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Evolv Technology Reports Record Fourth Quarter and Full Year Financial Results

  • Q4 Revenue of $20.9 million, up 217% year-over-year
  • Q4 Ending ARR1 of $34.1 million, up 164% year-over-year
  • Q4 Ending RPO2 of $144.6 million, up 181% year-over-year
  • Q4 Ending Evolv Express® subscriptions of 2,267, up 222% year-over-year

Evolv Technology (NASDAQ: EVLV), the leader in AI-based weapons detection security screening, today announced financial results for its fourth quarter and year ended December 31, 20223 and issued its business outlook for 2023.

“We’re pleased to be reporting strong fourth quarter results which capped a historic year of accelerated growth for the Company,” said Peter George, President and Chief Executive Officer of Evolv Technology. “Our results were highlighted by the addition of over 100 new customers in the fourth quarter including the Buffalo School District, the Duval County Schools, the Stony Brook University Hospital, the Honolulu Museum of Art, the Ocean Casino Resort, the Seabreeze Amusement Park, the Philadelphia Phillies, the Houston Astros, and the Tampa Bay Lightning. Looking ahead, we believe we are well positioned to achieve our goal of doubling our Annual Recurring Revenue in 2023 and further extending our market leadership.”

Results for the Fourth Quarter of 2022

Total revenue for the three months ended December 31, 2022 was $20.9 million, an increase of 217% compared to $6.6 million for the three months ended December 31, 2021. Total Contract Value (“TCV”)4 of orders booked for the three months ended December 31, 2022 was $57.6 million, an increase of 222% compared to $17.9 million in the three months ended December 31, 2021. Annual Recurring Revenue (“ARR”)1 was $34.1 million as of December 31, 2022, an increase of 164% compared to $12.9 million as of December 31, 2021. Net loss for the three months ended December 31, 2022 was $(28.1) million, or $(0.19) per basic and diluted share, compared to net income of $4.8 million or $0.03 per basic and diluted share in the three months ended December 31, 2021. Adjusted earnings (loss)5 for the three months ended December 31, 2022 was $(18.1) million, or $(0.12) per diluted share, compared to adjusted earnings (loss)5 of $(16.3) million, or $(0.10) per diluted share, for three months ended December 31, 2021. Adjusted EBITDA5 for the three months ended December 31, 2022 was $(17.8) million compared to $(15.2) million in the three months ended December 31, 2021.

Results for 2022

Total revenue in 2022 was $55.2 million, an increase of 136% compared to $23.4 million in 2021. TCV4 of orders booked in 2022 was $144.1 million, an increase of 168% compared to $53.8 million in 2021. Net loss in 2022 was $(86.2) million, or $(0.60) per basic and diluted share, compared to net loss of $(10.9) million, or $(0.15) per basic and diluted share, in 2021. Adjusted earnings (loss)5 in 2022 was $(72.4) million, or $(0.50) per diluted share, compared to $(49.8) million, or $(0.69) per diluted share, in 2021. Adjusted EBITDA5 in 2022 was $(69.4) million, compared to $(40.2) million in 2021.

Company Issues Outlook for 2023

The Company today commented on 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 March 1, 2023

 

Total Revenue

 

$55-$60

 

Annual Recurring Revenue1 (ARR) at 12/31/23

 

$65-$70

 

Adjusted EBITDA5

 

($55-$60)

 

Cash and Cash Equivalents

 

$165-$175

 

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 3784749. 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 as well as the accompanying investor presentation materials will be accessible from 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 9681780 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 live, 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 500 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 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 Amounts herein pertaining to December 31, 2022 represent a preliminary estimate as of the date of this earnings release. More information on our results of operations for the twelve months ended December 31, 2022 will be provided upon filing our Annual Report on Form 10-K with the Securities and Exchange Commission.

4 We define Total Contract Value, or TCV, of orders booked as the total value of the contract over the specified term. Our calculation of TCV 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). TCV should be viewed independently of, and not as a substitute for or forecast of, revenue and deferred revenue. Our calculation of TCV may differ from similarly titled metrics presented by other companies. The fourth quarter of the fiscal year ended December 31, 2022 is the final quarter that we will be reporting TCV.

5 Non-GAAP Financial Measures

In this press release, the Company’s adjusted operating expenses, adjusted gross profit (loss), adjusted gross margin, adjusted operating income (loss), adjusted EBITDA, adjusted earnings (loss), and adjusted earnings per share-diluted 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 items including stock-based compensation expense which management believes provides a more meaningful representation of contribution margin. Adjusted operating expenses is defined as operating expenses less one-time items including stock-based compensation expense, restructuring expenses, 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, and certain other one-time expenses. Adjusted earnings (loss) is defined as net income (loss) plus stock-based compensation, change in fair value of derivative liability, 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, change in fair value of common stock warrant liability, restructuring expenses, 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 operational 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 non-GAAP Adjusted EBITDA to Net Income (Loss), its most directly comparable GAAP financial measure, on a forward-looking basis without unreasonable effort, because items that impact this GAAP financial measure 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 goals for revenue and profitability, as well as our estimates for cash and cash equivalents, including for fiscal year 2023, our ability to retain existing and acquire new customers, and our ability to maintain our market position 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 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 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 competitiveness of the market in which the Company competes; the ability for the Company to obtain, maintain, protect and enforce the Company’s intellectual property rights; 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; risk that the COVID-19 pandemic may have an adverse effect on the Company’s business operations, as well as the Company’s financial condition and results of operations; the impact of fluctuating economic conditions; the need for additional capital to support business growth, which might not be available on acceptable terms, if at all; risks related to our indebtedness; 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, 2021 filed with the Securities and Exchange Commission ("SEC") on March 28, 2022, as updated in other filings we make with the SEC including our Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 that was filed with the SEC on November 9, 2022, 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

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)

(Unaudited)

 

 

Three Months Ended

December 31,

 

Twelve Months Ended

December 31,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

Revenue:

 

 

 

 

 

 

 

Product revenue

$

12,806

 

$

3,352

 

$

31,985

 

$

13,631

Subscription revenue

 

5,361

 

 

2,743

 

 

17,569

 

 

7,803

Service revenue

 

2,718

 

 

503

 

 

5,641

 

 

1,959

Total revenue

 

20,885

 

 

6,598

 

 

55,195

 

 

23,393

Cost of revenue:

 

 

 

 

 

 

 

Cost of product revenue

 

18,062

 

 

4,893

 

 

41,575

 

 

12,279

Cost of subscription revenue

 

1,739

 

 

1,421

 

 

7,469

 

 

4,501

Cost of service revenue

 

1,030

 

 

899

 

 

4,422

 

 

2,584

Total cost of revenue

 

20,831

 

 

7,213

 

 

53,466

 

 

19,364

Gross profit

 

54

 

 

(615)

 

 

1,729

 

 

4,029

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

4,824

 

 

3,059

 

 

18,771

 

 

11,458

Sales and marketing

 

13,243

 

 

8,343

 

 

46,412

 

 

26,099

General and administrative

 

8,451

 

 

7,811

 

 

37,719

 

 

19,869

Loss from impairment of property and equipment

 

123

 

 

213

 

 

1,161

 

 

1,869

Total operating expenses

 

26,641

 

 

19,426

 

 

104,063

 

 

59,295

Loss from operations

 

(26,587)

 

 

(20,041)

 

 

(102,334)

 

 

(55,266)

Other income (expense), net:

 

 

 

 

 

 

 

Interest expense

 

(223)

 

 

(116)

 

 

(712)

 

 

(6,068)

Interest income

 

1,554

 

 

 

 

3,165

 

 

Other expense, net

 

(7)

 

 

52

 

 

(64)

 

 

(617)

Loss on extinguishment of debt

 

 

 

 

 

 

 

(12,685)

Change in fair value of derivative liability

 

 

 

 

 

 

 

(1,745)

Change in fair value of contingent earn-out liability

 

(2,766)

 

 

14,751

 

 

6,988

 

 

47,360

Change in fair value of contingently issuable common stock liability

 

(657)

 

 

688

 

 

1,872

 

 

6,406

Change in fair value of public warrant liability

 

609

 

 

9,454

 

 

4,906

 

 

12,606

Change in fair value of common stock warrant liability

 

 

 

 

 

 

 

(879)

Total other income (expense), net

$

(1,490)

 

$

24,829

 

$

16,155

 

$

44,378

Net income (loss)

$

(28,077)

 

$

4,788

 

$

(86,179)

 

$

(10,888)

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

Basic

 

144,856,047

 

 

142,403,779

 

 

143,858,668

 

 

71,662,694

Diluted

 

144,856,047

 

 

161,906,393

 

 

143,858,668

 

 

71,662,694

Net income (loss) per share

 

 

 

 

 

 

 

Basic

$

(0.19)

 

$

0.03

 

$

(0.60)

 

$

(0.15)

Diluted

$

(0.19)

 

$

0.03

 

$

(0.60)

 

$

(0.15)

 

 

 

 

 

 

 

 

Net income (loss)

$

(28,077)

 

$

4,788

 

$

(86,179)

 

$

(10,888)

Other comprehensive income (loss)

 

 

 

 

 

 

 

Cumulative translation adjustment

 

(45)

 

 

 

(10)

 

Total other comprehensive income

 

(45)

 

 

 

 

(10)

 

 

Total comprehensive income (loss)

$

(28,122)

 

$

4,788

 

$

(86,189)

 

$

(10,888)

 

EVOLV TECHNOLOGY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)

 

 

December 31, 2022

 

December 31,

2021

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

229,783

 

$

307,492

Restricted cash

 

 

 

400

Accounts receivable, net

 

31,920

 

 

6,477

Inventory

 

10,257

 

 

2,890

Current portion of contract assets

 

2,852

 

 

1,459

Current portion of commission asset

 

3,232

 

 

1,645

Prepaid expenses and other current assets

 

14,388

 

 

10,757

Total current assets

 

292,432

 

 

331,120

Restricted cash, noncurrent

 

275

 

 

275

Contract assets, noncurrent

 

1,386

 

 

3,418

Commission asset, noncurrent

 

6,034

 

 

3,719

Property and equipment, net

 

44,707

 

 

23,783

Operating lease right-of-use assets

 

1,673

 

 

Other assets

 

1,835

 

 

542

Total assets

$

348,342

 

$

362,857

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

18,194

 

$

6,045

Accrued expenses and other current liabilities

 

11,545

 

 

9,551

Current portion of deferred revenue

 

18,273

 

 

6,599

Current portion of deferred rent

 

 

 

135

Current portion of long-term debt

 

10,000

 

 

2,000

Current portion of operating lease liabilities

 

1,114

 

 

Total current liabilities

 

59,126

 

 

24,330

Deferred revenue, noncurrent

 

17,695

 

 

2,475

Deferred rent, noncurrent

 

 

 

333

Long-term debt, noncurrent

 

19,683

 

 

7,945

Operating lease liabilities, noncurrent

 

892

 

 

Contingent earn-out liability

 

14,218

 

 

21,206

Contingently issuable common stock liability

 

3,392

 

 

5,264

Public warrant liability

 

6,124

 

 

11,030

Total liabilities

 

121,130

 

 

72,583

 

 

 

 

Stockholders’ equity:

 

 

 

Preferred stock, $0.0001 par value; 100,000,000 authorized at December 31, 2022 and December 31, 2021; no shares issued and outstanding at December 31, 2022 and December 31, 2021

 

 

 

Common stock, $0.0001 par value; 1,100,000,000 shares authorized at December 31, 2022 and December 31, 2021, respectively; 145,204,974 and 142,745,021 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively

 

15

 

 

14

Additional paid-in capital

 

419,190

 

 

396,064

Accumulated other comprehensive income

 

(10)

 

 

Accumulated deficit

 

(191,983)

 

 

(105,804)

Stockholders’ equity

 

227,212

 

 

290,274

Total liabilities and stockholders’ equity

$

348,342

 

$

362,857

 

EVOLV TECHNOLOGY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

Twelve Months Ended

December 31,

 

 

2022

 

 

2021

Cash flows from operating activities:

 

 

 

Net loss

$

(86,179)

 

$

(10,888)

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

 

 

 

Depreciation and amortization

 

5,465

 

 

2,895

Write-off of inventory

 

1,582

 

 

2,132

Adjustment to property and equipment for sales type leases

 

(625)

 

 

(91)

Loss from impairment of property and equipment

 

1,161

 

 

1,869

Loss on disposal of property and equipment

 

 

 

617

Stock-based compensation

 

22,498

 

 

9,596

Non-cash interest expense

 

55

 

 

5,245

Non-cash lease expense

 

811

 

 

Provision recorded for allowance for doubtful accounts

 

150

 

 

(13)

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

 

(6,988)

 

 

(47,360)

Change in fair value of contingently issuable common stock

 

(1,872)

 

 

(6,406)

Change in fair value of public warrant liability

 

(4,906)

 

 

(12,606)

Changes in operating assets and liabilities

 

 

 

Accounts receivable

 

(25,593)

 

 

(5,063)

Inventory

 

(8,495)

 

 

(3,436)

Commission assets

 

(3,902)

 

 

(3,072)

Contract assets

 

639

 

 

(4,877)

Other assets

 

(419)

 

 

32

Prepaid expenses and other current assets

 

(3,174)

 

 

(9,148)

Accounts payable

 

7,661

 

 

765

Deferred revenue

 

26,887

 

 

4,832

Deferred rent

 

 

 

457

Warranty Reserve

 

 

 

(42)

Accrued expenses and other current liabilities

 

1,462

 

 

2,472

Operating lease liability

 

(946)

 

 

Net cash used in operating activities

 

(74,728)

 

 

(56,781)

Cash flows from investing activities:

 

 

 

Development of internal-use software

 

(2,720)

 

 

(1,028)

Purchases of property and equipment

 

(21,473)

 

 

(16,557)

Proceeds from sale of property and equipment

 

312

 

 

Net cash used in investing activities

 

(23,881)

 

 

(17,585)

Cash flows from financing activities:

 

 

 

Proceeds from exercise of stock options

 

827

 

 

915

Proceeds from issuance of common stock from the PIPE Investment

 

 

 

300,000

Proceeds from the closing of the Merger

 

 

 

84,945

Payment of offering costs from the closing of the Merger and PIPE Investment

 

 

 

(34,132)

Repayment of financing obligations

 

 

 

(359)

Proceeds from long-term debt, net of issuance costs

 

29,683

 

 

31,882

Repayment of principal on long-term debt

 

(10,000)

 

 

(5,422)

Net cash provided by (used in) financing activities

 

20,510

 

 

377,829

Effect of exchange rate changes on cash and cash equivalents

 

(10)

 

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

(78,109)

 

 

303,463

Cash, cash equivalents and restricted cash

 

 

 

Cash, cash equivalents and restricted cash at beginning of period

 

308,167

 

 

4,704

Cash, cash equivalents and restricted cash at end of period

$

230,058

 

$

308,167

EVOLV TECHNOLOGY

REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS

(In thousands)

(Unaudited)

In preparing the condensed consolidated financial statements as of and for the three and six months ended June 30, 2022, the Company identified various errors in its previously issued financial statements. The identified errors impacted the Company's previously issued 2021 quarterly and annual financial statements and its quarterly financial statements for the three months ended March 31, 2022, and accordingly the Company has made adjustments to the prior period amounts presented herein. A summary of the revisions to certain previously reported financial information impacting amounts presented in this earnings release is as follows (in thousands):

 

Year Ended

December 31, 2021

 

As Previously

Reported

 

Adjustment

 

As Revised

Revenue:

 

 

 

 

 

Product revenue

$

13,917

 

$

(286)

 

$

13,631

Subscription revenue

 

7,855

 

 

(52)

 

 

7,803

Service revenue

 

1,920

 

 

39

 

 

1,959

Total revenue

 

23,692

 

 

(299)

 

 

23,393

Cost of revenue:

 

 

 

 

 

Cost of product revenue

 

12,471

 

 

(192)

 

 

12,279

Cost of subscription revenue

 

3,644

 

 

857

 

 

4,501

Cost of service revenue

 

936

 

 

1,648

 

 

2,584

Total cost of revenue

 

17,051

 

 

2,313

 

 

19,364

Gross profit

 

6,641

 

 

(2,612)

 

 

4,029

Operating expenses:

 

 

 

 

 

Research and development

 

11,416

 

 

42

 

 

11,458

Sales and marketing expense

 

27,404

 

 

(1,305)

 

 

26,099

General and administrative

 

20,013

 

 

(144)

 

 

19,869

Loss from impairment of property and equipment

 

1,869

 

 

 

 

1,869

Total operating expenses

 

60,702

 

 

(1,407)

 

 

59,295

Loss from operations

 

(54,061)

 

 

(1,205)

 

 

(55,266)

Other income (expense), net:

 

 

 

 

 

Interest expense, net

 

(6,095)

 

 

27

 

 

(6,068)

Interest income

 

 

 

 

 

Loss on disposal of property and equipment

 

(617)

 

 

 

 

(617)

Loss on extinguishment of debt

 

(12,685)

 

 

 

 

(12,685)

Change in fair value of derivative liability

 

(1,745)

 

 

 

 

(1,745)

Change in fair value of contingent earn-out liability

 

46,212

 

 

1,148

 

 

47,360

Change in fair value of contingently issuable common stock liability

 

6,406

 

 

 

 

6,406

Change in fair value of public warrant liability

 

12,606

 

 

 

 

12,606

Change in fair value of common stock warrant liability

 

(879)

 

 

 

 

(879)

Total other income (expense), net

 

43,203

 

 

1,175

 

 

44,378

Net loss

$

(10,858)

 

$

(30)

 

$

(10,888)

 

December 31, 2021

 

As Previously

Reported

 

Adjustment

 

As Revised

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

307,492

 

$

 

$

307,492

Restricted cash

 

400

 

 

 

 

400

Accounts receivable, net

 

6,477

 

 

 

 

6,477

Inventory

 

5,140

 

 

(2,250)

 

 

2,890

Current portion of contract assets

 

1,459

 

 

 

 

1,459

Current portion of commission asset

 

1,645

 

 

 

 

1,645

Prepaid expenses and other current assets

 

11,047

 

 

(290)

 

 

10,757

Total current assets

 

333,660

 

 

(2,540)

 

 

331,120

Restricted cash, noncurrent

 

275

 

 

 

 

275

Contract assets, noncurrent

 

3,418

 

 

 

 

3,418

Commission asset, noncurrent

 

3,719

 

 

 

 

3,719

Property and equipment, net

 

21,592

 

 

2,191

 

 

23,783

Other assets

 

401

 

 

141

 

 

542

Total assets

$

363,065

 

$

(208)

 

$

362,857

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

$

6,363

 

$

(318)

 

$

6,045

Accrued expenses and other current liabilities

 

9,183

 

 

368

 

 

9,551

Current portion of deferred revenue

 

6,690

 

 

(91)

 

 

6,599

Current portion of deferred rent

 

135

 

 

 

 

135

Current portion of long-term debt

 

2,000

 

 

 

 

2,000

Total current liabilities

 

24,371

 

 

(41)

 

 

24,330

Deferred revenue, noncurrent

 

2,475

 

 

 

 

2,475

Deferred rent, noncurrent

 

333

 

 

 

 

333

Long-term debt, noncurrent

 

7,945

 

 

 

 

7,945

Contingent earn-out liability

 

20,809

 

 

397

 

 

21,206

Contingently issuable common stock liability

 

5,264

 

 

 

 

5,264

Public warrant liability

 

11,030

 

 

 

 

11,030

Total liabilities

 

72,227

 

 

356

 

 

72,583

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Convertible preferred stock

 

 

 

 

 

Common stock

 

14

 

 

 

 

14

Additional paid-in capital

 

395,563

 

 

501

 

 

396,064

Accumulated deficit

 

(104,739)

 

 

(1,065)

 

 

(105,804)

Stockholders’ equity

 

290,838

 

 

(564)

 

 

290,274

Total liabilities and stockholders’ equity

$

363,065

 

$

(208)

 

$

362,857

 

EVOLV TECHNOLOGY

SUMMARY OF KEY OPERATING STATISTICS

(Unaudited)

 

 

Three Months Ended or as of,

($ in thousands)

 

March 31,

2021

 

June 30,

2021

 

September 30,

2021

 

December 31,

2021

 

March 31,

2022

 

June 30,

2022

 

September 30,

2022

 

December 31,

2022

New customers

 

 

13

 

 

21

 

 

23

 

 

27

 

 

44

 

 

53

 

 

92

 

 

106

Total contract value of orders booked

 

$

8,424

 

$

10,476

 

$

16,995

 

$

17,916

 

$

19,167

 

$

22,066

 

$

45,285

 

$

57,625

Annual recurring revenue

 

$

5,424

 

$

7,423

 

$

9,932

 

$

12,907

 

$

16,641

 

$

20,865

 

$

28,741

 

$

34,120

Remaining performance obligation

 

$

17,658

 

$

24,930

 

$

34,152

 

$

51,430

 

$

63,750

 

$

80,978

 

$

109,407

 

$

144,561

Net additions

 

 

64

 

 

113

 

 

176

 

 

136

 

 

207

 

 

237

 

 

545

 

 

575

Ending deployed units

 

 

278

 

 

391

 

 

567

 

 

703

 

 

910

 

 

1,147

 

 

1,692

 

 

2,267

 

EVOLV TECHNOLOGY

RECONCILIATION OF GAAP OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES

(In thousands)

(Unaudited)

 

 

Three Months Ended,

 

 

March 31,

2021

 

June 30,

2021

 

September 30,

2021

 

December 31,

2021

 

March 31,

2022

 

June 30,

2022

 

September 30,

2022

 

December 31,

2022

Operating expenses, GAAP

 

$ 9,400

 

$ 7,642

 

$ 22,826

 

$ 19,429

 

$ 24,760

 

$ 25,835

 

$ 26,827

 

$ 26,641

Stock-based compensation(1)

 

(300)

 

(1,052)

 

(4,589)

 

(3,513)

 

(3,819)

 

(4,781)

 

(6,298)

 

(6,771)

Restructuring expenses

 

 

 

 

 

(324)

 

13

 

 

Loss on impairment of lease equipment

 

 

 

(1,656)

 

(213)

 

(96)

 

(316)

 

(626)

 

(123)

Other one-time expenses

 

 

 

(685)

 

 

(1,107)

 

(2,298)

 

(69)

 

(41)

Adjusted Operating Expenses

 

$ 9,100

 

$ 6,590

 

$ 15,896

 

$ 15,703

 

$ 19,414

 

$ 18,453

 

$ 19,834

 

$ 19,706

(1) Reflects immaterial adjustments to previously reported stock-based compensation amounts.

 

EVOLV TECHNOLOGY

RECONCILIATION OF GAAP GROSS PROFIT TO ADJUSTED GROSS PROFIT AND GAAP OPERATING INCOME (LOSS) TO ADJUSTED OPERATING INCOME (LOSS)

(In thousands)

(Unaudited)

 

 

Three Months Ended

December 31,

 

Twelve Months Ended

December 31,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

Revenue

$

20,885

 

$

6,598

 

$

55,195

 

$

23,393

Cost of revenue

 

20,831

 

 

7,213

 

 

53,466

 

 

19,364

Gross Profit, GAAP

 

54

 

 

(615)

 

 

1,729

 

 

4,029

Stock-based compensation(2)

 

214

 

 

51

 

 

829

 

 

142

Amortization of capitalized stock-based compensation

 

9

 

 

2

 

 

24

 

 

2

Adjusted Gross Profit

$

277

 

$

(562)

 

$

2,582

 

$

4,173

 

 

 

 

 

 

 

 

Gross Margin %

 

0.3 %

 

 

(9.3) %

 

 

3.1 %

 

 

17.2 %

Adjusted Gross Margin %

 

1.3 %

 

 

(8.5) %

 

 

4.7 %

 

 

17.8 %

(2) Reflects immaterial adjustments to previously reported stock-based compensation amounts.

 

Three Months Ended

December 31,

 

Twelve Months Ended

December 31,

 

2022

 

2021

 

2022

 

2021

Operating income (loss), GAAP

$ (26,587)

 

$ (20,041)

 

$ (102,334)

 

$ (55,266)

Stock-based compensation

6,985

 

3,564

 

22,498

 

9,596

Amortization of capitalized stock-based compensation

9

 

2

 

24

 

2

Restructuring expenses

 

 

311

 

Loss on impairment of lease equipment

123

 

213

 

1,161

 

1,869

Other one-time expenses

41

 

 

3,515

 

685

Adjusted Operating Income (loss)

$ (19,429)

 

$ (16,262)

 

$ (74,825)

 

$ (43,114)

 

EVOLV TECHNOLOGY

RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA

(In thousands)

(Unaudited)

 

 

Three Months Ended

December 31,

 

Twelve Months Ended

December 31,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

Net income (loss)

$

(28,077)

 

$

4,788

 

$

(86,179)

 

$

(10,888)

Depreciation & amortization(3)

 

1,683

 

 

1,041

 

 

5,465

 

 

2,895

Stock-based compensation

 

6,985

 

 

3,564

 

 

22,498

 

 

9,596

Interest expense (income)

 

(1,331)

 

 

116

 

 

(2,453)

 

 

6,068

Loss on disposal of property & equipment

 

 

 

(42)

 

 

 

 

617

Loss on extinguishment of debt

 

 

 

 

 

 

 

12,685

Change in fair value of derivative liability

 

 

 

 

 

 

 

1,745

Change in fair value of contingent earn-out liability

 

2,766

 

 

(14,751)

 

 

(6,988)

 

 

(47,360)

Change in fair value of contingently issuable common stock liability

 

657

 

 

(688)

 

 

(1,872)

 

 

(6,406)

Change in fair value of public warrant liability

 

(609)

 

 

(9,454)

 

 

(4,906)

 

 

(12,606)

Change in fair value of common stock warrant liability

 

 

 

 

 

 

 

879

Restructuring expenses

 

 

 

 

 

311

 

 

Loss on impairment of lease equipment

 

123

 

 

213

 

 

1,161

 

 

1,869

Other one-time expenses

 

41

 

 

 

 

3,515

 

 

685

Adjusted EBITDA

$

(17,762)

 

$

(15,213)

 

$

(69,448)

 

$

(40,221)

(3) Reflects immaterial adjustments to previously reported depreciation and amortization amounts.

 

EVOLV TECHNOLOGY

RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED EARNINGS (LOSS)

(In thousands, except share and per share data)

(Unaudited)

 

 

Three Months Ended

December 31,

 

Twelve Months Ended

December 31,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

Net income (loss)

$

(28,077)

 

$

4,788

 

$

(86,179)

 

$

(10,888)

Stock-based compensation

 

6,985

 

 

3,564

 

 

22,498

 

 

9,596

Amortization of capitalized stock-based compensation

 

9

 

 

2

 

 

24

 

 

2

Loss on extinguishment of debt

 

 

 

 

 

 

 

12,685

Change in fair value of derivative liability

 

 

 

 

 

 

 

1,745

Change in fair value of contingent earn-out liability

 

2,766

 

 

(14,751)

 

 

(6,988)

 

 

(47,360)

Change in fair value of contingently issuable common stock liability

 

657

 

 

(688)

 

 

(1,872)

 

 

(6,406)

Change in fair value of public warrant liability

 

(609)

 

 

(9,454)

 

 

(4,906)

 

 

(12,606)

Change in fair value of common stock warrant liability

 

 

 

 

 

 

 

879

Restructuring expenses

 

 

 

 

 

311

 

 

Loss on impairment of lease equipment

 

123

 

 

213

 

 

1,161

 

 

1,869

Other one-time expenses

 

41

 

 

 

 

3,515

 

 

685

Adjusted earnings (loss)

$

(18,105)

 

$

(16,326)

 

$

(72,436)

 

$

(49,799)

 

 

 

 

 

 

 

 

Weighted average common shares outstanding – diluted

 

144,856,047

 

 

161,906,393

 

 

143,858,668

 

 

71,662,694

 

 

 

 

 

 

 

 

Adjusted Earnings Per Share – diluted

$

(0.12)

 

$

(0.10)

 

$

(0.50)

 

$

(0.69)

 

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