Evolv Technology Reports Strong Third Quarter Financial Results

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)–$EVLV–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

 

Contacts

Investor Relations:
Brian Norris

Vice President of Investor Relations

bnorris@evolvtechnology.com

Public Relations:
Fitz Barth

Director of Communications

fbarth@evolvtechnology.com