XOS Q1 2024 Earnings Call Transcript

Quartr
Provided by Quartr
May 15, 2024

There are 8 speakers on the call.

Operator

Greetings, and welcome to Excess Inc. 1st Quarter 2024 Earnings Call. At this time, all participant lines are in a listen only mode. For those of you participating in the conference call, there will be an opportunity for your questions at the end of today's prepared remarks. Please note this conference is being recorded.

Operator

At this time, I would like to turn the conference over to General Counsel of Exos, Kristin Romero. Thank you. You may begin.

Speaker 1

Thank you, everyone, for joining us today. Hosting the call with me are Chief Executive Officer, Dakota Simler Chief Operating Officer, Giordano Sardoni and Acting Chief Financial Officer, Liana Pogosyan. Ahead of this call, Exos issued its Q1 2024 earnings press release, which we will reference during this call. This can be found on the Investor Relations section of our website at investors. Exostrucks.com.

Speaker 1

On this call, management will be making forward looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. Actual results could differ materially from our forward looking statements if any of our key assumptions are incorrect because of factors discussed in today's earnings news release, during this conference call or in our latest reports and filings with the Securities and Exchange Commission. These documents can be found on our website at investors. Exostrucks.com. We do not undertake any duty to update any forward looking statements.

Speaker 1

Today's presentation also includes references to non GAAP financial measures and performance metrics. Please refer to the information contained in the company's Q1 2024 earnings press release for definitional information and reconciliations of historical non GAAP measures to the comparable GAAP financial measures. Participants should be cautioned not to put undue reliance on forward looking statements. With that, I now turn it over to our CEO, Dakota.

Speaker 2

Thanks, Kristin, and thank you, everyone, for joining us. On today's call, I will cover highlights from the Q1 of 2024, during which we generated $13,200,000 in revenue, delivered 62 units and achieved record gross margins of 21.2%. Gio and Liana will then provide operational and financial updates respectively. During the quarter, we closed our acquisition of ElectraMechanica, which gave us access to more than $50,000,000 in additional cash net of certain costs paid at close. This injection of cash combined with our improving margins significantly strengthens Exos capital base and liquidity.

Speaker 2

With our improved liquidity, we are taking advantage of opportunities to improve our operations, but remain committed to tight cost control and judicious capital allocation. Exos' first priority is becoming a self sustaining cash generating company, which we believe will come from continued focus on growing our core set van, XOS hub and Powertrain businesses. Compared with the Q1 of 2023, revenue is up 180%. However, revenue for the quarter was lower than the Q4 of 2023 due to delays in customer infrastructure and at some of our body upfitter partners, causing planned Q1 deliveries to spill into Q2. As we mentioned during last quarter's call, we expect 2024 volumes to be back half weighted like 2023, but meaningfully higher than last year.

Speaker 2

In the quarter, we delivered StepVans to a number of our most committed customers like UniFirst and FedEx Ground Contractors. We also made initial deliveries of our Step Van based powertrains to 2 new customers, a large on highway bus OEM and Winnebago. As a reminder, our powertrain offerings provide an opportunity for Exos to monetize our existing commercial EV technology in sectors beyond the last mile fleets that we serve with our complete vehicles. We see significant growth opportunities in our powertrain business and are looking forward to reporting growing powertrain deliveries in future calls. In Step vans, sales activity during the quarter remained strong with California's advanced clean fleets compliance increasing fuel bills and aging fleets motivating Step Van customers to make the transition to EVs with Exos.

Speaker 2

In support of our vehicle sales, we took steps during the quarter to tackle the charging infrastructure related delays faced by our customers. In January, we announced the updated Ekso's hub, a rapidly deployable charging unit designed to expedite electrification for fleets. The hub combines 2 80 kilowatt hours of battery storage with 4 chargers allowing each unit to support 8 or more step vans in typical last mile fleet depot applications. Onboard batteries dramatically reduced peak power drawn from the grid, allowing many hub customers to skip the lengthy utility upgrade process that frequently impacts EV fleets pursuing charger only solutions. These upgrades can add 12 or more months to the timeline for permanent infrastructure installation and are hard for customers to predict before purchasing their vehicles.

Speaker 2

By directly addressing the utility upgrade and charger installation timelines that are the most impactful source of delays for our truck deliveries, we expect hub deployments to meaningfully improve the predictability of our step van volumes. To that end, we are pursuing a range of solutions, including bundling hubs with Step Van orders to grow our business and minimize the impact of infrastructure constraints on Exos. The hub is also available as a trailer mounted mobile charging solution where its 4 charge heads and internal battery offer a solution for construction sites, remote work sites or other environments where commercial EVs are deployed without access to permanent charging infrastructure. While enabling greater Step Van deliveries remains the primary purpose of the hub, strong and broad based interest from non Step Van customers has motivated us to offer the hub more broadly. To that end, we have already signed sales orders and booked production slots for a range of customers, including Xcel Energy, FedEx Ground Contractors and SSA Marine.

Speaker 2

I look forward to reporting on the growth of the hub business and its expected strong margin profile in future calls.

Speaker 3

I'll now hand it over to our COO, Gio, for an operational update. Thanks, Dakota. Exosys' engineering, supply chain and manufacturing teams remain focused on scaling production to match customer demand and delivering further gross margin improvements. Our engineers continue to develop and implement refinements that contribute directly to our strong gross margins. The supply chain team is collaborating with suppliers and inbound shipping partners to improve competitiveness, expand margins and ensure the flow of components needed to achieve our delivery ambitions for 2024.

Speaker 3

As Dakota mentioned, we also began to build and deliver the updated hub in the Q1. In response to demand our sales team is seeing, we're preparing for production rates of up to 8 hubs per month in the second half of twenty twenty four. This rate will remain flexible and tied to the signed sales orders we receive. This is possible due to the significant overlap between the hub and our Step Van platform. From day 1, we designed the updated hub to leverage our existing Step Van design and supply chain as much as possible.

Speaker 3

For example, by sharing a battery system with our 200 mile step fan, the hub was able to reach production many months sooner and with much better margins than is possible with a standalone design. The similarities also extend to the factory floor. Like the Step Van, a hub is built of major sub assemblies in partnership with our suppliers, reducing the capital investments required to achieve our 2024 production targets in less than $50,000 All hubs are being built in the existing Ekso's plant footprint in Eastern Tennessee alongside our Stepan production line. And with that, I'll pass it to Liana.

Speaker 4

Thank you, Gio, and good afternoon, everyone. For the Q1, our revenue decreased to $13,200,000 from $18,400,000 in the Q4 of 2023, primarily as a result of our reduced deliveries during the slower time of the year. Our cost of goods sold during the quarter decreased to $10,400,000 compared to $17,000,000 in the Q4 of 2023. GAAP gross margin during the quarter was a profit of $2,800,000 or 21.2 percent compared to $1,300,000 last quarter or 7.2%. Margin improvements were mainly driven by higher average selling price, reduction in overhead costs related to the normalization of prior quarter change in our allocation and capitalization of freight costs into inventory, reductions in inventory reserves in line with reduced on hand inventory balances as we continue to focus on prudent supply chain management and a net benefit from physical inventory adjustments as compared to write offs during the Q4 of 2023 as we continue to focus on improvements in our inventory management processes.

Speaker 4

It should be noted that GAAP gross margins for a vehicle OEM are impacted by a range of reserves that combined with changes in sales mix between direct dealer and prior model inventory sales introduced higher levels of volatility in quarterly results. For this reason, we continue to share consistent non GAAP gross margin that you can find in today's earnings press release. Turning to expenses. Our first quarter operating expenses decreased to $13,000,000 from $13,200,000 in the prior quarter. As a result of the asset acquisition accounting, the transaction costs associated with the MB acquisition are included in cost of assets acquired and allocated amongst qualifying assets using the relative fair value basis.

Speaker 4

Non GAAP operating loss for the quarter was 9,300,000 dollars We closed the quarter with cash and cash equivalents of $46,200,000 compared with $11,600,000 at the end of the 4th quarter. As Dakota mentioned, the increase resulted from the acquisition of Electra Mechanical in March. Inventory decreased to $36,600,000 in the 1st quarter from $37,800,000 last quarter. Operating cash flow less CapEx or free cash flow of negative $14,600,000 for the quarter was an increase over negative $900,000 last quarter, largely as a result of our net loss and unfavorable changes in our working capital, including increases in accounts receivable resulting from delivery timing and growth in incentive voucher receivables as well as timing of payments on our outstanding liabilities. Finally, we are reaffirming our full year 2024 guidance of revenue in the range of 66 $700,000 to $100,400,000 and non GAAP operating loss of between $43,700,000 to $48,700,000 and 400 to 600 units delivered.

Speaker 4

I'll now turn the call back over to Dakota.

Speaker 2

Thanks, Liana. To wrap up, Exos is prepared for the future. The over $50,000,000 of cash that we secured this quarter and our industry leading gross margins provide Exos with significant advantages over our competition. As regulatory pressure on fleets to adopt EVs grows, we are benefiting from stronger demand for our proven and profitable truck, powertrain and mobile charging infrastructure products. As we look to a busy second half of the year, our competitive advantages and direct benefits from EV mandates and incentives have Exos on a track for long term success that I look forward to sharing with you in the coming quarters.

Speaker 2

With that, let's open the line for questions.

Operator

Thank you. We will now begin the question and answer session. Today's first question comes from Donovan Shafer with Northland Capital Markets. Please go ahead.

Speaker 5

Hey, guys. Thanks for taking the questions. So I want to first just start off by asking about the kind of infrastructure charge the charging infrastructure causing some delays. We've seen that before. And if you can elaborate on the upfitter part of that, if that is also infrastructure related, if it comes down to them needing chargers at their own sites to do some of the upfitting?

Speaker 5

And then how we what gives you confidence that this you said some orders pushed from Q1 deliveries from Q1 to Q2. What makes you feel confident in the full year guidance reiterating that, that you don't just get kind of these rolling pushes where some of Q2 to Q3 and then Q3 to Q4 and that hit the whole thing. So anything there would be great.

Speaker 2

Yes. Thanks for the question Donovan. Good to catch up with you. So I'll start with the first question in regards to the upfitter delays. So it's not tied back to infrastructure at the upfitters.

Speaker 2

When we build the chassis, we're sending it to one of our upfit partners and that requires very close coordination with them around their production schedule and making sure that we have build slots well in advance of when those need to be delivered to customers. In some cases, those can get pushed back from their own supply chain issues or other challenges that they've had. And so this quarter was one of those times. We don't expect it to happen again. We're taking a much more proactive approach towards planning with those upfitters and making sure that we're looking out about 2 quarters to plan our production timelines and get build slots scheduled for those deliveries.

Speaker 2

But that is really something that we anticipate will continue to improve and not related to charging infrastructure. The second question was really around charging infrastructure and making sure that this rolling pattern from rolling some of the vehicles in from Q1 into Q2 doesn't happen. And we actually have strong confidence on those vehicles, particularly that came from Q1 as several of them have already been delivered in Q2 at this point. So it gives us much better confidence in being able to say it's not going to carry on for 2 or 3 quarters with those few units that pushed into this Q2. And we're actually testing out some new temporary charging infrastructure tools that complement the hub and will allow us to be able to deploy charging infrastructure if we continue to see unanticipated delays either from the utility or from the permitting side when it comes to deploying permanent charging.

Speaker 2

So this is one of the first quarters where we're going to be deploying sites, where we're going to be deploying hubs and And that should give us a lot more predictability and forecastability and stability in our production numbers and being able to deliver everything that we build in a quarter.

Speaker 5

Okay, thanks. That's very helpful. And then turning to the hub itself, it seems like there's some real positive developments there, which is kind of very interesting, potentially exciting. So Gio, you said that you'll have things in place to be able to do 8 hubs per month in the second half of the year. That would be 48 hubs for the year.

Speaker 5

I guess the first question or kind of compound question here would just be, does is that kind of a more of an expectation or just being prepared for it? I mean, do you think is it a fairly likely chance that you'll be, say, delivering north of 20, 30 hubs, something like that? Or is that this just you're just gearing up to be ready? And then the other part would be how do they compare from an ASP and gross margin standpoint to the vehicles?

Speaker 3

Yes, Donovan, thanks for your questions. This is Gio speaking. It's more about getting ready for those production volumes. We're not providing specific kind of production guidance or total hub production for the year guidance. But we are building the production system to be able to handle those kinds of volumes.

Speaker 3

And I can say that we are actively producing multiple hubs even now, because we're getting a ton of interest and positive feedback from customers and folks placing orders for hubs. I think your second part of the question was around ASPs, and I'll let Dakota answer more of the margin and ASP questions for the hubs.

Speaker 2

Yes. So in looking at the hub as a from a commercial perspective, the comparable comparative solution utilizing DC fast chargers can range anywhere from 100 and $50,000 to north of $250,000 for an apples to apples comparison to 4 80 kilowatt DC fast chargers. We fall right into that range, right into the kind of middle of that range. And the benefits of the hub over 4 DC fast chargers that you had installed via conventional permanent charging infrastructure is that we are simplifying the installation by standardizing it into a single enclosure. We're reducing CapEx significantly by having one connection point instead of 4 connection points through various different ways.

Speaker 2

We're minimizing the amount of conduit, minimizing the amount of cable runs, trenching, site work as well as soft costs and engineering that go into site development. And then we're also adding in an additional nearly 300 kilowatt hours of energy storage combined with that DC charging. So if you were to scope this out for a traditional permanent DC charging infrastructure project with 4 DC fast chargers and approximately 300 kilowatt hours of energy storage, it would be significantly more than what a hub costs our customers today. And that's in a fixed amount of application. Obviously, one of the biggest attributes of the hub that's been so well received by our customers is not just that capital cost savings for permanent infrastructure deployments, but it's the flexibility of our trailer mounted hubs that will actually allows them flexibility in deploying vehicles either in facilities that they don't necessarily own, such as a leased building or a lease depot or yard or to be able to deploy them for roadside service or maintenance or in the event of resiliency where there might be a storm or a power outage, we can deploy a hub on-site.

Speaker 2

So it really gives fleets a tremendous amount of flexibility. While we have talked a little bit about some of the pricing dynamics in the early stages of production, we're still finalizing what those margins and gross margins will be for the product portfolio. We're confident that they will be at the high end of our product margins, potentially higher than even Step Van or Powertrain. And I think that really speaks to the technology that we've put into the hub, the core technology, which is the energy storage systems, the charging power electronics and all of the software and energy management planning software that we've developed to run the overall hub. A lot of it's been developed over the last 5 or 6 years that we've been manufacturing vehicles.

Speaker 2

So we've cost reduced it. We've made it durable. We've made it reliable. And now we're taking it into another market that ultimately can see the value significantly, because the charging market has not as established as the vehicle market has been in the last few years.

Speaker 5

Okay. That's very helpful. Thank you guys.

Speaker 3

Yes. There is some variability and some flexibility depending on who's buying the hub and whether they're bundling it with trucks. So of course, we originally designed the hub to help our customers with some of their infrastructure bottleneck challenges and that was the primary use case we intended for it. We do have customers buying trucks and hubs at the same time and we can be flexible on pricing in that sense. But we also have interest on the hub from folks that don't purchase or use step ends at all.

Speaker 3

So from different and unexpected industries, that they are looking to use the hub to charge vehicles, but not necessarily delivery vans or walk in vans.

Speaker 5

Great. Okay. Thank you. I'll hop back in the queue. Thanks guys.

Operator

Thank you. The next question is from Mike Schloski with D. A. Davidson. Please go ahead.

Speaker 6

Hi, good afternoon and thanks for taking my questions. I want to talk with you on some of your comments you made on gross margin. If you take out some of the one time items and I'm still going through the press release, it looks like you're around the low teens gross margin in the Q1. Do you think that's a reasonable sustainable level you can get taking out all the one time items and gains and losses, etcetera, the rest of the year? Or does a little more volume, which you'll be getting later in the year, get you a little bit higher towards the mid to high teens?

Speaker 6

Maybe that's my first question.

Speaker 2

Yes. Thanks for the question, Mike. So we are confident in those gross margins continuing to stabilize and grow even further. We are now almost completely through some of that legacy inventory that was lower or negative gross margin. We're moving into our 2024 model year vehicles, which are in the high teens and even into the low 20s range.

Speaker 2

There's always going to be some variability based upon product mix, customer incentives that we might do with various customers or specific markets that we're going after. But we are confident that that will continue to improve at the product level. And then when it comes to kind of contribution margin beyond that and some of the one time transaction costs, I'll let Liana speak a little bit more to that and what our margin profile has looked like beyond Q1.

Operator

Yes. I think with respect

Speaker 4

to the one time transaction costs, those have been normalized. We took additional capitalized freight costs as a result of the change in the methodology in the Q4 and those have been normalized and reflected in our results. And we are also seeing just overall lower inventory reserves based on just our overall improvement in our inventory processes that we expect to sustain. So all of that is it gets us to a positive direction that we feel confident in the outlook of our margins going forward.

Speaker 6

Great. Super. Thanks for that commentary. And then turning to operating expenses, if you cut that year over year by almost a third, do you think that about $13,000,000 a quarter is a reasonable way to go? And you probably see I'm trying to figure out when you get to EBITDA positive here, but is on the operating margin side $13,000,000 a decent run rate now?

Speaker 4

Yes. Maybe I think just to highlight a couple of 2 important factors on the operating expenses for this quarter. A lot of the DNB acquisition related transaction costs have been capitalized based on accounting rules. We did record about $2,000,000 of severance related costs that's reflected in operating expenses. But as far as kind of the normal cadence on what we expect moving forward, while we don't necessarily guide to that, but directionally, we might see some increase in operating expenses in the future quarters as we continue to wind down the EMV operations and some of the operating costs we assumed related to the mainly to the 2 leases that we're actively subleasing.

Speaker 4

But I think just overall, we have significantly cut our operating costs and we continue we feel comfortable that we'll maintain that cadence to help us get to free cash flow positivity.

Speaker 6

Great. Also I want to get a little more information on the EV bus and Winnebago customers. Do your deliveries that you've done so far this year, do those were those actually part of sales or were there more demos? And do you think those will be a material amount of the revenues this year? I'd love to hear a little bit of a commentary on what might be in the cards for 2025 from those 2 relationships.

Speaker 2

Yes, absolutely. So I'll speak to our powertrain business in general and not speak to specific units or customers, but we did deliver some powertrain units in Q1. It was a relatively small number compared to the total overall deliveries. But we do anticipate those will grow pretty significantly in Q4 and well into Q1 of 2025. Those sectors, both the on highway commercial vehicle that we're building with Winnebago as well as some of the bus applications and even the off highway powertrains are growing and we're seeing the demand for those products increase since we've made some of those announcements earlier this year with Winnebago and we have forthcoming announcements this quarter with some of our other partners.

Speaker 2

So we do anticipate that being a bigger mix of overall deliveries this year. That being said, it's still a one of our secondary business units and we anticipate trucks will be the majority of the volume that we're delivering this year.

Speaker 6

Okay. Let me just squeeze one more in. Average price in the quarter looked pretty solid. I You're over $200,000 on just dividing revenues by units. There is some mix in there, but is that a good assumption going forward to be above 200 percent?

Speaker 6

Or am I missing something on your top line?

Speaker 2

Yes. It's a great question. So this quarter we saw a lot more long range vehicles being delivered with that higher range battery pack. And that's really why the higher ASPs were reflected in the quarter. We don't anticipate that sustaining into the rest of the year.

Speaker 2

We will have quite a bit of deliveries with those longer range battery packs, but it will be in a more even mix of short range and long range options. We do anticipate it will it will grow slightly from last year, but not to the extent that we saw in Q1 where we saw significant volume of deliveries of those 200 mile range of vehicles.

Speaker 6

Okay, got it. Thank you so much. I'll jump back in queue.

Speaker 2

Thanks, Mike.

Operator

Thank you. The next question is from Stephen Gengaro with Stifel. Please go ahead.

Speaker 7

Thanks. Good morning. Good afternoon, everybody. It's two things for me. The first, can you just remind us the impact that mix has on margins and how we should think about that going forward?

Speaker 2

Yes, happy to. And thanks for the question, Stephen. So when we're looking at product mix today, typical step vans on our short range, 100 mile configuration, generally going to be in the low teens range of gross contribution margin. When we're looking at some of our longer range vehicles with specialty configurations, whether it be liftgates or power export or specialty bodies, those can get into the mid-20s range. So it varies again quarter to quarter depending upon what's in our customer delivery schedule and what's in the pipeline.

Speaker 2

But ultimately, we've really thought about a 2 thirds to 1 third ratio with 2 thirds being that 100 mile short range vehicle, and a third being the longer range vehicle with some of those specialty upfits or configurations on them. And then when we're looking at powertrains and some of our other ancillary businesses such as excess energy solutions, those are generally in the higher range. So when we're looking at services, anywhere from the 20% to 30% gross margin range. And then on the powertrain side, anywhere from the mid teens into the high 20% gross margin range on those product mixes. But both of those businesses make up less than 10% of revenues today.

Speaker 7

Great. Thank you for the details. And the other question just from a market perspective, what are you guys seeing in the market from a demand Yes,

Speaker 6

that

Speaker 2

Yes, that's a really great question. So I think there's been a tone across the industry that's been particularly set by the passenger car sector, around, growth potentially waning or the market slowing down, we have not seen that whatsoever. In Q1, our sales for Q1 this year versus last year were up significantly. And as we're tracking today, sales orders signed for Q2 is tracking very similar to Q1. We're continuing to see strong interest driven by a few key tailwinds, one of which is still the California ACF for advanced clean fleet regulation that's prompting a lot of fleets to really be proactive about their transition to EVs.

Speaker 2

Another is the cost of fuel still remains quite high in a lot of our key metro markets. And so customers are really looking for some of the fuel savings that are afforded by our vehicles. And then again, the third factor as we look at deployments is customers who are have already deployed a lot of excess vehicles are placing recurring orders because they're seeing maintenance costs come down and they're taking advantages of a lot of the incentives that exist within the market today. So there are both the state level incentives and municipal incentives that exist in places like New York and Texas, Oregon, as well as a lot of the federal incentives that were afforded to the industry by the IRA. So there's tremendous tailwinds in the commercial sector right now.

Speaker 2

And we have not seen growth slowdown. Obviously, going from a converted sales order to a delivery and recognizing revenue and getting that truck on the road is still a process and we're trying to streamline that and improve our infrastructure deliveries to make that happen quicker. But there has been no shortage of demand for the products this year.

Speaker 7

Great. Thank you for the details.

Speaker 2

Thank you.

Operator

Thank you. The next question is a follow-up from Donovan Shafer with Northland Capital Markets. Please go ahead.

Speaker 5

Hi, guys. Okay. So I want to real quick on just going back to the delay, just trying to understand your capability of handling that type of stuff internally. You took in the facility in Birdstown. You took that over yourselves from, I think, Fitzgerald.

Speaker 5

And so when you in the case like this where there are some delays in terms of customers taking deliveries, are you able to keep running that facility at the same run rate? Or do you run into sort of storage or warehousing capacity issues? I'm just trying to think if you get like a lumpiness or something like this, but then it gets unstuck the way Dakota you seem to have like described it like the delivery has already happened this quarter. Does that allow you to just run into more normalized you have a normalized operating rate even if from like a GAAP accounting revenue recognition whatever, it could somehow look lumpy, but you're able to just keep humming along. Is that are you able to do that?

Speaker 5

Or how does that work? If you could elaborate, that'd be great.

Speaker 3

Hey, Donovan, this is Gio again. Yes, we're able to keep humming along. This was one of the main design goals when we switched over from the previous version of the set band to the one that we're building today, a lot of the set band is built in sub assemblies. And so if we have a blockage in one of the areas, we can continue to build ahead on subassemblies, so that when that bottleneck gets unlocked, we can continue building trucks. But we've not been we've not had to send people home or had massive lumpiness due to some of these issues.

Speaker 3

We've been able to keep building consistently. And now we are adding another product or we've added another product to the same facility, which is the hub. And so we are also able to cross train folks on building step in chassis as well as hubs.

Speaker 5

Okay. That makes sense. And then for the hubs, so I think the standard configuration, I believe, is for chargers. You can charge 4 vehicles at once from the hub. Is it safe to take that as kind of like the rule of thumb?

Speaker 5

I'm getting at the bundling here. So when you bundle and I understand some vehicles are long range, some are shorter range, so on and so forth. But hypothetically, like if we were modeling or looking forward and suppose the bundling became a more regular thing or maybe, say 20% or something of vehicles full part of like bundling. Then is it kind of a 4:one ratio generally or does that sizing in terms of just the capacity for the vehicles versus the capacity of the hub, it may actually be better to size like 3 to 1 or something. Is there kind of a rule of thumb ratio where you've landed?

Speaker 2

Yes. It's a great question. And getting into a lot of the nuance with deploying the hubs, it's actually kind of works the other way in our favor. So with most of our shorter range vehicles, our customers are driving an average of 50 to 80 miles a day, utilizing in the range of kind of 40 to 80 kilowatt hours per day. And so what we see is that you can actually support quite a few more vehicles and run a dual charge cycle per day with the hub.

Speaker 2

So that It really It really makes a lot of sense for them because as you're thinking about their operations, if you can charge 8 of these vehicles quickly, get them back onto the package line or the delivery dock to be loaded for the next morning. It's really not disruptive to their operations. And it ultimately allows them to deploy charging infrastructure incredibly quickly without waiting for that site infrastructure or power upgrade that a lot of times 4 or even 8 chargers would necessitate.

Speaker 5

Wow, that's actually pretty impressive. So if in that case, if you can sort of enable or facilitate the delivery of 8 vehicles, is that something where you would look at offering the hub like at cost for that type of a situation or part of bundling it? Or would you just go for like a lower margin? Or just trying to think about how to think about what that would how you would look at that?

Speaker 2

Yes. We have a range of different customer incentives. It really depends on the customer profile and lifetime value of that customer. But ultimately, we're going to try and expedite and deploy as many trucks as possible in a sustainable manner with our customers. Some customers will require different loading configurations or they need more energy storage or less if they're running the higher longer range vehicles.

Speaker 2

They might only be able to get 4 charge cycles off of a single hub. So it's really nuanced and dependent upon the customer, but we are really focused on getting as many trucks out there as possible. And if the hub can support quicker deliveries, we're going to deliver them.

Speaker 5

That's awesome. Okay. Well, thanks guys. Thanks for taking all the questions. I'll leave it there.

Speaker 1

Thank you.

Operator

Thank you very much. This concludes our question and answer session and the conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines and have a great day.

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Key Takeaways

  • Exos reported Q1 2024 results of $13.2 million in revenue, 62 unit deliveries and a record 21.2% gross margin, representing a 180% year-over-year revenue increase.
  • The acquisition of ElectraMechanica closed in Q1, adding $50 million of net cash to Exos’ balance sheet and bolstering liquidity while management maintains tight cost controls to drive toward self-sustaining cash generation.
  • Some Q1 deliveries slipped into Q2 due to customer charging-infrastructure and body-upfitter delays, but Exos expects 2024 volumes to remain back-half weighted and reaffirms full-year guidance of 400–600 units and $66.7–$100.4 million in revenue.
  • Exos launched the Exos Hub, a trailer-mounted charging solution with 160 kWh of battery storage and four chargers that can support eight or more vans per day, avoiding 12+ month utility upgrade delays; early orders include Xcel Energy, FedEx Ground and SSA Marine.
  • Operationally, Exos is leveraging its existing Step Van platform to scale hub production, targeting up to 8 hubs per month in H2 2024 with under $50,000 of incremental capital investment per hub.
A.I. generated. May contain errors.
Earnings Conference Call
XOS Q1 2024
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