– Company Reaffirms Outlook for 2022
–
- Q1 Revenue of $8.7 million, up 118%
year-over-year
- Q1 Ending ARR of $16.6 million, up 207%
year-over-year
- Q1 Ending Evolv Express® subscriptions of 910, up 227%
year-over-year
Evolv Technology (NASDAQ: EVLV), a global leader in weapons
detection security screening, today announced financial results for
its first quarter ended March 31, 2022 and reaffirmed its business
outlook for 2022.
“We’re pleased to report solid first quarter results which were
highlighted by strong growth in revenues, new customers and Evolv
Express subscribers,” said Peter George, President and Chief
Executive Officer of Evolv Technology. “Our results continue to
reflect our expanding leadership position in North America as more
facility operators adopt our solutions to digitally transform their
security operations. Looking ahead, we believe we remain well
positioned to execute on our strategic growth plans.”
Results for the First Quarter of 2022 Total revenue for
the first quarter of 2022 was $8.7 million, an increase of 118%
compared to $4.0 million for the first quarter of 2021. Total
Contract Value (“TCV”)1 of orders booked for the first quarter of
2022 was $19.2 million, an increase of 128% compared to $8.4
million in the first quarter of 2021. Annual Recurring Revenue
(“ARR”)2 was $16.6 million at the end of first quarter of 2022, an
increase of 207% compared to $5.4 million in the first quarter of
2021. Net loss for the first quarter of 2022 was ($14.6) million,
or ($0.10) per basic and diluted share, compared to net loss of
($13.8) million, or ($1.32) per basic and diluted share, for the
first quarter of 2021. Adjusted earnings (loss)3 for the first
quarter of 2022 was ($19.1) million, or ($0.13) per basic and
diluted share, compared to ($10.5) million, or ($1.01) per basic
and diluted share, for the first quarter of 2021. Adjusted EBITDA3
for the first quarter of 2022 was ($18.2) million, compared to
($7.6) million for the first quarter of 2021. As of March 31, 2022,
the Company had cash and cash equivalents of $270.9 million
compared to $307.5 million as of December 31, 2021.
Company Reaffirms Outlook for 2022 The Company today
commented on its business outlook for 2022. The Company's outlook
is based on the current indications for its business, which may
change at any time.
2022 Business Outlook
Estimate (In millions)
Issued March 14, 2022
Issued May 11,
2022
Total Revenue
$29-$31
No change
Annual Recurring Revenue2 (ARR) at
12/31
$27-$28
No change
Adjusted EBITDA3
($65-$67)
No change
Cash and Cash Equivalents
$220-$230
No change
Company to Host Live Conference Call and Webcast The
Company’s management team plans to host a live conference call and
webcast at 4:30 p.m. Eastern Time today to discuss the financial
results as well as management’s outlook for the business and other
matters. The conference call may be accessed in the United States
by dialing +1.877.692.8955 and using access code 774298. The
conference call may be accessed outside of the United States by
dialing +1.234.720.6979 and using the same access code. The
conference call will be simultaneously webcast on the Company’s
investor relations website, which can be accessed at
http://ir.evolvtechnology.com. A replay of the conference call will
be available for a period of 30 days by dialing +1.866.207.1041 or
+1.402.970.0847 and using access code 5434851 or by accessing the
webcast replay on the Company’s investor relations website at
http://ir.evolvtechnology.com.
About Evolv Technology Evolv Technology (NASDAQ: EVLV) is
a global leader in weapons detection security screening. Our
mission is Evolv Technology (NASDAQ: EVLV) is a leader in weapons
detection for security screening, securing the world’s most iconic
venues and companies. Its mission is enabling a better experience
and better security for venues, creating a safer world to work,
learn, and play by transforming physical security to make
everywhere safer. It gives sports fans, theme park visitors,
concertgoers, shoppers, employees, students, and others peace of
mind so that they can gather without fear of violence. Its security
screening has scanned more than 250 million people, second only to
the Department of Homeland Security’s Transportation Security
Administration (TSA) in the United States, and its technology
combines powerful, advanced sensors with proven artificial
intelligence (AI), security ecosystem integrations, and
comprehensive venue analytics to reliably detect threats 10 times
faster than traditional metal detectors. Evolv Technology, Evolv
Express®, Evolv Insights™, and Evolv Cortex AI™ are registered
trademarks or trademarks of Evolv Technologies, Inc. in the United
States and other jurisdictions. For more information, visit
https://evolvtechnology.com.
1 We define Total Contract Value, or TCV, of orders
booked as the total value of the contract over the specified term.
Our calculation of TCV is not adjusted for the impact of any known
or projected future events (such as customer cancellations,
upgrades or downgrades, or price increases or decreases). TCV
should be viewed independently of, and not as a substitute for or
forecast of, revenue and deferred revenue. Our calculation of TCV
may differ from similarly titled metrics presented by other
companies.
2 We define Annual Recurring Revenue, or ARR, as
subscription revenue and the recurring service revenue related to
purchase subscriptions for the final month of the quarter
normalized to a one-year period. Our calculation of ARR is not
adjusted for the impact of any known or projected future events
(such as customer cancellations, upgrades or downgrades, or price
increases or decreases) that may cause any such contract not to be
renewed on its existing terms. In addition, the amount of actual
revenue that we recognize over any 12-month period is likely to
differ from ARR at the beginning of that period, sometimes
significantly. This may occur due to new bookings, cancellations,
upgrades, downgrades or other changes in pending renewals, as well
as the effects of professional services revenue and acquisitions or
divestitures. As a result, ARR should be viewed independently of,
and not as a substitute for or forecast of, revenue and deferred
revenue. Our calculation of ARR may differ from similarly titled
metrics presented by other companies.
3 Non-GAAP Financial Measures In this press release, the
Company’s adjusted gross profit, adjusted gross margin, adjusted
EBITDA and adjusted earnings (loss) are not presented in accordance
with generally accepted accounting principles (GAAP) and are not
intended to be used in lieu of GAAP presentations of results of
operations. Adjusted gross profit and adjusted gross margin exclude
one-time items which management believes provides a more meaningful
representation of contribution margin. Adjusted EBITDA is defined
as net income (loss) plus depreciation and amortization,
share-based compensation, and certain other one-time expenses.
Adjusted earnings (loss) is defined as net income (loss) plus
stock-based compensation, change in fair value of derivative
liability, change in fair value of contingent earn-out liability,
change in fair value of contingently issuable common stock
liability, change in fair value of public warrant liability, change
in fair value of common stock warrant liability, restructuring
expenses, loss on impairment of lease equipment, and certain other
one-time expenses. Management presents non-GAAP financial measures
because it considers them to be important supplemental measures of
performance. Management uses non-GAAP financial measures for
planning purposes, including analysis of the Company's performance
against prior periods, the preparation of operating budgets and to
determine appropriate levels of operating and capital investments.
Management also believes non-GAAP financial measures provide
additional insight for analysts and investors in evaluating the
Company's financial and operational performance. However, non-GAAP
financial measures have limitations as an analytical tool and are
not intended to be an alternative to financial measures prepared in
accordance with GAAP. We intend to provide non-GAAP financial
measures as part of our future earnings discussions and, therefore,
the inclusion of non-GAAP financial measures will provide
consistency in our financial reporting. Investors are encouraged to
review the reconciliation of these non-GAAP measures to their most
directly comparable GAAP financial measures. A reconciliation of
our non-GAAP financial measures to their most directly comparable
GAAP measures has been provided in this press release.
Forward-Looking Statements Certain statements in this
press release may constitute “forward-looking” statements and
information, within the meaning of Section 27A of the Securities
Act of 1933, Section 21E of the Securities Exchange Act of 1934,
and the safe harbor provisions of the U.S. Private Securities
Litigation Reform Act of 1995 that relate to our current
expectations and views of future events including but not limited
to statements regarding our ability to meet our business outlook
for revenue and profitability. Forward-looking statements involve
the Company’s current expectations and projections relating to its
financial condition, competitive position, future financial
results, plans, objectives, and business. All statements other than
statements of historical facts contained in this press release are
forward-looking statements. In some cases, these forward-looking
statements can be identified by words or phrases such as “may,”
“will,” “expect,” “should,” “could,” “anticipate,” “aim,”
“estimate,” “intend,” “plan,” “believe,” “potential,” “continue,”
“is/are likely to” or the negative of these terms or other similar
expressions. These forward-looking statements are subject to risks,
uncertainties and assumptions, some of which are beyond our
control. In addition, these forward-looking statements reflect the
Company’s current views with respect to future events and the
Company’s performance and are not a guarantee of future
performance. Actual outcomes may differ materially from the
information contained in the forward-looking statements as a result
of a number of factors, including, without limitation expectations
regarding the Company’s strategies and future financial
performance, including its future business plans or objectives,
prospective performance and opportunities and competitors,
revenues, products and services, pricing, operating expenses,
market trends, liquidity, cash flows and uses of cash, capital
expenditures; the Company’s history of losses and lack of
profitability; the Company’s reliance on third party contract
manufacturing; the rate of innovation required to maintain
competitiveness in the markets in which the Company competes; the
competitiveness of the market in which the Company competes; the
ability for the Company to obtain, maintain, protect and enforce
the Company’s intellectual property rights; the concentration of
the Company’s revenues on a single solution; the Company’s ability
to timely design, produce and launch its solutions, the Company’s
ability to invest in growth initiatives and pursue acquisition
opportunities; the limited liquidity and trading of the Company’s
securities; geopolitical risk and changes in applicable laws or
regulations; the possibility that the Company may be adversely
affected by other economic, business, and/or competitive factors;
operational risk; risk that the COVID-19 pandemic, including
variants, vaccine roll-out efforts, and local, state, and federal
responses to addressing the pandemic may have an adverse effect on
the Company’s business operations, as well as the Company’s
financial condition and results of operations; litigation and
regulatory enforcement risks, including the diversion of management
time and attention and the additional costs and demands on
resources; and the risk factors set forth under the caption “Risk
Factors” in our Annual Report on Form 10-K for the year ended
December 31, 2021 filed with the Securities and Exchange Commission
on March 28, 2022.
These statements reflect management’s current expectations
regarding future events and operating performance and speak only as
of the date of this press release. You should not put undue
reliance on any forward-looking statements. Although we believe
that the expectations reflected in the forward-looking statements
are reasonable, we cannot guarantee that future results, levels of
activity, performance and events and circumstances reflected in the
forward-looking statements will be achieved or will occur. Except
as required by law, we undertake no obligation to update or revise
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise, after the date on which
the statements are made or to reflect the occurrence of
unanticipated events.
EVOLV TECHNOLOGY
CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except share
and per share data)
(Unaudited)
Three Months Ended
March 31,
2022
2021
Revenue:
Product revenue
$
5,194
$
2,502
Subscription revenue
3,020
1,300
Service revenue
501
197
Total revenue
8,715
3,999
Cost of revenue:
Cost of product revenue
5,576
2,229
Cost of subscription revenue
1,065
595
Cost of service revenue
448
127
Total cost of revenue
7,089
2,951
Gross profit
1,626
1,048
Operating expenses:
Research and development
4,286
3,612
Sales and marketing
12,053
3,684
General and administrative
11,093
2,899
Loss from impairment of property and
equipment
96
-
Total operating expenses
27,528
10,195
Loss from operations
(25,902
)
(9,147
)
Interest expense
(142
)
(2,447
)
Interest income
209
-
Change in fair value of derivative
liability
—
(1,425
)
Change in fair value of contingent
earn-out liability
4,226
-
Change in fair value of contingently
issuable common stock liability
1,472
-
Change in fair value of public warrant
liability
5,586
-
Change in fair value of common stock
warrant liability
—
(736
)
Total other income (expense)
$
11,351
$
(4,608
)
Net loss and comprehensive loss – basic
and diluted
$
(14,551
)
$
(13,755
)
Net loss per share – basic and diluted
$
(0.10
)
$
(1.32
)
Weighted average common shares outstanding
– basic and diluted
142,878,406
10,443,323
EVOLV TECHNOLOGY
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
and per share data)
(Unaudited)
March 31, 2022
December 31,
2021
Assets
Current assets:
Cash and cash equivalents
$
270,872
$
307,492
Restricted cash
400
400
Accounts receivable, net
8,589
6,477
Inventory
7,181
5,140
Current portion of contract assets
1,448
1,459
Current portion of commission asset
1,477
1,645
Prepaid expenses and other current
assets
17,252
11,047
Total current assets
307,219
333,660
Restricted cash, noncurrent
275
275
Contract assets, noncurrent
3,321
3,418
Commission asset, noncurrent
4,239
3,719
Property and equipment, net
25,282
21,592
Operating lease right-of-use assets
2,287
-
Other assets
1,275
401
Total assets
$
343,898
$
363,065
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
4,645
$
6,363
Accrued expenses and other current
liabilities
7,118
9,183
Current portion of deferred revenue
7,433
6,690
Current portion of deferred rent
—
135
Current portion of long-term debt
3,000
2,000
Current portion of operating lease
liabilities
1,089
—
Total current liabilities
23,285
24,371
Deferred revenue, noncurrent
4,517
2,475
Deferred rent, noncurrent
—
333
Long-term debt, noncurrent
6,950
7,945
Operating lease liabilities,
noncurrent
1,634
—
Contingent earn-out liability
18,128
20,809
Contingently issuable common stock
liability
3,792
5,264
Public warrant liability
5,444
11,030
Total liabilities
63,750
72,227
Stockholders’ Equity:
Preferred stock
-
-
Common stock
14
14
Additional paid-in capital
399,424
395,563
Accumulated deficit
(119,290
)
(104,739
)
Total stockholders’ equity
280,148
290,838
Total liabilities and stockholders’
equity
$
343,898
$
363,065
EVOLV TECHNOLOGY
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended March
31,
2022
2021
Cash flows from operating
activities:
Net loss
$
(14,551
)
$
(13,755
)
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
948
452
Write off of inventory
324
—
Adjustment to property and equipment for
sales type leases
(321
)
—
Loss from impairment of property and
equipment
96
—
Stock-based compensation
5,190
1,082
Noncash interest expense
5
2,344
Noncash lease expense
197
—
Provision recorded for allowance for
doubtful accounts
—
(63
)
Change in fair value of derivative
liability
—
1,425
Change in fair value of common stock
warrant liability
—
736
Change in fair value of earn-out
liability
(4,226
)
—
Change in fair value of contingently
issuable common stock
(1,472
)
—
Change in fair value of public warrant
liability
(5,586
)
—
Changes in operating assets and
liabilities
Accounts receivable
(2,112
)
(874
)
Inventory
(6,985
)
(433
)
Commission assets
(351
)
(391
)
Contract assets
108
(119
)
Prepaid expenses and other current
assets
(5,280
)
(4,104
)
Accounts payable
(1,867
)
1,194
Deferred revenue
2,778
(621
)
Deferred rent
(468
)
(11
)
Accrued expenses and other current
liabilities
(2,065
)
1,100
Operating lease liabilities
(229
)
—
Net cash used in operating activities
(35,867
)
(12,038
)
Cash flows from investing
activities:
Development of internal-use software
(646
)
-
Purchases of property and equipment
(323
)
(2,522
)
Net cash used in investing activities
(969
)
(2,522
)
Cash flows from financing
activities:
Proceeds from exercise of stock
options
216
455
Repayment of financing obligations
-
(359
)
Proceeds from long-term debt, net of
issuance costs
-
31,882
Net cash provided by financing
activities
216
31,978
Net increase (decrease) in Cash, cash
equivalents and restricted cash
(36,620
)
17,418
Cash, cash equivalents and restricted
cash, beginning of period
308,167
4,704
Cash, cash equivalents and restricted
cash, end of period
$
271,547
$
22,122
EVOLV TECHNOLOGY
RECONCILIATION OF FORECASTED
2022 NET LOSS TO ADJUSTED EBITDA
(In thousands)
(Unaudited)
Twelve Months Ended December
31, 2022
High
Low
Net income (loss)
$
(83,000
)
$
(85,000
)
Adjustments to reconcile net income (loss)
to Adjusted EBITDA:
Depreciation and amortization
6,000
6,000
Stock-based compensation
11,000
11,000
Other expense
1,000
1,000
Adjusted EBITDA
$
(65,000
)
$
(67,000
)
EVOLV TECHNOLOGY
SUMMARY OF KEY OPERATING
STATISTICS
(Unaudited)
($ in thousands)
December 31, 2020
March 31,
2021
June 30,
2021
September 30, 2021
December 31, 2021
March 31,
2022
New customers
6
13
21
23
27
44
Total contract value of orders booked
$5,956
$8,424
$10,476
$16,995
$17,916
$19,167
Annual recurring revenue
$4,034
$5,424
$7,423
$9,932
$12,907
$16,641
Remaining performance obligation
$13,381
$17,658
$24,930
$34,152
$40,160
$50,537
Contract value for units in backlog
n/a
n/a
n/a
n/a
$11,270
$13,213
Net additions
32
64
113
176
136
207
Ending deployed units
214
278
391
567
703
910
EVOLV TECHNOLOGY
RECONCILIATION OF GAAP TO
ADJSUTED GROSS PROFIT AND GAAP OPERATING INCOME TO ADJUSTED
OPERATING INCOME
(In thousands)
(Unaudited)
Three Months Ended
March 31,
2022
2021
Revenue
$
8,715
$
3,999
Cost of revenue
7,089
2,951
Gross Profit
1,626
1,048
Stock-based compensation
60
5
Adjusted Gross Profit
$
1,686
$
1,053
Gross Margin %
18.7%
26.2%
Adjusted Gross Margin %
19.3%
26.3%
Three Months Ended
March 31,
2022
2021
Operating income (loss) GAAP
$
(25,902)
$
(9,147)
Stock-based compensation
5,190
1,082
Restructuring expenses
324
-
Loss on impairment of lease
equipment
96
-
Other one-time expenses
1,107
-
Adjusted Operating Income (loss)
$
(19,185)
$
(8,065)
EVOLV TECHNOLOGY
RECONCILIATION OF GAAP NET
INCOME TO ADJUSTED EBITDA
(In thousands)
(Unaudited)
Three Months Ended March
31,
2022
2021
Net income (loss)
$
(14,551
)
$
(13,755
)
Depreciation & Amortization
948
452
Stock-based compensation
5,190
1,082
Interest and other income (expense)
(67
)
2,447
Loss on disposal of property &
equipment
-
-
Loss on extinguishment of debt
-
-
Change in fair value of derivative
liability
-
1,425
Change in fair value of contingent
earn-out liability
(4,226
)
-
Change in fair value of contingently
issuable common stock liability
(1,472
)
-
Change in fair value of public warrant
liability
(5,586
)
-
Change in fair value of common stock
warrant liability
-
736
Restructuring expenses
324
-
Loss on impairment of lease equipment
96
-
Other one-time expenses
1,107
-
Adjusted EBITDA
$
(18,237
)
$
(7,613
)
EVOLV TECHNOLOGY
RECONCILIATION OF GAAP NET
INCOME AND EARNINGS PER SHARE TO ADJUSTED EARNINGS AND EARNINGS PER
SHARE
(In thousands, except share
and per share data)
(Unaudited)
Three Months Ended
March 31,
2022
2021
Net income (loss)
$
(14,551
)
$
(13,755
)
Stock-based compensation
5,190
1,082
Change in fair value of derivative
liability
-
1,425
Change in fair value of contingent
earn-out liability
(4,226
)
-
Change in fair value of contingently
issuable common stock liability
(1,472
)
-
Change in fair value of public warrant
liability
(5,586
)
-
Change in fair value of common stock
warrant liability
-
736
Restructuring expenses
324
-
Loss on impairment of lease equipment
96
-
Other one-time expenses
1,107
-
Adjusted earnings (loss)
$
(19,118
)
$
(10,512
)
Weighted average common shares outstanding
– basic and diluted
142,878,406
10,443,323
Adjusted EPS
$
(0.13
)
$
(1.01
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220510006519/en/
Investor Relations: Brian Norris Vice President of
Investor Relations bnorris@evolvtechnology.com
Evolv Technologies (NASDAQ:EVLV)
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