Xos, Inc.

And welcome to the Exos Inc. Third Quarter 2025 Earnings Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star then two. Please note that today's event is being recorded. I would now like to send the conference over to David Zlaciu, General Counsel. Please go ahead.

Thank you, everyone, for joining us today. Hosting the call with me are EXOS's Chief Executive Officer, Dakota Semler, EXOS's Chief Operating Officer, Giordano Sordoni, and EXOS's Chief Financial Officer, Diana Pagosian. Today, after the close of regular trading, EXOS issued its third quarter 2025 earnings press release and filed its quarterly report on Form 10-Q for the periods ended September 30, 2025. As you listen to today's conference call, we encourage you to have our press release and quarterly report in front of you, including our financial results, as well as commentary on the quarter and nine months ended September 30, 2025. Management statements today reflect management's views as of today. November 13, 2025 only, and will include forward-looking statements, including statements regarding our fiscal year 2025, management's expectations for future financial and operational performance, and other statements regarding our plans, prospects, and goals. These statements are not promises or guarantees and are subject to risks and uncertainties, which could cause them to differ materially from actual results. Additional information about important factors that could cause actual results to differ materially, including but not limited to, excesses ability to access capital when needed and continue as a going concern, excesses ability to implement business plans and identify and realize additional opportunities, and a potential supply chain disruption, including as a result of changes to or uncertainty around trade policies and tariffs. is included in today's press release and in our filings with the SEC, including our most recent annual report on Form 10-K and subsequent filings. We undertake no obligation to update forward-looking statements except as required by law. You should not put undue reference, excuse me, you should not put undue reliance on forward-looking statements. Further, today's presentation includes references to non-GAAP financial measures and performance metrics. Additional information about these non-GAAP measures, including reconciliations of historical non-GAAP measures to the comparable GAAP measures, is included in the press release we issued today. Our press release and SEC filings are available in the investor relations section of our website at www.exostrux.com slash investor hyphen overview. With that, I now turn it over to our CEO, Dakota.

Good afternoon, everyone. At Exos, we are building something that did not exist before and doing it under constraints that might break most companies. And yet, quarter after quarter, we've shown that discipline, when paired with conviction, scales. It creates momentum. It compounds. And in Q3 2020-25, that momentum was unmistakable. This quarter, we shipped 130 vehicles, generating $16.5 million in revenue. We actually shipped 140 vehicles, including 10 stripped chassis, already on their way to upfitters for a major customer program. That revenue will be recognized in the coming quarters. But the signal is clear. Demand is real, customers are returning, and scale is growing. Much of this volume went to UPS and FedEx ISPs. Organizations that do not forgive unreliability, that do not tolerate downtime, and that absolutely do not adopt new technologies unless they believe in your engineering and your ability to deliver at scale. Their confidence in us is earned, not inherited. We continued fulfilling the largest single order in our company's history, a 200-plus unit order program. We believe this is the shape of the future for Exos. Deeper relationships, larger programs, repeatable volumes. Our GAAP gross margin was 15.3%. This margin reflects a complex reality, a diverse mix of customers, long-term structured pricing with national accounts, and yes, tariffs that were not contemplated when some of these large programs were originally priced. These large fleet agreements may compress margins in the near term, but they're the foundation of a durable industrial business. They create the volume and the credibility needed to expand margins in the future. And while we shipped the highest units in our history, we also drove our lowest operating loss since the business went public, $7 million. That did not happen by accident. It happened because we questioned every expense, every process, and every outdated assumption about how vehicle OEMs should operate. This quarter represents the ninth consecutive quarter of positive non-gap gross margins. Many companies talk about this one. We have lived inside it, and it shows. We've also strengthened our liquidity while continuing to invest in the opportunities that are expanding around us. I want to personally acknowledge the Algema Automotive Company, whose support of Exos has been unwavering. They have seen our progress up close, and they've seen the technology, the execution, and the market shift towards reliability and total cost of ownership. Together, we amended the repayment structure of the convertible note, moving from a single August 2025 maturity to quarterly installments from November 2025 through February 2028. This is not just a restructuring, it's a strategic alignment. It allows us to operate from a position of focus rather than constraint. Interest accrued to the original maturity was paid in common stock in August 2025, making Algeme our largest shareholder, a strong signal of their conviction in our long-term trajectory. We will continue to pursue capital strategies, equity, debt, or hybrid structures that allow us to scale responsibly and capture the opportunity in front of us. Even as the step-in continues to drive substantial revenue, our strategy has never been limited to a single product. We are deliberately expanding into higher margin, lower concentration categories, including powertrains and energy infrastructure. This quarter, that strategy became real. We delivered 18 powertrain systems to Bluebird Corporation this quarter, and since quarter end, we've received nearly 80 additional powertrain orders. School districts are electrifying faster than anyone expected, and our technology, which is modular, reliable, and highly serviceable, is becoming the backbone they trust. And speaking of school districts, we are actively selling into that market right now. Gio and I are in Austin this week for the Bluebird annual dealer meeting. demonstrating firsthand why Exos powertrains outperform on reliability, serviceability, and total cost of ownership. Our presence here is already opening doors, and we expect this engagement to translate into significant commercial opportunities over the next one to three years as we expand our pipeline in the massive school bus market. And then there's the Exos hub. Grid constraints are not a theory. They are the single largest friction point in North American fleet electrification. The hub addresses this head on. It's not a prototype, it's deployed. It's working and its impact is expanding far beyond transportation. In Q3, deployments and demonstrations accelerated and interest in the hub broadened meaningfully. We also showcased the hub at RE+, the largest renewable energy conference in North America, where it drew significant attention from utilities energy developers, and industrial users looking for mobile power, resilience, and peak shaving solutions. The response confirmed what we already knew. The hub addresses a problem that almost no one else in the market is addressing effectively. We're now preparing the 2026 hub update, which will deliver greater power resilience, energy cost optimization, and advanced load balancing capabilities. This isn't just a charging product. It's a mobile energy platform capable of serving industrial users who require temporary power, peak shaving, and resilience in environments where grid infrastructure is either delayed or non-existent. This dramatically widens our total addressable market, and it positions Exos as an energy systems company, not just an electric truck company. All in, Q3 2025 was a milestone quarter. We achieved record deliveries, maintained revenue momentum, substantially improved operating performance, and further validated that our cost discipline and product strategy can not only maintain operations, but accelerate it. As we look ahead, the opportunities in front of us are expanding, not contracting. Order sizes are increasing as customers experience the real-world cost advantages of our trucks and our charging solutions. our product pipeline including the upgraded hub and our foray into power resiliency solutions aligns with secular markets that will grow regardless of political cycles incentives or noise i believe we are experiencing what durable industry companies go through in their formative years pressure discipline breakthroughs and the unmistakable feeling that the work is beginning to gain traction with that