XOS Q3 2025 Earnings Call Summary

1Key Financial Results and Metrics

Revenue: $16.5 million from 130 vehicle shipments, down from $18.4 million in Q2 2025 despite an increase in unit deliveries year-over-year.

GAAP Gross Margin: 15.3%, up from 8.8% in Q2 2025 but down from 18.1% in Q3 2024.

Non-GAAP Gross Margin: 16%, marking the ninth consecutive quarter of positive non-GAAP gross margins.

Operating Loss: $7 million, the lowest since going public, improved from $7.1 million in Q2 2025 and $9.7 million in Q3 2024.

Cash Position: $14.1 million in cash and equivalents, up from $8.8 million in Q2 2025, aided by an ATM program and improved inventory management.

Free Cash Flow: Positive at $3.1 million, down from $4.6 million in Q2 but a significant improvement from negative $11.7 million a year ago.

2Strategic Updates and Business Highlights

Vehicle Deliveries: Achieved record deliveries with 140 vehicles shipped, including a significant order from UPS and FedEx ISPs.

Powertrain Expansion: Delivered 18 powertrain systems to Bluebird Corporation, with nearly 80 additional orders received post-quarter.

Xos Hub: Continued deployment and demonstration of the Xos Hub, which addresses grid constraints and is gaining traction in various markets, including autonomous vehicles and backup power applications.

Operational Efficiency: Enhanced production capabilities in Tennessee, achieving a consistent production rate of three chassis per day.

3Forward Guidance and Outlook

2025 Guidance: Reaffirmed revenue guidance of $50.2 million to $65.8 million, with unit deliveries expected between 320 and 420 units. Non-GAAP operating loss guidance remains between $24.4 million and $26.9 million.

Long-term Growth: Management expressed confidence in expanding margins and scaling operations, with a focus on higher-margin products like powertrains and energy solutions.

4Bad News, Challenges, or Points of Concern

Revenue Decline: Despite increased unit deliveries, total revenue decreased due to a shift in product mix towards lower-priced strip chassis and powertrains.

Tariff Impact: Ongoing tariff challenges are affecting pricing strategies and margins, although management is actively working to mitigate these impacts through supplier negotiations and cost-sharing with customers.

Seasonal Variability: Anticipated lighter Q4 due to peak season operations of major customers, which may impact delivery volumes.

5Notable Q&A Insights

Hub Opportunities: Management highlighted the growing demand for the Xos Hub in the EV charging and power resiliency markets, with expectations of double-digit growth.

Customer Relationships: Xos maintains strong partnerships with major clients like FedEx and Bluebird, emphasizing the importance of diversified supplier relationships in the industry.

Margin Improvement: There is optimism around improving margins in 2026 due to a favorable product mix and reduced tariff impacts, although specific guidance was not provided.

Working Capital Management: Continued focus on improving days sales outstanding (DSO) and inventory management to enhance liquidity and operational efficiency. Overall, Xos demonstrated significant operational progress in Q3 2025, with a focus on scaling production and expanding into higher-margin markets, despite facing challenges related to revenue mix and tariffs. The company remains optimistic about its growth trajectory and strategic partnerships moving forward.