Generac Q3 Earnings & Revenues Miss Estimates, 2025 Outlook Revised

Generac Holdings Inc.  GNRC reported third-quarter 2025 adjusted earnings per share (EPS) of $1.83, which missed the Zacks Consensus Estimate of $2.25. GNRC reported adjusted EPS of $2.25 in the prior-year quarter.

Net sales were $1.11 billion, down 5% compared with $1.17 billion reported in the prior-year quarter. The figure also missed the consensus estimate of $1.2 billion. Weaker seasonal demand for home standby and portable generators offset increases in sales for global C&I products and higher shipments of residential energy technology products. Although home standby and portable generator shipments were up sequentially in the quarter, they came in below expectations due to a power outage environment that was considerably below the baseline average, as highlighted by GNRC. 

As a result of a weak power outage environment, management has revised its expectations for 2025. For 2025, GNRC now expects revenues to be flat compared with an increase of 2-5% guided earlier. 

Net income margin (before deducting for non-controlling interests) is now expected to be 6% compared with 7.5-8.5% guided earlier. Adjusted EBITDA margin is now estimated to be 17% compared with the previous range of 18% to 19%. GNRC now expects free cash flow conversion from adjusted net income to be 80% compared with the previous guided range of 90% to 100%.  

GNRC is down 10.1% in the pre-market trading today. The stock has gained 15.1% compared with the Manufacturing-General Industrial industry’s growth of 4.6% in the past year.

GNRC’s Segments in Detail

Segment-wise, domestic revenues fell 8% year over year to $938.1 million. Results were supported by acquisitions, which contributed 1% benefit. Core sales were impacted by lower home standby and portable generator sales, and tough year-over-year comparisons. 

International revenues surged 11% year over year to $185.5 million, which includes a 3% favorable impact from foreign currency fluctuations. Core revenue growth was mainly due to strength in C&I product shipments in Europe and initial shipments of large-megawatt generators to data centers. 

Product-wise, revenues from Residential were down 13% year over year to $627 million. C&I revenues totaled $358 million, up 9% year over year. Revenues from the Other product class totaled $129.4 million, up 5.3% year over year.

Generac Holdings Inc. Price, Consensus and EPS Surprise

Generac Holdings Inc. price-consensus-eps-surprise-chart | Generac Holdings Inc. Quote

The Zacks Consensus Estimate for Residential and C&I products’ third-quarter revenues was pegged at $714 million and $353 million, respectively.

GNRC’s Margin Performance

Gross profit was $426.9 million, down from $472.3 million in the prior-year quarter, with respective margins of 38.3% and 40.2%. The performance was impacted by unfavorable sales mix, higher tariffs and lower manufacturing absorption, which offset higher price realization.

Total operating expenses were $323.8 million, up 6.7% year over year, caused by certain legal and regulatory charges. 

Operating income was $103.1 million, down 38.9% year over year. Adjusted EBITDA, before deducting for non-controlling interests, was $193 million compared with $232 million a year ago.

GNRC’s Cash Flow & Liquidity

In the third quarter, the company generated $118.4 million of net cash from operating activities. Free cash flow totaled $96.5 million.

As of Sept. 30, 2025, GNRC had $300 million of cash and cash equivalents, with nearly $1.36 billion of long-term borrowings and finance-lease obligations.

In the reported quarter, the company did not buy back shares. GNRC had shares worth $200 million left under its buyback authorization as of June 30, 2025.  

In February 2024, GNRC approved a new share buyback authorization that allows for a repurchase of up to $500 million in the next 24 months. It replaced the remaining balance on the earlier program.

GNRC’s Zacks Rank

Generac currently has a Zacks Rank #4 (Sell). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performance of Other Companies in the Same Space

Illinois Tool Works Inc. ITW reported third-quarter 2025 adjusted earnings of $2.81 per share, which surpassed the Zacks Consensus Estimate of $2.56. Earnings increased 6% year over year. Illinois Tool’s revenues of $4.06 billion missed the consensus estimate of $4.08 billion. However, the top line increased 2% year over year, driven by a favorable foreign currency translation of 2%. 

Organic sales increased 1% in the quarter, while product line simplification had an adverse impact of 1%. At the end of the third quarter, Illinois Tool had cash and equivalents of $924 million compared with $948 million at the end of December 2024.

Dover Corporation DOV reported third-quarter 2025 adjusted EPS from continuing operations of $2.62, beating the Zacks Consensus Estimate of $2.50. In the year-ago quarter, the company reported an adjusted EPS of $2.27. On a reported basis, Dover Corporation has delivered an EPS (from continuing operations) of $2.20 in the quarter, down 3% year over year. Total revenues in the third quarter were $2.08 billion, up 4.8% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $2.09 billion.

Organic growth was 0.5% in the quarter. DOV’s bookings at the end of the third quarter were around $2 billion compared with the prior-year quarter’s $1.85 billion. 

Graco Inc.’s GGG third-quarter 2025 adjusted earnings of 73 cents per share missed the Zacks Consensus Estimate of 75 cents. The bottom line increased 3% year over year. Graco’s net sales of $543.4 million lagged the consensus estimate of $562 million. However, the top line increased 5% year over year due to incremental sales from acquired operations and sales growth across the Americas, EMEA and Asia Pacific regions. 

On a regional basis, quarterly sales generated from the Americas increased 2% year over year. In EMEA, sales increased 12% year over year. Sales from the Asia Pacific increased 7% year over year.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research