XPEL (NASDAQ:XPEL) Issues Earnings Results

Key Points

• XPEL beat quarterly expectations, reporting $0.68 in EPS versus the $0.60 consensus estimate and revenue of $143.05 million, up 14.7% year over year.
• Results included record operating cash flow of $30.8 million, 17.6% EBITDA growth, and strong window-film revenue growth, while the company continues investing roughly $110 million in new manufacturing facilities.
• Third-quarter revenue guidance of $137 million to $139 million reflects seasonality, pulled-forward sales, weaker European and Middle Eastern demand, and continued dealership pressure; analysts collectively maintain a “Hold” rating.

XPEL (NASDAQ:XPEL - Get Free Report) posted its quarterly earnings data on Wednesday. The company reported $0.68 earnings per share for the quarter, beating the consensus estimate of $0.60 by $0.08, FiscalAI reports. XPEL had a net margin of 10.82% and a return on equity of 19.14%. The firm had revenue of $143.05 million during the quarter, compared to analysts' expectations of $135.09 million. During the same quarter last year, the company posted $0.59 EPS. The company's quarterly revenue was up 14.7% compared to the same quarter last year.

Here are the key takeaways from XPEL's conference call:

• Second-quarter revenue rose 14.7% to a record $143.1 million, exceeding management’s expectations despite approximately $2 million of sales pulled forward ahead of anticipated price increases. EBITDA increased 17.6%, while operating margin reached 16.2%.
• Operating cash flow reached a record $30.8 million, with improved cash conversion and lower days sales outstanding. Window film revenue grew 16.1% to $32.5 million, and management expects gross margin to increase modestly through the remainder of the year.
• Management expects third-quarter revenue of $137 million to $139 million, below Q2, reflecting seasonality, $1 million to $2 million of additional sales pulled forward, and continued weakness in Europe and the Middle East. Dealership demand remains pressured by FTC compliance concerns.
• XPEL is investing approximately $110 million in manufacturing facilities in San Antonio and China, with additional capital expenditures expected through early 2027. Incremental margin benefits are expected beginning in mid-2027, with a mid-20% operating-margin run rate targeted by the end of 2028.
• China revenue reached $15.9 million despite domestic vehicle sales declining approximately 20% year over year, while India grew more than 60%. Management also plans to pursue small service- and OEM-adjacent acquisitions and use remaining cash flow for share repurchases, though manufacturing-related startup costs reduced Q2 earnings by about $0.03 per share.

XPEL Price Performance

XPEL traded up $4.38 during mid-day trading on Wednesday, hitting $50.29. The stock had a trading volume of 540,092 shares, compared to its average volume of 255,282. XPEL has a 1-year low of $31.50 and a 1-year high of $55.91. The stock's fifty day simple moving average is $45.61 and its 200-day simple moving average is $46.04. The firm has a market capitalization of $1.39 billion, a price-to-earnings ratio of 26.33 and a beta of 1.09.

Analyst Upgrades and Downgrades

XPEL has been the subject of several research reports. Freedom Capital cut XPEL from a "strong-buy" rating to a "hold" rating in a research note on Thursday, May 7th. Weiss Ratings reiterated a "hold (c)" rating on shares of XPEL in a research report on Wednesday, June 24th. Finally, Zacks Research upgraded shares of XPEL from a "strong sell" rating to a "hold" rating in a report on Monday, April 27th. Three equities research analysts have rated the stock with a Hold rating, Based on data from MarketBeat.com, XPEL has an average rating of "Hold".

Hedge Funds Weigh In On XPEL

Institutional investors and hedge funds have recently modified their holdings of the business. Steward Partners Investment Advisory LLC raised its holdings in XPEL by 462.9% during the 4th quarter. Steward Partners Investment Advisory LLC now owns 985 shares of the company's stock worth $49,000 after buying an additional 810 shares during the period. Lazard Asset Management LLC acquired a new position in shares of XPEL in the second quarter valued at approximately $55,000. Russell Investments Group Ltd. acquired a new position in shares of XPEL in the third quarter valued at approximately $66,000. Tower Research Capital LLC TRC increased its position in shares of XPEL by 234.0% during the second quarter. Tower Research Capital LLC TRC now owns 2,886 shares of the company's stock worth $104,000 after acquiring an additional 2,022 shares in the last quarter. Finally, Osaic Holdings Inc. raised its holdings in shares of XPEL by 319.7% during the second quarter. Osaic Holdings Inc. now owns 2,984 shares of the company's stock worth $107,000 after acquiring an additional 2,273 shares during the period. 75.08% of the stock is currently owned by institutional investors and hedge funds.

XPEL Company Profile

XPEL, Inc is a leading manufacturer and distributor of advanced protective films and coatings for automotive, marine, aviation, and architectural applications. The company's core products include paint protection film (PPF), window tinting film, and ceramic coatings designed to shield surfaces from scratches, environmental contaminants, and UV damage. XPEL's flagship PPF, known for its self-healing properties, is engineered to maintain a vehicle's factory finish by resisting swirl marks, stone chips, and acid rain.

Beyond automotive protection, XPEL has expanded its offerings to include protective films for electronics and architectural surfaces, providing solutions that enhance durability and prolong the life of high-value assets.

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