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Jun 30
Generac Q2 2025 Earnings Report
Generac reported strong second quarter 2025 results, with broad-based shipments and margins exceeding expectations, leading to an increase in the low end of its full-year margin outlook.
Key Takeaways
Generac delivered a robust performance in the second quarter of 2025, with net sales increasing by 6% to $1,061 million, driven by strong growth in both residential and commercial & industrial product sales. The company's net income rose to $74 million, or $1.25 per share, and adjusted net income reached $97 million, or $1.65 per share, surpassing prior-year figures. Gross profit margin improved to 39.3%, and adjusted EBITDA margin expanded to 17.7% of net sales, reflecting favorable pricing and lower input costs. Despite a decrease in cash flow from operations and free cash flow compared to the prior year, the company is optimistic about its full-year outlook, narrowing its net sales growth guidance and increasing its adjusted EBITDA margin expectations.
Net sales increased by 6% to $1,061 million in Q2 2025, up from $998 million in the prior-year quarter.
Net income attributable to the company was $74 million ($1.25 per share), and adjusted net income was $97 million ($1.65 per share).
Gross profit margin improved to 39.3% from 37.6% in the prior-year quarter, driven by favorable pricing and lower input costs.
Adjusted EBITDA was $188 million, representing 17.7% of net sales, an increase from $165 million or 16.5% 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.comOther Revenue
CapyFin.comRevenue by Geographic Location
Domestic Revenue
CapyFin.comInternational Revenue
CapyFin.com Forward Guidance
Generac is narrowing its full-year 2025 net sales growth guidance to 2% to 5% over the prior year, from the previous range of 0% to 7%. The company also increased its adjusted EBITDA margin outlook to 18.0% to 19.0%, up from 17.0% to 19.0%, and expects free cash flow conversion from adjusted net income to be 90% to 100%, compared to the previous 70% to 90%.
Positive Outlook
- Narrowed full-year net sales growth guidance to a positive range of 2% to 5%.
- Increased the low end of the full-year Adjusted EBITDA margin outlook to 18.0% to 19.0%.
- Increased outlook for free cash flow conversion from adjusted net income to 90% to 100%.
- Strong initial reception and significant global pipeline for new high-output diesel generator product offering in the data center market.
- Continued market share gains in portable generators and sustained demand for home standby generators.
Challenges Ahead
- Lower than previously anticipated price increases in the second half of the year due to lower tariff assumptions.
- Continued softness in C&I product shipments to national rental accounts.
- Increased operating expenses due to higher variable costs, increased employee costs, and ongoing acquisition-related expenses.
- Free cash flow decreased compared to the prior year due to increased working capital and higher capital expenditures.
- The company's guidance is subject to various risks, including fluctuations in raw material costs, supply chain dependencies, and changes in trade policies.
Revenue & Expenses
Visualization of income flow from segment revenue to net income