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XPEL, Inc. (XPEL)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered a clean beat: revenue $103.8M (+15.2% YoY) and diluted EPS $0.31 (+28.8% YoY), with gross margin at 42.3%; both top and bottom lines exceeded S&P Global consensus estimates. Management guided Q2 revenue to $117–$119M and announced a $50M stock repurchase authorization, adding a potential support to shares .
  • Revenue beat vs consensus: $103.8M actual vs $97.4M estimate; EPS beat: $0.31 vs $0.265; consensus built on limited coverage (3 revenue, 2 EPS estimates)*. The beat was driven by strong U.S. performance (+11.6% YoY), normalization in China ($8.1M), and record Middle East/Africa revenue .
  • Margin quality improved modestly YoY (GM 42.3% vs 42.0%), with EBITDA rising 23.2% to $14.4M (13.9% margin). SG&A growth moderated, though Q1 included ~$0.4M restructuring and ~$1.2M dealer conference costs, with tax rate elevated to 23.9% for the quarter before a 21% go-forward planning rate .
  • Near-term narrative catalysts: tariff mitigation and supply-chain optionality (manufacturing capacity in three countries), expanding product portfolio (windshield protection film, color films, architectural surface protection), and dealership/OEM programs (Rivian, referral platform) supporting demand and channel breadth .

What Went Well and What Went Wrong

What Went Well

  • Strong U.S. performance and global breadth: U.S. revenue +11.6% YoY to $58.1M; Middle East/Africa delivered a record quarter; Europe improved sequentially vs Q4 .
  • Product momentum and mix: window film revenue +28.1% YoY; total product revenue +17.7% YoY; EBITDA +23.2% to $14.4M with GM at 42.3% (up 30bps YoY) .
  • Management confidence on tariffs: “From a product standpoint, we don’t anticipate significant impact from the tariffs…we have manufacturing now available to us in 3 countries,” positioning XPEL to mitigate both U.S. and retaliatory tariff regimes .

What Went Wrong

  • Canada softness: revenue down 14.9% YoY; sentiment “relatively poor” with timing headwinds, though management believes the worst may be behind them .
  • Operating costs: SG&A grew 14.4% YoY (Q1 includes ~$0.4M restructuring; ~$1.2M dealer conference costs), limiting margin leverage in the quarter despite strong revenue growth .
  • Ongoing macro/tariff uncertainty: management refrained from full-year guidance, citing unpredictable impacts on new car demand, dealer inventory behavior, and currency volatility .

Financial Results

Consolidated P&L Trend vs Prior Periods

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$112.9 $107.5 $103.8
Gross Margin (%)42.5% 40.6% 42.3%
Operating Income ($USD Millions)$18.4 $12.3 $11.1
EBITDA ($USD Millions)$21.7 $14.3 $14.4
EBITDA Margin (%)19.2% 13.3% 13.9%
Net Income ($USD Millions)$14.9 $8.9 $8.6
Diluted EPS ($USD)$0.54 $0.32 $0.31

Consensus vs Actual (Quarter)

MetricQ1 2025 ConsensusQ1 2025 Actual
Revenue ($USD)$97,395,670*$103,805,000
Diluted EPS ($USD)$0.265*$0.31
# of Estimates (Revenue / EPS)3 / 2*—

Values marked with * retrieved from S&P Global.

Segment Mix (Product vs Service)

Metric ($USD Millions)Q3 2024Q4 2024Q1 2025
Product Revenue$86.95 $81.85 $78.71
Service Revenue$25.90 $25.68 $25.09
Total Revenue$112.85 $107.53 $103.81

Geographical Revenue (Q1 2025)

RegionRevenue ($USD Millions)% of TotalYoY Change
United States$58.0756.0%+11.6%
Continental Europe$11.1510.7%+9.1%
Canada$9.439.1%-14.9%
China$8.117.8%+459.1%
Middle East/Africa$5.915.7%+14.9%
Asia Pacific$5.004.8%+33.3%
United Kingdom$3.583.4%+2.7%
Latin America$2.562.5%-12.6%
Total$103.81100.0%+15.2%

KPIs (Select)

KPIQ3 2024Q4 2024Q1 2025
Window Film Revenue Growth YoY (%)+20.6% +32.9% +28.1%
Adjusted Product Revenue YoY (%)+6.8% -1.0% (ex-China +9.3%) +16.2%
Net Cash Provided by Ops ($USD Millions)$19.56 $6.33 $3.23
Effective Tax Rate (%)——23.9% (planning 21% forward)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ1 2025$97–$99M (given on 2/26/25) Actual $103.8M Beat vs guidance
RevenueQ2 2025—$117–$119M (Q1 PR) New guidance issued
Effective Tax RateForward quarters—~21% planning assumption New planning assumption
Capital ReturnOngoing—$50M stock repurchase authorization New authorization

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 / Q4 2024)Current Period (Q1 2025)Trend
Tariffs/MacroChina run-rate normalized ($8–$9M/quarter), tariff/currency uncertainty flagged “Don’t anticipate significant impact from tariffs”; supply-chain optionality (3 countries) but dealership/new car demand impacts remain uncertain Mitigation in place; uncertainty persists
Product PortfolioWindshield film launched at SEMA; color films planned Q1’25; architecture tools Additional colored films in Q2; architectural surface protection films; “protect everything” mantra Expanding
Regional TrendsUS strength; Canada strong in Q3; China normalized; Europe/UK softer US +11.6%; Canada -14.9%; Europe improved vs Q4; MEA record; China $8.1M Mixed, broadly constructive ex-Canada
Dealership/OEM ProgramsTesla referral program; distributor acquisitions (India/Japan); OEM interest Inventory dynamics; stable pre-load; OEM/Rivian package changes; referral expansion continued Building channel breadth
DAP/Tech EnablementDAP mobile app; workflow, quotes, scheduling improvements Continued DAP investment; dealer tools; operational efficiency focus Ongoing execution
Cost DisciplineSG&A growth arrested; flat Q4 vs Q3 expected; FX loss $1.2M Restructuring costs (~$0.4M Q1; ~$0.3M Q2); dealer conference ~$1.2M; 21% tax planning Intensifying cost focus

Management Commentary

  • “We are off to a good start in 2025 with both solid top line and bottom line performance. We will remain focused…as we navigate the ongoing tariff uncertainty.” — Ryan Pape, CEO .
  • “From a product standpoint, we don’t anticipate significant impact from the tariffs…we have manufacturing now available to us in 3 countries.” — Ryan Pape .
  • “Our U.S. business…grew at 11.6% and was almost flat sequentially…window film product line grew 28.1% in the quarter.” — Barry Wood, CFO .
  • “Q2 revenue should be in the $117–$119 million range…we won’t be providing any guidance for the year” given uncertainty. — Ryan Pape .
  • “Cash flow provided by ops was $3.2M…we continue to build cash on the balance sheet and have substantial debt capacity.” — Barry Wood .

Q&A Highlights

  • U.S. demand and pull-forward: March SAAR suggests some pull-ahead, but likely not XPEL’s core buyer; take-rates appear stable .
  • Dealership pre-loading: inventory contraction could be a headwind, though too early to call; Q4’s shift from rebuilding to steady-state inventory was the main headwind .
  • China outlook: sell-in/sell-through normalized; pursuing more direct model; tariff impacts largely a non-factor due to diversified manufacturing and routing .
  • Tariff mitigation: capacity in three countries to address both U.S. and retaliatory tariffs; logistics/inventory may see transient inefficiencies .
  • Audi/Porsche port holds: not observed as a headwind; end-market remains good .

Estimates Context

  • Q1 2025 beat vs consensus: revenue $103.8M vs $97.4M estimate; EPS $0.31 vs $0.265; coverage limited (3 revenue, 2 EPS estimates)*. This likely prompts upward revisions to near-term estimates and supports management’s Q2 revenue outlook of $117–$119M .
  • Q2 2025 consensus at the time: revenue ~$118.4M; EPS ~$0.467*, broadly consistent with management’s guidance range; mix, tariff noise, and SG&A initiatives remain swing factors*.
    Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Clean top/bottom-line beat with GM resilience (42.3%) and EBITDA growth; narrative shifts from FX/tariff risk toward execution and product/channel momentum .
  • U.S. remains the growth anchor; China normalized to ~$8–9M quarterly run-rate; MEA/Europe constructive; Canada weak but possibly bottoming .
  • Q2 revenue guide $117–$119M and $50M buyback provide near-term support; expect estimate revisions higher post Q1 beat .
  • Cost discipline is intensifying (RIF costs; dealer conference timing; 21% tax planning); SG&A growth moderating should aid operating leverage as volumes rise .
  • New products (windshield protection, color films) and architectural expansion broaden TAM; dealership/OEM referral programs deepen channel penetration (incl. Rivian) .
  • Tariff optionality (3-country capacity) and supply-chain agility reduce macro risk; watch currency strength and dealer inventory dynamics as key sensitivities .
  • Near-term trading setup: beats + authorization + guide vs limited sell-side coverage can catalyze positive sentiment; risk skew from macro/tariff headlines and Canada softness .
Footnote: Consensus estimate values marked with * are retrieved from S&P Global.

Citations:

  • Q1 2025 press release and 8-K:
  • Q1 2025 earnings call transcript:
  • Prior quarters: Q4 2024 press release/8-K/call: ; Q3 2024 press release/8-K/call:
  • Rivian program press release: