Yahoo Finance Xos Inc (XOS) (Q1 2024) Earnings Call Transcript Highlights: Surging Revenues and Strategic ...
Revenue: $13.2 million in Q1 2024, up 180% from Q1 2023 but down from $18.4 million in Q4 2023.
Gross Margin: Achieved a record 21.2% in Q1 2024, up from 7.2% in the previous quarter.
Net Income: Not explicitly mentioned, but operational and financial metrics indicate improvements in profitability.
Units Delivered: 62 units in Q1 2024.
Cash and Cash Equivalents: Increased to $46.2 million at the end of Q1 2024, up from $11.6 million at the end of Q4 2023.
Operating Expenses: Decreased to $13 million in Q1 2024 from $13.2 million in the previous quarter.
Free Cash Flow: Negative $14.6 million in Q1 2024, compared to negative $0.9 million in the previous quarter.
Full Year 2024 Guidance: Revenue projected between $66.7 million to $100.4 million; non-GAAP operating loss between $43.7 million to $48.7 million; 400 to 600 units expected to be delivered.
Release Date: May 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Xos Inc (NASDAQ:XOS) reported a significant year-over-year revenue increase of 180% in Q1 2024 compared to Q1 2023.
Achieved record gross margins of 21.2% in Q1 2024, indicating improved profitability.
Successfully closed the acquisition of ElectraMeccanica, enhancing Xos Inc (NASDAQ:XOS)'s cash position by over $50 million net of costs.
Introduced the updated Xos Hub, a rapidly deployable charging unit, which is expected to expedite fleet electrification and address infrastructure-related delays.
Strong sales activity in the Stepvan segment, driven by regulatory pressures and economic incentives, continues to motivate customers to transition to EVs.
Negative Points
Q1 2024 revenue of $13.2 million was lower than Q4 2023 revenue of $18.4 million, attributed to delays in customer infrastructure and body upfitter partners.
Reported a non-GAAP operating loss of $9.3 million for Q1 2024, indicating ongoing challenges in reaching operational profitability.
Experienced delays in vehicle deliveries due to infrastructure and upfitter constraints, causing revenue recognition to be pushed from Q1 to Q2.
Despite improvements, the company still faces challenges with supply chain and production scalability to meet customer demand.
Operating cash flow was negative $14.6 million for the quarter, reflecting continued financial strain from operational activities.
Q & A Highlights
Q: Can you elaborate on the charging infrastructure delays and the upfitter part of that? What gives you confidence that orders pushed from Q1 to Q2 won't continue to be delayed? A: Dakota Semler, Xos Inc - Chief Executive Officer, Co-Founder: The upfitter delays are not tied to infrastructure but to production scheduling and coordination. We're taking proactive steps to plan production timelines two quarters ahead to avoid such issues. Regarding charging infrastructure, we've already delivered several vehicles that were delayed from Q1 to Q2, and we're testing new temporary charging infrastructure tools to prevent future delays.
Q: Regarding the Hub, is the production of eight hubs per month in the second half of the year an expectation or just preparation? How do they compare from an ASP and gross margin standpoint to the vehicles? A: Giordano Sordoni, Xos Inc - Chief Operating Officer, Director: The production capacity for eight hubs per month is a preparation for potential demand, not a specific production target. Dakota Semler added that the Hub is competitively priced compared to traditional DC fast chargers and offers significant capital cost savings and flexibility, which is highly valued by customers.
Q: What is the sustainable gross margin level you expect, considering the one-time items and gains? A: Dakota Semler, Xos Inc - Chief Executive Officer, Co-Founder: We expect gross margins to stabilize and potentially grow as we move through our inventory and begin delivering our 2024 model year vehicles, which have higher gross margins. Liana Pogosyan, Xos Inc - Acting Chief Financial Officer, Vice President - Finance, added that normalized transaction costs and improved inventory processes support a positive margin outlook.
Q: Can you provide more details on the EV bus and Winnebago customers? Were these deliveries part of sales or demos, and what are the expectations for these relationships in 2025? A: Dakota Semler, Xos Inc - Chief Executive Officer, Co-Founder: The deliveries to these customers were part of sales, not demos. We expect significant growth in powertrain deliveries in Q4 and into 2025, with these sectors showing increasing demand.
Q: How does the mix of products affect margins, and what should we expect going forward? A: Dakota Semler, Xos Inc - Chief Executive Officer, Co-Founder: Product mix significantly impacts margins, with typical Stepvans on a 100-mile configuration yielding low teens in gross contribution margin, while specialty configurations can reach mid-20s. The mix is expected to be about two-thirds standard and one-third specialty configurations.
Q: What are the market demand trends, and how do they influence your outlook for the rest of the year and beyond? A: Dakota Semler, Xos Inc - Chief Executive Officer, Co-Founder: Market demand remains strong, driven by regulatory pressures, high fuel costs, and recurring orders from customers who see benefits in maintenance and operational costs. These factors, along with robust incentives, are expected to sustain growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
