Xos, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Q3 2026 revenue was $5.5 million, a 17.0% increase sequentially from $4.7 million in Q2 2026, but a 66.4% decrease year-over-year from $16.5 million in Q3 2025.
• Nine-month 2026 revenue was $21.5 million, a 47.2% decrease year-over-year from $40.8 million in the same period of 2025.
• Q3 2026 GAAP gross margin was 15.3%, up from 12.1% in Q2 2026 and slightly down from 15.5% in Q3 2025; nine-month GAAP gross margin expanded to 26.9% from 13.3% in the prior year.
• Q3 2026 Non-GAAP gross margin was 34.4%, up from 7.2% in Q2 2026 and 16.1% in Q3 2025, marking the 13th consecutive quarter of positive Non-GAAP gross margin.
• Q3 2026 operating loss was $7.5 million, an improvement of 6.1% sequentially and a decline of 7.0% year-over-year; nine-month operating loss improved 13.9% to $20.0 million from $23.3 million in 2025.
• Q3 2026 Non-GAAP operating loss was $4.1 million, improving 34.2% sequentially and 14.2% year-over-year; nine-month Non-GAAP operating loss improved 34.5% to $12.9 million from $19.6 million in 2025.
• Q3 2026 operating expenses were $8.3 million, down 2.5% sequentially and 12.8% year-over-year; nine-month operating expenses were $25.8 million, down 10.0% year-over-year.
• Q3 2026 Adjusted EBITDA was $(4.6) million, improving 15.6% sequentially and decreasing 7.3% year-over-year; nine-month Adjusted EBITDA improved 26.9% to $(12.0) million from $(16.5) million in 2025.
• Q3 2026 EBITDA was $(6.9) million; the year-over-year decrease was primarily due to a $9.4 million gain on operating lease termination in the prior year period.
• Cash and cash equivalents were $12.1 million as of September 30, 2026, down from $13.2 million at June 30, 2026 and $14.0 million at December 31, 2025.
• Inventories were $21.8 million as of September 30, 2026, down from $23.5 million at June 30, 2026 and $25.0 million at December 31, 2025.
• Convertible debt outstanding was $14.0 million as of September 30, 2026, down from $15.5 million at June 30, 2026.

Guidance and Future Outlook:

• Xos revised its 2026 outlook to revenue between $25 million and $35 million.
• Revised 2026 Non-GAAP operating loss guidance is between $(20.5) million and $(17.2) million.
• Revised 2026 unit deliveries guidance is between 185 and 250 units.
• The outlook revision reflects changes in expected product mix and volume expectations for the fourth quarter due to order revisions.
• Management priorities for the fourth quarter include converting pipeline into deliveries, bringing PowerHub rental and deployment partners online, and maintaining reliability and economics.

Business Segments and Product Lines:

• Q3 2026 deliveries totaled 33 units, up from 30 units in Q2 2026 and down from 130 units in Q3 2025; nine-month deliveries totaled 158 units, down from 294 units in the prior year period.
• Utilities expanded Hub deployments, with deliveries to multiple municipal and investor-owned utilities and additional orders scheduled for Q4 2026.
• Xos shipped its first Xos Hubs outside the United States to support Waymo's autonomous vehicle operations in London.
• Xos's 420 kWh and 630 kWh ChargerHub configurations are eligible for California CORE vouchers in the upcoming funding round; the PowerHub has been submitted to CARB for CORE eligibility.
• The company now has more than 1,000 units in the field, having driven over 16 million miles, with Hubs delivering over 5 GWh of energy.
• Production of higher-capacity Hubs began in Byrdstown during the quarter.

Market and Competitive Landscape:

• The press release notes that customers face years-long waits for grid power, positioning Xos mobile storage as a solution for rapid deployment.
• Xos states that mobile energy storage is becoming part of how utilities deliver power where and when it is needed.
• The company highlights its ability to power a hyperscaler's data center construction project where grid power was insufficient.

Risks and Challenges:

• Forward-looking statements cite risks including liquidity and access to capital, ability to service indebtedness, and ability to implement business plans.
• Potential risks include cost increases and production delays due to supply chain shortages, failure to meet production milestones, and variations in operating performance across competitors.
• Risks also include changes in laws and regulations, specifically tax incentive policies, and the risk of downturns in the highly competitive electric vehicle industry.
• Other risks mentioned include the ability to retain key personnel, macroeconomic and political conditions, and the outcome of legal proceedings.

Management Commentary and Tone:

• CEO Dakota Semler emphasized that customers need energy they can deploy now and stated that mobile storage solves problems the grid cannot solve fast enough.
• CFO Liana Pogosyan highlighted financial discipline, noting the expansion of GAAP gross margin, reduction in operating expenses, narrowing of operating loss, and improvement in Adjusted EBITDA.
• Management expressed confidence in strengthening the balance sheet, citing a $4.5 million reduction in convertible debt (24%) and a $3.1 million reduction in inventory since year-end.
• The tone reflects a focus on operational efficiency, cost discipline, and converting pipeline into deliveries.

Other Key Points:

• The company raised $2.8 million, net of offering costs, under its at-the-market offering program during Q3 2026.
• Xos repaid $1.5 million of principal on its convertible note during Q3 2026.
• A $9.4 million gain on operating lease termination occurred in the prior year period, significantly impacting year-over-year EBITDA comparisons.
• The press release includes reconciliations for Non-GAAP measures including Adjusted EBITDA, Free Cash Flow, Non-GAAP Operating Loss, and Non-GAAP Gross Profit.
• Prior-period amounts in financial tables have been revised to correct immaterial errors.