10-Q · August 4, 2026
Generac delivered a strong Q2: revenue increased 10.6% to $1.174 billion, GAAP diluted EPS nearly doubled to $2.40, and operating margin expanded 7.4 percentage points year over year to 17.9%. C&I growth of 29.2%, led…
Earnings analysis · 10-Q
GNRC earnings analysis
Filed November 3, 2026 · Our reading of the company's report
The latest report
Generac delivered strong third-quarter operating results, with revenue up 16.2% year over year, operating income up 55.8%, and GAAP diluted EPS rising to $1.83 from $1.12. C&I growth, particularly from data centers, and…
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Generac delivered strong third-quarter operating results, with revenue up 16.2% year over year, operating income up 55.8%, and GAAP diluted EPS rising to $1.83 from $1.12. C&I growth, particularly from data centers, and residential operating leverage drove the improvement, while cash generation and liquidity strengthened materially. The principal offsets are elevated warranty exposure, reliance on tariff-refund benefits in year-to-date margins, and increasing execution and concentration risk in data-center programs.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $1.83
What stood out
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Revenue and gross margin improved
Third-quarter net sales increased 16.2% year over year to $1.295 billion, while gross profit rose 20.9% to $516.041 million. Gross margin expanded to 39.9% from 38.3% a year earlier, primarily due to favorable price/cost impacts and lower tariff costs.
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Operating leverage drove EPS growth
Income from operations increased 55.8% year over year to $160.583 million, producing a 12.4% operating margin versus 9.3% in the prior-year quarter. GAAP diluted EPS increased to $1.83 from $1.12, while adjusted diluted EPS was $2.54 versus $1.83.
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C&I growth accelerated
Commercial & Industrial revenue grew 27.7% to $552.124 million, driven principally by ramping global data-center revenue and international growth. C&I Adjusted EBITDA increased 58.3% to $69.292 million, with margin rising to 12.5% from 10.1%.
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Residential profitability strengthened
Residential revenue increased 8.9% to $742.655 million, supported by higher home-standby and portable-generator shipments, partly offset by lower energy-storage shipments. Residential Adjusted EBITDA rose 25.4% to $200.792 million, and margin expanded to 27.0% from 23.4%.
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Cash generation improved materially
Nine-month operating cash flow increased 65.4% to $411.485 million from $248.719 million. Using reported operating cash flow less $126.937 million of capital expenditures, nine-month free cash flow was approximately $284.548 million versus approximately $138.185 million in the prior year.
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Liquidity and covenant headroom remain strong
Liquidity was $1.388 billion at September 30, 2026, consisting of $393.671 million of cash and $994.144 million of unused revolver capacity. Total leverage was 1.05x and interest coverage was 17.93x, versus required thresholds of below 3.75x and above 3.00x, respectively.
What to watch
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Warranty exposure increased
The company recorded a $14.293 million clean-energy warranty provision in the quarter, contributing to a total product-warranty liability of $144.680 million at September 30, 2026 versus $131.922 million at December 31, 2025. Management also states that actual legal and warranty losses could exceed reserves by a material amount.
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Tariff refund benefit may not recur
Nine-month gross-margin growth benefited from approximately $80.6 million of tariff refunds, including $9.5 million recorded as a reduction of third-quarter cost of goods sold. All expected Phase I refunds had been received, and $10.5 million remained in inventory, creating a difficult benefit comparison after the refund tailwind ends.
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Data-center concentration and execution
C&I revenue reached $552.124 million in the quarter, with management citing ramping global data-center revenue as the primary growth driver. The filing identifies uncertainty regarding data-center market growth and contract risks, including cancellation rights, delivery requirements, and potential liability exposure.
Management's outlook
The 10-Q does not provide new or revised quantitative guidance. The prior outlook was discussed in the October 28, 2026 earnings release rather than this filing.
Earlier filings 4
10-Q · May 5, 2026
Generac Holdings, Inc. reported robust Q1 2026 financial results with revenue reaching $1.06 billion, translating to an increase of 12.4% year-over-year, while gross profit rose to $410.2 million, reflecting a 10.3%…
10-K · February 18, 2026
Generac positions itself under the enterprise strategy “Powering A Smarter World,” emphasizing new 2025 product launches (next‑generation home standby generator, large-megawatt diesel generators, PWRcell 2, Generac…
10-Q · May 6, 2025
Generac reported revenue of $942.1M and gross profit of $372.0M for the three months ended March 31, 2025, driving margin and profitability expansion versus the year‑ago quarter. Operating income rose to $83.6M and…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.