Generac Holdings Inc. ($GNRC)

Good morning, and welcome to Generac's 2026 Investor Day. I'm Kris Rosemann, Director of Corporate Finance and Investor Relations here at Generac, and I'd like to thank you all for joining us. For your reference, today's slide deck is posted on our Investor Relations web page under the Investor Presentations page. Today's presentation will include strategic updates from leaders across our business, highlighting the range of opportunities that lie ahead for Generac. At the end of the presentation, we will conclude with a Q&A session for the in-person audience. So please hold all your questions until that time. Now a quick intro of today's speakers. Leading off will be Aaron Jagdfeld, President and CEO, with a strategic overview of Generac and the mega-trends that we expect to drive our long-term growth expectations as well as the strategic realignment that we believe will help us capture those opportunities. Then Erik Wilde, President, Domestic C&I, will follow with a highlight of the global capabilities and market opportunities that we expect to drive significant growth in C&I end markets for Generac over the next 3 years. Following a 15-minute break, Norm Taffe, President, Generac Home will highlight the organizational realignment and innovative technologies that we expect to accelerate growth on the residential side of our business. Following Norm, Kyle Raabe, President, Home Power Generation, will provide a specific focus on the significant penetration opportunity present in the home standby category. And finally, York Ragen, Chief Financial Officer, will bring us home with an updated 3-year financial framework looking out through 2028. We will begin our presentation today by commenting on forward-looking statements. Certain statements made during this presentation as well as other information provided from time to time by Generac or its employees may contain forward-looking statements and involve risks and uncertainties that could cause actual results to differ materially from those in these forward-looking statements. Please see our SEC filings for a list of words or expressions that identify such statements and the associated risk factors. In addition, we will make reference to certain non-GAAP measures during today's call. Additional information regarding these measures, including reconciliation to comparable U.S. GAAP measures, is available in our SEC filings. Finally, this presentation contains select recast unaudited financial information for the previously reported 12 months ended December 31, 2025, that relates to our organizational realignment, which will be discussed further during the presentation. Select recast unaudited financial information relating to our organizational realignment for the previously reported quarters in fiscal 2025 will be provided with our next periodic report or sooner. And with that, I'd now like to turn it over to Aaron.

All right. Can you guys hear me, okay? Sorry, I didn't mean to -- all right. Good deal. Welcome. Thank you for joining us today for Generac Investor Day here. It's been a bit since we've done one of these. We used to do them on every 2-year cycles. But we decided we'd wait a little bit longer this time around for 2 reasons. One, we noticed that the timing of our previous cycle we used to do it in the fall. And that's kind of right in the middle of the season. The season for our consumer power business or our residential business. So it was never really very optimal because depending on how the season turned out, it was difficult to set the baseline year with that timing. But the second reason and maybe more important is obviously the changes that we've been undergoing as a company that we're going to talk about this morning, kind of the headline changes around not only the strategy of the company, which we've been committed to for the last 3 years, and I'll talk about that. But some of the bigger changes in terms of the mix and what we're doing, and where we're focused, where we're putting our energy, our time and our resources and our investment talk about that this morning. But obviously, the C&I business is a big part of that and where we're going and what we'll talk about. And the data center market opportunity, obviously, front and center kind of the middle of that entire discussion point. So we thought that kind of moving the cadence here for the Investor Day to a spring season and then having this extra kind of 6, 8 months to kind of let that C&I business mature in terms of the developments there that we've been talking about as a business, and we'll talk and fill you in a little bit more on this morning. So just to level set here, starting out. You guys know the company quite well. This is a $4.2 billion company last year's sales, about $716 million of EBITDA last year. The last 3 years, $1.3 billion of free cash flow, if you know anything about this company, we generate a lot of free cash flow, which is great because we're putting that free cash flow to work, and we're going to talk about that this morning and how we're going to use that free cash flow enhance returns for shareholders and all of our stakeholders here in the next -- at least the next 3 years and probably longer. We've got great scale that we've built as a company with 9,400 employees. We have a lot of engineers as a part of that staff, we are a product-focused company. It's kind of deep in our DNA. Our founder was an engineer back in 1959, and we really believe deeply in the power of engineering and the importance of products and solutions for our customers. The center here is it says by segment, as Kris mentioned, and as you may have seen in the release, the 8-K this morning, we are debuting new segments today. Now I'll just point out that the 2 segments, residential and C&I, if you go back to how we used to use product classes, right? So product classes of our residential products and our commercial and industrial products. This is pretty close to what that would look like. We just don't have the other category. So the other category now is divided appropriately so into those 2 segments, and we'll talk a little bit further about that. But you can see how that mix kind of turns out based on last year's sales. About 59% of that would be on the residential side. Again includes home standby generators, portable generators. We have some core products still in that. We also have our -- some of our clean energy products. Our ecobee products are all in that residential bucket. And then on commercial and industrial, we have the larger machines, stationary machines as well as battery energy storage systems and our microgrid components, and we'll talk a little bit more about that. But about a 59%-41% split, if you looked at it based on last year's sales on the new segment I do want to -- a couple of things, though, this morning just to talk about here. This has been -- it's been an amazing company in terms of growth. I've been with the company almost 32 years now. And just a couple of things to point out on this slide. Obviously, the company has grown a lot. It's grown a lot really in the last decade, the last 15 years, in particular. I think when you kind of back up at least for the last 20 years, it's a 14% compounded annual growth rate. And I think the headline this morning, we want to talk about in terms of the next 3 years is kind of right there, right in that mid-teens compounded annual growth rate going forward. We believe we've got a great track record that supports that. And obviously, we believe we have a lot of really interesting things to talk about here and how we're going to make that work because as you know, in the law of large numbers, it gets harder to maintain that kind of pace of growth as the company grows. I think another important detail this morning, you probably saw it already, but we are maintaining our 2026 guidance. That's another important point on this slide. But again, I think when you look at a lot of companies, somebody has said this in the past, but if you're not growing, you're dying as a company. And so growth is incredibly important part of who we are as a company. It's an important part of at least how we've built this company to really go after opportunities. And to be aggressive. We have an aggressive slant in what we do. I think it's -- maybe it's deep, not only in the DNA of the company, but maybe deep within my own DNA in terms of being aggressive in terms of leaning forward in terms of going after opportunities and growing creates opportunities not only for us as a company, but obviously, our team members, right? So I think it's one of the things that I started out as a staff accountant with the company at one of levels that you could possibly come up with doing travel and expense report ticking and tying and things like that, work my way up to a CFO and then into this role. But I think that kind of opportunity only comes from growth. It's really difficult to get that kind of opportunity or to give that kind of opportunity to our team members, unless we're growing. So we're very focused on growth. It's not a growth at all costs type of mentality, but it's profitable growth. We want to make sure the things that we're doing are worthwhile. There's a lot of companies out there that grow but don't make any money. I call that running in place. That's not what we want to do. We're going to run to get somewhere. And so growing and growing profitably and finding opportunities that make sense that our strategy and really play into our future is really what we're all about. This is kind of just a -- maybe just the takeaway slide. It's kind of starting out and you're doing this in reverse. But these kind of bold statements here around what's going on with kind of the industry around us, the environment around us, the grid is strained. There's no question about that, and I've got some great slides on that. Load growth which has been flat for 2 decades is accelerating, and it's accelerating in a frightening way. And I've got a couple of data points I want to share with you. But I think if you're a utility executive or if you're a grid operator, and you're looking at load growth, I think you used to kind of used to -- you say, well, there's no load growth, 2 decades of 0 load growth, oh, boy, now they're projecting 1% and what are we going to do? How are we going to respond to 1% load growth? Now the numbers are staggering in terms of where demand is going on the grid. And I've got some data on that. And power prices are surging, and this is the good news is this is -- this kind of simple economics 101, right? We do not have enough supply for the demand. And when you don't have enough supply for the demand, what happens, prices go up. And that is exactly what we are seeing across the entire U.S. across the system. And our prediction is that will be a global phenomenon here as we go forward. A lot of places around the world where the power prices are already a lot higher than they are in the U.S. But within the U.S. and what we're seeing in terms of power prices increasing, is pretty frightening. All of those 3 bold statements kind of lead us to the fourth bold statement on the page. As we believe that we are at the intersection of a generational opportunity for Generac, right, both for our industry, but also specifically for our company in the way that we've aligned ourselves prepared ourselves, we've got the right strategy, and I'll talk to that. But we think that this is kind of one of those moments in life that maybe you can go through your entire career wherever you work, you may you don't ever have that chance to say that you have the opportunity to participate in something that happens only once in a generation, right? And this is, I think, one of those unique times, and we are directly at the dead center intersection of that generational opportunity. Now we're getting a lot of help from the media in terms of kind of presenting our case, if you will, right? The headlines that are out there. And we've talked about the power quality headlines for a long time, right? We talk about mega-trends, the mega-trends that we see in our industry that we see that impact the company. We see 4 main mega-trends, and I'll talk to these 4 this morning. The top 2, lower power quality and higher power prices. These 2 mega-trends have been around for some time, in particular, lower power quality. In fact, I might argue that as a company, Generac has maybe been solely focused on that singular mega-trend for the bulk of our 66-plus years, 67 years in business. The newest trend emerging here though, and as I said before, power prices, this higher power price concept these trends, I think, are -- have major implications on the direction that not only we go as a company, but I think about how we think about power in our own lives as homeowners, as business owners, right? It's -- and you guys get the system, right? It's a monopolistic system for the most part. You don't have a lot of choice. If your rates go up, you can't just go across the street and go to the other utility company on the other side. There's a few places around the U.S. where it's a little bit more of an open market, but for the most part, you're kind of locked in with your provider, right? I mean you have -- honestly, you have more choice in cable providers. You have more choices when it comes to your mobile phone providers. You have very limited choices when it comes to your power provider. As prices go up, that's going to put pressure on not only your household budget, but maybe your business budget. What do you do? What do you turn to you're going to start to think about this in a much, much different way going forward. And this is part of our thesis part of what we are focused on strategically as we believe there's an opportunity for us to play a role in that, not just about keeping the lights on, which has been Generac's kind of legacy business, but where we're going in the future in terms of helping homeowners, helping businesses solve not only for resiliency challenges that will still always be the core, but also for these higher power prices, right. Could be self-generation, could be different concepts around arbitrage, between when the grid is charging at high prices versus lower prices and what you do to kind of play that arbitrage as a homeowner or a business owner. We are developing products and solutions to help not only keep the lights on, but also keep your power costs in check. And these headlines keep coming. I mean these headlines are, again, the power outage at mines, that's easy. The lights go out, right? That's like we're in Wisconsin, right? We're a Wisconsin-based company, right? And the first snowflake that hits the ground, the meteorologists are out there, right? Live reports, it's snowing. Yes, no kidding. It's Wisconsin. That's what happens. It's going to snow every year, we're going to get that in every year. The media has to make a big deal out of that. That's what outage has always been about. When it powers out, it's easy to get those headlines. I think the bigger piece of this puzzle is the headlines now that are starting to come with regularity around these increasing power prices. That's a big change. I don't think we were talking about that a couple of years ago. We're almost talking about it relentlessly in a lot of places. In fact, you can pick up any of the major publications and you're going to find something about power prices, something about why those prices are increasing, and I'll talk to that because it's complicated. As you would imagine, that entire -- it's an easy story in terms of supply and demand and why prices are going up. It's a little bit more complicated underneath, though on why we don't have enough supply and why demand is growing. And so we'll unpack that a bit this morning to talk to that in terms of how it impacts us and where we're focused. So those are the headlines. Again, lower power quality. This is a long-standing trend. We are only going back a decade here to 2015, right? And on a 5-year rolling average, when we look at -- we call it our baseline average, and you guys who've followed the company for a long time know that that's how we guide, right? We use the 5-year rolling average of the 5-year baseline average of outages to set our guidance. We do that every year. And you can actually see 2025. So these bars represent total hours lost to outages. We call it a severity index. Last year, actually quite low. Actually, it was -- and we see this occasionally, every decade, something like that, you'll get a year where we don't get a season. And that's what happened last year. Back half of the year last year was historically low in terms of outages, but that's temporary, right? Now most outages have historically been caused by weather. Over 70% of the hours lost for outages come from some kind of direct weather event. Hurricane, could be an ice storm, something like that, right? You've had 13 major outage events since 2007. Seven of those -- or 2010, excuse me, in 7 of those since 2020. So we do get these spikes. Now in our 5-year baseline, we actually take those majors out in how we compute that because we don't, in fact, want to plan, we don't want to guide as if there's going to be a major event. For a longer-term planning horizon or so, we do include one major event. So for the next 3 years, our assumption is that, that happens in 2027. It might happen this year, it might happen in '28. It will happen. There's going to be a major event. And so in terms of outages and how we plan around that and guide around that, our annual guidance does not include that. But the purposes of longer-term discussions here on growth, we have to include that because that's prudent in terms of just the frequency, you can see the frequency of how often those major events happen. I think the new kernel here, though, around outages and the potential for outages goes to the heart of this kind of supply-demand imbalance as we call it. This map here, this is right out of North American Electric Reliability Corporation, NERC, if you will, they do a long-term assessment report once a year. They also do a winter readiness report and they do a summer readiness report. If you guys haven't read those I would encourage you to pick those up. This is the most recent, I think this was January of 2026. This was refreshed the long-term assessment. And this map kind of lays out kind of -- those are the grid territories, right? So you've got PJM, you've got MISO, you've got ERCOT, all the major grids that you guys are familiar with that we talk about. But these are the grid operators and how they kind of geographically lay out. The orange, kind of, color there represents what in NERC's vernacular is high risk, high risk for outage activity in the next 10 years. Those orange areas geographically represent over half the U.S. population is at a high risk for some kind of outage event, a major outage event within the next 5 to 10 years. That is -- and it's frightening you go back in history, you look at these reports. But even more frightening, if you just read the headlines from the reports, a couple of things that were packed in this thing. And you could argue maybe it's NERC's responsibility to scare people into action right? So is there some hyperbole in this report? I don't know there's a lot of data in the report. I think it's up to you to decide whether that data is hyperbolic or not. But at the end of the day, here's a couple of stats that are in that report. The peak summer and peak summer demand, right? So if you -- everybody kicks on their air conditioners and what could that peak demand look like is forecasted to be 70% higher than the previous year's forecast, 70%. Just from one forecast to the next, they said the summer load growth, the peak load is going to be 70% higher than they thought it was going to be a year ago. The winter -- and this is probably the more frightening part of this. the winter peak demand is forecasted to be 65% greater than they had the forecast a year before. And why is that important? Because outages in the summer are bad. Outages in the winter are catastrophic. In terms of property damage, in terms of loss of life, right, the winter outage, and we see this in our own business. If you go back to the Texas freeze February of 2021. Texas figured out that it could get cold. That scared a lot of people in Texas. And the damage that was done to homes and businesses from frozen pipes, right, the loss of heat. A lot of the heat in Texas is either heat pump or it's baseboard heating, right? It's electric. It has a lot to do, by the way, with what's going on with these winter demand peaks. It's electrification of heating, heat pumps now outsell gas furnaces, right? Just on a raw numbers basis, we clipped past that, I think, 2 years ago when heat pump sales actually eclipsed gas furnace sales. That has big implications, implications on the grid, right, that electrification just of heating, right? But there's also electrification of transportation. Now maybe we're in a lull here but make no mistake about it, right? A generation from now, the only vehicles that are on the road are electric vehicles, right? Gas vehicles will be out there, but they'll be the realm of hobbyists. Why? Because the technology is better, right? And the cost continues to come down. And the good thing about technology is it's politically agnostic. It doesn't really care whether you're red or blue right? What wins with technology is cost and performance. And if you've driven an electric vehicle, the performance is better, right? It makes me sad, I'm an engine guy. We like engines, right? That's at the heart of our business. But this transformation of transportation around electric vehicles has major implications on our industry, right, supply chains, things of that nature. Now it's going to take a long time to play out. It's another generation out there. And there, it will ebb and flow in terms of the adoption rate. Right now, it's ebbing, right? Policy is pushing that retrenchment. But over time, EVs will continue to grow, and that will have major implications on the grid. Demand growth continues to rise and rise very quickly. And there's a lot of reasons for that. I think probably underneath all this, what's really interesting is if you look at last year, retired about 20 gigawatts of power across the country, right retirements of old coal plants or old power plants coming offline. And on a net basis added about 20 gigawatts of new generating capacity. The difference, though, is important. What was retired were what are known as thermal assets. So coal, gas, nuclear, right? These are the assets that are great baseload power assets. They have 90-plus percent uptime in terms of planning capacity. And the 20 gigawatts that replace them were largely intermittent renewable, which it's great that we can build those plants on a relative cost basis, it's at or less than cost for a gas combined cycle gas turbine plant. But the problem is, from a planning standpoint, you can only plan in the 20 percentile range for a utility scale solar plant for a utility scale wind plant. Wind is just slightly better. Solar, the planning factor, something like 21%. Wind, it's something like 32%. So it is better, because the wind can blow when it's dark out. Solar will not work when the sun is not up or when the cloud took on a cloudy day. So you have to have then storage to augment that. And that's where the cost formula starts to get probably not apples-to-apples in terms of that comparison. Well, I can build and construct that utility scale renewable power plant for roughly the same or less than I can construct a typical thermal plant. When I add storage, some storage technology into that, it adds a lot of cost to the system. And who pays for that cost, by the way, I'm going to talk about that here in a second. We pay for that as rate payers. So it's complex, as we said. And I think the NERC report kind of gets to it. To put a little bit of a finer point on it, though, when you look at kind of just demand in general and where that growth is coming from. You can see that if you go back, the decade 2010 to 2020, it was actually down 1%, right? So no demand growth, right? That's basically almost goes back 2 decades if you were to look back all the way. The last 5 years though, we've seen demand grow 9% over that 5-year period. 9% over a 5-year period doesn't sound that great, but it doesn't sound that outlandish, but that's a big number. More importantly, though, is, of course, what's on the far right there, which is the forecasted growth over the next 5-year period. Demand is forecasted to grow 32%. That is an unbelievable number. And again, if you're a utility executive or if you're managing a grid, if you're a grid operator, those numbers are staggering. And you're basically -- you've kind of got your back against the wall in a lot of ways. By the way, there are just a couple of numbers here. There are over 3,000 independent power plant operators around the country. Now in those systems, those utilities, they're really full utilities. A lot of those are smaller cooperatives. There's a lot of where you've got local generation for a village or a city. But of those 3,000 utilities, there are 3,000 regulators, regulatory bodies. So it's 1:1. So is it any kind of wonder why, first of all, the utility industry, the pace that they can react is incredibly slow. Somebody once told me the only documented death of the utility was somebody getting run over by a glacier, right? That was -- that's how slow the pace is in the utility world, and there's a lot of reasons for that. It takes time, it takes money, right, to do a lot of the things that utilities need to do, whether it's building new generation, building new transmission and distribution. And then, of course, they've got regulatory bodies that tell them kind of what is -- what kind of return can they expect to earn on that investment, right? And there's been a lot of talk about this, right? Maybe we need to lower the return hurdles. In fact, there was just a ruling here recently where we saw return on transmission and distribution investments, the return on equity, the ROE was originally 10.57%. This is a FERC, the Federal group set that return on equity hurdle. It used to be 10.57%. They just changed it in a ruling, I think it was last week to 9.57%. 100 basis points less. They just said, you know what, it's not -- 10.57% is too rich. We're not going to allow you to get a return on equity 10.57%. It's going to be 9.57%. That has major implications for those utilities, right, for the grid operators. And it's going to transition -- it basically is all going to come down to reliability. At the end of the day, the incentive, if you compress the return, the hurdle rates, the incentives to actually make sure the system is up and running. I mean, we're just -- we're diminishing those incentives, diminishing the return. And it's just, again, this is what we forget about or at least at the federal level, we seem to, that matters, right? Those returns matter in terms of incentivizing investors and those corporations to continue to invest in the reliability of our electric grid. So what's underpinning demand growth, as I said before, these electrification trends, whether they be heat pump, whether they're EVs, EV trends. But also, as you know, data center growth is starting to come online and is having an enormous impact. It's -- I mean, it's hard to put into words when you look at the numbers in terms of the total gigawatts that are projected to be on the system here in the future as a result of data centers, but it's massive. And it's going to absolutely change everything we know about the grid today. It's going to change everything about how we use power, what we pay to use power, and it's going to change everything about -- unfortunately, about the availability of that power. And again, I think that probably the most frightening thing about this whole thing is just how quickly the forecasts are changing. Every new forecast that comes out is taking the forecast before. Some of these are 6 months ago. And it's dramatically increasing the percentages. You put that together with the pace of utilities, you have a major, major problem that we are headed towards. There is a huge cliff out there. It's either going to stop data center development, which I don't think is going to happen. Or right, the utilities themselves are going to find themselves in a position where they just can't supply enough power. And on very hot days, or very cold days, you're going to see stresses in this system with the utilities and the grid operators call reserve margins. They've always said, look, we've got to have between 20% and 30% reserve margin right? The excess highest point of demand over the excess -- or excuse me, the excess of supply over the highest point of demand. They call that reserve margin. Those reserve margins are shrinking. And in some cases, the projections are in the next 5 years, there are reserve margins in some of those regions, right? Those independent system operators, those grids, those ISOs were actually negative. And when it goes negative, that means your lights go out. That's exactly what happened in February of 2021 with ERCOT. They were 6 minutes away from major destruction, long-term destruction to components in the grid, transformers, operating plants, things that would have taken months, perhaps even years to fix. Their only tool in the toolkit with 6 minutes left was to shut everything off. Drop the load, they disconnected loads everywhere. 9 million people. That was the tool in the toolkit. That was the last one they had, to shut it off on a very cold day. This is going to happen more, right? That's an isolated example, right? It's 5 years old now. But we think that, that is the tip of the spear when it comes to what's coming at us in the future. As we said before, prices are going up. Who's paying for those prices? You and I, in the parlance of utility companies. In the parlance, the regulatory bodies that manage those companies and watch over to those companies. We are known as rate payers collectively together. We are the rate payers. We are the ones paying the bill. And there's a lot of discussion about there that data center should come out and they should pay their own way. Yes, they should. But this is a system. And the system has to generate power here, get power there, right, and has to adjust to stay perfectly in balance by the way. This is probably the biggest issue is that if you're a grid operator, the only thing you care about. You don't care about you care about power prices, but you don't care as much about power prices. You care about making sure that your supply and demand are almost equally balanced every single minute of the day. You can't have too little supply and you can't have too much supply. Those are also problems, right? You can't have too little demand, you can't have too much demand. You have to manage those. The problem is the equation there to keep things in balance is becoming very, very complex and the changes on both sides are now happening much more quickly. So the ability to react, the ability to keep those systems in balance is challenging. It's going to take a lot of money to do what we need to do as a nation in terms of investment in the power grid. $1.4 trillion is the estimate here. So it's not a small -- it's not for the faint of heart. That's over the next 5 years. Feedstocks going into the grid, those costs are increasing as well, right? I mean we all know what's going on right now with the energy shock that we're going through here over the last 4 weeks. Natural gas prices are up considerably. As those feedstock prices increase, right, that's -- who pays for that? We do. That's the variable cost portion. There's not even a question about that, by the way. Like when you look at the formulas. The variable cost piece comes right to us. The fixed cost piece is that's spread out over time. And again, we can go back to, okay, who really pays for that? Is it data centers? Do they pay direct, right? Should it be industrial users right? How do residential customers fit into that? Every grid operator every utility has different ideas on that. But at the end of the day, the result is the same. Our prices are going up, and they're not going up a little bit. In that same decade where we had 0 load growth, they only went up 6% over that decade. The next 5 years, they went up 32%, right? So if you've got your own power build at home and you look at that, it's up 30-plus percent, some parts of the country more than that from where it was 5 years ago. Where it's going is even worse. The next 5 years is going to go up another 40%. Power costs are going to double, more than double in the next decade. That's the forecast. That's the long-range forecast. There's a lot of reasons for this, but in the end, get back to that simple economics, supply and demand, the investments that need to be made to grow the grid to accommodate all that additional load growth that's coming at us. Now underpinning that is AI, as we said before, and you guys follow hyperscale CapEx numbers, but look at that chart, $650 billion, $670 billion pick your number, based on the major hyperscalers and what they've said they're going to spend. That's an unbelievable number. And we're seeing it both indirectly in terms of the impact it has on power costs and what that does for our business, but even directly, in terms of the backup power needed for these data centers that we're going to talk about this morning that we've been talking about for the last several quarters. The addressable market for our products for backing up those data centers grows commensurately with the CapEx spending, as you would imagine. Every single project, almost every single project has some amount of backup power on it, right? Some of them are fully backed up. Some are a smaller percentage, depending on if they've got their own generating capacity that they brought along. Over time, though, we think that based on at least the near term here, that market for backup power on a global basis, about a $14 billion to $17 billion opportunity. So obviously, a huge opportunity for us as a company. We're a new entrant in that market. We'll talk about that this morning, but it has major implications on where we're going as a company. So those are those 3 mega-trends, so lower power quality, higher power prices and then the AI-boom, if you will, in terms of what that's going to do to the grid and what it's going to do to our business directly. Those are 3 of the 4 mega trends. The fourth mega-trend is all about infrastructure investment. Now we've been focused on infrastructure investment as part of our strategy for quite some time, right? But we're doubling down on that. And we recently announced an acquisition, a company called Allmand that does mobile products, temporary lighting products, temporary power products, temporary heating products. These are the products you need when you're rebuilding infrastructure. When that infrastructure is finally rebuilt, you want to harden that infrastructure with backup power, we also do that. A lot of that in our C&I business, whether you're talking about -- you're talking about backing up the telecommunication sites, wastewater treatment plants, right, other municipal installations. We do all of that. You'll see our generators on -- if you go on toll rolls, you see them backing up at the tollbooth locations. You'll see them at ports. You'll see them again at cell towers along the highway. That's all critical infrastructure. And we believe deeply that this $100 trillion global infrastructure requirement, this investment that's required for the next 15 years, that they're going to need a lot of -- they don't need a lot of our products, both to build and construct. So that's our mobile products, and we'll talk about that, Eric is going to talk about that here. But also in the stationary products, to harden those infrastructure elements. Our strategy is powering a smarter world. This hasn't changed. The last 3 years, we put this together 3 years ago. There's 3 main pillars of this strategy: improving energy resilience and independence. That's kind of, again, as I said, if you were to look at Generac over the years, maybe over the last 60-plus years, that might have been the only kind of leg of the stool, if you will, in terms of our strategy. It's all about backup power, all about resilience. Optimizing energy efficiency and consumption, though, was a new leg of the stool that we added several years ago, 4 or 5 years ago, with our foray into battery storage, our foray in the rooftop solar right, battery energy storage in larger formats in our C&I business, micro-grids. Those are efforts that are focused on controlling costs, helping homeowners helping businesses not only keep the lights on as part of that system, but also reduce cost. And then as I said, innovating and protecting and building critical infrastructure, that's the third leg of the stool when it comes to our strategy, powering a smarter world. Now new this morning. In order -- we've got a great strategy, but in order to execute crisply against that strategy, we felt that we needed to take the next step in making sure we've got the right organizational structure. So we made an announcement this morning and something we've been working on over the last several months to get our segments and get the organizational structure of the company set up such that it can feed that strategy and help us quicken the pace of execution against the strategy. Our 2 segments, as we debuted this morning, will be our residential segment and our commercial and industrial. On the residential side, we're introducing something we call Generac Home. So this is the combination of our, I'll call it, our legacy consumer power business, right, home standby generators, portable generators, combining that with our energy technology businesses. Ecobee, Energy Hub Thermostats, right? Security cams. We've got all of our PowerMicro products, which are our rooftop solar products. Our battery energy storage products, power cell. Those products all combined, and then obviously, the monitoring and management of those assets underneath all that, and Norm Taffe is going to come up and tell you kind of explain the system. But as you've heard us talk about this, it's an ecosystem. We see the future of the home is not just a single product to solve a single problem, right, like a generator. You buy a generator because you're worried about the lights going out or they have gone out. That has been our approach traditionally. We've broadened that approach with the development of this ecosystem that works not only to protect your home your family, your livelihood, right, with backup power. It could be a generator, could be a storage device, right, something different, but also to focus on helping you control the costs of what you're paying for that power. That is the ecosystem. And to deliver a full ecosystem and to do it efficiently, we felt we needed to bring those groups together, okay? So we'll talk a lot about that this morning, but this is kind of the unveiling. It's about that ecosystem. It's about bringing those distribution networks from both of those businesses together into a single energy distribution network, residential energy distribution network. And obviously, when you do this, there's a lot of operational opportunities when it comes to efficiencies. We can leverage our technologies across the businesses better. We can leverage the people across the businesses better. for a more efficient outcome. And that's really what we're after those synergies that are buried in this, and we'll talk quite a bit about this morning. And on the commercial and industrial side, that's a global business for us, but we're working on improving the structure to increase the collaboration because whether you're building a 3-megawatt gen set for the Australian market or for the European theater, or for some part of the Americas, the South America market or the North American market. We want to make sure that we're leveraging our scale on the supply chain, right, in manufacturing, the technologies, the controls. They are at the heart of these machines. We want to make sure that we're getting the most out of that. Same is true of battery energy storage. We want to leverage our supply chains and technologies there across our global business. And so Erik is going to come up and talk about that. In fact, he'll be up next to talk about that. but this improved collaboration took some organizational changes as well. So bringing that together into a more, I would say, a tighter format was an important part of these changes that we're announcing here this morning. And it's aligning those reportable segments then to our strategy, right? So our former segments, domestic and international. And that made sense 10 years ago, we were new to the international markets. We acquired a company called Pramac over in Italy. That became our -- essentially the nucleus of our international business, and we've grown that business very nicely, by the way. It's a $700-plus million business on its own today. We acquired it, it was something -- it was $300 million, something like that. So we've more than doubled that business in the 10 years that we've owned it. And we've done that through organic expansion as well as additional acquisitions to go after other regions. But the fact of the matter is when we think about our business and where we're going and how we want to line up resources here, we feel that these new segments of residential and C&I are a better representation not only how we're going to manage the company going forward, but also I think how we talk to the company externally. How we talk to the investment community about Generac and the differences in those segments, both the growth rate differences, the profitability differences right? So I think you're going to get a different feel for that today. In particular, York is going to take you down that path to finish off here today. But those segments, as I said, if you restated 2025, C&I would be about $1.7 billion and residential, about $2.5 billion. I think probably the most exciting thing here, though, is back to that 59%-41% mix based on 2025 is what happens over the next 3 years. This becomes a much better balanced company. And I'm excited about that. I love our residential business as it's not becoming better balance because residential is not growing, by the way. Residential still has some very healthy growth rates in it. right? High single-digit types of compound annual growth rates over the next 3 years. But our commercial and industrial business is going to have better growth in the low 20s in terms of percentage. So a lot of opportunity there that we're going to talk to this morning. Again, if we execute, and that it's not -- can't take anything for granted. We don't put anything in a spreadsheet or can I talk about this all time. If you put anything in a spreadsheet that can be true, right? But the execution phase here is super critical. What I love about this, though, and I think about what we've been working on the last 5 years, as we got into some of the newer technologies, you guys have heard us talk about this, some of the challenges we ran into, right, in terms of just perfecting those technologies, becoming proficient in them, which by the way we are today, and Norm is going to talk about that. It took a lot more to get to where we are today than we thought it would when we made those investments 5 years ago. But we're there. right? We've got great technologies. We've got the latest technologies. They're competitive, market competitive, both in spec as well as price. Those are great technologies, but they were new to us. You look at C&I, if you look at the majority of the growth here, that is directly in our wheelhouse and what we do and what we have been doing as a company. Yes, they're larger formats, larger blocks of power. But these are generators. We know how to do generators. We know how to do these ecosystems on the C&I side. We've been doing it a lot longer. I'm not telling you it's a short put to grow 20-plus percent on a compounded annual basis for the next 3 years in that business. But I'm going to tell you that we feel very confident in the quality of the conversations we're having with the customer base there that Erik will talk to is fantastic. And if we do this, actually, the C&I business is just slightly bigger. We didn't do that on purpose, but it's slightly bigger than the residential business in 3 years. And I think a better balance Generac between C&I and residential, I think is a good thing, right? Because as we know, the residential market can be a fickle thing in particular, in our core markets, a backup power. Look what happened in the second half of last year, right? Things that are outside of our control. We know this. We think they're going to happen with increasing frequency and velocity. We just can't tell you when or where. And that sometimes is not what an investor in particular wants to hear. We know they're going to happen over time. And for the long run, we think that we're in the right places in our residential markets. I think we have the right strategy but the C&I market, again, there's no short things in life at all, but it sure feels like this is much more closer down the fairway to what we do as a company and what we have done as a company from a legacy standpoint. So with that, I'm going to turn this over to Erik and he's going to get you oriented, if you will, on the opportunities in our commercial and industrial business. Erik?

Thanks a lot, Aaron. I was going to kind of -- a lot of people are new to the Generac C&I business. Although the business isn't new to us. So I was going to walk through kind of where the products are, how it fits in and end up with where we're going. So the base business has been generators, which is top left, we have a mobile generator product line for site power, light towers. Our battery energy storage systems are part of our multi-asset solutions and micro-grids. We have our own natural gas engines, so we drive and develop our own products there. And then in the controls and connectivity, we've built out all of our controls and integration in-house. And we do sell those products externally, but really helps us drive a better value solution for our customers. And as Aaron has talked about the scale and the growth of the business, we've been investing in facilities globally. So right now, we're up to 17 manufacturing facilities in the global marketplace. Both covering the North America and international. We're serving 150 countries. And our strategy is to build and produce those products in the markets they're serving. So we try as much as possible to find scalable locations that can deliver a local market that brings density. And over the last 5 to 10 years, we've built out a really robust global distribution network. So we're not just a North American market. We have over 800 partners globally that we're working with. And how we've been doing it. So the Oshkosh factory, we have legacy facilities. But as we found the investment opportunity, we just added the middle factory, our Sussex facility that's going online in Q4, really late Q3 to build that large data center product. And on the right-hand side, we added the Beaver Dam facility to actually scale up our base business because that business has been growing very strong. And then with the Allmand acquisition on the bottom right corner, that's brought us additional expansion for our mobile product solution. On an international standpoint, as you can see, we're in market for market, and we build the same or similar products and solutions but we have it there for customers, their unique needs, their unique requirements to deliver that just-in-time experience that customers expect. Oftentimes, the products are very large, sometimes delivered in 2 truckloads or 3 truckloads. So having them available in the local markets gives us a very distinct advantage. So we look about the opportunity change, and this is what we're getting a lot of questions and feedback on is how is the large data center, large megawatt products change in the business. really, I think, first and foremost, it doubled the addressable market we're serving. So we went from a $14 billion market up to a $30 billion market opportunity. So purely just on the scale of the opportunity, it's giving us a lot more chance to really grow the business. So when Aaron talks about the C&I business growing and being as large as the residential side, the market is there, and we just have to capitalize on the market. And now we've opened up a whole new leg of growth in the business. So where do we serve and how do we cover those markets? So just a little bit of an eye chart, but it's really important to note, we have a multipronged strategy. So -- and it's not just large megawatts, small megawatt. It starts really with the go-to-market. So we go to market through our distribution partners in region. So those 800-some-odd distribution partners we have globally, but we also go direct. We pick those strategic pillars that you can bring scale and value by going direct with those end users. So we mix and match to optimize the way the customers want to procure products, and we meet them where they want to buy their products. What's interesting to us is that when you look at our below 2 megawatt, which we've had 2-megawatt products forever, basically, when you add in the additional product lines, we're already selling in those generator market segments to those customers. There's nothing we're missing on that far left side on those end use. Now we're just bringing a different larger product to those same end customers and end-use segments. It's giving us a really great opportunity. And we're meeting when we say we go direct. So we have 17 global branches not to mention our North America opportunity that we have here. So how does Generac win? Really, we differentiate our products in many ways. But one of the key things is we're fully vertically integrated. We manufacture, design and integrate our products for their end use. So we're not just going out and buying off-the-shelf components, packaging it up and delivering it. We design and produce our own alternators, we actually make our own natural gas engines. So up to our 1-megawatt gas product, that's a Generac natural gas engine. We optimize that product to meet the application. Metal fabrication and customization, it's something that's really our strong suit. So we been cut and shape our metal in-house, and we're actually expanding this kind of Generac core capability globally. And so as we've taken on the Pramac team, we've added these capabilities and our in-house expertise to their scale. So one of the key things that probably isn't known enough, the brains of all of our products come from an integrated control solution. And really, the Deep Sea acquisition we made several years ago, unlocked a lot of capability. So we had our own controls platforms, but this just took it to the next level to not only design but also manufacture fully end-to-end in-house and bring that technology and that technology curve very rapidly to deliver end-use customer products. So we're going through the process now. We've integrated all of these new features and products from Deep Sea into the Generac product line, and we're expanding the Deep Sea portfolio as well. So it's really a differentiated advantage because this is how the generators function or batteries function, we control those assets really through that control side. And that's something that's our own technology that we leverage in-house. We talk -- we really separate the markets into domestic and international inside C&I. On the domestic front, we approach the market in 2 ways. We go through independent distributors. But also something we haven't really talked externally about is that we also own about 40% of our distribution partners in the market. And really, why do we do that? It was more opportunistic. It's not a strategy that we're going to go up and buy distribution. As we wanted to grow the customer touch points and our connection with customers, we invested in those local markets. And by having this great geography and great coverage. So we cover every county in the U.S., every province in Canada, end to end, and we have our sales partners and service partners in those locations. And one of our unique differentiation is our elaborate service technician bench strength. So we have over 4,000 technicians to serve customers. And so when we talk to these large accounts, that's how we win. Historically, in the telecom side, we've been able to provide service for the customers where they need it. If it's on the mountain top, if it's in a downtown location, we have service partners that can deliver it or maybe it's even the Generac owned store that can deliver that solution. And what we really try to drive is that customer experience. And a lot of our expansion on the own distributors has been as we've gone to energy ecosystems, expanding the portfolio, selling microgrids to customers, so not just backup power. How are they using the assets to peak shave, to cut their energy cost, to optimize their energy bills. So we built out this distribution path and it's working very, very effectively. And we'll continue to evaluate where we go next with it. But right now, we really love our distribution partners, and they deliver a lot of value for customers. On the international side, really what we've been focused on is expanding our branch role. So you can't -- when you serve 150 countries, you can't have 150 different unique experiences. So we're leveraging our sales branches. We've been investing there. We just added recently in 2025 in Australia location to actually have like formal brick-and-mortar to support our channel partners in region. So we've really been broadening our capability and exposure, leveraging our branch to get us in region and then leveraging local partners to win big and win better like in that specific market. As we've done that, we've expanded our technician partnership to 800 servicing companies. So when we talk to a global hyperscaler, they know that we can provide a service support in that region for that customer. They're very confident in that. We built training centers globally to train in those markets so that our technicians are ready to support the products. And we've added engineering capabilities. So industrial generators are typically a specified engineered solution. So the customer has a problem and an engineer comes up with a solution to solve that. And we've invested a lot in building out that engineering capability within the region. And I mentioned earlier, leveraging the Generac playbook. So we're making a lot of investment to in-source all the previously outsourced components that the Pramac team had done. So now they're doing vertical integration just finished launching a new facility in Italy to in-source all their sheet metal fabrication to really want to deliver as a faster speed to market, but you also control your experience for the customer. You can have the products ready when they need it. And we'll continue to invest in vertical integration and expanding what we deliver as part of our value solution for customers. So we've been known really as the leader in telecom. And really, there's multiple different segments of the telecom space that we participate in. This is really a global effort. But we're talking specifically here about North America. And a lot of our North American customers are global, and we're winning outside the U.S. as well. But we're the market leader in the macro towers and the CRAN Hubs. And we provide products and solutions customized for those telecom customers, and we have a great support network. And really, as they're expanding their network and their products, so going with larger edge data centers, it's a growth opportunity for us as well. So when we talk about large data center products, it's not just for your traditional data centers. It also ties in and connects very closely with our telecom customers. And we're leveraging that customization and solutions that we've done with telecom as we jump into the data center space it crosses over very, very well. And we'll talk a little bit later on about edge data centers and how we're expanding there. But this telecom opportunity, as Aaron mentioned, it's a critical infrastructure. people really just can't function without it. A lot of emergency communications. People don't go to the radio anymore. They want the alert on their phone. And so this critical infrastructure is being backed up. It's still underserved. Less than half of all cell sites are really fully backed up. And so the market continues to grow and expand, and we're well positioned to serve whatever segment of the telecom channel is necessary. Rental equipment. So Aaron mentioned the Allmand acquisition. So in January, we acquired Allmand. It expanded our breadth of products. We've had mobile generators, mobile light towers and mobile heaters. This expanded it more, but it also gave us some scale and footprint, additional manufacturing capacity to better serve the market. It's been a great complement to our team, and it didn't really overlap. So their customer segment didn't overlap with Generac legacy customers and neither did the products. So we had similar products, but serving different market applications. So that's been a great addition to the team and really it ties into our global presence. We've built out over the last few years, this global mobile business that we haven't really highlighted just like we haven't hired C&I, that we're serving infrastructure markets globally. We have the most robust product line in the world, light towers, mobile generators, and we're serving that through multiple channel partners, both North America as well as internationally. And there are some key themes that are really driving the growth in that business right now. fleet replacement as we came out of post-COVID, that cycle kind of missed the fleet replacement as people weren't sure what was going to happen. And then there continues to be a global shift on rental versus owning. So on large capital equipment, a lot of construction companies are switching to that rental model, which benefits us as we deliver great rental solutions and our products are what we call rental ready. They're more robust than a typical generator. It's ready to be dropped on the site and used in live construction. So now jumping into really the data center side. which is a lot of what I think most people in the room want to hear about is what Generac is doing on the data center space and how we're going into it. And I want to start with what are the products and solutions we have. And really what happened, the bottom 3 right nodes are the only ones that are new. And as we look at data center business, we've been covering the product lines with our existing -- or the market needs with our existing product lines. And it's not just a diesel generator play. We've been selling and promoting and marketing natural gas generators in the data center space for years. And so we cover all the different end segments. And we're actually very strong on the edge data center market. We built a lot of custom solutions for edge data center customers. And in some cases, like it's this 500-kilowatt Well, a lot of the edge data center sites are 2 megawatts or more. And oftentimes, they'll actually take multiple units to have redundancy. So we pick 4 units, just like on a large data center, they're actually taking multiple units. We'll put 4 units on 1 site for that edge compute to optimize that performance. On the small-sized data centers, maybe it's a self-consuming data center, it's your own data and your own location. We've always had products to serve that. And really, even on the large side, we typically tapped out around 60 megawatts of power on a site. But as the generators have grown, customers desire to reduce the number of units on site has increased. And so we've now built out, as we brought in the product last year, we've launched and started shipping those products. And now we can cover all the way up to and by the end of this year, a 4.25, 4.5 megawatt range and building out the portfolio as people try to shrink the units on site. So we'll jump into a quick video now, and I'll come back. [Presentation]

I think one of the unique things about the product and why we like to show it is it is different than what you think for Generac, where a lot of people think portable, Home Depot, home standby. That's an 80,000-pound unit we started production last year in the second half of last year, started shipping products, and we're going to continue to grow and expand. And so what I'm going to talk about now is why we feel we're going to be competitive in that market space. How -- I mean, we're already winning now and how we're going to continue to win and grow and really build out our capabilities and our partners' capabilities. So I think I brought up the earlier topics about our vertical integration, things like that to show we've demonstrated it. It's not like we're new to the generator space. We were selling a 2-megawatt generator. Now this one is a little bit bigger. So we have this controls leadership position. So we're actually able to adapt our controls right over it directly correlates to the larger generators. So we're leading really with that innovation, and I'll talk a little bit later on, but the multi-asset solution and integrated solutions, we actually have a robust portfolio, probably the broadest in the market for integrated solutions, combining best microgrid controls transfer switches, switch gear and providing integrated solutions for customers. And we can talk about solutions for them, not just a product, it's not just a product we're delivering. So execution at scale. If you looked in the past, our ability to ramp up, build product fast, you probably heard it more publicly on the home standby. We've had a big store. We ramped up our capabilities. We've been doing that on the C&I side for years. And we've already launched new factories in recent years and expanded our capabilities and portfolio. So we know we can ramp up our capacity to deliver these solutions and we know how to build generators. And right now, by delivering them much faster than anybody else in the market, it's got us in the door, and then the rest of the work is going to be how do we prove that we deserve to be there, which we already are by a lot of the product innovation we're doing. Operational excellence. Our vertical integration has the ability for us to actually help -- it helps us shorten the lead times. We actually know how to work with our channel partners, whether it's an alternator manufacturer or the in manufacturer to develop a plan on how to have materials ready when we need them for the customer to really optimize that agility that we have dynamically delivering products and solutions to customers. Strategic partnerships. So we actually have a broad portfolio of customers we've been working with forever. So EPC firms are not new to Generac a lot of the developers building data centers, they built other products, and we're a partner of them already. So we're not new to them. So we're not a big concern. And the Generac brand name being public traded, Generac is a global company, we're well known. And so the objections that a lot of times people face entering a new market wasn't there because people know who Generac is. So how are we winning? And this is really a mixture of 2 things. We're leveraging that. We talk a lot about technicians and customers need support. So North America, we have over 900 technicians that are able to support the data center market, the end market, and we have 400 dedicated data center technicians. On the international side, we have 800 service partners, and they're all able to support these products. And when we talk about support, we were trained up on the engines. We're trained up on all the technology needed to keep the uptime we have a vast distribution network for parts and aftermarket so we can serve customers where they need it. And we're also doing it on the technical side. We're responding quickly to bids. We're providing a great experience for the customer from cradle to grave. So from the time they conceptualize a project, we actually have the engineering resources and capabilities. We've been expanding our team, so we've rapidly grown over the last 2 years. So it was probably new to the markets that we were actually investing in the data center space. But we've built this out over the last 2 years. So we have the people, the team, the application engineering that can actually deliver solutions for customers, and they're appreciating it right now. So one of the keys to be successful long term is to have these great maintenance plans to be able to fix units to corrective action. And we built all this out in advance. And we're really leveraging our distribution partners, both in North America as well as internationally. The emergency response capability. We're leveraging telematics and solutions to actually know when there's issues with products and getting a solution there in time. Our network operations center works 24/7. And so we actually have had all these things in place because that's been required of telecom customers. And so really, the actual scale is much easier to manage. Instead of 20,000 telecom units, it might be 20 of a given large megawatt unit on a site. So we've actually been able to easily address this using our leverage scalable systems and really managing the experience for customers. So we're approaching the market and the co-locator kind of the left-hand side, there's a colocator developer bucket and then hyperscalers. And there's 2 different ways to approach it. On the colocators side, so a lot of these people, we've already been doing business with. Now we're bringing larger products to them. And we've already been in there because they're familiar with our brand and the solutions we provide. We talked to them about full energy solutions. And you'll start hearing more and more in the end markets about multi-asset solutions on data center sites to optimize energy efficiency, optimize consumption and actually manage the grid challenges that are out there. And we are front and center with that market because we through some of our acquisitions, we've built out a portfolio of products that deliver those solutions. And then we provide that great customer experience. We we're the underdog, and we're actually fighting for their attention and peace of mind and giving them great service. And so we're winning there. And we're building out a great pipeline of backlog just from working with the colocators. The hyperscalers is a little bit different type of situation. There's a much more rigorous process to get on an AVL. We're starting out. I would say we're in late innings now moving very far along, but the process is actually long. And I think after we launched it, we were entering the space, a lot of people expected our very next earnings call, we talked about the great backlog and how we're building. But it's a robust process that they're requiring of all their suppliers. And it's not just the product and having a product that works, but it needs to work in their applications. So we're doing a lot of product validation right now, testing, durability analysis and then actually getting our processes checked. So we have a lot of great capabilities, and now we're having to provide that and document it with the hyperscale customers. And we're moving into the pilot stage with customers now, and that's where we'll actually be showing our capabilities to deploy projects to sites. And hopefully, in near term, we'll be actually talking about global supply agreements publicly. So I mentioned backlog, if you haven't looked at the slide. So from our last earnings call, our backlog continues to grow even as we're shipping product or up to $700 million now of backlog, and that continues to grow on a daily basis. We're deploying projects to sites. Example here in the photo 37-unit location deployed. We're doing global deployments. So outside of North America as well as North American deployments for the product. And I think what gives us confidence, and Aaron mentioned earlier, the there's many different data points on what the market size is. But when you talk about a $14 billion, whether it's $14 billion or $17 billion, there's a great market opportunity, and we feel avoid by having a great product and we can competitively deliver based on lead time. And so as we get more into the market, our confidence and capabilities to support the projects is getting greater and the visibility into the overall market opportunity is actually giving us more confidence in this $14 billion to $17 billion market. So what are we doing in North America? We realized very quickly that we actually, not to say we caught lightning in a bottle, but it came very quickly, and we needed to increase our capacity. So we've increased our Oshkosh factory, which was building our large megawatt units, and that wasn't enough, so now we actually started our Sussex factory. That will be online by Q4 at the latest this year. And we're fully underway on getting that factory up and ready to go. Just domestic capacity alone, we're sizing that at a little over $1 billion in available capacity. And those of you might say, well, why don't you have more -- why aren't you delivering more this year? A lot of these customers are on 18-, 24-month purchasing cycles. And so we're filling in slots, and I should have mentioned in the backlog, in '27 and some customers are booking out to '28. So longer lead time product. And then on the international side, we actually have 4 facilities that can produce the products. And so we're up and capable Italy, India, China and Mexico to produce the products. And actually, even for North America, Mexico is an option as we need additional capacity to bring products from there into the U.S. So we're sizing our capacity to meet the market needs. And I think as you've seen, we'll continue to invest and grow our capabilities as we have visibility into the requirements. So right now, we're sizing it at roughly $1.2 billion of capacity, but we're willing to invest more if it is justified. So talking about investments, we realized early on that the packaging could actually be a big bottleneck for us. And the open set generators, which are some of the photos we've shown already, they get delivered to a site inside a custom enclosure based on the customer specifications. And that's where the Enercon opportunity came about. They were a supplier for us, and we were working with them. And we decided that based on the scale and how the market was growing, we need to vertically integrate that and bring that capability in-house. And really control more of our own destiny. So it will allow us to deliver to customers faster and invest at the scale we need to meet customer needs. It expands our margin portfolio. So instead of a pass-through cost on the product it will actually will be able to generate margin on the sale of the enclosure and really meet customer expectations where they need it. With that, actually came switchgear capability. There's a lot of switchgear and electrical components built inside these enclosures. And that's an area that we didn't have a really robust product line on switchgear that opens a different market and actually now expands even on our multi-asset solutions, where we're selling a microgrid will now have in-house capability to develop our own switch gear to deploy with the products. So we're planning to close in Q2, and we did actually get approvals to close, so regulatory approvals are done. And so sometime in Q2, we plan to close the deal, and this will help accelerate our presence in the market. So I mentioned earlier we're going bigger. So we're actually in full development right now of the next larger product. And by Q4, we'll have the open order board to start booking backlog for the large up to 4.25-megawatt products. This is changing the product road map that we had. A lot of the customer sites, they're actually going to higher voltage sites. So what we call medium voltage. And this allows them to go to the higher larger-sized generators. In the past, they were limited at 480 volts. And so if you went to a 4-megawatt generator, you actually couldn't match that voltage. And so now, actually, as they're increasing voltage capacities on sites, the larger generators make more and more sense. And so we're building out that product line, and we're excited to have that in the market later this year. So data centers are not just a generator play. So we're actually working with quite a few customers on multi-asset solution. You might have seen we had a press release with EPC power, and really, there's 2 big requirements on why we're seeing a need to actually use batteries and multi-asset solution with data centers instead of just backup generators. So buffering volatile AI loads. So a lot of management of the energy, you'll go from 100% down to 30% and then back up very, very quickly. Generators or even grid infrastructure has a very difficult time keeping up with that. And a lot of the bridging power applications where people are bringing their own power to the site, a turbine can't react at all of that. It's a fixed load. And so we're seeing more and more requirements for the ability to buffer AI loads for the facility infrastructure. And we're pairing that with generator switchgear and this unit that you see on there to actually provide the seamless ride-through so that the equipment doesn't see any fluctuation. And then talking about ride through on utility ride through specifically, down in Texas, they've actually passed legislation that the data centers cannot drop off the grid. So a lot of times and like prior to this bill, if there was volatility in the grid, so frequency drop, the data center would disconnect from the grid and they would go on generator mode because they want stable power coming through. Well, the grid operators are saying, hey, we can't manage that to lose those large loads. So now they're requiring the data centers to maintain pulling power to their buildings. And by doing that, they need some more for that power to go because they can't afford to stay on a volatile grid and have surging in the building. So they're dropping on a generator power and then they're charging the batteries from the grid, so they maintain that grid control grid flow. It's a great application for a multi-asset solution. And it's something that we've been doing on all of our microgrid and multi-asset sites already. And now we've scaled it up and working with EPC, we have an inverter that we can actually manage that and manage that 2-way communication and dispatch of power. So it's been a great experience for us. And it's early stages on it, but now that we're seeing more and more requirements for data centers to have batteries integrated in their solution rather than a traditional UPS product. So we're really proud of our multi-asset solution portfolio. And really, we've built that over time. And it hasn't probably gotten a lot of press and publicity. So we talked about Deep Sea, bringing that controls the brain, the interface. We're adding Enercon in for switchgear. SunGrid was an acquisition a little over 2 years ago now that we acquired a battery energy storage company that developed integrated solutions with batteries and inverters. And then we added Refu store, an inverter manufacturer and battery packager in Europe. And then the Ageto product, which is our art control, so the microgrid controls. So these controls and the capabilities are what we're leveraging to take advantage of these opportunities with data centers, but also in our multi-asset solutions. We're seeing more and more customers trying to take their power requirements in their own hands. Optimize power price, optimize availability and uptime and really control their destiny with power. And depending on where the customer wants to go, we have a solution that matches what they need. If they just need pure backup power, we have our own transfer switches and traditional generator or more complicated up to the end where you're integrating all the assets we have and they need into one site, including transformers. So this is a growing market, and we see as power prices become more volatile and power availability is more volatile. We'll see more and more customers go to really behind-the-meter multi-asset solutions and microgrids. So how do we control it and optimize it. Generac Link is one of our proprietary platforms. And this is how we provide the customer confidence I talked earlier about the telematics solutions. This is our own in-house telematics solutions, we can actually control and optimize assets. So not just monitoring health, but if they want to dispatch their product into the open market. So they have excess power available and they want to run their generators. Our system is actually designed to actually be a dispatchable asset. So we'll actually control. And we do this for large customers. The product solutions started for hospitals, controlling 500, 600 assets on one side. And so it's a scalable product, but you can turn it off and on and send commands to the products to create the optimization you need. And so we're actually grid users, grid managers are actually using our product to manage their dispersed assets. It can work on any of our competitors' products as well or other assets, anything that consumes or generates electricity. But really, it's our own system that we're using to optimize our performance on site. And we're leveraging that with our next-generation AI to fault detect, to find what's going on. And when there is a problem, actually advance tell the customer or their technical support, you have a problem with your product. These are the recommended solutions. And there's a whole AI schematic tree that will actually walk them through how to troubleshoot fix so they don't have any downtime. So we think this is a great catch all for like in the back end of the systems to make sure customers have confidence that the products can be deployed and delivered successfully. So global growth drivers. So Aaron talked earlier and kind of stole the thunder on this, and so we didn't even put out 2028, how big that was going to be. But the plan is to grow the business, basically doubling the C&I business. And really on the backs of one big driver is the $1 billion global data center opportunity. That's a big opportunity, but the rest of the business, actually, there's many key drivers in the different markets rental refleeting, telecom sustained growth and a broader portfolio of products actually for our legacy C&I stationary business that gives us great opportunity and then the growing emerging market for multi-asset solutions. On the EBITDA side, right now, we're starting at a low base. As we get more operating leverage from the volume we're planning to get accelerated drop-through as well as the data center margins are accretive overall to the current EBITDA that we have. And we'll continue to vertically integrate in our own factories but also with acquisitions strategically, building M&A around it and continue to manage and optimize supply chain to improve our profitability. So in a nutshell, that's how we're going to move. So we're going to grow our EBITDA on a 20% CAGR or our top line and then grow our EBITDA to mid- to high teens. And with that, we'll turn it over to Kris before break.

We'll take a quick break. We'll plan to be back here around 10:05. A 15-minute break. [Break]

Good morning. I think we're all back together. So let's go ahead and get started again. My name is Norm Taffe, as Aaron indicated earlier, we've made rather significant organization change in the company. We formed a group called Generac Home. And it's more than just the combination really of our energy technology business and our consumer power business into one, it's really the full integration of several companies that we acquired 4, 5, 6 years ago. It's almost at least 7 different companies have been integrated together and now integrated into our core home standby generator business. So I'm going to talk a little bit about that integration as well as kind of the overall technology envelope and the opportunity, I think it provides us for delivering solutions to homeowners, then Kyle Raabe is going to come up here and spend a lot of time focusing on our real core business, which is how do we grow and continue to grow our home standby business. And I'll come up for a couple of slides at the end, just to wrap up kind of where we see the financial model going for what we are now a single organization called Generac Home. The other strategic reason we do this is we really have been building out the ecosystem Aaron talked about and building out an ecosystem so we can provide what we think is a better experience for homeowners and an experience to solve home energy problems that aren't just resiliency but also our savings. So if you take a look at kind of what I would call the business reasons behind the reorganization, First and foremost is that we were already seeing a convergence from a technology perspective. In fact, maybe 18 months ago, we started to combine our software efforts internally just because it didn't make any sense to build a software platform from homeowners differently in one group versus another. And we can get a lot more efficiencies and build a solution we think has much more value to those customers from a technical standpoint. Also on the hardware side, we'll talk a little bit later and Kyle will talk about areas where in the interconnect to the home, the 2 sides of the business, the solar side of the business as well as the generator side of the business, we're going toward the same solution. And we can actually get great efficiencies by combining those. At the same time, the changes, particularly in the renewable market had also led us to consider a recalibration of our spending profile. So what we wanted to make sure we did is in the combination, we could get efficiencies, allow us to put more leadership focus on growing our core home standby business, while at the same time, taking advantage of the new technologies that were part of the energy technology Group and apply them to a broader market. And of course, along with that, becomes increased efficiency. We literally had between ecobee, the energy technology -- other parts of the energy technology, consumer power Three separate customer service organizations, the sales and marketing organizations and more than that in terms of engineering organizations. Now in some cases, that makes sense, right? You do need expertise in specific areas. So there's some of those engineering organizations have to stay separate to an extent, but there's an opportunity across the board to do a lot of combinations here to gain efficiencies both improve our effectiveness, deliver better solutions to the customer and also save money. So that's kind of the core business rationale for why we made this change. And that's what's important from a business perspective -- it's also, we believe, a path to delivering a better solution for the homeowner perspective. So let me at this point, move to a video to give you a little bit of flavor for why we think that's powerful. [Presentation]

Okay. I think the video kind of represents part of the vision of what we've been talking about for quite some time. The graphic at the top here -- coverage Generac for a long time, probably seen it for quite a while. We've been talking about home energy ecosystem for quite a bit of time. I joined the company 3.5 years ago, and this vision was already in place, and we were buying companies and trying to build -- had bought companies to build this vision. I think it's important to note that this is not just on paper anymore. In fact, we really have built a very powerful portfolio of products, everything from a brand-new version of our home standby generator, which has much better connectivity and supports an ecosystem better, new portable products, new products in the solar space in the storage space. And then really at the center, a brand-new software platform to support it all. And even some projects we didn't envision originally. Now I won't say that the market evolved exactly as we expected as we made these investments, that -- a lot of that stuff changes. But it doesn't change the fact that we now have a capability to offer both customers and dealer partners a huge array of solutions for their needs, not just resilience needs but their ability to save money and had all lower cost solutions. I'll also say I've been around long enough that as much as markets shift in one way, before you know it, they might just shift another way again. And I think it's from a portfolio perspective, we're very well positioned to react to changes in the market. And one thing I know for sure is that energy and home is becoming more important than ever to consumers. Aaron talked about the -- these 2 megatrends as kind of the core megatrends. The power outage over time, which has always been the core of the company in the past because we're resiliently focused, but also about the dramatic changes in energy prices. And I think this graphic is kind of amazing. You can see how level really things were, just 2015 to 2020, how little pricing really changed overall. And then the dramatic changes that have happened in the last 5 years. And Aaron showed the data that said this is actually going to accelerate even further. Now I can tell you on the energy cost, I was from the solar industry, semiconductor and solar previous to this for quite some time. And it's probably about 10 years ago, we had -- one of the challenges we had in solar was we had done a survey at the previous company. And the survey determined that the average homeowner in the U.S. thought about their electricity built, 7 minutes a year. So one of the problems is we were selling on savings and nobody really thought about if we paid the electric bill. I guarantee you, people are spending more time than 7 minutes a year today thinking about their energy bill, and thinking about their home energy. It's just totally changed. The headlines, you never heard about it. It was just something that just worked. You didn't really worry that much about it. But it's just changed so significantly. It's now suddenly headline news. That -- the concentration effect that power goes more likely to go out and the power prices are going up is getting the attention to consumers. I think we have a great opportunity to give consumers a path to solve both of those problems with our portfolio. From just a pure market standpoint, it's also a great opportunity for us. Today, we have roughly $7 billion in 2025, a $7 billion SAM across the businesses, whether it be the power generation piece, solar and storage, or ecobee energy piece. Those are all growing over the next 4 years. We see a growth from about $7 billion to $12 billion. In the case of the solar and storage grows the most, part of that our SAM increasing. There is -- the market is, in the short term, has pulled back a bit, but it is going to recover mainly for the same reason we just saw in the previous page. The power prices keep going up and solar prices keep coming down. At the same time, in our case, we had previously not really participated in the inverter or microinverter side of that business, and that's a new SAM form. So that drives a bigger SAM for us going forward. But in power generation as well as the ecobee energy side, we also see growth in those markets. I think for us, strategically, we kind of have 3 things we're focused on. One, and first and foremost, and most important, continue to drive the growth of the home standby market, where we are the clear leader, it's a very profitable and great business for us. And a lot of the technologies we built here, we believe, will help us do that further, and that's what Kyle is going to come and talk about primarily. In the solar and storage space, it's a market we're still quite small. It's an opportunity for us to gain share in a growing space. It's an opportunity for us to deliver solutions which lower the customers' -- homeowners bill as well as providing some resiliency while our resiliency is primarily served by the home standby business. And an ecobee continues to grow, keen you gain share and has become a very nice business on its own. It's a nice market, #2 player in the space, gaining share. But at the same time, it also provides us an ecosystem, which we think we can leverage across the whole homeowner solution. If I spend a lot more time talking about ecobee, this is really turning to be a super valuable asset to us. I think we were attracted to it because from the beginning, it was an award-winning technology. Any kind of 10 best or year's best awards, wire cutter or seeing good housekeeping. Almost always right at the top, best smart thermostat in the marketplace, and that continues to be to drive both customer loyalty and market share gains. We're now in 5 million connected homes today. So there's more than 5 million thermostats out there at those homes. We are now 5 million homes that are connected. And now we've crossed the point where 1 million devices are enrolled in grid services programs. That is in addition to the business of selling the thermostat, that's ongoing revenue, which is highly profitable. Overall, we -- in the end of '24, we had our first profitable quarter. Last year, we had a full profitable year, and we're going to continue to grow that profit this year. as we grow market share, we think we took about 400 basis points over the last 3 years of market share. We're a strong #2 in this space. The GM gross margin in this business is higher than the overall margin of the company. and about 10% of the revenue -- just under 10% today is coming from recurring revenue streams, which over the time of the period, we expect to grow to over 15%. So that recurring revenue is not only more profitable, but it's a healthy based on ARR base for which to grow on. The other thing that we don't talk as much about, but also fuel some of that growth is that we are seeing great partnerships with companies like Carrier and more recently, Ream, where they've sort of made the conclusion that as an HVAC supplier they would be better off OEMing a solution with us, in the case of Carrier dual marking that solution, Carrier and ecobee and offering that to their customers as a solution. So that they can deliver customers a great experience. They don't have to develop it and they get all the benefits of that. So on its own, ecobee really has been coming just a great asset and an independent asset. But I think for from a perspective, both strategically and the vision right from the beginning, it's far more important to Generac than that. It really has become what we call the energy hub of the home. We've really based all of our software, as I mentioned, while we're announcing the full integration as part of the announcement today, the reality is on a software perspective, we started this effort about 18 months ago, where we built a program we call common platform. We started to combine groups within energy technology as well as consumer power to build the software platform that unifies that experience because we thought we could deliver a much better experience. It also just made it way easier. We had it shows 3 apps here. I will tell you we had 6 different new customer apps between all these different companies that we purchased. We're able to combine all that into a single experience on a platform that was already award-winning. And so this ecobee Generac experience, takes advantage of the fact that, that was a world-class platform and start to provide consumers that experience. It's also super differentiated because you don't just have an app in your hand, everybody's got an app, but you also have an app on the wall, an app that allows your consumer to engage not just the individual, but the whole family with no -- you don't have to log in. Nobody has to have the password. They can see what's going on with the energy of their home. And it really drives an engagement, which we think is a long-term benefit. And that -- one thing I'd like to say about this product in the equity. Sure, we'd love everybody to buy everything in our portfolio, and they will work together and there's a benefit for that. But this product actually makes every individual product of ours better. It makes our generator experience better if you just buy the generator, it makes our storage or solar experience better. All of them are better. It gets better and better you had more, but this is something that's a deposit differentiator no matter where you fit into the Generac puzzle. And then on the other side, and we don't talk as much about it, but for some of these businesses is arguably the thing that drives the buying behavior more than anything else is the dealer experience. the installation experience. And this actually has been fully combined. Today, even with our latest home standby generator that Kyle will talk more about, but we introduced last year, it already is the same installer field pro experience based on that common platform. And that, in the end of the day, when dealers -- what they care about is how efficiently I can get into that home, get this installed and move on to my next job. And so the improvements and being able to take that entire organization work together and build that best experience for the dealer is often just as powerful as being able to provide that to the customer. And I think that's kind of where we are right now, and that has, I think, had really strong implications on improving our experience. And we just had our annual conference in Florida at the beginning of the year. And across the board, the -- particularly the Field Pro is seen as just a huge step forward in the ease of doing our installation and doing their job with our products. And it's one of the things we think kind of creates a bigger and bigger moat around our core home standby business, a better experience for consumers to take advantage of. I also think one of the things maybe we didn't anticipate at the time these acquisitions were made is that the advent of AI is going to make that fundamental, I would say, capability even more important to the future. We I will say, and I'm an engineer for a long time. I haven't seen anything like the productivity increases that this is done from an engineering perspective. It is -- it really isn't -- there's areas here where I'm worried about hype -- the engineering productivity and part of it is not hype. It is really impressive. We've been able to do things in so fast in that integrated software group without -- actually the product management team has a hard time keeping up with development because development is able to do so much on their own. This is -- one thing wrong with tough about is it's really hard to do in a Justice on a PowerPoint swing. But this is something that we actually started working on end of last year, and we're already in beta test with 500 of our customers now, and we will introduce really the second half of this year. It's just an assistant called Ask your Home, it's what we're internally calling. We'll probably have a different name when it comes out. But it's a way for to take stuff which actually is quite complex and sophisticated and just make it easy to use. It takes -- it allows you to optimize savings, resilience comfort all from just asking questions and not having to understand how any of this stuff works. And it's another platform for increased customer engagement. And I'm just going to -- for me able to read kind of this just example. If you have the system like the beta testers that have these systems now the prompt here is just how can I get ready for the storm coming. The system automatically knows where you live and says, here's what we see in your area, what to expect, we expect power outage and 8 to 12 inches of snow with 40-mile wind. Here's our recommendation. We think you should -- would like to check your generator and check the fuel levels to make sure that's ready if it's needed to run. We'll change the battery mode to build optimize -- from bill optimizer to self-supply that's going from a place that focus on savings to a mode that's focused on better resilience. And update your reserve percentages. And we're going to go ahead and preheat your home in case the power goes out. That's our recommendation that just immediately within like 10 seconds comes back to and just ask you, would you like us to go ahead and make those changes that'll come back in about 15 seconds after that. If you say yes, and sent say your generator is ready to run, your propane is at 88%. Your battery has been switched to self supply. You should have about 22 hours for your -- based on your home usage. And the thermostat has been reset to 74 degrees. So it will be warm in case you lose your power. So it's taking -- doing a lot there and just doing it really simply. And I think that as that investment on software has become both more of a differentiator going forward, but it's also going to become something, frankly, that users are going to start to expect. And so that's, I think, a key element of what that effort has brought us. All right, I want to talk -- spend a couple of slides talking about some of the new elements to the portfolio from a hardware perspective and a market perspective before I turn it over to Kyle. The newest element from a hardware or for market for us is the introduction last fall and the beginning of volume shipments this quarter, the first Generac-branded microinverter called PWRmicro. Now this is 4 years in the making. We -- I would say, at least Aaron didn't expect it to take 4 years. But the reason it's 4 years we're making is this stuff is really hard. There's a reason why in the microinverter space there has been 1 company for a decade. And the reason in this space more than anything else, it's not performance, it's reliability and quality. It is really hard to make something that lasts 25 years on a rooftop in Arizona, or a rooftop in Maine, that has to be in ice or in the summer, it has to be in 160 degrees and have it to really last 25 years. And the mistake a lot of other players have made is not making the investment to match the quality that, that market absolutely demands and actually has come to expect. We have made that investment. It's that infrastructure investment was a significant investment that put in place a huge reliability capabilities and testing facilities and really it's like chambers, et cetera. This product before introduction or ad introduction has already gone through 2 million hours of reliability testing. By far the highest tester product in our company's history, and it's higher -- more testing than most products anywhere because of the difficulty of the environment. That's really what's necessary to be in this space. But when you get on the side of that, it's a huge barrier to entry. My favorite thing is a barrier to entry is when you get to other side of them, you love having them. And so it's really put us in a position to where we have an incremental opportunity in a very high-margin space. to not just support resiliency at customers but to offer them a path to lower costs as utility prices go up because solar is sold on savings. And as the prices of the utility prices keep going up, more and more of the country is going to those savings. Incentives are not. It doesn't -- at the end of the day, much of the market would still see savings with solar. It's taken a bit of a step back. But as those prices go up and frankly, in some ways to have the incentives in the back will be good for the industry. We expect solar to continue to grow again. And so this gives us an opportunity to be -- to take a part of that. On the other side of the incentives on the positive front, these are all manufactured in the U.S.A., the parts of the incentives, the 45x incentives. That have been preserved in both administrations, they continue to contribute this and also allow the cost structure for this to be very, very strong. So it's a great incremental high-margin opportunity for us. On the battery side, we introduced last -- earlier last year, PWRcell 2, which is a complete redo of our battery system. Back, Aaron made the comment we learned a lot. This is one of the areas we learned a lot to improve the product so that we have a solution here, which is complementary in many ways because it does some of the same resiliency capabilities that you get from a generator, although it is a shorter-term resiliency capability. Interesting in this space, we actually see a lot of attention partly because of our history, it's Generac, and people wanting to have a battery to make their solar to improve the ROI of their solar because in some states, that actually can be quite helpful. But also want to pair it with a home standby generator. And the reason that is, that's your ultimate backup experience. You have the quiet seamless backup experience of a battery, where you don't even notice the power went out, your apple tell you, the power went out. But batteries have a certain amount of time available. If you really want are worried about lasting through more than a day or half really more than half a day, having a generator allows you have really unlimited duration and get the best of those worlds. Now some people have said to me your sales we said, they really want to buy all that for a solution. Is that really realistic. I'll give you a data point, which about competitors batteries, the market-leading battery company that in terms of solar batteries, the average number of power walls, I'll just say, that were installed, is closer to 2 than it is to 1. Average number at home. That tells you that more than half the people or more people are putting 2, 3, 4, 5 multiple power walls that are just putting one. The 1 is there to make your solar more efficient. The other batteries are there because you want to go through resiliency. Well, I can tell you, if you're starting to stack a bunch of batteries, you're way better off putting 1 battery for the solar and add a generator with whoever is battery it is add a generator for long-duration resiliency because that actually solves the resiliency problem while you use the battery to lower your cost. And so we see a lot of people. And that isn't by the way, new with us, that's been done, Generac have been used with resiliency and batteries before. We're seeing an acceleration of that. And of course, our distribution network and sales network is really familiar with putting the generators in. So that's an opportunity. We see them pair together that does give you more of that full ecosystem experience. It's also just a great margin opportunity for the company. And in my last slide before I turn it over to Kyle. While we are excited in their own right for these new opportunities for us, like in the microinverter space to add incremental business, really, the integration as well as the development of software stuff really then building around our core generator business and making that experience both more -- a better experience for customers but also building a better moat around us versus competition in that space. And Kyle's going to go in a little more detail, but some of the areas like from a differentiation perspective that came from the IT side, and in some ways, more compelling on the generator side. If you're in the solar business, you know about things like a meter switch or other people call it a meter collars. It is for the places that they've been introduced there has been almost a 100% switch over to this approach. This approach essentially eliminates the transfer switch install and makes the installation itself of moving the ground wires, all the wires in the back way simpler. It literally plugs right into the meter, and it saves hours on installation time. And so it's become standard in areas for solar. It's brand new and the generator stuff and Kyle will talk more about that. Same thing for the generators. The smart breakers he's going to talk about. And of course, I talked to it about the benefits of ecobee brings to that space. So the innovation there is both making our generator business is more affordable, but also more differentiated. In the centered, one of the things we're also seeing is a lot of interest from people say, look, I want resiliency. I believe generate is the best thing for silent but I also want to save money. And one of the challenges we always have on generators is when you're just selling something resiliency only, there's really no economic case for that. However, if you could -- if a customer is open to saying, I'm going to put solar under roof, we can make a case that essentially the savings from solar more than pay for your generator over time. And so that combination building to be able to talk to customers about solving 2 problems, solving your savings issues, your cost issues, but also given your resiliency is a super compelling combination. And then finally, something that's happening, we see in the market and the channels and I would say the sales channels, is that these distinct markets of solar installers and customers which are very large variety of dealers in that space. And generator installers have been largely separated in the past. We're seeing more and more overlap. I can tell you, I would say this is one of the areas to where I think we -- or at least I kind of was seeing it the other way. Early on, it was my expectation was that a lot of generator deals are going to say, I want to get in that solar space. I would tell you in the last year, it's been the opposite. What's happened is that solar -- as a solar market has gone through a lot of change with 25D and the finances. A lot of your best solar companies that said, I need to diversify. A lot of them are doing HVAC and a lot of them are doing generators. And we're seeing that ability to come in with a generator solution actually really appealing on that side of the network. But it really expands us into kind of a whole new TAM of dealer market. I'll give a specific example. There's a company that's well known in the solar and she named Freedom Solar, that's based in Texas, actually, my previous comments, our largest dealer in the country. And one of the largest solar dealers anywhere for anyone. Freedom Solar renamed themselves in December, Freedom Power. The reason, because they're not just selling solar anymore, they're selling generators, and they're selling HVAC equipment. And I think you're going to see more and more of that happen. And I think it speaks back to the original thesis that portfolio of products is exactly the kind of portfolio of your products. If you were to see yourself as a dealer delivering energy solutions to the home as opposed to just either solar or backup solutions. So that's the strategy coming together. It's a long -- we'll see how that process evolves. But we see more and more of that happening. And I think we're very well posed to take advantage of that. With that, I'm going to bring up Kyle to talk about our core generator business.

Thanks, Norm. I'm going to talk to you a little bit about some things that you're probably familiar with in some of the slides or the things I'm going to go through, you might have seen a little bit earlier today. Actually, I should probably first introduce myself. Kyle Raabe, President of Power Generation for Home. As we brought the groups together, it's an area that I'm very familiar with. But we're going to bring these strategies together, not just for the sake of technology, not just for the sake of bringing technology, bringing our sales groups together. But you're going to see the themes and the strategies actually play out to our strength in an area where I talk to my teams very frequently, and I say, hey, guess what, we're an organization, we're in a position where we have an opportunity to go create the market. I talked to our groups, I talk to our customers, I talk to our dealers, major retailers throughout the world. And we talk about the ability to lead from the front, right? Aaron mentioned this morning, hey, you're doing one thing, you're either growing or you're doing the other thing, you're dying, right? And the choice that we have today is we're already in front on the standby power category. We're leading from the front. And what you're going to hear from me today is, yes, there are some things that we talked about this morning that you see behind me here. You see lower power quality. It's the things that you know demand is coming, and it's residential, it's commercial, it's industrial. You see people moving from fossil fuels over to electricity inside their homes, inside their vehicles. So we know that's happening. It's a proven fact, and you've already heard about it today. But the reality is, from a power generation perspective, from a resiliency perspective, the sensitivity to that going away continues to go up. And there's a couple of things at play here that I'll start out with today. Number 1 is that our core customer group, which is typically 65 or 60 years and older, right, continues to grow. And as they grow, they get older. As they get older, they're choosing day after day after day for a lot of reasons, which I really -- and I won't go into today because I could spend a lot of time as to why it's happening, but they're choosing to stay in their home longer. And as they go even as an older adult, right, in today's society, my dependence on the power being on every single day grows. And when you take that away from me, especially as I move into our core age categories, you create a problem for me. you create a problem that I can't solve. I can't get in the car. I can't drive away. I can't go to the neighbors or maybe frankly, I'm in an economic situation where I just don't want to. So we've got a couple of things coming together when we look at, hey, there's an opportunity in front of us for our core customers, our core segment to continue to grow and for us to continue to penetrate, it really becomes, hey, we have to go create the market. That's the opportunity in front of us. We've done it for years. In fact, we've done it for decades, go create the market. Our name is synonymous with backup power. And what you'll hear today is we're going to go and we're going to continue to do that, not just with the customers that we have today, but with a growing segment of customers but in a way that's smarter, more efficient and better for those customers. As we went through the decks here today, it's pretty funny. This is the third time you're seeing this chart, but to be unique here. I added 1 line on. And we've talked about it a little bit, but that thin line that you see cutting in between the dotted lines or below the dotted line there is your base power outages. We mentioned earlier today that that's how we plan the business, base power outages. And when you see that line continuing to trend up over that 11-year cycle behind me, there's really only 2 years that you've seen base power outages. And that's the daily outage that happens because of a thunderstorm, that's a daily outage that happens because the grid gets overloaded in a specific area, a transformer goes down. There's an accident somewhere and a poll gets hit, those continue to go up. Very rarely, do you ever see those reverse down. So when we plan a business on a long-term trend that continues to go up for a customer that is becoming more and more sensitive every single day, we see a heck of an opportunity to go and say, guess what? There's a market not that you just go take advantage of but there's a market to go create. With the demand side of it, right, Erik talked this morning, Aaron talked this morning, and they all said, hey, the AI, industrial, it's all sucking more power down, right? It's putting more stress on the grid. Utilities, hey, 1%, 2%, 3%. That all makes a difference. It would be one thing to say, if it's just an industrial demand going up. But as I've already mentioned, as you can see on the bottom line in the chart behind me, residential usage also continues to grow, although not at the same pace, it continues to grow. And that layers right on top of what I was talking about before when we think about, hey, my ability or my sensitivity to when that power goes out, goes up every single day. Every single time it goes up, I can't cook. I can't charge my car. I can't heat my home. I can't cool my home. I can't run my medical devices. I can't charge my phone. Those are things that we, as Americans, we take it for granted. I take for granted that want to plug something into the wall, it's just going to work, right? And as I get older, I have less tolerance for that not happening because it affects me personally, it affects my household personally and affect society in a greater way. So what is this in front of us? I talked about a market, a market we have to go create. How big is it? What really is the opportunity out there? We step back for a second and we took a look at our best states today. So we took our 5 best states, those that were penetrated almost up to 20% in most cases. And we took a look and said, there's an opportunity as the grid continues to get worse, storms get stronger. We're going to put more tax on the grid, both residentially, commercially, industrially. We're going to put the tax on the grid. Getting to 20% home penetration of our market in the next years is not an impossible feat. And in fact, we think it's very, very practical. And that brings to us, and this is something a little bit different than we showed a few years ago but that brings to us a $50 billion opportunity at wholesale prices, right? In the past, we've talked to you about retail prices and what the whole retail market looks like. But as we continue to push the market from where we are today at approximately 6.75% penetration up to that 20%, $50 billion. Now there's things built in there. As you can see down below, there's things built in there for replacement. As we got into this business 20 years ago, 30 years ago, we're starting to see that cycle start to build, right? People who have had a home standby generator. Actually were just sharing some pictures last night, a 22-year-old home standby generator, right? What does that look like? And when are the wheels going to fall off of that machine? 22 years is a long time, by the way, like not typical for machines. It's a very well taken care of machine. It doesn't look like it. But it's very well taken care of machine. But as they get older, they're still a mechanical device, right? And they're going to decay, right? They're going to be affected by saltwater, they're going to be affected by storms, rodents. They're made out of metal, plastic, steel aluminum, and that replacement cycle is going to lean into our business as a whole. The other thing that we're doing that is really starting to take effect are very strategic and very focused efforts in the new home building industry. The cheapest time. And if you talk to somebody actually I'll back up here a second, if you talk to someone and you say, hey, would you like a home standby generator. And you explain the concept to them. Is that a single person on the planet that says, yes, that's a bad idea, right? No, I don't want to control my own destiny, I don't want to back my family up. That conversation doesn't happen, but it does come down to affordability. And that work that we do with homebuilders is by far and away, still the cheapest way to acquire backup power. The cheapest way to ensure that your family is taken care of because we're putting it on a 30-year mortgage. We're running electrical, concrete, plumbing at the same time. So the efforts that we have here going forward is really to go acquire and to go create make and market into a $50 billion opportunity that we're going to take advantage of over the next years. Three ways that we're going to go do that. I'm going to walk you through each one of these, and it's about going and getting that consumer that knows they want the product, right? They know they need it. What do we have to do? Number one, bring the best product we possibly can. Lead from the front. Our standby generators are already considered the best in the market. We hear from our competitors, hey, we want to go design a unit that's as good as Generac. We want to have Generac quality. We're going to carry that forward with a heck of a lot of innovation. Number two, we're going to create the market. There are people that don't know that they can get a Generac. There are people that don't know about standby power. They're living through it. And sometimes because where you're in geography, sometimes it's an age group, but we're going to go attack both. And then last but not least, we're going to bring, as Norm was alluding to there, we're going to bring a unified network to be able to deliver that promise that our consumers are actually looking for. So when I start with product really quick. And for those of you that have been following us for a while, we've talked a lot about the one on the left side there, right, our air-cooled lineup over the course of 4 years roughly, maybe 5, right, depends on how long you want to think about when we started designing that new air-cooled product. It's into the market now, right? Every unit that comes off of our lines today are these new units. And the innovation that sits inside of that, what looks like a Tam-box that eloquently designed Tam-box does give us the best power output the best footprint, the widest portfolio or broadest portfolio up to 28 kW on an air cooled machine than anyone else in the industry. But something that gets overlooked that I think Norm addressed really well is the fact that every one of these are connected, and we can see every one of the units running. Now it sounds simple, it sounds, of course, you can, Kyle. There's a $7,000 machine in my backyard. I would hope somebody is looking at that every single day. But the reality is in the past that wasn't the case. We had a fraction of them being connected. So for us to be able to see is your unit ready to run? Are you having a problem? We can message you and say, hey, guess what, as Norm was talking before with the ecobee development. your units not ready to run. We see weather coming. How about we connect you with the dealer. So thinking about the service that we provide, it's not just a machine. It's taking care of you as a homeowner to make sure that the bet you placed with us to make sure the investment you placed with us actually comes to fruition when you need it is a massive advancement in the category, and no one else is bringing that. That also pertains to the far right, on the liquid cooled side. We're in the middle of redesigning our entire liquid cool portfolio that goes from 22 kW up to 150 kW with all of those same things that I talked about in our air-cooled platform. the quietest, the smallest footprint, the easiest to install. So the technology that we've learned and brought through our air-cooled product, applying that to a 60kW, a large unit some for commercial applications, some for home applications, but bringing that connectivity, bringing that ability to service the flexibility to install in any 3-phase application are major advancements that none of the competition is even come close to catching up with us. Now what you see in the middle, and I chose these 2 units very specifically, what you see in the middle is really building on what Norm talked about is now there's an ecobee thermostat. We call it ecobee Generac that can show you and visualizes exactly what is going on with your generator at any given time. It's ready to run. You have fuel, you have no maintenance needs. Here's your dealer but more importantly, and I'll talk about it here in the next slide as well is that it now has the ability to control temperature in your home and manage load. Why is that important? We've got a lot of different ways in which we try to manage load. And when we say manage load, you translate that to a homeowner, that means a smaller unit, right? That means price. That means I can get into a home that maybe I wasn't able to get into. Maybe they needed a 48 kW by any C code. That's great. We start managing loads. We drop you into an air cooled unit. We dropped thousands of dollars off your install cost, total in-cell cost, both unit and wiring. So knowing that I have a thermostat that's hanging in the living room, hanging the kitchen or whatever you put it, that is not only telling me what's going on, but it's also helping me manage that power, so as affordable as possible. Massive advancement again, something that I never thought of 6, 7, 8 years ago, did I ever think that a thermostat, hanging in my home would be the thing controlling my energy, saving me money, helping run my power plant not a chance. It's fantastic innovation. Price, everything is always about price. When I think about a consumer. We talk a little bit or I talked a little bit about ecobee being a way, the single way that we think in the future we can regulate temperature and manage temperature load. If I can't do that, right, or if that is the only mechanism I have, I can certainly drop down from 28 kW down to 16 kW, I might go from 48 down to 28. But we also have devices coming, and I'll focus on the right-hand side there first to keep the theme of load management, a new smart breaker coming out in 2026 here in the second half. The idea behind the smart breaker is, again, just like the thermostat, we can take any load off at any time. We start to see the generator overload. We can take it off, let your generator run and bring it back at the right time. What does that do? Again, number one, it's price. But number two, as Norm mentioned, sometimes our biggest asset are dealers and their capabilities. Being an electrician by trade, snapping a breaker in the single easiest way to digitally control the load going on in your home, very easy to adopt very little training. On the meter switch side, which is on the right-hand side, as Norm alluded to, really, that's industry revolutionizing, right? Today, we hang a transfer switch. Wires running conduit back and forth. I'm going down to a box. I'm going to a panel somewhere, putting a meter switch on by pulling the utility meter off putting a collar behind and reinserting it, we believe, has the ability to take anywhere between 1.5 and 3 hours out of the installation. Of course, it's very dependent on where you are. Does your utility allow you to do it, what's the complexity of the install, but between the ecobee load shedding, the Generac meter switch and our smart breaker, we think there's 15% of labor to pull out of that install which again comes back to what's my consumers total cost to put a standby generator in to put back up power in their home. We think we can take a significant bite out of that, along with bringing our costs down across the board with all of the innovation that we have. Last but not least, is that Field Pro app. It does sound -- how would say it. It does sound interesting that you would say, hey, how does an app really help a homeowner. It's an installer app. Over the years, if you've been around Generac for a long time like I have, you hear all the stories. Our dealers are great. They do fantastic installations. But we also have electricians that put them in. They're not a certified dealer. Maybe they put in 10 a year. When you put the Field Pro app into their hands and they start walking through an install. And that Field Pro app as the unit is going in, sees a problem and comes back to the installer, albeit a dealer, maybe it's the dealer's new employee, maybe it's an electrician, putting in their first unit. And it gives them feedback. And that feedback says, hey, you missed a step. You haven't done the right thing for that homeowner. You haven't done the right thing for that machine. Again, massive innovation that helps efficiency of the dealer, especially as they learn the process but number two, improves the quality of installation on what can be a very complex system. So some really big innovation that we've pulled in with a joint effort from our energy technology teams into our traditional home standby business. Now as we continue pushing forward here and we talk about market creation, I want to give you a snapshot of who's coming into the funnel. When you look from 2019 through 2025, great advancements, massive steps forward in creating IHCs or in-home consultations, which are when our dealers go out and they talk to a homeowner. They might come in to via phone call. They might come in via the web. We make it an e-mail. However, they make their way to us, we get them in the hands of a dealer. To be able to take that and grow that by 2.5x but at the same time, not just focusing on our existing segment, and we love our older segment, right? I talked to you about, hey, who actually buys these products and who puts them installed. But one of the things that we're doing is we go create these new customers, we go create the market is bringing a younger generation on making people who are in their 20s and 30s and 40s aware of the product category. Now it might not be the time for them to buy today. They might not have hit the level of, I call it, the pain threshold where I have to go and I have to make that purchase. But the awareness that is coming forward at age 30, at age 40 and age 50 is building a very sustainable funnel, and we're actually finding that the age group that we service that are buying generators is starting to move down slowly. It's a big number to move, right? But as we bring new customers on board, we're finding they're hitting the pain threshold and our ability to bring new customers in continues to grow. We do that in a couple of very specific ways. And there's a couple of takeaways that I want you to -- want you to go away with here on if you think about this slide in specific. We're leveraging all the things that we have done for years on the left-hand side. Fantastic infomercials our e-mail marketing as we bring somebody on board, maybe they're 40, maybe they're 30, and we have to educate them through the process. maybe they're 65 or 70 and they've never heard of a standby generator. We've got to bring them along. We do a lot of that work via e-mail, and it's becoming very, very, very effective. We also are reaching out to that younger crowd via social media. That's new over the last 3 years or so. But our velocity to bring younger people in, educate them and then convert them continues to go up. And we measure ourselves very specifically on how many can we bring in per outage hour right? So if you look in 2024, hey, guess what, record outages, what do we have 3 landed hurricanes, we had storms rolling through Texas. There's a lot going on. So our ability to bring a customer in there, you would say, well hey, guess what, Generac? I expect that to happen that you should be able to do that. It's the years like 2025 where outages were at all-time lows, that our ability to bring people in per outage hour has improved dramatically because of all those mechanisms that you see on the left-hand side. So our marketing engine and our marketing teams have been able to go and create interest in the market that statistically shouldn't have interest. The market statistically drop 64% from an outage perspective. But our customers coming in the door were down only 29%. So a huge lever, a huge weapon not only to take advantage of it of the times where the market is good, but to keep us from going backwards. York will walk us through and what we talk about a lot is a new and higher baseline. How do you create the baseline, you create the -- how do you hold the baseline, you do that by creating opportunities when they're not walking in the door. Aaron and the team have walked you through, and I know they've talked to you a lot about our lead generation, okay, what do we do with it when the customer comes in the door. I want to take just 2 minutes and walk you through really quickly what exactly happens when we moved from a push lead system to a pool or pull lead system and why we think the innovation there is so dramatic. When a customer comes in, in the past, we would receive them, and you'd push them out, you'd say, hey, guess what? Here's your ZIP code. We've got 5 dealers in the ZIP code, and we would assign it to 1 or 2 specific dealers. With this regard to whether that deal was suited to sell to you disregard to whether the dealer really service your neighborhood disregard to whether the dealer was at capacity. We knew they were a great dealer, but we didn't have the details. And in some cases, we never will have the details to define exactly what dealer is ready to go and get to the customer quickly and effectively. When you transform to a pooling system where a homeowner comes in, they digitally flow into a pool, they get pushed against a tiered section of dealers that then go and pull that customer out and say, acknowledge that I'm going to go connect with that homeowner, I'm going to go to the front door. I'm going to get on the phone. I'm going to send him an e-mail. I'm going to go convert that customer. You change the mindset. You change the behavior. And we reward dealers when they close leads. Period. In the past, we've had a lot of different metrics that we've put on dealers to enable them to receive leads, but now we measure dealers, do they close the business for us. When a dealer raises their hand and say, I'm going to go get a consumer. And if they can't get to the front door, they can't close that lead, that's a black mark on their record, and that prevents them from getting leads in the future. So every dealer that grabs a lead out of our pool is an active participant to go close. Well, what happens? That means we have dealers going to homeowners faster. The chart you see in the bottom behind me is kind of a representation that we have got an opportunity to push it and test the system out. And what you can see is that during storm firm, which is was a phenomenal marketed storm. It actually didn't matriculate into that many outages. But the press, the news, everything around that storm drove thousands and thousands of homeowners to raise their hands and say, get somebody to my front door. I want to get an IHC. In the past, you can see -- in massive surges, we would get there or our leads would be slowed down to 10 days, 15 days. In some cases, you see the bottom left there, 25 days. Now in a surge, we have the ability to respond because we can leverage the entire network via the pool in a much faster way. In the case of firm, 7 days, it was the longest we were getting somebody to the front door across thousands of people coming in, even though markets were flooded. It's better utilization of the network that we have, which is really the advantage of putting the system in. But prior to coming in, we actually are putting in things that will again build efficiency. The potential customers that come in were dropping AI and we're dropping tools onto the customers to segment them in the right way. It does us no good to pass a homeowner off to a dealer off to the pool that is not ready to buy. So we go and we score them with an advanced algorithm, right, and with AI, constant learning. If you're not ready to buy, we'll bring you down through the bottom path. We'll educate you will nurture you. We'll get you ready to go so that you're not shocked by a price. So you're not caught off balance by a complex solution. And when your score gets ready to go, we're going to push you back into the pool. And we're going to make sure that you have a dealer who's there and ready to grab you ready to get to your front door. Again, it sounds like very, very simple things, like, of course, you would do that. Why would you push somebody to a dealer that isn't ready to close that just heard about the category that doesn't know what they cost. We're going to take that onus on one, to create a better solution for a homeowner, but secondly, create a better solution for the dealer. So they're actually going out and utilizing their resources effectively as we continue to boom and grow. So as I bring this down here, we're going to bring more homeowners in. We're going to educate them. We're going to put them in a pool, and we're going to need more dealers because we're going to grow and expand out to homeowners. How do we solve the problem of volume. As Norm talked and he showed the overlapping circles in his presentation, we're going to bring together a network of over 10,000 energy partners. And they come from all walks of life. We've got the core HSB customers or the core installed base. You guys know those. We've talked about them for a long time, about 9,000 dealers. We're going to bring those together with our aligned contractors, a pool of contractors that help us service the storm, and we're going to bring them into the install network. We're also going to reach out and bring in the solar and storage installers. A big group of customers a group of customers that serve a big market and actually provide new access to a market that we don't serve today. Today, a standby generator never walks into a solar opportunity. But tomorrow, a solar installer might walk in and find out via a complex sales process, hey, this customer just needs to stand by generator, right? Those are at bats, I call that we wouldn't have gotten in the past. And bringing a network this large and setting it on top of what is already the best retail distribution in the country, what is the largest and our biggest share position, which is an electrical wholesale distribution ,HVAC wholesale distribution. It creates a network that can now work to go and deliver something out to a homeowner that they actually need with pace, with scale and with some of the tools that you see behind me in a way that we're going to bring them along. I talked about the digitization of the IHC or bringing a digital IHC through educating them, handing them off to a dealer. I talked about the journey. If they're not ready to buy, what do we do? We're going to nurture them. We're going to bring them along. We're going to score them. But the biggest part of our process that will make a difference as this complex ecosystem comes together is how do I train a solar dealer to deliver a system that includes a standby generator and a thermostat. How do I treat someone who came from the HVAC space to go and install a home standby generator or to include solar into a package. Creating a digital tool and a digital sales platform will help us not only ramp the business, but it will help a very complex solution become very, very simple for the installing dealer and then translating that over to a very simple solution, as Norm mentioned, for a homeowner, right? What does a homeowner want? Just tell me how you're going to lower my electrical bill, just tell me how you're going to solve my resiliency problem. Our solutions and our systems that we're developing today with faster speed than we've ever developed in the past, will bring our partners along and will bring our consumers along much faster in a very complex space. So what do we have as I wrap down here? We have an opportunity in front of us. We have an opportunity to go capture our piece, our share of $50 billion. And we're doing it from the front. We're doing it as an 80% market share leader already, right? We're going to continue to innovate our products, both on the standby side themselves, but also on the products that help us install faster and more efficiently. We're going to continue to push the market really, really hard with our marketing assets, with the way we handle consumers, with the way we pass them on to dealers. And we're going to create this network of over 10,000 professionals, 10,000 energy partners that are out there putting the products in and bring the customer the Generac promise of lower bills and more resiliency. So with that, I'll hand it over to Norm, and he'll walk us through the close.

I just want to kind of give you a residential business. So what it looks like today -- so just from a pure 2025 in terms of sales and adjusted EBITDA, when you combine the businesses in this way, you have a $2.5 billion business in 2025, which delivered 22.5% from an EBITDA margin standpoint for the residential segment. Obviously, certainly a healthy business. I think it's even more impressive that if you think about that business, that was in a year of both, frankly, a lot of tariffs and a year also with a light outage environment. So still on its own, quite an impressive business to sell. We see that from a sales standpoint, growing in high single digits through 2028, kind of building a business north of $3 billion, while at the same time, growing even faster on the EBITDA side. Now the EBITDA side has tailwinds of really improving margins across the board, but also recalibration on the OpEx side. We do see some synergies that are going to impact that and allow us to grow to mid- to high 20s on EBITDA. We also see a lot of, I think, success on the tariff side, both potentially some adjustments in tariffs, but really a lot of the mitigation efforts we've been putting in place are starting to have an impact, which is going to drive some of that EBITDA improvement as well. So that's how we see the model evolving for the -- what is really the new residential segmentation. And then just to summarize the story of Generac Home that we talked about today. We have consolidated the organization. That's really been an ongoing process over the last couple of months, the more, I guess, with more urgency. So we have a new structure. We think it both aligns with the customer experience we want to provide, but also increases our efficiency as an organization, allows us to reduce cost. We have brought out a comprehensive home energy offering. And I would also emphasize that a lot of the big investment, the upfront investment when you're entering new stuff, a lot of that is behind us. So we actually kind of leverage the fact we have this capability without necessarily having to do a lot of the start-up costs that we've already paid for. So it puts us in a very good position. We can offer solutions to improve people's resiliency like we always have, but we can also offer customer solutions to lower their energy bills. And I think the combination of those 2 things give us -- we both have an incremental market opportunity, but overall, just a consumer that is much more -- paying much more attention to their energy bills, much more attention to how they get their energy and the reliability of their energy. And I think we are very well positioned to show great growth and very healthy returns as a business. So that's all I have. I'm going to turn it over now to York to finish with.

The financial framework for the company. Awesome. All right. Let's put a bow on this. We heard a lot today. Financially, putting numbers around the strategy, that's basically what we're going to talk about. I like why are we all here? We're all here to try to figure out why I'm investing in ticker GNRC. My first slide, obviously, is a summary of what those investment highlights would be from a financial standpoint. You heard Erik, you heard Norm, you heard Kyle, massive opportunity on the top line. The generational growth opportunity around data centers -- right now, so our 2028 numbers have -- I think you saw it from Erik. We have $1 billion of top line in our 2028 numbers, let's say, roughly half of that's hyperscalers, a placeholder for hyperscaler, the other half, for co-locators, and given some of the dialogue that we're having on the hyperscaler side, as we continue to that $0.5 billion -- $500 million is just a placeholder as we continue to advance our discussions with those hyperscalers there. There's -- there could be significant upside with that. It's -- if anything, that's the low end of what we're talking about here. So a $1 billion opportunity, that's just the beginning, and that's what we baked in. Than you think about all of the significant penetration opportunity that Kyle talked about with Home Standby as the peer leader in that category and then continuing to sell the ecosystem, not only on the residential side, but Erik talked a lot about the ecosystem on the C&I side as well. There's lots of growth opportunities there. So mid-teens CAGR over the next 3 years. That's what we're talking about, that's significant top line growth and we heard and we'll see in a couple of slides where that's coming from. And then Aaron talked about a more balanced business. So more durable with C&I growing at a faster rate than Residential, that makes the durability of our demand more significant at a more balanced 50-50 blend between resi and C&I. There's more certainty with that demand profile. The reality is on the Residential side of the business, like Aaron said, you're a bit reliant on power outages, and that's something that we can't control, even though we know that outages will happen. We just can't tell you when that will be. We like the more balanced 50-50 blend from a demand profile. As we grow that top line, we're going to leverage our EBITDA margins. You're going to see that. I'll talk a little bit more about where that -- how that's going to get delivered. And with that, then we'll generate a significant amount of free cash flow, over $1.5 billion. We're expected to generate the next 3 years. And with that, with strong free cash flow and a strong healthy balance sheet there's significant optionality to drive significant shareholder value that's not baked into these numbers. So -- on a high-level summary, this is why you'd be investing in kicker GNRC. So base case assumptions. So we've talked a lot about the next 3 years. And the base case assumptions are as follows. The top two bullet points are on the megatrends that we talked about at length, lower power quality, higher power prices. And then the continued investment in AI and data center CapEx that the overall overarching assumption is that all those trends will continue and sustain for the long term, especially over the next 3 years. We talked -- so we're assuming a baseline level of power outages for 2026, in 2028. And then we're assuming, like Aaron said, and you saw like those power outage severity charts. Periodically, you get a major event and you see a big spike in power outages. We're assuming one of those in 2027, the middle of the 3-year period. I think it's important to note we're assuming that we maintain our recent pricing actions. And so as you recall, in 2025, we had to put price into the market to address tariffs, higher tariffs and as well as launching the new next-gen Home Standby, there was some price there. We're assuming that we maintain that price. And then any future inflationary pressures, we'd also be able to take on more price as the leader in particularly on the Residential side. So I think it's important. I mentioned tariffs. So tariffs, the assumption here in our guide is that although the IEPA tariffs have been ruled unlawful by the Supreme Court. The assumption is that somehow, some way, be it a section 122 tariff, a 301 tariff, 232 tariff. Somehow, the administration will figure out a way to get back to the same level of tariff profile that we had prior to the Supreme Court ruling. So our assumption is that the tariff rates remain at current levels. We will get a recovery from those IEPA tariffs. We haven't necessarily baked that into the numbers or, I guess, a onetime windfall. It's not in our free cash flow assumption, but we will get a tariff recovery but that's not in these numbers. I guess, capital expenditures, 3% to 3.5% tax rates. And again, the additional optionality around shareholder value, we are not assuming additional M&A, debt prepayments or share repurchases. So on a high-level summary, we unveiled our new segments today, Reporting segments. Erik talked about from a net sales standpoint, a low to mid-20% 3-year CAGR on the top line, mid- to high teens percent on the EBITDA line in 2028. On the Residential side, Norm just talked about a high single-digit 3-year CAGR, mid- to high 20s on the EBITDA. And then consolidated, you roll that up, as Aaron mentioned in one of his first slides mid-teens percent 3-year CAGR, low 20% EBITDA margins. There isn't a side note -- what's not -- what we haven't talked about is there's a corporate cost layer that we'll maintain, we're modeling that, that will stay at around 1% of net sales during the forecast period. So that's -- that's part of the segment profile there. So I'm going to make their jobs a little easier. So you saw all the qualitative -- lot of words on the previous slide. But I thought I'd just lay out, okay, where is the jumping off point with these new segments? And that's the 2025 financial results. So Residential $2.5 billion, C&I $1.7 billion, there's the $716 million of EBITDA. That's at 17%. That's what we carded in 2025. We gave guidance that we're reiterating for 2026. And again, when you lay that out for the new segments, roughly 10% Residential growth, low to mid-20s C&I, mid-teens overall. We guided 18% to 19% EBITDA margin. So that's all the same thing that we talked about mid-February. We're reiterating that. And then I thought I'd put dollar ranges then on the previous slide. So for Residential, all that would mean roughly $3.1 billion to $3.3 billion in sales. Same thing for C&I, $3.1 billion to $3.3 billion, there's the 50-50 split from a balance standpoint, mid- to teens percent CAGR will be roughly $6.2 billion to $6.6 billion. Talk low 20s percent EBITDA, that's about $1.25 billion to $1.45 billion, and we'll generate a lot of free cash flow, which we'll talk about in a second. So thought I'd -- thought I'd make your jobs easier and lay things out and try to quantify those ranges a little bit more precisely. So again, Erik, Norm, Kyle talked a lot about how they're going to grow their business over the last 3 hours or so. And again, we're talking mid-teens overall CAGR going from $4.2 billion to $6.2 billion to $6.6 billion. And so when you quantify the growth, the low to mid-20s percent CAGR growth for C&I, that's about $1.4 billion to $1.6 billion. And then the high single-digit CAGR for residential is about $0.6 billion to $0.8 billion. So drilling into the C&I, $1.4 billion to $1.6 billion. Like I said in the opening statement, $1 billion of that is data center growth. in revenue. And like I said, about half of that is hyperscalers, half of that is co-locators. The hyperscaler number -- a placeholder right now. And we're having, like I said, meaningful conversations that, that should be the low end of any range that we're talking about. So there should we'll continue to evaluate upside, and we'll continue to relate to the market, as we develop those conversations on the data center side. So that's -- what is that? About 2/3 of that C&I growth. The other $500 million is all the other initiatives that we're we're talking about growing that side of the business. Our industrial distributor channel, we expect to see good growth there, in particular with that large megawatt-diesel product offering, we can now offer in the traditional C&I market. That's through our traditional industrial distributor channels. So that's part of that growth there. Our international geographic expansion, we'll see good growth there. The Mobile business, again, as that cycle and the rental cycle starts turning positive. And the re-fleeting cycle begins, that mobile business, we expect to see very good growth there, and again, Telecom and the Multi-asset Integrated Energy Solutions growth. That's how we're going to generate low to mid-20% CAGR over the next 3 years for C&I. And then the, call it, $0.6 billion to $0.8 billion of Residential growth. I'd say about 2/3 of that is Home Standby growth. Really on the back of I would say 2025, maybe because we had such low outages in the second half of 2025, maybe it's a bit of an easy comp for lack of a better word. There's a little bit of pricing that's part of that growth that we'll get here in 2026. And then all the other initiatives that Kyle talked about in terms of driving lead generation, improving close rates, that's how we're going to continue to drive growth in that home standby business. And then the remainder of the growth is on the ecosystem side. So continuing to build out Power Micro, PowerCell and Ecobee growth, which we're expecting strong double-digit CAGR with that Ecobee business. So -- these -- this is basically trying to summarize in one slide, everything that you've heard the folks talk about the team talk about on how they're going to continue to drive growth. And then margin improvement. So we're expecting 400, 500 basis point expansion on EBITDA. When you quantify that in dollars, it's near doubling our EBITDA dollars, from that $716 million jumping off point to something closer to that $1.25 billion to $1.45 billion in 2028. And again, through -- if you look at that price-cost column relative to the mix column, those two bars are going to offset each other. So within price-cost is a lot of that I guess, operational execution that is going to be important to continue to drive positive price costs over the next 3 years. And you see some examples of that on the left side. Continuing -- supply chain resi -- internally, we have significant effort around supply chain resilience, trying to mitigate tariffs, continuing to work on the cost structure of our supply chain. Profitability enhancement programs, that's just something that's embedded within Generac that we continue -- are driving profitability enhancements around the entire organization, not only in the operations, but in the back office, improved plant operational execution. And then the vertical integration for an example, the [ Enercon ] deal. That's an example where we're acquiring a company to drive incremental margin stack on that business. So those are all examples of how we're going to drive incremental price cost over the next 3 years. And again, that should offset any mix -- unfavorable mix impact that we would see with C&I growing at a faster rate than Residential. So what's left then is this large operating leverage that we're going to see. When you have mid-teens CAGR overall as a company for the next 3 years, we're expecting significant operating leverage, the 4% column, which will drive EBITDA margins above -- back above 20%. And Included in that operating leverage is also the recalibration of our energy technology OpEx that we've been talking about at length to continue to recalibrate that investment lower and really driving profitability to those products. So the -- in the model, we're expecting profitability of Energy Technology products in 2027. And we've been talking about that for a long time. And and we're continuing to drive that. That's embedded in the 4% operating leverage. So again, with our new reporting segments, we talked -- this is just another way to maybe show how we're going to continue to drive top line growth as well as margin improvement. On the C&I side, again, that $1 billion of data center top line growth, along with the margin improvements that we've talked about in terms of operating leverage, vertical integration, operational execution. The fact that our data center margins actually are accretive to the overall C&I segment, that should allow us to see significant margin improvement in that C&I business from, call it, the low teens up to that mid- to high teens over the next 3 years. And then with Residential, we've always had good margins on the Residential side. But 2025, maybe you'd argue was probably artificially lower because we didn't have a season -- so we're starting off at a relative low point. If you get back to normalized outages and driving growth in that home standby business as well as the ecosystem recalibrating investment -- OpEx investment on energy technology downward, that's how we're going to drive margin improvement on the Residential side as well to that call it mid- to high 20% range. So free cash flow, Aaron mentioned, we've always been a known -- Generac has always been known as a strong free cash flow generator. The forecast period is no different. When you factor in our strong margins, strong top line growth, strong margins, the CapEx investment, which is around 3% to 3.5%, factor in some working capital investment to drive as a result of the mid-teens CAGR. When you put that all together, we do expect to generate over $1.5 billion of free cash flow over the next 3 years. Again, the pretax conversion in 2028 would be in that, call it, 80% to 90% range, again, factoring in some of that working capital investment that is required, to grow that top line. And so coupled with the strong free cash flow with a healthy balance sheet. We look at -- if you look at our gross debt leverage, continuing to work down from 2x down to 1x, well within our targeted range of 1x to 2x. So we like where we're at from a leverage standpoint. I like where we're at from a capital structure standpoint, our term loan A and term loan B. We don't have any near-term maturities, relatively low-cost debt. And we have a revolver where we don't have anything borrowed on it today. We have $1 billion of capacity there. So strong balance sheet, put the strong free cash flow with a strong balance sheet, drives significant optionality to continue to drive shareholder value. And then when you put it together from a more of a priority uses of cash standpoint, what are our capital allocation priorities. It's really no different than what we've talked about since we've been public since 2010. For the last 15 years, it's always -- we obviously prioritize organic growth. But given that we're relatively asset-light, which maybe at 3% to 3.5%, maybe it's a little bit higher than normal. Maybe normally, we be in that 2.5% to 3% range. But given some of the capacity expansion we're talking about, on the C&I side, we're forecasting a little bit higher but still relatively reasonable, modest CapEx investment to drive that organic growth. Strategic M&A, that's always been core to us. healthy balance sheet we talked about. And then when there's excess cash left over, we've always been returning capital to shareholders. You can see that on the far right. So in 2021, we had some -- we had some meaningful investments from an M&A standpoint, in particular around the Deep Sea acquisition that Erik talked about, that controls business relative for C&I power generation and the Ecobee business. So that's -- that's sort of the 2021 column with that middle section being the M&A investment. But I would say the last 4 years, we have prioritized organic growth, CapEx as well as share buybacks the last 4 years. In fact, the last 4 years, we bought back over 1 billion of our shares at roughly $138. Looking at 2026 and forward, when you think about the opportunities that we have in front of us. Again, I think there's opportunities to continue to expand capacity on the C&I side, both organically and inorganically. And again, you can see that with the [indiscernible] acquisition, the Enercon acquisition that will close here in the second quarter. So we'll start to given the opportunities we have on the C&I side of our business, you'll start to see some M&A activity there on the C&I side as well as driving organic growth from a CapEx standpoint. So with that, we'll wrap up final takeaways before we go into Q&A. Final takeaway before we go into Q&A.

Okay. Just a couple of things here just to bring this home as -- I guess, we're calling it final takeaways, and -- we'll do a short break to kind of set the stage up. We've got some chairs and things to bring the team to do a Q&A. Obviously, we talked a lot -- or I did this morning about the megatrends. You've heard it from the team as well. Four kind of key themes there. So lower power quality, which has been a long-standing trend. Obviously, Generac has been a beneficiary there for arguably 40 or 50 years -- that trend is firmly intact. A lot of data to underpin that. The next megatrend is higher power prices. And as you saw some of the data there, perhaps that was not a trend up until maybe 5 years ago. 5 years ago, we started to see power prices rise, up 32% in the last 5 years, projection for the next 5 years at 40%. So we think this is an important megatrend, for a lot of reasons, but not the least of which is that we think that there are opportunities for us given the fact that we're already there providing resiliency for homeowners and businesses, right? We understand, we know the electrical systems of these buildings, these dwellings. We understand the codes and standards. We have the distribution networks. And we have proficiency in the technologies. We've created proficiency in the technologies, invested in the technologies to create products and specific solutions to help rate payers as all of us are known as to help us rate payers reduce our dependence on utilities or at least not give them as large of a share of wallet as I think most people are going to have to shell out here in the future. It's just -- this is a reality. And again, probably -- even though the headlines are starting to tilt that way, this is definitely a theme that, I think Norm mentioned it. The survey showed that people on average spent 7 minutes a year, looking at their utility bills, 7 minutes a year, that was previous data. They're going to spend a lot more time than 7 minutes thinking about the cost of that power going forward. So that's the second megatrend. So lower power costs, higher power prices. You've got the AI infrastructure-related boom, the spending that's going to come from that, and the impact that, that's going to have on our Commercial and Industrial business in terms of backing up those data centers. These are massive, massive machines, as Erik showed you in the video, a single machine can weigh 80,000 pounds. The ASP on that machine is between $1 million and $1.5 million depending on the content, right? So it adds up very quickly. You're talking about data centers, you get into 300-megawatt data centers, that's going to look small. It's going to pale in comparison to the 1-gigawatt data centers that are projected to go online in the next couple of years. And you're talking about hundreds of those gen sets on a single site. Huge projects, right? Obviously, we've had a lot of success initially here with co-locators and we're getting a lot of traction with hyperscalers. We're not here to announce a hyperscale award this morning, but we've got a lot of deep conversations that are ongoing. And we have a lot of confidence, a lot of confidence that those awards will come. Just a question of timing. So the third megatrend of AI and driving not only the pressures on the grid, but also the CapEx spending, that's huge. And then last but not least, is the overall mega trend of the infrastructure rebuild of infrastructure, not only in the U.S. but on a global basis, the roads, the bridges, the ports, right, the airports, right? Just look at the investment here in the New York City market on airports alone. I keep waiting in Chicago O'Hare, and that is a disaster. But at some point, they're going to make the investment there. But those types of investments, that $100 trillion globally over the next 15 years, there's a lot of opportunity for Generac to participate in that, not only in the actual construction phases where you need those types of mobile products that we produce, the [Almond] acquisition that we just completed here to give us scale there. but also the backup power opportunities and the micro-grid opportunities. We're seeing this as well. Microgrids for things like wastewater treatment plants for infrastructure around health care, where you've got campuses, health care campuses or universities. You could argue universities are part of infrastructure as well, I suppose. Those four megatrends, firmly intact, we believe deeply in them. And we've oriented our strategy, powering a smarter world directly around those megatrends. We've oriented our investment. And when you look at everything we've been doing the last 3 to 5 years and the dollars that we've been investing all that free cash flow, the $1.3 billion of free cash flow in the last 3 years alone, we're putting that to work to chase after those mega trends to make sure that we're putting in a position to capitalize on those megatrends as they as they evolve. Our organizational realignment that we're talking about this morning, again, we've got a great strategy. We're going after the right megatrends. And we've got to make sure that the organizational structure of Generac is we've got it oriented properly around those megatrends and around the strategy. And so that's what the changes are this morning. Introducing Generac Home, right, the consolidation of our consumer power business as we used to call it, alongside our Energy Technology and Clean Energy Technology businesses, putting all of that into a single entity to allow us to leverage all this tremendous investment we've been making in the individual technologies, the technology stacks, right, the software and hardware layers, to bring all that together to support that home energy ecosystem that we believe deeply in to provide homeowners resiliency as well as opportunities to reduce their overall power costs, improve the efficiency, reduce their consumption and effectively make them better stewards of the planet with a lot of the products alongside helping them save some money and making sure that they're protecting their homes and families. It's a big part of that Generac Home org change. And then obviously, on the C&I side, as that commercial and industrial business has grown globally over the last 10 years. And that used to be $150 million business, public in 2010. It's a $1.7 billion property. We've been quietly building it out, right? We don't talk enough about it. Every meeting I have with probably everybody in this room, an analyst, an investor right, prospect for, as an investor. If we've got a half hour meeting, we spent 25 minutes talking about Home Standby, probably some Energy Tech discussion, and as I'm packing up my stuff to get to the next meeting. Somebody says, "Oh yes, tell us about that C&I business. I can tell you that over the last 6 months, maybe even the last 9 months, we've definitely changed the tenor around the talk track, right? Obviously, data centers being an important part of that. But I think what's happened here is people have come to realize that we have this significant global business in commercial and industrial, that we've built. It's a very valuable property. And yes, the EBITDA margins at 11.5% last year. We've got work to do because we've been building. It's in an investment phase. But as we scale that business, and we will scale it -- the opportunity to get to those mid-teens or higher EBITDA margins, I think that's real. We're going to leverage that, the mid- to high teens. And I think there's even probably upside beyond that, depending on how much business we see from the hyperscalers. We have $1 billion worth of backlog or $1 billion worth of data center business assumed in our 2028 guide here. And right now, we've got $700 million of backlog. So we're not that far away from the $1 billion. The backlog that we have is mostly -- there's a chunk of it for this year, about $300 million to be delivered in 2026. The rest of it, we're building the backlog for 2027. There's a tremendous amount of opportunities there. And when we scale that business, I think we're going to be talking a lot more about C&I, better visibility, right? We've got great growth rates. It's going to have great profitability long term. And it's going to present. I think it's going to put Generac in a different light relative to how people think about this company we love our consumer business. We love the brand that we've built there, being able to leverage that into something even bigger into something greater. I think it's definitely what we're on to here. when it comes to this next phase, this next chapter of the company. And getting that org structure right is a big part of that. Talked about this generation and it truly is a ton. -- what's a generation, 20 years, 25 years, I don't know how the -- how it's defined anymore. But it's maybe the last one I'll see in my career. right? But I have been here a long time, and I can tell you, I've seen a lot of really cool things and all that growth I showed you before, all the great opportunities that we've been talking about as a company, I haven't seen anything like this in our C&I business. What the data center market is going to do, and we were talking kind of in the break a little bit about what keeps me up at night. Well, obviously, I think any company that's coming close to the data center market are participating in this market, the biggest question is how long does it go? How far does it go? Is there something existential out there that changes it. And we're obviously believers that this is longer and stronger right? But I think that it's underpinned interestingly enough by our own experiences, Norm mentioned it a little bit that when it comes to software, just raw engineering, coding, software, the stuff that is going on in our own business, right? And you guys read about this every day, it's incredibly transformational in terms of just that part of the business, just the engineering part of that -- of our business when it comes to software, when it comes to firmware right? The part of AI, obviously, if we can use to enhance individual productivity, small team productivity, right? That is also very exciting. But I think probably what most companies are faced with is how does it change the way they think about deep within the company, the systems they use whether they're go-to-market systems or manufacturing systems, right, design systems technologies themselves, every single platform that we have is going to change. And we're going to be making choices as a company. Every company in America is going through this, making choices about how do we invest in the future. Today, it's simple. I go buy a license from Salesforce. I go buy a license from SAP. I buy a license from Oracle Tomorrow, not so easy. The next dollar we put down for a software package in this company, made a lot of scrutiny around what it is we're buying and how much we're paying for it. The power of the ability to create proprietary solutions that are lighter, more cost-effective and more rapidly evolving is right in front of us. That is going to change the nature of how we do business, every company. And that has wide-ranging implications, obviously, on the dependence on AI. And bringing this back around, that's why we think, at least I'm convinced based on the changes going on in our own business, just how important this investment cycle is that's going on. $650 billion or $700 million, whatever the new number is, keeps changing, right? Every time there's an update from one of these companies, they are taking their CapEx numbers up. And that's because of the real change that's going on underneath this. This -- and that change will translate into that generational opportunity for us. And not to be lost in all this, I said before, if you go back to of our previous Investor Day, we've done -- I don't know, we've done 5 of these in our time as a public company, 5 or 6 of them. We bought Home Standby has been a great opportunity. We sold the company back in 2006 to private equity. I remember, we were talking about how the penetration rate was at 2%. And here we stand today, just under 7%, right? And every 1% is about $3.5 billion to $4 billion amount of value to us as a company. Just thinking of how much value has been created to get from 2% to 7%. And what we laid out here this morning for you is a case, when we think what's realistic because this is a question we always get when we talk about Home Standby, where can penetration go? What is -- when you look at that curve, -- and we try to compare it to other technologies to control air conditioning. That was -- it was very small, 50 years ago. And today, it's in 98% of homes. Is that realistic? I don't know, home security systems, we lay out that kind of model, to show what that might look like. I think 20%, here's why I think 20% is real. You take those top 5 states, where we are today. Today, the average penetration rate in our top 5 states is 20%. I don't know if you caught that, those are real numbers, right? And they're not -- it's not something we made up that's not aspirational. That is today. The top 5 states are at an average of 20% penetration. So can we get the rest of the U.S. from 7% to 20%. If we do that, it's a $50 billion market opportunity, $50 billion. We have 3/4 of the machines or more that are on the ground today are Generac, right? That's our market share or greater, depending on who we talk to. So there's a lot of opportunity from here to there to get that $50 billion, that next incremental $50 billion. And that's real. I mean, that's again, these are numbers that are actual states with those pen rates -- and so I don't think it's a long way to think about that. As Norm pointed out, we've been talking about this Generac energy ecosystem and all these components and the hardware and the software and all the pieces of it, was always just on a page before. We'd show people what the idea was, the thesis. It's real. It exists today in real format. And every day, we are working to build it out even further. And not only does it present a ton of opportunity for us in adjacent spaces, like the solar markets, the storage markets. But as Norm said, it strengthens I would say it deepens, it widens the moat around our home standby business. How do we make sure that we not only grow that Home Standby market and we're making that market, by the way. So nobody else in that industry, it wakes up every day spending as much time or money thinking about selling the next home standby generator as Generac does. We do that. We drive the market. We made the market, it's our market. We're going to grow that market. But we got to make sure that we don't lose sight of the importance of the moat around it, right? Our distribution is critical, but the technology is equally critical. To be a market leader, you have to stay in front of the pack. I want my competitors in that business every day waking up, hating life. That's my job. They wake up, they think, how do I got to go compete against Generac. I don't even know what I'm doing. I'm going to call in sick today, forget it. I love that. I want them to hate their job, i want them to hate life, competing against Generac. I want to win every time. I tell Norm, I tell Kyle, why don't we have 100% market share? I don't understand. How do we get 20 points get away? That's the kind of approach that we have to that business, is growing it, owning it and making sure that we lead it. And what we're doing with the home energy ecosystem is super critical around the next phase, the next leg of growth. That next $50 billion of incremental opportunity, it's about leaning in, not only on resiliency, but leaning in on the opportunity to help these homeowners save money. As that becomes a bigger theme and as they spend more time focused on it, right? So that's -- I think it's super critical. Mid-teens sales CAGR, right? We've got a long track record here with that 14% CAGR in the last 20 years. I think this opportunity in front of us is -- I don't know, I think it's a layup, -- that's just me, right? It fits right in with what we're doing. We've got a lot of -- I think we got a lot of shots on goal. You look at everything that we're working on here at the company, and we have a pretty cool opportunity to do something unique here as we talked, not only generational on the C&I side. But as I've been talking here on the residential side as well, to go after those new opportunities around helping consumers save money. And then obviously, significant operating leverage that's going to come from that. If we can grow at that rate, -- we've made the investments. We've made huge investments, especially on the Residential side, right? Those are some costs. They're there. They're in the run rate. In fact, we're going to shrink that a bit because of the efficiencies of combining the Generac Home Group, bringing that group together. We're going to squeeze more out of it. But there's substantial opportunity here to improve our EBITDA margins in that low 20s range. From where we were at 17% last year. Can we get that another 400 or 500 basis point improvement Absolutely. We're going to get that from leverage. We're going to get that from improved profitability in some of the areas that we're talking about investing in more vertical integration. Erik talked about that on the C&I side. We believe deeply in that. The C&I market, by the way, is globally, in particular, it's littered with gen set companies. And I say littered. I mean, there's literally thousands of generator companies that serve the C&I market. Residential market is uniquely U.S.-focused. But on the C&I side, that's a global market. You need to back up hospitals no matter where that hospital is right, that wastewater treatment plant or that manufacturing plant, cold chain distribution that's [indiscernible]. It's a global market. The differentiating factor between packagers and manufacturers is a pretty high bar. We are a genset manufacturer, right? Major manufacturer -- or the major genset providers in the world are manufacturers. And they have gross margin profiles and EBITDA margin profiles that look like ours or better. As you've seen, we've got some of our competitors who have divisions, genset divisions, big companies, that where they've shared those numbers, I think they're -- you've seen -- they've got the benefit already of the scale from the AI build-out. We're just getting started. So I think it's -- in fact, if you were to wind the clock back on many of those companies and looked at their gen set division margins prior to the data center markets, margins look more like ours today. And so we've got, I think, we've got a clear path here to improve EBITDA margins to leverage all of this growth and to do something pretty special as we go forward. And all of that is going to bring it back to free cash flow. York Jorge said, we kind of have an asset-light model here, again, 3%, 3.5% of sales for CapEx. We're going to put that money to work. We're going to keep, as we've been doing. Over the last 15 years, we've been reinvesting very heavily in Generac. We've transformed this company from -- when we went public in 2010, kind of a one-trick pony. It was home standby. It was dependent on Mother Nature delivering our next demand surge. We've changed the nature of the company. We've changed the face of the company. We've changed the outcome right? We've changed the visibility going forward. And so I think that's important. And the cash flow that comes from that, we're going to continue to reinvest it in places we think we have even greater opportunities perhaps than the opportunities that we're sharing with you today. And that's going to drive shareholder value. It's going to drive stakeholder value. We love shareholders, but I love stakeholders in general, right? We're doing this. I wake up every day. I do this for our teams. I know you want to hear, I do it for you. I don't. I don't know. What we do, if we do it well, that's an outcome. It's a benefit for you, right? You're the beneficiary when we execute well, when we find the right strategic growth curves and the growth opportunities. When we have the right organizational structures, those are the things that you dependent on us doing. And those are the things that our team is dependent on us doing. We've got 9,400 employees and their families that depend on us doing that well every day. I carry that weight. The outcomes financially -- [indiscernible] are going to -- they'll go where they lay right? That's going to happen, those outcomes, and I think our track record speaks for itself. I went public at $13 a share in 2010. So we've got great outcomes. We got a great track record. And I think we've got a great future. So with that, we're going to take a quick break. I really appreciate you kind of listening to me, drone on here. I suppose the final takeaways supposed to be like 3 minutes, sorry. I got monologue in there. But we're going to take a quick break. They're just going to bring up some chairs grab fresh coffee and then we're going to open it up to Q&A. Thank you. [ Break ]

Yes, let's let George ask questions. George, yes. Get the mic over to you. This is webcast, so careful what you say. I'll be careful how I answer.

Hi, everyone. George Gianarikas from Canaccord. Thanks for having us today. Maybe first, point for York. I'm just curious about the 2026 guidance because specifically, I know you re-segment some stuff, but the Commercial revenue growth is a little lower than before, but I'm assuming that's because of just the re-segmentation. Can you...

The other category, if you think -- we're trying to refer to our product class guidance that we gave historically relative to this guidance, the difference is the other category is now getting blended into 2 segments. And if you recall, there are some divestitures that we talked about on our last earnings call, are causing that other category to go down. So it's maybe inorganic-type activity going on in other that maybe is causing that C&I, secondary lower '26 growth in what maybe on a segment basis relative to the product.

The guidance hasn't changed in totality.

Guidance hasn't changed at all.

No change at all. Maybe one follow-up. You've sort of eked into more vertical integration. I'm curious as to how far you want to take that?

Yes. I think it's a great question. When you look on our Residential business as an example, highly vertically integrated, right? So in a Home Standby generator, we make the engine, we make the alternator, we make the controls, right? It's our design in terms of the package around it, the fuel systems, the emission systems, all of that is vertically integrated. When you look on the C&I side, we have a high degree of vertical integration as well. When you get into certain ranges below 500-kilowatts, we are doing our own engines, our own alternators for gas engines anyway. Our own alternators all of our own structural elements, the base frames, the tanks, if they're diesel, enclosures and housings around the units. We do our own controls through the Deep Sea acquisition. And that break point today is about 500-kilowatts. As Erik said, we do engines up to 1-megawatt on the gas side. We are looking for ways to stretch our value add because obviously, what happens is as you get into the larger power ranges, in particular, the engine becomes a much bigger percentage of the cost of the overall cost of the package. And we don't make diesel engines. And these are primarily diesel engines above in these types of power ranges. That's the format today anyway for backup. And we're not going to go into diesel engines, right? That's not -- so let me answer the question maybe you're not asking, George. We're not going to go that vertically integrated. But that said, we do think there are opportunities to improve our integration of the fabricated components. So today, you get above 1-megawatt, and we start to hit our break points on just how big we go in terms of manufacturing our own and fabricating our own sheet metal components. We're going higher on those. We've got -- those plans are underway. And it's our intent to take over more control there on the fab on the the actual structural elements of the generator. The Enercon acquisition is a good example of taking it another step further. In our industry, when you get into those large power nodes, historically, the generator manufacturer would produce a generator that when you looked at it, it was just a basic set. It had an engine, it had an alternator, a set of controls, and it was on a steel skid. That particular product then would be shipped to a third-party packager, for final -- they build a housing around it. And these housings are more than just a steel skin. They oftentimes have fire suppression systems. They have electrical systems, lighting. They have alarms, security. There's all kinds of things, controls going inside a lot of times the switchgear and things are built into the housing. So those opportunities were left to third-party packagers before. We feel this is a great area for us. If we're not going to do the engine. We're not going to go down that path. There we think is a great opportunity for us. In fact, Enercon acquisition, just looking at that acquisition and taking that into consideration, there's more than 100 basis points of margin improvement in the C&I segment as a result of that acquisition going forward. So that's the kind of margin accretion we're going to get as it translates through. So that -- I don't want to say that's the end of how far we're going to go, but it certainly, I think it demonstrates the importance of us owning more of the content if we're not going to be the engine manufacturer.

Thanks for having us here today. I'm Dimple from Bank of America. Aaron, on the last earnings call, you mentioned you're in deep discussions with two hyperscalers. And today, you kind of reiterated about $1.2 billion worth of capacity that you have. Are the sizes of those two potential opportunities in line with that $1.2 billion capacity? Or do you think you might have to expand down the line? And I have a follow-up.

Right. So as it relates to that, we would have to expand. So the $1.2 billion today would serve, we think, very well our traditional market as well as the co-locators that we've -- we've nurtured relationships with and begun to receive orders from. On the hyperscale side, again, we said this, we are very far down the path, in fact with one of them. we received something called a notice to proceed. It's nonbinding, but it actually lays out in concrete terms what they want to buy from us in 2027, it's over $600 million. So if we can get on the ABL, and we expect to have that happen, that is something that we would use up a lot of that $1.2 billion worth of capacity very quickly. It's why today, we continue to look at additional sites. It's why we also, in our guidance, put in that kind of higher CapEx range, that 3% to 3.5% range for the entire 3-year period, because we believe we are going to have to add capacity. And that's something that I look at what we did at the existing capacity, we doubled it in the span of about -- it will be about 9 months, when we acquired a new facility, a brownfield site outside of Milwaukee, Sussex is the name of the village where that's located. That has basically helped us double our capacity north of $1 billion here domestically. We can do that very quickly. We think that there's a lot of opportunity. And we just want to see a little bit more -- I want to -- these are all wonderful. These terms we talk about, notice to proceeds and this I keep asking, when do I get a PO like, I want a purchase order. When do I see a purchase order? And the reality of it is, in order for these companies to cut you a purchase order, you've got to be on the approved vendor list. It's a very strict process because there's negotiated language on both sides of an agreement like that. So until we're there, we're not going to get a PO. But the fact that they're giving us these advanced notices to proceed, they're trying to tell us because we have to prepare for that. There's long lead time components, there's capacity considerations, things of that nature, we're preparing as if we're going to win that business. And so we're building that out here near term and longer term if we win more than one as a hyperscale account. That's where we're going to have to go even further.

Got it. And that follows into my next question regarding ABL. A large portion of that co-location backlog is related to hyperscalers. So how confident do you feel that your product kind of meets the requirements that hyperscalers are demanding today. And how long does that ABL process typically take?

Yes. I'll probably let Erik maybe chime in here because he's been in the middle of it.

Yes. So I think from a product standpoint, our products have actually passed all the reliability, durability testing, and they're actually being deployed in the field for validation further. But -- so from a product side, we've achieved all the required necessities. And just from some processes when we started this, we were told to take 18 to 24 months. I think some of our customers need product faster than that. And so we're assuming that there's going to be a faster track process. And it feels very much like that. But we're in the final stages.

Yes. They're bringing us along. I would say that if not for the current super-heated environment around CapEx spending and their need for these products, every one of these co-locators hyperscalers that we've talked to will tell you there's two major components that they worry most about in terms of time line as it relates to their projects and it's transformers, and it's generators, backup generators. And so because of that constraint, we found ourselves on the fast path. We've been fast tracked through these ABLs, even though it's not fast enough for the markets, of course, everybody wants to know that we've been put on it. It's a process. And you've got to go through that process. They're in our factories. They're qualifying the equipment in separate testing. They're into our supply chain, right? So we're taking them to our sub-suppliers. So they know that they understand who those folks are, and they run those companies through the [indiscernible] as well. It's just a process. There's a lot of boxes to check -- we're very far along on it. And I think that we're highly confident that we're going to get through that. We haven't had anything yet, that says we can't. All the performance testing of the product, you asked about that specifically, Dimple. Our products outperform the competition. And there's a simple reason for that. Our engine supplier has the most current technology of a high horsepower diesel engine in the market. We bought a company, they retooled that company from a technology standpoint and supply chain standpoint. And what they have on the market in the product ranges that we're supplying today, these high horsepower diesels are the most technologically advanced engines in the market. And therefore, when our customers and these prospects are testing these engines, we're actually outperforming current market specifications, what they've kind of aligned to. So we feel really good about the product. It's not about that. It's about getting through their process.

Praneeth Satish, Wells Fargo. Two quick questions here on C&I. So the first one you talked about upside to the mid- to high teens EBITDA margin guidance for C&I. I guess that's based on your traction with hyperscaler deals. So do you think there's a path here to getting to over 20% or even as high as the Resi business between hyperscalers and vertical integration on the packaging side, you mentioned 100 basis points with Enercon. .

Yes. Thanks, Praneeth. So I would say there is definitely a path to that, certainly, there's a -- for us, anyway, a very clear path to the mid- to high teens that we guided to today. Beyond that, should scale -- should we grow scale quicker? Absolutely. There's an opportunity to further leverage the operating line there and further opportunity for us to deepen the amount of vertical integration Enercon alone is not enough, right? Enercom alone only gives us a percentage of packaging capacity for planning here. So we're going to have to invest, whether it be additional M&A or organic investment to scale what Enercon has brought to us, those designs, the technologies, the teams, the certifications, all those packages are certified, and they meet our customers' needs, right? Our customers today, these hyperscale customers and co-locators are using Enercom packages today. So it puts us in the game immediately, and we're going to have to scale that up. And if we see the pathway to growing the top line, we're absolutely going to continue to invest there. Will it ever be like Residential margins? I don't know. I mean the Residential margins, we like to refer to them as special because I think they're very unique. The position we've built there, I think it's very rare to find a situation, you guys have a lot of companies you cover or invested in. And so you coverage universe, take a look, companies that are in the Residential kind of hard goods space like this, a durable goods space, where you've got the kind of growth profile you've got here, you've got a market leader from a share percentage with market-leading pricing, that has EBITDA margin profiles like this. I'm telling you right now, unless it's a software company, if it's a durable good company, it's very few and far between. And so those are unique margins. I don't know that we'll ever get there on the C&I side. But I do think there's upside to that mid-teens to high teens guidance range today.

Got you. That's helpful. And maybe switching gears on EPC power and the push into [indiscernible] and inverters for data centers. I guess, any metrics you can share in terms of the opportunity there, the TAM revenue per gigawatt on the surface seems like that could be a very large opportunity, granted there's more competitors. And then in the 3-year CAGR guidance, is there any meaningful contribution from this business baked into the guide?

Yes. There's not a huge amount of business baked into the guide there. I think it's only recently been an area of intense focus from the same customer base that we're talking to. I think, Erik, you might just share a little bit of some of the conversations we're having. These projects are massive. And this issue that Erik mentioned of AI or data centers disconnecting from the grid and what that does to both voltage and frequency on the grid. If you drop a large load suddenly, it has downstream ramifications for grid customers and grid operators in a way that they just -- it can't happen. So creating a buffer -- and I think the most likely buffer there is a BESS type of system. I mean that your customers are telling you this, if it's not already required it's probably something that will be required.

The architecture is being evaluated. And as we looked at our long-range plan, we know that we lead in the control side. So software and control space. And so I think that is what we anchored on. When you look at the overall battery market and the front of the meter drives the large scale, those margins are exactly what you don't want to see from us delivering. And so we're not viewing that like a huge dollar amounts, might not be coming through on the Generac side. We might find a way to deliver that value, but we definitely think on the controls and optimization. We're part of that discussion. And we have product solutions that meet the needs. But if the battery portion of that gets commoditized, we're not sure if we want to participate in that end.

Stephen Gengaro, Stifel. Two things for me. The first you're so dominant in the Residential business. When we think about the commercial opportunity, what are the few things that you really need to focus on to make sure you win in that business because it's obviously a bit of a different landscape you're facing.

Yes. It's a great question, Steve. And first of all, it's a much more mature market, right? So -- and you look at the players in that market, they're big companies, there's back to a little bit of the dialogue around value add. There's a reason that the diesel engine, every single large diesel engine manufacturer has a generator division effectively or a partnership as in our case. And that's because they need to scale. A generator is a great vessel for a diesel engine, and diesel engines, there's a lot of R&D to continue to meet ever-increasing emissions regulations. And there's a lot of capital involved in the tooling to produce those products. You need to spread that across both that R&D investment as well as the capital investment across a lot of units in order to make the math makes sense. For us, again, we're not a diesel engine company. We don't endeavor to be a diesel engine company. Our differentiated factor has been not being a diesel engine company. We tell people, we're focused on the generator, not on the engine. We're focused on the solution, not on this particular product with this horsepower output, this emissions profile, this fuel consumption rate, right, the engine. That engine that's, by the way, built for a myriad of applications in construction, in marine and rail. We are purpose-building generators for customers, we're optimizing those products for their application, right? I think the biggest proof point I can give you there is I'll take an area, so we're a 15% share in C&I domestically. Where are we better than 15? Telecom? In the Telecom space, we're a 60% share, maybe more. We're the #1 provider to every single Tier 1 wireless carrier in the U.S. today. We're #1. They're go-to supplier. How do we do that? We don't make the diesel engines. Those are all diesel, by the way, almost all of them. There's some gas. The majority, the vast majority are diesel. So how do we get that spot? Well, we got it because we engineered solutions for their networks that were unique, from AT&T to Verizon to T-Mobile, they all have different specifications. We went ahead and added the scale to produce to support them as they rolled out third generation, fourth generation, and now fifth generation wireless technologies. We made the bet. We said we're going to be able to be there to provide it. And then we wrapped around the entire system with a service network coast to coast, whether that tower is on a mountain in Colorado or it's down in the bayous in Louisiana, we can get a service technician there inside of 4 hours. Just sort of guaranteeing that, right? We tell them we're going to get somebody there if that machine goes down, because we understand how important network uptime is to those companies. Time is money. It used to be when the networks were down. It was a dropped call. Now it's lost revenue, right? We're all getting charged by the drink in terms of the data we consume. And not only that, but the critical nature of the communications that are going across these networks, life for death in some cases, right? So that's just one -- I think that's an example that we can say -- we can point to that example to say, look, we have an opportunity. Maybe we even have -- we can say we have a right to be greater than a 15% share in this space, even though we don't make the engine, but we can design purpose-built solutions that are focused on uptime. Five9s of reliability in these networks, in these data centers in these critical applications. So that's kind of how I think about it. And I think it's a great proof point for us to share, probably we don't share it enough again me because we don't talk about C&I enough. But that's one where I think telecom, we've done a marvelous job. And that's not something we just woke up and did. That's a 40-year relationship with those carriers that we've developed.

Thanks. I think you're going to be talking a lot about C&I. On the residential side, just a quick question. With the new product design, and you mentioned the 15% lower installation cost. Does that just drive installers to use your product? Or is there a way for you to capture any of that profitability? Or does the installer just kind of pocket the difference?

Well, our hope is -- and I'll let Kyle speak to this next. But our hope is that as we take labor out of the installation, right? And the meter switch, which we probably could have done a better job showing what that is today. You install a Home Standby generator on the wall somewhere near the panel, the main panel of your home, is something we call -- it's another box, we call it a transfer switch, right? So the electrician wires either critical circuits that you want to back up or maybe the entire service coming into the home goes through that switch to back up the whole home. The idea of the meter switch is that we take that box and replace it with something that is very common today, if you pull the meter out, you put this -- basically, it's like an insert in between the meter and the meter connection to the home, and that becomes your switch. That reduces all of that labor, right? High cost labor, too. You're talking about depending on where you're at, which part of the country, we are billing out at $150 an hour, sometimes more, depending on the market. And we would think our studies have shown, we can take 15% out of the installation cost, which is meaningful. Question is, do our dealers, do our channel partners pass it along. I mean we've gone through this before, and we think it's an opportunity. And it's a conversation we're certainly having. But of course, we don't control the full bid, right? We control, what we charge for the equipment to the partner, but we don't control what the partner charges, and we can't control, what the partner charges to the homeowner. But what we can do is make sure that we send leads to dealers that close better. And we do know with data that dealers that close better have lower prices, than dealers who don't close better. It's an inverse, directly inverse relationship. So over time, as those leads come through and as they end up tilting towards partners who win more, the assumption is they're winning more because they have lower prices. And we'll tell them the way to win is to translate that through to -- if you've got less labor, it's not about us taking money out of your pocket and saying you can't charge what you want to charge for it. It's giving you more bandwidth to sell more, to install more product with the same amount of crews. I don't know, Kyle, if there's anything else to add to that?

No, that was pretty spot on. There's oone idiosyncrasy that you might not have caught in one of the slides that I went through is we actually encourage a homeowner to get two quotes. So back to, hey, how do we drive price down, it's competitiveness. And when you're 80% share, right, you'd say, well, if I just hand it to one partner, they're going to get the price that they get. We actually encourage a homeowner to come into our pool, right, and to then be selected by 2 dealers, which then offers a competitive environment, which transitively what Aaron talked through is my best price as long as I'm delivering, a quality sales pitch, installation and total cost of ownership, right, actually wins the business. That win then translates into, hey, more opportunities for us to provide a lead back to that dealer. So it will take some time. to go do that, but by us dropping that labor out. And it's the skilled labor that we're after, right? It's not the manual labor. And we like taking manual labor out too. But it's going after that skilled labor and the competitiveness that we drive amongst our dealers that will translate into a better price for the homeowner.

Christine Cho with Barclays. I just wanted to kind of ask about your TAM number for the data center opportunity. as more of these data centers are looking to go find prime power solutions behind the meter. How do you think about that risk and like potentially eating into your $14 billion to $17 billion TAM as they kind of reduce their reliability on the grid altogether or using it, using the grid as back up?

Yes. I'll let Erik take that in a second. But I think it's really important that -- they may be relying -- or reducing their reliance on the grid if they bring their own power, but they still need backup because there are points of failure even if it's maybe not a single point of failure at the grid, okay, those assets could break down. And so having back up, again, the engineering teams that Erik and our teams have engaged with for the hyperscalers, these co-locators are very clear on something that Five9s of reliability is an absolute must. I couldn't even say this one of the things that blows my mind at this point is, a C&I gen set, well cared for, and we've seen these. They can last 40, 50 years in the field. They're already telling us that, well, we can't do that. We want to stay at Five9 reliability, the formula says we've got to replace that in tenors. Right. Well, if that's what the formula says. I guess so, have added. Maybe it should be 7 years. Why 10? But that's something -- we wouldn't even think of in our industry for a backup system like that, but they're thinking about this completely differently. And as a result, even when they're bringing their own power to site, whether that's a combined cycle turbine or whether it's a recept gas engine that's in a lean burn configuration like a [indiscernible] or [indiscernible] could be a fuel cell system, something like that. They're still going to need backup. And that's -- there are some examples where it's not 100% backup anymore, but we did take that into consideration in the formulation of the TAM.

Yes, we assumed, as we looked at it, roughly the 30% to 40% of bring-your-own power in certain markets. I think the challenge is fuel delivery. In many cases, getting that amount of natural gas to a facility is going to be almost as difficult electricity. And when you look outside of North America, it's few and far between on the bring your own power.

And then I have a question for York. I appreciate the EBITDA bridge, but I was curious -- I noticed the gross margins are flat in 2018 versus today. But C&I, which I believe is lower gross margin than Resi it's outpacing the growth for Resi. So just curious as to what the puts and takes are to have margin be flat despite the negative...

The unfavorable mix. Yes. Well, you saw that middle column, that price cost column was offsetting the unfavorable mix. So again, we're the assumption there is there's -- there's a number of things we're working on in terms of -- to deliver that positive price cost. It's 2% over 3 years. So whatever that is, 2/3 of a percent per year. There's a lot of things we're working on from supply chain resiliency, tariff mitigation is a big one. I mentioned this profitable enhancement program. That's just part of our DNA now in terms of delivering improved margins throughout the company. the vertical integration we talked about. So there are specific initiatives we're working on today that we'll continue to work on for the next 3 years that will deliver that positive price cost, which was 2% in the bridge, and that's offsetting the unfavorable gross margin impact on mix.

Brian Drab with William Blair. If I could ask two quick ones. You mentioned the $600 million notice to proceed. And if you think about the forecast for data center, about $300 million in revenue this year, $1 billion revenue in 2028 kind of a linear ramp, I think York had mentioned at least in the model -- in the model, $650 million then for 2027. How does that $600 million notice to proceed factor into your forecast for roughly $650 million?

That's all upside. I mean it's basically not in there. We have a little bit ascribed as it grows out through 2028, some hyperscale business. But the $600 million and some of that could actually be delivered this year. So if -- again, we've got it through the AVL [indiscernible] for this hyperscale customer, which we think we will. And if we do and if we have the supply chain capability the capacity we're trying to bring our Sussex facility online faster. So we originally targeted at the end of this year. Now we're shooting for the end of third quarter. Can we bring it on a quarter faster, which would give us some additional upside for the fourth quarter, if we were to see one of these deals come through as an actual PO as opposed to something that's nonbinding. But again, this particular customer, the quality of the conversations at a high level, the fact that they've sent us this notice, they're like, look, we can't give you a PO -- but we want the product, and we're going to get you through this process. And you're going to have to buy on risk when it comes to some of these longer lead times components you're going to have to make some bets on capacity, but we're going to be there. And if we can get through the rubric here on this AVL process, and we will and when we do, there's potential upside in '26, and certainly, beyond for this particular customer. I mean, really very little of that.

We did have some hyperscalers for '27.

But not all of it. It's definitely upside. Big time upside.

Okay. Got it. And then on the Service business, you did a good job outlining a pretty robust service business for the data center product line specifically. How do you envision that in terms of like a revenue stream maybe in 2028. Is that potentially a material revenue stream at that point?

I think it is. I don't I think in our company-owned distributors, that definitely plays into it the opportunity per unit.

The maintenance contracts that are going to be available to us with -- owning 40% of our distribution there and growing. Erik was keen to say it's not a strategy, it's an opportunity. But we can demonstrate holistically that where we've bought distribution, we have faster growth rates in the years that follow. And there's a reason for that. We're more focused on it, right? It becomes the only thing that, that former business, whatever it was. And a lot of these distributors of ours are not just generator distributors. They're in material handling or they're in construction or electrical contracting. They are in other businesses when we buy them, generators are the only business at that point. And focus does matter, and we see that come through in higher growth rates. But these service contracts and these maintenance contracts, again, back to the 5 -- 9s of reliability, the kinds of opportunities there to touch these machines monthly not just the normally once or twice a year that distributors, I think, would normally be banking on. Now there's not a ton of parts for us, right? These are limited use products for the part. But I think the labor that comes with that through distribution is important. And I think as the service models evolve, and I think they will evolve, maybe there are other places where it might make sense for us to be involved. The actual testing of the unit load banking as it's known in our industry, right? They load up the generators with load. It's actually -- they roll up a box. It's like a hair dryer and die. It puts resistive load against the generator, simulates the grid load, or the building load, I should say. And the opportunity perhaps to do some of that work. We're seeing it in the rental channels today. There's opportunities there. So that's something that as we look at this evolve, we'll keep an eye on.

I think it's a separate part of the business, though, so we have to keep it that way. But it's not awarded with the purchase of equipment. So the sites we're already delivering on are distributors, whether it's ours or the third party, they have to work to -- is the data center operator going to self-perform the maintenance? Or are they going to rely on a third party. And if they rely on a third party, then we have the opportunity to win. So there's a lot more steps. And -- but I think over the next 12 to 18 months, we'll have really good visibility into how we're going to participate in that and what that could turn into.

Jeff Hammond KeyBanc Capital Markets. I wanted to hit on energy technology. I mean, you talked in the opening about profitable growth that has been challenged. You seem fully committed to it. As we've got to reset with the new products in the market, what kind of growth do you see for this business in that 3 to 5-year plan? And then how much of the path to breakeven or profitability is this re-org cost takeout versus that growth assumption?

Yes. Maybe I'll speak to kind of the strategy around I'll let Norm too and then York can give you a little bit of the details. It's about $500 million in the 2028 number there that I just do it? I guess you don't need to do it, forget it. A good chunk of that's ecobee right? 3/5 of it's ecobee, 2/5 would be the rest of it. we still see strategically as power prices rise, even with the loss of support support being tax credits, the 25D credit is the most visible one for individual solar customers as that went away at the end of last year. As power prices continue to rise and these technologies continue to come down in cost, the payback will return very quickly. In some estimates, it's as quick as 2 years. We're right back to where we were prior to -- I actually personally -- I think the loss of those subsidies is a good thing. Solar is a market that's been around for 40 years. It's been subsidized for almost all 40 of those years. I mean at what point do you say a technology should no longer be subsidized and can stand on its own two feet. And so I think that the technology, I think it's sure enough, and it certainly cost competitive enough in relation to power prices that it makes sense. And as power prices rise, homeowners are going to turn to self-generation. Self-generation in the format of solar is probably the most likely outcome. And as Norm pointed out, especially when you talk about micro-inverter, which is the preferred technology in solar, there's one player. And so the opportunity to be a secondary source there -- we think that couple of hundred million dollars of business there between solar and storage assumes very kind of very, very modest market share.

Yes. No, I think you're right. And I think from that standpoint, the other piece of it is that side of the business in particular, also has a much better margin profile than I think the flat storage business. So you kind of also have the opportunity to do that. And I think it's -- the reality is there's a significant sun cost aspect to this, particularly on that one where we had to put in a ton of infrastructure. And the willingness to put in infrastructure. I appreciate because without it, you really can't truly compete in that space. That infrastructure is in place. We tested the testing room for those products is bigger than any other testing room we have, in terms of equipment, but that's in place. We use it, we build it. There's a lot of engineering in that. So what we've been able to do now in the integration is now start to shift much more of the resources elsewhere, save some money, obviously, at the same time. And then I think we're actually going to get overall for the business, I think a tailwind of, I think, the efficiencies as an organization. On the sales front, the marketing front, on the customer service front, et cetera, that is -- that will help the overall business, as you can see from kind of our expectations for the overall EBITDA margin improvement over the next 3 years.

I would say, though, that make no mistake about it, '26 and into '27 is a pivotal time period for those products for residential storage and for the micro-inverters. We have got to see traction. We've got to see market share, real market share gains even in a down market, even in a down market, we haven't moved the goalposts and when we said we're going to be profitable with those products. It's still 2027. So I've been very clear to the teams. We're not moving the goalpost. I don't care if the markets don't. They go out and win more share. That's -- and that's what we're focused on doing, and yet, that still is a pretty modest share postion, Jeff, that we're talking about. But if for the sake of argument, we don't see the traction there, we'll definitely recalibrate further. We've taken the first step here to recalibrate and making -- putting investment into places in our business where we have higher growth opportunities like C&I right? I mean we're giving Erick's business I don't want to say it's an open checkbook because you'll never hear that from me. I don't think you've ever heard that from me. No. You never will, because there has to be a return with everything we do. On these technologies, the return has been harder to come by. There's no question. And we've said that. We've been very open about that. But we also will deeply in the importance of those technologies again in terms of power prices and I think the knock-on benefit here is what we've learned over the last few years is just how much stronger, deeper, wider they can make the moat around that Home Standby business. And that, I think, is not a small thing. When you talk about the software layers -- you talk about firmware layers. You talk about this meter switch that I just was mentioning before, that technology is very prevalent in the solar and storage industry. It's not nearly as prevalent in the generator market. but it can take 15% out of the installation cost. So using that same core technology and applying it into our legacy market, that's a great side benefit. We wouldn't have been able to do that, in my opinion, as quickly or efficiently as we've done, had we not had our investments there. And then I still believe deeply about batteries and where that technology ultimately heads long term. So important.

Just one more. As you look kind of beyond this $1 billion capacity in data center and if you get these hyperscale opportunities, like what are the biggest risks of bottlenecks from your perspective? It seems like adding the capacity isn't hugely a challenge? Is it engines? Is it other supply chain or what?

So near term, it's -- it is in the supply chain. I would tell you, it's not in the engines. The engine partner we have is very committed to the space. They've got a tremendous amount of capacity, they've already put in place, and they are eager to add more capacity should it be needed. I'm not -- I'm actually not worried about the engine space, as much as I am some of the other components that go into the package. So today, near term, alternator capacity. So this is the business-end of the generator, right? It's a set of copper windings that the engine turns to actually produce power. -- those alternators and those frame sizes for these kind of 3-megawatt and higher machines, there is -- like on the diesel engine side, there's a limited set of suppliers in the world to produce those. Now every single one of those suppliers has big capacity plans coming online really towards the end of this year and in 2027. Near term, it's a problem. We're already seeing that. We're stretching some of these suppliers because we're trying to ramp faster, and they're trying to keep up. So near term, I think it is some of the supply chain elements. Beyond that, I think it's probably -- it's going to be more around some of the labor that maybe we don't talk enough about the trades labor to install these machines, right? The electrical contracting labor. We have an issue in this country. If you were to look at our Residential side in particular, we have a pretty good lens on electrical contractors. 80-plus percent of our dealers are -- like ECs. The average electric contractor is a 57-year-old who has been in the trades for 30-plus years, and they're looking forward to retirement, put it that way. And I think -- and I was talking during the break too, I'm part of the problem here. We all have taken our kids, and we said, "You're going college track, right? You got to go to the college track. We didn't push them into the trade track, we didn't push them into the tech track. We push them into the college track. And I think we've done a disservice probably to an entire generation maybe of college grads here who have come out with 6-figure loans. English lit majors working in Starbucks, that there's a lot to be said there, you can unpack that. But we probably might have done better to turn some of those folks into the trades. I mean -- and that will right itself because you're starting to see salaries for trades people rise very quickly, plumbing, HVAC, electrical, right? This is the new -- this is the new profession, I think, for a lot of people. And we're going to need a lot more of those. But I am worried if there's a constraint anywhere on this, it's actually probably in that trade -- those trade areas in the labor I was sitting at a recent event with somebody who's -- they do a lot of the data center development work, public company. And he shared the same. I mean, it's the trades that they're worried about the most. Trying to get these pads ready to be built on and then to actually construct these data centers to construct this critical infrastructure. We just don't have enough electricians. And so what are we going to do about that? We can wait for the market to come to them and get the economics right. But I think we're going to have to do something more quickly if we're going to make headway here and not have that be the constraint. But that's probably -- the one area I would worry most about.

Keith Housum from North Coast Research. Let me play devil's advocate a little bit here. If we look at Generac history in the Residential space, you guys were generators. HSPs were the one -- the one story. That's -- solar was expensive. Now you've got these battery systems. You got the Teslas out there. You have a bunch of new guys, commodity pricing. What's the confidence that you guys have that HSPs will still be the [indiscernible] product that people will need? And in the face of these cheaper alternatives coming down line with the battery and unique pricing that some of these guys are coming up with.

Yes. No, it's a great question, Keith. And this is Look, when we got into the battery market, the storage residential storage market 5 years ago, part of our thesis was defensive in nature, right? These technologies were improving in performance and reducing in cost very quickly. And look, you can't ignore some of the players that are in that market today. Now almost always, when a residential storage system is sold today, it's sold with solar. So you're talking about a project, the ticket is much bigger, right? You're talking about $25,000, $30,000, $35,000, $40,000, $50,000, if you've got multiple storage devices on site. But as time goes on, maybe battery technology gets to the point where if you've got somebody and they're just worried about limited outage protection. And that's all you're going to get out of one of these cabinets, half a day maybe if you're managing your loads closely, maybe you can stretch it a full day. But I don't think it's ever at least in the near term, going to be a stand-in for what a Home Standby can do. Here's the problem with a power outage. When it happens is you don't know how long it's going to be. How long powers going to be out. And so if you've made a bet on a short-term solution, the battery or even if you have two or three of those things. The reality of it is, if you have a multi-day outage, you got a problem there. I think the most likely next step in this evolution is some kind of hybridized system. And Norm touched on it. Kyle touched on it, but the idea don't buy 4 power walls. That is [indiscernible]. You buy 4 power walls. You don't know when or how long an outage is going to last. You only need one and a generator. And you have what in effect is about -- it's a bottomless battery. That technology and from a cost perspective, far less cost than doing multiple storage devices. Generators themselves are fantastically cost effective relative to the cost to actually produce the power, right. The cost -- the capital cost of the equipment. And so I don't see that changing anytime soon. I do think that over time, this hybridization strategy could become more prevalent. One of the benefits, by the way, if you do have a battery, if you have a hybrid system is you have what we refer to in our industry is a no break experience. Today, if you just have a generator on your house, utility drops, you still have the flashing clock problem, right? I mean it still happens. And as houses become, as homes become more sophisticated, as home automation systems, all these other technology or security systems. Oftentimes, those devices don't play well with a short-term outage, right? Your router drops, all the connectivity drops stuff that should work, doesn't work, has to be reset, powered on, power cycled, right? All the stuff that drives us nuts as consumers. If you have a battery system, that can act as a whole home buffer for that 10 seconds to 30 seconds between when the power is lost and when the generator comes fully online, you have an outbreak system. We have customers who are -- they're like, "Yes, I want that. Even if they aren't a solar on the roof. I just want to. I don't want to have to reset the clocks or they have a significant issue with even a momentary loss of power, and they can't have it. Oftentimes today, people buy individual is right for a point solution, uninterruptible power supply for your computer or a particular maybe a medical device in the home. But a whole home battery paired with a whole home generator, is probably the solution of the future. And you probably don't need as big of a battery, and you might not need as big of a generator, something of that -- so in our laboratories today in our R&D centers, we're working on hybridized products because we believe the future continues to change. And again, we think we have an advantage there because of all of the investment we've made in storage and all the investments we've made in clean energy, we think we have an advantage to come up with a hybridized system that by far would be not only the best performing system but also the lowest cost system in the marketplace.

Great. And quick follow-up here. Data center is obviously is the excitement from investors today, but there's also a fear that this excitement data center strength is going to wind down at some point in time. And everybody is going to have to go back to relying on other sources of growth, your nondata center business for these [indiscernible] diesel engines. I know it's probably not been a priority for you guys. But where is that falling in terms of what your plans are for the future in terms of building these relationships getting growth from that vertical?

Yes. So actually, we launched the products at the same time, and we're generating backlog on these products in a traditional application. Cold storage, wastewater treatment facilities. That was a very easy bolt-on to the business, just having the products available. So it's very complementary.

Yes, I mean we started quoting that maybe a little bit after -- we launched the data center units. The data center units are admittedly maybe a little more simple. Oftentimes, you'll see in our traditional business, when you get a machine that's required on a specification that's of that size, it's a lot of customization the bigger the machine, the higher level of customization. It's been the history in our industry. The data center thing is kind of breaking that because they want 100 copies of the same machine, that's like we're talking like build home standbys then, right? Like we're counting them out down an assembly line versus [indiscernible] building them in kind of with a high degree of customization. So we had to get some of that customization stuff ready. We're in market with it now. We took an order for our first project here recently. We've got a nice pipeline building there, to make sure on this Erik's got -- we have a project internally to double the size of our C&I business over the next 3 years. One of the core tenets of that project is not losing sight of our traditional business and the importance of that business. Because you're right, the data center market -- are they going to spend $700 billion a year for [indiscernible]? No, probably not. But it could be a lot on here. But even if there's not, there's a traditional business we weren't participating in at all. And that's all -- it's 100% incremental. And it's a space we think at least entitled to the 15% share we get in the rest of our C&I business. So as we build that out, that's a market that we're keen to make sure that we focus on it can't all be about data centers. And Erik's done a great thing in his business is he separated the teams. We have our traditional teams. We have a data center team. We have a direct sales team that he and his team have built to go directly after the data centers and call on those. And I think the service model, which was a question that came up before. That's why you got to keep that [indiscernible] as well. We can't lose sight to the importance of our traditional market as grows as well going forward. Do we have time for one more, Chris? Maybe we could do one more quick. We do one more. We'll just do a closure here. Anybody? Maybe there were no more questions, maybe you were ahead of me. Forget it, go to lunch. I don't care. No. Well, if there are any other questions. I really appreciate your time this morning. We hope that the takeaways here were meaningful. We hope it was worth the time. I think as I said before, we've got a very unique opportunity, an exciting opportunity as a company here to do something that we believe is, again, generational probably over using that word this morning. But stay tuned. Now it's on us. We've got to execute, and we will do that. Thank you very much.