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Fewer power outages kept sales flat in 2025, and dropped EPS, but focus is on datacenter opportunity
Management describes data center power as a "generational opportunity" for growth
Generac acquired a Sussex, WI manufacturing site to expand C&I production alongside Beaver Dam and Oshkosh
Generac Holdings ((GNRC - Free Report) ) is a leading manufacturer of power generation equipment, including standby generators, energy storage, and related products, serving residential, commercial, industrial, and portable needs. The company focuses on backup power solutions amid rising demand from outages, data centers, and electrification trends.
Revenue Segments
Generac's 2024 revenue reached $4.3 billion, with Residential products at 56-57% ($2.4 billion), Commercial & Industrial (C&I) at 32% ($1.4 billion), and Other products/services at 11%. Domestic sales dominate at 84%, with international at 16%. TTM revenue through mid-2025 stands at $4.41 billion.
The problem is that fiscal year 2025 revenues are looking like they are going to come in flat near $4.3 billion too.
Growth Rates
Revenue grew 6.8% in 2024 after an 11.9% decline in 2023, with TTM growth at 9.7%. Residential averaged 9.5% YoY growth over two years, while C&I saw 2.2% declines; Q3 2025 sales fell 5% to $1.11 billion. Analysts project 7.7% revenue growth over the next year and flat 2025 sales amid weak outages, with EPS up 15.8% to $7.54. Long-term CAGR is 14% since 2000.
Profits are a problem too with the Zacks consensus for 2025 projected at EPS of $6.61, representing a 9% annual drop.
Q3 Report Displays the Weakness
Generac reported third-quarter 2025 adjusted earnings per share (EPS) of $1.83, which missed the Zacks Consensus Estimate of $2.25 by 18%. GNRC reported adjusted EPS of $2.25 in the prior-year quarter.
Net sales were $1.11 billion, down 5% compared with $1.17 billion reported in the prior-year quarter. The figure also missed the consensus estimate of $1.2 billion.
Weaker seasonal demand for home standby and portable generators offset increases in sales for global C&I products and higher shipments of residential energy technology products. Although home standby and portable generator shipments were up sequentially in the quarter, they came in below expectations due to a power outage environment that was considerably below the baseline average, as highlighted by GNRC.
As a result of a weak power outage environment, management has revised its expectations for 2025. For 2025, GNRC now expects revenues to be flat compared with an increase of 2-5% guided earlier.
Net income margin (before deducting for non-controlling interests) is now expected to be 6% compared with 7.5-8.5% guided earlier. Adjusted EBITDA margin is now estimated to be 17% compared with the previous range of 18% to 19%. GNRC now expects free cash flow conversion from adjusted net income to be 80% compared with the previous guided range of 90% to 100%.
Demand and Backlog
Management describes data center power as a “generational opportunity,” with the potential to double C&I sales over the next three to five years as hyperscale and AI-driven capacity build out.
The order backlog for large???megawatt generators has roughly doubled in recent quarters, explicitly tied to data center projects, and is now a key component of forward C&I visibility.
Customers, Partners, and Competition
Key customers include residential homeowners, C&I clients like data centers (e.g., C7 Data Centers), and industrial users. Generac supplies high-capacity generators (2.25-3.25 MW) for data centers and partners with Wallbox for EV charging integration.
This month, Generac acquired a Sussex, WI manufacturing site to expand C&I production alongside their Beaver Dam and Oshkosh facilities. This long-term focus on growth is a key factor for investors to focus on during the short-term slump.
But there is new competition on the block.
Bloom Energy ((BE - Free Report) ) leads in solid oxide fuel cells (SOFCs) for stationary on-site power, targeting data centers with efficient, grid-independent generation deployable in 90 days. Bloom has customers like Oracle ((ORCL - Free Report) ) and partners with Brookfield Corporation ((BN - Free Report) ) to supply datacenters with fast, clean, agile energy.
Bloom also recently inked a $2.65 billion deal with American Electric Power ((AEP - Free Report) ) to provide fuel cells. I originally bought Bloom Energy shares in September because they had a chance to double revenues in under two years just like Generac did from 2020-2022 to $4.5 billion. Bloom Energy is projected to grow the topline by 38% this year to cross $2.6 billion.
While Generac dominates combustion generators, Bloom's cleaner fuel cells pose indirect competition in resilient backup markets like data centers as both serve electrification but differ technologically. Generac's Q3 strength in C&I data center shipments highlights this shared space.
Kevin Cook is a Senior Stock Strategist for Zacks where he runs the TAZR Trader portfolio and holds shares of Bloom Energy.
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Bear of the Day: Generac (GNRC)
Key Takeaways
Generac Holdings ((GNRC - Free Report) ) is a leading manufacturer of power generation equipment, including standby generators, energy storage, and related products, serving residential, commercial, industrial, and portable needs. The company focuses on backup power solutions amid rising demand from outages, data centers, and electrification trends.
Revenue Segments
Generac's 2024 revenue reached $4.3 billion, with Residential products at 56-57% ($2.4 billion), Commercial & Industrial (C&I) at 32% ($1.4 billion), and Other products/services at 11%. Domestic sales dominate at 84%, with international at 16%. TTM revenue through mid-2025 stands at $4.41 billion.
The problem is that fiscal year 2025 revenues are looking like they are going to come in flat near $4.3 billion too.
Growth Rates
Revenue grew 6.8% in 2024 after an 11.9% decline in 2023, with TTM growth at 9.7%. Residential averaged 9.5% YoY growth over two years, while C&I saw 2.2% declines; Q3 2025 sales fell 5% to $1.11 billion. Analysts project 7.7% revenue growth over the next year and flat 2025 sales amid weak outages, with EPS up 15.8% to $7.54. Long-term CAGR is 14% since 2000.
Profits are a problem too with the Zacks consensus for 2025 projected at EPS of $6.61, representing a 9% annual drop.
Q3 Report Displays the Weakness
Generac reported third-quarter 2025 adjusted earnings per share (EPS) of $1.83, which missed the Zacks Consensus Estimate of $2.25 by 18%. GNRC reported adjusted EPS of $2.25 in the prior-year quarter.
Net sales were $1.11 billion, down 5% compared with $1.17 billion reported in the prior-year quarter. The figure also missed the consensus estimate of $1.2 billion.
Weaker seasonal demand for home standby and portable generators offset increases in sales for global C&I products and higher shipments of residential energy technology products. Although home standby and portable generator shipments were up sequentially in the quarter, they came in below expectations due to a power outage environment that was considerably below the baseline average, as highlighted by GNRC.
As a result of a weak power outage environment, management has revised its expectations for 2025. For 2025, GNRC now expects revenues to be flat compared with an increase of 2-5% guided earlier.
Net income margin (before deducting for non-controlling interests) is now expected to be 6% compared with 7.5-8.5% guided earlier. Adjusted EBITDA margin is now estimated to be 17% compared with the previous range of 18% to 19%. GNRC now expects free cash flow conversion from adjusted net income to be 80% compared with the previous guided range of 90% to 100%.
Demand and Backlog
Management describes data center power as a “generational opportunity,” with the potential to double C&I sales over the next three to five years as hyperscale and AI-driven capacity build out.
The order backlog for large???megawatt generators has roughly doubled in recent quarters, explicitly tied to data center projects, and is now a key component of forward C&I visibility.
Customers, Partners, and Competition
Key customers include residential homeowners, C&I clients like data centers (e.g., C7 Data Centers), and industrial users. Generac supplies high-capacity generators (2.25-3.25 MW) for data centers and partners with Wallbox for EV charging integration.
This month, Generac acquired a Sussex, WI manufacturing site to expand C&I production alongside their Beaver Dam and Oshkosh facilities. This long-term focus on growth is a key factor for investors to focus on during the short-term slump.
But there is new competition on the block.
Bloom Energy ((BE - Free Report) ) leads in solid oxide fuel cells (SOFCs) for stationary on-site power, targeting data centers with efficient, grid-independent generation deployable in 90 days. Bloom has customers like Oracle ((ORCL - Free Report) ) and partners with Brookfield Corporation ((BN - Free Report) ) to supply datacenters with fast, clean, agile energy.
Bloom also recently inked a $2.65 billion deal with American Electric Power ((AEP - Free Report) ) to provide fuel cells. I originally bought Bloom Energy shares in September because they had a chance to double revenues in under two years just like Generac did from 2020-2022 to $4.5 billion. Bloom Energy is projected to grow the topline by 38% this year to cross $2.6 billion.
While Generac dominates combustion generators, Bloom's cleaner fuel cells pose indirect competition in resilient backup markets like data centers as both serve electrification but differ technologically. Generac's Q3 strength in C&I data center shipments highlights this shared space.
Kevin Cook is a Senior Stock Strategist for Zacks where he runs the TAZR Trader portfolio and holds shares of Bloom Energy.