Tecnoglass (TGLS) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues reached $219.7 million, the second highest in company history, with record single-family residential revenue of $95.7 million, up 10.1% year-over-year, and orders up over 60% YoY, reflecting strong demand and adaptability in a complex macroeconomic environment.

• Backlog grew 29% year-over-year to a record $1.02 billion, maintaining a book-to-bill ratio above 1.5x and providing visibility through 2025 and into 2026.

• Multifamily/commercial business saw sequential improvement but was impacted by higher interest and mortgage rates; backlog remains robust with new high-rise activity.

• Net income for Q2 2024 was $35.0 million ($0.75 per share); adjusted net income was $40.5 million ($0.86 per share); adjusted EBITDA was $64.1 million (29.2% margin).

• Net leverage ratio reached a record low of 0.06x net debt/LTM adjusted EBITDA, with strong cash flow generation of $34.5 million in Q2.

Financial highlights

• Q2 2024 total revenues were $219.7 million, down 2.5% year-over-year, but the second highest in company history.

• Gross profit was $89.6 million (40.8% margin), down from $109.7 million (48.7%) last year, mainly due to FX and higher salary expenses.

• SG&A expenses rose to $38.4 million (17.5% of revenue) due to annual salary adjustments.

• Operating cash flow reached $34.5 million; capital expenditures were $20.3 million in Q2 and $34.8 million in H1 2024, including land and Miami HQ investments.

• Cash and cash equivalents stood at $127 million, with total liquidity of ~$300 million at quarter end.

Outlook and guidance

• Full-year 2024 revenue expected between $860 million and $910 million, representing ~6% organic growth at the midpoint.

• Adjusted EBITDA projected at $260 million–$285 million, with gross margins expected in the low- to mid-40% range.

• Q3 2024 revenue guidance is $240 million–$250 million, with gross margins around 43% and EBITDA of $75 million–$80 million.

• Vinyl product revenues expected to ramp up in the second half, with $15–$25 million targeted for H2 2024 and $5–$10 million per month in 2025.

• Management expects continued positive operating cash flow and sufficient liquidity to meet obligations over the next twelve months.