On August 8, 2024, XPEL Inc (XPEL, Financial) released its 8-K filing for the second quarter of 2024. XPEL Inc, a provider of protective films and coatings, reported a 7.5% increase in revenue to $109.9 million, surpassing the analyst estimate of $105.68 million. However, the company's earnings per share (EPS) of $0.54 fell short of the estimated $0.46.
Company Overview
XPEL Inc is a leading provider of protective films and coatings, including automotive paint protection film, surface protection film, automotive and commercial/residential window films, and ceramic coatings. The company has a network of trained installers and proprietary DAP software, dedicated to exceeding customer expectations by providing quality products, customer service, technical support, and world-class training. The majority of revenue is derived from the United States.
Performance and Challenges
Despite achieving record revenue, XPEL Inc faced challenges in maintaining its net income, which decreased by 4.5% year-over-year to $15.0 million. The gross margin improved slightly to 43.5% from 43.0% in the same period last year. Operating expenses increased by 20.5%, impacting the operating income, which declined by 5.0% year-over-year.
Financial Achievements
XPEL Inc's revenue growth is significant in the Vehicles & Parts industry, where maintaining a steady revenue stream is crucial. The company's EBITDA for the quarter was $21.8 million, representing 19.9% of revenue, compared to $22.4 million or 21.9% of revenue in the second quarter of 2023. This decline in EBITDA margin indicates increased operational costs.
Income Statement Highlights
| Three Months Ended June 30 | 2024 | % of Total Revenue | 2023 | % of Total Revenue | % Change |
|---|---|---|---|---|---|
| Total revenue | $109,917 | 100.0% | $102,237 | 100.0% | 7.5% |
| Gross margin | $47,865 | 43.5% | $43,994 | 43.0% | 8.8% |
| Operating income | $19,186 | 17.5% | $20,191 | 19.7% | (5.0%) |
| Net income | $15,033 | 13.7% | $15,741 | 15.4% | (4.5%) |
| EBITDA | $21,824 | 19.9% | $22,428 | 21.9% | (2.7%) |
Geographical Revenue Summary
| Three Months Ended June 30 | 2024 | 2023 | % Change | % of Total Revenue (2024) | % of Total Revenue (2023) |
|---|---|---|---|---|---|
| United States | $64,902 | $59,149 | 9.7% | 59.0% | 57.9% |
| China | $4,401 | $8,103 | (45.7%) | 4.0% | 7.9% |
| Canada | $13,274 | $11,851 | 12.0% | 12.1% | 11.6% |
| Continental Europe | $11,355 | $9,689 | 17.2% | 10.3% | 9.5% |
| United Kingdom | $3,689 | $3,630 | 1.6% | 3.4% | 3.6% |
| Middle East/Africa | $4,803 | $4,109 | 16.9% | 4.4% | 4.0% |
| Asia Pacific | $4,334 | $3,314 | 30.8% | 3.9% | 3.2% |
| Latin America |
Explore the complete 8-K earnings release (here) from XPEL Inc for further details.
