Xos Inc (XOS) Q1 2025 Earnings Call Highlights: Navigating Revenue Decline and Operational ...

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Thu, May 15, 2025, 1:17 AM 4 min read

Revenue: $5.9 million for Q1 2025, down from $11.5 million in Q4 2024 and $13.2 million in Q1 2024.
Units Delivered: 29 units recognized in Q1 2025, with 60 units shipped.
Cost of Goods Sold: $4.7 million in Q1 2025, compared to $15.2 million in Q4 2024 and $10.4 million in Q1 2024.
GAAP Gross Margin: Profit of $1.2 million or 20.6% in Q1 2025.
Non-GAAP Gross Margin: Profit of approximately $900,000 or 15% in Q1 2025.
Operating Expenses: $10.5 million in Q1 2025, down from $13 million in Q1 2024.
Operating Loss: $9.3 million in Q1 2025, compared to $10.2 million in Q1 2024.
Cash and Cash Equivalents: $4.8 million at the end of Q1 2025.
Free Cash Flow: Negative $4.8 million in Q1 2025.
Inventory: Increased to $38 million in Q1 2025.
Full-Year 2025 Revenue Guidance: $50.2 million to $65.8 million.
Full-Year 2025 Unit Deliveries Guidance: 320 to 420 units.
Full-Year 2025 Non-GAAP Operating Loss Guidance: $17.2 million to $14 million.

Warning! GuruFocus has detected 5 Warning Signs with XOS.

Release Date: May 14, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Xos Inc (NASDAQ:XOS) reported $5.9 million in revenue for Q1 2025, with 29 units recognized, and an additional 31 units shipped but not yet recognized, indicating future revenue potential.
The company launched the MDXT, a new medium-duty chassis-cab, which has received positive feedback and is expected to tap into a larger market segment of up to 100,000 units per year.
Xos Inc (NASDAQ:XOS) achieved a positive GAAP gross margin of $1.2 million or 20.6%, marking a significant improvement from previous quarters.
The company has maintained seven consecutive quarters of positive non-GAAP gross margin performance, demonstrating consistent financial discipline.
Xos Inc (NASDAQ:XOS) is actively managing tariff impacts by exploring alternative sourcing strategies and implementing cost reduction projects, which are expected to mitigate cost increases in the second half of the year.

Negative Points

Revenue for Q1 2025 decreased compared to both Q4 2024 and Q1 2024, reflecting a decline in unit deliveries and revenue recognition challenges.
Operating expenses remain high at $10.5 million, although they have decreased from previous quarters, indicating ongoing cost management challenges.
The company reported an operating loss of $9.3 million for Q1 2025, highlighting the need for further improvements in operational efficiency.
Free cash flow was negative $4.8 million in Q1 2025, impacted by inventory purchases and indicating liquidity management challenges.
Xos Inc (NASDAQ:XOS) faces ongoing supply chain challenges and tariff headwinds, which could impact future cost structures and profitability.

Q & A Highlights

Q: Can you speak about the parts commonality between your Stepvans and the MDXT, and any potential incremental investment needed in Tennessee before launching production next year? A: Dakota Semler, CEO: We aimed to use as much content from our existing vehicle platforms to ensure reliability and durability. The MDXT shares over 90% of the same commodity components with the Stepvan, which reduces costs and simplifies inventory and training. The incremental investment in Tennessee is minimal, expected to be in a low seven-figure range, as most R&D work is already completed.

Q: Can you describe the market development for the MDXT and the timeline for initial orders? A: Dakota Semler, CEO: The MDXT targets a larger market than our strip-chassis product, with potential sales of up to 100,000 units per year in classes 5 and 6. While it will take time to build the pipeline, we believe it could eventually surpass Stepvan volumes due to its broader applicability and versatility.

Q: How should we think about the revenue recognition for the 31 units shipped to UPS but not recognized as revenue? A: Dakota Semler, CEO: We offer favorable pricing to large national customers, which may result in lower margins. Revenue recognition will be concentrated in Q2 and Q3, with smaller, higher-margin orders rounding out Q4.

Q: Can you update us on the progress and market interest in the charge hub? A: Giordano Sordoni, COO: We have received significant interest and orders for the charge hub, even beyond our truck customers. The hub solves charging issues with minimal grid impact. We are delivering hubs and conducting demos that could lead to larger orders. We are also considering customer feedback for future versions.

Q: What are the financial highlights for Q1 2025? A: Liana Pogosyan, Acting CFO: Revenue was $5.9 million for 29 units, with a GAAP gross margin profit of $1.2 million. Operating expenses were $10.5 million, and the operating loss was $9.3 million. We closed Q1 with $4.8 million in cash and reaffirmed full-year 2025 guidance with revenue expected between $50.2 million and $65.8 million.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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