Generac (US:GNRC) ZACKSยท2025-10-29 15:15Core Insights - Generac Holdings Inc. (GNRC) reported Q3 2025 adjusted earnings per share (EPS) of $1.83, missing the Zacks Consensus Estimate of $2.25 and down from $2.25 in the prior-year quarter [1][9] - Net sales were $1.11 billion, a decrease of 5% compared to $1.17 billion in the prior-year quarter, also missing the consensus estimate of $1.2 billion [2][9] - The company has revised its 2025 revenue expectations to flat growth, down from an earlier guidance of 2-5% increase [3] Financial Performance - Net income margin is now expected to be 6%, reduced from the previous guidance of 7.5-8.5% [4] - Adjusted EBITDA margin is estimated to be 17%, down from the previous range of 18-19% [4] - Free cash flow conversion from adjusted net income is now expected to be 80%, compared to the earlier guidance of 90-100% [4] Segment Performance - Domestic revenues fell 8% year over year to $938.1 million, with acquisitions contributing a 1% benefit [7] - International revenues increased by 11% year over year to $185.5 million, aided by a 3% favorable impact from foreign currency fluctuations [8] - Residential product revenues decreased by 13% year over year to $627 million, while C&I revenues rose by 9% to $358 million [10] Margin and Operating Metrics - Gross profit was $426.9 million, down from $472.3 million in the prior-year quarter, with respective margins of 38.3% and 40.2% [11] - Operating income decreased by 38.9% year over year to $103.1 million, and adjusted EBITDA fell to $193 million from $232 million a year ago [12] Cash Flow and Liquidity - The company generated $118.4 million of net cash from operating activities in Q3, with free cash flow totaling $96.5 million [13] - As of September 30, 2025, GNRC had $300 million in cash and cash equivalents, with long-term borrowings and finance-lease obligations totaling nearly $1.36 billion [13] - GNRC has a new share buyback authorization of up to $500 million for the next 24 months [14]