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Jun 30, 2023
Generac Q2 2023 Earnings Report
Generac's financial performance declined in Q2 2023 due to decreased residential product sales, partially offset by strong commercial and industrial product sales.
Key Takeaways
Generac reported a decrease in net sales by 23% to $1.00 billion compared to the prior-year quarter. Residential product sales declined, while Commercial & Industrial product sales increased. Net income and adjusted EBITDA also decreased compared to the same period last year. The company has updated its outlook for the full year 2023 due to a softer consumer environment.
Net sales decreased 23% to $1.00 billion compared to Q2 2022.
Residential product sales decreased 44% to $499 million, while Commercial & Industrial product sales increased 24% to $384 million.
Net income was $45 million, or $0.70 per share, compared to $156 million, or $2.21 per share, for the same period of 2022.
Adjusted EBITDA was $137 million, or 13.6% of net sales, compared to $271 million, or 21.0% of net sales, in the prior year.
Generac
Generac
Generac Revenue by Segment
Generac Revenue by Geographic Location
Revenue by Segment
Residential Products Revenue
CapyFin.comCommercial & Industrial Products Revenue
CapyFin.comRevenue by Geographic Location
Domestic Revenue
CapyFin.comInternational Revenue
CapyFin.com Forward Guidance
Generac has updated its full-year 2023 outlook due to a softer consumer environment, expecting net sales to decline between -10% to -12%.
Positive Outlook
- C&I product sales are now expected to grow at a mid-teens rate during 2023
- Operating and free cash flow generation are still expected to return to strong levels for the full year
- Conversion of adjusted net income to free cash flow expected to be well over 100%.
- The company is further investing in the build out of our suite of products and solutions to position ourselves as a leader in energy technology.
- Leading indicators of end market demand remain strong
Challenges Ahead
- Residential product sales are expected to be lower during the second half relative to prior expectations.
- Full-year 2023 net sales are now expected to decline between -10% to -12% as compared to the prior year.
- Net income margin, before deducting for non-controlling interests, is expected to be approximately 6.0 to 7.0% for the full-year 2023.
- EBITDA margin is now expected to be approximately 15.5 to 16.5%.
- Softer consumer environment.
Revenue & Expenses
Visualization of income flow from segment revenue to net income