Generac's Amazon warrant is worth $112.5 million, more than its quarter's profit, and cuts Amazon revenue
The generator maker's 10-Q prices the warrant it gave Amazon at $112.5 million and books it against Amazon revenue as the generators ship, more than the quarter's entire profit. The same filing shows how far the $4.5 billion backlog sits from the accounting.
Vincent Jiang · 3 min read
A sentence the deal paperwork never had
Generac's−9.90% — Generac, down 9.90 percent today 10-Q, the quarterly report filed on November 3, 2026, carries one line the deal's earlier paperwork did not 1. The warrant the backup-power maker granted a subsidiary of Amazon.com on September 16 was worth $112.5 million on its grant date, priced by the Black-Scholes option model at $66.40 a share, and Generac "will recognize the grant-date fair value of the Warrant as a reduction of revenue from Amazon+6.52% — Amazon, up 6.52 percent today as control of the related goods or services are transferred" 1.
That is more than the quarter's entire $109.2 million of net income 23. The September 8-K gave the share count and the strike; the October release gave the backlog 23. Neither priced the equity 23.
Two currencies in one order book
The warrant covers up to 1,693,745 shares, about 2.9% of the 58,988,982 shares outstanding on the filing's cover, at a strike of $200.9266, exercisable in cash or in shares at Amazon's election through September 16, 2033, with the share count protected by anti-dilution adjustments 12. Only 307,954 shares vested at signing; the rest vest in tranches as Amazon's payments for data-center generators accumulate toward $8 billion 2. Generac has booked $20.4 million of the value as an asset to offset future Amazon revenue; the remaining $92.0 million depends on Amazon actually spending 1.
Amazon's equity costs 1.4 cents of every dollar it must spend to vest it
The warrant's grant value is 1.4% of the $8 billion Amazon must pay to earn it
Data
| Value | |
|---|---|
| Payments to vest it fully | $8,000M |
| Initial deliveries, 2027-28 | $2,400M |
| Warrant value at grant | $112.5M |
The backlog is a statement, not a schedule
The quarter itself was a record: net sales of $1.2948 billion, up 16%, with the Commercial & Industrial segment up 28% to $552.1 million on data-center demand 13. Chief executive Aaron Jagdfeld put the data-center backlog at about $4.5 billion, nearly triple July's $1.6 billion 346.
The word backlog appears nowhere in the 10-Q 12. Its closest filed measure, remaining performance obligations, the revenue Generac still expects from signed contracts, totals about $330 million, and the $2.4 billion of initial Amazon deliveries expected in 2027 and 2028 is not in that line 12. The filing does not explain the gap 12.
A record $1.30 billion quarter ends a flat two-year run
Sales slid through 2025, then set a record as data-center demand arrived
Data
| Net sales | |
|---|---|
| Q4 '23 | $1.06B |
| Q1 '24 | $0.89B |
| Q2 '24 | $1B |
| Q3 '24 | $1.17B |
| Q4 '24 | $1.24B |
| Q1 '25 | $0.94B |
| Q2 '25 | $1.06B |
| Q3 '25 | $1.11B |
| Q4 '25 | $1.09B |
| Q1 '26 | $1.06B |
| Q2 '26 | $1.17B |
| Q3 '26 | $1.3B |
The incentive, and the seller
The bull case is cheap lock-in: the equity costs about 1.4% of the $8 billion Amazon must spend to vest it, and Jagdfeld says it creates "a material incentive for Amazon to continue leveraging Generac as a supplier"; a second, unnamed hyperscaler could match the $700 million he expects from it in 2027 4.
Jagdfeld sold 5,000 shares on November 2 at $200.61, 32 cents under the strike, his fourth such monthly sale since August under a pre-scheduled trading plan adopted December 4, 2025, months before the deal existed 56. The readings that decide it start in 2027, when deliveries begin and Amazon's payments start flowing back off Generac's own revenue line 56.
Get Power by email, free
How AI's hunger for electricity moves utilities, power plants and the grid. In our daily email, every weekday.
