XPEL, Inc. (XPEL) Income Statement

The sequential acceleration from 13.1% to 14.7% suggests improving demand momentum, possibly driven by new product adoption or market share gains. However, the growth rate remains below the 15.2% seen in 2025Q1, indicating that while the trend is positive, it has not yet surpassed prior peaks. Investors should monitor whether this acceleration is sustainable or a one-off quarter.

The 120 basis point year-over-year expansion in gross margin is a positive signal, suggesting XPEL is gaining pricing power or benefiting from lower input costs. This improvement is notable given the competitive auto parts industry, where peers like MPAA and LCII report gross margins of 20.2% and 23.8%, respectively. The trend appears sustainable if the company continues to innovate and differentiate its products.

The operating margin expanded to 16.2% from 15.5% in the prior year, driven by SG&A growing at a slower pace than revenue. This suggests that XPEL is scaling efficiently, with overhead costs well controlled. The trend is consistent with the company's focus on operational efficiency, though investors should watch for any future increases in SG&A that could compress margins.

The reduction in SG&A intensity is a key driver of operating margin expansion, as the company continues to scale without proportionate increases in overhead. This is particularly impressive given the revenue growth, suggesting that XPEL is leveraging its existing infrastructure. However, the lack of R&D expenses in the data is notable; if R&D is embedded in SG&A, the cost structure may be less transparent.