XPEL — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated revenue increased 9.9% year-over-year to $137.8 million for the third quarter of 2026, compared to $125.4 million in the third quarter of 2025.
• Revenue for the first nine months of 2026 increased 12.5% to $398.2 million, compared to $353.9 million in the same period of 2025.
• Gross margin improved to 44.6% in the third quarter of 2026 from 41.8% in the third quarter of 2025; for the first nine months, gross margin was 44.2% compared to 42.3% in 2025.
• Net income attributable to stockholders increased 26.3% to $16.3 million ($0.59 per share) in the third quarter of 2026, versus $12.9 million ($0.47 per share) in 2025.
• Net income attributable to stockholders increased 18.3% to $44.7 million ($1.62 per share) for the first nine months of 2026, compared to $37.8 million ($1.37 per share) in 2025.
• Adjusted net income attributable to stockholders increased 31.7% to $17.0 million ($0.62 per share) in the third quarter of 2026, and 22.2% to $46.2 million ($1.67 per share) for the first nine months of 2026.
• EBITDA increased 28.3% to $25.6 million (18.6% of revenue) in the third quarter of 2026, compared to $19.9 million (15.9% of revenue) in 2025; for the first nine months, EBITDA increased 21.3% to $70.1 million (17.6% of revenue).
• Adjusted EBITDA grew 30.7% to $26.1 million (18.9% of revenue) in the third quarter of 2026, and 23.4% to $71.3 million (17.9% of revenue) for the first nine months of 2026.
• Total operating expenses increased 13.3% to $40.4 million in the third quarter of 2026.
• Sales and marketing expenses increased 8.7% to represent 10.9% of revenue in the third quarter of 2026.
• General and administrative expenses increased 16.3% to represent 18.5% of revenue in the third quarter of 2026.
• Net cash provided by operating activities was $21.1 million in the third quarter of 2026, a 36.4% decrease from $33.2 million in the third quarter of 2025.
• Cash and cash equivalents were $45.7 million as of September 30, 2026, down from $50.9 million as of December 31, 2025.
• Long-term debt increased to $42.6 million as of September 30, 2026, from $0 as of December 31, 2025.
• Short-term debt increased to $1.8 million as of September 30, 2026, from $0.1 million as of December 31, 2025.

Guidance and Future Outlook:

• The Company expects fourth quarter 2026 revenue to be approximately $125 million to $127 million.
• Management stated that manufacturing investments in San Antonio and China remain on track and are expected to drive meaningful margin expansion in the years ahead.

Business Segments and Product Lines:

• Adjusted product revenue increased 10.0% year-over-year.
• Total window film revenue increased 11.8% year-over-year, representing 22.4% of total revenue.
• Total service revenue (excluding cutbank credit revenue) increased 9.5% year-over-year.
• Total installation revenue (labor and product combined) grew 4.5% year-over-year.
• The Company acquired a China manufacturer, with acquisition-related expenses excluded from adjusted net income and adjusted EBITDA for the first nine months of 2026.
• Costs related to the start-up and ramp-up of the San Antonio manufacturing facility were excluded from adjusted net income and adjusted EBITDA.

Market and Competitive Landscape:

• United States revenue increased 7.0% year-over-year, accounting for 55.7% of total revenue in the third quarter of 2026.
• Canada revenue increased 17.9% year-over-year, accounting for 11.1% of total revenue.
• North America total revenue increased 8.6% year-over-year, accounting for 66.8% of total revenue.
• China revenue increased 52.4% year-over-year, accounting for 11.1% of total revenue.
• Asia Other revenue increased 13.8% year-over-year, accounting for 4.6% of total revenue.
• Asia Pacific total revenue increased 38.7% year-over-year, accounting for 15.7% of total revenue.
• EU, UK, and Africa revenue decreased 2.1% year-over-year, accounting for 11.7% of total revenue.
• India and Middle East revenue decreased 16.6% year-over-year, accounting for 3.5% of total revenue.
• Latin America revenue increased 12.1% year-over-year, accounting for 2.3% of total revenue.

Risks and Challenges:

• Forward-looking statements identify risks including competition, prolonged or material contraction in automotive sales and production volumes, supply chain disruption, technology that could render products obsolete, changes in vehicle sales methods, brand damage, cyber events, and legal/regulatory developments.
• Actual results may differ materially from forward-looking statements due to known and unknown risks, uncertainties, and factors beyond the Company's control.

Management Commentary and Tone:

• Ryan Pape, President and Chief Executive Officer, commented that the Company delivered a solid third quarter in a challenging environment, growing revenue nearly 10% and expanding gross margin for the third consecutive quarter.
• Management expressed confidence that manufacturing investments in San Antonio and China will drive meaningful margin expansion in the years ahead.

Other Key Points:

• The Company purchased treasury shares totaling $3.0 million in the third quarter of 2026 and $5.9 million for the first nine months of 2026.
• The Company borrowed $44.8 million in debt during the first nine months of 2026.
• Non-cash acquisition consideration totaled $756,000 in the third quarter of 2026 and $15.0 million for the first nine months of 2026.
• The Company incurred $1.9 million in capital expenditures on property, plant, and equipment in the third quarter of 2026 and $76.7 million for the first nine months of 2026.
• The Company acquired businesses, net of cash acquired, for $5.3 million in the third quarter of 2026 and $12.4 million for the first nine months of 2026.
• A conference call and webcast were scheduled for November 4, 2026, at 8:30 a.m. Eastern Time to discuss the results.
• Preliminary results are unaudited and subject to adjustments upon completion of the quarter-end financial close processes.