WEG (WEGE3) Q2 2026 earnings summary

Executive summary

• Net operating revenue for Q2 2026 was R$10,143.6 million, down 0.6% year-over-year but up 7.1% sequentially, mainly due to the absence of centralized solar generation deliveries in Brazil, partially offset by strong international growth.

• EBITDA reached R$2,212.6 million, with a margin of 21.8%, down 2.1% year-over-year but up 5.2% sequentially.

• ROIC improved to 33.6%, up 0.7 percentage points year-over-year and 0.5 percentage points sequentially, reflecting disciplined capital allocation.

• Margins and returns remained healthy despite a challenging environment, with strong order intake and backlog in long-cycle equipment and T&D.

• Net income was R$1,558.6 million, down 2.1% year-over-year and up 7.0% sequentially; net margin was 15.4%.

Financial highlights

• Gross margin was 33.2%, down 50 bps year-over-year, mainly due to higher raw material costs and U.S. tariffs.

• EBITDA margin at 21.8%, supported by favorable product mix despite higher raw material costs and U.S. import tariffs.

• Operating cash flow reached R$2,451.2 million in H1 2026; CAPEX for Q2 2026 was R$794.9 million, with 44.5% in Brazil and 55.5% abroad.

• Net cash position at quarter-end was R$3,740.6 million.

• Net operating profit after taxes declined by 1.3% year-over-year.

Outlook and guidance

• Management expects a more favorable scenario for revenue growth in the second half of the year, driven by strong international demand and normalization of the comparison base.

• Ongoing investments in production capacity and product diversification are expected to sustain margins and ROIC above industry average.

• Growth in international markets remains in line with double-digit expectations in local currencies, though FX fluctuations may limit BRL growth.

• The order book remains healthy, especially in industrial and infrastructure-related projects.

• Robust investment plan for capacity expansion in Brazil and internationally.