Xos, Inc. Earnings Call: Growth Amid Challenges

Xos, Inc. ((XOS)) has held its Q1 earnings call. Read on for the main highlights of the call.

Xos, Inc. recently held its earnings call, where the sentiment was cautiously optimistic. The company is taking proactive steps to launch new products like the MDXT and maintain positive gross margins, despite facing challenges such as declining revenue and ongoing tariff issues. Xos remains committed to growth and improving liquidity, although concerns about cash flow and shipment issues persist.

Launch of MDXT Medium Duty Chassis Cab

Xos has introduced the MDXT, a new medium-duty chassis cab, which leverages technology from over 1,000 stepvans. The response at the ACT Expo was overwhelmingly positive, indicating strong market interest. The U.S. market for medium-duty chassis cabs is significant, with up to 100,000 units per year, and Xos aims to ramp up production by Q3 of 2026.

Positive Non-GAAP Gross Margin Performance

The company recorded its seventh consecutive quarter of positive non-GAAP gross margin, achieving a profit of approximately $900,000 or 15%. This performance highlights Xos’ ability to manage costs effectively despite external pressures.

Commitment to Growth, Liquidity, and Margins

Xos is focused on expanding sales, managing cash with discipline, and improving margins, even in the face of tariff impacts. The company is maintaining a robust sales pipeline and adapting to supply chain challenges to sustain its growth trajectory.

Orders and Interest for Mobile Charging Solutions

Xos’ charge hub product is attracting interest beyond its existing truck customers, with orders coming from utilities, transit authorities, and autonomous car fleets. This diversification could provide new revenue streams for the company.

Revenue Decline

Revenue for Q1 2025 was $5.9 million, a decrease from $11.5 million in Q4 2024 and $13.2 million in Q1 2024. This decline is attributed to recognition rules delaying revenue from 31 shipped units, impacting the financial results.

Ongoing Tariff and Supply Chain Challenges

Xos is dealing with tariff-related cost increases ranging from 10% to 30% on some products, which are affecting the cost of goods sold. These challenges continue to pressure the company’s financial performance.

Decreased Unit Deliveries and Operating Loss

Unit deliveries fell to 29 in Q1 2025 from 51 in Q4 2024. The operating loss for Q1 2025 was $9.3 million, though this marks an improvement from the previous quarter, indicating some progress in cost management.

Cash Flow and Liquidity Concerns

Xos ended Q1 2025 with $4.8 million in cash and cash equivalents, alongside a negative free cash flow of $4.8 million, primarily due to inventory purchases for upcoming deliveries. These figures highlight the need for careful liquidity management.

Forward-Looking Guidance

During the earnings call, Xos reaffirmed its full-year guidance, projecting revenue between $50.2 million and $65.8 million and unit deliveries ranging from 320 to 420. The company plans to focus on growing sales, managing liquidity with discipline, and maintaining strong margins despite challenges such as new tariffs and supply chain disruptions. The launch of the MDXT medium-duty chassis cab is seen as a promising opportunity, with production scaling expected by Q3 2026.

In summary, Xos, Inc.’s earnings call reflected a mix of optimism and caution. While the company is making strides with new product launches and maintaining positive margins, it faces significant challenges from declining revenues and tariff impacts. The forward-looking guidance suggests a focus on growth and disciplined financial management to navigate these hurdles.