Tecnoglass(TGLS) - 2025 Q2 - Quarterly Results

Tecnoglass Q2 2025 Earnings Release Financial & Operational Highlights Tecnoglass achieved record Q2 2025 results, with $255.5 million revenue, 44.7% gross margin, $79.8 million Adjusted EBITDA, and a $1.2 billion backlog Key Financial & Operational Metrics | Metric | Q2 2025 Value | Year-over-Year Change | | :--- | :--- | :--- | | Total Revenue | $255.5 Million | +16.3% | | Single-Family Residential Revenue | $109.6 Million | +14.5% | | Gross Margin | 44.7% | +400 bps | | Net Income | $44.1 Million | - | | Adjusted Net Income | $48.5 Million | - | | Adjusted EBITDA | $79.8 Million | +24.5% | | Adjusted EBITDA Margin | 31.2% | - | | Backlog | $1.2 Billion | +17.2% | - Strategic operational highlights include the completion of the Continental Glass Systems asset acquisition to diversify production into the U.S., signing a lease for a West Coast showroom to promote the new "Legacy" aluminum product line, and continuing a feasibility study for a new automated facility in Florida[2] Management Commentary Management attributed record quarterly performance to the vertically integrated platform, successful pricing, and strategic diversification, with a $1.2 billion backlog providing visibility into 2026 - CEO José Manuel Daes emphasized that the company's vertically integrated platform, successful pricing, and the Continental Glass acquisition are key drivers of growth and margin expansion[4] - COO Christian Daes noted that the record $1.2 billion backlog provides project visibility well into 2026, supported by a solid uptick in single-family residential orders and an expanding geographic footprint, including a new California showroom[4] Detailed Financial Performance (Q2 2025) Q2 2025 saw record revenue of $255.5 million (+16.3% YoY), gross margin improvement to 44.7%, and Adjusted EBITDA growth of 24.5% to $79.8 million Revenue Analysis Total revenues for Q2 2025 reached a record $255.5 million, increasing 16.3% YoY, driven by strong growth in both multi-family/commercial and single-family residential segments Revenue Breakdown by Segment | Revenue Segment | Q2 2025 Revenue | YoY Growth | | :--- | :--- | :--- | | Total Revenues | $255.5 Million | +16.3% | | Multi-family/Commercial | - | +17.8% | | Single-family Residential | - | +14.5% | - A portion of the single-family residential growth was attributed to customers accelerating orders ahead of anticipated tariff-related price adjustments[5] Profitability Analysis Gross margin expanded by 400 basis points to 44.7% in Q2 2025, contributing to a 24.5% increase in Adjusted EBITDA to $79.8 million despite higher SG&A Key Profitability Metrics | Profitability Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Gross Profit | $114.3 Million | $89.6 Million | | Gross Margin | 44.7% | 40.8% | | Net Income | $44.1 Million | $35.0 Million | | Diluted EPS | $0.94 | $0.75 | | Adjusted Net Income | $48.5 Million | $40.5 Million | | Adjusted Diluted EPS | $1.03 | $0.86 | | Adjusted EBITDA | $79.8 Million | $64.1 Million | | Adjusted EBITDA Margin | 31.2% | 29.2% | - SG&A expenses increased mainly due to $5.9 million in aluminum tariffs paid in April and higher transportation and personnel expenses, partially offset by late-quarter price adjustments[7] Cash Flow, Capital Allocation & Liquidity Tecnoglass generated $17.9 million in operating cash flow, invested $32.5 million in capex (including Continental Glass), and maintained strong liquidity of $310 million Cash Flow & Liquidity Summary | Metric | Q2 2025 Value | | :--- | :--- | | Cash from Operating Activities | $17.9 Million | | Capital Expenditures | $32.5 Million | | Cash Dividends Paid | $7.0 Million | | Total Liquidity (End of Q2) | $310 Million | | Cash and Cash Equivalents | $137.9 Million | | Total Debt | $109.2 Million | - The company has approximately $76.5 million remaining under its current share repurchase program as of August 7, 2025[12] Strategic Initiatives & Corporate Developments Tecnoglass is pursuing strategic growth through the Continental Glass Systems acquisition and advancing U.S. expansion with a new Florida facility feasibility study and West Coast showroom Continental Glass Asset Acquisition In April 2025, Tecnoglass acquired assets from Continental Glass Systems for approximately $30 million to strengthen its U.S. market presence and create operational synergies - Acquired certain assets of Continental Glass Systems for approximately $30 million in April 2025[15] - The acquisition is aimed at strengthening U.S. market presence, broadening client reach, and creating synergies in the architectural glass industry[15] U.S. Expansion Plans The company is advancing U.S. expansion with a West Coast showroom for its "Legacy" aluminum product line and a feasibility study for a new automated Florida manufacturing facility - A feasibility study is underway for a new, fully automated facility in Florida to address future growth, diversify operations, and improve logistics[2][14] - A lease was signed for a West Coast showroom to promote the new "Legacy" aluminum product line and support geographical expansion[2] Full Year 2025 Guidance Tecnoglass raised its full-year 2025 guidance, projecting revenues between $980 million and $1.02 billion and Adjusted EBITDA of $310 million to $325 million Full Year 2025 Financial Guidance | Guidance Metric | Full Year 2025 Range | Midpoint Growth | | :--- | :--- | :--- | | Revenues | $980 Million - $1.02 Billion | ~12% | | Adjusted EBITDA | $310 Million - $325 Million | ~15% | - The updated outlook assumes that pricing initiatives will more than compensate for a projected $25 million full-year impact from elevated input costs and tariffs[16] Financial Statements The consolidated financial statements show total assets of $1.18 billion, net income of $86.3 million for six months, and $64.8 million cash from operations Consolidated Balance Sheets As of June 30, 2025, total assets increased to $1.18 billion, driven by property, plant, and equipment and inventories, with shareholders' equity reaching $736.0 million Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $137,907 | $134,882 | | Total current assets | $639,399 | $560,010 | | Total assets | $1,181,209 | $1,016,648 | | Total current liabilities | $320,481 | $265,826 | | Total liabilities | $445,208 | $385,465 | | Total shareholders' equity | $736,001 | $631,183 | Consolidated Statements of Operations Q2 2025 operating revenues were $255.5 million, yielding a gross profit of $114.3 million and net income of $44.1 million ($0.94 per diluted share) Consolidated Statements of Operations (Q2, in thousands) | Income Statement Item | 2025 | 2024 | | :--- | :--- | :--- | | Total operating revenues | $255,546 | $219,654 | | Gross profit | $114,335 | $89,577 | | Operating income | $61,204 | $51,134 | | Net income | $44,083 | $35,028 | | Diluted income per share | $0.94 | $0.75 | Consolidated Statements of Cash Flows For the six months ended June 30, 2025, cash provided by operating activities was $64.8 million, with a net cash increase of $3.0 million for the period Consolidated Statements of Cash Flows (Six Months Ended June 30, in thousands) | Cash Flow Item | 2025 | 2024 | | :--- | :--- | :--- | | Cash Provided by Operating Activities | $64,760 | $67,945 | | Cash Used in Investing Activities | $(48,627) | $(27,802) | | Cash Used in Financing Activities | $(14,924) | $(40,327) | | Net Increase/(Decrease) in Cash | $3,024 | $(2,703) | Supplemental Information This section provides geographic revenue breakdown, with the U.S. as the dominant market, and reconciliations of non-GAAP measures like Adjusted EBITDA and Free Cash Flow Revenues by Region In Q2 2025, U.S. revenues grew 15.5% to $242.2 million, comprising the majority of sales, while other countries saw significant 62.9% growth Revenues by Geographic Region (Q2 2025, in thousands) | Region | Q2 2025 Revenue | YoY Change | | :--- | :--- | :--- | | United States | $242,205 | +15.5% | | Colombia | $6,620 | +13.5% | | Other Countries | $6,722 | +62.9% | | Total | $255,546 | +16.3% | Reconciliation of Non-GAAP Measures Detailed reconciliations are provided for non-GAAP metrics, including Adjusted EBITDA of $79.8 million and Free Cash Flow of $0.474 million for Q2 2025 Reconciliation to Adjusted EBITDA (Q2 2025, in thousands) | Reconciliation to Adjusted EBITDA | Amount | | :--- | :--- | | Net income | $44,083 | | Add: Interest expense | $1,350 | | Add: Income tax provision | $18,148 | | Add: Depreciation & amortization | $9,145 | | Add/Subtract: Other adjustments | $7,053 | | Adjusted EBITDA | $79,779 | Reconciliation to Free Cash Flow (Q2 2025, in thousands) | Reconciliation to Free Cash Flow | Amount | | :--- | :--- | | Cash Provided by Operating Activities | $17,862 | | Less: Acquisition of property and equipment | $(32,515) | | Add back: Portion of asset acquisition in capex | $15,127 | | Free Cash Flow | $474 |