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 results 1 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:

First Nine Months 2025 Overview:

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

EBITDA 2

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

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

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

Overall Revenue

Product and Service Revenue

Other Financial Information

Cash Flows from Operations

2025 Outlook

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

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

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

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

)

(11

)

(35

)

Stock compensation

1,080

862

2,776

2,329

Provision for credit losses

678

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

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

)

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

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)

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

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