Evolv Technologies Financial Performance

Overview

Evolv Technologies is a leader in AI-based weapons detection for security screening. In the first quarter of 2024, the company continued to execute on its transition to a pure subscription model.

The company reported first quarter revenue of $21.7 million, up 17% year-over-year. The growth was driven by a 124% increase in subscription revenue to $14.5 million. However, product revenue declined significantly to $0.6 million as Evolv shifts away from product sales.

Despite the revenue growth, Evolv reported a net loss of $11.6 million compared to a net loss of $28.6 million in the first quarter of 2023. The reduced net loss reflects lower operating expenses and a $6.9 million gain on the revaluation of contingent liabilities.

At quarter-end, Evolv had $141.8 million in cash, cash equivalents and marketable securities. The company continues investing to drive future growth, with capital expenditures of $19.7 million in the quarter.

Financial Results

$ millions	Q1 2024	Q1 2023	Change
Revenue	$21.7	$18.6	+17%
Subscription Revenue	$14.5	$6.5	+124%
Product Revenue	$0.6	$8.8	-93%
Net Loss	$(11.6)	$(28.6)	Improved

• Subscription revenue increased 124% on a larger installed base
• Product revenue declined as Evolv shifts to subscription model
• Reduced net loss driven by subscription model and gain on liabilities

Business Highlights

• Added 13 new subscription customers
• Ended quarter with annual recurring revenue of $86 million
• Continued investing in technology and go-to-market
• Appointed new Chief Revenue Officer and Chief People Officer

Outlook

Evolv is successfully executing a strategic transition toward a subscription model. This is enabling more predictable revenue streams while positioning the company for improved profitability.

Investments in technology and go-to-market will continue in 2024. For the full year, Evolv expects revenue of $105 to $125 million.

Over the long-term, Evolv aims to enhance public safety and security through mainstream adoption of its weapons detection systems. With a large addressable market and product-market fit, the company has significant growth potential.

Table 1: Key Financial Metrics

$ millions	Q1 2024	FY 2023
Revenue	$21.7	$86.4
Subscription Revenue	$14.5	$50.1
Annual Recurring Revenue	$86	$83
Remaining Performance Obligations	$254	$247
Cash, Cash Equivalents and Marketable Securities	$141.8	$118.5

Table 2: Income Statement Summary

$ millions	Q1 2024	Q1 2023	Change
Revenue	$21.7	$18.6	+17%
Gross Profit	$11.8	$4.8	+144%
Operating Expenses	$34.1	$27.3	+25%
Operating Loss	$(22.3)	$(22.5)
Net Loss	$(11.6)	$(28.6)	Improved
Loss Per Share	$(0.08)	$(0.20)

Table 3: Balance Sheet Summary

$ millions	Q1 2024	FY 2023
Cash, Cash Equivalents and Marketable Securities	$141.8	$118.5
Total Assets	$282.3	$298.7
Total Liabilities	$140.7	$152.4
Total Stockholders’ Equity	$141.6	$146.3