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XI

Xos, Inc. (XOS)·Q2 2025 Earnings Summary

Executive Summary

  • Record quarter: $18.4M revenue on 135 units, the highest in company history; GAAP gross margin 8.8% and lowest operating loss since going public at $7.1M; operating cash flow and free cash flow were positive at $4.6M .
  • Guidance: Revenue ($50.2–$65.8M) and unit deliveries (320–420) maintained; non-GAAP operating loss guidance widened to $26.9–$24.4M (from $17.2–$14.0M) due to product mix and tariff costs; a clear negative surprise relative to prior guidance .
  • Mix and tariffs drove margins lower sequentially (GAAP GM 20.6% → 8.8%; non-GAAP GM 15% → 1.4%); management described the impact and mitigation steps, sharing tariff headwinds of roughly 5–15% of ASPs depending on product .
  • Liquidity actions and collections improved cash: cash rose to $8.8M (from $4.8M in Q1); inventories fell to $31.0M; Xos amended the repayment of a major convertible note to spread installments through Feb 2028, easing near-term funding pressure .

What Went Well and What Went Wrong

What Went Well

  • Record revenue and deliveries: “We delivered more vehicles, more revenue, and more free cash flow than ever before,” with 135 units and $18.4M revenue; positive free cash flow of $4.6M, and the lowest operating loss since going public ($7.1M) .
  • Strategic traction beyond trucks: additional deliveries and new orders for powertrain kits (nearly 20 units) to Blue Bird and continued Hub deployments, supporting a diversified, higher-margin portfolio .
  • Operational discipline: operating expenses down 35% YoY and 17% sequentially; accounts receivable collections robust; inventories reduced as deliveries ramped, improving working capital .

What Went Wrong

  • Sequential margin compression: GAAP gross margin fell to 8.8% from 20.6% in Q1; non-GAAP GM to 1.4% from 15%, driven by product mix and tariff costs, plus inventory adjustments .
  • Guidance downgraded: non-GAAP operating loss guidance widened to $26.9–$24.4M for FY25 (previous $17.2–$14.0M) due to expected S2H product mix and tariff costs; a material negative revision .
  • Tariff headwinds quantified: management cited 5–15% ASP impact depending on product and ongoing changes across supplier geographies; a continuing cost pressure that required customer-shared burden .

Financial Results

Summary vs prior quarters

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$11.5 $5.9 $18.4
GAAP Gross Margin %(32.4)% 20.6% 8.8%
Non-GAAP Gross Margin %23.2% 15.0% 1.4%
Loss from Operations ($USD Millions)$(14.6) $(9.269) $(7.081)
Net Loss ($USD Millions)$(19.0) $(10.186) $(7.505)
Basic EPS ($USD)$(2.36) $(1.26) $(0.91)
Units Delivered (units)51 29 135

Year-over-year Q2 comparison

MetricQ2 2024Q2 2025
Revenue ($USD Millions)$15.5 $18.4
Gross Profit ($USD Millions)$2.030 $1.619
GAAP Gross Margin %13.1% 8.8%
Non-GAAP Gross Profit ($USD Millions)$2.027 $0.266
Loss from Operations ($USD Millions)$(11.368) $(7.081)
Net Loss ($USD Millions)$(9.663) $(7.505)
Basic EPS ($USD)$(1.23) $(0.91)

KPIs and balance sheet items

KPIQ4 2024Q1 2025Q2 2025
Units Delivered (units)51 29 135
Operating Expenses ($USD Millions)$10.855 $10.480 $8.700
Operating Cash Flow ($USD Millions)$3.298 $(4.756) $4.645
Free Cash Flow ($USD Millions)$3.298 $(4.756) $4.645
Cash & Equivalents ($USD Millions)$10.996 $4.758 $8.785
Inventories ($USD Millions)$36.567 $38.006 $31.012
Accounts Receivable ($USD Millions)$26.870 $22.210 $18.089
Non-GAAP Operating Loss ($USD Millions)$(6.365) $(8.076) $(6.860)

Estimates vs results

Metric (Q2 2025)Consensus (S&P Global)Actual
RevenueUnavailable*$18.4M
EPSUnavailable*$(0.91)

*Consensus values retrieved from S&P Global – unavailable at time of writing.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2025$50.2–$65.8M $50.2–$65.8M Maintained
Unit Deliveries (units)FY 2025320–420 320–420 Maintained
Non-GAAP Operating Loss ($USD Millions)FY 2025$17.2–$14.0M $26.9–$24.4M Lowered (wider loss)

Drivers: expected product mix shift in H2 and increased expected tariff costs on parts and commodities; management did not provide a forward-looking GAAP reconciliation .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Tariffs / macroProposed tariffs could add $5k–$20k per vehicle; mitigation via reshoring and cost offsets . Q1: cost increases 10–30% by product; pricing actions and mitigation underway .Tariff impact ~5–15% of ASP by product; shared burden with customers; guidance revised on tariff costs .Headwinds intensifying; mitigation ongoing.
Supply chain resilience$10M direct-material cost reductions; supplier diversification; U.S. supply chain investment .Deep dive and resourcing plan; continued BOM improvements .“Nimble” supply chain; plan to minimize 2025+ tariff impacts with global suppliers .
Hub product2 units/week capacity; customers incl. Waymo, FP&L, Duke, Caltrans; demos positive .Strong tempo; scoping v2 features to broaden appeal .Expanded deployments; 2026 update planned for power resilience and load balancing .
Powertrain (Blue Bird)FMVSS testing complete; first production order (20 units) .Production kits underway for OEM partners .Additional deliveries; nearly 20 new orders since quarter end .
MDXT medium-duty—Launch, national road tour; production target Q3 2026 .Continued demos; municipal interest; low incremental capex to launch .
Liquidity & capitalFirst positive FCF; AR collections; new ~$40M liquidity transaction .FCF negative due to inventory build; expected improvement with deliveries .Positive OCF/FCF; convertible note amended to spread repayments to 2028 .
Customer concentrationUPS 193-unit order, 20 hubs for Caltrans; FedEx & UPS presence .Q1 shipped 60 units incl. 31 chassis supporting UPS order; FedEx ISPs deliveries .UPS substantial portion of Q2 deliveries; expanded FedEx ISP deployments .

Management Commentary

  • CEO: “This is what disciplined execution looks like… record unit volumes, record revenue, and record free cash flow,” highlighting resilience amid EV industry headwinds and a shift toward a “complete electrification platform” spanning trucks, powertrains, and mobile charging .
  • CFO: Record quarterly operating cash flow/free cash flow of $4.6M; operating expenses down 35% YoY and 17% QoQ; lowest operating loss since going public; guidance for non-GAAP operating loss revised to reflect mix and tariffs .
  • COO: Tennessee plant ran at high utilization delivering for UPS; powertrain kits ramping for OEMs; ongoing tariff monitoring and targeted cost reductions to protect margins .
  • Liquidity: Amendment of a large convertible note to spread principal repayments through Nov 2025–Feb 2028, with accrued interest paid in stock; intended to preserve capital for growth .

Q&A Highlights

  • Industry outperformance drivers: leadership emphasized team execution, long-standing customer trust, and organizational adaptability to tariff/supply chain shocks enabling record volumes with positive margins despite complexity .
  • MDXT status and demand signals: ongoing national demos; multiple vocational use cases; municipal procurement channels; expectation of building a production backlog with minimal incremental Tennessee capex to launch .
  • Tariff quantification: ASP impact range ~5–15% depending on product; cost-sharing with customers to mitigate burden; active monitoring across geographies .
  • Analyst comment on beat: an analyst noted results “better than 20% ahead of the consensus” (cannot be verified here given S&P consensus unavailability) .
  • Guidance clarification: non-GAAP operating loss range widened due to updated tariffs and product mix assumptions for H2 .

Estimates Context

  • S&P Global consensus for Q2 2025 EPS and revenue was unavailable at time of writing; no verified beat/miss can be asserted from S&P data.*
  • Analyst commentary suggested a revenue beat (>20%), but this is not corroborated by S&P consensus in our dataset; given the record top-line and units, coverage may adjust revenue upward, while the lowered non-GAAP operating loss guidance likely drives wider FY25 loss expectations .

*Consensus values retrieved from S&P Global – unavailable at time of writing.

Key Takeaways for Investors

  • Record execution with 135 units and $18.4M revenue, but margins compressed on mix and tariffs; watch H2 mix and tariff pass-through to assess margin recovery trajectory .
  • Guidance reset: non-GAAP operating loss widened to $26.9–$24.4M; this is the key negative revision and likely the primary stock narrative driver near-term; any improved tariff environment or mix shift could narrow losses .
  • Liquidity improving: $4.6M positive operating cash flow/FCF, cash rebuilt to $8.8M, inventories down; convertible note amortization extension reduces near-term cash strain .
  • Diversification catalysts: powertrain orders (Blue Bird) and Hub deployments broaden revenue streams beyond stepvans, potentially supporting margin mix over time .
  • Operational discipline: OpEx down 35% YoY; continued BOM cost reductions and supplier diversification should cushion tariff impacts longer term .
  • MDXT pipeline: customer demos and municipal interest point to future volume expansion with low incremental capex; ramp targeted for 2026, offering mid-term growth optionality .
  • Trading setup: near-term sentiment hinges on tariff/mix visibility and H2 delivery cadence; positive cash flow and unit momentum are offsets to widened loss guidance; monitor updates on tariff mitigation and large fleet programs (UPS/FedEx ISPs) .