EVLV - Earnings call transcript Q4 2021 | Evolv Technologies Holdings, Inc.

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Operator

Good afternoon, and welcome to the Evolv Technology Fourth Quarter Earnings Results Conference Call. [Operator Instructions] As a reminder, ladies and gentlemen, this conference is being recorded. I would now like to introduce your host for today's call, Brian Norris, Vice President of Investor Relations for Evolv Technologies. Please go ahead, sir.

Brian Norris

Thank you, Melisa, and good afternoon, everyone, and welcome to the call. by our our Chief Chief today and Executive Risk here Ramos, Mario Financial joined Peter Chief George, Officer; Officer. I'm Officer and press quarter after announcing outlook afternoon, the closed, issued This market for XXXX. our and results a fourth our business we release IR is the of press as release outlets well on available This our news website. major as on section Investor can we an accompanying to note Please also found be be will that during this referring Relations on our presentation, afternoon's which website. call, investor

other assumptions, differ to Actual X some furnished result number Slide will within on meaning of the which on As Act presentation, we uncertainties, Safe of to financial of as XXE today's U.S. Risk of the of uncertainties views factors highlighted of risks the and today's Harbor call, from XXXX, including, Exchange of of forward-looking forth materially forward-looking results a make a Reform of during with XXA risk the of Private future filed SEC and set control. forward-looking our the and September statements or the Securities documents events limitation, time. events. to Securities or in prospectus X, XXXX Act are of provisions caption statements risks, current Act and it Section that material our subject to All the expectations Litigation the SEC and XXXX, relate time those filed without statements and are Securities from beyond Factors our may the of from XXXX

XXXX. our views represent of made XX, March statements today Forward-looking as

occur. cannot events that those any events circumstances forward-looking of results, disclaim future by that statements future will be believe reflect Except the on in activity, we expectations as circumstances. may performance them are required reasonable, or to we applicable will reflected be when to the law, we obligation guarantee achieved Although update and statements and levels reflected

include an also profit, and as results or with will substitute today be for adjusted provide Our non-GAAP investor Reconciliations in margin commentary financial in can insight issued measures trends. and information EBITDA, to evaluating not operating adjusted presentation. should additional investors be gross today gross believe including principles. accompanying considered accepted GAAP from our accordance in prepared adjusted for we These measures, generally which our metrics accounting press in non-GAAP reported from the isolation financial and a results for found in ongoing release

presented and typical investors leading insight will Obligation to today business, SaaS to ARR subscription with or recurring Remaining the like units for measures call Annual deferred should these to our independently recognized the substitute titled of and not other or of Please of mind, TCV revenue from revenue revenue X-year sharing Recurring represents Revenue RPO for installed turn metrics of period. incremental the be between difference similarly With the definition reflects transparency, a a differ I'll forecast and contract and RPO. of end we performance quarter. additional subscriptions to revenue or begin normalized or well in through Finally, may the of service ARR, metrics as Performance provide X Peter. purchase value as and keep that, as to revenues. our Peter? components. RPO as over

Peter George

more and to play. a every X and and Slide on enjoyable as and strategy me our We're year one fourth safer making results to quarter world everywhere, work, of well is place democratize our a to mission, to Thanks, our take pleased as goals you, for But and XXXX. we moment which and people facilities do for security, full share secure highlights us making Brian, thank the remind today. here venues, that, and more joining before everyone, the let of learn

do personal, firearms better safety There visit have growth smart. frictionless and it they and X. visitor demanding current experience. way the awareness driving the increasing experience to venues know the and want trends COVID. trends visitor that Slide visitor experience. converging need safe a facility and gather focus, to do in the again. We want is of want but safely, health to risk anxiety gun the like violence they venue and secular transform touchless The and pandemic are informed to public They They accelerating safety to want that and a experience to to again, be Moving from ownership, continue from digitally threat drive to and powerful safe are

and on evidenced solutions close I safer a on from as analog sure shift venues in architectural of and soon. make venues X. companies forever urgent that one has changed the world in Evolv, the lots work has And moment, digital imperative I mass making Moving It's the field highs more their of we to safer. Evolv everywhere to how scary sense customers. is time believe us, everyone We happier. of an our their that's to gun today's that is the an transformation elevated the live, as gathering place. where anxiety XXX and And people spend historic a we the the visitors about we to a security. have by digital way with that anytime United to become This leading pandemic I'm is not to Slide going unpredictable violence and physical and unique listening personally at know belief that need that, again States are XXXX. to our play, change thing, is they're shootings our moment make help in and shared relying about and

finally Evolv, only can our today Evolv and democratize we reporting today available to pace reflect subscription AI-based weapons anyone right business it Through entering while now in as so This first moment at from as meet strongly experience detection mission people have. at I As to and the that company. they The you life. security intersection we feel results model why visitor the data our developed security that future threats the about know, about preserving platform prevents our the unprecedented of shouldn't our make our and places walk and set, our the of mission human who are needs we tomorrow it. and imperative and is SaaS-based

Moving to X. Slide

in We product Our strong XXX% XXXX. were $X.X introduction revenue customer fourth demand-driven new fourth over quarter highlighted total of results with of up our year and by XXX% and revenue channel reported million, acquisition, year-over-year million acceleration quarter, up the full the innovations $XX.X of partners.

churn XX the XXXX. in of turn, was as our guidance units visibility revenues. we deployed determined beyond the We Despite our revenue our still added business us which growing growth had generated contract. quarter Express had of renewal the over We not customers while revenue of no expected grew our year-over-year. subscription new the added yet. to up of and from into top number end in XXXX, We of subscriptions under XXXX, We in adding XXX% the our we our for our XXXX this value customers. in As taken believe fourth we like quarter overall requires Mario SaaS to This, news positive remarks, revenue. adjusted to his more year will change, in We greater describe SaaS in have subscription this a ours. value is that now ascribe reported to in for had of offerings delivered a transition offerings XXX customers portion an recognition the have a by greater were on subscriptions to forward new XXX Evolv fourth active define Xx reflecting any as or range, in that

in million Contract XXX% up of was year-over-year XXXX, fourth Total year-over-year. Finally, Orders or $XX.X was million the up $XX.X TCV and booked XXX% in quarter,

more X. Turning dozen the to base fourth quarter. Slide honored than enterprises customer in to our to We X were welcome

market to While number RFP others screening pilots the activity, have XXX customers we're our at bring end to in base over of XX cite to in customer or the the XXXX year. security of added new grateful a

quarter, broad customer again Our saw activity. pace In new of of year. throughout diversification accelerated acquisition fourth we the a our acquisition customer the

Arts Birmingham As TCV the the Schools, Hospital, Center. in MLB professional as West sports fifth football Course pro franchise. as Van XX% Art Evolv some see as Arts the and Center Theater We Monterey of our now include you Fall are on nearly the franchise, came Shore of slide, NFL our Florida from Center, Public the MLB Champagne of XX% the team another Casino, River Aquarium, Woodruff team, now XX% DHL, Race theater Express performing Fox the vertical performing Center, newest Jalaz the another professional of we and Schools, our well baseball North Atlanta, secured this Bay NFL customers. can have fifth customers our

TCV TCV in States. health immediately education United and about important market, Aquarium the quarter shooting our we fourth in transactions. hospitals saw sites, Michigan. We winning the through landed also fourth represented We Nearly from opportunity We quarter came saw of the in by Monterey XX% the in fourth XX% some X came the following our Capital Washington, Oxford, TCV. market includes care Arena our of Bay including D.C. an market that and tourist XX% the in of iconic from most quarter acceleration in K-XX One clinics closed venues where contributions the of which unfortunately and school important the

about TCV. represents about vertical TCV to XX% warehouses. X hotel market in convention fourth quarter, We performing in contributed which saw growth our continued including the also art and factory each and casino quarter centers of centers, other the markets XX%

well you partners X company in a been channel as and our Slide force in or as vertical direct about We've on centric. markets. network our geographies consists clear as partners quota-carrying to help approach extend refer to the through an which channel to efforts, scale intentions update a growing our sales turn reach of we of with to certain that Let's go-to-market

the that quarter partner XX%, Our ended both channel to and TCV was of We without of partners customer and up now partners. demand XX% with XX% starting see from our of closed TCV doubling fourth evidence beginning involved our transactions goal we're all at any strong with engagement. at of secure partner, XXXX to the involvement to us.

dozen activity X opportunities and more Controls, global of across the of channel and & Solutions, authorized Johnson incidentally, fourth prospects. where number strategic than over pipeline our broad in Decker, qualified partners to in Black seeing course, the partners doubled are quarter in Stanley XXX several We Motorola

that which between rest the the we're growing on highlights of are XX the several are creating Slide the the separation Evolv Evolv highlighted to There elements of of and Technology competitive left unique side the market. here slide. Turning story,

than a million than Said visitors. these We data when dozen billion we've we're across XXX markets. way, commercially more security data about points collecting be XXX every we're more more single to collecting that you another or Simply screening in That industry. every hour than volume put, vertical consider believe are screening points day every people we the XXX,XXX on of X.X single day. the each security more what than currently in average about XX,XXX is venues for created largest lake people important data

our believe the in market. bar we such the digitally to bring advanced innovation that Unit We or capabilities more superior venue data As by us our us we with power this turn believe Revenue people the Average customers ever to brands raise to before. their of a continually and and enables better areas deliver will than reach as mass data of time, possible And as These and having crowd to result, to maximize and products to the to and better better and improved ARPU initial us We're believe renewal buy to makes Evolv growing which time. algorithms end able transforming By proposition enable able rates market. detection assessment, optimize and capabilities this a set rapidly over in Per when security our notification unique, digital products, customers and security thresholds. improve their detection, posture, on to analytics. accuracy based contracts. deliver critical large enable this We're with value customers we're SaaS weapons makes an safer it to

operators. our to the savings of divesting as strive also their operational a venue we without addition, ever can that single venue close without file, without ever superior forming drives deliver experience We to items ever for down, efficiencies cost XX% a and customers customers' slowing significant deliver enter personal up contact visitor In line.

platform Finally, venue we're which of automatically operators a customers available our to level data, decisions valuable during able analytics events. Evolv security better delivered demand and are before, with higher on provide via our to and Insights, to after make

and of the some reopening share over does visitors as near-term mission to believe way our the of Slide longer-term business, right things position all. of and Express turn of want new I Several Evolv the operators to the just now. Before of well near-term for turn democratizing and I Mario, business which to us drivers are fulfill include safer happening XX and for facilities, to Facility some thoughts to a our to drivers of looking of security welcoming certainly back that. that's we

industry. in We has ability impact expected the subscription gain are chain to increases price we will that balance the for our this quotas both customers' full in offsetting inflation as and had value while increase book for will have with well our increasing access has quota-carrying implemented to continue on every impact as sales COVID to executives, XXXX across near-term look the also the offering, nearly booked install increases to to supply demand likely had Other our and that premises drivers units. have

our channel partners up all We're opportunities Switching growing be in in from strategy, business. XX% drivers of driver XX% the much is to continues expecting involved some the as Another momentum. of long-term in which XXXX. to as channel-centric show of XXXX, to

more Unfortunately, First demands islands the public and foremost, trends abating. than are important for not gun in escalating, ever. safety strong is secular

long-term significant and for a with existing see new partners. we both opportunity Second, channel

great making do. progress more there's We are and much still, to

to expect higher with which will opportunities. tools, streams enhancing ancillary analytics while digital revenue We expect and drive we ARPU also over average benefit renewal time from

take to through new our XXXX. of With our Mario? Finally, who me will that results, we can over for potential this drive untapped let penetration anticipate TAM and key you Mario, financial trends segments. deeper turn large outlook that, products

Mario Ramos

Thank you.

recognition in change have is XXX% Peter mentioned, our XXXX in of adoption. recognition strong Have want to to purposes Though the to impact timing on manner secular rollout Evolv the This in strong hardware. reflects the trends. the As accounting Evolv ASC Cortex be year-over-year. allocated our purposes. advancements growth clear, reported. there change of for recognition forma change customer Express from have of of sell and our the a This continue actually means the $XX a newest change the we not contracts way based that XX, been been our the had AI a up software. quarter not reflected would software of $XX.X selling accounting This of result the pro of $XX revenue versus of million to is fourth been and have on Revenues any $XX.X XXX, value this we Slide greater million. in revenue revenue This customer percentage the stand-alone the benefit revenue adjustment we we assumptions our Highlighted market XXXX changes products. our million, instead million revenue for impacts was assumption. That to been made, I price and platform recent in for in XXXX would

most which XXXX. of and the total XXXX, reflects in portion service the appendix. it for growing revenue, recurring revenue of revenue, included Express have the $X.X longer sites. we to importance not believe related more does booked X-year was subscription will over We're of purchase or install revenue guide growth annual or XXX% as table reflecting over $XX.X orders Contract of growth is period. million installation which year-over-year. not at Value reported recurring also XX, to of grew the both XXXX, convert which information up useful We XXX% reflecting Evolv activity. represents service subscription the performance million, and no indicator December in a here because TCV, revenue with XX, the at monthly TCV TCV, normalized We recurring customer revenue Total subscriptions $XX.X of December ARR, plan We revenue XXX% to a XXXX. consider to recurring to we ARR million, to highlighting

Finally, Investors as have fourth at value RPO, been units which RPO, regularly and has or between that remaining XXX% already contract deployed the deployed end sharing obligation, renewal we add would up us the was RPO revenue is XXXX which $XX.X the make. of activity. of deployed. difference disclosed for year-over-year. of performance quarter we million, as well as and the end quarter. of reflects recognized churn been the report should of progress ARR to we on to are XX. In to subscriptions expect number subscriptions Slide ending of indicative expect Flipping We're continue and additions, which the that time, to the

churn any years However, X are have in our given not we length. experienced contracts

we here, XXX additions in XXX the the see quarter can with you deployments. As and added ended subscription year

It approximately no units orders, revenue ended we included XXX point purchase yet deployment our customers but to the restrictions in into fourth has year not is since which quarter units These addition, our out important been install personnel and has yet that valid In have installation XXXX. been among among represent in completed. service either or our impacted recognized ability to Omicron-related backlog. been with the the subscription TCV of

trends to we at RPO. a in ARR As XX, deeper Slide Here's the a and move look

base. the ARR across in As you continue to as strong here XXXX. customer can the deployments left, see to see we XXX% reflect new the as expanding adoption we customer well continues up are our on year-over-year This was seeing

RPO On million. the be as contract already recognized grew end year-over-year you reflects right for fully difference to the the is units and $XX.X are of of on the XXX% is Also highlighted yet contract are on the that the of the under value which see backlog, deployed. value chart value to which of units but installed revenue right, between the the again quarter.

as installed of As you had revenue December yet $XX.X with of XX, associated had see, another contracted million been XXXX. we not that can units

$XX.X So plus RPO million backlog. in about of total,

our XX. want I discuss briefly financial highlights. Turning to Slide to

up total fourth $X.X year-over-year. discussed, million in quarter, revenue was previously the XXX% As

million, as was was over We in the gross quarter in X% year, for margin XXX% XX% XX% quarter year. year, product full full the fourth reported and negative of full gross $XX.X up XX% the down for XXXX. the total For margin follows: revenue broken fourth the and

expenses, Our $XXX,XXX by $XXX,XXX. miscellaneous build legacy charges related some margin to several our fourth product onetime for other impacted gross was product, price million well as as for inventory $X.X impairment a quarter purchase variance product about a onetime first-generation of Edge,

impacted finished In prioritize to availability chain costs challenges as of supply we addition, products. continue

respectively. quarter and 'XX last for in Excluding these X% adjustments, XX% been quarter XX% in to compared and and gross fourth was margin the 'XX, fourth have the product would gross QX year fiscal margin XX% year. Subscription of

of well as certain team, the assets. full XX%. modest XXX compared was to most employees gross employees the in For the million over company, for the year, the up year-over-year end margin XX technical subscription talent our and fourth XXXX. across XXXX. revenue-generating compensation with exited quarter, in headcount quarter up $XX.X fourth sales of the of expense, the as engineering in $XX.X and associated XXXX, operating The transaction primary We drivers stock-based Total write-down were additions costs were for the a XXX% increase million expenses with XXX% offering, at notably impairment

operations from XXXX. million up loss to in was XXX% XXXX, XXX% $XX million was Our quarter, year-over-year in $XX the and fourth up compared

loss or of per a share quarter the or Finally, $X.X net $X.XX compared we million $X.XX per fourth net of reported diluted in income million share of year. last $X.X to

credit balance now compared on the about or ended million million down diluted per million in our in equivalent, million $XX.X net loss we're inventory cash the investment cash the We quarter we XXXX. $X.X the million share $XX line QX use the plan. fourth This half operating continuing sheet. from approximately quarter of $XX the in Briefly making per third and or our reflects of quarter. of as to year, well $X.XX $X.XX reported For $XX.X with loss build anticipation XXXX million, second on revolving a to cash as $XXX of of share of repayment the

of Slide our move the can on we subscription you model. As to see leverage XX,

which slide, reporting As are company. the we reported, we for highlighted of is this gross XX%, contribution record adjusted on recurring high a margin

presented. periods amortization, onetime which subscription and items recurring margin. context, revenue and adjusted a For all and of representation margin excludes contribution more and provides service gross revenue depreciation we for Recurring profit includes meaningful revenue gross believe

Moving on.

growth expectations XX. highlights Over year SSP the to XXXX to would full rationale million today. for that current forward-looking are XX% outlook on our been and between XXXX. in revenue I'll share forma the change in business growth -- investors XX% these We assumptions our here investors as about with our Starting next for would $XX I of That reflect few statements of and it. $XX represent the of views slides, million, behind remind of want Slide pro only which have year-over-year. the

XXXX ending $XX more expect to -- than double December We million. me, XXXX to in excuse between to XX ARR $XX at million

in $XX to We expenses million expect $XX operating increase to to million XXXX.

to mostly continue headcount across to revenue-supporting position. engineering as expect extend to revenue-generating We investing as continue our resources well and in business, the leadership

our expect $XX range between loss to operating in XXXX. We million million $XX to

Finally, negative we million and $XX million to range expect between in $XX EBITDA XXXX. adjusted

and priorities sales. marketing, adding on We're sales strategy XX. clients our to of quota-carrying for of to some we're also Moving In to higher us drive opportunities. area Evolv balancing ancillary reductions investment gross ARPU XXXX a drive investment contacts sales significant Express We're channel to position to the I us and best to want on provide focusing We're renewal well higher. accelerate growth position of cost executives, in number products margins with enhancing Starting in with to the existing R&D. also investing next-generation designed put XXXX. to our and in deliver this while will in beyond. which Slide

Turning G&A. to

the company's reporting manage infrastructure to controls our as to continue and as future environment growth. to current We well support and build

our stages final live the in is of NetSuite which For set of go XXXX. quarter example, second we the to implementation, are in

of size. company making initiatives company our the a of public we're Finally, in necessary typical investments

projected to to use Slide into additional share insights want XX. our We of cash some XXXX. Turning in

supply XXXX into ramp chain and investments and constraints. as elevated expect emerge cash We from burn we an up

we infrastructure as public losses to to make sales investments necessary and 'XX our marketing. We to build the in continue and company in expect elevated operating build

leverage to expect business. We meaningfully we areas the scale beyond, further in investment 'XX both and as

the been have have challenges last to not our costs hardware which to months, over that XX XX immune We persisted have COVID-related driven chain supply higher.

been sheet recognize certain been able certain balance to our hard-to-find have take we cases, scale to purchasing to able we've advantage to benefits. significant prebuy sufficiently yet While in parts, of not

However, we costs efforts investing in reducing are hardware working XX% and the with redesign goal to XX%. by of

are to in We our to in To meet the of with and more our expected the efforts growing the XX Express inventory 'XX. than continuing we end units build to proactively support half compared inventory of 'XX to second demand 'XX. to that pipeline units inventory end end, year expect and at XXX approximately in into

is, cost the subscription funding model a to of equipment subscription Another cash subscription pure noncancelable customers. subscription then retaining purchase important the our costs equipment the the use the over When of higher subscription that platform. we over and value our Express with model, pure contracts. of our customers Evolv support recover We fully choose the are of term course, title

in program We are we financing place, to currently that offering. to $XXX expect to $XX XXXX equipment in our which to In currently light XXXX use million costs needs. million with as consumption million sources our evaluating $XX $XXX would Without as of these iterations, expect pure approximately much million all of reduce significantly cash to support in we third-party cash. subscription end

about share few considerations modeling you to wanted a with think XX. additional you to Slide And XXXX. Turning as I

quarter. quarter an installations the XXXX see that subscription the and most first in first installations on the are product we to revenue linearity impact the of of due here in both to since will of recognition, element and expect important impact revenue continue We Omicron,

in of We ARR as we and to expect customers add to accelerate XXXX subscriptions. both and half additional continue second further revenues the

mix purchase We of XX% the be expect and subscription. installed pure XX% to units subscription

that that I'll we're installations of to we of QX, in an Omicron half back of Again, due installation count. of modeling X,XXX, subscriptions our of to Brian. impacted rate doubling some expect to will the XXXX into X,XXX With second over accelerate ending between year. the in approximately ending sub base that, of challenges the Finally, the turn and

Brian Norris

At Thank to up Instructions] open this we'd call like the Q&A. you, Mario. [Operator time, for

Operator

to first the Cowen. we'll go of And Instructions] line [Operator Eyal Shaul with

Shaul Eyal

you. Thank

fiscal recap, revenue have just company So potential for through? but the to the guide, would 'XX, adjustment accounting for you're but been the taking what that

Mario Ramos

of the in Yes, talk in 'XX, used would we we have growth had same what been our all is 'XX, of that revenue XXXX, adjusted 'XX the number SSP used of a for entirety assumption had quarter XX%. guidance didn't if fourth of -- said we about been an the

look you talking that the lower the have We earnings of see didn't assumption. you if deck, the can in of what the XXXX number So appendix under we're revenue would million about provide $XX.X old for XXXX. been

Shaul Eyal

how should maybe fiscal be think that about guiding headcount, Got you're give Got towards we And of 'XX the typically, as it. into range? from headcount take or sort a about thinking with when but we fiscal it. know a investment 'XX you're perspective putting the ending not I some company.

Peter George

We XXXX. hired in about people XXX

that investment had and in infrastructure we people year a big we So went the public. during

for about to heads. is XXXX to XX plan Our more XX add

XXX to XXXX. we people XXX people, exit as should we close -- be before So

Operator

Capital Mike Markets. go We'll with to Latimore Northland

Mike Latimore

of The terms standpoint, things quickly, look what are cycle relative I of bookings ago? diversity to sales the are guess just months quarter. -- from great environment, in you X moving a this slowing the seeing sales

Peter George

Yes.

spoke, unfortunately, we the we from in XX for in days. Two December. of in and time our again, Omicron the that in showed moved up contracting of remote things having fully last did We customers. so most QX, In middle us It's our the think sales being changed to QX said beginning everybody the -- QX. office I about and being is So still there. cycle to

we So the deploy our slowdown a TCV, little but bit systems. saw home. customers ability mostly were And in to back in a

went sales and but couldn't So And of was got their cycle the it down, them. facilities to course, reach home when they customers our didn't change, hard we install system.

we So systems TCV exiting systems but backlog year. we left in the about XXX XXX in deploying QX, up in ended

just robust So we couldn't we installed. It's them pretty had bookings. get

thing. one that's So

this and XX the QX, really slowed talks channel cycle in they of when we That portion because directly. we by we represented cycle. in the mentioned work days we of and in had did We the business. we channel significant sales about thing QX, second The sales like investment a our do significant control direct down have our a don't to

Xx the you as part of to health want markets. making care, go engagement the So in started have on and traditionally have plan, K-XX, of our sure said quarter we're out through and make us Having having to we to we places in planning the want Xx by to because channel that great we pipeline a plan instead open pipeline, those sure planning municipalities, in we make up we forward We're experience. diversification had month talking business. weren't in now of an the channel we the about for that, helped extra

So we QX, -- in going to in make it know was the big pay investments it's big XXXX. to dividends

Mike Latimore

a going And those replacing metal lot you I you're of markets you're kind detector, in mentioned of a greenfield? guess just in not really

Peter George

bet. You

you markets TAM, $XX and is all detector. there places, or traditionally a metal these $XX greenfield billion And billion know, so as of isn't

win company, to a have deals compete and there, So continue When to when it's we normally compete our to them. rate metal we we be like have with XX% our detector of uncontested.

Mike Latimore

the purchase on the just subscription the does product-only and then model just relate And yes. purchase change, model? that Yes, accounting or to subscription

Peter George

So right.

by one equipment is gets that. client subscription purchase that selling a to upfront we're where impacted So the the

Mario Ramos

And is accounting is is to this, States. This not be United us -- this super principles This I rules. the this gap. changing is us about generally mean accepted Mike, adhering to just in following us on clear

offering, that ours. is a And so business growing attributable what test our we a which revenue is greater our thing SaaS finding great to a percentage for is of are like

long seeing. And thing great is what term. This you're so that's a

Operator

Imperial Next, we'll go to Brian Ruttenbur with Capital.

Brian Ruttenbur

So be to that product million revenue, recurring. you total and $XX there revenue going have category? going Are $XX the million -- you going you $XX to in I and going you're subscription to to million is is and Are just want guidance how going million have because $XX to of or clarify mentioned forward. to report to written all services then other still have subscription and still

Mario Ramos

be is taking right? annualizing the that. clear, December, Brian, it's to that. expect just revenue December be million XX, recurring a month and stand-alone So not to to recurring year, $XX The subscription we the So annualized last annual $XX revenue of what metric for of revenue times million

of not time. throughout do $XX $XX There the both million the that. one revenue at We'll generate this represents other. the is to to we change no from it's continue million The part year and subscription. So is product the

Brian Ruttenbur

Okay. that the out. part question you was you pointing then financials. the appreciate talk I That of And on also obvious. second --

off weaker than being we a little drop You an in the about you that I a half. second first peak you quarter. that the the bit about the how as and talk had maybe talked strong Can third see quarter? fourth seasonality? in it little think the Is half third then extremely quarter

Mario Ramos

Yes.

because of and I distractions by think be about that's early this probably very if by statement. a pattern similar in holidays, But We're into a off the year. we fair seasonality. sheer the wouldn't still number clients the surprised Obviously, quarter have on. learning fourth days I just of we're

Brian Ruttenbur

of onetime write-off Evolv of $X Is was that related Okay. the charge the guess I to in first that And -- correct? the million. generation then roughly it's terms system, the

Mario Ramos

million. It big. Not $X.X was that

Brian Ruttenbur

$X.X million.

Mario Ramos

It's basically we the to was did swapped our of in that they're Part units we generation the allow because reason greater old functionality the yes, for U.S. it's clients. platform. of most units on have whom software the based clients proactively is that new -- out

as extend contracts -- So to -- but able and were we well.

units. benefit company, a meant that but was off to the had there those So term, we write it to short

Brian Ruttenbur

Okay. that Or XXXX? off could all is out? Is any in be cleaned older this written there other units

Mario Ramos

is This out. cleaned

Peter George

went was was Edge It second meaning was time. to product, metered may wave, and a to X everyone introduced we was our product And first a that millimeter product. go it Brian, you generation our remember through it wanted Once Express, you generation, that. at

them allowed do we've so to that. And

more So write-offs we have no Edge with anymore.

Mario Ramos

are to some operate. about is off, mostly expect continue different them just in writing don't field. The international. There units, clear, to of they'll be we Brian, decision those But our to And Yes. of still be a U.S. platform. XX do we because again, the have units

Operator

Galvin. question And Rob from our last is

Brian Norris

Norris. it's Rob, Brian

on call. you You to line the ask question a is open, wanted if

Rob Galvin

me? Can you hear guys

Brian Norris

Yes, yes.

Rob Galvin

if cash -- on get that expect is to Galvin it you current additional Rob neutral I'm flow think can the wondering I This money to the was for just Brad flow Sorry, on Reback. neutral you -- mute. model? you if think with raise cash or with

Mario Ramos

things. or some really lot to for additional we improvement current flexibility to third-party at get the burn any even to raise slow of expect we of do might business. we for do us that. of capital expect is capital. the line the Yes, cash that cash Rob, preserve of the We're more like Obviously, additional flow talked financing early But stage not only clients. evaluating with do cash neutral to the raise I the do don't bottom have we about expect to acceleration a kind that But

Brian Norris

Rob, any are follow-up good? question? you Or

Rob Galvin

was it. that No,

Brian Norris

CEO I'm for over closing George, remarks. going it some Terrific. turn Okay. Peter to to our

Peter George

We're joining All right. excited love really we us XXXX want -- performance of enthusiastic company. future and thank We in the about for to today. our very the everyone about

you, call. thank forward look the earnings us. So for We everyone. next everyone, Thanks, to joining

Mario Ramos

Bye-bye.

Operator

and Thank AT&T Service. that and using does you. for Thank your gentlemen, for conclude your for you Conferencing conference participation Ladies Event today.

You now disconnect. may

Evolv Technologies (EVLV) 15 Mar 222021 Q4 Earnings call transcript