# Generac Holdings Inc. (GNRC) — Financial Analysis

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-29  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/GNRC/thesis · /stocks/GNRC/memo

## Financial Snapshot

---
source: coverage-next-full
ticker: GNRC
step: "04"
title: Financial Snapshot — 3-Year P&L, Margins & Key Profitability Metrics
created: 2026-05-29
---

### Step 04 — Financial Snapshot

#### Income Statement Summary (FY2021–FY2023)

| Metric | FY2021 | FY2022 | FY2023 |
|---|---|---|---|
| **Revenue** | **$3,736M** | **$4,590M** | **$3,651M** |
| YoY Growth | +50.3% | +22.9% | -20.5% |
| Cost of Goods Sold | $2,367M | $3,155M | $2,356M |
| **Gross Profit** | **$1,369M** | **$1,435M** | **$1,295M** |
| Gross Margin | 36.6% | 31.3% | 35.5% |
| Operating Expenses (SG&A + R&D) | $601M | $792M | $716M |
| SG&A | $415M | $547M | $496M |
| R&D | $186M | $245M | $220M |
| **Operating Income (EBIT)** | **$768M** | **$643M** | **$579M** |
| Operating Margin | 20.6% | 14.0% | 15.9% |
| Interest Expense (net) | ($41M) | ($104M) | ($114M) |
| Other Income / (Expense) | ($10M) | ($80M) | ($20M) |
| **Pre-Tax Income** | **$717M** | **$459M** | **$445M** |
| Income Tax Expense | $161M | $120M | $125M |
| Effective Tax Rate | 22.5% | 26.1% | 28.1% |
| **Net Income (attributable to GNRC)** | **$519M** | **$257M** | **$190M** |
| Net Margin | 13.9% | 5.6% | 5.2% |
| Diluted Shares Outstanding | 66.4M | 65.2M | 62.3M |
| **Diluted EPS** | **$7.82** | **$3.94** | **$3.05** |

*Note: FY2022 Net Income and EPS include significant goodwill impairment (~$120M) related to Ecobee and clean energy business write-downs, which meaningfully depressed reported earnings.*

#### Adjusted / Non-GAAP Metrics

GNRC reports Adjusted EBITDA and Adjusted Net Income, which exclude amortization of intangibles, stock-based compensation, transaction costs, and write-offs.

| Non-GAAP Metric | FY2021 | FY2022 | FY2023 |
|---|---|---|---|
| Adjusted EBITDA | $931M | $792M | $692M |
| Adj. EBITDA Margin | 24.9% | 17.3% | 19.0% |
| Adjusted Net Income | ~$680M | ~$530M | ~$430M |
| Adjusted EPS (diluted) | ~$10.24 | ~$8.13 | ~$6.90 |

#### Margin Analysis

##### Gross Margin Decomposition

| Driver | FY2021 | FY2022 | FY2023 |
|---|---|---|---|
| Gross Margin | 36.6% | 31.3% | 35.5% |
| Key Commentary | Peak demand; favorable pricing | Input cost spike (steel, chips, logistics); mix shift to lower-margin products | Recovery: price increases hold, input costs normalize; fixed cost absorption improves |

FY2022 gross margin compression was driven by:
1. Extraordinary raw material cost inflation (steel, copper, semiconductors)
2. Logistics/freight cost spike ($50–100M headwind estimated)
3. Expedite fees and supply chain premiums
4. Mix shift toward lower-margin portable/C&I products during supply crunch

FY2023 gross margin recovery reflects:
1. Steel and freight cost normalization
2. Price increases implemented in 2022 holding into 2023
3. Partially offset by lower fixed cost absorption on lower volumes

**Long-run gross margin target**: Management has guided to 36–38% normalized gross margin (ex-clean energy dilution); the company demonstrated it can achieve 38%+ margins in pre-2020 normal years.

##### Operating Expense Trend

| OpEx Category | FY2021 | FY2022 | FY2023 | Commentary |
|---|---|---|---|---|
| SG&A | $415M (11.1%) | $547M (11.9%) | $496M (13.6%) | Ecobee + headcount growth; modest rationalization in 2023 |
| R&D | $186M (5.0%) | $245M (5.3%) | $220M (6.0%) | Clean energy investment; remained elevated even as revenue fell |
| **Total OpEx** | **$601M (16.1%)** | **$792M (17.3%)** | **$716M (19.6%)** | OpEx ratio rose as revenue fell — fixed cost structure |

**Key observation**: GNRC has meaningful operating leverage — when revenue rises, OpEx ratio shrinks; when revenue falls, the ratio rises because a large portion of SG&A and R&D is relatively fixed. The operating margin decline from 20.6% (FY2021) to 15.9% (FY2023) on -$1B of revenue reflects this dynamic.

##### Depreciation & Amortization

| Item | FY2021 | FY2022 | FY2023 |
|---|---|---|---|
| D&A Total | $163M | $234M | $224M |
| Of which: Intangible amortization | $94M | $148M | $131M |
| Of which: Depreciation | $69M | $86M | $93M |

*High intangible amortization reflects numerous acquisitions (Ecobee, Pramac, Motortech, etc.)*

#### Historical Revenue Context (5-Year View)

| Year | Revenue | YoY Growth |
|---|---|---|
| FY2019 | $2,204M | +5.2% |
| FY2020 | $2,485M | +12.8% |
| FY2021 | $3,736M | +50.3% |
| FY2022 | $4,590M | +22.9% |
| FY2023 | $3,651M | -20.5% |
| FY2024E | ~$3,700–4,100M | Flat to +12% (consensus) |

The 2021–2022 revenue surge was unprecedented in GNRC's history, and the 2023 correction was similarly severe. The long-run organic growth rate (pre-boom) was approximately 8–12% CAGR driven by rising penetration + event-driven demand.

#### Earnings Power at "Normalized" Revenue

Management has articulated a "normalized" revenue run-rate of $4.0–4.5B as the 2-3 year target (not a boom-time number, but reflecting higher penetration + clean energy contribution). At those revenue levels:

| Scenario | Revenue | Adj. EBITDA Margin | Adj. EBITDA | Adj. EPS (est.) |
|---|---|---|---|---|
| Near-term recovery | $3.8B | 19–20% | $720–760M | ~$7.50–8.50 |
| Normalized | $4.2B | 21–23% | $880–970M | ~$10–12 |
| Upside (outage event + clean energy) | $5.0B | 23–25% | $1,150–1,250M | ~$14–16 |

#### Profitability Ratios (FY2023)

| Metric | FY2023 | FY2022 | FY2021 |
|---|---|---|---|
| Gross Margin | 35.5% | 31.3% | 36.6% |
| EBIT Margin | 15.9% | 14.0% | 20.6% |
| Adj. EBITDA Margin | 19.0% | 17.3% | 24.9% |
| Net Margin | 5.2% | 5.6% | 13.9% |
| Return on Assets | 4.7% | 5.1% | 9.8% |
| Return on Equity | 12.1% | 12.4% | 26.5% |

#### Key Earnings Quality Notes

1. **Goodwill write-downs**: FY2022 included ~$120M impairment of Ecobee goodwill (partial write-down; additional risk of further write-downs if clean energy segment underperforms). Total goodwill on balance sheet as of FY2023: ~$1.4B.
2. **Intangible amortization**: ~$131M in FY2023 — significantly depresses GAAP EPS vs. adjusted metrics.
3. **Tax rate variability**: Effective tax rate rose from 22.5% (FY2021) to 28.1% (FY2023) due to mix of lower-taxed income and changes in discrete items.
4. **Stock compensation**: ~$75–90M annually — meaningful dilution source; excluded from adjusted EPS.

---
*Financial snapshot compiled 2026-05-29 | Source: SEC EDGAR 10-K FY2021/2022/2023, earnings releases*

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/GNRC/fundamental

## Navigation

- Overview: /stocks/GNRC
- Financials (this page): /stocks/GNRC/financials
- Thesis: /stocks/GNRC/thesis
- Investment Memo: /stocks/GNRC/memo
- Coverage universe: /stocks