Generac Lifts 2026 Adjusted EBITDA Margin Outlook

The Tip Desk · November 2, 2026 · 3 min read

The company now expects full-year adjusted EBITDA margin of about 20.5% to 21.0% after a record $1.29 billion quarter and a $2.4 billion Amazon generator deal.

Generac Holdings Inc. (GNRC) posted record third-quarter net sales of $1.29 billion, up 16% from $1.11 billion a year earlier, and raised its full-year 2026 adjusted EBITDA margin outlook to about 20.5% to 21.0% from a prior range of 20.0% to 21.0%.

The energy-technology manufacturer said acquisitions, divestitures and foreign currency added a net 1% to sales growth. Growth accelerated from 11% in the second quarter, when the same mix of items had contributed 2%.

Net income attributable to the company was $109 million, or $1.83 a share, compared with $66 million, or $1.12 a share, in the year-ago quarter. Adjusted net income was $151 million, or $2.54 a share. Adjusted EBITDA before noncontrolling interests was $256 million, or 19.8% of sales.

Commercial & Industrial external net sales rose about 28% to $552 million from $432 million. Total C&I sales were $553.0 million, including an approximate 4% net favorable impact from acquisitions, divestitures and currency. The company said core growth was driven by ramping revenue from products sold into the global data center market, with broad-based international regional growth offset by lower shipments to domestic industrial distributor and telecom channels. C&I adjusted EBITDA was $69.3 million, or 12.5% of segment sales, versus $43.8 million, or 10.1%, a year earlier, which the company attributed to operating leverage on higher shipments and the net favorable impact of acquisitions and divestitures.

Residential external net sales increased about 9% to $743 million from $682 million, reversing a 2% decline in the second quarter. Total Residential sales were $744.1 million. The company said the increase was primarily driven by strong sales of home standby and portable generators, partially offset by lower energy-storage shipments. Residential adjusted EBITDA was $200.8 million, or 27.0% of segment sales, versus $160.2 million, or 23.4%, a year earlier, on favorable price/cost, volume leverage and lower energy-technology operating expense.

Gross profit margin was 39.9%, versus 38.3% in the prior-year third quarter. The company said the increase was primarily driven by favorable price/cost impacts, including lower tariff costs, partially offset by unfavorable sales mix. Operating expenses rose $31.6 million, or 10%, on higher investments to support C&I growth, marketing, incentive compensation and intangible amortization, partially offset by lower energy-technology spending. The provision for income taxes was $34.2 million, or a 23.9% effective rate, versus $11.8 million, or 15.0%, a year earlier, as favorable discrete tax items did not repeat.

Cash flow from operations was $171 million, versus $118 million in the prior-year quarter. Free cash flow was $132 million, versus $96 million. The company said the increase was primarily driven by higher operating earnings, partially offset by increased capital expenditures.

During the quarter the company entered a long-term supply agreement with Amazon.com, Inc. for backup power generators for Amazon data centers, with initial deliveries expected to total a combined $2.4 billion in 2027 and 2028. President and Chief Executive Officer Aaron Jagdfeld said backlog for products to be sold to the data center market has grown to approximately $4.5 billion after the Amazon agreement and other wins.

Generac is maintaining full-year 2026 net sales growth guidance in the mid-to-high teens percent range versus the prior year, including an approximate 2% favorable impact from the net effect of foreign currency, acquisitions and divestitures. Net income margin guidance of about 9.0% to 10.0% was also maintained.