Generac Holdings (NYSE:GNRC) is betting on a "generational opportunity" in the data center market to drive a 2026 rebound, even as a massive legal settlement and a cooling residential market weighed down its latest quarterly results.
The Waukesha, Wisconsin-based power equipment giant reported a $24 million net loss for the fourth quarter of 2025, a sharp swing from profit a year earlier.
The bottom line was hit by a $104.5 million provision related to a legal settlement involving its portable generator products.
Quarterly sales fell 12% to $1.09 billion, hampered by a 23% plunge in residential product revenue as a lack of major power outages dampened demand for home standby units.
Despite the quarterly dip, CEO Aaron Jagdfeld is doubling down on industrial growth.
The company closed its acquisition of Allmand, a mobile power equipment manufacturer, on Jan. 5, and is expanding its manufacturing footprint in Wisconsin to meet surging demand from hyperscale data center operators.
With an order backlog for large generators that has recently doubled, Generac is forecasting mid-teens sales growth for 2026 and has authorized a new $500 million share buyback program to signal confidence in its pivot toward the industrial energy transition.