– Company Raises Outlook for 2023
–
Evolv Technology (NASDAQ: EVLV), the leader in AI-based weapons
detection security screening, today announced preliminary financial
results for the quarter ended September 30, 2023. The Company will
report final financial results on November 9, 2023 after the market
closes.
Preliminary Results for the Third Quarter of 2023
Based on preliminary third quarter estimates which are subject
to change, the Company currently expects:
- Total revenues to range between $19.3 million to $19.8
million
- Q3 ending ARR1 to range between $65.5 million to $66.0
million
- Q3 net additions to range between 620 to 625
- Gross margin to range between 56% to 57%
- Adjusted2 gross margin to range between 57% to 58%
- Approximately 30% of net additions in the quarter to be via the
new distribution model announced in Q2’23
- Approximately 70 new customers added across multiple end
markets including education, healthcare, professional sports,
tourist attractions and industrial workplaces.
Company Raises Outlook for 2023
The Company today raised 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 August 10, 2023
Issued October 12,
2023
Total Revenue
$70-$75
$75-$77
Annual Recurring Revenue1 (ARR)
at 12/31/23
$70-$72
$73-$75
Adjusted Gross Margin2
38%-42%
43%-45%
Adjusted EBITDA2
($52-$56)
($50-$53)
Company to Host Conference Call & Webcast On November 9,
2023 to Discuss Final Results for Third Quarter 2023
The Company will release final financial results for the third
quarter of 2023 on Thursday, November 9, 2023, after the market
closes. Members of the Company’s management team plan to host a
live conference call and webcast at 4:30 p.m. Eastern Time on that
day to discuss the final financial results for the third quarter of
2023 as well as management’s outlook for the business. 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 4536095 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.
Financial Disclosure Advisory
The Company reports its financial results in accordance with
U.S. generally accepted accounting principles (“GAAP”). The
expected financial results discussed in this press release are
preliminary and represent the most current information available to
the Company’s management, as financial closing procedures for the
third quarter ended September 30, 2023 are not yet complete. These
estimates are not a comprehensive statement of the Company’s
financial results for the third quarter ended September 30, 2023
and actual results may differ materially from these estimates as a
result of the completion of normal quarter-end accounting
procedures and adjustments, including the execution of the
Company’s internal control over financial reporting, the completion
of the preparation and review of the Company’s financial statements
and the subsequent occurrence or identification of events prior to
the formal issuance of the third quarter financial results.
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 Non-GAAP Financial Measures In this press release, the
Company’s adjusted gross profit (loss), adjusted gross margin, and
adjusted EBITDA, are not presented in accordance with 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 EBITDA is defined as net income
(loss) plus depreciation and amortization, share-based
compensation, 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.
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 statements
regarding preliminary financial results for the third quarter are
forward-looking statements. 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 June 30, 2023 that was filed with the SEC on August 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
PRELIMINARY
RECONCILIATION OF GAAP GROSS
PROFIT TO ADJUSTED GROSS PROFIT AND
GAAP GROSS MARGIN TO ADJUSTED
GROSS MARGIN INCOME (LOSS)
(In thousands)
(Unaudited)
Three Months Ended
September 30, 2023
Low
High
Revenue
$19,300
$19,800
Cost of Revenue
8,492
8,514
Gross Profit, GAAP
$10,808
$11,286
Stock-based compensation
$175
$175
Amortization of capitalized stock-based
compensation
$18
$23
Adjusted Gross Profit
$11,001
$11,484
Gross Margin %
56.00%
57.00%
Adjusted Gross Margin %
57.00%
58.00%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231012256016/en/
Investor Relations: Brian Norris Senior Vice President of
Finance and Investor Relations bnorris@evolvtechnology.com
Evolv Technologies (NASDAQ:EVLV)
Historical Stock Chart
From Sep 2024 to Oct 2024
Evolv Technologies (NASDAQ:EVLV)
Historical Stock Chart
From Oct 2023 to Oct 2024