Generac Q2 Earnings & Revenues Beat Estimates, 2025 Outlook Revised

Core Insights - Generac Holdings Inc. (GNRC) reported second-quarter 2025 adjusted earnings per share (EPS) of $1.65, exceeding the Zacks Consensus Estimate of $1.33, and up from $1.35 in the prior-year quarter [1][8] - Net sales reached $1.061 billion, a 6% increase from $998 million in the prior-year quarter, also surpassing the consensus estimate of $1.024 billion, driven by growth in both Residential and Commercial & Industrial (C&I) product sales [1][8] Financial Performance - GNRC's adjusted EPS for Q2 was $1.65, with revenues of $1.061 billion, both beating consensus estimates [1][8] - Domestic revenues rose 7% year over year to $884.5 million, supported by acquisitions and higher demand for residential energy technology solutions [9] - International revenues increased 7% year over year to $197.2 million, with a favorable impact from foreign currency fluctuations [10] - Gross profit was $416.8 million, up from $375.6 million in the prior-year quarter, with gross profit margins improving to 39.3% from 37.6% [12] - Operating income increased by 8.3% year over year to $111.8 million, and adjusted EBITDA rose to $188 million from $165 million a year ago [13] Guidance and Expectations - GNRC revised its 2025 revenue growth expectations to 2-5%, narrowing from the previous guidance of 0-7% [3][8] - The company anticipates net income margin to be in the range of 7.5-8.5%, up from the earlier guidance of 6.5-8.5% [3] - Free cash flow conversion from adjusted net income is now expected to be 90% to 100%, compared to the previous range of 70% to 90% [3] Strategic Initiatives - GNRC sees long-term opportunities in the data-center vertical, driven by increased investment in data centers and the growth of artificial intelligence [4] - The company is building a robust backlog for its new high-output diesel generator product, following strong initial reception [4] Stock Performance - GNRC's stock rose by 7.7% in pre-market trading, with a 1.4% increase over the past six months, outperforming the Manufacturing-General Industrial industry's growth of 1% [5]