Generac Misses Q4 Earnings & Sales Estimates, Provides 2026 Outlook

Generac Holdings Inc. GNRC has reported fourth-quarter 2025 adjusted earnings per share (EPS) of $1.61, which missed the Zacks Consensus Estimate of $1.81. GNRC had registered an adjusted EPS of $2.80 in the prior-year quarter.

Net sales were $1.09 billion, down 12% from $1.23 billion in the prior-year quarter. The figure also missed the consensus estimate of $1.17 billion.

Weaker demand for home standby and portable generators amid a softer outage environment offset increases in sales to data center customers and higher shipments of residential energy technology products. Management added that the momentum in the data center market was a big plus and that increasing supplies to key hyperscalers should drive the backlog over the next few quarters.

Generac Holdings Inc. Price, Consensus and EPS Surprise

 

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

Generac noted that it is focused on capacity expansion for large megawatt generators and has purchased an additional manufacturing facility in Wisconsin in the fourth quarter, while continuing with investments in the existing facilities. GNRC expects these strategic initiatives to lead to a doubling of C&I product sales in the coming years. 

For 2026, GNRC expects revenues to grow in the mid-teens percent range compared with the sales decline of 2% registered in 2025. This includes a 1% favorable impact from the net effect of foreign currency, and completed acquisitions and divestitures. Driven by data center momentum and the Allmand acquisition, C&I product sales are anticipated to grow in the 30% range.

Assuming a return to power outage activity in line with the longer-term baseline and subsequent higher home standby generator price realization and higher shipments, Residential product sales are expected to increase in the 10% range for 2026. 

The net income margin (before deducting for non-controlling interests) is expected to be between 8% and 9%. The adjusted EBITDA margin is estimated to be 18-19%.

GNRC is up 4% in the pre-market trading today. The stock has gained 19.6% compared with the Manufacturing-General Industrial industry’s growth of 20.5% in the past year.

GNRC’s Segments in Detail

Segment-wise, domestic revenues fell 17% year over year to $889 million. Sales were impacted by lower home standby and portable generator sales, and tough year-over-year comparisons. 

International revenues rallied 12% year over year to $209.2 million, which includes a 6% favorable impact from foreign currency fluctuations. Core revenue growth was mainly due to strength in large-megawatt generators to data centers and higher shipments for the controls product offering. 

Product-wise, revenues from Residential were down 23% year over year to $572 million. C&I revenues totaled $400 million, up 10% year over year. Revenues from the Other product class totaled $120.1 million, down 6.2% year over year.

The Zacks Consensus Estimate for Residential and C&I products’ fourth-quarter revenues was pegged at $643 million and $394 million, respectively.

GNRC’s Margin Performance

Gross profit was $396.1 million, down from $501.4 million in the prior-year quarter, with respective margins of 36.3% and 40.6%. The performance was impacted by an unfavorable sales mix and a certain inventory provision in the current quarter. Higher price realization mostly offset increased input costs and lower manufacturing absorption.

Total operating expenses were $405.4 million, up 34% year over year, caused by provision for the settlement of a legal matter.

The operating loss was $9.3 million compared with the operating income of $198 million in the prior-year quarter. Adjusted EBITDA, before deducting for non-controlling interests, was $185 million compared with $265 million a year ago.

GNRC’s Cash Flow & Liquidity

In the fourth quarter, the company generated $189 million of net cash from operating activities. The free cash flow totaled $130 million.

For 2025, the company generated $438 million of net cash from operating activities. The free cash flow totaled $268 million compared with the guidance of approximately $300 million.

As of Dec. 31, 2025, GNRC had $341.4 million of cash and cash equivalents, with $1.26 billion of long-term borrowings and finance-lease obligations.

In 2025, the company repurchased 1.1 million shares for $148 million. GNRC also approved a share repurchase authorization of up to $500 million over the next 24 months. This new program replaces the remaining balance of 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 Performances of Other Companies in the Same Space

Illinois Tool Works Inc. ITW reported fourth-quarter 2025 adjusted earnings of $2.72 per share, which surpassed the Zacks Consensus Estimate of $2.68. Earnings increased 7% year over year.  Illinois Tool’s revenues of $4.09 billion beat the consensus estimate of $4.07 billion. The top line increased 4% year over year, driven by a favorable foreign currency translation of 2.5%.

Organic sales increased 1.3% in the quarter, while acquisitions had a favorable impact of 0.3%. In 2025, ITW reported net revenues of $16 billion, which increased 0.9% year over year. However, the company’s adjusted earnings were $10.49 per share, down 10.4% year over year.

Dover Corporation DOV posted fourth-quarter 2025 adjusted EPS from continuing operations of $2.51, beating the Zacks Consensus Estimate of $2.48. In the year-ago quarter, the company reported an adjusted EPS of $2.20.

On a reported basis, Dover delivered earnings of $2.01 per share in the quarter, up 17% year over year. Total revenues for the fourth quarter increased 8.8% year over year to $2.099 billion. The top line beat the Zacks Consensus Estimate of $2.068 billion. Organic growth grew 4.6% in the quarter.

Graco Inc.’s GGG fourth-quarter 2025 adjusted earnings of 77 cents per share came in line with the Zacks Consensus Estimate. The bottom line grew 20% year over year. The company’s net sales of $593.2 million surpassed the consensus estimate of $585 million. Also, the top line increased 8% year over year due to incremental sales from acquired operations and sales growth across the Americas, EMEA and the Asia Pacific regions.

On a regional basis, quarterly sales generated from the Americas increased 5% year over year. In Europe, the Middle East and Africa, sales increased 15% year over year. Sales from the Asia Pacific increased 11% year over year.

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