Xos, Inc. Q4 FY2023 earnings call

• 2023 was a best year-to-date with $44.5M revenue, 283 units delivered, and positive gross margins in Q3 and Q4. - Anticipated acquisition of ElectraMeccanica, closing on March 25, 2024, provides over $45M in additional capital. - Operational updates: New Stepvan platform with higher payload and range, factory operations revamped to scale output, and hub revamped with lower cost and increased capacity. - Financials: Q4 revenue $18.4M, COGS $17M, non-GAAP operating loss $10.9M, cash and cash equivalents $11.6M at year-end.

In 2023, Xos generated revenues of $44.5 million. Direct sales comprised over 90% of 2023 sales. The new Stepvan platform contributed significantly, with over 170 units delivered in the second half of 2023, and long-range variants making up approximately 53% of 2023 deliveries. Powertrain deliveries are planned for Winnebago and a nationally recognized school bus manufacturer in 2024. The Xos Hub saw surging interest and purchase orders from customers like Xos Energy and Duke Energy, with the second-generation hub launched in Q1 2024.

• 2024 revenue guidance: $66.7M to $100.4M. - Non-GAAP operating loss: $48.7M to $43.7M. - Deliveries: 400 to 600 units. - Anticipated acquisition of ElectraMeccanica provides over $45M in capital to support operations and working capital needs.

• Infrastructure challenges for EV charging, which can delay vehicle deliveries. - Variability in gross margins due to model mix, reserves, and different sales channels (direct vs. dealer).

Q: How did gross margins change from Q3 to Q4 and what drives it?

A: GAAP gross margins were impacted by reserves and model mix. Non-GAAP margins are affected by model mix, with shorter-range or differently configured vehicles having different margin profiles. As older inventory is phased out and more 2023/2024 Stepvans are delivered, margins are expected to improve.

Q: Update on customer EV charging infrastructure?

A: Infrastructure is a major challenge, but Xos is working with customers to improve deployment. The second-generation hub was launched in Q1 2024 to help enable vehicle deliveries by providing stopgap charging solutions.

Q: Deliveries outlook for 2024 and breakdown by segments?

A: Deliveries expected to be 400-600 units in 2024, with all segments (Stepvans, powertrains, hub) growing substantially. Specific breakdown by segment not provided, but all segments are expected to grow double digits.

Q: Cash consumption and delivery timing in 2024?

A: Cash consumption in the second half of 2023 was $2.2M to $8.5M. Deliveries are back half weighted due to factors like parcel delivery seasonality and customer budget cycles, similar to 2023 trends.