This article first appeared on GuruFocus .
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Revenue:$4.7 million in Q2 2026, down from $18.4 million in Q2 2025 and $11.2 million in Q1 2026.
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Unit Deliveries:30 units in Q2 2026, compared to 135 units in Q2 2025 and 95 units in Q1 2026.
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GAAP Gross Margin:12.1% in Q2 2026, compared to 8.9% in Q2 2025 and 38.9% in Q1 2026.
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Non-GAAP Gross Margin:7.2% in Q2 2026, versus 1.5% in Q2 2025 and 38.2% in Q1 2026.
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Operating Loss:$7.9 million in Q2 2026, compared to $7.1 million in Q2 2025 and $4.6 million in Q1 2026.
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Non-GAAP Operating Loss:$6.2 million in Q2 2026, compared to $6.8 million in Q2 2025 and $2.6 million in Q1 2026.
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Adjusted EBITDA:Loss of $5.1 million in Q2 2026, compared to a loss of $4.9 million in Q2 2025 and a loss of $2 million in Q1 2026.
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Cash and Cash Equivalents:$13.2 million at end of Q2 2026, up from $9.8 million at end of Q1 2026.
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Hub Production:29 hubs produced in Q2 2026, the highest quarterly production to date.
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Full Year 2026 Guidance:Revenue expected between $35 million and $43 million; unit deliveries between 250 and 350 units; non-GAAP operating loss between $14.7 million and $11.4 million.
Release Date: August 13, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Launched the Power Hub, a mobile containerized battery energy storage system, expanding into the large data center and AI infrastructure market.
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Achieved the highest first-half GAAP gross margin (31%) and gross profit in company history, with a 19-percentage-point improvement year-over-year.
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Record production of 29 hubs in Q2, with over 250 MWh of energy storage deployed across North America.
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Strengthened balance sheet with cash increasing 35% to $13.2 million, supported by $7.6 million in capital raises.
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Improved operating loss by 23% (GAAP) and 41% (non-GAAP) in the first half, reflecting cost discipline and operational efficiency.
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Selected as a finalist for the US Air Force Global Strike Command showcase, demonstrating defense market potential.
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Over 100 powertrain orders since launch, with hubs operating for major fleets like Caltrans, Duke Energy, and Waymo.
Negative Points
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Q2 revenue fell to $4.7 million, down from $18.4 million in the prior year, due to order deferrals and customer delays.
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Unit deliveries were lighter than planned, with multiple orders shifted to subsequent quarters, impacting near-term revenue.
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Revised full-year 2026 revenue guidance down to $35-43 million, reflecting lower volume expectations.
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Q2 GAAP gross margin declined sequentially to 12.1% from 38.9% in Q1, due to product mix and delivery timing.
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Free cash flow was negative $4.3 million in the first half, compared to negative $0.1 million in the prior year.
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Operating loss increased sequentially in Q2 to $7.9 million from $4.6 million in Q1, driven by lower volumes.
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UL certification for new hub variants is incomplete, with some standards not expected until next year, potentially limiting market acceptance.
Q & A Highlights
Q: Can you elaborate on the Power Hub's competitive differentiation, specifically versus large-scale BESS systems from suppliers like CATL or Ford, and confirm the cell supplier for this product? A: Dakota Semler (CEO) explained that traditional BESS systems are "DC blocks" requiring separate, costly inverters and controllers for grid connection. The Power Hub integrates the battery, power conversion system, and energy controller into a single AC-output unit, making it cheaper, faster to deploy, and directly connectable to conventional diesel or natural gas gensets. This is critical for volatile AI compute loads, as it allows generators to run at optimal efficiency, reducing maintenance and fuel costs. The primary cell supplier is Gotion, with domestic production in Illinois, which is a critical requirement for FEOC compliance and defense customers.
Q: What caused the unit delivery shortfall in Q2, and can you provide color on where the delays occurred? A: Dakota Semler (CEO) stated that the shortfall was primarily due to delays on the powertrain side of the business, along with a few smaller truck orders that pushed back. He emphasized that these are deferrals, not cancellations, and the company anticipates fulfilling these orders over the next year, with some potentially coming through within the next couple of quarters.
Q: What is the status of the UL certification process for the new hub configurations, and is it gating customer deliveries? A: Giordano Sordoni (COO) stated that they have UL approval at the component level and are pursuing system-level testing. They expect approval on one standard within the next couple of weeks, while another standard may push into next year. Crucially, this is not gating deliveries, as many customers are willing to accept the hub with the current level of certification. The testing is designed to cover multiple variants of the platform, including different sizes and AC/DC output capabilities.
Q: Does Blue Bird's recent acquisition of Ford's chassis operations have any implications for Xos? A: Dakota Semler (CEO) views this as a potential complementary opportunity. Blue Bird has purchased Xos powertrains to sell into the commercial chassis space, and Ford has never built a zero-emissions product for its strip chassis lineup. The Detroit facility's capacity (upwards of 20,000 units a year) represents a very large volume opportunity, and Xos sees this as a potential growth avenue as they expand their relationship with Blue Bird.
Q: What is a fair expectation for inventory liquidation over the next couple of quarters, and will it help release cash? A: Dakota Semler (CEO) confirmed that inventory reduction will continue to release cash. The shift in product mix towards hubs and powertrains accelerates inventory turnover because these products change hands immediately upon leaving the factory, unlike step vans which may sit with upfitters. The company is focused on building to order and reducing demo inventory, aiming for multiple inventory turns per year, which will be further supported by domestic production of critical components like battery cells.
Q: Were the reductions in SG&A and R&D in Q2 specific cost-out actions or a function of variable expenses, and can we expect similar levels going forward? A: Liana Pogosyan (Acting CFO) stated that while some decreases were a function of revenue, a lot of the reduction came from smaller purchases of R&D materials. She guided that expenses should be expected to remain at a level similar to the first quarter of 2026.
Q: Can you provide more detail on the production numbers for the Xos Hub in Q2? Were the 29 units produced also delivered? A: Giordano Sordoni (COO) clarified that the 29 units were the number produced, not all of which counted as deliveries. Some of the units have been paid for but are still in the factory awaiting pickup and final delivery to the customer.
Q: How does the Power Hub address the specific challenges of powering data centers, and what is the key use case? A: Dakota Semler (CEO) detailed that the Power Hub is designed for temporary power applications where data centers face 3-7 year grid interconnection waits. Operators often use large reciprocating gensets, but AI compute loads are highly volatile, causing generator maintenance issues and poor fuel efficiency. The Power Hub allows generators to run at optimal efficiency (70-80% load), smoothing out peaks, reducing wear and tear, lowering fuel consumption, and reducing emissions, making it a critical component for sites like the xAI facility in Memphis.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
