Executive Summary

Top line fell sequentially on seasonal delivery timing, but Xos delivered its first-ever positive quarterly Free Cash Flow ($3.3M) as AR collections improved; non-GAAP gross margin held at 23.2% despite a 27.3% revenue decline vs Q3, driven by higher-margin Hub and powertrain mix .
GAAP gross margin turned negative in Q4 due to inventory reserves and physical write-offs tied to warehouse consolidation and legacy parts; on a non-GAAP basis, gross profit remained positive ($2.7M; 23.2% margin) for a sixth consecutive quarter .
2025 outlook introduced: revenue $50.2–$65.8M, non-GAAP operating loss $17.2–$14.0M, and 320–420 units; management highlighted infrastructure readiness (not tariffs) as the key risk to unit deliveries .
Potential stock catalysts in 2025: largest customer order to date (UPS 193 strip chassis), Hub momentum (GSA listing, utility/public sector traction), and state incentive tailwinds (e.g., ~$10M TVERP in Texas) .

What Went Well and What Went Wrong

What Went Well
- Positive Free Cash Flow for the first time ($3.3M), with favorable working capital changes (AR collections) and inventory down sequentially to $36.6M .
- Non-GAAP gross margin sustained at 23.2% in Q4 despite lower volume, supported by mix shift toward higher-ASP, higher-margin Hub and powertrain products; six straight quarters of positive non-GAAP GP .
- Commercial traction: largest UPS order (193 units), Hub on GSA Schedule (federal procurement), and Blue Bird powertrain program through FMVSS and production order for 20 units; Winnebago’s first mobile medical production delivery .
What Went Wrong
- Sequential revenue decline (27.3%) and 51 units delivered in Q4 as parcel customers deferred intake during peak season; GAAP gross margin negative due to reserves and write-offs from annual counts and warehouse consolidation .
- Full-year delivery shortfall vs earlier 2024 guidance revisions (ended at 297 units vs revised 320–400 range), with 2024 revenue of $56.0M near the lower bound of Q3 guidance; infrastructure delays remained a gating factor .
- Tariff headwinds loom (potential $5k–$20k per vehicle cost), requiring continued mitigation via cost-outs and reshoring; management emphasized ongoing monitoring and supplier diversification .

Financial Results

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$18.38	$15.54	$15.79	$11.47
Gross Profit ($USD Millions)	$1.33	$2.03	$2.86	$(3.72)
GAAP Gross Margin %	—	13.1%	18.1%	-32.4%
Non-GAAP Gross Profit ($USD Millions)	$0.63	$2.03	$3.67	$2.67
Non-GAAP Gross Margin %	—	—	23.2%	23.2%
Loss from Operations ($USD Millions)	$(11.83)	$(11.37)	$(9.69)	$(14.57)
Non-GAAP Operating Loss ($USD Millions)	$(10.93)	$(9.74)	$(6.64)	$(6.37)
Net Loss ($USD Millions)	$(13.83)	$(9.66)	$(10.51)	$(18.98)
Diluted EPS ($)	$(2.33)	$(1.23)	$(1.32)	$(2.36)

Notes: Management cited a 27.3% sequential revenue decline in Q4 driven by seasonal delivery timing in parcel customers . GAAP gross margin in Q4 was significantly impacted by inventory reserves and write-offs; excluding these, non-GAAP gross margin was 23.2% .

KPIs and Balance/Cash Flow

KPI / Cash Flow	Q2 2024	Q3 2024	Q4 2024
Units Delivered (Units)	90	94	51
Free Cash Flow ($USD Millions)	$(26.11)	$(11.67)	$3.30
Inventories ($USD Millions)	$41.36	$42.40	$36.57
Accounts Receivable, net ($USD Millions)	$29.74	$36.44	$26.87
Cash and Cash Equivalents ($USD Millions)	$20.70	$9.20	$11.00

Full-year context: 2024 revenue $56.0M (vs $44.5M in 2023), 297 units delivered (vs 283 in 2023); GAAP gross margin turned positive for the year (7.1%) and non-GAAP gross margin reached ~18% .

Segment/Product Mix: Xos does not disclose formal segment revenue. Management noted Q4 reflected an increased Hub mix (higher ASP/margins), continued StepVan deliveries (greater emphasis on strip chassis), and expanding “Powered by Xos” powertrain activity (Blue Bird, Winnebago) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($M)	FY2025	—	$50.2–$65.8	New
Non-GAAP Operating Loss ($M)	FY2025	—	$17.2–$14.0	New
Unit Deliveries (Units)	FY2025	—	320–420	New
Revenue ($M)	FY2024	$66.7–$100.4	$54.1–$67.6	Lowered
Non-GAAP Operating Loss ($M)	FY2024	$48.7–$43.7	$42.2–$33.7	Improved/Narrowed
Unit Deliveries (Units)	FY2024	400–600	320–400	Lowered

Management emphasized that 2025 delivery risk skews more to infrastructure readiness than tariffs; backlog exceeds guided units for 2025, but some orders deliver later .

Earnings Call Themes & Trends

Topic	Q2 2024 (Q-2)	Q3 2024 (Q-1)	Q4 2024 (Current)	Trend
Hub product & capacity	Preparing to reach up to ~8/month run-rate; strong interest from fleets/government	Running ~2/week; customer list incl. Waymo, ABM, Loomis, Xcel; demo ramp	~2/week sustained; increased mix aiding margins; cautious on capacity expansion pending validated backlog	Strengthening
Powertrain partnerships	Announced Blue Bird partnership; strong interest from OEMs	First Blue Bird school bus powertrain delivered; broader pipeline	FMVSS completed; first production order of 20 Blue Bird powertrains; Winnebago mobile medical delivery	Progressing
Tariffs/macro	Monitoring potential tariffs; minimal disruption anticipated	Expect possible tariff increases; reshoring/dual sourcing in progress	Possible $5k–$20k per vehicle cost impact; mitigation ongoing; infra readiness is larger risk to 2025 deliveries	Headwind, mitigated
Working capital/AR	Elevated AR; pursuing non-dilutive WC, inventory for 2H growth	>$25M incentive AR backlog; collections to accelerate	First positive FCF; improved AR collections; dealer floorplan to shorten cycles	Improving
Cost reduction/operations	Direct material cost reductions; StepVan process efficiency	Ops streamlining; facility sublease; U.S. supply chain investments	>$10M cost reductions over 12 months; Tennessee as ops base; further subleases planned	Improving
Regulatory/incentives	ACF timelines support national accounts	Incentive collections lag; process improvements underway	State incentives tailwinds (TX ~$10M; NJ + WA programs; 45W credit partial)	Supportive

Management Commentary

“Q4 marked the close of Xos’ strongest year yet… we expect that trend to continue with top line growth, margin expansion and improved product diversity… the most efficient public commercial EV company in the market today.” — CEO, prepared remarks .
“GAAP gross margin [in Q4] was significantly impacted… by changes in our inventory reserves and write-offs… Excluding these adjustments, non-GAAP gross margin… was 23.2%… sixth consecutive quarter of positive non-GAAP gross margin.” — CFO .
“We secured… just under 200 strip chassis to be delivered to UPS, 20 Hub units to Caltrans and our first production order of 20 Blue Bird powertrains.” — CEO .
“These tariffs could add $5,000 to $20,000 per vehicle… we are proactively… reshoring… and exploring cost offset programs.” — CEO .
“We steadily increased our Hub production rates… approximately 2 Hub units per week… positioning us well to… meet demand in 2025.” — COO .

Q&A Highlights

Margin resilience: Adjusted gross margin at 23.2% remained flat QoQ despite ~45% unit decline; driven by favorable mix (Hub/powertrain) and ongoing cost improvements; potential to improve with scale .
Hub demand/capacity: Operating near ~2/week; expanding capabilities (power export/energy management) before scaling capacity further; validating market first .
Powertrain penetration: FMVSS certification enables selling production units; Blue Bird’s 20-unit order to go into a school district; deep co-development with OEM partners .
Working capital and liquidity: AR/incentive collection accelerating; dealer floorplan partners shorten cash cycles; aim to lean out AR and inventory further .
2025 outlook sensitivities: Bottom-end of guide more about infrastructure readiness than tariffs; backlog exceeds guided units, but some orders deliver post-2025 .

Estimates Context

S&P Global consensus estimates for Q4 2024 were unavailable for Xos (no published EPS or revenue estimates found for the period). As a result, we cannot benchmark Q4 results versus consensus.
Values retrieved from S&P Global.*

Key Takeaways for Investors

Sustained non-GAAP gross margin performance (23.2%) with improving product mix and cost discipline, despite seasonal volume softness; validates Xos’ pricing/mix and cost-out strategy .
First-ever positive quarterly Free Cash Flow ($3.3M) underscores tangible progress on working capital and collections; sequential inventory and AR improvements support 2025 liquidity runway .
2025 guide frames realistic growth (revenue $50.2–$65.8M; 320–420 units) with non-GAAP operating loss narrowing, while acknowledging infrastructure timing as the primary execution risk .
Commercial momentum and product breadth are catalysts: UPS 193-unit order, Blue Bird/Winnebago powertrain wins, and Hub traction (including GSA listing) broaden addressable demand beyond parcel delivery .
Tariff risk is real but manageable via reshoring, supplier diversification, and engineering cost reductions; state-level incentives remain supportive demand drivers .
Continued focus on dealer partnerships and strip chassis mix should accelerate cash conversion cycles and reduce balance sheet intensity .
Watch for: cadence of Hub orders (utilities/public sector), pace of incentive/AR collections, and any updates on the convertible note maturity path in 2025 .

Appendix: Additional Relevant Press Releases (Q4 2024 context)

Product: Launch of 2025 Xos SV Stepvan with new 158" and 208" wheelbases (flexibility for customers, complements 178") .
Customer: Crown Linen ordered two 22' electric stepvans (industry adoption beyond parcel) .

Cross-References and Reconciliation Notes

Non-GAAP definitions and reconciliations provided in press releases/8-Ks; Q4 GAAP vs non-GAAP differences driven by inventory reserves and physical write-offs .
Q3 non-GAAP metrics benefited from clean energy credit sales; mgmt disclosed effect on GAAP gross margin (15% ex-credits) .

Citations:
Earnings press release and 8-K (Q4 2024): .
Q4 2024 earnings call: .
Q3 2024 (PR/8-K/call): .
Q2 2024 (PR/8-K/call): .
Other releases: GSA Hub listing (Feb 19, 2025): ; Stepvan 2025 product launch (Oct 10, 2024): ; Crown Linen PO (Nov 22, 2024): .

Xos, Inc. (XOS)·Q4 2024 Earnings Summary