Xos, Inc. Earnings Call Highlights Growth and Challenges

Xos, Inc. ((XOS)) has held its Q3 earnings call. Read on for the main highlights of the call.

Xos, Inc. recently held an earnings call that highlighted both achievements and challenges faced by the company. The sentiment expressed during the call was largely optimistic, with notable accomplishments such as record vehicle shipments, positive cash flow, and expanded product offerings. However, the company also acknowledged challenges, including a decline in quarterly revenue and the impact of tariffs on margins. Despite these hurdles, the overall outlook remains positive, with expectations for future growth and improved margins.

Record Vehicle Shipments

Xos, Inc. achieved a significant milestone by shipping 130 vehicles, generating $16.5 million in revenue. Additionally, 10 strip chassis are on their way to upfitters, marking a substantial increase in demand and scaling efforts. This achievement underscores the company’s ability to meet growing market demands and expand its operational capacity.

Positive Non-GAAP Gross Margins

The company reported its ninth consecutive quarter of positive non-GAAP gross margins, achieving a 16% margin for Q3 2025. This consistent performance reflects Xos’s effective cost management strategies and operational efficiencies, contributing to its financial stability.

Strategic Partnership and Financial Restructuring

Xos has strategically amended the repayment structure of its convertible note with Alger Mae Automotive, extending the maturity to 2028. This move enhances the company’s liquidity and aligns with its long-term strategic goals, providing a solid foundation for future growth.

Expansion into Powertrains and Energy Infrastructure

The company has expanded its offerings by delivering 18 powertrain systems to Bluebird Corporation, with nearly 80 additional orders in the pipeline. This expansion into powertrains and energy infrastructure indicates strong market demand and positions Xos as a key player in fleet electrification.

Strong Free Cash Flow

Xos generated positive free cash flow of $3.1 million in Q3, marking the third instance of being free cash flow positive since going public. This achievement highlights the company’s financial discipline and ability to generate cash from its operations.

Improved Operating Loss

The company recorded its lowest operating loss since going public, at $7 million. This improvement is attributed to strong cost management and operational discipline, demonstrating Xos’s commitment to enhancing its financial performance.

Revenue Decline

Despite an increase in unit deliveries, Xos experienced a revenue decline in Q3 2025, with revenue dropping to $6.5 million from $18.4 million in the previous quarter. This decline highlights the challenges the company faces in maintaining revenue growth amidst market fluctuations.

Impact of Tariffs

The company’s GAAP gross margin was adversely affected by tariffs, which were not initially anticipated. These tariffs have compressed margins in the near term, posing a challenge to Xos’s profitability.

Forward-Looking Guidance

Looking ahead, Xos, Inc. remains optimistic about its strategic developments and financial outlook. The company reaffirmed its full-year 2025 guidance, expecting revenue between $50.2 million and $65.8 million and unit deliveries between 320 and 420 units. Xos also emphasized its strategic expansion into powertrains and energy infrastructure, with plans to address grid constraints in fleet electrification through the deployment of the Xos Hub.

In conclusion, Xos, Inc.’s earnings call reflected a company navigating both achievements and challenges. While facing revenue declines and tariff impacts, the company remains optimistic about its future, driven by record vehicle shipments, positive cash flow, and strategic expansions. Investors and stakeholders can look forward to Xos’s continued growth and improved financial performance.