EVLV Evolv Technologies Holdings Inc

– Company Raises Outlook for 2023 –

• Q2 Revenue of $19.8 million, up 119% year-over-year
• Q2 Ending ARR1 of $54.3 million, up 160% year-over-year
• Q2 Ending RPO2 of $198.3 million, up 145% year-over-year
• Q2 Ending Evolv Express® subscriptions of 3,386, up 195% year-over-year

Evolv Technology (NASDAQ: EVLV), the leader in AI-based weapons detection security screening, today announced financial results for the quarter ended June 30, 2023 and raised its business outlook for 2023.

Results for the Second Quarter of 2023

Total revenue for the second quarter of 2023 was $19.8 million, an increase of 119% compared to $9.1 million for the second quarter of 2022. Annual Recurring Revenue (“ARR”)1 was $54.3 million at the end of second quarter of 2023, an increase of 160% compared to $20.9 million at the end of the second quarter of 2022. Net loss for the second quarter of 2023 was $(66.8) million, or $(0.45) per basic and diluted share, compared to net loss of $(25.7) million, or $(0.18) per basic and diluted share, in the second quarter of 2022. Adjusted earnings (loss)3 for the second quarter of 2023 was $(14.3) million, or $(0.10) per diluted share, compared to adjusted earnings (loss)3 of $(17.3) million, or $(0.12) per diluted share, for the second quarter of 2022. Adjusted EBITDA3 for the second quarter of 2023 was $(13.8) million compared to $(16.4) million in the second quarter of 2022. As of June 30, 2023, the Company had cash, cash equivalents, and restricted cash of $156.8 million and no debt.

Results for the First Six Month of 2023

Total revenue for the six months ended June 30, 2023 was $38.4 million, an increase of 116% compared to $17.8 million for the six months ended June 30, 2022. Net loss for the six months ended June 30, 2023 was $(95.4) million, or $(0.65) per basic and diluted share, compared to net loss of $(39.5) million, or $(0.28) per basic and diluted share, in the six months ended June 30, 2022. Adjusted earnings (loss)3 for the six months ended June 30, 2023 was $(31.2) million, or $(0.21) per diluted share, compared to adjusted earnings (loss)3 of $(35.8) million, or $(0.25) per diluted share, for the six months ended June 30, 2022. Adjusted EBITDA3 for the six months ended June 30, 2023 was $(29.3) million compared to $(33.7) million in the six months ended June 30, 2022.

The following table summarizes the breakdown of recurring and non-recurring revenue4 during each quarter:

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

2022

 

% Change

 

 

2023

 

 

2022

 

% Change

Recurring revenue

$

11,689

 

$

4,604

 

154

%

 

$

20,764

 

$

7,763

 

167

%

Non-recurring revenue

 

8,136

 

 

4,466

 

82

%

 

 

17,642

 

 

10,017

 

76

%

Total revenue

$

19,825

 

$

9,070

 

119

%

 

$

38,406

 

$

17,780

 

116

%

The following table summarizes operating cash flows during each quarter:

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net loss

$

(66,754

)

 

$

(25,686

)

 

$

(95,363

)

 

$

(39,487

)

Non-cash (income) expense

 

54,467

 

 

 

7,758

 

 

 

68,472

 

 

 

2,632

 

Changes in operating assets and liabilities

 

7,208

 

 

 

(5,137

)

 

 

18,378

 

 

 

(15,640

)

Net cash used in operating activities

$

(5,079

)

 

$

(23,065

)

 

$

(8,513

)

 

$

(52,495

)

Company Raises Outlook for 2023

The Company today commented on its business outlook for 2023. The Company's outlook is based on the current indications for its business, which may change at any time.

 

 

2023 Business Outlook

Estimate (In millions)

 

Issued May 10, 2023

 

Issued August 10, 2023

Total Revenue

 

$60-$65

 

$70-$75

Annual Recurring Revenue1 (ARR) at 12/31/23

 

$67-$71

 

$70-$72

Adjusted Gross Margin3

 

35%-40%

 

38%-42%

Adjusted EBITDA3

 

($53-$58)

 

($52-$56)

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 825879. 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 1955791 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 transforming human security to make a safer, faster, and better experience for the world’s most iconic venues and companies as well as schools, hospitals, and public spaces, using industry leading artificial intelligence (AI)-powered weapons detection and analytics. Its mission is to transform security to create a safer world to work, learn, and play. Evolv has digitally transformed the gateways in places where people gather by enabling seamless integration combined with powerful analytics and insights. Evolv’s advanced systems have scanned more than 750 million people, second only to the Department of Homeland Security’s Transportation Security Administration (TSA) in the United States. Evolv has been awarded the U.S. Department of Homeland Security (DHS) SAFETY Act Designation as a Qualified Anti-Terrorism Technology (QATT) as well as the Security Industry Association (SIA) New Products and Solutions (NPS) Award in the Law Enforcement/Public Safety/Guarding Systems category. Evolv Technology®, Evolv Express®, Evolv Insights®, and Evolv Cortex AI® are registered trademarks of Evolv Technologies, Inc. in the United States and other jurisdictions. For more information, visit https://evolvtechnology.com.

1 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.

2 We define Remaining Performance Obligation, or RPO, as estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied or partially satisfied as of the end of the quarter.

3 Non-GAAP Financial Measures In this press release, the Company’s adjusted gross profit (loss), adjusted gross margin, adjusted operating expenses, adjusted operating income (loss), adjusted EBITDA, adjusted earnings (loss), and adjusted earnings per diluted share 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 and stock-based compensation expense which management believes provides a more meaningful representation of contribution margin. Adjusted operating expenses is defined as operating expenses less one-time items, stock-based compensation expense, restructuring expenses, and loss on impairment of lease equipment which management believes provides a more meaningful representation of on-going operating expense levels. 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 operating 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 included in this press release. The Company is unable to provide a reconciliation of Adjusted Gross Margin to GAAP Gross Margin and non-GAAP Adjusted EBITDA to Net Income (Loss), each measure's most directly comparable GAAP financial measure, on a forward-looking basis without unreasonable effort, because items that impact these GAAP financial measures are not within the Company’s control and/or cannot be reasonably predicted. These items may include, but are not limited to, predicting forward-looking share-based compensation, changes in the fair value of derivative liabilities, changes in the fair value of contingent earn out liabilities, changes in the fair value of contingently issuable common stock liabilities and changes in fair value of public warrant liabilities. Such information may have a significant, and potentially unpredictable, impact on the Company’s future financial results.

4 Recurring revenue includes the recurring portion of revenue associated with pure subscription contracts and hardware purchase subscription contracts. Non-recurring revenue includes revenue that is one-time in nature, such as product revenue, shipping revenue, and revenue from installation, training, and professional services.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release other than statements of historical facts, including without limitation statements regarding our ability to meet our 2023 annual guidance for revenue, ARR, adjusted gross margin, and adjusted EBITDA, as well as our estimates for cash and cash equivalents for fiscal year 2023. Words such as “believe” “may,” “will,” “expect,” “should,” “could,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “project,” “plan,” “target,” “is/are likely to” or the negative of these terms or other similar expressions are intended to identify forward-looking statements, though not all forward-looking statements use these words or expressions. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: expectations regarding the Company’s strategies and future financial performance, including its future business plans or objectives, prospective performance, competitors, revenues, products and services, pricing, operating expenses, market trends, liquidity, cash flows and uses of cash, and capital expenditures; the Company’s history of losses and lack of profitability; the Company’s reliance on third party contract manufacturing and a global supply chain; the rate of innovation required to maintain competitiveness in the markets in which the Company competes; the loss of designation of the Evolv Express system as a Qualified Anti-Terrorism Technology under the Homeland Security SAFETY Act; the ability for the Company to obtain, maintain, protect and enforce the Company’s intellectual property rights and use of “open source” software; 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; risks related to existing and changing tax laws; 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; the impact of fluctuating general economic and market conditions; the need for additional capital to support business growth, which might not be available on acceptable terms, if at all; litigation and regulatory enforcement risks, including the diversion of management time and attention and the additional costs and demands on resources, and the Company’s ability to identify and implement digital advances in its technology. These and other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission ("SEC") on March 24, 2023, as may be updated from time to time in other filings we make with the SEC including our Quarterly Report on Form 10-Q for the quarter ended on March 31, 2023 that was filed with the SEC on May 10, 2023, could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release.

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

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)

(Unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue:

 

 

 

 

 

 

 

Product revenue

$

7,243

 

 

$

4,146

 

 

$

15,997

 

 

$

9,340

 

Subscription revenue

 

7,964

 

 

 

4,006

 

 

 

14,430

 

 

 

7,010

 

Service revenue

 

4,618

 

 

 

918

 

 

 

7,979

 

 

 

1,430

 

Total revenue

 

19,825

 

 

 

9,070

 

 

 

38,406

 

 

 

17,780

 

Cost of revenue:

 

 

 

 

 

 

 

Cost of product revenue

 

7,722

 

 

 

5,347

 

 

 

18,300

 

 

 

10,553

 

Cost of subscription revenue

 

3,406

 

 

 

1,981

 

 

 

5,757

 

 

 

3,523

 

Cost of service revenue

 

1,284

 

 

 

1,189

 

 

 

2,171

 

 

 

2,254

 

Total cost of revenue

 

12,412

 

 

 

8,517

 

 

 

26,228

 

 

 

16,330

 

Gross profit

 

7,413

 

 

 

553

 

 

 

12,178

 

 

 

1,450

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

6,395

 

 

 

4,156

 

 

 

11,784

 

 

 

8,331

 

Sales and marketing

 

13,613

 

 

 

11,751

 

 

 

26,417

 

 

 

21,423

 

General and administrative

 

10,874

 

 

 

9,612

 

 

 

19,800

 

 

 

20,429

 

Loss from impairment of property and equipment

 

157

 

 

 

316

 

 

 

294

 

 

 

412

 

Total operating expenses

 

31,039

 

 

 

25,835

 

 

 

58,295

 

 

 

50,595

 

Loss from operations

 

(23,626

)

 

 

(25,282

)

 

 

(46,117

)

 

 

(49,145

)

Other income (expense), net:

 

 

 

 

 

 

 

Interest expense

 

—

 

 

 

(159

)

 

 

(654

)

 

 

(301

)

Interest income

 

1,853

 

 

 

491

 

 

 

2,806

 

 

 

559

 

Other expense, net

 

(22

)

 

 

—

 

 

 

(3

)

 

 

—

 

Loss on extinguishment of debt

 

—

 

 

 

—

 

 

 

(626

)

 

 

—

 

Change in fair value of contingent earn-out liability

 

(28,113

)

 

 

(569

)

 

 

(31,431

)

 

 

2,509

 

Change in fair value of contingently issuable common stock liability

 

(5,095

)

 

 

(24

)

 

 

(5,837

)

 

 

1,448

 

Change in fair value of public warrant liability

 

(11,751

)

 

 

(143

)

 

 

(13,501

)

 

 

5,443

 

Total other income (expense), net

 

(43,128

)

 

 

(404

)

 

$

(49,246

)

 

$

9,658

 

Net loss

$

(66,754

)

 

$

(25,686

)

 

$

(95,363

)

 

$

(39,487

)

 

 

 

 

 

 

 

 

Weighted average common shares outstanding – basic and diluted

 

148,882,160

 

 

 

143,552,032

 

 

 

147,664,534

 

 

 

143,220,268

 

Net loss per share - basic and diluted

$

(0.45

)

 

$

(0.18

)

 

$

(0.65

)

 

$

(0.28

)

 

 

 

 

 

 

 

 

Net loss

$

(66,754

)

 

$

(25,686

)

 

$

(95,363

)

 

$

(39,487

)

Other comprehensive income (loss)

 

 

 

 

 

 

 

Cumulative translation adjustment

 

(17

)

 

 

(10

)

 

 

(33

)

 

 

(10

)

Total other comprehensive loss

 

(17

)

 

 

(10

)

 

 

(33

)

 

 

(10

)

Total comprehensive loss

$

(66,771

)

 

$

(25,696

)

 

$

(95,396

)

 

$

(39,497

)

 

EVOLV TECHNOLOGY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)

 

 

June 30, 2023

 

December 31, 2022

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

155,537

 

 

$

229,783

 

Restricted cash

 

1,000

 

 

 

—

 

Accounts receivable, net

 

32,393

 

 

 

31,920

 

Inventory

 

5,032

 

 

 

10,257

 

Current portion of contract assets

 

4,732

 

 

 

2,852

 

Current portion of commission asset

 

3,648

 

 

 

3,384

 

Prepaid expenses and other current assets

 

13,808

 

 

 

14,388

 

Total current assets

 

216,150

 

 

 

292,584

 

Restricted cash, noncurrent

 

275

 

 

 

275

 

Contract assets, noncurrent

 

690

 

 

 

1,386

 

Commission asset, noncurrent

 

6,649

 

 

 

5,655

 

Property and equipment, net

 

81,085

 

 

 

44,707

 

Operating lease right-of-use assets

 

1,241

 

 

 

1,673

 

Other assets

 

1,878

 

 

 

1,835

 

Total assets

$

307,968

 

 

$

348,115

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

16,912

 

 

$

18,194

 

Accrued expenses and other current liabilities

 

10,821

 

 

 

11,545

 

Current portion of deferred revenue

 

39,366

 

 

 

18,273

 

Current portion of long-term debt

 

—

 

 

 

10,000

 

Current portion of operating lease liabilities

 

1,130

 

 

 

1,114

 

Total current liabilities

 

68,229

 

 

 

59,126

 

Deferred revenue, noncurrent

 

20,715

 

 

 

17,695

 

Long-term debt, noncurrent

 

—

 

 

 

19,683

 

Operating lease liabilities, noncurrent

 

363

 

 

 

892

 

Contingent earn-out liability

 

45,649

 

 

 

14,218

 

Contingently issuable common stock liability

 

9,229

 

 

 

3,392

 

Public warrant liability

 

19,625

 

 

 

6,124

 

Total liabilities

 

163,810

 

 

 

121,130

 

 

 

 

 

Stockholders’ equity:

 

 

 

Preferred stock, $0.0001 par value; 100,000,000 authorized at June 30, 2023 and December 31, 2022; no shares issued and outstanding at June 30, 2023 and December 31, 2022

 

—

 

 

 

—

 

Common stock, $0.0001 par value; 1,100,000,000 shares authorized at June 30, 2023 and December 31, 2022; 149,790,742 and 145,204,974 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively

 

15

 

 

 

15

 

Additional paid-in capital

 

431,759

 

 

 

419,190

 

Accumulated other comprehensive loss

 

(43

)

 

 

(10

)

Accumulated deficit

 

(287,573

)

 

 

(192,210

)

Stockholders’ equity

 

144,158

 

 

 

226,985

 

Total liabilities and stockholders’ equity

$

307,968

 

 

$

348,115

 

 

EVOLV TECHNOLOGY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

Cash flows from operating activities:

 

 

 

Net loss

$

(95,363

)

 

$

(39,487

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

Depreciation and amortization

 

4,087

 

 

 

2,350

 

Write-off of inventory and change in inventory reserve

 

337

 

 

 

425

 

Adjustment to property and equipment for sales type leases

 

—

 

 

 

(625

)

Loss from impairment of property and equipment

 

294

 

 

 

412

 

Stock-based compensation

 

11,732

 

 

 

8,988

 

Non-cash interest expense

 

22

 

 

 

10

 

Non-cash lease expense

 

432

 

 

 

392

 

Change in allowance for expected credit losses

 

173

 

 

 

80

 

Loss on extinguishment of debt

 

626

 

 

 

—

 

Change in fair value of earn-out liability

 

31,431

 

 

 

(2,509

)

Change in fair value of contingently issuable common stock

 

5,837

 

 

 

(1,448

)

Change in fair value of public warrant liability

 

13,501

 

 

 

(5,443

)

Changes in operating assets and liabilities

 

 

 

Accounts receivable

 

(646

)

 

 

(5,786

)

Inventory

 

5,080

 

 

 

(3,545

)

Commission assets

 

(1,258

)

 

 

(339

)

Contract assets

 

(1,184

)

 

 

(1,352

)

Other assets

 

(43

)

 

 

(756

)

Prepaid expenses and other current assets

 

580

 

 

 

(9,707

)

Accounts payable

 

(7,409

)

 

 

2,147

 

Deferred revenue

 

24,113

 

 

 

6,031

 

Accrued expenses and other current liabilities

 

(342

)

 

 

(1,876

)

Operating lease liability

 

(513

)

 

 

(457

)

Net cash used in operating activities

 

(8,513

)

 

 

(52,495

)

Cash flows from investing activities:

 

 

 

Development of internal-use software

 

(1,599

)

 

 

(1,301

)

Purchases of property and equipment

 

(33,173

)

 

 

(11,379

)

Proceeds from sale of property and equipment

 

60

 

 

 

—

 

Net cash used in investing activities

 

(34,712

)

 

 

(12,680

)

Cash flows from financing activities:

 

 

 

Proceeds from exercise of stock options and warrants

 

344

 

 

 

384

 

Proceeds from long-term debt

 

1,876

 

 

 

—

 

Repayment of principal on long-term debt

 

(31,876

)

 

 

—

 

Payment of debt issuance costs and prepayment penalty

 

(332

)

 

 

—

 

Net cash provided by (used in) financing activities

 

(29,988

)

 

 

384

 

Effect of exchange rate changes on cash and cash equivalents

 

(33

)

 

 

(10

)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

(73,246

)

 

 

(64,801

)

Cash, cash equivalents and restricted cash

 

 

 

Cash, cash equivalents and restricted cash at beginning of period

 

230,058

 

 

 

308,167

 

Cash, cash equivalents and restricted cash at end of period

$

156,812

 

 

$

243,366

 

 

EVOLV TECHNOLOGY

SUMMARY OF KEY OPERATING STATISTICS

(Unaudited)

 

 

Three Months Ended or as of,

($ in thousands)

 

March 31, 2022

 

June 30, 2022

 

September 30, 2022

 

December 31, 2022

 

March 31, 2023

 

June 30, 2023

New customers

 

 

44

 

 

53

 

 

92

 

 

106

 

 

61

 

 

74

Annual recurring revenue

 

$

16,641

 

$

20,865

 

$

28,741

 

$

34,120

 

$

42,021

 

$

54,339

Recurring revenue

 

$

3,159

 

$

4,604

 

$

6,221

 

$

7,388

 

$

9,075

 

$

11,689

Remaining performance obligation

 

$

63,750

 

$

80,978

 

$

109,407

 

$

144,561

 

$

161,813

 

$

198,296

Net additions

 

 

207

 

 

237

 

 

545

 

 

575

 

 

520

 

 

599

Ending deployed units

 

 

910

 

 

1,147

 

 

1,692

 

 

2,267

 

 

2,787

 

 

3,386

 

EVOLV TECHNOLOGY

RECONCILIATION OF GAAP OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES

(In thousands)

(Unaudited)

 

 

Three Months Ended,

 

 

 

March 31, 2022

 

June 30, 2022

 

September 30, 2022

 

December 31, 2022

 

March 31, 2023

 

June 30, 2023

Operating expenses, GAAP

 

$

24,760

 

 

$

25,835

 

 

$

26,827

 

 

$

26,868

 

 

$

27,256

 

 

$

31,039

 

Stock-based compensation

 

 

(3,819

)

 

 

(4,781

)

 

 

(6,298

)

 

 

(6,771

)

 

 

(4,898

)

 

 

(6,505

)

Restructuring expenses

 

 

(324

)

 

 

13

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Loss on impairment of lease equipment

 

 

(96

)

 

 

(316

)

 

 

(626

)

 

 

(123

)

 

 

(137

)

 

 

(157

)

Other one-time expenses

 

 

(1,107

)

 

 

(2,298

)

 

 

(69

)

 

 

(41

)

 

 

(53

)

 

 

(683

)

Adjusted Operating Expenses

 

$

19,414

 

 

$

18,453

 

 

$

19,834

 

 

$

19,933

 

 

$

22,168

 

 

$

23,694

 

 

EVOLV TECHNOLOGY

RECONCILIATION OF GAAP GROSS PROFIT TO ADJUSTED GROSS PROFIT, GAAP GROSS MARGIN TO ADJUSTED GROSS MARGIN AND GAAP OPERATING INCOME (LOSS) TO ADJUSTED OPERATING INCOME (LOSS)

(In thousands)

(Unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue

$

19,825

 

 

$

9,070

 

 

$

38,406

 

 

$

17,780

 

Cost of Revenue

 

12,412

 

 

 

8,517

 

 

 

26,228

 

 

 

16,330

 

Gross Profit, GAAP

 

7,413

 

 

 

553

 

 

 

12,178

 

 

 

1,450

 

Stock-based compensation

 

184

 

 

 

280

 

 

 

329

 

 

 

388

 

Amortization of capitalized stock-based compensation

 

11

 

 

 

6

 

 

 

21

 

 

 

9

 

Adjusted Gross Profit

$

7,608

 

 

$

839

 

 

$

12,528

 

 

$

1,847

 

 

 

 

 

 

 

 

 

Gross Margin %

 

37.4

%

 

 

6.1

%

 

 

31.7

%

 

 

8.2

%

Adjusted Gross Margin %

 

38.4

%

 

 

9.3

%

 

 

32.6

%

 

 

10.4

%

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Operating income (loss), GAAP

$

(23,626

)

 

$

(25,282

)

 

$

(46,117

)

 

$

(49,145

)

Stock-based compensation

 

6,689

 

 

 

5,061

 

 

 

11,732

 

 

 

8,988

 

Amortization of capitalized stock-based compensation

 

11

 

 

 

6

 

 

 

21

 

 

 

9

 

Restructuring expenses

 

—

 

 

 

(13

)

 

 

—

 

 

 

311

 

Loss on impairment of lease equipment

 

157

 

 

 

316

 

 

 

294

 

 

 

412

 

Other one-time expenses

 

683

 

 

 

2,298

 

 

 

736

 

 

 

3,405

 

Adjusted Operating Income (Loss)

$

(16,086

)

 

$

(17,614

)

 

$

(33,334

)

 

$

(36,020

)

 

EVOLV TECHNOLOGY

RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA

(In thousands)

(Unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net loss

$

(66,754

)

 

$

(25,686

)

 

$

(95,363

)

 

$

(39,487

)

Depreciation & amortization

 

2,272

 

 

 

1,264

 

 

 

4,087

 

 

 

2,350

 

Stock-based compensation

 

6,689

 

 

 

5,061

 

 

 

11,732

 

 

 

8,988

 

Interest expense (income)

 

(1,853

)

 

 

(332

)

 

 

(2,152

)

 

 

(258

)

Loss on extinguishment of debt

 

—

 

 

 

—

 

 

 

626

 

 

 

—

 

Change in fair value of contingent earn-out liability

 

28,113

 

 

 

569

 

 

 

31,431

 

 

 

(2,509

)

Change in fair value of contingently issuable common stock liability

 

5,095

 

 

 

24

 

 

 

5,837

 

 

 

(1,448

)

Change in fair value of public warrant liability

 

11,751

 

 

 

143

 

 

 

13,501

 

 

 

(5,443

)

Restructuring expenses

 

—

 

 

 

(13

)

 

 

—

 

 

 

311

 

Loss on impairment of lease equipment

 

157

 

 

 

316

 

 

 

294

 

 

 

412

 

Other one-time expenses

 

683

 

 

 

2,298

 

 

 

736

 

 

 

3,405

 

Adjusted EBITDA

$

(13,847

)

 

$

(16,356

)

 

$

(29,271

)

 

$

(33,679

)

 

EVOLV TECHNOLOGY

RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED EARNINGS (LOSS)

(In thousands, except share and per share data)

(Unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net loss

$

(66,754

)

 

$

(25,686

)

 

$

(95,363

)

 

$

(39,487

)

Stock-based compensation

 

6,689

 

 

 

5,061

 

 

 

11,732

 

 

 

8,988

 

Amortization of capitalized stock-based compensation

 

11

 

 

 

6

 

 

 

21

 

 

 

9

 

Loss on extinguishment of debt

 

—

 

 

 

—

 

 

 

626

 

 

 

—

 

Change in fair value of contingent earn-out liability

 

28,113

 

 

 

569

 

 

 

31,431

 

 

 

(2,509

)

Change in fair value of contingently issuable common stock liability

 

5,095

 

 

 

24

 

 

 

5,837

 

 

 

(1,448

)

Change in fair value of public warrant liability

 

11,751

 

 

 

143

 

 

 

13,501

 

 

 

(5,443

)

Restructuring expenses

 

—

 

 

 

(13

)

 

 

—

 

 

 

311

 

Loss on impairment of lease equipment

 

157

 

 

 

316

 

 

 

294

 

 

 

412

 

Other one-time expenses

 

683

 

 

 

2,298

 

 

 

736

 

 

 

3,405

 

Adjusted Earnings (Loss)

$

(14,255

)

 

$

(17,282

)

 

$

(31,185

)

 

$

(35,762

)

 

 

 

 

 

 

 

 

Weighted average common shares outstanding – diluted

 

148,882,160

 

 

 

143,552,032

 

 

 

147,664,534

 

 

 

143,220,268

 

 

 

 

 

 

 

 

 

Adjusted Earnings (Loss) Per Share – diluted

$

(0.10

)

 

$

(0.12

)

 

$

(0.21

)

 

$

(0.25

)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230810378529/en/

Investor Relations: Brian Norris Senior Vice President of Finance and Investor Relations bnorris@evolvtechnology.com