Xos, Inc. — Call Transcript 2025

Good day, and welcome to the Xos third quarter 2025 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchstone phone. To withdraw your question, please press star then two. Please note that today's event is being recorded. I would now like to send the conference over to David Zlotchew, General Counsel. Please go ahead. Thank you, everyone, for joining us today. Hosting the call with me are Xos' Chief Executive Officer, Dakota Semler, Xos' Chief Operating Officer, Giordano Sordoni, and Xos' Chief Financial Officer, Liana Pogosyan. Today, after the close of regular trading, Xos issued its third quarter 2025 earnings press release and filed its quarterly report on Form 10-Q for the period that ended September 30, 2025. As you listen to today's conference call, we encourage you to have our press release and quarterly report in front of you, including our financial results, as well as commentary on the quarter and nine months ended September 30, 2025. Management statements today reflect management's views as of today, November 13, 2025 only, and will include forward-looking statements, including statements regarding our fiscal year 2025, management's expectations for future financial and operational performance, and other statements regarding our plans, prospects, and goals. These statements are not promises or guarantees and are subject to risks and uncertainties, which could cause them to differ materially from actual results. Additional information about important factors that could cause actual results to differ materially, including but not limited to, Xos' ability to access capital when needed and continue as a going concern, Xos' ability to implement business plans and identify and realize additional opportunities, and potential supply chain disruptions, including as a result of changes to or uncertainty around trade policies and tariffs, is included in today's press release and in our filings with the SEC, including our most recent annual report on Form 10-K and subsequent filings. We undertake no obligation to update forward-looking statements except as required by law. You should not put undue—excuse me—you should not put undue reliance on forward-looking statements. Further, today's presentation includes references to non-GAAP financial measures and performance metrics. Additional information about these non-GAAP measures, including reconciliations of historical non-GAAP measures to the comparable GAAP measures, is included in the press release we issued today. Our press release and SEC filings are available in the Investor Relations section of our website at www.exostructs.com/investor-overview. With that, I now turn it over to our CEO, Dakota. Good afternoon, everyone. At Xos, we are building something that did not exist before and doing it under constraints that might break most companies. Yet, quarter after quarter, we've shown that discipline, when paired with conviction, scales. It creates momentum. It compounds. In Q3 2025, that momentum was unmistakable. This quarter, we shipped 130 vehicles, generating $16.5 million in revenue. We actually shipped 140 vehicles, including 10 strip chassis already on their way to outfitters for a major customer program. That revenue will be recognized in the coming quarters. The signal is clear. Demand is real. Customers are returning. Scale is growing. Much of this volume went to UPS and FedEx ISPs, organizations that do not forgive unreliability, that do not tolerate downtime, and that absolutely do not adopt new technologies unless they believe in your engineering and your ability to deliver at scale. Their confidence in us is earned, not inherited. We continued fulfilling the largest single order in our company's history, a 200+ unit order program. We believe this is the shape of the future for Xos: deeper relationships, larger programs, repeatable volume. Our GAAP gross margin was 15.3%. This margin reflects a complex reality: a diverse mix of customers, long-term structured pricing with national accounts, and yes, tariffs that were not contemplated when some of these large programs were originally priced. These large fleet agreements may compress margins in the near term, but they're the foundation of a durable industrial business. They create the volume and the credibility needed to expand margins in the future. While we shipped the highest units in our history, we also drove our lowest operating loss since the business went public, $7 million. That did not happen by accident. It happened because we questioned every expense, every process, and every outdated assumption about how vehicle OEMs should operate. This quarter represents the ninth consecutive quarter of positive non-GAAP gross margins. Many companies talk about discipline. We have lived inside it, and it shows. We have also strengthened our liquidity while continuing to invest in the opportunities that are expanding around us. I want to personally acknowledge the Aljomaih Automotive Company, whose support of Xos has been unwavering. They have seen our progress up close, and they have seen the technology, the execution, and the market shift towards reliability and total cost of ownership. Together, we amended the repayment structure of the convertible note, moving from a single August 2025 maturity to quarterly installments from November 2025 through February 2028. This is not just a restructuring. It is a strategic alignment. It allows us to operate from a position of focus rather than constraint. Interest accrued to the original maturity was paid in common stock in August 2025, making Aljomaih our largest shareholder, a strong signal of their conviction and our long-term trajectory. We will continue to pursue capital strategies, equity, debt, or hybrid structures that allow us to scale responsibly and capture the opportunity in front of us. Even as the step-down continues to drive substantial revenue, our strategy has never been limited to a single product. We are deliberately expanding into higher-margin, lower-concentration categories, including powertrains and energy infrastructure. This quarter, that strategy became real. We delivered 18 powertrain systems to Blue Bird Corporation this quarter. Since quarter end, we've received nearly 80 additional powertrain orders. School districts are electrifying faster than anyone expected, and our technology, which is modular, reliable, and highly serviceable, is becoming the backbone they trust. Speaking of school districts, we are actively selling into that market right now. Gio and I are in Austin this week for the Blue Bird annual dealer meeting, demonstrating firsthand why Xos' powertrains outperform on reliability, serviceability, and total cost of ownership. Our presence here is already opening doors, and we expect this engagement to translate into significant commercial opportunities over the next one to three years as we expand our pipeline in the massive school bus market. There is the Xos Hub. Grid constraints are not a theory. They are the single largest friction point in North American fleet electrification. The Hub addresses this head-on. It is not a prototype. It is deployed. It is working. Its impact is expanding far beyond transportation. In Q3, deployments and demonstrations accelerated, and interest in the hub broadened meaningfully. We also showcased the hub at RE+, the largest renewable energy conference in North America, where it drew significant attention from utilities, energy developers, and industrial users looking for mobile power, resilience, and peak-shaving solutions. The response confirmed what we already knew. The hub addresses a problem that almost no one else in the market is addressing effectively. We're now preparing the 2026 hub update, which will deliver greater power resilience, energy cost optimization, and advanced load balancing capabilities. This isn't just a charging product. It's a mobile energy platform capable of serving industrial users who require temporary power, peak shaving, and resilience in environments where grid infrastructure is either delayed or nonexistent. This dramatically widens our total addressable market, and it positions Xos as an energy systems company, not just an electric truck company. All in, Q3 2025 was a milestone quarter. We achieved record deliveries, maintained revenue momentum, substantially improved operating performance, and further validated that our cost discipline and product strategy can not only maintain operations but accelerate it. As we look ahead, the opportunities in front of us are expanding, not contracting. Order sizes are increasing as customers experience the real-world cost advantages of our trucks and our charging solutions. Our product pipeline, including the upgraded hub and our foray into power resiliency solutions, aligns with secular markets that will grow regardless of political cycles, incentives, or noise. I believe we are experiencing what durable industry companies go through in their formative years: pressure, discipline, breakthroughs, and the unmistakable feeling that the work is beginning to gain traction. With that, I'll turn it over to Gio to walk through the operational highlights of the quarter. Thanks, Dakota. Good afternoon, everyone. Q3 was another quarter of steady execution, disciplined operations, and forward momentum as we continue to deliver for customers and position Xos for sustained long-term growth. Our Tennessee plant remained the cornerstone of our success this quarter, running efficiently and producing at a consistent cadence for our major fleet customers. We continue delivering on our UPS order, demonstrating our ability to maintain quality at scale for one of the world's largest and most demanding fleet operators. With a small, highly capable production team, we achieved rates of three chassis per day, underscoring our ability to efficiently scale into higher volumes. Our engineering, supply chain, and production teams also responded quickly to customer requests during the quarter, designing and deploying product improvements that enhance reliability, serviceability, and customer satisfaction across our chassis line. Production of our innovative mobile charging system, the Xos Hub, also continued in Q3. The hub remains one of our most differentiated offerings in the market, providing fleets a fast, flexible, and cost-effective way to deploy electric vehicles without waiting for fixed infrastructure. The hub allows these fleets to speed up the time it takes to deploy fast charging by skipping lengthy permitting, utility power upgrades, and construction processes. Customers are now using the hub across a broad range of segments and unique charging use cases, including electric trucks, school buses, light-duty electric vehicles, and even autonomous vehicle fleets. The hub engineering team has been hard at work developing new variants aimed at further expanding the product's addressable market and enabling new use cases. Q3 also marked the expansion of our powertrain production capabilities as we advanced new powertrain variants for Blue Bird Corporation. These efforts further validate the versatility and maturity of the Xos powertrain platform and strengthen our position as a trusted electrification partner for vehicle manufacturers seeking proven and road-tested solutions. As we close out the year, our focus has shifted towards setting the stage for 2026. Across our trucks, powertrains, and hubs, we're preparing for continued growth that we expect will bring higher volumes and a broader customer base. In Tennessee, we've begun expanding the hub and powertrain assembly areas within our factory in anticipation of 2026 demand. These improvements will allow us to scale efficiently without significant increases in capital expenditure while maintaining flexibility across product lines. Q3 reinforced what makes Xos unique: reliable execution, engineering innovation, and operational discipline. We continue delivering for our major customers like UPS, built new hubs, advanced powertrain programs with OEM partners, and invested in the foundation to support our next phase of growth. As we look ahead, our team is focused on finishing the year strong and carrying this momentum into 2026, where we see significant opportunities across all three pillars of our business: trucks, powertrains, and charging infrastructure. With that, I'll hand it over to Liana for financial review. Thank you, Gio. Third quarter 2025 revenue was $16.5 million on 130 units, down from $18.4 million on 135 units last quarter and $15.8 million on 94 units a year ago, reflecting strong execution of our delivery plan and major shipments to customers like UPS, Blue Bird, and FedEx ISPs. While we recognize revenue for 130 units this quarter, as Dakota mentioned, we actually shipped a total of 140 units. For the first three quarters of 2025, revenue totaled $40.8 million on 294 units compared to $44.5 million on 246 units in the same period last year. We delivered more units year over year, reflecting strong demand, though the shift in product mix, driven largely by our strip chassis product and powertrains, resulted in a lower average selling price and a modest decline in total revenue. GAAP gross margin was 15.3% in the third quarter, compared to 8.8% in the second quarter this year and 18.1% in the third quarter of 2024. The sequential increase was mainly driven by changes in product mix discussed earlier, including more powertrain units sold, which generally have a higher margin than strip chassis and step-downs. In addition, we had a higher ASP from the sale of UPS strip chassis this quarter due to a negotiated rate to include the impact of tariffs. Non-GAAP gross margin was 16% this quarter, up from 1.4% in Q2, mainly because inventory-specific reserves, which increased this quarter, are added back in the non-GAAP number. This marks our ninth consecutive quarter of positive non-GAAP gross margin. For the first three quarters of 2025, non-GAAP gross margin was 9.3% compared to 16.6% in the same period last year. We remain confident in our ability to improve margins over time as we scale production and execute on cost reduction initiatives. Turning to expenses, operating expenses were $9.5 million in the third quarter, up $0.8 million, or 9%, from the second quarter this year, and down $3 million, or 24%, from the third quarter of 2024. For the first three quarters of 2025, operating expenses totaled $28.7 million, a $10.3 million, or 26%, improvement from $39 million in the same period last year. These sustained reductions demonstrate the structural impact of our prior cost-cutting actions and reinforce our disciplined approach to managing the business. Operating loss for the quarter hit a record low since going public at $7 million, down from $7.1 million in the second quarter this year and down from $9.7 million in the third quarter of 2024. Non-GAAP operating loss since the business went public also hit a record low at $4.8 million compared to $6.9 million in the second quarter this year and $6.6 million in the third quarter of 2024. For the first three quarters of 2025, operating loss was $23.3 million, improving from $31.3 million in the same period last year, while non-GAAP operating loss also improved to $19.7 million from $25.7 million in the period last year. Moving to the balance sheet, we ended the quarter with $14.1 million in cash and cash equivalents, up from $8.8 million at the end of last quarter. Our improvement in liquidity this quarter was boosted by three main factors. First, successful launch of our ATM program, which generated $2.4 million in net cash proceeds this quarter. Second, strategic inventory management. Inventory declined to $25.2 million from $31 million last quarter, driven by strong unit sales outpacing production as we moved more units from existing inventory, reflecting our ongoing inventory management to support upcoming deliveries. Third, accounts receivable came down to $15.4 million at the end of the quarter from $18.1 million at the end of June. We had very strong collections this quarter, about $18.7 million, from customers as well as state grant program administrators. While our UPS deliveries carry longer payment terms, which increased new receivables in the quarter, we feel well-positioned for continued solid collections going into the next quarter. Our focus this quarter has been on execution, financial discipline, and strengthening the foundation for sustained growth. During the quarter, we took strategic actions to strengthen our balance sheet and extend our financial runway. We amended our $20 million convertible note, extending principal payments quarterly starting in Q4 2025 through early 2028 to enhance liquidity and provide greater flexibility. We also reached an agreement to terminate our Mesa facility lease that we acquired as part of the EMB acquisition during the first quarter of 2024, which is expected to generate approximately $20.7 million in cash savings through 2033. Although we're no longer responsible for rent on the Mesa facility, the termination agreement does require us to make 18 monthly payments totaling about $2.8 million. As part of the termination, we also recognize a $9.4 million gain in non-operating income, along with other required GAAP adjustments such as the removal of the related operating lease liabilities. We continue to actively manage our liquidity position and are exploring additional opportunities to further enhance it. Together, these actions demonstrate our disciplined approach to capital management and our ongoing commitment to positioning Xos for long-term stability and growth. Beyond the balance sheet actions, we continue to execute well operationally. We generated positive free cash flow of $3.1 million in the third quarter, marking the third time we've been free cash flow positive since going public. This is down slightly from $4.6 million in the second quarter, but is a major improvement from -$11.7 million we reported a year ago. That progress reflects strong deliveries and continued discipline in managing working capital. Finally, turning to guidance, we are reaffirming our full year 2025 guidance for revenue and unit deliveries and previously revised non-GAAP operating loss guidance. Revenue between $50.2 million and $65.8 million, non-GAAP operating loss between $24.4 million-$26.9 million, and unit deliveries between 320 and 420 units. With that, I'll turn the call back over to Dakota. Thank you, Liana. Stepping into 2026, the momentum behind Xos is unmistakable. Our priorities are clear: accelerate growth, reinforce liquidity, and continue expanding margins with precision and discipline. Over the last 12 months, we've shown that a company can be both lean and innovative, that you can run efficiently without sacrificing the strength or competitiveness of your product portfolio. We've built a deep and diversified sales pipeline, even while navigating global supply chain disruptions that caught much of the industry off guard. Our ability to adapt quickly, to absorb unexpected shocks, and to keep delivering for customers is one of our defining capabilities. Customers notice, in a marketplace that changes by the week, resilience and reliability are currency, and they're becoming core reasons fleets are choosing Xos as a long-term partner. As we move toward what we expect to be our largest and most transformative year, our confidence is only growing. We believe we're positioned to confront challenges head-on and to continue building the most durable, dependable business in our sector. With that, I'll hand it back over to the operator for questions. Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If your question has already been addressed and you'd like to remove yourself from queue, please press star then two. At this time, we'll pause momentarily to assemble our roster. Today's first question comes from Craig Irwin with Roth Capital. Please go ahead. Hey, guys. It's Andrew on for Craig. Congrats on the continued progress, and thanks for taking my questions. First one for me is on the hub. I mean, the use case for fleets is pretty obvious, but I think we're seeing increased activity here in the autonomous vehicle space, and you guys have talked about increasing demand for uses such as backup power applications. So kind of how should we think of the expanded opportunity for the hub platform now? Yeah, Andrew, thanks for the question. With the hub opportunity, I think there will continue to be in the realm of double-digit growth in the next year for that EV charging segment, which is supported by a lot of our fleet customers, but also customers beyond the customers of Xos trucks. One of our larger customers that we've talked about is Waymo, the self-driving car company. They've been continuing to grow their purchases with us. We also have several utilities and state transportation agencies like Caltrans, who bought quite a few units. We continue to see that market growing at a very stable clip. Our power resiliency and backup power functions are going to be launched next year, and that's another exciting opportunity that we believe far exceeds the growth potential of the EV charging market. As you may know, the power cost in the U.S. In the last five years has risen anywhere from 20%-50%, depending upon where you are in the States and what utility you're in. That incremental cost is borne by consumers and borne by businesses. While a lot of that market has been addressed by the consumer market, has been addressed by residential energy storage, there hasn't been a large influx of commercial and industrial buildings adopting energy storage. We have used significant opportunities in that market to participate in wholesale power markets, to do demand response programs, and to ultimately help businesses with reducing their total energy cost. That is really where our focus on growth is going to be for the hub in the years to come. We haven't provided specific guidance around how we're quantifying that growth and volume, but we expect it will follow similar trajectories to the launch of the Xos Hub charging system and also continue to be a higher margin product that's really more of a unique product in a segment that hasn't been widely addressed by other suppliers in the space. Great. It seems like an exciting opportunity, and thanks for the details. Second one for me here is on your chassis deliveries to Blue Bird. You seem like they're accelerating. You guys said, I believe, 80 more orders following quarter-end. You touched on it in the prior remarks, but can you just talk about customer feedback, what you're seeing, and what's kind of driving this accelerated growth? Yeah, absolutely. It has been an exciting partnership with them, and we have continued to build this over the last couple of years, and it is finally starting to take hold. We have delivered those first 20 or so units, and they are actually operating with a customer up in the Northeast right now. One of the exciting things for us is that Blue Bird has been selling electric vehicles for many years now, working with other powertrain providers. Their powertrain options, I would say, are more limited than what we can provide. One of the first projects we helped them bring to market was a shorter wheelbase powertrain configuration that had not been an option before for some of these short wheelbase school buses that are used in city environments. We packaged that first powertrain with them over a year ago, went through the full durability and validation process, and now that's in market with customers. If there's anything we've learned this week from being at the Blue Bird dealer meeting in Austin, it's that there's a lot of interest in that product beyond the initial launch customer. We mentioned that we've got those additional follow-on orders subsequent to the quarter close, and we are actively working on additional variants with increased capacity and range that will ultimately start marketing to the Blue Bird dealer body as well as many of their national accounts. What's really exciting about that is there's a significant growth opportunity in school bus. We're still seeing high rates of electrification, Blue Bird being the leading alternative powertrain provider in the school bus industry, and we are going to be their first LFP battery option and powertrain option, which will, I think, significantly help with their customers in adopting these vehicles just because it's going to increase the reliability and the resiliency of these battery packs for school bus fleets, which obviously reliability and durability and longevity for their fleet is top of mind. It's probably one of the single most important evaluating criteria when they're making a determination of which partner they work with. We expect that to continue to grow into 2026 pretty substantially, and hopefully we'll be able to talk about that more by next quarter and give a little bit more detail on those orders beyond the additional 80. Great. I appreciate the call. The last one for me, if I may, you guys had another solid quarter of unit deliveries. I believe you're at 294 for the year. You reiterated your guide of 320-420 for the year. Can you just kind of talk about the puts and takes, reaching kind of the high and low end of the guide there? Yeah, as we've talked about in the past, we always have seasonal delays in delivering through Q4, and that's attributed to the industry that we serve. We work with the largest parcel delivery companies in the world, and many of them are operating during their peak season in Q4, meaning once the Thanksgiving holiday starts, their network volumes can often double, and they're dealing with a lot of other additional growth and package volume than they normally do. It is generally a lighter quarter from our key customers in Q4. We expect a little bit of that impact to hit us in Q4. We still expect to remain within that guidance range, but there will be other deliveries in Q4, such as powertrain deliveries and some other customers and hub deliveries that will continue to round out the year. We expect that to continue to grow back in Q1 and Q2 of next year. Great. I appreciate the call and congrats on the strong results. Thank you. Thank you. Once again, if you have a question, please press star then one. Our next question comes from Ted Jackson at Northland Securities. Please go ahead. Thank you very much. I will echo congratulations on a quarter that went well across the board. Thanks, Ted. Let's start with tariffs, Dakota. I mean, one of the comments that you made in your prepared remarks was that you were able to do some renegotiation with UPS with regards to tariffs. I guess the first question around tariffs is, have you been able to price adjust that across kind of your product offering at this point, or is there still some impact that will come to bear as we roll through going forward? Yeah, I'm happy to start, and I'll pass it over to Gio to follow on. I think we're taking a multi-step approach to insulate ourselves from the volatility that we've experienced this year from tariff regime changes and uncertainty in that tariff environment. The first of which is focusing on reshoring or getting as much domestic content as possible to make sure that we don't face this kind of volatility in the years to come. The second is working with our suppliers and sharing in that cost and helping us to realize better cost improvements or accelerated cost-down efforts that they understand, obviously, will help them grow their sales pipeline with us. Sharing in some of that exposure has been, I think, the second most impactful decision. The third and the last area is just, again, an effort to work with our customers, not to just increase prices to them, but to give them clarity around the tariff changes that have impacted us and then figure out how we share in that tariff exposure. We want to build long-term, durable relationships with our customers. These are not fly-by-night customers. They are some of the most sophisticated fleets in the world. Our efforts are not just to pass everything along to them, but to demonstrate to them that we are willing to work together to share in that cost exposure while still trying to reduce the acquisition costs of our vehicles for them so they can be competitive from a total cost of ownership standpoint and ultimately get these vehicles to near-price parity with diesel vehicles. I'll let Gio add a little bit more context too. Yeah, I think Dakota hit the nail on the head. It's really been, it's kept our supply chain team busy with tariff changes starting earlier in the year. We've seen some continued, at least talk of changes. We are keeping our options open, working with our supply base, establishing backup supply in critical parts where needed. It's really on the cost front been an open conversation, and there's been willingness to share in some of the cost increases between ourselves, our suppliers, and our customers. We're doing everything we can to make sure we can guarantee supply going forward without blowing up costs. Okay. Next question. First, so you shipped 18 powertrains to Blue Bird during the third quarter, and then you had 80 orders since that time? Yeah, approximately. I think it was closer to exactly 75 incremental orders. Yeah, we've had substantial follow-on since we made those other deliveries. If you did 18 powertrains, did you have any hubs went out during the quarter? Liana, we have that, I think, in the. Yeah, it'll be in the Q. I haven't looked at the Q yet. It's more of a part of a question. That's what I'm going with it. If you don't have it in front of you, it's not that big of a deal. And then Dakota. Yeah. We did have incremental hubs. While we do not disclose the breakout between powertrains and hubs, we did have hubs deliveries as well this quarter. Usually, actually, you do break it out in the Q. Anyway, so then with the 75 new powertrains, will those be, are those, the bulk of those will ship in 2026? That's correct. Yeah. When I think about that, hub is growing fast. Powertrains is growing fast. You're bringing the cost of tariffs more in line. If you go forward, you're going to have a mix shift towards your higher margin products in 2026, along with less of a drag on tariffs. What can we think about when we, I mean, it's more of a general concept, but what kind of margin improvement do you think you could get in 2026, versus 2025, with those tailwinds, if you would? Yeah. We haven't provided specific guidance around next year. I think when we look at the margin profile of our core truck products, it's really variable depending upon our customer profile. That can be as low as the low teens to kind of the mid 20% gross margin range based upon product configuration, specifications, customer pricing details, bulk purchases, things of that nature. When we look at our other product lines, like the powertrain and the hub business, those are generally, I would say, in the kind of 15%-35% range, with the hub representing that higher end of that range, and the powertrain configurations representing kind of the lower to the middle portion of that range. You're right in assuming that the margin mix will shift towards the higher end of our margin spectrum. That is something that, as we work with our partners and our customers, I think we can continue to mitigate and minimize the exposure and disruption from tariffs to further improve that in a way that benefits both of us and hopefully improves margin on our powertrain kits as well as on their end-user products that they are selling to their customers. I mean, is it fair to just conceptually that the chances are that you'll have a noticeable improvement with regards to your margins in 2026 versus 2025 because of how the mix of your business is changing? Yeah. I think that's a very fair assumption. Okay. Can I touch over on the lease? You have $2.8 million that you're going to be paying over the next 18 months. Is that what you said? That's correct. Yeah. So basically, then it's like, what is it? Like $450,000 a quarter, $470,000 a quarter, and then you'll be done in as you exit 2026 for the most part, into 2027. And then that. That's exactly right. With regards to working capital, you've made tremendous progress with regards to your working capital in the last couple of quarters. Can we expect to see continued improvement on that as we go into the fourth quarter and then beyond? Yeah. That's a deliberate part of our focus. I have to beg Gio to make any payments and to release any payments that are going out to our vendors. No, in all honesty, I think it's a team effort across the company to focus on how we can manage cash flow, how we can improve receivables collection. We've had some very supportive customers that have been willing to work with us on the terms that we offer them and ensuring that they're adhering to those terms and paying in a more timely manner. One of the most significant drivers of this is that increased product mix away from trucks and direct sales of trucks will reflect a lower proportion of those sales being driven by incentives. That'll shorten our receivables time dramatically if we don't have to collect from those incentive agencies or government agencies. We should expect to see, just generally speaking, as we go forward, an improvement in DSOs. I mean, I tend to look at inventory on a daily basis too, but a continued improvement there relative to what you mean, the progress that you've made in the second and the third quarter. We'll see even more improvement kind of as we march forward over the next several quarters. That's fine. My last one is kind of a question and kind of more just asking for some commentary. There was a—I just saw it in the journal today, so the timing was just kind of average forward, perfect. One of your peers, Harbinger, did a raise of—I do not know what it was, like $150 million-$160 million with FedEx. It is the lead. FedEx is, like they say, that FedEx is basically going to take a lot of their product, and they are spewing out that they are going to ship 3,000 units next year. I mean, how do you think about that? Does that give you any kind of pause as it relates to your relationship with FedEx? Or you also could look at it, the fact that they're able to raise that kind of money, that it says it's also an opportunity to say a vote, if you would, of confidence in your end markets and the opportunity that you yourself face. I mean, have a little discussion about that. Yeah. I think from—I'll kind of segment the question, but I think from a capital markets standpoint, it's an incredible validation and proof point that there's still interest from investors in investing into the transportation business and into commercial electric vehicles, which we see as a very positive indicator because in the last couple of years, it has been different in what we saw from the fundraising environment in the preceding few years. I think that's a great indicator for our industry as a whole and for our ongoing access to capital. Secondly, I think pertaining to the commercial opportunity that exists, we view FedEx as a critical customer of ours and a key customer, and we want to continue to work with them. We've built an incredible relationship with the Express team in Memphis and also the former ground team in Pittsburgh. It is now a part of FedEx Corporate. I think that relationship will continue to extend. I actually messaged them and congratulated them this morning on the announcement. I think we see them as a strategic partner. One thing I'll mention, which I think is really important and relevant, is these large parcel delivery companies and large fleets, they do not sole source with any of their products and any of their technology in their fleets. They are always going to have generally two to three, sometimes even four primary suppliers that they work with to maintain some competitive tension, to make sure they do not have too much exposure to a single company. We see another company in this space as a validation that the industry is still growing, there's still opportunity, and there's still really strong customers that are willing to make investments and grow in this segment. I think for us, FedEx is one of many customers that we have, but we're still excited, very excited about working with them and continuing to work with them. To this point, it's not referred to as FedEx Ground anymore, but for their contractor business, we are the largest electric vehicle vendor with more electric vehicles than anybody deployed across their network. I think we expect that trend to continue, and we'll keep working with the contractors as well as with their fleet management, their centralized fleet management for their corporate-owned fleet. I think it actually bodes well for the industry and for us as a company. Great. So again, correct. On the quarter, I mean, literally, you just moved the ball. As my wife says, you moved the chains, and you did it on every front in your business. So congrats. Thank you. Thanks, Ted. Appreciate you calling in. Thank you. That concludes our question and answer session and today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

Speaker 5: Good day, and welcome to the Xos third quarter 2025 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchstone phone. To withdraw your question, please press star then two. Please note that today's event is being recorded. I would now like to send the conference over to David Zlotchew, General Counsel. Please go ahead. Good day, and welcome to the Xos third quarter 2025 earnings call. good day and welcome to the xos third quarter 2025 earnings call All participants will be in listen-only mode. all participants will be in listen-only mode Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. should you need assistance please signal a conference specialist by pressing the star key followed by zero After today's presentation, there will be an opportunity to ask questions. after today's presentation there will be an opportunity to ask questions To ask a question, you may press star then one on your touchstone phone. to ask a question you may press star then one on your touchstone phone To withdraw your question, please press star then two. to withdraw your question please press star then two Please note that today's event is being recorded. please note that today's event is being recorded I would now like to send the conference over to David Zlotchew, General Counsel. i would now like to send the conference over to david zlotchew general counsel Please go ahead. please go ahead

Speaker 7: Thank you, everyone, for joining us today. Hosting the call with me are Xos' Chief Executive Officer, Dakota Semler, Xos' Chief Operating Officer, Giordano Sordoni, and Xos' Chief Financial Officer, Liana Pogosyan. Today, after the close of regular trading, Xos issued its third quarter 2025 earnings press release and filed its quarterly report on Form 10-Q for the period that ended September 30, 2025. As you listen to today's conference call, we encourage you to have our press release and quarterly report in front of you, including our financial results, as well as commentary on the quarter and nine months ended September 30, 2025. Management statements today reflect management's views as of today, November 13, 2025 only, and will include forward-looking statements, including statements regarding our fiscal year 2025, management's expectations for future financial and operational performance, and other statements regarding our plans, prospects, and goals. Thank you, everyone, for joining us today. thank you everyone for joining us today Hosting the call with me are Xos' Chief Executive Officer, Dakota Semler, Xos' Chief Operating Officer, Giordano Sordoni, and Xos' Chief Financial Officer, Liana Pogosyan. hosting the call with me are xos' chief executive officer dakota semler xos' chief operating officer giordano sordoni and xos' chief financial officer liana pogosyan Today, after the close of regular trading, Xos issued its third quarter 2025 earnings press release and filed its quarterly report on Form 10-Q for the period that ended September 30, 2025. today after the close of regular trading xos issued its third quarter 2025 earnings press release and filed its quarterly report on form 10-q for the period that ended september 30 2025 As you listen to today's conference call, we encourage you to have our press release and quarterly report in front of you, including our financial results, as well as commentary on the quarter and nine months ended September 30, 2025. as you listen to today's conference call we encourage you to have our press release and quarterly report in front of you including our financial results as well as commentary on the quarter and nine months ended september 30 2025 Management statements today reflect management's views as of today, November 13, 2025 only, and will include forward-looking statements, including statements regarding our fiscal year 2025, management's expectations for future financial and operational performance, and other statements regarding our plans, prospects, and goals. management statements today reflect management's views as of today november 13 2025 only and will include forward-looking statements including statements regarding our fiscal year 2025 management's expectations for future financial and operational performance and other statements regarding our plans prospects and goals These statements are not promises or guarantees and are subject to risks and uncertainties, which could cause them to differ materially from actual results. Additional information about important factors that could cause actual results to differ materially, including but not limited to, Xos' ability to access capital when needed and continue as a going concern, Xos' ability to implement business plans and identify and realize additional opportunities, and potential supply chain disruptions, including as a result of changes to or uncertainty around trade policies and tariffs, is included in today's press release and in our filings with the SEC, including our most recent annual report on Form 10-K and subsequent filings. We undertake no obligation to update forward-looking statements except as required by law. You should not put undue—excuse me—you should not put undue reliance on forward-looking statements. Further, today's presentation includes references to non-GAAP financial measures and performance metrics. These statements are not promises or guarantees and are subject to risks and uncertainties, which could cause them to differ materially from actual results. these statements are not promises or guarantees and are subject to risks and uncertainties which could cause them to differ materially from actual results Additional information about important factors that could cause actual results to differ materially, including but not limited to, Xos' ability to access capital when needed and continue as a going concern, Xos' ability to implement business plans and identify and realize additional opportunities, and potential supply chain disruptions, including as a result of changes to or uncertainty around trade policies and tariffs, is included in today's press release and in our filings with the SEC, including our most recent annual report on Form 10-K and subsequent filings. additional information about important factors that could cause actual results to differ materially including but not limited to xos' ability to access capital when needed and continue as a going concern xos' ability to implement business plans and identify and realize additional opportunities and potential supply chain disruptions including as a result of changes to or uncertainty around trade policies and tariffs is included in today's press release and in our filings with the sec including our most recent annual report on form 10-k and subsequent filings We undertake no obligation to update forward-looking statements except as required by law. we undertake no obligation to update forward-looking statements except as required by law You should not put undue—excuse me—you should not put undue reliance on forward-looking statements. you should not put undue—excuse me—you should not put undue reliance on forward-looking statements Further, today's presentation includes references to non-GAAP financial measures and performance metrics. further today's presentation includes references to non-gaap financial measures and performance metrics Additional information about these non-GAAP measures, including reconciliations of historical non-GAAP measures to the comparable GAAP measures, is included in the press release we issued today. Our press release and SEC filings are available in the Investor Relations section of our website at www.exostructs.com/investor-overview. With that, I now turn it over to our CEO, Dakota. Additional information about these non-GAAP measures, including reconciliations of historical non-GAAP measures to the comparable GAAP measures, is included in the press release we issued today. additional information about these non-gaap measures including reconciliations of historical non-gaap measures to the comparable gaap measures is included in the press release we issued today Our press release and SEC filings are available in the Investor Relations section of our website at www.exostructs.com/investor-overview. our press release and sec filings are available in the investor relations section of our website at www.exostructs.com/investor-overview With that, I now turn it over to our CEO, Dakota. with that i now turn it over to our ceo dakota

Speaker 4: Good afternoon, everyone. At Xos, we are building something that did not exist before and doing it under constraints that might break most companies. Yet, quarter after quarter, we've shown that discipline, when paired with conviction, scales. It creates momentum. It compounds. In Q3 2025, that momentum was unmistakable. This quarter, we shipped 130 vehicles, generating $16.5 million in revenue. We actually shipped 140 vehicles, including 10 strip chassis already on their way to outfitters for a major customer program. That revenue will be recognized in the coming quarters. The signal is clear. Demand is real. Customers are returning. Scale is growing. Much of this volume went to UPS and FedEx ISPs, organizations that do not forgive unreliability, that do not tolerate downtime, and that absolutely do not adopt new technologies unless they believe in your engineering and your ability to deliver at scale. Good afternoon, everyone. good afternoon everyone At Xos, we are building something that did not exist before and doing it under constraints that might break most companies. at xos we are building something that did not exist before and doing it under constraints that might break most companies Yet, quarter after quarter, we've shown that discipline, when paired with conviction, scales. yet quarter after quarter we've shown that discipline when paired with conviction scales It creates momentum. it creates momentum It compounds. it compounds In Q3 2025, that momentum was unmistakable. in q3 2025 that momentum was unmistakable This quarter, we shipped 130 vehicles, generating $16.5 million in revenue. this quarter we shipped 130 vehicles generating $16.5 million in revenue We actually shipped 140 vehicles, including 10 strip chassis already on their way to outfitters for a major customer program. we actually shipped 140 vehicles including 10 strip chassis already on their way to outfitters for a major customer program That revenue will be recognized in the coming quarters. that revenue will be recognized in the coming quarters The signal is clear. the signal is clear Demand is real. demand is real Customers are returning. customers are returning Scale is growing. scale is growing Much of this volume went to UPS and FedEx ISPs, organizations that do not forgive unreliability, that do not tolerate downtime, and that absolutely do not adopt new technologies unless they believe in your engineering and your ability to deliver at scale. much of this volume went to ups and fedex isps organizations that do not forgive unreliability that do not tolerate downtime and that absolutely do not adopt new technologies unless they believe in your engineering and your ability to deliver at scale Their confidence in us is earned, not inherited. We continued fulfilling the largest single order in our company's history, a 200+ unit order program. We believe this is the shape of the future for Xos: deeper relationships, larger programs, repeatable volume. Our GAAP gross margin was 15.3%. This margin reflects a complex reality: a diverse mix of customers, long-term structured pricing with national accounts, and yes, tariffs that were not contemplated when some of these large programs were originally priced. These large fleet agreements may compress margins in the near term, but they're the foundation of a durable industrial business. They create the volume and the credibility needed to expand margins in the future. While we shipped the highest units in our history, we also drove our lowest operating loss since the business went public, $7 million. That did not happen by accident. Their confidence in us is earned, not inherited. their confidence in us is earned not inherited We continued fulfilling the largest single order in our company's history, a 200+ unit order program. we continued fulfilling the largest single order in our company's history a 200+ unit order program We believe this is the shape of the future for Xos: deeper relationships, larger programs, repeatable volume. we believe this is the shape of the future for xos deeper relationships larger programs repeatable volume Our GAAP gross margin was 15.3%. our gaap gross margin was 15.3% This margin reflects a complex reality: a diverse mix of customers, long-term structured pricing with national accounts, and yes, tariffs that were not contemplated when some of these large programs were originally priced. this margin reflects a complex reality a diverse mix of customers long-term structured pricing with national accounts and yes tariffs that were not contemplated when some of these large programs were originally priced These large fleet agreements may compress margins in the near term, but they're the foundation of a durable industrial business. these large fleet agreements may compress margins in the near term but they're the foundation of a durable industrial business They create the volume and the credibility needed to expand margins in the future. they create the volume and the credibility needed to expand margins in the future While we shipped the highest units in our history, we also drove our lowest operating loss since the business went public, $7 million. while we shipped the highest units in our history we also drove our lowest operating loss since the business went public $7 million That did not happen by accident. that did not happen by accident It happened because we questioned every expense, every process, and every outdated assumption about how vehicle OEMs should operate. This quarter represents the ninth consecutive quarter of positive non-GAAP gross margins. Many companies talk about discipline. We have lived inside it, and it shows. We have also strengthened our liquidity while continuing to invest in the opportunities that are expanding around us. I want to personally acknowledge the Aljomaih Automotive Company, whose support of Xos has been unwavering. They have seen our progress up close, and they have seen the technology, the execution, and the market shift towards reliability and total cost of ownership. Together, we amended the repayment structure of the convertible note, moving from a single August 2025 maturity to quarterly installments from November 2025 through February 2028. This is not just a restructuring. It is a strategic alignment. It happened because we questioned every expense, every process, and every outdated assumption about how vehicle OEMs should operate. it happened because we questioned every expense every process and every outdated assumption about how vehicle oems should operate This quarter represents the ninth consecutive quarter of positive non-GAAP gross margins. this quarter represents the ninth consecutive quarter of positive non-gaap gross margins Many companies talk about discipline. many companies talk about discipline We have lived inside it, and it shows. We have also strengthened our liquidity while continuing to invest in the opportunities that are expanding around us. we have lived inside it and it shows. we have also strengthened our liquidity while continuing to invest in the opportunities that are expanding around us I want to personally acknowledge the Aljomaih Automotive Company, whose support of Xos has been unwavering. i want to personally acknowledge the aljomaih automotive company whose support of xos has been unwavering They have seen our progress up close, and they have seen the technology, the execution, and the market shift towards reliability and total cost of ownership. they have seen our progress up close and they have seen the technology the execution and the market shift towards reliability and total cost of ownership Together, we amended the repayment structure of the convertible note, moving from a single August 2025 maturity to quarterly installments from November 2025 through February 2028. together we amended the repayment structure of the convertible note moving from a single august 2025 maturity to quarterly installments from november 2025 through february 2028 This is not just a restructuring. It is a strategic alignment. this is not just a restructuring. it is a strategic alignment It allows us to operate from a position of focus rather than constraint. Interest accrued to the original maturity was paid in common stock in August 2025, making Aljomaih our largest shareholder, a strong signal of their conviction and our long-term trajectory. We will continue to pursue capital strategies, equity, debt, or hybrid structures that allow us to scale responsibly and capture the opportunity in front of us. Even as the step-down continues to drive substantial revenue, our strategy has never been limited to a single product. We are deliberately expanding into higher-margin, lower-concentration categories, including powertrains and energy infrastructure. This quarter, that strategy became real. We delivered 18 powertrain systems to Blue Bird Corporation this quarter. Since quarter end, we've received nearly 80 additional powertrain orders. It allows us to operate from a position of focus rather than constraint. it allows us to operate from a position of focus rather than constraint Interest accrued to the original maturity was paid in common stock in August 2025, making Aljomaih our largest shareholder, a strong signal of their conviction and our long-term trajectory. interest accrued to the original maturity was paid in common stock in august 2025 making aljomaih our largest shareholder a strong signal of their conviction and our long-term trajectory We will continue to pursue capital strategies, equity, debt, or hybrid structures that allow us to scale responsibly and capture the opportunity in front of us. we will continue to pursue capital strategies equity debt or hybrid structures that allow us to scale responsibly and capture the opportunity in front of us Even as the step-down continues to drive substantial revenue, our strategy has never been limited to a single product. even as the step-down continues to drive substantial revenue our strategy has never been limited to a single product We are deliberately expanding into higher-margin, lower-concentration categories, including powertrains and energy infrastructure. we are deliberately expanding into higher-margin lower-concentration categories including powertrains and energy infrastructure This quarter, that strategy became real. this quarter that strategy became real We delivered 18 powertrain systems to Blue Bird Corporation this quarter. we delivered 18 powertrain systems to blue bird corporation this quarter Since quarter end, we've received nearly 80 additional powertrain orders. since quarter end we've received nearly 80 additional powertrain orders School districts are electrifying faster than anyone expected, and our technology, which is modular, reliable, and highly serviceable, is becoming the backbone they trust. Speaking of school districts, we are actively selling into that market right now. Gio and I are in Austin this week for the Blue Bird annual dealer meeting, demonstrating firsthand why Xos' powertrains outperform on reliability, serviceability, and total cost of ownership. Our presence here is already opening doors, and we expect this engagement to translate into significant commercial opportunities over the next one to three years as we expand our pipeline in the massive school bus market. There is the Xos Hub. Grid constraints are not a theory. They are the single largest friction point in North American fleet electrification. The Hub addresses this head-on. It is not a prototype. It is deployed. It is working. Its impact is expanding far beyond transportation. School districts are electrifying faster than anyone expected, and our technology, which is modular, reliable, and highly serviceable, is becoming the backbone they trust. school districts are electrifying faster than anyone expected and our technology which is modular reliable and highly serviceable is becoming the backbone they trust Speaking of school districts, we are actively selling into that market right now. speaking of school districts we are actively selling into that market right now Gio and I are in Austin this week for the Blue Bird annual dealer meeting, demonstrating firsthand why Xos' powertrains outperform on reliability, serviceability, and total cost of ownership. gio and i are in austin this week for the blue bird annual dealer meeting demonstrating firsthand why xos' powertrains outperform on reliability serviceability and total cost of ownership Our presence here is already opening doors, and we expect this engagement to translate into significant commercial opportunities over the next one to three years as we expand our pipeline in the massive school bus market. our presence here is already opening doors and we expect this engagement to translate into significant commercial opportunities over the next one to three years as we expand our pipeline in the massive school bus market There is the Xos Hub. there is the xos hub Grid constraints are not a theory. grid constraints are not a theory They are the single largest friction point in North American fleet electrification. they are the single largest friction point in north american fleet electrification The Hub addresses this head-on. It is not a prototype. It is deployed. the hub addresses this head-on. it is not a prototype. it is deployed It is working. it is working Its impact is expanding far beyond transportation. its impact is expanding far beyond transportation In Q3, deployments and demonstrations accelerated, and interest in the hub broadened meaningfully. We also showcased the hub at RE+, the largest renewable energy conference in North America, where it drew significant attention from utilities, energy developers, and industrial users looking for mobile power, resilience, and peak-shaving solutions. The response confirmed what we already knew. The hub addresses a problem that almost no one else in the market is addressing effectively. We're now preparing the 2026 hub update, which will deliver greater power resilience, energy cost optimization, and advanced load balancing capabilities. This isn't just a charging product. It's a mobile energy platform capable of serving industrial users who require temporary power, peak shaving, and resilience in environments where grid infrastructure is either delayed or nonexistent. This dramatically widens our total addressable market, and it positions Xos as an energy systems company, not just an electric truck company. In Q3, deployments and demonstrations accelerated, and interest in the hub broadened meaningfully. in q3 deployments and demonstrations accelerated and interest in the hub broadened meaningfully We also showcased the hub at RE+, the largest renewable energy conference in North America, where it drew significant attention from utilities, energy developers, and industrial users looking for mobile power, resilience, and peak-shaving solutions. we also showcased the hub at re+ the largest renewable energy conference in north america where it drew significant attention from utilities energy developers and industrial users looking for mobile power resilience and peak-shaving solutions The response confirmed what we already knew. the response confirmed what we already knew The hub addresses a problem that almost no one else in the market is addressing effectively. the hub addresses a problem that almost no one else in the market is addressing effectively We're now preparing the 2026 hub update, which will deliver greater power resilience, energy cost optimization, and advanced load balancing capabilities. we're now preparing the 2026 hub update which will deliver greater power resilience energy cost optimization and advanced load balancing capabilities This isn't just a charging product. this isn't just a charging product It's a mobile energy platform capable of serving industrial users who require temporary power, peak shaving, and resilience in environments where grid infrastructure is either delayed or nonexistent. it's a mobile energy platform capable of serving industrial users who require temporary power peak shaving and resilience in environments where grid infrastructure is either delayed or nonexistent This dramatically widens our total addressable market, and it positions Xos as an energy systems company, not just an electric truck company. this dramatically widens our total addressable market and it positions xos as an energy systems company not just an electric truck company All in, Q3 2025 was a milestone quarter. We achieved record deliveries, maintained revenue momentum, substantially improved operating performance, and further validated that our cost discipline and product strategy can not only maintain operations but accelerate it. As we look ahead, the opportunities in front of us are expanding, not contracting. Order sizes are increasing as customers experience the real-world cost advantages of our trucks and our charging solutions. Our product pipeline, including the upgraded hub and our foray into power resiliency solutions, aligns with secular markets that will grow regardless of political cycles, incentives, or noise. I believe we are experiencing what durable industry companies go through in their formative years: pressure, discipline, breakthroughs, and the unmistakable feeling that the work is beginning to gain traction. With that, I'll turn it over to Gio to walk through the operational highlights of the quarter. All in, Q3 2025 was a milestone quarter. all in q3 2025 was a milestone quarter We achieved record deliveries, maintained revenue momentum, substantially improved operating performance, and further validated that our cost discipline and product strategy can not only maintain operations but accelerate it. we achieved record deliveries maintained revenue momentum substantially improved operating performance and further validated that our cost discipline and product strategy can not only maintain operations but accelerate it As we look ahead, the opportunities in front of us are expanding, not contracting. as we look ahead the opportunities in front of us are expanding not contracting Order sizes are increasing as customers experience the real-world cost advantages of our trucks and our charging solutions. order sizes are increasing as customers experience the real-world cost advantages of our trucks and our charging solutions Our product pipeline, including the upgraded hub and our foray into power resiliency solutions, aligns with secular markets that will grow regardless of political cycles, incentives, or noise. our product pipeline including the upgraded hub and our foray into power resiliency solutions aligns with secular markets that will grow regardless of political cycles incentives or noise I believe we are experiencing what durable industry companies go through in their formative years: pressure, discipline, breakthroughs, and the unmistakable feeling that the work is beginning to gain traction. i believe we are experiencing what durable industry companies go through in their formative years pressure discipline breakthroughs and the unmistakable feeling that the work is beginning to gain traction With that, I'll turn it over to Gio to walk through the operational highlights of the quarter. with that i'll turn it over to gio to walk through the operational highlights of the quarter

Speaker 1: Thanks, Dakota. Good afternoon, everyone. Q3 was another quarter of steady execution, disciplined operations, and forward momentum as we continue to deliver for customers and position Xos for sustained long-term growth. Our Tennessee plant remained the cornerstone of our success this quarter, running efficiently and producing at a consistent cadence for our major fleet customers. We continue delivering on our UPS order, demonstrating our ability to maintain quality at scale for one of the world's largest and most demanding fleet operators. With a small, highly capable production team, we achieved rates of three chassis per day, underscoring our ability to efficiently scale into higher volumes. Our engineering, supply chain, and production teams also responded quickly to customer requests during the quarter, designing and deploying product improvements that enhance reliability, serviceability, and customer satisfaction across our chassis line. Thanks, Dakota. thanks dakota Good afternoon, everyone. good afternoon everyone Q3 was another quarter of steady execution, disciplined operations, and forward momentum as we continue to deliver for customers and position Xos for sustained long-term growth. q3 was another quarter of steady execution disciplined operations and forward momentum as we continue to deliver for customers and position xos for sustained long-term growth Our Tennessee plant remained the cornerstone of our success this quarter, running efficiently and producing at a consistent cadence for our major fleet customers. our tennessee plant remained the cornerstone of our success this quarter running efficiently and producing at a consistent cadence for our major fleet customers We continue delivering on our UPS order, demonstrating our ability to maintain quality at scale for one of the world's largest and most demanding fleet operators. we continue delivering on our ups order demonstrating our ability to maintain quality at scale for one of the world's largest and most demanding fleet operators With a small, highly capable production team, we achieved rates of three chassis per day, underscoring our ability to efficiently scale into higher volumes. with a small highly capable production team we achieved rates of three chassis per day underscoring our ability to efficiently scale into higher volumes Our engineering, supply chain, and production teams also responded quickly to customer requests during the quarter, designing and deploying product improvements that enhance reliability, serviceability, and customer satisfaction across our chassis line. our engineering supply chain and production teams also responded quickly to customer requests during the quarter designing and deploying product improvements that enhance reliability serviceability and customer satisfaction across our chassis line Production of our innovative mobile charging system, the Xos Hub, also continued in Q3. The hub remains one of our most differentiated offerings in the market, providing fleets a fast, flexible, and cost-effective way to deploy electric vehicles without waiting for fixed infrastructure. The hub allows these fleets to speed up the time it takes to deploy fast charging by skipping lengthy permitting, utility power upgrades, and construction processes. Customers are now using the hub across a broad range of segments and unique charging use cases, including electric trucks, school buses, light-duty electric vehicles, and even autonomous vehicle fleets. The hub engineering team has been hard at work developing new variants aimed at further expanding the product's addressable market and enabling new use cases. Q3 also marked the expansion of our powertrain production capabilities as we advanced new powertrain variants for Blue Bird Corporation. Production of our innovative mobile charging system, the Xos Hub, also continued in Q3. production of our innovative mobile charging system the xos hub also continued in q3 The hub remains one of our most differentiated offerings in the market, providing fleets a fast, flexible, and cost-effective way to deploy electric vehicles without waiting for fixed infrastructure. the hub remains one of our most differentiated offerings in the market providing fleets a fast flexible and cost-effective way to deploy electric vehicles without waiting for fixed infrastructure The hub allows these fleets to speed up the time it takes to deploy fast charging by skipping lengthy permitting, utility power upgrades, and construction processes. the hub allows these fleets to speed up the time it takes to deploy fast charging by skipping lengthy permitting utility power upgrades and construction processes Customers are now using the hub across a broad range of segments and unique charging use cases, including electric trucks, school buses, light-duty electric vehicles, and even autonomous vehicle fleets. customers are now using the hub across a broad range of segments and unique charging use cases including electric trucks school buses light-duty electric vehicles and even autonomous vehicle fleets The hub engineering team has been hard at work developing new variants aimed at further expanding the product's addressable market and enabling new use cases. the hub engineering team has been hard at work developing new variants aimed at further expanding the product's addressable market and enabling new use cases Q3 also marked the expansion of our powertrain production capabilities as we advanced new powertrain variants for Blue Bird Corporation. q3 also marked the expansion of our powertrain production capabilities as we advanced new powertrain variants for blue bird corporation These efforts further validate the versatility and maturity of the Xos powertrain platform and strengthen our position as a trusted electrification partner for vehicle manufacturers seeking proven and road-tested solutions. As we close out the year, our focus has shifted towards setting the stage for 2026. Across our trucks, powertrains, and hubs, we're preparing for continued growth that we expect will bring higher volumes and a broader customer base. In Tennessee, we've begun expanding the hub and powertrain assembly areas within our factory in anticipation of 2026 demand. These improvements will allow us to scale efficiently without significant increases in capital expenditure while maintaining flexibility across product lines. Q3 reinforced what makes Xos unique: reliable execution, engineering innovation, and operational discipline. These efforts further validate the versatility and maturity of the Xos powertrain platform and strengthen our position as a trusted electrification partner for vehicle manufacturers seeking proven and road-tested solutions. these efforts further validate the versatility and maturity of the xos powertrain platform and strengthen our position as a trusted electrification partner for vehicle manufacturers seeking proven and road-tested solutions As we close out the year, our focus has shifted towards setting the stage for 2026. as we close out the year our focus has shifted towards setting the stage for 2026 Across our trucks, powertrains, and hubs, we're preparing for continued growth that we expect will bring higher volumes and a broader customer base. across our trucks powertrains and hubs we're preparing for continued growth that we expect will bring higher volumes and a broader customer base In Tennessee, we've begun expanding the hub and powertrain assembly areas within our factory in anticipation of 2026 demand. in tennessee we've begun expanding the hub and powertrain assembly areas within our factory in anticipation of 2026 demand These improvements will allow us to scale efficiently without significant increases in capital expenditure while maintaining flexibility across product lines. these improvements will allow us to scale efficiently without significant increases in capital expenditure while maintaining flexibility across product lines Q3 reinforced what makes Xos unique: reliable execution, engineering innovation, and operational discipline. q3 reinforced what makes xos unique reliable execution engineering innovation and operational discipline We continue delivering for our major customers like UPS, built new hubs, advanced powertrain programs with OEM partners, and invested in the foundation to support our next phase of growth. As we look ahead, our team is focused on finishing the year strong and carrying this momentum into 2026, where we see significant opportunities across all three pillars of our business: trucks, powertrains, and charging infrastructure. With that, I'll hand it over to Liana for financial review. We continue delivering for our major customers like UPS, built new hubs, advanced powertrain programs with OEM partners, and invested in the foundation to support our next phase of growth. we continue delivering for our major customers like ups built new hubs advanced powertrain programs with oem partners and invested in the foundation to support our next phase of growth As we look ahead, our team is focused on finishing the year strong and carrying this momentum into 2026, where we see significant opportunities across all three pillars of our business: trucks, powertrains, and charging infrastructure. as we look ahead our team is focused on finishing the year strong and carrying this momentum into 2026 where we see significant opportunities across all three pillars of our business trucks powertrains and charging infrastructure With that, I'll hand it over to Liana for financial review. with that i'll hand it over to liana for financial review

Speaker 2: Thank you, Gio. Third quarter 2025 revenue was $16.5 million on 130 units, down from $18.4 million on 135 units last quarter and $15.8 million on 94 units a year ago, reflecting strong execution of our delivery plan and major shipments to customers like UPS, Blue Bird, and FedEx ISPs. While we recognize revenue for 130 units this quarter, as Dakota mentioned, we actually shipped a total of 140 units. For the first three quarters of 2025, revenue totaled $40.8 million on 294 units compared to $44.5 million on 246 units in the same period last year. We delivered more units year over year, reflecting strong demand, though the shift in product mix, driven largely by our strip chassis product and powertrains, resulted in a lower average selling price and a modest decline in total revenue. Thank you, Gio. thank you gio Third quarter 2025 revenue was $16.5 million on 130 units, down from $18.4 million on 135 units last quarter and $15.8 million on 94 units a year ago, reflecting strong execution of our delivery plan and major shipments to customers like UPS, Blue Bird, and FedEx ISPs. third quarter 2025 revenue was $16.5 million on 130 units down from $18.4 million on 135 units last quarter and $15.8 million on 94 units a year ago reflecting strong execution of our delivery plan and major shipments to customers like ups blue bird and fedex isps While we recognize revenue for 130 units this quarter, as Dakota mentioned, we actually shipped a total of 140 units. while we recognize revenue for 130 units this quarter as dakota mentioned we actually shipped a total of 140 units For the first three quarters of 2025, revenue totaled $40.8 million on 294 units compared to $44.5 million on 246 units in the same period last year. for the first three quarters of 2025 revenue totaled $40.8 million on 294 units compared to $44.5 million on 246 units in the same period last year We delivered more units year over year, reflecting strong demand, though the shift in product mix, driven largely by our strip chassis product and powertrains, resulted in a lower average selling price and a modest decline in total revenue. we delivered more units year over year reflecting strong demand though the shift in product mix driven largely by our strip chassis product and powertrains resulted in a lower average selling price and a modest decline in total revenue GAAP gross margin was 15.3% in the third quarter, compared to 8.8% in the second quarter this year and 18.1% in the third quarter of 2024. The sequential increase was mainly driven by changes in product mix discussed earlier, including more powertrain units sold, which generally have a higher margin than strip chassis and step-downs. In addition, we had a higher ASP from the sale of UPS strip chassis this quarter due to a negotiated rate to include the impact of tariffs. Non-GAAP gross margin was 16% this quarter, up from 1.4% in Q2, mainly because inventory-specific reserves, which increased this quarter, are added back in the non-GAAP number. This marks our ninth consecutive quarter of positive non-GAAP gross margin. For the first three quarters of 2025, non-GAAP gross margin was 9.3% compared to 16.6% in the same period last year. GAAP gross margin was 15.3% in the third quarter, compared to 8.8% in the second quarter this year and 18.1% in the third quarter of 2024. gaap gross margin was 15.3% in the third quarter compared to 8.8% in the second quarter this year and 18.1% in the third quarter of 2024 The sequential increase was mainly driven by changes in product mix discussed earlier, including more powertrain units sold, which generally have a higher margin than strip chassis and step-downs. the sequential increase was mainly driven by changes in product mix discussed earlier including more powertrain units sold which generally have a higher margin than strip chassis and step-downs In addition, we had a higher ASP from the sale of UPS strip chassis this quarter due to a negotiated rate to include the impact of tariffs. in addition we had a higher asp from the sale of ups strip chassis this quarter due to a negotiated rate to include the impact of tariffs Non-GAAP gross margin was 16% this quarter, up from 1.4% in Q2, mainly because inventory-specific reserves, which increased this quarter, are added back in the non-GAAP number. non-gaap gross margin was 16% this quarter up from 1.4% in q2 mainly because inventory-specific reserves which increased this quarter are added back in the non-gaap number This marks our ninth consecutive quarter of positive non-GAAP gross margin. this marks our ninth consecutive quarter of positive non-gaap gross margin For the first three quarters of 2025, non-GAAP gross margin was 9.3% compared to 16.6% in the same period last year. for the first three quarters of 2025 non-gaap gross margin was 9.3% compared to 16.6% in the same period last year We remain confident in our ability to improve margins over time as we scale production and execute on cost reduction initiatives. Turning to expenses, operating expenses were $9.5 million in the third quarter, up $0.8 million, or 9%, from the second quarter this year, and down $3 million, or 24%, from the third quarter of 2024. For the first three quarters of 2025, operating expenses totaled $28.7 million, a $10.3 million, or 26%, improvement from $39 million in the same period last year. These sustained reductions demonstrate the structural impact of our prior cost-cutting actions and reinforce our disciplined approach to managing the business. Operating loss for the quarter hit a record low since going public at $7 million, down from $7.1 million in the second quarter this year and down from $9.7 million in the third quarter of 2024. We remain confident in our ability to improve margins over time as we scale production and execute on cost reduction initiatives. we remain confident in our ability to improve margins over time as we scale production and execute on cost reduction initiatives Turning to expenses, operating expenses were $9.5 million in the third quarter, up $0.8 million, or 9%, from the second quarter this year, and down $3 million, or 24%, from the third quarter of 2024. turning to expenses operating expenses were $9.5 million in the third quarter up $0.8 million or 9% from the second quarter this year and down $3 million or 24% from the third quarter of 2024 For the first three quarters of 2025, operating expenses totaled $28.7 million, a $10.3 million, or 26%, improvement from $39 million in the same period last year. for the first three quarters of 2025 operating expenses totaled $28.7 million a $10.3 million or 26% improvement from $39 million in the same period last year These sustained reductions demonstrate the structural impact of our prior cost-cutting actions and reinforce our disciplined approach to managing the business. these sustained reductions demonstrate the structural impact of our prior cost-cutting actions and reinforce our disciplined approach to managing the business Operating loss for the quarter hit a record low since going public at $7 million, down from $7.1 million in the second quarter this year and down from $9.7 million in the third quarter of 2024. operating loss for the quarter hit a record low since going public at $7 million down from $7.1 million in the second quarter this year and down from $9.7 million in the third quarter of 2024 Non-GAAP operating loss since the business went public also hit a record low at $4.8 million compared to $6.9 million in the second quarter this year and $6.6 million in the third quarter of 2024. For the first three quarters of 2025, operating loss was $23.3 million, improving from $31.3 million in the same period last year, while non-GAAP operating loss also improved to $19.7 million from $25.7 million in the period last year. Moving to the balance sheet, we ended the quarter with $14.1 million in cash and cash equivalents, up from $8.8 million at the end of last quarter. Our improvement in liquidity this quarter was boosted by three main factors. First, successful launch of our ATM program, which generated $2.4 million in net cash proceeds this quarter. Second, strategic inventory management. Non-GAAP operating loss since the business went public also hit a record low at $4.8 million compared to $6.9 million in the second quarter this year and $6.6 million in the third quarter of 2024. non-gaap operating loss since the business went public also hit a record low at $4.8 million compared to $6.9 million in the second quarter this year and $6.6 million in the third quarter of 2024 For the first three quarters of 2025, operating loss was $23.3 million, improving from $31.3 million in the same period last year, while non-GAAP operating loss also improved to $19.7 million from $25.7 million in the period last year. for the first three quarters of 2025 operating loss was $23.3 million improving from $31.3 million in the same period last year while non-gaap operating loss also improved to $19.7 million from $25.7 million in the period last year Moving to the balance sheet, we ended the quarter with $14.1 million in cash and cash equivalents, up from $8.8 million at the end of last quarter. moving to the balance sheet we ended the quarter with $14.1 million in cash and cash equivalents up from $8.8 million at the end of last quarter Our improvement in liquidity this quarter was boosted by three main factors. our improvement in liquidity this quarter was boosted by three main factors First, successful launch of our ATM program, which generated $2.4 million in net cash proceeds this quarter. first successful launch of our atm program which generated $2.4 million in net cash proceeds this quarter Second, strategic inventory management. second strategic inventory management Inventory declined to $25.2 million from $31 million last quarter, driven by strong unit sales outpacing production as we moved more units from existing inventory, reflecting our ongoing inventory management to support upcoming deliveries. Third, accounts receivable came down to $15.4 million at the end of the quarter from $18.1 million at the end of June. We had very strong collections this quarter, about $18.7 million, from customers as well as state grant program administrators. While our UPS deliveries carry longer payment terms, which increased new receivables in the quarter, we feel well-positioned for continued solid collections going into the next quarter. Our focus this quarter has been on execution, financial discipline, and strengthening the foundation for sustained growth. During the quarter, we took strategic actions to strengthen our balance sheet and extend our financial runway. Inventory declined to $25.2 million from $31 million last quarter, driven by strong unit sales outpacing production as we moved more units from existing inventory, reflecting our ongoing inventory management to support upcoming deliveries. inventory declined to $25.2 million from $31 million last quarter driven by strong unit sales outpacing production as we moved more units from existing inventory reflecting our ongoing inventory management to support upcoming deliveries Third, accounts receivable came down to $15.4 million at the end of the quarter from $18.1 million at the end of June. third accounts receivable came down to $15.4 million at the end of the quarter from $18.1 million at the end of june We had very strong collections this quarter, about $18.7 million, from customers as well as state grant program administrators. we had very strong collections this quarter about $18.7 million from customers as well as state grant program administrators While our UPS deliveries carry longer payment terms, which increased new receivables in the quarter, we feel well-positioned for continued solid collections going into the next quarter. while our ups deliveries carry longer payment terms which increased new receivables in the quarter we feel well-positioned for continued solid collections going into the next quarter Our focus this quarter has been on execution, financial discipline, and strengthening the foundation for sustained growth. our focus this quarter has been on execution financial discipline and strengthening the foundation for sustained growth During the quarter, we took strategic actions to strengthen our balance sheet and extend our financial runway. during the quarter we took strategic actions to strengthen our balance sheet and extend our financial runway We amended our $20 million convertible note, extending principal payments quarterly starting in Q4 2025 through early 2028 to enhance liquidity and provide greater flexibility. We also reached an agreement to terminate our Mesa facility lease that we acquired as part of the EMB acquisition during the first quarter of 2024, which is expected to generate approximately $20.7 million in cash savings through 2033. Although we're no longer responsible for rent on the Mesa facility, the termination agreement does require us to make 18 monthly payments totaling about $2.8 million. As part of the termination, we also recognize a $9.4 million gain in non-operating income, along with other required GAAP adjustments such as the removal of the related operating lease liabilities. We continue to actively manage our liquidity position and are exploring additional opportunities to further enhance it. We amended our $20 million convertible note, extending principal payments quarterly starting in Q4 2025 through early 2028 to enhance liquidity and provide greater flexibility. we amended our $20 million convertible note extending principal payments quarterly starting in q4 2025 through early 2028 to enhance liquidity and provide greater flexibility We also reached an agreement to terminate our Mesa facility lease that we acquired as part of the EMB acquisition during the first quarter of 2024, which is expected to generate approximately $20.7 million in cash savings through 2033. we also reached an agreement to terminate our mesa facility lease that we acquired as part of the emb acquisition during the first quarter of 2024 which is expected to generate approximately $20.7 million in cash savings through 2033 Although we're no longer responsible for rent on the Mesa facility, the termination agreement does require us to make 18 monthly payments totaling about $2.8 million. although we're no longer responsible for rent on the mesa facility the termination agreement does require us to make 18 monthly payments totaling about $2.8 million As part of the termination, we also recognize a $9.4 million gain in non-operating income, along with other required GAAP adjustments such as the removal of the related operating lease liabilities. as part of the termination we also recognize a $9.4 million gain in non-operating income along with other required gaap adjustments such as the removal of the related operating lease liabilities We continue to actively manage our liquidity position and are exploring additional opportunities to further enhance it. we continue to actively manage our liquidity position and are exploring additional opportunities to further enhance it Together, these actions demonstrate our disciplined approach to capital management and our ongoing commitment to positioning Xos for long-term stability and growth. Beyond the balance sheet actions, we continue to execute well operationally. We generated positive free cash flow of $3.1 million in the third quarter, marking the third time we've been free cash flow positive since going public. This is down slightly from $4.6 million in the second quarter, but is a major improvement from -$11.7 million we reported a year ago. That progress reflects strong deliveries and continued discipline in managing working capital. Finally, turning to guidance, we are reaffirming our full year 2025 guidance for revenue and unit deliveries and previously revised non-GAAP operating loss guidance. Revenue between $50.2 million and $65.8 million, non-GAAP operating loss between $24.4 million-$26.9 million, and unit deliveries between 320 and 420 units. Together, these actions demonstrate our disciplined approach to capital management and our ongoing commitment to positioning Xos for long-term stability and growth. together these actions demonstrate our disciplined approach to capital management and our ongoing commitment to positioning xos for long-term stability and growth Beyond the balance sheet actions, we continue to execute well operationally. beyond the balance sheet actions we continue to execute well operationally We generated positive free cash flow of $3.1 million in the third quarter, marking the third time we've been free cash flow positive since going public. we generated positive free cash flow of $3.1 million in the third quarter marking the third time we've been free cash flow positive since going public This is down slightly from $4.6 million in the second quarter, but is a major improvement from - $11.7 million we reported a year ago. this is down slightly from $4.6 million in the second quarter but is a major improvement from - $11.7 million we reported a year ago That progress reflects strong deliveries and continued discipline in managing working capital. that progress reflects strong deliveries and continued discipline in managing working capital Finally, turning to guidance, we are reaffirming our full year 2025 guidance for revenue and unit deliveries and previously revised non-GAAP operating loss guidance. finally turning to guidance we are reaffirming our full year 2025 guidance for revenue and unit deliveries and previously revised non-gaap operating loss guidance Revenue between $50.2 million and $65.8 million, non-GAAP operating loss between $24.4 million-$26.9 million, and unit deliveries between 320 and 420 units. revenue between $50.2 million and $65.8 million non-gaap operating loss between $24.4 million-$26.9 million and unit deliveries between 320 and 420 units With that, I'll turn the call back over to Dakota. With that, I'll turn the call back over to Dakota. with that i'll turn the call back over to dakota

Speaker 4: Thank you, Liana. Stepping into 2026, the momentum behind Xos is unmistakable. Our priorities are clear: accelerate growth, reinforce liquidity, and continue expanding margins with precision and discipline. Over the last 12 months, we've shown that a company can be both lean and innovative, that you can run efficiently without sacrificing the strength or competitiveness of your product portfolio. We've built a deep and diversified sales pipeline, even while navigating global supply chain disruptions that caught much of the industry off guard. Our ability to adapt quickly, to absorb unexpected shocks, and to keep delivering for customers is one of our defining capabilities. Customers notice, in a marketplace that changes by the week, resilience and reliability are currency, and they're becoming core reasons fleets are choosing Xos as a long-term partner. Thank you, Liana. thank you liana Stepping into 2026, the momentum behind Xos is unmistakable. stepping into 2026 the momentum behind xos is unmistakable Our priorities are clear: accelerate growth, reinforce liquidity, and continue expanding margins with precision and discipline. our priorities are clear accelerate growth reinforce liquidity and continue expanding margins with precision and discipline Over the last 12 months, we've shown that a company can be both lean and innovative, that you can run efficiently without sacrificing the strength or competitiveness of your product portfolio. over the last 12 months we've shown that a company can be both lean and innovative that you can run efficiently without sacrificing the strength or competitiveness of your product portfolio We've built a deep and diversified sales pipeline, even while navigating global supply chain disruptions that caught much of the industry off guard. we've built a deep and diversified sales pipeline even while navigating global supply chain disruptions that caught much of the industry off guard Our ability to adapt quickly, to absorb unexpected shocks, and to keep delivering for customers is one of our defining capabilities. our ability to adapt quickly to absorb unexpected shocks and to keep delivering for customers is one of our defining capabilities Customers notice, in a marketplace that changes by the week, resilience and reliability are currency, and they're becoming core reasons fleets are choosing Xos as a long-term partner. customers notice in a marketplace that changes by the week resilience and reliability are currency and they're becoming core reasons fleets are choosing xos as a long-term partner As we move toward what we expect to be our largest and most transformative year, our confidence is only growing. We believe we're positioned to confront challenges head-on and to continue building the most durable, dependable business in our sector. With that, I'll hand it back over to the operator for questions. As we move toward what we expect to be our largest and most transformative year, our confidence is only growing. as we move toward what we expect to be our largest and most transformative year our confidence is only growing We believe we're positioned to confront challenges head-on and to continue building the most durable, dependable business in our sector. we believe we're positioned to confront challenges head-on and to continue building the most durable dependable business in our sector With that, I'll hand it back over to the operator for questions. with that i'll hand it back over to the operator for questions

Speaker 5: Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If your question has already been addressed and you'd like to remove yourself from queue, please press star then two. At this time, we'll pause momentarily to assemble our roster. Today's first question comes from Craig Irwin with Roth Capital. Please go ahead. Thank you. thank you We will now begin the question-and-answer session. we will now begin the question-and-answer session To ask a question, you may press star then one on your telephone keypad. to ask a question you may press star then one on your telephone keypad If your question has already been addressed and you'd like to remove yourself from queue, please press star then two. if your question has already been addressed and you'd like to remove yourself from queue please press star then two At this time, we'll pause momentarily to assemble our roster. at this time we'll pause momentarily to assemble our roster Today's first question comes from Craig Irwin with Roth Capital. today's first question comes from craig irwin with roth capital Please go ahead. please go ahead

Speaker 3: Hey, guys. It's Andrew on for Craig. Congrats on the continued progress, and thanks for taking my questions. First one for me is on the hub. I mean, the use case for fleets is pretty obvious, but I think we're seeing increased activity here in the autonomous vehicle space, and you guys have talked about increasing demand for uses such as backup power applications. So kind of how should we think of the expanded opportunity for the hub platform now? Hey, guys. hey guys It's Andrew on for Craig. it's andrew on for craig Congrats on the continued progress, and thanks for taking my questions. congrats on the continued progress and thanks for taking my questions First one for me is on the hub. first one for me is on the hub I mean, the use case for fleets is pretty obvious, but I think we're seeing increased activity here in the autonomous vehicle space, and you guys have talked about increasing demand for uses such as backup power applications. i mean the use case for fleets is pretty obvious but i think we're seeing increased activity here in the autonomous vehicle space and you guys have talked about increasing demand for uses such as backup power applications So kind of how should we think of the expanded opportunity for the hub platform now? so kind of how should we think of the expanded opportunity for the hub platform now

Speaker 4: Yeah, Andrew, thanks for the question. With the hub opportunity, I think there will continue to be in the realm of double-digit growth in the next year for that EV charging segment, which is supported by a lot of our fleet customers, but also customers beyond the customers of Xos trucks. One of our larger customers that we've talked about is Waymo, the self-driving car company. They've been continuing to grow their purchases with us. We also have several utilities and state transportation agencies like Caltrans, who bought quite a few units. We continue to see that market growing at a very stable clip. Our power resiliency and backup power functions are going to be launched next year, and that's another exciting opportunity that we believe far exceeds the growth potential of the EV charging market. As you may know, the power cost in the U.S. Yeah, Andrew, thanks for the question. yeah andrew thanks for the question With the hub opportunity, I think there will continue to be in the realm of double-digit growth in the next year for that EV charging segment, which is supported by a lot of our fleet customers, but also customers beyond the customers of Xos trucks. with the hub opportunity i think there will continue to be in the realm of double-digit growth in the next year for that ev charging segment which is supported by a lot of our fleet customers but also customers beyond the customers of xos trucks One of our larger customers that we've talked about is Waymo, the self-driving car company. one of our larger customers that we've talked about is waymo the self-driving car company They've been continuing to grow their purchases with us. they've been continuing to grow their purchases with us We also have several utilities and state transportation agencies like Caltrans, who bought quite a few units. we also have several utilities and state transportation agencies like caltrans who bought quite a few units We continue to see that market growing at a very stable clip. we continue to see that market growing at a very stable clip Our power resiliency and backup power functions are going to be launched next year, and that's another exciting opportunity that we believe far exceeds the growth potential of the EV charging market. our power resiliency and backup power functions are going to be launched next year and that's another exciting opportunity that we believe far exceeds the growth potential of the ev charging market As you may know, the power cost in the U.S. as you may know the power cost in the u.s In the last five years has risen anywhere from 20%-50%, depending upon where you are in the States and what utility you're in. That incremental cost is borne by consumers and borne by businesses. While a lot of that market has been addressed by the consumer market, has been addressed by residential energy storage, there hasn't been a large influx of commercial and industrial buildings adopting energy storage. We have used significant opportunities in that market to participate in wholesale power markets, to do demand response programs, and to ultimately help businesses with reducing their total energy cost. That is really where our focus on growth is going to be for the hub in the years to come. In the last five years has risen anywhere from 20%- 50%, depending upon where you are in the States and what utility you're in. in the last five years has risen anywhere from 20%- 50% depending upon where you are in the states and what utility you're in That incremental cost is borne by consumers and borne by businesses. that incremental cost is borne by consumers and borne by businesses While a lot of that market has been addressed by the consumer market, has been addressed by residential energy storage, there hasn't been a large influx of commercial and industrial buildings adopting energy storage. while a lot of that market has been addressed by the consumer market has been addressed by residential energy storage there hasn't been a large influx of commercial and industrial buildings adopting energy storage We have used significant opportunities in that market to participate in wholesale power markets, to do demand response programs, and to ultimately help businesses with reducing their total energy cost. we have used significant opportunities in that market to participate in wholesale power markets to do demand response programs and to ultimately help businesses with reducing their total energy cost That is really where our focus on growth is going to be for the hub in the years to come. that is really where our focus on growth is going to be for the hub in the years to come We haven't provided specific guidance around how we're quantifying that growth and volume, but we expect it will follow similar trajectories to the launch of the Xos Hub charging system and also continue to be a higher margin product that's really more of a unique product in a segment that hasn't been widely addressed by other suppliers in the space. We haven't provided specific guidance around how we're quantifying that growth and volume, but we expect it will follow similar trajectories to the launch of the Xos Hub charging system and also continue to be a higher margin product that's really more of a unique product in a segment that hasn't been widely addressed by other suppliers in the space. we haven't provided specific guidance around how we're quantifying that growth and volume but we expect it will follow similar trajectories to the launch of the xos hub charging system and also continue to be a higher margin product that's really more of a unique product in a segment that hasn't been widely addressed by other suppliers in the space

Speaker 3: Great. It seems like an exciting opportunity, and thanks for the details. Second one for me here is on your chassis deliveries to Blue Bird. You seem like they're accelerating. You guys said, I believe, 80 more orders following quarter-end. You touched on it in the prior remarks, but can you just talk about customer feedback, what you're seeing, and what's kind of driving this accelerated growth? Great. great It seems like an exciting opportunity, and thanks for the details. it seems like an exciting opportunity and thanks for the details Second one for me here is on your chassis deliveries to Blue Bird. second one for me here is on your chassis deliveries to blue bird You seem like they're accelerating. you seem like they're accelerating You guys said, I believe, 80 more orders following quarter-end. you guys said i believe 80 more orders following quarter-end You touched on it in the prior remarks, but can you just talk about customer feedback, what you're seeing, and what's kind of driving this accelerated growth? you touched on it in the prior remarks but can you just talk about customer feedback what you're seeing and what's kind of driving this accelerated growth

Speaker 4: Yeah, absolutely. It has been an exciting partnership with them, and we have continued to build this over the last couple of years, and it is finally starting to take hold. We have delivered those first 20 or so units, and they are actually operating with a customer up in the Northeast right now. One of the exciting things for us is that Blue Bird has been selling electric vehicles for many years now, working with other powertrain providers. Their powertrain options, I would say, are more limited than what we can provide. One of the first projects we helped them bring to market was a shorter wheelbase powertrain configuration that had not been an option before for some of these short wheelbase school buses that are used in city environments. Yeah, absolutely. It has been an exciting partnership with them, and we have continued to build this over the last couple of years, and it is finally starting to take hold. We have delivered those first 20 or so units, and they are actually operating with a customer up in the Northeast right now. yeah absolutely. it has been an exciting partnership with them and we have continued to build this over the last couple of years and it is finally starting to take hold. we have delivered those first 20 or so units and they are actually operating with a customer up in the northeast right now One of the exciting things for us is that Blue Bird has been selling electric vehicles for many years now, working with other powertrain providers. one of the exciting things for us is that blue bird has been selling electric vehicles for many years now working with other powertrain providers Their powertrain options, I would say, are more limited than what we can provide. their powertrain options i would say are more limited than what we can provide One of the first projects we helped them bring to market was a shorter wheelbase powertrain configuration that had not been an option before for some of these short wheelbase school buses that are used in city environments. one of the first projects we helped them bring to market was a shorter wheelbase powertrain configuration that had not been an option before for some of these short wheelbase school buses that are used in city environments We packaged that first powertrain with them over a year ago, went through the full durability and validation process, and now that's in market with customers. If there's anything we've learned this week from being at the Blue Bird dealer meeting in Austin, it's that there's a lot of interest in that product beyond the initial launch customer. We mentioned that we've got those additional follow-on orders subsequent to the quarter close, and we are actively working on additional variants with increased capacity and range that will ultimately start marketing to the Blue Bird dealer body as well as many of their national accounts. What's really exciting about that is there's a significant growth opportunity in school bus. We packaged that first powertrain with them over a year ago, went through the full durability and validation process, and now that's in market with customers. we packaged that first powertrain with them over a year ago went through the full durability and validation process and now that's in market with customers If there's anything we've learned this week from being at the Blue Bird dealer meeting in Austin, it's that there's a lot of interest in that product beyond the initial launch customer. if there's anything we've learned this week from being at the blue bird dealer meeting in austin it's that there's a lot of interest in that product beyond the initial launch customer We mentioned that we've got those additional follow-on orders subsequent to the quarter close, and we are actively working on additional variants with increased capacity and range that will ultimately start marketing to the Blue Bird dealer body as well as many of their national accounts. we mentioned that we've got those additional follow-on orders subsequent to the quarter close and we are actively working on additional variants with increased capacity and range that will ultimately start marketing to the blue bird dealer body as well as many of their national accounts What's really exciting about that is there's a significant growth opportunity in school bus. what's really exciting about that is there's a significant growth opportunity in school bus We're still seeing high rates of electrification, Blue Bird being the leading alternative powertrain provider in the school bus industry, and we are going to be their first LFP battery option and powertrain option, which will, I think, significantly help with their customers in adopting these vehicles just because it's going to increase the reliability and the resiliency of these battery packs for school bus fleets, which obviously reliability and durability and longevity for their fleet is top of mind. It's probably one of the single most important evaluating criteria when they're making a determination of which partner they work with. We expect that to continue to grow into 2026 pretty substantially, and hopefully we'll be able to talk about that more by next quarter and give a little bit more detail on those orders beyond the additional 80. We're still seeing high rates of electrification, Blue Bird being the leading alternative powertrain provider in the school bus industry, and we are going to be their first LFP battery option and powertrain option, which will, I think, significantly help with their customers in adopting these vehicles just because it's going to increase the reliability and the resiliency of these battery packs for school bus fleets, which obviously reliability and durability and longevity for their fleet is top of mind. we're still seeing high rates of electrification blue bird being the leading alternative powertrain provider in the school bus industry and we are going to be their first lfp battery option and powertrain option which will i think significantly help with their customers in adopting these vehicles just because it's going to increase the reliability and the resiliency of these battery packs for school bus fleets which obviously reliability and durability and longevity for their fleet is top of mind It's probably one of the single most important evaluating criteria when they're making a determination of which partner they work with. it's probably one of the single most important evaluating criteria when they're making a determination of which partner they work with We expect that to continue to grow into 2026 pretty substantially, and hopefully we'll be able to talk about that more by next quarter and give a little bit more detail on those orders beyond the additional 80. we expect that to continue to grow into 2026 pretty substantially and hopefully we'll be able to talk about that more by next quarter and give a little bit more detail on those orders beyond the additional 80

Speaker 3: Great. I appreciate the call. The last one for me, if I may, you guys had another solid quarter of unit deliveries. I believe you're at 294 for the year. You reiterated your guide of 320-420 for the year. Can you just kind of talk about the puts and takes, reaching kind of the high and low end of the guide there? Great. great I appreciate the call. i appreciate the call The last one for me, if I may, you guys had another solid quarter of unit deliveries. the last one for me if i may you guys had another solid quarter of unit deliveries I believe you're at 294 for the year. i believe you're at 294 for the year You reiterated your guide of 320-420 for the year. you reiterated your guide of 320-420 for the year Can you just kind of talk about the puts and takes, reaching kind of the high and low end of the guide there? can you just kind of talk about the puts and takes reaching kind of the high and low end of the guide there

Speaker 4: Yeah, as we've talked about in the past, we always have seasonal delays in delivering through Q4, and that's attributed to the industry that we serve. We work with the largest parcel delivery companies in the world, and many of them are operating during their peak season in Q4, meaning once the Thanksgiving holiday starts, their network volumes can often double, and they're dealing with a lot of other additional growth and package volume than they normally do. It is generally a lighter quarter from our key customers in Q4. We expect a little bit of that impact to hit us in Q4. We still expect to remain within that guidance range, but there will be other deliveries in Q4, such as powertrain deliveries and some other customers and hub deliveries that will continue to round out the year. Yeah, as we've talked about in the past, we always have seasonal delays in delivering through Q4, and that's attributed to the industry that we serve. yeah as we've talked about in the past we always have seasonal delays in delivering through q4 and that's attributed to the industry that we serve We work with the largest parcel delivery companies in the world, and many of them are operating during their peak season in Q4, meaning once the Thanksgiving holiday starts, their network volumes can often double, and they're dealing with a lot of other additional growth and package volume than they normally do. we work with the largest parcel delivery companies in the world and many of them are operating during their peak season in q4 meaning once the thanksgiving holiday starts their network volumes can often double and they're dealing with a lot of other additional growth and package volume than they normally do It is generally a lighter quarter from our key customers in Q4. it is generally a lighter quarter from our key customers in q4 We expect a little bit of that impact to hit us in Q4. we expect a little bit of that impact to hit us in q4 We still expect to remain within that guidance range, but there will be other deliveries in Q4, such as powertrain deliveries and some other customers and hub deliveries that will continue to round out the year. we still expect to remain within that guidance range but there will be other deliveries in q4 such as powertrain deliveries and some other customers and hub deliveries that will continue to round out the year We expect that to continue to grow back in Q1 and Q2 of next year. We expect that to continue to grow back in Q1 and Q2 of next year. we expect that to continue to grow back in q1 and q2 of next year

Speaker 3: Great. I appreciate the call and congrats on the strong results. Great. great I appreciate the call and congrats on the strong results. i appreciate the call and congrats on the strong results

Speaker 4: Thank you. Thank you. thank you

Speaker 5: Thank you. Once again, if you have a question, please press star then one. Our next question comes from Ted Jackson at Northland Securities. Please go ahead. Thank you. thank you Once again, if you have a question, please press star then one. once again if you have a question please press star then one Our next question comes from Ted Jackson at Northland Securities. our next question comes from ted jackson at northland securities Please go ahead. please go ahead

Speaker 6: Thank you very much. I will echo congratulations on a quarter that went well across the board. Thank you very much. thank you very much I will echo congratulations on a quarter that went well across the board. i will echo congratulations on a quarter that went well across the board

Speaker 4: Thanks, Ted. Thanks, Ted. thanks ted

Speaker 6: Let's start with tariffs, Dakota. I mean, one of the comments that you made in your prepared remarks was that you were able to do some renegotiation with UPS with regards to tariffs. I guess the first question around tariffs is, have you been able to price adjust that across kind of your product offering at this point, or is there still some impact that will come to bear as we roll through going forward? Let's start with tariffs, Dakota. let's start with tariffs dakota I mean, one of the comments that you made in your prepared remarks was that you were able to do some renegotiation with UPS with regards to tariffs. i mean one of the comments that you made in your prepared remarks was that you were able to do some renegotiation with ups with regards to tariffs I guess the first question around tariffs is, have you been able to price adjust that across kind of your product offering at this point, or is there still some impact that will come to bear as we roll through going forward? i guess the first question around tariffs is have you been able to price adjust that across kind of your product offering at this point or is there still some impact that will come to bear as we roll through going forward

Speaker 4: Yeah, I'm happy to start, and I'll pass it over to Gio to follow on. I think we're taking a multi-step approach to insulate ourselves from the volatility that we've experienced this year from tariff regime changes and uncertainty in that tariff environment. The first of which is focusing on reshoring or getting as much domestic content as possible to make sure that we don't face this kind of volatility in the years to come. The second is working with our suppliers and sharing in that cost and helping us to realize better cost improvements or accelerated cost-down efforts that they understand, obviously, will help them grow their sales pipeline with us. Sharing in some of that exposure has been, I think, the second most impactful decision. Yeah, I'm happy to start, and I'll pass it over to Gio to follow on. yeah i'm happy to start and i'll pass it over to gio to follow on I think we're taking a multi-step approach to insulate ourselves from the volatility that we've experienced this year from tariff regime changes and uncertainty in that tariff environment. i think we're taking a multi-step approach to insulate ourselves from the volatility that we've experienced this year from tariff regime changes and uncertainty in that tariff environment The first of which is focusing on reshoring or getting as much domestic content as possible to make sure that we don't face this kind of volatility in the years to come. the first of which is focusing on reshoring or getting as much domestic content as possible to make sure that we don't face this kind of volatility in the years to come The second is working with our suppliers and sharing in that cost and helping us to realize better cost improvements or accelerated cost-down efforts that they understand, obviously, will help them grow their sales pipeline with us. the second is working with our suppliers and sharing in that cost and helping us to realize better cost improvements or accelerated cost-down efforts that they understand obviously will help them grow their sales pipeline with us Sharing in some of that exposure has been, I think, the second most impactful decision. sharing in some of that exposure has been i think the second most impactful decision The third and the last area is just, again, an effort to work with our customers, not to just increase prices to them, but to give them clarity around the tariff changes that have impacted us and then figure out how we share in that tariff exposure. We want to build long-term, durable relationships with our customers. These are not fly-by-night customers. They are some of the most sophisticated fleets in the world. Our efforts are not just to pass everything along to them, but to demonstrate to them that we are willing to work together to share in that cost exposure while still trying to reduce the acquisition costs of our vehicles for them so they can be competitive from a total cost of ownership standpoint and ultimately get these vehicles to near-price parity with diesel vehicles. The third and the last area is just, again, an effort to work with our customers, not to just increase prices to them, but to give them clarity around the tariff changes that have impacted us and then figure out how we share in that tariff exposure. the third and the last area is just again an effort to work with our customers not to just increase prices to them but to give them clarity around the tariff changes that have impacted us and then figure out how we share in that tariff exposure We want to build long-term, durable relationships with our customers. we want to build long-term durable relationships with our customers These are not fly-by-night customers. They are some of the most sophisticated fleets in the world. these are not fly-by-night customers. they are some of the most sophisticated fleets in the world Our efforts are not just to pass everything along to them, but to demonstrate to them that we are willing to work together to share in that cost exposure while still trying to reduce the acquisition costs of our vehicles for them so they can be competitive from a total cost of ownership standpoint and ultimately get these vehicles to near-price parity with diesel vehicles. our efforts are not just to pass everything along to them but to demonstrate to them that we are willing to work together to share in that cost exposure while still trying to reduce the acquisition costs of our vehicles for them so they can be competitive from a total cost of ownership standpoint and ultimately get these vehicles to near-price parity with diesel vehicles I'll let Gio add a little bit more context too. I'll let Gio add a little bit more context too. i'll let gio add a little bit more context too

Speaker 1: Yeah, I think Dakota hit the nail on the head. It's really been, it's kept our supply chain team busy with tariff changes starting earlier in the year. We've seen some continued, at least talk of changes. We are keeping our options open, working with our supply base, establishing backup supply in critical parts where needed. It's really on the cost front been an open conversation, and there's been willingness to share in some of the cost increases between ourselves, our suppliers, and our customers. We're doing everything we can to make sure we can guarantee supply going forward without blowing up costs. Yeah, I think Dakota hit the nail on the head. yeah i think dakota hit the nail on the head It's really been, it's kept our supply chain team busy with tariff changes starting earlier in the year. it's really been it's kept our supply chain team busy with tariff changes starting earlier in the year We've seen some continued, at least talk of changes. we've seen some continued at least talk of changes We are keeping our options open, working with our supply base, establishing backup supply in critical parts where needed. we are keeping our options open working with our supply base establishing backup supply in critical parts where needed It's really on the cost front been an open conversation, and there's been willingness to share in some of the cost increases between ourselves, our suppliers, and our customers. it's really on the cost front been an open conversation and there's been willingness to share in some of the cost increases between ourselves our suppliers and our customers We're doing everything we can to make sure we can guarantee supply going forward without blowing up costs. we're doing everything we can to make sure we can guarantee supply going forward without blowing up costs

Speaker 6: Okay. Next question. First, so you shipped 18 powertrains to Blue Bird during the third quarter, and then you had 80 orders since that time? Okay. okay Next question. next question First, so you shipped 18 powertrains to Blue Bird during the third quarter, and then you had 80 orders since that time? first so you shipped 18 powertrains to blue bird during the third quarter and then you had 80 orders since that time

Speaker 4: Yeah, approximately. I think it was closer to exactly 75 incremental orders. Yeah, we've had substantial follow-on since we made those other deliveries. Yeah, approximately. yeah approximately I think it was closer to exactly 75 incremental orders. i think it was closer to exactly 75 incremental orders Yeah, we've had substantial follow-on since we made those other deliveries. yeah we've had substantial follow-on since we made those other deliveries

Speaker 6: If you did 18 powertrains, did you have any hubs went out during the quarter? If you did 18 powertrains, did you have any hubs went out during the quarter? if you did 18 powertrains did you have any hubs went out during the quarter

Speaker 4: Liana, we have that, I think, in the. Liana, we have that, I think, in the. liana we have that i think in the

Speaker 6: Yeah, it'll be in the Q. I haven't looked at the Q yet. It's more of a part of a question. That's what I'm going with it. If you don't have it in front of you, it's not that big of a deal. And then Dakota. Yeah, it'll be in the Q. yeah it'll be in the q I haven't looked at the Q yet. i haven't looked at the q yet It's more of a part of a question. it's more of a part of a question That's what I'm going with it. that's what i'm going with it If you don't have it in front of you, it's not that big of a deal. And then Dakota. if you don't have it in front of you it's not that big of a deal and then dakota

Speaker 2: Yeah. We did have incremental hubs. While we do not disclose the breakout between powertrains and hubs, we did have hubs deliveries as well this quarter. Yeah. yeah We did have incremental hubs. we did have incremental hubs While we do not disclose the breakout between powertrains and hubs, we did have hubs deliveries as well this quarter. while we do not disclose the breakout between powertrains and hubs we did have hubs deliveries as well this quarter

Speaker 6: Usually, actually, you do break it out in the Q. Anyway, so then with the 75 new powertrains, will those be, are those, the bulk of those will ship in 2026? Usually, actually, you do break it out in the Q. usually actually you do break it out in the q Anyway, so then with the 75 new powertrains, will those be, are those, the bulk of those will ship in 2026? anyway so then with the 75 new powertrains will those be are those the bulk of those will ship in 2026

Speaker 4: That's correct. Yeah. That's correct. that's correct Yeah. yeah

Speaker 6: When I think about that, hub is growing fast. Powertrains is growing fast. You're bringing the cost of tariffs more in line. If you go forward, you're going to have a mix shift towards your higher margin products in 2026, along with less of a drag on tariffs. What can we think about when we, I mean, it's more of a general concept, but what kind of margin improvement do you think you could get in 2026, versus 2025, with those tailwinds, if you would? When I think about that, hub is growing fast. when i think about that hub is growing fast Powertrains is growing fast. powertrains is growing fast You're bringing the cost of tariffs more in line. you're bringing the cost of tariffs more in line If you go forward, you're going to have a mix shift towards your higher margin products in 2026, along with less of a drag on tariffs. if you go forward you're going to have a mix shift towards your higher margin products in 2026 along with less of a drag on tariffs What can we think about when we, I mean, it's more of a general concept, but what kind of margin improvement do you think you could get in 2026, versus 2025, with those tailwinds, if you would? what can we think about when we i mean it's more of a general concept but what kind of margin improvement do you think you could get in 2026 versus 2025 with those tailwinds if you would

Speaker 4: Yeah. We haven't provided specific guidance around next year. I think when we look at the margin profile of our core truck products, it's really variable depending upon our customer profile. That can be as low as the low teens to kind of the mid 20% gross margin range based upon product configuration, specifications, customer pricing details, bulk purchases, things of that nature. When we look at our other product lines, like the powertrain and the hub business, those are generally, I would say, in the kind of 15%-35% range, with the hub representing that higher end of that range, and the powertrain configurations representing kind of the lower to the middle portion of that range. You're right in assuming that the margin mix will shift towards the higher end of our margin spectrum. Yeah. yeah We haven't provided specific guidance around next year. we haven't provided specific guidance around next year I think when we look at the margin profile of our core truck products, it's really variable depending upon our customer profile. i think when we look at the margin profile of our core truck products it's really variable depending upon our customer profile That can be as low as the low teens to kind of the mid 20% gross margin range based upon product configuration, specifications, customer pricing details, bulk purchases, things of that nature. that can be as low as the low teens to kind of the mid 20% gross margin range based upon product configuration specifications customer pricing details bulk purchases things of that nature When we look at our other product lines, like the powertrain and the hub business, those are generally, I would say, in the kind of 15%-35% range, with the hub representing that higher end of that range, and the powertrain configurations representing kind of the lower to the middle portion of that range. when we look at our other product lines like the powertrain and the hub business those are generally i would say in the kind of 15%-35% range with the hub representing that higher end of that range and the powertrain configurations representing kind of the lower to the middle portion of that range You're right in assuming that the margin mix will shift towards the higher end of our margin spectrum. you're right in assuming that the margin mix will shift towards the higher end of our margin spectrum That is something that, as we work with our partners and our customers, I think we can continue to mitigate and minimize the exposure and disruption from tariffs to further improve that in a way that benefits both of us and hopefully improves margin on our powertrain kits as well as on their end-user products that they are selling to their customers. That is something that, as we work with our partners and our customers, I think we can continue to mitigate and minimize the exposure and disruption from tariffs to further improve that in a way that benefits both of us and hopefully improves margin on our powertrain kits as well as on their end-user products that they are selling to their customers. that is something that as we work with our partners and our customers i think we can continue to mitigate and minimize the exposure and disruption from tariffs to further improve that in a way that benefits both of us and hopefully improves margin on our powertrain kits as well as on their end-user products that they are selling to their customers

Speaker 6: I mean, is it fair to just conceptually that the chances are that you'll have a noticeable improvement with regards to your margins in 2026 versus 2025 because of how the mix of your business is changing? I mean, is it fair to just conceptually that the chances are that you'll have a noticeable improvement with regards to your margins in 2026 versus 2025 because of how the mix of your business is changing? i mean is it fair to just conceptually that the chances are that you'll have a noticeable improvement with regards to your margins in 2026 versus 2025 because of how the mix of your business is changing

Speaker 4: Yeah. I think that's a very fair assumption. Yeah. yeah I think that's a very fair assumption. i think that's a very fair assumption

Speaker 6: Okay. Can I touch over on the lease? You have $2.8 million that you're going to be paying over the next 18 months. Is that what you said? Okay. okay Can I touch over on the lease? can i touch over on the lease You have $2.8 million that you're going to be paying over the next 18 months. you have $2.8 million that you're going to be paying over the next 18 months Is that what you said? is that what you said

Speaker 4: That's correct. That's correct. that's correct

Speaker 6: Yeah. So basically, then it's like, what is it? Like $450,000 a quarter, $470,000 a quarter, and then you'll be done in as you exit 2026 for the most part, into 2027. And then that. Yeah. yeah So basically, then it's like, what is it? so basically then it's like what is it Like $450,000 a quarter, $470,000 a quarter, and then you'll be done in as you exit 2026 for the most part, into 2027. like $450,000 a quarter $470,000 a quarter and then you'll be done in as you exit 2026 for the most part into 2027 And then that. and then that

Speaker 4: That's exactly right. That's exactly right. that's exactly right

Speaker 6: With regards to working capital, you've made tremendous progress with regards to your working capital in the last couple of quarters. Can we expect to see continued improvement on that as we go into the fourth quarter and then beyond? With regards to working capital, you've made tremendous progress with regards to your working capital in the last couple of quarters. with regards to working capital you've made tremendous progress with regards to your working capital in the last couple of quarters Can we expect to see continued improvement on that as we go into the fourth quarter and then beyond? can we expect to see continued improvement on that as we go into the fourth quarter and then beyond

Speaker 4: Yeah. That's a deliberate part of our focus. I have to beg Gio to make any payments and to release any payments that are going out to our vendors. No, in all honesty, I think it's a team effort across the company to focus on how we can manage cash flow, how we can improve receivables collection. We've had some very supportive customers that have been willing to work with us on the terms that we offer them and ensuring that they're adhering to those terms and paying in a more timely manner. One of the most significant drivers of this is that increased product mix away from trucks and direct sales of trucks will reflect a lower proportion of those sales being driven by incentives. That'll shorten our receivables time dramatically if we don't have to collect from those incentive agencies or government agencies. Yeah. yeah That's a deliberate part of our focus. that's a deliberate part of our focus I have to beg Gio to make any payments and to release any payments that are going out to our vendors. i have to beg gio to make any payments and to release any payments that are going out to our vendors No, in all honesty, I think it's a team effort across the company to focus on how we can manage cash flow, how we can improve receivables collection. no in all honesty i think it's a team effort across the company to focus on how we can manage cash flow how we can improve receivables collection We've had some very supportive customers that have been willing to work with us on the terms that we offer them and ensuring that they're adhering to those terms and paying in a more timely manner. we've had some very supportive customers that have been willing to work with us on the terms that we offer them and ensuring that they're adhering to those terms and paying in a more timely manner One of the most significant drivers of this is that increased product mix away from trucks and direct sales of trucks will reflect a lower proportion of those sales being driven by incentives. one of the most significant drivers of this is that increased product mix away from trucks and direct sales of trucks will reflect a lower proportion of those sales being driven by incentives That'll shorten our receivables time dramatically if we don't have to collect from those incentive agencies or government agencies. that'll shorten our receivables time dramatically if we don't have to collect from those incentive agencies or government agencies

Speaker 1: We should expect to see, just generally speaking, as we go forward, an improvement in DSOs. I mean, I tend to look at inventory on a daily basis too, but a continued improvement there relative to what you mean, the progress that you've made in the second and the third quarter. We'll see even more improvement kind of as we march forward over the next several quarters. We should expect to see, just generally speaking, as we go forward, an improvement in DSOs. we should expect to see just generally speaking as we go forward an improvement in dsos I mean, I tend to look at inventory on a daily basis too, but a continued improvement there relative to what you mean, the progress that you've made in the second and the third quarter. i mean i tend to look at inventory on a daily basis too but a continued improvement there relative to what you mean the progress that you've made in the second and the third quarter We'll see even more improvement kind of as we march forward over the next several quarters. we'll see even more improvement kind of as we march forward over the next several quarters

Speaker 4: That's fine. That's fine. that's fine

Speaker 6: My last one is kind of a question and kind of more just asking for some commentary. There was a—I just saw it in the journal today, so the timing was just kind of average forward, perfect. One of your peers, Harbinger, did a raise of—I do not know what it was, like $150 million-$160 million with FedEx. It is the lead. FedEx is, like they say, that FedEx is basically going to take a lot of their product, and they are spewing out that they are going to ship 3,000 units next year. I mean, how do you think about that? Does that give you any kind of pause as it relates to your relationship with FedEx? My last one is kind of a question and kind of more just asking for some commentary. my last one is kind of a question and kind of more just asking for some commentary There was a—I just saw it in the journal today, so the timing was just kind of average forward, perfect. there was a—i just saw it in the journal today so the timing was just kind of average forward perfect One of your peers, Harbinger, did a raise of—I do not know what it was, like $150 million-$160 million with FedEx. one of your peers harbinger did a raise of—i do not know what it was like $150 million-$160 million with fedex It is the lead. it is the lead FedEx is, like they say, that FedEx is basically going to take a lot of their product, and they are spewing out that they are going to ship 3,000 units next year. fedex is like they say that fedex is basically going to take a lot of their product and they are spewing out that they are going to ship 3,000 units next year I mean, how do you think about that? i mean how do you think about that Does that give you any kind of pause as it relates to your relationship with FedEx? does that give you any kind of pause as it relates to your relationship with fedex Or you also could look at it, the fact that they're able to raise that kind of money, that it says it's also an opportunity to say a vote, if you would, of confidence in your end markets and the opportunity that you yourself face. I mean, have a little discussion about that. Or you also could look at it, the fact that they're able to raise that kind of money, that it says it's also an opportunity to say a vote, if you would, of confidence in your end markets and the opportunity that you yourself face. or you also could look at it the fact that they're able to raise that kind of money that it says it's also an opportunity to say a vote if you would of confidence in your end markets and the opportunity that you yourself face I mean, have a little discussion about that. i mean have a little discussion about that

Speaker 4: Yeah. I think from—I'll kind of segment the question, but I think from a capital markets standpoint, it's an incredible validation and proof point that there's still interest from investors in investing into the transportation business and into commercial electric vehicles, which we see as a very positive indicator because in the last couple of years, it has been different in what we saw from the fundraising environment in the preceding few years. I think that's a great indicator for our industry as a whole and for our ongoing access to capital. Secondly, I think pertaining to the commercial opportunity that exists, we view FedEx as a critical customer of ours and a key customer, and we want to continue to work with them. We've built an incredible relationship with the Express team in Memphis and also the former ground team in Pittsburgh. Yeah. yeah I think from—I'll kind of segment the question, but I think from a capital markets standpoint, it's an incredible validation and proof point that there's still interest from investors in investing into the transportation business and into commercial electric vehicles, which we see as a very positive indicator because in the last couple of years, it has been different in what we saw from the fundraising environment in the preceding few years. i think from—i'll kind of segment the question but i think from a capital markets standpoint it's an incredible validation and proof point that there's still interest from investors in investing into the transportation business and into commercial electric vehicles which we see as a very positive indicator because in the last couple of years it has been different in what we saw from the fundraising environment in the preceding few years I think that's a great indicator for our industry as a whole and for our ongoing access to capital. i think that's a great indicator for our industry as a whole and for our ongoing access to capital Secondly, I think pertaining to the commercial opportunity that exists, we view FedEx as a critical customer of ours and a key customer, and we want to continue to work with them. secondly i think pertaining to the commercial opportunity that exists we view fedex as a critical customer of ours and a key customer and we want to continue to work with them We've built an incredible relationship with the Express team in Memphis and also the former ground team in Pittsburgh. we've built an incredible relationship with the express team in memphis and also the former ground team in pittsburgh It is now a part of FedEx Corporate. I think that relationship will continue to extend. I actually messaged them and congratulated them this morning on the announcement. I think we see them as a strategic partner. One thing I'll mention, which I think is really important and relevant, is these large parcel delivery companies and large fleets, they do not sole source with any of their products and any of their technology in their fleets. They are always going to have generally two to three, sometimes even four primary suppliers that they work with to maintain some competitive tension, to make sure they do not have too much exposure to a single company. It is now a part of FedEx Corporate. it is now a part of fedex corporate I think that relationship will continue to extend. i think that relationship will continue to extend I actually messaged them and congratulated them this morning on the announcement. i actually messaged them and congratulated them this morning on the announcement I think we see them as a strategic partner. i think we see them as a strategic partner One thing I'll mention, which I think is really important and relevant, is these large parcel delivery companies and large fleets, they do not sole source with any of their products and any of their technology in their fleets. They are always going to have generally two to three, sometimes even four primary suppliers that they work with to maintain some competitive tension, to make sure they do not have too much exposure to a single company. one thing i'll mention which i think is really important and relevant is these large parcel delivery companies and large fleets they do not sole source with any of their products and any of their technology in their fleets. they are always going to have generally two to three sometimes even four primary suppliers that they work with to maintain some competitive tension to make sure they do not have too much exposure to a single company We see another company in this space as a validation that the industry is still growing, there's still opportunity, and there's still really strong customers that are willing to make investments and grow in this segment. I think for us, FedEx is one of many customers that we have, but we're still excited, very excited about working with them and continuing to work with them. To this point, it's not referred to as FedEx Ground anymore, but for their contractor business, we are the largest electric vehicle vendor with more electric vehicles than anybody deployed across their network. I think we expect that trend to continue, and we'll keep working with the contractors as well as with their fleet management, their centralized fleet management for their corporate-owned fleet. I think it actually bodes well for the industry and for us as a company. We see another company in this space as a validation that the industry is still growing, there's still opportunity, and there's still really strong customers that are willing to make investments and grow in this segment. we see another company in this space as a validation that the industry is still growing there's still opportunity and there's still really strong customers that are willing to make investments and grow in this segment I think for us, FedEx is one of many customers that we have, but we're still excited, very excited about working with them and continuing to work with them. i think for us fedex is one of many customers that we have but we're still excited very excited about working with them and continuing to work with them To this point, it's not referred to as FedEx Ground anymore, but for their contractor business, we are the largest electric vehicle vendor with more electric vehicles than anybody deployed across their network. to this point it's not referred to as fedex ground anymore but for their contractor business we are the largest electric vehicle vendor with more electric vehicles than anybody deployed across their network I think we expect that trend to continue, and we'll keep working with the contractors as well as with their fleet management, their centralized fleet management for their corporate-owned fleet. i think we expect that trend to continue and we'll keep working with the contractors as well as with their fleet management their centralized fleet management for their corporate-owned fleet I think it actually bodes well for the industry and for us as a company. i think it actually bodes well for the industry and for us as a company

Speaker 6: Great. So again, correct. On the quarter, I mean, literally, you just moved the ball. As my wife says, you moved the chains, and you did it on every front in your business. So congrats. Great. great So again, correct. so again correct On the quarter, I mean, literally, you just moved the ball. on the quarter i mean literally you just moved the ball As my wife says, you moved the chains, and you did it on every front in your business. as my wife says you moved the chains and you did it on every front in your business So congrats. so congrats

Speaker 4: Thank you. Thanks, Ted. Appreciate you calling in. Thank you. thank you Thanks, Ted. thanks ted Appreciate you calling in. appreciate you calling in

Speaker 5: Thank you. That concludes our question and answer session and today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day. Thank you. thank you That concludes our question and answer session and today's conference call. that concludes our question and answer session and today's conference call We thank you all for attending today's presentation. we thank you all for attending today's presentation You may now disconnect your lines and have a wonderful day. you may now disconnect your lines and have a wonderful day