Gerdau S.A. reported fourth‑quarter 2025 results that included revenue of $3.1 billion (R$16.97 billion), slightly above the consensus estimate of $3.25 billion (R$16.81 billion). Earnings per share fell to –$0.33, a miss of $0.44 against the $0.11 estimate, representing a surprise of –268.33%. The company guided 2026 capital expenditures to R$4.7 billion, a 24% reduction from 2025, signaling a focus on improving free‑cash‑flow generation.
Gerdau’s North American division drove the majority of the performance, recording an 18.5% year‑over‑year increase in adjusted EBITDA and expanding its margin to 21.1% from 10.8% in Q4 2024. In contrast, the Brazilian segment saw a 64.5% decline in adjusted EBITDA and a margin contraction to 7.1% from 18.5% in Q4 2024, largely due to intensified competition from imported steel that averaged 25% penetration in the first nine months of the year.
The company’s cost of sales rose 24.3% year‑over‑year, while gross profit increased only 2.5%, compressing overall profitability. Net income for the full year 2025 was R$1.42 billion, a 69% decline from the prior year, underscoring the impact of higher input costs and weaker margins in Brazil.
"During the third quarter of 2025, the North American market remained resilient, with solid demand for steel. The North America Division recorded its highest quarterly adjusted EBITDA in the last two years. The Brazilian market, in turn, continued to be affected during the period by the high penetration of imported steel, which averaged 25% in the first nine months of the year," said CEO Gustavo Werneck. CFO Rafael Japur added, "Taking advantage of strong cash generation in North America, we are announcing the early repayment of our 2030 Bond, in the amount of US$498 million (approximately R$2.6 billion), which will allow us to significantly reduce our gross debt to about R$14 billion by the end of this year." In the Q4 earnings call, management noted, "North America accounted for 62% of the Company's Consolidated EBITDA in 2025."
The company is progressing on its Sustainable Miguel Burnier Mining project, with 91% physical progress and nearing operational phase, and it distributed R$2.4 billion to shareholders in 2025. Investors reacted negatively to the earnings miss, reflecting concerns over the EPS shortfall despite a revenue beat and a cautious outlook for 2026.
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