Generac Holdings Inc. swung to a Q4 loss due to legal settlement charges, but anticipates strong growth in 2026 driven by data center demand and normalization of outage activity. Net sales for the quarter were $1.09 billion, down 12% YoY, with residential product sales falling 23% and C&I sales rising 10%.

CEO Aaron Jagdfeld highlighted momentum in the data center segment, with Generac deepening its role as a supplier to hyperscale operators. The company is expanding manufacturing capacity for large generators and targeting a doubling of C&I product sales. Generac posted a net loss of $24 million, including a $104.5 million settlement provision.

For full-year 2025, net sales slipped 2% to $4.21 billion. Residential sales declined 7% while C&I sales increased 5%. Generac repurchased 1.1 million shares for $148 million and approved a $500 million share repurchase authorization. The company is guiding for mid-teens percentage net sales growth in 2026, with C&I product sales expected to rise around 30%.

Generac expects full-year 2026 adjusted EBITDA margins to improve to 18-19%, alongside net income margins of around 8-9%. The company’s outlook reflects a shift in power markets, with data center expansion driving demand for on-site generation. Commercial backup power is seen as a durable driver of earnings compared to cyclical residential demand.

Read more at Yahoo Finance: Generac Swings to Q4 Loss as Data Center Sales Surge