Xos, Inc. Q4 FY2024 earnings call

• Q4 marked the close of Xos' strongest year yet, with $11.5 million revenue and 51 deliveries. Despite seasonal delays, demand pipeline remains confident. • Operational milestones in 2024 include delivery of second-generation hub, powertrain business expansion with FMVSS testing and production orders, and vehicle deliveries to large fleets. • Closed major commercial orders post-year end, added $40 million in liquidity. • Reduced operating expenses, including facility costs and head count. • Hub production rates increased to ~2 units per week, working on longer wheelbase StepVan variant, and focusing on cost reductions through design optimization and supplier partnerships.

In Q4 2024, Xos generated $11.5 million in revenue and delivered 51 units. For the full year 2024, revenue was $56 million, up from $44.5 million in 2023. Non-GAAP gross margin in Q4 was 23.2%, and the full year non-GAAP gross margin was 18%. Product segments include vehicles, with deliveries to major fleets like FedEx Ground and UPS; the hub product is in low-volume series production with customers like Waymo and Caltrans; the powertrain business expanded with production orders from Blue Bird and Winnebago.

• Anticipates 2025 revenue to fall in the range of $50.2 million to $65.8 million. • Unit deliveries expected to be between 320 to 420 units. • Non-GAAP operating loss projected to be in the range of $17.2 million to $14 million. • Adjusted gross margins expected to improve with increased scale, addressing tariffs, and reducing non-cash GAAP expenses.

• Potential supply chain disruptions and trade policy/tariff uncertainties. • Dependence on state incentive programs which may be impacted by federal policy shifts. • Charging infrastructure readiness affecting customer vehicle acceptance and delivery timing.

Q: Could you help us understand what's going right in there to really deliver on margin results like this?

A: It's a shifting product mix, especially with unique products like the Xos hub and powertrain customers. Adjusted gross margins should improve with increased scale, addressing tariffs, and reducing non-cash GAAP expenses.

Q: Do you expect to operate anywhere near production capacity in your hub business this year?

A: We've set up the line to support the market, but we'll increase hub capabilities to service a broader market. We'll expand capacity when market and customer base are validated.

Q: In the fourth quarter, did you have any environmental credit revenue?

A: In the fourth quarter, we did not have any credit revenue; we had credit revenue in the third quarter of last year.

Q: What do you think your CapEx will be in 2025?

A: The Tennessee plant is well-equipped, and we don't anticipate significant CapEx other than preventative maintenance and incremental investments.