Generac Financial Model
Energy Equipment Company Financials Example (Free Excel Download)
Generac Holdings Inc. designs, manufactures, and provides energy technology solutions and backup power generation equipment for residential, commercial, and industrial markets.
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About this model
This model provides a comprehensive equity valuation and scenario planning tool for Generac Holdings Inc., enabling an analyst to forecast the recovery of residential standby generator demand and the rapid growth of Commercial and Industrial data centre power solutions.
Generac Holdings Inc. designs, manufactures, and provides energy technology solutions and backup power generation equipment for residential, commercial, and industrial markets. The company pioneered the residential standby generator category and has recently expanded into energy storage, energy management devices, and grid services.
Business segments by 2025 revenue contribution:
- Residential products (approx. 54%)
- Commercial & Industrial (C&I) products (approx. 35%)
- Other products and services (approx. 11%)
Key geographies:
- Domestic / United States (approx. 83%)
- International (approx. 17%)
The business model is an asset-heavy manufacturing operation combined with a growing asset-light energy technology and smart grid solutions portfolio. Generac holds a dominant competitive position in the North American home standby generator market with an estimated 70 to 75 percent market share, competing against firms like Cummins and Briggs & Stratton. Recent major events include a weak power outage environment in 2024 and 2025 that depressed residential sales, a $104.5 million legal settlement provision in Q4 2025, and the acquisition of Allmand in January 2026 to bolster its industrial product offerings.
The downloadable Generac financial model includes SEC-sourced historical financials, forecast assumptions, core operating schedules, and valuation outputs in an Excel workbook built for review and scenario analysis.
A turnkey financial model
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
Historicals & AssumptionsGenerac financial modelCompany, Historicals & Assumptions used
Source: SEC EDGAR · values in USD
| Line item | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Revenue | $3.74B | $4.56B | $4.02B | $4.30B | $4.21B |
| Gross profit | $1.36B | $1.52B | $1.37B | $1.67B | $1.61B |
| Operating income | $721.1M | $566.3M | $386.2M | $536.7M | $289.2M |
| Net income | $556.6M | $408.9M | $217.1M | $316.9M | $161.4M |
Forecast assumptions
Defaults used in the downloadable model. Forecast horizon: FY2026–FY2030.
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How to build a detailed financial model for Generac
A complete walkthrough of every driver, margin, working-capital input, and capital-allocation assumption used in the downloadable model.
Revenue Deep Dive
Residential Products
- Segment name: Residential product sales
- Revenue driver formula: Home Standby Units Sold x Average Selling Price + Portable Units Sold x Average Selling Price + Energy Technology Solutions Revenue
- Historical growth rate: Highly volatile and weather-dependent; declined 7 percent in 2025 to $2.27 billion, following previous years of double-digit pandemic-driven growth.
- Key growth levers and headwinds: Major weather events (hurricanes, winter storms), grid instability, and adoption of solar plus storage solutions act as levers. Headwinds include mild weather seasons and high interest rates impacting consumer discretionary spending.
- Pricing dynamics: Spot pricing for portable units and contractual/dealer pricing for home standby units. The company has strong pricing power due to its dominant market share.
- Revenue recognition notes: Recognised primarily upfront upon shipment to dealers or retailers.
- Seasonality: Q3 and Q4 are typically the strongest quarters due to the Atlantic hurricane season and winter storm preparations.
Commercial & Industrial (C&I) Products
- Segment name: C&I product sales
- Revenue driver formula: C&I Generator Units Sold x Average Selling Price
- Historical growth rate: Grew 5 percent in 2025 to $1.46 billion.
- Key growth levers and headwinds: Explosive demand for data centre backup power and telecom infrastructure upgrades are massive tailwinds. Weakness in national rental equipment accounts serves as a headwind.
- Pricing dynamics: Highly competitive bidding for large industrial contracts, though data centre demand has improved pricing leverage.
- Revenue recognition notes: Recognised upon shipment or delivery depending on contract terms.
- Seasonality: Less seasonal than the residential segment, driven more by capital expenditure cycles of enterprise customers.
Other Products and Services
- Segment name: Other products and services
- Revenue driver formula: Installed Base x Attachment Rate for Extended Warranties and Parts
- Historical growth rate: Steady 3 to 5 percent CAGR.
- Key growth levers and headwinds: Grows linearly with the cumulative installed base of generators.
- Pricing dynamics: High margin, contractual, and recurring in nature.
- Revenue recognition notes: Warranty and service contract revenue is deferred and recognised over time.
- Seasonality: Relatively stable throughout the year.
Cost Structure
Variable Costs / COGS
- COGS includes raw materials (steel, copper, aluminium, engines, alternators), direct manufacturing labour, inbound freight, and manufacturing overhead.
- Gross margin range: 35.0 to 40.0 percent over the last 5 years (36.3 percent in Q4 2025).
- Key input costs and commodity exposures: Highly exposed to steel and copper prices, as well as global shipping rates.
- COGS scales relatively linearly with revenue, though lower manufacturing absorption during weak demand periods (like 2025) compresses gross margins.
Operating Expenses
- R&D: Typically 2 to 3 percent of revenue, covering new product development for energy storage, clean energy, and smart grid technologies.
- SG&A: Typically 16 to 19 percent of revenue. Includes heavy marketing and advertising spend to drive residential consumer awareness, plus distribution and general administrative headcount.
- Depreciation & Amortisation: Approximately 3 to 4 percent of revenue, split between tangible manufacturing equipment and amortisation of acquired intangibles.
- Stock-Based Compensation: Approximately 1 to 2 percent of revenue.
- Restructuring / one-time charges: Infrequent, but the company recorded a massive $104.5 million legal settlement provision in Q4 2025.
Margin Profile
- Gross margin: 35.0 to 40.0 percent.
- Adjusted EBITDA margin: 17.0 to 22.0 percent (17.0 percent for full-year 2025).
- Operating margin: 10.0 to 15.0 percent.
- Net margin: 4.0 to 10.0 percent.
- Margins have recently compressed due to an unfavourable sales mix (lower margin C&I growing faster than high margin Residential) and lower manufacturing absorption.
Balance Sheet Structure
- Total assets: Approximately $5.6 billion.
- Key asset categories: Inventory, accounts receivable, property, plant and equipment, and a large goodwill balance.
- Goodwill & intangibles: Represent over 40 percent of total assets, reflecting a history of bolt-on acquisitions (Ecobee, Allmand, etc.).
- Working capital profile:
- Days Sales Outstanding (DSO): 35 to 45 days.
- Days Inventory Outstanding (DIO): 110 to 130 days. Generac carries high inventory to ensure product availability during sudden, unpredictable power outage events.
- Days Payable Outstanding (DPO): 40 to 50 days.
- Net working capital as % of revenue: 15 to 20 percent.
- Working capital is positive and represents a significant use of cash during growth phases.
- PP&E: Consists of manufacturing facilities primarily in Wisconsin and Mexico. Maintenance capex is relatively low.
- Right-of-use assets / operating leases: Material but not a dominant balance sheet item (approximate magnitude of $100 to $150 million).
Capital Expenditure & Investment
- Capex as % of revenue: 2.0 to 3.0 percent.
- Maintenance capex vs. growth capex: Approximately 40 percent maintenance and 60 percent growth (tooling for new product lines and facility expansion).
- Major capex programmes: Expanding manufacturing capacity for C&I generators to meet data centre demand.
- Capitalised software / development costs: Minimal compared to physical tooling and facility capex.
- M&A pattern: Serial bolt-on acquirer focusing on energy technology, smart home devices, and industrial power.
- Typical acquisition multiple paid: 10x to 15x EV/EBITDA for technology assets.
Debt & Capital Structure
- Total debt: Approximately $1.33 billion as of Q4 2025.
- Net debt: Approximately $1.0 billion.
- Debt/EBITDA ratio: 1.9x gross debt leverage as of Q4 2025 (target range is 1.0x to 2.0x).
- Credit rating: BB+ / Ba1 (typically high-yield / crossover).
- Key debt instruments: Term Loan B and a revolving credit facility.
- Maturity profile: Average maturity is 3 to 5 years with no immediate near-term liquidity cliffs.
- Interest rate profile: Mix of fixed and floating, with a weighted average cost of debt around 5.5 to 6.5 percent.
- Covenants: Standard leverage and interest coverage ratios tied to the credit facility.
- Share repurchase programme: Highly active. Repurchased $148 million in 2025; board approved a new $500 million programme in early 2026.
- Dividend policy: The company does not pay a dividend.
Cash Flow Characteristics
- Operating cash flow conversion: OCF / Net Income is typically 1.5x to 2.5x due to heavy depreciation, amortisation, and non-cash charges. OCF was $438 million in 2025.
- Free cash flow margin: 6.0 to 12.0 percent (FCF was $268 million in 2025).
- Major non-cash items: Depreciation, amortisation of intangibles, stock-based compensation, and deferred income taxes.
- Working capital cash flow impact: Inventory builds are a major use of cash ahead of hurricane season; inventory liquidations provide massive cash inflows during active storm years.
- Capex intensity: Low (asset-light relative to revenue scale).
- Cash tax rate vs. GAAP effective tax rate: Cash taxes are often lower due to MACRS depreciation and R&D tax credits. The GAAP effective tax rate was approximately 13.4 to 15.0 percent in late 2025.
Sheet Structure
- Assumptions: Hardcoded drivers for macroeconomic inputs, segment growth rates, margin profiles, and working capital days.
- Revenue Build: Detailed build forecasting Residential, C&I, and Other revenue based on volume and pricing assumptions, further split by Domestic and International segments.
- Income Statement: Consolidated P&L from Net Sales down to Net Income and Earnings Per Share.
- Balance Sheet: Standard assets, liabilities, and shareholders' equity, balancing in every projected period.
- Cash Flow Statement: Indirect method starting from Net Income, adjusting for non-cash items and working capital changes to arrive at Free Cash Flow.
- Working Capital Schedule: Calculation of Accounts Receivable, Inventory, and Accounts Payable based on DSO, DIO, and DPO.
- Debt & Interest Schedule: Tranches of term loans and revolvers, tracking mandatory amortisation, optional paydowns, and interest expense.
- Depreciation & Amortisation: Waterfall schedule for PP&E and acquired intangibles.
- Shareholders Equity: Tracking retained earnings, share repurchases, and stock-based compensation.
- DCF Valuation: Unlevered free cash flow build, WACC calculation, terminal value, and implied share price.
Key Financial Relationships
- Domestic Segment Revenue = Domestic Residential Revenue + Domestic C&I Revenue + Domestic Other Revenue
- International Segment Revenue = International Residential Revenue + International C&I Revenue + International Other Revenue
- Total Net Sales = Domestic Segment Revenue + International Segment Revenue
- Gross Profit = Total Net Sales - Cost of Goods Sold
- SG&A Expense = Total Net Sales x SG&A Margin %
- Adjusted EBITDA = Net Income + Interest Expense + Income Tax Expense + Depreciation & Amortisation + Stock-Based Compensation + Legal Settlement Provisions
- Accounts Receivable = (Total Net Sales / 365) x DSO
- Inventory = (Cost of Goods Sold / 365) x DIO
- Accounts Payable = (Cost of Goods Sold / 365) x DPO
- Free Cash Flow = Net Cash Provided by Operating Activities - Purchases of Property and Equipment
- Interest Expense = Average Debt Balance x Weighted Average Interest Rate
- Ending Shares Outstanding = Beginning Shares Outstanding - (Share Repurchase Amount / Average Share Price) + Shares Issued for SBC
Cross-Sheet Dependencies
- The Revenue Build sheet feeds the top line of the Income Statement and drives the activity levels in the Working Capital Schedule.
- The Income Statement generates Net Income, which is the starting point for the Cash Flow Statement.
- The Working Capital Schedule calculates the period-over-period changes in current assets and liabilities, which feed the operating section of the Cash Flow Statement.
- The Depreciation & Amortisation sheet feeds operating expenses on the Income Statement and the non-cash add-backs on the Cash Flow Statement.
- The Debt & Interest Schedule creates a circular reference: Interest Expense reduces Net Income, which reduces Cash Flow, which impacts the amount of cash available to pay down Debt, which in turn changes the Interest Expense.
- The Cash Flow Statement ending cash balance feeds the Balance Sheet cash line item.
Sign Convention
- Revenue, Assets, and Equity are entered as positive numbers.
- Expenses (COGS, SG&A, Interest) are entered as positive numbers and subtracted in formulas.
- Liabilities are entered as positive numbers.
- On the Cash Flow Statement, cash inflows are positive and cash outflows (e.g., capital expenditures, debt repayments, share repurchases) are negative.
Things Most Likely to Go Wrong
- Failing to normalise 2025 earnings for the $104.5 million legal settlement provision, which artificially depresses GAAP operating margins.
- Underestimating the volatility of the Residential segment; straight-line growth assumptions will fail because revenue spikes during major hurricane years and drops during mild years.
- Mismodelling the gross margin mix shift; as C&I (data centres) grows faster than Residential, consolidated gross margins will face structural compression.
- Ignoring the massive inventory swings; Generac must build inventory ahead of storm seasons, which drains cash flow in the first half of the year.
- Double-counting inter-segment sales; the company reports Domestic and International segments including inter-segment sales, which must be eliminated in consolidation.
- Forgetting to include the Allmand acquisition (closed January 2026) in forward-looking C&I revenue and operating expense projections.
- Overestimating free cash flow by failing to deduct the cash taxes that will increase due to the exhaustion of certain historical tax attributes.
- Creating an unbalanced balance sheet by failing to link the share repurchase cash outflow on the CFS to the reduction in Shareholders Equity and Shares Outstanding.
Validation Checks
- Gross margin should remain in the 35.0 to 40.0 percent range; flag if outside this band.
- Adjusted EBITDA margin should be between 17.0 and 20.0 percent.
- Gross Debt to Adjusted EBITDA should remain between 1.0x and 2.0x per management's stated target.
- Free Cash Flow conversion (FCF / Adjusted Net Income) should be between 80 and 100 percent.
- Total Assets must equal Total Liabilities plus Shareholders Equity in every projected period.
- Capex as a percentage of revenue should not exceed 4.0 percent without a specific growth rationale flagged.
- The effective tax rate should be modelled between 13.0 and 16.0 percent based on recent historical performance.
- Days Inventory Outstanding (DIO) should remain above 100 days; dropping below this implies the company cannot meet sudden storm-driven demand.
Key Assumptions (Default Values)
| Assumption | Default Value | Unit | Rationale |
|---|---|---|---|
| Residential Revenue Growth | 5.0 | % | Rebound assumption following a 7% decline in 2025 due to a weak outage environment |
| C&I Revenue Growth | 12.0 | % | Driven by strong, sustained data centre backup power demand |
| Other Revenue Growth | 4.0 | % | Steady growth in line with the expanding installed base of generators |
| Gross Margin | 36.5 | % | Aligns with Q4 2025 actuals and accounts for the mix shift toward C&I |
| SG&A % of Revenue | 18.0 | % | Historical average required to maintain consumer marketing and distribution |
| R&D % of Revenue | 2.5 | % | Consistent with historical investment in energy technology solutions |
| Days Sales Outstanding (DSO) | 40 | Days | Based on 2025 average accounts receivable turnover |
| Days Inventory Outstanding (DIO) | 120 | Days | Reflects the strategic need to hold high inventory for unpredictable outages |
| Days Payable Outstanding (DPO) | 45 | Days | Based on historical supplier payment terms |
| Capex % of Revenue | 2.5 | % | Historical average for maintenance and moderate facility expansion |
| Effective Tax Rate | 15.0 | % | Aligns with Q3 2025 actuals and management guidance |
| Weighted Average Interest Rate | 6.0 | % | Blended rate of current term loans and revolving credit facilities |
| Annual Share Repurchases | 250 | $ Millions | Run-rate assumption based on the new $500 million 24-month authorisation |
| WACC | 9.5 | % | Standard discount rate for a mid-cap industrial/technology hybrid |
| Terminal Growth Rate | 2.5 | % | Long-term GDP growth plus slight premium for grid transition tailwinds |
Data Sources & Benchmarks
- SEC EDGAR: Generac Holdings Inc. (GNRC) 10-K and 10-Q filings.
- Generac Investor Relations: Q4 2025 Earnings Release and Supplemental Presentation.
- Key peers for benchmarking: Cummins (CMI), Caterpillar (CAT), Eaton (ETN), and Briggs & Stratton (private).
- Industry data sources: U.S. Energy Information Administration (EIA) for grid reliability and power outage statistics; NOAA for hurricane season forecasts.
- Consensus estimates: Bloomberg or FactSet for forward-looking revenue and EPS validation.
Sources
- Generac Holdings Inc. Q4 and Full-Year 2025 Earnings Release (February 11, 2026).
- Generac Holdings Inc. Q3 2025 Earnings Release (October 29, 2025).
- Generac Holdings Inc. Form 10-Q for the period ended September 30, 2025.
- Generac Holdings Inc. Form 10-Q for the period ended June 30, 2025.
- Macrotrends and CompaniesMarketCap historical financial databases for GNRC revenue and debt metrics.
- Simply Wall St GNRC Balance Sheet & Financial Health Metrics.
Do more with the Generac model
Frequently asked
What does Generac Holdings Inc. do?+
Generac Holdings Inc. designs, manufactures, and provides energy technology solutions and backup power generation equipment for residential, commercial, and industrial markets. They are known for pioneering the residential standby generator category and have expanded into energy storage, energy management, and grid services.
What are the primary revenue drivers for Generac?+
Generac's revenue is primarily driven by residential products, which contribute about 54% of sales, and commercial & industrial (C&I) products, contributing about 35%. Demand for residential products is influenced by power outage environments, while C&I growth is bolstered by data center power solutions.
What is Generac's capital expenditure strategy?+
Generac's capital expenditure as a percentage of revenue is typically between 2.0% and 3.0%. Approximately 60% of this capex is allocated to growth initiatives, such as tooling for new product lines and expanding manufacturing capacity for C&I generators to meet data center demand.
How does Generac's working capital profile impact its cash flow?+
Generac maintains a positive net working capital, which can represent a significant use of cash during growth phases. The company carries high inventory, with Days Inventory Outstanding (DIO) between 110 to 130 days, to ensure product availability during unpredictable power outage events.
Where can I find a financial model for Generac (GNRC)?+
A comprehensive equity valuation and scenario planning tool for Generac Holdings Inc. is available for download, with a forecast horizon from FY2026 to FY2030. This Excel model allows analysts to forecast the recovery of residential standby generator demand and the rapid growth of Commercial and Industrial data center power solutions.
What is Generac's market position in the North American home standby generator market?+
Generac holds a dominant competitive position in the North American home standby generator market, with an estimated 70 to 75 percent market share. They compete against firms like Cummins and Briggs & Stratton in this segment.
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