Group 1 - China Yuchai (CYD) is a notable stock in the Auto-Tires-Trucks sector, currently outperforming its peers with a year-to-date return of approximately 62.5% compared to the sector's average return of -20.1% [4] - The Zacks Rank for China Yuchai is 1 (Strong Buy), indicating strong analyst sentiment and an improving earnings outlook, with a consensus estimate for full-year earnings having increased by 19.1% in the past quarter [3][4] - The Automotive - Original Equipment industry, to which China Yuchai belongs, has an average loss of 6.9% this year, further highlighting CYD's superior performance within its industry [6] Group 2 - Xos, Inc. (XOS) is another stock in the Auto-Tires-Trucks sector that has shown strong performance, with a year-to-date return of 19.8% and a Zacks Rank of 2 (Buy) [5] - The Automotive - Domestic industry, which includes Xos, has experienced a decline of 27% this year, indicating that XOS is also outperforming its industry despite the overall negative trend [6]

Core Viewpoint - Xos, Inc. (XOS) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with stock price movements, particularly due to institutional investors adjusting their valuations based on these estimates [4][6]. - For Xos, the recent upgrade reflects an improvement in the company's underlying business, suggesting that investor sentiment may lead to increased stock prices [5][10]. Earnings Estimate Revisions - Xos is projected to earn -$3.97 per share for the fiscal year ending December 2025, representing a year-over-year change of 40.7% [8]. - Over the past three months, the Zacks Consensus Estimate for Xos has increased by 5%, indicating a positive trend in earnings estimates [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with only the top 20% receiving a 'Strong Buy' or 'Buy' rating, highlighting their potential for market-beating returns [9][10]. - The upgrade of Xos to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting a favorable position for potential price increases in the near term [10].

Acquisition and Partnerships - Xos completed the acquisition of ElectraMeccanica, converting each share into 0.0143739 of a share of Common Stock, totaling 1,766,388 shares[30]. - The acquisition of ElectraMeccanica is expected to enhance capital position and provide growth opportunities, but realization of these benefits is uncertain[208]. - The company is actively pursuing partnerships with OEMs to supply powertrain kits for various commercial vehicles[51]. - The company has entered into MOUs with key manufacturers and suppliers to form strategic alliances, but there is no guarantee these will lead to successful relationships[125]. Product and Technology Development - The next-generation Xos Hub™ offers 280kWh of energy storage capacity and charging rates up to 320kW, allowing simultaneous charging of up to four electric vehicles[40]. - The X-Platform chassis is designed for medium-duty commercial vehicles, focusing on durability and reliability for last-mile applications[44]. - Xos utilizes lithium iron phosphate (LFP) battery packs, which are known for their long cycle life and reduced reliance on rare earth minerals[46]. - The company plans to release refreshed versions of its vehicles as battery technology evolves, which may affect the adoption of existing products[121]. Financial Performance and Risks - The company incurred an operating loss of $45.9 million for the year ended December 31, 2024[174]. - Negative cash flow from operating activities was $48.8 million for the year ended December 31, 2024[178]. - The company faces substantial doubt about its ability to continue as a going concern for the next 12 months due to uncertainties regarding capital access and operational funding[102][108]. - The company may face significant capital needs and may need to raise additional capital, which could dilute stockholders[180]. - The company is dependent on the adoption of electric vehicles by last-mile delivery fleets, and any failure in market development could materially impact its business[120]. Customer and Revenue Concentration - Three customers accounted for 34% of the Company's revenue during the year ended December 31, 2024, with individual contributions of 13%, 11%, and 10%[52]. - The company relies heavily on a small number of customers for revenue, and any loss or reduction in purchases from these customers could adversely affect financial performance[110]. Regulatory and Compliance Challenges - The company is subject to fluctuating raw material prices and potential supply chain risks, with key suppliers including CATL and Dana[60]. - The company is exposed to fluctuations in material costs, which could impact margins if not recouped through sales[146]. - The company faces regulatory risks related to U.S. trade policies and tariffs, which could adversely affect costs and demand for products[212][213]. - Compliance with substantial regulations is necessary for the company and its suppliers, and failure to comply could harm business operations[219]. Operational and Manufacturing Challenges - The company has experienced delays in battery production, resulting in a manufacturing backlog in the vehicle assembly line[128]. - The company has no experience in high-volume manufacturing, which raises concerns about meeting quality and production standards[133]. - The company relies on third-party suppliers for key components, and any delays from these suppliers could impact delivery timelines[128]. - Delays in providing sufficient charging solutions have resulted in postponed vehicle deliveries, impacting customer demand[151]. Workforce and Organizational Changes - The company has 109 full-time employees and 21 contractors as of December 31, 2024, down from 161 full-time employees and 25 contractors the previous year[96]. - The company initiated a workforce reduction of approximately 26% to cut future operating expenses and improve cash flows[172]. - The company has plans to strategically hire more personnel[159]. Intellectual Property and Innovation - As of December 31, 2024, Xos had eight awarded U.S. patents and 23 pending or approved U.S. trademark applications, reflecting its commitment to intellectual property protection[84]. Environmental and Market Considerations - Xos customers may be eligible for up to $40,000 in federal tax credits per vehicle under the Inflation Reduction Act, effective through 2032[66]. - The company is leveraging incentive programs from various states to encourage the installation of charging infrastructure for electric vehicles[69]. - The automotive industry typically experiences higher revenue in spring and summer months, with a peak season for commercial vehicle sales between Thanksgiving and Christmas[82]. Cybersecurity and IT Risks - Cybersecurity threats, including ransomware attacks, are increasingly prevalent and can lead to significant operational disruptions and reputational harm[226]. - The company relies on third-party service providers for critical business systems, and any security incidents with these providers could result in adverse consequences[229]. - The complexity of the company's IT systems and the need for periodic remote updates pose inherent risks, including potential software bugs and security vulnerabilities[231].

Company Performance - Xos, Inc. reported a quarterly loss of $2.36 per share, which was worse than the Zacks Consensus Estimate of a loss of $1.13, representing an earnings surprise of -108.85% [1] - The company posted revenues of $11.47 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 35.49%, and down from $18.38 million a year ago [2] - Over the last four quarters, Xos has surpassed consensus EPS estimates three times but has not beaten consensus revenue estimates [2] Stock Outlook - Xos shares have increased by approximately 9.9% since the beginning of the year, contrasting with the S&P 500's decline of -3.2% [3] - The current consensus EPS estimate for the upcoming quarter is -$1.14 on revenues of $17.8 million, and for the current fiscal year, it is -$4.18 on revenues of $102.46 million [7] Industry Context - The Automotive - Domestic industry, to which Xos belongs, is currently ranked in the bottom 18% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Xos's stock performance [5]

Financial Performance - Xos achieved a record revenue of $56.0 million in 2024, representing a 25% increase from $44.5 million in 2023[4] - Revenues for Q4 2024 were $11,474,000, a decrease of 37.5% compared to $18,376,000 in Q4 2023[21] - Net loss for Q4 2024 was $(18,981,000), compared to a net loss of $(13,827,000) in Q4 2023, representing a 37.5% increase in losses[21] - The company reported a total comprehensive loss of $(18,981,000) for Q4 2024, compared to $(13,827,000) in Q4 2023[21] Unit Deliveries - The company delivered 297 units in 2024, up from 283 units in 2023[4] - Xos received its largest customer order in 2025 for 193 units from UPS, expected to be delivered in 2025[4] - The company launched the next-generation Xos Hub and received a significant order for 19 units sold to Caltrans[4] - Xos's outlook for 2025 projects revenue between $50.2 million and $65.8 million, with unit deliveries forecasted between 320 and 420 units[6] Gross Margins and Operating Expenses - GAAP gross margins improved from a negative 2.9% in 2023 to positive 7.1% in 2024, while non-GAAP gross margins increased from negative 5.2% to positive 18%[4] - Operating expenses were reduced by $13.8 million, or 21.7%, compared to 2023[4] - Total operating expenses for Q4 2024 were $10,855,000, down 17.5% from $13,155,000 in Q4 2023[21] - Research and development expenses for Q4 2024 were $1,936,000, down 53.4% from $4,143,000 in Q4 2023[21] Cash Flow and Liquidity - The company reported $3.3 million of net cash provided by operating activities and achieved its first quarter of positive Free Cash Flow of $3.3 million[1] - Free cash flow for Q4 2024 was $3,298,000, compared to $(852,000) in Q4 2023, indicating a significant improvement[22] - Cash and cash equivalents stood at $11.0 million as of December 31, 2024, compared to $11.6 million in 2023[20] Liabilities - The total liabilities increased to $64.7 million in 2024 from $48.5 million in 2023[20] Losses and Improvements - Gross loss for Q4 2024 was $(3,717,000), compared to a gross profit of $1,327,000 in Q4 2023[21] - Non-GAAP operating loss for Q4 2024 was $(6,365,000), an improvement from $(10,926,000) in Q4 2023[22] - Non-GAAP gross profit for Q4 2024 was $2,667,000, compared to $631,000 in Q4 2023, showing a positive trend[22] Shareholder Information - The weighted average shares outstanding increased to 8,034,000 in Q4 2024 from 5,933,000 in Q4 2023 due to a reverse stock split[21]

Financial Data and Key Metrics Changes - For the full year of 2024, revenue increased to $56 million from $44.5 million in 2023, while cost of goods sold rose to $52 million from $45.8 million [40] - GAAP gross margin for 2024 was a profit of $4 million (7.1%) compared to a loss of $1.3 million (-2.9%) in 2023, and non-GAAP gross margin was a profit of $10 million (18%) compared to a loss of $2.3 million (-5.2%) in 2023 [40] - In Q4, revenue was $11.5 million, down from $15.8 million in Q3, with cost of goods sold increasing to $15.2 million from $12.9 million in Q3 [41][42] - Q4 GAAP gross margin was a loss of $3.7 million (-32.4%) compared to a profit of $2.9 million (18.1%) in Q3, significantly impacted by inventory reserves and write-offs [42] Business Line Data and Key Metrics Changes - In Q4, the company delivered 51 units, reflecting a 27.3% decline in top-line revenue compared to Q3 due to seasonal challenges in the parcel delivery segment [11][16] - The step-van business is expected to shift positively towards strip chassis deliveries, which could reduce inventory turnover by two to three months [17] - The powertrain business made significant progress, with the first powertrain product delivered for a Bluebird electric school bus, and commercial production deliveries expected to begin in early 2025 [18] Market Data and Key Metrics Changes - The company has secured major commercial orders, including nearly 200 strip chassis for UPS and 20 hub units for Caltrans, indicating strong demand across various sectors [14] - The hub product has seen increased demand, with customers including Waymo and Duke Energy, and production rates reached approximately two hub units per week [20][32] Company Strategy and Development Direction - The company aims to continue top-line growth, margin expansion, and improved product diversity, positioning itself as the most efficient public commercial EV company [9] - Strategic partnerships with Bluebird and Winnebago are expected to drive growth in the Powered by XS segment [19] - The company is focused on reducing operational expenses and improving liquidity, with a goal of achieving positive free cash flow [27][28] Management's Comments on Operating Environment and Future Outlook - Management remains resilient despite economic changes and potential cost impacts from new tariffs, having prepared for these shifts over the past year [10] - The outlook for 2025 anticipates revenue between $50.2 million and $65.8 million, with unit deliveries expected to range from 320 to 420 units [48] - Management believes that the evolving regulatory landscape presents opportunities to differentiate the company in the market [50] Other Important Information - The company closed a significant transaction that added over $40 million in liquidity to its balance sheet [15] - Inventory decreased to $36.6 million from $37.8 million at the end of 2023, attributed to strategic purchasing and inventory management [47] Q&A Session Summary Question: Can you help us understand what's going right in delivering strong margin results despite lower volume? - Management attributed the strong margins to a shifting product mix, particularly with specialty products like the XS Hub, which have higher margins [56][57] Question: Do you expect to operate near production capacity for the hub business this year? - Management indicated plans to increase capabilities of the hub to offer broader market applications, but will not expand production capacity until market validation is achieved [60][63] Question: Can you provide insight into the powertrain business and FMVSS certification? - The powertrain business requires deep partnerships for engineering validation and testing, with production units expected to be shipped to end-user customers this year [66][68] Question: How much room is there to continue improving working capital? - Management emphasized a focus on sustainable business practices, improving working capital usage, and proactive measures to ensure timely delivery and cash collection [71][74] Question: Will gross margins remain positive throughout 2025? - Management anticipates continued positive gross margins for 2025, with expectations for year-over-year growth on an adjusted basis [79][80] Question: Did you have any environmental credit revenue in Q4? - Management confirmed that there was no credit revenue in Q4, unlike in the previous quarter [89] Question: Can you provide details on the unit mix for Q4 and guidance for 2025? - Management noted an increased mix of hubs in Q4, which are higher ASP products, and expects this trend to positively impact margins in 2025 [91][92]

Financial Data and Key Metrics Changes - For the full year of 2024, revenue increased to $56 million from $44.5 million in 2023, while cost of goods sold rose to $52 million from $45.8 million [40] - GAAP gross margin for 2024 was a profit of $4 million or 7.1%, compared to a loss of $1.3 million or negative 2.9% in 2023 [40] - Non-GAAP gross margin for 2024 was a profit of $10 million or 18%, compared to a loss of $2.3 million or negative 5.2% in 2023 [40] - In Q4, revenue was $11.5 million, down from $15.8 million in Q3, with cost of goods sold increasing to $15.2 million from $12.9 million in Q3 [41][42] - Q4 GAAP gross margin was a loss of $3.7 million or negative 32.4%, significantly impacted by inventory reserves and write-offs [42] Business Line Data and Key Metrics Changes - In Q4, the company delivered 51 units, reflecting a 27.3% decline in top-line revenue compared to Q3 due to seasonal delays in the parcel delivery segment [11][16] - The step-van business is expected to shift positively towards strip chassis deliveries, which can reduce inventory turnover by two to three months [17] - The powertrain business made significant progress, with the first powertrain product delivered for a Bluebird electric school bus [18] Market Data and Key Metrics Changes - The company has secured major commercial orders, including nearly 200 strip chassis for UPS and 20 hub units for Caltrans, indicating strong demand across various sectors [14] - The hub product has seen increased demand, with customers including Waymo and Duke Energy, and production rates reached approximately two hub units per week [20][32] Company Strategy and Development Direction - The company aims to continue growing revenue, improving liquidity, and expanding margins while adapting to regulatory changes and infrastructure challenges in the EV market [50] - There is a focus on American manufacturing, with significant investments in the Tennessee facility to support operations [38] - The company is exploring alternative sourcing strategies to mitigate potential tariff impacts and enhance its supply chain [37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand pipeline despite challenges from seasonal delays and potential tariff impacts [11][10] - The outlook for 2025 anticipates revenue between $50.2 million and $65.8 million, with unit deliveries expected to range from 320 to 420 units [48] - Management remains focused on achieving positive gross margins and improving working capital efficiency [72] Other Important Information - The company closed a significant transaction that added over $40 million in liquidity to its balance sheet [15] - Inventory decreased to $36.6 million from $42.6 million last quarter, reflecting improved inventory management practices [47] Q&A Session Summary Question: Gross margin performance despite lower volume - Management attributed strong margins to a shifting product mix, particularly with specialty products like the XS Hub [56] Question: Hub business outlook and production capacity - Management indicated plans to increase hub capabilities and production capacity based on customer demand [60][62] Question: FMVSS certification for powertrain business - The powertrain business requires deep partnerships for engineering validation and testing, with production units expected to be shipped to end-user customers [68] Question: Balance sheet and working capital improvements - Management emphasized the goal of improving working capital usage and reducing inventory levels through strategic partnerships and delivery shifts [72][75] Question: Margin growth expectations for 2025 - Management anticipates continued positive gross margins and year-over-year growth on an adjusted basis [80] Question: Environmental credit revenue in Q4 - No environmental credit revenue was reported in Q4, contrasting with the previous quarter [89] Question: Unit mix and guidance for 2025 - An increased mix of hubs, which have higher average selling prices, was noted, with expectations for continued demand in 2025 [92] Question: CapEx expectations for 2025 - Management does not anticipate significant CapEx beyond maintenance and minor investments, given the current capacity of the Tennessee plant [94]

Core Insights - Xos, Inc. reported a significant financial performance for the year 2024, achieving $56.0 million in revenue, a 25% increase from $44.5 million in 2023 [4][6] - The company achieved its first positive Free Cash Flow of $3.3 million and positive gross margins of approximately 7% for GAAP and 18% for non-GAAP [1][6] - Xos expanded its customer base and product offerings, including partnerships with Blue Bird and UPS, marking a successful year of innovation and growth [3][6] Financial Highlights - For Q4 2024, revenues were $11.5 million, down from $15.8 million in Q3 2024, while the full year revenue was $56.0 million compared to $44.5 million in 2023 [4][6] - The company reported a net loss of $19.0 million for Q4 2024, an increase from a net loss of $10.5 million in Q3 2024, but a significant reduction from a net loss of $75.8 million in 2023 [4][6] - Non-GAAP gross profit for the full year was $10.0 million, compared to a loss of $2.3 million in 2023, indicating improved operational efficiency [4][6] Operational Achievements - Xos delivered 297 units in 2024, an increase from 283 units in 2023, reflecting growth in production capabilities [6] - The company successfully launched the next-generation Xos Hub and received a significant order for 19 units from Caltrans [6] - Xos has become a primary electric vehicle vendor for last-mile delivery fleets at UPS and FedEx Ground, showcasing its market penetration [3][6] 2025 Outlook - The company projects revenues between $50.2 million and $65.8 million for 2025, with expected unit deliveries ranging from 320 to 420 units [7][6] - Non-GAAP operating loss is anticipated to improve to between $17.2 million and $14.0 million [7] - Xos aims to continue its growth trajectory by leveraging its technological advancements and expanding its customer base [6]

Core Viewpoint - Xos, Inc. is set to release its fourth quarter 2024 operating results on March 28, 2025, followed by a conference call to discuss these results [1]. Group 1: Conference Call and Webcast Details - The conference call will take place on March 28, 2025, at 4:30 p.m. EDT / 1:30 p.m. PDT [2]. - Participants can access the call via a U.S. toll-free number or an international dial-in option, with a conference ID provided for access [2]. - An audio replay of the call will be available until midnight on March 28, 2025, with specific numbers provided for replay access [3]. Group 2: Company Overview - Xos, Inc. is a prominent technology company specializing in electric truck manufacturing and fleet services for battery-electric fleets [4]. - The company focuses on medium- and heavy-duty commercial vehicles designed for last-mile and back-to-base routes, utilizing proprietary technologies for cost efficiency [4]. - Xos vehicles are positioned as easier to maintain and more cost-effective on a total cost of ownership basis compared to traditional internal combustion engine vehicles [4].

Core Insights - Xos, Inc. has successfully added its Xos Hub™ to the General Services Administration (GSA) Schedule, facilitating easier procurement for federal agencies [1][3] - The Xos Hub™ is designed to provide significant cost savings for federal agencies by reducing operational expenses associated with electric vehicles (EVs) [2] - The Hub is a mobile energy storage system and DC fast charger that can be operational within a day, bypassing common infrastructure deployment delays [2][4] Company Overview - Xos, Inc. specializes in fleet electrification and energy solutions, focusing on medium- and heavy-duty commercial vehicles [8] - The company leverages proprietary technologies to deliver sustainable transportation solutions that enhance total cost of ownership (TCO) and reduce maintenance needs [8] Product Features - The Xos Hub™ is a trailer-mounted, rapidly deployable EV charging unit that eliminates lengthy infrastructure and permitting requirements [4][5] - It is designed for various applications, including stopgap charging for EV fleets, remote charging, and backup power during outages [4] - The Hub ensures interoperability with a wide range of OEMs and vehicle models, making it a versatile mobile charging solution [5][6] Procurement Process - The Xos Hub™ is available for purchase on GSA Advantage, which streamlines the government procurement process with pre-established pricing and terms [3] - The procurement process is expedited for government buyers, allowing for quicker identification of needs and purchasing [3]