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Dec 31, 2023
Generac Q4 2023 Earnings Report
Generac experienced strong margin expansion and record free cash flow generation in Q4 2023, with net sales increasing slightly and the company initiating a positive outlook for 2024.
Key Takeaways
Generac reported a 1% increase in net sales to $1.06 billion for Q4 2023 compared to the prior year. The company saw improvements in net income and adjusted EBITDA, along with record cash flow from operations and free cash flow. They are initiating full-year 2024 net sales growth guidance to be approximately 3 to 7%.
Net sales increased 1% to $1.06 billion compared to Q4 2022.
Net income attributable to the company was $97 million, or $1.57 per share, compared to $71 million, or $0.83 per share, for the same period of 2022.
Adjusted EBITDA was $213 million, or 20.0% of net sales, compared to $174 million, or 16.6% of net sales, in the prior year.
Cash flow from operations was a record $317 million, and free cash flow was a record $266 million.
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
The company is initiating guidance for full-year 2024 that anticipates a return to net sales growth as compared to the prior year. Full-year net sales are expected to increase between 3 to 7% as compared to the prior year, which includes a slight favorable impact from foreign currency. Adjusted EBITDA margin is expected to be approximately 16.5 to 17.5%.
Positive Outlook
- Return to consolidated sales growth
- Year-over-year margin expansion for the full year period
- Continued investment for future growth
- Residential product sales growth in the mid-teens range
- Strong levels of operating and free cash flow generation
Challenges Ahead
- C&I product sales are expected to decline at a rate of approximately 10%
- Weakness with certain direct telecom customers
- Weakness with rental customers
- Weakness with beyond standby customers
- Reliance on electricity continues to increase and supply-demand imbalances remain a challenge for grid operators
Revenue & Expenses
Visualization of income flow from segment revenue to net income