Key Highlights

  • Consensus EPS of 2.43 sits between reported second-quarter diluted EPS of 2.40 and adjusted EPS of 2.91.
  • Consensus revenue of USD 1.32 billion compares with second-quarter net sales of USD 1,173,510 thousand, against USD 1,061,169 thousand.
  • Data center backlog was USD 1.6 billion, and management guided about USD 450 million of data center revenue for 2026.
  • Tariff refunds contributed a USD 71 million pretax benefit, or USD 0.90 per share, to second-quarter adjusted results.

Generac (NYSE:GNRC) reports third-quarter results on Wednesday, Oct. 28, before the market opens. Consensus stands at EPS of 2.43 on revenue of USD 1.32 billion, and the company has a market capitalization of USD 11.18 billion.

Generac makes generators and energy technology products and reports Residential and Commercial and Industrial (C&I) segments. Second-quarter net sales were USD 1,173,510 thousand against USD 1,061,169 thousand, and management put C&I sales at USD 556 million and Residential at USD 621 million.

Estimates Against Third-Quarter Guidance

Management guided third-quarter net sales growth in the high teens range, with further acceleration in the fourth quarter, without giving a dollar figure. The EPS estimate of 2.43 is above the diluted EPS of 2.40 and below the adjusted EPS of 2.91 reported for the second quarter, and the estimates table does not state its EPS basis.

The revenue estimate of USD 1.32 billion is above the USD 1,173,510 thousand of second-quarter net sales.

What Management Guided and What It Left Open

Management raised C&I full-year sales growth guidance to the low 30s percent range from the mid- to high 20s, and cut Residential to high single-digit growth from 10%. It expects nearly USD 450 million of data center revenue in 2026 and maintained its adjusted EBITDA margin range of 18.5% to 19.5%, excluding a 150 basis point tariff refund effect.

Management said full-year telecom shipments are flat because a certain telecom customer is working through a backlog of installations, and it cited a soft power outage environment for Residential. It left open the second hyperscale agreement, which is in final negotiation for 2027 to 2028 volumes.

Second-Quarter Results and Tariff Refunds

Gross profit was USD 521,811 thousand against USD 416,749 thousand, and gross margin was 44.5% against 39.3%. The filing says tariff refunds contributed approximately 6% to gross margin growth, partly offset by unfavorable sales mix and higher input costs.

Operating income was USD 210,433 thousand against USD 111,789 thousand, and net income was USD 143,244 thousand against USD 74,016 thousand. Adjusted EBITDA was USD 291 million, or 24.8% of net sales, which includes the USD 71 million tariff refund benefit.

Adjusted EPS was 2.91 against 1.65, including 0.90 from tariff refunds. Basic EPS was 2.44 against 1.27.

Data Center Backlog and Capacity

Data center backlog was USD 1.6 billion, with about USD 1 billion of new orders over the last 90 days and USD 1.35 billion scheduled for 2027 delivery. The first hyperscale agreement commits nearly USD 700 million for 2027. Management cited a path to triple large megawatt production capacity over the next 12 months and production at its Sussex, Wisconsin facility beginning by the end of the third quarter.

Capital expenditures are projected at 4.5% of net sales for 2026. Free cash flow was USD 63 million against USD 14 million, and the debt leverage ratio was 1.5x adjusted EBITDA. The estimates table lists a market capitalization of USD 11.18 billion.

Figures to Follow in the Release

Adjusted EPS against 2.43 and net sales against USD 1.32 billion are the headline comparisons. Other markers are C&I segment sales, data center shipments, residential outage activity and tariff refund effects.