Xos, Inc. Q2 FY2024 earnings call

• Sales and deliveries: Revenue for Q2 2024 was $15.5 million, up 18% QoQ and 227% YoY. Most units delivered were StepVans for fleet customers, with powertrain sales to Blue Bird and Hub sales to new customers. Demand for Xos products remained robust, and they were showcased at the Advanced Clean Transportation Expo with strong interest. - Charging products: Hub sales were particularly strong this quarter, addressing the need for flexible charging solutions as customers face challenges with permanent infrastructure. The Hub is a mature and cost - competitive product with a strong sales pipeline. - Operational updates: Engineering is developing a longer 208 - inch wheelbase variation of the Xos Stepvan with signed sales orders, to be delivered by Q1 2025. Software and controls team made improvements to connectivity platform for cost savings. In - house logistics for completed chassis was increased, and manufacturing is preparing for up to 8 Hubs per month production. Monitoring tariff changes on China - sourced components, with no significant anticipated disruptions currently.

In the second quarter of 2024, Xos generated $15.5 million in revenue, delivering 90 units. Revenue was up 18% quarter over quarter and 227% year over year. The majority of the 90 units delivered were StepVans for fleet customers such as UPS and FedEx Ground contractors, supplemented by powertrain sales to Blue Bird and Hub sales to multiple new customers, including a large government fleet. The StepVans segment contributed significantly to revenue, and the Hub segment saw stronger - than - expected sales activity, filling gaps for customers due to lagging permanent infrastructure installation timelines.

• Reaffirmed full - year 2024 guidance: Revenue is expected to be in the range of $66.7 million to $100.4 million, non - GAAP operating loss is between $43.7 million to $48.7 million, and 400 to 600 units are expected to be delivered. - Expect revenue growth in the back half of the year, with working capital balances expected to stabilize over coming quarters as initiatives are implemented, and continued margin improvements as volumes grow.

• Tariff changes on China - sourced components: Xos is monitoring potential tariff changes that could impact production, but currently does not anticipate significant disruptions to the production schedule.

Q: Given the $9.7 million non - GAAP operating loss in 2Q and the full - year guidance, what's dragging on income in the back half?

A: High inventory spending due to demand in the second half and slower collection of government incentives for vehicles delivered at the end of Q2. But expect to recover cash from incentives and convert inventory to sales in the second half.

Q: Comment on existing customer interest, new customer interest, and future of sales backlog?

A: Strong interest from large national accounts, slower purchasing in small and regional fleets due to elevated cost of capital. Sales backlog continues to grow with Stepvans, Hubs, and powertrains, and will grow further due to interest in electrifying various vehicle spaces.

Q: Are there other powertrain partnerships beyond Blue Bird and Winnebago? Update on Hub production?

A: Powertrain team is active with other deals in the works. Hub production is ramping up, not at 8 per month every week yet but approaching, with more than 1.5 per week and heading to 2 per week by end of the month.