XPEL, Inc. (XPEL) supplies protective films, coatings and related services primarily to the automobile aftermarket, new car dealerships and automobile original equipment manufacturers, or OEMs.
The majority of the company’s revenue is derived from the sale of its automotive products and related services, while the remainder of its revenue is derived from non-automotive products, including architectural window film and marine and flat surface protection films.
In 2007, the company began selling...
XPEL, Inc. (XPEL) supplies protective films, coatings and related services primarily to the automobile aftermarket, new car dealerships and automobile original equipment manufacturers, or OEMs.
The majority of the company’s revenue is derived from the sale of its automotive products and related services, while the remainder of its revenue is derived from non-automotive products, including architectural window film and marine and flat surface protection films.
In 2007, the company began selling automotive paint protection film products to complement its software business. As paint protection film technology improved and became more durable, awareness and adoption of paint protection film continued to increase, driving significant industry growth over the last several years. Initial adoption of paint protection film came primarily from luxury car enthusiasts in the United States and Canada. These enthusiasts were primarily served by a growing automotive aftermarket of independent installers of automotive paint protection and window films. Internationally, nascent demand began to build as awareness and adoption in the United States and Canada continued to increase. Over the last few years, new car dealership interest in the product increased due to their exposure to the aftermarket installer network, while OEM interest in the product increased through their exposure to the new car dealerships that were selling the product.
The company’s strategy initially centered on how best to serve and grow its network of independent installers in the United States and Canada, and to sell products internationally through independent distributors, while simultaneously building and enhancing the XPEL brand. This ‘best-in-class’ service strategy was then extended to new car dealerships and OEMs. Internationally, while its initial market entry was primarily through indirect distribution, it desires to ultimately sell directly to the majority of the top twenty-five car markets in the world, which is an important element of its acquisition strategy.
Products
Surface and Paint Protection Film: The company’s primary products are paint and surface protection films. Most of the products sold are for automotive applications. Paint protection film, its flagship product, is a self-adhesive, clear film designed to be applied to painted surfaces of automobiles and other surfaces. The company sells a variety of product lines, each with its own unique characteristics, warranties, and intended uses.
Automotive Window Film (or Tint): The company sells several lines of automotive window or tint films, primarily under the XPEL PRIME brand name, which exhibit a range of performance characteristics and appearances.
Windshield Protection Film: The company sells windshield protection film, which, unlike automotive window tint, is applied to the outside of a windshield, helping to make the windshield more impact-resistant and prevent costly repairs.
Architectural Window Film: The company sells architectural glass solutions for commercial and residential buildings under the VISION brand name, representing its first product set with a fully non-automotive use. Architectural window films come in several broad categories, including:
Solar: Solar films are designed to provide solar energy rejection. The company offers a variety of films with varying colors, visual light transmissions, and price points.
Safety & Security: Safety and Security films are clear, thick polyethylene terephthalate, or PET, films to secure glass in the event of a breakage. The company offers a variety of thicknesses and films with varying adhesive characteristics for different types of installations.
Other: In addition to the main categories of Solar and Safety & Security films, the company also offers anti-graffiti, exterior applied, and decorative films.
Ceramic Coating: The company sells a hydrophobic, self-cleaning coating that can be applied to a variety of surface types for automobiles, aircraft, and marine applications.
Miscellaneous Products, Tools, and Pre-Cut Films: The company sells a variety of other miscellaneous product sets, including pre-cut film products, tools and accessories, and merchandise and apparel.
Services
Installation Services: The company offers installation services for the installation of all its products in its various channels. It has over 400 installation technicians who are highly trained to install its products effectively and efficiently.
Software: A key component of the company’s product offering is its Design Access Platform (‘DAP’). DAP is a proprietary SAAS platform and database consisting of over 80,000 vehicle applications used by the company and its customers to cut automotive protection film into vehicle panel shapes for both paint protection film and window film products.
The company commits significant resources to keep the pattern database updated, with a goal toward having a pattern for every panel of every vehicle. When new vehicle models are introduced to the market, it strives to create the pattern as soon as possible. The company’s patterns and software increase installer efficiency and reduce waste.
The company’s DAP customers pay a monthly access fee to access its proprietary database.
Training Services: The company offers training services to its customers for the installation of all its products. The installation of surface protection and window films requires training and practice to become proficient. The company offers both inbound and outbound training for a fee.
Strategy
XPEL continues to pursue several key strategic initiatives to drive continued growth. The company’s global expansion strategy includes establishing a local presence where possible, allowing it to better control the delivery of its products and services. It utilizes a new car dealership centric focus that allows it to sustain continued growth in the enthusiast segment, while simultaneously driving increased awareness and adoption down market with non-luxury brands.
The company seeks to increase global brand awareness in strategically important areas, including pursuing high visibility at premium events, such as major car shows, auto races, and high-value placement in advertising media consumed by car enthusiasts, to help further expand its premium brand.
XPEL also continues to expand its delivery channels by acquiring select installation facilities in key markets, and acquiring international partners to enhance its global reach. As it expands globally, the company strives to tailor its distribution model to adapt to target markets.
Sales and Distribution
The company sells and distributes its products through independent installers, new car dealerships, third-party distributors, company-owned installation centers, Automobile Original Equipment Manufacturers, Protex Canada’s franchisees, and online.
Independent Installers
The company offers complete turn-key solutions to independent installers, which include XPEL protection films, installation training, access to its proprietary DAP software, marketing support, and lead generation.
The company offers a suite of services to complement its products for its aftermarket installer customers and strives to create value for being an XPEL dealer. The company provides access to its proprietary DAP software, which, in turn, provides access to pattern libraries that enable cutting its films into specific shapes to aid in their installation. Increasingly, DAP is used to manage operations for the company’s dealers, including job management, scheduling, and inventory tracking. The company also provides marketing and lead generation for its customers by featuring them in its dealer locator on its website. To be considered an Authorized Dealer (and thereby have end customers referred to them), independent installers must employ certified installers and meet other requirements, including purchase minimums and more.
New Car Dealerships
The company’s products are primarily utilized for new cars. As such, new car dealerships will likely be involved in the ultimate sale of its products and services. New car dealerships have multiple options to sell its products:
Outsourcing the installation of film to the aftermarket, which is the most common option;
Developing an in-house program where the dealerships hire and train their own employees to install the product (which is purchased directly from the company); and,
Utilizing third-party labor to install the product in the dealership facility either on a pre-load basis or after the sale. The company is agnostic as to who applies its products to new vehicles. It supports all of these options for new car dealerships through the sales and support to its aftermarket customers, training and support to dealerships that want to build an in-house program, and through its Dealership Services business, which provides third-party installation services at dealership locations. The company also offers 24/7 customer service for independent installers and new car dealerships, where it provides installation, software, and training support via its website and telephone technical support services.
Distributors
In various parts of the world, the company operates primarily through third-party distributors under written agreements with the company to develop a market or a region under its supervision and direction. These distributors may sell to other distributors or customers who ultimately install the product on an end customer’s vehicle. Due to the nature of this channel, product margins are generally less than other channels.
In China, the company operates through a sole distributor under a distribution agreement, Shanghai Xing Ting Trading Co., Ltd., which it refers to as the China Distributor.
Company-Owned Installation Centers
The company operates 23 company-owned installation centers: ten in the United States, nine in Canada, and one each in the United Kingdom, Australia, Mexico, and Taiwan. These locations serve wholesale and retail customers in their respective markets.
Some of the company’s company-owned installation centers are located in geographic areas where it also serves customers in its independent installer channel, which could be perceived to generate channel conflict. However, these channels have a synergistic relationship, with the company’s company-owned centers supporting independent installers and dealerships by allowing it to implement local marketing, making inventory available locally for fast delivery, offering overflow installation capacity, and assisting with training needs.
OEMs
The company sells products, including paint protection film, and provides services, including the installation of paint protection film, referral programs, and pre-delivery inspection to various OEMs. The installation and pre-delivery inspection services are provided in-plant at the OEMs’ facilities or in one of the company’s facilities that is typically adjacent to the OEM’s facility.
Online and Catalog Sales
The company offers certain products, such as paint protection kits, car wash products, after-care products, and installation tools via its website.
Competition
Within the market for surface and paint protection film, the company’s principal competitors include Eastman Chemical Company (under the LLumar and Suntek brands) and several other smaller companies.
Intellectual Property
The company has a perpetual license to the United States Patent No. 8,765,263, ‘Multilayer Polyurethane Protective Films’.
Government Regulation and Legislation
The company’s products are subject to export controls, including the U.S. Department of Commerce’s Export Administration Regulations and economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Asset Controls, and similar laws that apply in other jurisdictions in which it distributes or sells its products.
The company is also subject to various domestic and international anti-corruption laws, such as the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, as well as other similar anti-bribery and anti-kickback laws and regulations.
The company is also subject to, and complies with, increasingly complex privacy and data protection laws and regulations in the United States and other jurisdictions. This includes the EU’s General Data Protection Regulation (‘GDPR’) and the California Privacy Rights Act (‘CPRA’), which enforce rules relating to the protection of processing and movement of personal data.
Environmental Matters
The company is ISO 14001:2015 registered and accredited.
Research and Development
The company’s research and development costs were $2.9 million in the year ended December 31, 2024.
History
XPEL, Inc. was founded in 1997. The company was incorporated in Nevada in 2003.