Generac sees Q1 adjusted EBITDA margins in mid-12% range

On the company’s earnings call, Generac executives stated: “With respect to operating expenses, we continue to invest heavily in the resources needed to position our business for long-term growth in new and existing markets, maintaining a heavy focus on supporting innovation, and executing our strategic initiatives across the enterprise. As a result of these investments, we expect operating expenses as a percentage of sales to be approximately 23% for the full year 2024… As a result of our gross margin and operating expense expectations, adjusted EBITDA margins before deducting for noncontrolling interests are expected to be approximately 16.5% to 17.5% for the full year, compared to 15.9% in 2023. From a seasonality perspective, we expect adjusted EBITDA margins to improve significantly as we move throughout the year. Specifically, regarding the first quarter, adjusted EBITDA margins are expected to be the lowest for the year in the mid-12% range, and then improved sequentially throughout the year, returning to approximately 20% in the fourth quarter. As a result, second half adjusted EBITDA margins are expected to be nearly 600 basis points higher than the first half margins.”