Q2 2026 Xpel Inc. Earnings Call Transcript
Key Points
- Record Q2 revenue of $143.1 million, up 14.7% year-over-year, exceeding expectations.
- Strong performance in the U.S. region with record revenue of $78.6 million, up 11.7%.
- China region delivered solid results despite a challenging domestic car market, with revenue of $15.9 million.
- Record cash flow from operations of $30.8 million in the quarter, with improved cash conversion cycle.
- Strategic investments in manufacturing (San Antonio and China) expected to drive margin expansion to mid-20% by 2028.
- Dealership channel continues to face headwinds due to FTC compliance concerns, impacting sales.
- Europe region revenue declined 2.3% due to timing of distribution orders and lower OEM volumes.
- India and Middle East region revenue declined 5% due to the Iran conflict and vehicle availability shortages.
- Gross margin pressure from higher-cost inventory acquired in the China distributor acquisition, with modest price increases needed to offset cost pressures.
- Start-up and ramp-up costs for manufacturing investments are expected to increase to $0.03-$0.04 per share in Q3.
Good morning everyone and welcome to the Xpel Incorporated second quarter 2026 earnings call.
(Operator Instructions)
It's now my pleasure to turn the floor over to your host, John Nesbett of IMF Investor Relations. John, the floor is yours.
Good morning and welcome to our conference call to discuss Xpel's second quarter 2026 financial results. On the call today, Ryan Pape, Xpel's President and Chief Executive Officer, and Barry Wood, Xpel's Senior Vice President and Chief Financial Officer, will provide an overview of the business operations and review the company's financial results. Immediately after the prepared comments, we will take questions from call participants. A transcript of this call will be available on the company's website after the call.
Take a moment to read the safe harbor statement. During the course of this call, we will make certain forward-looking statements regarding XBel Inc. And its business, which may include but are not limited to anticipated use of proceeds
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