XPEL's Q1 2025: Navigating Contradictions in China Strategy, Tariffs, and Revenue Stability

China Market Strategy and Direct Business Model, Tariff Impact on the China Business, Strategic Shift and Market Focus in China, OEM Referral Program Strategy, and China Revenue Stabilization are the key contradictions discussed in XPEL's latest 2025Q1 earnings call.



Revenue Growth and Regional Performance:
- XPEL, Inc. reported a 15.2% increase in revenue to $103.8 million for Q1 2025.
- The growth was driven by an 11.6% increase in the U.S. region and solid performance in European and Middle Eastern regions, while the Canada region saw a 14.9% decline.

Tariff and Market Uncertainty:
- The company is closely monitoring the changing tariff situation, with potential impacts on new car demand, vehicle substitution, and dealership behavior.
- While they anticipate limited direct impact on product sales, the uncertainty may affect business strategy and planning.

Window Film and Architectural Product Growth:
- XPEL's window film product line grew by 28.1% in Q1, driven by a 16.2% increase in automotive window tint and a 9.6% increase in architectural window film.
- The growth is attributed to the introduction of new windshield protection film and expansion into architectural applications.

Operational Efficiency and Cost Management:
- EBITDA increased by 23.2% to $14.4 million, reflecting a 14% EBITDA margin.
- Despite a 14.4% increase in SG&A expenses, the company achieved operational efficiency through restructuring initiatives and cost management.