Xos, Inc. (XOS) Q1 2026 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call highlighted strong financial performance with record revenue and gross margin, alongside reduced operating expenses and losses. The expansion of the Hub product line and growth in the powertrain business with Blue Bird are positive indicators. Despite uncertainties in shipment mix, the Q&A emphasized the Hub's role as a growth driver and the company's ability to meet demand without significant CapEx. These factors suggest a likely positive stock price movement, considering the improved financial health and strategic growth initiatives.

Key Financial Performance

Revenue $11.2 million, nearly double the same quarter last year ($5.9 million in Q1 2025). The increase was driven by a strategic shift to focus on powertrain and hub units.

Gross Margin 38.6%, the highest in the company's history, compared to 20.6% in Q1 2025. This improvement was due to cost discipline, optimized inventory management, sourcing strategies, and a greater mix of higher-margin hub and powertrain unit deliveries.

Operating Expenses $9 million, down 14% from $10.5 million in Q1 2025. The reduction reflects strong operational discipline in managing costs.

Operating Loss $4.7 million, the lowest since going public, compared to $9.3 million in Q1 2025. This improvement was driven by improved operating efficiency and cost discipline.

Adjusted EBITDA Loss of $2 million, representing an improvement of over 70% compared to both Q1 2025 and Q4 2025. This reflects continued momentum towards profitability.

Cash and Cash Equivalents $9.8 million at the end of Q1 2026. This reflects active liquidity management and disciplined capital allocation.

Inventory $23.7 million at the end of Q1 2026, down from $25 million at the end of Q4 2025 and $38 million at the end of Q1 2025. This decline reflects progress in inventory management initiatives.

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Operating Highlights

Xos Hub: Invested more aggressively in hub production capacity and engineering. New iterations in development to expand product capabilities. Preparing to ship hubs to Europe later this year.

Powertrain Systems: Delivered 63 powertrain systems for Blue Bird and 10 strip chassis for UPS. Focused on higher-margin product categories.

International Expansion: Preparing to ship hubs to Europe and establishing service partnerships to meet customer SLAs.

Public Sector Engagement: Selected as a finalist in the U.S. Air Force Global Strike Command showcase. Engaged with municipal, state, and federal customers.

Cost Discipline: Continued cost reduction efforts, optimized inventory management, and sourcing strategies. Achieved highest gross margins in company history.

Manufacturing Flexibility: Expanded hub and powertrain production areas. Launched a new higher-capacity hub configuration (420-kilowatt hours).

Diversification: Transitioning from a single-product company to a broader commercial vehicle and power infrastructure manufacturer.

Regulatory Adaptation: Focused on economic-driven demand rather than relying on regulatory tailwinds. Highlighted cost savings of electric vehicles over diesel.

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Risk or Challenges

Access to Capital: Xos' ability to access capital when needed and continue as a going concern is a risk factor mentioned.

Supply Chain Disruptions: Potential supply chain disruptions due to trade policies, tariffs, or geopolitical issues like war in Iran could impact operations.

Economic Downturns: Economic downturns, including shortages of access to oil, energy, or other key industrial inputs, pose risks to the business.

Regulatory Shifts: The federal climate shift, including the EPA's removal of California's CARB waiver and challenges to the Endangerment Finding, has softened regulatory tailwinds for zero-emissions adoption.

Tariff Environment: An evolving tariff environment requires active management of sourcing strategies, which could impact costs and supply chain stability.

Capital Markets: Challenges in capital markets are acknowledged as a potential risk to the company's financial stability and growth.

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Guidance & Outlook

Revenue Guidance for 2026: The company reaffirms its full-year 2026 revenue guidance to fall within the range of $40 million to $50 million.

Unit Deliveries for 2026: The company expects unit deliveries to be within the range of 350 to 500 units for the full year 2026.

Non-GAAP Operating Loss for 2026: The company projects a non-GAAP operating loss to be in the range of $11.9 million to $13.3 million for the full year 2026.

Gross Margins: The company anticipates maintaining a higher overall margin profile across its product portfolio for 2026, with gross margins expected to be meaningfully better than 2025 on a full-year basis.

Hub Production and Development: The company plans to invest more aggressively in hub production capacity and engineering, with new iterations of the hub in development to expand product capabilities. Shipments to Europe are expected to begin later this year.

Demand Environment: The company sees renewed interest in its products driven by economic factors such as fuel cost savings, with heavy-duty applications showing per-mile fuel cost savings of more than 60% compared to diesel.

Public Sector and Defense Opportunities: The company is experiencing strong demand signals from municipal, state, and federal customers, including being selected as a finalist in the U.S. Air Force Global Strike Command commercial capabilities showcase.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:How many hubs were shipped during the first quarter?

A:Approximately 22 hubs were shipped during the first quarter.

Q:What is the expected mix of shipments for the remainder of the year?

A:The mix of shipments for the remainder of the year is uncertain. Hubs generally have a higher ASP and margin profile, while powertrains have a lower ASP and margin profile. The wide range of unit volumes is due to the pipeline for the second half of the year still being firmed up.

Q:Will the hub be a primary driver of growth for Xos in the next few years?

A:Yes, the hub is expected to be a primary growth driver for Xos. There is significant demand from new customer segments, and the hub addresses challenges like grid resiliency and power reliability. New variations of the hub are also being developed to expand the market further.

Q:What structural cost changes contributed to the strong gross margins this quarter?

A:Structural cost changes included initiatives to reduce direct material, overhead, and direct labor costs, as well as improved inventory management processes that reduced GAAP reserves.

Q:What has been learned from the early deployments of the hub?

A:The hub has been tested in demanding conditions, including extreme weather and high usage scenarios. It has performed well, with over 50 different vehicles tested for interoperability. The core architecture, energy storage system, and software have proven durable and reliable, contributing to future iterations of the product.

Q:How has the relationship with Blue Bird evolved, and what are the future opportunities?

A:The relationship with Blue Bird has strengthened, with tripled powertrain deliveries compared to last year. Blue Bird values the reliability of Xos products, and there are opportunities to expand the partnership into additional product lines and vehicle configurations.

Q:What is the nature of the relationship with MacAllister-Caterpillar, and what opportunities does it present?

A:The hub is being used to support zero-emissions equipment at a data center site. There are opportunities to expand the relationship with other Caterpillar dealerships and address the data center segment and temporary power needs. The hub's architecture is well-suited for these markets.

Q:What capacity does Xos have to meet growing demand, and will significant CapEx be required?

A:Xos has sufficient capacity to meet growing demand using existing infrastructure and equipment. Some nominal CapEx may be required, but significant investments are not needed due to the shared core components and technology across product lines.

Q:Review of Unclear Management Responses

A:Management avoided providing a clear answer regarding the expected mix of shipments for the remainder of the year, citing uncertainty and the need to firm up the pipeline for the second half of the year.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

XOS Transcript

Xos, Inc. (XOS) Q1 2026 Earnings Call Transcript

Positive5-14

Xos, Inc. (XOS) Q4 2025 Earnings Call Transcript

Positive3-26

The earnings call summary highlights strong product development and market strategy, with significant growth expected in hubs and powertrains. Management's focus on expanding into new markets and leveraging engineering experience is promising. The Q&A section reveals positive sentiment towards these developments, despite some uncertainties. The company's efforts to improve gross margins and generate cash from working capital further support a positive outlook. Although specific guidance was not provided, the overall sentiment remains optimistic, suggesting a positive stock price movement in the short term.

Xos, Inc. (XOS) Q3 2025 Earnings Call Transcript

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The earnings call highlights improved financial performance, with reduced operating losses and positive free cash flow. The company is addressing tariff impacts and expects margin improvements in 2026. The Q&A section reveals growth opportunities in the Hub platform and chassis deliveries, despite some uncertainties in delivery guidance. Analysts' sentiment is generally positive, with a focus on strategic partnerships and market expansion. The reaffirmed revenue guidance and positive developments in cash flow suggest a positive stock price movement, likely between 2% to 8%.

Xos, Inc. (XOS) Q2 2025 Earnings Conference Call Transcript

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Despite positive financial performance with increased revenue and unit deliveries, challenges such as tariff costs, supply chain disruptions, and dependency on a few large customers pose significant risks. The decline in gross margins and reliance on capital raising strategies add to the uncertainty. The Q&A section reveals management's reluctance to provide specific guidance, which raises concerns. Overall, the mixed signals result in a neutral sentiment, anticipating limited stock price movement.

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Xos, Inc. (XOS) Q1 2026 Earnings Call Transcript