WEG (WEGE3) Q2 2026 earnings summary

Executive summary

• Net operating revenue for 2Q26 was R$10.14 billion, down 0.6% year-over-year but up 7.1% sequentially, mainly due to the absence of centralized solar generation deliveries in Brazil, partially offset by double-digit international growth in USD.

• EBITDA reached R$2.21 billion, a 2.1% decrease year-over-year but a 5.2% increase from 1Q26; EBITDA margin was 21.8%.

• Net income was R$1.56 billion, down 2.1% year-over-year and up 7.0% sequentially; net margin was 15.4%.

• ROIC improved to 33.6%, up 0.7 percentage points year-over-year and 0.5 sequentially, reflecting disciplined capital allocation and strong investment quality.

• Strong order intake and backlog in long-cycle equipment and T&D, with positive industrial activity in key markets.

Financial highlights

• Gross margin was 33.2%, down 50 bps year-over-year, mainly due to higher raw material costs and U.S. tariffs.

• EBITDA margin at 21.8%, supported by favorable product mix despite higher raw material costs and U.S. import tariffs.

• Operating cash flow reached R$2.45 billion in 1H26, with CAPEX of R$794.9 million in 2Q26, focused on capacity expansion and modernization.

• Net cash position at quarter-end was R$3.74 billion, with gross debt of R$5.07 billion and duration of 12.4 months.

• Net operating profit after taxes declined by 1.3% year-over-year.

Outlook and guidance

• Management expects a more favorable scenario for revenue growth in the second half of the year, driven by strong international demand and normalization of the comparison base.

• Ongoing investments in production capacity and product diversification are expected to sustain margins and ROIC above industry average.

• Growth in international markets remains in line with double-digit expectations in local currencies, though FX fluctuations may limit BRL growth.