Generac Stock Surges on Strong Q2 Earnings, Raised Outlook Fueled by Data Center Demand

Shares of Generac (NYSE: GNRC) surged 8.9% in pre-market trading after the energy technology company announced second-quarter results that significantly surpassed Wall Street expectations, bolstered by a large tariff refund and strong growth in its commercial segment.

Q2 Earnings Breakdown

Generac reported adjusted earnings per share (EPS) of $2.91, easily beating the analyst consensus of approximately $2.00. The company's profitability metrics were significantly aided by a pre-tax impact of about $71 million related to tariff refunds recorded during the quarter.

Net sales for the quarter rose 11% year-over-year to $1.17 billion. While demonstrating solid growth, this figure came in just shy of the $1.18 billion consensus estimate. The primary driver of the positive investor reaction was the substantial earnings beat and the outlook for its commercial business.

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Data Center Growth and Raised Guidance

The company's Commercial & Industrial segment was a standout performer, with sales growing approximately 29% to $556 million. Generac attributed this strength primarily to increasing demand for products serving the global data center market, a key growth area for the company.

Underscoring this momentum, Generac confirmed a global supply agreement with a major hyperscale data center operator, which includes a commitment for nearly $700 million in volume for 2027. The company also noted it secured a similar agreement with a second hyperscale customer on June 24. Reflecting this performance and the tariff refund, Generac raised its full-year adjusted EBITDA margin guidance to a range of 20.0–21.0%, up from the previous forecast of 18.5–19.5%.