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Tecnoglass Inc. (TGLS)·Q2 2025 Earnings Summary

Executive Summary

  • Record Q2 results: revenue $255.546M (+16.3% YoY), adjusted EPS $1.03, and adjusted EBITDA $79.779M; gross margin expanded 400 bps to 44.7% on pricing, mix, and operating leverage .
  • Clear beat vs consensus on revenue and adjusted EPS: $255.5M vs $246.6M and $1.03 vs $0.958, helped by strong residential demand, pricing actions, and continued share gains; guidance raised at the low end for FY25 revenues and narrowed for EBITDA .
  • Residential remained a core engine (SFR revenue $109.6M, +14.5% YoY; SFR orders +29% QoQ), while multi-family/commercial grew 17.8% YoY; backlog reached a record $1.2B (+17.2% YoY) .
  • Tariff headwinds were mitigated by supply chain shifts and price increases (5–7% in residential); SG&A rose on ~$5.9M aluminum tariffs in April and higher transport and personnel, but margins still expanded .
  • Stock-reaction catalysts: reinforced FY25 outlook (revenue $980M–$1.02B; adj. EBITDA $310M–$325M), record backlog visibility into 2026, California showroom ramp for “Legacy” aluminum, and feasibility study for a fully automated Florida plant .

What Went Well and What Went Wrong

  • What Went Well

    • Record revenue and margin expansion: $255.546M revenue (+16.3% YoY) and 44.7% gross margin (+400 bps YoY) on pricing, mix, and operating leverage .
    • Strong order momentum and backlog: SFR orders +29% sequentially; record backlog $1.2B (+17.2% YoY) with visibility into 2026; book-to-bill ~1.2x and “virtually no project cancellations” .
    • Pricing/tariff mitigation: Residential price increases (5–7%) and supply-chain shifts to U.S.-sourced aluminum are offsetting tariff impacts; management expects less tariff impact going forward .
    • Management quote: “Our ability to consistently generate robust growth and share gains while significantly expanding margins demonstrates the power of our vertically integrated platform.” — CEO José Manuel Daes .

  • What Went Wrong

    • SG&A deleverage: SG&A rose to $53.1M (20.8% of revenue) vs 17.5% LY on ~$5.9M aluminum tariffs in April, higher transport, and salary increases .
    • Some residential order pull-forward: Company estimates $5–$7M of residential orders were pulled forward from Q3 into Q2 ahead of tariff-related pricing adjustments, implying some Q3 revenue timing effects .
    • JV contribution down YoY: Adjusted EBITDA included $0.5M contribution from the Saint-Gobain JV vs $1.4M LY .

Financial Results

Core P&L and Margins (chronological: oldest → newest)

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Revenue ($USD Millions)219.654 239.573 222.288 255.546
GAAP Diluted EPS ($)0.75 1.00 0.90 0.94
Adjusted Diluted EPS ($)0.86 1.05 0.92 1.03
Gross Margin %40.8% 44.5% 43.9% 44.7%
Adjusted EBITDA ($USD Millions)64.092 79.241 70.200 79.779
Adjusted EBITDA Margin %29.2% 33.1% 31.6% 31.2%

Q2 2025 vs Wall Street Consensus (S&P Global)

MetricActual Q2 2025Consensus*Beat/Miss
Revenue ($USD Millions)255.546 246.603*Beat
Adjusted/Primary EPS ($)1.03 0.958*Beat

*Values retrieved from S&P Global.

Segment and Mix (Q2 2025)

Segment / KPIQ2 2025YoY
Single-Family Residential Revenue ($USD Millions)109.6 +14.5%
Multi-Family/Commercial Revenue ($USD Millions)145.9 +17.8%
SFR Orders (QoQ)+29% —
U.S. Revenue ($USD Millions)242.205 +15.5%

Cash Flow, Balance Sheet, and Other KPIs (Q2 2025)

KPIQ2 2025
Operating Cash Flow ($USD Millions)17.862
Free Cash Flow ($USD Millions)0.474
Capex ($USD Millions)32.516 (incl. $15.127M CGS asset component)
Total Liquidity ($USD Millions)~310
Cash and Cash Equivalents ($USD Millions)137.907
Total Debt ($USD Millions)109.2
Backlog ($USD Billions)1.2 (+17.2% YoY)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$960M–$1.02B $980M–$1.02B Raised low end
Adjusted EBITDAFY 2025$305M–$330M $310M–$325M Narrowed (midpoint maintained ~+15% growth)
CapexFY 2025Not disclosed$65M–$75M Introduced range
Tariff/Input Cost AssumptionFY 2025~$25M headwind pre‑mitigation ~$25M headwind; offset by pricing/mitigation Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
Pricing/Tariffs2025 outlook assumed tariffs largely offset via sourcing/pricing ; Q1 noted $4.7M tariffs, price actions from May/June 5–7% residential price increases; ~$5.9M aluminum tariffs in April; supply chain shift to U.S.-sourced aluminum; expect reduced tariff impact going forward Mitigation progressing; full impact of price increases to flow in H2
Residential MomentumQ4: record SFR; Q1: SFR +21.6% YoY, 5–6 week lead times SFR revenue $109.6M (+14.5% YoY); SFR orders +29% QoQ; July described as highest revenue month to date Strong and accelerating into H2
Backlog/CommercialQ4: record $1.1B ;Record $1.2B (+17.2% YoY); ~1.2x book-to-bill; minimal cancellations; commercial ramp may mix down margins via installs Visibility extended into 2026
Geographic ExpansionQ4: expanding Vinyl, showrooms California showroom lease for “Legacy” aluminum; dealers +15–20% YTD; expansion to new U.S. cities (e.g., Nashville, Austin, Dallas, Houston) Broadening footprint
Manufacturing/AutomationQ4: feasibility to develop U.S. automated capacity Florida plant feasibility narrowed to two locations; target “fully automated” to support growth, lead-times, and logistics Execution steps advancing
Regulatory/Legal2024 tariffs/ITC reference Tariffs addressed via pricing/sourcing ; post-Q2: defamation suit filed 9/10/25 (reputation defense) Tariff risk managed; legal response underway

Management Commentary

  • “Our ability to consistently generate robust growth and share gains while significantly expanding margins demonstrates the power of our vertically integrated platform.” — CEO José Manuel Daes .
  • “Our backlog grew to a record $1.2 billion, providing visibility into our multi-family and commercial project pipeline extending well into 2026.” — COO Christian Daes .
  • “We now expect revenues to be in the range of $980 million to $1.02 billion... and are narrowing our Adjusted EBITDA guidance to $310 million to $325 million.” — CFO Santiago Giraldo .
  • On tariff mitigation and pricing: “We’re beginning to see the benefits of our strategic supply chain diversification... pricing model with margins starting to strengthen toward June...” .

Q&A Highlights

  • Residential order pull-forward: Management estimates $5–$7M acceleration in residential orders into Q2 ahead of tariff-related price adjustments; most of the impact expected to affect Q3 timing .
  • Pricing power vs peers: Residential price increases of ~5–7% (in line to low end vs peers); new commercial jobs signing at new prices (timing benefits for light commercial) .
  • Margin cadence: Gross margins modeled “in line with year-to-date” at guidance midpoint; commercial ramp could present mix headwinds from higher installation revenues, offset by full-quarter price increases .
  • July update: Management cited July as the highest revenue month in company history, with strong ongoing order trends into Q3 .
  • U.S. plant: Early-stage but progressing; goal is high automation and EBITDA profile close to Colombia production economics .
  • Dealer and geographic expansion: Dealers up ~15–20% since year-end; expanding into additional U.S. markets beyond Florida .

Estimates Context

  • Q2 2025 vs consensus: Revenue $255.546M vs $246.603M* (beat); Adjusted/Primary EPS $1.03 vs $0.958* (beat). Drivers: robust SFR demand, price increases (5–7%), geographic expansion, and commercial momentum; incremental contribution from Continental Glass asset acquisition .
  • Prior quarter (Q1 2025) also exceeded revenue ($222.288M vs $213.275M*) and EPS ($0.92 vs $0.82*), reinforcing positive estimate revisions bias .
  • FY 2025 consensus revenue $979.213M* aligns with new guidance range ($980M–$1.02B); Street EPS $3.796* implies continued margin strength consistent with low-to-mid 40% gross margin commentary .

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Pricing and mix are offsetting tariff headwinds, enabling margin expansion even with SG&A inflation; full benefit of May pricing to flow through H2 .
  • Backlog at $1.2B (+17.2% YoY) and ~1.2x book-to-bill provides multi-quarter visibility; commercial ramp supports revenue trajectory albeit with some install mix headwind to margins .
  • SFR demand remains resilient with +29% QoQ orders and rapid lead times; July set a revenue record, supporting a strong Q3 setup .
  • FY25 guidance raised at the low end for revenue and narrowed for EBITDA, signaling confidence despite macro and input cost uncertainty .
  • Strategic initiatives (California showroom, U.S. automation feasibility, Continental Glass acquisition) expand footprint and optionality for capacity and logistics advantages .
  • Near-term trading lens: narrative skewed positive on estimate beats, raised outlook, and order momentum; watch Q3 for any residual effect from Q2 order pull-forward and the margin impact of higher install mix .

Appendix: Additional Data Points

  • Regional revenue (Q2 2025): U.S. $242.205M (+15.5% YoY), Colombia $6.620M (+13.5% YoY), Other $6.722M (+62.9% YoY) .
  • Liquidity: ~$310M total; cash $137.9M; total debt $109.2M; dividends paid $7.0M in Q2; $76.5M remaining under repurchase authorization as of 8/7/25 .
  • Non-GAAP reconciliation: Adjusted net income $48.5M ($1.03 per diluted share) excludes FX and other non-core items; adjusted EBITDA $79.779M .