Generac CEO: Data Center Boom Has 5+ Years Left

Generac Chairman, President, and CEO Aaron Jagdfeld highlighted a significant shift in the company's order flow, describing the recent $1 billion in data center orders as unprecedented. He anticipates this buildout phase to persist for at least five to seven years, possibly longer, driven by committed capital and ongoing developments.

The company's second quarter performance reflected this strategic pivot, with earnings per share of $2.91 surpassing the $2.01 consensus. Revenue increased by 10.59% year over year to $1.17 billion. The commercial and industrial segment saw robust growth of 29%, while the residential segment experienced a slight decline.

Generac's total data center backlog reached approximately $1.6 billion. This figure does not yet include committed volumes from a second major hyperscale customer with whom a global supply agreement was signed during the quarter.

Jagdfeld noted a strategic rebalancing of Generac's business, moving from a roughly 65% residential and 33% commercial and industrial (C&I) split towards a more even 50-50 balance. This diversification aims to enhance revenue stability, as the residential business is more susceptible to external factors like weather events.