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DATE

Thursday, November 6, 2025 at 10 a.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Jose Manuel Daes
  • Chief Operating Officer — Christian T. Daes
  • Chief Financial Officer — Santiago Giraldo

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RISKS

  • CFO Santiago Giraldo stated that revenue guidance at the midpoint was reduced by $20 million due to slower-than-anticipated commercial construction invoicing. At least half of that amount is now expected in 2026.
  • Giraldo noted that recent aluminum input costs have increased materially, with LME prices up 15% and US aluminum premiums rising 65% over ninety days. This is delaying smaller commercial projects.

TAKEAWAYS

  • Single-family Residential Pricing -- Management implemented a 5%–7% price increase in May 2025, now fully reflected in current single-family residential orders.
  • Double-digit Revenue Growth Guidance for 2026 -- CFO Santiago Giraldo referenced expectations for double-digit growth in 2026, stating, "So when we're talking about double-digit growth, it's more coming from volume rather than the assumption that we're gonna be able to raise prices again." due to limited room for further price increases.
  • Gross Margin Outlook -- Management expects gross margins to remain in the low- to mid-40% range for 2026, subject to input costs, FX movements, and sales mix.
  • Installation Revenue Mix -- For the year, $200 million in revenue will be from installation, up 50% from last year, which impacts margin profile compared to product-only sales.
  • CapEx for New U.S. Plant -- Christian T. Daes estimated future capital expenditures of approximately $225 million for land and building (multi-year project; timing not specified), $150 million for machinery, with the site to employ one-eighth of the typical workforce via automation over a multiyear spend.
  • Net Cash Position -- Company continues to project a net cash position, citing minimal debt and increasing free cash flow generation.
  • Board-approved Share Repurchases -- CFO Giraldo confirmed ongoing share buybacks and referenced a recent board action to increase the repurchase program.
  • Geographic Expansion -- CEO Jose Manuel Daes reported new market penetration in Tampa, Jacksonville, and the Panhandle in Florida, as well as Boston, New York, Texas, California, Hawaii, and other West/East Coast markets.
  • Backlog Growth -- Backlog continues to expand, supported by share gains and diversification beyond Florida.
  • Multimax Product Performance -- CEO Jose Manuel Daes stated, "Multimax is doing much better this year," attributing improvement to new account wins despite a decline in new housing by homebuilders.

SUMMARY

Management reduced 2025 revenue guidance by $20 million at the midpoint due to delays in commercial project invoicing, with at least half of that deferred revenue now expected in 2026. Aluminum price pressures and rising US premiums have materially increased input costs in recent months, contributing to the timing shift and slowing some smaller commercial jobs. A major capital expenditure project is under early consideration for a new U.S. automated factory, with preliminary cost estimates of $375 million spanning multiple years and the goal of significant labor efficiency. Double-digit top-line growth for 2026 is anticipated to be predominantly volume-driven across more diversified US regions, reflecting expanding product and installation mix. The company is deploying capital into incremental share repurchases, sustaining its dividend, while maintaining a net cash position as capacity utilization remains favorable.

  • Jose Manuel Daes highlighted, "Well, Multimax is doing much better this year. Even though the new housing has dropped a little bit for every builder. Because we gained a couple of very nice accounts. We now are selling to three more. So the deadline is doing well."
  • Jose Manuel Daes said, "most of the growth next year, particularly, are gonna come from the new lines that we are launching. Complete by the end of the year to the other market. To Texas, California, and Arizona, Nevada, Utah. I mean, even though they're not complete, we are already selling in those states. With people that are really, really happy and enthusiastic. They can't wait to buy a lot more. So we're really excited about those lines."
  • Management clarified that the buildout of the proposed U.S. plant can be staged to match future demand, mitigating immediate capital risk.
  • Order backlog is supported by both geographic expansion into new major US metro markets and market share capture.

INDUSTRY GLOSSARY

  • LME: London Metal Exchange, a key global marketplace for trading industrial metals, particularly aluminum pricing referenced in cost inputs.
  • GMMP: Internal Tecnoglass brand referenced as the company's installation operations arm in the U.S. market.
  • Multimax: Tecnoglass's product line for single-family/residential housing applications, central to current and projected growth.

Full Conference Call Transcript

Brent Thielman: So where to piggyback a little bit on Tim Wojs's questions around 2026. Can you remind us what the price and tariff cost rollovers are from 2025 into 2026?

Santiago Giraldo: And what I'm I guess, what I'm getting at Santiago is do you figure generally speaking, 2026 gross margins might shake out? And can you lever EBITDA margins next year?

Santiago Giraldo: Yeah. So obviously, there's a few moving pieces here. As far as pricing goes, as you know, we increase single-family residential pricing 5% to 7% in May. So, obviously, all of that now have the new pricing. And on the commercial side, you see a lot more of the backlog that was signed earlier in the year coming in with new price. And, obviously, we're executing still some of the older backlog where we adjust pricing. As far as gross margin goes, I mean, it's early to tell but I think the idea, depending on what happens with the inputs that we just discussed, is that we can be able to maintain the low to mid-forties type profile.

But as you see, there's FX. There is aluminum cost. There's mix. We're doing more installation based on the high-end projects that GMMP is executing. And you got operating leverage. Right? I mean, if we're saying that we can grow top line double digits again next year, we would obviously expect to get operating leverage in there. But, again, we'll get you guys more detail as the time approaches, and we report Q4 in full 2026 guidance in the next call. Gotcha. And then, as it relates to pricing,

Brent Thielman: as it stands right now, do you anticipate further pricing actions to mitigate some of your costs, and what are you seeing out in the field in terms of a competitive response to all the aluminum pressures?

Santiago Giraldo: Generally, you've seen tight pricing, as you would expect. Everybody's trying to maintain so for the expectation for our growth next year is more on the volume side. As Jose Manuel Daes was mentioning, not only we're expecting the full ramp-up on vinyl, but all of the other geographies contributing much more meaningfully. So when we're talking about double-digit growth, it's more coming from volume rather than the assumption that we're gonna be able to raise prices again. Based on what the competition is doing and the dynamics for the industry.

Brent Thielman: And then my last question, the perspective that you are contemplating I know it's still in the semi-early stages but can you give us a sense of looking at? What the CapEx cost might be, and the timing of those sorts of expenditures?

Christian T. Daes: Well, we're still designing, studying, doing engineering, but we do believe that the building and land will be around $225 million and the machines will be around $150 million. And it will be the we will have the capacity of 40% of most lines. It's still too early to tell. We do have a line already a piece of land that we like. It's in a very special place. We're making we're gonna bid on it, and when we have all the numbers together, because it's gonna be a fully automatic robotic factory that will employ, like, one-eighth of the people that we normally employ to make the same window.

When we have all that, we'll give you more color on what it is that we have to do. But we are really looking into it because it's a good thing to do, especially that we wanna do it on the East Coast. And also on the West Coast.

Santiago Giraldo: Simon, just to add to Christian T. Daes's comments, obviously, that CapEx is multiyear. Right? So this is something where if the factory is gonna take two, three years to get billed out, this is something that gets spent over a multiyear horizon. And, also, it can be billed gradually, right, depending on demand. So you don't have to make a full investment without having the demand for the excess capacity as well.

Brent Thielman: So roughly $350 million to $400 million in total costs and maybe $500 million in capacity. Is that the broad brush way of looking at it?

Santiago Giraldo: Yeah. That roughly sounds good. So if you extrapolate to decent margins, the payback is attractive, obviously.

Brent Thielman: Very good. Thank you. I appreciate it.

Operator: Thanks. Thank you. Our next question comes from the line of Rohit Seth with B. Riley. Please go ahead.

Rohit Seth: Hi. Thanks for taking my question. Just on the guidance, you cited slower than anticipated invoicing like commercial construction as the driver of the guidance cut. Can you quantify how much revenue maybe slipped from Q4 into 2026? Is this like, one or two projects? Or just more, a broader issue on the commercial side?

Santiago Giraldo: Well, we're talking about a $20 million reduction at the midpoint of the guidance, more or less. We would estimate that at least half of that is 2026 business, which, obviously, further supports the idea of double-digit growth next year. And I would say some of that is coming from more stable resi invoicing than previously anticipated. But these are projects that are obviously in the backlog and not expected to drop off. It's more a timing issue.

Rohit Seth: Okay. And then, on the 2026 double-digit growth, guide on revenues, could you maybe narrow that down to a specific range? Is it 10% to 12%? Are you 13% to 15%?

Santiago Giraldo: I mean, at this point, I would assume low double-digit growth. But, again, more details to come. We're basically working with back-of-the-envelope calculations and assumptions. But when we report Q4 and give you full guidance, we'll provide more granular detail on that.

Rohit Seth: Okay. And your gross margins, you know, come down to the mid-forties. As you think about 2026, and you're deriving your margin assumptions. What are the key swing factors, you know, is there a path back to the mid-forties? And you think this low forties is sort of the new run rate?

Santiago Giraldo: Low to mid-forties is what we had talked about on the earlier question. And if you kinda back into the math, that's more or less where we can end up this year. Next year, again, there's different variables related to input cost. Hopefully, some of the recent spikes in aluminum cost and premiums will come down to normalized levels. FX is also in question, so it's an important input. And installation mix versus manufacturing mix also comes to play. And finally, how much operating leverage can we get on those incremental sales? So, again, there are different variables. We'll provide more color when we report next quarter.

Rohit Seth: Okay. And just on the higher mix of revenues with installation, it's been a headwind. Just can you quantify what percentage of your commercial revenues is installation versus product only?

Santiago Giraldo: What percentage of the commercial revenues what? I'm sorry?

Rohit Seth: What percentage was the installation mix in the third quarter? Versus product only?

Santiago Giraldo: If you look at the overall revenue for the year, we're doing about $990 million take. About $200 million of that is gonna be installation for the year. And that is up 50% versus last year. This quarter, the impact on mix alone for the fourth quarter is roughly about $2 million of EBITDA. Versus where we were in the prior, midpoint.

Rohit Seth: Alright. Great. I'll pass it on. Thank you for taking my question. Thank you.

Brent Thielman: Yeah. Yeah.

Rohit Seth: Thank you.

Operator: Our next question comes from the line of Brent Thielman with D. A. Davidson. Please go ahead.

Brent Thielman: Hey. Great. Thanks. Just coming back to the sort of the short cycle commercial work that's maybe pushed some revenue out or delayed revenue, however you wanna frame it, what mean, what is sort of, in your view, kinda changed in the last few months that's influenced that? And I guess as a follow-up question, know, the backlog continues to grow here. Maybe what you see across the country in terms of high-end base is the market getting better? Is the backlog growth purely an influence of you taking share? If you could comment on those two things, that'd be great.

Santiago Giraldo: Well, I think that the input cost that we're mentioning here is playing a part in many other segments in the construction industry. Right? So when you have light commercial construction depending on those input costs, it's probably prudent to kind of push off some of those projects until things normalize. So I think in what you have seen, we talked about LME going up 15% in ninety days and US aluminum premiums up 65% in the same time period, that's translating into other things. Right? So for somebody that is putting in place a smaller project where they don't have necessarily financial closings of people that have already bought condos, for instance. That's a different story.

It's a different proposition. So it's a matter of timing and having things normalized. At some point, there's gonna be some type of correction. So I think that's what's playing a part there. And on your second question, can you repeat? I think Jose Manuel Daes is gonna address that.

Brent Thielman: The maybe just the back I mean, look. The backlog is growing at the same time here. So is this is the is the market for high-end space getting better in The US? Is this that you're capturing more share, new regions? Just discussion there.

Jose Manuel Daes: Well, we are expanding geographically. For example, before, we have any work in the Tampa, San Petersburg area. And now we have a lot of work there. We have worked in Jacksonville. We have three buildings where we never had any. And we keep quoting. We have a lot of work in the Panhandle area. And that's only in Florida. And now we see a resurgence in the Boston, New York area, and also we are quoting directly with the GMMP brand, which is the installation brand. In Texas, California, and even Hawaii. So we're not just relying on Florida anymore. We are expanding Florida South Florida to all over the state. And we are expanding outside the state.

With really good results.

Brent Thielman: Okay. And then maybe just one more follow-up on the single-family product line you know, when you look outside of Florida, where do you these different geographies you're targeting, where are you getting the most traction? Like, where are you getting a lot of momentum building those Texas East Coast? West Coast.

Jose Manuel Daes: All over the East Coast is growing with the new line. But we see most of the growth is West Texas, Arizona, Nevada, California, Utah, even Hawaii. I mean, we sold last year in Hawaii. Around I don't know exactly, but gonna end up invoicing this year, like, $6 million to $10 million. And we hope to do $20 million or $30 million next year.

Brent Thielman: Got it. Okay. Thank you. Thank you.

Operator: Our next question comes from the line of Julio Alberto Romero with Sidoti. Please go ahead.

Julio Alberto Romero: Thanks. Hey. Good morning, Jose Manuel Daes, Christian T. Daes, Santiago Giraldo.

Jose Manuel Daes: Good morning. Good morning.

Julio Alberto Romero: Appreciate the preliminary revenue expectation for 2026, and understand we'll get more color to come on the puts and takes there. Any preliminary thoughts on how we should think about capital allocation? You know, I know you have the automated plan in Florida that you're currently weighing. Trying to think about how you're thinking about capital expenditures and your recently up share repurchase and, you know, how would you have us think about that?

Santiago Giraldo: On CapEx, as we have mentioned before, it's trending down, and we're talking about core growth CapEx. Not talking about the potential to do The US plant, which is still early in the process. So the CapEx is gonna trend down. Utilized capacity still allows us to grow well into double digits for the next couple of years. You saw what we did in terms of buybacks last quarter and in terms of the board action to increase that program. So I think that's definitely a good use of capital. Going forward as we continue to generate free cash flow. The dividend continues to be there, so that's another way to return capital to shareholders, obviously.

And we have very little debt. We continue to expect to be in a net cash position for the foreseeable future. So I think it'll be finding opportunities to continue reinvesting in the business. If the backlog continues growing or as Jose Manuel Daes mentioned, the opportunities on single-family residential materialize and we grow over the next year, then at some point, we'll have to just reinvest in growth. But immediately, you know, I think, doing something on the buyback front makes sense as you saw from the board's actions. And waiting to see what happens with the general conditions of the market.

Julio Alberto Romero: Very helpful there. And then, you know, on single-family, I know we talked about vinyl, and we talked about showrooms, but wanted to get a progress update on Multimax. You know, how that's doing at the moment. And a lot of the homebuilders have been rather pessimistic, you know, expressing that the near-term rebound isn't likely in the near term. Yeah. We'll be curious to how you're thinking about that product line and the outlook at the moment.

Jose Manuel Daes: Well, Multimax is doing much better this year. Even though the new housing has dropped a little bit for every builder. Because we gained a couple of very nice accounts. We now are selling to three more. So the deadline is doing well. But most of the growth next year, particularly, are gonna come from the new lines that we are launching. Complete by the end of the year to the other market. To Texas, California, and Arizona, Nevada, Utah. I mean, even though they're not complete, we are already selling in those states. With people that are really, really happy and enthusiastic. They can't wait to buy a lot more. So we're really excited about those lines.

Julio Alberto Romero: Great. Thanks, Jose Manuel Daes. Good luck in the fourth quarter.

Jose Manuel Daes: Okay, Jose Manuel Daes. Thank you.

Julio Alberto Romero: Thank you.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Jose Manuel Daes, for closing remarks.

Jose Manuel Daes: Thanks, everyone, for participating in today's call. We hope to keep growing double digits. And please keep time for better news.

Operator: Thank you.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.