WEG (WEGE3) Q2 2025 earnings summary

Executive summary

• Net operating revenue rose 10.1% year-over-year to R$10,207.2 million in 2Q25, with external markets driving growth despite domestic headwinds and a 1.3% sequential increase.

• EBITDA increased 6.5% year-over-year to R$2,259.5 million, with a margin of 22.1%.

• Net income for 2Q25 was R$1,591.9 million, up 10.4% year-over-year, with a net margin of 15.6%.

• Return on invested capital (ROIC) was 32.9%, down 450 bps year-over-year due to higher capital employed and non-recurring items.

• Management highlighted resilience amid global uncertainty, with strong T&D infrastructure performance and international expansion.

Financial highlights

• Consolidated net operating revenue for 1H25 was R$20,285.8 million, up 17.2% year-over-year.

• EBITDA for 1H25 totaled R$4,432.5 million, with a margin of 21.9%.

• Gross margin for 2Q25 was 33.7%, stable year-over-year, supported by stable raw material costs and favorable product mix.

• SG&A expenses rose 20.2% year-over-year, mainly due to acquisitions and higher freight costs, representing 11.9% of revenue.

• Investments (CAPEX) in 2Q25 were R$583.4 million, focused on modernization and expansion in Brazil and Mexico.

Outlook and guidance

• Management expects continued growth in international markets, especially in North America, and ongoing investments in production capacity.

• Domestic growth is expected to remain constrained by the absence of wind generation projects and slower industrial investment.

• Healthy operational dynamics and product mix are expected to support margins.

• Capacity expansion in T&D to double by 2027, with new volumes expected as investments come online.

• Confidence in global presence and diversified portfolio to mitigate macroeconomic risks.