Generac Holdings (GNRC) 10-K risk factor changes: FY2024 vs FY2023

| For the fiscal year ended December 31, [removed: 2023] [added: 2024] Or | |

The aggregate market value of the voting common equity held by non-affiliates of the registrant on June [removed: 30, 2023,] [added: 28, 2024,] the last business day of the registrant’s most recently completed second fiscal quarter, was approximately [removed: $9.0] [added: $8] billion based on the closing price reported for such date on the New York Stock Exchange.

As of February [removed: 16, 2024, 60,269,310] [added: 14, 2025, 59,614,025] shares of the registrant's common stock were outstanding.

Portions of the registrant’s Annual Report to Stockholders for the year ended December 31, [removed: 2023] [added: 2024] furnished to the Securities and Exchange Commission are incorporated by reference into Part II of this Form 10-K.

Portions of the registrant’s Proxy Statement for the [removed: 2024] [added: 2025] Annual Meeting of Stockholders (the [removed: “2024] [added: “2025] Proxy Statement”), which will be filed by the registrant on or prior to 120 days following the end of the registrant’s fiscal year ended December 31, [removed: 2023,] [added: 2024,] are incorporated by reference into Part III of this Form 10-K.

[](# [removed: "toc")2023] [added: "toc")2024] FORM 10-K ANNUAL REPORT

| Item 1B. | [Unresolved Staff Comments](#item1b) | [removed: [21](#item1b)] [added: [20](#item1b)] |

| Item 1C. | [Cybersecurity](#item1c) | [removed: [21](#item1c)] [added: [20](#item1c)] |

| Item 2. | [Properties](#item2) | [removed: [21](#item2)] [added: [20](#item2)] |

| Item 3. | [Legal Proceedings](#item3) | [removed: [22](#item3)] [added: [21](#item3)] |

| Item 4. | [Mine Safety Disclosures](#item4) | [removed: [22](#item4)] [added: [21](#item4)] |

| Item 5. | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#item5) | [removed: [22](#item5)] [added: [21](#item5)] |

| Item 6. | [removed: [\[Removed and Reserved\]](#item6)] [added: [\[Reserved\]](#item6)] | [removed: [24](#item6)] [added: [23](#item6)] |

| Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#item7) | [removed: [24](#item7)] [added: [23](#item7)] |

| Item 7A. | [Quantitative and Qualitative Disclosures About Market Risk](#item7a) | [removed: [35](#item7a)] [added: [33](#item7a)] |

| Item 8. | [Financial Statements and Supplementary Data](#item8) | [removed: [36](#item8)] [added: [34](#item8)] |

| Item 9. | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#item9) | [removed: [71](#item9)] [added: [69](#item9)] |

| Item 9A. | [Controls and Procedures](#item9a) | [removed: [71](#item9a)] [added: [69](#item9a)] |

| Item 9B. | [Other Information](#item9b) | [removed: [72](#item9b)] [added: [70](#item9b)] |

| Item 9C. | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#item9c) | [removed: [72](#item9c)] [added: [70](#item9c)] |

| Item 10. | [Directors, Executive Officers and Corporate Governance](#item10) | [removed: [72](#item10)] [added: [70](#item10)] |

| Item 11. | [Executive Compensation](#item11) | [removed: [72](#item11)] [added: [70](#item11)] |

| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#item12) | [removed: [72](#item12)] [added: [70](#item12)] |

| Item 13. | [Certain Relationships and Related Transactions, and Director Independence](#item13) | [removed: [72](#item13)] [added: [70](#item13)] |

| Item 14. | [Principal Accountant Fees and Services](#item14) | [removed: [72](#item14)] [added: [70](#item14)] |

| Item 15. | [Exhibits and Financial Statement Schedules](#item15) | [removed: [72](#item15)] [added: [70](#item15)] |

| Item 16. | [Form 10-K Summary](#item16) | [removed: [76](#item16)] [added: [74](#item16)] |

| | ● | our failure or inability to adapt to, or comply with, current or future changes in applicable [removed: laws] [added: laws, regulations,] and [removed: regulations;] [added: product standards;] |

| | ● | scrutiny regarding our [removed: ESG] [added: sustainability] practices; |

| | ● | changes in U.S. trade [removed: policy;] [added: policy, including the imposition of new or increased tariffs;] |

| | ● | our potential need for additional capital to finance our growth or [removed: refinancing] [added: refinance] our existing credit facilities; |

[removed: Generac is a leading energy technology solutions company that] [added: The Company] provides [removed: backup and prime] power generation [removed: products for residential and commercial & industrial (C&I) applications, solar + battery] [added: equipment, energy] storage systems, energy [removed: monitoring &] management devices [added: & solutions,] and [removed: services,] [added: other power products] and [removed: engine- & battery-powered tools] [added: services serving the residential, light commercial,] and [removed: equipment.][added: industrial markets.]

[removed: As an] [added: The Company continues to expand its] energy technology [removed: solutions company that is “Powering] [added: offerings for homes and businesses in its mission to Power] a Smarter [removed: World”, our corporate purpose is to] [added: World and] lead the evolution to more resilient, efficient, and sustainable energy [removed: solutions around the world.][added: solutions.]

We have a long history of providing power generation products across a variety of applications, and we maintain one of the leading [removed: market] positions in the [added: North American market for] power equipment [removed: markets in North America and] [added: with] an expanding presence internationally.

[removed: In recent years, the] [added: The] Company [removed: has been] [added: is] evolving its product portfolio by building out ecosystems of energy technology products, solutions, and services for homes and [removed: businesses.][added: businesses, enabling end users to better manage their energy costs and needs.]

As part of this evolution, we have made significant investments into [removed: growing] [added: developing] markets such as residential and [removed: C&I] [added: commercial & industrial (C&I)] energy storage, solar [removed: module-level] power [removed: electronics (MLPE),] [added: inverters,] energy monitoring & management devices, and electric vehicle (EV) charging.

Central to these ecosystems are the Company’s [removed: next-generation] [added: advanced] connectivity devices, controls capabilities, and software platforms that facilitate the integration of our products [removed: and support the growing utilization of such distributed energy resources (DERs) in] [added: into] grid services programs.

In addition, we have been leveraging our leading position in the growing market for natural gas fueled generators, which we believe represents a cleaner [removed: transition] fuel compared to diesel, to expand into applications beyond standby power, allowing us to participate in [removed: Energy-as-a-Service and] [added: multi-purpose] microgrid projects for C&I customers.

As the traditional centralized utility model evolves over time, we believe that a more decarbonized, digitized, and decentralized grid infrastructure will develop, and [removed: Generac’s] [added: our] energy technology solutions are uniquely and strategically positioned to participate in this next-generation [removed: grid referred to as “Grid 2.0”.][added: grid.]

In addition, our focus on more resilient, efficient and sustainable energy solutions has dramatically increased our served addressable market, and as a result, we believe [removed: that Generac is well positioned for success] [added: we can continue to be a leader as energy costs rise and end markets evolve] over [removed: the long term.][added: time.]

Founded in 1959, Generac is a leading global designer, manufacturer, and provider of a wide range of energy technology solutions.

Given our competitive strengths in our traditional power generation markets, we believe we are well-positioned to execute on the growing opportunity for backup power for homes and businesses, where increased penetration is being driven by multiple mega-trends that are resulting in poorer power quality for end users.

In connection with that transaction, Generac Holdings Inc. was formed as a Delaware holding company.

Generac Power Systems, Inc. is a wholly owned subsidiary of Generac Holdings Inc. For ease of reference in explaining the general activities of its related entities in this report, Generac Holdings Inc. includes here the operating activities of its wholly owned subsidiaries.

It is during this time in the 2010’s that we formed and built out our International segment, which provided additional capability to expand and increase market share by introducing our broad product offering into local markets around the world.

Although we do not believe battery storage applications will displace traditional engine driven backup generators used for power resiliency in the short or medium term, our strategy and continued investment in such energy technology solutions will help ensure Generac maintains its leadership as an energy solutions provider as battery technology evolves over time.

With these investments, we are able to provide another source of power resiliency that complements our traditional backup power business.

To further strengthen this relationship, we made an additional minority investment in Wallbox in August 2024.

Following these acquisitions and investments, we have made considerable organic investments in improving the quality, reliability, and manufacturability of the solutions provided.

We have also made considerable progress in building out leadership teams and integrating the technical capabilities from our recent acquisitions, which will help drive our energy technology strategic initiatives forward.

The integration of these technologies expands upon our well-established value proposition of providing homeowners with resiliency by also optimizing for cost, convenience, and comfort.

While the policy back drop for the clean energy market may evolve over time, we believe customer interest and demand, as well as government programs and support for such energy technology products, will continue as grid capacity is strained and energy costs rise.

Additionally, in 2024, we strengthened our presence in the emerging North American markets for C&I behind-the-meter energy storage and multi-asset microgrids with the acquisitions of SunGrid’s C&I battery energy storage system (BESS) product offering and Ageto, a leading provider of microgrid controllers that seamlessly integrate, optimize and manage distributed energy resources (DERs).

This remote monitoring information can also be accessed by our dealers to help them monitor their installed base of products and proactively support their customers.

We also offer propane tank monitoring solutions, a technology that we acquired in 2021 via Tank Utility Inc. (Tank Utility), an IoT propane tank monitoring solutions company.

In 2025, we expect to launch the PWRcell 2 Series, the next generation of our PWRcell energy storage system, which includes significant improvements in performance and compatibility as compared to the first generation.

Our next-generation clean energy products and solutions, including PWRcell 2 and Wallbox’s EV charging solutions, will be fully integrated with the ecobee platform.

In 2023, we acquired REFU, a European based provider of stationary C&I BESS solutions and related inverter products, which expanded our product offering to enter certain C&I BESS markets around the world.

In 2024, we strengthened our position in the North American C&I BESS market with the acquisitions of SunGrid’s C&I BESS product offering and Ageto, a leading provider of microgrid controllers that seamlessly integrate, optimize and manage DERs.

These microgrids can include other energy assets such as commercial EV charging capabilities, which we are now able to offer via our partnership with Wallbox.

The 2024 acquisition of Ageto further enhanced our advanced control capabilities, particularly in the C&I BESS and multi-asset microgrid markets.

In addition to its controls hardware, Ageto’s solutions include software-as-a-service contracts for site level system integration and control of end customer energy assets that make up a microgrid.

Our Concerto energy-balancing software platform provides a highly flexible approach for controlling and dispatching DERs from flexible loads, backup generators, energy storage systems, and other renewable energy sources.

| | ● | Lower power quality continuing to drive demand for backup power solutions: | |

| | | o | More frequent severe and volatile weather impacting an aging grid, causing increased power outage activity. |

| | | o | Increasing deployment of intermittent generation sources coupled with accelerating electricity demand trends driving supply/demand imbalances for utilities and grid operators. |

| | ● | Higher power prices driving the need for energy management solutions: | |

| | | o | Electrification trends causing power demand to exceed supply, driving up power prices. |

| | | o | Investment required to upgrade grid infrastructure and transition to renewable power sources, pushing prices higher. |

| | ● | Artificial intelligence adoption accelerating, creating a large market opportunity for backup power: | |

| | | o | Significant power requirements for the buildout of data centers to enable AI adoption could drive further grid instability. |

| | | o | Acceleration in the number of hyperscale and edge data centers that require significant backup power. |

| | ● | Growing demand for cleaner burning fuels: | |

| | | o | Demand for natural gas-fueled backup generators growing as homes and businesses desire cleaner-burning fuel sources of generation. |

| | ● | Required investment in global infrastructure, driving demand for our products: | |

| | | o | Upgrading of aging and underinvested legacy infrastructure systems, such as power, telecommunications, transportation, and water. |

| | | o | Expanding investment for increasingly critical technology infrastructure as we transition to a more "connected" society. |

| | ● | Home as a Sanctuary, driving increased demand for resiliency solutions that provide peace of mind: | |

| | | o | Increasing importance of the home with more people working from home and aging in place. |

| | | o | Growing market for intelligent and connected homes that can provide improved energy efficiency. |

| --- | --- |

| --- | --- | --- |

As our traditional power generation markets continue to grow due to multiple mega-trends that are driving increased penetration of our products, we believe we are in an excellent position to execute on this opportunity given our competitive strengths.

Additionally, the favorable policy backdrop for these markets, underscored by the Inflation Reduction Act and other state regulations, provides the necessary visibility to drive potential long-term, value-creating investments.

Additionally, in 2023 Generac launched a series of stationary battery energy storage systems for commercial and industrial applications in the North American market that will help us advance our capabilities in microgrid projects.

In 2021, we expanded our residential connectivity strategy with the acquisition of Tank Utility Inc. (Tank Utility), an IoT propane tank monitoring solutions company.

This residential storage solution consists of a system of batteries, an inverter, photovoltaic (PV) optimizers, power electronic controls, and other components.

In 2022, we launched PWRmanager, the second generation of our load management controls, allowing customers to program and remotely control certain loads in a home and thereby manage battery run times from their smart phones or tablets.

In addition to Generac’s efforts to expand Mean Green’s production capacity and distribution capabilities, this acquisition will help to accelerate the electrification of our higher-powered lineup of chore products.

In 2023, we acquired REFU, a European based provider of stationary energy storage systems and related inverter products.

We also organically introduced a line of larger stationary battery energy storage systems for C&I applications in the North American market.

These capabilities are broadly referred to as grid services.

The acquisition of ecobee further enhanced our efforts in grid services.

| | ● | _“Grid 2.0_”: which is the evolution of the traditional electrical utility model as the increasing reliance on intermittent renewable generation sources and the electrification of everything are leading to supply/demand imbalances and rising electricity costs, driving the migration towards distributed energy resources and decarbonization, digitization, and decentralization of the grid. |

| | ● | _Impact of climate change:_ which includes the expectation of more severe and volatile weather driving increased power outage activity, and more global regulation accelerating renewable investments. |

| | ● | _Home as a Sanctuary:_ which includes the trend of the increasing importance of the home – including more people working from home and aging in place – is leading to increasing sensitivity to power outages and need for peace of mind, combined with the more intelligent and connected home and desire for improved energy resiliency and efficiency. |

| | ● | _Growing investment in global infrastructure creating new opportunities:_ Upgrading of aging and underinvested legacy systems including transportation, power, healthcare and elderly care; along with expanding investment for increasingly critical technology infrastructure including data centers, telecom and EV charging. |

Additionally, rapid growth in renewable power sources such as solar and wind is resulting in increased intermittency of supply, further impairing the reliable supply of electricity at a time when demand is starting to increase meaningfully with the electrification of a wide range of consumer and commercial products, including transportation, HVAC systems, and other major appliances.

We are seeing increasing evidence that warnings of potential resource inadequacies are driving incremental consumer awareness of the need for backup power solutions.

Additionally, these markets are receiving an increasing level of regulatory and legislative support, most notably from the Inflation Reduction Act that was passed in 2022.

We believe this legislative support will provide necessary opportunity for long-term, value-creating investments for market participants in this space.

Additionally, growing interest in our C&I products across a variety of “beyond standby” applications is driving an increase in demand for subscription-like models for end customers, in which Generac will partner with third parties to deliver resiliency solutions that are also able to contribute to grid stability with minimal upfront capital outlays.

We also believe that we can gain share in the C&I “behind the meter” energy storage market, including microgrid applications that require advanced system-level controls.

Generac is the leading supplier of backup power to the telecommunications market in the United States, where approximately half of all existing tower sites have yet to be hardened with backup power.

The “electrification of everything” is expected to drive increasing demand for electricity over the next several years; including the electrification of transportation, via both electric vehicle adoption and expanding charging infrastructure; the electrification of the home, including HVAC systems and other appliances; and the electrification of commercial and industrial systems.

We expect to further simplify and integrate our residential product offering into a single ecosystem, leveraging our software development capabilities brought by the ecobee acquisition.

This singular system-level platform is intended to serve as the central hub and user interface for consumers to monitor and manage all their DERs, thereby empowering the user to optimize energy efficiency and consumption.

Additionally, the growing power demands and increasingly critical nature of data centers and 5G telecom networks globally makes backup power solutions essential elements for creating resilient next-generation infrastructure.

Over the years, we have made significant investments in our “Power Play” guided sales process for residential dealers, making enhancements in several areas targeted to improve the customer experience and overall close rates.

We have made several acquisitions in recent years that significantly enhanced our R&D capabilities.

This includes substantial technical resources in energy storage, monitoring, and power conversion for residential applications, as well as in the C&I energy storage and generator controls spaces.

These resources add proficiency in power electronics and battery management software, and we have also added considerable expertise in designing and prototyping energy efficiency products.

Combining advanced software development with the expansion of our electrical engineering resources is expected to accelerate our energy technology efforts.

Intellectual Property

See “Item 1A.

In 2023, we announced plans to build a new manufacturing facility in Beaver Dam, Wisconsin that will expand our production capacity and increase our vertical integration capabilities for certain C&I product lines.

We believe our vertical integration and scale in home standby generators provides a material benefit in our ability to maintain industry-leading output with state-of-the-art manufacturing processes, especially when demand for our products can increase rapidly with very short notice.

Components and equipment are sourced accordingly based on this evaluation.

We face competition from a variety of large diversified industrial companies as well as smaller generator manufacturers, along with mobile equipment, engine powered tools, solar inverter, battery storage, smart thermostat, and grid services providers, both domestic and internationally.

We believe that our engineering capabilities and core focus on generators provide us with manufacturing flexibility and enable us to maintain a competitive advantage for product innovation.