XPEL, Inc.

Previous wording

We believe the items we have outlined above are important factors that could cause estimates included in our financial statements to differ materially from actual results and those expressed in a forward-looking statement made in this report or elsewhere by us or on our behalf. We have discussed these factors in more detail in the Annual Report and supplemented in this Report. These factors are not necessarily all of the factors that could affect us. Unpredictable or unanticipated factors that we have not discussed in this Report could also have material adverse effects on actual results. We do not intend to update our description of important factors each time a potential important factor arises, except as required by applicable securities laws and regulations. We advise our shareholders that they should (1) be aware that factors not referred to above could affect the accuracy of our forward-looking statements and (2) use caution when considering our forward-looking statements.

Current wording

We believe the items we have outlined above are important factors that could cause estimates included in our financial statements to differ materially from actual results and those expressed in a forward-looking statement made in this report or elsewhere by us or on our behalf. We have discussed these factors in more detail in the Annual Report as supplemented in this Report. These factors are not necessarily all of the factors that could affect us. Unpredictable or unanticipated factors that we have not discussed in this Report could also have material adverse effects on actual results. We do not intend to update our description of important factors each time a potential important factor arises, except as required by applicable securities laws and regulations. We advise our shareholders that they should (1) be aware that factors not referred to above could affect the accuracy of our forward-looking statements and (2) use caution when considering our forward-looking statements.

Previous wording

The following table is a reconciliation of Net income to EBITDA for the three and six months ended June 30, 2025 and 2024 (in thousands):

Current wording

The following table is a reconciliation of Net income to EBITDA for the three and nine months ended September 30, 2025 and 2024 (in thousands):

Previous wording

The following tabled summarize the Company’s consolidated results of operations for the three and six months ended June 30, 2025 and 2024 (dollars in thousands):

Current wording

The following tables summarize the Company’s consolidated results of operations for the three and nine months ended September 30, 2025 and 2024 (dollars in thousands):

Previous wording

The following tables summarize revenue results for the three and six months ended June 30, 2025 and 2024 (dollars in thousands):

Current wording

The following tables summarize revenue results for the three and nine months ended September 30, 2025 and 2024 (dollars in thousands):

Previous wording

Because many of our international customers require us to ship their orders to freight forwarders located in the United States, we cannot be certain about the ultimate destination of the product. The following table represents our estimate of sales by summarized geographic regions based on our understanding of ultimate product destination based on customer interactions, customer locations and other factors for the three and six months ended June 30, 2025 and 2024 (dollars in thousands):

Current wording

Because many of our international customers require us to ship their orders to freight forwarders located in the United States, we cannot be certain about the ultimate destination of the product. The following table represents our estimate of sales by summarized geographic regions based on our understanding of ultimate product destination based on customer interactions, customer locations and other factors for the three and nine months ended September 30, 2025 and 2024 (dollars in thousands):

Previous wording

Product Revenue. Product revenue for the three months ended June 30, 2025 increased 13.9% over the three months ended June 30, 2024. Product revenue represented 76.0% of our total revenue compared to 75.7% in the three months ended June 30, 2024. Revenue from our paint protection film product line increased 9.3% over the three months ended June 30, 2024. Paint protection film sales represented 50.2% and 52.1% of our total consolidated revenues for the three months ended June 30, 2025 and 2024, respectively. The total increase in paint protection film sales was due to increased demand for our film products across multiple regions.

Current wording

Product Revenue. Product revenue for the three months ended September 30, 2025 increased 9.8% over the three months ended September 30, 2024. Product revenue represented 76.1% of our total revenue compared to 77.0% in the three months ended September 30, 2024. Revenue from our paint protection film product line increased 4.9% over the three months ended September 30, 2024. Paint protection film sales represented 50.7% and 53.6% of our total consolidated revenues for the three months ended September 30, 2025 and 2024, respectively. The total increase in paint protection film sales was due to increased demand for our film products across multiple regions.

Previous wording

Revenue from our window film product line grew 27.0% for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. Window film sales represented 22.4% and 20.0% of our total consolidated revenues for the three months ended June 30, 2025 and 2024, respectively. This increase was driven by continued demand resulting from increased product adoption in multiple regions for automotive window film. Our windshield protection film revenue for the three months ended June 30, 2025 was $2.1 million and represented 7.5% of total window film revenue and 1.7% of total consolidated second quarter revenue. Our windshield protection film product was launched during the fourth quarter 2024.

Current wording

Revenue from our window film product line grew 22.2% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Window film sales represented 22.0% and 20.1% of our total consolidated revenues for the three months ended September 30, 2025 and 2024, respectively. This increase was driven by continued demand resulting from increased product adoption in multiple regions for automotive window film. Our windshield protection film revenue for the three months ended September 30, 2025 was $1.9 million and represented 6.8% of total window film revenue and 1.5% of total consolidated third quarter revenue. Our windshield protection film product was launched during the fourth quarter 2024.

Previous wording

Other product revenue for the six months ended June 30, 2025 increased 9.1% compared to the six months ended June 30, 2024. This was due primarily to continued growth in revenue from our FUSION product line, which grew 7.2% to $3.3 million compared to the six months ended June 30, 2024.

Current wording

Other product revenue for the three months ended September 30, 2025 increased 13.5% compared to the three months ended September 30, 2024 due primarily to continued growth in revenue from our FUSION product line and other installation support products.

Previous wording

Geographically, we experienced continued growth in most of our regions during the three months ended June 30, 2025 including 75.1%, 31.7% and 40.5% in China, Asia-Other and Middle East/India, respectively. The increase in China was driven primarily by increased paint protection film sales into China as prior excess inventory levels at our China distributor began to normalize. The increases in Asia-Other and Middle East/India were driven primarily by increased production adoption and increased demand.

Current wording

Geographically, we experienced continued growth in most of our regions during the three months ended September 30, 2025 including 44.0%, 28.8%, and 11.2% in Asia-Other, EU/UK/Africa, and China, respectively. The increases in Asia-Other and EU/UK/Africa were driven primarily by increased product adoption and increased demand. The increase in China was driven primarily by increased demand and incremental direct revenue resulting from the completion of our acquisition of our China distributor late in the third quarter 2025. Revenue from our Canada region declined 10.0% primarily due to economic instability and uncertainty in the region.

Previous wording

Product revenue for the six months ended June 30, 2025 increased 15.6% over the six months ended June 30, 2024. Product revenue represented 75.9% of our consolidated revenue compared to 75.0% in the six months ended June 30, 2024. Revenue from our paint protection film product line increased 12.0% over the six months ended June 30, 2024. Paint protection film sales represented 52.1% and 53.2% of our consolidated revenues for the six months ended June 30, 2025 and 2024, respectively.

Current wording

Product revenue for the nine months ended September 30, 2025 increased 13.5% over the nine months ended September 30, 2024. Product revenue represented 76.0% of our consolidated revenue compared to 75.7% in the nine months ended September 30, 2024. Revenue from our paint protection film product line increased 9.4% over the nine months ended September 30, 2024. Paint protection film sales represented 51.6% and 53.3% of our consolidated revenues for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Revenue from our window film grew 27.4% compared to the six months ended June 30, 2024. Window film sales represented 20.4% and 18.3% of our total consolidated revenues for the six months ended June 30, 2025 and 2024, respectively. This increase was driven by continued demand resulting from increased product adoption in multiple regions. Our windshield protection film for the six months ended June 30, 2025 was $3.9 million and represented 8.4% of total window film revenue for the six months ended June 30, 2025 and 1.7% of total consolidated revenue for the six months ended June 30, 2025.

Current wording

Revenue from our window film grew 25.4% compared to the nine months ended September 30, 2024. Window film sales represented 21.0% and 18.9% of our total consolidated revenues for the nine months ended September 30, 2025 and 2024, respectively. This increase was driven by continued demand resulting from increased product adoption in multiple regions. Our windshield protection film sales for the nine months ended September 30, 2025 was $5.8 million and represented 7.8% and 1.6% of total window film revenue and total consolidated revenue for the nine months ended September 30, 2025, respectively.

Previous wording

Other product revenue for the three months ended June 30, 2025 increased 7.8% compared to the three months ended June 30, 2024 due primarily to continued growth in revenue from our FUSION product line. Revenue for our FUSION product line for the three months ended June 30, 2025 grew 9.5% to $1.9 million compared to the three months ended June 30, 2024.

Current wording

Other product revenue for the nine months ended September 30, 2025 increased 10.6% compared to the nine months ended September 30, 2024 due primarily to continued growth in revenue from our FUSION product line and other installation support products.

Previous wording

Geographically, we saw growth in most region during the six months ended June 30, 2025. These increases were primarily due to increased product awareness and attach rates.

Current wording

Geographically, we saw growth in most regions during the nine months ended September 30, 2025. These increases were primarily due to increased product awareness and attach rates.

Previous wording

Service revenue grew 12.0% over the three months ended June 30, 2024. Within this category, software revenue increased 9.5% over the three months ended June 30, 2024. This increase was due to an increase in total subscribers to our DAP software. Installation labor revenue increased 15.4% over the three months ended June 30, 2024 due mainly to increased demand across our dealership services and OEM networks.

Current wording

Service revenue grew 15.7% over the three months ended September 30, 2024. Within this category, software revenue increased 8.2% over the three months ended September 30, 2024. This increase was due to an increase in total subscribers to our DAP software. Installation labor revenue increased 16.9% over the three months ended September 30, 2024 due mainly to increased demand across our dealership services and OEM networks.

Previous wording

Service revenue for the six months ended June 30, 2025 grew 10.1% over the six months ended June 30, 2024. Within this category, software revenue grew 9.7% over the six months ended June 30, 2024. This increase was due to an increase in total subscribers to our DAP software. Installation labor revenue increased 13.6% over the six months ended June 30, 2024 due mainly to increased demand across our dealership services and OEM networks.

Current wording

Service revenue for the nine months ended September 30, 2025 grew 12.0% over the nine months ended September 30, 2024. Within this category, software revenue grew 9.2% over the nine months ended September 30, 2024. This increase was due to an increase in total subscribers to our DAP software. Installation labor revenue increased 14.8% over the nine months ended September 30, 2024 due mainly to increased demand across our dealership services and OEM networks.

Previous wording

Total installation revenue (labor and product combined) increased 17.9% over the three months ended June 30, 2024. This represented 22.0% and 21.2% of our total consolidated revenue for the three months ended June 30, 2025 and 2024, respectively. These increases were primarily due to increased demand across our dealership services and OEM networks. Total installation revenue increased 14.8% over the six months ended June 30, 2024. This represented 21.6% and 21.5% of our total consolidated revenue for the six months ended June 30, 2025 and 2024, respectively. These increases were primarily due to increased demand across our dealership services and OEM networks. Adjusted product revenue, which combines the cutbank credit revenue service component with product revenue, increased 12.9% over the three months ended June 30, 2024. Adjusted product revenue increased 14.4% over the six months ended June 30, 2024.

Current wording

Total installation revenue (labor and product combined) increased 21.3% over the three months ended September 30, 2024. This represented 21.9% and 20.0% of our total consolidated revenue for the three months ended September 30, 2025 and 2024, respectively. These increases were primarily due to increased demand across our dealership services and OEM networks. Total installation revenue increased 17.1% over the nine months ended September 30, 2024. This represented 21.8% and 21.1% of our total consolidated revenue for the nine months ended September 30, 2025 and 2024, respectively. These increases were primarily due to increased demand across our dealership services and OEM networks. Adjusted product revenue, which combines the cutbank credit revenue service component with product revenue, increased 9.0% over the three months ended September 30, 2024. Adjusted product revenue increased 12.4% over the nine months ended September 30, 2024.

Previous wording

Product costs for the six months ended June 30, 2025 increased 14.2% over the six months ended June 30, 2024. Cost of product sales represented 46.7% and 46.7% of total revenue in the six months ended June 30, 2025 and 2024, respectively. Cost of service revenue grew 17.3% during the six months ended June 30, 2025. Refer to the Gross Margin section below for discussion of this cost relative to revenue.

Current wording

Product costs for the three months ended September 30, 2025 increased 10.9% over the three months ended September 30, 2024. Cost of product sales represented 47.7% and 47.8% of total revenue in the three months ended September 30, 2025 and 2024, respectively. Cost of service revenue grew

Previous wording

Product costs for the three months ended June 30, 2025 increased 13.5% over the three months ended June 30, 2024. Cost of product sales represented 46.7% and 46.6% of total revenue in the three months ended June 30, 2025 and 2024, respectively. Cost of service revenue grew 20.7% during the three months ended June 30, 2025. Refer to the Gross Margin section below for discussion of this cost relative to revenue.

Current wording

Product costs for the nine months ended September 30, 2025 increased 13.0% over the nine months ended September 30, 2024. Cost of product sales represented 47.0% and 47.1% of total revenue in the nine months ended September 30, 2025 and 2024, respectively. Cost of service revenue grew 18.2% during the nine months ended September 30, 2025. Refer to the Gross Margin section below for discussion of this cost relative to revenue.

Previous wording

Gross margin for the three months ended June 30, 2025 grew approximately $5.7 million, or 11.8%, compared to the three months ended June 30, 2024. For the three months ended June 30, 2025, gross margin represented 42.9% of revenue compared to 43.5% for the three months ended June 30, 2024.

Current wording

Gross margin for the three months ended September 30, 2025 grew approximately $4.5 million, or 9.4%, compared to the three months ended September 30, 2024. For the three months ended September 30, 2025, gross margin represented 41.8% of revenue compared to 42.5% for the three months ended September 30, 2024.

Previous wording

Gross margin for the six months ended June 30, 2025 grew approximately $11.7 million, or 13.6%, compared to the six months ended June 30, 2024. For the six months ended June 30, 2025, gross margin represented 42.6% of revenue compared to 42.9% for the six months ended June 30, 2024.

Current wording

Gross margin for the nine months ended September 30, 2025 grew approximately $16.2 million, or 12.1%, compared to the nine months ended September 30, 2024. For the nine months ended September 30, 2025, gross margin represented 42.3% of revenue compared to 42.7% for the nine months ended September 30, 2024.

Previous wording

The following tables summarize gross margin for product and services for the three and six months ended June 30, 2025 and 2024 (dollars in thousands):

Current wording

The following tables summarize gross margin for product and services for the three and nine months ended September 30, 2025 and 2024 (dollars in thousands):

Previous wording

Product gross margin for the three months ended June 30, 2025 increased approximately $4.7 million, or 14.7%, over the three months ended June 30, 2024 and represented 38.6% and 38.4% of total product revenue for the three months ended June 30, 2025 and 2024, respectively. The increases in gross margin and gross margin percentage were due primarily to sales mix, decreases in product costs and improved operating leverage.

Current wording

Product gross margin for the three months ended September 30, 2025 increased approximately $2.6 million, or 8.0%, over the three months ended September 30, 2024 and represented 37.3% and 37.9% of total product revenue for the three months ended September 30, 2025 and 2024, respectively. The decrease in gross margin percentage was due primarily to an increase in product costs primarily related to transient vendor price increases.

Previous wording

Product gross margin for the six months ended June 30, 2025 increased approximately $10.2 million, or 18.1%, over the six months ended June 30, 2024 and represented 38.5% and 37.7% of total product revenue for the six months ended June 30, 2025 and 2024, respectively. The increases in product gross margin and gross margin percentage were primarily due to decreases in product costs and improved operating leverage.

Current wording

Product gross margin for the nine months ended September 30, 2025 increased approximately $12.9 million, or 14.4%, over the nine months ended September 30, 2024 and represented 38.1% and 37.8% of total product revenue for the nine months ended September 30, 2025 and 2024, respectively. The increases in product gross margin and gross margin percentage were primarily due to decreases in product costs and improved operating leverage compared to the nine months ended September 30, 2024.

Previous wording

Service gross margin increased approximately $1.0 million, or 6.1%, over the three months ended June 30, 2024. This represented 56.5% and 59.7% of total service revenue for the three months ended June 30, 2025 and 2024, respectively. The decrease in service gross margin was primarily due to a higher mix of dealership related installations.

Current wording

Service gross margin increased approximately $1.9 million, or 12.5%, over the three months ended September 30, 2024. This represented 56.1% and 57.7% of total service revenue for the three months ended September 30, 2025 and 2024, respectively. The decrease in service gross margin was primarily due to a higher mix of dealership related installations.

Previous wording

Service gross margin increased approximately $1.4 million, or 4.9%, over the six months ended June 30, 2024. This represented 55.5% and 58.2% of total service revenue for the six months ended June 30, 2025 and 2024, respectively.

Current wording

Service gross margin increased approximately $3.3 million, or 7.5%, over the nine months ended September 30, 2024. This represented 55.7% and 58.0% of total service revenue for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Sales and marketing expenses for the three months ended June 30, 2025 increased 15.4% compared to the same period in 2024. This increase was primarily due to increased personnel and marketing costs including additional sponsorships and increased marketing efforts to dealerships and end customers. These expenses represented 9.5% and 9.4% of total consolidated revenue for the three months ended June 30, 2025 and 2024, respectively.

Current wording

Sales and marketing expenses for the three months ended September 30, 2025 increased 29.7% compared to the same period in 2024. This increase was primarily due to increased personnel and marketing costs associated with ongoing growth in multiple markets as the company increased the number of sponsorships and increased marketing efforts to dealerships and end customers. These expenses represented 11.0% and 9.4% of total consolidated revenue for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

For the six months ended June 30, 2025, sales and marketing expenses increased 14.8% compared to the same period in 2024. This increase was due to increased personnel and marketing costs incurred to associated with ongoing growth in multiple markets as the Company increased its marketing efforts to dealerships and end customers. These expenses represented 10.4% and 10.3% of total consolidated revenue for the six months ended June 30, 2025 and 2024, respectively.

Current wording

For the nine months ended September 30, 2025, sales and marketing expenses increased 19.9% compared to the same period in 2024. This increase was primarily due to increased personnel and marketing costs associated with ongoing growth in multiple markets as the Company increased its marketing efforts to dealerships and end customers. These expenses represented 10.6% and 10.0% of total consolidated revenue for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

General and administrative expenses grew approximately $4.0 million, or 21.5% over the three months ended June 30, 2024. This increase in cost was due primarily to increases in personnel, occupancy costs and professional fees. These costs represented 17.9% and 16.7% of total consolidated revenue for the three months ended June 30, 2025 and 2024, respectively.

Current wording

General and administrative expenses grew approximately $3.0 million, or 15.8% over the three months ended September 30, 2024. This increase in cost was due primarily to increases in personnel, occupancy costs and acquisition-related professional fees. These costs represented 17.4% and 16.7% of total consolidated revenue for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

General and administrative expenses grew approximately $6.6 million, or 18.0% over the six months ended June 30, 2024. This increase in cost was due primarily to increases in personnel, occupancy costs and professional fees. These costs represented 18.9% and 18.3% of total consolidated revenue for the six months ended June 30, 2025 and 2024, respectively.

Current wording

General and administrative expenses grew approximately $9.6 million, or 17.3% over the nine months ended September 30, 2024. This increase in cost was due primarily to increases in personnel, occupancy costs and professional fees. These costs represented 18.4% and 17.8% of total consolidated revenue for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Income tax expense for the three months ended June 30, 2025 increased $0.6 million from the three months ended June 30, 2024. Our effective tax rate was 20.3% for the three months ended June 30, 2025 compared with 18.8% for the three months ended June 30, 2024. The increase in our effective rate was primarily due to an increase in foreign taxes associated with our China operations.

Current wording

Income tax expense for the three months ended September 30, 2025 decreased $0.2 million from the three months ended September 30, 2024. Our effective tax rate was 21.1% for the three months ended September 30, 2025 compared with 20.0% for the three months ended September 30, 2024. The increase in our effective rate was primarily due to an increase in foreign taxes associated with our China operations.

Previous wording

Income tax expense for the six months ended June 30, 2025 increased $1.5 million from the same period in 2024, Our effective tax rate was 21.6% for the six months ended June 30, 2025 compared with 19.6% for the six months ended June 30, 2024. The increase in our effective rate was primarily due to an increase in foreign taxes associated with our China operations.

Current wording

Income tax expense for the nine months ended September 30, 2025 increased $1.3 million from the same period in 2024, Our effective tax rate was 21.4% for the nine months ended September 30, 2025 compared with 19.8% for the nine months ended September 30, 2024. The increase in our effective rate was primarily due to an increase in foreign taxes associated with our China operations.

Previous wording

Net income for the three months ended June 30, 2025 increased 7.8% to $16.2 million.

Current wording

Net income for the three months ended September 30, 2025 decreased 11.8% to $13.1 million.

Previous wording

Net income for the six months ended June 30, 2025 decreased 14.3% to $24.8 million.

Current wording

Net income for the nine months ended September 30, 2025 increased 3.7% to $37.9 million.

Previous wording

The primary source of liquidity for our business is available cash and cash equivalents, cash flows provided by operations and borrowing capacity under our credit facilities. As of June 30, 2025, we had cash and cash equivalents of $49.6 million. For the six months ended June 30, 2025, cash provided by operations was $31.1 million and as of June 30, 2025 we had $128.3 million in funds available under our credit facilities. We expect to continue to have sufficient access to cash to support working capital needs, pay for capital expenditures (including acquisitions), and to pay interest and service debt. We believe we have the ability and sufficient resources to meet these cash requirements by using available cash, internally generated funds and borrowings under committed credit facilities. We are focused on continuing to generate positive operating cash to fund our operational and capital investment initiatives. We believe we have sufficient liquidity to operate for at least the next 12 months from the date of this quarterly report.

Current wording

The primary source of liquidity for our business is available cash and cash equivalents, cash flows provided by operations and borrowing capacity under our credit facilities. As of September 30, 2025, we had cash and cash equivalents of $64.5 million. For the nine months ended September 30, 2025, cash provided by operations was $64.3 million and as of September 30, 2025 we had $128.2 million in funds available under our credit facilities. We expect to continue to have sufficient access to cash to support working capital needs, pay for capital expenditures (including acquisitions), and to pay interest and service debt. We believe we have the ability and sufficient resources to meet these cash requirements by using available cash, internally generated funds and borrowings under committed credit facilities. We are focused on continuing to generate positive operating cash to fund our operational and capital investment initiatives. We believe we have sufficient liquidity to operate for at least the next 12 months from the date of this quarterly report.

Previous wording

Operating activities. Cash provided by operations totaled $31.1 million for the six months ended June 30, 2025, compared to $21.9 million during the six months ended June 30, 2024. This increase in cash flows from operating activities was mainly due to an increase in net income and other changes in working capital.

Current wording

Operating activities. Cash provided by operations totaled $64.3 million for the nine months ended September 30, 2025, compared to $41.5 million during the nine months ended September 30, 2024. This increase in cash flows from operating activities was mainly due to an increase in accounts payable and other accrued liabilities due to normal payment cycle timing and other changes in working capital.

Previous wording

Investing activities. Cash used in investing activities totaled approximately $2.9 million during the six months ended June 30, 2025 compared to $10.6 million during the six months ended June 30, 2024. This decrease was due primarily to a reduction in fixed asset purchases and acquisitions during 2025.

Current wording

Investing activities. Cash used in investing activities totaled approximately $20.8 million during the nine months ended September 30, 2025 compared to $13.0 million during the nine months ended September 30, 2024. This increase was due primarily to an increase in acquisitions during 2025.

Previous wording

Financing activities. Cash used in financing activities during the six months ended June 30, 2025 totaled $0.3 million compared to $8.1 million during the same period in the prior year. This change was due primarily to the timing of repayments on our credit facility, which was fully repaid in 2024.

Current wording

Financing activities. Cash used in financing activities during the nine months ended September 30, 2025 totaled $0.4 million compared to $19.2 million during the same period in the prior year. This change was due primarily to the timing of repayments on our credit facility, which was fully repaid in 2024.

Previous wording

Debt and contingent obligations as of June 30, 2025 and December 31, 2024 totaled approximately $2.3 million and $2.1 million, respectively.

Current wording

Debt and contingent obligations as of September 30, 2025 and December 31, 2024 totaled approximately $25.3 million and $2.1 million, respectively.

Previous wording

The Company has a revolving credit facility providing for secured revolving loans and letters of credit in an aggregate amount of up to $125 million, which is subject to the terms of a credit agreement dated April 6, 2023 (the "Credit Agreement"). As of June 30, 2025 and December 31, 2024, the Company had no outstanding balances under this agreement.

Current wording

On September 11, 2025, XPEL entered into the Amendment to the Credit Agreement with Wells Fargo Bank, N.A., as Administrative Agent, and other lenders party thereto. The Amendment, among other things, extended the maturity of the Credit Agreement from April 6, 2026 to September 11, 2028. The Credit Agreement provides for secured revolving loans and letters of credit in an aggregate amount of up to $125 million, which is subject to the terms of the Credit Agreement. As of September 30, 2025 and December 31, 2024, the Company had no outstanding balances under the Credit Agreement. All capitalized terms in this description of the credit facility that are not otherwise defined in this report have the meaning assigned to them in the Credit Agreement.

Previous wording

Borrowings under the Credit Agreement bear interest, at XPEL’s option, at a rate equal to either (a) Base Rate or (b) Adjusted Term SOFR. In addition to the applicable interest rate, the Credit Agreement includes a commitment fee ranging from 0.20% to 0.25% per annum for the unused portion of the aggregate commitment and an applicable margin ranging from 0.00% to 0.50% for Base Rate Loans and 1.00% to 1.50% for Adjusted Term SOFR Loans. At June 30, 2025, these rates were 7.5% and 5.4%, respectively. Both the margin applicable to the interest rate and the commitment fee are dependent on XPEL’s Consolidated Total Leverage Ratio. The Credit Agreement's maturity date is April 6, 2026. All capitalized terms in this description of the credit facility that are not otherwise defined in this report have the meaning assigned to them in the Credit Agreement.

Current wording

Borrowings under the Credit Agreement bear interest, at XPEL’s option, at a rate equal to either (a) Base Rate or (b) Adjusted Term SOFR. In addition to the applicable interest rate, the Credit Agreement includes a commitment fee ranging from 0.20% to 0.25% per annum for the unused portion of the aggregate commitment and an applicable margin ranging from 0.00% to 0.50% for Base Rate Loans and 1.00% to 1.50% for Adjusted Term SOFR Loans. At September 30, 2025, these rates were 7.3% and 5.3%, respectively. Both the margin applicable to the interest rate and the commitment fee are dependent on XPEL’s Consolidated Total Leverage Ratio. The Credit Agreement's maturity date is September 11, 2028.