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What changed in Generac's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Generac's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+375 added−380 removedSource: 10-K (2026-02-18) vs 10-K (2025-02-19)

Top changes in Generac's 2025 10-K

375 paragraphs added · 380 removed · 284 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

146 edited+39 added−72 removed44 unchanged
Biggest changeKey Mega-Trends: ● Lower power quality continuing to drive demand for backup power solutions: o More frequent severe and volatile weather impacting an aging grid, causing increased power outage activity. o Increasing deployment of intermittent generation sources coupled with accelerating electricity demand trends driving supply/demand imbalances for utilities and grid operators. ● Higher power prices driving the need for energy management solutions: o Electrification trends causing power demand to exceed supply, driving up power prices. o Investment required to upgrade grid infrastructure and transition to renewable power sources, pushing prices higher. ● Artificial intelligence adoption accelerating, creating a large market opportunity for backup power: o Significant power requirements for the buildout of data centers to enable AI adoption could drive further grid instability. o Acceleration in the number of hyperscale and edge data centers that require significant backup power. ● Growing demand for cleaner burning fuels: o Natural gas and other alternative fuels are vital to the energy transition. o Demand for natural gas-fueled backup generators growing as homes and businesses desire cleaner-burning fuel sources of generation. ● Required investment in global infrastructure, driving demand for our products: o Upgrading of aging and underinvested legacy infrastructure systems, such as power, telecommunications, transportation, and water. o Expanding investment for increasingly critical technology infrastructure as we transition to a more "connected" society. ● Home as a Sanctuary, driving increased demand for resiliency solutions that provide peace of mind: o Increasing importance of the home with more people working from home and aging in place. o Growing market for intelligent and connected homes that can provide improved energy efficiency. 6 Table of Contents Strategic Growth Themes: Power quality issues continue to increase .
Biggest changeThose mega-trends and growth themes are as follows: Key Mega-Trends: ● Lower power quality continuing to drive demand for backup power solutions: o More frequent, severe, and volatile weather impacting an aging grid, causing increased power outage activity. o Increasing deployment of intermittent renewable generation sources coupled with accelerating electricity demand trends driving supply/demand imbalances for utilities and grid operators. ● Higher power prices driving the need for energy management solutions: o Electrification trends causing power demand to exceed supply, driving up power prices. o Investment required to upgrade grid infrastructure and transition to renewable power sources, pushing prices higher. o Higher power prices result in shorter paybacks for solar & storage systems. ● Artificial intelligence adoption accelerating, creating a large market opportunity for backup power: o Significant power requirements for the buildout of data centers to enable AI adoption could drive further grid instability and higher power prices. o Massive capital investment into hyperscale and edge data centers has created a very large market for back-up power that is supply-constrained, providing a significant growth opportunity for our newly introduced large-megawatt C&I products. ● Growing demand for cleaner burning fuels, such as natural gas: o Natural gas and other alternative fuels are vital to the energy transition. o Demand for natural gas-fueled backup generators growing as homes and businesses choose cleaner-burning fuel sources of generation, relative to diesel generators. ● Required investment in global infrastructure, driving demand for our products: o Upgrading of aging and under-invested legacy infrastructure systems, such as energy production, telecommunications, transportation, and data centers. o Expanding investment for increasingly critical technology infrastructure as we transition to a more "connected" society. ● Home as a Sanctuary, driving increased demand for resiliency solutions that provide peace of mind: o Increasing importance of the home with more people working from home and aging in place. o Electrification of home appliances and vehicles increases the need for back-up power. o Growing market for intelligent and connected homes that can provide improved energy efficiency.
We have relationships with key Tier 1 carriers and tower companies globally, in addition to having the distribution partners to provide local service support to the global market. We believe these factors coupled with Generac’s ability to customize solutions to each customer’s needs help us to maintain our strength within the global telecommunications market.
We have relationships with key Tier 1 carriers and tower companies globally, in addition to having distribution partners to provide local service support to the global market. We believe these factors coupled with Generac’s ability to customize solutions to each customer’s needs help us to maintain our strength within the global telecommunications market.
Our light-commercial standby generators and related transfer switches include a full range of affordable systems from 22kW to 150kW, providing three-phase power sufficient for most small and mid-sized businesses such as grocery stores, convenience stores, restaurants, gas stations, pharmacies, retail banks, small health care facilities and other small-footprint retail applications.
Our light-commercial standby generators and related transfer switches include a full range of affordable systems from 22kW to 150kW, providing three-phase power sufficient for most small and mid-sized businesses such as grocery stores, convenience stores, restaurants, gas stations, pharmacies, retail banks, smaller health care facilities, and other small-footprint retail applications.
We introduced our first residential standby generator in 1989 and expanded our industrial product offering and global distribution system in the 1990’s, forming a series of alliances that rapidly increased our sales. Our growth accelerated in the 2000’s as we expanded our purpose-built line of residential and commercial automatic standby generators and implemented our multi-layered, omni-channel distribution philosophy.
We introduced our first residential standby generator product line in 1989 and expanded our industrial product offering and global distribution in the 1990’s, forming a series of alliances that rapidly increased our sales. Our growth accelerated in the 2000’s as we expanded our purpose-built line of residential and commercial automatic standby generators and implemented our multi-layered, omni-channel distribution philosophy.
In the generator market, many of the traditional participants compete in only certain portions of the market, targeting specific applications within their larger diversified product mix. In addition, for certain competitors, power generation is typically a smaller piece of their business, and therefore, is less prioritized from a strategic standpoint.
In the overall generator market, many of the traditional participants compete in only certain portions of the market, targeting specific applications within their larger, diversified product mix. In addition, for certain competitors, power generation is typically a smaller piece of their business, and therefore, is less prioritized from a strategic standpoint.
Our single-engine industrial generators range in output from 10kW up to 3,250kW, include stationary and containerized packages, and can include our Modular Power Systems (MPS) technology that extends our product range up to much larger multi-megawatt systems through an integrated paralleling configuration.
Our single-engine industrial generators range in output from 10kW up to 3,250kW, include stationary and containerized mobile packages, and can include our Modular Power Systems (MPS) technology that extends our product range up to much larger multi-megawatt systems through an integrated paralleling configuration.
These utility-sponsored programs, when and where offered, can provide value to homeowners in the form of lower utility costs, while also helping provide grid operators incremental capacity to address supply/demand imbalances on the grid.
These utility-sponsored programs, when and where offered, can provide value to homeowners in the form of lower utility costs, while also helping to provide grid operators with incremental capacity to address supply/demand imbalances on the grid.
As a leader in providing backup power generators for wireless cell towers around the world, we believe we can play an important role in helping to protect and build this critical infrastructure.
As a leader in providing backup power generators for wireless cell towers around the world, we believe we can play an important role in helping to protect and build this critical telecommunications infrastructure.
Generac’s primary focus is on power generation and storage equipment with a key emphasis on standby, portable and mobile generators with broad capabilities across the residential, light-commercial and industrial markets. We believe that our core focus on power generation and storage drives product innovation and provides us with competitive advantages to win in the marketplace.
Generac’s primary focus is on power generation and storage equipment with a key emphasis on standby, portable and mobile products and broad capabilities across residential, light-commercial and industrial markets. We believe that our core focus on power generation and storage drives product innovation and provides us with competitive advantages to win in the marketplace.
Applicable laws & regulations include those governing, among other things, emissions to air, discharges to water, noise, and employee & consumer safety, as well as the generation, handling, storage, transportation, treatment, and disposal of hazardous waste and other materials. In addition, our products are subject to various laws & regulations relating to fuel requirements, labeling, and marketing.
Applicable laws & regulations include those governing, among other things, emissions to air, discharges to water, noise, and safety, as well as the generation, handling, storage, transportation, treatment, and disposal of hazardous waste and other materials. In addition, our products are subject to various laws & regulations relating to fuel requirements, labeling, and marketing.
This report details certain measures that align with our “Powering a Smarter World” enterprise strategy and our purpose statement: 'To lead the evolution to more resilient, efficient, and sustainable energy solutions.' The information provided within the sustainability report is not part of this report and is therefore not incorporated herein by reference.
This report details certain measures that align with our “Powering a Smarter World” enterprise strategy and our purpose statement: 'To lead the evolution to more resilient, efficient, and innovative energy solutions.' The information provided within the sustainability report is not part of this report, and is therefore not incorporated herein by reference.
We maintain an employee wellness program, incentivize healthy-living activities, and develop and administer company-wide policies to help ensure the safety of each employee and compliance with government agency and other standards. Talent development & employee engagement – Our success is directly tied to our employees and what we can accomplish together.
We maintain an employee wellness program, incentivize healthy-living activities, and develop and administer company-wide policies to help ensure the safety of each employee and compliance with government agencies and other standards. Talent development & employee engagement – Our success is directly tied to our employees and what we can accomplish together.
Enterprise Strategy The mega-trends and strategic growth themes that we have identified support our enterprise strategy, “Powering A Smarter World,” and our purpose statement, “To lead the evolution to more resilient, efficient, and sustainable energy solutions.” As we continue to execute our strategic plan into the future, we are focused on three key objectives: (i) improve energy resilience and independence, (ii) optimize energy efficiency and consumption, and (iii) protect and build critical infrastructure.
Enterprise Strategy The mega-trends and strategic growth themes that we have identified support our enterprise strategy, “Powering A Smarter World,” and our purpose statement, “To lead the evolution to more resilient, efficient, and innovative energy solutions.” As we continue to execute our strategic plan into the future, we are focused on three key objectives: (i) improve energy resilience and independence, (ii) optimize energy efficiency and consumption, and (iii) innovate to protect and build critical infrastructure.
We believe the electric utility landscape will undergo significant changes in the decade ahead due to accelerating demand growth, grid instability and power quality issues, environmental concerns, and the continuing performance and cost improvements in renewable energy and energy storage technologies.
We believe the electric utility landscape will undergo significant changes in the decade ahead due to accelerating demand growth, grid instability and power quality issues, environmental concerns, permitting challenges, and the continuing performance and cost improvements in renewable energy and energy storage technologies.
Additionally, rapid growth in renewable power sources such as solar and wind is resulting in increased intermittency of supply as more traditional thermal generation assets are retired, further impairing the reliable supply of electricity.
Additionally, growth in renewable power sources (such as solar and wind) is resulting in increased intermittency of supply as traditional thermal generation assets are retired, further impairing the reliable supply of electricity.
In addition, we continue to provide various gaseous-engine control systems and accessories, which are used in our natural gas generators, as well as sold to other gas-engine manufacturers and aftermarket customers.
Finally, we continue to provide various gaseous-engine control systems and accessories, which are used in our natural gas generators, as well as sold to other gas-engine manufacturers and aftermarket customers.
See “Item 1A. Risk Factors” of this Annual Report on Form 10-K for additional factors that can influence our supply of raw materials, components and equipment. 10 Table of Contents Competition In our traditional power generation markets, we face competition from a variety of large diversified industrial companies, as well as smaller generator manufacturers or packagers around the world.
Risk Factors” of this Annual Report on Form 10-K for additional factors that can influence our supply of raw materials, components and equipment. 11 Table of Contents Competition In our traditional power generation markets, we face competition from a variety of large, diversified industrial companies, as well as smaller generator manufacturers or packagers around the world.
Over the last few decades, we have developed significant manufacturing capability in the power generation industry, including engines, alternators, sheet metal fabrication, and controls. We have a heavy focus on vertical integration for certain proprietary manufacturing processes, and outsource certain components and complete products where we can leverage scale to optimize cost and quality.
Over the last few decades, we have developed significant manufacturing capabilities in the power generation industry, including engines, alternators, sheet metal fabrication, and controls. We have a heavy focus on vertical integration using certain proprietary manufacturing processes, and we outsource certain components and complete products where we can leverage scale to optimize cost and quality.
The information provided on these websites is not part of this report and is therefore not incorporated herein by reference. 12 Table of Contents Information About Our Executive O fficers The following table sets forth information regarding our executive officers: Name Age Position Aaron P. Jagdfeld 53 President, Chief Executive Officer and Chairman York A.
The information provided on these websites is not part of this report and is therefore not incorporated herein by reference. 13 Table of Contents Information About Our Executive O fficers The following table sets forth information regarding our executive officers: Name Age Position Aaron P. Jagdfeld 54 President, Chief Executive Officer and Chairman York A.
This remote monitoring information can also be accessed by our dealers to help them monitor their installed base of products and proactively support their customers. The data that is provided by this remote monitoring functionality also allows us to better understand our products in the field, while optimizing both product quality and customer satisfaction.
This remote monitoring information can also be accessed by our dealers to help them monitor their installed base of products and proactively support their customers. The data that is provided by this remote monitoring functionality also allows us to better understand our products in the field, helping to optimize both product quality and customer satisfaction.
Energy storage systems offer similar resiliency advantages to consumers and can benefit from these same awareness drivers, at least for short duration power outages. The optional standby market for C&I power generation is also driven by power quality issues and the related need for backup power.
Energy storage systems offer similar resiliency advantages to consumers (at least for short duration power outages and for limited circuits) and demand for these products can benefit from these same awareness drivers. The optional standby market for C&I power generation is also driven by power quality issues and the related need for backup power.
Homes, businesses, and communities are experiencing a deterioration in the reliable supply of electricity due to a number of factors including: climate change impacts driving more severe and volatile weather leading to increased power outages; a capacity constrained legacy power infrastructure that’s still predominantly a one-way system; power infrastructure being impaired by underinvestment making it more susceptible to power outages; regulatory and legislative actions focused on carbon intensity, coupled with incentives for adoption of more intermittent renewable power sources; and a dramatic increase in power demand that could outpace supply growth due to electrification trends, accelerating power demands of data centers and artificial intelligence, and the re-industrialization of North America.
Homes, businesses, and communities are experiencing a deterioration in the reliable supply of electricity due to a number of factors including: climate change impacts driving more severe and volatile weather leading to increased power outages; a capacity constrained legacy power infrastructure that’s still predominantly a one-way system; power infrastructure being impaired by under-investment making it more susceptible to power outages; regulatory and legislative actions focused on carbon intensity, coupled with the continued adoption of more intermittent renewable power sources; and a dramatic increase in power demand that could outpace supply growth due to accelerating power requirements of data centers and artificial intelligence, electrification trends, and the re-industrialization of North America.
We also continue to explore and expand our capabilities within new gaseous generator market opportunities, including continuous-duty, prime rated, distributed generation, demand response, microgrids, and overall use as a DERs in areas where grid stability is needed.
We also continue to explore and expand our capabilities within new gaseous generator market opportunities, including continuous-duty, prime rated, distributed generation, demand response, microgrids, and overall use as a Distributed Energy Resource (DER) in areas where grid stability is needed.
We prioritize creating opportunities to help employees build careers and support their growth as part of a meaningful and valuable employee experience. We hold internal career development events as well as partner with third party educational resources to offer on the job learning, collaborative work experiences and formal learning programs to support the progression and advancement of our workforce.
We prioritize creating opportunities to help employees build careers and then support their growth as part of a meaningful and valuable employee experience. We conduct internal career development activities as well as partner with third party educational resources to offer on the job learning, collaborative work experiences and formal learning programs to support the progression and advancement of our workforce.
Risk Factors” to this Annual Report on Form 10-K for additional legal and regulatory factors that can affect the products we sell and the results of our operations. 11 Table of Contents Sustainability Practices We published a report on our sustainability practices in April 2024.
Risk Factors” to this Annual Report on Form 10-K for additional legal and regulatory factors that can affect the products we sell and the results of our operations. 12 Table of Contents Sustainability Practices We published a report on our sustainability practices in April 2025.
Our light-commercial generators predominantly run on natural gas and liquid propane. We design and manufacture a broad product line of modularized and configured stationary generators and related transfer switches for various industrial standby, continuous-duty, and prime rated applications.
Our light-commercial generators predominantly run on natural gas and liquid propane. 7 Table of Contents We design and manufacture a broad product line of configured stationary generators and related transfer switches for various industrial standby, continuous-duty, and prime-rated applications.
We continuously evaluate the quality and cost structure of our purchased components & equipment and assess the capabilities and capacity of our supply chain. We select our sourcing partners based on this evaluation.
Our strategic global sourcing teams continuously evaluate the quality and cost structure of our purchased components & equipment, and assess the capabilities and capacity of our supply chain. We select our sourcing partners based on this evaluation.
Our broad offering of C&I mobile products (including mobile light towers, mobile power generators, mobile energy storage systems and hybrid generators) play a key role in the completion of infrastructure construction projects, such as roads, highways, bridges, and airports.
In addition, our broad offering of C&I mobile products (including mobile light towers, mobile power generators, mobile heaters, mobile energy storage systems and hybrid generators) plays a key role in the completion of infrastructure construction projects, such as roads, highways, bridges, and airports.
A copy of the sustainability report is available on our Investor Relations webpage at Generac.com. We plan to publish an updated report on our sustainability practices in April 2025 that coincides with the filing of our annual Proxy Statement.
A copy of our 2024 Sustainability & Impact Report is available on our Investor Relations webpage at Generac.com. We plan to publish an updated report on our sustainability practices in April 2026 that coincides with the filing of our annual Proxy Statement.
Ragen 53 Chief Financial Officer Erik Wilde 50 President, Domestic C&I Raj Kanuru 54 Executive Vice President, General Counsel and Secretary Norman Taffe 58 President, Energy Technology Kyle Raabe 50 President, Consumer Power Aaron P. Jagdfeld has served as our Chief Executive Officer since September 2008, as a director since November 2006 and was named Chairman in February 2016.
Ragen 54 Chief Financial Officer Erik Wilde 51 President, Domestic C&I Raj Kanuru 55 Executive Vice President, General Counsel and Secretary Norman Taffe 59 President, Energy Technology Kyle Raabe 51 President, Consumer Power Aaron P. Jagdfeld has served as our Chief Executive Officer since September 2008, as a director since November 2006 and was named Chairman in February 2016.
Importantly, we are leveraging ecobee’s technologies and software development expertise to develop a user interface at the center of our home energy ecosystem that will allow homeowners to monitor and control Generac’s entire suite of products using a “single pane of glass”.
Importantly, we are leveraging ecobee’s technologies and software development expertise to develop a user interface at the center of our home energy ecosystem that will allow homeowners to monitor and control Generac’s entire suite of products using a common platform.
At the same time, power demand is expected to meaningfully accelerate as a result of the rapid adoption of artificial intelligence and related data center energy requirements, the re-industrialization of North America, and the electrification of a wide range of consumer and commercial products, including transportation, HVAC systems, and other major appliances.
At the same time, power demand is expected to meaningfully accelerate due to (i) the rapid adoption of artificial intelligence and related data center energy requirements, (ii) the re-industrialization of North America, and (iii) the electrification of a wide range of consumer and commercial products, including transportation, HVAC systems, and other major appliances.
The channel consists of selling branches of both national and local distribution houses for electrical, HVAC and solar equipment on a wholesale basis, which in turn typically sell to electricians and HVAC/solar installers who are not in our dealer network.
The channel consists of selling branches of both national and local distribution houses for electrical, HVAC, and solar equipment on a wholesale basis. These branches typically sell to electricians, HVAC businesses, and solar installers who are not in our direct dealer network.
The competitive landscape varies between our Residential and C&I power generation products. We face a different set of competitors for our mobile equipment and engine powered tools as well. In recent years, we have expanded who we compete against as we enter certain energy technology markets, such as solar inverters, battery storage systems, smart thermostats, and grid services.
The competitive landscape varies between our Residential and C&I power generation products. We face a different set of competitors for our mobile equipment and engine-powered tools as well. In recent years, our competitive landscape has expanded as we enter certain energy technology markets, including solar inverters, battery storage systems, smart thermostats, and grid services.
In addition, we have been leveraging our leading position in the growing market for natural gas fueled generators, which we believe represents a cleaner fuel compared to diesel, to expand into applications beyond standby power, allowing us to participate in multi-purpose microgrid projects for C&I customers.
We have also been leveraging our leading position in the growing market for natural gas fueled generators, which we believe represents a cleaner fuel compared to diesel, to develop solutions for applications beyond standby power, allowing us to participate in multi-purpose microgrid projects for C&I customers.
Item 1. Business Overview Founded in 1959, Generac is a leading global designer, manufacturer, and provider of a wide range of energy technology solutions. Generac provides power generation equipment, energy storage systems, energy management devices & solutions, and other power products serving the residential, light commercial, and industrial markets.
Item 1. Business Overview Founded in 1959, Generac is a leading global designer, manufacturer, and provider of a wide range of energy technology solutions. Generac provides power generation equipment, energy storage systems, energy management devices & solutions, and other power products and services serving the residential, commercial, data center, telecom, rental, and industrial markets.
Raabe holds a BA, Biological Science from Lawrence University. 13 Table of Contents
Raabe holds a BA, Biological Science from Lawrence University. 14 Table of Contents
We believe natural gas will continue to be an important and cleaner transition fuel of the future, compared to diesel, as the world continues to shift towards lower emission power generation sources.
Natural gas generators, a continuing growth opportunity . We believe natural gas will continue to be an important and cleaner transition fuel of the future, compared to diesel, as the world continues to shift towards lower emission power generation sources.
Additionally, the combination of accelerating demand growth with significant investments in maintaining, upgrading, and decarbonizing the power grid is likely to cause meaningful increases in the price of electricity, ultimately driving home and business owners to adopt solutions to offset the impact of rising costs.
The combination of accelerating demand growth together with significant investments in maintaining, upgrading, and decarbonizing the power grid is likely to cause meaningful increases in the cost of electricity, ultimately driving home and business owners to adopt solutions to help offset the impact of these rising costs.
Over the past several years, we have introduced larger and higher-powered gaseous-fueled generators, with the highest output of 1,000kW for a single-engine set. Our industrial standby generators are primarily used as emergency backup for larger applications (such as healthcare, telecom, datacom, commercial office, retail, municipal and manufacturing, to name a few).
Over the past several years, we have introduced larger and higher-powered gaseous-fueled generators, with the highest output of 1,000kW for a single-engine set. Our industrial standby generators are primarily used as emergency backup for larger applications such as data centers, healthcare, telecom, datacom, commercial office, retail, distribution centers, manufacturing, and municipal, among others.
The impact of climate change has received increased global focus in recent years, and an aging and underinvested electrical grid infrastructure remains highly vulnerable to the expectation of more severe and volatile weather.
The impact of climate change has received increased global focus in recent years, and an aging and under-invested electrical grid infrastructure remains highly vulnerable to potentially more severe and volatile weather.
Residential products – Competitors include Rehlko (formerly known as Kohler Power), Briggs & Stratton, Honda, Champion, Techtronics International, Harbor Freight, Husqvarna, Ariens, Tesla, Enphase, Solar Edge, Google, Resideo, The Toro Company, Goal Zero, and Emerson along with a number of other domestic and foreign competitors; certain of which also have broad operations in other manufacturing businesses.
The following is a list of competitors by product class: Residential products – Competitors include Rehlko (formerly known as Kohler Power), Briggs & Stratton, Honda, Champion, Techtronics International, Harbor Freight, Husqvarna, Ariens, Tesla, Enphase, Solar Edge, Google, Resideo, The Toro Company, EcoFlow, and Emerson, along with a number of other domestic and foreign competitors; certain of which also have broad operations in other manufacturing businesses.
We also have a line of stationary and mobile energy storage systems that serve global C&I markets. We have a selection of energy monitoring and management devices that we expect to serve as the central hub or controls platform for our residential and C&I energy ecosystems.
We also have a line of C&I Battery Energy Storage Systems and mobile energy storage systems that serve global C&I markets. We have a selection of energy monitoring and management devices and controls that serve as the central hub for our residential and C&I energy ecosystems.
Finally, our Mobile Link platform provides remote monitoring services for our residential home standby customers and “Fleet” services for our residential home standby dealers, whereby we collect subscription revenue for these services on a recurring basis. "Other products and services" compr ised 11.1%, 11.5% and 8.6%, respectively, of total net sales in 2024, 2023 and 2022.
Finally, our expansive Mobile Link platform provides remote monitoring services for our residential home standby customers and “Fleet” services for our residential home standby dealers, whereby we collect subscription revenue for these services on a recurring basis. "Other products and services" comprised 11.5%, 11.1% and 11.5%, respectively, of total net sales in 2025, 2024 and 2023.
The distribution for our C&I mobile products includes global, national, regional, and specialty equipment rental companies, equipment distributors, and construction companies which primarily serve non-residential building construction, road construction, energy markets and special events.
The distribution for our C&I mobile products includes global, national, regional, and specialty equipment rental companies, equipment distributors, and construction companies which primarily serve non-residential building construction, road construction, energy, special events, municipal, and general rents & hire markets around the world.
In 2025, we expect to launch the PWRcell 2 Series, the next generation of our PWRcell energy storage system, which includes significant improvements in performance and compatibility as compared to the first generation.
In 2025, we launched the PWRcell 2 Series, the next generation of our PWRcell energy storage system, which includes significant improvements in performance and capability as compared to the first generation.
As part of our efforts to increase sales & installation bandwidth for home standby generators, we have established an Aligned Contractor Program that provides certain benefits to contractors that purchase our products through the wholesale network and agree to participate in enhanced training sessions.
As part of our efforts to increase sales and installation bandwidth for home standby generators, we have established an Aligned Contractor Program that provides certain benefits to contractors that purchase our products through this wholesale network and agree to participate in more advanced product and service training.
We design and manufacture other power products including light towers and a broad line of outdoor power equipment that we refer to as “chore products”, which includes a variety of property maintenance equipment powered by both engines and batteries.
We design and manufacture other power products, including light towers and a broad line of outdoor power equipment, which includes a variety of property maintenance equipment powered by both engines and batteries.
This strategic plan accelerated the Company’s transition from primarily a North America focused, emergency backup generator company into a more diversified industrial technology company with the addition of new and adjacent product categories and an expanded global presence, primarily through a series of acquisitions.
Soon after going public, we accelerated the Company’s transition from primarily a North America focused, emergency backup generator company into a more diversified industrial technology company with the addition of new and adjacent product categories and an expanded global presence, primarily through a series of acquisitions.
Further, we maintain an ongoing global employee engagement initiative with targeted action plans by region, function, and business group. Action plans and their progress are measured by global employee engagement surveys. A global human capital management system was implemented enabling Generac management to make better talent decisions, proactively manage careers, scale globally and maintain compliance.
Further, we maintain an ongoing global employee engagement initiative with targeted action plans by region, function, and business groups. Action plans and their progress are measured by global employee engagement surveys. A global human capital management system enables Generac management to improve talent decisions, proactively manage careers, scale globally, and maintain compliance.
These developments are causing growing supply/demand imbalances for grid operators across North America, which has led to high-profile examples of rolling blackouts and calls for utility customers to reduce consumption to maintain grid integrity.
These developments are causing a growing supply/demand imbalance for grid operators across the world, which has led to high-profile examples of rolling blackouts and calls for utility customers to reduce consumption to maintain grid integrity.
C&I products comprise d 32.3%, 3 7.2% and 27.6%, respectively, of total net sales in 2024, 2023 and 2022. 5 Table of Contents Other P roducts and Services Our “Other products and services” category primarily consists of aftermarket service parts and product accessories sold to our customers, installation and maintenance services, extended warranty revenue, grid services and other software-related subscription revenue, remote monitoring subscription revenue, and other project management service offerings provided by our owned industrial distributors.
C&I products comprised 34.6%, 32.3% and 37.2%, respectively, of total net sales in 2025, 2024 and 2023. 8 Table of Contents Other Products and Services Our “Other products and services” category primarily consists of aftermarket service parts and product accessories sold to our customers, installation and maintenance services, extended warranty revenue, grid services and other software-related subscription revenue, remote monitoring subscription revenue, and other project management service offerings provided by our owned industrial distributors.
We also sell direct to certain customers that are the end users of our products covering a variety of end market verticals both domestically and around the world. This includes telecommunication, retail, data centers, banking, energy, healthcare, convenience stores, grocery stores, restaurants, governments, and other commercial applications.
We also sell our industrial products direct to certain end-user customers of our products covering a variety of end market verticals both domestically and internationally. This includes data centers, telecommunication, retail, banking, energy, healthcare, convenience stores, grocery stores, restaurants, governments, and other commercial & industrial applications.
Optimize energy efficiency and consumption. Enable sustainable and more efficient power generation and consumption through monitoring, management and lower-carbon solutions. Multiple entrenched trends are expected to drive accelerated demand growth for electricity in the coming years.
Enable efficient power generation and consumption through monitoring, management and energy optimizing solutions. Multiple entrenched trends are expected to drive accelerated demand growth for electricity in the coming years.
Demand for natural gas generators continues to represent an increasing portion of the overall C&I market, as the benefits of natural gas power generation are very compelling relative to traditional diesel fueled generators.
Demand for natural gas generators continues to represent an increasing portion of many C&I end markets, as the benefits of natural gas power generation are very compelling relative to traditional diesel fueled generators for certain end users.
These onsite generation and storage solutions provide peace of mind and protection against rising power quality issues by delivering energy resilience and independence for end users and their communities. Many of these onsite solutions are capable of being connected to the grid and can help support overall grid reliability, resiliency and sustainability when enrolled in utility grid services programs.
These onsite generation and storage solutions provide peace of mind and protection against power outages by delivering energy resilience and independence for end users. Many of these solutions are capable of being connected to the grid and can help support overall grid reliability and resiliency when enrolled in grid services programs. Optimize energy efficiency and consumption.
Increased frequency and duration of major power outage events, that have a broader impact beyond a localized level, increases product awareness and may drive consumers to accelerate their purchase of a standby or portable generator during the immediate and subsequent period, which we believe may last for six to twelve months following a major outage event.
Increased frequency and duration of major power outage events, that have a broader impact beyond a localized level, increases product awareness and may drive consumers to accelerate their purchase of a standby or portable generator during the immediate and subsequent period.
As more mission-critical data is transmitted over wireless networks, we believe the penetration rate of backup generators on cell towers must increase considerably to maintain a higher level of reliability across the network.
Generac is the leading supplier of backup power to the telecommunications market in the United States. As more mission-critical data is transmitted over wireless networks, we believe the penetration rate of backup generators on cell towers must increase considerably to maintain a higher level of reliability across the network.
For our C&I products, we are developing a similar ecosystem of controls that are building off Deep Sea’s industrial controls, Blue Pillar’s IoT network solutions, and Ageto’s multi-asset microgrid control technology, helping businesses to better optimize their energy efficiency and consumption.
For our C&I products, we are developing a similar ecosystem of controls that are building off Deep Sea’s industrial controls, Blue Pillar’s IoT network solutions, and Ageto’s multi-asset microgrid control technology.
These incentives cover a wide range of clean energy products and solutions, including solar inverters, battery storage systems, grid services, and grid-edge devices. The availability, size, and outlook for such incentives can impact the markets for these products and solutions.
These incentives cover a wide range of clean energy products and solutions, including solar inverters, battery storage systems, grid services, and grid-edge devices. They include both investment tax credits to owners of these systems and production tax credits to manufacturers of these products. The availability, size, and outlook for such incentives can impact the markets for these products and solutions.
Since 2020, we have acquired a number of our industrial distributors to give us direct coverage of those regions in the United States and accelerate our efforts in those markets. Industrial distributors and dealers provide C&I end users with ongoing sales, installation, service and product support.
Since 2020, we have acquired a number of our industrial distributors in certain regions of the United States in order to accelerate investments and increase market share in those markets. Industrial dealers provide C&I end users with ongoing sales, installation, service and product support.
Our industrial distributors and dealers help maintain the local relationships with commercial electrical contractors, specifying engineers, and national account regional buying offices. We also sell to certain EPC companies and other companies that specialize in managing more complex power generation projects, including microgrids and “beyond standby” applications.
They also help maintain the local relationships with commercial electrical contractors, specifying engineers, and regional buying offices for national accounts. We also sell to certain Engineering, Procurement & Construction (EPC) companies that specialize in managing more complex power generation projects, including microgrids and “beyond standby” applications.
We also have engineering and product management resources focused on evaluating and developing alternative technologies that are emerging and could become commercially viable over the long-term, such as fuel cells and hydrogen. We have a long history of driving product innovation into the markets that we serve.
We also have engineering and product management resources focused on evaluating and developing alternative technologies that are emerging and could become commercially viable over the long-term, such as fuel cells and hydrogen-fueled products.
Power disruptions are an important driver of consumer awareness for backup power and have historically influenced demand for generators both in the United States and internationally.
Strategic Growth Themes: Power quality issues continue to increase . Power disruptions are an important driver of consumer awareness for backup power and have historically influenced demand for generators both in the United States and internationally.
We have one of the broadest product offerings that we believe can directly address these challenges for homes and businesses. Our residential and C&I product offering begins with emergency standby generators that can be supplemented with portable and mobile power generators. We have also built out an offering of battery energy storage systems for behind-the-meter residential and C&I applications.
We believe that Generac’s broad portfolio of back-up power products and solutions can directly address these challenges for homes and businesses. Our residential and C&I products begin with emergency standby generators that can be supplemented with portable and mobile power generators. We have also built out an offering of battery energy storage systems (BESS) for behind-the-meter residential and C&I applications.
This system captures and stores electricity from solar panels or other power sources and helps reduce home energy costs while also protecting homes from shorter duration power outages. PWRcell systems can range in size from 9kWh up to 36kWh of storage capacity.
This system captures and stores electricity from solar panels or other power sources and helps reduce home energy costs while also protecting homes from shorter duration power outages. PWRcell systems can range in size from 9kWh up to 72kWh of storage capacity, depending on how many battery modules are installed with any given system.
In 2023, we acquired REFU, a European based provider of stationary C&I BESS solutions and related inverter products, which expanded our product offering to enter certain C&I BESS markets around the world.
In 2023, we acquired REFU, a European based provider of stationary C&I BESS solutions and related inverter products, which expanded our product offering to enter certain C&I BESS markets around the world. In 2024, we strengthened our position in the North American C&I BESS market with the acquisition of SunGrid’s C&I BESS product offering, based out of Canada.
Our battery storage solutions for both residential and C&I applications allow end users to store power that is often generated on-site to optimize the timing of consumption. With this capability, home and business owners can discharge power from their battery at times when utility rates are at their highest, thereby saving money on their utility bills.
Our PWRcell battery storage solutions are also integrated into our residential energy ecosystem, allowing end users to store power that is often generated on-site to optimize the timing of consumption. With this capability, home owners can discharge power from their battery at times when utility rates are at their highest, thereby saving money on their utility bills.
In the residential and light commercial markets, we have developed proprietary engines, cooling packages, controls, fuel systems, and emissions systems which help drive innovation while also enhancing the margin profile of those products.
We have significant experience using natural gas engines in our products and have developed specific expertise with fuel systems and emissions technologies. In the residential and light commercial markets, we have developed proprietary engines, alternators, cooling packages, fuel & emissions systems, and controls which help drive innovation while also enhancing the margin profile of those products.
We believe utility supply shortfalls and related warnings may continue in the future, resulting in continued deterioration of power quality in North America. Finally, certain utilities are adopting preventative power shutoff policies to reduce the risk of wildfires caused by their electrical distribution equipment, predominately in the western half of the country.
We believe utility supply shortfalls and related warnings may continue in the future, resulting in further power quality issues for the world’s electrical grid. Finally, certain utilities are adopting preventative power shutoff policies to reduce the risk of wildfires caused by their electrical distribution equipment, predominately in the western part of the United States.
For certain products, we do not have internal manufacturing capabilities and rely upon a small number of contract manufacturers to build these products or supply these components, including but not limited to certain energy technology products and components.
For certain products, we do not have internal manufacturing capabilities and rely on a small number of contract manufacturers to build these products or supply these components, including but not limited to certain energy technology products and components. Similarly, we have diversified the geographic reach of our global supply chain partners.
We classify our products and services into three categories based on similar ranges of power output geared for varying end customer uses: Residential products, C&I products, and Other products and services.
We classify our products and services into three categories based on similar ranges of power output geared for varying end customer uses: Residential products, C&I products, and Other products and services. The following summary outlines these categories, including their key attributes and customer applications.
Importantly, we expect that a confluence of factors will continue to drive meaningful increases in power prices for end users in the future.
Importantly, we expect that a confluence of factors will continue to drive power prices meaningfully higher in the future.
Given our increasing focus on energy technology solutions, advanced electronic components and micro-processors have become a larger consideration within our supply chain. Within the clean energy market, batteries are a significant supply chain input for our energy storage systems. Over multiple decades, we have developed an extensive network of reliable suppliers in the United States and around the world.
Given our broad offering of energy technology solutions, advanced electronic components and micro-processors are now a larger supply chain consideration. In addition, batteries are a significant supply chain input for our energy storage systems for residential and C&I behind-the-meter applications. Over multiple decades, we have developed an extensive network of reliable suppliers in the United States and around the world.
C&I products – Competitors include Caterpillar, Cummins, Rehlko (formerly known as Kohler Power), IGSA, AKSA, MultiQuip, Wacker, Doosan, Atlas Copco, Himoinsa, FG Wilson, Woodward, Planelec, and Co-map, as well as other domestic and foreign competitors that package engines and alternators into power generation equipment in local markets around the world; certain of which focus on the market for diesel generators as they are also diesel engine manufacturers.
C&I products – Competitors include Caterpillar, Cummins, Rehlko (formerly known as Kohler Power), IGSA, MTU (Rolls Royce), AKSA, MultiQuip, Wacker, Doosan, Atlas Copco, Himoinsa, Woodward, Planelec, and Co-map, as well as other domestic and foreign competitors that package engines and alternators into power generation equipment in local markets around the world.
All of our residential energy technology products and home standby generators come with grid-connection capabilities, enabling consumers to connect and enroll their DERs in available grid services programs.
Our ecosystem approach to our residential installed products is yet another differentiator that demonstrates our innovative approach to the market. All of our residential energy technology products and home standby generators come with grid-connection capabilities, enabling consumers to connect and enroll their DERs in available grid services programs.
More recently, we have also built out specific expertise around battery storage systems and power conversion that we plan to leverage as we expand into clean energy markets. In addition, we have significantly increased our software development capabilities across a variety of applications, including energy management, system-level microgrid controls, remote monitoring, and distributed energy resource management systems.
More recently, we have also built out engineering expertise in BESS and power conversion that we are leveraging to compete in clean energy markets. In addition, we have significantly increased our software development capabilities across a variety of applications, including energy management, system-level microgrid controls, and remote monitoring.
With only approximately 6.5% penetration of the addressable market of homes in the United States (which we define as single-family detached, owner-occupied households with a home value of over $175,000, as defined by the U.S.
Many potential customers are still not aware of the costs and benefits of automatic backup power solutions. With only approximately 6.75% penetration of the addressable market of homes in the United States (which we define as single-family detached, owner-occupied households with a home value of over $175,000, as defined by the U.S.
We also provide a broad product line of portable and inverter generators that range in size from 800W to 18kW, as well as multiple portable battery solutions that provide clean, emission-free power at the push of a button.
We also provide a broad product line of portable and inverter generators that range in size from 800W to 18kW, as well as various portable battery solutions that provide clean, emission-free power at the push of a button. These products can be used on a limited basis for home backup, construction, and recreational purposes.
In addition to the mega-trends supporting growth of the category, we believe by expanding and developing our distribution network, continuing to invest in our product lines and technologies, and targeting our marketing efforts, we can continue to build awareness and increase penetration for our home standby generators. Solar, storage, and energy management markets continue to develop .
In addition to the mega-trends supporting growth of the category, we believe by expanding and developing our distribution network, continuing to invest in new product lines and technologies, and optimizing our marketing efforts, we can continue to build awareness and increase penetration for our home standby generators. Substantial capital investments in new data centers and accelerating adoption of artificial intelligence.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

42 edited+11 added−6 removed156 unchanged
Biggest changeFor certain products we rely upon contract manufacturers to build these products or supply these components, including but not limited to certain clean energy products or components. The timing of purchases in future periods could differ materially from our estimates due to fluctuations in demand requirements related to varying sales levels as well as changes in economic conditions.
Biggest changeThe timing of purchases in future periods could differ materially from our estimates due to fluctuations in demand requirements related to varying sales levels as well as changes in economic conditions. Further, the revenues that our suppliers generate from our orders may represent a relatively small percentage of their overall revenues.
If any of these contract manufacturers or component suppliers were unable or unwilling to manufacture or produce our products in required volumes and at high quality levels or renew existing terms under supply agreements, we would have to identify, qualify and select acceptable alternative contract manufacturers, which may not be available to us on favorable terms, if at all.
If any of these manufacturers or component suppliers were unable or unwilling to manufacture or produce our products in required volumes and at high quality levels or renew existing terms under supply agreements, we would have to identify, qualify and select acceptable alternative suppliers, which may not be available to us on favorable terms, if at all.
While we maintain insurance coverage in amounts that we believe are reasonable, we cannot assure we will be able to maintain this insurance on acceptable terms or that this insurance will provide sufficient coverage against potential liabilities that may arise.
While we maintain insurance coverage in amounts that we believe are reasonable, we cannot assure we will be able to maintain this insurance on acceptable terms or that this insurance will provide sufficient coverage against potential liabilities that have or may arise.
These attacks pose a risk to the security of our products, private data, systems and networks and those of our customers, suppliers and third-party service providers, as well as to the confidentiality of our information and the integrity and availability of our data.
These attacks pose a risk to the security of our products, private data, systems and networks and those of our customers, suppliers and third-party service providers, as well as to the confidentiality of our information and the integrity and availability of our data and related systems.
This could cause us to lose additional sales, incur additional costs, delay new product introductions or suffer harm to our reputation. We depend upon a small number of outside contract manufacturers and component suppliers, as well as single-source suppliers, for certain products and components, and our business and operations could be disrupted if we encounter problems with these parties.
This could cause us to lose additional sales, incur additional costs, delay new product introductions or suffer harm to our reputation. We depend upon a small number of outside manufacturers and component suppliers, as well as other single-source suppliers, for certain products and components, and our business and operations could be disrupted if we encounter problems with these parties.
The U.S. government has made changes in U.S. trade policy over the past several years. These changes include renegotiating and terminating certain existing bilateral or multi-lateral trade agreements, such as the U.S.-Mexico-Canada Agreement, and initiating tariffs on certain foreign goods from a variety of countries and regions, most notably China.
The U.S. government has made changes in U.S. trade policy over the past several years. These changes include renegotiating and terminating certain existing bilateral or multi-lateral trade agreements, such as the U.S.-Mexico-Canada Agreement, and initiating tariffs on certain foreign goods from a variety of countries and regions, most notably China, India, or the EU.
As a result, we cannot be assured that the combination of our acquisitions with our business will result in the realization of the full benefits anticipated from the transaction. 17 Table of Contents A significant portion of our purchased components are sourced in foreign countries, exposing us to additional risks that may not exist in the United States.
As a result, we cannot be assured that the combination of our acquisitions with our business will result in the realization of the full benefits anticipated from the transaction. 21 Table of Contents A significant portion of our purchased components are sourced in foreign countries, exposing us to additional risks that may not exist in the United States.
We monitor certain cyber security threats and vulnerabilities in our systems, and we have experienced viruses and attacks targeting our IT systems and networks. Such prior events, to date, have not had a material impact on our financial condition, results of operations or liquidity.
We monitor cyber security threats and vulnerabilities in our systems, and we have experienced attacks targeting our IT systems and networks. Such prior events, to date, have not had a material impact on our financial condition, results of operations or liquidity.
If we are unable to hire and retain employees capable of performing at a high level, our business, financial condition and results of operations could be adversely affected. 16 Table of Contents We may experience material disruptions to our manufacturing operations.
If we are unable to hire and retain employees capable of performing at a high level, our business, financial condition and results of operations could be adversely affected. 19 Table of Contents We may experience material disruptions to our manufacturing operations.
Our reliance on such contract manufacturers makes us vulnerable to possible capacity constraints and reduced control over component availability, delivery schedules, quality issues, manufacturing yields and costs. Moreover, we single-source certain types of parts in our product designs. Delays in our suppliers' deliveries have sometimes impaired, and may continue to impair, our ability to deliver products to our customers.
Our reliance on such suppliers makes us vulnerable to possible capacity constraints and reduced control over component availability, delivery schedules, quality issues, manufacturing yields and costs. Moreover, we single-source certain types of parts in our product designs. Delays in our suppliers' deliveries have sometimes impaired, and may continue to impair, our ability to deliver products to our customers.
Commitments and Contingencies” and our discussion of “Non-GAAP measures – Adjusted EBITDA” in Item 7 of this Annual Report on Form 10-K. Our operations are subject to various environmental, health and safety laws and regulations, and non-compliance with or liabilities under such laws and regulations could result in substantial costs, fines, sanctions and claims.
Commitments and Contingencies” and our discussion of “Non-GAAP measures – Adjusted EBITDA” in Item 7 of this Annual Report on Form 10-K. 22 Table of Contents Our operations are subject to various environmental, health and safety laws and regulations, and non-compliance with or liabilities under such laws and regulations could result in substantial costs, fines, sanctions and claims.
If we need to replace any of these individuals in the near future, the loss of their services could disrupt our operations and have a material adverse effect on our business if we do not have effective succession plans in place. Disruptions caused by labor dis putes or organized labor activities could harm our business.
If we need to replace any of these individuals in the near future, the loss of their services could disrupt our operations and have a material adverse effect on our business if we do not have effective succession plans in place. Disruptions caused by labor disputes or organized labor activities could harm our business.
For further information, see Note 18, "Commitments and Contingencies," to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K. 14 Table of Contents We may incur costs and liabilities as a result of product liability, warranty claims, recalls, or other claims.
For further information, see Note 18, "Commitments and Contingencies," to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K. We may incur costs and liabilities as a result of product liability, warranty claims, recalls, or other claims.
A reduction in net income resulting from the write-down or impairment of goodwill or indefinite-lived intangibles could have a material adverse effect on our financial statements. 19 Table of Contents General risk factors The market price of our common stock may be volatile or may decline regardless of our operating performance.
A reduction in net income resulting from the write-down or impairment of goodwill or indefinite-lived intangibles could have a material adverse effect on our financial statements. General risk factors The market price of our common stock may be volatile or may decline regardless of our operating performance.
While we attempt to mitigate these risks through board oversight, hiring additional internal cyber-security professionals to manage these risks, enhancing controls, due diligence, employee training and communication, third party intrusion testing, system hardening, email and web filters, regular patching, multi-factor authentication, surveillance, encryption, and other measures, we remain vulnerable to information security threats.
While we attempt to mitigate these risks through board oversight, hiring additional internal cyber-security professionals to manage risk mitigations, enhancing controls, due diligence, employee training and communication, third party intrusion testing, system hardening, email and web filters, regular patching, multi-factor authentication, surveillance, encryption, and other measures, we remain vulnerable to inherent risks associated with information security threats.
Our Tranche B Term Loan Facility matures on July 3, 2031, and our Tranche A Term Loan Facility as well as our Revolving Facility mature on June 29, 2027. The terms of our credit facilities restrict our current and future operations, particularly our ability to respond to changes in our business or to take certain actions.
Our Tranche B Term Loan Facility matures on July 3, 2031, and our Tranche A Term Loan Facility as well as our Revolving Facility mature on July 1, 2030. The terms of our credit facilities restrict our current and future operations, particularly our ability to respond to changes in our business or to take certain actions.
Although we currently maintain product liability insurance coverage, such insurance coverage may not be sufficient to cover claims or damage awards or we may not be able to obtain such insurance on acceptable terms in the future, if at all, or obtain insurance that will provide adequate coverage against potential claims.
Although we currently maintain product liability insurance coverage, in certain cases such insurance coverage has not and may continue to not be sufficient to cover claims or damage awards or we may not be able to obtain such insurance on acceptable terms in the future, if at all, or obtain insurance that will provide adequate coverage against potential claims.
As a result, we may be required to devote significant management attention and resources to integrating the business practices and operations of any acquired businesses with ours. The integration process may disrupt our business and, if implemented ineffectively, could preclude realization of the full benefits expected by us.
The integration of independent businesses is a complex, costly and time-consuming process. As a result, we may be required to devote significant management attention and resources to integrating the business practices and operations of any acquired businesses with ours. The integration process may disrupt our business and, if implemented ineffectively, could preclude realization of the full benefits expected by us.
On February 12, 2024, the Company’s Board of Directors (Board) approved the current stock repurchase program that allows for the repurchase of up to $500 million of the Company’s common stock over a twenty-four-month period.
On February 9, 2026, the Company’s Board of Directors (Board) approved the current stock repurchase program that allows for the repurchase of up to $500 million of the Company’s common stock over a twenty-four-month period.
Should additional taxes be assessed as a result of an audit, assessment or litigation, there could be a material adverse effect on our cash, tax provisions and net income in the period or periods for which that determination is made. Item 1B. Unresolved Staff Comments None.
Should additional taxes be assessed as a result of an audit, assessment or litigation, there could be a material adverse effect on our cash, tax provisions and net income in the period or periods for which that determination is made.
Goodwill represents the excess of cost over the fair market value of net assets acquired in business combinations. Indefinite-lived intangibles are comprised of certain tradenames. As of December 31, 2024, goodwill and other indefinite-lived intangibles tota led $1,563.5 m illion.
Goodwill represents the excess of cost over the fair market value of net assets acquired in business combinations. Indefinite-lived intangibles are comprised of certain tradenames. As of December 31, 2025, goodwill and other indefinite-lived intangibles tota led $1,594.4 m illion.
In addition, developments in proceedings in any given period may require us to adjust the loss contingency estimates that we have recorded in our financial statements, record estimates for liabilities or assets previously not susceptible to reasonable estimates or pay cash settlements or judgments. Any of these developments could adversely affect our financial statements in any particular period.
In addition, developments in proceedings in any given period have and may continue to require us to adjust the loss contingency estimates that we have recorded in our financial statements, record estimates for liabilities or assets previously not susceptible to reasonable estimates or pay cash settlements or judgments.
Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business. For further information, see Note, “18. Commitments and Contingencies” and our discussion of "Non-GAAP measures - Adjusted EBITDA" in Item 7 of this Annual Report on Form 10-K. Our business is subject to potential tax liabilities.
Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business. For further information, see Note, “18. Commitments and Contingencies” in Item 8 of this Annual Report on Form 10-K. 24 Table of Contents Our business is subject to potential tax liabilities.
We manufacture our products based on both actual customer orders and our estimates of customer demand. This process requires us to make multiple forecasts and assumptions relating to the demand of our distributors, their end customers, general market conditions, and other macroeconomic conditions. The frequency and duration of power outages also affects demand for our products as described above.
This process requires us to make multiple forecasts and assumptions relating to the demand of our distributors, their end customers, general market conditions, and other macroeconomic conditions. The frequency and duration of power outages also affects demand for our products as described above.
Demand for the majority of our products is significantl y affected by unpredictable power outage activity that can lead to substantial variations in, and uncertainties regarding, our financial results from period to period.
Risk factors related to our business and industry Demand for the majority of our products is significantly affected by unpredictable power outage activity that can lead to substantial variations in, and uncertainties regarding, our financial results from period to period.
We cannot assure our liabilities in connection with litigation and other legal and regulatory proceedings will not exceed our estimates or adversely affect our financial statements and reputation.
Any of these developments could adversely affect our financial statements in any particular period. We cannot assure our liabilities in connection with litigation and other legal and regulatory proceedings will not exceed our estimates or adversely affect our financial statements and reputation.
Government agencies and security experts have warned about growing risks of hackers, cyber-criminals, malicious insiders and other actors targeting confidential information and all types of IT systems. These actors may engage in fraudulent activities, theft of confidential or proprietary information and sabotage or ransomware.
Further, we collect and store sensitive information in cloud-based data centers and on our networks. Government agencies and security experts have warned about growing risks of hackers, cyber-criminals, malicious insiders and other actors targeting confidential information and all types of IT systems. These actors may engage in fraudulent activities, theft of confidential or proprietary information and sabotage or ransomware.
As the threats evolve and become more potent, we may incur additional costs to secure the products that we sell, as well as our data and infrastructure of networks and devices. See "Item 1C. Cybersecurity" of this Annual Report on Form 10-K for additional information related to cybersecurity risks.
As the threats evolve and become more potent, we may incur additional costs to secure the products that we sell, as well as our data and infrastructure of networks and devices. See "Item 1C.
If we are unable to successfully manage these and other organizational changes, the ability to complete such activities and realize anticipated synergies or cost savings, as well as our results of operations and financial condition, could be materially adversely affected.
If we are unable to successfully manage these and other organizational changes, the ability to complete such activities and realize anticipated synergies or cost savings, as well as our results of operations and financial condition, could be materially adversely affected. 20 Table of Contents Our ability to realize the anticipated benefits of our acquisitions will depend, to a large extent, on our ability to integrate the acquired businesses with our business.
The sales, gross margins, and profitability for each of our segments could be directly impacted by changes in tariffs and trade agreements. In addition, certain of our products or key components or raw materials have and may continue to be subject to the imposition of higher duties as a result of anti-dumping and countervailing duties applied against them.
In addition, certain of our products or key components or raw materials have and may continue to be subject to the imposition of higher duties as a result of anti-dumping and countervailing duties applied against them.
Such risks or events may disrupt our supply chain and not enable us to produce products to meet customer demand. 15 Table of Contents If we do not forecast demand for our products accurately, we may experience product shortages, delays in product shipment, excess product inventory, difficulties in planning expenses or disputes with suppliers, any of which may adversely affect our business and financial condition.
If we do not forecast demand for our products accurately, we may experience product shortages, delays in product shipment, excess product inventory, difficulties in planning expenses or disputes with suppliers, any of which may adversely affect our business and financial condition. We manufacture our products based on both actual customer orders and our estimates of customer demand.
As a result, fulfilling our orders may not be considered a priority to these suppliers in the event of constrained ability to fulfill all of their customer obligations in a timely manner.
While we seek to negotiate supply agreements with all of our vendors, we may purchase some products or components on a purchase order basis. As a result, fulfilling our orders may not be considered a priority to these suppliers in the event of constrained ability to fulfill all of their customer obligations in a timely manner.
The failure to comply with existing and future regulatory or product standards or requirements could adversely affect our position in the markets we serve, our reputation, business, results of operations or financial condition in any particular period. 18 Table of Contents Risk factors related to cybersecurity Failures or security breaches of our networks or information technology systems could have an adverse effect on our business .
The failure to comply with existing and future regulatory or product standards or requirements could adversely affect our position in the markets we serve, our reputation, business, results of operations or financial condition in any particular period.
Moreover, we have and may continue to be exposed to product recalls and adverse public relations if our products are alleged to have defects, to cause property damage, to cause injury or illness, or if we are alleged to have violated governmental regulations.
Our failure to accurately predict future claims could have a material adverse effect on our business, results of operations, or financial condition. 16 Table of Contents Moreover, we have and may continue to be exposed to product recalls and adverse public relations if our products are alleged to have defects, to cause property damage, to cause injury or illness, or if we are alleged to have violated governmental regulations.
Our global operations are exposed to political and economic risks, commercial instability and events beyond our control in the countries in which we operate.
Our global operations are exposed to political and economic risks, commercial instability and events beyond our control in the countries in which we operate. Such risks or events may disrupt our supply chain and not enable us to produce products to meet customer demand.
Impairment of our relationships with our distributors, dealers or large customers, loss of a substantial number of these distributors or dealers or of one or more large customers, or an increase in our distributors' or dealers' sales of our competitors' products to our customers or of our large customers' purchases of our competitors' products could materially reduce our sales and profits.
Our distribution agreements and any contracts we have with large national, retail and other customers are typically not exclusive, and many of the distributors with whom we do business also offer competitors’ products and services. 18 Table of Contents Impairment of our relationships with our distributors, dealers or large customers, loss of a substantial number of these distributors or dealers or of one or more large customers, or an increase in our distributors' or dealers' sales of our competitors' products to our customers or of our large customers' purchases of our competitors' products could materially reduce our sales and profits.
Risk factors related to our business and industry Decreases in the availability and quality, or increases in the cost, of raw materials , key components and labor we use to make our products could materially reduce our earnings.
Despite their unpredictable nature, we believe power disruptions create awareness and accelerate adoption and demand for our home standby products. Decreases in the availability and quality, or increases in the cost, of raw materials, key components and labor we use to make our products could materially reduce our earnings.
Although we have ongoing contractual disputes with certain such suppliers, such disputes have not to date had any significant adverse impact on our business, financial condition or results of operation.
Although we have ongoing contractual disputes with certain such suppliers, such disputes have not to date had any significant adverse impact on our business, financial condition or results of operation. 15 Table of Contents Our business could be negatively impacted if we fail to adequately protect our intellectual property rights or if third parties claim that we are in violation of their intellectual property rights.
Risk factors related to our capital structure We hav e indebtedness which could adversely affect our cash flow and our ability to make payments on our indebtedness. As of December 31, 2024, we had total indebtedness o f $1,334.2 m illion.
Cybersecurity" of this Annual Report on Form 10-K for additional information related to cybersecurity risks. 23 Table of Contents Risk factors related to our capital structure We have indebtedness which could adversely affect our cash flow and our ability to make payments on our indebtedness. As of December 31, 2025, we had total indebtedness of $1,333.1 million.
We rely heavily on information technology (IT) both in our products and services for customers and in our IT systems used to run our business. Further, we collect and store sensitive information in cloud-based data centers and on our networks.
Risk factors related to cybersecurity Failures or security breaches of our networks or information technology systems could have an adverse effect on our business. We rely heavily on technology both in our products and services for customers and in our IT systems used to run our business.
Certain of our products benefit from government incentive or tax credit programs and we cannot be assured that these incentive or tax credit programs will be maintained and for how long. For example, in July 2024, we received a grant from the U.S.
If we do not continue to strategically advance our product portfolio to maintain our technology leadership, our competitive position could be adversely affected. Certain of our products benefit from government incentive or tax credit programs and we cannot be assured that these incentive or tax credit programs will be maintained and for how long.
Department of Energy (DOE) to facilitate the installation of residential solar and battery storage systems for disadvantaged Puerto Rican residents that, if fully realized and not terminated early, would provide up to $120 million in funds over the duration of the five-year award agreement.
Department of Energy (DOE) to facilitate the installation of residential solar and battery storage systems for disadvantaged Puerto Rican residents that the DOE has elected to stop funding going forward in 2026.
Removed
Further, the revenues that our contract manufacturers generate from our orders may represent a relatively small percentage of their overall revenues. While we seek to negotiate supply agreements with all of our vendors, we may purchase some products or components on a purchase order basis.
Added
For certain products we rely upon outside manufacturers to build these products or supply these components, including but not limited to certain clean energy products or components and large engines used in data center backup applications.
Removed
Our business could be negatively impacted if we fail to adequately protect our intellectual property rights or if third parties claim that we are in violation of their intellectual property rights.
Added
In fact, in order to avoid the uncertainty of a potential negative jury trial outcome on a products liability injury case, we have agreed to settle at least one such case, which we previously disclosed, in an amount which exceeded our insurance coverage, but which will not have a material adverse impact on our business, results of operations or financial condition.
Removed
Our failure to accurately predict future claims could have a material adverse effect on our business, results of operations, or financial condition.
Added
On July 4, 2025, the United States enacted the OBBBA, which introduced substantial tax law changes, eliminates or reduces several tax credits and incentives applicable to energy related technologies, which has and may continue to negatively impact our business in the short term. For example, in July 2024, we received a grant from the U.S.
Removed
Despite their unpredictable nature, we believe power disruptions create awareness and accelerate adoption and demand for our home standby products. Demand for our products is significantly affected by durable goods spending by consumers and businesses , and other macroeconomic conditions.
Added
G rowth of the data center market is difficult to project and may not be sustaining, and we may not be successful in achieving our growth, revenue, or profitability objectives in the future related to it.
Removed
Our distribution agreements and any contracts we have with large national, retail and other customers are typically not exclusive, and many of the distributors with whom we do business also offer competitors’ products and services.
Added
The increasing use and development of artificial intelligence has created significant demand for the build out of data center infrastructure, which includes backup power generation. While we believe the potential for this business is very promising, the growth and development of this rapidly evolving industry is difficult to project.
Removed
Our ability to realize the anticipated benefits of our acquisitions will depend, to a large extent, on our ability to integrate the acquired businesses with our business. The integration of independent businesses is a complex, costly and time-consuming process.
Added
Our expectations regarding this market may not prove to be accurate or the market may not be sustainable. Our operating results may fluctuate moving forward as we develop this business and expand our offering of high output diesel generators.
Added
Our expectations around growth for this market may also place significant demands on our management team and require significant capital investment as well as other resources. The technical, operational, or general contractual requirements for certain large data center customers or projects can be significant.
Added
Challenges in meeting these requirements, due to evolving project specifications or changing customer or supplier circumstances, or other issues could result in delays, increased costs, reduced revenue, or reputational harm. Any such issues with our performance under these contracts could materially impact our net sales and operating results.
Added
We may not be able to address these challenges in a cost-effective manner or at all. If we do not effectively manage our growth, we may not be able to execute on our business plan, respond to competitive pressures, or take advantage of the market opportunities.
Added
All of these could have an impact on our future objectives for growth, revenue, or profitability as well as our financial results and operations. 17 Table of Contents Demand for our products is significantly affected by durable goods spending by consumers and businesses, and other macroeconomic conditions.
Added
In particular, during 2025, the U.S. imposed new or increased tariffs and other countries, resulting in the imposition of retaliatory tariffs on the U.S., which increased costs in our supply chain. The sales, gross margins, and profitability for each of our segments could be directly impacted by changes in tariffs and trade agreements.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed0 unchanged
Biggest changeThe following table provides information about our principal owned or leased facilities exceeding 20,000 square feet: Location Owned/ Leased Activities Segment Waukesha, WI Owned Corporate headquarters, R&D Domestic Pewaukee, WI Owned Sales, office Domestic Eagle, WI Owned Manufacturing, office, training Domestic Whitewater, WI Owned Manufacturing, office, warehouse Domestic Oshkosh, WI Owned Manufacturing, office, warehouse, R&D Domestic Berlin, WI Owned Manufacturing, office, warehouse, R&D Domestic Fond du Lac, WI Leased Warehouse Domestic Jefferson, WI Owned Manufacturing, office, distribution, R&D Domestic Jefferson, WI Leased Storage, distribution Domestic Janesville, WI Leased Distribution Domestic Richfield, WI Leased Storage, distribution Domestic Trenton, SC Owned Manufacturing, office, warehouse, distribution Domestic Stockton, CA Leased Sales, office, warehouse, training Domestic Corona, CA Leased Sales, office, storage Domestic Hamilton, OH Leased Storage Domestic Maquoketa, IA Owned Storage, rental property Domestic South Burlington, VT Leased Office, sales, R&D Domestic South Portland, ME Leased Sales, office, R&D Domestic Marlborough, MA Leased Sales, office, warehouse Domestic Reno, NV Leased Warehouse, R&D Domestic Toronto, Canada Leased Office, sales, R&D Domestic Mexico City, Mexico Owned Storage International Hidalgo, Mexico Owned Manufacturing, sales, distribution, warehouse, office, R&D International Casole d’Elsa, Italy Owned Manufacturing, office, warehouse, R&D International Balsicas, Spain Leased Manufacturing, office, warehouse, R&D International Foshan, China Owned Manufacturing, office, warehouse, R&D International Saint-Nizier-sous-Charlieu, France Leased Sales, office, warehouse International Cravinhos, Brazil Leased Manufacturing, office, warehouse International Sydney, Australia Leased Sales, office, warehouse International Fellbach, Germany Leased Sales, office, warehouse International Pfullingen, Germany Leased Manufacturing, sales, distribution, warehouse, office, R&D International Suzhou, China Leased Office, R&D International Rugby, United Kingdom Leased Manufacturing, office, warehouse, R&D International Staffordshire, United Kingdom Leased Warehouse, Office International Hunmanby, United Kingdom Owned Manufacturing, warehouse, sales, distribution, office, R&D International Celle, Germany Owned Manufacturing, office, warehouse, R&D, sales International Kolkata, India Leased Manufacturing, warehouse International In addition to the countries represented above, the Company operates small facilities in the United Arab Emirates, Romania, Bahrain, and Colombia.
Biggest changeThe following table provides information about our principal owned or leased facilities exceeding 20,000 square feet: Location Owned/ Leased Activities Segment Waukesha, WI Owned Corporate headquarters, R&D Domestic Pewaukee, WI Owned Sales, office Domestic Eagle, WI Owned Manufacturing, office, training Domestic Whitewater, WI Owned Manufacturing, office, warehouse Domestic Oshkosh, WI Owned Manufacturing, office, warehouse, R&D Domestic Oshkosh, WI Leased Storage, distribution Domestic Berlin, WI Owned Manufacturing, office, warehouse, R&D Domestic Fond du Lac, WI Leased Warehouse Domestic Jefferson, WI Owned Manufacturing, office, distribution, R&D Domestic Jefferson, WI Leased Storage, distribution Domestic Janesville, WI Leased Distribution Domestic Richfield, WI Leased Storage, distribution Domestic Sussex, WI Owned Manufacturing, office Domestic Beaver Dam, WI Owned Manufacturing, office, training Domestic Augusta, GA Leased Storage, distribution Domestic Rockford, IL Leased Office, distribution, sales, training Domestic Shelton, CT Leased Office, warehouse Domestic Trenton, SC Owned Manufacturing, office, warehouse, distribution Domestic Stockton, CA Leased Sales, office, warehouse, training, distribution Domestic Corona, CA Leased Sales, office, storage, distribution Domestic Maquoketa, IA Owned Storage, rental property Domestic South Burlington, VT Leased Office, sales, R&D Domestic South Portland, ME Leased Sales, office, R&D Domestic Reno, NV Leased Warehouse, R&D Domestic Marlborough, MA Leased Sales, office, warehouse Domestic Toronto, Canada Leased Office, sales, R&D Domestic Hunmanby, United Kingdom Owned Manufacturing, office, storage, R&D, distribution, sales, training International Staffordshire, United Kingdom Leased Warehouse, office International Rugby, United Kingdom Leased Manufacturing, office, warehouse, R&D International Kolkata, India Leased Manufacturing, warehouse, office International Hidd, Bahrain Leased Manufacturing, warehouse, office International Celle, Germany Owned Manufacturing, office, warehouse, R&D International Fellbach, Germany Leased Sales, office, warehouse International Pfullingen, Germany Leased Manufacturing, sales, distribution, warehouse, office, R&D International Cravinhos, Brazil Leased Manufacturing, office, warehouse International Balsicas, Spain Leased Manufacturing, office, warehouse, R&D International Hidalgo, Mexico Owned Manufacturing, sales, distribution, warehouse, office, R&D International Saint-Nizier-sous-Charlieu, France Leased Sales, office, warehouse International Casole d’Elsa, Italy Owned Manufacturing, office, warehouse, R&D International Villanova d'Ardenghi, Italy Owned Manufacturing, office, warehouse International Sydney, Australia Leased Sales, office, warehouse International Foshan, China Owned Manufacturing, office, warehouse, R&D International Suzhou, China Leased Office, R&D International In addition to the countries represented above, the Company operates small facilities in the United Arab Emirates, Romania, Poland, and Colombia.
Item 2. Properties We own or lease manufacturing, distribution, R&D, and office facilities globally totaling over seven million square feet. We also utilize third party inventory warehouses that accommodate material storage and rapid response requirements of our customers.
Item 2. Properties We own or lease manufacturing, distribution, R&D, and office facilities globally totaling over eight million square feet. We also utilize third party inventory warehouses that accommodate material storage and rapid response requirements of our customers.
As of December 31, 2024, substantially all of our domestically-owned and a portion of our internationally-owned properties are subject to collateral provisions under our senior secured credit facilities. 20 Table of Contents
As of December 31, 2025, substantially all of our domestically-owned and a portion of our internationally-owned properties are subject to collateral provisions under our senior secured credit facilities. 26 Table of Contents

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+2 added−0 removed4 unchanged
Biggest changeFor information on the Company’s stock repurchase plans, refer to Note 13, “Stock Repurchase Programs,” to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K. 21 Table of Contents Stock Performance Graph The line graph below compares the cumulative total stockholder return on our common stock with the cumulative total return of the Standard & Poor’s (S&P 500) Index, the S&P MidCap 400 Index, and the S&P 500 Industrial Index, for the five-year period ended December 31, 2024.
Biggest changeFor information on the Company’s stock repurchase plans, refer to Note 13, “Stock Repurchase Programs,” to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K.
The graph and table assume $100 was invested on December 31, 2019, in each of our common stock, the S&P 500 Index, the S&P MidCap 400 Index, and the S&P 500 Industrial Index, and that all dividends were reinvested.
The graph and table assume $100 was invested on December 31, 2020, in each of our common stock, the S&P 500 Index, the S&P MidCap 400 Index, and the S&P 500 Industrial Index, and that all dividends were reinvested.
A substantially greater number of holders of Generac common stock are “street name” or beneficial holders, whose shares are held of record by banks, brokers and other financial institutions. Dividends We do not have plans to pay dividends on our common stock in the foreseeable future.
A substantially greater number of holders of Generac common stock are “street name” or beneficial holders, whose shares are held of record by banks, brokers and other financial institutions. 28 Table of Contents Dividends We do not have plans to pay dividends on our common stock in the foreseeable future.
Accordingly, our ability to pay dividends to our stockholders is dependent on the earnings and distributions of funds from our subsidiaries. 22 Table of Contents Securities Authorized for Issuance Under Equity Compensation Plans For information on securities authorized for issuance under our equity compensation plans, refer to Note 17, “Share Plans,” and “Item 12 - Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” of this Annual Report on Form 10-K which is incorporated herein by reference.
Securities Authorized for Issuance Under Equity Compensation Plans For information on securities authorized for issuance under our equity compensation plans, refer to Note 17, “Share Plans,” and “Item 12 - Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” of this Annual Report on Form 10-K which is incorporated herein by reference.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Shares of our common stock are traded on the New York Stock Exchange (NYSE) under the symbol “GNRC.” Purchases of Equity Securities By the Issuer and Affiliated Purchasers The following table summarizes the stock repurchase activity for the three months ended December 31, 2024, which consisted of the withholding of shares upon the vesting of restricted stock awards to pay related withholding taxes on behalf of the recipient: Total Number of Shares Purchased Average Price Paid per Share Total Number Of Shares Purchased As Part Of Publicly Announced Plans Or Programs Approximate Dollar Value Of Shares That May Yet Be Purchased Under The Plans Or Programs 10/01/24 - 10/31/24 830 $ 158.40 - $ 347,256,871 11/01/24 - 11/30/24 260 $ 169.93 - $ 347,256,871 12/01/24 - 12/31/24 23,094 $ 189.67 - $ 347,256,871 Total 24,184 $ 188.39 For equity compensation plan information, refer to Note 17, “Share Plans,” to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Shares of our common stock are traded on the New York Stock Exchange (NYSE) under the symbol “GNRC.” Purchases of Equity Securities By the Issuer and Affiliated Purchasers The following table summarizes the stock repurchase activity for the three months ended December 31, 2025, which consisted solely of the withholding of shares upon the vesting of restricted stock awards to pay related withholding taxes on behalf of the recipient: Total Number of Shares Purchased Average Price Paid per Share Total Number Of Shares Purchased As Part Of Publicly Announced Plans Or Programs Approximate Dollar Value Of Shares That May Yet Be Purchased Under The Plans Or Programs 10/01/25 - 10/31/25 2,776 $ 166.89 - $ 199,340,001 11/01/25 - 11/30/25 352 $ 163.14 - $ 199,340,001 12/01/25 - 12/31/25 5,458 $ 149.88 - $ 199,340,001 Total 8,586 $ 155.92 For equity compensation plan information, refer to Note 17, “Share Plans,” to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K.
Company / Market / Peer Group 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Generac Holdings Inc. $100.00 $226.04 $349.76 $100.03 $128.42 $154.04 S&P 500 Index - Total Returns 100.00 118.40 152.39 124.79 157.59 197.02 S&P MidCap 400 Index 100.00 113.66 141.80 123.28 143.54 163.54 S&P 500 Industrials Index 100.00 111.06 134.52 127.15 150.20 176.44 Holders As of February 14, 2025, there were 921 registered holders of record of Generac’s common stock.
Company / Market / Peer Group 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 Generac Holdings Inc. $ 154.73 $ 44.25 $ 56.81 $ 68.15 $ 59.93 S&P 500 Index - Total Returns 128.71 105.40 133.10 166.40 196.16 S&P MidCap 400 Index 124.76 108.47 126.29 143.89 154.68 S&P 500 Industrials Index 121.12 114.48 135.24 158.87 189.72 Holders As of February 13, 2026, there were 804 reg istered holders of record of Generac’s common stock.
Added
On December 4, 2025, Aaron Jagdfeld, Chief Executive Officer and director, adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 60,000 shares of the Company’s common stock until February 26, 2027. 27 Table of Contents Stock Performance Graph The line graph below compares the cumulative total stockholder return on our common stock with the cumulative total return of the Standard & Poor’s (S&P 500) Index, the S&P MidCap 400 Index, and the S&P 500 Industrial Index, for the five-year period ended December 31, 2025.
Added
Accordingly, our ability to pay dividends to our stockholders is dependent on the earnings and distributions of funds from our subsidiaries.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 6. [Reserved] 23 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 23 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 33 Item 8. Financial Statements and Supplementary Data 34 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 69 Item 9A. Controls and Procedures 69
Biggest changeItem 6. [Reserved] 29 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 29 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 40 Item 8. Financial Statements and Supplementary Data 41 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 74 Item 9A. Controls and Procedures 74

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

77 edited+39 added−17 removed67 unchanged
Biggest change(e) Represents the following litigation, regulatory, and other matters that are not indicative of our ongoing operations: • A provision for judgments, settlements, and legal expenses related to certain patent lawsuits - $9.2 million in 2024; $27.3 million in 2023. • Legal expenses related to certain class action lawsuits - $1.3 million in 2024; $1.0 million in 2023. • A bad debt provision and additional customer support costs related to a clean energy product customer that filed for bankruptcy in 2022 – $0.4 million additional customer support costs in 2024; $4.4 million additional customer support costs in 2023; $17.9 million bad debt provision in 2022. • A provision for a matter with the CPSC concerning the imposition of civil fines for allegedly failing to timely submit a report under the Consumer Product Safety Act (CPSA) in relation to certain portable generators that were subject to a voluntary recall previously announced on July 29, 2021 - $5.8 million in 2023; $10.0 million in 2022. • A warranty provision to address certain clean energy product warranty-related matters - $37.3 million in 2022.
Biggest change(e) Represents the following litigation, regulatory, and other matters that are not indicative of our ongoing operations: • Legal expenses, judgments, and settlements related to certain patent lawsuits - $7.5 million in 2025; $9.2 million in 2024; $27.3 million in 2023. • Legal expenses and settlements related to certain class action lawsuits - $22.7 million in 2025, which includes a $15.0 million provision for a multi-district class action settlement related to clean energy products; $1.3 million in 2024; $1.0 million in 2023. • Legal expenses related to certain government inquiries and other significant matters - $7.6 million in 2025. • Additional customer support costs related to a clean energy product customer that filed for bankruptcy in 2022 – $0.4 million in 2024; $4.4 million additional customer support costs in 2023. • A provision for a matter with the CPSC concerning the imposition of civil fines for allegedly failing to timely submit a report under the Consumer Product Safety Act (CPSA) in relation to certain portable generators that were subject to a voluntary recall previously announced on July 29, 2021 - $5.8 million in 2023. • A provision of $104.5 million, net in the fourth quarter of 2025 for a settlement agreement (in principle) related to a certain portable generator product liability case deemed outside the ordinary course of routine litigation for the Company. • A $15.6 million net inventory provision in the fourth quarter of 2025 related to the settlement of a contract dispute with a supplier for a discontinued product.
We explain in more detail in footnotes (a) through (g) below why we believe these adjustments are useful in calculating Adjusted EBITDA as a measure of our operating performance. Adjusted EBITDA does not represent, and should not be a substitute for, net income or cash flows from operations as determined in accordance with U.S. GAAP.
We explain in more detail in the footnotes (a) through (g) below why we believe these adjustments are useful in calculating Adjusted EBITDA as a measure of our operating performance. Adjusted EBITDA does not represent, and should not be a substitute for, net income or cash flows from operations as determined in accordance with U.S. GAAP.
Major outage activity is unpredictable by nature and, as a result, our sales levels and profitability may fluctuate from period to period. The seasonality experienced during a major power outage, and for the subsequent quarters following the event, will vary relative to other periods where no major outage events occurred. Acquisitions.
Major outage activity is unpredictable by nature and, as a result, our sales levels and profitability may fluctuate from period to period. The seasonality experienced during a major power outage, and for the subsequent quarters following the event, will vary relative to other periods where no major outage events occurred.
We believe Adjusted EBITDA is useful to investors for the following reasons: ● Adjusted EBITDA and similar non-GAAP measures are widely used by investors to measure a company's operating performance without regard to items that can vary substantially from company to company depending upon financing and accounting methods, book values of assets, tax jurisdictions, capital structures and the methods by which assets were acquired; ● investors can use Adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of our Company, including our ability to service our debt and other cash needs; and ● by comparing our Adjusted EBITDA in different historical periods, our investors can evaluate our operating performance excluding the impact of items described below.
We believe Adjusted EBITDA is useful to investors for the following reasons: ● Adjusted EBITDA and similar non-GAAP measures are widely used by investors to measure a company's operating performance excluding the impact of items that can vary substantially from company to company depending upon financing and accounting methods, book values of assets, tax jurisdictions, capital structures and the methods by which assets were acquired; ● investors can use Adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of our Company, including our ability to service our debt and other cash needs; and ● by comparing our Adjusted EBITDA in different historical periods, our investors can evaluate our operating performance excluding the impact of items described below.
The Tranche A Term Loan Facility and the Revolving Facility contain certain financial covenants that require the Company to maintain a total leverage ratio below 3.75 to 1.00, an interest coverage ratio above 3.00 to 1.00, and may require an excess cash flow payment.
The New Tranche A Term Loan Facility and the New Revolving Facility contain certain financial covenants that require the Company to maintain a total leverage ratio below 3.75 to 1.00, an interest coverage ratio above 3.00 to 1.00, and may require an excess cash flow payment.
In addition, we apply a discount rate to the estimated future cash flows for the purpose of the valuation. This discount rate is based on the estimated weighted average cost of capital for the business and may change from year to year.
In addition, we apply a discount rate to the estimated future cash flows for the purpose of the valuation. This discount rate is based on the estimated weighted average cost of capital for the underlying business and may change from year to year.
Although we attempt to maintain a flexible manufacturing cost structure, our margins can be impacted if we cannot timely adjust labor and manufacturing costs to match fluctuations in net sales. 24 Table of Contents Operating E xpenses Our operating expenses consist of costs incurred to support our sales, marketing, distribution, service parts, warranty, engineering, information systems, human resources, accounting, finance, risk management, legal and tax functions, among others.
Although we attempt to maintain a flexible manufacturing cost structure, our margins can be impacted if we cannot timely adjust labor and manufacturing costs to match fluctuations in net sales. 31 Table of Contents Operating E xpenses Our operating expenses consist of costs incurred to support our sales, marketing, distribution, service parts, warranty, engineering, information systems, human resources, accounting, finance, risk management, legal and tax functions, among others.
New Accounting Standards For information on new accounting pronouncements and the impact of these pronouncements on our consolidated financial statements, refer to Note 2, “Summary of Accounting Policies - New Accounting Pronouncements,” to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K. 29 Table of Contents Non-GAAP Measures Adjusted EBITDA To supplement our consolidated financial statements presented in accordance with U.S.
New Accounting Standards For information on new accounting pronouncements and the impact of these pronouncements on our consolidated financial statements, refer to Note 2, “Summary of Accounting Policies - New Accounting Pronouncements,” to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K. 36 Table of Contents Non-GAAP Measures Adjusted EBITDA To supplement our consolidated financial statements presented in accordance with U.S.
These factors include: ● a rising interest rate environment; ● a prolonged global or regional economic downturn; ● a significant decrease in the demand for our products; ● the inability to develop new and enhanced products and services in a timely manner; ● a significant adverse change in legal factors, the business climate, or regulatory environment; ● an adverse action or assessment by a regulator; ● successful efforts by our competitors to gain market share in our markets; ● disruptions to the Company’s business; ● inability to effectively integrate acquired businesses; ● loss of key management and employees ● unexpected or unplanned changes in the use of assets or entity structure; and ● business divestitures.
These factors include: ● a rising interest rate environment; ● a prolonged global or regional economic downturn; ● a significant decrease in the demand for our products; ● the inability to develop new and enhanced products and services in a timely manner; ● a significant adverse change in legal factors, the business climate, or regulatory environment; ● an adverse action or assessment by a regulator; ● an inability to gain market share in our markets; ● disruptions to the Company’s business; ● inability to effectively integrate acquired businesses; ● loss of key management and employees ● unexpected or unplanned changes in the use of assets or entity structure; and ● business divestitures.
Costs of Goods Sold The principal elements of costs of goods sold are component parts, raw materials, inbound and outbound freight, factory overhead and labor. The principal component parts are engines, alternators, batteries, electronic controls, and steel enclosures. We design and manufacture air-cooled engines for certain of our generators up to 26kW, along with certain liquid-cooled, natural gas engines.
Costs of Goods Sold The principal elements of costs of goods sold are component parts, raw materials, inbound and outbound freight, factory overhead and labor. The principal component parts are engines, alternators, batteries, electronic controls, and steel enclosures. We design and manufacture air-cooled engines for certain of our generators up to 28kW, along with certain liquid-cooled, natural gas engines.
Refer to Note 12, “Credit Agreements,” to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for further information. The decrease in interest expense in the current year was primarily driven by lower borrowings and lower SOFR interest rates during the year.
Refer to Note 12, “Credit Agreements,” to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for further information. The decrease in interest expense in the current year was primarily driven by lower borrowings, lower SOFR interest rates, and lower interest rate spreads during the year.
We seek to mitigate the impact of commodity price changes on our business through a continued focus on global sourcing, product design improvements, manufacturing efficiencies, price increases and select hedging transactions. We are also impacted by foreign currency fluctuations given our global supply chain.
We seek to mitigate the impact of commodity price changes on our business through a continued focus on global sourcing, product design improvements, manufacturing efficiencies, price increases and select hedging transactions. We are also impacted by foreign currency fluctuations and global trade policies given our global supply chain.
(b) Represents losses/(gains) attributable to the disposition of a business or assets occurring in other than ordinary course, as defined in our credit agreement. (c) See reconciliation of net income to Adjusted EBITDA attributable to Generac Holdings Inc. above. 32 Table of Contents
(b) Represents losses/(gains) attributable to the disposition of a business or assets occurring in other than ordinary course, as defined in our credit agreement. (c) See reconciliation of net income to Adjusted EBITDA attributable to Generac Holdings Inc. above. 39 Table of Contents
Other (expense) income also includes other financial items such as losses on extinguishment of debt, investment income earned on our cash and cash equivalents, gains/losses on the sale of certain investments, and changes in the fair value of our investment in Wallbox N.V. warrants and equity securities.
Other (expense) income also includes other financial items such as losses on debt refinancing, investment income earned on our cash and cash equivalents, gains/losses on the sale of certain investments, and changes in the fair value of our investment in Wallbox N.V. warrants and equity securities.
We receive payment from the finance company after shipment of product to the dealer, and our dealers are given a longer period of time to pay the finance company. If our dealers do not pay the finance company, we may be required to repurchase the applicable inventory held by the dealer.
We receive payment from the finance company after shipment of product to the dealer, and our dealers are given a longer period of time to pay the finance company. If our dealers do not pay the finance company, we may be required to repurchase the applicable inventory held by the dealer at cost.
Our research and development expenses include mechanical engineering, electronics engineering, and software development costs and support numerous projects covering all of our product lines. They also support our connectivity, grid services, remote monitoring, and energy management initiatives.
Our research and development expenses include mechanical engineering, electronics engineering, and software development costs and support numerous projects covering all of our product lines. They also support our connectivity, remote monitoring, and energy management initiatives.
Year ended December 31, 2024 compared to year ended December 31, 2023 The following table sets forth our consolidated statement of operations data for the periods indicated: Year Ended December 31, (U.S.
Year ended December 31, 2025 compared to year ended December 31, 2024 The following table sets forth our consolidated statement of operations data for the periods indicated: Year Ended December 31, (U.S.
We performed the required annual impairment tests for goodwill and other indefinite-lived intangible assets for the fiscal years 2024, 2023 and 2022, and found no impairment.
We performed the required annual impairment tests for goodwill and other indefinite-lived intangible assets for the fiscal years 2025, 2024 and 2023, and found no impairment.
Long-term Liquidity We believe our cash and cash equivalents, cash flow from operations, and availability under our Revolving Facility and other short-term lines of credit will provide us with sufficient capital to continue to run our operations.
We believe our cash and cash equivalents, cash flow from operations, availability under our New Revolving Facility and other short-term lines of credit will provide us with sufficient capital to continue to run our operations.
Results of O perations A detailed discussion of the year-over-year changes from the Company's fiscal 2022 results of operations to fiscal 2023 results of operations can be found in the Management's Discussion and Analysis section of the Company's fiscal 2023 Annual Report on Form 10-K filed February 21, 2024.
Results of O perations A detailed discussion of the year-over-year changes from the Company's fiscal 2023 results of operations to fiscal 2024 results of operations can be found in the Management's Discussion and Analysis section of the Company's fiscal 2024 Annual Report on Form 10-K filed February 19, 2025.
The Company was also in compliance with all other covenants of the Amended Credit Agreement as of December 31, 2024.
The Company was also in compliance with all other covenants of the Amended Credit Agreement as of December 31, 2025.
Adjusted EBITDA is defined and reconciled to net income in, “Non-GAAP Measures – Adjusted EBITDA” included below in Item 7 of this Annual Report on Form 10-K. Adjusted EBITDA margins for the domestic segment for the year ended December 31, 2024, were 19.1% of domestic segment total sales compared to 15.8% for the year ended December 31, 2023.
Adjusted EBITDA is defined and reconciled to net income in, “Non-GAAP Measures – Adjusted EBITDA” included below in Item 7 of this Annual Report on Form 10-K. Adjusted EBITDA margins for the domestic segment for the year ended December 31, 2025 were 17.1% of domestic segment total sales compared to 19.1% for the year ended December 31, 2024.
These estimates can also affect our supplemental information disclosures, including information about contingencies, risk and financial condition. We believe, given current facts and circumstances, that our estimates and assumptions are reasonable, adhere to U.S. GAAP, and are consistently applied.
These estimates can also affect our supplemental information disclosures, including information about contingencies, risk and financial condition. We believe, given current facts and circumstances, that our estimates and assumptions are reasonable, adhere to U.S. generally accepted accounting principles (U.S. GAAP), and are consistently applied.
This discussion contains forward-looking statements, based on our expectations at the time of filing this Annual Report on Form 10-K and related to future events and our future financial performance, that involve risks and uncertainties.
This discussion contains forward-looking statements that involve risks and uncertainties. These forward-looking statements refer to future events and our future financial performance, and are based on our expectations at the time of filing this Annual Report on Form 10-K.
Refer to Note 12, “Credit Agreements,” to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information on the losses on extinguishment of debt. 31 Table of Contents Adjusted Net Income To further supplement our consolidated financial statements in accordance with U.S.
Refer to Note 12, “Credit Agreements,” to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information. 38 Table of Contents Adjusted Net Income To further supplement our consolidated financial statements in accordance with U.S.
We have periodically reissued shares out of Treasury stock, including for acquisition contingent consideration payments and some equity grants. We have an arrangement with a finance company to provide floor plan financing for selected dealers. This arrangement provides liquidity for our dealers by financing dealer purchases of Generac products with credit availability from the finance company.
We have periodically reissued shares out of Treasury stock, including for acquisition contingent consideration payments. We have an arrangement with a finance company to provide floor plan financing for qualifying dealers. This arrangement provides liquidity for our dealers by financing dealer purchases of Generac products with credit availability from the finance company.
The Tranche A Term Loan Facility and the Revolving Facility bear interest at a rate based on adjusted SOFR plus an applicable margin between 1.25% and 1.75%, based on the Company's total leverage ratio and subject to a SOFR floor of 0.0%.
The New Tranche A Term Loan Facility and the New Revolving Facility bear interest at a rate based on SOFR plus an applicable margin between 1.25% and 1.75%, both based on our total leverage ratio and subject to a SOFR floor of 0.0%.
Although there is demand for our products throughout the year, in each of the past five years, approximately 19% to 25% of our net sales occurred in the first quarter, 22% to 28% in the second quarter, 24% to 28% in the third quarter and 23% to 31% in the fourth quarter, with different seasonality depending primarily on the occurrence, timing and severity of major power outage activity in each year.
Although there is demand for our products throughout the year, in each of the past five years, approximately 20% to 25% of our net sales occurred in the first quarter, 23% to 28% in the second quarter, 24% to 27% in the third quarter, and 23% to 29% in the fourth quarter, with different seasonality depending primarily on the occurrence, timing and severity of power outage activity in each year.
Business” of this Annual Report on Form 10-K contains information regarding business drivers, including key mega-trends and strategic growth themes under the subheading “Mega-Trends, Strategic Growth Themes, and Additional Business Drivers.” F actors Affecting Results of O perations We are subject to various factors that can affect our results of operations, which we attempt to mitigate through factors we can control, including continued product development, expanded distribution, pricing, cost control, and hedging.
Business” of this Annual Report on Form 10-K contains information regarding business drivers, including key mega-trends and strategic growth themes under the subheading “Key Mega-Trends and Strategic Growth Themes.” We are subject to various other business drivers and factors that can affect our results of operations, which we attempt to mitigate through factors we can control, including continued product development, expanded distribution, pricing, cost control, and hedging.
Capital expenditures were $136.7 million, $129.1 million, and $86.2 million in the years ended December 31, 2024, 2023 and 2022, respectively, and were funded primarily through cash from operations. 28 Table of Contents Critical Accounting P olicies and Estimates In preparing the financial statements, management is required to make estimates and assumptions that have an impact on the asset, liability, revenue and expense amounts reported.
Capital expenditures were $169.9 million, $136.7 million, and $129.1 million in the years ended December 31, 2025, 2024 and 2023, respectively, and were funded primarily from cash from operations. 35 Table of Contents Critical Accounting P olicies and Estimates In preparing the financial statements, management is required to make estimates and assumptions that have an impact on the asset, liability, revenue and expense amounts reported.
Our results are also influenced by changes in fuel prices in the form of freight rates, which in some cases are accepted by our customers and in other cases are paid by us. Seasonality.
Our results are also influenced by changes in fuel prices in the form of freight rates, which in some cases are accepted by our customers and in other cases are paid by us. Tariffs and international trade relations.
The Company continues to expand its energy technology offerings for homes and businesses in its mission to Power a Smarter World and lead the evolution to more resilient, efficient, and sustainable energy solutions. Further information regarding our business is provided in “Part I, Item 1. Business” of this Annual Report on Form 10-K.
The Company’s broad portfolio of energy technology offerings for homes and businesses enables its mission to Power a Smarter World and lead the evolution to more resilient, efficient, and innovative energy solutions. Further information regarding our business is provided in “Part I, Item 1. Business” of this Annual Report on Form 10-K.
Additionally, on February 12, 2024, our Board approved a new stock repurchase program that allows for the repurchase of up to $500.0 million of our common stock over the next twenty-four months. The new program replaced the prior share repurchase program, which had approximately $26.3 million remaining available for repurchase when the new program was approved.
Additionally, on February 9, 2026, our Board of Directors approved a new stock repurchase program that allows for the repurchase of up to $500.0 million of our common stock over the next twenty-four months. The new program replaces the prior share repurchase program, which had approximately $199.3 million remaining available for repurchase when the new program was approved.
We are not dependent on any one channel or customer for our net sales, with no single customer representing more than 5% of our net sales, and our top ten customers representing less than 16% of our net sales in aggregate for the year ended December 31, 2024.
We are not dependent on any one channel or customer for our net sales, with no single customer representing more than 4% of our net sales, and our top ten customers representing approximately 18% of our net sales in aggregate for the year ended December 31, 2025.
As we continue to expand our business, we may require additional capital to fund other shareholder value enhancing activities. 27 Table of Contents Cash F low Year ended December 31, 2024 compared to year ended December 31, 2023 The following table summarizes our cash flows by source (use) for the periods presented: Year Ended December 31, (U.S.
As we continue to expand our business, we may require additional capital to fund other activities that could potentially drive incremental shareholder value. 34 Table of Contents Cash F low Year ended December 31, 2025 compared to year ended December 31, 2024 The following table summarizes our cash flows by source (use) for the periods presented: Year Ended December 31, (U.S.
These adjustments eliminate the impact of a number of items that: ● we do not consider indicative of our ongoing operating performance, such as non-cash write-downs and other charges, non-cash gains, write-offs relating to the retirement of debt, severance costs and other restructuring-related business optimization expenses, provision for certain legal and regulatory charges, certain other specific provisions, and mark-to-market gains and losses on a minority investment; ● we believe to be akin to, or associated with, interest expense, such as administrative agent fees, revolving credit facility commitment fees and letter of credit fees; or ● are non-cash in nature, such as share-based compensation expense.
These adjustments eliminate the impact of a number of items that: ● we do not consider indicative of our ongoing operating performance, such as non-cash write-downs and other charges, non-cash gains, write-offs relating to the retirement of debt, severance costs and other restructuring-related business optimization expenses, provision for certain legal and regulatory charges, certain other specific provisions, and mark-to-market gains and losses on a minority investment; ● we believe to be akin to, or associated with, interest expense, such as administrative agent fees, revolving credit facility commitment fees and letter of credit fees; or ● are non-cash in nature, such as share-based compensation expense; or ● the provision for legal and regulatory charges adjusts for matters that are significant and not part of the ordinary routine litigation or regulatory matters incidental to the Company’s business, including but not limited to large suits and settlements, class action lawsuits, government inquiries, and certain intellectual property litigation.
As of December 31, 2024, the Company’s total leverage ratio was 1.33 to 1.00, and the Company's interest coverage ratio was 10.03 to 1.00. The Company was not required to make an excess cash flow payment as of December 31, 2024.
As of December 31, 2025, the Company’s total leverage ratio was 1.39 to 1.00, and the Company's interest coverage ratio was 11.76 to 1.00. The Company was not required to make an excess cash flow payment as of December 31, 2025.
While we believe all of these adjustments are appropriate, and while the calculations are subject to review by our Board in the context of the Board's review of our financial statements, and certification by our Chief Financial Officer in a compliance certificate provided to the lenders under our Amended Credit Agreement, this discretion may be viewed as an additional limitation on the use of Adjusted EBITDA as an analytical tool.
While we believe all of these adjustments are appropriate, and while the calculations are subject to review by our Board in the context of the Board's review of our financial statements, and certification by our Chief Financial Officer in a compliance certificate provided to the lenders under our Amended Credit Agreement, this discretion may be viewed as an additional limitation on the use of Adjusted EBITDA as an analytical tool. 37 Table of Contents Because of these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business.
Net income attributable to Generac Holdings Inc. Net income attributable to Generac Holdings Inc. was $316.3 million as compared to $214.6 million in the prior year period. The increase was primarily driven by higher sales and gross margin, as noted above. Adjusted EBITDA.
Net income attributable to Generac Holdings Inc. was $159.6 million as compared to $316.3 million in the prior year period. The decrease was primarily driven by lower sales and gross margin, along with the higher 2025 operating expenses noted above. Adjusted EBITDA.
The Tranche B Term Loan Facility bears interest at the adjusted SOFR rate plus an applicable margin of 1.75%, subject to a SOFR floor of 0.0%. As of December 31, 2024, the interest rate for the Tranche B Term Loan Facility is 6.34%.
The Term Loan B Facility bears interest at the adjusted SOFR rate plus an applicable margin of 1.75%, subject to a SOFR floor of 0.0%. As of December 31, 2025, the interest rate for the Term Loan B Facility was 5.62%.
In addition, total net sales from non-annualized acquisitions for the year ended December 31, 2024, were $16.5 million, mostly in the domestic segment. Gross profit. Gross profit margin for the year ended December 31, 2024, was 38.8% compared to 33.9% for the year ended December 31, 2023.
In addition, total net sales from non-annualized acquisitions for the year ended December 31, 2025, were $28.3 million, entirely in the domestic segment. Gross profit. Gross profit margin for the year ended December 31, 2025 was 38.3% compared to 38.8% for the year ended December 31, 2024.
Business D rivers and Operational Factors “Part I, Item 1.
Business Drivers and Operational Factors “Part I, Item 1.
These services accounted for less than 4% of our net sales for the year ended December 31, 2024. Refer to Note 2, “Summary of Accounting Policies - Revenue Recognition,” to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information on our revenue streams and related revenue recognition accounting policies.
Refer to Note 2, “Summary of Accounting Policies - Revenue Recognition,” to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information on our revenue streams and related revenue recognition accounting policies.
GAAP results and using Adjusted EBITDA only supplementally. 30 Table of Contents The following table presents a reconciliation of net income to Adjusted EBITDA attributable to Generac Holdings Inc.: Year Ended December 31, (U.S.
We compensate for these limitations by relying primarily on our U.S. GAAP results and using Adjusted EBITDA only supplementally. The following table presents a reconciliation of net income to Adjusted EBITDA attributable to Generac Holdings Inc.: Year Ended December 31, (U.S.
Dollars in thousands) 2024 2023 2022 Net income attributable to Generac Holdings Inc. $ 316,315 $ 214,606 $ 399,502 Net income attributable to noncontrolling interests 663 2,514 9,368 Net income 316,978 217,120 408,870 Amortization of intangible assets 97,743 104,194 103,320 Amortization of deferred financing costs and original issue discount 3,242 3,885 3,234 Transaction costs and other purchase accounting adjustments (a) 2,717 2,089 3,588 Loss/(gain) attributable to business or asset dispositions (b) 65 (119 ) (229 ) Business optimization and other charges (c) 4,752 10,551 4,371 Provision for legal, regulatory, and clean energy product charges (c) 10,931 38,490 65,265 Change in fair value of investment (c) 38,006 - - Loss on extinguishment of debt (c) 4,861 - 3,743 Tax effect of add backs (40,173 ) (38,384 ) (43,638 ) Adjusted net income 439,122 337,826 548,524 Adjusted net income attributable to noncontrolling interests 663 2,514 9,675 Adjusted net income attributable to Generac Holdings Inc. $ 438,459 $ 335,312 $ 538,849 (a) Represents transaction costs incurred directly in connection with any investment, as defined in our credit agreement, equity issuance or debt issuance or refinancing, and certain purchase accounting and contingent consideration adjustments.
Dollars in thousands) 2025 2024 2023 Net income attributable to Generac Holdings Inc. $ 159,554 $ 316,315 $ 214,606 Net income attributable to noncontrolling interests 1,800 663 2,514 Net income 161,354 316,978 217,120 Amortization of intangible assets 101,507 97,743 104,194 Amortization of deferred financing costs and original issue discount 2,380 3,242 3,885 Transaction costs and other purchase accounting adjustments (a) 1,797 2,717 2,089 Loss/(gain) attributable to business or asset dispositions (b) 4,295 65 (119 ) Business optimization and other charges (c) 7,301 4,752 10,551 Provision for legal, regulatory, and other costs (c) 157,981 10,931 38,490 Change in fair value of investments (c) 20,610 38,006 - Loss on refinancing of debt (c) 1,225 4,861 - Tax effect of add backs (80,658 ) (40,173 ) (38,384 ) Adjusted net income 377,792 439,122 337,826 Adjusted net income attributable to noncontrolling interests 1,800 663 2,514 Adjusted net income attributable to Generac Holdings Inc. $ 375,992 $ 438,459 $ 335,312 (a) Represents transaction costs incurred directly in connection with any investment, as defined in our credit agreement, equity issuance or debt issuance or refinancing, and certain purchase accounting and contingent consideration adjustments.
Dollars in thousands) 2024 2023 2022 Net income attributable to Generac Holdings Inc. $ 316,315 $ 214,606 $ 399,502 Net income attributable to noncontrolling interests 663 2,514 9,368 Net income 316,978 217,120 408,870 Interest expense 89,713 97,627 54,826 Depreciation and amortization 171,768 166,602 156,141 Provision for income taxes 92,460 73,180 99,596 Non-cash write-down and other adjustments (a) 4,757 (5,953 ) (2,091 ) Non-cash share-based compensation expense (b) 49,248 35,492 29,481 Transaction costs and credit facility fees (c) 5,097 4,054 5,026 Business optimization and other charges (d) 4,752 10,551 4,371 Provision for legal, regulatory, and clean energy product charges (e) 10,931 38,490 65,265 Change in fair value of investment (f) 38,006 - - Loss on extinguishment of debt (g) 4,861 - 3,743 Other 530 696 139 Adjusted EBITDA 789,101 637,859 825,367 Adjusted EBITDA attributable to noncontrolling interests 1,175 4,687 15,087 Adjusted EBITDA attributable to Generac Holdings Inc. $ 787,926 $ 633,172 $ 810,280 (a) Represents the following non-cash charges, gains, and other adjustments: (gains)/losses on the disposition of assets other than in the ordinary course of business, (gains)/losses on sales of certain investments, unrealized mark-to-market adjustments on commodity contracts, certain foreign currency related adjustments, and certain purchase accounting and contingent consideration adjustments.
Dollars in thousands) 2025 2024 2023 Net income attributable to Generac Holdings Inc. $ 159,554 $ 316,315 $ 214,606 Net income attributable to noncontrolling interests 1,800 663 2,514 Net income 161,354 316,978 217,120 Interest expense 70,697 89,713 97,627 Depreciation and amortization 194,835 171,768 166,602 Provision for income taxes 37,706 92,460 73,180 Non-cash write-down and other adjustments (a) 6,636 4,757 (5,953 ) Non-cash share-based compensation expense (b) 49,947 49,248 35,492 Transaction costs and credit facility fees (c) 3,976 5,097 4,054 Business optimization and other charges (d) 7,301 4,752 10,551 Provision for legal, regulatory, and other costs (e) 157,981 10,931 38,490 Change in fair value of investments (f) 20,610 38,006 - Loss on refinancing of debt (g) 1,225 4,861 - Other 3,274 530 696 Adjusted EBITDA 715,542 789,101 637,859 Adjusted EBITDA attributable to noncontrolling interests 2,648 1,175 4,687 Adjusted EBITDA attributable to Generac Holdings Inc. $ 712,894 $ 787,926 $ 633,172 (a) Represents the following non-cash charges, gains, and other adjustments: (gains)/losses on the disposition of assets other than in the ordinary course of business, (gains)/losses on sales of certain investments, unrealized mark-to-market adjustments on commodity contracts, certain foreign currency related adjustments, and certain purchase accounting and contingent consideration adjustments.
We do not indemnify the finance company for any credit losses they may incur. Total dealer purchases financed under this arrangement accounted for approximately 13% and 12% of net sales for the years ended December 31, 2024 and 2023, respectively.
We do not indemnify the finance company for any credit losses they may incur. Total dealer purchases financed under this arrangement accounted for approximately 13% of net sales for the years ended December 31, 2025 and 2024. The amount financed by dealers which remained outstanding was $149.7 million and $165.4 million as of December 31, 2025 and 2024, respectively.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Item 1A. - Risk Factors.” of this Annual Report on Form 10-K. Overview Generac is a total energy solutions company that empowers people to use energy on their own terms.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Item 1A. - Risk Factors.” of this Annual Report on Form 10-K. Overview Founded in 1959, Generac is a leading global designer, manufacturer, and provider of a wide range of energy technology solutions.
The stock repurchase program may be suspended or discontinued at any time without prior notice. As of December 31, 2024, the remaining unused buyback authorization was $347,257. During the years ended December 31, 2024 and 2023, we repurchased 1,046,351 shares of our common stock for $152.7 million, and 2,188,475 shares for $251.5 million, respectively.
The stock repurchase program may be suspended or discontinued at any time without prior notice. During the years ended December 31, 2025, and 2024, we repurchased 1,109,206 shares of our common stock for $147.9 million, and 1,046,351 shares of our common stock for $152.7 million, respectively.
The amount financed by dealers which remained outstanding was $165.4 million and $158.0 million as of December 31, 2024 and 2023, respectively. See Note 12, “Credit Agreements,” and Note 13, “Stock Repurchase Program,” to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for more information on our credit agreements and stock repurchase programs.
See Note 12, “Credit Agreements,” and Note 13, “Stock Repurchase Program,” to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for more information on our credit agreements and stock repurchase programs.
This margin decrease was primarily due to reduced operating leverage on lower shipments during the year. Adjusted net income. Adjusted Net Income is defined and reconciled to net income in, “Non-GAAP Measures – Adjusted Net Income” included below in Item 7 of this Annual Report on Form 10-K.
This margin increase was primarily due to favorable sales mix and price/cost realization. Adjusted net income. Adjusted Net Income is defined and reconciled to net income in, “Non-GAAP Measures – Adjusted Net Income” included below in Item 7 of this Annual Report on Form 10-K.
As of December 31, 2024, there was $498.8 million outstanding under the Tranche B Term Loan Facility, $712.5 million outstanding under the Tranche A Term Loan Facility, and no borrowings on the Revolving Facility, leaving $1,249.2 million of unused capacity, net of outstanding letters of credit.
As of December 31, 2025, there was $494 million outstanding under the Term Loan B Facility, $700 million outstanding under the New Tranche A Term Loan Facility, and there were no borrowings on the New Revolving Facility, leaving $999.3 million of unused capacity, net of outstanding letters of credit.
This margin improvement was primarily driven by favorable sales mix and lower input costs, partially offset by higher operating expense investments to support future growth initiatives. Adjusted EBITDA margins for the international segment, before deducting for non-controlling interests, for the year ended December 31, 2024, were 13.2% of international segment total sales compared to 13.7% in the prior year.
This margin decline was primarily driven by unfavorable sales mix, higher input costs, and operating deleverage on lower sales volumes, partially offset by increased price cost realization. 33 Table of Contents Adjusted EBITDA margins for the international segment, before deducting for non-controlling interests, for the year ended December 31, 2025 were 15.1% of international segment total sales compared to 13.2% in the prior year.
Components of Net Sales and Expenses Net Sales Our net sales primarily consist of the sale of products to our customers. This includes sales of our power generation equipment, energy storage systems, and other power products to the residential, commercial and industrial markets, as well as service parts to our dealer network.
This includes sales of our power generation equipment, energy storage systems, and other power products to the residential, commercial and industrial markets, as well as service parts to our dealer network. Net sales also include shipping and handling charges billed to customers, with the related freight costs included in cost of goods sold.
Our international acquisitions, along with our existing global supply chain, expose us to fluctuations in foreign currency exchange rates and regulatory tariffs that can also have a material impact on our results of operations. We have historically attempted to mitigate the impact of any inflationary pressures through improved product design and sourcing, manufacturing efficiencies, price increases, and select hedging transactions.
Additionally, geopolitical instability can contribute to significant fluctuations in foreign currency exchange rates which can impact our reported financial performance from our foreign operations and supply chain. We have historically attempted to mitigate the impact of any inflationary pressures through improved product design and sourcing, manufacturing efficiencies, price increases, and select hedging transactions.
In July 2022, our Board approved a stock repurchase program, which commenced on August 5, 2022, and allowed for the repurchase of up to $500.0 million of our common stock over a 24-month period.
On February 12, 2024, our Board of Directors approved a stock repurchase program that allowed for the repurchase of up to $500.0 million of our common stock over a twenty-four-month period.
There was no impact to the financial results of the year ended December 31, 2024, and we do not expect the rules to have a material impact on our effective tax rate for the following year. We will update our future tax provisions based on new regulations or guidance accordingly.
As a result, we expect our cash taxes paid to remain subject to local minimum tax regimes where applicable. There was no impact to the financial results of the year ended December 31, 2025, and we do not expect the rules to have a material impact on our effective tax rate for the following year.
A summary of the recent acquisitions can be found in Note 1, “Description of Business" to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K. 23 Table of Contents Factors Influencing Interest Expense Interest expense can be impacted by a variety of factors, including market fluctuations in SOFR, interest rate election periods, interest rate swap agreements, repayments or borrowings of indebtedness, and amendments to our credit agreements.
Factors Influencing Interest Expense Interest expense can be impacted by a variety of factors, including market fluctuations in SOFR, interest rate election periods, interest rate swap agreements, repayments or borrowings of indebtedness, and amendments to our credit agreements.
Other expense. The increase in other expense, net in 2024 was driven primarily by a $38.0 million expense for the change in fair value of our investment in warrants and equity securities of Wallbox N.V., and a $4.9 million loss on extinguishment of debt.
Other expense. The decrease in other expense, net in 2025 was driven primarily by a reduced loss from the change in fair value of our investment in warrants and equity securities of Wallbox N.V. and a decrease in interest expense, as compared to the prior year. Provision for income taxes.
The increase in operating expenses was primarily driven by higher employee and marketing costs, and increased incentive compensation and variable expenses related to higher shipment volumes and profitability. 2024 operating expenses also include $10.5 million of legal provisions and other costs related to patent and other litigation (see Note 18, “Commitments and Contingencies” to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for additional information). 2023 operating expenses included a $5.8 million provision for a regulatory matter with the CPSC, $28.3 million of legal charges related to patent and other litigation (see Note 18, “Commitments and Contingencies” for additional information), $4.4 million of additional customer support costs related to a clean energy product customer that filed for bankruptcy.
(see Note 18, “Commitments and Contingencies” to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for additional information). 2024 operating expenses included $10.5 million of legal provisions and other costs related to patent and other litigation (see Note 18, “Commitments and Contingencies” to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for additional information).
The increase in domestic segment sales for the year ended December 31, 2024, was primarily driven by an increase in residential product sales, most notably in home standby and portable generators following the elevated power outage activity in the second half of the year.
The decrease in domestic segment sales for the year ended December 31, 2025, was primarily driven by a decrease in residential product sales, most notably in home standby and portable generators as a result of the significantly lower power outage environment together with a strong prior year comparison which included multiple major landed hurricanes.
Founded in 1959, Generac is a leading global designer, manufacturer, and provider of a wide range of energy technology solutions. The Company provides power generation equipment, energy storage systems, energy management devices & solutions, and other power products serving the residential, light commercial, and industrial markets.
Generac provides power generation equipment, energy storage systems, energy management devices & solutions, and other power products and services serving the residential, commercial, data center, telecom, rental, and industrial markets.
The $178.1 million net cash used in investing activities for the year ended December 31, 2023 primarily represents cash payments of $129.1 million for the purchase of property and equipment (net of $10.9 million of capital expenditures in accounts payable as of December 31, 2023), $30.0 million for a minority investment in Wallbox, $16.0 million for the acquisition of REFU, $6.6 million for a tax equity investment, and a $2.6 million minority investment in Rolling Energy Resources and Earth Foundry Fund.
The $172.9 million net cash used in investing activities for the year ended December 31, 2025 primarily represents cash payments of $169.9 million for the purchase of property and equipment (net of $12.2 million of capital expenditures in accounts payable as of December 31, 2025), $3.0 million for the purchase of long-term investments, and $3.1 million related to other investing activities.
(f) Represents non-cash losses from changes in the fair value of the Company's investment in Wallbox N.V. warrants and equity securities. (g) Represents fees paid to creditors and the write-off of the unamortized original issue discount and deferred financing costs in connection with the 2024 and 2022 credit agreement refinancings.
(f) Represents non-cash losses primarily from changes in the fair value of the Company's investment in Wallbox N.V. warrants and equity securities. (g) For the year ended December 31, 2025, the loss represents the third-party costs and the write-off of certain deferred financing costs in connection with the refinancing of the Tranche A Term Loan Facility and Revolving Debt Facility.
Dollars in thousands) 2024 2023 $ Change % Change Net sales $ 4,295,834 $ 4,022,667 $ 273,167 6.8 % Cost of goods sold 2,630,208 2,657,236 (27,028 ) -1.0 % Gross profit 1,665,626 1,365,431 300,195 22.0 % Operating expenses: Selling and service 526,446 448,199 78,247 17.5 % Research and development 219,600 173,443 46,157 26.6 % General and administrative 285,095 253,396 31,699 12.5 % Amortization of intangible assets 97,743 104,194 (6,451 ) -6.2 % Total operating expenses 1,128,884 979,232 149,652 15.3 % Income from operations 536,742 386,199 150,543 39.0 % Total other expense, net (127,304 ) (95,899 ) (31,405 ) -32.7 % Income before provision for income taxes 409,438 290,300 119,138 41.0 % Provision for income taxes 92,460 73,180 19,280 26.3 % Net income 316,978 217,120 99,858 46.0 % Net income attributable to noncontrolling interests 663 2,514 (1,851 ) -73.6 % Net income attributable to Generac Holdings Inc. $ 316,315 $ 214,606 $ 101,709 47.4 % 25 Table of Contents The following sets forth our reportable segment information for the periods indicated: Net Sales by Reportable Segment Year Ended December 31, (U.S.
Dollars in thousands) 2025 2024 $ Change % Change Net sales $ 4,209,147 $ 4,295,834 $ (86,687 ) -2.0 % Cost of goods sold 2,597,410 2,630,208 (32,798 ) -1.2 % Gross profit 1,611,737 1,665,626 (53,889 ) -3.2 % Operating expenses: Selling and service 555,358 526,446 28,912 5.5 % Research and development 243,470 219,600 23,870 10.9 % General and administrative 422,211 285,095 137,116 48.1 % Amortization of intangible assets 101,507 97,743 3,764 3.9 % Total operating expenses 1,322,546 1,128,884 193,662 17.2 % Income from operations 289,191 536,742 (247,551 ) -46.1 % Total other expense, net (90,131 ) (127,304 ) 37,173 29.2 % Income before provision for income taxes 199,060 409,438 (210,378 ) -51.4 % Provision for income taxes 37,706 92,460 (54,754 ) -59.2 % Net income 161,354 316,978 (155,624 ) -49.1 % Net income attributable to noncontrolling interests 1,800 663 1,137 171.5 % Net income attributable to Generac Holdings Inc. $ 159,554 $ 316,315 $ (156,761 ) -49.6 % 32 Table of Contents The following sets forth our reportable segment information for the periods indicated: Net Sales by Reportable Segment Year Ended December 31, (U.S.
Dollars in thousands) 2024 2023 $ Change % Change Net cash provided by operating activities $ 741,301 $ 521,670 $ 219,631 42.1 % Net cash used in investing activities (208,712 ) (178,063 ) (30,649 ) -17.2 % Net cash used in financing activities (448,835 ) (277,137 ) (171,698 ) -62.0 % Effect of foreign exchange rate changes on cash and cash equivalents (3,471 ) 1,801 (5,272 ) -292.7 % Net increase in cash and cash equivalents $ 80,283 $ 68,271 $ 12,012 17.6 % The increase in net cash provided by operating activities was primarily driven by higher operating earnings coupled with a larger decrease in working capital in the current year period, as compared to the prior year.
Dollars in thousands) 2025 2024 $ Change % Change Net cash provided by operating activities $ 437,978 $ 741,301 $ (303,323 ) -40.9 % Net cash used in investing activities (172,904 ) (208,712 ) 35,808 17.2 % Net cash used in financing activities (212,719 ) (448,835 ) 236,116 52.6 % Effect of foreign exchange rate changes on cash and cash equivalents 7,781 (3,471 ) 11,252 -324.2 % Net increase in cash and cash equivalents $ 60,136 $ 80,283 $ (20,147 ) -25.1 % The decrease in net cash provided by operating activities was primarily driven by a significant reduction in net working capital in the prior year which did not repeat and lower operating earnings as compared to the prior year.
Adjusted Net Income was $438.5 million for the year ended December 31, 2024, compared to $335.3 million for the year ended December 31, 2023, with the increase primarily due to higher net income in the current year as outlined above, together with the impact of various add-backs in the current and prior years. 26 Table of Contents Liquidity and Financial Position Our primary cash requirements include payment for raw materials and components, salaries and benefits, facility and lease costs, operating expenses, interest and principal payments on debt, and capital expenditures.
Adjusted Net Income was $376.0 million for the year ended December 31, 2025 compared to $438.5 million for the year ended December 31, 2024, with the decrease primarily due to lower net income in the current year as outlined above, together with the impact of various add-backs in the current and prior years.
Dollars in thousands) 2024 2023 $ Change % Change Domestic $ 3,599,149 $ 3,276,324 $ 322,825 9.9 % International 696,685 746,343 (49,658 ) -6.7 % Total net sales $ 4,295,834 $ 4,022,667 $ 273,167 6.8 % Total Sales by Reportable Segment Year Ended December 31, 2024 Year Ended December 31, 2023 External Net Sales Intersegment Sales Total Sales External Net Sales Intersegment Sales Total Sales Domestic $ 3,599,149 $ 35,932 $ 3,635,081 $ 3,276,324 $ 43,937 $ 3,320,261 International 696,685 28,700 725,385 746,343 91,552 837,895 Intercompany elimination - (64,632 ) (64,632 ) - (135,489 ) (135,489 ) Total net sales $ 4,295,834 $ - $ 4,295,834 $ 4,022,667 $ - $ 4,022,667 Adjusted EBITDA by Reportable Segment Year Ended December 31, 2024 2023 $ Change % Change Domestic $ 693,203 $ 523,337 $ 169,866 32.5 % International 95,898 114,522 (18,624 ) -16.3 % Total Adjusted EBITDA $ 789,101 $ 637,859 $ 151,242 23.7 % The following table sets forth our net sales by product class for the periods indicated: Net Sales by Product Class Year Ended December 31, (U.S.
Dollars in thousands) 2025 2024 $ Change % Change Domestic $ 3,470,966 $ 3,599,149 $ (128,183 ) -3.6 % International 738,181 696,685 41,496 6.0 % Total net sales $ 4,209,147 $ 4,295,834 $ (86,687 ) -2.0 % Total Sales by Reportable Segment Year Ended December 31, 2025 Year Ended December 31, 2024 External Net Sales Intersegment Sales Total Sales External Net Sales Intersegment Sales Total Sales Domestic $ 3,470,966 $ 23,205 $ 3,494,171 $ 3,599,149 $ 35,932 $ 3,635,081 International 738,181 39,250 777,431 696,685 28,700 725,385 Intercompany elimination - (62,455 ) (62,455 ) - (64,632 ) (64,632 ) Total net sales $ 4,209,147 $ - $ 4,209,147 $ 4,295,834 $ - $ 4,295,834 Adjusted EBITDA by Reportable Segment Year Ended December 31, 2025 2024 $ Change % Change Domestic $ 597,915 $ 693,203 $ (95,288 ) -13.7 % International 117,627 95,898 21,729 22.7 % Total Adjusted EBITDA $ 715,542 $ 789,101 $ (73,559 ) -9.3 % The following table sets forth our net sales by product class for the periods indicated: Net Sales by Product Class Year Ended December 31, (U.S.
The effective income tax rates for the years ended December 31, 2024 and 2023 were 22.6% and 25.2%, respectively. The decrease in the effective tax rate was primarily due to unfavorable discrete tax items in 2023 that did not repeat in the current year, as well as favorable 2024 earnings mix with higher earnings in lower tax jurisdictions.
The effective income tax rates for the years ended December 31, 2025 and 2024 were 18.9% and 22.6%, respectively. The decrease in the effective tax rate was driven primarily by the impact of certain discrete tax items and their impact on a lower pre-tax income in the current year. Net income attributable to Generac Holdings Inc.
The increase in gross profit margin was primarily driven by favorable sales mix, including higher home standby generator sales, the realization of lower input costs, and plant efficiencies. Operating expenses. Operating expenses increased $149.7 million, or 15.3%, as compared to the prior year.
The decrease in gross profit margin was primarily driven by higher inputs costs, unfavorable sales mix, and a certain inventory provision as disclosed in the reconciliation table below. This decline was partially offset by higher price realization. Operating expenses. Operating expenses increased $193.7 million, or 17.2% as compared to the prior year.
Dollars in thousands) 2024 2023 $ Change % Change Residential products $ 2,433,474 $ 2,062,929 $ 370,545 18.0 % Commercial & Industrial products 1,389,469 1,494,799 (105,330 ) -7.0 % Other 472,891 464,939 7,952 1.7 % Total net sales $ 4,295,834 $ 4,022,667 $ 273,167 6.8 % Net sales.
Dollars in thousands) 2025 2024 $ Change % Change Residential products $ 2,266,912 $ 2,433,474 $ (166,562 ) -6.8 % Commercial & Industrial products 1,457,385 1,389,469 67,916 4.9 % Other 484,850 472,891 11,959 2.5 % Total net sales $ 4,209,147 $ 4,295,834 $ (86,687 ) -2.0 % Net sales.
These uses of cash were partially offset by proceeds of $348.8 million from long-term borrowings, $64.3 million from short-term borrowings, and $7.8 million proceeds from the exercise of employee stock options.
These were partially offset by $3.1 million of cash proceeds received from the sale of property and equipment.
We finance our operations primarily from cash flow generated from operations and, if necessary, borrowings under our revolving credit facility.
Liquidity and Financial Position Our primary cash requirements include payment for raw materials and components, salaries and benefits, facility and lease costs, operating expenses, interest and principal payments on debt, and capital expenditures. We finance our operations primarily from cash flow generated from operations and, if necessary, borrowings under our revolving credit facility.
The $277.1 million net cash used in financing activities for the year ended December 31, 2023 primarily consisted of $104.8 million in cash payments used to purchase the remaining ownership interest in Pramac, $251.5 million used for stock repurchases, $325.8 million of debt repayments ($37.1 million of short-term borrowings and $288.7 million of long-term borrowings and finance lease obligations), $10.9 million of taxes paid related to equity awards, and $5.0 million for payment of contingent acquisition consideration.
These cash proceeds were more than offset by $216.7 million of debt repayments ($48.2 million of short-term borrowings and $168.5 million of long-term borrowings and finance lease obligations), $147.9 million of share repurchases, $5.3 million of debt issuance costs, $2.7 million payment of contingent acquisition consideration, $14.3 million for taxes paid related to equity awards, and $0.9 million of other financing activities.
Weighted average cost of capital includes certain assumptions such as market capital structures, market betas, risk-free rate of return and estimated costs of borrowing. For all reporting units, a considerable amount of management judgment and assumptions are required in performing the goodwill and indefinite-lived intangible asset impairment tests.
Weighted average cost of capital includes certain assumptions such as market capital structures, market betas, risk-free rate of return and estimated costs of borrowing. In our October 31, 2025 impairment test calculation, the Clean Energy reporting unit had an estimated fair value that exceeded its carrying value by approximately 20%.
Net sales also include shipping and handling charges billed to customers, with the related freight costs included in cost of goods sold. Additionally, we offer other services, including extended warranties, installation, maintenance, data center and telecom facility design and build, remote monitoring, and grid services to utilities in certain circumstances.
Additionally, we offer other services, including extended warranties, installation, maintenance, telecom facility design and build, and remote monitoring. These services accounted for approximately 4% of our net sales for the year ended December 31, 2025.
Certain operational and other factors that affect our business include the following: Effect of commodity, currency, component price fluctuations, and resource availability.
Certain operational and other factors that affect our business include the following: Impact of residential investment cycle. The market for our residential products is affected by the residential investment cycle and overall consumer confidence and sentiment.
Removed
Acquisitions in recent years have increased our use of advanced electronic components and battery cells, as well as further expanded our commercial and operational presence outside of the United States.
Added
When homeowners are confident of their household income, the value of their home and overall net worth, they are more likely to invest in their home. These trends can have an impact on demand for residential generators, solar and energy storage systems, and energy management devices.
Removed
Over the years, we have executed a number of acquisitions that support our strategic plan.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs a result, we are exposed to fluctuating market prices for those commodities. While such materials are typically available from numerous suppliers, commodity raw materials are subject to price fluctuations. We generally buy these commodities and components based on market prices that are established with the supplier as part of the purchase process.
Biggest changeWhile such materials are typically available from numerous suppliers, commodity raw materials are subject to price fluctuations. We generally buy these commodities and components based on market prices that are established with the supplier as part of the purchase process. Depending on the supplier, these market prices may reset on a periodic basis based on negotiated lags and calculations.
These interest rate swap agreements qualify as cash flow hedges and therefore, the effective portions of their gains or losses are reported as a component of accumulated other comprehensive loss (AOCL) in the consolidated balance sheets.
These interest rate swap agreements qualify as cash flow hedges and therefore, the effective portions of their gains or losses are reported as a component of accumulated other comprehensive income (loss) in the consolidated balance sheets.
For additional information on the Company’s foreign currency and commodity forward contracts and interest rate swaps, including amounts charged to the statements of comprehensive income during 2024, 2023, and 2022, refer to Note 5, “Derivative Instruments and Hedging Activities,” and Note 6, “Accumulated Other Comprehensive Loss,” to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K. 33 Table of Contents
For additional information on the Company’s foreign currency and commodity forward contracts and interest rate swaps, including amounts charged to the statements of comprehensive income during 2025, 2024, and 2023, refer to Note 5, “Derivative Instruments and Hedging Activities,” and Note 6, “Accumulated Other Comprehensive Income (Loss),” to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K. 40 Table of Contents
Realized gains and losses on transactions denominated in foreign currency are recorded as a component of cost of goods sold in the statements of comprehensive income. The following is a summary of the 41 foreign currency forward contracts outstanding as of December 31, 2024 (notional amounts in thousands of U.S. dollars).
Realized gains and losses on transactions denominated in foreign currency are recorded as a component of cost of goods sold in the statements of comprehensive income. The following is a summary of the 24 foreign currency forward contracts outstanding as of December 31, 2025 (notional amounts in thousands of U.S. dollars).
As of December 31, 2024, we had the following interest rate swap contracts outstanding to help minimize our borrowing costs (notional amount in thousands of U.S. dollars): Hedged Item Contract Date Effective Date Notional Amount Fixed SOFR Rate Expiration Date SOFR Interest Rate March 4, 2020 May 31, 2023 $200,000 1.1360% December 14, 2026 SOFR Interest Rate March 5, 2020 May 31, 2023 $100,000 1.0700% December 14, 2026 SOFR Interest Rate March 6, 2020 May 31, 2023 $200,000 0.9560% December 14, 2026 In June 2022, in conjunction with the amendments to the Company's credit agreements discussed further in Note 12, “Credit Agreements,” to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K, the Company amended its interest rate swaps to match that of the underlying debt and reconfirmed hedge effectiveness.
As of December 31, 2025, we had the following interest rate swap contracts outstanding to help minimize our borrowing costs (notional amount in thousands of U.S. dollars): Hedged Item Contract Date Effective Date Notional Amount Fixed SOFR Rate Expiration Date SOFR Interest Rate March 4, 2020 May 31, 2023 $200,000 1.0380% December 13, 2026 SOFR Interest Rate March 5, 2020 May 31, 2023 $100,000 0.9700% December 13, 2026 SOFR Interest Rate March 6, 2020 May 31, 2023 $200,000 0.8580% December 13, 2026 In July 2025, in conjunction with the amendments to the Company's credit agreements discussed further in Note 12, “Credit Agreements,” to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K, the Company modified its interest rate swaps to match that of the underlying debt and reconfirmed hedge effectiveness.
As of December 31, 2024, we had the following commodity forward contracts outstanding (notional amounts in thousands of U.S. dollars): Hedged Item Contract Date Effective Date Notional Amount Expiration Date High Grade Copper July 22, 2024 August 1, 2024 $947 January 31, 2025 High Grade Copper July 30, 2024 August 1, 2024 $923 January 31, 2025 Interest R ates As of December 31, 2024, all of the outstanding debt under our Term Loans and Revolving Facility was subject to floating interest rate risk.
As of December 31, 2025, we had the following commodity forward contract outstanding (notional amounts in thousands of U.S. dollars): Hedged Item Contract Date Effective Date Notional Amount Expiration Date High Grade Copper August 8, 2025 September 1, 2025 $1,924 June 30, 2026 Interest R ates As of December 31, 2025, all of the outstanding debt under our Term Loans and Revolving Facility was subject to floating interest rate risk.
As of December 31, 2024, the fair value of these interest rate swaps was an asset of $29.3 million, excluding the impact of credit risk.
As of December 31, 2025, the fair value of these interest rate swaps was an asset of $11.6 million, excluding the impact of credit risk.
A hypothetical change in the SOFR interest rate of 100 basis points would have changed annual interest expense by approximately $8.5 million (or, without the swaps in place, approximately $13.5 million) in 2024.
A hypothetical change in the SOFR interest rate of 100 basis points would have changed annual interest expense by approximately $7.4 million (or, without the swaps in place, approximately $12.4 million) in 2025.
Currency Denomination Trade Dates Effective Dates Notional Amount Expiration Dates USD 11/4/24 11/4/24 $6,000 10/1/25 - 11/3/25 AUD 11/14/24 - 12/18/24 11/14/24 - 12/18/24 $13,250 1/15/25 - 2/5/25 GBP 11/14/24 11/14/24 $1,750 1/15/25 Commodity P rices We are a purchaser of commodities and components manufactured from commodities including steel, aluminum, copper and others.
Currency Denomination Trade Dates Effective Dates Notional Amount Expiration Dates AUD 11/19/25 - 12/16/25 11/19/25 - 12/16/25 $12,450 1/14/26 - 1/28/26 GBP 12/16/25 12/16/25 $1,600 1/21/26 Commodity P rices We are a purchaser of commodities and components manufactured from commodities including steel, aluminum, copper and others. As a result, we are exposed to fluctuating market prices for those commodities.
Removed
Depending on the supplier, these market prices may reset on a periodic basis based on negotiated lags and calculations.