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Tecnoglass Inc. (TGLS)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered a quarterly record: revenue $239.6M (+23.1% y/y), diluted EPS $1.00, gross margin 44.5%, and adjusted EBITDA $79.2M (33.1% margin) .
  • Backlog reached an all-time high $1.1B (book-to-bill 1.3x), with management emphasizing visibility well into 2026 and strong single-family momentum entering Q1 2025 .
  • 2025 outlook introduced: revenue $940M–$1.02B (≈10% growth mid-point), adjusted EBITDA $300M–$340M; assumptions include COP at/above 4,200 for higher-end margins, vinyl revenue $15M–$40M, and capex $65M–$70M .
  • Key catalysts: tariff headline risk (proposed 25% U.S. aluminum import tariff) with mitigation via U.S.-sourced aluminum and potential pricing actions; dividend raised 36% to $0.15 (annualized $0.60), net cash at year-end supporting buybacks ($76.5M capacity remaining) .

What Went Well and What Went Wrong

What Went Well

  • Record Q4 revenue and margin expansion driven by both single-family and commercial demand; adjusted EBITDA +27.9% y/y with margin 33.1% .
    Quote: “Total revenues for the fourth quarter … increased 23.1% to a quarterly record of $239.6 million … adjusted EBITDA … $79.2 million … 33.1%” .
  • Backlog strength and visibility: all-time high $1.1B; 31st consecutive quarter of y/y backlog growth; book-to-bill 1.3x; ~2/3 backlog typically converts within 12 months .
    Quote: “Our backlog reached an all-time high of $1.1 billion … book-to-bill … 1.3x … approximately 2/3 … converting to revenue within the next 12 months” .
  • Strategic momentum: vinyl ramp beginning (Q4 single-family $93.5M), showroom expansion (CA/AZ), strong bidding/quoting; record operating cash flow $170.5M for 2024 and $61.1M in Q4 .

What Went Wrong

  • SG&A rose to $39.4M in Q4 on transport/commissions and salary adjustments; 2024 SG&A 17.2% of revenue vs 15.7% prior year .
  • Macro/FX headwinds: unfavorable FX earlier in 2024 pressured margins; COP wage increase of 9% expected to weigh on margins, partly offset by leverage/efficiency .
  • Tariff risk: proposed 25% U.S. aluminum tariff could affect ~$25M of annual aluminum component costs; mitigation planned via U.S. sourcing and pricing actions, but creates uncertainty .

Financial Results

Core P&L Metrics (Trend: Q2 → Q3 → Q4 2024)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$219.7 $238.3 $239.6
Diluted EPS ($)$0.75 $1.05 $1.00
Gross Margin (%)40.8% 45.8% 44.5%
Adjusted EBITDA ($USD Millions)$64.1 $81.4 $79.2
Adjusted EBITDA Margin (%)29.2% 34.2% 33.1%
SG&A ($USD Millions)$38.4 $41.5 $39.4

End-Market/Operational KPIs

KPIQ2 2024Q3 2024Q4 2024
Single-Family Residential Revenue ($USD Millions)$95.7 $109.7 $93.5
Backlog ($USD Billions)$1.02 $1.04 $1.10
Book-to-Bill (x)1.5x 1.1x 1.3x
Operating Cash Flow ($USD Millions)$34.5 $41.5 $61.1
SG&A as % of Revenue (%)17.5% 17.4% 16.4%

Revenue by Region

RegionQ2 2024 ($M)Q3 2024 ($M)Q4 2024 ($M)
United States$209.7 $228.2 $228.0
Colombia$5.8 $5.5 $8.5
Other Countries$4.1 $4.7 $3.1
Total$219.7 $238.3 $239.6

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Billions)FY 2025N/A$0.94 – $1.02 Introduced
Adjusted EBITDA ($USD Millions)FY 2025N/A$300 – $340 Introduced
Gross Margin (%)FY 2025N/ALow–mid 40s; mid–high 40s at high-end case Introduced
Vinyl Revenue ($USD Millions)FY 2025N/A~$15 (low-end) to ~$40 (high-end) Introduced
COP FX AssumptionFY 2025N/AHigh-end assumes COP ≥ 4,200 Introduced
Capex ($USD Millions)FY 2025N/A$65 – $70 Introduced
Free Cash FlowFY 2025N/A“Another strong year” (qualitative) Introduced
SG&A LeverageFY 2025N/AExpect fixed-cost leverage to offset wage increases Introduced
Dividend (per quarter)Q4 2024 onward$0.11$0.15 (+36%) Raised
FY 2024 Revenue ($USD Billions)FY 2024$0.88 – $0.90 $0.890 (actual) Achieved (mid/high end)
FY 2024 Adj. EBITDA ($USD Millions)FY 2024$270 – $280 $275.8 (actual) Achieved (midpoint)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Aluminum tariffs/macroHedged aluminum, competitors raising prices; FX headwinds ITC reversed specific aluminum tariffs; pass-through workable Monitoring proposed 25% U.S. tariffs; U.S. sourcing and pricing to mitigate; ~$25M potential impact Elevated risk, managed mitigation
Vinyl windows rampQuoting strong; shipments begin; 2H’24 ~$20M target Full line completeness coming; 2025 meaningful contributor 2025 vinyl revenues $15–$40M; expect growth; potential doubling vs last year Accelerating from low base
Capacity/automationTargeted capacity increases for 2025–2026 demand Efficiency investments; strong margins Running ~65–70% capacity; buying automation to produce more with less Ongoing efficiency gains
Supply chain/ports—Port strike risk manageable; alternative ports/inventory buffer Alternative U.S. aluminum supply; FX/pricing dynamics Neutral-to-positive mitigations
Backlog & conversionBacklog ≈ $1.0B; book-to-bill 1.5x Backlog $1.04B; 1.1x book-to-bill; 60–65% 12-month conversion Backlog $1.1B; 1.3x book-to-bill; ~2/3 converts in 12 months Rising backlog, solid visibility
PricingStable pricing; competitors increasing due to tariffs Tariff costs passed through No price increases yet; waiting on tariff outcome; likely pass-through; favorable pricing environment expected Likely upward bias if tariffs

Management Commentary

  • Strategic positioning: “Our record revenues … demonstrate our consistent track record of gaining market share while maintaining operational excellence … vertically integrated business model” .
  • Backlog visibility: “Backlog reached an all-time high of $1.1 billion … strong momentum in quoting and bidding … well positioned for continued growth in 2025” .
  • Profit drivers: “Adjusted EBITDA for Q4 2024 increased 27.9% y/y to $79.2M … gross margin 44.5%, up from 42.6%” .
  • Tariff stance: “We have taken steps … securing alternative sources of aluminum from U.S. suppliers … expect a more favorable pricing environment” .
  • 2025 framework: “Revenue $940M–$1.02B … adjusted EBITDA $300M–$340M … gross margins mid–high 40s at high end … capex $65–$70M” .

Q&A Highlights

  • Vinyl cadence: Management expects vinyl revenues to “keep growing” and potentially “double what we did last year,” with a $15–$40M range in 2025 .
  • Capacity and automation: Current utilization ~65–70%; adding automation to increase output while maintaining 4–5 week lead times .
  • Single-family momentum: Early 2025 in single-family “has been extraordinary,” with growth vs Dec and Jan 2024 .
  • Light commercial mix: Monthly light commercial revenues ~$10–$12M, implying ~$125–$150M per year (≈20–25% of total commercial) .
  • Tariff impact sizing: Rough math suggests ~$25M annual impact on aluminum components; plan to counter via pricing and U.S. sourcing; peers likely similarly affected .

Estimates Context

  • Wall Street consensus (S&P Global/Capital IQ) was not accessible at the time of analysis due to data vendor limitations. As a result, a direct comparison of Q4 2024 actuals vs consensus EPS and revenue is unavailable. Values that would normally be sourced from S&P Global are therefore omitted.

Key Takeaways for Investors

  • Backlog-led visibility supports 2025 growth; conversion (~2/3 within 12 months) plus strong single-family momentum underpins the revenue outlook .
  • Margin resilience: Q4 gross margin 44.5% and adjusted EBITDA margin 33.1% reflect pricing power, stable raw material costs, and operating leverage; FX improvements vs early 2024 are constructive .
  • Tariff watch: Proposed 25% aluminum tariff could be a near-term headline risk; TGLS plans U.S. sourcing and pass-through pricing; monitor tariff decisions and competitors’ pricing moves .
  • Vinyl optionality: 2025 vinyl revenues targeted at $15–$40M; successful ramp would expand addressable market and diversify revenue mix .
  • Capital allocation: Record operating cash flow ($61.1M Q4; $170.5M FY), net cash at year-end, dividend up 36% to $0.15, and ~$76.5M buyback capacity position TGLS to support returns while funding growth .
  • SG&A leverage: Expect fixed-cost leverage to offset mandated wage increases; watch installation mix in Florida for potential margin pressure .
  • Trading implications: Stock likely sensitive to tariff headlines and FX (COP) levels; positive catalysts include vinyl order flow, showroom expansion (CA/AZ), and light commercial stability .

Appendix: Additional Full-Year 2024 Metrics

MetricFY 2024
Revenue ($USD Millions)$890.2
Net Income ($USD Millions)$161.3
Diluted EPS ($)$3.43
Adjusted Net Income ($USD Millions)$171.6
Adjusted EBITDA ($USD Millions)$275.8
Gross Profit ($USD Millions)$380.0
Cash from Operations ($USD Millions)$170.5
Capex ($USD Millions)$79.6

Notes: All figures are GAAP unless explicitly noted as adjusted/non-GAAP. Adjusted metrics reconcile to GAAP in company tables .