Cyrela Brazil Realty (CYRE3.SA) 2Q26 First Take In line Net Income yet Strong Cash Generation and Gross Margins

Equity Research 13 August 2026 | 7:38PM BRT

Cyrela Brazil Realty (CYRE3.SA): 2Q26 First Take: In-line Net Income yet Strong Cash Generation and Gross Margins

Our Take: We expect a neutral to positive stock reaction to Cyrela results, as 2Q26 Jorel Guilloty | brought evidence of a company executing well under a challenging macro scenario. Goldman Sachs do Brasil CTVM S.A. While net income came in-line, cash generation was the second highest in the past Igor Machado five years, reaching R$272 mm or approximately R$172 mm excluding a land plot | sale, above GSe at R$100 mm. ND/E thus declined 350 bps q/q to 16.5%. Sales of Goldman Sachs do Brasil CTVM S.A.

finished inventory which as noted in our 2Q26 operating preview review reached a record R$329 mm, helped drive this. Considering the elevated level of finished inventory sales, gross margins at 34.4% were a surprise 151 bps ahead of Gse and the highest since 2021, as one would expect discounting to help drive these sales. The company attributed this strong performance to increasing exposure to the low income segment through Vivaz. This helped drive a 6% gross profit beat on revenue that was 1% ahead. Higher than expected selling expenses (+13% vs Gse) mitigated the impact of this gross profit beat which the company attributed to an increase in media expenses (+46% q/q) likely on the back of the elevated level of launches seen in 2Q26 which were 39%/91% higher y/y and q/q. For the call tomorrow we will seek more detail on understanding 1) the recently announced R$2+bn MOU with TRX; 2) outlook for selling expenses considering the recent acceleration in launches; 3) sustainability of elevated gross margins considering that REF margins did not change materially q/q (20 bps higher to 36.2%). We are Buy rated.

Digging deeper: Gross margin was 34.4% in 2Q26, 173bps y/y and 156bps q/q. Adjusted gross margin reached 37.3%, increasing 1.2 p.p. q/q and 2.4 p.p. y/y, supported by higher capitalized interest from COGS (R$73mm vs. R$65mm in 1Q26). In addition to the gross profit beat, net income came in broadly in line with our estimates and consensus (R$453mm vs. GSe R$454mm and BBG R$462mm), with selling expenses coming in above expectations (R$253mm vs. GSe R$225mm, a 13% miss). We note that show room expenses remains elevated in R$92mm, a 62% increase y/y.

Fundamental trends: Cyrela reported a 36.2% backlog margin, which increased 20bps q/q and decreased 10bps y/y. Backlog revenue at R$12.2bn increased 5% q/q and 24% y/y. The company reported R$272mm in cash generation, according to the company driven by higher than expected sales of ready inventory.

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Goldman Sachs Cyrela Brazil Realty (CYRE3.SA)

Exhibit 1: Cyrela Quarterly Results Comparison Earnings Table GS Actual BBG Actual vs Historical In R$ mm 2Q26A 2Q26 vs GS Consensus BBG 2Q25 Y/Y 1Q26 Q/Q Revenue 2,480 2,455 1% 2,500 -1% 2,106 18% 2,025 22%

Operating Expenses (1,627) (1,647) -1% (1,418) 15% (1,360) 20%

Gross Profit 853 807 6% 688 24% 665 28% % margin (diff. in bps) 34.4% 32.9% 151 32.7% 173 32.8% 156

Selling Expenses (253) (225) 13% (202) 25% (222) 14%

G&A (132) (134) -1% (125) 6% (132) 0%

Other Operating Revenues/Expenses (34) (23) 48% (22) NM (19) -

EBITDA 432 424 2% 337 28% 290 49% % margin (diff. in bps) 17.4% 17.3% 17 16.0% 143 14.3% 313

Equity Income 107 147 -27% 140 NM 128 -16%

Interest Income 333 332 0% 253 32% 261 28%

Finance Cost (263) (255) 3% (186) 41% (223) 18%

Net Income 453 454 0% 462 -2% 387 17% 296 53% % margin (diff. in bps) 18.3% 18.5% -22 18.4% -11 14.6% 365

Key operational metrics (Consolidated) Revenue Backlog 12,228 12,167 0% 9,849 24% 11,662 5% Cash Generation (Burn) 272 100 NM (392) NM 134 NM

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