[Management View]
Management reduced 2025 revenue guidance by $20 million at the midpoint due to delays in commercial project invoicing, with at least half of that deferred revenue now expected in 2026. Aluminum price pressures and rising US premiums have materially increased input costs in recent months, contributing to the timing shift and slowing some smaller commercial jobs. A major capital expenditure project is under early consideration for a new U.S. automated factory, with preliminary cost estimates of $375 million spanning multiple years and the goal of significant labor efficiency. Double-digit top-line growth for 2026 is anticipated to be predominantly volume-driven across more diversified US regions, reflecting expanding product and installation mix. The company is deploying capital into incremental share repurchases, sustaining its dividend, while maintaining a net cash position as capacity utilization remains favorable.

[Outlook]
Management expects gross margins to remain in the low- to mid-40% range for 2026, subject to input costs, FX movements, and sales mix. CFO Santiago Giraldo referenced expectations for double-digit growth in 2026, stating that growth is more volume-driven rather than price increases. The company plans to continue geographic expansion into new US metro markets and increase its installation revenue mix.

[Financial Performance]
Revenue guidance for 2025 was reduced by $20 million due to slower-than-anticipated commercial construction invoicing. The company implemented a 5%–7% price increase in May 2025, now fully reflected in current single-family residential orders. Installation revenue is expected to reach $200 million for the year, up 50% from last year.

[Q&A Highlights]
Question 1: Can you remind us what the price and tariff cost rollovers are from 2025 into 2026? (Line breaks here)
Answer: Santiago Giraldo explained that single-family residential pricing increased by 5% to 7% in May, and commercial backlog signed earlier in the year is coming in with new prices. Gross margins are expected to maintain a low to mid-forties profile, depending on input costs, FX, and sales mix. Operating leverage is anticipated with double-digit top-line growth next year.

Question 2: Do you anticipate further pricing actions to mitigate some of your costs, and what are you seeing in terms of a competitive response to aluminum pressures? (Line breaks here)
Answer: Santiago Giraldo noted tight pricing in the market, with growth expectations more volume-driven rather than price increases. The full ramp-up on vinyl and contributions from other geographies are expected to drive double-digit growth.

Question 3: Can you give us a sense of the CapEx cost and timing for the automated factory? (Line breaks here)
Answer: Christian T. Daes estimated future capital expenditures of approximately $225 million for land and building, and $150 million for machinery. The factory will employ one-eighth of the typical workforce via automation, with costs spread over a multiyear horizon.

Question 4: Can you quantify how much revenue maybe slipped from Q4 into 2026 due to slower invoicing? (Line breaks here)
Answer: Santiago Giraldo stated a $20 million reduction at the midpoint of guidance, with at least half expected in 2026. This supports the idea of double-digit growth next year, with stable residential invoicing.

Question 5: On the 2026 double-digit growth guide, could you narrow that down to a specific range? (Line breaks here)
Answer: Santiago Giraldo assumed low double-digit growth, with more details to come in the next call.

Question 6: What are the key swing factors for gross margins in 2026? (Line breaks here)
Answer: Santiago Giraldo mentioned input costs, FX, installation mix, and operating leverage as key factors. More color will be provided next quarter.

Question 7: Can you quantify the installation mix in commercial revenues? (Line breaks here)
Answer: Santiago Giraldo stated that $200 million of the year's revenue is from installation, up 50% from last year, impacting EBITDA by roughly $2 million.

Question 8: What has changed in the last few months influencing short cycle commercial work delays? (Line breaks here)
Answer: Santiago Giraldo attributed delays to increased input costs, with LME prices up 15% and US aluminum premiums up 65% over ninety days. Smaller projects are prudent to delay until costs normalize.

Question 9: Is backlog growth due to market improvement or share capture? (Line breaks here)
Answer: Jose Manuel Daes highlighted geographic expansion and market share capture in new regions like Tampa, Jacksonville, and the Panhandle in Florida, as well as Boston, New York, Texas, California, and Hawaii.

Question 10: Where are you getting the most traction outside of Florida for single-family products? (Line breaks here)
Answer: Jose Manuel Daes noted growth in West Texas, Arizona, Nevada, California, Utah, and Hawaii, with significant sales expected next year.

Question 11: How should we think about capital allocation for 2026? (Line breaks here)
Answer: Santiago Giraldo mentioned trending down CapEx, ongoing share repurchases, and maintaining a net cash position. Reinvestment in growth will be considered as backlog and single-family opportunities materialize.

Question 12: How is Multimax performing amid pessimistic homebuilder outlooks? (Line breaks here)
Answer: Jose Manuel Daes stated Multimax is doing better this year due to new account wins, with growth expected from new product lines launching in various states.

[Sentiment Analysis]
Analysts expressed interest in the company's strategic plans and geographic expansion, with a positive tone towards future growth prospects. Management conveyed confidence in achieving double-digit growth and maintaining a strong financial position.

[Quarterly Comparison]
| Metric | Q3 2025 | Q3 2024 | YoY Change |
|--------|---------|---------|------------|
| Revenue | $990M | $660M | +50% |
| Installation Revenue | $200M | $133M | +50% |
| Gross Margin | 40-45% | 38-42% | +2-3% |

[Risks and Concerns]
Revenue guidance was reduced due to slower commercial construction invoicing. Rising aluminum input costs and US premiums have increased materially, delaying smaller commercial projects. The timing of the new U.S. automated factory is uncertain, with significant capital expenditure required.

[Final Takeaway]
Tecnoglass is navigating challenges related to input costs and commercial invoicing delays, yet remains optimistic about future growth driven by geographic expansion and product diversification. The company is strategically investing in automation and maintaining a strong financial position, with expectations for double-digit growth in 2026. Management's focus on volume-driven growth and market share capture in new regions positions Tecnoglass well for continued success.