Evolve Express

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Evolv Technologies (EVLV) - 2025 Q2 - Earnings Call Transcript
2025-08-14 21:30
Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $32,500,000, reflecting a 2% sequential increase and a 29% year-over-year growth, driven by strong new customer growth and expanding deployments [13][30] - Annual recurring revenue (ARR) as of June 30, 2025, was $110,500,000, representing a 27% year-over-year increase [13][32] - Adjusted EBITDA was positive at $2,000,000, compared to a loss of $8,000,000 in the same quarter last year, resulting in an adjusted EBITDA margin of 6% [34] - Total cash, cash equivalents, and marketable securities increased by $2,000,000 sequentially to $37,000,000, marking the first quarter of sequential cash increase [14][35] Business Line Data and Key Metrics Changes - The company welcomed over 60 new customers in Q2 2025, bringing the total to over 1,000 customers globally [14][92] - The company surpassed 7,000 active subscriptions, on track to meet the goal of at least 8,000 by year-end [15] - Approximately 54% of booked units and 56% of booked ARR in Q2 came from existing customers, indicating strong customer trust and value [16] Market Data and Key Metrics Changes - In the education market, the company expanded its presence by approximately 20 new school districts across the U.S., including a significant $15,000,000 contract with Gwinnett County Public Schools [19][20] - In healthcare, the company secured contracts with major institutions like Ohio State University Wexner Medical Center and Broward Health, reflecting growing demand for security solutions [21][22] - The sports and entertainment sector saw new wins with teams like Inner Miami CF and FC Cincinnati, along with significant upgrades from existing customers [24][25] Company Strategy and Development Direction - The company is shifting its go-to-market model to focus more on direct purchase subscriptions, which are expected to yield higher revenue and ARR compared to distribution fulfillment [26][27] - The company aims to build a durable, high-growth business with predictable results, focusing on operational efficiency and customer satisfaction [10][93] - The company is raising its revenue growth outlook for 2025 to 27-30%, up from the previous guidance of 20-25% [28][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver on 2025 goals, citing strong visibility into key business drivers and a growing backlog [28][38] - The company is focused on disciplined execution and improving operational efficiency, with a commitment to generating positive cash flow in Q4 2025 [29][40] - Management noted that the DOJ investigation is no longer a concern, allowing the company to focus on growth [9][93] Other Important Information - The company has secured a new $75,000,000 nondilutive credit facility to support its subscription-based sales model [36] - A settlement in principle was reached regarding a securities class action lawsuit, with expected direct financial exposure of no more than $1,000,000 [9][37] Q&A Session Summary Question: What is the expected mix of subscription deals versus purchase subscription deals going forward? - Management indicated a shift towards more subscription deals over time, with a balanced mix expected by 2026 [43][44] Question: What is the cost to refurbish Gen one Express machines for the new certified pre-owned program? - The program, named Evolve Flex, is new, and while refurbishment costs are being kept reasonable, traction is still early [45][46] Question: What is the hiring strategy for the remainder of the year? - Targeted hiring in R&D and services teams is expected, with a slight uptick in operational expenses [51][52] Question: What are the early signs regarding renewals and net revenue retention? - The company reported a net unit retention of over 100% for early renewals, with a focus on derisking renewals [62][63] Question: Where are the biggest opportunities in end markets? - Management highlighted the diversity across verticals, with strong opportunities in education, healthcare, and industrial workplaces [66][67] Question: Will the new credit line be drawn down sooner if business momentum continues? - The first $30,000,000 should suffice for a while, but the credit facility provides flexibility if needed [68][69]
Evolv Technologies (EVLV) - 2025 Q1 - Earnings Call Transcript
2025-05-20 21:32
Financial Data and Key Metrics Changes - Revenue in Q1 2025 was $32 million, up 10% sequentially and 44% year over year, reflecting new customer acquisition and strong expansion from the installed customer base [21][43] - Annual recurring revenue (ARR) grew 34% year over year to $106 million at the end of Q1 2025, with 80% of revenue in Q1 being recurring [22][44] - Adjusted EBITDA for Q1 2025 increased to $1.7 million, with an adjusted EBITDA margin of 5% [22][46] Business Line Data and Key Metrics Changes - The company welcomed over 50 new customers in Q1 2025, now serving approximately 950 customers across key end markets [21] - The Evolve Expedite product saw early traction with 12 new customers added shortly after its launch [28] Market Data and Key Metrics Changes - Evolve's technology is deployed in 20 of the 100 largest US school districts, screening over 850,000 students and visitors daily [31] - In healthcare, the installed base reached 500 hospital buildings, with daily visitor screenings nearly doubling year over year [32] Company Strategy and Development Direction - The company aims to leverage its subscription model to drive predictable long-term revenue growth, with 78% of the 2025 revenue plan already contracted at the start of the year [12][74] - A new certified pre-owned program is being introduced to recapture value from returning units, which is expected to positively impact revenue and cash flow [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver on 2025 revenue targets, expecting revenue growth of 20% to 25% [40][54] - The company is focused on enhancing operational efficiency and expects to achieve positive full-year adjusted EBITDA in 2025 [54] Other Important Information - The company has resolved an FTC inquiry and completed a restatement that shifted $3.1 million in revenue to future periods [17] - The company ended Q1 2025 with $35 million in cash, down from $52 million at the end of Q4 2024, primarily due to one-time cash disbursements [48] Q&A Session Summary Question: Success with expansions and vertical contributions - Management noted that 50% of new subscriptions in Q1 came from existing customers, indicating strong customer commitment [60][61] Question: Impact of new California law on hospital security - Management acknowledged the legislation as a positive indicator for increased safety focus in healthcare and noted active engagement with customers in California [62][63] Question: Expectations for gross margin with new product rollout - Management indicated that gross margins are expected to remain consistent, with a shift towards more full subscriptions maximizing ARR [64] Question: CapEx expectations for the year - Management estimated CapEx to be in the range of $20 to $25 million to support the subscription business [68] Question: Strategy refinements and potential acquisitions - Management emphasized the focus on driving a strong subscription model and securing more entry lanes for growth [74] Question: Revenue progression expectations for 2025 - Management expects to maintain a consistent revenue growth trajectory, informed by strong subscription bookings [85][88] Question: Purchase versus subscription model mix - Management confirmed a preference for pure subscription models but will continue to offer both options to customers [92][94] Question: Performance of the Evolve Expedite product - Management reported a mix of new and existing customers adopting the Expedite product, indicating strong market interest [95]
Evolv Technologies (EVLV) - 2025 Q1 - Earnings Call Transcript
2025-05-20 21:30
Financial Data and Key Metrics Changes - Revenue in Q1 2025 was $32 million, up 10% sequentially and 44% year over year, reflecting new customer acquisition and strong expansion from the installed customer base [21][43] - Annual recurring revenue (ARR) grew 34% year over year to $106 million at the end of Q1 2025 [22][44] - Adjusted EBITDA for Q1 2025 increased to $1.7 million, with an adjusted EBITDA margin of 5% [22][47] Business Line Data and Key Metrics Changes - The company welcomed over 50 new customers in Q1 2025, serving approximately 950 customers across key end markets [21] - Sales and marketing spend as a percentage of revenue is improving, indicating more effective execution by the sales team [24] - The new certified pre-owned program aims to recapture value from returning units, contributing positively to revenue and cash flow [25][26] Market Data and Key Metrics Changes - Evolve Express is deployed in 20 of the 100 largest US school districts, screening over 850,000 students and visitors daily [30] - In healthcare, the installed base has reached 500 hospital buildings, with daily visitor screenings nearly doubling year over year [31] - The company is monitoring new legislation in California mandating weapons detection systems in hospitals, indicating potential market growth [32] Company Strategy and Development Direction - The company aims to leverage its subscription model to drive predictable long-term revenue growth, with 78% of the 2025 revenue plan already contracted [75] - The focus is on expanding the subscription base and enhancing customer engagement across various verticals, including education and healthcare [76] - The company is optimistic about the long-term potential of its AI-powered weapons detection technology, with plans to increase market penetration significantly [38] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges faced over the past year but expresses confidence in the company's ability to emerge stronger and more resilient [18][20] - The outlook for 2025 includes expected revenue growth of 20% to 25%, with a focus on achieving positive adjusted EBITDA and cash flow [40][54] - The company is committed to maintaining operational efficiency while investing in back-office improvements to support growth [54] Other Important Information - The company has resolved an FTC inquiry and completed a restatement that shifted $3.1 million in revenue to future periods [17] - The balance sheet shows $35 million in cash and equivalents, down from $52 million at the end of Q4 2024, primarily due to one-time cash disbursements [49] Q&A Session Summary Question: Success with expansions and vertical contributions - Management noted that 50% of new subscriptions came from expansions, with specific vertical contributions to be followed up later [60] Question: Impact of new California law on hospital security - Management confirmed engagement with customers in California regarding the new legislation, viewing it as a significant opportunity [63] Question: CapEx expectations for the year - Management indicated a CapEx range of $20 to $25 million to support the subscription business [68] Question: Strategy refinements and potential acquisitions - The focus remains on driving the subscription model, with 78% of the revenue outlook already contracted [75] Question: Revenue progression expectations for 2025 - Management expects to deploy at least as many units in 2025 as in 2024, with a focus on subscription growth [84] Question: Purchase versus subscription model mix - Management confirmed a preference for pure subscription models, while still offering purchase options [92] Question: New customers for Expedite product - The 12 new customers for Expedite included both existing customers and new clients, indicating strong early traction [95]