Business
XPEL Reports Revenue Growth of 11.1% to $125.4 million in Third Quarter 2025; Announces Strategic Investments in Manufacturing and Supply Chain
SAN ANTONIO--(BUSINESS WIRE)-- XPEL, Inc. (Nasdaq: XPEL) (the "Company"), a global provider of protective films and coatings, announced consolidated results1
About this update from Xpel, Inc.
SAN ANTONIO --(BUSINESS WIRE)-- XPEL, Inc. (Nasdaq: XPEL) (the "Company"), a global provider of protective films and coatings, announced consolidated results1 for the third quarter of 2025. Additionally, the Company has announced it will be making further strategic investments in its manufacturing and supply chain. Third Quarter 2025 Overview: Revenue increased 11.1% to $125.4 million in the third quarter of 2025. Gross margin of 41.8% in the third quarter of 2025. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) decreased 8.1% to $19.9 million , or 15.9% of revenue, compared to $21.7 million , or 19.2% of revenue in the third quarter of 2024.2 Net income decreased 11.8% to $13.1 million , or $0.47 per basic and diluted share, versus net income of $14.9 million , or $0.54 per basic and diluted share in the third quarter of 2024. First Nine Months 2025 Overview: Revenue increased 13.1% to $353.9 million in the first nine months of 2025. Gross margin of 42.3% in the first nine months of 2025. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased 4.6% to $57.8 million , or 16.3% of revenue, compared to $55.2 million , or 17.6% of revenue in the first nine months of 2024.2 Net income increased 3.7% to $37.9 million , or $1.37 per basic and diluted share, versus net income of $36.6 million , or $1.32 per basic and diluted share in the first nine months of 2024. Barry Wood , Senior Vice President and Chief Financial Officer of XPEL, commented, "The Company delivered record revenue performance in the quarter as we continue to see momentum in the business. We did see some gross margin pressure during the third quarter due to unfavorable, non-tariff related price increases that were not in line with the market. We have mitigated that and expect gross margin to return to its normal trajectory beginning in the fourth quarter. Our SG&A in the quarter reflects continued investment in the channel to support our new countries and our new service businesses. We believe we are well positioned to drive leverage in our cost structure in the coming quarters and deploy capital in a manner that maximizes shareholder value." Enhanced Investment in Manufacturing and Supply Chain XPEL announced that it will increase its investment in manufacturing and supply chain via capital expenditures, mergers/acquisitions, and/or joint ventures. The Company anticipates investing $75 million to $150 million over the next two years with the goal of increasing gross margin to a range of 52% to 54% and operating margin to the mid to high 20% range by the end of 2028. Ryan Pape , President and Chief Executive Officer of XPEL, commented, "Given our scale today, we believe this is the right time to further invest in manufacturing and our supply chain with the intention of driving significant margin improvement. This initiative represents a meaningful inflection point for the potential future profitability of the business." Financial Highlights for the Third Quarter 2025: Summary consolidated financial information for the three months ended September 30, 2025 and 2024 (unaudited, dollars in thousands): Three Months Ended September 30 , % Change 2025 % of Total Revenue 2024 % of Total Revenue 2025 vs. 2024 Total revenue $ 125,415 100.0 % $ 112,852 100.0 % 11.1 % Gross margin 52,424 41.8 % 47,916 42.5 % 9.4 % Operating Expenses 35,673 28.4 % 29,529 26.2 % 20.8 % Net income 13,135 10.5 % 14,892 13.2 % (11.8 )% EBITDA2 19,944 15.9 % 21,698 19.2 % (8.1 )% Net cash provided by operating activities $ 33,154 n/a $ 19,559 n/a 69.5 % Geographical Revenue Summary Three Months Ended September 30 , % % of Total Revenue 2025 2024 Inc (Dec) 2025 2024 United States $ 71,725 $ 64,565 11.1 % 57.2 % 57.2 % Canada 12,975 14,415 (10.0 )% 10.4 % 12.8 % North America 84,700 78,980 7.2 % 67.6 % 70.0 % China 10,074 9,058 11.2 % 8.0 % 8.0 % Asia Other 5,545 3,851 44.0 % 4.3 % 3.4 % Asia Pacific 15,619 12,909 21.0 % 12.3 % 11.4 % EU, UK , and Africa 16,537 12,835 28.8 % 13.2 % 11.4 % India and Middle East 5,718 5,301 7.9 % 4.6 % 4.7 % Latin America 2,841 2,827 0.5 % 2.3 % 2.5 % Total $ 125,415 $ 112,852 11.1 % 100.0 % 100.0 % Overall Revenue Total revenue grew 11.1% compared to third quarter of 2024 ("YoY"). Minimal impact from China distributor acquisition due to late third quarter close. Product and Service Revenue Total product revenue increased 9.8% YoY and represented 76.1% of total revenue. Total window film revenue increased 22.2% YoY and represented 22.0% of total revenue. Total service revenue increased 15.7% YoY and represented 23.9% of total revenue. Total installation revenue (labor and product combined) grew 21.3% YoY. Adjusted product revenue (combining cutbank credits revenue and product revenue) increased 9.0% YoY. Other Financial Information Gross margin percentage was 41.8% and 42.5% in the third quarter of 2025 and 2024, respectively. Sales and marketing expense increased 29.7% YoY. General and administrative expense increased 15.8% YoY. Cash Flows from Operations Cash flows provided by operations were $33.2 million in the third quarter of 2025; highest quarter in our history 2025 Outlook The Company expects fourth quarter 2025 revenue of approximately $123 - $125 million . Please see the information under "Forward-looking Statements" below regarding certain cautionary statements relating to our 2025 Fourth Quarter Outlook. Conference Call Information The Company will host a conference call and webcast today, November 5, 2025 at 11:00 a.m. Eastern Time to discuss the Company’s third quarter 2025 results. To access the live webcast, please visit the XPEL, Inc. website at https://investor.xpel.com/events-and-presentations/ . To participate in the call by phone, dial (888) 506-0062 approximately five minutes prior to the scheduled start time. International callers please dial (973) 528-0011. Callers should use access code: 174259. A replay of the teleconference will be available until December 5, 2025 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 53055. About XPEL, Inc. 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. With a global footprint, a network of trained installers and proprietary DAP software, XPEL is dedicated to exceeding customer expectations by providing high-quality products, leading customer service, expert technical support and world-class training. XPEL, Inc. is publicly traded on Nasdaq under the symbol “XPEL”. 1 The results summarized above for 2025 are preliminary and unaudited. As the Company completes its quarter-end financial close processes and finalizes its financial statements for the third quarter of 2025, it is possible that the Company may identify items that require it to make adjustments to the preliminary information set forth above, and those adjustments could be material. Full third quarter 2025 financial information will be included in the filing of the Company’s Quarterly Report on Form 10-Q with the Securities and Exchange Commission which is anticipated on or prior to November 7, 2025 . 2 See "Non-GAAP Financial Measure" and "Reconciliation of Non-GAAP Financial Measure" below. Forward-looking Statements This release includes forward-looking statements (within the meaning of Section 27A of the Securities act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended) regarding XPEL, Inc. and its business, which may include, but is not limited to, anticipated use of proceeds from capital transactions, expansion into new markets, execution of the company's growth strategy and outlook. Often, but not always, forward-looking statements can be identified by the use of words such as "plans," "is expected," "expects," "scheduled," "intends," "contemplates," "anticipates," "believes," "proposes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may," "could," "would," "might" or "will" be taken, occur or be achieved. Such statements are based on the current expectations and assumptions of the management of XPEL. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements expressed or implied by the forward-looking statements. These risks, uncertainties and other factors relate to, among others: competition, a prolonged or material contraction in automotive sales and production volumes, disruption in our supply chain, technology that could render our products obsolete, changes in the way vehicles are sold, damage to our brand and reputation, cyber events and other legal and regulatory developments. There are several risks, uncertainties, and other important factors, many of which are beyond the Company’s control, that could cause its actual results to differ materially from the forward-looking statements contained in this press release, including those described in the “Risk Factors” section of Annual Report on Form 10-K. Although XPEL has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and XPEL undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Non-GAAP Financial Measure To aid in the understanding of XPEL's ongoing business performance, XPEL uses EBITDA, a non-GAAP financial measure. EBITDA is defined as net income (loss) plus interest expense, net, plus income tax expense plus depreciation and amortization expense. EBITDA should be considered in addition to, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. It is not a measurement of XPEL's financial performance under GAAP and should not be considered as an alternative to revenue or net income, as applicable, or any other performance measures derived in accordance with GAAP and may not be comparable to other similarly title measures. For a full reconciliation of EBITDA to comparable GAAP measure, refer to the reconciliation titled " Reconciliation of Non-GAAP Financial Measure." XPEL, Inc. Consolidated Statements of Income (Unaudited) (In thousands except per share data) Three Months Ended September 30 , Nine Months Ended September 30 , 2025 2024 2025 2024 Revenue Product revenue $ 95,459 $ 86,950 $ 268,966 $ 237,002 Service revenue 29,956 25,902 84,967 75,871 Total revenue 125,415 112,852 353,933 312,873 Cost of Sales Cost of product sales 59,838 53,967 166,468 147,376 Cost of service 13,153 10,969 37,629 31,840 Total cost of sales 72,991 64,936 204,097 179,216 Gross Margin 52,424 47,916 149,836 133,657 Operating Expenses Sales and marketing 13,794 10,637 37,531 31,308 General and administrative 21,879 18,892 65,136 55,547 Total operating expenses 35,673 29,529 102,667 86,855 Operating Income 16,751 18,387 47,169 46,802 Interest expense 1 97 83 962 Foreign currency exchange loss/(gain) 110 (332 ) (1,164 ) 216 Income before income taxes 16,640 18,622 48,250 45,624 Income tax expense 3,505 3,730 10,321 9,033 Net income 13,135 14,892 37,929 36,591 Net income attributed to non-controlling interest 195 — 113 — Net income attributable to stockholders of the Company $ 12,940 $ 14,892 $ 37,816 $ 36,591 Earnings per share attributable to stockholders of the Company Basic $ 0.47 $ 0.54 $ 1.37 $ 1.32 Diluted $ 0.47 $ 0.54 $ 1.37 $ 1.32 Weighted Average Number of Common Shares Basic 27,675 27,642 27,665 27,636 Diluted 27,701 27,644 27,683 27,639 XPEL, Inc. Consolidated Balance Sheets (In thousands except share and per share data) (Unaudited) (Audited) September 30, 2025 December 31, 2024 Assets Current Cash and cash equivalents $ 64,497 $ 22,087 Accounts receivable, net 36,882 29,146 Inventory, net 128,715 110,904 Prepaid expenses and other current assets 4,438 5,314 Income tax receivable — 893 Total current assets 234,532 168,344 Property and equipment, net 16,229 17,735 Right-of-use lease assets 21,497 19,490 Intangible assets, net 56,267 34,562 Deferred tax asset, net 2,117 — Other non-current assets 4,761 1,350 Goodwill 52,292 44,126 Total assets $ 387,695 $ 285,607 Liabilities Current Current portion of notes payable $ 69 $ 63 Current portion lease liabilities 6,487 4,666 Accounts payable and accrued liabilities 52,226 36,138 Income tax payable 2,121 — Other short-term liabilities 23,442 651 Total current liabilities 84,345 41,518 Deferred tax liability, net — 469 Other long-term liabilities 12,628 1,810 Non-current portion of lease liabilities 16,752 16,126 Non-current portion of notes payable 116 229 Total liabilities 113,841 60,152 Stockholders’ equity Preferred stock, $0.001 par value; authorized 10,000,000; none issued and outstanding — — Common stock, $0.001 par value; 100,000,000 shares authorized; 27,678,601 and 27,651,773 issued and outstanding, respectively 28 28 Additional paid-in-capital 18,165 15,550 Accumulated other comprehensive loss (843 ) (4,236 ) Retained earnings 251,929 214,113 Stockholders' equity 269,279 225,455 Non-controlling interest 4,575 — Total stockholders’ equity 273,854 225,455 Total liabilities and stockholders’ equity $ 387,695 $ 285,607 XPEL, Inc. Consolidated Statements of Cash Flows (Unaudited) (In thousands) Three Months Ended September 30 , Nine Months Ended September 30 , 2025 2024 2025 2024 Cash flows from operating activities Net income $ 13,135 $ 14,892 $ 37,929 $ 36,591 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of property, plant and equipment 1,640 1,504 4,733 4,308 Amortization of intangible assets 1,663 1,475 4,722 4,327 Gain on sale of property and equipment (17 ) (6 ) (11 ) (35 ) Stock compensation 1,080 862 2,776 2,329 Provision for credit losses 678 91 859 279 Deferred income tax (825 ) (553 ) (2,727 ) (1,414 ) Changes in assets and liabilities: Accounts receivable, net 455 279 (7,386 ) (5,475 ) Inventory, net (2,716 ) (3,592 ) 5,195 5,174 Prepaid expenses and other current assets 1,590 (1,477 ) (308 ) (2,785 ) Income taxes receivable and payable 1,902 957 2,954 370 Accounts payable and accrued liabilities 14,569 5,127 15,535 (2,172 ) Net cash provided by operating activities 33,154 19,559 64,271 41,497 Cash flows used in investing activities Purchase of property, plant and equipment (989 ) (1,257 ) (2,934 ) (5,085 ) Proceeds from sale of property and equipment 19 40 34 40 Acquisition of businesses, net of cash acquired (14,981 ) (592 ) (15,165 ) (6,520 ) Purchases of long term investments (1,685 ) — (1,685 ) — Development of intangible assets (248 ) (580 ) (1,036 ) (1,421 ) Net cash used in investing activities (17,884 ) (2,389 ) (20,786 ) (12,986 ) Cash flows from financing activities Net payments on revolving line of credit — (11,000 ) — (19,000 ) Restricted stock withholding taxes paid in lieu of issued shares — (88 ) (161 ) (175 ) Repayments of notes payable (18 ) (13 ) (117 ) (44 ) Proceeds from deferred acquisition consideration (147 ) — (147 ) — Net cash used in financing activities (165 ) (11,101 ) (425 ) (19,219 ) Net change in cash and cash equivalents 15,105 6,069 43,060 9,292 Foreign exchange impact on cash and cash equivalents (199 ) (67 ) (650 ) 85 Increase in cash and cash equivalents during the period 14,906 6,002 42,410 9,377 Cash and cash equivalents at beginning of period 49,591 14,984 22,087 11,609 Cash and cash equivalents at end of period $ 64,497 $ 20,986 $ 64,497 $ 20,986 Supplemental schedule of non-cash activities Non-cash acquisition consideration $ 33,537 $ — $ 33,537 $ — Non-cash lease financing $ 1,556 $ 1,172 $ 4,396 $ 6,210 Issuance of common stock for vested restricted stock units $ 327 $ 438 $ 848 $ 900 Non-cash minority interest contribution $ 4,462 $ — $ 4,462 $ — Supplemental cash flow information Cash paid for income taxes $ 2,665 $ 3,458 $ 10,122 $ 10,256 Cash paid for interest $ — $ 151 $ 89 $ 995 Reconciliation of Non-GAAP Financial Measure EBITDA is a non-GAAP financial measure. EBITDA is defined as net income (loss) plus interest expense, net, plus income tax expense plus depreciation expense and amortization expense. EBITDA should be considered in addition to, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. It is not a measurement of our financial performance under GAAP and should not be considered as alternatives to revenue or net income, as applicable, or any other performance measures derived in accordance with GAAP and may not be comparable to other similarly titled measures of other businesses. EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our operating results as reported under GAAP. EBITDA does not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of ongoing operations and other companies in our industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure. EBITDA Reconciliation (in thousands) (Unaudited) (Unaudited) Three Months Ended September 30 , Nine Months Ended September 30 , 2025 2024 2025 2024 Net Income $ 13,135 $ 14,892 $ 37,929 $ 36,591 Interest 1 97 83 962 Taxes 3,505 3,730 10,321 9,033 Depreciation 1,640 1,504 4,733 4,308 Amortization 1,663 1,475 4,722 4,327 EBITDA $ 19,944 $ 21,698 $ 57,788 $ 55,221 View source version on businesswire.com : https://www.businesswire.com/news/home/20251105973765/en/ For more information: Investor Relations: John Nesbett / Jennifer Belodeau IMS Investor Relations Phone: (203) 972-9200 Email: [email protected] Source: XPEL, Inc.