Tecnoglass Aktie

Good morning, and welcome to the Tecnoglass, Inc. First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Brad Cray, Investor Relations. Please go ahead.

Thank you for joining us for Tecnoglass' First Quarter 2026 Conference Call. A copy of the slide presentation to accompany this call may be obtained on the Investors section of the Tecnoglass website.

Our speakers for today's call are Chief Executive Officer, Jose Manuel Daes; Chief Operating Officer, Chris Daes; and Chief Financial Officer, Santiago Giraldo. I'd like to remind everyone that matters discussed in this call, except for historical information, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding future financial performance, future growth and future acquisitions.

These statements are based on Tecnoglass' current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary in a material nature from those expressed or implied by the statements herein due to changes in economic, business, competitive and/or regulatory factors and other risks and uncertainties affecting the operation of Tecnoglass' business.

These risks, uncertainties and contingencies are indicated from time to time in Tecnoglass' filings with the SEC. The information discussed during the call is presented in light of such risks.

Further, investors should keep in mind that Tecnoglass' financial results in any particular period may not be indicative of future results. Tecnoglass is under no obligation to and expressly disclaims any obligation to update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise.

I will now turn the call over to Jose Manuel, beginning on Slide #4.

Thank you, Brad, and thank you, everyone, for participating on today's call. We are pleased with how our business performed to start 2026 and more importantly, with our positioning heading into the rest of the year. The demand environment for our products is favorable. Our backlog is at a record level and order activity across both our commercial and single-family residential businesses continues to build momentum.

The fundamentals of what we do, the quality of our products, our vertically integrated model and our customer relationships are as strong as they have ever been. That underlying momentum is important context for how we view the recent trade policy changes affecting aluminum-containing imports. The trade policy changes do not change our competitive position in the market, and they do not reflect any softening in demand for our products.

We have been preparing for and navigating a dynamic cost and trade environment for a handful of years now. We have invested in our supply chain to structure our sourcing and built a platform with the flexibility to adapt. Our industry-leading cost structure and vertically integrated model allows us to respond to these changes with more agility than most competitors. We have implemented pricing actions and remain confident in our ability to execute these increases while preserving our competitive position.

We are confident in our trajectory because we are not just reacting to macro conditions. We are investing in the long-term growth of the business. Our vinyl expansion and geographic expansion are gaining traction. We are opening new showrooms and entering new geographies. Projects outside of Florida accounted for almost 1/4 of the total backlog as of the end of the first quarter.

We are advancing the U.S. re-domiciliation, which will further align our corporate structure with where we operate and invest. And we continue to evaluate the potential construction of a new U.S. facility based on the potential returns and market conditions meeting our thresholds. If we decide to move forward, this automated facility will expand capacity, improve lead times and position us for expansion opportunities we do not fully serve today while expecting to preserve a strong margin profile.

We have built Tecnoglass over many years by focusing on product quality, customer service and operational excellence. Our business generates strong cash flow, and we remain committed to returning capital to shareholders while investing in growth initiatives that will drive long-term value. We are confident in our ability to deliver on our full year objectives and continue building long-term value for our shareholders.

I will now turn the call over to Chris to provide additional operating highlights.

Thank you, Jose Manuel. Moving to Slide #5 and 6. Our backlog grew 19.1% year-over-year to a record $1.36 billion. Multifamily and commercial revenues up 20.4% year-over-year to a record $160.5 million, reflecting consistent execution on an expanding project pipeline and market share gains. Our backlog has grown sequentially every quarter since 2021, and our book-to-bill ratio of 1.3x extends our track record to 21 consecutive quarters above 1.1x.

We have virtually no project cancellations as we install windows in buildings already well advanced in construction. In recent years, our mix has shifted toward larger high-end projects such as luxury condominiums and upscale lodging, which are less sensitive to interest rate fluctuations. Our growing geographic diversification also reduces regional concentration risk.

Moving to Slide #7. Single-family residential revenues were essentially flat year-over-year in the first quarter, mainly reflecting the timing of invoicing. Demand was better represented by orders, which grew 3.4% year-over-year and 14.1% sequentially with additional momentum into April. Approximately 65% of our single-family revenues are tied to repair and remodel demand, which is more resilient and less correlated with mortgage rates.

This provides a more stable demand base regardless of new construction activity. We see multiple avenues to continue gaining share. Our dealer network has expanded over 20% in the last 12 months. Our vinyl line continues to gain traction with robust quoting activity as evidenced by the highest monthly order level to date in April. Our Los Angeles showroom is on track to open in the coming weeks, bringing our legacy light aluminum window line to the Southwest market and marking our fifth showroom outside of Florida and seventh overall.

Turning to Slide #8. Despite a muted residential market, Tecnoglass has consistently outperformed industry benchmarks with our single-family revenues growing at a roughly 40% organic CAGR since entering the market in 2018. This outperformance comes even as the national residential construction spending and remodeling activity have remained muted during the last couple of years. We are well positioned to continue performing.

Our business and geographic penetration strategy is concentrated in regions which are projected to lead residential construction and spending growth in 2026. Combined with our expanding dealer base, new showroom openings and the ongoing vinyl ramp, this underpins our confidence in achieving double-digit revenue growth guidance, which is well above expected end market growth expectations.

I will now turn the call over to Santiago to discuss our financial results and full year outlook.

Thank you, Christian. Turning to the drivers of revenue on Slide #10. Total revenues for the first quarter increased 12% year-over-year to a first quarter record of $249 million.

The growth was driven by positive momentum in our multifamily and commercial business, which grew 20.4% year-over-year, reflecting strong execution on our record backlog and market share gains. This was partially offset by roughly flat single-family residential revenues, mainly reflecting the timing of order conversion into revenue with modest invoicing in January and February, giving away to a strong pickup in March and continued positive momentum into April.

Looking at the profit drivers on Slide #11. Adjusted EBITDA for the first quarter of 2026 was $61.5 million, representing an adjusted EBITDA margin of 24.7% compared to $70.2 million or 31.6% in the prior year quarter. First quarter gross margin was 38.5% compared to 43.9% in the prior year quarter.

The year-over-year decline reflected the continuation of several dynamics that persisted into 2026, an unfavorable revenue mix from a higher proportion of installation revenues in commercial and multifamily, elevated U.S. aluminum costs with aluminum LME plus U.S. premium spot rates increasing approximately 48% year-over-year and a 12% year-over-year appreciation of the Colombian peso further pressured margin.

We also realized higher salary expenses related to the annual salary adjustments at the beginning of the year. These headwinds were partially offset by stronger pricing and operating leverage on higher volume. SG&A for the first quarter was 20.4% of revenue compared to 19.1% of revenue in the prior year quarter. The increase primarily reflected aluminum and reciprocal tariff expenses, higher personnel expense from annual salary adjustments at the beginning of the year and a stronger peso during the period, higher transportation and commission expenses associated with revenue growth. We also had a onetime $2.9 million expense related to a government-imposed wealth tax on large companies in Colombia to address a government declared climate-related emergency.

We provide a closer look at the margin dynamics on Slide #12, namely aluminum and FX. With respect to aluminum, it is important to distinguish between 2 separate dynamics. The first is the escalation in underlying aluminum cost, which was the primary driver of margin pressure in the first quarter. Global aluminum LME rates and U.S. Midwest premiums reached record highs during the quarter, increasing approximately 48% year-over-year and creating industry-wide cost pressure.

The second dynamic is the 10% Section 232 tariff on finished aluminum window imports, which was enacted April 2026 after the close of the first quarter. We are proactively addressing this new tariff through pricing actions effective on early May orders and are advancing additional operational efficiencies, including logistics optimization, increased automation and headcount rationalization to further mitigate the impact as we move through the year and expect to fully neutralize it in 2027.

Looking at the foreign exchange dynamics, the Colombian peso appreciated approximately 12% year-over-year. Given that approximately 25% of our costs are peso-denominated, primarily representing labor cost, this appreciation pressured margins, compounded by annual salary adjustments in Colombia at the beginning of the year.

On average, a 5% movement in the Colombian peso impacts our gross margins by approximately 110 basis points. To partially mitigate the exposure, we executed additional hedges during the quarter on a portion of our Colombian peso exposure and will continue to be opportunistic in adding incremental coverage throughout 2026.

Now examining our cash flow and balance sheet on Slide #13 and 14. First quarter operating cash flow of $6.7 million reflected a strategic decision to secure approximately $34 million of U.S. sourced aluminum as part of our tariff mitigation and supply chain resilience strategy, which is expected to provide cost benefits in the middle of the year. Capital expenditures of $17.3 million in the quarter included scheduled payments on previous investments and early investments on additional automation.

Our balance sheet remains solid. Total liquidity of approximately $425 million at quarter end, including over $330 million of availability under our revolving credit facility. We have no significant debt maturities until the end of 2030. With net debt to LTM adjusted EBITDA approximately 0.4x, we maintain a conservative leverage profile that provides significant financial flexibility to continue investing in growth and returning capital to shareholders.

Our disciplined investments in operational excellence and our vertically integrated platform have consistently delivered superior returns relative to the broader industry, supported by our leading profitability and working capital management. These strengths continue to generate sustainable cash flow and shareholder value while preserving financial flexibility to pursue additional growth opportunity.

Consistent with that approach, we are pleased to have returned substantial capital to shareholders during the first quarter. We repurchased approximately $16.5 million in shares under our $250 million program with approximately $92.5 million of remaining repurchase capacity as of May 7, 2026, and paid $6.7 million in dividends, returning a combined $23.2 million to shareholders during the quarter.

Now moving to our outlook on Slide 16. Our first quarter 2026 performance came in line with our expectations, supported by record revenues, all-time high backlog of $1.36 billion and positive momentum across both our residential and commercial platforms. Based on the strength of our top line results and the visibility provided by our backlog order trends, we are reaffirming our full year 2026 guidance.

We expect revenue in the range of $1.06 billion to $1.13 billion and adjusted EBITDA in the range of $225 million to $245 million. This is unchanged from our guidance communicated in April, which incorporated the incremental impact of the recently enacted 10% tariff on finished aluminum window imports into the U.S.

With our guidance range, the primary factors remain the timing of project invoicing from our commercial backlog, the pace of residential market recovery, execution in new geographies and vinyls and the trajectory of aluminum cost and foreign exchange. The high end of the range assumes a more constructive demand and cost backdrop, while the low end contemplates a more measured recovery and continued pressure from the current aluminum and FX conditions.

Importantly, both scenarios assume continued market share gains, strong backlog execution and disciplined cost management across the business. Our May price increase is expected to begin contributing to results by early July, providing a meaningful mitigation to the tariff headwinds already discussed. As we execute on our pricing and efficiency initiatives throughout the year, we see potential for additional margin expansion as we move through the year and see a clear path to full neutralization of the tariff impact 2027 when full year pricing across both businesses and incremental automation savings are expected to fully offset the tariff-related headwinds.

We expect another year of strong cash generation, albeit with more use of working capital given upcoming tariff payments, strategically securing U.S. aluminum ahead of production times and longer cash conversion cycles given the increase in installation work, which has less upfront payments and more retainage. As in years past, the second quarter of the year is expected to have the seasonal impact related to income tax payments for our Colombian-based subsidiary.

Capital expenditures are projected to be in the range of $60 million to $70 million, which includes maintenance CapEx at approximately 1% of revenues, plus planned investments in efficiency initiatives and amortization payments of previous investments. Separately, we expect to invest approximately $20 million to $25 million for the purchase of the land related to the potential new U.S. facility, which we would plan to finance with our available credit facilities.

Executing the land purchase now preserves our optionality as the feasibility study continues, and we have already secured substantial state and local tax credits that would significantly enhance project economics. If we decide to move forward with construction, the project would proceed in phases, with each stage evaluated based on demand trends, return profiles and overall market conditions. We would only move forward if the project meets our high return thresholds.

In conclusion, our results demonstrate the durability of our business model and the strength of our competitive position, even as we navigate a dynamic operating environment. We are executing on a record backlog, gaining share in new and existing geographies, building momentum in vinyl and taking targeted pricing and operational actions to mitigate tariff headwinds.

With a record backlog, a growing national presence in single-family residential and a solid balance sheet, we remain confident in our ability to deliver on our full year objectives and outperform the market for years to come.

With that, we will be happy to answer your questions. Operator, please open the line for questions.

[Operator Instructions] The first question comes from Rohit Seth with B. Riley.

Just on the price increase, are you seeing your competitors also raising prices? And what gives you confidence that it's going to be the take rate from competitors?

Yes. Everybody has raised prices because of the increases in aluminum and the increases in glass. All the products that we buy to make the windows are subject to increases due to the oil and gas increases. So everybody has raised prices, some more than us and a couple a little less than us.

Okay. And then on the aluminum, it looks like you built some inventory. I imagine that's the aluminum. How are you positioned now going into the second half on aluminum?

Right now, Seth, we're buying it on the spot. And if you kind of listen to what we said a couple of weeks ago when we reguided, we also baked in the impact of higher than the beginning of the year pricing, right? So at this point in time, we're buying it at spot, even though it has gone up roughly 12% since the beginning of the year. That's already baked into projections.

Your next question comes from Julio Romero with Sidoti & Co.

Can you guys expand on how April has trended since you guys have announced price increases, as competitors have announced price increases and specifically with regards to customer receptivity and how they're managing through rising input costs on their end? Are they changing anything from order size or project scope, both on the residential and the commercial side?

Well, April was extremely strong. And as you saw in the press release, obviously, you see some orders of clients anticipating the price increase that took place in May 4. I think what we'll be telling is how orders continue to trend in May. So far, so good.

Nothing really to speak of in terms of drop in demand, but April was abnormally high. I mean, we're talking about 40% more of a normal month. But obviously, some of that is pulled forward of orders that probably would have taken place in May and June.

Helpful. And where are you guys on the U.S. re-domiciling? Is that -- I guess, that's expected to close in the second quarter?

Yes. The expectation is that, that will be done by mid-June. Proxy cards should be going out for voting likely around mid- to end of May. And effectively, we should be re-domiciled if the vote goes through by the middle of June.

[Operator Instructions] Your next question comes from Tim Wojs with Baird.

Maybe just to start, just kind of just big picture question. Obviously, the tariffs, I think, obviously surprised you, surprised the market. You guys obviously still have a pretty meaningful cost advantage even with the tariffs in the marketplace.

And I'm just kind of curious, as you've talked to your customers and these have obviously kind of come into the market, have you noticed any change from your perspective in terms of share gains or just kind of incrementally working with customers? I'm just kind of curious if the tariff dynamic has really changed your position in the market at all or not?

No, not at all. I mean everybody has raised their prices and the raising of the prices came from a local competitor or local competitors before we did it. We follow the trend. We were going to absorb the tariff if nobody else increases the prices to keep competitive and not lose market share. But on the contrary, we -- everybody raised the prices, and we have gained market share, and we're going to keep gaining market share.

Now as we said on the press release, around 20% to 25% of all our sales are outside Florida. That's going to keep gaining momentum, and we hope in a year or 1.5 years from now, 50% of the growth is going to be outside of Florida. And we're doing really good. I mean, our product mix is great. Our service is great. The customers love the performance. So we plan to keep gaining market share for sure.

And this is Christian. And we also plan to make up for the tariffs with more volume and also with cost -- cutting costs. We have implemented a program to cut our costs significantly in the next few months. And we'll be -- by the end of the year, we'll be back to the levels of profitability that we have before.

Okay. That's really helpful. And then Santiago, just I was hoping maybe you could kind of dial in Q2 for us maybe a little bit, just given, obviously, the tariffs are kind of coming into the P&L. And I think typically, you do see kind of a step-up in revenue just from a seasonality perspective. So any kind of broad kind of comments on how we should think about the model for the second quarter, please?

Yes. As we have discussed previously, you're going to have a quarter in which you have the impact of the newly established tariffs, but yet you don't have the impact of the pricing actions that took place in May, right? So you're going to have a step down Q2 just based on the fact that you have the incremental costs associated with tariffs, but the offsetting on pricing starts taking place in late June, early July, right?

So from that perspective, you will see a step down, albeit at a higher revenue base. And essentially, as you saw in the press release, we saw acceleration in terms of revenues and orders in March, and we're seeing that in April as well. So we're seeing a step-up in revenues. On the backlog side, obviously, we know where we are, and you saw what happened with the commercial construction segment growing 20%. We expect that trend somewhat to continue.

And on the resi side, we did see acceleration at the end of Q1 and beginning of Q2. So from a top line perspective, we're expecting Q2 to be higher than Q1. You will have the impact, however, of the tariffs not being fully offset by pricing on this quarter, but that will be partially offset in Q3 once orders placed in May start hitting P&L.

Okay. And then mechanically, the tariffs fall, I believe, for you in SG&A. So do you -- would you actually see gross profit pick up a little bit sequentially and then kind of offset by the higher SG&A, so EBITDA actually goes down?

I think it's going to be more or less in line. You will have some impact of higher aluminum cost that wasn't prebought. Remember that we were expecting aluminum to cover us through May. So you're going to have aluminum flowing through the P&L at newly spot prices, not at the levels that we bought it earlier in the year.

So I think that probably balances out, and we end up with somewhat similar gross profit margins. If we're able to get more operating leverage on higher sales, maybe a little bit higher. But I would say base case, we end up around the 39% gross margin profile.

This concludes our question-and-answer session. I would like to turn the conference over to Jose Manuel Daes for closing remarks.

Well, thanks, everybody, for participating on today's call. We are doing our best to keep growing and having the best margins in the industry and wait for the better news. Thank you.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good day, and welcome to the Tecnoglass, Inc. Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions]

Please note this event is being recorded. I would now like to turn the conference over to Mr. Blake Warren of Investor Relations. Please go ahead, sir. .

Thank you for joining us for Tecnoglass Fourth Quarter and Full Year 2025 Conference Call. A copy of the slide presentation to accompany this call may be obtained on the Investors section of Tecnoglass website. Our speakers for today's call are Chief Executive Officer, Jose Manuel Daes; Chief Operating Officer, Chris Daes; and Chief Financial Officer, Santiago Giraldo. I'd like to remind everyone that matters discussed in this call, except for historical information, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding future financial performance, future growth and future acquisitions. These statements are based on Tecnoglass current expectations or beliefs and are subject to uncertainty and changes in circumstances.

Actual results may vary in a material nature from those expressed or implied by the statements herein due to changes in economic, business, competitive and/or regulatory factors and other risks and uncertainties affecting the operation of Tecnoglass' business.

These risks, uncertainties and contingencies are indicated from time to time in Tecnoglass' filings with the Securities and Exchange Commission. The information discussed during the call is presented in light of such risks. Further, investors should keep in mind that Tecnoglass' financial results in any particular period may not be indicative of future results. Tecnoglass is under no obligation to and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events changes in assumptions or otherwise. I will now turn the call over to Jose Manuel, beginning on Slide #4.

Thank you, Blake, and thank you, everyone, for participating on today's call. We are pleased to report another year of strong performance for 2025, our record revenues of $984 million reflect the strength across our businesses and our consistent ability to gain market share and capitalize on demand for our differentiated offerings. These results are a testament to the dedication of our team and the durability of the competitive advantages we have built over many years.

Our single family residential business delivered yet another record year with revenues growing to an all-time high of $403 million. Growth was driven by our expanding dealer network, geographic diversification into new markets, a strong pricing execution, and the momentum in our wider product line.

Our multifamily and commercial businesses was similarly strong with revenues growing to $580 million on robust demand for our high-performance products in high-end resignation and luxury launching projects. From an operational standpoint, I am particularly proud of our team's ability to maintain our industry-leading margin profile through a unique challenging year. This reflects or consistent pricing discipline and significant cost control measures. These actions more than offset the impact of tariffs and increased raw material costs supporting a stable gross margin for the year.

We also continue to ramp up our mining windows product portfolio and diversified our manufacturing footprint through the Continental Glass System acquisition, both of which help us expand our presence into different markets and diversify our operational platform. This robust operational performance, along with our disciplined working capital management directly into a strong cash generation. Cash flow from operations of $136 million for the full year allowed us to return substantial value to our shareholders through dividends and our share repurchase program.

To that end, we repurchased $180 million in shares during the year, including $88 million in the fourth quarter alone. We announced today the Board has expanded our share repurchase authorization by $100 million, reflecting their confidence in our continued cash flow generation capabilities, the strength of our balance sheet and our commitment to delivering superior returns to shareholders.

In summary, 2025 was a year that demonstrated the durability and adaptability of our business bubble. We grew revenue to nearly $1 billion, maintained our gross margin profile in the face of significant external headwinds, diversified our manufacturing and product platform and returned substantial capital to shareholders. Our performance, along with our record backlog positions us well for another year of record revenue and value creation in 2026.

I will now turn the call over to Chris to provide additional operating highlights.

Thank you, Jose Manuel. Moving to Slide #5 and 6. We maintained a sharp focus on operational execution throughout 2025, Our overall performance through a dynamic macroeconomic environment reflects the durability of our differentiated platform and the dedication of our team to delivering best-in-class products and service to our customers. In 2025, we delivered double-digit revenue growth in our multifamily and commercial business driven by continued strong performance in our key markets and incremental contribution from our Continental Glass system asset acquisition completed at the beginning of the year.

Continental continues to integrate smoothly into our operation, enhancing our capabilities in high-end architectural glass and glazing while providing us with a diversified manufacturing presence in Florida. Activity remains healthy across our commercial markets given our expansion into new markets and ability to gain market share, which is reflected in our double-digit revenue growth expectations for 2026.

The trend of our activity is also reflected directly in yet another backlog record number, which closed the year up 16% to a record $1.3 billion. Our book-to-bill ratio of 1.1x in the fourth quarter extended our track record to 20 consecutive quarters above 1.1x. Our project cancellation rate is near 0 given our late stage installation profile and our backlog has demonstrated consistent sequential growth every quarter since 2021. I will also reiterate a key point that the composition of our backlog has shifted more towards high-end large-sized projects recently, which tend to be less sensitive to higher interest rates and overall affordability constraints.

Moving to Slide #7. Our single family residential business achieved record full year revenues of $403 million compared to $372 million in 2024. The year-over-year improvement reflects dealership growth, geographic expansion and ongoing contributions from our vinyl products. Despite challenging macro conditions, we were encouraged to see order received during the fourth quarter growth by double digits year-over-year with additional momentum into the new year as January orders outperformed the prior 2 months, giving us confidence heading into 2026.

Over the course of 2025, our dealer base expanded considerably, driven largely by expansion into new geographies beyond our traditional core markets. Our Los Angeles showroom is expected to open in the first quarter of this year, adding to our existing showrooms in Florida, South Carolina, New York, Texas and Arizona and serving as a hope for our legacy light aluminum line in the Southwest.

Our vinyl expansion continues to progress well with robust quoting activity validating the significant market opportunity ahead. Across all product lines, our quality, efficient lead times and superior service and competitive pricing continues to be key difference makers in attracting and retaining dealers.

Turning to Slide #8. The broader market backdrop as we enter 2020 gives us additional confidence in our long-term trajectory. Total U.S. construction spending is expected to grow approximately 1% this year with residential spending projected to increase approximately 2% as affordability conditions improve. Contractor sentiment has moved back into expansion territory with the national remodeling conditions index at 54.5. and the backlog component strengthened meaningfully to 70.4 in the first quarter of 2026 from 54.6 in the fourth quarter of 2025, a leading indicator that aligns well with what we are seeing in our own order activity.

From a regional perspective, the South Atlantic, Mid-Atlantic and West South Central Sensors divisions where our business is more concentrated are projected to be among the strongest performing regions from residential construction spending in 2026. This geographic alignment between our platform and the market expected to outperform underpins our growth outlook for 2026. Additionally, we continue to expect that market share gains in the new geographies and product segments will allow us to outperform market growth in years to come.

I will now turn the call over to Santiago to discuss our financial results and full year outlook.

Thank you, Christian. Turning to the drivers of revenue on Slide #10. Total revenues for the fourth quarter increased 2.4% year-over-year to $245.3 million. The growth was driven by positive momentum in our multifamily and commercial business. This was partially offset by a modest decline in single-family residential, which saw pricing and share gains that we had a very challenging prior year comparison. Full year revenues increased 10.5% to a record 983.6 million. The full year growth came from both our multifamily and commercial and single-family residential businesses, reflecting strong execution on a record backlog, healthy conditions in our core Southeast high-end commercial portfolio, geographic expansion and continued traction in our vinyl product line. .

Looking at the profit drivers on Slide #11. Full year adjusted EBITDA reached $291.3 million, representing a margin of 29.6% compared to 31% in the prior year. On a full year basis, gross margin increased slightly to 42.8% compared to 42.7% in the prior year. The essentially stable full year gross margin despite challenging macroeconomic factors during the second half reflects stronger pricing and operating leverage that more than offset the impact of tariffs and higher raw material costs, a strengthening Colombian peso and higher salary expenses throughout the year.

Full year SG&A as a percentage of revenue was approximately 20% and compared to 17.2% in the prior year, mainly due to the tariffs paid during 2025, which increased our selling expenses year-over-year. Full year performance was stronger in the first half given different macro headwinds that started toward the middle of the year. Accordingly, adjusted EBITDA for the fourth quarter 2025 was $62.2 million, representing an adjusted EBITDA margin of 25.4% compared to $79.2 million or 33.1% in the prior year quarter. Consistent with the dynamics we highlighted on our last earnings call, the fourth quarter carry the full weight of the cost headwinds and stronger local currency that intensified through the second half of the year. Fourth quarter gross margin was 40% compared to 44.5% gross margin in the prior year quarter. The year-over-year change in gross margin was driven by 3 key factors: first, an unfavorable revenue mix with a higher proportion of installation revenues, which reached a record high during the fourth quarter; second, near all-time high U.S. aluminum costs which continued their steep climb throughout the fourth quarter and significantly impacted our raw material cost; and third, a significant revaluation of the Colombian peso which strengthened approximately 9.5% year-over-year in the quarter, creating an unfavorable effect on our margins.

These headwinds were partially offset by stronger pricing flowing through from the adjustments we implemented earlier in the year. SG&A for the fourth quarter was 21.8% of revenue compared to 16.4% of revenue in the prior year quarter. The increase primarily reflected aluminum and reciprocal tariff expenses on stand-alone component sales, higher personnel expense from annual salary adjustments and stronger Colombian peso during the period and higher transportation and commission expenses associated with revenue growth.

We provide a closer look at the primary headwinds that impacted our margins in the second half of 2025 on Slide #12, namely aluminum and FX which continued to move sharply following our last earnings call. With respect to aluminum, it is important to distinguish between the 2 separate dynamics. The $25 million tariff impact we communicated earlier in the year was fully offset through our pricing actions. The more significant headwind was the sharp escalation in underlying aluminum cost independent of tariffs. Global aluminum spot rates spiked higher. And on top of that, U.S. Midwest aluminum premiums more than doubled during the year, creating industry-wide margin pressure that accelerated materially in the second half of the year.

Separately, we faced aluminum and reciprocal tariffs on stand-alone component sales, which we have proactively addressed through targeted mitigation actions, including pass-through pricing on stand-alone glass and aluminum products and securing U.S. aluminum supply to mitigate tariff headwinds. As cost mitigation offsets, our pricing adjustments implemented earlier in the year partially offset a portion of the higher aluminum cost in the fourth quarter.

Looking ahead, our continued expansion into vinyl windows and eventual normalization of input costs or potential future pricing adjustments to reduce the impact of aluminum cost as a percentage of sales over time. We continue to evaluate incremental pricing actions as warranted by market conditions, but have not embedded this assumption within our guidance scenarios and could represent potential upside to our outlook. Looking at foreign exchange dynamics, the Colombian peso appreciated approximately 12% during full year 2025, moving from 43.08 to 37.91 per dollar. Given the approximately 20% to 25% of our costs are peso denominated, this appreciation made our Colombian cost base more expensive and pressure margins, compounded by salary adjustments in Colombia during the year.

To partially mitigate this exposure, we hedged a portion of our Colombian peso exposure during 2025 and will continue to be opportunistic in executing hedges in 2026 above our current guidance assumptions, creating potential upside to guidance.

Now examining our strong cash flow and balance sheet on Slide #13. We generated $135.8 million in operating cash flow for the full year 2025, driven by effective working capital management and solid underlying profitability. Capital expenditures of $89 million included scheduled payments on previous investments as well as expenditures related to the Continental Glass Systems acquisition. Our balance sheet remains solid with liquidity of approximately $465 million at year-end, including a cash position of approximately $100.9 million and $365 million of availability under our revolving credit facility and bilateral lines of credit.

In September, we refinanced our senior secured credit facility, expanding capacity to $500 million, reducing spreads by 25 basis points and extending the maturity to 2030. We have no significant debt maturities until year-end 2030. With net debt to LTM adjusted EBITDA of 0.24x, we maintain a conservative leverage profile that provides significant financial flexibility to continue investing in growth initiatives and returning capital to shareholders.

On Slide #14, our strong track record of generating returns above the broader industry continues to validate our disciplined capital allocation approach. Over the past 3 years, our strategic investments in operational excellence and capacity expansion have consistently delivered superior returns for our shareholders, driven by our industry-leading profitability, very clean integrated platform and significant improvements to working capital. These strengths continue to generate sustainable cash flow and shareholder value while preserving financial flexibility to pursue additional growth opportunities. We're also pleased to have returned substantial capital to shareholders through share repurchases and dividends during the year. During 2025, we repurchased $118 million in shares, including $87.6 million in the fourth quarter alone, partially funding that activity through a draw on our revolving credit facility, reflecting our conviction in the intrinsic value of the business. In total, we returned approximately $146 million to shareholders through repurchases and dividends.

Given the Board's confidence in our continued cash flow generation capabilities, prudent balance sheet management and commitment to delivering superior returns to shareholders they approved an expansion on our share repurchase authorization to $250 million in total, resulting in approximately $110 million of remaining repurchasing power. In addition to the expansion of the buyback program, our Board also approved the redomiciliation of the company from the Cayman Islands into the U.S. Subject to shareholder approval, which will be sought within the next couple of months, the company would now be both headquarter and domicile in the U.S., continuing our long-term strategy to become even more U.S.-centric as we become a larger company with a complete nationwide footprint.

The redomicile into the U.S. will help us achieve turn tax efficiencies from a corporate level perspective as well as to facilitate dividend distributions to shareholders.

Now moving to our outlook on Slide 16. Our full year 2025 performance demonstrated the strength of our business in a toughening macro environment into year-end that has continued into early 2026. Based on the visibility provided by our residential order book in multiyear backlog, we are introducing our full year 2026 outlook for revenues to be in the range of $1.06 billion to $1.13 billion, representing growth of approximately 11% at the midpoint of the range.

Additionally, we're introducing our adjusted EBITDA outlook in the range of $265 million to $305 million. Our high-end outlook assumes continued downward trends in interest rates benefiting mortgage rates and improved affordability, a more favorable interest rate environment supporting a broader acceleration in project invoicing. The high-end outlook assumes continued market share gains and strong execution in new geographies in vinyl as well as full backlog execution without significant project delays. At the top end, we expect aluminum input costs to soften approximately 10% by the middle of the year versus year-end 2025 levels and the Colombian peso to trend 4,000 pesos per dollar, which is essentially stable year-over-year.

The top of the range also assumes annual salary adjustments in Colombia that are offset by favorable operating leverage and efficiency gains. The low end of our range contemplates a more challenging environment in which the Fed does not cut rates during the year, constraining residential invoicing momentum with high single-digit revenue growth, driven primarily by backlog execution, market share gains and flattish single-family revenues. Under this scenario, we also assume a more gradual expansion in new geographies in vinyl and potential timing shift in certain commercial projects into 2027. The low scenario further assumes stable aluminum input cost versus year-end 2025 and the Colombian peso remaining below 3,800 pesos per dollar with annual salary adjustments in Colombia, not being fully offset by operating leverage.

As mentioned earlier, our guidance range establishes a baseline that excludes several potential upside levers. Specifically, our outlook does not factor in additional pricing actions or opportunistic hedging strategies that we are actively evaluating to further protect margins. From a seasonal perspective, we expect the first quarter of the year to be softer as some of the aforementioned headwinds remain in place currently, and the level of orders started picking up earlier this year with actual invoicing expected to take place within the second quarter and beyond; both assumptions also bake in an incremental amount of installation revenue in line with our previous discussions around the shift in backlog composition geared to larger projects in which we do both supply the windows and perform installation.

Under both scenarios, we expect another year of strong free cash flow generation. Working capital should continue to be a source of cash as we further penetrate residential markets, so this will be partially offset by longer cash conversion cycles in our growing installation business. Capital expenditures are projected to be in the range of $60 million to $75 million, which includes maintenance CapEx at approximately 1% of revenues and the remainder for planned investments in efficiency initial years. As previously disclosed, in 2025, we initiated a feasibility study for a new state-of-the-art largely automated facility in the U.S. If we decide to move forward with the project and the diligence process is completely favorably, our 2026 investment related to this would be limited to an estimated of $20 million to $25 million for the land acquisition only.

This potential land purchase is not included in our current 2026 capital expenditure guidance and remains subject to a final investment decision and the ongoing assessment of demand trends and overall market conditions. Beyond the land purchase, we do not expect significant additional capital deployment on this initiative in 2026 as we complete equipment testing and continue to monitor demand trends.

In conclusion, our fourth quarter and full year 2025 results demonstrate our ability to deliver strong results in a dynamic environment. We are leveraging our competitive advantages, including our very clean integrated manufacturing platform, our expanding geographic footprint and our diversified and growing product portfolio to gain share and drive long-term value for our shareholders.

With a record backlog, a growing national presence in single-family residential, a strengthened balance sheet and multiple growth initiatives advancing, we entered 2026 with a strong momentum. These advantages are structural and durable. Our share gains and geographic expansion are on track and we remain confident in our ability to continue outperforming the market for years to come.

With that, we will be happy to answer your questions. Operator, please open the line for questions.

[Operator Instructions]

And first question today will come from Sam Darkatsh with Raymond James.

Good morning, Jose Manuel, Chris, Santiago, how are you? .

Good morning. Doing well. Thank you.

So I'm just going to ask some clarification or quantification question, Santiago, apologies for this. You mentioned that the first quarter was softer. Can you give us a sense, generally speaking, of sales, gross margin, EBITDA type of thing that we should be expecting for the first quarter, knowing that 2/3 of it is done at this point?

More or less in line with Q4. That's what we would expect. Remember that in Q1, you also have a couple of weeks of scheduled maintenance shutdown. So you have a shorter quarter, in line with Q4 when we shut down at the end of the year. So it would be more or less in line with that. .

Got you. And then within the '26 framework at the low end and the high end, what are your expectations for gross margins, general and administrative and then also tariffs?

On tariffs, just the ongoing tariffs on stand-alone product, we continue to supply aluminum from the U.S., but being able to mitigate that impact. On the gross margin from the low to the high end, you have about 200 basis points of difference from high 30s to low 40s, depending on where we are. And obviously, the main impact would be the input cost as it relates to raw materials, the FX, as you saw in the presentation, we are providing different scenarios that outline what the assumptions would be on either case.

SG&A, we expected to go down in terms of percentage of our sales based on the fact that we will not incur aluminum tariffs as we did in 2025. But obviously, on a nominal basis, when we're growing 11% at the midpoint, you have some variable expenses related to transportation and commissions and salary adjustments that increased the nominal base.

But as a percentage of sales, the idea is that we should be slightly lower.

Your next question will come from Rohit Seth with B. Riley.

Hi Santiago. Can you talk a little bit about the pricing actions that you have not yet implemented, what products are on? And when do you expect to put those prices out.

Well, this is Jose Manuel. We have to wait and see the reaction of the total market in order to raise our prices. We would like to raise the prices. Obviously, we have started in all the new jobs but in residential, our competition is strongly, so they have not raised their prices in order to gain market share. We have not raised, not to let them take the market that we do have. So we'll have to wait and see.

Okay. And just a follow-up on the vinyl and your new product lines. Can you just quantify how much of the new product lines you achieved in 2025 and what you're expecting to see in 2026?

Our base case shows that we ended up with vinyl roughly around $10 million for the year. We expect that to increase at least 2.5 to 3x in 2026. We feel that there is upside to that base case and the cadence of sales will dictate how much we're able to ramp that up at the end of the year. As we have discussed in previous calls, the main issue was not having the full availability of the products, which we feel good about at this point in time, the dealer base has increased over 20% year-over-year. A lot of that is vinyl dealers. So in essence, the seed has been planned to execute and grow that a few times over year-over-year. .

Understood. And so the certification of those products is done, you have the full product line set up and ready to go?

Yes, that is the case. It's just a matter of executing on sales.

Okay. All right. I'll pass it along.

The next question will come from Tim Wojs with Baird.

Maybe just kind of first question. I guess, would you expect to see the U.S. commercial revenue accelerate in '26. I think it grew 11% in '25, but your backlog has clearly been up more than that over the past few years. So should we start to see those growth rates merge as that backlog starts to convert in a bigger way in '26?

Yes, sure. Commercial is going to grow in '26 and '27 because not only we have a big backlog in Florida, mostly, but we are expanding our reach into other markets by our installer GMP. So we expect to the commercial side to keep growing at a very big pace, double digits or more.

Okay. And I guess when you're if you're thinking about kind of the backlog in the pipeline, I mean, has anything -- I know the market is choppy. But has anything changed there? I mean do you guys still expect to see some pretty good backlog growth in '26 as well?

Yes. Yes, for sure. We see a lot of commercial activity in the Northeast that was seen before. And now we are landing jobs in Texas, Utah, Colorado, we expect with our new brand in California to gain a lot of traction there, too. .

Okay. Okay. Great. And then San, what is the residential assumption for revenue at the midpoint of the guide? I think they did, what, $403 million this year?

We ended up $403 million. What we're expecting is on the kind of legacy Florida business to be up low single digits. And then the rest of the growth coming from vinyl in non-Florida opportunities. And we expect that obviously, altogether to equate to a double-digit growth year-over-year as well. So both segments, we are projecting to grow double digits. And on the resi side, coming more from geographical expansion in vinyl. .

Okay. Okay. Great. Good luck on your guys.

All right. Thanks, Tim. .

Next question will come from Julio Romero with Sidoti & Company.

Thanks for the vinyl breakout earlier of about $10 million in '25. I think you said about 2.5 to 3x is expected in '26. Kind of same question, but for the showrooms, your 5 showrooms going soon to be 6 in the first quarter. Just help us level set the contribution there? And is that separate from the Vinyl contribution expected? How would you have us think about that?

Yes, because the showrooms not only have the new vinyl lines, but they have the new legacy line many new products that we are -- we developed last year, like, for example, the garage door, we have a garage door now, but it was only for impact hurricane impact in Florida. Now we developed the garage door nation wide, and we expect that to ramp up a lot and also, we have a new few doors and windows that have had tremendous success with our clients. They love it. I think we're going to grow double digits, but we hope it's going to be a lot in the high double digits.

And I guess just to rephrase that a little bit. I guess I'm just asking how much incremental aside from the $10 million in vinyl came from the showrooms in '25 and how much kind of separate from that is '26 that doesn't overlap?

On the showrooms, remember that, that's both commercial and residential, right? So if we wanted to kind of break that out on the resi side for the showroom revenues, we ended up at about $10 million, and we're expecting to do $30 million to $35 million this year. So again, that segment of the business in line with the answer to Tim's question earlier, is what is going to drive the single family residential growth. Both vinyl and non-Florida resi are expected to grow 2.5, 3x this year.

Very helpful. And I guess -- you also mentioned that on the new plant that you're evaluating, you're also looking at new opportunities such as Buy America projects and quick turnaround. I was just hoping you could dive into that a little bit for us.

Well, we are in the state. This is Christian. We are going to be testing the new technology in Colombia first and make sure that we can reach a level of automation in off. So we require the least amount of people to work. I mean, we don't want to have another place with 9,000 employees. We want to have 1,500 or the most 2000 and be able to first deliver faster, also make about the same amount of money because there will be some savings on transportation and the tariffs and all that.

And it will be to have also a good thing to have in the states. But obviously, it's not going to take care -- take place this year because we're going to be testing at the end of the year, all the technology. So it will be a decision that we make by February or March of next year of what to build in the U.S. and how to build it. We are close to buying the land, but it's also important for us to -- I mean, to our products to be by American. And another thing is that regardless of the product being manufactured in Colombia, almost all raw materials come from the U.S. So we are American company anyways.

Yes, absolutely. And I think maybe just to look at that -- thank you, Christian, for another angle is just when I hear by America projects, I think about like federally funded infrastructure projects or something of that nature. So could your window products potentially participate in projects such as those?

Well, they used to be able to participate with the free trade agreement that we had in place because all the materials were manufacturing in the U.S. and not anymore. So with the new plant, if we build it next year, that will be an advantage that we will have to be able to do further buildings, too. So we're trying to keep growing and our idea is to double ourselves in the next 3 to 5 years. And we don't -- we're not doing this only for the money, but because it's our life and we love what we do. And we've been doing it for over 40 years. So this is the way to go.

Absolutely. -- and best of luck in 2026. .

Your next question will come from Deane Vilas with D.A. Davidson.

Yes. I apologize if perhaps repeating some of the things you mentioned, but could you just kind of like walk me through with some of the cadence of the nonresidential -- the commercial and single-family kind of work that you'll be doing through first half in the second half compared I guess what I'm getting to is I'm wondering, is there -- as you're expanding into Northern Florida and some of perhaps dynamic changes that's occurring in your commercial side. Is that influencing how you move through the backlog?

So let me rephrase and make sure I'm getting your question right. In terms of cadence of revenues. The way that we're projecting this is that each sequential quarter is going to be incremental revenues as we move through the year. As we said earlier, the first quarter is expected to be kind of more or less in line with Q4 and then sequentially, both because of the backlog visibility that we have and the geographical penetration and the vinyl ramp-up, we're expecting revenues both in the single family residential and the commercial segments to go higher as we're moving through the year. So it's going to be back loaded based on those assumptions. .

Okay. Appreciate that. And then just thinking about the impact of aluminum, is that under your assumption, does that alleviate then in the second half? Or is there a sequential taper coming off your 1Q guidance?

No. I mean if you look at the presentation that we put together and what we discussed here is that there's 2 scenarios. On the downside, we're assuming stable pricing in line with what you saw at the end of last year. which is kind of more like what we're seeing today. If you're looking at the upside, we're assuming that aluminum prices taper up and we get a benefit in the second half of the year, because as of now, we're almost 2 months into this and aluminum prices remain elevated.

Makes sense. And just on the vinyl -- is there a space for a bigger upside as you have more and more products available. And you mentioned that there is better bundles that you -- better opportunities when you sell these different products that have vinyl in them. Do we look -- is the 3x is -- yes, is it 3x just the top? Or is there more of an upside that you could grow from there on that vinyl tap?

3x is the minimum we expect. We are very conservative on that side. If everything falls into place, we expect to go, let's assume that this year, we were selling around $1 million a month. We expect from the second half of the year to do $5 million a month. And we believe that we're going to do -- that's going to ramp up next year to do at least $10 million of, that is what we expect, we'll have to see. But $20 million is a conservative estimate. .

Thank You so much. I appreciate your time.

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Jose Manuel Daes for any closing remarks.

Well, thank you, everyone, for participating on today's call. And in spite of all that is happening in the market, in spite of the tariffs, in spite of the aluminum going up, in spite of the devaluation of the dollar, we have done very well. The company is going to keep striving. We have a lot of plans of growth for '26, '27 and '28 and we're going to make our clients happy and our investors more than happy. Thank you. .

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

I call the 2025 Annual General Meeting of Tecnoglass Inc. to order. I am Santiago Giraldo, Chief Financial Officer of the company. Also present is Andrea Zambrano, our General Counsel.

I appoint Andreas Zambrano to add the inspector of this meeting and to execute the oath of office.

I present the affidavit of Continental Stock Transfer & this company, showing that notice of the annual meeting and proxy statement was mailed on December 1, 2025, and to all shareholders of record at the close of business on November 24, 2025.

I ordered the affidavit to be filed in the minute book immediately following the minutes of this meeting.

I present the list of shareholders of record as of the close of business on November 24, 2025, as certified by Continental Stock Transfer & Trust Company.

Will the inspector please report on the number of shares eligible to both the number present and the presence of a quorum.

46,569,446 ordinary shares outstanding and eligible to vote. At least 50% of such shares are represented at this meeting by proxy or in person.

Legal notice of the meeting has been given. A quorum is present, the meeting is regularly and lawfully convened and ready to transact business.

The first item of business is to elect two Class C directors to the company's Board of Directors, Jose Manuel Daes and John Paul Pérez have been nominated for election to serve as Class C directors to hold office until such term expires in 2028, and their successors are elected and qualified.

I move for their election.

I second the motion.

Are there any persons present who wish to cast a ballot or change their proxy cards?

Management casts proxies are directed by the shareholder instruction set forth on such proxies.

The shares voting were sufficient to elected two Class C directors.

The second item of business is to approve on an advisory basis, the executive compensation of the company's named executive officers.

I move for his approval.

I second the motion.

Are there any persons present who wish to cast a ballot or change their proxy cards?

Management casts proxies are directed by the shareholder instructions set forth on such proxies.

And the majority of the outstanding shares present and entitled to voted in favor of the proposal.

The third item of business is to select, on an advisory basis 1 every 3 years as the frequency with which the company will hold an advisory shareholder vote to approve executive compensation.

I move for his approval.

I second motion.

Are there any persons present who wish to cast a ballot or change their proxy cards?

Management casts proxies as directed by the shareholder instructions set forth on such proxies.

A sufficient number of shares were voted in favor of the proposal.

Representatives of PricewaterhouseCoopers, the company's auditors will respond to any appropriate questions you may have after the meeting. At this time, all of the business to come before this meeting is now completed.

I will entertain a motion to adjourn the meeting.

I so moved.

I second the motion, meeting adjourned.

Good morning, and welcome to the Tecnoglass Third Quarter 2025 Conference Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Brad Cray, Investor Relations. Please go ahead.

Thank you for joining us for Tecnoglass' Third Quarter 2025 Conference Call. A copy of the slide presentation to accompany this call may be obtained on the Investors section of the Tecnoglass website. .

Our speakers for today's call are Chief Executive Officer, Jose Manuel Daes; Chief Operating Officer, Chris Daes; and Chief Financial Officer, Santiago Giraldo. I'd like to remind everyone that matters discussed in this call, except for historical information, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. And including statements regarding future financial performance, future growth and future acquisitions.

These statements are based on Tecnoglass' current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary in a material nature from those expressed or implied by the statements herein due to changes in economic, business, competitive and/or regulatory factors and other risks and uncertainties and affecting the operation of Tecnoglass' business.

These risks, uncertainties and contingencies are indicated from time to time in Tecnoglass' filings with the SEC. The information discussed during the call is presented in light of such risks. Further, investors should keep in mind that Tecnoglass' financial results in any particular period may not be indicative of future results. Tecnoglass is under no obligation to and expressly disclaims any obligation to update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise.

I will now turn the call over to Jose Manuel, beginning on Slide #4.

Thank you, Brad, and thank you, everyone, for participating on today's call. We are pleased to report another exceptional quarter that demonstrate the strength and resilience of our business model even under challenging macroeconomic conditions. Our third quarter total revenues reached a record $260.5 million, up 9.3% year-over-year driven by strong organic growth from both our single-family residential and multifamily commercial businesses.

Our robust results in the face of market uncertainty and ongoing inflationary pressure showcases our team's dedication to excellence and our ability to consistently outperform market trends.

In our single-family residential business, we grew revenue of 3.4% year-over-year to a record $113.5 million. This performance reflects the early benefits from our pricing initiatives implemented earlier this year. Continued market share gains through geographic and leadership expansion and contribution from our growing final portfolio.

Our multifamily and commercial business delivered impressive growth of 14.3% year-over-year to a record $147 million. The improvement reflects both bank share gains in key markets and solid execution on our expanding project pipeline. The industry outperformance we're seeing in our commercial activity has resulted in a record backlog of $1.3 billion, up over 20% year-over-year.

We maintained a strong profitability with a gross margin of 42.7% and an adjusted EBITDA margin of 30.4%. Our vertically integrated platform a previously implemented strategic pricing actions are helping to mitigate various cost pressures positioning us well as we move into 2026. This margin resilience, combined with our disciplined working capital management, drove robust cash flow from operations.

This cash generation enabled us to return significant capital to shareholders while maintaining strategic flexibility. To that end, we were pleased to report a $30 million in shares and pay $7 million in dividends during the quarter.

Our both to expand our share repurchase program to $150 million reinforces the confidence in the business and our commitment to balance capital allocation. Our third quarter results demonstrate the power of our vertically integrated business model and our ability to execute in a dynamic environment.

With our strong balance sheet, record backlog providing multiyear visibility and multiple growth initiatives and advancing, we remain confident that ever in our ability to continue delivering exceptional shareholder value for years to come. I will now turn the call over to Christian.

Thank you, Jose Manuel. Moving to Slide #5 and 6. Our third quarter performance reflects the successful execution of our growth strategy across both businesses with a stable order activity and continued market share gains across our key regions. Our multifamily and commercial business delivered record revenue driven by robust activity within the key markets.

We ended the quarter with another record backlog of $1.3 billion up substantially over 20% year-over-year. This expanding pipeline provides a strong visibility through 2026 and 2027, with additional market share gain opportunities across our core geographies, and project execution on track. Our backlog has seen consistent sequential growth since 2021, reflecting sustainability of our structural competitive advantages even under challenging macroeconomic conditions.

Our book-to-bill ratio remained healthy at 1.3x for the third quarter, continuing our track record of maintaining a ratio above 1.1x for the past 19 consecutive quarters. As previously stated, the composition of our backlog has changed during the last year, shifting more towards high-end large-sized projects which tend to be less sensitive to higher interest rates and overall affordability. Moving to Slide #7. Our single-family residential business achieved record revenues on entirely organic growth.

This performance was driven by previously enacted pricing initiatives that are now flowing through the P&L and helping to offset higher input costs. We were encouraged by double-digit year-over-year increase in residential orders during this quarter.

This is very notable because we had $5 million to $7 million in orders that pull forward into the second quarter ahead of our price increase. This positive performance demonstrates successful geographic expansion. Strong reception of our expanded product offering, more than 20% year-over-year growth in our dealer network and growing contributions from our vinyl product line.

We are excited about several growth initiatives that we expect will further strengthen our market position. Our dealer network expansion continues to drive market penetration support by short lead times and initiative products offering. Better than nationwide demographic trends across our key Southeast markets, combined with our geographic diversification efforts are creating multiple avenues for continued market share gains.

The California showroom opening in the fourth quarter and the introduction of the light aluminum legacy line designed for new geographies represent an important milestone in our geographical expansion, where we are already seeing encouraging growth in orders with our expand product line portfolio expanding aluminum and vinyl solutions, we are well positioned to continue to grow into 2026.

Additionally, we continue to advance our feasibility study for a new fully automated facility in Florida which would diversify our manufacturing footprint and provide logistics and lead time advantages in many of our target markets, further strengthening our vertically integrated platform.

I will now turn the call over to Santiago to discuss our financial results and full year outlook.

Thank you, Christian. Turning to the drivers of revenue on Slide #9. Total revenues for the third quarter increased 9.3% year-over-year to a record $260.5 million, with growth in both our single-family residential and multifamily commercial businesses. This performance reflects pricing gains as well as a robust demand for our best-in-class product offerings, driving strong organic momentum. Our Continental glass asset acquisition contributed approximately $4 million to revenue during the quarter.

Looking at the profit drivers on Slide #10. Adjusted EBITDA for the third quarter of 2025 was $79.1 million, representing an adjusted EBITDA margin of 30.4% compared to $81.4 million or a 34.2% margin in the prior year quarter. This quarter, gross profit was $111.3 million, representing a 42.7% gross margin compared to gross profit of $109.2 million, representing a 45.8% gross margin in the prior year quarter.

The year-over-year change in gross margin reflected several factors. First, we had an unfavorable revenue mix with a higher proportion of installation revenue. Second, raw material costs were impacted by U.S. aluminum premiums reaching all-time highs during the quarter. Third, the Colombian peso strengthened significantly during the quarter. affecting our nonhedged portion of local costs.

SG&A expenses were $47.3 million or 18.2% of total revenues compared to $41.5 million or 17.4% of total revenues in the prior year quarter. The increase included approximately $3.1 million in aluminum tariffs on stand-alone component sales, which we are mitigating through our pricing actions.

Additionally, we had higher transportation and commission expenses associated with our revenue growth as well as increased personnel expenses related to annual salary adjustments implemented at the beginning of the year. Our strategic pricing initiatives and cost control measures are gaining traction.

We implemented mid-single-digit pricing adjustments on residential products and shifted to U.S. sourced aluminum. And we're beginning to see the benefit of those actions as higher-priced orders are invoiced. We expect our pricing actions and supply chain optimization efforts to offset an estimated $25 million full year impact of tariffs and increased premiums on U.S. aluminum.

Now examining our strong cash flow and balance sheet on Slide #11. We generated operating cash flow of $40 million in the third quarter, driven by strong profitability and efficient working capital management, which more than offset incremental inventory purchases of U.S. aluminum and increased receivables on higher installation revenues, which carry longer cash cycles. Capital expenditures of $18.8 million in the quarter included scheduled payments on previous investments and continued progress on our growth initiatives.

We continue to expect capital expenditures to moderate through year-end, driving strong free cash flow generation in the fourth quarter. Our balance sheet remains exceptionally strong with total liquidity of approximately $550 million at quarter end, including a cash position of $124 million and $425 million of availability under our recently refinanced and expanded senior secured credit facility and other bilateral bank facilities.

In September, we expanded our syndicate facility to $500 million from $150 million, reducing spreads by 25 basis points and extending the maturity to 2030, providing significant financial flexibility for growth and other strategic capital allocation initiatives.

With total debt of $111.9 million we maintain a net debt to LTM adjusted EBITDA ratio of negative 0.04x, providing us with tremendous financial flexibility to execute on growth initiatives while returning capital to shareholders. On Slide #12, our strong track record of generating returns above the broader industry continues to validate our disciplined capital allocation approach.

Over the past 3 years, our strategic investments in operational excellence and capacity expansion have consistently delivered superior returns for our shareholders. This outperformance reflects our focus on high return investments in a very clean integrated platform as well as our industry-leading profitability and significant improvements to working capital, which are driving sustainable cash generation and shareholder value while maintaining our financial flexibility to pursue additional growth opportunities.

We're also pleased to continue returning a portion of capital to shareholders through share repurchases and dividends. During the quarter, we repurchased $30 million in shares and paid $7 million in dividends. Given the Board's confidence in our continued cash flow generation capabilities, prudent balance sheet management and commitment to delivering superior returns to shareholders they have authorized an expansion of Tecnoglass share repurchase authorization to $150 million.

Following the expansion, the company had approximately $96.5 million remaining under its existing share repurchase program. Now moving to our outlook on Slide 14. Based on our strong performance through the first 9 months of 2025, and the expectations for the fourth quarter of the year based on current market conditions, we're updating our full year 2025 financial guidance.

We now expect revenues to be in the range of $970 million to $990 million, reflecting growth of approximately 10% at the midpoint. This updated range reflects lower project starts in light commercial due to current macroeconomic uncertainty while maintaining our confidence in double-digit top line growth for the full year 2025 as well as for the full year 2026.

Additionally, we're updating our adjusted EBITDA outlook to a range of $294 million to $304 million, representing approximately 8% growth at the midpoint. This guidance assumes that pricing initiatives and other mitigation efforts will help compensate for the projected $25 million full year impact from elevated input costs and tariffs on select products, but now accounts for higher-than-expected aluminum cost, U.S. aluminum premiums and a stronger local currency.

Key assumptions supporting our outlook include stable volumes on residential orders for the rest of the year. Lower volumes in light construction activity continued downtrend in interest rates, driving mortgage rates lower. FX headwinds from a stronger Colombian peso year-over-year and a healthy cash flow generation during the rest of the year.

We expect low single-digit growth for legacy single-family residential revenue with a higher mix of commercial jobs with installation. We now anticipate gross margins in the low to mid-40% range.

In conclusion, our third quarter 2025 results demonstrate our ability to execute effectively in all environments by leveraging our competitive advantages to gain market share while maintaining industry-leading margins and generating exceptional cash flow with our record backlog providing multiyear visibility, expanding markets presence through geographic and product diversification and strong balance sheet supporting strategic flexibility, we are well positioned to continue our track record of outperformance.

We remain confident in our ability to deliver another year of strong growth in revenues and adjusted EBITDA while creating lasting value for our shareholders and also anticipate to be able to once again grow our top line by double digits in 2026. With that, we will be happy to answer your questions. Operator, please open the line for questions.

[Operator Instructions] Our first question comes from Tim Wojs with Baird.

Hey, everybody. Good morning. Maybe just first on 2026 and kind of calling out double-digit growth. I'm just curious if you could add a little bit of context around the visibility to that, what kind of you're assuming in that number for some of your larger project work, residential and then also just kind of acknowledging some of the kind of weaker kind of smaller commercial projects right now.

Tim, I'll take this first. Obviously, we have a record backlog in place that gives us visibility, especially on the larger projects that are either in execution or already breaking ground that has financial closings in place already. So that gives us a lot of visibility.

And I think the single-family residential component, a lot of the growth is coming from what we're seeing as far as the geographical expansion into other places and the vinyl product ramp-up. We'll obviously come back to you guys with more granular detail. This is kind of like what we're seeing based on making some general assumptions and have a lot of confidence in that. But as far as the breakdown goes and where we think specifically each bucket is going to contribute I think we'll give you more detail in the next call.

Okay. Okay. And then as I think about the cost side of things, is there a way just give us some -- I think aluminum was a $5 million headwind and you had a couple of million dollars from FX. But I guess how do those -- how does the aluminum piece kind of trend in the fourth quarter and early '26? And then -- if you could just maybe talk about kind of when you would expect some of the peso headwinds to kind of normalize out? Is that kind of the mid-2026 time line at this point .

Yes. On the aluminum, if you look at what's happened here in the last 3 months, LME has gone up 15% from about 2,500 to 2,900. So that's been a pretty fast ramp-up. -- and the U.S. aluminum premiums have gone up even faster, about 67% from about $1,000 to $1,800, right? So that's happened fast as of late. I think the thought process here is that as volumes and demand subside, those are going to correct. .

But as of now, is anybody's guess as to what's going to happen there. Hopefully, that won't stay at record high levels for a prolonged period of time. And if you look at what's happened with the FX since our last call, we were at $41.70, and now we're at $38.50. That's an 8% revaluation in 90 days. So again is a headwind of a very rapid ramp-up over the last 90 days.

What's happening there as well is that the government of Colombia data liability management deal where they have monetized a lot of dollars as of late. The expectation is for the peso probably to come back up about 4,000 by year-end. Locally, we're covered on about 60% of our cost and expenses, and we'll be looking to be opportunistic and find an attractive entry point to mitigate that risk going forward. But the expectation based on the economist, is that we should be closer to the 4,000 level by year-end.

Okay. Okay. And then I guess just last one for me. On the vinyl business, could you just give us an update maybe on kind of where that business is tracking in 2025 and maybe your kind of initial expectations for next year there? .

Tim, this is Jose. This year, we duplicated what we did last year, but it still minimum compared to what is going to be next year. We expect next year to be from 7 to 10x more than we have done this year, because we're going to have a complete line, and we have already like 15 new dealers lined up just waiting for the line to be complete. .

Our next question comes from Sam Darkatsh with Raymond James. .

So I wanted to piggyback a little bit on Tim's questions around 26 million -- can you remind us what the price and tariff cost rollovers are from 25 into '26. And when I'm -- I guess what I'm getting at Santiago is what do you figure generally speaking, '26 gross margins might shake out? And can you lever EBITDA margins next year? .

Yes. So obviously, there's a few moving pieces here. As far as pricing goes, as you know, we increased single-family residential pricing 5% to 7% in May. So obviously, all of that now has the new pricing. And on the commercial side, you see a lot more of the backlog that was signed earlier in the year coming in with new prices.

And obviously, we're executing still some of the older backlog where we did adjust pricing. As far as gross margin goes, I mean, it's early to tell, but I think the idea depending on what happens with the inputs that we just discussed is that we can be able to maintain the low to mid-40s type profile, but as you see, there's FX, there is aluminum cost, there's mix. We're doing more installation based on the high-end projects that GM&P is executing and you got operating leverage, right?

I mean we're saying that we can grow top line double digits again next year, we would obviously expect to get operating leverage in there. But again, we'll get you guys more detail as the time approaches, and we report Q4 and full 2026 guidance in the next call.

Got you. And then as it relates to pricing, as it stands right now, do you anticipate further pricing actions to mitigate some of your costs? And what are you seeing out in the field in terms of a competitive response to all the aluminum pressures?

Generally, you're seeing tight pricing, as you would expect. Everybody is trying to maintain their market share. So for as much as we would like to take further pricing actions, the market details really what you can do. So the expectation for our growth next year is more on the volume side, as Jose was mentioning, not only we're expecting the full ramp-up on vinyl, but all of the other geographies contributing much more meaningful. So when we're talking about double-digit growth, it's more coming from volume rather than the assumption that we're going to be able to raise prices again based on what the competition is doing and the dynamics for the industry. .

And then my last question, the perspective U.S. facility that you are contemplating? I know it's still in the semi early stages, but can you give us a sense of how much capacity you're looking at, what the CapEx cost might be and the timing of those sorts of expenditures?

Well, we're still designing starting, doing engineering, but we do believe that the building and land will be around $225 million and the machines will be around 150, and it will be the -- we will have the capacity of 40% of most lines. It's still too early to tell. We do have a line already a piece of land that we like is in a very special place. We're making -- we're going to bid on it. And when we have all the numbers together because it's going to be a fully automatic robotic factory that will employ like 1/8 of the people that we normally employ to make the same window. When we have all that will give you more color on what is it that we have to do. But we are really looking into it because it's a good thing to do, especially that we want to do it in the East Coast and also in the West Coast.

Samuel, just to add to Christian's comments. Obviously, that CapEx is multiyear, right? So this is something where if the factory is going to take 2, 3 years to get built out, this is something that gets spent over a multiyear horizon. And also, it can be built gradually, right, depending on demand. So you don't have to make a full investment without having the demand for the excess capacity as well. .

So roughly $350 million to $400 million in total costs and maybe $500 million in capacity. Is that the broad brush way of looking at it? .

Yes. That roughly sounds good. So if you extrapolate to decent margins, the payback is attractive, obviously.

Our next question comes from the line of Rohit Seth with B. Riley. .

Just on the guidance, you cited slower-than-anticipated invoicing light commercial construction is the driver of the guidance cut -- can you quantify how much revenue maybe slip from Q4 into 2026. Is this like 1 or 2 projects or this more a broader issue in the commercial side? .

Well, we're talking about a $20 million reduction at the midpoint of the guidance more or less. We would estimate that at least half of that is 2026 business, which obviously further supports the idea of double-digit growth next year. And I would say some of that is coming from more stable resi invoicing than previously anticipated. .

But these are projects that are obviously in the backlog and not expected to obviously drop off is more a timing issue.

Okay. And then on the 2026 double-digit growth guide on revenues, could you maybe narrow that down to a specific range? Is it 10 to 12 or 13 to 15.

I mean, at this point, I would assume low double-digit growth. But again, more details to come we're basically working with back of the envelope calculations and assumptions. But when we report Q4 and give you full guidance, we'll provide more granular detail on that. .

Okay. And your gross margins come down to the mid-40s. As you think about 2026, I mean, and you're driving your margin assumptions. What are the key swing factors? Is there a path back to the mid-40s and you think this low 4 lesions or of the new run rate? .

Low to mid-40s is what -- what we had talked about on the earlier question. And if you kind of back into the math, that's more or less where we can end up this year? Next year, again, there's different variables related to input cost. Hopefully, some of the recent spikes in aluminum costs and premiums will come down to normalized levels. FX is also in question, so it's an important input and installation mix virtues manufacturing mix also comes to play. .

And finally, how much operating leverage can we get on those incremental sales. So again, there's different variables. We'll provide more color when we report next quarter.

Okay. And just on the higher mix of revenues with installation, it's been a headwind. Just can you quantify what percentage of your commercial revenue is the installation versus product building? .

What percentage of the commercial revenues, one, I'm sorry? .

What percentage was the installation mix in the third quarter versus product only .

If you look at the overall revenue for the year, we're doing about $990 million take -- about $200 million of that is going to be installation for the year, and that is up 50% versus last year. This quarter, the impact on mix alone for the fourth quarter is roughly about $2 million of EBITDA versus where we were in the prior midpoint.

Our next question comes from the line of Brent Thielman with DA Davidson. .

Great. Just coming back to the sort of the short cycle commercial work that maybe pushed some revenue out or delayed revenue, however you want to frame it. What I mean what is sort of in your view kind of changed in the last few months that's influenced that? And I guess, as a follow-up question, the backlog continues to grow here. maybe what you see across the country in terms of high-end space? Is the market getting better? Is the backlog growth purely an influence of you taking share? Can you comment on those 2 things, that would be great. .

Well, I think that the input costs that we're mentioning here is playing a part in many other segments in the construction industry, right? So when you have light commercial construction depending on those input costs is probably prudent to kind of push up some of those projects until things normalize. So I think in what you have seen, we talked about LME going up 15% in 90 days and U.S. aluminum premiums up 65% in the same time period. .

That's translated into other things, right? So for somebody that is putting in place a smaller project where they don't have necessarily financial closings of people that have already bought condos, for instance, that's a different story, is a different proposition. So it's a matter of timing and having things normalized. At some point, there's going to be some type of correction. So I think that's what playing a part there. And on your second question, can you repeat, I think Jose is going to address that? .

Maybe just the back -- I mean, look, the backlog is growing at the same time here. So is this is the market for high-end space getting better in the U.S.? Is this that you're capturing more share in new regions, just discussion there.

Well, we are expanding geographically. For example, before, we didn't have any work in the top Semirara. And now we have a lot of work there. We have worked in Jackson bill. We have 3 buildings where we never had any and we keep quoting. We have a lot of work in the area, and that's only in Florida. And now we see resurgence in the Boston, New York area. And also, we are quoting directly with the GMP brand, which is the installation brand in Texas, California and even in Hawaii. So we're not just relying on Florida anymore. We are expanding Florida. So Florida to all over the state, we are expanding outside the state with really good results. .

Okay. And then maybe just 1 more follow-up on the single-family product line, when you look outside of Florida, where do you -- are these different geographies you're targeting? Where are you getting the most traction? Like where are you getting a lot of momentum building the Texas East Coast West Coast? .

All over the East Coast is growing with the new line, but we see most of the growth is West Texas, Arizona, Utah, even Hawaii. I mean we sold last year in Hawaii around I don't know exactly, but -- we're going to end up invoicing this year like $6 million to $10 million, and we hope to do 20 or 30 next year.

Our next question comes from the line of Julio Romero with Sidoti.

Christian, Santiago. I appreciate the preliminary revenue expectation for '26 and I understand we'll get more color to come on the puts and takes there. Any preliminary thoughts on how we should think about capital allocation? I know you have the automated plant in Florida that you're currently weighing. Just trying to think about how you're thinking about capital expenditures and your recently up share repurchase? And how would you have us think about that?

On CapEx, as we had mentioned before, it's trending down, and we're talking about core growth CapEx not talking about the potential to do the U.S. plant, which is still early in the process. So the CapEx is going to trend down, utilize capacity, still allows us to grow well into double digits for the next couple of years.

You saw what we did in terms of buybacks last quarter and in terms of the Board action to increase that program. So I think that's definitely a good use of capital going forward as we continue to generate free cash flow. The dividend continues to be to be there.

So that's another way to return capital to shareholders, obviously. And we have very little debt. We continue to expect to be in a net cash position for the foreseeable future. So I think it will be finding opportunities to continue reinvesting in the business. If the backlog continues growing or as Jose mentioned, the opportunities for single-family residential materialize, and we grow significantly over the next year, then at some point, we'll have to just reinvest in growth.

But immediately, I think doing something on the buyback front makes sense as you saw from the Board's actions and waiting to see what happens with the general conditions of the market.

Very helpful there. And then on single-family, I know we talked about vinyl and we talked about showrooms, but wanted to get a progress update on Multimax how that's doing at the moment. And a lot of the homebuilders have been rather pessimistic expressive in the near term, rebound isn't likely in the near term. We'll be curious to how you're thinking about that product line and the outlook at the moment. .

Well,Multimax is doing much better this year, even though the housings have dropped a little bit for every builder, because we gained a couple of very nice accounts. We now are selling to 3 more home builders, and we expect to take 1 or 2 more within the next 6 months. So that line is doing well, but most of the growth next year, particularly are going to come from the new lines that we are launching complete by the end of the year to the other markets to Texas, California, Arizona. I mean, those lines even though not complete, we are already selling in those states with -- and people are really, really happy and enthusiastic. They can wait to buy a lot more. So -- we're really excited about those lines.

This concludes our question-and-answer session. I would like to turn the conference back over to Jose Manuel Daes for closing remarks. .

Thanks, everyone, for participating on today's call. We hope to keep growing double digits. Please keep time for better. .

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good morning, and welcome to the Tecnoglass Inc. Second Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Brad Cray, Investor Relations. Please go ahead.

Thank you for joining us for Tecnoglass' Second Quarter 2025 Conference Call. A copy of the slide presentation to accompany this call may be obtained on the Investors section of the Tecnoglass website.

Our speakers for today's call are Chief Executive Officer, José Manuel Daes; Chief Operating Officer, Chris Daes; and Chief Financial Officer, Santiago Giraldo.

I'd like to remind everyone that matters discussed in this call, except for historical information, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding future financial performance, future growth and future acquisitions. These statements are based on Tecnoglass' current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary in a material nature from those expressed or implied by the statements herein due to changes in economic, business, competitive and/or regulatory factors and other risks and uncertainties affecting the operation of Tecnoglass' business. These risks, uncertainties and contingencies are indicated from time to time in Tecnoglass' filings with the SEC. The information discussed during the call is presented in light of such risks. Further, investors should keep in mind that Tecnoglass' financial results in any particular period may not be indicative of future results. Tecnoglass is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise.

I will now turn the call over to José Manuel, beginning on Slide #4.

Thank you, Brad, and thank you, everyone, for participating on today's call. We are excited to report another exceptional quarter that demonstrates the strength and resilience of our business.

Our second quarter total revenues reached a record $255.5 million, up 16.3% year-over-year. This strong growth was driven almost entirely by robust double-digit organic growth in both our single-family residential and multifamily commercial businesses. These outstanding results showcase our ability to consistently outperform market trends while expanding margins and gaining market share.

Our vertically integrated platform continues to deliver exceptional value and flexibility, giving us confidence in our ability to respond effectively to evolving market conditions. At the same time, we are maintaining our industry-leading margins and commitment to operational excellence.

In our single-family residential business, we grew revenues 14.5% year-over-year to a second quarter record of $109.6 million. This performance reflects continued success in our geographic expansion strategy, market share gains and meaningful contributions from our vinyl product line.

We were also pleased to see strong sequential growth of 29% single-family residential orders compared to the first quarter of 2025, making the second highest quarter of orders in the history of the company.

Our multifamily and commercial businesses delivered solid growth of 17.8% year-over-year to $145.9 million, demonstrating our ability to capitalize on healthy demand for luxury mid- to high-rise projects in Florida.

The momentum we are seeing in project activity reinforces our confidence as we continue to execute on our growing backlog, now at an all-time high of $1.2 billion.

In the face of ongoing macroeconomic uncertainty and higher cost environment, we were pleased to expand our margin substantially during the quarter. We achieved a gross margin of 44.7%, representing a 400 basis point improvement year-over-year. Our margin performance reflects the benefits of increasing our production to achieve a record revenue quarter as well as favorable product mix and pricing and cost control actions. Supported by our vertically integrated model, all these actions substantially minimize our exposure to market volatility and are expected to position us well as we move forward.

In conclusion, our record second quarter results demonstrate the power of our vertically integrated business model and our ability to execute in a dynamic environment. With our strong balance sheet, substantial cash position and a growing backlog, we believe we will deliver additional shareholder value. We remain focused on being a reliable partner to our customers and making necessary adjustments to maintain supply chain stability. Overall, we are confident in our trajectory and our ability to continue growing faster than the market in 2025 and beyond.

I will now turn the call over to Christian.

Thank you, José Manuel.

Moving to Slide #5. Our robust second quarter performance across both our single-family residential and multifamily commercial businesses reflects our consistency in delivering best-in-class products and service to our customers. Our single-family residential business achieved exceptional results, with revenues reaching a second quarter record of $109.6 million, representing strong growth of 14.5% year-over-year.

Order levels remain healthy, with the second quarter marking the second highest residential order quarter in Tecnoglass history, building a strong momentum into the second half and beyond. This outstanding performance was driven by continued market share gains through geographic expansion and meaningful contributions from other geographies beyond our traditional markets.

On the multifamily and commercial side, we delivered revenue growth of 17.8% year-over-year, reflecting continued strength in key markets and solid light commercial activity. We ended the quarter with a record backlog of $1.2 billion, representing approximately 2.2x our LTM multifamily and commercial revenues, marking our 33rd consecutive quarter of year-over-year backlog expansion. This backlog provides exceptional visibility into our project pipeline, extending well into 2026 and beyond.

The successful completion of our Continental Glass Systems asset acquisition in April further strengthens our capabilities in high-end architectural glass and glazing solutions. This action also diversifies our production footprint into the U.S. market, providing additional growth avenues as we execute our strategic vision.

Moving to Slide #6. Our backlog has shown consistent sequential growth since 2021, highlighting strong bidding activity and a solid project pipeline across our markets. Our book-to-bill ratio remained healthy at 1.2x as of the second quarter, continuing our track record of maintaining a ratio above 1.1x for 18 consecutive quarters.

Historically, roughly 2/3 of our reported backlog converts to revenue over the following 12 months. As previously discussed, our backlog composition has been shifting towards high-end, large-sized projects, which are less interest rate sensitive and are executed over a multiyear time horizon.

The strength of our backlog is supported by several key factors. First, we experienced virtually no project cancellation as we typically install windows in buildings that are already well advanced into the construction process. Second, our backlog is primarily composed of projects that have shown resilience to interest rate changes and economic fluctuations. And third, the continued geographic diversification of our project portfolio helps to reduce regional market concentration risk.

While external factors may occasionally impact delivering timing, our consistently robust book-to-bill ratio reinforces our confidence in delivering sustained revenue growth for years to come.

I will now turn the call over to Santiago to discuss our financial results and improved outlook for 2025.

Thank you, Christian.

Turning to single-family residential on Slide #7. Our single-family residential business continues to perform exceptionally well and represents a key driver of our overall growth strategy. Single-family residential revenues reached a record $109.6 million in the second quarter, representing robust growth of 14.5% year-over-year and our second highest quarter on record. This outstanding performance reflects several key factors. This includes our continued geographic expansion with contributions from new markets, our expanded product portfolio included vinyl growth and, to a lesser extent, customers accelerating orders ahead of anticipated tariff-related pricing adjustments.

In light of $5 million to $7 million of residential revenue pull forward from Q3 into Q2, we were pleased to see 29% sequential growth in customer orders during the quarter, which puts us squarely on track to execute against our full year objectives.

Looking ahead, we remain optimistic about the organic growth opportunities in our single-family residential business, which are supported by several key drivers. First, our expanding dealer network continues to benefit from our industry-leading 5- to 6-week lead times and our innovative high-performance product offerings. Second, we continue to see strong demographic trends such as population migration patterns across our key markets, supporting our growth outlook. And third, our ongoing geographic expansion is gaining momentum.

To that point, we were pleased to commence actions in April to open a new showroom in California, which is expected to help promote our newly developed legacy aluminum product line. We're already seeing encouraging order momentum in advance of the showrooms expected opening in the fourth quarter supported by our established sales presence and strong product availability in the region.

Turning to the drivers of revenue on Slide #9. Total revenues for the second quarter increased 16.3% year-over-year to a record $255.5 million with double-digit growth across both our single-family residential and multifamily and commercial businesses, reflecting strong demand for our best-in-class product offerings, geographic expansion and early contributions from our Continental acquisition.

Looking at the profit drivers on Slide #10. Adjusted EBITDA for the second quarter of 2025 was $79.8 million, representing an adjusted EBITDA margin of 31.2%, increased on both metrics compared to $64.1 million or a 29.2% margin in the prior year quarter.

Second quarter gross profit increased to $114.3 million, representing a 44.7% gross margin compared to gross margin profit of $89.6 million, representing a 40.8% gross margin in the prior year quarter. The 400 basis point improvement in gross margin was primarily driven by increased volumes on record revenues, generating operating leverage as well as stable raw material costs, favorable mix and weaker peso. In April, we hedged a large portion of our 2025 Colombian peso exposure at premium rates at roughly 9% better than last year. This effectively offsets local currency inflationary pressures.

SG&A expenses were $53.1 million or 20.8% of total revenues compared to $38.4 million or 17.5% of total revenues in the prior year quarter. The increase was primarily attributable to incremental selling expenses associated with tariffs, including approximately $5.9 million in aluminum tariffs paid in April, nonrecurring expenses associated with the Continental acquisition and higher transportation and commission expenses associated with our revenue growth as well as increased personnel expenses related to annual salary adjustments implemented at the beginning of the year.

As a reminder, during the quarter, we took decisive measures to mitigate the impact of tariffs through our pricing and sourcing actions. We're beginning to see the benefits of our strategic supply chain diversification following our shift to U.S. sourced aluminum and an updating pricing model, with margins starting to strengthen toward the end of June once higher-priced orders started getting invoiced. Looking forward, we do not expect to be as heavily impacted by tariffs as we have adjusted our supply chain and have taken pricing actions in order to compensate for the incremental expense.

The recurring tariffs on stand-alone products continue to be effectively passed through to clients and our proactive approach to supply chain optimization and pricing adjustments has positioned us to maintain our competitive position and margin profile.

Now examining our strong cash flow and balance sheet on Slide #11. We generated operating cash flow of $17.9 million in the second quarter, supported by our efficient working capital management and the favorable cash dynamics of our single-family residential business, which features upfront payments and shorter conversion cycles. We achieved this positive cash generation despite the annual timing of income tax payments, which totaled approximately $36 million during the quarter.

Capital expenditures of $32.5 million in the quarter included scheduled payments on previous investments, along with $15.1 million of the Continental Glass Systems asset acquisition classified as capital expenditures. We continue to expect capital expenditures to drop significantly in the back half of 2025 driving even stronger free cash flow through the year-end.

Our balance sheet remains robust with total liquidity of approximately $310 million at quarter end, including a strong cash position of $137.9 million and $170 million of availability under our revolving credit facilities. With total debt of $109.2 million, our strong liquidity position and solid cash flow generation position us well to achieve our growth objectives and further invest in strategic growth initiatives.

On Slide #12, our ability to deliver exceptional returns continues to distinguish us within the industry. Over the past 3 years, our strategic investments and operational excellence initiatives have consistently generated superior value for our shareholders. This sustained outperformance demonstrates the resilience of our business model, our commitment to operational discipline and our prudent approach to capital deployment.

Now moving to our outlook on Slide 14. We are proud of our robust performance through the first half of 2025. The continued strength we are seeing across our business and our visibility into demand trends for the second half of the year support an increase to the low end of our full year revenue guidance.

We now expect revenues to be in the range of $980 million to $1.02 billion, reflecting growth of approximately 12% at the midpoint. Additionally, we are narrowing our adjusted EBITDA outlook to a range of $310 million to $325 million. This updated outlook maintains our assumption that our pricing initiatives and other cost mitigation efforts will more than compensate for a projected $25 million full year impact from elevated input costs and tariffs on select products.

In our single-family residential business, we estimate the significant majority of the $5 million to $7 million of accelerated customer orders during the second quarter were pulled from the third quarter.

We have provided a detailed set of assumptions in the presentation to support both the high end and the low end of our revenue and adjusted EBITDA guidance, encompassing our expectations for our vinyl business ramp-up, residential market performance, pricing adjustments, tariff impacts, margin dynamics and foreign exchange rates. These comprehensive assumptions reflect various scenarios ranging from the more favorable interest rate environment and healthy residential business growth at the high end to a more conservative volume projection and other potential headwinds at the low end of our guidance range.

We continue to expect a full year of strong cash flow generation. That said, we're updating our projection for capital expenditures to be in the range of $65 million to $75 million to reflect the tail end of previous investments, maintenance CapEx, further investments in efficiency initiatives and expenditures related to our Continental Glass Systems asset acquisition. Working capital should continue to be a source of cash as we expand our single-family residential revenues, though this will be partially offset by longer cash conversion cycles in our commercial and multifamily business.

In conclusion, our second quarter 2025 results demonstrate the strength of our business model and our ability to execute consistently across market cycles. We're seeing strong customer reception and growing demand for our innovative vinyl solutions, which complement our traditional aluminum and glass offerings and contribute meaningfully to our overall growth trajectory. We're navigating the shifting construction dynamics with flexibility, supported by a more resilient supply chain built through past disruptions.

Our strategic initiatives, proactive management of external challenges, strong balance sheet and growing backlog, all position us very well for continued success. Additionally, the completion of the Continental Glass asset acquisition further cements our market presence in key geographies and provides additional growth avenues as we continue to execute on our strategic vision. We remain committed to delivering industry-leading returns while maintaining the financial flexibility to capitalize on further growth opportunities in 2025 and beyond.

With that, we will be happy to answer your questions. Operator, please open the line for questions.

[Operator Instructions] Our first question is from Julio Romero with Sidoti & Company.

So I wanted to start out on the revenue line. I appreciate you calling out the pull forward of $5 million to $7 million in the second quarter. How much of that pull forward in your view was after the Section 232 increase in June? And more broadly, how has that announcement translated to any change in customer behavior?

It was before we announced -- so we announced price increases to take place towards the beginning to middle of May. So it was done then. So what you saw was a little bit of that effect towards the end of June, but largely everything that was pulled forward will actually become invoiced July, August and September. So we expect most of that to impact Q3, not Q4.

Got it. Okay. That's helpful. And then it sounds like you've made progress with narrowing down locations for the plans to build out a manufacturing facility in the U.S. Just any early takeaways you can call out from having Continental Glass under your belt that you're applying to the feasibility study for the fully automated plant?

Well, we are in the stages of doing the math, and the engineering and the location and everything is coming out looking really good. We don't want to say too much at this time, but the level of automation that we're going to have is going to make us be very close to the levels of EBITDA that we're looking at today from Colombia producing in the U.S. So we have a good feeling about the plant in the U.S. We're well into the design, but still a little early to make an announcement or a decision, but it is coming soon.

The next question is from Tim Wojs with Baird.

Just to clarify, Santiago, so the $5 million to $7 million of pull forward, that's an order number, right? Like that didn't get pulled really into the second quarter revenue, did it?

Some of it did, Tim, because if these orders started getting done ahead of that price increases at the beginning of May and you place those orders towards the end of April, beginning of May, you get some of that into Q2, towards the end of Q2. That's the calculation that we did.

Okay. So there's a part of the $5 million to $7 million in Q2 and then the rest is in Q3, basically?

No, no, no. The $5 million to $7 million is Q2. The rest is going to flow through Q3.

I got you. Okay. And then I guess on the margins, just the midpoint of the guidance, just doing some math, I think it suggests that the margins might be down a little bit in the second half of the year. I'm just trying to kind of think through the puts and takes there, how you're thinking about the margin cadence in the second half, especially since I think you grew EBITDA or EBITDA margin this quarter despite having those kind of aluminum tariff costs. So just kind of the puts and takes there would be helpful.

From a gross margin perspective, we're modeling at the midpoint of guidance in line with year-to-date, so not a whole lot of difference there.

And you always have to remember that we like to be conservative on the projections because we never want to miss, we want to succeed.

The one other put and take here, Tim, is that we're expecting commercial construction to ramp up quite a bit the rest of the year. So obviously, as you know, that comes with more installation. So if anything, a potential headwind on margins would be from that. But you also have the full impact of the price increases that were done in May that are going to start fully hitting in Q3. So on a conservative basis, we're modeling gross margins at the same level as what you have seen year-to-date.

Okay. That's helpful. And then just on pricing, I guess, we're kind of a few months' delay kind of now from the tariffs. Just where are your pricing increases kind of landing relative to the competition as they're kind of layering things in? Are you in line? Are you kind of below, above? And just is that pricing all in residential? Or have you been able to kind of pass through some pricing in commercial? So sorry, there's a bunch of questions there.

Yes. No, it's in line. We had announced prior to this call, something around 5% to 7% strictly on the residential side because you also have, on the commercial side, contracts that have already been in place. But any new commercial jobs that are being signed are signed with the new pricing. So you may actually get the benefit of short-dated, kind of light commercial projects that get invoiced this year. But most of the impact will be on the single-family residential side orders that came in after May. And in line with what we've seen from others, I would say on the low end as far as that benchmark goes. We've heard of kind of high single digits to low double digits even price increases across the board.

The next question is from Rohit Seth with B. Riley.

Just building on the order questions, maybe you can give us a sense of what you've seen so far in July?

A very good month. I mean it's been kind of very robust across the board. You saw what we said about orders in Q2, 29% up sequentially from Q1. July was a very strong month. I would say it was the highest revenue month that we've had to date in the company's history. And as far as order goes, continues to be strong, which gives us kind of good visibility for the rest of Q3.

All right. And then just on the new product lines, the vinyl windows, maybe just give a status update. You guys talked last quarter about getting some of those new specs kind of certified, so just any update on that front.

Yes, we're working on that. And we have new lines that are selling already in Utah, in Nevada, California, Arizona. And the complete line is going to be ready by the end of the year, and we expect that next year, with the vinyl complete, the new legacy line complete and some other new products that we're testing, we expect to ramp it up next year, for sure.

Last quarter, you mentioned a catapulting of sales. Do you still feel the same?

Yes. I mean the reaction of the market towards our products is well, well received. I mean they love it. We've been doing rounds in all those Western states, and it's really exciting. I mean we are more than hilarious about it.

All right. Fantastic. And maybe if I could squeeze the last one. You've had a great run here with replacing windows in Florida. Maybe just give us a sense of what's happening in the marketplace.

No, the market is really strong in every segment, even though the months of July and August are the worst because all the fathers go on vacation with their sons in these summer months. But what I hear from everybody, all the GCs, all the developers, is that things are coming back. People are getting used to the mortgages at those levels. So residential is going to start picking up again. I mean, we are very excited about the Florida market and even more excited about the new markets that we're entering because the reception is unbelievable.

[Operator Instructions] The next question comes from Jean Veliz with D.A. Davidson.

Congrats on the quarter. I want to start -- just sort of wondering what sort of opportunities are there outside of your current footprint within Florida?

Well, we are just entering the market in vinyl. By the end of the year, vinyl is going to be ready. And from Tampa up, there is a huge market for both windows. And everybody, all the dealers that we have, they buy aluminum and they buy vinyl. And they want to buy vinyl from us, but we don't have the complete line, which we're going to have by the end of the year. So that's one. And number two, we, for example, are selling now in Jacksonville, in the Panhandle, that we were not existing before.

As a follow-up to that, from year-end to June, we've increased our dealers by about 15%, 20%, and a lot of those come from other geographies outside of Florida. So to the point of José, now having the product to sell in other states and having dealers in place is paving the way and the seed has been planted for us to start growing those markets significantly. And they're already contributing, by the way. I mean there's already evidence of that.

And just a follow-up. Does that apply as well for the commercial side of the business?

Yes, it does. We are doing a lot of commercial works now in Tampa, Jacksonville, Georgia and Atlanta. And now we're going to open in Nashville, which is a hot market. We're going to open in Austin, Texas, I mean, Dallas and Houston. The country is big, and there are many states that we were not present. Now we're going to be nationwide.

This concludes our question-and-answer session. I would like to turn the conference back over to José Manuel Daes for any closing remarks.

Well, thanks, everyone, for participating today. We are very excited about the future of the company. We have planted the seeds, as Santiago said, and we expect much better news. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.