Xos, Inc. Reports 4% Revenue Growth in Q3 2025, Achieves Net Income Turnaround

Xos, Inc. reported its financial results for the third quarter of 2025, revealing a revenue increase of 4% to $16.5 million compared to $15.8 million in the same period last year. The company attributed this growth primarily to an increase in vehicle sales, which rose to 98 units from 78 units year-over-year. However, the average selling price decreased due to a shift in product mix. For the nine months ending September 30, 2025, total revenue decreased by 8% to $40.8 million, down from $44.5 million in the prior year, reflecting similar trends in product mix and pricing.

The company's cost of goods sold also increased, rising by 8% to $14.0 million for the third quarter, driven by higher production costs, including identifiable tariff charges and direct materials. Despite this, Xos reported a gross profit of $2.5 million for the quarter, down from $2.9 million a year earlier. Operating expenses decreased significantly, with general and administrative costs dropping by 27% to $6.5 million, reflecting cost-cutting measures and a reduction in headcount. The company reported a net income of $2.1 million for the quarter, a substantial turnaround from a net loss of $10.5 million in the same quarter of 2024.

In terms of strategic developments, Xos completed the termination of its Mesa Lease, resulting in a gain of $9.4 million recognized in the financial statements. This move is part of the company's broader strategy to streamline operations and reduce costs. Additionally, Xos continues to focus on its product offerings, including the Xos Hub and Xosphere, which are designed to support electric vehicle fleets and enhance operational efficiency.

Operationally, Xos has seen fluctuations in customer demand, with one customer accounting for 72% of revenues in the latest quarter. The company is also facing challenges related to supply chain disruptions and tariff impacts, which have affected its ability to source components efficiently. As of September 30, 2025, Xos had cash and cash equivalents of $14.1 million, but the company expressed substantial doubt about its ability to continue as a going concern over the next 12 months without additional capital.

Looking ahead, Xos plans to pursue various strategies to secure funding, including potential equity financing and leveraging its Standby Equity Purchase Agreement. However, the company acknowledges that its ability to raise capital is uncertain, and it may need to scale back operations if sufficient funding is not obtained. The management remains committed to addressing its internal control weaknesses and enhancing its financial reporting processes to improve overall operational efficiency.