XOS · Xos, Inc.

Xos, Inc. reported FY 2025 results showing revenue of $46.0M, gross profit of $2.7M, and a gross margin of 5.9%. These outcomes stem from strategic shifts in product mix toward less labor-intensive units like powertrains, which reduced direct labor encompassing both employee and subcontractor costs. Freight expenses also declined due to lower average shipping costs per unit, as strip chassis are now shipped to body outfitters closer to the manufacturing facility rather than end customers. Overhead costs decreased primarily from more efficient allocations of manufacturing facility space, with manufactured inventories and work in process absorbing an appropriate share of production overheads based on operating capacity. Return reserves increased upon recognition as units at dealer locations were delivered to end customers.

Net cash provided by operating activities reached $5.4M, with capital expenditures at zero, yielding free cash flow of $5.4M. This positive shift highlights effective working capital management under the liquidity improvement initiatives, providing a foundation amid scaling pressures. However, management cautions that these measures, or any future cost-cutting efforts, may not fully address immediate or longer-term liquidity and working capital needs. Estimates of deferred tax asset realizability depend on projected future taxable income, reversal timing of deferred tax liabilities, and tax planning strategies, underscoring the uncertainties in the path to profitability.

Overall, FY 2025 reflects progress in cash generation and cost efficiencies from operational refinements, positioning Xos to support growth while navigating persistent losses inherent to its expansion phase.