XOSWW — Xos, Inc.

Summary of Xos, Inc. Q3 2025 Earnings Call

1. Key Financial Results and Metrics

• Revenue: $16.5 million from 130 vehicle shipments, down from $18.4 million in Q2 2025 but up from $15.8 million a year ago.
• 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%, significantly improved from 1.4% in Q2 2025, marking the ninth consecutive quarter of positive non-GAAP gross margins.
• Operating Loss: $7 million, a record low since going public, down from $7.1 million in Q2 2025 and $9.7 million in Q3 2024.
• Cash Position: $14.1 million, up from $8.8 million in Q2 2025, aided by an ATM program and improved inventory management.
• Free Cash Flow: Positive $3.1 million, down from $4.6 million in Q2 but a significant improvement from negative $11.7 million a year ago.

2. Strategic Updates and Business Highlights

• Vehicle Deliveries: Achieved record deliveries with 140 vehicles shipped, including 10 strip chassis for a major customer.
• Customer Relationships: Continued fulfillment of a significant order from UPS and positive engagement with Bluebird Corporation, leading to additional powertrain orders.
• Product Expansion: Launched 18 powertrain systems for Bluebird and received nearly 80 additional orders post-quarter.
• Xos Hub: The mobile charging system is gaining traction, with deployments accelerating and interest from utilities and industrial users.
• Operational Efficiency: The Tennessee plant is producing at a consistent rate, achieving three chassis per day.

3. Forward Guidance and Outlook

• 2025 Guidance: Reaffirmed revenue guidance of $50.2 million to $65.8 million, with unit deliveries expected between 320 and 420.
• Margin Improvement: Anticipated shift towards higher-margin products in 2026, with expectations for noticeable margin improvements due to product mix and reduced tariff impacts.

4. Bad News, Challenges, or Points of Concern

• Revenue Decline: The decrease in revenue from Q2 to Q3, despite year-over-year growth, raises concerns about product mix and pricing pressures.
• Operating Expenses: Operating expenses increased by 9% from Q2 2025, although down 24% from the previous year.
• Tariff Impact: Ongoing tariff uncertainties and their influence on pricing strategies remain a concern, although management is actively working to mitigate these effects.

5. Notable Q&A Insights

• Hub Opportunities: Management highlighted the growing demand for the Xos Hub, particularly in backup power applications, with expectations for significant growth in this segment.
• Bluebird Partnership: Positive feedback from Bluebird on the powertrain deliveries, with expectations for continued growth in the school bus market.
• Competitive Landscape: Management expressed confidence in maintaining strong relationships with key customers like FedEx, viewing competition as a validation of market growth rather than a threat.
• Working Capital Management: Continued focus on improving cash flow and reducing days sales outstanding (DSO) was emphasized, with expectations for further improvements in working capital management.

Overall, Xos, Inc. demonstrated solid operational execution and strategic growth initiatives in Q3 2025, despite facing challenges related to revenue fluctuations and tariff impacts. The company is well-positioned for future growth with a focus on expanding its product offerings and enhancing customer relationships.