XPEL (XPEL) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 2026 revenue of $143.1 million, up 14.7% year-over-year, with net income up 12.9% to $18.3 million and EBITDA up 17.6% to $27.6 million, driven by strong demand in China, Asia-Pacific, and North America.

• Growth was supported by robust sales of paint protection and window film products, and increased installation labor revenue.

• Major manufacturing investments included the acquisition of a four-building site in San Antonio for $60.4 million and a 75% interest in a China facility, totaling $110 million.

• Some Q2 sales were pulled ahead due to anticipated price increases.

Financial highlights

• Gross margin improved to 44.1% from 42.9% YoY; EBITDA margin was 19.3%, with adjusted EBITDA margin reaching 20.7%.

• Operating income increased 20.3% to $23.2 million (margin 16.2%); net income attributable to stockholders up 12.9% to $18.3 million (margin 12.6%).

• Adjusted net income margin was 13.2%; EPS was $0.65, adjusted EPS $0.68.

• Record cash flow from operations at $30.8 million in Q2; cash and equivalents at quarter-end were $40.7 million.

• CapEx was $65.1 million, including real estate purchase; investing cash outflows surged due to facility acquisitions.

Outlook and guidance

• Q3 2026 revenue expected in the $137–$139 million range, assuming consistent trends in U.S. and APAC, with seasonality in Europe and modest Middle East improvement.

• Gross margin expected to continue modestly increasing through year-end, with incremental margin benefits from manufacturing investments starting mid-2027.

• Operating margin goal of mid-20% range on a run rate basis by end of 2028, assuming project schedules are maintained.

• Management expects continued revenue and margin growth, supported by expanded manufacturing and direct sales in China and North America.

• Sufficient liquidity and borrowing capacity are expected to support ongoing operations, capital expenditures, and acquisitions.