WEG (WEGE3) Q4 2025 earnings summary

Executive summary

• Net operating revenue for 4Q25 was R$10,246.8 million, down 5.3% year-over-year, mainly due to lower demand in solar generation and currency impacts.

• EBITDA reached R$2,292.0 million, 4.0% lower year-over-year, with margin improving to 22.4%.

• ROIC was 32.5%, down 170 basis points year-over-year.

• Net income for 4Q25 was R$1,587.8 million, a decrease of 6.3% year-over-year, with a net margin of 15.5%.

• International expansion advanced with the acquisition of Sonaloc/Sanelec in India and a new battery energy storage plant in Itajaí.

Financial highlights

• Domestic market revenue fell 12.2% year-over-year, while external market revenue declined 0.5%.

• Gross margin improved to 34.0%, up 60 bps year-over-year, driven by favorable product mix and operational efficiency.

• SG&A expenses totaled R$1,253.6 million, representing 12.2% of revenue, up 60 bps year-over-year.

• Cash flow from operations in 2025 was R$6,451.0 million, with CAPEX of R$2,910.8 million.

• Investments in the quarter totaled R$814.3 million, split almost evenly between Brazil and international operations.

Outlook and guidance

• Management remains cautious due to geopolitical uncertainties and international trade volatility but expects healthy margins and returns.

• Revenue growth in 1H 2026 may be weighed down by exchange rate impacts and absence of centralized solar projects.

• Two-digit revenue growth possible if exchange rates stabilize; otherwise, single-digit growth more likely.