• Total Revenue: $25.5 million, up 29% year-over-year.
• Annual Recurring Revenue (ARR): $89 million, reflecting growth of 64% year-over-year.
• Recurring Revenue Percentage: 83% of Q2 2024 revenue, up from 59% in Q2 2023.
• Remaining Performance Obligation (RPO): $263 million, up 33% year-over-year and 4% sequentially.
• Adjusted Gross Margin: 58% in Q2 2024, compared to 38% in Q2 2023.
• Adjusted Operating Expenses: $26.5 million, compared to $23.7 million in Q2 2023.
• Adjusted Loss: $11.1 million, compared to $14.3 million in Q2 2023.
• Adjusted EBITDA: Negative $7.9 million, compared to negative $13.8 million in Q2 2023.
• Cash and Equivalents: $57 million at the end of Q2 2024, down from $81 million at the end of Q1 2024.
• Full Year Revenue Guidance: Approximately $100 million, reflecting 25% growth year-over-year.
• Expected Year-End ARR: Around $100 million, reflecting 33% growth year-over-year.
• Full Year Adjusted Gross Margin Estimate: About 60%.
• Full Year Adjusted EBITDA Improvement: At least 40% in 2024.

• Warning! GuruFocus has detected 3 Warning Signs with EVLV.

Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Evolv Technologies Holdings Inc (NASDAQ:EVLV) reported a 29% year-over-year increase in total revenue for Q2 2024, reaching $25.5 million.
• Annual recurring revenue (ARR) grew by 64% year-over-year, reaching $89 million as of June 30, 2024.
• The company has secured significant new partnerships, including venues like Soldier Field and the Target Center, and expanded its relationship with ASM Global.
• Evolv Technologies Holdings Inc (NASDAQ:EVLV) released a major software update for Evolv Express, enhancing integration with customers' security infrastructure and introducing new features.
• The company expects to achieve positive adjusted EBITDA by Q2 2025 without additional debt financing, indicating strong financial management and growth potential.

Negative Points

• The company reported a negative adjusted EBITDA of $7.9 million for Q2 2024, although this was an improvement from the previous year.
• Cash and cash equivalents decreased to $57 million at the end of Q2 2024 from $81 million at the end of Q1 2024, reflecting cash used in operations.
• Sales cycles have elongated, partly due to regulatory overhangs and the need for customer trials and proofs of concept.
• The company is still in the trial phase with the New York City subway system, indicating potential delays in securing large contracts.
• There is ongoing communication with the FTC regarding regulatory inquiries, which could pose risks to future operations and sales cycles.

Q & A Highlights

Q: Can you provide an update on the new vertical of industrial warehouses and its potential impact on revenue? A: Peter George, CEO: It's early days for the industrial warehouse vertical, but we expect it to become materially important by 2025. Along with education, it could be one of our top two verticals in the future.

Q: How are sales cycles and regulatory issues affecting your business? A: Peter George, CEO: We are in communication with the FTC and working towards a resolution. Sales cycles have elongated slightly, but our close rate remains high, especially in the healthcare vertical. We address regulatory issues early in the sales process to maintain transparency and efficiency.

Q: What is the status of your involvement with the New York City subway system? A: Peter George, CEO: We are still in the trial phase with the New York City subway system. They are testing our systems alongside others, and we continue to support them as they make decisions to protect the city.

Q: How is the partnership with Columbia Technology progressing, and what are your plans for new products? A: Mark Donohue, CFO: Columbia Technology remains a key partner, and we are confident in their ability to support our volume needs. We plan to release one or two new products by year-end, which may include both digital and physical offerings.

Q: What trends are you seeing in the competitive landscape, particularly in the education sector? A: Peter George, CEO: The competitive landscape remains stable. Our main competitor offers a metal detector-like technology. We perform well in head-to-head comparisons, especially in less price-sensitive markets. The trend of integrating security into operating budgets is positive for us.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.