Xos (XOS) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $15.8 million, up from $15.5 million in Q2 but down from $16.7 million year-over-year, with 94 units delivered and an 18.1% gross margin, marking the fifth consecutive quarter of positive gross margins.

• Net loss for Q3 2024 was $10.5 million, a 33% improvement from Q3 2023; nine-month net loss narrowed by 50% to $31.2 million.

• Saw growing momentum in customer and product diversity, with significant hub product ramp-up, first powertrain delivery for a Blue Bird school bus, and serial production of the Xos Hub for major utility and fleet customers.

• Completed the acquisition of ElectraMeccanica in March 2024, adding $50.2 million in cash and integrating assets.

• Reduced workforce by 26% and implemented executive salary cuts in October 2024 to conserve cash.

Financial highlights

• Gross profit for Q3 2024 was $2.9 million, up from $2.0 million last quarter and $2.0 million in Q3 2023; non-GAAP gross profit was $3.7 million.

• Operating expenses for Q3 2024 fell to $12.6 million, with R&D and sales/marketing down 42% and 33%, respectively.

• Non-GAAP operating loss improved to $6.6 million from $9.7 million in Q2; loss from operations was $9.7 million in Q3 2024.

• Free cash flow for Q3 2024 was negative $11.7 million, a significant improvement from negative $26.1 million in Q2.

• Cash and cash equivalents at September 30, 2024, were $8.4 million, down from $11.6 million at year-end 2023.

Outlook and guidance

• 2024 revenue guidance revised to $54.1–$67.6 million, with unit deliveries forecasted at 320–400 for the year.

• Non-GAAP operating loss guidance narrowed to $42.2–$33.7 million, reflecting improved margins and cost controls.

• Management highlights substantial doubt about the company’s ability to continue as a going concern over the next 12 months without additional capital.

• Plans include further cost reductions, seeking new capital through debt, equity, or asset-based financing, and maximizing use of the SEPA facility.

• Expect continued challenges from infrastructure and customer delays but anticipate higher average selling prices and improved margins.