Evolv Technology Reports Strong Third Quarter Financial Results

Rhea-AI Summary

Evolv Technology (NASDAQ: EVLV) reported strong Q3 2021 results, with total revenue of $8.4 million, a 473% year-over-year increase, and Total Contract Value (TCV) of $16.9 million, up 365%. The company has raised its 2021 outlook, estimating TCV between $53-$57 million and total revenue between $20-$23 million. GAAP net income for Q3 2021 was $23.2 million, or $0.15 per diluted share, compared to a loss of $6.3 million in Q3 2020. Evolv continues to expand its customer base, securing deals with notable clients like the NFL's Carolina Panthers.

Positive

• Q3 2021 total revenue increased by 473% year-over-year to $8.4 million.
• Total Contract Value (TCV) for Q3 2021 reached $16.9 million, a 365% rise.
• GAAP net income for Q3 2021 was $23.2 million, versus a net loss of $6.3 million in Q3 2020.
• The company raised its 2021 revenue outlook to $20-$23 million, up from a previous estimate of $20-$21 million.

Negative

• Despite strong Q3 results, the company reported a net loss of $13.4 million for the first nine months of 2021.

– Company Raises Outlook for 2021 –

• Q3 Total Contract Value (TCV) of $16.9 million, up 365% year-over-year
• Q3 Revenue of $8.4 million, up 473% year-over-year

WALTHAM, Mass.--(BUSINESS WIRE)-- Evolv Technology (NASDAQ: EVLV), the global leader in weapons detection security screening, today announced financial results for its third quarter ended September 30, 2021 and raised its business outlook for 2021.

“We are pleased to be reporting strong third quarter results highlighted by record revenues, accelerating channel activity and category defining new product innovations,” said Peter George, Chief Executive Officer of Evolv Technology. “We continued to extend our market leadership position with dozens of new customers including the Indianapolis Symphony Orchestra, the Nasdaq MarketSite and the National Football League’s Carolina Panthers and Tennessee Titans. Looking ahead, we are focused on a strong finish in 2021 and believe that we are well positioned for accelerated growth.”

Results for the Third Quarter of 2021

Total revenue for the third quarter of 2021 was $8.4 million, an increase of 473% compared to $1.5 million for the third quarter of 2020. Total Contract Value (“TCV”) of orders booked for the third quarter of 2021 was $16.9 million, an increase of 365% compared to $3.6 million in the third quarter of 2020. GAAP net income for the third quarter of 2021 was $23.2 million, or $0.15 per diluted share, compared to a GAAP net loss of $6.3 million, or $0.70 per basic and diluted share, for the third quarter of 2020.

Results for the First Nine Months of 2021

Total revenue for the first nine months of 2021 was $16.8 million, an increase of 513% compared to $2.8 million for the first nine months of 2020. TCV of orders booked for the first nine months of 2021 was $36.0 million, an increase of 280% compared to $9.5 million in the first nine months of 2020. GAAP net loss for the first nine months of 2021 was $13.4 million, or $0.28 per basic and diluted share, compared to a GAAP net loss of $18.0 million, or $2.00 per basic and diluted share, for the first nine months of 2020.

Company Raises Outlook for 2021

The Company today raised its business outlook for 2021. The Company's outlook is based on the current indications for its business, which may change at any time.

	Business Outlook for Year Ending December 31, 2021
Estimate	Issued August 16, 2021	Issued November 10, 2021
TCV of orders booked (in millions)	$53-$55	$53-$57
Total Revenue (in millions)	$20-$21	$20-$23

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 +1.844.867.6169 and using access code 1400696. The conference call may be accessed outside of the United States by dialing +1.409.207.6975 and using access code 1400696. 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 3758262 or by accessing the webcast replay on the Company’s investor relations website at http://ir.evolvtechnology.com. The Company has used, and intends to continue to use, the investor relations portion of its website as a means of disclosing material non-public information and for complying with disclosure obligations under Regulation FD.

About Evolv Technology

Evolv Technology (NASDAQ: EVLV) is the global leader in weapons detection security screening. Our 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. This enhances the visitor experience and improves weapons detection. We give sports fans, theme park visitors, concertgoers, shoppers, employees, students, and others peace of mind so that they can gather without fear of violence. Our security system, delivered as a SaaS-based offering, has scanned more than 100 million people, second only to the Department of Homeland Security’s Transportation Security Administration in the United States, and our 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.

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. 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 our current views with respect to future events or our 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 Evolv’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, and Evolv’s ability to invest in growth initiatives and pursue acquisition opportunities; the risk that the consummation of the business combination with NewHold Investment Corp. (the “Business Combination”) disrupts Evolv’s current plans; the ability to recognize the anticipated benefits of the Business Combination; unexpected costs related to the Business Combination; limited liquidity and trading of our securities; geopolitical risk and changes in applicable laws or regulations; the possibility that we 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 our business operations, as well as our 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 our resources; our ability to successfully deploy the proceeds from the Business Combination; and the risk factors set forth under the caption “Risk Factors” in our prospectus, filed with the Securities and Exchange Commission (the “SEC”) on September 3, 2021, and in our other documents filed with or furnished to the SEC.

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 September 30,						Nine Months Ended September 30,
		2021			2020			2021			2020
Revenue:
Product revenue	$	5,345		$	349		$	10,299		$	422
Subscription revenue		2,305			794			5,118			1,743
Service revenue		717			318			1,429			585
Total revenue		8,367			1,461			16,846			2,750
Cost of revenue:
Product revenue		2,933			163			7,237			361
Subscription revenue		1,086			490			2,542			1,192
Service revenue		192			169			732			376
Total cost of revenue		4,211			822			10,511			1,929
Gross profit		4,156			639			6,335			821
Operating expenses:
Research and development		3,641			4,088			8,330			10,629
Sales and marketing		8,510			1,552			17,284			5,105
General and administrative		6,983			1,177			11,162			2,676
Loss from impairment of leased equipment		1,656			-			1,656			-
Total operating expenses		20,790			6,817			38,432			18,410
Loss from operations		(16,634)			(6,178)			(32,097)			(17,589)
Interest and other expense		(955)			(84)			(6,657)			(207)
Loss on extinguishment of debt		(865)			-			(12,685)			-
Change in fair value of derivative liability		475			-			(1,745)			-
Change in fair value of contingent earn-out liability		31,818			-			31,818			-
Change in fair value of contingently issuable common stock liability		5,718			-			5,718			-
Change in fair value of public warrant liability		3,152			-			3,152			-
Change in fair value of common stock warrant liability		42			-			(879)			-
Total other income (expense)	$	39,385		$	(84)		$	18,722		$	(207)
Net income (loss) and comprehensive loss attributable to
common stockholders – basic	$	22,751		$	(6,262)		$	(13,375)		$	(17,796)
Net income (loss) and comprehensive loss attributable to
common stockholders – diluted	$	23,222		$	(6,262)		$	(13,375)		$	(17,796)
Net income (loss) per share – basic	$	0.19		$	(0.70)		$	(0.28)		$	(2.00)
Net income (loss) per share – diluted	$	0.15		$	(0.70)		$	(0.28)		$	(2.00)
Weighted average ordinary shares outstanding – basic		119,745,196			8,917,855			47,786,638			8,892,564
Weighted average ordinary shares outstanding – diluted		153,903,195			8,917,855			47,786,638			8,892,564

EVOLV TECHNOLOGY CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) (Unaudited)
	September 30, 2021			December 31, 2020
Assets
Current assets:
Cash		333,747			4,704
Restricted Cash		400			-
Accounts receivable, net		7,330			1,401
Inventory		3,530			2,742
Prepaid expenses and other current assets		14,756			1,462
Total current assets		359,763			10,309
Commission asset, noncurrent		2,310			1,730
Property and equipment, net		17,783			9,316
Restricted cash, noncurrent		275			-
Other long-term assets		2,582			-
Total assets	$	382,713		$	21,355
Liabilities and Shareholders’ Equity (Deficit)
Current liabilities:
Accounts payable		8,460			4,437
Accrued expenses and other current liabilities		6,169			3,727
Current portion of deferred revenue		5,668			3,717
Current portion of long-term debt		1,000			-
Other current liabilities		37			238
Total current liabilities		21,334			12,119
Deferred revenue		988			480
Noncurrent portion of deferred rent		371			-
Common stock warrant liability		-			1
Public warrant liability		20,484			-
Derivative liability		-			1,000
Contingent earn-out liability		35,027			-
Contingently issuable common stock liability		5,952			-
Financing obligation, noncurrent		-			132
Long-term debt, noncurrent		14,359			16,432
Total liabilities		98,515			30,164
Convertible preferred stock and shareholders’ equity
Convertible preferred stock		-			75,877
Common stock		14			1
Additional paid-in capital		391,440			9,194
Accumulated deficit		(107,256)			(93,881)
Total shareholders’ equity (deficit		284,198			(84,686)
Total liabilities and shareholders’ equity		382,713			21,355

EVOLV TECHNOLOGY CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
	Nine Months Ended September 30,
		2021			2020
Cash flows from operating activities:
Net loss	$	(13,375)		$	(17,796)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,948			685
Loss from impairment of leased equipment		1,656			-
Loss on disposal of fixed assets		659			-
Stock-based compensation		4,013			525
Noncash interest expense		5,561			-
Provision recorded for allowance for doubtful accounts		(63)			(16)
Loss on extinguishment of debt		12,685			-
Change in fair value of derivative liability		1,745			-
Change in fair value of common stock warrant liability		879			-
Change in fair value of earn-out liability		(31,818)			-
Change in fair value of contingently issuable common stock		(5,718)			-
Change in fair value of public warrant liability		(3,152)			-
Changes in operating assets and liabilities		(25,727)			(1,795)
Net cash used in operating activities		(50,707)			(18,397)
Cash flows from investing activities:
Purchases of property and equipment		(3,082)			(4,304)
Net cash used in investing activities		(3,082)			(4,304)
Cash flows from financing activities:
Proceeds from issuance of Series B-1 convertible preferred stock, net of issuance costs		-			2,994
Proceeds from exercise of stock options		777			418
Proceeds from issuance of common stock from the PIPE Investment		300,000			-
Proceeds from the closing of the Merger, net of offering costs		51,207			-
Repayment of financing obligations		(359)			(225)
Proceeds from long-term debt, net of issuance costs		31,882			5,284
Net cash provided by financing activities		383,507			8,471
Net increase (decrease) in cash		329,718			(14,230)
Cash, beginning of period		4,704			17,341
Cash, end of period	$	334,422		$	3,111
Supplemental disclosure of cash flow information:
Cash paid for interest	$	427		$	207

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20211110006285/en/

Investor Relations:

Brian Norris

Vice President of Investor Relations

bnorris@evolvtechnology.com

Public Relations:

Fitz Barth

Director of Communications

fbarth@evolvtechnology.com

Source: Evolv Technology

FAQ

What were Evolv Technology's Q3 2021 revenue figures?

Evolv Technology reported total revenue of $8.4 million for Q3 2021, a 473% increase from the previous year.

What is the Total Contract Value (TCV) for Evolv in Q3 2021?

The Total Contract Value for Q3 2021 was $16.9 million, marking a 365% year-over-year increase.

What is Evolv's updated outlook for 2021?

Evolv Technology raised its 2021 outlook for TCV to $53-$57 million and total revenue to $20-$23 million.

What was Evolv Technology's GAAP net income for Q3 2021?

The GAAP net income for Q3 2021 was $23.2 million, or $0.15 per diluted share.

Who are some of Evolv's new customers in Q3 2021?

Evolv added clients including the Indianapolis Symphony Orchestra and the NFL's Carolina Panthers in Q3 2021.