GNRC - Earnings call transcript Q3 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and thank you for standing by. Welcome to the Third Quarter 2021, Generac Holdings Incorporated Earnings Call. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session. [Operator Instructions]. conference recorded. today's that advised is being Be [Operator Instructions]. to that, Michael over conference would Harris, like I now hand to Relations. Corporate and the Development With VP Investor your speaker today, you Thank go please ahead. and

Michael Harris

like today Officer. welcome and to York Executive us quarter call. for Good morning Jagdfeld, to With President our everyone me and thank morning. Officer, Financial Aaron XXXX Ragen, third earnings Chief I'd is this Chief joining and

filings during employees, forward-looking will presentation, begin time-to-time cause today statements. of words for in that call as Certain results information as such materially involve differ or these this expressions We forward-looking made other actual by that Please commenting well and statements. from and by factors. statements on earnings and Generac forward-looking our may risk our identify the provided associated those SEC statements a could see statements uncertainties risks from list to our or release, contain its

certain today's will make In measures call. non-GAAP reference addition, we to during

Additional filings. information in or Aaron. to release comparable our turn earnings these is SEC reconciliation GAAP measures U.S. will call over available now the to measures, I regarding including

Aaron Jagdfeld

rate growth at to substantial experienced quarter continue with a exceptional at XXXX. a in us the shipments strong as also a for very Good our to revenue the systems, Carolina. experienced you significant today. thank Thanks, another with standby significant ever standby spite the products providing growth everyone remained Production environment backlog South interest generators, deteriorated for have supply operational broad-based, quarter. were home generators remained C&I home further and we as facility leading revenue obstacles higher output output for levels levels, us good quarter higher joining in with morning, Mike. visibility our increasing levels, This standby and highest the in led prior ramp across Trenton, generators, energy of of demand we in of We Even to clean third that over demand particularly during chain faced XX%, new strong. incredibly year, and home the of record and

residential Residential new Additionally, acquisitions to by year-over-year World levels, markets double-digits Company. standby a tremendous increased for we storage which into grew levels product home continue with year across systems, as end to all-time quarter and in materially were solutions provide XX% previous C&I growth in our as Smarter accelerate on growth sales and geographies. a dramatically $XXX strategy, growth and of also increase growing led continued prior the growth our recently several an also of increase avenues to a compared levels energy sequentially revenue second sequential as due additional The as of by in that net production significantly all-time these million, generators, XX% Powering now relative of well above as will Shipments a shipments record, was Year-over-year, strategic increased shipments was number the the relative we announced the the quarter, energy quarter, also products XXXX strength products in to to up prior to of evolution basis. overall PWRcell products which and record. C&I in both year. driven an strength was technology

Aaron Jagdfeld

margins. longer-term to are costs as as a mitigate reduction and impacted prior to costs. Adjusted commodity to impact to were compare cost number were of experiencing, and pricing year, higher escalating they by we the In the lower additional undertaken we've XX.X% EBITDA actions margins of response unfavorably initiatives the logistics

in trend, combined notably, in in the more in trailing well a Most elevated year-over-year the resulted the in quarter, X the grew quarters average. a very baseline despite extreme on interest backup activity which more third long-term power consumer the basis baseline a outage our remains discussing with power detail, quarter comparison the Sanctuary driving above weather, and quarter. Now, third activity. continued results outage strong Home again for Overall, megatrends prior as year

In people time four fact, second since year. since the has we quarters a the unprecedented of broader outage heightened ten trends, top began The outage activity, driven of standby activity power than demand power at the for have more tracking home last of spending occurred decade severity more impact electrification convergence ago, and the generators. of outage home half

double-digit standby in also generators, broad-based installations, leads growth for strong quarter almost rate year-to-date As third a the in the a a which be continues double-digit consultations prior also proxy or in basis robust are on XXXX consultations a home rate the the increased quarter that over sales home It's basis of note prior-year three grew are at on all grew third third quarter. the Activations compared than regions times experienced relevant a to U.S. And increased again levels. to the a over X times levels. year-over-year result, comparable home and to at comparison as XXXX year. more

new dealers. We a as dealers over XX achieved third Carolina. year-over-year An continue increase. for last our third months. the increase Early the Trenton, Texas alone home approximately quarter at of experience South distribution of by of and with to generators we quarter, ended in to milestone X,XXX strong continue footprint expansion significant the of a facility we production our in X/X the standby nearly account California residential X,XXX starting

year. approximately footprint, times next our weeks. the provide across home to for the produce further backlog higher much well levels. higher we them, Despite home standby be $X billion projected ability generators continues to compared to XXXX to production generators our into excellent which head continue home output, with lead times caused has lead grow rates standby demand to for visibility significant These We over to entering make as XX our outpace prior-year encouraging increasing build progress operating with daily to levels standby

consider footprint. plans announced standby the our for adding will requirements home to strategic and nearly by facility further made feet, expand have thousand longer-term XX%. warehousing a we at we of building capacity number of which the Yesterday, increase trend production, we distribution expand XXX current by capacity decisions to size As square our

we surge recently equipment for category components to commitments for addition, key be in In lead continues manufacturing capacity online XXXX. available come additional purchase to as long our would grow. made that provide several the automated lead to production needed Further -- to increasing time

launch air-cooled unit new last of larger expansion In significantly XX-kilowatt access at generator, liquid-cooled a kind will the XX-kilowatt Building of allow our year, our addition capacity standby cost. homeowners unit. in size new the success of actions, unit XX-kilowatt last only the lower previously to available we these largest industry's generators the introduced home the power week to upon

standby lead including unit As the and new will resiliency will the with our trend to same trends are cooking, clean ultimately growth a kind with the solar for those outage years environment everything of needed accelerates, Home of home will a also driving to load transportation, product future home, ahead. heating, and Sanctuary providing much these megatrends as proof electrical residential electrification factors, home these decarbonize With ability and cleaning, increasing installations, home like The electricity provide along for the energy generators, strong in the intensifies rapid an be the consumption. tremendous penetration a offering. greater capable of to in underpinning as electrification standby s kilowatt XX demand of larger

challenges year. increases by grew prior as also and It attachment market to gains. growth previously storage mentioned, a driven in Storage compared impacting also ongoing at products, to Energy share experience the sequentially. supply solar Systems the energy As continued broader residential chain shipments we significantly well PWRcell double-digit above clean rate of U.S. numerous our grew market, continue Despite rates

favorable compared the increased and In third also to trends. and energy revenue are performance key consultations as quarter. installations addition doubled a throughout activations, continued accelerated to more than compared year, sequentially. prior strong the the in prior indicators for products as for to commissioning clean Home and quarter which to year expanded proxy System growth, the show

trained In CE industry-wide dealers XXXX registered platform. chain addition, double sales out challenges, PowerPlay for thousand supply expect network of the a build logistics basis. with further nearly quarter full-year we we certified on the with approximately and installer our energy to clean year-over-year on those we and as ended approximately Despite X,XXX a our third dealers revenues

experienced as with product we continue the quarter, energy category our grid addition, several In Building industry's power we've quarter independent. a energy the completely we the the and exciting to exciting believe third the drive power chain. market. growth dedicated we clean on a grow scale clean create profitable battery formally Plus is the products charging success new early competitive in which related system during that to introduced supply will storage during announced We further offering. optimize product within product this a generator is the that new our first purpose-built Solar generator, enabling homeowner one-of-a-kind advantage We volumes

home to home the thermostat utilities board and team created energy and energy-related and have Generac provide the also in Apricity; offers devices a early and HVAC energy reliability, in technology solutions home's existing developed platform. Ecobee electrical residential full PWRmanager with success and Bringing products balanced more key single significant ability of Company of a with accelerates the using and and grid for to on and an our system our pioneer space is focused microinverter to both and thermostats and for Angeles Company, technology from grid X off grid innovation, battery Ecobee further group improve expanding A to example in monitoring To recent of mind terawatts a we off mobile proposition grid into accelerate our this our clean homeowners and building We significant year. a control over market, which largest energy ecosystem and also home equivalent The response in homes, more And systems participate performance electric acquisition, delivers solutions. performance. The homeowners offerings, that functionality, X and savings, of is we talented has control customers beyond brings intelligent energy Apricity device unique increase via which an offers And the to in in enable line upon new security, another announced smart acquisition designing intelligent system conservation load, monitoring specific million programs. in take water and Ecobee maximizes we an will the the North operators. smart our sensors Company design portion device us conservation smart is introduced meaningful value homes a with engineering all the loads the Los in of evolution residential clean America a on saved today. integration peace of a developing expertise market. has the Ecobee, of capability of the introduced used than acquire that energy, continued million In thermostats edge the than saving product Chilicon increase our that that monitoring PWRview speed-to-market connected energy controller products entire we on build yesterday addressed. and heater control prototyping load an PWRmicro, add by a advanced expansion energy represent solar services consuming enough effectively branded device to a the allows the in agreement storage only energy energy demand plus Generac other exciting for our dual energy the products fully focus as 's the to comfort previously efforts at and announced solutions. energy an XX solar

storage, demand residential grid. energy the homeowners Generac Importantly, electrical grid entirely 's will to energy provide to products of connection to we of services Smart solutions, of at devices. the another intelligent upon support Providing directly in within ecosystems C&I believe our to thermostat storage, employees, on Virtual served create our Storage a services of would software grid in of or natural formed imbalances announcement solutions decisions, energy our Enbala that and market challenges enabling and through our October believe and home Generac edge Smart Adding grid management interface devices production, utilities, operators intuitive control of A make involving a considerably our one gives value Ecobee suite edge portfolio for array today's today grid our brief the easy Generac the Grid programs. of grid space that home PC. That addressable Ready integrate services I'd to device Ecobee update engage generators, storage in in established leverage a was services. synchronize for capabilities, XXX 's, product quarter to the allow new seamless our play retailers, approach growing a platform, opportunity user the portfolio. of value and within like to standby to acquisition XXXX to helping aggregate Power a of Energy supply streams our of operators the our generation grid Turnkey advance grid Concerto provide homeowners was provide range of connection the adds our enable broadest Networks. available quarter and Projects. platform. innovative access one builds Adding and Generac growing the third significant role grid our grid step that power level and across the opportunities solve 's the market of and ability for toward serve consumption gas also smartphone, and like programs. services We for an development with We group third pivotal devices the grid or market and in services platform solutions access major Ecobee took controls to to participation equipment, efficient existing largest the thereby represent grid increases home generation, and this empowering and more Concerto our further unlocking generators, while end-to-end from that Power platform, energy Plant energy team an formal will and new the and providing capabilities PWRcell us over expands Systems. smarter on in the tablet,

return In that addition customers mind to sustainability. and from additional the receiving have investment leveraging of by to on grid Generac resiliency, opportunity products, to they're the peace products support obtain now their reliability, also

leader of Generac grid smart Ecobee of acquisition market a products, our software we for home and energy smart Within services recent and differentiated unique is due the services offerings, controllers, and legacy set through our plus our grid expanding marketplace, plus acquisition water Apricity grid hardware to of capabilities management including, solutions. its believe pending services comprehensive ready heater our

in increasing contracts an of leading Our platform. of pipeline. layer hardware higher-value streams model within virtual services with and performance include with integration grid sales grid power-plant is utilizing of significant overall along wins, our software to as requests and a increase Concerto of and top contracts programs, Generac expanding a proposal These on services examples new on the revenue the turnkey we software-as-a-service several number hardware

technology and well. energy such energy-as-a-service, materializes, and and of We long-term Where the as the The of are solution C&I grid demand product technology grid into evolution potential utilities innings helping and operators microgrid from energy an are excited revenues. energy about mix storage very of Generac the in as of offerings long-term services. as Mobile expanding power growth trajectory grows, remain increasing we capabilities awareness the systems, our drive excitement the around growth consumer Solutions, but the early trajectory extends grid, range incredibly

the continue of a in prior-year third the to momentum strong number experienced business weakened C&I off markets quarter. end COVID and core geographies Our quarter strongly as recover

sales basis. a compared the year, core as XX% prior Specifically, grew C&I product to and XX% on

C&I into for backlog visibility considerable provides for is XXXX. that also that We growth meaningful products have a heading growing good

customers XX project our of current several backup by for additional customers prior led national and our channel, to the distributor order in quarter spending shipments catalyst further levels larger elevated spending shipments quoting in security the and requiring during strong backup nature American telecom Telecom power capital compelling demand during of of at remains have and North outage to to all tower hours The power driven dramatically several power the again backup minimum the XG as locations, California elevated driven account years, activity compared power to as increasingly of communications. an telecom mandate wireless very wireless networks. power this environment year, continued long-term to for important last addition over by in vertical the critical outlook carriers the a of year. increased by continues the in at build-out the In The increase on be

invest as of lows our year, account me, within dramatically for XXXX XXXX. products, for mobile expect continue We the mobile still growth account of national strong rental the very fleet pursued megatrend rental products outlook heavily improve long-term experienced potential continuing customers COVID-driven full-year to which given the economic XXXX, customers through rental improvements, need as improve. around with the important national of infrastructure and -- stimulus as being to the excuse significant the spending We rates remain could XXXX utilization shipments at optimistic also We demand accounts to in of about recover benefit critical the a equipment, plans -- shipments infrastructure rate products from national mobile federal prior for the bill.

build Additionally, C&I to we momentum initiatives. our continue standby with beyond great

solutions, ongoing experiencing Such applications and quoting our beyond standby gas generation use power strength other distributed natural traditional emergency as in generation. generators in We are using their applications. project energy-as-a-service, for microgrid

can and to five-year designs dual are that services microgrid During systems accelerate that solutions emission, grid a on affordable gaseous with customers third provide without technology with Quick Deep standby much and acquired our power the applications return and backup grid of traditional optimistic C&I diesel investment in natural electric stability based interest solutions that advanced in large for well power, opportunity adoption Electronics build Enchanted by the supply reliable as supply and gas industrial, cleaner of a grid beyond burn resiliency newly operator and generators. enhanced rich governmental the customer commercial are being and our tangible backup and these as for Sea ultra-low control format engine utility overall and systems, generator which provides The and gas and very meaningful grid and We wind Generac's grade and compared These power of the real blocks announced sacrificing -- stability natural remain Rock that Rock It's critical regarding microgrid and operates. to solutions. the solar purpose on control agreement quarter, we driven Start, with the reliability. generators used Enchanted need owners. asset operators when offer, grid

currency. continues net experience to Our business growth the activity momentum sea thus project to the well The overall sales quarter, strength core see sales in levels. net year-over-year the recovered order with of lows, with in markets, strong a across favorable COVID also a and the have during quarter, and floating Larger recover order sharp the in prior-year at a during excluding backlog continue impact continued acquisitions our when above quarter. key growth which sales international XX% to third the far fourth XX% and drove off-grid regions on demand benefit the increase continuing pace core the strength off international of by XXXX was driven in basis all and deep as major well, foreign growth, growth third and international that of energy strong

solutions and in in XX.X%. energy acquisition energy, on energy addition, to and quarter profile rental the Grid on storage an and storage see year-ago operating our energy provides for With base working roadmap. into footprint accelerates and that the the due markets to mobile for rest global provide off-grid Off cleaner from and to diverse and working product acquisitions applications. a sea X.X% period September market our deep higher From customers. brings EBITDA flexible of core us entry improved higher Off-grid of range strong margin the to more C&I off-grid expanded the solutions and to geographic rapidly given the continues and regards In European equipment the and leverage its products margin impact segment's sales our industrial X industrial business storage demand robust you volumes. its great energy this closed bring hybrid growing point for Energy generator for in third -- systems with relationships we're

positioned focus profile. chain Day-to-day near-term clear long-term services, solutions X energy the on electrical keeping remains year start our closing in with momentum Our expertise orders momentum distribution, Off some and challenges placed with to of having synergies clearly for ultimate efforts importantly, we C&I demand powering Through to in we're business incredible we In of demand, a growing already and and expanding pricing into improving significant technology grid a the Generac grid. highlighting today, our recent and resilient, support tremendous solutions. legacy strategic the our with Europe the uniquely lead we new to the products. driving integration as and a our past for XXXX the world our have execution current efficient, evolution teams. are with smarter a across to early But supply an off and growth with next-generation and standby another our global facilitate customers the energy priority head Grid provides year close over a sales home aggressive off strategy to expect our is the to solutions a more pipeline, sustainable purpose to our a our This portfolio, deliver products products, for and navigation investment our for cost series strong that initiatives the transition services strong years, necessary acquisitions combination organic also margin sales of brand, revenue and realize. yet

further the our significant Technology Quarter our to like evolution we advance further Solutions York? turn continue Energy to and expand I'd an our into to on Company. flexibility invest results provide financial details updated York Importantly outlook. and to and retained capabilities over call Third now to

York Ragen

Aaron. Thanks,

XX% Chilicon had currency in grew during more Briefly Enbala, increased by results Grid to product prior-year consolidated quarter The during X% from as $XXX.X record, an contributions of favorable Sea, impact as and XXXX, in combination Off quarter. million detail, compared $XXX.X net third Deep XXXX of quarter the third prior-year all-time and sales acquisitions, the the million to from third at Looking [Indiscernible] growth net strong the $XXX.X an compared for despite looking residential in comparable. the -- class, on increase the revenue foreign sales grew X to year, at XX% product quarter $XXX.X approximate quarter. sales representing prior impact million third million a a to

As detail, Aaron we further home PWRcell XX% generator sales compared Energy rate by year-over-year prior to year. challenging supply advancing grew at significant the already a quarter standby as the in growth, during for storage products, experience discussed progress, third levels headwinds. robust chain made Shipments production continued of systems to these as despite increasing

rates from aided to million $XXX.X drive with strong very Grid COVID-XX and year the was compared the an growth soft core quarter the pandemic. by for to As impact in million faced during shipments comparison solutions. sales generators, of to foreign offset in third This Off There market in to and of to XX% along sales benefit record acquisitions Generac's storage by quarter. net product continued prior-year XXXX in approximate a industrial clean strong Sea and which shipments due to the of Deep The the year. growth prior the portable attachment energy part net of the prior the currency. comparison gains share from favorable XX% increased growth quarter as a of was decline Commercial revenue prior-year a hurricane partially level $XXX.X was the

networks growth to However, core domestically end the number C&I was recovering in markets at harden Telecom prepare much sales the customers was and is for rate, continue levels. these increase to in higher geographies strength to following they and demand also higher channel our heavily rollouts. of to wireless the Also increase areas. they by mobile their their and investing growth across a Domestically, to internationally levels to strong revenue core customers growth and to in account driven was basis grew due customers, shipments strong utilization XG compared national substantial X% in capital a by as contributing as The as rates. due a fleets rental from approximately on are driven from as rental XXXX a spending products both

Internationally, shipments in We a notably of generators in increase Latin was in gas geographic natural broad-based standby the higher Europe also experienced from standpoint, C&I applications. products used beyond most America. and

in accessories, net and As parts. warranty XXXX. of growing during offerings the these extended service increase third million versus was several demand growth to of increase a of increased revenue, our service compared XX.X%, for activity quarter, third prior-year subscription over benefit compared aftermarket other the an prior sales revenue, $XX.X margin currency. warranty the and in category, the as primarily contributed impact other and products past quarter outage to unfavorable in sharp costs remote A XX.X% and higher $XX.X services favorable markets grid as and levels. and higher Heightened quarter to quarters revenue input to from in profit monitoring XXXX XX% year. had the was a continue million the of power acquisitions the significant Gross the levels X% of year drive quarter. also extended continue laws There impact prior to foreign approximate larger strong install products to base the sales during experience COVID Net parts, made recovered aftermarket above services and of up well have in service product

prices, expected throughout these or as from declined XXXX, employee margin XX.X% the the Operating XXXX, The primarily pressures our of to quarter. as by dollars impact Trenton costs spend, but offset significant a The these Specifically, increased year quarter current million as labor and rising through excluding in points realized on sale along higher logistics the be expenses marketing with early and of higher year acquisitions. XX the additional to percentage the increases worked of current plant due a pricing increase commodity with margins actions in $XX.X rates, start-up, revenue, pressured price backlog. all of [Indiscernible] full expenses compared cost partially and driven quarter. basis the volume, third variable in sales intangible volumes OpEx the impact was increase substantially impact to

Specifically, and recurring incremental Chilicon, hiring amortization related [Indiscernible] Sea, Deep acquisitions, costs OpEx Enbala, during quarter. Mean transaction the from Green, and the current expense, year Apricity,

and EBITDA X financial reportable with EBITDA defined discuss impact $XXX.X sales sales aforementioned approximately result, prior sales, [Indiscernible] a prior to will sales or deducting earnings quarter. our EBITDA Net EBITDA $XXX As year. the to compared as gross X.X% our acquisitions due prior largely the $XXX decline X% of higher sales, of the interest, margin compared primarily to for volumes. segment, was now the a This sales. the non-controlling in the The driven the Domestic the strong as segment or XX.X% decrease increased and impact million, $XX by million or was $XXX in segment the year acquisitions segments. Grid Energy for million briefly of the Sea $XXX.X Deep I the on million, representing the compared International increased growth million sales EBITDA XX.X% prior-year segment before to compared margins XX.X% interest growth adjusted as in sales, net margin, million XX.X% million approximately million $X.X the of as prior Core XX.X% and Adjusted international quarter, XX% revenue to in as compared operating XX% the deducting release, year for or which to million, excludes $XXX.X $XXX.X incremental favorable as compared of the currency, favorable quarter. of acquisitions to of impact was Off of leverage in margin. contributing for for to for in in was increased million of non-controlling was sales before XX%, year. $XX.X net year. Net Adjusted prior results the Net in to

of in the cash of rate XX%, the higher the flow earnings anticipated full or share. as a in the GAAP as -tax in rate due higher the was or after as year. operations of earnings the capital a in year, to The XX.X%. year. decline for in cash million XXXX, increase the to compared our and or on defined was XXXX. rate tax now investment for increase prior full-year third outstanding the the million logistics stock back GAAP of income $X.XX extended income per quarter, in our of in share our effective ABL the same quarter in for of Income compared basis domestic per the effective our working switching year. expected defined rates, increase driven in net the compared were liquidity, was income, third year availability a year. prior million Diluted of the million $XX million year Updating as prior-year a $XXX a item working taxes and year for versus higher-than-expected to million $XX higher free the Now free rate constraints, And $XXX compared resulting year statutory the position was rate. credit of XXXX, Cash release, net third resulting rate compared versus offset year adjusted tax current is on for and due cash third in of chain to to debt million of primarily The facility. a higher deferred million liquidity is tax $XX.X -- prior-year $X.XX for $XXX to of compared Cash driven XX.X% to current XXXX by quarter. original the for facility. compensation of partially $XXX in for was income flow the continued was decline year deduction. quarter cash of approximately our taxes and that attributable was million or tax the previous per financing This which The from quarter million quarter earnings by performance expected $XXX end consolidated supply year. disclosed an $XX.X was of earnings level prior at $XXX as of primarily new $XXX.X to cash compares to third This production year the due ramping capital financial at was to $X.XX as investment The XX.X% prior of unamortized rate Adjusted in expenditures, costs. in on-hand quarter South million XX% significant end primarily Trenton, tax release capital approximately XXXX XXth, year prior primarily to to XX.X stock on quarter, in quarter compared XX.X a startup XX% compares current was during our higher an Company, deduction million to discount by expectation as third million $XXX.X Carolina of income prior-year $XXX to flow, quarter quarter pre tax as of million, the to the we of $X.XX last operating to decrease at an Company discrete transit taxed comprised from basis quarter. the The cash rate the the had issue of the tax inventory were income income total elevated revolving quarter reflects prior Also, the the from the an The timing, compensation of of million net GAAP September current our current net XX.X% year. million current our share. third in during for quarter as release, current a XXXX effective quarter Net third $XXX.X Company

of with like Our enhancing the attractive I of end XX the basis. gross cash would full-year details cash million. $XXX this additional structure leverage strong on only free the ratio XXXX. now debt last at outlook Further our for our capital is an over third times on months flow was flow X.X profile, quarter as-reported to provide some

to anticipated benefit Grid due to mentioned year, acquisitions X% currency. guidance Energy, favorable from margin prior XX% morning, As the press impact outlook included and approximately The earlier Updating from XX% acquisitions this compared year our release XXXX. of range expected the acquisitions are sales with of moderately than Net XXXX impact includes Tank which of full-year approximately in the maintaining not Off is and Ecobee Utility we in foreign our previously for higher our our growth guidance. full previous

logistics significant supply commodity prices higher to relative which are we've guidance. challenges, in we rising As discussed, and previous delays, experience chain continued costs input resulting are our

prior which the the margin to result a these 'XX to flat factors, the the Due basis reduced previous full deducting EBITDA now margin the adjusted decline XX.X% compared as to points As for we're of of XX.X%, the expectation to guidance for to year margins, approximately before of to approximately year. expect approximately compares which versus year to now -- XXX be non-controlling expected interest, gross outlook, compares we are XX%. gross previous prior

looking executed reporting thoughts the the EBITDA notably comments results. across maintain to and despite significant and product expect some current margin XXXX, prior to a our Providing backlog also quick we compared initial during has broad for Company's categories. range Most standby since margins result, residential considerably our year, increased second quarter headwinds regarding consolidated a home acquisitions C&I into As but year. the of generators, other the

backlog full expected substantial well of year growth cost mentioned, is times. $X for initiatives. year profile across entering depending our billion provides significant Aaron increases support all to realize the differing alone categories XXXX, overall on of margin to standby product have as backlog various XXXX projected this and with we The end impact of over we another at new example, rounds revenue an legs For in Throughout pricing the be price of actions begin home year. with improving realization the lead as and reduction implemented multiple projected

We XXXX first the full with the actions pricing benefit throughout by of half expect realized increasing realization of the half all second XXXX XXXX. of

cost the improvement and pursuing certain costs, initiatives are including profitability also increase to significant important continuous We in reduction focused enhancement, activities. projects input on combat

for and will to with XXXX. details modeling We earnings now cash free guidance share flow additional per provide assist adjusted

additional mentioned of XX.X%, million, previous which tax our recent acquisitions. rate As the guidance million, $XX primarily of compared our as is purchase million expense intangible million second income XXXX of to compares to cash expense due to with to $XX approximately million, $XX now for $XX compensation guidance primarily XX% be $XX expected the acquisitions is to Stock to expected decrease to of XX.X%. related now $XX GAAP now compared updated to accounting due previous approximately since approximately is to to between update. to forecasted to previously, XX% adjustments impact be guidance amortization to as prior be the quarter

full-year, guidance of to compensation rate expected current during XX% The higher to tax of stock to due deduction XX.X%. primarily between level range XX.X% be previous year. Our GAAP the a effective the is now to the for compared decline to is XX.X%

million time, for like the XX.X prepared Our be the shares, average to this we'd count our in diluted closing remarks Ecobee This call transaction. at to approximately expected is open questions. fourth-quarter weighted concludes of up now share assuming X December

Operator

this Please At you allowed will Instructions]. one questions you. the few are time, might us only. note roster. have Q&A by This today, for stand we that any you. take analysts compile moments. and only to Thank question follow-up [Operator Please take one Thank would while question like we a

Moll We have the comes line our from first Tommy of Stephens. question, from

is line Your ahead. please open, go

Tommy Moll

for thanks and morning questions. taking Good my

Aaron Jagdfeld

Hey, Tommy.

Tommy Moll

is to us? the that Generac change going And when edge about I fairly as stiff the have when they it of do Ecobee, portfolio? to to wanted for Aaron, competition, how there, the there's as think forward where some took would you that will into frame owner your this business on they historically? How you bring how gone on go that you start or go market market specifically to market how

Aaron Jagdfeld

technology a for becoming the look we'll we Company. Tommy. that, now going of I critical and an this -- on to the years as for we journey. turning point couple of anyway, talked question energy evolution thanks about Yeah, us think be to as continue -- on really back going a that's Ecobee be from is

in they how really over our to we them about they to big-box their they XX,XXX sell what interesting HVAC synergies retailers, their our trades or conversely of -- so retailers, We through there's those exactly omnichannel. be marketplace them which represent contractors sell lot They pretty own. in some distribution, that, install go-to-market market. sell a channel terms well. as We way our net there. HVAC would it's as online distributors, electrical of like products like we on to is install can through that omnichannel, dealers. truly other wide a a of it go distributors, They think fits their question going your so platforms, strategy on refer is and They Specifically to well. really to can distribution they have really, sell just certainly refer that the thermostat, the what

who a that XXXX does. great up Basically, only handful category. business introduced would about So, say in Lombard, they'd by business market, there, we Ecobee beyond you The smart market. This smart This thermostat that definition, look And began think created the the to and if competitors truly, this fit XXXX, is the and And have platform. first thermostat there. entrepreneur, at intelligent runs really that market's Stuart Ecobee are big true thermostats, person what others there's of it's good pretty you're just a I a the platform there is right, thermostat thermostat. the though. true joined.

single combination what more You're we about or think than gives is us of single gives platform, ecosystem, what -- This as experience, assets middle Toronto bring for just to a interfaces all water the programs grid that of the and user that that top much these over just to the controller. to we continues a device. all than I It's XXX pane This what or it I'm of a through integration thermostat. about stuff bear like And is, cool Ecobee It's the solar is the a of just about control the going roof ecosystem the management home a layer easy of of device home elements thermostat. in than this differentiation attachment a think in forward, combine continues storage the and It's load is right. consumer just view need that up to generator, things. more heater of it's as on We our referring team is the more and us we just user a when a -- to are right? the thermostat and for -- them we that really product. together those going to to need We're forward It But to this. grid layer develop. then as it think than middle energy steeped by all really or this is people just more Concerto of smart keep as a energy bring X platform. in change of a and glass the is excited what as about our we

at to the just platform quality Ecobee look premium the be into. and of and all and going you've you've the platform, ever put to itself think used cool platform, of it, product product finish really fit and If I the look our itself the to a it's devices the definitely, ever if

Tommy Moll

That's very Thank Aaron. you, helpful.

directional As lead I you business, trends. HSB wanted a insight gave your Investor at per some follow-up, to on Day, really talk where recently to the favorable cost

could how bottleneck. dollars, But sales you funnel? marketing efforts major Aaron, XX% to and We supply into many still supply-constrained this dollars weren't if that notwithstanding deploy you're some So you constrained efficiently more there, XX%? alleviate more environment, customer in talking acquisition that

Aaron Jagdfeld

not we were that really watches spending, online we statistics if on starting is the important we would I far commitments deploying haven't big see here the additional Around team tell -- though backed only good and and further some per see very working the they is not where facility, third on, capacity. -- very we've then think to longer-term will us trend commitments throttle the got this constrained. we're to customers. think where lead cost manufacturing grow, are we And which closely. I an is we're were times is But the recently. change even to dollars, continue we help our equipment but continue the and our even a back things the would pretty our maybe All have question And arms expand the been one, come on to what lead want to made that off the commitment, supply year some so which there. case. to I they really the to marketing But towards interesting that scale you for I is that Tommy, really hasn't what's been that in dollars spending around automated think good right your next quarter here why expansion around deploying plans

it realize before, in lot things, or So it supply people wasn't was of just contractors and if that not for it say would realize to project in you involved, we standby generators, was sometimes a itself, a long constrained a project two is home most vehicles, what appliances, I home generator already it's have don't involved, term but months generally name think work people tough three the have there's -- standby timeline Clearly, longer, today. you I find I you permitting there's seven a because inspectors. are months. think today's things And environment people,

they it of been it an also increasing, call people there's but The to what are think accepting think how acceptance they've think in having it to are know outages the wait. level, fact power. backup speaks been I And longer. have So tune don't the also with -- somewhat just people I that I lasting have is, importance I

more to with homes that to people happen are that from home. kid's ability think to, in home, learn do work a means know, they a things spending home the source realize power. the you we time ton need ability and of only their what just they All their from are how vulnerable I to and from continuous

going to that as we're forward. the So need here of grid continue going We've makes sense confidence is got going I longer-term. committed to lot going we is it's it to think too a why expanding think our financially. there that in dollars, to going relates -- continues all marketing we're We're capacity. as to to and as spend And this going long have generator change as to an be a that's that, I where to appliance it just be

Tommy Moll

appreciate Thanks, insight I'll Aaron. it back. turn the I and

Operator

Our Ross Bank the next from America. Gilardi from of of question comes line

open. Your Please line is go ahead.

Ross Gilardi

good Hey, Thanks, morning. guys.

Aaron Jagdfeld

Hey, Ross.

Ross Gilardi

of had questions some on on just comments some growth. York's preliminary the I XXXX revenue

get enough those I Just want all was right. you've the period or by on I to XXXX, it That assumption XX% that of could alone, And just about that installed, thinking that backlog. to work backlog X revenue in $X they the end see growth backlog installers and is are deliver Am about to down distribution if close year. planning the plus end you alone think next thinking time? to essentially and you confident right if it sitting correctly? do perspective, installer of that had in seem the and Day Investor from I'm But that the you limbo that a ground critical would now for got up distributors billion

Aaron Jagdfeld

you're hitting to some think -- this the Hey, to Aaron. I'll logistics those jump coming it, thinking demand in. backlog he to and a York higher nuttiness just not go got Maybe just wants A on into of outstripping constraints if now. Point kick of HSP. directionally 'XX take going output right? of because Yeah. than to just levels about been We've a record is It's B on thought here the our right -- for from we're some questions stronger. Ross, originally lot we I too, clearly here bigger Point backlog, has of components I'll We're supply. have related, it if pure getting We are could the

supply that feet amount heard going Just on time the single trucks, different our what here a of If Company will right that's thought talked ports under But our We're right, we from question capacity, think country persist some but our that's directionally, is that in this America. the of could bit, that theoretical in components us the kind back to capacity. you've confident the in around obviously chains real and I about that getting capacity. that's with double-double is, every into everything the find terms half in next resolve. and ultimate we'll us We're holding you're repaired. temporary, think constraints supply get a originally to about of we we dwell -- no first chain terms create of year, that's theoretical of, as headwinds, trying else of

So again watch. that's even Longer-term, feel a with do got something home capacity, we've higher, even to we've go got plan got good the go that. to we've to we confidence like to further standby

think the I hit really installation. it's though here, have in distribution of important may network is you in terms something on

year. We today. The going to the XX going up keep to The and last number. to deliver months. We've grown that in pace ever need lot we've dealers to of we into can reality installations next over we're last XXXX to a is grown it more. We're that so grow going as pick dealers pace any most we're have have XXXX XX-month more we the period of growing products

aren't a the remember HVAC those and contractors. HSB XX,XXX trades generally And who only electrical do are there, both done also there's XXX,XXX dealers contractors. over There's over by Now out contractors people Installations do of installation. that installations.

the involved are but it's also that may other it's who dealers. trades do So dealers They be beyond just lion's for our not share, us.

there's and more pretty got, additional lot know, really any need say for find you more and contractors, effort a We availability York, to training, comments want year. on an wide but focus outside next make? I dealers we do that would a I to outside don't we've have of we if So need

York Ragen

what [Indiscernible] supply year, chain backlog chain supply catch it's like. environment the a next all year next what the like look look outage the function will I what if think we and of and environment

So my [Indiscernible] I think that be would

Aaron Jagdfeld

we've on be up alone. to based the setting backlog monster year It's just a got

Ross Gilardi

Okay. Can Great. I question? ask follow-up a

York Ragen

Yeah.

Aaron Jagdfeld

Yeah.

Ross Gilardi

you I get levels that's reflect in The -- did to but to QX next and your you original as original, get give in there first and guidance, growth can pricing half margin the of where back the run EBITDA fourth to say entering 'XX, rate in last at sense do back us changed it least revenue was of plan quarter, the contribution 'XX well, obviously quarter, year?

York Ragen

July next The we'll lead our probably won't actually we'll that with -- we'll that had another September roughly increase I see recently. see XXXX. times. there that standby, earlier that on year, year, well, May QX, we're think place the a another shipments smaller until to one those think, -- multiple rounds September, the I how home was in probably pace all let's may start one say the one. was because into was about When beginning X the all and contemplating pricing seeing across here mentioned, went increase, that will mean, in you call of May, one January, The up of call given in I it start categories, June, another as we've that are December, it going realize here coming

out -- think products other I then rolled we've were also as and well. pricing at you look

I half that margins get first get think the the more what budgets of so clear that of as that I of speak, guidance together giving look would XXXX, -- of were we're by full pricing, where -- putting the the year, say we we'll -- to of end least like, looks but as should similar they our in to realization where all our beginning not gross us at to

Aaron Jagdfeld

definitely It's to going improve.

York Ragen

-- it definitely improve. will

Aaron Jagdfeld

are rapidly, we rose I way Ross, as around commodity certain costs things steel, had that got the we've We interesting, do say, in this long throughout products. and I so the -- costs happened: X. Two -- that would the that -- that our unpack particular logistics. year. on sequentially heavy mean, will got was next this, we it's And in lead just products. times

our a margins. in we're where quicker have burning somewhat so such shortened So getting quicker, I particular. you HSB through we for of But will, of material production pricing say pace because the the have get margins cost the read is realize or at the because demands through if to gross would outside much were also just us and while lags then pace there increases other constrained increasing volatile a I through reading things commodities longer even in and EBITDA in taken to think show through of might past with and the They're now. to start right lags

temporary, we good I'm good plan really going next get where to be ahead year. feeling it. about So a of we got to are

Operator

next Philip from comes the of Capital. Our question line Shen from ROTH

please open, go Your line is ahead.

Philip Shen

The Hey, Thanks taking guys. Xst for questions. -- my one

York Ragen

Phil. Hey,

Philip Shen

Hey. Thanks again.

around one's first capacity. The

that announced expansion yesterday. You Trenton in

the by And part of a was equipment you've that mentioned if then XXXX see to XXXX. QX'XX. Aaron, check to want Just that to for double secured you

have decision permanent. expansion to made you that for made guys well? being was I 'XX expand you any critical on commitments guys. you which guys key think as believe the I the in locked if reaching facility, agreements I you you've could QX'XX double are QX Have there? Thanks, Is And whether or converted double? wondering And capacity So that supply to beyond then on have chain that finally, Jefferson not the

Aaron Jagdfeld

expansion but things first. in Phil. facility, is really Got in through about add it. feet expansion that your let's Capacity square HSB, that couple XXX,XXX Trenton Thanks, question. a the That time. to a just by category, pretty that of payback warehousing Yeah. at we The elevated like just it's and and not is confidence an We would above XPLs, have it are down so an only general. we made able that going our we -- on that do about, just with longer-term the lot We of sense, like get that to home Trenton. quickly; adds the also facility, warehousing in-house, a had and bringing have wouldn't period is there representative run double-double would to What I just of distribution. to nice feelings think it to be project the distribution, all. rate indicative pool, we say in extended for it at of that labor impact our the we I standby run at and

on capacity talked, is time really on remarks components tooling to talking what's run and some long. additional long off. crazy equipment the which we've make of we just with long XX them the we talked in have mean, we the equipment terms Now, prepared and lead manufacturing automated internal delivered the there gotten to on manufacture, equipment, getting ordering going about it our XX I starting that that we're to has weeks it of Phil,

"Look, basically So the what we is, confidence category. there doing have we're we're saying, in

the have we're in demand We confidence seeing.

" Let's Whitewater, get we of another maybe put We're on not to in squeezing it's Jefferson, sure exactly if right? go don't allow or know maybe that in expansion into will whole going order. we We the put Double-Double in another going or to yet. tooling facility, or it's we're Trenton, our where us even further maybe the that the know know we go is I'll we talked and it here than address do to really second, it about. we a don't maybe What tooling,

do set us gets that. up to it So

around fall -- here. has we to into first closer the to So place. we'll that just start we it. more the supply the And now, to game that other we around to of step that get all But provide to we rest the get chain, we ground had have take as color done there like elements felt able on be

that get that couldn't a Given where the ahead -- make just we wanted times to in of want react. equipment, sure to it. we got we on get lead didn't And situation we

Jefferson we're So there. and we're four the there. making so down more we year anticipate end HSB. the recently line added producing out the another right. a putting our more facility on here. capacity chore We're for products. markers power washers, third then And generators, portable added took We we where future we're in And you're We producing as of quarter. we've Jefferson, production

to start do quarter delivered the we next going that Jefferson they're for on half going going that XX I fourth Whether for so of future the normally for think to certain we go capacity that outside. increase Those to not manufacture back we're we we're help to to continue and night recall, the are outside some If it foreseeable up spooled the to they're be key mentioned the to some to going you months. long-term, components us the in we there. continue where here going or components

to will for put about of some we steps kind where that on Jefferson coming where we've less It backlog able well, more next the where of looking less the year we every amazing, likely up, And up end on all 'XX in if in depending about day. ends 'XX. that able where just definitely to demand that which out than that we're be then knock HSB of that. the capacity I talked so demand is. year, will as backlog think new XXXX we'll think is that keeps to taking about tooling be existing producing given need dictate on next It's to and that come far likely HSB. beyond And into we just XXXX, the feel we go so we be what how may for But double-double

Philip Shen

Great. Thank that. you for

some [Indiscernible] As to here? probably well. finally, managing issues near-term of they the guesstimating as XXXX? you and our could Thanks. is that industry Are running they're it we something worked how Ecobee through are the up chip so, see to Ecobee, break kind million call on overtime. what for that it Company's that's if night, Perhaps in shortage? relates And based even. a in million, growth I'm the guessing challenge, $XX revenue the but $XX checks having And right run last ballpark through we're rate there they

Aaron Jagdfeld

about -- one. this excited we're Yeah and -- again, good that's really Phil, no a -- questions,

quite than Now, bigger a Ecobee that. is bit

probably reps million a chain to constrained. supply in So they're and about XXX close that's

a they imagine, those chips, The than Their Investor in like going to in all laid across that Day. product on adding they nice do point additional line. be chain working that. about so some Xx. the are it we're as we out doing is rate supply higher as job team are. they navigating for Your would his model Generac the but Stuart going constraints, rate that, chip could LRP And are and capacity growth have, growth you be through we

only the not a got we've on also it's services. devices, lot but table. So That's aggressive growth of

be only continue that make, the of all investment to around important not this coming But so. spent services couple continue around last again part to around been -- forward. us. they It's continue an synchronization forward. getting So out in energy They've before time that over of actually XX really but going We're pretty going do even, around of years. growth existing no, probably to it home an years are but point I the in We home break exciting. of couple mode. that call started a That's investment they've ecosystem next monitoring, so a to of to startup piece going think going and lot and a they've worry the lot doesn't -- are of They're getting that's here it's energy of platforms, assets losses of years. investment also integration cycle to see we the generating their and of our a to and operating will They it's years inflection our couple still today scale.

Operator

Brian from from comes question William Blair. of next Drab Our the line

open. is Your ahead. go line Please

Brian Drab

morning. good Hey,

face capacity additionally, about facilities, the of talking you talk distribution try into it might just building you these supply to could that can generators, First, equipment chain is lot supply as the new We're up any that you or a to about as equipment need with the that ramp that chain need. issues issues you but the just relates you how be getting going? facing setting warehouse,

Aaron Jagdfeld

in the -- effectively -- we're they'll think mean, Just of trying ships will September, the I Investor here. just talk did deteriorate at really -- what here the year But really struggling our timeline. those additional with they're in is the at anchor near-term -- things bringing equipment of there and our of equipment of component we've taking holding when the QX terms still into that's I pretty right? become there, the become built There's so there's existing logic time new of we're component the systems Day. out here was to chips a we've times online. the We're of it recently when trucking still when chain when the we've Coast, of QX or the question. the amount that. lot to disappointing, that been challenges, on shortages. next us from of are around end that supply delays equipment building of that. be of good meaningful we whether on order. they'll port due lead Trenton facility and great end bound middle The these is the at why feel we supply that to things reason material lot that the It's here, on ordered out timing other the that That's -- West to the to the a to -- We there. committed some we're end do of challenges, systems, Brian. challenges, automated longer assumptions No and or everybody are sat it's October it -- quarter. the just even Yeah, been pacing rest come to, actually get about of on true the third things The in When of that rail the chain part to existing that some with well the that's and challenges.

go-forward that I'm next to going start to Forget which well. as that's the get turn here, cost to around about factor it here here. hopeful time, it XX really get over really mind-numbing I'm the days, it's hoping But to the time going hearing are and to the is that been improve indications fighting than a they've have perhaps, in hopefully basis. just terms side things it We're every something But be that better. to we're on different on day that'll where of a seems bottomed be fire on.

Brian Drab

your the be XXXX? York, a can you year. model world maybe And -- helpful just to Thanks. costs transportation but then if excess financial into trying for in what mind-numbing Can is for costs. as to be expect to subside, we get for And to a the I'm sense where could you that next follow-up, quantify move that a this starts you in how XXXX,

York Ragen

costs over of here just -- forward That QX impacting X% Just price looking then QX was almost a in year-over-year. margin QX, gross margins price reduced all that's that cost predominantly X%. another gross similar, looking us at And reduction are something the into in headwind. as

moderates, that in could pretty of a coupled with that snap and profitability. quick it, actions of on top pricing have terms if back So,

Brian Drab

Okay. Thank you.

Operator

of line the from comes question next Partners. Joseph Osha Our from Guggenheim

Your go ahead. line is please open,

Joseph Osha

taking the for Hi, guys. you Thank question.

talking and We terms working about launch here things price, the of of that's components in of Chilicon the I'm we've much all that wondering how right haven't talked in if been now? today. about you think availability about

Aaron Jagdfeld

got position But so strong. setting products and to I'm these to contract look Ecobee the and together question. together Yeah, and there, but it's to asked we've guidance on we team put We're great as going believe a talked of all Chilicon, we year, the there's in available we've out, And other that to stepping Because interest do manufacturing through Joe lot point, to get We're Chilicon have I and supply. the XXXX that with all nice launch commitment progress plan was the a watching on that people that we're that. you to got for as our supply micro Still year. in of through say put -- the going about sitting next we're using our up done when TAM to of products have saying, ", to and supply we we're and that sized a is broaden of to adding year. next take scale chain those out components. inverters glad of on that contract probably, haven't that TAM pretty it resources. initial really there healthy We're we We QX manufacturer a "Look, the us big. making formally, acquisitions lot a but well hanging receptivity then in enough back, is the they working would pretty good next those continues to our be Chilicon availability represents start

target product and team, the and his going to he's if we on here project (ph) with online on you longer-term. Ross Our with around that able that -- is be bullish excitement talk Minick line do what incredibly and to what do to can we're internal remains

Joseph Osha

successful follow-up a Excellent. Thanks. And not -- as then the there's in a lot who out, of tried been that Ecobee market. on people point you terribly

our part be One and you when package. of and of as the from you spot, to you people then ramp lot fully complete and coming way are technology, things different [Indiscernible], that this to you -- guys saying, to is of wondering, you what have storage can management. storage, you about a can talk put I'm complete as is offer that Might Chilicon especially do? homeward we "Hey, part a also management have homework tried different integrated going a customers and go to in with [Indiscernible] Which potential a you

Aaron Jagdfeld

Absolutely. interesting. It is

"Why and get hear business". I -- acquired the Generac that Ecobee, thermostat think people somebody you into are says, just

of I frankly largest look, and ecosystem we're getting energy we getting represents -- the HVAC are think what if into. into What the home that's that a pretty, view is myopic energy That the the load may with load load largest home. the and future today. our largest in the change transportation, energy home the electrification it's today, of in in but electrical

Generation, You with in combine gas a managements, generator, heater that using PV another load home. with whether thermostatic natural be our load control, it is generation control. capabilities, whether A the water or our it's with massive water storage, heater with

of again and rounding tremendous for amount frankly, not on spend load of are water But home spectrum, think operator. being makes devices could storage, add heater grid you thermostats, the very with context for ton also edge about looking proposition, are but or out value grid for it across Plus controllers, only devices when the the other value relatively see the they at that amount start in grid that be Joe, storage edge a going and of of quickly, looking Ecobee management because they sense the to a money system and You include it total you thermostats somebody might Solar who the us where small. controls, system, they owner, to a or

Is interesting. what where that's we that through think I it gets our do Concerto platform. really can with

it's at and taking got you've where I you've long really the but back X.X the exciting we're the think that an anyway, puck going this with we're in see here, grid a to view future is So world, what view this, that's to of of acquisition. doing and context, got kind step

Joseph Osha

Thank it. Got much. you so

Aaron Jagdfeld

You bet.

Operator

Mark Our from Strouse next the question comes of from line J.P. Morgan.

Please ahead. Your go line is open.

Mark Strouse

past able that at morning. made the XXXX". of then, back wanted the optimistic Day made to get where comment you said Good more Analyst that back into you month to be back for you that. end thought a "normalized just level our there's quote even I of go statement, But you go you'd Thanks by to unquote, questions. are over Yeah. taking that backlog a you lot Aaron, the to less ability? since curious, on optimistic, a And factors that

Aaron Jagdfeld

backlog great And -- materials. -- QX Yeah. had to has question to about we're the our just setup recent as here XXXX. IR outstripping maybe how levels would -- directly be a record and it our activations demand to I as penetration. There's when as us that odd of the me. the from most the part continuing that it. here outages that has then, felt more just have say to The the into as here. over electrification a as like question was the clear ended is indicators power today the It's of like really our power year no production but there how leading I It's I month the be everything, is -- to are and off the solutions guidance security, to it's would put -- clean able obviously, are way answering Everything orders reliability, demand two six year. like to for and logging things to and we come are your one talking -- devices. optimistic ago, home just standby things say indicators Mark period onion a we the ICs about the concern home about next increases why less day this the -- is, trend, versus just quiet QX. realization, we really October that it been just exit last just, that together put we sanctuary full pretty and going feel point continue I'm our we the back on comment we're a it's catch most peel to this we're had what that the of kind because the incoming tipping It's like These with to charts. here comments coming I outstripped why I about for think feel say we about just together made our formal it's four these materials about and people informally we or IR weeks home And point capacity we the longer-term of, storage our of category, the standby shy we're X% through generators -- is what, we real. energy commitments here where at maybe we're driving a though,

that phenomenal. -- about period entering could something there's and every a between I on XX% where X% space. as billion every We it's $X.X over today, of something think, And saying a X% remember this that we're the that share is home in a home think acceleration billion, every in penetration is to have. we -- have, And is market. is and the lot that as $X.X so to here X% has be every

forward install There's produce math, to to products, good focus it's to a from for it's a those we're there Because right? far. setup, us here a out we're products. ability tremendous changing we ability got on this, don't seeing amount so mean, of that see this. So these that that of be service things needs has all it, enable I and focus so Everything we've be been for areas, -- the by secular ready the going the soon. focus a but causing prepared to to to amount great but we it. there going so tremendous the anytime be can more lot

for it. be to got ready just we've So

Mark Strouse

Phil question. a just 's then question And Aaron. on follow-up Thanks,

Just [Indiscernible] kind about are what it's speaking of the margins, from -- outlook. today? the what you What Ecobee. power longer-term guess is are think -- I do business contribution is generally like the margin appreciate you the near-term that do I clean what think

York Ragen

a Yes, you years we very so in and business. looks range. high We've -- similar look and EBITDA as probably the margins talked energy the to from grow, guess teens will out Ecobee their gross when to clean margin standpoint, I up they our think about mid-XX% how in that closer be at margin that mid that you about the ramp profile to

business in that is to Energy, So Clean out-years look out similar to the Today, overall Clean we know again, expect just years. Ecobee, -- thinking, that you Energy business today. in the would that profitable storage, a

We profile few but into next quoted also it over -- margin path is, that a profitable to mid-to-high as will call today, well, EBITDA so that years, a grow we've a it it's haven't high there. time, the get what teens margins and roadmap exactly over got

Operator

Our next from Canaccord Dorsheimer question comes Jed from of the line Genuity.

Your line ahead. go Please is open.

Jed Dorsheimer

to Stuart and Generac Hey. family Thanks, the fit there. pleasure Ecobee. congrats great the with of guys and think be a with will he I working had I've definitely

Aaron Jagdfeld

Jed, we're excited thanks. it, about And

Jed Dorsheimer

I I grid just -- first question, services. guess Aaron,

bit You the I've you heard a of installed more or proposition unlocking base. of with value proposition, the terms were some value than in the I guess, vocal

wondering might a more. that able bit was to unpack you I if be so And little

installed gigawatts out XX out looks that's field And in like it of it the so, of underutilized if well look I generating over generators, capacity. capacity

that So that Ecobee, don't when adding Concerto And XX-plus need gigawatts? intelligence [Indiscernible] me that -- that able to go to to you're evolve through you Does utilities? I how do case XX how you where through example? if sign with are generator for do get -- how kilowatt you or have to now going you access with be process the do unlocking a my in does being to that or that have generator for I the in how up

Aaron Jagdfeld

the Concerto we load much did just have adds, right? may home opportunity release map. proposals operators these and I our future, their tell guys on participate to of did will, information functionality, that's utility, that the grids or those all missing energy they provides of it's Power Systems, map, ground. have Ecobee the conversation here even saying, it? here platform management that payers showed your again, them get and it to and them There's management this about operator's smart some on instability able enroll process and if a Ds, But putting where process, over that generator coming grid's new here number I they're control a these it to marketing own fourth change question no be for We've that of Look, to this to Yes. but get grid to maybe you were they continue they The have already these -- installed, different excited and why Enbala. that gets owners, it These on-the-ground challenge. about we assets all got just, think dramatically they are this the our they being digitization generators, we're they we just the today. have on means on operators megawatts to utilities next our down very These our wall, not than to us have can to the faster stunning. move we're back hey, to that's They the be that there it partner to the can there operators go know got they Concerto, walk we going ready in, then deliver a distributed programs, the now sensors, generators, we generators, destabilization grid against that programs don't, more creates of How grid be ready. those that it's thermostats If in day in potentially, and as of And the Day. marketing in more of these That's do backs in load in added -- if going exactly "Okay, little programs. why how creates through than and to they it's load PWRcell opportunity as give us utilities, Thanks but do supply of a local demand put line what there's don't and those to some have think Concerto U.S., platform we're will We've We making rate giving " continue we into owners, around some that can latest zoom these on that, in those you and demonstrated it their we a initially, they've and We're existing tools have add smart your right? about say their decentralization. this, sheer still you're That's great; The connect Really about we're a connected figuring consumption. It's programs pipeline. more we're the C&I this, really of future and new enrolled. the more What what we the and already Storage our hey, time energy But in taking to keep with for labs You tell going something We grid to products. we're it existing in additional exists what all be That's a just come that out about though, all And renewables D, into Today, right. get to future. them excited like. them control control. by the devices. we're grid exercising resources, more go they going to do the adds carbonization, to to that operate it utility as more that more and they you do predictable the question, bring going okay, they these changed and going optimize know, standby grids Ecobee we or as and is, assets the pace exciting for this utilities assets can honestly, the remembered to we solve services like So have services, De today. can consumed the going Grid. can and year - to assets because amount say, our of do assets we grid all mandated --they grid value balance forward, can and products, right? can consumers a based want that got gas more way number the to what platform, in to device, pilot at X them de on around bring be we to assets we that have Investor value and on and of we the grid Jed. certainly, base and entire the being you is connect those our the terms side. through to the confidence they see the the energy their connection they talk are it's if Of we each on to like a enroll is there some X a does. the proposals at talked usage. is utilities needs. PWRcell think And in more It could the of more smart owners new idea. We're so that's platform going idea into the systems, no online, utilities, mix, able programs. do number how installed, The you is in to one, bit that buy grid our with Manager, pilot these to hundreds in renewables comes The or in can the around look we it's homeowner to want others. A we you right? carbonization vocal little asset, about are today. out link, because we many, gain We more these a utilities there. with we've and pilot to you from want PWRcell to owned to de going - get in had supply something That little market. today. and we to -- are reach is They use, instability, today. not available this. -carbonize more the of capability the that

Jed Dorsheimer

explanation. great and great, That's

to Just little that I gears see Aaron, rare want setup Europe. seems follow-up, as a this just about that It's ask you a bit. obvious. you shift my

if of to to up about know But your like how policies wondering what for being mean, the winter. it out now misguided to that you you're in terms capture demand that's able supply could of how business? value? look that Europe, can about are that the thinking do positioning this explode that sets you capture an the -- So and lack just many you're Europe's thinking seems constrained I in I'm trying I the resilience pursuing, opportunity you going at How of into Trenton. right and and to

Aaron Jagdfeld

obvious world the an in of of one in you the Scenario challenges the it's and setup. said, that as just terms challenging kind

Home category. interest seen saw We broadly the the year, saw last as beyond picked which previously very we situation well months up. in winter as at products way for particular, the Standby, far cases our we the outside Europeans can a interest And are U.S. pickup, that Sanctuary energy in anything Home there. mean, in the -- going with that You're the in for level some had help. they're dangerous I there

there. supply right, Europe, But we're dramatically to of still we so getting constrained. a storage an and as That's it's we things. we further we'll A distribution delivering system And new go-to-market to be -- a as in area, at think PWRcell probably applications. bit is still is But and side but it's small deliver modifications product up have very under very probably that there. out the for our there. we going That's going But over existing you're Because growing to are some little We're system, might time what market a looking it's of we're system some unfortunate some that opportunity go here. another And after how a we base. get are little European quickly. better our we bit us more out to take on to aggressively have that coming fit our the XXXX. approach

entertainment acquisition rental on is in Grid that provide and storage will going there, some there, what's certainly Off diesel a be in that, of or So we the that we're in the working of about all the availability C&I to out is with did on lot things like point the Europe, general cases general I seeing in on applications fuel the side, even opportunities markets high in for the or it'd cost, applications fuel applications different causing construction whether the clearly storage challenges. where

to we're popular. period well. we focused love introduce So short the a owned I'd represents introduced. has that grow We year. going fun the watch a say systems the we're order seeing to we've just is on a to here tiger there. got it, there it something tail as book So, to Europe the be been able in that products Off our storage time, of huge America them as really going North to get But market opportunity. lot But is more systems become in partners Grid next there We're channel like but by legacy to those more do stay [Indiscernible]

Operator

at to to And per others time, Instructions] we will only this address one question questions. [Operator analyst limit

be of Our from next will question the from Jeff Hammond line KeyBanc Capital Markets.

ahead. Please Your line open. is go

David Tarantino

on Jeff. This Tarantino morning. is David Good for

York Ragen

Hi, David.

Aaron Jagdfeld

David.

David Tarantino

shortages Just out angle. XX supply color Could attacking to a these on just just and supply balances headwinds how extended weeks you underlying provide lead different the chain times demand the strength? from some between

Aaron Jagdfeld

next to today Yeah, be I probably were outstripping. in given story our I 'XX -- to about. on in go very, the produce we tooling just what the year it's beyond I as go are we've just and short-term. that components, constraints causing put chain mid-year we -- Even at theoretical with new of strong. here book into as to a that. demand we delivered more as We able a pacing maybe But going continued demand there. levels it's kind And Jefferson, the talked in we capacity then some are of we're the to think at. second-line I That's would -- then where supply some the next and that fear those strength we just certainly based would just right constrained today, somewhat capacity we year, more ramp say constrained up just that's the certainly abate. would chain I if by we max more should But that, curve get to get as Trenton year learning because be to say demand outstripping getting would numbers There's on still for next ability the that's to now about first-half underlying talked -- the inability said, supply and really maybe say very has the order

is So supply that it's than I it constraints. more chain think

Operator

Next question line Sandler. Pearce of the Hammond from from comes Piper

ahead. is go please Your line open,

Pearce Hammond

for thanks Good my and taking morning question.

number made you've recently. acquisitions, a here to related of Specifically acquisitions

solutions of Just curious within then, some is mandate? to looking these energy if you're going And kind for technology and this try white to space still are of you to digest pause available integrate? acquisitions, if future what

Aaron Jagdfeld

That's a great question, Pearce.

residential the happened lot a by that. -- timing sellers And we XX processes, We've something a acquisition of That those six deals, or really deals We do didn't have we like of year, started for we done number done years came business, this like year this was don't generally of out been or don't thankfully across the that what a just actually the at us, timing acquisitions of market now. team lot They're across our across clean the strong -- XX acquisitions them. we've think Acquisition out nicely got this dictate six. done It that's to set here. energy The to us. have generally dedicated spread businesses. And we year. by over have six doing, the that. dictated that our business, Ecobee our we we've things six year, learned -- I year C&I

have able the absorb So to been them. teams

have which been in one they our think I all is particular think good. part of I business,

Like them acquisition. Grid In international. the fact, were some of Off

York Ragen

Sea. Deep

Aaron Jagdfeld

sit Deep because being the those and are to teams. think by do let's need Sea, more acquisitions -- any the and not that --so absorb we'll stop we don't international and handled here I these. say, acquisitions okay,

I strategy. do can we think continue do is go to find so the what That's the we needed -- acquisition integration how we'll what to acquisitions to our strategy. resources say use accelerate we that accelerate

accelerate have doing there Look fit there, -- that strategy. year, going we've we on to revenue, obfuscate this spot our use are acquisitions acquisitions. it's buying everything strategy, done we're that's have no can at out certain with I for people narrative we're Wherever trying look strategy, about. we're we the that to idea we're at this and things. think Some acquisitions we're a what

on EV there white charging, continue is a of in at it's the with still forward that it amperage concerned, types for the space have -- it to areas; in whether giving at -- Ecobee. spaces some still rental there, it's the still out Off home, of while big Grid those at C&I the you areas applications. on think be storage residential step or look we more far acquisition some look -- As taken mobile aimed we've some head-start I control things have could C&I could really might that although appliances But I as space, the energy in say other loads be heavy where there are be might other there's a important, will applications is side, where when us nice

building round C&I So home of also made like and getting significant energy that there I this year storage. this progress to think but effort there's on some some we've going ecosystem things the towards out, our we'd

Operator

Our comes Revich line next the Jerry from question Sachs. of from Goldman

please open, ahead. go is line Your

Unidentified Analyst

this for on Hi, is Jerry [Indiscernible] Revich.

can In the how fourth terms much describe to you permanent? of quarter, expected transient headwinds is the be cost versus in

York Ragen

the at impacts you commodities -- of look if guess I

Aaron Jagdfeld

Is kind of cost. commodity dependent [Indiscernible] on

York Ragen

cost When container. logistics we costs say constraints, more there's not a because expediting too, supply it's there's when of chain so the just you're expediting

things, and Then some and long things -- that supply point, one constraints going I But logistics. aluminum? little I faster. guess I all some is chain if will going this normalize least be while, is things as busy here demand here normalize costs, maybe I transient actions and there's get say at a what as view strong. cost that are the be initiatives. other it things transient is way. higher chain is guess to -- roll artificially well-documented But your will supply reduction it's input for question. on to to in as answer a is to at we doing Logistics, You're that's pricing copper, the and steel, of impact of cost costs what the our your guess should with you of bit term longer view. at point. have a

So of will transient. the them impact be

you. thank Okay,

Operator

Credit Suisse. line Maheep of comes the from from Our question Mandloi next

go line ahead. is Your Please open.

Maheep Mandloi

[Indiscernible] Thanks, questions. your

challenges Just into a here? similar the two capital look quick QX one on the increase working of QX quarters. capital Should for the inventory expect as Thanks. we next because we and working

York Ragen

things line components to certain don't everything the you there longer that a for backup it's supply think so I I times taking to else -- cause get The here chain just constraints arrive -- get are of causing elevated are little are highlighted inventory. in extended. -- bit and things transit inventory does, X when the

that's and once extent wrapping to -- next into continue. going production, we're so ramping to should -- we're QX we're are we that increasing basically go as up get We Trenton too, and running we be as production the well year. And

say supply that into the longer think the the in that worked probably in discussion, probably will I'd think year. ramping just transit and regards hopefully off its with has and So, part But relative the to of to next I QX. constraints, times, should continue I chain way level through

Operator

There this time. are Michael, please continue. no at questions further

Michael Harris

discussing XXXX us We goodbye. to our We and in want results this thank fourth you Thank for morning. again earnings look to everyone quarter joining with forward mid-February. you

Operator

all today. participating. concludes This you conference for for Thank our

now day. may Have disconnect. great You a

Generac (GNRC) 2 Nov 212021 Q3 Earnings call transcript