Earnings call transcript: Xos Q4 2024 sees revenue growth, stock volatile

Xos Inc reported its financial results for the fourth quarter of 2024, showcasing significant improvements in revenue and gross margins, despite a decline in quarterly revenue compared to the previous quarter. The company’s stock experienced notable volatility in aftermarket trading, reflecting mixed investor sentiment. According to InvestingPro data, Xos stock has shown high price volatility, with a beta of 1.69 and a significant 65% decline over the past year. Currently trading at $3.44, InvestingPro’s Fair Value analysis suggests the stock is undervalued. Xos ended the year with a positive GAAP gross margin and announced strategic initiatives to enhance its product lineup and operational efficiency.

Key Takeaways

• Xos reported full-year 2024 revenue of $56 million, a 25.8% increase from 2023.
• The company achieved its first positive GAAP gross margin of 7.1%.
• Operating expenses were significantly reduced to $49.8 million.
• Stock price fluctuated in aftermarket trading, showing a 16.57% increase to $4.01.
• Strategic focus on expanding the powertrain business and cost reductions.

Company Performance

Xos demonstrated robust year-over-year revenue growth, with a 25.8% increase to $56 million in 2024. This growth was supported by the launch of new products and expansion into new markets. The company also reported its first positive GAAP gross margin, reflecting improved operational efficiencies and a favorable product mix. However, the fourth quarter revenue of $11.5 million marked a sequential decline from the third quarter, indicating potential seasonal or market challenges.

Financial Highlights

• Full-year revenue: $56 million (up from $44.5 million in 2023)
• Q4 2024 revenue: $11.5 million (down from $15.8 million in Q3)
• GAAP gross margin: 7.1% (up from -2.9% in 2023)
• Non-GAAP gross margin: 18% (up from -5.2% in 2023)
• Operating expenses: $49.8 million (down from $63.7 million in 2023)

Outlook & Guidance

Xos provided revenue guidance for 2025, projecting between $50.2 million and $65.8 million. The company anticipates delivering 320 to 420 units, with a focus on improving gross margins further. Strategic priorities include working capital management and enhancing liquidity, alongside expanding the powertrain business.

Executive Commentary

Dakota Semler, CEO of Xos, emphasized the company’s leadership position in the medium-duty electric vehicle sector, stating, "We’re delivering more medium-duty electric vehicles than any other company in our sector." CFO Liana Pogosian highlighted the company’s financial outlook, noting, "We anticipate revenue to fall within the range of $50.2M to $65.8M." Semler also expressed optimism about the company’s strategic position, saying, "We believe we are entering the new year in one of the strongest positions in our company’s history."

Risks and Challenges

• Potential tariffs on imported EV components could increase costs by $5,000 to $20,000 per vehicle.
• The commercial EV market faces challenges with infrastructure deployment.
• Dependence on state-level incentive programs remains critical for EV adoption.
• Supply chain disruptions could impact production schedules and costs.
• The need to continuously reduce the bill of materials costs to maintain competitive pricing.

Q&A

During the earnings call, analysts inquired about the drivers behind the improved gross margins, which were attributed to a specialty product mix including the Hub and powertrains. Concerns were raised about potential tariff impacts, with management exploring strategies to mitigate these risks. Additionally, the readiness of charging infrastructure was identified as a key constraint on deliveries, while the absence of environmental credit revenue in Q4 was noted.

Full transcript - Xos Inc (XOS) Q4 2024:

Conference Operator: Good day, and welcome to the Ekso’s Fourth Quarter twenty twenty four Earnings Conference Call. All participants will be in a listen only mode. After today’s presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I would now like to turn the conference over to David Slachute, General Counsel.

Please go ahead.

David Slachute, General Counsel, Exos: Thank you, everyone, for joining us today. Hosting the call with me are Exos’ Chief Executive Officer, Dakota Semler Exos’ Chief Operating Officer, Giordano Sardoni and Exos’ Acting Chief Financial Officer, Liana Pogosian. Today, after the close of regular trading, Exos issued its fourth quarter twenty twenty four 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 12/31/2024. Management’s statements today reflect management’s views as of today, 03/28/2025 only, and will include forward looking statements, including statements regarding our fiscal year 2025, management’s expectations for future financial and operational performance and other statements regarding our plans, prospects and expectations.

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, Exaxe’s ability to access capital when needed and continue as a going concern and potential supply chain disruptions, including as a result of changes to our uncertainty around trade policies and tariffs, is included in today’s press release and in our filings with the SEC, including our most recent annual report on Form 10 K and subsequent filings. We undertake no obligation to update forward looking statements, except as required by law. Participants are cautioned not to put undue reliance on forward looking statements. Further, today’s presentation includes references to non GAAP financial measures and performance metrics.

Additional information about these non GAAP measures, including reconciliations of 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.exostrucks.com/investoroverview. With that, I now turn it over to our CEO, Dakota.

Dakota Semler, Chief Executive Officer, Exos: Thanks, David, and thank you everyone for joining us. Q4 marked the close of Exos’ strongest year yet, and it sets the stage for an even stronger 2025. Over the last twelve months, we’ve demonstrated that we can not only grow revenue and diversify our customer base, but also improve profitability, cash flow management and operational execution. As we look ahead, we expect that trend to continue with top line growth, margin expansion and improved product diversity. This momentum positions Exos as the most efficient public commercial EV company in the market today.

We’re delivering more medium duty electric vehicles than any other company in our sector and we’re doing it with the most efficient operational expense structure in the industry. Even as the economic environment continues to evolve and we see changes in administration, regulatory policies and tariff structures, Exos remains resilient. While these changes have brought their own set of challenges, including potential cost impacts from new tariffs, we’ve been preparing for these shifts for over a year. We’ll talk more about these steps we’re taking to stay ahead of those changes in today’s call. In Q4, we generated $11,500,000 in revenue and delivered 51 units.

Despite regular seasonal delays in the Parcel Delivery segment, where many of our customers experienced peak volume during Q4 and Q1, delaying vehicle acceptance, we remain confident in our demand pipeline. While we fell short of our guided deliveries for the year, we still achieved significant year over year revenue growth in 2024. This reflects continued demand for our products even at higher average selling prices than we’ve previously seen, which we view as a strong validation of our value proposition in the market. Importantly, Exos is also one of the very few electric vehicle manufacturers delivering double digit gross margins on our products. In addition to gross margin gains, we’re continuing to drive improvements in liquidity, inventory turnover and working capital management.

Beyond our financial accomplishments, we also achieved a number of operational milestones in 2024. We began delivery of our second generation hub, a product now in low volume series production. We expanded our powertrain business, completing FMBSS testing and securing production orders with both Bluebird and Winnebago. And we have delivered vehicles to some of the largest and most sophisticated fleets in the world, including FedEx Ground and UPS. Following the end of the year, we also secured several major commercial orders, just under 200 strip chassis to be delivered to UPS, twenty hub units to be delivered to Caltrans and our first production order of 20 Bluebird powertrains.

Each of these orders represents the largest unit volume order we have received in the respective product categories, and we believe this momentum will only continue. Additionally, we closed a significant transaction that added over $40,000,000 in liquidity to our balance sheet, providing essential flexibility as we manage the timing of incentive program collections. In my remarks, I’ll cover highlights from Q4 across our vehicle deliveries, hub product ramp up and broader market shifts. Then Gio and Liana will walk through our operational and financial performance in more detail. Of the 51 deliveries this quarter, we’ve seen growing momentum and customer diversification across sectors and applications.

As mentioned earlier, we’ve experienced seasonal challenges from our parcel delivery customers who typically deprioritized vehicle intake during their peak season in Q4. This temporarily impacted unit deliveries and contributed to a 27.3% decline in top line revenue compared to Q3. In our Step Van business, we anticipate a positive shift towards stripped chassis deliveries. This operational pivot can reduce our inventory turnover period by two to three months, helping us accelerate cash collection in a working capital intensive environment. We plan to continue delivering completed vehicles as well, but we expect this mix shift to give us more flexibility and responsiveness across our order base.

We also made significant progress in our Powertrain business. In Q4, we delivered our first Powertrain product for use in a Bluebird electric school bus. The short wheel based Type C school bus has already completed FMBSS testing and we plan to begin commercial production deliveries in early twenty twenty five. We anticipate our Powered by Excess segment will continue to grow through strategic partnerships with Bluebird and Winnebago. In 2024, we delivered one of Winnebago’s specialty vehicles and completed FMBSS testing for that configuration.

We also delivered the first production mobile medical vehicle to a Winnebago customer. This quarter marked a major milestone as we ramped into low volume series production of the HUB, our mobile charging and energy storage solution. Hub customers now include Lamo, ABM, Loomis, Florida Power and Light, Tampa Electric, Duke Energy and Caltrans, the California Department of Transportation, who is deploying hubs to support critical infrastructure across the state. The demand for hub continues to expand across fleet and utility applications alike. In light of that success, we ramped up hub demonstrations in Q4 to showcase use cases across mobile fleet charging, large event charging and disaster response.

The response has been overwhelmingly positive and reinforces our belief in the long term potential of the hub platform. Beyond our deliveries, we secured several million dollars in new incentives in 2024. We also anticipate additional funding opportunities opening up soon. The New Jersey Voucher Incentive Program is expected to resume and Washington State has announced a new program with up to $80,000,000 in available funding. Our incentives team is closely tracking these programs and is already in discussions with interested customers about leveraging them for future orders.

We’re also excited to share that we secured nearly $10,000,000 from the Texas Vehicle Emissions Reduction Program for vehicle deliveries scheduled in 2025. We’re pleased with the momentum of that program and believe it will continue to be a growth driver for us. Given recent changes in federal policy, we anticipate some of our customers will lose access to tax credits and federal incentives. While the federal 45 W tax credit does provide some benefit, the most impactful incentives are administered at the state level in California, New York, Texas and others where point of sale or voucher style programs are critical to our customers purchasing decisions. While some of these programs may be impacted by shifts in federal policy, we believe that many states will maintain or even increase their support for these incentives.

These programs are essential for our ability to grow our business and our largest regional markets all continue to have active incentive programs in place. On the operational side, we’ve also taken steps to improve inventory turnover. In Q4, we began working with several partners to help floor plan vehicles during the delivery process, improving our ability to manage working capital without needing to carry inventory on our books for extended periods. As the environment for zero emission vehicles continues to evolve, we know there will be challenges. However, we believe that with a focused team and a strong execution plan, we can overcome these obstacles.

One of the major headwinds on the horizon is the proposed introduction of new tariffs on imported EV components and vehicles. Depending upon the configuration, these tariffs could add $5,000 to $20,000 per vehicle in costs. While these figures are not insignificant, we are proactively working with both our suppliers and our customers to minimize the impact. That includes reshoring critical components where feasible and exploring federal cost offset programs to reduce the burden of these tariffs. Our goal remains unchanged to provide customers with the most competitive total cost of ownership in the commercial EV space.

Just as we began 2024, we closed the year with a sharp focus on reducing operational expenses. Gio will speak more about the progress we’ve made, including reductions in operating facility costs and headcount as we continue our push towards achieving positive free cash flow in the near term.

Giordano Sardoni, Chief Operating Officer, Exos: Thanks, Dakota, and good afternoon, everyone. Our manufacturing, supply chain and engineering teams delivered a strong close to the year, improving efficiency while executing at our highest production rates yet. Despite operating with a significantly smaller team, we achieved our most efficient vehicle and hub production rates to date, demonstrating the strength of our streamlined operations. In addition to our regular chassis production, the team worked hard this quarter to prepare for the launch of a longer wheelbase variant of our set van chassis platform. We are now producing this two zero eight inches wheelbase variant on our main chassis line.

This longer wheelbase allows for a larger body and an additional 200 cubic feet of cargo capacity, a direct response to customer requests. A key highlight this quarter was our continued engineering work on chassis improvements for one of our largest customers to whom we are now making deliveries. Our focus on refining vehicle design and durability ensures we’re meeting the evolving needs of our fleet customers, while driving long term cost efficiencies. We steadily increased our hub production rates throughout the quarter, reaching approximately two hub units per week. The significant accomplishment positions us well to build and deliver additional hub units to meet customer demand in 2025.

The engineering and supply chain teams remain dedicated to reducing bill of material costs through both vehicle design optimization and strategic supplier partnerships. In the last twelve months, our team has implemented over $10,000,000 in cost reductions and we have additional reductions planned for the coming year. We are actively working to mitigate potential tariff impacts and related uncertainties by continuing to drive down direct material costs through engineering improvements and supplier partnership. We remain focused on our strategy to invest more in Tennessee, which has become the foundation of our operations. Our Step Van chassis and the Exos Hub are both built at our main plant in Birdstown, Tennessee.

Recently, we secured a sublease for part of our Los Angeles facility and transferred possession to our new tenant. This move will reduce our operational expenses throughout the lease term. We’re also actively working on subleasing two additional properties that we assumed through our acquisition of Electra Meccanica in Q1. There is interest in both properties and we hope to provide more updates on these potential subleases soon. Our operational improvements and cost control measures are designed both to support short term production and delivery needs and to keep us on track for our long term goals.

In light of the recent election results, we anticipate potential federal level policy changes that could impact our industry and business, particularly possible particularly possible increases in tariffs and imported components. We’re closely monitoring this evolving situation with the help of customs advisors. Meanwhile, we’re actively working with our supplier partners to pursue alternative sourcing strategies, including reshoring components to North America and expanding our investments in The U. S. Supply chain.

While these tariffs could be disruptive, we’re confident they won’t hinder our ability to source necessary components and continuing delivering trucks profitably. Additionally, we anticipate offsetting much of the potential tariff impact through continued cost reductions in our goods along with efficiencies from our engineering and supply chain initiatives. We’re committed to American manufacturing, which is why we’ve invested significantly in our Tennessee facility. As we look ahead, we will continue to enhance our manufacturing and supply chain infrastructure to adapt to potential regulatory changes, while maintaining our strong operational momentum. With that, I’ll turn it over to Liana for an in-depth look at our financial performance.

Liana Pogosian, Acting Chief Financial Officer, Exos: Thank you, Gio. This year, we continue to grow our revenues, delivered our first positive full year GAAP gross margin and reduced total operating expenses. For the full year of 2024, our revenue was $56,000,000 up from $44,500,000 compared to last year. Our cost of goods sold during the year increased to $52,000,000 compared to $45,800,000 in 2023. GAAP gross margin during the year was a profit of $4,000,000 or 7.1% compared to a loss of $1,300,000 or negative 2.9% in 2023.

Non GAAP gross margin during the year was a profit of $10,000,000 or 18% compared to a loss of $2,300,000 or negative 5.2% in 2023. Margin improvements were mainly driven by higher average selling price, continued focus on reducing labor and overhead costs and improving our production processes. The increase in average selling price was primarily due to selling our newer generation step vans and hubs, which have higher prices than our legacy products for the full year 2024 as compared to just a portion of the 2023 year. For the fourth quarter of twenty twenty four, our revenue was $11,500,000 down from $15,800,000 in the third quarter this year. Our cost of goods sold during the quarter increased to $15,200,000 compared to $12,900,000 in the third quarter.

GAAP gross margin during the quarter was a loss of $3,700,000 or negative 32.4% compared to a profit of $2,900,000 or 18.1% in the third quarter. GAAP gross margin was significantly impacted in the current quarter by changes in our inventory reserves and write offs of inventory from our annual physical count as well as absolute parts. Write offs of inventory mainly related to consolidation of two warehouses in 2024 into our main plant in Bardstown, as well as write offs of inventory related to previous versions of our product. Excluding these adjustments, non GAAP gross margin during the quarter was a profit of $2,700,000 or 23.2% compared to a profit of $3,700,000 or 23.2% in the third quarter. This quarter marks our sixth consecutive quarter of positive non GAAP gross margin performance.

Turning to expenses, our full year 2024 operating expenses were $49,800,000 compared to $63,700,000 last year as we remain disciplined in managing our costs while continuing to support key growth initiatives. Our operating profitability continued to follow a promising trajectory with a non GAAP operating loss for 2024 of 32,100,000 compared to a loss of $58,100,000 in 2023. Our fourth quarter operating expenses were $10,900,000 compared to $12,600,000 last quarter. This was driven by several cost cutting measures taken during the fourth quarter, which included a reduction in our total workforce in October and temporary salary reduction for certain of our senior executives. This contributed to our non GAAP operating loss for the fourth quarter of $6,400,000 compared to $6,600,000 in the third quarter.

Turning to the balance sheet, we closed the year with cash and cash equivalents totaling $11,000,000 Operating cash flow less CapEx or free cash flow was negative $49,100,000 for the year compared to a negative free cash flow of $40,700,000 last year. Free cash flow was $3,300,000 for the quarter compared to a negative free cash flow of $11,700,000 last quarter. The favorable working capital changes primarily in accounts receivable collections contributed to achieving our first quarter ever of positive free cash flow. Inventory decreased to $36,600,000 this year from $37,800,000 at the end of twenty twenty three and from $42,400,000 last quarter. Inventory dropped due to a combination of faster returns and our focus on strategic purchasing and inventory management, as well as changes in inventory reserves and write offs as previously mentioned.

We are actively managing our liquidity position and plan to improve our liquidity and working capital requirements including preserving financial resources, improving accounts receivable collections and exploring options for enhancing our liquidity. In the past quarter, we have made great progress in collecting receivables from customers and from organizations helping to administer state grant programs. We remain focused on our goal of earning positive gross margins by delivering innovative products that help our fleet customers achieve lower operating costs. Now turning to our outlook for 2025, we anticipate revenue to fall within the range of $50,200,000 to $65,800,000 unit deliveries to be within the range of three twenty to four twenty units and non GAAP operating loss to be in the range of $17,200,000 to $14,000,000. With that, I’ll turn the call back over to Dakota.

Dakota Semler, Chief Executive Officer, Exos: Thank you, Liana. As we look ahead to 2025, we remain focused on delivering growth, increasing liquidity and margins and building products that stand the test of time. While the broader EV landscape continues to evolve, facing regulatory shifts, infrastructure bottlenecks and cost pressures, we see these as opportunities to differentiate ourselves. Over the past year, we’ve expanded our product portfolio, deepened our customer partnerships and proven that we can adapt quickly while maintaining discipline in execution and our high quality standards. The interest we’re seeing across powertrains, strip chassis and the Exos hub reflects the strength of our company and the trust we’ve built with customers.

With the foundational work of 2024 behind us, we believe we are entering the new year in one of the strongest positions in our company’s history. We’re excited for the road ahead and we’re just getting started. With that, I’ll hand it back to the operator for questions.

Conference Operator: Thank you. We will now begin the question and answer session. And your first question today will come from Craig Irwin with ROTH Capital Partners. Please go ahead.

Craig Irwin, Analyst, ROTH Capital Partners: Good evening. Thank you for taking my questions. So Dakota, to start from the top, your gross margins 23% in quarter on an adjusted basis really surprised me. Really strong when we consider volume in the quarter of fifty one units down 45% sequentially, but your margins are flat. So that kind of suggests that either you have a substantial improvement in variable production costs or production costs overall or maybe a positive mix issue going on.

Can you help us understand what’s going right in there to really deliver on margin results like this?

Dakota Semler, Chief Executive Officer, Exos: Yes, absolutely. And thanks for the question, Craig. It really comes down to a shifting product mix. And when we look at some of our specialty products that are unique in the market, such as the Exos Hub, and some of our powertrain customers, those margins can be strong given the uniqueness of those products and the engineering investments that we make upfront with our customers. So if we see quarters that reflect a higher mix of some of those products, we anticipate that that’s going to be reflected in our adjusted gross margins for the quarter.

And I think one other thing to note about that is we anticipate these will continue to improve. Assuming we can address the challenges with tariffs, with increased scale across our supply chain and increased scale in the production and manufacturing environment, those margins should be able to be improved. And several of those non cash GAAP associated expenses such as capitalized freight and other items can also continue to go down as we increase those volumes.

Craig Irwin, Analyst, ROTH Capital Partners: Excellent, excellent. So that dovetails nicely to my second question, which is about your Hub business outlook. You mentioned several customers in your prepared comments, Waymo, Duke, Caltrans, others. You also mentioned two units a week in production capacity. Do you expect to operate anywhere near production capacity in this business this year?

Is there maybe anything that would have you consider increasing capacity or is there a potential for that based on discussions you’re having with this interesting list of customers?

Dakota Semler, Chief Executive Officer, Exos: Yes, absolutely. So we’ve set up the line to be able to support the market the way we understand it today. It is still a incredibly unique product and that it’s providing an infrastructure stopgap for many customers that experience charging infrastructure deployment delays, from installing permanent infrastructure. And it’s kind of an interesting process because generally when we talk to a customer, they’re only interested in the product after they’ve had or dealt with the difficulty of deploying charging infrastructure. So it takes folks a first run at deploying infrastructure in a conventional manner to be able to really see the value in the hub.

But one thing we are planning on doing this year is increasing the capabilities of the hub to be able to offer other, power export capabilities and energy management capabilities that will service a broader market and potentially even be utilized in fixed infrastructure applications where it can still provide a similar unique product offering to customers kind of going through those same pain points. So we do anticipate the volume potential and the production capacity potential growing, but we’re not going to expand that production capacity until we really can validate that market and make sure that we have a strong customer base and backlog behind it.

Craig Irwin, Analyst, ROTH Capital Partners: Excellent. So then moving on to the Drivetrain business, Bluebird and Winnebago, obviously customers that are both working for you, things are going well there. I assume there are other customers in the pipeline. Can you maybe help people understand what FMBSS certification means for the drivetrain delivered for Bluebird and the 20 units that they ordered for powertrains for this year? Would you expect those to be in production vehicles?

And any additional color on the powertrain business would be great. Thank you.

Dakota Semler, Chief Executive Officer, Exos: Absolutely. So the powertrain business is a unique business and that it requires a deep partnership with our customers and collaborating with their respective engineering organizations to integrate the powertrain into their vehicle chassis. And so we do a lot of work upfront with these customers in engineering validation and durability assessment and testing as well as homologation. And through that homologation process, there are several steps that we have to comply with in order to satisfy the Federal Motor Vehicle Safety Standards. And those steps can take many months, in some cases years to get through.

So what that means when we complete those processes is that we can sell production units to end user customers. So it’s an exciting step. And the order that we received is expected to go to an end user customer. So these are full production powertrains that we’ll be shipping this year, going to a school district.

Craig Irwin, Analyst, ROTH Capital Partners: Okay. And then last question, if I may, the balance sheet was another complete surprise, right? $3,300,000 in free cash flow, $2,500,000 higher cash exiting your fourth quarter than in your third quarter, dollars ’15 million in cash out from receivables and inventory in the quarter. How much room is there to go to continue improving on working capital? You did give us the details around your mix shift towards strip chassis and how that helps a little bit, but can you continue to lean out inventory and receivables?

And is there anything else we should know about the balance sheet that would help us understand cash needs over the next

Giordano Sardoni, Chief Operating Officer, Exos: year? Yes. So first and foremost, our goal is to build

Dakota Semler, Chief Executive Officer, Exos: a sustainable business and to improve working capital usage to the most efficient level it can possibly get to. For us, that means several things that we’re doing. I talked a little bit about the shift in deliveries to strip chassis versus completed vehicles that shortened the cycle for delivery times to our customers. We’re also working with our suppliers to help us with better terms, to ensure that we’re laying out cash for working capital inventory, in a more efficient manner. And lastly, I think what we’ve always said is we need to take a proactive stance on infrastructure to ensure that our customers don’t experience infrastructure delays.

And if they are already having delays that we have a solution in place with the hub. So it’s really a combination of several factors, improving the kind of throughput of those vehicles getting to customers. Now on the back end, you have the collection process, which as we’ve talked about at great length, the incentive collections can take many, many months. In order to mitigate the exposure to those incentives, we partnered with several dealers and partners to help floor plan some of these vehicles, before the incentives are received and in the door. And what that means is for us, we can deliver the vehicle, recognize revenue, collect that receivable and collect the incentive from the dealer and allow them to help in that process of getting a truck delivered to a customer, shortening the cycle of inventory turnover and collections timelines.

So that’ll really dramatically improve our ability to collect cash quicker, hopefully should lean out receivables. And as we work to improve the efficiency of the manufacturing plant, and our customer delivery schedule, we should also be able to continue to reduce inventory levels relative to top line revenue.

Craig Irwin, Analyst, ROTH Capital Partners: Great. Well, congratulations on a strong execution this quarter. I’ll go ahead and hop back in the queue. Thanks, Craig.

Conference Operator: And your next question today will come from Mike Schluskey with D. A. Davidson. Please go ahead.

Mike Schluskey, Analyst, D.A. Davidson: Yes. Hi, good afternoon. Thanks for taking my questions. Wanted to touch on the margin story for a second year because you mentioned that mix can go up and down and change. I guess I’d like to confirm, do you still think you’ll have positive gross margins throughout 2025?

And then further, could there be improvement upon the prior year, although it’s already again quite strong?

Dakota Semler, Chief Executive Officer, Exos: Thanks, Mike. Yes. When we look at gross margins for 2025, we anticipate them continuing to stay strongly positive and we do anticipate for the full year that we will see margin growth on an adjusted basis. As we look at our business, there are several factors that influence GAAP gross margin. And some of those factors are hard to forecast given the changes and dynamics and current climate in the economy right now.

But on an adjusted basis, we do anticipate that those non GAAP gross margins will continue to grow year over year.

Mike Schluskey, Analyst, D.A. Davidson: Okay. And then the other question was that there were certainly some question marks remaining around the tariff situation, this could change by the end of the night, who knows. But the range that you provided on top line and on operating losses for the year, does the bottom end include like kind of worst case scenario tariffs? Or could there be some very compelling situations that just you’re not constantly right now on what you’re putting out there?

Dakota Semler, Chief Executive Officer, Exos: Yes, it’s a great question. And specifically talking in regards to tariffs, I think most of the exposure is something we’re working to mitigate. That doesn’t mean we’re going to avoid paying tariffs. We obviously have already paid tariffs today on battery cells ranging in the kind of 10% to 15% range. But if there are ways in which we can reduce our exposure such as bringing some of the components back to production in The U.

S, we’re absolutely going to entertain those kinds of options. And in that some in some ways that may mean cost trade offs, slightly increased costs, but if those costs are still lower than the tariffs, in many ways it still helps us to reduce our exposure. When we look at the bottom end of the guidance range, we really think the biggest factors that are influencing that and our delivery of units is not so much tariff factors, but rather charging infrastructure readiness. We have a backlog that already exceeds the current level of guided orders and that’s because we have some customer orders that won’t take delivery in 2025, but later after that. So we’re not concerned about so much the demand or even the tariffs changing the cost structure of our vehicles as much as we are concerned about the readiness of charging infrastructure and the customers being able to accept delivery of those trucks and get them into service.

Mike Schluskey, Analyst, D.A. Davidson: Got it. Okay. I appreciate it. I’ll pass it along. Thank you.

Giordano Sardoni, Chief Operating Officer, Exos: Thank you.

Conference Operator: Your next question today will come from Ted Jackson with Northland Securities. Please go ahead.

Giordano Sardoni, Chief Operating Officer, Exos: Thanks very much. So my first question is, I’m just curious in the quarter, do you have any environmental credit revenue?

Dakota Semler, Chief Executive Officer, Exos: In the fourth quarter, we did not have any credit revenue. We had credit revenue in third quarter of last year.

Giordano Sardoni, Chief Operating Officer, Exos: Okay. When we if possible with regards to fourth quarter, could you give some kind of color with regards the makeup of units, hubs, chassis, things like that? And then the same with regards to the guidance for ’25?

Dakota Semler, Chief Executive Officer, Exos: Yes. In terms of the mix of the quarter level, we haven’t drilled that far into it. We can share that it was an increased mix of hubs, which are higher ASPs, reflecting the lower unit mix there and also higher gross margins, on that product. As we work throughout the year in 2025, we don’t plan to specifically guide to the unit mix throughout the year, but we are seeing an increasing demand for that hub product, which obviously we only launched halfway through last year. So we didn’t have that factored significantly into our unit mix or our revenue or gross margin mix for 2024.

So that should be positively accretive and hopefully continue to bolster up the margins.

Giordano Sardoni, Chief Operating Officer, Exos: Okay. That’s actually quite useful. What do you think your CapEx will be in 2025?

Dakota Semler, Chief Executive Officer, Exos: As a facility today, the Tennessee plant is actually incredibly well equipped to accommodate volumes that are far larger than what we’re delivering today, both on the vehicle side as well as on the hubs. We really don’t anticipate much more CapEx other than preventative maintenance and incremental iterative investments as we work through the year. But I would say the CapEx budgeted is relatively negligible in comparison to total top line and part of the way our balance sheet sits today.

Giordano Sardoni, Chief Operating Officer, Exos: Do you know when you’ll file your K?

Dakota Semler, Chief Executive Officer, Exos: Planning on filing it on Monday.

Giordano Sardoni, Chief Operating Officer, Exos: Any chance that you could give us a cash flow statement and maybe your breakdown of revenue in terms of stuff that’s in there, step vans, powertrain hubs, other ancillary. So I assume I’m not the only person that has their model built around some of that kind of stuff, so that we would be able to get our models turned in front of your release?

Liana Pogosian, Acting Chief Financial Officer, Exos: Well, the full cash flow payment will be available once we file the 10 K on Monday. We do have in the earnings release, we do have a tabular disclosure around net cash provided by used in operating activities.

David Slachute, General Counsel, Exos: I saw that.

Liana Pogosian, Acting Chief Financial Officer, Exos: And as we but the rest will be available on Monday.

Giordano Sardoni, Chief Operating Officer, Exos: Okay. Well, that’s it for me. Thanks very much. Thanks, Ed.

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