EVLV Evolv Technologies Holdings Inc

• Q2 Revenue of $25.5 million, up 29% year-over-year
• Q2 Ending ARR1 of $88.9 million, up 64% year-over-year
• Q2 Ending RPO2 of $262.9 million, up 33% year-over-year
• Q2 Ending Evolv Express® subscriptions of 5,323, up 57% year-over-year

Evolv Technology (NASDAQ: EVLV), a leading security technology company pioneering AI-based screening designed to help create safer experiences, today announced financial results for the quarter ended June 30, 2024.

Results for the Second Quarter of 2024

Total revenue for the second quarter of 2024 was $25.5 million, an increase of 29% compared to $19.8 million for the second quarter of 2023. Annual Recurring Revenue (“ARR”)1 was $88.9 million at the end of second quarter of 2024, an increase of 64% compared to $54.3 million at the end of the second quarter of 2023. Net income for the second quarter of 2024 was $3.5 million, or $0.02 per basic and diluted share, compared to net loss of $(66.8) million, or $(0.45) per basic and diluted share, in the second quarter of 2023. Adjusted earnings (loss)3 for the second quarter of 2024 was $(11.1) million, or $(0.06) per diluted share, compared to adjusted earnings (loss)3 of $(14.3) million, or $(0.10) per diluted share, for the second quarter of 2023. Adjusted EBITDA3 for the second quarter of 2024 was $(7.9) million compared to $(13.8) million in the second quarter of 2023. As of June 30, 2024, the Company had cash, cash equivalents, marketable securities, and restricted cash of $56.7 million and no debt.

Results for the First Six Months of 2024

Total revenue for the six months ended June 30, 2024 was $47.2 million, an increase of 23% compared to $38.4 million for the six months ended June 30, 2023. Net loss for the six months ended June 30, 2024 was $(8.2) million, or $(0.05) per basic and diluted share, compared to $(95.4) million, or $(0.65) per basic and diluted share, in the six months ended June 30, 2023. Adjusted earnings (loss)3 for the six months ended June 30, 2024 was $(24.2) million, or $(0.16) per diluted share, compared to adjusted earnings (loss)3 of $(31.2) million, or $(0.21) per diluted share, for the six months ended June 30, 2023. Adjusted EBITDA3 for the six months ended June 30, 2024 was $(18.6) million compared to $(29.3) million in the six months ended June 30, 2023.

The following table summarizes the breakdown of recurring and non-recurring revenue4 for each period presented:

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

2023

 

% Change

 

 

2024

 

 

2023

 

% Change

Recurring revenue

$

21,249

 

$

11,689

 

82

%

 

$

40,630

 

$

20,764

 

96

%

Non-recurring revenue

 

4,291

 

 

8,136

 

(47

)%

 

 

6,578

 

 

17,642

 

(63

)%

Total revenue

$

25,540

 

$

19,825

 

29

%

 

$

47,208

 

$

38,406

 

23

%

The following table summarizes operating cash flows for each period presented:

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net loss

$

3,462

 

 

$

(66,754

)

 

$

(8,182

)

 

$

(95,363

)

Non-cash expense

 

(12,264

)

 

 

54,225

 

 

 

(10,611

)

 

 

68,230

 

Changes in operating assets and liabilities

 

(13,077

)

 

 

7,208

 

 

 

(19,169

)

 

 

18,378

 

Net cash used in operating activities

$

(21,879

)

 

$

(5,321

)

 

$

(37,962

)

 

$

(8,755

)

Company Comments on Outlook for 2024

The Company today commented on its business outlook for 2024. The Company's outlook is based on the current indications for its business, which may change at any time.

Estimate ($ in millions)

 

Issued May 9, 2024

 

Issued August 8, 2024

Total Revenue

 

~$100

 

Reaffirmed

ARR1 (ARR) at 12/31/24

 

~$100

 

Reaffirmed

Adjusted Gross Margin3

 

~60%

 

Reaffirmed

Adjusted EBITDA3

 

Improve by 40%+

 

Reaffirmed

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. The press release with the financial results will be available on the Company’s website prior to the conference call. 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 8674340 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) uses advanced sensors, artificial intelligence powered software, and cloud services to reliably detect firearms, improvised explosives, and certain types of knives while ignoring many harmless items such as cell phones and keys. Its solutions and services are designed to capture valuable visitor data customers can leverage to inform their security operations, while providing end-users with an approachable and non-intrusive security experience. Evolv has digitally transformed the gateways in many places where people gather by enabling seamless integration combined with powerful analytics and insights. Evolv’s advanced systems have scanned more than a billion people since 2019. 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, as well as Sport Business Journal’s (SBJ) awards for “Best In Fan Experience Technology” and “Best In Sports Technology”. Evolv®, Evolv Express®, Evolv Insights®, Evolv Cortex AI®, and Evolv Visual Gun Detection™ 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 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 expenses, stock-based compensation expense, and amortization of capitalized stock-based compensation which management believes provides a more meaningful representation of contribution margin. Adjusted operating expenses is defined as operating expenses less one-time expenses, stock-based compensation expense, amortization of capitalized stock-based compensation, 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, interest expense (income), loss on extinguishment of debt, 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, loss on impairment of lease equipment, and certain other one-time expenses. Adjusted earnings (loss) is defined as net income (loss) plus stock-based compensation, amortization of capitalized stock-based compensation, loss on extinguishment of debt, 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, 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 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 and related presentation materials other than statements of historical facts, including without limitation statements regarding our ability to meet our 2024 guidance for revenue, ARR, adjusted gross margin, and adjusted EBITDA, our estimates for cash and cash equivalents for fiscal year 2024, our results of operations and financial position, business strategy, plans and prospects, our relationship with significant manufacturers and suppliers, our ability to obtain new customers and retain existing customers, existing and prospective products, the potential benefits of our ongoing transition to a pure subscription model, timing and likelihood of success, macroeconomic and market trends, our expectations regarding any outcomes and impact of any legal proceedings, government investigation or enforcement action (such as the current investigations by the FTC and the SEC), and plans and objectives of management for future operations and results are forward-looking statements. Words such as “believe” “may,” “will,” “expect,” “should,” “could,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “project,” “plan,” “target,” “forecast”, “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. The forward-looking statements in this press release and related presentation materials are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements 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: relating to our history of losses and ability to reach profitability; our reliance on reseller partners to generate a growing portion of our revenue; 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 reliance on third party contract manufacturing and distribution, and a global supply chain; the Company recognizes a substantial portion of its revenue ratably over the term of its agreements, and, as a result, downturns or upturns in sales may not be immediately reflected in its operating results; 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 failure of our products to detect threats could result in injury or loss of life, which could harm our brand, reputation, and results of operations; the loss of designation of our Evolv Express® system as a Qualified Anti-Terrorism Technology under the Homeland Security SAFETY Act; risks related to our business model, which is predicated, in part, on building a customer base that will generate a recurring stream of revenues through the sale of our subscription contracts; 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; risks related to material weaknesses in our internal control over financial reporting and our remediation plans; risks related to increasing attention to and evolving expectations for, environmental, social, and governance initiatives; the impact of fluctuating general economic and market conditions and reductions in spending; the need for additional capital to support business growth, which might not be available on acceptable terms, if at all; and litigation and regulatory enforcement risks, including the diversion of management time and attention and the additional costs and demands on resources. 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, 2023 filed with the Securities and Exchange Commission ("SEC") on February 29, 2024, as any such factors may be updated from time to time in our other filings with the SEC, including the Quarterly Report on Form 10-Q for the quarter ended June 30, 2024. The forward-looking statements in this press release and related presentation materials are based upon information available to us as of the date hereof, and while we believe such information forms a reasonable basis for such statements, it may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should review this press release and the documents that we reference in this press release and related presentation materials with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this press release and related presentation materials, whether as a result of any new information, future events or otherwise.

 

EVOLV TECHNOLOGY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except share and per share data)

(Unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenue:

 

 

 

 

 

 

 

Product revenue

$

2,044

 

 

$

7,243

 

 

$

2,647

 

 

$

15,997

 

Subscription revenue

 

15,903

 

 

 

7,964

 

 

 

30,406

 

 

 

14,430

 

Service revenue

 

5,553

 

 

 

3,905

 

 

 

10,937

 

 

 

6,691

 

License fee and other revenue

 

2,040

 

 

 

713

 

 

 

3,218

 

 

 

1,288

 

Total revenue

 

25,540

 

 

 

19,825

 

 

 

47,208

 

 

 

38,406

 

Cost of revenue:

 

 

 

 

 

 

 

Cost of product revenue

 

3,149

 

 

 

7,722

 

 

 

5,926

 

 

 

18,300

 

Cost of subscription revenue

 

6,436

 

 

 

3,406

 

 

 

12,215

 

 

 

5,757

 

Cost of service revenue

 

1,311

 

 

 

1,014

 

 

 

2,522

 

 

 

1,597

 

Cost of license fee and other revenue

 

172

 

 

 

270

 

 

 

301

 

 

 

574

 

Total cost of revenue

 

11,068

 

 

 

12,412

 

 

 

20,964

 

 

 

26,228

 

Gross profit

 

14,472

 

 

 

7,413

 

 

 

26,244

 

 

 

12,178

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

5,722

 

 

 

6,395

 

 

 

11,927

 

 

 

11,784

 

Sales and marketing

 

16,892

 

 

 

13,613

 

 

 

32,897

 

 

 

26,417

 

General and administrative

 

14,185

 

 

 

10,874

 

 

 

26,025

 

 

 

19,800

 

Loss from impairment of property and equipment

 

—

 

 

 

157

 

 

 

—

 

 

 

294

 

Total operating expenses

 

36,799

 

 

 

31,039

 

 

 

70,849

 

 

 

58,295

 

Loss from operations

 

(22,327

)

 

 

(23,626

)

 

 

(44,605

)

 

 

(46,117

)

Other income (expense), net:

 

 

 

 

 

 

 

Interest expense

 

—

 

 

 

—

 

 

 

—

 

 

 

(654

)

Interest income

 

681

 

 

 

1,853

 

 

 

1,766

 

 

 

2,806

 

Other income (expense), net

 

(39

)

 

 

(22

)

 

 

(67

)

 

 

(3

)

Loss on extinguishment of debt

 

—

 

 

 

—

 

 

 

—

 

 

 

(626

)

Change in fair value of contingent earn-out liability

 

16,514

 

 

 

(28,113

)

 

 

23,413

 

 

 

(31,431

)

Change in fair value of contingently issuable common stock liability

 

3,747

 

 

 

(5,095

)

 

 

4,274

 

 

 

(5,837

)

Change in fair value of public warrant liability

 

4,886

 

 

 

(11,751

)

 

 

7,037

 

 

 

(13,501

)

Total other income (expense), net

 

25,789

 

 

 

(43,128

)

 

 

36,423

 

 

 

(49,246

)

Net income (loss)

$

3,462

 

 

$

(66,754

)

 

$

(8,182

)

 

$

(95,363

)

Net income (loss) attributable to common stockholders – basic and diluted

$

3,421

 

 

$

(66,754

)

 

$

(8,182

)

 

$

(95,363

)

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

Basic

 

156,473,080

 

 

 

148,882,160

 

 

 

154,774,899

 

 

 

147,664,534

 

Diluted

 

171,563,943

 

 

 

148,882,160

 

 

 

154,774,899

 

 

 

147,664,534

 

Net income (loss) per share

 

 

 

 

 

 

 

Basic

$

0.02

 

 

$

(0.45

)

 

$

(0.05

)

 

$

(0.65

)

Diluted

$

0.02

 

 

$

(0.45

)

 

$

(0.05

)

 

$

(0.65

)

 

 

 

 

 

 

 

 

Net income (loss)

$

3,462

 

 

$

(66,754

)

 

$

(8,182

)

 

$

(95,363

)

Other comprehensive income (loss)

 

 

 

 

 

 

 

Cumulative translation adjustment

 

8

 

 

 

(17

)

 

 

11

 

 

 

(33

)

Total other comprehensive income (loss)

 

8

 

 

 

(17

)

 

 

11

 

 

 

(33

)

Total comprehensive income (loss)

$

3,470

 

 

$

(66,771

)

 

$

(8,171

)

 

$

(95,396

)

 

EVOLV TECHNOLOGY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)

 

 

June 30, 2024

 

December 31, 2023

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

35,698

 

 

$

67,162

 

Restricted cash

 

—

 

 

 

275

 

Marketable securities

 

20,757

 

 

 

51,289

 

Accounts receivable, net

 

36,428

 

 

 

22,611

 

Inventory

 

18,604

 

 

 

9,507

 

Current portion of contract assets

 

1,690

 

 

 

3,707

 

Current portion of commission asset

 

4,810

 

 

 

4,339

 

Prepaid expenses and other current assets

 

19,912

 

 

 

16,954

 

Total current assets

 

137,899

 

 

 

175,844

 

Restricted cash, noncurrent

 

275

 

 

 

—

 

Contract assets, noncurrent

 

144

 

 

 

451

 

Commission asset, noncurrent

 

7,128

 

 

 

7,107

 

Property and equipment, net

 

120,045

 

 

 

112,921

 

Operating lease right-of-use assets

 

2,161

 

 

 

1,195

 

Other assets

 

865

 

 

 

1,202

 

Total assets

$

268,517

 

 

$

298,720

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

5,574

 

 

$

17,400

 

Accrued expenses and other current liabilities

 

15,913

 

 

 

15,578

 

Current portion of deferred revenue

 

56,168

 

 

 

47,677

 

Current portion of operating lease liabilities

 

1,754

 

 

 

1,391

 

Total current liabilities

 

79,409

 

 

 

82,046

 

Deferred revenue, noncurrent

 

23,655

 

 

 

23,813

 

Operating lease liabilities, noncurrent

 

566

 

 

 

—

 

Contingent earn-out liability

 

5,706

 

 

 

29,119

 

Contingently issuable common stock liability

 

2,256

 

 

 

6,530

 

Public warrant liability

 

3,852

 

 

 

10,889

 

Total liabilities

 

115,444

 

 

 

152,397

 

 

 

 

 

Stockholders’ equity:

 

 

 

Preferred stock, $0.0001 par value; 100,000,000 authorized at June 30, 2024 and December 31, 2023; no shares issued and outstanding at June 30, 2024 and December 31, 2023

 

—

 

 

 

—

 

Common stock, $0.0001 par value; 1,100,000,000 shares authorized at June 30, 2024 and December 31, 2023; 157,474,122 and 151,310,080 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

 

16

 

 

 

15

 

Additional paid-in capital

 

459,745

 

 

 

444,825

 

Accumulated other comprehensive loss

 

(42

)

 

 

(53

)

Accumulated deficit

 

(306,646

)

 

 

(298,464

)

Stockholders’ equity

 

153,073

 

 

 

146,323

 

Total liabilities and stockholders’ equity

$

268,517

 

 

$

298,720

 

 

EVOLV TECHNOLOGY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

Cash flows from operating activities:

 

 

 

Net loss

$

(8,182

)

 

$

(95,363

)

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

 

 

 

Depreciation and amortization

 

7,442

 

 

 

4,087

 

Write-off of inventory and change in inventory reserve

 

1,725

 

 

 

337

 

Loss from impairment of property and equipment

 

—

 

 

 

294

 

Stock-based compensation

 

13,834

 

 

 

11,732

 

Non-cash interest expense

 

—

 

 

 

22

 

Amortization (accretion) of premium (discount) on marketable securities, net of change in accrued interest

 

181

 

 

 

(242

)

Non-cash lease expense

 

728

 

 

 

432

 

Change in allowance for expected credit losses

 

203

 

 

 

173

 

Loss on extinguishment of debt

 

—

 

 

 

626

 

Change in fair value of earn-out liability

 

(23,413

)

 

 

31,431

 

Change in fair value of contingently issuable common stock

 

(4,274

)

 

 

5,837

 

Change in fair value of public warrant liability

 

(7,037

)

 

 

13,501

 

Changes in operating assets and liabilities

 

 

 

Accounts receivable

 

(14,020

)

 

 

(646

)

Inventory

 

(10,354

)

 

 

5,080

 

Commission assets

 

(492

)

 

 

(1,258

)

Contract assets

 

2,324

 

 

 

(1,184

)

Other assets

 

337

 

 

 

(43

)

Prepaid expenses and other current assets

 

(2,958

)

 

 

580

 

Accounts payable

 

(1,653

)

 

 

(7,409

)

Deferred revenue

 

8,333

 

 

 

24,113

 

Accrued expenses and other current liabilities

 

79

 

 

 

(342

)

Operating lease liability

 

(765

)

 

 

(513

)

Net cash used in operating activities

 

(37,962

)

 

 

(8,755

)

Cash flows from investing activities:

 

 

 

Development of internal-use software

 

(3,408

)

 

 

(1,599

)

Purchases of property and equipment

 

(21,092

)

 

 

(33,173

)

Proceeds from sale of property and equipment

 

—

 

 

 

60

 

Purchases of marketable securities

 

(14,567

)

 

 

(29,405

)

Proceeds from maturities of marketable securities

 

44,918

 

 

 

—

 

Net cash provided by (used in) investing activities

 

5,851

 

 

 

(64,117

)

Cash flows from financing activities:

 

 

 

Proceeds from exercise of stock options

 

636

 

 

 

344

 

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

 

636

 

 

 

(29,988

)

Effect of exchange rate changes on cash and cash equivalents

 

11

 

 

 

(33

)

Net decrease in cash, cash equivalents and restricted cash

 

(31,464

)

 

 

(102,893

)

Cash, cash equivalents and restricted cash

 

 

 

Cash, cash equivalents and restricted cash at beginning of period

 

67,437

 

 

 

230,058

 

Cash, cash equivalents and restricted cash at end of period

$

35,973

 

 

$

127,165

 

 

EVOLV TECHNOLOGY

SUMMARY OF KEY OPERATING STATISTICS

(Unaudited)

 

 

Three Months Ended or as of,

($ in thousands)

 

March 31, 2023

 

June 30, 2023

 

September 30, 2023

 

December 31, 2023

 

March 31, 2024

 

June 30, 2024

New customers

 

 

61

 

 

74

 

 

70

 

 

75

 

 

53

 

 

84

Annual recurring revenue

 

$

42,021

 

$

54,339

 

$

65,774

 

$

74,989

 

$

82,511

 

$

88,864

Recurring revenue

 

$

9,075

 

$

11,689

 

$

14,377

 

$

17,350

 

$

19,381

 

$

21,249

Remaining performance obligation

 

$

161,813

 

$

198,296

 

$

221,126

 

$

240,513

 

$

254,070

 

$

262,947

Net additions

 

 

520

 

 

599

 

 

628

 

 

491

 

 

377

 

 

441

Ending deployed units

 

 

2,787

 

 

3,386

 

 

4,014

 

 

4,505

 

 

4,882

 

 

5,323

 

EVOLV TECHNOLOGY

RECONCILIATION OF GAAP OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES

(In thousands)

(Unaudited)

 

 

Three Months Ended,

 

 

March 31, 2023

 

June 30, 2023

 

September 30, 2023

 

December 31, 2023

 

March 31, 2024

 

June 30, 2024

Operating expenses, GAAP

 

$

27,256

 

 

$

31,039

 

 

$

31,629

 

 

$

32,167

 

 

$

34,050

 

 

$

36,799

 

Stock-based compensation

 

 

(4,898

)

 

 

(6,505

)

 

 

(5,454

)

 

 

(6,711

)

 

 

(6,272

)

 

 

(7,251

)

Loss on impairment of lease equipment

 

 

(137

)

 

 

(157

)

 

 

(28

)

 

 

—

 

 

 

—

 

 

 

—

 

Other one-time expenses

 

 

(53

)

 

 

(683

)

 

 

(945

)

 

 

(535

)

 

 

(476

)

 

 

(3,011

)

Adjusted operating expenses

 

$

22,168

 

 

$

23,694

 

 

$

25,202

 

 

$

24,921

 

 

$

27,302

 

 

$

26,537

 

 

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,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenue

$

25,540

 

 

$

19,825

 

 

$

47,208

 

 

$

38,406

 

Cost of revenue

 

11,068

 

 

 

12,412

 

 

 

20,964

 

 

 

26,228

 

Gross profit, GAAP

 

14,472

 

 

 

7,413

 

 

 

26,244

 

 

 

12,178

 

Stock-based compensation

 

173

 

 

 

184

 

 

 

311

 

 

 

329

 

Amortization of capitalized stock-based compensation

 

15

 

 

 

11

 

 

 

29

 

 

 

21

 

Other one-time expenses

 

106

 

 

 

—

 

 

 

1,310

 

 

 

—

 

Adjusted gross profit

$

14,766

 

 

$

7,608

 

 

$

27,894

 

 

$

12,528

 

 

 

 

 

 

 

 

 

Gross margin %

 

56.7

%

 

 

37.4

%

 

 

55.6

%

 

 

31.7

%

Adjusted gross margin %

 

57.8

%

 

 

38.4

%

 

 

59.1

%

 

 

32.6

%

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Operating loss, GAAP

$

(22,327

)

 

$

(23,626

)

 

$

(44,605

)

 

$

(46,117

)

Stock-based compensation

 

7,424

 

 

 

6,689

 

 

 

13,834

 

 

 

11,732

 

Amortization of capitalized stock-based compensation

 

15

 

 

 

11

 

 

 

29

 

 

 

21

 

Loss on impairment of lease equipment

 

—

 

 

 

157

 

 

 

—

 

 

 

294

 

Other one-time expenses

 

3,117

 

 

 

683

 

 

 

4,797

 

 

 

736

 

Adjusted operating loss

$

(11,771

)

 

$

(16,086

)

 

$

(25,945

)

 

$

(33,334

)

 

EVOLV TECHNOLOGY

RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA

(In thousands)

(Unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net income (loss)

$

3,462

 

 

$

(66,754

)

 

$

(8,182

)

 

$

(95,363

)

Depreciation & amortization

 

3,968

 

 

 

2,272

 

 

 

7,442

 

 

 

4,087

 

Stock-based compensation

 

7,424

 

 

 

6,689

 

 

 

13,834

 

 

 

11,732

 

Interest expense (income)

 

(681

)

 

 

(1,853

)

 

 

(1,766

)

 

 

(2,152

)

Loss on extinguishment of debt

 

—

 

 

 

—

 

 

 

—

 

 

 

626

 

Change in fair value of contingent earn-out liability

 

(16,514

)

 

 

28,113

 

 

 

(23,413

)

 

 

31,431

 

Change in fair value of contingently issuable common stock liability

 

(3,747

)

 

 

5,095

 

 

 

(4,274

)

 

 

5,837

 

Change in fair value of public warrant liability

 

(4,886

)

 

 

11,751

 

 

 

(7,037

)

 

 

13,501

 

Loss on impairment of lease equipment

 

—

 

 

 

157

 

 

 

—

 

 

 

294

 

Other one-time expenses

 

3,117

 

 

 

683

 

 

 

4,797

 

 

 

736

 

Adjusted EBITDA

$

(7,857

)

 

$

(13,847

)

 

$

(18,599

)

 

$

(29,271

)

 

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,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net income (loss)

$

3,462

 

 

$

(66,754

)

 

$

(8,182

)

 

$

(95,363

)

Stock-based compensation

 

7,424

 

 

 

6,689

 

 

 

13,834

 

 

 

11,732

 

Amortization of capitalized stock-based compensation

 

15

 

 

 

11

 

 

 

29

 

 

 

21

 

Loss on extinguishment of debt

 

—

 

 

 

—

 

 

 

—

 

 

 

626

 

Change in fair value of contingent earn-out liability

 

(16,514

)

 

 

28,113

 

 

 

(23,413

)

 

 

31,431

 

Change in fair value of contingently issuable common stock liability

 

(3,747

)

 

 

5,095

 

 

 

(4,274

)

 

 

5,837

 

Change in fair value of public warrant liability

 

(4,886

)

 

 

11,751

 

 

 

(7,037

)

 

 

13,501

 

Loss on impairment of lease equipment

 

—

 

 

 

157

 

 

 

—

 

 

 

294

 

Other one-time expenses

 

3,117

 

 

 

683

 

 

 

4,797

 

 

 

736

 

Adjusted loss

$

(11,129

)

 

$

(14,255

)

 

$

(24,246

)

 

$

(31,185

)

 

 

 

 

 

 

 

 

Weighted average common shares outstanding – diluted

 

171,563,943

 

 

 

148,882,160

 

 

 

154,774,899

 

 

 

147,664,534

 

 

 

 

 

 

 

 

 

Adjusted loss per share – diluted

$

(0.06

)

 

$

(0.10

)

 

$

(0.16

)

 

$

(0.21

)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240807488453/en/

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