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Tecnoglass Inc. (TGLS)·Q1 2025 Earnings Summary

Executive Summary

  • Record Q1 revenue of $222.3M (+15.4% YoY) and gross margin of 43.9% (+510 bps YoY), with double‑digit organic growth across residential (+21.6% YoY to $88.9M) and multi‑family/commercial (+11.6% YoY); Adjusted EBITDA rose 37.5% YoY to $70.2M (31.6% margin) .
  • Beat S&P Global consensus on both revenue and EPS: $222.3M vs $213.3M* and $0.92 adj. EPS vs $0.82*; GAAP diluted EPS $0.90 . Values with asterisk from S&P Global.
  • Guidance raised at the low end for FY25 revenue ($960M–$1.02B from $940M–$1.02B) and narrowed for adj. EBITDA ($305M–$330M from $300M–$340M); FY25 CapEx trimmed to $45M–$55M from $65M–$70M, reflecting efficiency and timing .
  • Strategic catalysts: record backlog $1.14B (+24.9% YoY), U.S. footprint expansion via Continental Glass Systems (approx. $30M annualized revenue) and feasibility work on a fully automated U.S. plant; tariff headwinds (~$25M for 2025) expected to be offset by May 1 pricing actions, supply chain shifts, and COP hedges (>4,400 per USD) .

What Went Well and What Went Wrong

  • What Went Well

    • Strong topline and profitability: revenue +15.4% YoY to $222.3M, gross margin +510 bps YoY to 43.9%, adj. EBITDA +37.5% YoY to $70.2M (31.6% margin) .
    • Residential share gains and product traction: single‑family revenue hit a Q1 record at $88.9M (+21.6% YoY), driven by expanded geographies and vinyl line progress; management: “delivered double‑digit growth across both … significantly outperforming broader macro trends.” .
    • Balance sheet/cash flow: record cash $157.3M; Q1 operating cash flow $46.9M and FCF $28.8M; total liquidity ≈$330M; $76.5M remaining on buyback, $7.0M dividends paid in Q1 .
    • Positive tone on backlog and order momentum: record multi‑year backlog $1.14B; residential orders up ~17% Y/Y into Q2; book‑to‑bill 1.2x and 17 straight quarters ≥1.1x .

  • What Went Wrong

    • SG&A deleverage from tariff costs and growth: SG&A $42.5M (19.1% of revenue) vs $33.6M (17.5%) a year ago, including $4.7M of tariff expense; management expects mitigation starting May/June from pricing and supply changes .
    • Tariff and macro uncertainty: management estimates ~$(25)M 2025 gross impact from aluminum tariffs before mitigation; acknowledged potential demand impacts if macro weakens .
    • Vinyl ramp behind early hopes: management said the vinyl business is ramping but “has been a challenge… we didn't know the business well,” targeting broader completion of the product set by year‑end to catalyze 2026 .

Financial Results

Overall P&L and margins (oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($M)238.3 239.6 222.3
GAAP Diluted EPS ($)1.05 1.00 0.90
Adjusted EPS ($)1.08 1.05 0.92
Gross Margin (%)45.8% 44.5% 43.9%
Adjusted EBITDA ($M)81.4 79.2 70.2
Adjusted EBITDA Margin (%)34.2% 33.1% 31.6%

Q1 YoY (vs Q1 2024)

MetricQ1 2024Q1 2025Commentary
Revenue ($M)192.6 222.3 +15.4% YoY
GAAP Diluted EPS ($)0.63 0.90 —
Adjusted EPS ($)0.66 0.92 —
Gross Margin (%)38.8% 43.9% +510 bps YoY
Adjusted EBITDA ($M)51.0 70.2 +37.5% YoY

Versus S&P Global consensus (Q1 2025)

MetricActualConsensus*
Revenue ($M)222.3 213.3*
Primary EPS ($)0.90 GAAP / 0.92 Adj. 0.82*

Values with asterisk retrieved from S&P Global.

Segment revenue (where disclosed)

Segment ($M)Q3 2024Q1 2025
Single‑Family Residential109.7 88.9
Multi‑Family/Commercial128.6 133.4

KPIs and balance sheet (oldest → newest)

KPIQ3 2024Q4 2024Q1 2025
Backlog ($B)1.04 1.10 1.14
Cash & Equivalents ($M)122.1 134.9 157.3
Total Liquidity ($M)~290 ~305 ~330
Operating Cash Flow ($M)41.5 61.1 (quarterly record) 46.9
Free Cash Flow ($M)——28.8

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$940M–$1.02B $960M–$1.02B Raised low end
Adjusted EBITDAFY 2025$300M–$340M $305M–$330M Narrowed (centered)
CapExFY 2025$65M–$70M $45M–$55M Lowered
DividendQ1 2025$0.15/sh announced (36% increase from prior rate) $0.15/sh payable Apr 30, 2025 Maintained
Tariff impact (pre‑mitigation)FY 2025Not specified≈$25M New detail
Assumptions/LeversFY 2025Low‑to‑mid 40% GM, stable COP Pricing (effective May 1), supply chain shifts, COP hedges; Continental breakeven EBITDA Updated actions

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 & Q4 2024)Current Period (Q1 2025)Trend
Tariffs & pricingPassed through select aluminum tariffs; later reversed by ITC (Q3); monitoring broader tariff risks; no price increase yet as of Q4 Pricing adjustments effective May 1; ~$(25)M 2025 gross impact to be largely mitigated by pricing, supply shift, COP hedges; minimal EBIT impact expected Proactive mitigation accelerating
FX/hedgingFX stability aiding margins into Q4; outlook mid‑40s GM possible Hedged large portion of COP exposure at >4,400/USD (~9% better YoY) Tailwind
U.S. footprint/ManufacturingConsidering organic growth and tuck‑ins; automation investments; capacity at 65‑70% (Q4) Acquired Continental Glass Systems (~$30M annualized rev); plan to diversify production into U.S.; evaluating fully automated U.S. vertical operation (5–7 years) Expansion intensifying
Vinyl window rampInitial ramp in H2’24; expected to contribute in 2025 ($15–$40M framework) Ramp ongoing but slower learning curve; fuller line by YE to support 2026 step‑up Gradual, 2H biased
Backlog/book‑to‑billRecord $1.04B (Q3) and $1.1B (Q4); 16 quarters ≥1.1x Record $1.14B; book‑to‑bill ~1.2x; 17th consecutive ≥1.1x; ~2/3 invoiced over next 12 months Sustained strength
Geographic diversificationExpanding showrooms; traction outside FL; single‑family growth across Southeast Orders and backlog broadening: East Coast, Texas, West Coast; new AZ showroom; Florida condo R&R opportunity Broadening

Management Commentary

  • “We delivered double‑digit growth across both our residential and multi‑family/commercial businesses, significantly outperforming broader macroeconomic trends.” – CEO José Manuel Daes .
  • “The incremental cost of tariffs for the remainder of 2025 are expected to be more than offset by our disciplined pricing strategy, redistribution of supply chains and other countermeasures.” – COO Christian Daes .
  • “We are raising the low end of our previously provided full year revenue outlook… $960 million to $1.02 billion… narrowing our Adjusted EBITDA outlook to $305 million to $330 million.” – CFO Santiago Giraldo .
  • “We have also implemented pricing adjustments effective as of May 1… we anticipate that the full calendar year 2025 tariff impact of approximately $25 million will be largely mitigated.” – CFO Santiago Giraldo .
  • “We… completed the acquisition of … Continental… diversifies our production footprint into the United States… and creates additional synergies across our operations.” – CEO José Manuel Daes .

Q&A Highlights

  • Industry/tariff exposure and competitive positioning: Management emphasized most competitors also import aluminum; tariffs likely an “even playing field,” with costs passed through; TGLS benefits from U.S. raw materials and vertical integration .
  • Continental rationale and long‑term U.S. build‑out: Continental adds U.S. manufacturing capacity (~$10M/month potential throughput) and strong condo R&R niche; integration expected to align with group margins over time; longer‑term plan to build fully automated U.S. operation over 5–7 years (foundry → extrusion → glass → windows) .
  • Residential growth mix and vinyl cadence: Legacy Florida expected mid‑ to high‑single digit growth for FY25; vinyl contribution reduced at high end of guide near‑term given product set completion timing; broader ramp anticipated into 2026 .
  • Demand/backlog breadth: Backlog and orders diversifying beyond Florida into East Coast, Texas, West Coast; residential orders +17% YoY through early Q2 .
  • Cash flow and CapEx: Seasonality expected to reduce Q2 operating cash flow (tax timing, working capital for growth), but CapEx to drop significantly through 2025, supporting strong FCF; FY25 CapEx now $45–$55M .

Estimates Context

  • Q1 2025 results exceeded S&P Global consensus on both revenue and EPS: $222.3M vs $213.3M* revenue and $0.92 adj. EPS vs $0.82*; GAAP diluted EPS was $0.90 . Values with asterisk retrieved from S&P Global.
  • Estimate implications: Strong Q1 print, raised low‑end revenue guide, narrowed EBITDA guide, and tariff mitigation detail likely drive upward revisions to FY25 revenue (particularly residential) and maintain EBITDA margin confidence amid lower CapEx .

Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

  • Broad‑based strength with share gains: double‑digit organic growth across both end‑markets, margin expansion, and a record backlog de‑risk FY25 revenue trajectory .
  • Guidance quality improved: revenue range lifted at the low end, EBITDA narrowed, and CapEx reduced—supportive of FCF and return of capital (Q1 dividend paid; $76.5M buyback capacity) .
  • Tariff management credible: pricing effective May 1, supply chain adjustments, and COP hedges underpin management’s expectation to largely offset ~$25M tariff headwinds, preserving operating profit .
  • Structural U.S. expansion: Continental accelerates U.S. manufacturing presence and opens R&R condo channel; feasibility underway for automated U.S. plant—multi‑year margin and logistics benefits .
  • Residential momentum into Q2 and beyond: order growth, geographic expansion, and product innovation (vinyl, pivot doors) sustain the thesis; vinyl becomes a larger 2026 lever as the line completes .
  • Watch items: SG&A mix (commissions/transport), timing of price realization vs tariff costs, and vinyl ramp cadence; management expects tariff mitigation to be in full effect by May/June .
  • Setup: The combination of raised revenue floor, backlog strength, tangible mitigation levers, and lowered CapEx supports upward bias to FY25 FCF and sustained premium margin profile.

Additional Details and Sources

  • Q1 2025 press release: revenue/margins/segments, backlog, cash/liquidity, guidance and non‑GAAP reconciliations .
  • Q1 2025 8‑K (Item 2.02) attaching release; confirms updated guidance and financials .
  • Q1 2025 earnings call: strategy, tariffs/pricing/hedges, Continental acquisition, capex outlook, demand trends .
  • Prior quarters for trend: Q4 2024 release and call (record year, FY25 initial guide), Q3 2024 release/call (record quarter, dividend hike, backlog momentum) .

Values with asterisk retrieved from S&P Global.