Generac reported a weak Q4 2025 with revenue down 12%, driven by a severe drop in residential sales due to low outage activity, but provided strong double-digit growth guidance for 2026, powered by a ramp in data center CNI products and a recovery in home standby. The company is making significant capacity investments to capture the data center opportunity, with a growing backlog and early progress with hyperscalers. Q4 revenue fell 12% YoY to $1.1B, with residential sales down 23%, but CNI product sales grew 10% on data center demand.
Generac reported a weak Q4 2025 with revenue down 12%, driven by a severe drop in residential sales due to low outage activity, but provided strong double-digit growth guidance for 2026, powered by a ramp in data center CNI products and a recovery in home standby. The company is making significant capacity investments to capture the data center opportunity, with a growing backlog and early progress with hyperscalers. Q4 revenue fell 12% YoY to $1.1B, with residential sales down 23%, but CNI product sales grew 10% on data center demand.
Generac reported a weak Q4 2025 with revenue down 12%, driven by a severe drop in residential sales due to low outage activity, but provided strong double-digit growth guidance for 2026, powered by a ramp in data center CNI products and a recovery in home standby. The company…
Q4 revenue fell 12% YoY to $1.1B, with residential sales down 23%, but CNI product sales grew 10% on data center demand.
Management is significantly increasing capital expenditure and manufacturing capacity, including purchasing a new facility in Wisconsin and ramping domestic capacity for large megawatt generators to over $1 billion by Q4 2026, to support expected data center demand growth.
Guidance · revenue to 15%
Guidance calls for strong growth driven by data center CNI sales and a recovery in residential, with improving EBITDA margins.
Management is significantly increasing capital expenditure and manufacturing capacity, including purchasing a new facility in Wisconsin and ramping domestic capacity for large megawatt generators to over $1 billion by Q4 2026, to support expected data center demand growth.
Management expressed confidence in the data center opportunity and residential recovery, citing strong backlog growth, progress with hyperscalers, and expectations for normalized outage activity.
“At the same time, we believe we are well positioned to capitalize on the massive growth opportunity presented by the supply shortage of mission-critical backup power generators for the data center market.”
“We think in the context of the other part of your question about the rest of the market and where we are competitively, um, you know, we think that our lead times are going to remain shorter than the rest of the market, at least for the nea”
“Our engine partner, we believe, can allow us to continue to keep shorter lead times because of their overall investment in their capacity, which gives us access to what is arguably the most critical component in the Genset in terms of long”
“We are seeing certain spark ignited engines being used in applications behind the meter to power data centers where grid interconnect is not available and where the lead time is to wait for maybe a traditional gas turbine or a different sol”
“As a result of these investments, we expect that our domestic manufacturing capacity for large megawatt generators will surpass $1 billion by the fourth quarter of this year.”
“The backlog, there's a couple of units in there for the pilot program but that's it so um the 400 million and remember the 400 million is after we uh you know we began shipping product in q4 and here also started q1 so good order flow agai…”
“We're seeing around mid-teens EBITDA margins or contribution margins for these projects in 2026. And then as we ramp up and get more scale, uh, we're, we're seeing more high teens margins in the 27, 28 range in the data center space.”
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| Capex | FY2026 | 3.5% | 3.5% | INITIATED |
| Free cash flow | FY2026 | $350M | $350M | INITIATED |
| Gross margin | FY2026 | 38%–39% | 38.5% | INITIATED |
| Op margin | FY2026 | 18%–19% | 18.5% | INITIATED |
| Revenue | FY2026 | 14.5%–15.5% | 15% | INITIATED |
| Revenue | FY2026 Q1 | 11%–13% | 12% | INITIATED |