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    TGLS
    Earnings call· Jun 2026(Q2 FY26)

    Tecnoglass Q2 FY26 earnings call TGLS

    Aug 6, 2026 Source

    Executive summary

    Tecnoglass Q2 FY26 — Record Revenue and Backlog Driven by Strong Demand

    Tecnoglass delivered record revenue and backlog in Q2 FY26, driven by robust demand across both residential and commercial segments and successful geographic expansion. Despite strong underlying demand, profitability was impacted by elevated aluminum costs, a strengthening Colombian peso, and tariff-related expenses, which led to a sequential revenue pull-forward and a narrowed full-year EBITDA outlook. The company is implementing pricing actions and automation initiatives to offset these pressures and remains confident in its long-term growth trajectory.

    Highlights

    5

    • Record revenue of $295.3 million, up 15.6% year-over-year.

    • Record backlog of $1.4 billion, growing 15.6% year-over-year, with a book-to-bill ratio of 1.1x for 23 consecutive quarters.

    • Multifamily and commercial revenues grew 15.7% year-over-year to a record $168.8 million.

    • Single-family residential revenues grew 15.4% year-over-year to a record $126.5 million.

    • Net leverage ratio of 0.6x provides significant financial flexibility.

    Concerns

    5

    • Adjusted EBITDA declined to $51.7 million (17.5% margin) from $79.8 million (31.2% margin) in the prior year quarter.

    • Gross margin decreased to 37.3% from 44.7% year-over-year, primarily due to a 77% increase in U.S. aluminum costs and a 14% appreciation of the Colombian peso.

    • SG&A expenses increased by $20.4 million year-over-year, including $17 million related to Section 232 tariffs on finished aluminum windows.

    • Full-year Adjusted EBITDA guidance narrowed to $220 million - $230 million, reflecting stronger-than-expected peso headwinds.

    • Q3 revenues expected to step down sequentially from Q2 due to $15 million to $20 million of residential orders pulled forward ahead of May pricing actions.

    Guidance & targets

    8
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $1.08 billion to $1.12 billion
    high materiality
    High
    Full-year 2026 Adjusted EBITDA
    $220 million to $230 million
    high materiality
    High
    Full-year 2026 Capital Expenditures
    $80 million to $95 million
    medium materiality
    High
    Q3 FY26 Gross Margin
    roughly flat or slightly higher
    medium materiality
    Medium
    Q3 FY26 Revenues
    in the range of $280 million or so
    medium materiality
    High
    Year-over-year Revenue Growth
    double-digit growth
    high materiality
    High
    Tariff Impact Offset
    fully offsetting the tariff impact
    medium materiality
    High
    Single-family residential revenue outside Florida
    roughly $30 million
    low materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Multifamily and Commercial
    Achieved record revenue, reflecting consistent execution on an expanding project pipeline and continued market share gains, including growing contributions from projects beyond Florida. Backlog strength supported by virtually no project cancellations, a shift toward larger high-end projects, and geographic diversification.
    Backlog contribution from Florida: 3/4 (Q2) vs 80% (Q1) vs 90% (year-ago)Project cancellations: virtually noneMix shift: toward larger high-end projects
    		$168.8 million15.7%——
    Single-family Residential
    Achieved record revenue, driven by continued market share gains through geographic expansion, growing contributions from the vinyl product line, and healthy order activity, including pull-forward ahead of May pricing actions. A significant portion of revenues is tied to resilient repair and remodel demand.
    Revenue outside Florida YTD: ~$15 millionRepair and remodel demand: ~65%-70% of revenuesDealer network expansion: >20% in last 12 monthsLead times: 5- to 6-week
    		$126.5 million15.4%——

    Operational metrics

    15
    Adjusted EBITDA
    $51.7 milliondown from $79.8 million YoY
    Q2 FY26

    Impacted by elevated aluminum costs, stronger peso, and tariff-related SG&A.

    Gross Margin
    37.3%down from 44.7% YoY
    Q2 FY26

    Partially offset by operating leverage on record volume. Pricing actions began flowing into orders late in Q2.

    SG&A Expenses
    $73.5 millionup from $53.1 million YoY
    Q2 FY26

    Nearly a full quarter carrying the new 10% tariff.

    Colombian Peso Exchange Rate
    3,200appreciated ~14% YoY
    Q2 FY26 end

    Stronger than assumptions in prior outlook scenarios, creating a headwind to margins.

    Residential Pricing Adjustment
    7%
    May 2026

    Orders started getting invoiced at the end of Q2, with benefit building through September.

    Capital Expenditures
    $35.4 million
    Q2 FY26

    Included scheduled payments for previously announced capacity and automation investments.

    Total Liquidity
    $360 million
    Q2 FY26 end

    No significant debt maturities until end of 2030.

    Net Leverage Ratio
    0.6x
    Q2 FY26 end

    Conservative leverage profile providing financial flexibility.

    Single-family Residential Organic CAGR
    40%
    since 2018

    Consistently outperformed industry benchmarks despite a muted residential market.

    U.S. Residential Improvement Spending Growth
    5.1%
    FY26

    Expected growth for the year, which Tecnoglass expects to outperform.

    Residential Orders Pull-forward
    $15 million to $20 million
    Q2 FY26

    Orders pulled into Q2 ahead of May pricing actions, leading to sequential step-down in Q3 revenues.

    Headcount Reduction
    10%
    as of June

    Part of automation and efficiency program, with additional automation expected by year-end.

    Dealer Network Expansion
    20%
    last 12 months

    Supported by high-quality products and efficient lead times, contributing to market share gains.

    Single-family Residential Revenue from Repair and Remodel
    65% to 70%
    Q2 FY26

    This portion of revenue is more resilient and less correlated with mortgage rates.

    Commercial Quick Turnaround Orders Revenue
    $12 million to $15 million
    per month

    New pricing expected to flow into these orders starting Q4 FY26.

    Industry KPIs

    4
    MetricValueDetails
    Price cost7%%
    Order backlog$1.4 billionUSD
    Book to bill ratio1.1x
    Order lead times placement horizon5- to 6-week

    Orderbook & backlog

    1
    Total Backlog$1.4 billionQ2 FY26 end

    15.6% YoY growth

    Consistent sequential growth every quarter since 2021. Virtually no project cancellations.

    Product announcements

    1
    ProductTypeDetails
    Legacy light aluminum window lineexpansion

    Capital programs

    1
    Potential new U.S. facility land purchaseunderway$20 million to $25 million

    Benefit: Preserves optionality for future U.S. facility

    The purchase is expected to be completed in the coming weeks. Discussions with state and local authorities on incentives are ongoing. If construction proceeds, it would be in phases based on demand and market conditions.

    Risks & headwinds

    5
    Elevated U.S. aluminum costsQ2 FY26

    average all-in U.S. aluminum price up approximately 77% year-over-year

    Mitigation: Pricing actions, strategic purchases of U.S.-sourced aluminum, automation initiatives. Costs have come down from May peak.

    Colombian Peso AppreciationQ2 FY26

    appreciated approximately 14% year-over-year; currently at ~COP 3,200/USD

    Mitigation: Reducing peso expenses through ongoing automation-related headcount reduction. Opportunistic foreign exchange hedges if normalization occurs (not currently hedged at current low levels).

    Section 232 Tariffs on Finished Aluminum WindowsQ2 FY26

    $17 million of expenses associated with tariffs in Q2 FY26

    Mitigation: Pricing actions, automation and efficiency programs. Committed to fully offsetting tariff impact by 2027.

    Higher Labor Costsbeginning of FY26

    related to 23% minimum wage increase in Colombia

    Mitigation: Automation and efficiency initiatives, headcount reductions.

    Sequential Revenue Step-down in Q3Q3 FY26

    $15 million to $20 million of residential orders pulled into Q2 FY26

    Mitigation: Pricing actions are flowing through, and year-over-year growth is still expected in Q3 and Q4.

    What to watch in Q3 FY26

    5

    Q3 FY26 Revenue Performance

    Q3 FY26
    CurrentQ2 FY26 revenue: $295.3 million
    TargetAround $280 million, with year-over-year growth

    Why it matters

    To verify the impact of residential order pull-forward📎 and the company's ability to maintain year-over-year growth despite sequential decline.

    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📎.

    Q&A highlights

    6

    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

    2 min read5 chapters

    Detailed Narrative

    01

    Record Performance and Market Share Gains

    Tecnoglass achieved record revenue of $295.3 million and a record backlog of $1.4 billion, demonstrating robust double-digit growth in both single-family residential and multifamily/commercial segments. The company continues to gain market share, supported by its vertically integrated low-cost model and strong customer relationships. Geographic expansion is gaining traction, with Florida representing approximately 75% of the backlog in Q2, down from 80% in Q1 and 90% a year ago, indicating successful diversification.

    02

    Profitability Headwinds and Mitigation Strategies

    Gross margin declined to 37.3% from 44.7% year-over-year, primarily due to a 77% increase in U.S. aluminum costs and a 14% appreciation of the Colombian peso. SG&A expenses also rose, including $17 million related to Section 232 tariffs. Management expects Q3 gross margin to be flat or slightly higher than Q2, with improved pricing offsetting these pressures. The company is implementing pricing actions (e.g., 7% residential adjustment in May) and automation initiatives, including a 10% headcount reduction, to strengthen its cost structure and fully offset tariff impact🌐s by 2027.

    03

    Geographic Expansion and Product Momentum

    The company's geographic expansion is progressing, with a new West Coast showroom on track to open in late September, marking its seventh U.S. showroom. This will bring the legacy light aluminum window line to the West Coast. The vinyl product line continues to build momentum, having more than doubled the addressable market and contributing to record results. The dealer network has expanded over 20% in the last 12 months, supporting market share gains.

    04

    Strategic Investments and Corporate Structure

    Tecnoglass completed its redomiciliation from the Cayman Islands to the United States in July, aiming to enhance index eligibility and broaden its investor base. The company is also advancing plans for a potential new U.S. facility, with a land purchase of $20 million to $25 million expected to be completed soon. This investment preserves optionality, with construction proceeding in phases based on demand and market conditions. Automation programs are advancing on schedule, providing incremental headcount efficiency.

    05

    Cash Flow and Capital Allocation

    Cash provided by operating activities was $4.4 million in Q2, impacted by seasonal Colombian tax payments ($26 million), tariff-related payments, and strategic purchases of U.S.-sourced aluminum. Capital expenditures were $35.4 million, related to capacity and automation investments. The company maintains a solid balance sheet with $360 million in liquidity and a net leverage ratio of 0.6x, providing flexibility for growth investments and capital returns, with expectations for improved operating cash flow in H2.

    AI-generated summary of the company’s earnings call. Not investment advice.