Core Insights - Generac Holdings, Inc. emphasizes the importance of preparedness for the anticipated above-average 2025 hurricane season, which could lead to significant power outages and disruptions for homeowners [1][2][3] Industry Outlook - Colorado State University's forecast predicts 17 named storms for the 2025 hurricane season, with nine expected to become hurricanes and four reaching major hurricane strength (Category 3 or higher) [2] - The 2024 hurricane season was notably intense, with activity tracking 130% above normal, and the early forecast for 2025 is projected to be about 125% above the average of the past decade [2] Company Initiatives - Generac offers a comprehensive Hurricane Preparedness Guide, developed by power outage experts, which includes recommendations, safety tips, and best practices to help homeowners prepare for severe weather [3] - The company aims to protect homeowners from the disruptions caused by power outages, highlighting the reliance on electricity for daily life [3] Company Background - Generac Holdings, Inc. is a leading global designer, manufacturer, and provider of energy technology solutions, founded in 1959, and is known for its innovative backup power solutions [5]

Core Insights - Generac Holdings Inc (GNRC) reported first-quarter 2025 adjusted earnings per share (EPS) of $1.26, exceeding the Zacks Consensus Estimate of 99 cents and up from 88 cents in the prior-year quarter [1] - Net sales reached $942 million, a 6% increase from $889 million in the prior-year quarter, also surpassing the consensus estimate of $918.7 million [2] Financial Performance - The increase in Residential product sales was a key driver, compensating for weaker Commercial & Industrial (C&I) product sales, with higher demand for home standby generators amid rising power outages [2] - Management revised its 2025 revenue expectations to a growth range of 0-7%, down from the previous guidance of 3-7%, with net income margin expectations adjusted to 6.5-8.5% from 8-9% [3][4] - Gross profit rose to $372 million from $316.4 million year-over-year, with gross profit margins improving to 39.5% from 35.6% [10] Segment Analysis - Domestic revenues increased by 9% year-over-year to $782.3 million, aided by acquisitions contributing a 2% increase, while core sales rose by 7% [5] - International revenues decreased by 0.6% year-over-year to $185.5 million, impacted by a 5% unfavorable effect from foreign currency fluctuations [6] - Residential product revenues surged by 15% year-over-year to $494 million, while C&I revenues fell by 5% to $337 million [7] Cash Flow and Liquidity - In the first quarter, GNRC generated $58 million in net cash from operating activities, with free cash flow totaling $27 million [12] - As of March 31, 2025, GNRC had $187.5 million in cash and cash equivalents, alongside nearly $1.19 billion in long-term borrowings [12] Share Buyback Program - GNRC approved a new share buyback authorization of up to $500 million over the next 24 months, replacing the remaining balance of the previous program [13]

Core Insights - Generac Holdings reported revenue of $942.12 million for Q1 2025, a year-over-year increase of 5.9% and an EPS of $1.26 compared to $0.88 a year ago, exceeding the Zacks Consensus Estimate of $918.71 million by 2.55% [1] - The company delivered an EPS surprise of 27.27%, with the consensus EPS estimate being $0.99 [1] Revenue Breakdown - Revenue from Residential products was $494.15 million, surpassing the average estimate of $483.51 million by five analysts, representing a year-over-year change of 15.2% [4] - Revenue from Other products was $110.60 million, slightly above the average estimate of $110.51 million, with a year-over-year change of 4% [4] - Revenue from Commercial & Industrial products was $337.37 million, exceeding the average estimate of $324.61 million, but showing a year-over-year decline of 4.7% [4] Stock Performance - Shares of Generac Holdings have returned -10.4% over the past month, compared to a -0.2% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Overall net sales increased by 6% year-over-year to $942 million for the quarter, with residential product sales up 15% driven by strong demand for home standby generators and energy technology solutions [6][22] - Adjusted EBITDA margins increased to nearly 16% for the quarter, reflecting strong gross margins which expanded by nearly 400 basis points to 39.5%, the highest first-quarter gross margin since 2021 [7][24] - GAAP net income for the quarter was $44 million, compared to $26 million in the prior year, with diluted net income per share increasing to $0.73 from $0.39 [27][28] Business Line Data and Key Metrics Changes - Residential product sales rose to $494 million, up from $429 million, primarily due to increased shipments of home standby generators and energy storage systems [22][24] - Commercial and Industrial (C and I) product sales declined by 5% to $337 million, impacted by softness in certain end markets despite growth in domestic telecom and industrial distributor channels [16][22] - Net sales in the other products and services category increased by approximately 4% to $111 million, driven by growth in aftermarket service parts and connectivity subscription sales [23] Market Data and Key Metrics Changes - International sales increased by approximately 5% year-over-year, supported by strength in residential product shipments in Latin America [19] - Domestic segment total sales rose by 9% to $782 million, with adjusted EBITDA for the segment at 15.7% of total sales, up from 13.8% in the prior year [25][26] - The telecom market is identified as a long-term growth opportunity due to the increasing need for reliable power in expanding global tower networks [17] Company Strategy and Development Direction - The company is focused on launching a next-generation home standby generator lineup in the second half of 2025, aimed at improving efficiency and reducing costs for homeowners and channel partners [12][13] - Continued investment in residential energy technology solutions is planned, with expectations for Ecobee to achieve profitability in 2025 [15] - The company is widening its guidance ranges for 2025 to account for potential impacts from tariffs and uncertain economic conditions, while maintaining a focus on agility in response to market changes [8][29] Management's Comments on Operating Environment and Future Outlook - Management anticipates a cautious economic environment but expects the U.S. economy to avoid a full recession in 2025, despite potential impacts from tariffs [8][30] - The company expects product costs to increase by approximately $125 million in the second half of 2025 due to tariffs, but believes that price increases will offset these costs [9][68] - Management remains optimistic about long-term growth driven by megatrends such as lower power quality and rising power prices [20] Other Important Information - The company ended the first quarter with over 9,200 residential dealers, an increase of more than 400 dealers year-over-year, enhancing its distribution network [11] - Cash flow from operations was $58 million, down from $112 million in the prior year, primarily due to increased working capital [28] - The company repurchased approximately 717,000 shares for $97 million during the quarter, with $250 million remaining on its share repurchase authorization [28] Q&A Session Summary Question: Inquiry about new product launches in C and I for the data center market - Management expressed excitement about the new data center product line and confirmed that the go-to-market strategy will leverage the existing nationwide service network built for telecommunications customers [42][45] Question: Request for anecdotes regarding potential business softening - Management acknowledged the uncertainty in the economic environment but noted that outages significantly influence demand, and they are prepared to adapt to changing conditions [54][56] Question: Clarification on the impact of China tariffs on guidance - Management indicated that approximately two-thirds of the projected $125 million impact from tariffs is related to China, emphasizing ongoing efforts to diversify the supply chain [68][90]

Financial Data and Key Metrics Changes - Overall net sales increased by 6% year-over-year to $942 million for the quarter, with residential product sales up 15% driven by strong demand for home standby generators and energy technology solutions [5][21] - Adjusted EBITDA margins increased to nearly 16% for the quarter, reflecting continued strong gross margins which expanded by nearly 400 basis points to 39.5%, the highest first-quarter gross margin since 2021 [5][24] - GAAP net income for the quarter was $44 million, compared to $26 million in the prior year, with diluted net income per share increasing to $0.73 from $0.39 [26][27] Business Line Data and Key Metrics Changes - Residential product sales reached $494 million, a 15% increase from $429 million in the prior year, primarily due to higher shipments of home standby generators and energy storage systems [22] - Commercial and Industrial (C and I) product sales declined by 5% year-over-year to $337 million, with growth in domestic telecom and industrial distributor channels offset by softness in other C and I end markets [22][16] - Sales in the other products and services category increased by approximately 4% to $111 million, driven by growth in aftermarket service parts and connectivity subscription sales [23] Market Data and Key Metrics Changes - International sales increased approximately 5% year-over-year, driven by strength in residential product shipments in Latin America, despite a decline in international C and I product sales [18] - Power outage hours during the first quarter were above the long-term baseline average, particularly due to wildfires in Southern California, which is a developing market for home standby generators [9][10] Company Strategy and Development Direction - The company is widening its guidance ranges for the year to reflect potential impacts from tariffs and federal policy actions, while maintaining a cautious outlook on consumer spending [6][29] - A new generation of home standby generators is set to launch in the second half of 2025, aimed at improving efficiency and reducing costs for homeowners and channel partners [11][12] - The company is focused on expanding its distribution network and enhancing consumer awareness, particularly in underpenetrated markets like California [10][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the U.S. economy will avoid a full recession in 2025, despite a more cautious economic environment anticipated for consumers [6] - The company expects product costs to increase by approximately $125 million in the second half of 2025 due to tariffs, but anticipates that price increases will offset these costs [7][68] - Management highlighted the importance of agility in responding to changing market conditions and trade policies, emphasizing the company's ability to adapt [60] Other Important Information - The company ended the first quarter with over 9,200 residential dealers, an increase of more than 400 dealers year-over-year, which supports a higher baseline level of consumer awareness [10] - Total debt outstanding at the end of the quarter was $1.3 billion, with a gross debt leverage ratio of 1.6 times, within the targeted range [28] Q&A Session Summary Question: About new product launches in C and I for the data center end market - Management confirmed that the new data center product line will leverage the existing nationwide service network built for telecommunications, allowing for direct sales and aftermarket service through dealers [41][46] Question: Insights on potential softening in business - Management noted that higher prices could dampen demand, but outages remain a critical factor driving generator sales, with the assumption that the average environment will align with long-term averages [55][56] Question: Clarification on the impact of China tariffs - Management indicated that approximately two-thirds of the projected $125 million impact from tariffs is related to China, emphasizing ongoing efforts to diversify the supply chain [68][89]

Financial Performance - Net sales increased by 6% to $942 million in Q1 2025, compared to $889 million in Q1 2024, with residential product sales up approximately 15% to $494 million[4] - Net income attributable to the Company was $44 million, or $0.73 per share, compared to $26 million, or $0.39 per share, in the same period of 2024[4] - Adjusted EBITDA was $150 million, representing 15.9% of net sales, up from $127 million, or 14.3% of net sales, in the prior year[4] - Gross profit margin improved to 39.5% from 35.6% in the prior-year first quarter, driven by a favorable sales mix and lower input costs[5] - Domestic segment sales increased approximately 9% to $782.3 million, driven by higher sales of home standby generators and energy technology solutions[9] - International segment sales slightly decreased to $185.5 million, impacted by a 5% unfavorable effect from foreign currency[11] - Net sales for Q1 2025 reached $942,121, an increase of 5.9% compared to $889,273 in Q1 2024[35] - Gross profit for Q1 2025 was $371,986, up from $316,379 in Q1 2024, reflecting a gross margin improvement[35] - Net income attributable to Generac Holdings Inc. for Q1 2025 was $43,840, a significant increase of 67.3% from $26,232 in Q1 2024[35] - Adjusted EBITDA for Q1 2025 was $149,546, representing a 17.5% increase from $127,233 in Q1 2024[39] - Domestic sales in Q1 2025 totaled $782,336, compared to $720,473 in Q1 2024, indicating a growth of 8.6%[39] Guidance and Expectations - The Company updated its full-year 2025 net sales growth guidance to 0 to 7%, down from the previous range of 3 to 7%[4] - Adjusted EBITDA margin guidance for 2025 is now expected to be 17.0 to 19.0%, compared to the previous range of 18.0 to 19.0%[15] - Free cash flow is expected to convert from adjusted net income between 70 to 90% for the full year[16] Expenses and Costs - Operating expenses increased by $38.8 million, or 15.6%, primarily due to higher employee costs and increased marketing spend[6] - Research and development expenses increased to $62,048 in Q1 2025, up from $49,410 in Q1 2024, reflecting a focus on innovation[35] Cash and Assets - Cash and cash equivalents decreased to $187,464 as of March 31, 2025, down from $281,277 at the end of 2024[37] - Total current assets as of March 31, 2025, were $1,988,539, a slight decrease from $2,032,170 at the end of 2024[33] - Total liabilities decreased to $2,587,429 as of March 31, 2025, compared to $2,611,888 at the end of 2024[33] Shareholder Returns and Stock Activity - The company repurchased $97,454 in stock during Q1 2025, indicating a commitment to returning value to shareholders[37] Adjusted Income and Other Charges - Adjusted net income for Q1 2025 was $75.80 million, up from $53.20 million in Q1 2024, reflecting a 42.5% growth[43] - Adjusted net income per diluted share increased to $1.26 in Q1 2025 from $0.88 in Q1 2024, marking a 43.2% rise[43] - The weighted average common shares outstanding on a diluted basis decreased from 60,486,125 in Q1 2024 to 59,747,589 in Q1 2025[43] - Amortization of intangible assets was $25.49 million in Q1 2025, slightly up from $24.75 million in Q1 2024[43] - The company incurred $3.75 million in legal, regulatory, and clean energy product charges in Q1 2025, compared to $2.54 million in Q1 2024[43] - Losses attributable to business or asset dispositions were $0.39 million in Q1 2025, significantly higher than $0.04 million in Q1 2024[43] - The change in fair value of investments resulted in a loss of $9.95 million in Q1 2025, compared to a loss of $6.02 million in Q1 2024[43] - The tax effect of add backs was $(10.37) million in Q1 2025, compared to $(8.93) million in Q1 2024[43] - The company reported transaction costs and other purchase accounting adjustments of $0.11 million in Q1 2025, down from $0.84 million in Q1 2024[43]

Core Insights - Generac Holdings Inc. reported strong first-quarter results for 2025, driven by robust growth in residential product sales and improved gross margins, leading to adjusted EBITDA exceeding expectations [3][4][6] - The company is confident in its long-term strategy despite near-term uncertainties related to trade policies and macroeconomic conditions, and it is implementing measures to mitigate tariff impacts [3][13] Financial Performance - Net sales increased by 6% to $942 million compared to $889 million in the prior year, with residential product sales rising approximately 15% to $494 million [6][39] - Gross profit margin improved to 39.5% from 35.6% in the prior year, primarily due to a favorable sales mix and lower input costs [4][10] - Operating expenses rose by $38.8 million, or 15.6%, driven by higher employee costs, increased marketing spend, and ongoing expenses from recent acquisitions [5] Income Metrics - Net income attributable to the company was $44 million, or $0.73 per share, compared to $26 million, or $0.39 per share, in the same period of 2024 [6][34] - Adjusted net income attributable to the company was $75 million, or $1.26 per share, up from $53 million, or $0.88 per share, in the first quarter of 2024 [6][43] - Adjusted EBITDA was $150 million, representing 15.9% of net sales, compared to $127 million, or 14.3% of net sales, in the prior year [6][41] Cash Flow and Share Repurchase - Cash flow from operations was $58 million, down from $112 million in the prior year, while free cash flow decreased to $27 million from $85 million [8][48] - The company repurchased 716,685 shares for approximately $97 million during the quarter, with $250 million remaining under the current repurchase program [6][8] 2025 Outlook - The company updated its full-year 2025 net sales growth guidance to a range of 0% to 7%, down from the previous range of 3% to 7%, reflecting potential impacts from tariffs and lower shipment volumes [6][14] - Adjusted EBITDA margin is now expected to be between 17.0% and 19.0%, compared to the previous guidance of 18.0% to 19.0% [15] - The company anticipates strong free cash flow conversion from adjusted net income between 70% to 90% for the full year [16]

Core Viewpoint - Generac Holdings Inc. is set to report its first-quarter 2025 results on April 30, with expectations of revenue growth driven by strong residential product sales, despite challenges in the commercial and industrial (C&I) segment [1][3][4]. Group 1: Financial Performance Expectations - The Zacks Consensus Estimate for first-quarter revenues is $918.7 million, reflecting a 3.3% increase year-over-year, while earnings are estimated at 99 cents per share, up 12.5% year-over-year [1]. - Generac has consistently beaten the Zacks Consensus Estimate in the past four quarters, with an average earnings surprise of 14.2% [2]. - The company's shares have declined 17.8% over the past year, compared to a 9.3% loss in the Zacks Manufacturing-General Industrial industry [2]. Group 2: Key Factors Influencing Performance - The residential segment, particularly home standby generators, is expected to be a significant growth driver, with a 28% year-over-year increase in residential product sales in Q4 2024, reaching $743 million [3]. - Demand for Generac's products has been bolstered by extreme weather events leading to power outages, with 2024 recording the highest number of outage hours since 2010 [4]. - The first quarter typically sees less impact from hurricanes, but unexpected severe weather could positively influence sales [4]. Group 3: Product Developments and Market Position - Generac's expansion into the data center market with new high-capacity generators (2.25 MW to 3.25 MW) is aimed at meeting rising electricity needs and enhancing reliability [11]. - The ecobee smart thermostat line is gaining traction, with the launch of the Smart Thermostat Essential expected to contribute to top-line growth [12]. - The introduction of the 28kW home standby generator model enhances Generac's product offerings, providing a comprehensive home energy solution [13]. Group 4: Segment Performance Insights - The Zacks Consensus Estimate for residential products' revenues is $483.5 million, while C&I products' revenues are estimated at $324.6 million [8]. - There is concern over prolonged weakness in C&I revenues, with expectations of flat year-over-year sales and a high single-digit decline in the first quarter [7].

All-new Vanquish Autonomous is designed to improve productivity and profitabilityWAUKESHA, Wis., April 28, 2025 /PRNewswire/ -- Mean Green, a leading battery-powered, commercial-grade turf care manufacturer and a Generac Power Systems (NYSE: GNRC) company, today announced the expansion of its commercial-grade electric mower lineup with its all-new Vanquish Autonomous. Mean Green Vanquish Autonomous The world's first commercial-electric stand-on autonomous mower is built for the crews that never stop pu ...

Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Generac Holdings (GNRC) , which belongs to the Zacks Manufacturing - General Industrial industry.When looking at the last two reports, this generator maker has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 12.82%, on average, in the last two quarters.For the last reported quarter, Generac Holdings came out with ...