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]