Xos, Inc. ((XOS)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Xos, Inc. recently held an earnings call that highlighted a robust performance, marked by record-breaking revenue and deliveries. Despite facing challenges such as declining gross margins and tariff impacts, the overall sentiment was one of positive progress and strategic growth.
Record-Breaking Revenue and Deliveries
Xos achieved its highest quarterly revenue and unit deliveries in history, with $18.4 million in revenue and 135 vehicles delivered. This marks a significant increase from previous quarters, showcasing the company’s strong market presence and operational capabilities.
Large-Scale Customer Orders
The company began fulfilling a 200-plus unit order for a single customer, the largest in its history. This milestone reflects increasing customer confidence and demand for Xos’s products, positioning the company for further growth.
Operational Efficiency
Xos reported its lowest operating loss since going public, approximately $7.1 million, and achieved positive free cash flow of $4.6 million, the highest in its history. These achievements underscore the company’s focus on operational efficiency and financial discipline.
Expansion of Product Offerings
Xos expanded its product strategy by delivering additional units to Blue Bird Corporation for electric school buses and securing nearly 20 powertrain unit orders. The company also made advancements in its charging infrastructure products, broadening its market reach.
Gross Margin Decline
The GAAP gross margin fell to 8.8% from 20.6% in the first quarter. This decline was primarily due to changes in product mix and additional tariff costs, highlighting areas for potential improvement.
Impact of Tariffs
Tariffs have impacted Xos’s cost structure, with potential effects on gross margins ranging from 5% to 15% of ASPs, depending on the product. This challenge underscores the need for strategic adjustments in response to external economic factors.
Forward-Looking Guidance
Xos Inc. reaffirmed its full-year guidance, expecting revenue between $50.2 million and $65.8 million, with unit deliveries ranging from 320 to 420. Despite challenges, the company is focused on disciplined growth, liquidity, and expanding its higher-margin product offerings, such as powertrain systems and charging infrastructure, to diversify revenue streams and improve profitability.
In summary, Xos, Inc.’s earnings call highlighted a period of significant achievements and strategic growth, despite facing challenges such as declining gross margins and tariff impacts. The company’s record-breaking revenue and deliveries, along with its operational efficiency and product expansion, position it well for future success.