Evolv Technologies (EVLV) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $25.5 million, up 29% year-over-year, driven by strong new customer acquisition and expansion in key verticals, with a focus on subscription and service revenue.

• Net income for Q2 2024 was $3.5 million ($0.02/share), compared to a net loss of $66.8 million in Q2 2023, primarily due to favorable changes in fair value of liabilities.

• Annual recurring revenue (ARR) reached $88.9 million, up 64% year-over-year and 8% sequentially.

• Recurring revenue comprised 83% of Q2 revenue, up from 59% a year ago, reflecting a successful shift to a subscription-based model.

• Adjusted EBITDA improved to -$7.9 million from -$13.8 million year-over-year, with a path to positive Adjusted EBITDA by Q2 2025.

Financial highlights

• Q2 recurring revenue was $21.2 million, up 82% year-over-year; non-recurring revenue fell 47%.

• Gross profit for Q2 was $14.5 million (GAAP gross margin 56.7%, adjusted gross margin 58%), up from 38% in Q2 2023.

• Remaining performance obligation (RPO) was $262.9 million, up 33% year-over-year and 4% sequentially.

• Adjusted operating expenses were $26.5 million, up from $23.7 million year-over-year, mainly due to modest headcount investments.

• Ended Q2 with $56.7 million in cash and equivalents, down from $81 million in Q1, with no debt outstanding.

Outlook and guidance

• Reaffirmed full-year 2024 revenue guidance of approximately $100 million, representing 25% year-over-year growth.

• Expects to exit 2024 with ARR of around $100 million, up 33% year-over-year.

• Forecasts adjusted full-year gross margin of about 60% and at least 40% improvement in adjusted EBITDA for 2024.

• On track to achieve positive Adjusted EBITDA by Q2 2025 without additional debt financing.

• Cash resources expected to fund operations and capital needs for at least the next twelve months.