Tecnoglass (NYSE:TGLS) Reports Strong Q2

Glass and windows manufacturer Tecnoglass (NYSE:TGLS) reported revenue ahead of Wall Street’s expectations in Q2 CY2025, with sales up 16.3% year on year to $255.5 million. The company expects the full year’s revenue to be around $1 billion, close to analysts’ estimates. Its non-GAAP profit of $1.03 per share was 7.5% above analysts’ consensus estimates.

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Company Overview

The first-ever Colombian company to trade on the NASDAQ, Tecnoglass (NYSE:TGLS) is a manufacturer of architectural glass, windows, and aluminum products.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Thankfully, Tecnoglass’s 20.3% annualized revenue growth over the last five years was incredible. Its growth beat the average industrials company and shows its offerings resonate with customers, a helpful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Tecnoglass’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 6.6% over the last two years was well below its five-year trend.

This quarter, Tecnoglass reported year-on-year revenue growth of 16.3%, and its $255.5 million of revenue exceeded Wall Street’s estimates by 4.3%.

Looking ahead, sell-side analysts expect revenue to grow 9.2% over the next 12 months, an improvement versus the last two years. This projection is healthy and suggests its newer products and services will spur better top-line performance.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Tecnoglass has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 27.3%. This result isn’t surprising as its high gross margin gives it a favorable starting point.

Looking at the trend in its profitability, Tecnoglass’s operating margin rose by 5.9 percentage points over the last five years, as its sales growth gave it immense operating leverage.

In Q2, Tecnoglass generated an operating margin profit margin of 24%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Tecnoglass’s EPS grew at an astounding 44.8% compounded annual growth rate over the last five years, higher than its 20.3% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into the nuances of Tecnoglass’s earnings can give us a better understanding of its performance. As we mentioned earlier, Tecnoglass’s operating margin was flat this quarter but expanded by 5.9 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Tecnoglass, its two-year annual EPS declines of 2.6% mark a reversal from its (seemingly) healthy five-year trend. These shorter-term results weren’t ideal, but given it was successful in other measures of financial health, we’re hopeful Tecnoglass can return to earnings growth in the future.

In Q2, Tecnoglass reported adjusted EPS at $1.03, up from $0.86 in the same quarter last year. This print beat analysts’ estimates by 7.5%. Over the next 12 months, Wall Street expects Tecnoglass’s full-year EPS of $4.08 to grow 10.2%.

Key Takeaways from Tecnoglass’s Q2 Results

We were impressed by how significantly Tecnoglass blew past analysts’ EBITDA expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. On the other hand, its full-year EBITDA guidance was in line. Overall, we think this was a solid quarter with some key areas of upside. Investors were likely hoping for more, and shares traded down 3.3% to $75.78 immediately after reporting.

So should you invest in Tecnoglass right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.