Tecnoglass (TGLS) Q2 FY26 earnings call: guidance and Q&A

What is the primary driver for the EBITDA guidance reduction, specifically between the stronger Colombian peso, aluminum costs, and other factors?

The stronger Colombian peso is by far the biggest lever impacting the EBITDA guidance reduction, as it appreciated rapidly to COP 3,200 from COP 3,600-3,700, while aluminum costs have been stable.

“Most of it, Julio. If you look at what we told you guys a quarter ago, the peso was at about COP 3,600, COP 3,700, and we were estimating that it could stay flattish from there. It has strengthened down to an all-time high since 7 years ago. So it went down to COP 3,200, while on the aluminum front, it's been stable since then. So nothing really surprising on the aluminum front. It's more on the FX side.”

asked by Julio Romero · answered by Santiago Giraldo

Given the Q3 gross margin forecast (flat or slightly higher than Q2), what does that imply for Q3 revenue relative to Q2?

Q3 revenues are expected to step down sequentially to around $280 million from Q2's $295.3 million, due to a $15 million to $20 million pull-forward of residential orders into Q2 ahead of May price increases.

“No. If you look at what we said, there is actually $15 million to $20 million of orders that came in ahead of the price increase in May, right? So what we're actually seeing is Q3 revenues in the range of $280 million or so, still quite a bit of growth year-on-year, but a step down from Q2 based on that pull forward.”

asked by Julio Romero · answered by Santiago Giraldo

Could you provide a rough split and timing for when new pricing will impact commercial revenues, distinguishing between quick turnaround and larger projects?

Quick turnaround commercial orders ($12M-$15M/month) will see new pricing in Q4 FY26 and all of FY27. Larger commercial projects will see new pricing flow through to revenue starting in Q2-Q3 FY27.

“So the light orders really account for about $12 million to $15 million per month in terms of revenues. By year-end, that will still have some of the older pricing in Q3. But in Q4, you'll start seeing some of that getting invoiced with the newer pricing. So you get the benefit at year-end and obviously all of '27. And then on the larger commercial stuff, we estimate that you start seeing the new pricing Q2, Q3. And that's obviously the rest of the commercial segment revenues. So you can kind of back into it with the range that I gave you of $12 million to $15 million on the light commercial side.”

asked by Julio Romero · answered by Santiago Giraldo

Is an EBITDA range of $45 million to $50 million for Q3 roughly accurate, or are there other OpEx factors?

EBITDA for Q3 is expected to be slightly higher than the $45M-$50M range, closer to Q2's level, as improved pricing helps offset the stronger peso and continued high aluminum costs.

“I would say slightly higher. At the higher end of that, I would expect somewhere close to Q2. And again, you have better pricing that is flowing through, but obviously, worse effects based on current conditions versus Q2, right? So at the end of the day, we're not expecting a step down sequentially Q3 versus Q2. The expectation is that we can get to somewhat of a flattish EBITDA result for Q3.”

asked by Sam Darkatsh · answered by Santiago Giraldo

Why was there a pause in share repurchases in Q2, and what are the plans for the remaining $100 million authorization in the second half?

The pause was due to working capital demands in Q2, including seasonal tax payments, strategic pre-purchasing of U.S. aluminum, and growth-related AR. Operating cash flow is expected to improve in H2, potentially allowing for further repurchases, depending on Board decisions.

“Working capital. I mean if you look at Q2, you have the seasonal effect of tax payments. We also have been doing prepurchasing of aluminum -- of U.S. aluminum to secure supply. And from an AR perspective, obviously, we're growing 15% year-on-year. So there's working capital demands. And that is not unusual that Q2 would be the one that uses the most working capital because of the factors that I just mentioned. And then on top of that, having to prepurchase U.S. aluminum doesn't help. We expect cash flow from operations to improve in the second half of the year. So obviously, depending on what we continue to see from a working capital perspective, obviously, we still have some CapEx to invest. But yes, we do still have $100 million remaining on that authorization. So depending on what the Board wants to do, I would assume that the cash flow is better in the second half of the year to do some of that as well.”

asked by Sam Darkatsh · answered by Santiago Giraldo

How would you describe the underlying demand environment today compared to 3-6 months ago, both in Florida and outside?

Demand is surprisingly high everywhere across the U.S., including Florida and New York. The company is experiencing an unbelievable volume of quoting for new jobs, requiring new hires for quoting.

“The demand is really high. I mean, it is surprisingly high everywhere across the U.S. We have -- how do we assess the demand because the quoting progress that we have is unbelievable. We have to even hire new people for quoting because the demand for new jobs is crazy, in Florida and outside of Florida, surprisingly, New York is coming back really strong also. So demand is there.”

asked by Timothy Wojs · answered by Jose Daes