Generac continued its expansion strategy by acquiring Wolverine Power Systems, Ageto, and the C&I BESS product offering from SunGrid Solutions Inc. These acquisitions aim to enhance Generac's capabilities in the residential and commercial energy technology markets.

Generac is strategically shifting towards energy technology solutions, expanding beyond traditional power generation. This includes investments in residential and C&I energy storage, solar power inverters, energy monitoring & management devices, and EV charging.

Generac is leveraging its position in natural gas fueled generators to expand into applications beyond standby power, participating in multi-purpose microgrid projects for C&I customers. This aligns with the trend toward decarbonization and a decentralized grid infrastructure.

Operating expenses increased by 15.3% YoY, driven by higher employee and marketing costs, as well as increased incentive compensation. This indicates ongoing investment in future growth initiatives.

The company continues to focus on improving the quality, reliability, and manufacturability of its solutions. This is evidenced by the opening of a dedicated engineering center of excellence in Reno, Nevada.

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

Demand for residential products is significantly affected by unpredictable power outage activity, which can lead to substantial variations in financial results from period to period. Sustained periods without major power disruptions can lead to reduced consumer awareness and reduced sales growth.

Fluctuations in the cost, availability, and quality of raw materials, key components, and labor required to manufacture products could materially reduce earnings. The company is susceptible to price fluctuations due to trends in supply and demand, commodity prices, currency rate changes, transportation costs, government regulations and tariffs, price controls, economic conditions and other unforeseen circumstances beyond our control.

Increased governmental and societal attention to sustainability matters, including expanding mandatory and voluntary reporting, and disclosure topics such as climate change, natural resources, waste reduction, energy, and risk oversight could expand the nature, scope, and complexity of matters that we are required to control, assess, and report.

Generac faces competition from large diversified industrial companies and smaller generator manufacturers. Competition is also increasing in energy technology markets such as solar inverters, battery storage systems, smart thermostats, and grid services.

Generac's core focus on power generation and storage, broad product offering, diverse omni-channel distribution model, and strong factory support provide additional advantages in the marketplace.

In a continuously evolving market, Generac believes its scale and broad capabilities position it well to remain competitive. Overall, Generac competes primarily based on brand reputation, quality, reliability, pricing, innovative features, breadth of product and solution offering, product availability and factory support.

The increase in gross profit margin was primarily driven by favorable sales mix, including higher home standby generator sales, the realization of lower input costs, and plant efficiencies.

Although we attempt to maintain a flexible manufacturing cost structure, our margins can be impacted if we cannot timely adjust labor and manufacturing costs to match fluctuations in net sales.

Over time, we have diversified the geographic reach of our global supply chain partners to partially mitigate the impact of certain trade tariffs that have been assessed on imports coming into the United States.

Research and development expenses increased to $219.6 million in 2024. These activities are focused on new product introductions, developing new technologies and product enhancements.

Generac has significantly increased its software development capabilities across a variety of applications, including energy management, system-level microgrid controls, remote monitoring, and distributed energy resource management systems.

We are committed to research, development, and product innovation, and we rely on a combination of patents and trademarks to help establish and protect our proprietary rights.

The Board approved a new stock repurchase program, allowing for the repurchase of up to $500 million of common stock. This reflects management's view of undervalued shares and confidence in future cash flow generation.

Capital expenditures increased to $136.7 million in 2024, supporting facilities and related improvements, technology, research & development, tooling, equipment, capacity expansion, internal use software, IT systems & infrastructure, and upgrades.

The company continues to allocate capital towards acquisitions that support its strategic plan, as evidenced by the acquisitions of Wolverine Power Systems, Ageto, and the C&I BESS product offering from SunGrid Solutions Inc in 2024.

The company published a report on its sustainability practices in April 2024, detailing measures that align with the 'Powering a Smarter World' enterprise strategy.

Employee health and safety is the Company's top priority. Generac's total rewards program is based on the four pillars of balance, security, well-being and community.

Generac prioritizes creating opportunities to help employees build careers and support their growth as part of a meaningful and valuable employee experience.

Power disruptions are an important driver of consumer awareness for backup power. The impact of climate change has received increased global focus in recent years, and an aging and underinvested electrical grid infrastructure remains highly vulnerable to the expectation of more severe and volatile weather.

With only approximately 6.5% penetration of the addressable market of homes in the United States, Generac believes there are significant opportunities to further penetrate the residential standby generator market both domestically and internationally.

The electric utility landscape will undergo significant changes in the decade ahead due to accelerating demand growth, grid instability and power quality issues, environmental concerns, and the continuing performance and cost improvements in renewable energy and energy storage technologies.