Tecnoglass - Earnings Call - Q3 2025

Executive Summary

• Q3 delivered record revenue ($260.5M, +9.3% y/y) with both Single-Family Residential and Multi-Family/Commercial hitting record quarterly revenues, but EPS ($1.01) and revenue modestly missed S&P Global consensus, and Adjusted EBITDA margin compressed to 30.4% on aluminum premiums, installation mix, and FX headwinds; consensus: Rev $264.6M*, EPS $1.108*, EBITDA $85.1M* (see Estimates Context).
• Management lowered FY25 guidance (Rev: $970–$990M; Adj. EBITDA: $294–$304M) from Q2 levels on slower light commercial invoicing and higher-than-expected aluminum costs/premiums plus a stronger COP; at least half of the ~midpoint $20M revenue trim likely shifts into 2026, where they still expect low double‑digit growth.
• Backlog reached a record ~$1.3B (+21.4% y/y) with 1.3x book-to-bill, supporting visibility into 2026+; liquidity expanded to ~$550M after refinancing, enabling both growth investments and capital returns.
• Capital return stepped up: $30M of buybacks and $7M dividends in Q3; authorization expanded to $150M (≈$96.5M remaining) — a potential stock support against the guidance cut and estimate misses.

What Went Well and What Went Wrong

What Went Well

• Record revenue with balanced end-market strength: Single-Family Residential revenue rose on pricing and dealer/geographic expansion; Multi-Family/Commercial benefited from market share gains and Continental Glass contribution (~$4M).
• Structural demand and visibility: Backlog hit a record ~$1.3B (+21.4% y/y), book‑to‑bill 1.3x; CEO: “Record revenues and continued market share gains…The early benefits from our residential pricing initiatives are materializing…”.
• Balance sheet and liquidity: Total liquidity ≈$550M (cash ~$124M; $425M revolver availability), positioning TGLS to pursue U.S. expansion, buybacks, and growth initiatives.

What Went Wrong

• Margin compression: Gross margin fell to 42.7% (from 45.8% y/y) and Adj. EBITDA margin to 30.4% on installation mix, all‑time high U.S. aluminum premiums, and COP revaluation.
• Tariffs and SG&A: SG&A increased to $47.3M (18.2% of sales), including ~$3.1M in aluminum tariffs on standalone component sales; transportation/commissions/personnel also rose.
• Guidance cut and estimate misses: FY25 revenue and Adj. EBITDA ranges reduced (revenue midpoint -$20M), with at least half slipping to 2026; Q3 revenue/EPS/EBITDA below consensus (see Estimates Context).

Transcript

Christian Daes (COO)

Good morning, and welcome to the Tecnoglass third quarter 2025 Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal an operator by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your telephone keypad. To withdraw your question, please press star then two. Please note that this event is being recorded. I would now like to turn the conference over to Brad Cray, Investor Relations. Please go ahead.

Brad Cray (Head of Investor Relations)

Thank you for joining us for Tecnoglass's third quarter 2025 Conference Call. A copy of the slide presentation to accompany this call may be obtained on the Investor section of the Tecnoglass website. Our speakers for today's call are Chief Executive Officer José Manuel Daes, Chief Operating Officer Chris Daes, and Chief Financial Officer Santiago Giraldo. I'd like to remind everyone that matters discussed in this call, except for historical information, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding future financial performance, future growth, and future acquisitions. These statements are based on Tecnoglass's current expectations or beliefs and are subject to uncertainty and changes in circumstances.

Actual results may vary in a material nature from those expressed or implied by the statements herein due to changes in economic, business, competitive, and/or regulatory factors and other risks and uncertainties affecting the operation of Tecnoglass's business. These risks, uncertainties, and contingencies are indicated from time to time in Tecnoglass's filings with the SEC. The information discussed during the call is presented in light of such risks. Further, investors should keep in mind that Tecnoglass's financial results in any particular period may not be indicative of future results. Tecnoglass is under no obligation to and expressly disclaims any obligation to update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions, or otherwise. I will now turn the call over to José Manuel, beginning on slide number four.

José Manuel Daes (CEO)

Thank you, Brad, and thank you, everyone, for participating on today's call. We are pleased to report another exceptional quarter that demonstrates the strength and resilience of our business model even under challenging macroeconomic conditions. Our third quarter total revenues reached a record $260.5 million, up 9.3% year-over-year, driven by strong organic growth from both our single-family residential and multi-family commercial businesses. Our robust results in the face of market uncertainty and ongoing inflationary pressure showcase our team's dedication to excellence and our ability to consistently outperform market trends. In our single-family residential business, we grew revenue 3.4% year-over-year to a record $113.5 million. This performance reflects the early benefits from our pricing initiatives implemented earlier this year, continued market share gains through geographic and dealership expansion, and contributions from our growing vinyl product portfolio. Our multi-family and commercial business delivered impressive growth of 14.3%.

Year-over-year to a record $147 million. The improvement reflects both market share gains in key markets and solid execution on our expanding project pipeline. The industry out performance we're seeing in our commercial activity has resulted in a record backlog of $1.3 billion, up over 20% year-over-year. We maintain strong profitability with a gross margin of 42.7% and an adjusted EBITDA margin of 30.4%. Our vertically integrated platform and previously implemented strategic pricing actions are helping to mitigate various cost pressures, positioning us well as we move into 2026. This margin resilience, combined with our disciplined working capital management, drove robust cash flow from operations. This cash generation enabled us to return significant capital to shareholders while maintaining a strategic flexibility. To that end, we were pleased to report just $30 million in shares and pay $7 million in dividends during the quarter.

Our board's authorization to expand our share repurchase program to $150 million reinforces their confidence in the business and our commitment to balanced capital allocation. Our third quarter results demonstrate the power of our vertically integrated business model and our ability to execute in a dynamic environment. With our strong balance sheet, record backlog providing multi-year visibility, and multiple growth initiatives advancing, we remain as confident as ever in our ability to continue delivering exceptional shareholder value for years to come. I will now turn the call over to Christian.

Christian Daes (COO)

Thank you, José Manuel. Moving to slide number five and six. Our third quarter performance reflects the successful execution of our growth strategy across both businesses, with a stable order of activity and continued market share gains across our key regions. Our multi-family and commercial business delivered record revenue driven by robust activity within the key markets. We ended the quarter with another record backlog of $1.3 billion, up substantially over 20% year over year. This expanding pipeline provides strong visibility through 2026 and 2027, with additional market share gains opportunities across our core geographies and project execution on track. Our backlog has seen consistent sequential growth since 2021, reflecting the sustainability of our structural competitive advantages even under challenging microeconomic conditions. Our book-to-bill ratios remain healthy at 1.3x for the third quarter, continuing our track record of maintaining a ratio above 1.1x for the past 19 consecutive quarters.

As previously stated, the composition of our backlog has changed during the last year, shifting more towards high-end, large-sized projects, which tend to be less sensitive to higher interest rates and overall affordability. Moving to slide number seven, our single-family residential business achieved record revenues on entirely organic growth. This performance was driven by previously enacted pricing initiatives that are now flowing through the P&L and helping to offset higher input costs. We were encouraged by double-digit year-over-year increase in residential orders during these quarters. This is very notable because we had $5 million-$7 million in orders that pulled forward into the second quarter ahead of our price increase. This positive performance demonstrates successful geographic expansion. A strong reception of our expanded products offering. More than 20% year-over-year growth in our dealer network and growing contributions from our vinyl product line.

We are excited about several growth initiatives that we expect will further strengthen our market position. Our dealer network expansion continues to drive market penetration supported by short lead times and initiative products offering. Better than nationwide demographic trends across our key Southeast markets, combined with our geographic diversification efforts, are creating multiple avenues for continued market share gains. The California showroom opening in the fourth quarter and the introduction of the light aluminum legacy line designed for new geographies represent an important milestone in our geographical expansion, where we are already seeing encouraging growth in orders. With our expanded product line portfolio spanning aluminum and vinyl solutions, we are well positioned to continue to grow into 2026.

Additionally, we continue to advance our feasibility study for a new fully automated facility in Florida, which would diversify our manufacturing footprint and provide logistics and lead time advantages in many of our target markets, further strengthening our vertically integrated platform. I will now turn the call over to Santiago to discuss our financial results and full-year outlook.

Brad Cray (Head of Investor Relations)

Thank you, Christian. Turning to the drivers of revenue on slide number nine. Total revenues for the third quarter increased 9.3% year-over-year to a record $260.5 million, with growth in both our single-family residential and multi-family commercial businesses. This performance reflects pricing gains as well as a robust demand for our best-in-class product offerings, driving strong organic momentum. Our Continental Glass asset acquisition contributed approximately $4 million to revenue during the quarter. Looking at the profit drivers on slide number 10. Adjusted EBITDA for the third quarter of 2025 was $79.1 million, representing an adjusted EBITDA margin of 30.4%. Compared to $81.4 million for a 34.2% margin in the prior year quarter. This quarter gross profit was $111.3 million, representing a 42.7% gross margin compared to gross profit of $109.2 million, representing a 45.8% gross margin in the prior year quarter. The year-over-year change in gross margin reflected several factors.

First, we had an unfavorable revenue mix with a higher proportion of installation revenue. Second, raw material costs were impacted by U.S. aluminum premiums reaching all-time highs during the quarter. Third, the Colombian peso strengthened significantly during the quarter, affecting our non-hedged portion of local costs. SG&A expenses were $47.3 million, or 18.2% of total revenues, compared to $41.5 million, or 17.4% of total revenues in the prior year quarter. The increase included approximately $3.1 million in aluminum tariffs on standalone component sales, which we are mitigating through our pricing actions. Additionally, we had higher transportation and commission expenses associated with our revenue growth, as well as increased personnel expenses related to annual salary adjustments implemented at the beginning of the year. Our strategic pricing initiatives and cost control measures are gaining traction. We implemented mid-single-digit pricing adjustments on residential products and shifted to U.S. source aluminum.

We are beginning to see the benefit of those actions as higher price orders are invoiced. We expect our pricing actions and supply chain optimization efforts to offset an estimated $25 million full-year impact of tariffs and increased premiums on U.S. aluminum. Now, examining our strong cash flow and balance sheet on slide number 11. We generated operating cash flow of $40 million in the third quarter, driven by strong profitability and efficient working capital management, which more than offset incremental inventory purchases of U.S. aluminum and increased receivables on higher installation revenues, which carry longer cash cycles. Capital expenditures of $18.8 million in the quarter included scheduled payments on previous investments and continued progress on our growth initiatives. We continue to expect capital expenditures to moderate through year-end, driving strong free cash flow generation in the fourth quarter.

Our balance sheet remains exceptionally strong, with total liquidity of approximately $550 million at quarter end, including a cash position of $124 million and $425 million of availability under a recently refinanced and expanded senior secured credit facility and other bilateral bank facilities. In September, we expanded our syndicate facility to $500 million from $150 million, reducing spreads by 25 basis points and extending the maturity to 2030, providing significant financial flexibility for growth and other strategic capital allocation initiatives. With total debt of $111.9 million, we maintain a net debt-to-LTM adjusted EBITDA ratio of negative 0.04 times, providing us with tremendous financial flexibility to execute on growth initiatives while returning capital to shareholders. On slide number 12, our strong track record of generating returns above the broader industry continues to validate our disciplined capital allocation approach.

Over the past three years, our strategic investments in operational excellence and capacity expansion have consistently delivered superior returns for our shareholders. This outperformance reflects our focus on high-return investments in our vertically integrated platform, as well as our industry-leading profitability and significant improvements to working capital, which are driving sustainable cash generation and shareholder value while maintaining our financial flexibility to pursue additional growth opportunities. We're also pleased to continue returning a portion of capital to shareholders through share repurchases and dividends. During the quarter, we repurchased $30 million in shares and paid $7 million in dividends. Given the board's confidence in our continued cash flow generation capabilities, prudent balance sheet management, and commitment to delivering superior returns to shareholders, they have authorized an expansion of Tecnoglass share repurchase authorization to $150 million. Following the expansion, the company had approximately $96.5 million remaining under its existing share repurchase program.

Now, moving to our outlook on slide 14. Based on our strong performance through the first nine months of 2025 and the expectations for the fourth quarter of the year based on current market conditions, we're updating our full-year 2025 financial guidance. We now expect revenues to be in the range of $970 million-$990 million, reflecting growth of approximately 10% at the midpoint. This updated range reflects slower project starts in light commercial due to current macroeconomic uncertainty, while maintaining our confidence in double-digit top-line growth for the full year 2025 as well as for the full year 2026. Additionally, we're updating our adjusted EBITDA outlook to a range of $294 million-$304 million, representing approximately 8% growth at the midpoint.

This guidance assumes that pricing initiatives and other mitigation efforts will help compensate for the projected $25 million full-year impact from elevated input costs and tariffs on select products, but now accounts for higher-than-expected aluminum costs, U.S. aluminum premiums, and a stronger local currency. Key assumptions supporting our outlook include stable volumes on residential orders for the rest of the year, lower volumes in light construction activity, continued downtrend in interest rates driving mortgage rates lower, FX headwinds from a stronger Colombian peso year-over-year, and a healthy cash flow generation during the rest of the year. We expect low single-digit growth for legacy single-family residential revenue with a higher mix of commercial jobs with installation. We now anticipate gross margins in the low to mid-40% range. In conclusion, our third quarter 2025.

Results demonstrate our ability to execute effectively in all environments by leveraging our competitive advantages to gain market share while maintaining industry-leading margins and generating exceptional cash flow. With our record backlog providing multi-year visibility, expanding markets' presence through geographic and product diversification, and strong balance sheets supporting strategic flexibility, we are well positioned to continue our track record of outperformance. We remain confident in our ability to deliver another year of strong growth in revenues and adjusted EBITDA while creating lasting value for our shareholders and also anticipate to be able to once again grow our top line by double digits in 2026. With that, we will be happy to answer your questions. Operator, please open the line for questions.

Operator (participant)

Thank you. We will now begin with the question and answer session. To ask a question, you may press Star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press Star, then 2. At this time, we will pause momentarily to assemble our roster. Our first question comes from Tim Wojcis with Baird. Please go ahead.

Timothy Ronald Wojs (Analyst)

Hey, everybody. Good morning and nice job. Maybe just first on 2026 and kind of calling out double-digit growth. I'm just curious if you could add a little bit of context around the visibility to that. What kind of you're assuming in that number for some of your larger project work. Residential, and then also just kind of acknowledging some of the kind of weaker kind of smaller commercial projects right now.

Santiago Giraldo (CFO)

Hey, Tim, I'll take this first. Obviously, we have a record backlog in place that gives us visibility, especially on the larger projects that are either in execution or already breaking ground that has financial closings in place already. That gives us a lot of visibility. I think the single-family residential component, a lot of the growth is coming from what we're seeing as far as the geographical expansion into other places and the vinyl product ramp-up. We'll obviously come back to you guys with more granular detail. This is kind of like what we're seeing based on making some general assumptions. I have a lot of confidence in that. As far as the breakdown goes and where we think specifically each bucket is going to contribute, I think we'll give you more detail in the next call.

Timothy Ronald Wojs (Analyst)

Okay. Okay. As I think about the cost side of things, is there a way just to give us some—I think aluminum was a $5 million headwind and you had a couple of million dollars from FX. I guess how do those—how does the aluminum piece kind of trend in the fourth quarter and early 2026? If you could just maybe talk about kind of when you would expect some of the peso headwinds to kind of normalize out, is that kind of a mid-2026 timeline at this point?

Santiago Giraldo (CFO)

Yeah. On the aluminum, if you look at what's happened here in the last three months, LME has gone up 15% from about $2,500-$2,900. That has been a pretty fast ramp-up. The U.S. aluminum premiums have gone up even faster, about 67% from about $1,000-$1,800, right? That has happened fast as of late. I think the thought process here is that as volumes and demand subside, those are going to correct. As of now, it is anybody's guess as to what's going to happen there. Hopefully, that will not stay at record high levels for a prolonged period of time. If you look at what's happened with the FX since our last call, we were at 4,170 and now we're at 3,850. That is an 8% revaluation in 90 days. Again, it is a headwind of a very rapid ramp-up over the last 90 days.

What's happening there as well is that the government of Colombia did a liability management deal where they have monetized a lot of dollars as of late. The expectation is for the peso probably to come back up above 4,000 by year-end. Luckily, we're covered on about 60% of our cost and expenses, and we'll be looking to be opportunistic and find an attractive entry point to mitigate that risk going forward. The expectation based on the economist is that we should be closer to the 4,000 level by year-end.

Timothy Ronald Wojs (Analyst)

Okay. Okay. I guess just last one for me. On the vinyl business. Could you just give us an update maybe on kind of where that business is tracking in 2025 and maybe your kind of initial expectations for next year there? Thanks.

José Manuel Daes (CEO)

Listen, this year, Tim, this is José Daes. This year, we duplicated what we did last year, but it's still minimum compared to what it's going to be next year. We expect next year to be from 7-10 times more than we have done this year because we're going to have a complete line, and we have already 50 new dealers lined up, just waiting for the line to be complete.

Timothy Ronald Wojs (Analyst)

Great. Thanks very much. Good luck.

José Manuel Daes (CEO)

Thank you.

Operator (participant)

Thanks. Thank you. Our next question comes from Sam Darkats with Raymond James. Please go ahead.

Sam Darkats (Analyst)

Good morning, José Manuel. Chris, Santiago, how are you?

Christian Daes (COO)

Good morning, Sam.

José Manuel Daes (CEO)

Good morning.

Sam Darkats (Analyst)

I wanted to piggyback a little bit on Tim's questions around 2026. Can you remind us what the price and tariff costs rollovers are from 2025 into 2026? I guess what I'm getting at, Santiago, is what do you figure, generally speaking, 2026 gross margins might shake out, and can you lever EBITDA margins next year?

Yeah. Obviously, there's a few moving pieces here. As far as pricing goes, as you know, we increased single-family residential pricing 5-7% in May. Obviously, all of that now has the new pricing. On the commercial side, you see a lot more of the backlog that was signed earlier in the year coming in with new pricing. Obviously, we're executing still some of the older backlog where we didn't adjust pricing. As far as gross margin goes, I mean, it's early to tell, but I think the idea, depending on what happens with the inputs that we just discussed, is that we can be able to maintain the low to mid-40s type profile. As you see, there's FX, there's aluminum costs, there's mix. We're doing more installation based on the high-end projects that GMMP is executing. You got operating leverage, right?

I mean, if we're saying that we can grow top line double digits again next year, we would obviously expect to get operating leverage in there. Again, we'll get you guys more detail as the time approaches, and we report Q4 and full 2026 guidance in the next call.

Gotcha. As it relates to pricing, as it stands right now, do you anticipate further pricing actions to mitigate some of your costs? What are you seeing out in the field in terms of a competitive response to all the aluminum pressures?

Generally, you're seeing tight pricing, as you would expect. Everybody's trying to maintain their market share. For as much as we would like to take further pricing actions, the market dictates really what you can do. The expectation for our growth next year is more on the volume side, as José was mentioning. Not only are we expecting the full ramp-up on vinyl, but all of the other geographies contributing much more meaningfully. When we're talking about double-digit growth, it's more coming from volume rather than the assumption that we're going to be able to raise prices again, based on what the competition is doing and the dynamics for the industry.

My last question. The prospective U.S. facility that you are contemplating. I know it's still in the semi-early stages, but can you give us a sense of how much capacity you're looking at, what the CapEx cost might be, and the timing of those sorts of expenditures?

José Manuel Daes (CEO)

We're still designing, studying, doing engineering. We do believe that the building and land will be around $225 million. The machines will be around $150 million. We will have the capacity of 40% of most lines. It's still too early to tell. We do have a line already, a piece of land that we like. It's in a very special place. We're going to bid on it. When we have all the numbers together, because it's going to be a fully automatic robotic factory that will employ one-eighth of the people that we normally employ to make the same window, when we have all that, we'll give you more color on what is it that we have to do. We are really looking into it because it's.

A good thing to do, especially that we want to do it in the East Coast and also in the West Coast.

I mean, just to add to Christian's comments, obviously, that CapEx is multi-year, right? This is something where if the factory is going to take two, three years to get built out, this is something that gets spent over a multi-year horizon. It can be built gradually, right, depending on demand. You do not have to make a full investment without having the demand for the excess capacity as well.

Sam Darkats (Analyst)

So roughly $350 million to $400 million in total costs and maybe $500 million in capacity. Is that the broad brush way of looking at it?

Yeah. That roughly sounds good. If you extrapolate to decent margins, the payback is attractive, obviously.

Very good. Thank you all. Appreciate it.

Santiago Giraldo (CFO)

Thanks.

Operator (participant)

Thank you. Our next question comes from the line of Rohit Sheth with BYD. Please go ahead.

Rohit Seth (Senior Research Analyst)

Hi. Thanks for taking my question. Just on the guidance, you cited slower than anticipated invoicing light commercial construction as the driver of the guidance cut. Can you quantify how much revenue maybe slipped from Q4 into 2026? Is this like one or two projects, or is this more a broader issue in the commercial side?

Santiago Giraldo (CFO)

We're talking about a $20 million reduction at the midpoint of the guidance, more or less. We would estimate that at least half of that is 2026 business, which obviously further supports the idea of double-digit growth next year. I would say some of that is coming from more stable resi invoicing than previously anticipated. These are projects that are obviously in the backlog and not expected to obviously drop off. It's more a timing issue.

Rohit Seth (Senior Research Analyst)

Okay. And then on the 2026 double-digit growth guide on revenues, could you maybe narrow that down to a specific range? Is it 10-12 or 13-15?

Santiago Giraldo (CFO)

I mean, at this point, I would assume low double-digit growth. Again, more details to come. We're basically working with back-of-the-envelope calculations and assumptions. When we report Q4 and give you full guidance, we'll provide more granular detail on that.

Rohit Seth (Senior Research Analyst)

Okay. Your gross margins come down to the mid-40s. As you think about 2026, I mean, and you're deriving your margin assumptions, what are the key swing factors? Is there a path back to the mid-40s? Do you think this low 40s is sort of the new run rate?

Santiago Giraldo (CFO)

Low to mid-40s is what we had talked about on the earlier question. If you kind of back into the math, that's more or less where we can end up this year. Next year, again, there's different variables related to input cost. Hopefully, some of the recent spikes in aluminum cost and premiums will come down to normalized levels. FX is also in question, so it's an important input. Installation mix versus manufacturing mix also comes to play. Finally, how much operating leverage can we get on those incremental sales? Again, there's different variables. We'll provide more color when we report next quarter.

Rohit Seth (Senior Research Analyst)

Okay. Just on the higher mix of revenues with installation. It's been a headwind. Just can you quantify what percentage of your commercial revenue is installation versus product-only?

Santiago Giraldo (CFO)

What percentage of the commercial revenue is what, I'm sorry?

Rohit Seth (Senior Research Analyst)

What percentage was the installation mix in the third quarter versus product-only?

Santiago Giraldo (CFO)

If you look at the overall revenue for the year, we're doing about $990 million. Take. About $200 million of that is going to be installation for the year. And that is up 50% versus last year. This quarter, the impact on mix alone. For the fourth quarter is roughly about $2 million of EBITDA versus where we were in the prior midpoint.

Rohit Seth (Senior Research Analyst)

Okay. All right. All right, great. I'll pass it on. Thank you for taking my question.

Santiago Giraldo (CFO)

All right. Thank you.

Operator (participant)

Thank you. Our next question comes from the line of Brent Peelman with D.A. Davidson. Please go ahead.

Brent Thielman (Equity Research Analyst)

Hey, great. Thanks. Just coming back to the sort of the short cycle commercial work that's maybe pushed some revenue out or delayed revenue, however you want to frame it. I mean, what has sort of, in your view, kind of changed in the last few months that's influenced that? I guess as a follow-up question, the backlog continues to grow here. Maybe what you see across the country in terms of high-end space, is the market getting better? Is the backlog growth purely an influence of you taking share? If you could comment on those two things, that'd be great.

Santiago Giraldo (CFO)

I think that the input costs that we're mentioning here are playing a part in many other segments in the construction industry, right? When you have light commercial construction, depending on those input costs, it's probably prudent to kind of push off some of those projects until things normalize. I think in what you have seen, we talked about LME going up 15% in 90 days, and U.S. aluminum premiums up 65% in the same time period. That's translated into other things, right? For somebody that is putting in place a smaller project where they don't have necessarily financial closings of people that have already bought condos, for instance, that's a different story. It's a different proposition. It's a matter of timing and having things normalized. At some point, there's going to be some type of correction.

I think that's what's playing a part there. On your second question, can you repeat? I think José is going to address that.

Brent Thielman (Equity Research Analyst)

Maybe just the back, I mean, look, the backlog is growing at the same time here. Is the market for high-end space getting better in the U.S.? Is this that you're capturing more share, new regions? Just discussion there.

José Manuel Daes (CEO)

We are expanding geographically. For example, before, we did not have any work in the Tampa, St. Petersburg area. Now we have a lot of work there. We have work in Jacksonville. We have three buildings where we never had any, and we keep quoting. We have a lot of work in the Panhandle area, and that is only in Florida. Now we see a resurgence in the Boston, New York area. Also, we are quoting directly with the GM&P brand, which is the installation brand, in Texas, California, and even Hawaii. We are not just relying on Florida anymore. We are expanding Florida, South Florida, to all over the state, and we are expanding outside the state with really good results.

Brent Thielman (Equity Research Analyst)

Okay. And then maybe one more follow-up on the single-family product line. When you look outside of Florida, where do you see these different geographies you're targeting, where are you getting the most traction? Where are you getting a lot of momentum building? There's Texas, East Coast, West Coast.

José Manuel Daes (CEO)

All over the East Coast is growing with the new line. We see most of the growth is West. Texas, Arizona, Nevada, California, Utah, even Hawaii. I mean, we sold last year in Hawaii. Around. I do not know exactly, but we are going to end up invoicing this year like $6 million-$10 million. We hope to do $20 million or $30 million next year.

Brent Thielman (Equity Research Analyst)

Yeah. Okay. Thank you.

Operator (participant)

Thank you. Our next question comes from the line of Julia Romero with Sidoti & Company. Please go ahead.

Thanks. Hey, good morning. José Manuel, Christian, Santiago.

Santiago Giraldo (CFO)

Good morning.

José Manuel Daes (CEO)

Morning.

Julio Romero (Equity Analyst)

Appreciate the preliminary revenue expectation for 2026 and understand we'll get more color to come on the puts and takes there. Any preliminary thoughts on how we should think about capital allocation? I know you have the automated plan in Florida that you're currently weighing. Just trying to think about how you're thinking about capital expenditures and your recently upped share repurchase. How would you have us think about that?

Santiago Giraldo (CFO)

On CapEx, as we had mentioned before, it's trending down. We're talking about core growth CapEx, not talking about the potential to do the U.S. plant, which is still early in the process. The CapEx is going to trend down. Utilized capacity still allows us to grow well into double digits for the next couple of years. You saw what we did in terms of buybacks last quarter and in terms of the board action to increase that program. I think that's definitely a good use of capital. Going forward as we continue to generate free cash flow. The dividend continues to be there. That's another way to return capital to shareholders, obviously. We have very little debt. We continue to expect to be in a net cash position for the foreseeable future.

I think it'll be finding opportunities to continue reinvesting in the business. If the backlog continues growing or, as José mentioned, the opportunities on single-family residential materialize and we grow significantly over the next year, then at some point, we'll have to just reinvest in growth. Immediately, I think doing something on the buyback front makes sense, as you saw from the board's actions. Waiting to see what happens with the general conditions of the market.

Julio Romero (Equity Analyst)

Very helpful there. Then on single-family, I know we talked about vinyl and we talked about showrooms, but wanted to get a progress update on MultiMax, how that's doing at the moment. A lot of the home builders have been rather pessimistic, expressing that a rebound isn't likely in the near term. We'll be curious to how you're thinking about that product line and the outlook at the moment.

José Manuel Daes (CEO)

MultiMax is doing much better this year, even though the new housings have dropped a little bit for every builder. Because we gained a couple of very nice accounts, we now are selling to three more home builders, and we expect to take one or two more within the next six months. That line is doing well. Most of the growth next year, particularly, is going to come from the new lines that we are launching, complete by the end of the year, to the other markets, to Texas, California, Arizona, Nevada, Utah. I mean, those lines, even though they're not complete, we are already selling in those states, and people are really, really happy and enthusiastic. They can't wait to buy a lot more. We're really excited about those lines.

Julio Romero (Equity Analyst)

Great. Thanks, José Manuel. Best of luck in the fourth quarter.

José Manuel Daes (CEO)

Okay. Thank you.

Operator (participant)

Thank you. This concludes our question-and-answer session. I would like to turn the conference back over to José Manuel Daes for closing remarks.

José Manuel Daes (CEO)

Thanks, everyone, for participating on today's call. We hope to keep growing double digits. Please keep tight for better news.

Operator (participant)

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.