XOS - Earnings call transcript Q1 2024

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Operator

Greetings, and welcome to Xos Inc.'s First Quarter 2024 Earnings Call. [Operator Instructions]. Please note, this conference is being recorded. At this time, I would like to turn the conference over to General Counsel of Access, Christen Romero. Thank you.

begin. may You

Christen Romero

to Dakota. comparable that, in financial to our earnings company's information the be XXXX during non-GAAP and it not and found statements. be On Investor I non-GAAP Liana for press me over are measures. the in everyone, website our Operating also today. today's section the during duty forward-looking discussed first can refer definitional to presentation the this Participants This current or call, information now be Financial investors.xostrucks.com. on Relations key Hosting will earnings on and subject uncertainties. Giordano call, call call. the contained which investor.xostrucks.com. on release, undue release of found GAAP Thank any issued not press this Actual forward-looking update which Xos historical Chief cautioned measures joining to differ to website expectations to Commission. we Executive management any with factors documents includes statements its forward-looking in Officer, assumptions Chief Today's results of the Acting put are Exchange , performance do of our We on if with XXXX financial making measures risks for assumptions, first CEO, this Chief metrics. and be at our . based Officer, incorrect Please filings call references statements news Ahead These statements. quarter Sordoni this earnings are could conference reports undertake you, turn of at quarter and us our and of should and from reliance Pogosyan release, Dakota any latest can Officer, forward-looking materially to reference our reconciliations Securities Semler, With will because

Dakota Semler

today's delivered in joining margins Gio which operational highlights the call, updates, achieved I million thank gross and from and XXXX, us. units will everyone, and On first will revenue, you, quarter XX Christen, financial respectively. XX.X%. Thanks, and Liana $XX.X then provide for during generated of record of cover we

cost closed to than advantage which improved of quarter, $XX strengthens cash ElectraMeccanica, our XXX%. million and Xos' up Compared core to additional our our improve more of with at injection XXXX, Hub combined we we acquisition base cash-generating certain net our tight With costs us control focus continued becoming to and the is Powertrain improving of opportunities allocation. Xos first our StepVan, judicious priority access of come capital significantly a we operations, self-sustaining with revenue believe in gave liquidity. and growing is are the margins During but close. on quarter committed This remain which taking Xos will from first businesses. company, capital cash, paid liquidity, of

into for body some than to second was causing customer planned spill quarter. deliveries quarter upfitter revenue due fourth XXXX first at partners, of quarter However, and infrastructure quarter in the of the to delays our lower

committed to half StepVans delivered As quarter, quarter's a we than XXXX, back contractors. XXXX of weighted to last Ground expect mentioned number during the we year. last and volumes we our call, In like like meaningfully higher but most UniFirst FedEx be customers

large a StepVan-based Winnebago. our of deliveries initial made powertrains on-highway X and bus also OEM to We new customers,

charger are time installation from to it's Hub our motivating our meaningfully we drawn charging hard strong, for impact the process each bills more To skip unit sales, of bundling business StepVan access constraints by infrastructure increasing that that our to pursuing frequently Hub serve In and source StepVans, an purchasing during existing end, dramatically impactful rapidly of on the deployments fleets Powertrain our most Xos see to transition the aging January, make work kilowatt designed for charging are deliveries available infrastructure. our California's to typical and with technology including solutions, customers powertrain offerings Xos reminder, solution utility StepVan compliance fleets Hub trailer-mounted deployed can a without In that or sales activity to only last-mile significant internal installation monetize for are of growth forward for utility with support also customers. complete took truck deployable we orders we related fuel battery X and electrification the in the fleet depot quarter commercial provide charging Xos. in steps support faced the Hubs other solution range remained EVs fleets. our for to are StepVans where of of or months offer customers addressing delays we looking is a commercial sectors for The Xos. the our as sites with add beyond allowing or where with chargers, StepVan are peak vehicles. powertrain batteries to upgrade expedite the of volumes. and to Onboard updated opportunity opportunities infrastructure heads to clean grid, in environments combines minimize We battery solutions. improve In XXX business vehicles. that the last pursuing sites, and charge Hub, quarter lines The EVs predictability fleets to with a fleets mile deliveries, calls. during growing EV storage EV mobile advanced permanent announced power construction These allowing lengthy grow for the hours and a remote the vehicle charging unit our the predict expect time By XX impacts As to reporting infrastructure upgrades in many before tackle their delays customers line charger to permanent reduced Hub and a we for to the more future applications. upgrade our directly

and Energy, While has With customers, and of primary signed Ground Gio, remains already range an the have end, FedEx to interest future update. enabling Hub, non-StepVan I'll orders for deliveries motivated it that I we strong Hub broadly. the broad-based offer from including strong SSA our and hand business us expected operational of to margin its more now Marine. growth Xcel COO, Hub the sales to for slots booked a over greater customers contractors the calls. of StepVan the look production on profile purpose in forward and reporting

Giordano Sordoni

on customer demand gross and to manufacturing match teams delivering focused margin scaling production improvements. Thanks, Dakota. further Xos' engineering, supply chain and remain

collaborating for Our suppliers needed contribute improve and supply ambitions and to our strong of our expand shipping partners achieve directly continue and gross inbound implement develop engineers components to to delivery The team margins ensure flow refinements is margins. XXXX. chain competitiveness, that the with to

X, As of and demand step much Dakota half second to the to as is band the platform. we sales began significant and of StepVan seeing, mentioned, day we're quarter. our tied chain Hub preparing will is and designed we X as team due rates the to the From This deliver also Hub overlap This design supply the response production orders sales Hub to signed for receive. possible. to flexible updated the month the we our remain per build XXXX. first in updated existing in rate our In the possible to and Hubs up between leverage

similarities and much our XXXX For the able to reach targets was the extend All factory also investments of example, in reducing with production by Hubs months a less major many with The plant than to I'll StepVan, being footprint the the Like our sharing better pass in to StepVan, with existing built Tennessee our sooner subassemblies of that, our and production is battery Eastern achieve production with Liana. than StepVan XXX-mile Hub system with a partnership And are is possible the the it suppliers, line. Xos floor. design. to Hub built capital stand-alone required alongside margins $XX,XXX.

Liana Pogosyan

afternoon, Thank and you, good Gio, everyone.

the million million time the the the $XX.X from to revenues as fourth in quarter, during quarter For year. a of our XXXX, of deliveries slower first $XX.X primarily reduced result our of decreased

should quarter a improvements our and compared we quarter were net write-offs adjustments quarter capitalization from into of to driven reduced million gross continue to for that of we XXXX. the goods to $XX quarterly our to focus noted to the prior to overhead $X.X X.X%. in change Margin during balances in and in volatility quarter with fourth during gross in continue management supply of million sold as price, prudent XXXX Our related by in improvements inventory that the inventory physical inventory, on of last mainly in in and on was focus management, quarter introduced of GAAP a a chain fourth compared OEM reserves XX.X% results. with It be decreased the compared of are by million as average processes. inventory higher as benefit costs normalization levels profit inventory of GAAP cost reduction $XX.X reserves higher margin selling on-hand impacted million direct inventory allocation combined dealer quarter freight vehicle range mix a of the sales or model line a between margins changes or sales, during in to $X.X reductions prior costs

gross non-GAAP that earnings reason, you this margin For consistent can press share find release. today's continue we in to

to Turning expenses.

the Our to first decreased $XX.X quarter. million million from quarter in operating $XX prior expenses

the in Non-GAAP of compared end was amongst fair closed with the with allocated operating million $X.X million the included and the quarter are the acquired of result quarter. fourth for cost the a assets MB using $XX.X cash associated loss at costs We acquisition of cash assets with the $XX.X basis. accounting, As of relative and transaction equivalents value million. qualifying the asset acquisition quarter

Operating $XX.X of our quarter of over resulted electromechanical from mentioned, increases and negative or outstanding of $XX.X and acquisition $XX.X million as the March. cash in first in million from accounts unfavorable on capital, growth the Dakota the receivable quarter payments increase for a voucher to $X.X timing receivables working million flow including an liabilities. our in was result million delivery changes as last timing quarter, of quarter. resulting the CapEx loss largely our less As as decreased free last from net in well negative increase incentive Inventory cash flow in

million reaffirming back in non-GAAP million, XXX are full million call to operating $XX.X over we between now revenue to the million Dakota. turn units Finally, of the to $XX.X XXXX to loss guidance I'll $XX.X year range our of XXX $XXX.X delivered. and a of

Dakota Semler

up, and margins gross industry-leading competition. million over provide future. that Xos secured we Liana. our Thanks, significant for the quarter our prepared The cash Xos To with of over advantages $XX wrap is this

stronger from infrastructure benefiting As for and regulatory are and demand pressure on grows, to mobile adopt EVs powertrain products. charging truck our fleets proven we profitable

As advantages that, a we for half the quarters. a Xos on look mandates look to second and let's success competitive to forward the I With line in EV long-term you and direct busy of sharing track for that from our the year, open questions. with of coming incentives benefits

Operator

Instructions]. comes Markets. [Operator from with Capital Northland Today's Schafer first Donovan question

Donovan Schafer

deliveries So own infrastructure start them their first upfitting? causing down I And elaborate of related We've some asking at delays. to upfitter to the if charging just the comes by then infrastructure about chargers it And of to that orders makes some some some before. QX is to or on needing want don't then that, the whole how confident off if do that, to and QX. also of you that part sites this said can gives guidance, if in seen these pushes you confidence what full reiterating pushed year QX, from feel QX the What rolling the QX just and QX QX you that hit you that that thing. get you from where -- to

would great. there be anything So

Dakota Semler

to delays. So with in first I'll regards the start question the upfitter

to back of customers. around and build to sure making chassis, they've upfitters. infrastructure sending and need that coordination we them production it When build when tied the advance can their supply those or in slots well had. those upfit we're not our one requires to to at challenges their it's have chain close schedule some partners, from with be So own a get cases, that pushed back In other delivered we issues of that very

time will But it lines charging taking slots production deliveries. about X that quarters plan much so to our out planning again. related really those was get with scheduled build and And is continue happen proactive quarter improve that something infrastructure. and we those to not for that towards to anticipate expect more times. making of sure we're this and don't upfitters We We're those a approach looking one to

The as vehicles pattern already QX, some that QX have actually those this from this QX second delivered and we making doesn't happen. QX confidence from them strong really on of question was around in several charging the rolling And into at sure infrastructure particularly in that of came been vehicles, point. have from

utility not it charging And charging. infrastructure delays complement deploying or us better new confidence will allow deploy quarter. we're gives it's in able units carry if those X tools side quarters the into to the continue from comes either see going and much that permitting it with or temporary Hub charging be X say us out testing from pushed the to infrastructure some So able permanent on to unanticipated the for actually second few to being to when we to that

deploying and where first the charging gets our place in installed. numbers being charging in of give that we until temporary So quarter. us able their temporary we're Hubs And should have lot and will this in going a more to permanent build everything to forecastability predictability be production one that stability deliver charging and a is customers where quarters and

Donovan Schafer

there, itself, Hub positive the seems there's real exciting. potentially developments very to interesting, like is it which turning then And some

the to Gio you Hubs, other would a year. second would be expectation the margin fairly XX the XX for then be said do the of just you'll being So chance of place here would that how an prepared it is gearing think gross to they question likely be in do north just be have just like be, delivering that half it? that that? is of to for you something first say, guess you'll the per Hubs an mean ASP to just X is That in XX, the do and Or part ready? compare up or standpoint things that month I year. more And I compound Hubs able from vehicles? be you're

Giordano Sordoni

of more producing This we're getting customers but total the are we And multiple Hubs. ton orders able volumes. speaking. kind or Hub for providing production be because actively system say I It's is of even to handle those not Gio to specific production guidance and for kinds feedback a those can and from are we guidance, year for ready about production production building Hubs of that getting placing positive volumes. interest now We're folks the

I think I'll the part ASP let was of and question Dakota your around the more ASPs, of questions answer second and margin for the Hubs.

Dakota Semler

installation various instead well solution at work cost that range site looking trenching, engineering comparative are permanent chargers over into range go then an storage, had adding that fast that of the a and the hours DC from Hub energy runs, additional development. of soft can We're middle connection minimizing comparison So CapEx XX-kilowatt standardizing range. point in of XXX the commercial enclosure. of We're apples-to-apples DC X we perspective, amount different it And chargers. via X that the the nearly DC for also by X, minimizing an from reducing points as into to chargers having right into charging. by of comparable one right north fast with XXX fall conduit, combined significantly single through connection We kind $XXX,XXX site that simplifying the the anywhere Hub benefits infrastructure amount And the of fast kilowatt utilizing cable to into DC in that of we're is of you as ways. conventional a installed charging

X energy traditional infrastructure it leased either project a storage, you well were a kilowatt today. hub in they charging as And our the attributes a that's more permanent our able savings yard flexibility the a customers application. costs deployments, this biggest in received of on power would significantly or that one customers necessarily fixed that's can hub roadside trailer-mounted a might capital or actually in so just by with approximately of a or don't allow DC to such building in permanent vehicles chargers be will hubs what than Depot a but service there or them of XXX out flexibility fast leased the DC facilities own, scope hours that not hub is maintenance deploying be amount Obviously, resiliency, that or our of deploy the and outage, infrastructure to So cost of we site. been deploy if where for them be to of a storm or it's event a or for

tremendous really it amount a fleets of flexibility. So gives

of what vehicles. dynamics confident that end speaks little to StepVan of product electronics the developed the the think overall of A will systems, product we've a talked at powertrain. about margins that and the we've the into stages hub, X lot charging or portfolio. software the production, that and be margins the over software the pricing be core technology, really some in of years our all will planning is finalizing that gross margins storage bit that the the than run of we're have the energy And management higher we energy they early While even manufacturing and been potentially high last Hub. still technology for it's to those the power We're we've been which or I X developed put

And can the not So taking We see we're it. durable. been made into last has years. ultimately has market we've the value in market the few as charging now market it significantly cost another it because the vehicle it reduced established We've reliable. that made as

Donovan Schafer

some there flexibility some [Indiscernible]? and variability Is

Dakota Semler

Hub and the it Yes, trucks. whether there on is flexibility some depending some they're variability with buying who's bundling and

customers primary hubs interest from we trucks the and And was infrastructure use that it. customers flexible course, have do so use have intended the had Hub be pricing to purchase time, But on some with for Hub buying or bottleneck designed on case in that of we StepVans and the the originally folks all. we their at of sense. can help same at our And We we challenges. also that don't

So charge vans. and from to delivery or they different unexpected necessarily looking the that vans are not Hub vehicles walk-in but industries use to

Operator

from The Mike Davidson. D.A. next is question with Shlisky

Michael Shlisky

you some want to with comments on on thought margin. your of gross I you made

it the the and items a press can Maybe rest the around onetime be the that's take think there's you the Or that's looks the a taking reasonable some getting volume, one-time going question. through in later you're teens again, quarter. I'm of first year out to you level release, all which gross high Do like items, gains If the losses, margin little of sustainable still first and bit teens. the out cetera, the get, low in and get you a et towards mid you'll higher my little year? you more

Dakota Semler

those margins stabilize in So to continuing grow gross we even confident are further. and

that, We legacy There's and gross incentives going to low some that model what into are customer let are the improve like with some costs, we through that Liana after. specific or which was year margin QX. vehicles always product that margin the bit our might our But moving based that beyond that of a continue onetime even inventory comes and do mix, markets variability are lower little And high transaction various the contribution when profiles of to now confident margin. will beyond more it in XXs XXXX to speak I'll at almost going product then and look customers level. teens range. be completely we're that negative we We're the or some into upon to that

Liana Pogosyan

improvement have been to normalized we result We results. costs overall to took with expect overall inventory reserves and our the on in change in just processes seeing the inventory And sustain. have a in reflected I capitalized those and quarter, methodology are the that fourth onetime costs, respect transaction based lower of just normalized. our as we those the additional also in our freight think been

margins it is that outlook the direction gets to of feel in us all of we positive our going confident forward. that a So

Michael Shlisky

teens is year-over-year then is turning that's when $XX think expenses, now? if go. figure to a side, about I'm reasonable Do to you X/X. trying that EBITDA by operating to see probably almost you you right positive way And margin can get quarter on the you $XX here. to But out a million operating million cut And in

Liana Pogosyan

actively in on quarters X of the A we we But necessarily we severance-related expenses that operating cash the subleasing. accounting the reflected I operating operating in were factors that as quarter. the we have on But that forward, cadence and comfortable did as of free But $X operating acquisition-related We to guide lot EMV of costs we of the we feel that might to while costs Just leases expect mainly of the don't positivity. to our important expenses. for transaction I some kind and wind increase to moving that's X overall, normal about a see think significantly help continue been have future some get couple down assumed highlight EMV we based to us as operating million just related cadence flow operations expenses we'll costs costs, the cut on what maintain record in rules. this to that. directionally, far capitalized

Michael Shlisky

far this year, be little hear material on Also do year? revenues of on more those amount were you customers. sales? Do business information EV actually a that love you've I done be I'd were a deliveries more from the think ships? get the they will so want for XXXX those Or and part those to might cards And of little bus of what Winnebago this X the commentary a in a demos? to

Dakota Semler

Yes, absolutely.

are of building in of and those both Winnebago relatively in overall our commercial powertrain was It some sectors, off-highway number general in did anticipate XXXX. the QX a products quarter do made we we're as units we've since we some forthcoming total have small year the increase those customers, into seeing Winnebago, with pretty announcements the the powertrain earlier of other our growing, will as but of well to this with powertrains some to applications and and and we announcements but to specific QX not we're or this A those deliver speak speak on-highway and compared well significantly demand So bus units deliveries, I'll grow business with those to the that even for vehicle some partners. QX.

So we anticipate volume that a deliveries year. of delivering bigger still do That said, trucks one the we're we secondary this of mix business anticipate and will it's be being units, overall our being the year. that majority this of

Michael Shlisky

Average price looked the pretty solid. quarter in

by you're something think $XXX,XXX mix to be a I revenues There there, Am on going your above over some missing dividing forward is in line? $XXX. just units. but assumption top is on good I that

Dakota Semler

this higher that battery the with quarter. more anticipate ASPs really pack, into year. were of we range So rest the the vehicles delivered higher that's the lot sustaining saw long-range a reflected in being and why quarter, don't We that

but but of of of packs, saw mix long-range deliveries will longer-range QX options. of extent where those of volume grow bit those the anticipate from will it and battery quite a it vehicles. to year, have range we more saw last significant in be with short-range not will We do a slightly even XXX-mile that deliveries we We

Operator

from Stifel. Stephen is Gengaro question next The with

Stephen Gengaro

things Two for me.

has the we going that that on you just remind impact mix margins about should first, how think us can forward? and The

Dakota Semler

at export generally looking XXX-mile margin. lift we're mid-XXs of specialty configuration, into longer-range in gross teens contribution some the of When short-range the or or our range. So today, when StepVan vehicles product our specialty whether to we're be with gates those power going configurations, be it bodies, get looking can range on at low mix typical

what's range. of powertrains the specialty in we've on longer-range ultimately, ratio really in short-range being the depending X/X or some and varies schedule to pipeline. and when quarter-to-quarter then with at generally X/X we're are about But vehicle those And the and customer upon as other that Xos being X/X them. what's thought a it businesses again those Energy our So delivery upfits in XXX-mile our such of configurations looking ancillary higher solutions, some with X/X vehicle

services, high XX% on to less margin at those the But margin than XX% looking anywhere gross of both product then side, range. on up into make the those gross from we're when the So XX% from powertrain of anywhere the And mid-teens mixes. revenues businesses today. XX% range

Stephen Gengaro

seeing that just you other and the market rest question, does are guidance the at next year, from give perspective, into year? And this from perspective guys what and demand a of you confidence as inquiries? look market even in what The you a your

Dakota Semler

there's or the been the I down. waning the think sector passenger across growth car So by around been industry potentially a slowing set that's particularly tone market

seen We that have not whatsoever.

of continuing Our sales year orders for We're sales proactive for EVs. by to transition regulation that's this fleet one signed as similar a be today, really see few to about year QX is prompting to versus advanced ACF key lot to California very tracking a tailwinds last significantly. strong fleets and QX. interest we're of the were And QX which up for still tracking clean is their driven

key remains in the quite high a fuel is our of cost metro still Another markets. of lot

vehicles of a are incentives placing recurring at the of vehicles. are fuel because third by then And costs they're for come our deployed maintenance really Xos looking the that orders market today. within of down, And a some is as that lot we exist look they're have lot taking again, the so factor deployments the already customers of are afforded savings seeing and customers advantage

as lot Texas, So industry in and well that the Oregon there York exist incentives were are by like afforded municipal and to as a the that the places of federal New incentives both incentives IRA. state-level the

recognizing has to have we're the there now, road not order the from seen there's growth deliveries to on our for and commercial a we converted a that sector the sales truck Obviously, still that So no slowdown. streamline getting quicker, this right and tailwinds that revenue improve tremendous demand to in infrastructure delivery products going and a is make been but of year. trying process, shortage happen and and

Operator

is from The Capital Northland Donovan Markets. follow-up Schafer with next a question

Donovan Schafer

understand to town. facility to your of just you to want So back internally, in of the in going real I Birds capability that on took handling the trying just stuff type quick delay,

yourselves You took Gio. I think, over from, that it's

recognition, Does in the just there -- delays like running more And taking described where do like this or into in that to run Or something they run to so get to normalized trying terms if are able you just run rate like case are Are accounting have gets elaborate, you to keep the you capacity you think seem you issues? do humming if somehow that like way deliveries, sort to of it along. great. customers rate? storage able like some GAAP be I'm this, a lumpy, If could Dakota, but but this, you just allow delivery how the like revenue at or that in a normalized facility the same of already Or lumpiness have even from could whatever unstuck that? then would quarter. work? warehousing keep happened a does able a you're operating look has to you you that

Giordano Sordoni

StepVan today. the the of that Yes, the is we're humming Gio keep over goals main in design to able when of built switched was to version along. we're subassemblies. of building is This previous A one lot the this Donovan, StepVan the from again. one we

home massive facility, adding added issues. in due blockage to building send people we had continue not of build to so Hub. another when another trucks. a or so some that bottleneck which areas building continue are product we the on the But we we've able one now keep that And consistently. the we can or have same lumpiness gets to And unlocked, if of product we've to subassembly had is been We've these can to ahead

able to also StepVan chassis cross hubs. on building are as train well we as so And folks

Donovan Schafer

for configuration, hubs, And so think the I the standard for I then believe, is chargers.

You from Hub. at bundling I'm charge that getting X Is can to vehicles once the like rule of as it thumb? at the the safe take here.

bundling. just say, like is better I vehicles sizing or bundling may are be size terms the Then were we you some a Hub, so the X:X bundle the or like some so looking it So capacity the to vehicles on XX% if versus and are regular forth. more of or capacity long forward range, vehicles range, of hypothetically, ratio shorter in X:X. became suppose of thing it Or a something of or generally? and part like when modeling the for and understand does maybe, full that actually But

I is there where kind ratio a rule-of-thumb of landed? you think

Dakota Semler

a into Getting favor. deploying the it works lot nuance with in actually our other the of way the hubs,

utilizing average So vehicles, with are XX hours a to to of most XX customers our of our per driving of miles range of an day, shorter-range kind day. XX kilowatt the XX

to actually X can you that more that incredibly It's and Hub. charge and is operations their for see can cycle with these quite even the to back quickly a line we getting loaded next delivery necessitate. day allow what the infrastructure vehicles dual a to support the really customers upgrade so actually disruptive a to allows few you charge package run environment. the per And to times would or or will charging trucks run ultimately in X not thinking about of them really It to on morning. infrastructure sense makes their X for dock be of operations, be you're them as vehicles chargers because a per for if Hub up bundled without that power or lot waiting lot able X to site deploy quickly, a That of

Donovan Schafer

can or enable you Hub something of part that how of at about at in like of would that Or the or bundling case, Just you for to like go how where margin? situation it? look would a the about you would lower just that delivery a think you to that? if think of type sort trying for vehicles, look at is offering facilitate X if So cost

Dakota Semler

different sustainable a the deploy customers. on really and of depends range and value possible in profile have expedite with as our customer customer. and that many the ultimately, It incentives. manner lifetime trucks we're customer as going to try We of But a

longer-range might vehicles Some configurations less to off able hub. that if only single cycles be customers will a charge loading or energy they they're X require the higher or different storage get need running of more

the upon to as dependent many And support customer, going can and nuanced we as really quicker on deliver deliveries, are there really them. if we're the it's focused trucks So but Hub possible. getting out

Operator

concluded. you has and concludes Thank question-and-answer today's conference This the presentation. session, attending our for now

great have day. You a may lines, disconnect and your now

Xos (XOS) 15 May 242024 Q1 Earnings call transcript