Q - GENERAC HOLDINGS

Previous wording

The forward-looking statements contained in this quarterly report are based on assumptions that we have made in light of our industry experience and on our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you read and consider this report, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond our control) and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results and cause them to differ materially from those anticipated in the forward-looking statements. The forward-looking statements contained in this quarterly report include estimates regarding:

Current wording

The forward-looking statements contained in this quarterly report are based on assumptions that we have made in light of our industry experience and on our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you read and consider this report, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond our control) and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results and cause them to differ materially from those anticipated in the forward-looking statements. The forward-looking statements contained in this quarterly report include estimates and comments regarding:

Previous wording

As disclosed in Part I, Item 1A: Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, the company’s business is subject to risks related to, among other factors, tariffs and other changes in U.S. trade policy and international trade relations. Starting in the first quarter of 2025, the United States government announced additional tariffs on goods imported into the U.S. from numerous countries and multiple nations countered with reciprocal tariffs and other actions in response. The U.S. government stated it is willing to negotiate with other countries regarding the tariffs. The tariffs may negatively impact demand due to higher prices and result in lower margins for some of our products. Generac is currently analyzing the impacts of the tariffs and actions that can be taken to moderate and/or minimize their effects.

Current wording

As disclosed in Part I, Item 1A: Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, the company’s business is subject to risks related to, among other factors, tariffs and other changes in U.S. trade policy and international trade relations. Starting in the first quarter of 2025, the United States government enacted additional tariffs on goods imported into the U.S. from numerous countries (such as China, Vietnam, and Mexico) and certain countries announced tariffs on U.S. goods. Some of these tariffs have been subsequently modified or delayed, and the U.S. government has also stated it is willing to negotiate with respect to the tariffs it has enacted.

Previous wording

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 addition, our focus on more resilient, efficient and sustainable energy solutions has dramatically increased our served addressable market, and as a result, we believe we can continue to be a leader as energy costs rise and end markets evolve over time.

Current wording

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 addition, our focus on more resilient, efficient and sustainable energy solutions has increased our served addressable market, and as a result, we believe we can continue to be a leader as energy costs rise and end markets evolve over time.

Previous wording

Solar, storage, and energy management markets continue to develop. We believe 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. Importantly, we expect that a confluence of factors will continue to drive meaningful increases in power prices for end users in the future. As a result, on-site power generation from renewable sources and cleaner-burning natural gas generators are projected to become more prevalent as will the need to monitor, manage, and store this power – potentially developing into a significant market opportunity as utility customers seek alternative solutions to combat rising power prices. In addition, battery storage provides customers another source of power resiliency for shorter duration outages. Additionally, these markets are currently being supported by significant subsidies and investment tax credits for consumers and businesses to help advance the adoption of clean energy technologies. Further, production tax credits are being offered to businesses that meet certain domestic manufacturing requirements in the production of renewable energy products. While the expected duration of these subsidies and tax credits may change, we believe the overall mega-trends that are driving the solar, storage, and energy management markets currently provide sufficient incentive for long-term, value-creating investments for market participants in this space. Given the significant market opportunity ahead of us, we expect to further advance our capabilities in energy technology by increasing our product development, sourcing, distribution, and marketing efforts. In addition, we plan to leverage our significant competencies in the residential standby generator market to build our market position in the emerging residential solar, storage, and energy management markets.

Current wording

Solar, storage, and energy management marketopportunities. We believe 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. Importantly, we expect that a confluence of factors will continue to drive meaningful increases in power prices for end users in the future. As a result, on-site power generation from renewable sources and cleaner-burning natural gas generators are projected to become more prevalent as will the need to monitor, manage, and store this power – potentially developing into a significant market opportunity as utility customers seek alternative solutions to combat rising power prices. In addition, battery storage provides customers another source of power resiliency for shorter duration outages. Additionally, these markets have been supported by subsidies and investment tax credits for consumers and businesses to help advance the adoption of clean energy technologies. Further, production tax credits are being offered to businesses that meet certain domestic manufacturing requirements in the production of renewable energy products. While the duration of certain subsidies and tax credits has changed, we believe the overall mega-trends that are driving the solar, storage, and energy management markets currently provide sufficient incentive for long-term, value-creating investments for market participants in this space. Given the significant long-term market opportunity, we expect to further improve our capabilities in energy technology product development, sourcing, distribution, and marketing. In addition, we plan to leverage our significant competencies in the residential standby generator market to build our market position in the residential solar, storage, and energy management markets.

Previous wording

Impact of business capital investment and other economic cycles. The global market for our C&I products is affected by different capital investment cycles, which can vary widely across the different regions and markets that we serve. These cycles include non-residential building construction, durable goods and infrastructure spending, as well as investments in the exploration and production of oil & gas, as businesses or organizations either add new locations or make investments to upgrade existing locations or equipment. These trends and market conditions can have a material impact on demand for our products. The capital investment cycle may differ for the various C&I end markets that we serve, including light commercial, retail, office, telecommunications, rental, industrial, data centers, healthcare, construction, oil & gas and municipal infrastructure, among others. The market for these products is also affected by general economic conditions, fluctuations in interest rates, and geopolitical matters in the various countries where we serve, as well as credit availability in those regions.

Current wording

Impact of business capital investment and other economic cycles. The global market for our C&I products is affected by different capital investment cycles, which can vary widely across the different regions and markets that we serve. These cycles include non-residential building construction, durable goods and infrastructure spending, as well as investments in the build out of data centers, as businesses or organizations either add new locations or make investments to upgrade existing locations or equipment. These trends and market conditions can have a material impact on demand for our products. The capital investment cycle may differ for the various C&I end markets that we serve, including light commercial, retail, office, telecommunications, rental, industrial, data centers, healthcare, construction, oil & gas and municipal infrastructure, among others. The market for these products is also affected by general economic conditions, fluctuations in interest rates, and geopolitical matters in the various countries where we serve, as well as credit availability in those regions.

Previous wording

In 2021, the Organization for Economic Cooperation and Development (OECD) released Pillar Two Global Anti-Base Erosion model rules, designed to ensure large corporations are taxed at a minimum rate of 15% in all countries of operation. The OECD continues to release guidance and countries are implementing legislation to adopt the rules, some of which became effective on January 1, 2024. The United States has not yet enacted legislation implementing Pillar Two. We are continuing to implement the Pillar Two rules and evaluate their potential impact on future periods. There was no impact to our financial results for the three months ended March 31, 2025, and we do not expect the rules to have a material impact on our effective tax rate for the remainder of the year. We will update our future tax provisions based on new regulations or guidance accordingly.

Current wording

In 2021, the Organization for Economic Cooperation and Development (OECD) released Pillar Two Global Anti-Base Erosion model rules, designed to ensure large corporations are taxed at a minimum rate of 15% in all countries of operation. The OECD continues to release guidance and countries are implementing legislation to adopt the rules, some of which became effective on January 1, 2024. The United States has not yet enacted legislation implementing Pillar Two. We are continuing to implement the Pillar Two rules and evaluate their potential impact on future periods. There was no impact to our financial results for the three or six months ended June 30, 2025, and we do not expect the rules to have a material impact on our effective tax rate for the remainder of the year. We will update our future tax provisions based on new regulations or guidance accordingly.

Previous wording

Three*** months endedMarch 31, 2025,** comparedto the three months ended ***March 31, 2024

Current wording

Three*** months endedJune 30, 2025,** comparedto the three months ended ***June 30, 2024

Previous wording

In addition, total contribution from non-annualized acquisitions for the first quarter of 2025 was $11.2 million for the domestic segment.

Current wording

In addition, total contribution from non-annualized acquisitions for the second quarter of 2025 was $6.2 million for the domestic segment.

Previous wording

Net income attributable to Generac Holdings Inc. Net income attributable to Generac Holdings Inc. in the first quarter of 2025 was $43.8 million compared to $26.2 million in the prior-year first quarter. This increase was primarily driven by the factors outlined above.

Current wording

Net income attributable to Generac Holdings Inc. * * Net income attributable to Generac Holdings Inc. in the second quarter of 2025 was $74.0 million compared to $59.1 million in the prior-year second quarter. This increase was primarily driven by the factors outlined above.

Previous wording

Adjusted EBITDA. Adjusted EBITDA for the domestic segment in the first quarter of 2025 was $122.5 million, or 15.7% of domestic segment total sales, as compared to $99.2 million, or 13.8% of total sales, in the prior-year first quarter. This margin improvement was primarily driven by favorable sales mix and lower input costs, partially offset by increased operating expense investments to support future growth.

Current wording

Adjusted EBITDA. Adjusted EBITDA for the domestic segment in the second quarter of 2025 was $158.1 million, or 17.9% of domestic segment total sales, as compared to $139.7 million, or 16.9% of total sales, in the prior-year second quarter. This margin increase was primarily driven by favorable price realization and lower input costs, partially offset by unfavorable sales mix and increased operating expense investments to support future growth.

Previous wording

Adjusted EBITDA for the international segment in the first quarter of 2025, before deducting for non-controlling interests, was $27.0 million, or 14.6% of international segment total sales, as compared to $28.0 million, or 15.0% of total sales, in the prior-year first quarter. This slight margin decline was primarily driven by unfavorable sales mix and higher operating expenses during the quarter.

Current wording

Adjusted EBITDA for the international segment in the second quarter of 2025, before deducting for non-controlling interests, was $29.5 million, or 15.0% of international segment total sales, as compared to $25.0 million, or 13.6% of total sales, in the prior-year second quarter. This margin increase was primarily driven by favorable price and cost impacts, partially offset by unfavorable sales mix.

Previous wording

Adjusted Net Income. Adjusted Net Income in the first quarter of 2025 was $75.4 million compared to $53.0 million in the prior-year first quarter. This increase was primarily driven by higher net income in the current period as outlined above together with changes in certain add-back items.

Current wording

Adjusted Net Income. Adjusted Net Income in the second quarter of 2025 was $97.3 million compared to $81.7 million in the prior-year second quarter. This increase was primarily driven by higher net income in the current period as outlined above together with changes in certain add-back items.

Previous wording

Net sales. Domestic segment total sales (including inter-segment sales) increased 9% to $782.3 million in the first quarter of 2025, as compared to $720.5 million in the prior-year first quarter, including an approximately 2% benefit from acquisitions. This increase was primarily driven by higher sales of home standby generators and energy technology solutions, as well as growth in C&I product shipments to national telecom customers and industrial distributors. This growth was partially offset by lower C&I product sales to national rental accounts and other direct customers for “beyond standby” applications.

Current wording

Net sales. Domestic segment total sales (including inter-segment sales) increased 8% to $1,666.8 million in the six months ended June 30, 2025, as compared to $1,547.6 million in the prior-year comparable period, including an approximately 1% benefit from acquisitions. This increase was primarily driven by higher sales of home standby generators, portable generators, and energy technology solutions, as well as growth in C&I product shipments to national telecom customers and industrial distributors. This growth was partially offset by lower C&I product sales to national rental accounts and other direct customers for “beyond standby” applications.

Previous wording

International segment total sales (including inter-segment sales) decreased slightly to $185.5 million in the first quarter of 2025, as compared to $186.7 million in the prior-year first quarter, including an approximate 5% unfavorable impact from foreign currency. Excluding the impact of foreign currency, the total sales growth for the segment was primarily driven by strength in residential product shipments in Latin America as well as higher inter-segment sales to the U.S. market, partially offset by softer C&I shipments in most global end markets that we serve.

Current wording

International segment total sales (including inter-segment sales) increased to $382.7 million in the six months ended June 30, 2025, as compared to $371.2 million in the prior-year comparable period, including an approximate 2% unfavorable impact from foreign currency. Excluding the impact of foreign currency, the total sales growth for the segment was primarily driven by higher inter-segment sales to the U.S. market and stronger product sales in Europe, partially offset by softer C&I shipments in other regions.

Previous wording

Gross profit. Gross profit margin for the first quarter of 2025 was 39.5%, as compared to 35.6% in the prior-year first quarter. The increase in gross margin was primarily driven by favorable sales mixand realization of lower input costs.

Current wording

Gross profit. * * Gross profit margin for the six months ended June 30, 2025 was 39.4%, as compared to 36.7% in the prior-year comparable period. The increase in gross margin was primarily driven by favorable price realization and lower input costs.

Previous wording

Operating Expenses. Operating expenses increased $38.8 million, or 15.6%, as compared to the prior-year first quarter. The growth in operating expenses was primarily driven by increased employee costs to support future growth across the business, higher marketing spend to drive incremental awareness for our products, and ongoing operating expenses related to recent acquisitions.

Current wording

Operating Expenses. Operating expenses for the six months ended June 30, 2025 increased $71.5 million, or 13.7%, as compared to the prior-year comparable period. The growth in operating expenses was primarily driven by higher variable costs due to higher shipment volumes, increased employee costs to support future growth across the business, higher marketing spend, and ongoing operating expenses related to recent acquisitions.

Previous wording

Other Expense. The decrease in other expense, net was driven primarily by a decrease in interest expense due to lower borrowings and lower interest rates compared to the prior-year first quarter. This was partially offset by a larger loss on the change in the fair value of the Company's investment in Wallbox N.V. shares and warrants.

Current wording

Other Expense. The decrease in other expense, net was driven primarily by a decrease in interest expense due to lower borrowings and lower interest rates compared to the prior-year comparable period. This was partially offset by a larger loss on the change in the fair value of the Company's investment in Wallbox N.V. shares and warrants, along with a pre-tax loss attributable to the sale of our immaterial Tank Utility fleet business in the current year period.

Previous wording

Provision for income taxes. Provision for income taxes for the first quarter of 2025 was $14.2 million, or an effective tax rate of 24.3%, as compared to $12.0 million, or a 31.2% effective tax rate, for the prior-year first quarter. The decrease in effective tax rate was primarily driven by certain unfavorable discrete tax items in the prior-year comparable period that did not repeat in the current period.

Current wording

Provision for income taxes. Provision for income taxes for the six months ended June 30, 2025 was $29.7 million, or an effective tax rate of 20.0%, as compared to $31.7 million, or a 27.0% effective tax rate, for the prior-year comparable period. The decrease in effective tax rate was primarily due to a discrete tax benefit in the second quarter of 2025 related to the sale of our immaterial Tank Utility fleet business as well as certain unfavorable discrete tax items in the period year comparable period that did not repeat in the current period.

Previous wording

As of March 31, 2025, there was $497.5 million outstanding under the New Term Loan B Facility, $703.1 million outstanding under the Tranche A Term Loan Facility, and no borrowings on the Revolving Facility, leaving $1,249.2 million of unused capacity, net of outstanding letters of credit. The New Term Loan B Facility bears interest at the adjusted SOFR rate plus an applicable margin of 1.75%, subject to a SOFR floor of 0.0%. As of March 31, 2025, the interest rate for the New Term Loan B Facility is 6.06%. The Tranche A Term Loan Facility and the Revolving Facility bear interest at a rate based on adjusted SOFR plus an applicable margin between 1.25% and 1.75%, based on the Company's total leverage ratio and subject to a SOFR floor of 0.0%. As of March 31, 2025, the interest rate for the Tranche A Term Loan Facility is 5.92% and the interest rate for the Revolving Facility is 5.93%. There were no borrowings under the Revolving Facility as of March 31, 2025.

Current wording

As of June 30, 2025, there was $496.3 million outstanding under the Term Loan B Facility, $693.8 million outstanding under the Tranche A Term Loan Facility, and $90.0 million of borrowings on the Revolving Facility, leaving $1,159.3 million of unused capacity, net of outstanding letters of credit. The Term Loan B Facility bears interest at the adjusted SOFR rate plus an applicable margin of 1.75%, subject to a SOFR floor of 0.0%. As of June 30, 2025, the interest rate for the Term Loan B Facility is 6.07%. The Tranche A Term Loan Facility and the Revolving Facility bear interest at a rate based on adjusted SOFR plus an applicable margin between 1.25% and 1.75%, based on our total leverage ratio and subject to a SOFR floor of 0.0%. As of June 30, 2025, the interest rate for the Tranche A Term Loan Facility and the Revolving Facility is 5.92%.

Previous wording

The New Term Loan B Facility does not require an Excess Cash Flow payment (as defined in our Amended Credit Agreement) if our net secured leverage ratio is maintained below 3.75 to 1.00. As of March 31, 2025, our net secured leverage ratio was 1.33** to 1.00, and we were in compliance with all covenants of the Facility. There are no financial maintenance covenants on the Term Loan B Facility. The Tranche A Term Loan Facility and the Revolving Facility contain certain financial covenants that require us to maintain a total leverage ratio below 3.75 to 1.00, as well as an interest coverage ratio above 3.00 to 1.00. As of March 31, 2025, our total leverage ratio was 1.40 to 1.00, and our interest coverage ratio was **11.25 to 1.00. We were also in compliance with all other covenants of the Amended Credit Agreement as of March 31, 2025.

Current wording

The Term Loan B Facility does not require an Excess Cash Flow payment (as defined in our Amended Credit Agreement) if our net secured leverage ratio is maintained below 3.75 to 1.00. As of June 30, 2025, our net secured leverage ratio was 1.37 to 1.00, and we were in compliance with all covenants of the Facility. There are no financial maintenance covenants on the Term Loan B Facility. The Tranche A Term Loan Facility and the Revolving Facility contain certain financial covenants that require us to maintain a total leverage ratio below 3.75 to 1.00, as well as an interest coverage ratio above 3.00 to 1.00. As of June 30, 2025, our total leverage ratio was 1.44 to 1.00, and our interest coverage ratio was** **12.34 to 1.00. We were also in compliance with all other covenants of the Amended Credit Agreement as of June 30, 2025.

Previous wording

In July 2022, our Board of Directors approved a stock repurchase program, which commenced on August 5, 2022, and allowed for the repurchase of up to $500.0 million of our common stock over a 24-month period. Additionally, on February 12, 2024, our Board of Directors approved a new stock repurchase program that allows for the repurchase of up to $500.0 million of our common stock over the next twenty-four months. The new program replaced the prior share repurchase program, which had approximately $26.3 million remaining available for repurchase when the new program was approved. Pursuant to the approved program, we may repurchase our common stock from time to time, in amounts and at prices we deem appropriate, subject to market conditions and other considerations. The repurchases may be executed using a combination of Rule 10b5-1 trading plans, open market purchases, privately negotiated agreements, or other transactions. The actual timing, number and value of shares repurchased under the program will be determined by management at its discretion and in compliance with the terms of our credit agreements. The repurchases may be funded with cash on hand, available borrowings, or proceeds from potential debt or other capital markets sources. The stock repurchase program may be suspended or discontinued at any time without prior notice. As of March 31, 2025, the remaining unused buyback authorization under the current program was $249.8 million.

Current wording

In July 2022, our Board of Directors approved a stock repurchase program, which commenced on August 5, 2022, and allowed for the repurchase of up to $500.0 million of our common stock over a 24-month period. Additionally, on February 12, 2024, our Board of Directors approved a new stock repurchase program that allows for the repurchase of up to $500.0 million of our common stock over the next twenty-four months. The new program replaced the prior share repurchase program, which had approximately $26.3 million remaining available for repurchase when the new program was approved. Pursuant to the approved program, we may repurchase our common stock from time to time, in amounts and at prices we deem appropriate, subject to market conditions and other considerations. The repurchases may be executed using a combination of Rule 10b5-1 trading plans, open market purchases, privately negotiated agreements, or other transactions. The actual timing, number and value of shares repurchased under the program will be determined by management at its discretion and in compliance with the terms of our credit agreements. The repurchases may be funded with cash on hand, available borrowings, or proceeds from potential debt or other capital markets sources. The stock repurchase program may be suspended or discontinued at any time without prior notice. As of June 30, 2025, the remaining unused buyback authorization under the current program was $199.3 million.

Previous wording

During the first quarter of 2025, we repurchased 716,685 shares of common stock for $97.5 million. There were no share repurchases under the program during the first quarter of 2024. We have periodically reissued shares out of Treasury stock, including for acquisition contingent consideration payments.

Current wording

During the three and six months ended June 30, 2025, we repurchased 392,521 and 1,109,206 shares of common stock for $50.5 million and $147.9 million, respectively. During the three and six months ended June 30, 2024, we repurchased 355,640 shares of common stock for $50.6 million. We have periodically reissued shares out of Treasury stock, including for acquisition contingent consideration payments.

Previous wording

As of March 31, 2025, we had total liquidity of $1,436.7 million which consists of $187.5 million of cash and cash equivalents and $1,249.2 million of availability under our Revolving Facility. We believe we have a strong liquidity position that allows us to execute our strategic plan, fund common stock buybacks, and provides the flexibility to continue to invest in future growth opportunities.

Current wording

As of June 30, 2025, we had total liquidity of $1,382.8 million which consists of $223.5 million of cash and cash equivalents and $1,159.3 million of availability under our Revolving Facility. We believe we have a strong liquidity position that allows us to execute our strategic plan, fund common stock buybacks, and provides the flexibility to continue to invest in future growth opportunities.

Previous wording

We have an arrangement with a finance company to provide floor plan financing for qualifying dealers. This arrangement provides liquidity for our dealers by financing dealer purchases of Generac products with credit availability from the finance company. We receive payment from the finance company after shipment of product to the dealer, and our dealers are given a longer period of time to pay the finance company. If our dealers do not pay the finance company, we may be required to repurchase the applicable inventory held by the dealer. We do not indemnify the finance company for any credit losses they may incur. Total dealer purchases financed under this arrangement accounted for approximately 15% and 12% of net sales for the three months ended March 31, 2025 and 2024, respectively. The amount financed by dealers which remained outstanding under this arrangement was $185.0 million and $165.4 million as of March 31, 2025, and December 31, 2024, respectively.

Current wording

We have an arrangement with a finance company to provide floor plan financing for qualifying dealers. This arrangement provides liquidity for our dealers by financing dealer purchases of Generac products with credit availability from the finance company. We receive payment from the finance company after shipment of product to the dealer, and our dealers are given a longer period of time to pay the finance company. If our dealers do not pay the finance company, we may be required to repurchase the applicable inventory held by the dealer. We do not indemnify the finance company for any credit losses they may incur. Total dealer purchases financed under this arrangement accounted for approximately 13% of net sales for the six months ended June 30, 2025, and 2024, respectively. The amount financed by dealers which remained outstanding under this arrangement was $167.2.0 million and $165.4 million as of June 30, 2025, and December 31, 2024, respectively.

Previous wording

We believe our cash and cash equivalents, cash flow from operations, and availability under our Revolving Facility and other short-term lines of credit will provide us with sufficient capital to continue to run our operations. We may use a portion of our cash flow for debt repayments and common stock buybacks, impacting the amount available for working capital, capital expenditures, acquisitions, and other general corporate purposes. As we continue to expand our business, we may require additional capital to fund other activities that drive incremental shareholder value.

Current wording

We believe our cash and cash equivalents, cash flow from operations, and availability under our Revolving Facility and other short-term lines of credit will provide us with sufficient capital to continue to run our operations. We may use a portion of our cash flow for debt repayments and common stock buybacks, impacting the amount available for working capital, capital expenditures, acquisitions, and other general corporate purposes. As we continue to expand our business, we may require additional capital to fund other activities that could potentially drive incremental shareholder value.** **

Previous wording

The decrease in operating cash flows for the three months ended March 31, 2025 was primarily driven by an increase in working capital in the current year period, which included the replenishment of certain residential product finished good inventories, partially offset by higher operating earnings.

Current wording

The decrease in operating cash flows for the six months ended June 30, 2025 was primarily driven by an increase in working capital in the current year period, which included the replenishment of certain residential product finished good inventories, partially offset by higher operating earnings.

Previous wording

The $33.5 million net cash used in investing activities for thethree months ended March 31, 2025 primarily represents cash payments of $30.9 million related to the purchase of property and equipment and $2.6 million for the purchase of long-term investments.

Current wording

The $93.3 million net cash used in investing activities for the six months ended June 30, 2025 primarily represents cash payments of $88.7 million related to the purchase of property and equipment, $2.7 million for the purchase of long-term investments, and $2.0 million relating to other investing activities.

Previous wording

The $26.6 million net cash used in investing activities for the three months ended March 31, 2024 primarily represents cash payments of $26.8 million related to the purchase of property and equipment, and $1.6 million for a tax equity investment. These were partially offset by $2.0 million of cash proceeds from the sale of our minority investment in Rolling Energy Resources.

Current wording

The $74.0 million net cash used in investing activities for the six months ended June 30, 2024 primarily represents cash payments of $54.8 million related to the purchase of property and equipment, $17.8 million for the acquisitions of Huntington and C&I BESS, $1.6 million for a tax equity investment, and $1.9 million for an investment in Earth Foundry II. LP, a venture capital fund. These were partially offset by $2.0 million of cash proceeds from the sale of our minority interest in Rolling Energy Resources.

Previous wording

The $119.7 million net cash used in financing activities for the three months ended March 31, 2025 primarily represents proceeds of $19.2 million from short-term borrowings, $0.9 million from long-term borrowings, and $0.6 million from the exercise of stock options. These cash proceeds were more than offset by $34.4 million of debt repayments ($20.0 million of short-term borrowings and $14.4 million of long-term borrowings and finance lease obligations), $97.5 million of share repurchases, and $8.6 million for taxes paid related to equity awards.

Current wording

The $101.3 million net cash used in financing activities for the six months ended June 30, 2025 primarily represents proceeds of $21.9 million from short-term borrowings, $92.6 million from long-term borrowings, and $1.0 million from the exercise of stock options. These cash proceeds were more than offset by $59.2 million of debt repayments ($30.2 million of short-term borrowings and $29.0 million of long-term borrowings and finance lease obligations), $147.9 million of share repurchases, and $9.4 million for taxes paid related to equity awards.

Previous wording

The $36.3 million net cash used in financing activities for the three months ended March 31, 2024 primarily represents proceeds of $9.0 million from short-term borrowings, $0.5 million from long-term borrowings, and $0.3 million from the exercise of stock options. These cash proceeds were more than offset by $25.5 million of debt repayments ($18.5 million of short-term borrowings and $7.0 million of long-term borrowings and finance lease obligations), a $9.1 million payment for the remaining ownership interest in Captiva, a $6.0 million payment of deferred acquisition consideration related to our Chilicon acquisition, and $5.5 million for taxes paid related to equity awards.

Current wording

The $96.5 million net cash used in financing activities for the six months ended June 30, 2024 primarily represents proceeds of $20.7 million from short-term borrowings, $2.9 million from long-term borrowings, and $10.6 million from the exercise of stock options. These cash proceeds were more than offset by $53.7 million of debt repayments ($39.0 million of short-term borrowings and $14.7 million of long-term borrowings and finance lease obligations), $50.6 million of share repurchases, a $9.1 million payment for the remaining ownership interest in Captiva, a $6.0 million payment and $1.4 million payment of deferred acquisition consideration related to our Chilicon and Blue Pillar acquisitions, respectively, and $10.0 million for taxes paid related to equity awards.

Previous wording

As discussed in our Annual Report on Form 10-K for the year ended December 31, 2024, in preparing the financial statements in accordance with U.S. GAAP, management is required to make estimates and assumptions that have an impact on the asset, liability, revenue and expense amounts reported. These estimates can also affect supplemental information disclosures of the Company, including information about contingencies, risk and financial condition. The Company believes, given current facts and circumstances, its estimates and assumptions are reasonable, adhere to U.S. GAAP, and are consistently applied. Inherent in the nature of an estimate or assumption is the fact that actual results may differ from estimates, and estimates may vary as new facts and circumstances arise. The Company makes routine estimates and judgments in determining net realizable value of accounts receivable, inventories, property and equipment, prepaid expenses, product warranties and other reserves. Management believes our most critical accounting estimates and assumptions are in the following areas: goodwill and other indefinite-lived intangible asset impairment assessment; and income taxes.

Current wording

As discussed in our Annual Report on Form 10-K for the year ended December 31, 2024, in preparing the financial statements in accordance with GAAP, management is required to make estimates and assumptions that have an impact on the asset, liability, revenue and expense amounts reported. These estimates can also affect supplemental information disclosures of the Company, including information about contingencies, risk and financial condition. The Company believes, given current facts and circumstances, its estimates and assumptions are reasonable, adhere to U.S. GAAP, and are consistently applied. Inherent in the nature of an estimate or assumption is the fact that actual results may differ from estimates, and estimates may vary as new facts and circumstances arise. The Company makes routine estimates and judgments in determining net realizable value of accounts receivable, inventories, property and equipment, prepaid expenses, product warranties and other reserves. Management believes our most critical accounting estimates and assumptions are in the following areas: goodwill and other indefinite-lived intangible asset impairment assessment; and income taxes.

Previous wording

We explain in more detail in footnotes (a) through (f) below why we believe these adjustments are useful in calculating Adjusted EBITDA as a measure of our operating performance.

Current wording

We explain in more detail in footnotes (a) through (g) below why we believe these adjustments are useful in calculating Adjusted EBITDA as a measure of our operating performance.

Previous wording

• A provision for judgments, settlements, and legal expenses related to certain patent lawsuits - $1.5 million in the first quarter of 2025 and $2.1 million in the first quarter of 2024.

Current wording

• A provision for judgments, settlements, and legal expenses related to certain patent lawsuits - $1.7 million and $3.2 million for the three and six months ended June 30, 2025, respectively and $0.4 million and $2.5 million for the three and six months ended June 30, 2024, respectively.

Previous wording

• Legal expenses related to certain class action lawsuits - $1.4 million in the first quarter of 2025.

Current wording

• Legal expenses related to certain class action lawsuits - $2.5 million and $3.9 million for the three and six months ended June 30, 2025, respectively.

Previous wording

• Legal expenses related to certain government inquiries and other significant matters - $0.9 million in the first quarter of 2025.

Current wording

• Legal expenses related to certain government inquiries and other significant matters - $0.7 million and $1.6 million for the three and six months ended June 30, 2025, respectively.

Previous wording

• Additional customer support costs related to a clean energy product customer that filed for bankruptcy in 2022 – $0.4 million in the first quarter of 2024.

Current wording

• Additional customer support costs related to a clean energy product customer that filed for bankruptcy in 2022 – $0 and $0.4 million for the three and six months ended June 30, 2024, respectively.

Previous wording

(f) Represents non-cash losses from changes in the fair value of the Company's investment in Wallbox N.V. warrants and equity securities.

Current wording

(f) Represents non-cash losses primarily from changes in the fair value of the Company's investment in Wallbox N.V. warrants and equity securities.