XPEL Reports Revenue Growth of 11.1% to $125.4 million in Third Quarter 2025; Announces Strategic Investments in Manufacturing and Supply Chain

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):

Geographical Revenue Summary

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."

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.

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