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Sep 30, 2023
Generac Q3 2023 Earnings Report
Generac's Q3 2023 earnings reflected a decrease in net sales, but an increase in net income and adjusted EBITDA. The company experienced growth in C&I product sales and margin expansion, along with substantial free cash flow generation.
Key Takeaways
Generac's Q3 2023 saw a slight decrease in net sales by 2% to $1.07 billion, but net income increased to $60 million, or $0.97 per share. Adjusted EBITDA rose to $189 million, representing 17.6% of net sales, and the company generated $117 million in free cash flow.
Net sales decreased 2% to $1.07 billion compared to the prior-year third quarter.
Net income attributable to the company increased to $60 million, or $0.97 per share.
Adjusted EBITDA increased to $189 million, or 17.6% of net sales.
Free cash flow was $117 million, a significant increase compared to $(73) million in the prior year.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
The Company is maintaining its overall full-year 2023 net sales guidance for a decline of approximately -10 to -12% as compared to the prior year, which includes approximately 2% of net favorable impact from acquisitions and foreign currency. Additionally, the Company now expects net income margin, before deducting for non-controlling interests, to be approximately 5.0 to 6.0% for the full-year 2023 compared to the prior guidance range of 6.0 to 7.0%. The corresponding adjusted EBITDA margin is still expected to be approximately 15.5% to 16.5%, in line with the previous guidance. Operating and free cash flow generation are expected to return to strong levels for the full year, with conversion of adjusted net income to free cash flow expected to be well over 100%.
Positive Outlook
- Maintaining full-year net sales guidance.
- Expect approximately 2% of net favorable impact from acquisitions and foreign currency.
- Adjusted EBITDA margin is still expected to be approximately 15.5% to 16.5%.
- Operating and free cash flow generation are 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%.
Challenges Ahead
- Net sales are expected to decline approximately -10 to -12% compared to the prior year.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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