Dollars in Thousands) in the nine months ended September 30, 2026, compared with $ 147,917 (U.S. Dollars in Thousands) in the prior-year period.
Analysis
Generac reported record third-quarter net sales of $1.29 billion, up 16% from $1.11 billion in the prior-year quarter. C&I was the principal growth engine, with total sales up approximately 28% to $553.0 million, as ramping data center revenue drove core growth. Residential returned to growth, with total sales up approximately 9% to $744.1 million, led by home standby and portable generators, although energy storage system shipments declined.
Profitability improved materially. Gross profit margin was 39.9%, compared with 38.3% in the prior-year quarter, as favorable price/cost impacts including lower tariff costs outweighed unfavorable sales mix. Total operating expenses increased 10%, primarily for investments supporting future C&I growth, marketing, incentive compensation, and intangible amortization. Income from operations was $160.6 million, compared with $103.1 million, while adjusted EBITDA reached $256.2 million and 19.8% of net sales, compared with $193.2 million and 17.3% of net sales.
Cash generation increased alongside earnings. Third-quarter operating cash flow was $171.0 million, compared with $118.4 million, and free cash flow was $131.7 million, compared with $96.5 million. The Company attributed the free-cash-flow increase primarily to higher operating earnings, partly offset by increased capital expenditures. Cash and cash equivalents were $393.7 million at September 30, 2026, while long-term borrowings and finance lease obligations were $1.24 billion.
The data center opportunity became more prominent in the period. The Company disclosed a long-term Amazon supply agreement, with initial deliveries expected to total a combined $2.4 billion in 2027 and 2028, and said data center product backlog had grown to approximately $4.5 billion. Management is maintaining full-year net sales growth guidance in the mid-to-high teens percent range, including an approximate 2% favorable impact from foreign currency, acquisitions, and divestitures.
Management maintained full-year net income margin guidance of approximately 9.0 to 10.0% and increased the low end of full-year adjusted EBITDA margin guidance to approximately 20.5 to 21.0% from approximately 20.0 to 21.0%. Key execution items are capacity expansion, backlog conversion, Amazon delivery timing, and the durability of Residential demand. Investors should also monitor lower domestic industrial distributor and telecom shipments, lower energy storage shipments, the higher tax rate, unfavorable mix, and clean energy warranty related matters.
Management, verbatim
I’m incredibly proud of our team’s efforts as our third quarter results reflect an all-time record for net sales as we continued to see tremendous momentum in our C&I segment during the third quarter with significant additional commitments from data center customers providing further confidence in our position as a leading provider to this large and rapidly growing market.
Aaron Jagdfeld, President and Chief Executive Officer
Following the recently announced agreement with Amazon, along with other wins from both new and existing customers, our backlog for products to be sold to the data center market has now grown to approximately $4.5 billion, and we continue to execute on our previously announced capacity expansion plans that will allow us to capture this generational growth opportunity.
Aaron Jagdfeld, President and Chief Executive Officer
Additionally, our Residential segment returned to strong year-over-year growth during the quarter as the mega-trends around lower power quality supported an impressive increase in shipments of home standby and portable generators relative to the prior year period.
Aaron Jagdfeld, President and Chief Executive Officer
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so no actual-versus-prior-guidance comparison is available.
- Prior-quarter comparisons were not reported for the listed quarterly metrics.
- GAAP operating margin was not reported.
- GAAP net income margin for the third quarter was not reported.
- A common-stock dividend declaration or payment was not reported.
- Share repurchase authorization, remaining authorization, and third-quarter share repurchases were not reported.
- Full-year 2026 guidance for gross margin, operating expenses, tax rate, earnings per share, operating cash flow, free cash flow, capital expenditures, cash, and debt was not reported.
- Nine-month gross margin, effective tax rate, and segment sales growth percentages were not reported.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.