What caused XPEL's Q3 earnings to miss slightly?

XPEL's Q3 earnings missed slightly, with an EPS of $0.32 falling short of the forecasted $0.35, while revenue came in at $107.53 million, surpassing expectations of $105.48 million. The EPS miss was due to **Challenges in China** and **Strategic Decisions**:

1. **Challenges in China**:
- XPEL faced significant challenges in China, with revenue declining from $16.6 million in Q4 2023 to $9.2 million in Q4 2024. The company's CEO, Ryan Pape, acknowledged that the strategy in China is to ensure the brand's market share matches its mind share, which involves optimizing the product portfolio, ensuring distribution partners have access to necessary products, and exploring OEM and dealership opportunities. These challenges contributed to the lower-than-expected earnings.
2. **Strategic Decisions**:
- XPEL's OEM revenue declined slightly due to changes in the Rivian program, impacting quarterly results. The company is also grappling with uncertain macroeconomic conditions, including tariffs and foreign exchange impacts. These strategic decisions and external factors influenced the company's financial performance in Q4 2024.

In summary, XPEL's Q3 earnings miss was primarily due to challenges in China and strategic decisions. Despite these setbacks, the company achieved a record high revenue of $112.9 million for Q3, marking a 9.9% increase.