Generac Q2 sales rise on data center demand

Overview

• Energy technology maker's Q2 sales rose 11% yr/yr, slightly missing analyst expectations

• Adjusted EPS and adjusted EBITDA for Q2 beat analyst expectations, aided by tariff refunds

• Company maintained full-year sales growth outlook and secured major data center supply deals

Outlook

• Generac maintains full-year 2026 net sales growth guidance of mid-to-high teens percent

• Company raises full-year 2026 adjusted EBITDA margin outlook to 20.0-21.0% from 18.5-19.5%

• Generac expects CI segment sales to grow in low 30% range, Residential sales in high-single digits

Result Drivers

• DATA CENTER DEMAND - CI segment growth was primarily driven by ramping revenue from products sold into the global data center market

• TARIFF REFUNDS - Tariff refunds contributed approximately 6% to gross margin and boosted adjusted net income and EBITDA

• RESIDENTIAL SALES MIX - Residential segment sales declined due to lower energy storage system and portable generator shipments, mostly offset by growth in home standby generator sales

Company press release: ID:nGNX1fPlf4

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 15 "strong buy" or "buy", 7 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the electrical components equipment peer group is "buy"

• Wall Street's median 12-month price target for Generac Holdings Inc is $285.00, about 45.7% above its July 28 closing price of $195.60

• The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 22 three months ago

Reuters Recommended Reads

• July 28 - Electrical equipment maker Hubbell lifts profit forecast amid demand from data centers

• July 28 - Logitech beats forecasts after US tariff refund

• July 28 - Meta, BlackRock partner on $14 billion El Paso data center venture

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)