Evolv Technologies Holdings, Inc. Q1 FY2025 earnings call

• New leadership: John Kedzierski joined as CEO in December 2024 with extensive experience from Motorola Solutions; Chris Kutsor joined as CFO. - Business progress: Revenue in Q1 2025 reflected new customer acquisition, expansion from existing customers, growth in Evolv Express subscriptions, and early adoption of Evolv eXpedite. ARR reached $106 million at quarter end. - Customer retention: Retained 92% of eligible education customers and 90% of deployed units; 50% of Q1 bookings came from existing customers. - New programs: Rolling out a certified pre-owned (CPO) program in Q2 to recapture value from returning units; eXpedite, an autonomous bag screening solution, added 12 new customers in Q1. - Vertical impact: Deployed in 20 of the 100 largest US school districts, 500 hospital buildings, and various sports/entertainment venues, with daily screenings of over 3 million people in schools and nearly 900,000 in healthcare.

In Q1 2025, Evolv Technology reported revenue of $32 million, marking a 10% sequential increase and a 44% year-over-year growth. Annual recurring revenue (ARR) grew 34% year-over-year to $106 million at the end of Q1 2025. Adjusted EBITDA for Q1 2025 increased to $1.7 million with an adjusted EBITDA margin of 5%.

• Expect total revenues to grow by 20% to 25% in 2025, ranging from $125 million to $130 million. - Anticipate positive full-year adjusted EBITDA and cash flow positive by the end of 2025. - Shift towards more pure subscription models, which may slightly affect gross margins in 2025 but enhance long-term ARR and revenue visibility.

• Exposure to trade tariffs and related uncertainties that could impact pricing and component access. - Continued need to monitor and manage risk factors detailed in SEC filings, including those related to litigation and operational challenges.

Q: Jeremy Hamblin asked about expansions across verticals, California's healthcare legislation, Gen2 Express gross margin, and CapEx expectations.

A: John Kedzierski and Brian Norris responded, noting expansions from existing customers, active engagement with California healthcare legislation, and CapEx expectations of $20 million to $25 million.

Q: Michael Latimore inquired about strategy refinements, vertical momentum, and tariff impacts.

A: John Kedzierski and Chris Kutsor answered, discussing focus on subscription model growth, momentum across verticals, and tariff management with products assembled in the US and limited China content.

Q: Eric Martinuzzi asked about unit number expectations, revenue progression, and near-term investments.

A: John Kedzierski and Chris Kutsor replied, stating expectation of ~8,000 units deployed by year-end, no specific Q2 revenue guidance, and $2 million near-term investments with more in the second half.

Q: Brett Knoblauch questioned purchase vs. subscription mix and eXpedite customer types.

A: John Kedzierski answered, noting shift towards pure subscription models and a mix of new and existing customers for eXpedite