WEG (WEGE3) Q4 2025 earnings summary

Executive summary

• Net operating revenue in 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%.

• Return on invested capital (ROIC) was 32.5%, down 170 bps 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%.

• Net operating profit after taxes increased by 8.7% compared to 4Q24, while invested capital rose 14.2%.

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.

• Main financial indicators remained strong, with ROIC at 32.5%.

Outlook and guidance

• Management remains cautious due to geopolitical uncertainties and international trade volatility but is confident in the long-term business model and global diversification.

• Expectation of strong revenue opportunities in core businesses, but growth may be weighed down in 1H 2026 by exchange rate impacts and absence of centralized solar projects.

• Two-digit revenue growth for 2026 is possible if exchange rates stabilize; otherwise, single-digit growth is more likely.

• Margins for 2026 expected to remain in line with recent years, barring significant changes in product mix or exchange rates.

• Positive operational dynamics expected to continue, with healthy margins and returns.