At press time, XPEL’s stock price was largely unchanged following its Q4 earnings report released this morning. This is the company’s first earnings test since the stock dropped more than 30 percent when Tesla announced it had inked a deal with another company to provide its OEM color paint protection film (PPF). In an investor conference call this morning, the company reported strong growth during the last quarter of 2023 and for the year.

Overall, revenue increased by 34.5% to $105.5 million while net income was up 42.3% and EBITA (earnings before interest, taxes, depreciation and amortization) grew 33.6% over the fourth quarter of 2022.

The company increased its annual revenue by 22.3% over 2022.

“We are pleased with our full year 2023 performance and closed out the year with solid growth in the fourth quarter,” says XPEL CEO Ryan Pape. “We delivered strong performance across our end markets and product offerings driving improved profitability for the year.”

Much of the growth can be attributed to international markets, including the Middle East which was up 100.4% quarter-over-quarter, and China, up 166.6%, representing 15.7% of total revenue while the U.S. contributed to 15.8% of revenue growth, according to Pape.

The PPF business grew 32.4% while its window film revenue grew 19.2% quarter-over-quarter. Its OEM business grew 74% quarter-over-quarter while ceramic coatings grew 50%.

In analyzing the broader market, “there’s no question the aftermarket has slowed,” Pape says, noting car sales are expected to be slower in 2024.

Pape says XPEL plans to invest in marketing and increase it to more than 3% of company revenue.

“We would like to see that expand and fund that by our increasing gross margin,” he says, adding the company is looking into more acquisitions ranging from $25-50 million to scale growth, which would be on the higher end for the company.

The company also gave some insight into its SEMA expenses. Known for its blowout parties in Las Vegas held annually, approximately $800,000 went into total marketing costs for the trade show, per company CFO Barry Wood.

Finally, the company projected its growth in 2024 to be 15%.

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