Q4 2025 Xos Inc Earnings Call

March 26, 2026

Speaker #2: Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions.

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Speaker #2: I would now like to turn the call over to David Zlotchew, general counsel. Please go ahead. Thank you, everyone, for joining us today. Hosting the call with me are Xos's Chief Executive Officer, Dakota Semler; Xos's Chief Operating Officer, Giordano Sordoni; and Xos's Chief Financial Officer, Liana Pogosyan.

David Zlotchew: Thank you everyone for joining us today. Hosting the call with me are Xos's Chief Executive Officer, Dakota Semler, Xos's Chief Operating Officer, Giordano Sordoni, and Xos's Chief Financial Officer, Liana Pogosyan. Today, after the close of regular trading, Xos issued its Q4 and full year 2025 earnings press release. As you listen to today's conference call, we encourage you to have our press release in front of you, which includes our financial results as well as commentary on the quarter and year ended December 31, 2025. Management's statements today reflect management's views as of today, March 26, 2026 only and will include forward-looking statements, including statements regarding our fiscal year 2026, management's expectations for future financial and operational performance, and other statements regarding our plans, prospects, and goals.

Speaker #2: an. Today, after the close of regular trading, Xos issued its fourth quarter and full year 2025 earnings press release. As you listen to today's conference call, we encourage you to have our press release in front of you which includes our financial results as well as commentary on the quarter and year ended December 31, 2025.

Speaker #2: Management statements today reflect management's views as of today, March 26, 2026, only, and will include forward-looking statements, including statements regarding our fiscal year 2026, management's expectations for future financial and operational performance, and other statements regarding our plans, prospects, and goals.

Speaker #2: 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's ability to access capital when needed and continue as a going concern, Xos's ability to implement business plans and identify and realize opportunities, potential supply chain disruptions and/or economic downturns as a result of trade policies and tariffs or war in Iran and shortages of access to oil, energy, and other key industrial inputs, is included in today's press release and then our filings with the SEC, including our most recently filed annual report on Form 10-K and subsequent filings.

David Zlotchew: 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's ability to implement business plans and identify and realize opportunities, potential supply chain disruptions and/or economic downturns as a result of trade policies and tariffs or war in Ukraine, and shortages of access to oil, energy, and other key industrial inputs, is included in today's press release and in our filings with the SEC, including our most recently filed 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 reliance on forward-looking statements.

Speaker #2: We undertake no obligation to update forward-looking statements except as required by law. You should not put undue reliance on forward-looking statements. Further, today's presentation includes references to non-GAAP financial measures and performance metrics.

David Zlotchew: We undertake no obligation to update forward-looking statements except as required by law. You should not put undue reliance on forward-looking statements.

David Zlotchew: 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 on the investor relations section of our website at www.xostrucks.com/investor-overview. With that, I now turn it over to our CEO, Dakota Semler.

Speaker #2: 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.

Speaker #2: Our press release and SEC filings are available on the Investor Relations section of our website at www.xostrucks.com/investor-overview. With that, I now turn it over to our CEO, Dakota Semler.

Speaker #3: Good afternoon, everyone. 2025 was the year Xos proved something that many doubted was possible: that a young electric vehicle company operating with discipline, under real constraints, and without the luxury of unlimited capital could deliver a full year of positive free cash flow, grow its customer base, diversify its product portfolio, and emerge stronger on the other side.

Dakota Semler: Good afternoon, everyone. 2025 was the year Xos proved something that many doubted was possible, that a young electric vehicle company operating with discipline under real constraints and without the luxury of unlimited capital could deliver a full year of positive free cash flow, grow its customer base, diversify its product portfolio, and emerge stronger on the other side. That is exactly what happened, and it did not happen by accident. For the full year, Xos generated $46 million in revenue on 328 units delivered, more units than any year in our history. Our GAAP gross margin was 5.9%, marking our second consecutive full year of positive GAAP and non-GAAP gross margins.

Speaker #3: That is exactly what happened. And it did not happen by accident. For the full year, Xos generated 46 million in revenue on 328 units delivered.

Speaker #3: More units than any year in our history. Our GAAP gross margin was 5.9%, marking our second consecutive full year of positive GAAP and non-GAAP gross margins.

Speaker #3: Full-year operating loss narrowed 28% to $33.1 million, the lowest since we went public. And our adjusted EBITDA loss improved 33% to $23.5 million.

Dakota Semler: Full year operating loss narrowed 28% to $33.1 million, the lowest since we went public, and our adjusted EBITDA loss improved 33% to $23.5 million. The number that I'm most proud of is this. We generated +$5.4 million of free cash flow for the year, compared to -$49.1 million in 2024. That is a $54 million swing. In Q4, we delivered our third consecutive quarter of positive free cash flow, the fourth time we have achieved that milestone since going public. Those are not just numbers, they are proof that our model works. In Q4, specifically, we shipped strip chassis already on their way to outfitters for a major customer program.

Speaker #3: But the number that I'm most proud of is this: we generated 5.4 million dollars of positive free cash flow for the year, compared to negative 49.1 million in 2024.

Speaker #3: That is a 54 million dollar swing. And in Q4, we delivered our third consecutive quarter of positive free cash flow. The fourth time we have achieved that milestone since going public.

Speaker #3: Those are not just numbers. They are proof that our model works. In Q4 specifically, we shipped strip chassis already on their way to upfitters for a major customer program.

Speaker #3: Revenue recognized in the quarter was $5.2 million on 34 units, with a balance to be recognized in coming quarters as vehicles are completed and delivered.

Dakota Semler: Revenue recognized in the quarter was $5.2 million on 34 units, with the balance to be recognized in coming quarters as vehicles are completed and delivered. The signal is clear. Demand is real, customers are returning, and scale is growing. Let me step back and put this year in context, because I think the arc of 2025 tells the real story of where this company is headed. We entered 2025 with a clear mandate, grow the business, protect margins, and manage liquidity with discipline. Every quarter, we executed on that mandate, and every quarter the results compounded. Even amidst a tumultuous environment with frequent tariff changes and complex macroeconomic factors, we prevailed. In Q1, we set the foundation. We continued growing hub production at our Tennessee plant. At the same time, we strengthened our balance sheet and sharpened our cost structure.

Speaker #3: The signal is clear: demand is real, customers are returning, and scale is growing. Let me step back and put this year in context, because I think the arc of 2025 tells the real story of where this company is headed.

Speaker #3: We entered 2025 with a clear mandate: grow the business, protect margins, and manage liquidity with discipline. Every quarter, we executed on that mandate, and every quarter, the results compounded.

Speaker #3: Even amidst a tumultuous environment with frequent tariff changes and complex macroeconomic factors, we prevailed. In Q1, we set the foundation. We continued growing hub production at our Tennessee plant, at the same time we strengthened our balance sheet and sharpened our cost structure.

Dakota Semler: Even amidst a tumultuous environment with frequent tariff changes and complex macroeconomic factors, we prevailed. In Q1, we set the foundation. We continued growing hub production at our Tennessee plant. At the same time, we strengthened our balance sheet and sharpened our cost structure.

Speaker #3: Q2 was a breakthrough. Revenue hit $18.4 million, the highest quarterly revenue in our history. We delivered 135 units, secured the orders for the largest production program in company history at over 200 units, and proved that national fleets are not experimenting with Xos anymore.

Dakota Semler: Q2 was a breakthrough. Revenue hit $18.4 million, the highest quarterly revenue in our history. We delivered 135 units, secured the orders for the largest production program in company history at over 200 units, and proved that national fleets are not experimenting with Xos anymore. They're committing to us at scale. Q3 sustained that momentum. Revenue held strong at $16.5 million on 130 units. Our operating loss dropped to $7 million, the lowest since the company went public, and we achieved our second consecutive quarter of positive free cash flow, demonstrating that this was not a one-time event, but a structural shift in how the business operates. Q4 capped the year with continued execution.

Speaker #3: They're committing to us at scale. Q3 sustained that momentum. Revenue held strong at $16.5 million, on 130 units. Our operating loss dropped to $7 million, the lowest since the company went public, and we achieved our second consecutive quarter of positive free cash flow.

Speaker #3: Demonstrating that this was not a one-time event, but a structural shift in how the business operates. And Q4 capped the year with continued execution.

Speaker #3: While Q4 is seasonally our lightest quarter, the team kept delivering, fulfilling our 200-plus unit program, scaling Bluebird powertrain production, and preparing the hub platform for its next chapter.

Dakota Semler: While Q4 is seasonally our lightest quarter, the team kept delivering, fulfilling our 200+ unit program, scaling Blue Bird powertrain production, and preparing the hub platform for its next chapter. Each quarter built on the last. That is what momentum looks like when it is earned, not inherited. Much of our 2025 volume went to organizations like UPS and FedEx ISPs. Fleets that do not forgive unreliability, that do not tolerate downtime, and that do not adopt new technology unless they have deep confidence in the engineering and provider's ability to deliver at scale. Their confidence in Xos is earned. It is validated by millions of miles on the road with several customers now exceeding 1 million miles across their Xos vehicles, and evidenced by repeat orders that have grown in size.

Speaker #3: Each quarter built on the last. That is what momentum looks like when it is earned, not inherited. Much of our 2025 volume went to organizations like UPS and FedEx ISPs.

Speaker #3: Fleets that do not forgive unreliability that do not tolerate downtime and that do not adopt new technology unless they have deep confidence in the engineering and provider's ability to deliver at scale.

Speaker #3: Their confidence in Xos is earned. It is validated by millions of miles on the road, with several customers now exceeding 1 million miles across their Xos vehicles.

Speaker #3: And evidenced by repeat orders that have grown in size. Our 200-plus unit program represents the shape of the future for Xos. Deeper relationships, larger programs, repeatable volume.

Dakota Semler: Our 200+ unit program represents the shape of the future for Xos. Deeper relationships, larger programs, repeatable volume. These large fleet agreements may compress margins in the near term, but they are the foundation of a durable industrial business. They create the volume and the credibility needed to expand margins over time. I want to personally acknowledge the Aljomaih Automotive Company, whose support of Xos has been unwavering. Together, we amended the repayment structure of the convertible note, moving from a single August 2025 maturity to quarterly installments through February 2028. This is not just a restructuring. It is a strategic alignment that allows us to operate from a position of focus rather than constraint. Aljomaih is now our largest shareholder, a strong signal of their conviction in our long-term trajectory.

Speaker #3: These large fleet agreements may compress margins in the near term, but they are the foundation of a durable industrial business. They create the volume and the credibility needed to expand margins over time.

Speaker #3: I want to personally acknowledge the Aljamaa Automotive Company, whose support of us, whose support of Xos, has been unwavering. Together, we amended the repayment structure of the convertible note, moving from a single August 2025 maturity to quarterly installments through February 2028.

Speaker #3: This is not just a restructuring. It is a strategic alignment that allows us to operate from a position of focus rather than constraint. Aljamaa is now our largest shareholder, a strong signal of their conviction in our long-term trajectory.

Speaker #3: Our collections execution was exceptional this year. Accounts receivable came down from $26.9 million to $6 million, driven by $14 million in Q4 collections alone.

Dakota Semler: Our collections execution was exceptional this year. Accounts receivable came down from $26.9 million to $6 million, driven by $14 million in Q4 collections alone, including the $9.9 million from UPS. Liana will walk you through the full liquidity picture, but the takeaway is this. We ended the year with $14 million in cash, up from $11 million, while simultaneously paying down obligations and investing in growth. Even as the step van continues to drive substantial revenue, our strategy has never been limited to a single product. In 2025, we deliberately expanded into higher margin, less competitive categories, and that strategy is now delivering real results. Our powertrain business had a breakout year. We delivered 15 powertrain systems to Blue Bird Corporation in Q4 alone, and since Q2, we've received nearly 100 additional orders.

Speaker #3: Including the $9.9 million from UPS, Liana will walk you through the full liquidity picture, but the takeaway is this: we ended the year with $14 million in cash, up from $11 million, while simultaneously paying down obligations and investing in growth.

Speaker #3: Even as the step van continues to drive substantial revenue, our strategy has never been limited to a single product. In 2025, we deliberately expanded into higher-margin, less competitive categories, and that strategy is now delivering real results.

Speaker #3: Our powertrain business had a breakout year. We delivered 15 powertrain systems to bluebird corporation in Q4 alone. And since Q2, we've received nearly 100 additional orders.

Speaker #3: School districts are electrifying, and our technology, which is modular, reliable, and highly serviceable, is becoming the backbone they trust. Gi and I attended the Bluebird dealer meeting last year, and the engagement from dealers and districts is exciting.

Dakota Semler: School districts are electrifying, and our technology, which is modular, reliable, and highly serviceable, is becoming the backbone they trust. Gio and I attended the Blue Bird dealer meeting last year, and the engagement from dealers and districts is exciting, and we believe it will translate to a robust pipeline that we expect to convert over the next 1 to 3 years. Finally, 2025 saw the emergence of our flagship Xos Hub product line, which we are expanding in 2026. 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, and its impact is expanding far beyond transportation. In 2025, we deployed hubs to utilities, fleet operators, and industrial users.

Speaker #3: And we believe it will translate to a robust pipeline that we expect to convert over the next one to three years. And finally, 2025 saw the emergence of our flagship Xos Hub product line.

Speaker #3: Which we are expanding in 2026. 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, and its impact is expanding far beyond transportation.

Speaker #3: In 2025, we deployed hubs to utilities, fleet operators, and industrial users. We showcased the hub at RE Plus, the largest renewable energy conference in North America, where it drew significant attention from energy developers and utilities looking for mobile power, resilience, and peak shaving solutions.

Dakota Semler: We showcased the Hub at RE+, the largest renewable energy conference in North America, where it drew significant attention from energy developers and utilities looking for mobile power, resilience, and peak shaving solutions. The response confirmed what we already knew. The Hub addresses a problem almost no one else in the market is addressing effectively. We are now preparing the 2026 Hub update offered in three size configurations ranging from 210 to 630 kWh, delivering greater power resilience, energy cost optimization, and advanced load balancing capabilities. This is not just a charging product. It's a mobile energy platform capable of serving industrial users who require temporary power, peak shaving, and resilience where grid infrastructure is delayed or non-existent. That dramatically widens our total addressable market and positions Xos as an energy company, not just an electric vehicle company.

Speaker #3: The response confirmed what we already knew. The hub addresses a problem almost no one else in the market is addressing effectively. We are now preparing the 2026 hub update, offered in three size configurations ranging from 210 to 630 kilowatt-hours.

Speaker #3: Delivering greater power resilience, energy cost optimization, and advanced load balancing capabilities. This is not just a charging product—it's a mobile energy platform capable of serving industrial users who require temporary power, peak shaving, and resilience where grid infrastructure is delayed or non-existent.

Speaker #3: That dramatically widens our total addressable market and positions Xos as an energy company not just an electric vehicle company. As we look to 2026, the opportunities in front of us are expanding.

Dakota Semler: As we look to 2026, the opportunities in front of us are expanding. Order sizes are increasing as customers experience the real-world cost advantages of our trucks and our charging solutions. Our product pipeline, the upgraded Hub, our powertrain expansion with Blue Bird, and the continued growth of our step van business align with secular markets that will grow regardless of political cycles, incentives, or noise. I believe 2025 was the year Xos proved it could build a durable industrial business. 2026 will be the year we scale it, and while some may perceive a pullback in the US EV market, Xos keeps pulling forward. We're not just enabling cleaner delivery vans carrying packages. Xos also provides cleaner and more efficient transportation of school children through Blue Bird's powertrains, enables unloading of cargo vessels in ports with Wiggins, and charges fleets of autonomous rideshare vehicles.

Speaker #3: Order sizes are increasing as customers experience the real-world cost advantages of our trucks and our charging solutions. Our product pipeline, the upgraded Hub, our powertrain expansion with Bluebird, and the continued growth of our step van business align with secular markets that will grow regardless of political cycles, incentives, or noise.

Speaker #3: I believe 2025 was the year Xos proved it could build a durable industrial business. 2026 will be the year we scale it. And while some may perceive a pullback in the US EV market, Xos keeps pulling forward.

Speaker #3: We're not just enabling cleaner delivery vans carrying packages. Xos also provides cleaner and more efficient transportation of school children through Blue Bird's powertrains, enables unloading of cargo vessels and ports with Wiggins, and charges fleets of autonomous rideshare vehicles.

Dakota Semler: We're not just enabling cleaner delivery vans carrying packages. Xos also provides cleaner and more efficient transportation of school children through Blue Bird's powertrains, enables unloading of cargo vessels in ports with Wiggins, and charges fleets of autonomous rideshare vehicles. There's even a Xos ice cream truck in Sacramento. The breadth and variety of our deployments underscore the foundational strength of our technology and the enormous opportunity that lies ahead. With that, I'll turn it over to Gio to walk through the operational highlights of the quarter and the full year.

Speaker #3: There's even an Xos ice cream truck in Sacramento. The breadth and variety of our deployments underscore the foundational strength of our technology and the enormous opportunity that lies ahead.

Dakota Semler: There's even a Xos ice cream truck in Sacramento. The breadth and variety of our deployments underscore the foundational strength of our technology and the enormous opportunity that lies ahead. With that, I'll turn it over to Gio to walk through the operational highlights of the quarter and the full year.

Speaker #3: With that, I'll turn it over to Gi to walk through the operational highlights of the quarter and the full year.

Speaker #2: Thanks, Dakota. 2025 was a year defined by focused execution, operational discipline, and continued progress towards scalable production. I'll walk through our fourth quarter performance and then zoom out to highlight our full-year operational achievements across manufacturing, engineering, and the supply chain.

Giordano Sordoni: Thanks, Dakota. 2025 was a year defined by focused execution, operational discipline, and continued progress towards scalable production. I'll walk through our Q4 performance and then zoom out to highlight our full year operational achievements across manufacturing, engineering, and the supply chain. In the Q4, we continued to demonstrate consistent production execution across our core product lines at the factory in Tennessee, while also executing on the launch of new powertrain kit variants for Blue Bird and preparing for the launch of new mobile charging hub variants. At our Byrdstown, Tennessee facility, the team continued building and delivering against our over 200-unit UPS program, maintaining a steady production cadence and reinforcing our ability to execute on large fleet commitments.

Speaker #2: In the fourth quarter, we continued to demonstrate consistent production execution across our core product lines at the factory in Tennessee, while also executing on the launch of new powertrain kit variants for bluebird, and preparing for the launch of new mobile charging hub variants.

Speaker #2: At our Birch Town, Tennessee facility, the team continued building and delivering against our over 200-unit UPS program, maintaining a steady production cadence and reinforcing our ability to execute on large fleet commitments.

Speaker #2: We expanded our manufacturing capabilities by adding a dedicated production line within our facility for bluebird kit development, which began producing kits in the second quarter of last year.

Giordano Sordoni: We expanded our manufacturing capabilities by adding a dedicated production line within our facility for Blue Bird kit development, which began producing kits in Q2 of last year. This expansion of our kit production line marks an important step in scaling our powertrain systems business and supporting external OEM partners like Blue Bird. We also initiated the development of a more robust production line for the next generation of our mobile charging hub. We're now offering it in three size configurations, ranging from 210kWh all the way up to 630kWh. This new line layout offers, allows for scaled production into higher volumes in 2026, while producing several variants on the same production line.

Speaker #2: This expansion of our kit production line marks an important step in scaling our powertrain systems business and supporting external OEM partners like Blue Bird. We also initiated the development of a more robust production line for the next generation of our mobile charging hub.

Speaker #2: We're now offering it in three size configurations, ranging from 210 kilowatt-hours all the way up to 630 kilowatt-hours. This new line layout allows for scaled production into higher volumes in 2026, while producing several variants on the same production line.

Speaker #2: From an engineering perspective, our team was focused on developing new powertrain kit variants for Bluebird, as well as improved versions of our charging hubs and improvements on our chassis.

Giordano Sordoni: From an engineering perspective, our team was focused on developing new powertrain kit variants for Blue Bird, as well as improved versions of our charging hubs and improvements on our chassis. At the same time, our supply chain organization remained focused on navigating tariff dynamics while continuing to drive impact, to drive direct material cost impacts where possible. We've resourced some components, localized others, and negotiated with our supply base to share in the costs of the new tariff impacts that we saw in 2025. Stepping back to the full year, 2025 marked a meaningful step in building a more efficient, scalable, and margin-focused operating platform. Our engineering, supply chain, and manufacturing groups worked together to build and deliver over 328 units while reducing operational and direct material costs throughout the year.

Speaker #2: At the same time, our supply chain organization remained focused on navigating tariff dynamics while continuing to drive impact to direct material cost impacts where possible.

Speaker #2: We've resourced some components, localized others, and negotiated with our supply base to share in the cost of the new tariff impacts that we saw in 2025.

Speaker #2: Stepping back to the full year, 2025 marked a meaningful step in building a more efficient, scalable, and margin-focused operating platform. Our engineering, supply chain, and manufacturing groups worked together to build and deliver over 328 units while reducing operational and direct material costs throughout the year.

Speaker #2: We also engineered and launched new product variants, while improving on existing products. And all the while contributing to reductions in overall operating expenses of 28%, that Dakota mentioned.

Giordano Sordoni: We also engineered and launched new product variants while improving on existing products, and all the while contributing to reductions in overall operating expenses of 28% that Dakota mentioned. In 2025, the engineering team enhanced our vehicle product offering, introduced improvements like galvanized frame rails, which improve long-term corrosion resistance and durability for our fleet customers. These types of targeted upgrades reflect our focus on delivering higher quality, longer life vehicles. The engineering and supply chain groups collaborated to reduce the bill of material costs of the strip chassis by making changes to our design and sourcing strategy. We expanded our engineering and product capabilities, including the development of 5 distinct powertrain kits to support Blue Bird school buses.

Speaker #2: In 2025, the engineering team enhanced our vehicle product offering and introduced improvements like galvanized frame rails, which improved long-term corrosion resistance and durability for our fleet customers.

Speaker #2: These types of targeted upgrades reflect our focus on delivering higher quality, longer-life vehicles. The engineering and supply chain groups collaborated to reduce the bill of material costs of the strip chassis by making changes to our design and sourcing strategy.

Speaker #2: We expanded our engineering and product capabilities, including the development of five distinct powertrain kits to support Blue Bird school buses. This work further establishes Xos as a flexible electrification partner for OEMs looking to benefit from battle-tested powertrains that have driven millions of real-world miles by our fleet customers.

Giordano Sordoni: This work further establishes Xos as a flexible electrification partner for OEMs looking to benefit from battle-tested powertrains that have driven millions of real-world miles by our fleet customers. At the plant in Tennessee, our manufacturing team established a production line for powertrain kits and expanded our hub production line. The team built vehicles more efficiently than ever before, reducing the labor hours per vehicle while building at a rate of three units per day at certain points throughout the year. Building at these volumes for UPS is evidence of Xos' ability to ramp up our supply chain and manufacturing capability to meet high volumes for large national fleet customers. We were also able to negotiate the termination of the Mesa, Arizona lease that we inherited from our merger with ElectraMeccanica, which resulted in a total cash savings of $20.7 million.

Speaker #2: At the plants in Tennessee, our manufacturing team established a production line for powertrain kits and expanded our hub production line. The team built vehicles more efficiently than ever before, reducing the labor hours per vehicle while building at a rate of three units per day at certain points throughout the year.

Speaker #2: Building at these volumes for UPS is evidence of Xos's ability to ramp up our supply chain and manufacturing capability to meet high volumes for large national fleet customers.

Giordano Sordoni: Building at these volumes for UPS is evidence of Xos' ability to ramp up our supply chain and manufacturing capability to meet high volumes for large national fleet customers. We were also able to negotiate the termination of the Mesa, Arizona lease that we inherited from our merger with ElectraMeccanica, which resulted in a total cash savings of $20.7 million.

Speaker #2: We were also able to negotiate the termination of the Mesa, Arizona lease that we inherited from a merger with Lecture Mechanica, which resulted in a total cash savings of $20.7 million.

Speaker #2: From a supply chain perspective, 2025 was defined by disciplined execution and a volatile environment. The team successfully navigated tariff uncertainty through a combination of strategic stockpiling, cost restructuring, and proactive planning, while also implementing shared-risk supplier agreements to help absorb tariff impacts and protect margins.

Giordano Sordoni: From a supply chain perspective, 2025 was defined by disciplined execution in a volatile environment. The team successfully navigated tariff uncertainty through a combination of strategic stockpiling, cost restructuring, and proactive planning, while also implementing shared risk supplier agreements to help absorb tariff impacts and protect margins. At the same time, we strengthened our battery sourcing strategy by onboarding a top-tier global supplier for our hub programs and locking in pre-tariff pricing through 2025 and 2026. This approach gives us both cost stability and supply continuity as we scale production. We also made meaningful progress in how we manage working capital and inventory. The team introduced a more robust annual procurement and inventory planning process, improving forecast accuracy and better aligning spend with our production needs without compromising supply reliability.

Speaker #2: At the same time, we strengthened our battery sourcing strategy by onboarding a top-tier global supplier for our hub programs and locking in pre-tariff pricing through '25 and '26.

Speaker #2: This approach gives us both cost stability and supply continuity as we scale production. We also made meaningful progress in how we manage working capital and inventory.

Speaker #2: The team introduced a more robust annual procurement and inventory planning process, improving forecast accuracy and better aligning spend with our production needs without compromising supply reliability.

Speaker #2: In parallel, we advanced our supplier strategy by expanding dual sourcing and geographic diversification across critical components, reducing dependency risks while increasing supplier competitiveness and flexibility across the supply base.

Giordano Sordoni: In parallel, we advanced our supplier strategy by expanding dual sourcing and geographic diversification across critical components, reducing dependency risks while increasing supplier competitiveness and flexibility across the supply base. Importantly, these initiatives translated directly into financial performance. The supply chain team delivered meaningful cost reduction, material cost reductions across key components, contributing to the company achieving positive gross margins. During the year, we were able to maintain or reduce direct material costs despite headwinds from tariffs. At the same time, we maintained strong supply continuity despite variability in customer schedules and ongoing supplier constraints, proactively managing lead times, inventory levels, and delivery commitments to keep production running smoothly. Overall, 2025 was a year where we improved our product, strengthened our cost structure, and laid the foundation for a scalable growth across trucks, powertrains, and our hub platform.

Speaker #2: Importantly, these initiatives translated directly into financial performance. The supply chain team delivered meaningful cost reduction, material cost reductions across key components contributing to the company achieving positive gross margins.

Speaker #2: During the year, we were able to maintain or reduce direct material costs despite headwinds from tariffs. At the same time, we maintained strong supply continuity despite variability in customer schedules and ongoing supplier constraints, proactively managing lead times, inventory levels, and delivery commitments to keep production running smoothly.

Speaker #2: Overall, 2025 was a year where we improved our product, strengthened our cost structure, and laid the foundation for scalable growth across trucks, powertrains, and our hub platform.

Speaker #2: We maintained positive gross margins despite changes in product mix, reserves, and write-downs in 2025. We achieved a 28% cost reduction in operating expenses. We improved our cash position with faster inventory turns.

Giordano Sordoni: We maintained positive gross margins despite changes in product mix, reserves, and write-downs in 2025. We achieved a 28% cost reduction in operating expenses. We improved our cash position with faster inventory turns. As we look ahead, our focus remains on continuing to drive cost discipline and seek margin expansion, scaling efficient production across our core multiple product lines, and preparing our operations to support increased demand in 2026 and beyond. With that, I'll turn it over to Liana to walk through the financial results.

Speaker #2: As we look ahead, our focus remains on continuing to drive cost discipline and seek margin expansion. We are scaling efficient production across our core multiple product lines and preparing our operations to support increased demand in 2026 and beyond.

Speaker #2: With that, I'll turn it over to Liana to walk through the financial results.

Speaker #1: Thanks, Gio. Before getting into the details, I want to take a moment to highlight the meaningful progress we made in 2025. This was a year of execution and important milestones across the business, from achieving positive free cash flow for the full year and improving liquidity to driving substantial reductions in operating losses and expenses.

Liana Pogosyan: Thanks, Gio. Before getting into the details, I want to take a moment to highlight the meaningful progress we made in 2025. This was a year of execution and important milestones across the business, from achieving positive free cash flow for the full year and improving liquidity to driving substantial reductions in operating losses and expenses. At the same time, we took decisive actions to strengthen our balance sheet, optimize working capital, and position the company for more sustainable long-term growth. For the full year of 2025, revenue totaled $46 million on 328 units, compared to $56 million on 297 units last year.

Speaker #1: At the same time, we took decisive actions to strengthen our balance sheet, optimize working capital, and position the company for more sustainable, long-term growth.

Speaker #1: For a full year of 2025, revenue totaled $46 million, on $328 units compared to $56 million on $297 units 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 decline in total revenues.

Liana Pogosyan: 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 decline in total revenues. For Q4 2025, revenue was $5.2 million on 34 units, down from $16.5 million on 130 units last quarter and $11.5 million on 51 units a year ago. Revenue is down as a result of our reduced deliveries during the slower time of the year as the company began shifting focus and allocating resources to powertrain and hub production. This quarter's deliveries were mainly driven by our hub and powertrain product lines, including Blue Bird powertrain kits, which have generated orders for over 100 units between Q2 2025 and Q1 2026.

Speaker #1: For the fourth quarter 2025, revenue was $5.2 million on 34 units, down from $16.5 million on 130 units last quarter and $11.5 million on 51 units a year ago.

Speaker #1: Revenue is down as a result of our reduced deliveries during the slower time of the year, as the company began shifting focus and allocating resources to powertrain and hub production.

Speaker #1: This quarter's deliveries were mainly driven by our Hub and Powertrain product lines, including Bluebird powertrain kits, which have generated orders for over 100 units between the second quarter of 2025 and the first quarter of 2026.

Speaker #1: Turning to gross margin, we continued to make meaningful progress in building a more sustainable and scalable business. For the full year, gap gross margin was 2.7 million dollars or 5.9% compared to $4 million or 7.1% in 2024.

Liana Pogosyan: Turning to gross margin, we continued to make meaningful progress in building a more sustainable and scalable business. For the full year, GAAP gross margin was $2.7 million or 5.9% compared to $4 million or 7.1% in 2024. Performance for the year reflects product mix, including a higher volume of low-margin strip chassis units under the UPS order, as well as certain inventory write-downs associated with our commercialization strategy. Tariffs reflected in cost of goods sold were a meaningful headwind to margins this year. Non-GAAP gross margin for the year was $4.1 million or 8.8% compared to $10 million or 18% in the prior year, driven by the same mix dynamics and normalization of inventory-related adjustments.

Speaker #1: Performance for the year reflects product mix, including a higher volume of low-margin strip chassis units under the UPS order, as well as certain inventory write-downs associated with our commercialization strategy.

Speaker #1: Tariffs reflected in cost of goods sold were a meaningful headwind to margins this year. Non-GAAP gross margin for the year was $4.1 million, or 8.8%, compared to $10 million, or 18%, in the prior year, driven by the same mix dynamics and normalization of inventory-related adjustments.

Speaker #1: Importantly, this marks our second consecutive full year of positive GAAP and non-GAAP gross margins, underscoring the structural progress we've made and our clear path toward margin expansion over time.

Liana Pogosyan: Importantly, this marks our second consecutive full year of positive GAAP and non-GAAP gross margins, underscoring the structural progress we've made in our clear path towards margin expansion over time. For Q4, GAAP gross margin was a loss of $2.6 million, primarily driven by discrete items, including additional inventory reserves and write-offs, due to a shift in the commercialization strategy and warranty reserve updates. Excluding these items, non-GAAP gross margin was a profit of $0.3 million or 5.2%. While down sequentially, this marks our 10th consecutive quarter of positive non-GAAP gross margin, reinforcing the consistency of our underlying performance and the strength of our margin foundation as we continue to scale.

Speaker #1: For the fourth quarter, gap gross margin was a loss of 2.6 million dollars, primarily driven by discrete items including additional inventory reserves and write-offs due to a shift in the commercialization strategy and warranty reserve updates.

Speaker #1: Excluding these items, non-gap gross margin was a profit of 0.3 million dollars or 5.2%. While down sequentially, this marks our tenth consecutive quarter of positive non-gap gross margin, reinforcing the consistency of our underlying performance and the strength of our margin foundation as we continue to scale.

Speaker #1: Turning to expenses, our full year 2025 operating expenses were $35.8 million, down $14 million, or 28%, from $49.8 million last year. These sustained reductions reflect the structural impact of actions we've taken and underscore our disciplined approach to managing the business.

Liana Pogosyan: Turning to expenses, our full year 2025 operating expenses were $35.8 million, down $14 million or 28% from $49.8 million last year. These sustained reductions reflect the structural impact of actions we've taken and underscore our disciplined approach to managing the business. Q4 operating expenses were $7.1 million, representing a $2.4 million or 25% reduction from prior quarter and a $3.8 million or 35% decrease from the Q4 of last year. Q4 operating expenses benefited from $1.7 million of non-recurring favorable adjustments related to the settlement of finance equipment leases and certain vendor payables. Excluding these items, operating expenses would have been $8.8 million, reflecting continued sequential improvement from the Q3 and a more normalized run rate.

Speaker #1: Fourth quarter operating expenses were $7.1 million, representing a $2.4 million, or 25%, reduction from the prior quarter and a $3.8 million, or 35%, decrease from the fourth quarter of last year.

Speaker #1: Fourth quarter operating expenses benefited from $1.7 million of non-recurring favorable adjustments related to the settlement of finance equipment leases and certain vendor payables. Excluding these items, operating expenses would have been $8.8 million, reflecting continued sequential improvement from the third quarter and a more normalized run rate.

Speaker #1: We made strong progress on operating performance in 2025. With operating loss narrowing by approximately 28% to $33.1 million from $45.9 million last year, non-GAAP operating loss improved by approximately 24% to $24.3 million, reflecting continued momentum toward profitability.

Liana Pogosyan: We made strong progress on operating performance in 2025, with operating loss narrowing by approximately 28% to $33.1 million from $45.9 million last year. Non-GAAP operating loss improved by approximately 24% to $24.3 million, reflecting continued momentum towards profitability. Operating loss for the quarter was $9.7 million, higher than Q3, mainly due to discrete items mentioned, but significantly improved from $14.6 million in Q4 2024. Non-GAAP operating loss improved to $4.6 million compared to $4.8 million in Q3 and $6.4 million in Q4 of last year.

Speaker #1: Operating loss for the quarter was $9.7 million higher than the third quarter, mainly due to discrete items mentioned, but significantly improved from $14.6 million in the fourth quarter of 2024.

Speaker #1: Non-GAAP operating loss improved to $4.6 million, compared to $4.8 million in the third quarter and $6.4 million in the fourth quarter of last year.

Speaker #1: Our full-year EBITDA loss was cut by more than half, improving to a loss of $21 million from $42.2 million in 2024. Adjusted EBITDA improved to a loss of $23.5 million from $34.8 million, a 33% improvement, reflecting the compounding benefits of cost discipline and operational efficiency.

Liana Pogosyan: Our full year EBITDA loss was cut by more than half, improving to a loss of $21 million from $42.2 million in 2024. Adjusted EBITDA improved to a loss of $23.5 million from $34.8 million, a 33% improvement, reflecting the compounding benefits of cost discipline and operational efficiency. As we've said, our focus this year has been on execution, financial discipline, and strengthening the foundation for sustained growth. In 2025, we made meaningful progress across each of these areas. We took a series of strategic actions to strengthen our balance sheet and extend our financial runway, ending the year with $14 million in cash and cash equivalents, up from $11 million at the end of last year. This improvement in liquidity was driven by several key factors.

Speaker #1: As we've said, our focus this year has been on execution, financial discipline, and strengthening the foundation for sustained growth, and in 2025, we made meaningful progress across each of these areas.

Speaker #1: We took a series of strategic actions to strengthen our balance sheet and extend our financial runway, ending the year with $14 million in cash and cash equivalents, up from $11 million at the end of last year.

Speaker #1: This improvement in liquidity was driven by several key factors. First, accounts receivable declined significantly to $6.0 million at year-end from $26.9 million last year.

Liana Pogosyan: First, accounts receivable declined significantly to $6 million at year-end from $26.9 million last year. This was driven by another year of very strong collections, approximately $66 million of collections from customers and state grant program administrators. Second, we successfully launched our ATM program during 2025, generating $2.4 million in net cash proceeds during the year. Third, we continued to execute on strategic inventory management, with inventory declining to $25 million from $36.6 million last year. This reflects strong unit sales outpacing production as we moved more units from existing inventory while positioning ourselves to support upcoming deliveries. Fourth, we amended our $20 million convertible note, extending principal payments to begin quarterly in Q4 2025 through Q1 2028, enhancing liquidity and providing greater financial flexibility.

Speaker #1: This was driven by another year of very strong collections, approximately $66 million of collections from customers and state grant program administrators. Second, we successfully launched our ATM program during 2025, generating $2.4 million in net cash proceeds during the year.

Speaker #1: Third, we continue to execute on strategic inventory management with inventory declining to $25 million from $36.6 million last year. This reflects strong unit sales outpacing production as we moved more units from existing support upcoming deliveries.

Speaker #1: Fourth, we amended our $20 million convertible note extending principal payments to begin quarterly in Q4 2025 through Q1 2028, enhancing liquidity and providing greater financial flexibility.

Speaker #1: Lastly, in Q3 2025, we reached an agreement to terminate our Mesa facility lease, which we had assumed as part of the EMB acquisition. This action is expected to generate approximately $21 million in cash savings through 2023.

Liana Pogosyan: Lastly, in Q3 2025, we reached an agreement to terminate our Mesa facility lease, which we had assumed as part of the ElectraMeccanica acquisition. This action is expected to generate approximately $21 million in cash savings through 2023. While the agreement requires 18 monthly payments through March 2027, totaling about $2.8 million, it significantly reduces our long-term obligations. As part of the termination, we also recognized a $9.9 million gain in non-operating income, along with related GAAP adjustments, including the removal of the associated operating lease liabilities. We continued to actively manage our liquidity position throughout Q4 while advancing additional opportunities to further strengthen it. Together, these actions reflect our disciplined approach to capital management and reinforce our commitment to enhancing financial flexibility and positioning Xos for long-term stability and growth. Beyond the balance sheet, we continued to execute well operationally.

Speaker #1: While the agreement requires 18 monthly payments through March 2027 totaling about $2.8 million, it significantly reduces our long-term obligations. As part of the termination, we also recognize a $9.9 million gain in non-operating income along with related GAAP adjustments, including the removal of the associated operating lease liabilities.

Speaker #1: We continue to actively manage our liquidity position throughout the fourth quarter, while advancing additional opportunities to further strengthen it. Together, these actions reflect our disciplined approach to capital management and reinforce our commitment to enhancing financial flexibility and positioning Xos for long-term stability and growth.

Liana Pogosyan: We continued to actively manage our liquidity position throughout Q4 while advancing additional opportunities to further strengthen it. Together, these actions reflect our disciplined approach to capital management and reinforce our commitment to enhancing financial flexibility and positioning Xos for long-term stability and growth. Beyond the balance sheet, we continued to execute well operationally.

Speaker #1: Beyond the balance sheet, we continue to execute well operationally. We generated positive free cash flow of $5.4 million for the year, a significant improvement from negative $49.1 million last year.

Liana Pogosyan: We generated +$5.4 million in free cash flow for the year, a significant improvement from -$49.1 million last year. Q4 free cash flow was $2.4 million compared to $3.1 million last quarter and $3.3 million in the same period last year. This marks our third consecutive quarter of positive free cash flow and the fourth time we've achieved positive free cash flow since going public. This consistent performance highlights the strength of our execution and the durability of our operating model. We are building a business that is increasingly self-sustaining, with disciplined capital deployment and a clear path to continued improvements in cash generation. Finally, turning to the guidance for 2026.

Speaker #1: Fourth quarter free cash flow was $2.4 million compared to $3.1 million last quarter and $3.3 million in the same period last year. This marks our third consecutive quarter of positive free cash flow and the fourth time we've achieved positive free cash flow since going public.

Speaker #1: This consistent performance highlights the strength of our execution and the durability of our operating model. We are building a business that is increasingly self-sustaining with disciplined capital deployment and a clear path to continued improvement in cash generation.

Speaker #1: Finally, turning to the guidance for 2026, we anticipate revenue to fall within the range of $40 to $50 million unit deliveries to be within the range of $350 and $500, and non-gap operating loss to be in the range of $11.9 to $13.3 million.

Liana Pogosyan: We anticipate revenue to fall within the range of $40 to 50 million, unit deliveries to be within the range of 350 to 500, and non-GAAP operating loss to be in the range of $11.9 to 13.3 million. With that, I'll turn the call back over to Dakota.

Speaker #1: With that, I'll turn the call back over to Dakota.

Speaker #2: Thank you, Liana. To close, I want to step back to what 2025 really represented for Xos. A year ago, the question many had was whether a company like ours could sustain itself.

Dakota Semler: Thank you, Liana. To close, I want to step back to what 2025 really represented for Xos. A year ago, the question many had was whether a company like ours could sustain itself, whether we could grow, manage costs, and generate cash in a market that was still sorting itself out. The answer is in the results. Positive free cash flow for the year, our lowest full-year operating loss since going public, our second consecutive year of positive gross margins, a product portfolio that is broader, stronger, and more relevant than at any point in our history. None of this happened by accident. It happened because this team questioned assumptions, executed with discipline, and refused to accept that building an industrial company from scratch required cutting corners on quality, on service, or on the ambition of what Xos can become.

Speaker #2: Whether we could grow, manage costs, and generate cash in a market that was still sorting itself out. The answer is in the results. Positive free cash flow for the year, our lowest full-year operating loss since going public, our second consecutive year of positive gross margins, a product portfolio that has broader stronger and more relevant than at any point in our history.

Speaker #2: None of this happened by accident. It happened because this team questioned assumptions, executed with discipline, and refused to accept that building an industrial company from scratch required cutting corners on quality, on service, or on the ambition of what Xos can become.

Speaker #2: Stepping into 2026, our priorities remain clear: accelerate growth, reinforce liquidity, and continue expanding margins. The foundation is built; now it is the time to scale.

Dakota Semler: Stepping into 2026, our priorities remain clear. Accelerate growth, reinforce liquidity, and continue expanding margins. The foundation is built. Now it is the time to scale. With that, I'll hand it back over to the operator for questions.

Speaker #2: With that, I'll hand it back over to the operator for questions.

Speaker #3: We will now begin the question-and-answer session. To ask a question, you may press star, then one, on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.

Operator 3: We will now begin the question-and-answer session. To ask a question, you may press Star then One on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press Star then Two. Our first question comes from Craig Irwin with Roth Capital. Please go ahead.

Operator: We will now begin the question-and-answer session. To ask a question, you may press Star then One on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press Star then Two. Our first question comes from Craig Irwin with Roth Capital. Please go ahead.

Speaker #3: To withdraw your question, please press star, then two. Our first question comes from Craig Irwin with Roth Capital. Please go ahead.

Speaker #4: Hey guys, it’s Andrew on for Craig. Congrats on the progress and thanks for taking my questions. The first one for me is on the new hub products you guys announced.

[Analyst] (Roth Capital Partners): Hey, guys, it's Andrew on for Craig. Congrats on the progress and thanks for taking my questions. The first one for me is on the new hub products you guys announced that you'll start developing in 2026. Can you kind of talk about the opportunities, especially these larger products have with customers, you know, outside of the typical EV charging opportunity?

Speaker #4: You'll start developing in 2026. Can you kind of talk about the opportunities associated with these larger products have with customers outside of the typical EV charging opportunity?

Speaker #2: Yeah, thanks for the question, Andrew. And appreciate you joining. I think there's a little bit of background noise coming from your line, so if it's possible, maybe just a mute.

Dakota Semler: Yeah. Thanks for the question, Andrew, and appreciate you joining. I think there's a little bit of background noise coming from your line, so if it's possible, maybe just to mute, that would be helpful. But in regards to the question on the hub, we really have been focusing on listening to customers over the last year and a half to two years since we rolled out our first units. What we learned is that there are a variety of different use cases that people have been using them as. Some have been using them as a direct replacement for large DC charging infrastructure sites, like our autonomous car fleet. They charge sometimes up to 80 vehicles a day with a single hub unit. So very high throughput power discharge and charge applications. Some folks have been using them for remote power.

Speaker #2: That would be helpful. But in regards to the question on the hub, we really have been focusing on listening to customers over the last year and a half to two years since we rolled out our first units.

Speaker #2: And what we learned is that there are a variety of different use cases that people have been using them as. Some have been using them as a direct replacement for large DC charging infrastructure sites.

Dakota Semler: Some have been using them as a direct replacement for large DC charging infrastructure sites, like our autonomous car fleet. They charge sometimes up to 80 vehicles a day with a single hub unit. So very high throughput power discharge and charge applications. Some folks have been using them for remote power.

Speaker #2: Like our autonomous car fleet, they charge sometimes up to 80 vehicles a day with a single hub unit. So, very high throughput power discharge and charge applications.

Speaker #2: Some folks have been using them for remote power; one of our utility customers, big water utility in Southern California, utilizes it for when they do pipeline shutdowns.

Dakota Semler: One of our utility customers, big water utility in Southern California, utilizes it for when they do, like, pipeline shutdowns. They'll roll out a hub, and all of their EV equipment can charge out in the field when they have a few day kind of pipeline shutdown. We've got other utilities using them for disaster preparedness. When hurricanes come or storms come, they'll roll one out into the field for customers, and it dramatically expands their existing DC charging infrastructure when people are looking to evacuate a specific zone within their territory. A ton of different use cases, different sizes of vehicles, being charged, and different kinds of applications where some are remaining plugged into the grid, some are completely off-grid, some are using, you know, mobile gen sets to power them.

Speaker #2: The rollout of hub and all of their EV equipment can charge out in the field when they have a few-day kind of pipeline shutdown.

Speaker #2: And then we've got other utilities using them for disaster preparedness. When hurricanes come or storms come, they're rolling out into the field for customers, and it dramatically expands their existing DC charging infrastructure when people are looking to evacuate a specific zone within their territory. So, a ton of different use cases, different sizes of vehicles being charged, and different kinds of applications—where some are remaining plugged into the grid, some are completely off-grid, some are using mobile gensets to power them.

Speaker #2: And so the next iteration was really designed to address those different use cases. The first attribute or the first element that we've incorporated is these new energy storage capacities.

Dakota Semler: The next iteration was really designed to address those different use cases. The first attribute or the first element that we've incorporated is these new energy storage capacities. We started with a slightly smaller energy storage capacity for really light-duty Class 1, Class 2 pickup trucks, fleets that aren't gonna see a ton of throughput on a hub to be able to offer a more competitive price point. That product can really be used in lieu of traditional DC fast chargers. We have a lot of customers that are deploying them in fixed applications because it's much more cost-effective than deploying conventional DC fast chargers with their energy storage systems.

Speaker #2: So we started with a slightly smaller energy storage capacity for really light-duty Class 1, Class 2 pickup trucks, fleets that aren't going to see a ton of throughput on a hub, to be able to offer a more competitive price point.

Speaker #2: And that product can really be used in lieu of traditional DC fast chargers. We have a lot of customers that are deploying them in fixed applications because it's much more cost-effective than deploying conventional DC fast chargers with their energy storage systems.

Speaker #2: We have our new kind of mid-tier, what we're going to be calling our flagship variant, which is our 420 kilowatt-hour version. And that's going to replace the last version, which was 280 kilowatt-hours.

Dakota Semler: We have our new kind of mid-tier, what we're gonna be calling our flagship variant, which is our 420kWh version, and that's gonna replace the last version, which was 280kWh, competitively priced and in the same territory as our previous unit. But you're getting basically another 30, almost 40% additional energy storage capacity on that unit. You're still able to keep that unit sub 10,000lbs. So you don't need a CDL to drive it around. It can be rapidly deployed with a pickup truck, just basically building better capabilities, more energy capacity for our customers, but doing it at the same price point.

Speaker #2: Competitively priced and in the same territory as our previous unit, but you're getting basically another 30, almost 40 percent additional energy storage capacity on that unit.

Speaker #2: And you're still able to keep that unit sub-10,000 pounds. So you don't need a CDL to drive it around. It can be rapidly deployed with a pickup truck.

Speaker #2: Just basically building better capabilities, more energy capacity for our customers but doing it at the same price point. And then that third largest variant, the 630 kilowatt-hour configuration, is really designed for our larger battery capacity operators customers that are running medium-duty or heavy-duty trucks that need rapid power deployment.

Dakota Semler: That third-largest variant, the 630 kilowatt-hour configuration, is really designed for our larger battery capacity operators, customers that are running medium-duty or heavy-duty trucks that need rapid power deployment. That's really gonna be for your medium-duty trucks, Class 5, 6 trucks like ours, as well as getting into Class 7 and 8, electric and zero emissions vehicles and off-highway products. We actually have a customer now building a large data center in Indiana, and they've inquired about some of their zero emissions construction products utilizing this larger capacity unit. It's a perfect application for both on-highway traditional applications that we've been serving for the last year and a half or so, but also a lot of new off-highway construction, agricultural type applications too.

Speaker #2: And that's really going to be for your medium-duty trucks, Class 5, 6 trucks like ours, as well as getting into Class 7 and 8 electric and zero-emissions vehicles and off-highway products we actually have a customer now building a large data center in Indiana and they've inquired about some of their zero-emissions construction products utilizing this larger capacity unit.

Speaker #2: So it's a perfect application for both on-highway, traditional applications that we've been serving for the last year and a half or so, but also a lot of new off-highway construction, agricultural-type applications too.

Speaker #2: And that's just the first variant and first kind of product launch that we announced earlier this year. We've got several more announcements and several more upgrades to the hub product configuration that we're going to be talking about probably in Q2 and Q3 that are really exciting about the capabilities and the end-user markets that these new versions will address, which are going to be potentially even larger than the markets that we're serving today.

Dakota Semler: That's just the first variant and first kind of product launch that we announced earlier this year. We've got several more announcements and several more upgrades to the hub product configuration that we're gonna be talking about probably in Q2 and Q3 that are really exciting about the capabilities and the end user markets that these new versions will address, which are gonna be potentially even larger than the markets that we're serving today.

Speaker #4: Great. Well, I appreciate the detail and looking forward to those announcements later in the year. Second one from me, kind of a similar question, but you were talking about exploring new designs for your powertrain product; can you kind of just talk about how that may expand the opportunity set as you grant that business unit?

[Analyst] (Roth Capital Partners): Great. Well, I appreciate the detail. I'm looking forward to those announcements, later in the year. Second one from me, kind of a similar question, but you were talking about, you know, exploring, new designs, for your powertrain product. Can you kinda just talk about how that may, expand the opportunity set as, you know, you ramp that business unit?

Speaker #2: Yeah, I mean specifically in regards to the powertrain products?

Dakota Semler: Yeah. Specifically, in regards to the powertrain products?

Speaker #4: Talking about looking at new designs for the powertrain products.

[Analyst] (Roth Capital Partners): Talking about, looking at new designs for the powertrain products.

Speaker #2: Yeah. So one of the things we've been able to do over the years is taken all the learnings from deploying thousands of our own vehicles on the road and applying that to our other segments, including the hub product and the powertrain products.

Dakota Semler: Yeah. One of the things we've been able to do over the years is taken all the learnings from deploying thousands of our own vehicles on the road and applying that to our other segments, including the hub product and the powertrain products. We're not starting from scratch. We're building upon a foundation of engineering that we've invested in over the last 10 years. Now those variations that we're selling are being sold into a wider variety of products. We've talked a lot about our school bus partnership and relationship. We're developing several configurations there addressing the traditional Type C school buses, which is the largest part of the market and represents anywhere from 70% to 85% of the market on an annual basis.

Speaker #2: So we're not starting from scratch. We're building upon a foundation of engineering that we've invested in over the last 10 years. And now those variations that we're selling are being sold into a wider variety of products.

Speaker #2: So, we've talked a lot about our school bus partnership and relationship. We're developing several configurations there, addressing the traditional Type C school buses, which is the largest part of the market and represents anywhere from 70% to 85% of the market on an annual basis.

Speaker #2: But we are also developing a rear-engine configuration that we're in construction or in production with now for a traditional Type D bus, which is in use in places like California and some other markets.

Dakota Semler: We are also developing a rear engine configuration that we're in construction or in production with now, for a traditional Type D bus, which is in use in places like California and some other markets. We've really done a lot to work focus on commonizing our platforms to drive reliability and service performance in the aftermarket, 'cause these buses and trucks are expected to run 10, 15 years in most cases, but also driving cost competitiveness. That's a key attribute that our customers are interested in, is they don't want another premium product that's entirely dependent upon incentives. Everybody wants to be able to scale without being reliant on incentives and subsidies. The focus is driving a cost competitiveness to eventually achieve parity with diesel.

Speaker #2: And we've really done a lot to focus on commonizing our platforms to drive reliability and service performance in the aftermarket, because these buses and trucks are expected to run 10, 15 years in most cases.

Speaker #2: But also driving cost competitiveness. And that's a key attribute that our customers are interested in is they don't want another premium product that's entirely dependent upon incentives everybody wants to be able to scale without being reliant on incentives and subsidies.

Speaker #2: And so the focus is driving a cost competitiveness to eventually achieve parity with diesel and by commonizing components, commonizing parts, building supply chain synergies across our product portfolios we're able to achieve scale even in segments that might be considered niche.

Dakota Semler: By commonizing components, commonizing parts, building supply chain synergies across our product portfolios, we're able to achieve scale even in segments that might be considered niche. A lot of work has been done by our engineering team to achieve that and particularly our supply chain team to realize those synergies. That work is continuing this year. We've got a couple new variants that we're working on that will hopefully ship into production by probably Q4, and I'm sure we'll continue into subsequent years too.

Speaker #2: So a lot of work has been done by our engineering team to achieve that, and particularly our supply chain team to realize those synergies, and that work is continuing this year.

Speaker #2: We've got a couple of new variants that we're working on that we'll hopefully ship into production by probably Q4 and I'm sure we'll continue into subsequent years too.

Speaker #4: Thanks for taking my questions and I'll jump back into Q.

[Analyst] (Roth Capital Partners): Thanks for taking my questions, and I'll jump back in the queue.

Dakota Semler: Thanks.

Speaker #3: Our next question comes from Ted Jackson, with Northland Securities. Please go ahead.

Operator 3: Our next question comes from Ted Jackson with Northland Securities. Please go ahead.

Operator: Our next question comes from Ted Jackson with Northland Securities. Please go ahead.

Speaker #5: Hey, thanks for taking my questions. First thing, just out of curiosity, are you going to file your case today?

Ted Jackson: Hey, thanks for taking my questions. First thing, just out of curiosity, are you gonna file your K today?

Speaker #2: We are—oh, sorry. Sorry, not the K. We filed the 8-K. The K is going to be filed likely on Monday.

Dakota Semler: We are.

Ted Jackson: Okay, good.

Dakota Semler: Oh, sorry, not the K. We filed the Form 8-K. The K gonna be filed likely on Monday.

Speaker #5: Okay. So there's no—I won't have a cash flow statement from you until Monday.

Ted Jackson: Okay. I won't have the cash flow statement from you until Monday, basically.

Speaker #2: No. You'll be able to reconcile it on Monday. Yeah.

Dakota Semler: No. Well, you'll be able to reconcile it on Monday. Yeah.

Speaker #5: Okay. Then there's a bunch of data in there that obviously is not available, but I want to maybe dance around it, unless you want to tell me, because I want to bring it forth into '26.

Ted Jackson: Okay. There's a bunch of data in there that's typically, you know, obviously is not available, but I wanna get into maybe dance around it unless you wanna tell me 'cause I wanna bring it forth into 2026. You know, typically you break out kinda the revenue within or units within kinda step vans and powertrain and other.

Speaker #5: So, typically, you break out kind of the revenue within, or units within, kind of step vans and powertrain and other. Can you talk, with regards to what that mix was in the fourth quarter?

Dakota Semler: Mm-hmm.

Ted Jackson: Can you talk with regards to what that mix was in Q4? When we think about that mix in 2026, how would we think about it? I would assume that there's gonna be a shift, if you would, to a greater number of units coming from powertrains and hubs, given what's going on with Blue Bird and all the effort you're making with hubs. Maybe a little discussion about how you see your unit mix evolving from what we've seen, you know, the fourth quarter and, you know, really I guess all of 2025. That's my first question. Thanks.

Speaker #5: And then when we think about that mix, how would we think about it? I would assume that there's going to be a shift, if you would, to a greater number of units coming from powertrains and hubs, given what's going on with Bluebird and all the effort you're making with hubs, but maybe a little discussion about how you see your unit mix evolving from what we've seen the fourth quarter and really, I guess, all 25.

Speaker #5: That's my first question. Thanks.

Speaker #6: Thanks for the question. The unit mix will be disclosed. The details of the unit mix will be disclosed in our 10-K that we're planning to file on Monday.

Liana Pogosyan: Thanks for the question. The details of the unit mix will be disclosed in our 10-K that we're planning to file on Monday, but I would say directionally for 2025, the majority of the units were predominantly step vans, and hubs and powertrains made up the remainder of the mix for the full year. For Q4, powertrain and hubs drove the significant volumes with step vans being less significant.

Speaker #6: But I would say, directionally for 2025, the majority of the units were predominantly step vans, and hubs and powertrains made up the remainder of the mix for the full year.

Speaker #6: For the fourth quarter powertrain and hubs, drove the significant volume with step vans being less significant.

Ted Jackson: when we think about 2026, would it, you know, given the focus of the company, we should see.

Speaker #5: And then, when we think about 2026, given the focus of the company, we should expect to see a pronounced shift to more powertrains and hubs.

Ted Jackson: when we think about 2026, would it, you know, given the focus of the company, we should see.

Dakota Semler: Yeah.

Ted Jackson: We should expect to see a pronounced shift to more powertrains and hubs relevant.

Dakota Semler: Yeah. Appreciate the question, Ted. When we're talking about 2026, we don't guide specifically to the ranges. However, the rate of growth that we're seeing in both the hub business and the powertrain business is high double digits and could easily exceed, you know, triple digits this year. The relative rate of growth is increasing significantly as compared to step vans. We still anticipate step vans will grow and sustain a lot of our core customers. Overall, we expect the other two to grow proportionately or to grow increasingly.

Speaker #2: Yeah. Appreciate the question, Ted. And when we're talking about 26, we don't guide specifically to the ranges. However, the rate of growth that we're seeing in both the hub business and the powertrain business is high double digits and could easily exceed triple digits.

Speaker #2: This year, and so the relative rate of growth is increasing significantly as compared to step vans. We still anticipate step vans will grow and sustain a lot of our core customers.

Speaker #2: But overall, we expect the other two to grow proportionately—to grow increasingly. So I think, for—we don't want to put too rough of a number on it, but I think there's a general consensus that we're seeing a lot of demand, particularly for the new variants of the Hub that we've released, and then also a lot of demand with the school bus powertrains that we're building today.

Dakota Semler: I think we don't wanna put too rough a number on it, but I think there's a general consensus that we're seeing a lot of demand, particularly with the new variants of the hub that we've released, and then also a lot of demand with the school bus powertrains that we're building today.

Ted Jackson: Mm-hmm. Those are, you know, we talked about this last quarter too, Nicole, but those are your higher margin products. You did kind of allude in terms of your discussion of that last quarter that you are making strides. You just to kind of share some of the tariff costs with your customers. You know what I mean? You know on those higher margin products, so it won't show up per se, you know, like 100% through to you. Can you talk a little bit about, you know, like how you would see, you know what I mean? 'Cause if you look at like, say, your gross margin this quarter, and I'm only gonna talk-

Speaker #5: And then those are— we've talked about this last quarter too in the call, but those are your higher margin products, and you did kind of allude, in terms of your discussion of that last quarter, that you are making strides.

Speaker #5: You just kind of share some of the tariff costs with your customers, you know what I mean? On those higher-margin products, it won't show up, per se, like 100% through to you, but can you talk a little bit about how you would see—you know what I mean?

Speaker #5: Because if you look at, say, your gross margin this quarter, and I'm only going to talk gap because that's what I have in front of me.

Dakota Semler: Mm-hmm.

Ted Jackson: GAAP because it's what I have in front of me. You know, your gross margin for the year was down. I mean, would we see a pronounced improvement with regards to gross margin because of the mix? I mean, could you get yourself north of what you did in 2024 or is that too much?

Speaker #5: But your gross margin for the year was down. I mean, would we see a pronounced improvement with regards to gross margin because of the mix?

Speaker #5: I mean, could you get yourself north of what you did in '24? Or is that too much?

Speaker #2: Yeah, that's a great question. So, we did have some one-time impacts to gross margins that hit last year that we don't anticipate will be recurring.

Dakota Semler: Yeah. That's a great question. We did have some one-time impacts to gross margins that hit last year that we don't anticipate will be recurring. In regards to gross margins across the portfolio, I would say the hub is probably the strong gross margin one. The powertrains are comparable to what we see in the step van realm. The reason for that is there is a lot of engineering effort and investment that goes into development for those new platforms. A lot of that gets amortized over, you know, the overall revenue that we generate into that segment, from that segment.

Speaker #2: In regards to gross margins across the portfolio, I would say the Hub is probably the strong gross margin one. The powertrains are comparable to what we see in the step van realm.

Speaker #2: And the reason for that is there is a lot of engineering effort and investment that goes into development for those new platforms. A lot of that gets amortized over the overall revenue that we generate into that segment from that segment.

Dakota Semler: Comparable to step vans, hubs definitely, and powertrains and step vans, we do an annual pricing exercise where we try to realign pricing with all of the factors from the previous year, taken into consideration. I don't wanna communicate what is gonna happen with tariff strategy or tariff policy in the next 12 months, but I think things have slowed down and have become a bit more stable in terms of tariff volatility and tariff changes. We anticipate that our 2026 pricing, which factored in a lot of the tariff impacts that we were aware of from last year, will allow us to achieve those target margin ranges without having to go back to the customer and have them make concessions or share in any additional tariff exposure.

Speaker #2: But comparable to step vans, hubs definitely and powertrains and step vans, we do an annual pricing exercise where we try to realign pricing with all of the factors from the previous year taken into consideration.

Speaker #2: And I don't want to communicate what is going to happen with tariff strategy or tariff policy in the next 12 months, but I think things have slowed down and have become a bit more stable in terms of tariff volatility and tariff changes.

Speaker #2: And so we anticipate that our 2026 pricing which factored in a lot of the tariff impacts that we were aware of from last year will allow us to achieve those target margin ranges without having to go back to the customer or go back to the customer and have them make concessions or share in any additional tariff exposure.

Speaker #2: And the way we see it, we're very transparent with these customers around the tariff exposure and the tariff cost structure. Because it's not benefiting either of us, right?

Dakota Semler: The way we see it, we're very transparent with these customers around the tariff exposure and the tariff cost structure, 'cause it's not benefiting either of us, right? It's like increasing your cost basis for the products that we're both building together. A high degree of transparency is shared with those customers, and I think that level of transparency creates appreciation for them in order to, you know, be able to share in some of those exposure and that cost. Our 2026 pricing does have it factored in.

Speaker #2: It's increasing your cost basis for the products that we're both building together. And so a high degree of transparency shared with those customers. And I think that level that level of transparency creates appreciation for them.

Speaker #2: In order to be able to share in some of that exposure and that cost. But our 2026 pricing does have it factored in.

Speaker #5: Okay. Shifting over to the UPS program. So it's a 200-unit program. You've been putting units out to it. Can you give us some kind of sense, in terms of that program, like how many units have you shipped, and how many are left in the timeframe form?

Ted Jackson: Shifting over to the UPS program. It's a 200 unit program. You know, you've been putting units out to it. Can you give us some kind of sense in terms of, you know, of that program, like how many units have you shipped and how many are left in the time frame for?

Speaker #2: Yeah, the vast majority of them have shipped. There are only a few units that will hit this quarter that we will be recognizing revenue for, which have actually already been delivered, but we still have to meet all of the other revenue recognition criteria.

Dakota Semler: Yeah. The vast majority of them have shipped. There's only a few units that will hit this quarter that we'll be recognizing revenue for, which they've actually already been delivered, but you know, we still have to meet all of the other revenue recognition criteria. Most of those units are on the road operating every day, delivering packages. You probably can't tell that they're an Xos truck. There's no markings or logos on them. But if it says electric vehicle on the side, very high likelihood that it is an Xos truck. They're running, you know, in California and Texas, Pennsylvania, New York, New Jersey, all over the place. You probably very likely that if you're in one of those major states or cities, you'll see them on the roads.

Speaker #2: And most of those units are on the road, operating every day, delivering packages. You probably can't tell that they're a Xos truck. There's no markings or logos on them.

Speaker #2: But if it says electric vehicle on the side, very high likelihood that it is an Exos truck. And they're running in California and Texas, Pennsylvania, New York, New Jersey, all over the place.

Speaker #2: And so you probably very likely that if you're in one of those major states or cities, you'll see them on the roads.

Speaker #5: Well, that's exciting. I won't see them up here in Minnesota, but maybe someday. How about on powertrains? So you shipped 15 to Blue Bird. You said this quarter.

Ted Jackson: Well, that's exciting. I won't see them up here in Minnesota, but maybe someday. How about on powertrains? You know, you shipped 15 to Blue Bird, you said this quarter. I think it was 10 last quarter. You had orders of 100 since Q2. I mean, like, is it fair to assume that, you know, three-quarters of the volume that you've gotten from Blue Bird is, you know, on the come, if you will?

Speaker #5: I think it was 10 last quarter. You've had orders of 100 since the second quarter. You know what I mean? So, is it fair to assume that three quarters of the volume that you've gotten from Bluebird is on the come, if you will?

Speaker #2: Yeah, it's a good question. We do a lot of close work with their production planning team, coordinating and organizing to ensure that we're meeting their demand forecast.

Dakota Semler: Yeah, it's a good question. We do a lot of close work with their production planning team and coordinating and organizing to ensure that we're meeting their demand forecast. But they're also selling a number of other buses and their alt-fuel powertrains. So it does vary and fluctuate quarter to quarter, and it really comes down to their build schedule.

Speaker #2: But they're also selling a number of other buses and their alt fuel powertrains. So it does vary and fluctuate quarter to quarter and it really comes down to their bills schedule.

Ted Jackson: Mm-hmm.

Speaker #2: We do anticipate that business will grow, as I was saying before, probably double digits, if not triple digits, in terms of percentage this year.

Dakota Semler: We do anticipate that business will grow, as I was saying before, probably double digits, if not triple digits in terms of percentage, this year. We've already started to see that demand come in with that order of an additional 100 units, since our last Q. The great thing about that business is there's still very, very strong interest in that market. School buses are an ideal application to go electric. They do very short routes, generally driving twice a day, even for some of the longer range vehicles. They're doing field trips and other activities. They're not long-range vehicles.

Speaker #2: And we've already started to see that demand come in with that order of an additional 100 units since our last queue. And the great thing about that business is there's still very, very strong interest in that market.

Speaker #2: School buses are an ideal application to go electric. They do very short routes, generally driving twice a day. Even for some of the longer-range vehicles, they're doing field trips and other activities.

Speaker #2: They're not long-range vehicles. And we also announced in Q1, actually, an accomplishment that the newer vehicles will actually have V2G capability on them, which is becoming critical for achieving or obtaining funding and public incentive funding for procuring or acquiring these vehicles for school districts.

Dakota Semler: We also announced in Q1, actually, an accomplishment that the newer vehicles will actually have V2G capability on them, which is becoming critical for achieving or obtaining funding and public incentive funding for procuring or acquiring these vehicles for school districts. Really for us, we see that application continuing to grow over time. We've been very fortunate to have such an incredible partner like Blue Bird that has invested in us, continued to grow with us, and continues to share in several of these opportunities because I think they see the reliability, the durability that our platform has brought to them, and they see the cost competitiveness versus some of the other solutions that are out there in the market.

Speaker #2: So really, for us, we see that application continuing to grow over time. And we've been very fortunate to have such an incredible partner like Bluebird that has invested in us, continued to grow with us, and continues to share in several of these opportunities, because I think they see the reliability and durability that our platform has brought to them.

Speaker #2: And they see the cost competitiveness versus some of the other solutions that are out there in the market.

Speaker #5: So you provided a good segue into it wasn't actually my next question, but I'm going to make it my next question, which is on the two-way charging capabilities that you announced in the quarter.

Ted Jackson: You provided a good segue. It was actually my next question, but I'm gonna make it my next question, which is, you know, on the two-way charging capabilities that you announced in the quarter. What, you know what I mean, given that, you know, you know, a battery system has, you know, so many cycles of charge and discharge. When you put something like that in place, does it change it? I'd assume it would change kinda the lifespan, if you would, of that infrastructure. Is there much of an impact for that, and is there any kind of, you know, resistance because of it?

Speaker #5: You know what I mean? Given that a battery system has so many cycles of charge and discharge, when you put something like that in place, I assume it would change, kind of, the lifespan, if you would, of that infrastructure?

Speaker #5: Is there much of an impact for that? And is there any kind of resistance because of it?

Speaker #2: Yeah, that's a great question. And any use of the battery or any component in the powertrain is going to have an impact on the overall lifespan.

Dakota Semler: Yeah, it's a great question. Any use of the battery or any component in the powertrain is gonna have an impact on the overall lifespan. In the context of V2G, the discharge rate for most V2G chargers and V2G vehicles is not nearly the most intense use of the battery pack. The most intense use is often fast charging. If you're doing 1C charging on the vehicle, that's 1C or 2C charging, depending on the battery system. When you're doing V2G charging, for instance, a typical bus battery for us might be around 200kWh. Typical V2G power connection is usually only about 60kW. It's equivalent to, like, a 0.3C charge rate. Without getting too much into the technical specifics, it's a much lower charge demand.

Speaker #2: In the context of V2G, the discharge rate for most V2G chargers and V2G vehicles is not nearly the most intense use of the battery pack.

Speaker #2: The most intense use is often fast charging. So if you're doing 1C charging on the vehicle, that's 1C or 2C charging, depending upon the battery system.

Speaker #2: So, when you're doing V2G charging, for instance, a typical bus battery for us might be around 200 kilowatt-hours. A typical V2G power connection is usually only about 60 kilowatts.

Speaker #2: So, it's an equivalent to a 0.3C charge rate. And without getting too much into the technical specifics, it's a much lower charge demand, so it still does create some degradation, and it's like utilizing the pack, but it's not a very intense use case like you’ve had with fast charging.

Dakota Semler: It still does create some degradation, and it's like utilizing the pack, but it's not a very intense use case like you've had with fast charging. All of that is factored into our long-term warranty. We warrant on usage as well as on duration of, you know, when the vehicle's deployed. We have warranty programs depending upon what the customer wants and what our suppliers want that will extend that. We've done a ton of work in qualifying the batteries and characterizing them to make sure that we can hit those warranty periods. Really that's largely in part due to the newer battery chemistry that we've been using for the past four years or so, which is our lithium iron phosphate battery packs that enable us to achieve those higher extended life cycles.

Speaker #2: And all of that is factored into our long-term warranties. So we warrant on usage as well as on duration of when the vehicle is deployed.

Speaker #2: So we have warranty programs depending upon what the customer wants and what our suppliers want. That will extend that. And we've done a ton of work in qualifying the batteries and characterizing them to make sure that we can hit those warranty periods and really that's largely in part due to the newer battery chemistry that we've been using for the past four years or so, which is our lithium iron phosphate battery packs that enable us to achieve those higher extended life cycles.

Speaker #5: Is there an ability for you to retrofit any of your installed base with that capability? I'd imagine it'd be interesting, if you could.

Ted Jackson: Is there an ability for you to retrofit any of your installed base with that capability? I'd imagine it'd be interesting if you could.

Speaker #2: Yeah. So for some of our later generation vehicles that we've recently delivered, we have explored the potential to install the V2G capability. It's a pretty simple hardware change and a software change.

Dakota Semler: Yeah. For some of our later generation vehicles that we've recently delivered, we have explored the potential to install the V2G capability. It's a pretty simple hardware change and a software change. We haven't determined whether it's a big enough opportunity to pursue and commercialize and offer it to customers. But from a technical feasibility standpoint, it is something that we've evaluated and feel that we could do that.

Speaker #2: We haven't determined whether it's a big enough opportunity to pursue and commercialize and offer it to customers. But from a technical feasibility standpoint, it is something that we've evaluated and feel that we could do.

Speaker #5: I'm going to ask one more and then I'll get out of line, but I do have more behind in case there's no more. I'm going to cycle back in.

Ted Jackson: I'm gonna ask one more, and then I'll get out of line, but I do have more behind in case there's no more. I'm gonna cycle back in. My next question is, just going back into Blue Bird and the Hub, you know, when you think about the opportunity that you have with Blue Bird and, you know, the strategic nature of it, you know, it's gonna be a big fleet of, you know, Xos technology, let's just call it. Are they interested in the Hub? Is there any chance that you'd have them as a distribution partner for you for the Hub? Or do they bring you in for sales and such? 'Cause it seems like a logical place for the Hub to go.

Speaker #5: But my next question is, just going back into Bluebird and the hub, when you think about the opportunity that you have with Bluebird and the strategic nature of it, you're really going to—it's really—you’re going to—it’s going to be a big fleet of Xos technology, let’s just call it.

Speaker #5: Are they interested in the hub? Is there any chance that you would have them as a distribution partner for you for the hub, or would they bring you in for sales and such?

Speaker #5: Because it seems like a logical place for the hub to go.

Speaker #2: Yeah, that's a great question. So Blue Bird itself has obviously been very interested in the product. But they have an incredibly robust dealer network that they partner with, which is crucial in their distribution of their products.

Dakota Semler: Yeah, it's a great question. Blue Bird itself have obviously been very interested in the product, but they have a incredibly robust dealer network with that they partner with, which is crucial in their distribution of their products. We've actually already started building relationships with several of their dealers who've been delivering the buses with Xos powertrains in them. Those folks have been a great touch point to socialize the product for the end school district fleets. We've already had several of those conversations. We do think there's a tremendous opportunity in those school bus fleets. Oftentimes, they don't have the adequate power in their yards, because they haven't had EVs in their fleet before, just like most of our customers. The Hub is a perfect application.

Speaker #2: And we've actually already started building relationships with several of their dealers who've been delivering the buses with Xos powertrains in them. And those folks have been great touchpoints to socialize the product for the end school district fleets, so we've already had several of those conversations.

Speaker #2: We do think there's a tremendous opportunity in those school bus fleets. Oftentimes, they don't have adequate power in their yards, because they haven't had EVs in their fleet before—just like most of our customers.

Speaker #2: So the hub is a perfect application and, generally, a lot of these sales—average sale of a school bus transaction—it's not in the 50 to 100 or 200 units.

Dakota Semler: Generally, a lot of these sales, average sale of a school bus transaction, it's not in the 50 to 100 or 200 units. It's very low volumes. It can be single-digit units. The Hub really is a perfect partner or perfect product to be able to support those smaller deployments that don't currently have infrastructure in place. We're looking to expand that distribution kind of segment with our existing Hub's commercial team.

Speaker #2: It's very low volumes—it can be single-digit units. So the hub really is a perfect partner, or a perfect product, to be able to support those smaller deployments that don't currently have infrastructure in place. We're looking to expand that distribution kind of segment with our existing hubs and commercial team.

Speaker #5: And so, you would be going into that distribution network with the blessing of Bluebird. Bluebird would not be OEMing or reselling your product into it themselves.

Ted Jackson: You would be going into that distribution network with the blessing of Blue Bird. Blue Bird would not be like OE-ing or reselling your product into it themselves.

Speaker #2: That's correct.

Dakota Semler: That's correct.

Speaker #5: Okay. I mean, I have a couple more questions, but I feel like I've been hogging time. So I'm going to step out, and if no one else comes back in—

Ted Jackson: Okay. I have a couple more questions, but I feel like I've been hogging time, so I'm gonna step out and if no one else comes back in, I'll key back in and ask a couple more to go to.

Speaker #5: I'll key back in and ask a couple more to go to. Thanks.

Dakota Semler: All right.

Ted Jackson: Okay, thanks.

Speaker #2: I think in the queue, nobody's asking right now. So I think you can keep going if you want.

Dakota Semler: I think in the queue, nobody's asking right now, so I think you can keep going if you.

Ted Jackson: Okay.

Dakota Semler: If you want.

Ted Jackson: Okay. A couple more for you. Just again, going back in on the new Hubs. In your release, you said that they would start becoming available in April, which is next month. Is that still on track?

Speaker #5: Okay. Then a couple more for you. Just again, going back in on the new hubs—you were, in your release, you said that you would start becoming available in April, which is next month.

Speaker #5: Is that still on track?

Speaker #2: Yeah, actually the first 400-kilowatt-hour variant shipped this quarter. So we have a couple of units that are going out, and everything after this will be all of the new options.

Dakota Semler: Yeah. Actually, the first 400kWh variant shipped this quarter. We have a couple units that are going out, and everything after this will be all of the new options.

Speaker #5: Well, that's exciting.

Ted Jackson: Well, that's exciting.

Speaker #2: Thanks.

Dakota Semler: Thanks.

Ted Jackson: I said. This is a working capital question. I mean, you know, it's a negative question, but honestly, it's a negative question because you've had so much positive. You know, the improvement in working capital that you guys have done in 2025 is unbelievable. It's amazing. You know, it's been a huge source of your operating cash flow. If I look at you know, the balance sheet in the Q4 and I see where kind of your receivables and everything are, I mean, I'm hard-pressed to see that there's much more improvement that you can get.

Speaker #5: I asked that. I asked that. This is a working capital question. I mean—and it's a negative question, but I mean, honestly, it's a negative question because you've had so much positive.

Speaker #5: The improvement in working capital that you guys have done in 2025 is unbelievable. It's amazing. But it's been a huge source of your operating cash flow.

Speaker #5: But if I look at the balance sheet in the fourth quarter and I see where receivables and everything are, I mean, it's hard for us to see that there's much more improvement that you can get.

Speaker #5: I mean, when you think about 2026 and your ability to generate cash, is there more cash that you think you can get off the balance sheet, or is it going to be more based on access at the ATM and, let's call it, revenue growth and margin improvement?

Ted Jackson: I mean, you know, when you think about 2026 and, you know, your ability to generate cash, is there more cash that you think you can get off the balance sheet, or is it gonna be more based on, you know, access at the ATM and, you know, let's call it revenue growth and margin improvement? You can kind of walk through that.

Speaker #5: So you can kind of.

Dakota Semler: Yeah, it's a great question. The first thing I would start with is on the working capital utilization standpoint. We still have about $25 million in inventory, and not all of that, a very small portion of that is finished goods, but that usable inventory is the primary means of generating more cash for working capital in the year. We're continuing to focus on the longest segments of our inventory conversion process to optimize and cut those down to make sure that we can turn that inventory. We wanna be really, really lean. We wanna get to multiple inventory cycles per year, which we still have yet to do.

Speaker #2: Yeah, it's a great question. So the first thing I would start with is, on the working capital utilization standpoint, we still have about $25 million in inventory.

Speaker #2: And not all of that—a very small portion of that—is finished goods. But that usable inventory is the primary means of generating more cash for working capital in the year.

Speaker #2: And we're continuing to focus on the longest segments of our inventory conversion process to optimize and cut those down to make sure that we can turn that inventory and we want to be really lean.

Speaker #2: We want to get to multiple inventory cycles per year, which we still have yet to do. So, I think the first thing that we're working on is optimizing that inventory—turning it over quicker, building to order, delivering products faster, delivering more strip chassis as opposed to step vans.

Dakota Semler: I think the first thing that we're working on is optimizing that inventory, turning it over quicker, building to order, delivering products faster, delivering more strip chassis as opposed to step vans, and delivering more Hubs, which is a complete assembly that we build. Same with powertrains. It's a completed assembly, so we recognize revenue as soon as it's delivered. The product mix will favor that and help that, as well as just our improved processes internally to order spec and get vehicles delivered. We do hope to be able to utilize the ATM in the year ahead. We're gonna, you know, figure out when there's an optimal time to be able to do that. But that's why we have that facility outstanding.

Speaker #2: And delivering more hubs, which is a complete assembly that we build. Same with powertrains. It's a completed assembly. So we recognize revenue as soon as it's delivered.

Speaker #2: So, the product mix will favor that and help that, as well as just our improved processes internally to order, spec, and get vehicles delivered.

Speaker #2: We do hope to be able to utilize the ATM in the year ahead. We're going to figure out when there's an optimal time to be able to do that.

Speaker #2: But that's why we have that facility outstanding. We are going to be selective about it, and we don't want to overly dilute the cap table and impact investors, particularly where the stock is today.

Dakota Semler: We are gonna be selective about it, and we don't wanna overly dilute the cap table and impact investors, and particularly where the stock is today. I think there's other things that we can continue to do and improve. We've taken a pretty hard look at OpEx, and we don't believe OpEx is gonna be restructured that heavily in 2026. There are some expenses that will continue to reduce and burn down through the year, which will be favorable for working capital.

Speaker #2: And then I think there are other things that we can continue to do and improve. We've taken a pretty hard look at OPEX, and we don't believe OPEX is going to be restructured that heavily in 2026.

Speaker #2: But there are some expenses that will continue to reduce and burn down through the year, which will be favorable for working capital. And then I would say lastly, is growth in new segments like having products such as the hub and the powertrains, so that we don't ever have to deliver a partially assembled vehicle where it's sitting in somebody else's hands.

Dakota Semler: I would say lastly is growth in new segments, like having products such as the Hub and the powertrains that we don't ever have to deliver a partially assembled vehicle where it's sitting in somebody else's hands, which could be for months on end, will dramatically enable us to reduce that inventory count, that inventory value over time and speed up our inventory turns.

Speaker #2: Which could be for months on end. We'll dramatically enable us to reduce that inventory count that inventory value over time and speed up our inventory turns.

Speaker #5: That's a good point. Then just jumping back over to the Hub, and I think I have one more after this. But I think it was last quarter you talked about, or in the press release maybe, going into some new avenues with the Hub, like power and resiliency, and you mentioned that you'd be able to provide some more color on that.

Ted Jackson: That's a good point. Then quickly just jumping back over in the hub, and I think I have one more after this. You know, I think it was last quarter you talked about, you know, or in the press release maybe going into, you know, some new avenues with the hub with, you know, like power and resiliency. You know, you mentioned that you'd be able to provide some more color on that. Can you know, maybe a little update on what's going on? It's a pretty exciting market. You know, what's going on with regards to your efforts to position the hub for that and, you know, kind of penetrate it.

Speaker #5: Can you maybe give a little update on what's going on? It's a pretty exciting market. What's going on with regards to your efforts to position the hub for that and kind of penetrate it?

Speaker #2: Yeah, it's actually a big area of focus for the engineering team, as well as our sales and business development team, right now. We think that there is a niche that isn't being serviced right now in the power reliability and power resiliency markets.

Dakota Semler: Yeah. It's actually a big area of focus for the engineering team as well as our sales and business development team right now. We think that there is a niche that isn't being serviced right now in the power reliability and power resiliency markets, not just for mobile applications, but also for fixed applications. I can talk about it at a high level, but with the influx of data center demand creating huge demands on the grid for power, every industrial power user is now competing with the likes of those customers, which are willing to pay premiums for power delivery, and they're willing to pay premiums for power reliability and resiliency.

Speaker #2: Not just for mobile applications, but also for fixed applications. And I can talk about it at a high level, but with the influx of data center demand creating huge demands on the grid for power, every industrial power user is now competing with the likes of those customers.

Speaker #2: Which are willing to pay premiums for power delivery and they're willing to pay premiums for power reliability and resiliency. And so now folks that operated a 3PL warehouse or a cold storage facility or any other kind of industrial power consumer they're going to be competing with the likes of Google and Facebook and many of these other larger companies that are incredibly well capitalized looking to buy power or even establish behind the meter infrastructure.

Dakota Semler: Now folks that operated a 3PL warehouse or a cold storage facility or any other kind of industrial power consumer, they're gonna be competing with the likes of Google and Facebook and many of these other larger companies that are incredibly well capitalized, looking to buy power or even establish behind the meter infrastructure. Our focus is on solving really the niche segment, which is gonna be power reliability, power resiliency, and being able to provide those industrial power users that are focused on keeping their operations going and continuing to grow. Data centers is one application, but we believe that's one segment of many that will need power reliability in this kind of current industrial grid environment that we're in today.

Speaker #2: So our focus is on solving really the niche segment, which is going to be power reliability, power resiliency, and being able to provide those industrial power users that are focused on keeping their operations going and continuing to grow. Data centers is one application, but we believe that's one segment of many that will need power reliability in this kind of current industrial grid environment that we're in today.

Speaker #5: Okay. And then my last one—this is more for clarity for me, and I should know this—but when we talk about powertrains, it's kind of, it's almost interchangeable: powertrain business and Bluebird.

Ted Jackson: Okay. Then my last one, and this is more for a clarity thing for me, and I should know this, but you know, you, when we talk about powertrains, it kinda, it's almost interchangeable powertrain business and Blue Bird. You know, you talked last quarter about 10 shipments to Blue Bird, this quarter 15. Is there other customers other than Blue Bird that are taking powertrains, or is Blue Bird right now kind of the only thing, and it's something you wanna build off of in terms of, you know, other-

Speaker #5: You talked last quarter about 10 of shipments to Bluebird this quarter, 15. Is there other customers other than Bluebird that are taking powertrains, or is Bluebird right now kind of the only thing, and it's something you want to build off of in terms of?

Speaker #2: There are a few other customers. The customer diversity is not nearly what it is in the vehicles business, but it is something that we are working on diversifying and building up new customers there.

Dakota Semler: There are a few other customers. The customer diversity is not nearly what it is in the vehicles business, but it is something that we are working on diversifying and building up new customers there. I think with our latest powertrain platforms that we've been developing, we should have a lot more interest coming from some other off-highway customers and other segments that we haven't really gotten the best penetration in previous years.

Speaker #2: And I think with our latest powertrain platforms that we've been developing, we should have a lot more interest coming from some other off-highway customers and other segments that we haven't really gotten the best penetration in, in previous years.

Speaker #5: Okay, all right. That's it for me. Thanks for all the time. I appreciate it.

Ted Jackson: Okay. All right. That's it for me. Thanks for all the time. I appreciate it.

Speaker #2: Thanks, Ted. Yeah, I appreciate all the questions.

Dakota Semler: Thanks, Ted. Yeah, I appreciate all the questions.

Operator 3: This concludes our question and answer session. Thank you for attending today's presentation. You may now disconnect.

Operator: This concludes our question and answer session. Thank you for attending today's presentation. You may now disconnect.

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