Xpel, Inc. Reports Strong Growth Amid Challenges

Xpel, Inc. ((XPEL)) has held its Q1 earnings call. Read on for the main highlights of the call.

The recent earnings call for Xpel, Inc. painted a generally optimistic picture, highlighting robust revenue growth, especially in the U.S. and Middle East regions. The company reported significant increases in EBITDA and window film sales, though challenges persist in the Canadian market with declining revenue and customer sentiment. Strategic adjustments in China amid tariff concerns also pose ongoing challenges. Nevertheless, the overall sentiment remains positive, supported by strategic investments and cost management initiatives.

Revenue Growth

Xpel, Inc. reported a 15.2% increase in revenue, reaching $103.8 million. The U.S. region was a major contributor, with an 11.6% increase to $58.1 million, reflecting strong performance and market demand.

EBITDA Increase

The company achieved a 23.2% growth in EBITDA, totaling $14.4 million, which corresponds to a 14% EBITDA margin. This increase underscores the company’s effective cost management and operational efficiency.

Record Revenue in the Middle East

The Middle East region achieved record revenue for the quarter, showcasing the company’s expanding market reach and successful penetration in this region.

Strong Performance of Window Films

Xpel’s window film product line saw a 28.1% growth, with automotive window tint sales up by 16.2% and architectural window film sales increasing by 9.6%. This highlights the growing demand for these products.

Solid Gross Margin

The company reported a strong gross margin of 42.3%, indicating healthy profitability and efficient cost management.

Share Repurchase Plan

Xpel announced a $50 million share repurchase plan, signaling confidence in its financial health and commitment to returning value to shareholders.

Revenue Decline in Canada

Revenue in Canada declined by 14.9% to $9.4 million, with challenges in customer sentiment impacting performance. This remains a key area of concern for the company.

Challenges in China Market

While revenue in China met expectations, the company continues to navigate strategic adjustments and potential impacts from tariff situations, which remain a concern.

SG&A Expense Increase

SG&A expenses increased by 14.4% to $32.8 million, including $0.4 million in restructuring costs. This rise reflects the company’s ongoing investments in restructuring and strategic initiatives.

Forward-Looking Guidance

Looking ahead, Xpel anticipates Q2 revenue to range between $117 million and $119 million. The company remains focused on optimizing its business strategy amid tariff uncertainties, with continued investment in growth and cost management.

In summary, Xpel, Inc.’s earnings call conveyed a positive outlook, driven by strong revenue growth and strategic initiatives. Despite challenges in Canada and China, the company is well-positioned for future growth, with a focus on expanding its market presence and enhancing shareholder value.