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Note 7 - Segment Reporting | 12 Months Ended
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Dec. 31, 2025
Notes to Financial Statements |
Segment Reporting Disclosure [Text Block] |
7. | Segment Reporting
The Company has two reportable segments for financial reporting purposes – domestic and international. The domestic segment includes the legacy Generac business and all historical acquisitions based in the U.S. and Canada, all of which have revenues substantially derived from the U.S. and Canada. The international segment includes all historical acquisitions not based in the U.S and Canada, all of which have revenues substantially derived from outside the U.S and Canada. Both reportable segments design and manufacture a wide range of energy technology solutions and other power products. The Company has multiple operating segments, which it aggregates into the two reportable segments, based on materially similar economic characteristics, products, production processes, classes of customers, distribution methods, organizational structure, and regional considerations. Intersegment sales are at an appropriate transfer price. The Company's product offerings consist primarily of power generation equipment, energy storage systems, energy management devices & solutions, and other power products geared for varying end customer uses. While Residential products and Commercial & Industrial (C&I) products include similar products, they differ based on power output and end customer. The composition of net sales between residential, C&I, and other products & services by reportable segment is as follows:
|  | Net Sales by Segment |
|  | Year Ended December 31, 2025 |
Product Classes |  | Domestic |  |  | International |  |  | Total |
Residential products |  | $ | 2,182,105 |  |  | $ | 84,807 |  |  | $ | 2,266,912 |
Commercial & Industrial products |  |  | 863,762 |  |  |  | 593,623 |  |  |  | 1,457,385 |
Other |  |  | 425,099 |  |  |  | 59,751 |  |  |  | 484,850 |
Total net sales |  | $ | 3,470,966 |  |  | $ | 738,181 |  |  | $ | 4,209,147 |
|  | Year Ended December 31, 2024 |
Product Classes |  | Domestic |  |  | International |  |  | Total |
Residential products |  | $ | 2,352,629 |  |  | $ | 80,845 |  |  | $ | 2,433,474 |
Commercial & Industrial products |  |  | 828,586 |  |  |  | 560,883 |  |  |  | 1,389,469 |
Other |  |  | 417,934 |  |  |  | 54,957 |  |  |  | 472,891 |
Total net sales |  | $ | 3,599,149 |  |  | $ | 696,685 |  |  | $ | 4,295,834 |
|  | Year Ended December 31, 2023 |
Product Classes |  | Domestic |  |  | International |  |  | Total |
Residential products |  | $ | 1,945,273 |  |  | $ | 117,656 |  |  | $ | 2,062,929 |
Commercial & Industrial products |  |  | 916,118 |  |  |  | 578,681 |  |  |  | 1,494,799 |
Other |  |  | 414,933 |  |  |  | 50,006 |  |  |  | 464,939 |
Total net sales |  | $ | 3,276,324 |  |  | $ | 746,343 |  |  | $ | 4,022,667 |
Residential products consist primarily of automatic home standby generators ranging in output from 7.5kW to 150kW, portable generators, residential energy storage systems, energy management devices & solutions, and other outdoor power equipment. These products are predominantly sold through independent residential dealers, national and regional retailers, e-commerce merchants, electrical/HVAC/solar wholesalers, solar installers, and outdoor power equipment dealers. The residential products revenue consists of the sale of the product to the Company's distribution partners, who in turn sell the product to the end consumer, including installation and maintenance services. In some cases, residential products are sold directly to the end consumer. Substantially all of the residential products' revenues are transferred to the customer at a point in time. C&I products consist of larger output stationary generators used in C&I applications, with power outputs up to 3,250kW. Also included in C&I products are mobile generators, light towers, C&I battery energy storage systems, mobile heaters, mobile pumps, and related controls for power generation equipment. These products are sold globally through industrial distributors and dealers, Engineering, Procurement, and Construction (EPC) companies, equipment rental companies, and equipment distributors. The C&I products revenue consists of the sale of the product to the Company's distribution partners, who in turn sell or rent the product to the end customer, including installation and maintenance services. In some cases, C&I products are sold directly to the end customer. C&I also provides back-up power solutions for data centers including delivery of large backup power generators, project management, installation commissioning and training. The majority of C&I products' revenues are transferred to the customer at a point in time. Other consists primarily of aftermarket service parts and product accessories sold to the Company's distribution partners, the amortization of extended warranty deferred revenue, remote monitoring and grid services subscription revenue, as well as certain design, build, installation, and maintenance service revenue. The aftermarket service parts and product accessories are generally transferred to the customer at a point in time, while the extended warranty and subscription revenue are recognized over the life of the contract. Other service revenue is recognized when the service is performed. The Company views Adjusted EBITDA as a key measure of the Company's performance. The computation of Adjusted EBITDA is based primarily on the definition that is contained in the Company’s credit agreements. The Company presents Adjusted EBITDA not only due to its importance for purposes of the Company's credit agreements, but also because it assists the Company in comparing performance across reporting periods on a consistent basis as it excludes items the Company's management does not believe are indicative of the Company's core operating performance. The Company's Chief Operating Decision Maker (CODM) is Aaron Jagdfeld, President and Chief Executive Officer (CEO). He uses Adjusted EBITDA, along with the Company's management:
| ● | for planning purposes, including the preparation of the Company's annual operating budget and developing and refining internal projections for future periods;
| ● | to allocate resources to enhance the financial performance of the Company's business;
| ● | as a target for the determination of the bonus component of compensation for the Company's senior executives under the Company's management incentive plan, as described further in the Company's Proxy Statement;
| ● | to evaluate the effectiveness of the Company's business strategies and as a supplemental tool in evaluating the Company's performance against the Company's budget for each period; and
| ● | in communications with the Company's Board and investors concerning the Company's financial performance.
See "Non-GAAP measures - Adjusted EBITDA" in Item 7 of this Annual Report on Form 10-K for more information on the Company's use of Adjusted EBITDA. The table below presents total sales (external and intersegment), significant segment expenses, and Adjusted EBITDA by reportable segment, reconciled to consolidated income before provision for income taxes.
|  | Year Ended December 31, 2025 |  |  | Year Ended December 31, 2024 |  |  | Year Ended December 31, 2023 |
|  | Domestic |  |  | International |  |  | Total |  |  | Domestic |  |  | International |  |  | Total |  |  | Domestic |  |  | International |  |  | Total |
External net sales |  | $ | 3,470,966 |  |  | $ | 738,181 |  |  | $ | 4,209,147 |  |  | $ | 3,599,149 |  |  | $ | 696,685 |  |  | $ | 4,295,834 |  |  | $ | 3,276,324 |  |  | $ | 746,343 |  |  | $ | 4,022,667 |
Intersegment sales |  |  | 23,205 |  |  |  | 39,250 |  |  |  | 62,455 |  |  |  | 35,932 |  |  |  | 28,700 |  |  |  | 64,632 |  |  |  | 43,937 |  |  |  | 91,552 |  |  |  | 135,489 |
Total sales |  |  | 3,494,171 |  |  |  | 777,431 |  |  |  | 4,271,602 |  |  |  | 3,635,081 |  |  |  | 725,385 |  |  |  | 4,360,466 |  |  |  | 3,320,261 |  |  |  | 837,895 |  |  |  | 4,158,156 |
Elimination of intersegment sales |  |  | - |  |  |  | - |  |  |  | (62,455 | ) |  |  | - |  |  |  | - |  |  |  | (64,632 | ) |  |  | - |  |  |  | - |  |  |  | (135,489 | )
Costs of goods sold |  |  | 2,095,406 |  |  |  | 564,459 |  |  |  | 2,659,865 |  |  |  | 2,155,269 |  |  |  | 539,571 |  |  |  | 2,694,840 |  |  |  | 2,168,210 |  |  |  | 624,515 |  |  |  | 2,792,725 |
Elimination of intersegment cost of goods sold |  |  | - |  |  |  | - |  |  |  | (62,455 | ) |  |  | - |  |  |  | - |  |  |  | (64,632 | ) |  |  | - |  |  |  | - |  |  |  | (135,489 | )
Operating expenses |  |  | 1,175,856 |  |  |  | 146,690 |  |  |  | 1,322,546 |  |  |  | 991,042 |  |  |  | 137,842 |  |  |  | 1,128,884 |  |  |  | 839,827 |  |  |  | 139,405 |  |  |  | 979,232 |
Other segment items (1) |  |  | (375,006 | ) |  |  | (51,345 | ) |  |  | (426,351 | ) |  |  | (204,433 | ) |  |  | (47,926 | ) |  |  | (252,359 | ) |  |  | (211,113 | ) |  |  | (40,547 | ) |  |  | (251,660 | )
Adjusted EBITDA by reportable segment |  | $ | 597,915 |  |  | $ | 117,627 |  |  | $ | 715,542 |  |  | $ | 693,203 |  |  | $ | 95,898 |  |  | $ | 789,101 |  |  | $ | 523,337 |  |  | $ | 114,522 |  |  | $ | 637,859 |
Interest expense |  |  |  |  |  |  |  |  |  |  | (70,697 | ) |  |  |  |  |  |  |  |  |  |  | (89,713 | ) |  |  |  |  |  |  |  |  |  |  | (97,627 | )
Depreciation and amortization |  |  |  |  |  |  |  |  |  |  | (194,835 | ) |  |  |  |  |  |  |  |  |  |  | (171,768 | ) |  |  |  |  |  |  |  |  |  |  | (166,602 | )
Non-cash write-down and other adjustments (2) |  |  |  |  |  |  |  |  |  |  | (6,636 | ) |  |  |  |  |  |  |  |  |  |  | (4,757 | ) |  |  |  |  |  |  |  |  |  |  | 5,953 |
Non-cash share-based compensation expense (3) |  |  |  |  |  |  |  |  |  |  | (49,947 | ) |  |  |  |  |  |  |  |  |  |  | (49,248 | ) |  |  |  |  |  |  |  |  |  |  | (35,492 | )
Transaction costs and credit facility fees (4) |  |  |  |  |  |  |  |  |  |  | (3,976 | ) |  |  |  |  |  |  |  |  |  |  | (5,097 | ) |  |  |  |  |  |  |  |  |  |  | (4,054 | )
Business optimization and other charges (5) |  |  |  |  |  |  |  |  |  |  | (7,301 | ) |  |  |  |  |  |  |  |  |  |  | (4,752 | ) |  |  |  |  |  |  |  |  |  |  | (10,551 | )
Provision for legal, regulatory, and other costs (6) |  |  |  |  |  |  |  |  |  |  | (157,981 | ) |  |  |  |  |  |  |  |  |  |  | (10,931 | ) |  |  |  |  |  |  |  |  |  |  | (38,490 | )
Change in fair value of investments (7) |  |  |  |  |  |  |  |  |  |  | (20,610 | ) |  |  |  |  |  |  |  |  |  |  | (38,006 | ) |  |  |  |  |  |  |  |  |  |  | - |
Loss on refinancing of debt (8) |  |  |  |  |  |  |  |  |  |  | (1,225 | ) |  |  |  |  |  |  |  |  |  |  | (4,861 | ) |  |  |  |  |  |  |  |  |  |  | - |
Other |  |  |  |  |  |  |  |  |  |  | (3,274 | ) |  |  |  |  |  |  |  |  |  |  | (530 | ) |  |  |  |  |  |  |  |  |  |  | (696 | )
Income before provision for income taxes |  |  |  |  |  |  |  |  |  | $ | 199,060 |  |  |  |  |  |  |  |  |  |  | $ | 409,438 |  |  |  |  |  |  |  |  |  |  | $ | 290,300 |
| (1) | Other segment items primarily represent adjustments for depreciation and amortization and the following items defined below: Non-cash write-down and other adjustments; Non-cash shared-based compensation expense; Transaction costs and credit facility fees; Business optimization and other charges; Provision for legal, regulatory, and other costs.
| (2) | Includes gains/(losses) on the disposition of assets other than in the ordinary course of business, gains/(losses) on sales of certain investments, unrealized mark-to-market adjustments on commodity contracts, certain foreign currency related adjustments, and certain purchase accounting and contingent consideration adjustments.
| (3) | Represents share-based compensation expense to account for stock options, restricted stock, and other stock awards over their respective vesting periods.
| (4) | Represents transaction costs incurred directly in connection with any investment, as defined in the Company's credit agreement, equity issuance or debt issuance or refinancing, together with certain fees relating to the Company's senior secured credit facilities, such as administrative agent fees and credit facility commitment fees under the Company's credit agreement.
| (5) | Represents severance and other restructuring charges related to the consolidation of certain operating facilities and organizational functions.
| (6) | Represents the following litigation, regulatory, and other matters that are not indicative of our ongoing operations: • Legal expenses, judgments, and settlements related to certain patent lawsuits - $7,520 in 2025; $9,299 in 2024; $27,289 in 2023. • Legal expenses and settlements related to certain class action lawsuits - $22,698 in 2025, which includes a $15,000 provision for a multi-district class action settlement related to clean energy products; $1,267 in 2024; $1,051 in 2023. • Legal expenses related to certain government inquiries and other significant matters - $7,630 in 2025. • Additional customer support costs related to a clean energy product customer that filed for bankruptcy in 2022 – $365 and $4,350 in 2024 and 2023, respectively. • A provision for a matter with the CPSC concerning the imposition of civil fines for allegedly failing to timely submit a report under the CPSA in relation to certain portable generators that were subject to a voluntary recall previously announced on July 29, 2021 - $5,800 in 2023. • A provision of $104,500, net in the fourth quarter of 2025 for a settlement agreement (in principle) related to a certain portable generator product liability case deemed outside the ordinary course of routine litigation for the Company. • A $15,633 net inventory provision in the fourth quarter of 2025 related to the settlement of a contract dispute with a supplier for a discontinued product.
| (7) | Represents non-cash losses primarily from changes in the fair value of the Company's investment in Wallbox warrants and equity securities.
| (8) | For the year ended December 31, 2025, the loss represents third party costs and the write-off of certain deferred financing costs in connection with the refinancing of the Original Tranche A Term Loan Facility and Original Revolving Facility. For the year ended December 31, 2024, the loss represents fees paid to creditors and the write-off of the original issue discount and deferred financing costs in connection with the refinancing of the Tranche B Term Loan Facility.
The following tables summarize additional financial information by reportable segment:
|  | Assets |
|  | December 31, |
|  | 2025 |  |  | 2024 |  |  | 2023 |
Domestic |  | $ | 4,186,567 |  |  | $ | 3,873,904 |  |  | $ | 3,770,883 |
International |  |  | 1,387,112 |  |  |  | 1,235,427 |  |  |  | 1,322,429 |
Total |  | $ | 5,573,679 |  |  | $ | 5,109,331 |  |  | $ | 5,093,312 |
|  | Depreciation and Amortization |
|  | Year Ended December 31, |
|  | 2025 |  |  | 2024 |  |  | 2023 |
Domestic |  | $ | 158,999 |  |  | $ | 135,434 |  |  | $ | 129,648 |
International |  |  | 35,836 |  |  |  | 36,334 |  |  |  | 36,954 |
Total |  | $ | 194,835 |  |  | $ | 171,768 |  |  | $ | 166,602 |
|  | Capital Expenditures |
|  | Year Ended December 31, |
|  | 2025 |  |  | 2024 |  |  | 2023 |
Domestic |  | $ | 143,056 |  |  | $ | 117,836 |  |  | $ | 103,036 |
International |  |  | 26,794 |  |  |  | 18,897 |  |  |  | 26,024 |
Total |  | $ | 169,850 |  |  | $ | 136,733 |  |  | $ | 129,060 |
The Company’s sales in the United States represent approximately 78%, 79%, and 77% of total sales for the years ended December 31, 2025, 2024 and 2023, respectively. Approximately 74% and 76% of the Company’s identifiable long-lived assets are located in the United States as of December 31, 2025 and 2024, respectively.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-21 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name 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