Nov 3, 2025 3:00 PM Eastern Standard Time XPEL Debuts COLOR PPF, Ultra-Exclusive Pagani Imola Roadster & Live Demos at SEMA 2025 Share New Color-Changing Film to Be Installed Live on BMW M5 Touring; Special Appearances from Will Castro, INDYCAR racer Scott McLaughlin & More SAN ANTONIO--(BUSINESS WIRE)--XPEL, Inc. (NASDAQ: XPEL), a global leader in protective films and coatings, will make a major statement at the 2025 SEMA Show in Las Vegas (November 4-7) with the debut of XPEL COLOR Paint Protection Film ( ...

Company Overview - Xpel (NASDAQ: XPEL) specializes in providing premium films and coatings primarily for automotive applications, focusing on painted surfaces and windows [1] Product Offering - The coatings offered by Xpel are generally transparent and designed to protect the finish of vehicles, making them a popular add-on for buyers of premium cars [1] Market Positioning - Xpel targets value-oriented investment ideas and special situations, particularly in the mid/small cap segment, and is open to contrarian investment opportunities that present asymmetric upside/downside potential [1]

Company Overview - Xpel (NASDAQ: XPEL) specializes in providing premium films and coatings primarily for automotive applications, focusing on painted surfaces and windows [1] Product Offering - The coatings offered by Xpel are generally transparent and designed to protect the finish of vehicles, making them appealing to buyers of premium cars [1] Market Position - Xpel's products are often considered add-ons for consumers purchasing high-end vehicles, indicating a niche market focus [1]

Group 1 - XPEL, Inc. is a global leader in protective automotive films and coatings, generating revenue primarily through paint protection films (PPF), window tint, ceramic coatings, and supporting software and tools for installers [2][3] - The company benefits from recurring revenue driven by ongoing demand for PPF on new vehicles, repeat business from dealerships and installers, and an expanding global distribution network [2][3] - XPEL's strong brand reputation in premium PPF and tint solutions, along with high-margin products, positions it favorably in the automotive aftermarket sector [2][4] Group 2 - The growth potential of XPEL is enhanced by its ability to expand into new regions and verticals, leveraging trusted brand and established dealer relationships [3][4] - The company's products not only protect vehicles but also enhance resale value, improve aesthetics and durability, and provide comfort and energy efficiency [3] - XPEL's integrated approach, balancing high-quality products, strong customer relationships, and strategic expansion, creates a compelling investment case with predictable revenue growth [4][6] Group 3 - The company's stock price was trading at $38.48 as of September 8th, with a forward P/E of 21.87 [1] - Previous analyses indicated that the company's stock price had depreciated approximately by 11.25% as of January 2025, amid macro and regional challenges [5] - The current bullish thesis emphasizes recurring revenue, scalable distribution, and the integrated approach to dealer and customer relationships [6]

Group 1 - XPEL has acquired the assets of its exclusive distributor in the aftermarket in China [2] - The acquired business is projected to generate annual revenues of approximately $45 - $50 million [2] - This acquisition is expected to add incremental revenue of approximately $13 - $18 million to XPEL [2]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38858 XPEL, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organiz ...

Financial Data and Key Metrics Changes - The company reported a record revenue growth of 13.5% to $124.7 million in Q2 2025, exceeding expectations [5] - Gross margin for the quarter was 42.9%, up six basis points sequentially, but down from the previous year's second quarter due to revenue mix [15] - EBITDA for the quarter was $25 million, reflecting a growth of 14.7% when normalizing for one-time costs [18] - Net income increased by 7.8% for the quarter, with a net income margin of 13% [26] - Earnings per share (EPS) was $0.59 for the quarter, normalizing for one-time costs would result in an EPS of $0.63 [27] Business Line Data and Key Metrics Changes - Total product revenue increased by 13.9%, while total service revenue grew by 12% quarter over quarter [24] - The automotive window tint product line grew by 22.5%, contributing significantly to overall product revenue growth [24] - The company experienced strong performance in the dealer service business, with revenue growth outpacing the aftermarket channel [30] Market Data and Key Metrics Changes - The U.S. region revenue grew by 8.4% to $70.4 million, marking a record for the quarter [6] - Canada region revenue increased by 7.4%, showing recovery after a slow start to the year [8] - China revenue was $7.7 million, reflecting a more normalized revenue recognition cadence [10] - Latin America saw a revenue decline due to inconsistent timing in large distributor markets [11] Company Strategy and Development Direction - The company is focused on consolidating international distribution and expanding its direct sales model in key markets like Brazil [19][44] - There is an emphasis on enhancing the personalization platform to increase consumer awareness and drive product sales [20][35] - The company plans to launch new products, including colored paint protection films, to expand its product offerings [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance relative to competitors despite a challenging environment [13] - The company anticipates Q3 revenue to be in the range of $117 million to $119 million, facing a tough comparison to the previous year's highest revenue quarter [12] - Management expects low double-digit growth in China, driven by increased efforts in the OEM and PDI channels [52] Other Important Information - The company ended the quarter with approximately $50 million in net cash on the balance sheet [18] - There were one-time costs of $1.6 million in SG&A for the quarter, related to restructuring and M&A activities [17] Q&A Session Summary Question: Any more color on the dealer service business trends? - Management noted that the dealer service business continues to grow faster than the aftermarket channel, with July setting records in terms of vehicles and revenue [30] Question: Can you delve into the personalization platform initiatives? - The personalization platform aims to increase consumer awareness and facilitate online transactions, ultimately driving revenue for installers [35] Question: Any considerations for gross margin and OpEx in the second half? - Management indicated that the overall cost structure is stable, with no significant changes expected for the rest of the year [38] Question: Thoughts on M&A opportunities with the current cash position? - The company is actively pursuing M&A opportunities, focusing on consolidating international distribution and expanding dealership business [44] Question: How is the U.S. market positioned for the second half and into 2026? - Management emphasized the importance of focusing on controllable factors to increase attach rates, regardless of fluctuations in new car sales [49] Question: What is the growth outlook for China? - The company expects low double-digit growth in China, with significant upside potential from pursuing OEM and PDI channels [52]

Company Overview and Performance Highlights [Second Quarter 2025 Performance Overview](index=1&type=section&id=Second%20Quarter%202025%20Overview) XPEL achieved record **$124.7 million USD** revenue in Q2 2025, a 13.5% year-over-year increase, with EBITDA and net income growing, especially after excluding one-time expenses Second Quarter 2025 Financial Performance (USD in millions) | Metric | Q2 2025 | Q2 2024 | YoY Growth | Notes | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $124.7 | $109.9 | 13.5% | Record revenue | | **Gross Margin** | 42.9% | 43.5% | -0.6% | | | **EBITDA** | $23.4 | $21.8 | 7.1% | 18.7% of revenue (19.9% in 2024) | | **EBITDA (Normalized)** | $25.0 | - | 14.7% | Excludes approximately $1.6 million one-time expenses | | **Net Income** | $16.2 | $15.0 | 7.8% | | | **Basic and Diluted EPS** | $0.59 | $0.54 | - | | | **Net Income (Normalized)** | $17.5 | - | 16.7% | Excludes one-time expenses | | **Basic and Diluted EPS (Normalized)** | $0.63 | - | - | Excludes one-time expenses | - The company incurred approximately **$1.6 million USD** in one-time expenses during the second quarter, primarily related to restructuring costs, legal and due diligence fees, and acquisition strategies[2](index=2&type=chunk) [First Six Months 2025 Performance Overview](index=1&type=section&id=First%20Six%20Months%202025%20Overview) For the first six months of 2025, XPEL's revenue grew 14.2% to **$228.5 million USD**, with EBITDA and net income also achieving double-digit growth, indicating strong first-half momentum First Six Months 2025 Financial Performance (USD in millions) | Metric | First Six Months 2025 | First Six Months 2024 | YoY Growth | | :--- | :--- | :--- | :--- | | **Revenue** | $228.5 | $200.0 | 14.2% | | **Gross Margin** | 42.6% | 42.9% | -0.3% | | **EBITDA** | $37.8 | $33.5 | 12.9% | | **Net Income** | $24.8 | $21.7 | 14.3% | | **Basic and Diluted EPS** | $0.90 | $0.79 | - | - President and CEO Ryan Pape expressed satisfaction with the first-half results and anticipates continued growth momentum in the second half of the year[1](index=1&type=chunk) Detailed Financial Analysis [Consolidated Financial Highlights for Q2 2025](index=2&type=section&id=Financial%20Highlights%20for%20the%20Second%20Quarter%202025) This section presents unaudited consolidated financial highlights for Q2 2025 and Q2 2024, detailing key financial metrics and their year-over-year changes Consolidated Financial Summary (USD in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $124,713 | $109,917 | 13.5 | | Gross Profit | $53,517 (42.9%) | $47,865 (43.5%) | 11.8 | | Operating Expenses | $34,219 (27.4%) | $28,679 (26.1%) | 19.3 | | Net Income | $16,208 (13.0%) | $15,033 (13.7%) | 7.8 | | EBITDA | $23,369 (18.7%) | $21,824 (19.9%) | 7.1 | | Net Cash Provided by Operating Activities | $27,888 (22.4%) | $26,896 (24.5%) | 3.7 | [Revenue Summary by Geographical Region](index=2&type=section&id=Geographical%20Revenue%20Summary) In Q2 2025, XPEL achieved significant revenue growth across multiple regions, with China showing the strongest increase at **75.1%**, and record revenues in the US, Europe, and the Middle East Geographical Revenue Breakdown (USD in thousands) | Region | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | 2025 Share of Total Revenue | 2024 Share of Total Revenue | | :--- | :--- | :--- | :--- | :--- | :--- | | United States | $70,380 | $64,902 | 8.4% | 56.4% | 59.0% | | Canada | $14,254 | $13,274 | 7.4% | 11.5% | 12.1% | | **North America** | **$84,634** | **$78,176** | **8.3%** | **67.9%** | **71.1%** | | China | $7,705 | $4,401 | 75.1% | 6.2% | 4.0% | | Rest of Asia | $5,428 | $4,120 | 31.7% | 4.3% | 3.8% | | **Asia Pacific** | **$13,133** | **$8,521** | **54.1%** | **10.5%** | **7.8%** | | EU, UK, and Africa | $17,360 | $15,261 | 13.8% | 13.9% | 13.9% | | India and Middle East | $6,746 | $4,800 | 40.5% | 5.4% | 4.4% | | Latin America | $2,840 | $3,159 | (10.1)% | 2.3% | 2.8% | | **Total** | **$124,713** | **$109,917** | **13.5%** | **100.0%** | **100.0%** | - The company achieved record revenues in the United States, Europe, and the Middle East[6](index=6&type=chunk) [Revenue by Product and Service Type](index=2&type=section&id=Product%20and%20Service%20Revenue) In Q2 2025, XPEL's product and service revenues both grew, with window film revenue increasing most significantly at **27.0%**, and product revenue remaining the primary component - Total product revenue increased by **13.9%** year-over-year, accounting for **76.0%** of total revenue[6](index=6&type=chunk) - Total window film revenue increased by **27.0%** year-over-year, representing **22.4%** of total revenue[6](index=6&type=chunk) - Total service revenue increased by **12.0%** year-over-year, comprising **24.0%** of total revenue[6](index=6&type=chunk) - Total installation revenue (combining labor and products) increased by **17.9%** year-over-year[6](index=6&type=chunk) - Adjusted product revenue (combining cutbank credit revenue and product revenue) increased by **12.9%** year-over-year[6](index=6&type=chunk) [Operating Expenses and Margins](index=2&type=section&id=Operating%20Expenses%20and%20Margins) In Q2 2025, the company's gross margin slightly decreased, while both selling and marketing expenses and general and administrative expenses saw double-digit increases - Gross margin was **42.9%** in Q2 2025, compared to **43.5%** in the same period of 2024[6](index=6&type=chunk) - Selling and marketing expenses increased by **15.4%** year-over-year[6](index=6&type=chunk) - General and administrative expenses increased by **21.5%** year-over-year[6](index=6&type=chunk) [Cash Flows from Operating Activities](index=3&type=section&id=Cash%20Flows%20from%20Operations) In Q2 2025, the company generated **$27.9 million USD** in cash flow from operating activities - Cash flow provided by operating activities was **$27.9 million USD** in Q2 2025[7](index=7&type=chunk) Business Outlook [Third Quarter 2025 Outlook](index=3&type=section&id=2025%20Outlook) The company projects Q3 2025 revenue to be between **$117 million** and **$119 million USD** - The company expects Q3 2025 revenue to be approximately **$117 million** to **$119 million USD**[8](index=8&type=chunk) Corporate Information and Disclosures [About XPEL, Inc.](index=3&type=section&id=About%20XPEL%2C%20Inc.) XPEL is a leading provider of protective films and coatings, offering high-quality products and customer service through a global network and proprietary software - XPEL is a leading provider of protective films and coatings, including automotive paint protection film, surface protection film, automotive and architectural window films, and ceramic coatings[11](index=11&type=chunk) - The company boasts a global presence, a network of trained installers, and proprietary DAP software, committed to delivering high-quality products, leading customer service, expert technical support, and world-class training

Core Insights - The article discusses the author's academic and professional background in Machine Learning, Economics, and Finance, highlighting affiliations with prestigious institutions and experience in financial advisory, particularly in banking and mergers & acquisitions [1]. Group 1 - The author holds a PhD in Machine Learning with a focus on Economics and Finance [1]. - The author has academic affiliations with IESE Business School, ESADE Business School, and the Barcelona Supercomputing Center [1]. - The professional experience includes working at Deloitte Financial Advisory, specializing in banking and mergers & acquisitions [1]. Group 2 - The author's interests include machine learning and generative AI applications in finance and economics [1]. - The author is proficient in programming languages such as Python, R, and SQL [1].

Financial Data and Key Metrics Changes - The meeting confirmed that XPEL had 27,664,765 shares of common stock issued and outstanding as of April 15, 2025, with over 72% of eligible votes represented at the meeting [6][19]. Business Line Data and Key Metrics Changes - No specific financial data or key metrics for individual business lines were provided in the meeting. Market Data and Key Metrics Changes - No specific market data or key metrics were discussed during the meeting. Company Strategy and Development Direction and Industry Competition - The company emphasized the importance of leveraging the creativity and quality of content created by independent dealers to enhance marketing efforts [22][23]. - XPEL has focused on manufacturing localization and product innovation, which has improved their ability to innovate and respond to regional market needs [26][27]. - The company remains cautious regarding acquisitions in light of uncertainty in the automotive market, indicating that they will not overpay for acquisitions and will continue to pursue opportunities prudently [28][31][34]. Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertainty in the automotive market but stated that it has not significantly impacted their acquisition appetite or strategy [28][34]. - They believe that the current market conditions do not necessitate drastic changes in their approach, maintaining a strong balance sheet allows for continued investment [34]. Other Important Information - The proposals for the election of board members, ratification of the independent accounting firm, approval of executive compensation, and adoption of the employee stock purchase plan were all approved by majority votes [19][20]. Q&A Session Summary Question: How does XPEL leverage the creativity of independent dealers in marketing? - Management highlighted the importance of amplifying content created by independent dealers through social media platforms like Instagram, indicating that they support content creators with products to enhance their marketing efforts [22][23][24]. Question: Has localization of production enhanced product innovation speed? - Management confirmed that localization has indeed enhanced their ability to innovate faster, supported by a deeper technical team and a focus on regional needs [26][27]. Question: How has uncertainty in the auto market affected acquisition strategies? - Management stated that while they remain cautious, their appetite for acquisitions has not changed significantly, and they will not overpay for opportunities [28][31][34].