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 subscription growth.

• 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 $89 million, up 64% year-over-year and 8% sequentially.

• Added 84 new customers in Q2, the highest since Q4 2022, now serving over 800 customers across 10 verticals.

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

Financial highlights

• Subscription revenue doubled year-over-year to $15.9 million in Q2 2024; service revenue grew 42% to $5.6 million; product revenue declined 72% to $2.0 million.

• Adjusted gross margin expanded to 58% in Q2, up from 38% in Q2 last year, with gross profit at $14.5 million.

• Adjusted EBITDA improved to -$7.9 million from -$13.8 million a year ago.

• Adjusted loss narrowed to $11.1 million from $14.3 million year-over-year; adjusted loss per share was $(0.06), improved from $(0.10) YoY.

• Cash, equivalents, and marketable securities totaled $56.7 million at quarter-end, down from $81 million in Q1.

Outlook and guidance

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

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

• Adjusted gross margin for the year estimated at 60%; adjusted EBITDA expected to improve by over 40%.

• Anticipates positive Adjusted EBITDA by Q2 2025, with cash levels around $60 million and no need for additional debt.

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