– Company Reaffirms Outlook for Positive
Adjusted EBITDA1 by Q2 2025 –
– Company Provides Update on Restatement Effort
and Regulatory Inquiry –
Evolv Technology, Inc. (NASDAQ: EVLV) (the “Company”), a leading
security technology company pioneering AI-based solutions designed
to create safer experiences, today provided an update on select
strategic metrics for the three-month period ended December 31,
20242. The Company also provided an update on its pending
restatement effort and other regulatory matters.
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According to preliminary estimates which are subject to change,
for the three-month period ended December 31, 2024, the
Company:
- Surpassed 6,000 Evolv Express units deployed globally with the
activation of approximately 470 new multi-year subscriptions;
- Added approximately 60 new customers across multiple industries
including education, healthcare, professional sports and live
entertainment, tourist attractions and industrial workplaces;
- Added nearly 100 additional school buildings and now serves
over 1,200 school buildings;
- Added over 30 additional hospital buildings and now serves over
450 hospital buildings;
- Booked its first orders of Evolv eXpedite™, the Company’s new
AI-based weapons detection solution for bags; and
- Ended the quarter with cash, cash equivalents, marketable
securities and restricted cash of approximately $52 million on
December 31, 2024, and no debt.
“We’re pleased with our solid finish to 2024. During the fourth
quarter, we saw strong new customer adoption across a broad range
of industries, significant expansion by our existing customers,
exciting market traction of Evolv eXpedite and the resolution of
certain regulatory matters,” said John Kedzierski, President and
Chief Executive Officer of Evolv Technology. “Looking ahead to
2025, we remain focused on achieving positive Adjusted EBITDA in
the second quarter with positive free cash flow in the fourth
quarter. We thank our customers, partners, employees, and
shareholders for their continued support of our mission to make the
world a safer and more enjoyable place for people to live, work,
learn, and play.”
Restatement Update The Company today also provided an
update on its restatement efforts as previously disclosed in the
Company’s press release dated October 25, 2024. The Company
submitted to The Nasdaq Market LLC (“Nasdaq”) on January 17, 2025,
a plan of compliance to address how it intends to regain compliance
with the Nasdaq Listing Rule 5250(c)(1) as a result of the delayed
filing of the Company’s Quarterly Report on Form 10-Q for the
period ended September 30, 2024 (the "Quarterly Report"). If
accepted, Nasdaq can grant an exception of up to 180 calendar days
from the filing's due date as extended by Rule 12b-25, or until May
19, 2025, to regain compliance. In partnership with AlixPartners
LLP, a leading global business advisory firm, the Company is
working expeditiously to complete the restatement effort and file
the Quarterly Report and the restated financial statements. The
Company will host a publicly accessible conference call to review
the financial results once they have been filed.
FTC Inquiry Update On November 26, 2024, the Company
announced that it had resolved the United States Federal Trade
Commission’s (FTC) inquiry into certain aspects of the Company’s
prior marketing claims. As part of that resolution, the Company
agreed to offer a limited number of its K-12 education customers
the option to cancel the remainder of their current contracts with
the Company during a 60-day cancellation period. In total, this
group of customers3 represented approximately 237 Evolv Express
units, approximately $3.9 million of the Company’s Annual Recurring
Revenue4 and approximately $10.5 million of the Company’s Remaining
Performance Obligation5. Per the terms of the resolution, notice
was sent to this limited group of customers about their contract
cancellation option. As of January 23, 2025, no customers had
exercised their contract cancellation rights provided by the
resolution. The vast majority of the cancellation rights available
to this group of customers are scheduled to expire by March 14,
2025.
1 Non-GAAP Financial Measures. In this press release, adjusted
EBITDA and free cash flow 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 EBITDA is defined as net income (loss) plus
depreciation and amortization, share-based compensation, interest
expense (income), loss on extinguishment of debt, 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, loss on impairment of lease equipment,
and certain other one-time expenses. Free cash flow is calculated
as cash provided from operating activities less capital
expenditures. 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 operating 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. The Company has relied upon
the exception in item 10(e)(1)(i)(B) of Regulation S-K as the
Company is unable to provide a reconciliation of each measure's
most directly comparable GAAP financial measure (net income in the
case of Adjusted EBITDA and operating cash flow in the case of free
cash flow), on a forward-looking basis without unreasonable effort,
because items that impact these GAAP financial measures 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.
2 Subject to completion of pending restatement effort as
announced by the Company on October 25, 2024 (“The Board of Evolv
Technology Determines that Certain Financial Statements Should Not
Be Relied Upon”).
3 "Customer(s)" means school(s) or school district(s) in the
K-12 range that purchased or otherwise contracted for the use of
Evolv Express between the period April 1, 2022, to June 30, 2023.
Excluded from this definition is any school or school district
that: (1) participated in a pilot program of at least 30 days prior
to such purchase or contract; (2) purchased 15 or more Evolv
Express units; or (3) purchased or contracted for, and deployed,
additional Evolv Express units more than 45 days after initially
deploying Evolv Express at a school.
4 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.
5 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.
About Evolv Technology Evolv Technology (NASDAQ: EVLV) is
designed to transform 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 screening 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 many places where people gather by
enabling seamless integration combined with powerful analytics and
insights. Evolv’s advanced systems have scanned more than two
billion people since 2019. 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, as
well as Sport Business Journal’s (SBJ) awards for “Best In Fan
Experience Technology” and “Best In Sports Technology.” Evolv®,
Evolv Express®, Evolv Insights®, Evolv Visual Gun Detection™, Evolv
eXpedite™, and Evolv Eva™ are registered trademarks or trademarks
of Evolv Technologies, Inc. in the United States and other
jurisdictions. For more information, visit evolv.com.
Forward-looking Statements This press release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. We intend for 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 other
than statements of historical fact are statements that could be
deemed forward-looking statements, including statements made in the
President and Chief Executive Officer’s quotes, and statements
regarding the Company’s future financial and operational results,
the expected timing of the Company’s restatement efforts and the
filing of the Company’s Quarterly Report and the restated financial
statements, and the Company’s ability to regain compliance with
Nasdaq’s requirements for continued listing. Forward-looking
statements involve known and unknown risks, uncertainties and other
important factors that may cause our actual results and actions to
be materially different from any future results or actions
expressed or implied by the forward-looking statements, including,
but not limited to, the factors discussed under the caption “Risk
Factors” in our Annual Report on Form 10-K for the year ended
December 31, 2023 filed with the SEC on February 29, 2024, as any
such factors may be updated from time to time in our other filings
with the SEC, including the Quarterly Report on Form 10-Q for the
quarter ended June 30, 2024, as well as risks related to our
leadership transition. The forward-looking statements in this press
release are based upon information available to us as of the date
hereof, and while we believe such information forms a reasonable
basis for such statements, it may be limited or incomplete, and our
statements should not be read to indicate that we have conducted an
exhaustive inquiry into, or review of, all potentially available
relevant information. These statements are inherently uncertain,
and investors are cautioned not to unduly rely upon these
statements. Except as required by applicable law, we do not plan to
publicly update or revise any forward-looking statements contained
in this press release, whether as a result of any new information,
future events or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250123179310/en/
Investor Relations: Brian Norris Senior Vice President of
Finance and Investor Relations bnorris@evolvtechnology.com
Media Relations: Alex Ozerkis Vice President of Corporate
Communications aozerkis@evolvtechnology.com
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