A maker of backup power systems and home energy technology, Generac builds the home standby generators that keep households lit during outages, plus the PWRcell battery storage, ecobee smart thermostats, and large generators for data centers and industry. It started in 1959 when Robert Kern launched a small operation in a barn in Wales, Wisconsin, and its name blends "generating" and "AC" (alternating current), once even styled as "GenerAC." The company is one of the largest makers of home standby generators in the United States.
Q2 2026 gross margin rose 5.2 points to 44.5% on $71M tariff refunds as C&I sales grew 29.2%.
C&I data center demand and $71M in reshaped the quarter. rose 10.6% to $1,173.5M, expanded 5.2 points to 44.5%, and rose 92.0% to $2.40 as the C&I grew 29.2% to $556.5M while residential sales dipped 2.2%. The company posted its highest quarterly margin in the reported record, but the refund boost is non-recurring.
Key takeaways
expanded to 44.5% from 39.3% a year earlier, primarily from approximately $71M in reducing cost of goods sold, partially offset by unfavorable mix and higher input costs.
C&I sales rose 29.2% to $556.5M on ramping data center , lifting consolidated net sales 10.6% to $1,173.5M, while residential sales dipped 2.2% to $617.0M on lower energy storage and portable generator shipments.
rose 92.0% to $2.40 and rose 93.5% to $143.2M; rose 88.2% to $210.4M and rose 54.9% to $290.7M.
Section summaries
Management's Discussion and Analysis
Q2 FY2026 net income rose 93.5% to $143M on 10.6% sales growth, driven by C&I data center demand and $71M in tariff refunds boosting margins.
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Consolidated grew 10.6% to $1,173.5M, with C&I sales surging 29.2% to $556.5M on ramping data center revenue, while Residential sales dipped 2.2% to $617.0M on lower energy storage and portable generator shipments.
increased 67.9% to $121.2M for the quarter and $240.5M for the half, benefiting from higher earnings and $61M in cash , partially offset by higher use.
The rose to 24.6% from 17.2% due to a non-recurring favorable discrete item in the prior year related to a business disposition; no share repurchases were made in Q2 2026.
Total liquidity stood at $1,264.2M with $264.9M cash and $999.3M available under the ; fell 6.9% from a year earlier to $1,191.2M.
What changed
Q2 2026 residential sales rose 1.1% in Q1 to a 2.2% dip this quarter, against the hurricane-driven prior-year base that Q1 flagged as the watch item — the flat trend did not accelerate.
C&I sales sustained the 27.8% Q1 increase with a 29.2% rise to $556.5M, confirming data center demand carried beyond one quarter as Q1 flagged to watch.
direction: after the 0.8-point Q1 decline to 38.7%, Q2 expanded 5.2 points to 44.5% as offset tariff and commodity input costs Q1 flagged as the watch item.
Cash impact of the $104.5M portable generator product liability provision was not addressed in this filing; no update on resolution or payment was given.
reversed the six-month FY2025 drop — Q2 quarterly operating cash flow rose to $121.2M from $72.2M a year earlier and the half-year print was $240.5M.
What to watch
Q3 2026 to see if the 44.5% level holds or falls back once the $71M tariff refund benefit does not repeat.
Q3 2026 C&I sales to confirm data center demand sustains the 29.2% Q2 increase.
Q3 2026 residential sales to see if the 2.2% dip deepens or reverses as outage and storage demand develop.
Resolution and cash impact of the $104.5M portable generator product liability provision in FY2026.
expanded to 44.5% from 39.3%, primarily due to approximately $71M in tariff refunds reducing cost of goods sold, partially offset by unfavorable sales mix and higher input costs.
rose 54.9% to $290.7M; Residential Adjusted EBITDA margin increased to 34.7% driven by tariff refunds and favorable mix, while C&I margin improved to 14.6% on tariff refunds and .
increased 84.5% to $240.5M, benefiting from higher earnings and $61M in cash tariff refunds, partially offset by higher use.
Total liquidity stood at $1,264.2M with $264.9M in cash and $999.3M available under the ; no share repurchases were made in Q2 2026.
The rose to 24.6% from 17.2% due to a non-recurring favorable discrete item in the prior year related to a business disposition.
Quantitative and Qualitative Disclosures About Market Risk
Refer to Note 4, “Derivative Instruments and Hedging Activities,” to the condensed consolidated financial statements for a discussion of the Wallbox warrant derivative instruments, changes in commodity, currency and interest rate related risks, and other hedging activities. Othe…
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Refer to Note 4, “Derivative Instruments and Hedging Activities,” to the condensed consolidated financial statements for a discussion of the Wallbox warrant derivative instruments, changes in commodity, currency and interest rate related risks, and other hedging activities. Otherwise, there have been no material changes in market risk from the information provided in Item 7A (Quantitative and Qualitative Disclosures About Market Risk) of our Annual Report on Form 10-K for the year ended December 31, 2025.
See Note 16, "Commitments and Contingencies," to the condensed consolidated financial statements for further information on the Company's legal proceedings.
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See Note 16, "Commitments and Contingencies," to the condensed consolidated financial statements for further information on the Company's legal proceedings.
There have been no material changes in our risk factors since the February 18, 2026, filing of our Annual Report on Form 10-K for the year ended December 31, 2025.
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There have been no material changes in our risk factors since the February 18, 2026, filing of our Annual Report on Form 10-K for the year ended December 31, 2025.