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%…
Earnings analysis · 10-Q
GNRC earnings analysis
Filed August 4, 2026 · Our reading of the company's report
The latest report
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…
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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 by data-center demand, more than offset a 2.2% Residential sales decline. Results and margin expansion benefited substantially from $71 million of tariff recoveries recognized in cost of goods sold, which tempers the underlying earnings quality and creates a difficult comparison.
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
- $2.4
What stood out
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Revenue and GAAP EPS accelerated
Q2 net sales rose 10.6% year over year to $1.174 billion from $1.061 billion, and increased from $1.059 billion in Q1 2026. GAAP diluted EPS increased to $2.40 from $1.25 a year earlier and $1.24 in Q1.
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Margins expanded sharply
Gross margin expanded to 44.5% from 39.3% a year ago and 38.7% in Q1 2026; operating margin rose to 17.9% from 10.5% and 11.1%, respectively. Management attributes approximately 6 percentage points of quarterly gross-margin expansion to tariff refunds.
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C&I data-center-led growth was strong
C&I sales grew 29.2% to $556.5 million, with core growth led by ramping global data-center products. C&I adjusted EBITDA increased 52.8% to $81.5 million and margin improved to 14.6% from 12.4%.
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Residential revenue down but profitability up
Residential sales declined 2.2% to $617.0 million from $630.6 million, but segment adjusted EBITDA rose 47.1% to $215.4 million; its margin reached 34.7% versus 23.1%.
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Operating cash flow improved materially
Six-month operating cash flow increased 84.5% to $240.5 million. Less $87.7 million of property-and-equipment spending, implied free cash flow was $152.8 million; capex equaled 3.9% of six-month sales.
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Liquidity remains ample
Liquidity was $1.264 billion at June 30, comprising $264.9 million of cash and $999.3 million of undrawn revolver capacity. Total term-loan borrowings were $1.191 billion, with no revolver borrowings and net secured leverage of 1.15x.
What to watch
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Tariff refunds materially lifted margins
The quarter's 44.5% gross margin included approximately 6 percentage points from tariff refunds; $71 million of tariff recovery reduced Q2 cost of goods sold, while $28 million remained recorded as a tariff-refund receivable. This creates a material non-recurring comparison headwind.
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Residential demand remained soft
Residential external sales fell $13.6 million, or 2.2%, to $617.0 million, driven by lower energy-storage-system and portable-generator shipments. The segment represented 52.6% of Q2 total net sales.
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Acquisition spending consumed cash flow
Investing cash outflow increased to $275.8 million in the first half from $93.3 million, including $211.8 million for acquisitions and $87.7 million of capex. The higher investment burden exceeded the $240.5 million of operating cash flow for the period.
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No material risk-factor updates
The filing states there were no material risk-factor changes since the February 18, 2026 Form 10-K. Existing disclosures continue to identify data-center-market uncertainty and contract risk, while C&I sales grew 29.2% to $556.5 million in Q2, increasing exposure to this growth area.
Management's outlook
The 10-Q does not provide quantitative revenue or EPS guidance. Management discusses long-term demand drivers, including a supply-constrained large-megawatt data-center market, but provides no numeric outlook in the filing.
Earlier filings 4
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…
10-Q · August 6, 2024
Generac reported Q2 net sales of $998,197,000, essentially flat year-over-year (down $2,223,000 vs. $1,000,420,000 in Q2 2023) while gross profit rose to $375,561,000 driving operating income of $103,235,000 and diluted…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.