Earnings call transcript Q2 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by and welcome to the Evolv Technologies Second Quarter Earnings Call. At this time, all participants are in listen-only mode. Later, we will have a question-and-answer session and instruction for queuing up will be provided for you at that time. [Operator Instructions] And as a reminder, this conference is being recorded.

At this time, I'd like to turn the conference call over to our host, Senior Vice President of Finance & Investor Relations for Evolv Technologies, Brian Norris. sir. ahead go Please

Brian Norris

Chief and joined everyone George, here Executive Donohue, and John, the our welcome call. Chief our Mark and I'm today Officer; Officer. good you, and afternoon, to President Financial Thank by Peter

website. issued available This announcing press section on our business the our closed, This XXXX. our and release outlook results IR a for afternoon quarter press market after updated the we second release of is

of Section Please not the during meaning statements financial statements call, growth gain to within of will Act relate we XXXX Securities products of future XXXX, of business offerings, forward-looking of operations, note our and limited Harbor results, make XXA new XXXX, Securities our our Private and to the and that our Act that, expectations today's Litigation the including, and Act XXE to, of customers, Securities the views Safe our regarding the ability and Section and of for of Reform potential outlook. ability provisions Exchange growth, future for to our demand but meet events,

our XXXX, updated on Form SEC filed report as time-to-time. year XX, documents or or Factors because forward-looking results from XX-K risks annual Xth, subject to material events of which December the filed without with to factors set with differ risks, may All and of in statements forth SEC Risk limitation, the other the are under the a ended beyond including, statements number these control. uncertainties, on from Actual and forward-looking assumptions, in materially caption our furnished XXXX, for March risk uncertainties, are some financial of the

XXXX. our statements August of made today views as Our forward-looking represent XX,

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

believe measures, measures should financial not Our GAAP. investors. commentary include prepared we today additional financial will or for as insights for, from, non-GAAP accordance with which in in provide be isolation considered a substitute information also These

and Reconciliations found measures press note the that GAAP titled metrics can other issued measures definition measures from companies. directly be today. non-GAAP release in may similarly most comparable our our of by these presented between differ Please

performance believe investors be making deployment will remaining of metrics such annual in or to We business. activity total as, subscriptions, key is the obligation helpful recurring understanding progress RPO, we which discussing of revenue and a number we're or ARR, each as

One that our to we the second Presentations. in for of active over Deutsche investors on the things year, item For highlighted entitled and very Credit the on the website Conference XX, here August that Peter, that Bank have under IR have our a half November. information the Conference turn in IR schedule Technology Technology I in Suisse UBS the the may by please May section event note is all Day of missed available Analyst section before replay last

We variety also events. virtual a will other hosting be and live of

contact please For more me information, at bnorris@evolvtechnology.com.

turn I'll that, With call Peter. over to the Peter?

Peter George

operational will the providing for we and second believe spend the Mark year. on our that Brian, driving the minutes an trends a developments for few few to important today. results then key our business. going the you, financial us thanks, joining and as the on Thank as of a spend I'm everyone, then minutes positive are outlook well remainder in through those results our walk update several for and results quarter

revenue, have of on in guidance for for we our in the ARR, profitability. year, the are seeing business, raising of gross the of are strong results, the remainder we results drivers our including every strong measure the end we our across During these Based demand strength margins the outlook the XXXX. second quarter, confidence subscriptions, we and RPO, delivered key key again and markets

Revenue million, second in XXX% quarter up the year-over-year. was $XX.X

likely X,XXX. Based pipeline first customer the and growth of year to for active on compared ARPUs overall We our in Our new nearly X,XXX and the in subscriptions think units will deployed. second activity, reflect the the acquisition and to Evolv new we welcomed X,XXX year of end to number sizes the quarter of in early deal with and strong estimates our growth it's the expanding of subscription subscriptions. XX have subscriptions over second that multiyear now activated growth XXX half we half, continues customers close strong We our Express.

XXX,XXX in Our the of screening last accelerated second now visitors quarter. and million We more in activity visitor activity subscriptions the than robust our during to averaging the nearly XXX over quarter drive second screening the year. up growth year double day, screened from quarter, customers ago screened million in visitors We're a continue visitors period. in X.X

the million screened We have X the now visitors screened billion XXX end are on before to pace year. of visitors and within reach over

about means Express and the accurate detect again, half the systems year. grew end than end and QX, $XX million is scanning get at which of weapons to of revenue. were Our We of all subscriptions more our and $XX more by sequentially Evolv XXX,XXX XXXX, the use accelerating we More fueled over to our from last tagged of of growth customers shift reflecting first smarter and detection in customers the at XXX% reoccurring increased time. QX XX% ARR over million to year-over-year, data

earlier growth, thoughts expansion, in prudent confidence in margin gives management, adjusted moments us ahead. in revised than more gross our the expense well and more deliver our double this of ability to EBITDA targets. outlook our ahead coupled of remain results ARR We positioned This and our will share those upwardly XXXX. continued with Mark to about

continue several reflect Our to results growth powerful strong trends.

education, health market and care sports. in to adoption with demand We see strong broad continue our solutions AI-based of professional end

quarter about XX% which education business the The by XX% nearly sequentially. second in market, represents our grew of

solutions We dozen three to used We now found XXX about new every a in now increase single the education screen XX customers day, being quarter. nearly tenfold XXX,XXX students country. top added districts school can a Our the year in in be second from just the are of ago.

School Public County University in in North in NASH Northwest Prince to We're San District Lighthouse Virginia, Chicago, the pleased County Providence the Charter the Florida, Mississippi. School Antonio Colorado, [ph] Public the St. William Texas, Southeastern Schools India District welcome Schools Public Carolina Jackson the the Independent Westminster Schools, School Nova in and the in Mel in School in

care where including over XX% leadership over of X,XXX care comprised and our exceed We Delaware to the in market, workplace which continue Health hospitals includes We XX early position which ChristianaCare system, takes System, of the another place. quarter, hospitals the Northern and is health violence three throughout customers second new health in the addedX

with River and the Gulf and Singing South System throughout Coast. operations Health North the Dakota on both Health Mississippi Sanford

business XX% saw We sequential a health increase in in our QX. in care activity

screening hospital XX,XXX year compared us. single a now to ago. for day XXX,XXX are Professional every a just visitors We over remained high-visibility sports vertical

the League, partner arena Soccer. the Major Baseball, Football National Houston Some and We're of to to across with market wins now XX over League our Football Major teams in include Germany, League National Berlin, the League National Texans. professional most franchise our Hockey XXth proud Mercedes-Benz recent in League,

second to screened million increase sports in fans Xx nearly year-over-year. quarter, the across professional a XX close We

screening X on XXXX be football Sunday expect NFL fans We to fall season this off. to close when given million any kicks the

through channel. to in continue partners. our the the About quarter second We with our bookings see came momentum activity accelerating channel XX% of

particularly We strong to dozens vertical. continue channel work Alliance ICU effectively Johnson in is partner the education others. Allied including University, very STANLEY Controls, Stone partners, Motorola, which many with and a Securitas, of technologies Technology, Security,

Summit the and was align ever attended technical strategies, on across second partner quarter. the Evolv over Technology was innovation a from host training. to opportunity The executives by event in and great our and pleased go-to-market personnel ecosystem sales Partner We're product first XXX technical to and collaboration

our our all that model. pure increased directly adoption was the XX% in the Another model to QX. was delivered second subscription we in second bookings quarter quarter That about margin the trend important throughout saw expansion, subscription via were gross we of the unit correlated of

deal continue Finally, we to sizes. see growing

was per the average our unit of an in units average up size prices reflecting deal. increase XX% number year-over-year In and higher both per about selling deal fact,

I front. important partnership innovation briefly developments some highlight the on want during and to product the second quarter

second product the with innovation. of availability to We're breakthroughs. starting absolutely upgrade latest believe AI key the technical We offers announce software First, it is Cortex quarter. the general we This in delighted Express released our X.X. platform that several of Evolv

some offer higher detection a customers we're our bladed enhanced which able First, level, smaller sensitivity provides threat now of weapons. to new

detection bombs capabilities, respect and While detection capabilities weapons. we is X.X with have knives, our exceptional provided designed smaller tactical to to larger guns extend and long with bladed

and was second than is This XX% customers. up Interestingly, in significantly year-over-year tagging subscriptions our by weapon knife sequentially in tagging in our customers the new and growth in quarter. bladed XX% faster surge,

schools it is say tight customers with important evolve spaces Another in is important breakthrough customers hospitals. our to in units, reconfigure our more Express enables and which X.X easily lobby that like

change configuration automatically it. adapt Customers system's the to can physical the now and will software

without our sacrificing for it technology deploy customers even making our detection we're So capability. to easier

SaaS our four-year can an off an all sensor to is company. a over enhancements. contracts the drop deliver efficiently benefit more an expectation subscription. our but both the our Like software we merely customers don't releases, features and This to and as customers a is subscription being available X.X with delivered to platform, ongoing upgrade We value of

our delighted partner partnership delivery with Turning a I one of update take on Ricoh, Technology. world. Ricoh investors the our with to in Columbia two service important largest with the moment and want new We're organizations to developments. with to work

well-established coverage Our growing partnership program rapidly believe our service base. leveraging provide this comprehensive our new by for Advantage and Ricoh's customer will service our We extend and own program. expands Service customer support better, service faster and

expanded The provide expedited field Ricoh with technical an service partnership support is part our increased and resources, designed availability. customers to

increased for maintenance this and to of We located will provide an faster preventative The provide partnership will United highly customers of including believe engineers, the about trained eventually services. resources Ricoh States. technicians workforce throughout enablement XXX, break/fix field

first now own staff meaningful to able can third-party moment in. provide who comes Level the also response resources technical first our call phone with technical augment from We're X the support engineers,

faster delivery. months, coming where number to stored the of locations enabling are expand even in Finally, the around country expect parts the we

our for second was an our important manufacturer, Express. us quarter now long-time Columbia has which Another Columbia in Technology. Evolv distributor partnership with authorized Technology, of is milestone been contract expanded the

prefer Express a directly do hardware with order will one the order partners Columbia reseller customers an of Evolv's to in-turn the place -- which approved put, of agreement. placing that Tech hardware our Express separate reseller so Simply under, Evolv one of by with component purchase for can now a

of component hardware customers Evolv So the their turn to to don't to Evolv, Express have System. purchase

approved reseller, solution distributed the second Subscription by place Concurrently, a The Columbia Technology. be for power which with a newly purchased us Software Evolv the long-term contract, order complete partner will will Express. will

expansion is with for of can manufacturer. grant our This Evolv make our will CapEx strong accustomed fully We Express important model. our preferences a contractual and to we Resources this partnership is partnership easier from an of procure customers ensure to believe working the even expanded our that customers, designed and those directly deploy, under it or support to particularly

cost this two into expanded plans billion our and with business. $X a in to Columbia long-range develop partnership supporting Technology steps, Ricoh our believe important new We with ARR partnership are effectively

strong second turn in within existing Mark, new and in quarter things over RPO. solid both in reporting acquisition I revenues, delivered the growth briefly let base. ARR strong our customer again summarize. by growth to before So results, and customer deployments highlighted me We expanding We're

pure, model. improvement significant our in subscription margins, accelerated reflecting a gross saw adoption We of

evidence the We operating again, see leverage revenue growth. of our continue as model to expense growth business in outpaced

the execute to we XXXX on which breakeven enable the and us well, sheet to of capital. doubling focused growth will need expect plans that our our our balance without additional cash strength and We to is raise reach ARR, for on believe any

through things outlook. that, you our results will Mark, over who me to and take With turn our financial Mark? let

Mark Donohue

second detail business our outlook results and afternoon, upwardly Peter, revised I'm review for then quarter good walk our and in going XXXX. Thanks, through everyone. more to

mentioned, XXX% year-over-year. Peter revenue million, As was total $XX.X up

and the Our growth ARPUs, was of higher growth again by revenue strong revenue-generating subscriptions. customer fueled new rapid acquisition activity,

second growth XXX% XX% Total ARR, of million second XX, of year-over-year quarter million, XXX% XXXX, revenue Annual recurring the year-over-year. reflecting compared the quarter recurring reflecting revenue, $XX.X million $XX.X to was XXXX, or XXXX at and June during of sequentially. $X.X in was of growth

the This million, end XX% QX strong Our of growth driver total XXXX. revenue-generating obligation, XXXX, on increased to of was June compared a at end of was number year-over-year to up revenues. XXXX XXX% XXth, subscriptions at X,XXX record Remaining the of $XXX.X primary the RPO, in the to sequentially. performance X,XXX QX as or recurring and

quarter the Adjusted gross year excludes of XXXX XX% was first in of stock-based of second to compensation, XX% margin, last quarter in compared year. the second quarter which and the X% in this

gross pure of our our primarily preceding Our margin profit in strong subscription quarter our than combined. gross that will XXXX profit note offering. demand reflects Investors was greater profit the and gross improved second for the and customer five quarters in gross

In the business all model. expanded via XX% units of quarter, were of units model, via XX% booked our second our subscription and were nearly approximately CT booked new peer distribution

recurring to continue streams. we demand margins accelerates shift continue expect We the to our as and to of to vast expand gross business model majority for distributor revenue the CT

were impairment of million the of million and second and $XX.X certain year expenses, last expenses, Adjusted one-time first on equipment, quarter the of stock-based to compared which loss $XX.X other quarter million in operating this $XX.X compensation, excludes year. in

primarily increases research in reflect investments revenue-generating positions headcount and The and and development.

Our revenue to growth provides outpace in in evidence of leverage operating the further our expenses, model. business continues which

of employees with support XXXX. XXX to presale professionals. at XX, organization, sales including was Most within exited additional sales the XXX hiring compared customer technical the the We executives, quarter and managers, March

operating We in million other which the non-cash million this charges, of year stock-based one-time in $XX.X adjusted and last quarter quarter items, year. $XX.X of and $XX.X loss, to our first compared second reduced the compensation, to million excludes

items, stock-based in compensation of the quarter million this year. quarter in and other $XX.X last improved compared million Adjusted second to $XX.X negative $XX.X first million and one-time negative which excludes to EBITDA, the a year of the

certain cash, the assets quarter Turning fixed with to the sequentially. and to million loss, to in the cash $XXX subscription balance The support changes our down net by in million restricted in sheet. driven business. capital working ended primarily cash, about equivalents We pure $XX addition

$X the We ended There this to compared are QX with at million, $X.X million driving two QX. about of dynamics inventory of change. end

on First, certain of orders. sit the their balance distribution agreement, due our to new now for goods fulfillment sheet Technology in of finished inventory Columbia

model us lease as more increase plant the require likely second the under be or net goods in accounting delivered become our of in equipment rules in The to finished a as big much there subscription and and asset. are for to our That's sit property, they more account sequential a QX. fixed property is for them pricing pure also driver

I for with updated want comments to a few close our on thinking XXXX.

trends, the hiring As we and shared with with investors last enablement percentage quarter, coming we second channel to ramping of certain half equity the our book the decisions lead in believe combined greater of year. of timing seasonality will of a

for reward longer over revenue time growth, the our believe the Technology significantly recurring to gross Columbia a with margins will that The be will because the continue all headwind that We expanded higher books. newly to ARR slight part is on associated our business. of partnership with course, for no hardware of that, be

of first are the that on current outlook. we're said, based in our raising the business, in are year, being the seeing we that our half indications performance strong Without

and to revenues in expect our million to $XX guidance between of to $XX We between $XX compared million of $XX million. earlier XXXX million

the million expect end $XX guidance to to compared $XX end $XX million $XX million with We of at and XXXX. XXXX ARR previous million million $XX compared to between our to of to of

are revised CT modeling partnership. this due ARR to outlook Again, reflects headwind expanded upwardly the we the

and and accelerated the subscription expect the to from decrease outlook resulting year, ARPUs adoption now associated with This to throughout our of pure up as We well of Evolv modeling as for in our improve prior forecast product XX% XX% gross XX%. pricing benefits the revenue to expanding Express. XX% the reflects continue for to model margins XXXX are full

raising outlook Based improving on gross are the our revenue strength profit and profitability our of our expectations, outlook. we

million. million expect and Specifically, our EBITDA million negative negative million forecast now $XX between to to we $XX range adjusted $XX to $XX of compared previous

Finally, year of We between half cash first net to remain and in we range $XXX of $XXX million to in with the continue $XXX cash. the with XXXX to exit expect breakeven million million the to cash net $XX reach million. well capitalized in to expect

gross a we the in the us confidence with of by coupled So which quarter, and strengthening our raise the business gives highlighted year. profit, summary, remainder had for leading the solid strong outlook indicators revenue to for

With that, Brian. I'll over turn the to call back

Brian Norris

Thanks, the Mark. the including Technology of in Perfect. up conferences Folks, remind question, could, Conference the for please. Craig-Hallum just first Q&A we're want ready have several going if Bank we Credit half back UBS, – Credit Deutsche major Conference. the investors Northland year, and the as our we're the Technology waiting that Securities to session. Conference, on open Suisse John, I the to we Conference,

Operator

Instructions] to first [Operator go Hugh please. going Go We're TD Cowen. ahead, with to Cunningham

Hugh Cunningham

very congratulations Question, and strong particularly your the quarter, on a foresight, to And your on very the guys, impressive. model margins. moving regarding impact on subscription-only

two I questions. So got quick

The schools any that's then any secondly, on in demand first But are And schools be terms is places to out that? opportunity? new heard think there timing. and protections is there's in then bit and Thank in international this so related you. anything happening and where more regulatory smaller on on blades side requiring than capability of updates industrial capability that more of there sensitive And this here. you've that finally, the other sort like workplace on -- sort I – but the may some a little for of there, markets is,

Peter George

much. Yes. Thank Hugh you, very

me start one. let So with the first

warehouses. the you asked industrial I think about

industrial some vertical of warehouses company, and the know, starting our we're those high like is warehouse industrial company healthcare, and deals. winning sports education, the like so focused see you professional on for verticalized big the next verticals we to As we're like

all really about world the are delivering those post-COVID. that things particularly sizable quickly. Think companies over very They're

we a year. higher in like those look verticals. So in big wins those us in see other of And next area. that like our part think done expert we've product And in be will had industrial couple mix verticals I in QX warehouse a will go vertical of you'll what that

days, early today. we be still schools potentially but we So education that see where and that It could big. rivaling with are

protocol. it's almost bigger fact, a In

So that's one.

our blades, the smaller systems train have to technology. machine terms In improve said using of models and because we're accuracy our of to we've that going efficacy we're the to learning opportunity always

a result mass use X.X as long have story on guns. that. So And which we we in a casualties, focusing and does have, is of case the in background identifying

about fact, find that But with In we've also a been today. smaller bladed more be we we that stated XXX weapon. through guns reliable day able process, to

that. to happy system setting advantage really we that. customers called some It's of about the a of we're So on our G, and new setting expect take

And funds like to comps safety security regulatory, then terms for still we're in seeing the funds, finally, important. ESR of schools the funds make

they four where Kentucky, to in just systems. funds ESR was use I fact, In buy

We Evolv sure had also to give their they to in donated more two doorway. make that systems systems

So continue to going We starts ESR of they know advantage coming any take it using don't funding. work we're to coming we our it. new can certainly and down, But when that down. make customers of to funding see comps sure them with

Hugh Cunningham

you, Pater. Thank

wondering, the are change time. And AI the to you I'm the impact But of the the while intelligence guys potential of part way of is opportunities for AI some about or AI talking occurred view has speaking. one a critical Just you fields, the that were evolve? think buzzword. that to about add-on now adjacencies or as thing generative some available In been you me have system your hot, of your sort the AI of

Peter George

recognizing long, AI AI have you about Cortex time. to how platform a thank fundamental that talking is so Well, long for we Right. for been our

involved. products we already products. And to on the ago just I -- platform. head here, analyst to that. just recognizing few We Parag we is a exciting organization. adopt your some digital central really as meeting, we think are that for you months working who thank at I our introduced And a Parag [ph], didn't to So in who digital It's been Vaish bought be you know

a Tesla products. with Disney, background and his Google and remember, and really digital StubHub great it's in got you background If so

think part an products next-generation out. products AI we that the And be will and we digital important of that come

frictionless that us products the digital to of sit you'll to look And experience sometime XXXX side can which we'll most do proposition. the that in to to more their that unique the deploy field value we of in do posture, both our new that on them, them platform want Evolv to it security of see also but on potentially be for all customers, increasing will So, this that. our able and that's is continuing

Hugh Cunningham

Peter, and strong very again Thanks, the quarter. congrats on

Peter George

Thanks a it. lot, Hugh. Appreciate

Brian Norris

Next question please?

Operator

to Markets. We'll now Capital go Please go Northland ahead. Mike from Latimore

Mike Latimore

than were quarter. Awesome improved? much. subscription, business a stays through XX% you at I The suggest that Does the peer very of bit it coming or level believe guess, Thanks, pipeline Great. that planning. it's I even little higher

Peter George

the Thanks of it the Yes. the were temporarily to on kind We question, as through for CT. stay, expect think, side. I to subscription working had just really Mike. pure models level don't pivoted We there, at that different we somewhat

a As still just side, hardware in CT the It is component doesn't too. you it. know, have subscription

half going forward, still QX model year. It subscription probably distribution Day. start we in will I stick about will we think come said and and in, But half that at and pure time, of going to will but some half, next Analyst to business That QX into kind our year. this half Tech be take Columbia believe what we of

of second in booked what we came said Tech, we across from XX% in call, of great about our only in that terms we're resellers. the place actually on enablement but Columbia quarter a As the

to go expect quite we So a up bit. that

how XX-XX some plus But they buy to next just expense. day, and our to act year up agnostic to capital, trying way just the to at the to use end coming look, it. at looking and with really really We're simplify customers, that model. and operating the the We're like verticals we're some perform trying typically be of they'll our over

Mike Latimore

to your of of percent are sense. resellers of new this [indiscernible]? certified big many your How under sell big or Yeah, purchase resellers yeah. what Makes

Peter George

good a question. Yeah, it's

activated portion We of have I coming a them. from. where where -- would our from coming it's not start, that model to we're be this of smaller channel move of over for some most is resellers point. going and probably portion. time. It's at probably – another ones a It of into to where the we’ll XX% huge It's then is will have say largest

Mike Latimore

And time the is how looking than goals? pipeline in to line, of just this Is year? average Great. last the the for coverage, relative pipeline better your it

Mark Donohue

Yeah.

We quality around marketing, be to we continue very, our pipeline pipe, registered size the demand very both themselves. focused channel development, on metrics of get all the generation, the from it, the of from deals that

We have guys our process robust and also very reference through sales a customers. to there,

pipeline. all components So three those increase our

And Xx. we right quarter, X next quality that like And be scrub, forward we now, looking feel if the pipe are, we'll make going Xx, given the or continue a we quarters. very, the have right have now, very we confident our it's metrics to into to able the

to So we're pipeline about as where development. good feeling relates we are it

as salespeople But we better last They'll grow, And that. well. with added XX new them to pipeline at continue we as and quarter. get better in bringing the we be about got to

now, rate. hire stay very but we So to we're we're the are. developing feeling salespeople close very right where And the revenue good both and about pipeline increasing behind the on quality the continue curve, and going focused to

Mike Latimore

Congrats Thanks. again. Great.

Mark Donohue

Thanks, Mike.

Peter George

Thanks, Mike.

Operator

please. ahead We'll Bennett go Craig to Go next Hallum. now Chad with

Chad Bennett

questions. to and you the product my for quarter job reiterate guys, customers. your I'll getting phenomenal execution good a on taking for Thanks

in in ask you education guys. really when want to last for Peter Mark, on just And in second Obviously, I seasonality started maybe year, second half. or the the strong seasonality had that's kicking very you believe just So half.

seasonality don't in demand before season the the these know in any is June in of open trying schools the get I there's September now, And and they so doors place quarter. if the to robust, terms the right buying things because in education really being quarter

the color seeing kind mean, imagine into just any seasonality of any in quarter? half? or as in seasonality you March can't negative So, really there's look second you're I education And the market like Any of magnitude December there? I

Mark Donohue

Mark. is thanks question comments. and the for Chad, nice Yes, the this for

about terms the to with higher our going unit year the this in the way through than In second now first we're they Columbia were seasonality, be we're Tech model, is think expect half. that of the is thinking I in transition bookings it right half we of the

there ARR the at be bit we've terms an could just putting in of on headwind construed of If little first a you gave, about of look done half the we the how how in will guidance million But it's going on just Tech that ARR this in it the $XX understand that we're reminder to impact forward. trying process. through still up. Columbia We're a and that drive year going

those of in day. comments, X,XXX. And of raise around remember, that some of the X,XXX unit very strong confident the as that with day, the the is impacts. we an And at the said thinking we the pretty And it's end we'll XX% end gross of and be feel margins ARR ARR company our to at XX% license

education player a point. of We're in by though It for largest a not is became quarter. a I'll catalyst the back was It's It's that us. growth, to zero vertical was XXX really seeing important important. QX a really year, quarter this at for that the quarter. last last in far it's our this year. a like point but in Education it vertical really QX remind at you

Peter George

we would elevation, would just I going were maybe the thought what to last change, and that we the to be And holiday to year their just second during did was continue. wondering to we a kids not is a fundamentally have education thing keep everything what one every good is QX, that up that orders add momentum of go And us half weekend, quarter is break place up quarter superintendents said. stand Mark and that safe. to tale and the only last we kids to But The to, over learn were things learned in year echo if of willing schools that safe. but keep

the them from because can kids like to just they systems, want anymore. then not their thing put Board be technology they'll it's summer the get as the safe. if It's as soon they they support get can get them in in So put and to

education that, an beyond elevated rate why in school. run So during which goes the learn that we're we is having summer just before QX

Chad Bennett

of follow-up Got then CT, of we we of just vast in color bunch a have color. we CT eat as purchase backlog? also. maybe were as that or that go of -- already of kind But to second it. units through through this in through did or terms direct them of appreciate there direct just the I in much good can No, in of backlog, process still kind a majority obviously dictate, on that quarter that more kind and half eat units, do And

Mark Donohue

but the great right it purchase certain there a of to our the anticipated. think purchase we've it, Look, than hardware year through about was do We revenue were we in that of was the run this got XX% activity And And It's did enabling the own enablement year. CT is at we the I Chad. of activity legacy heightened, think, books. we by did. our did appreciate We where It's it. is I we in first the model. what demand purchase I expected we point the half now. more actually because entire that pockets in of for still question,

from year. expect still but said model. before, of purchase will legacy depending So majority vast we through situations, the the in scan model all time-to-time go nearly old we the the of back we -- happen CT expect to on it half we certain Like the expect usage

Chad Bennett

Nearly half. it. the Got in all second

Okay. for And maybe me. one one then last

with savings are next get next-generation I of terms XX% of think still update where that give year and product in and associated kind we think early to cost savings can those if -- cost of on Just your you an I cost track? on it's the kind with out savings, there you Thanks. are

Mark Donohue

Yeah, Chad.

point. are this we working that put feel We to in and prototypes We're different at it. things good tracking nature the that on of place. plan We about

now. is think and that We little are even right the in in be confident it to I And cost better a bit be than right reductions. the ZIP code XX%, could

Chad Bennett

Okay. All right. Thanks.

Peter George

Chad. Thanks, change. no So,

Operator

Go Fitzgerald. Cantor ahead, please. to go Next, with we'll Brett Knoblauch

Brett Knoblauch

quantify like guys your any and quarter. the ARR in guess, us just of back transition for what I for was guys. new my ARR could Hi, kind the headwind that? half? we're just I taking hoping, help Thanks you the if anything from magnitude been congrats of on CT, excluding very questions strong the color guide the Maybe on CT have or seeing maybe

Mark Donohue

if Yeah. two-thirds think I think about ARR get in the to that typically mean go probably the specifics, of I subscription CT you a hard real but through we when get model, into we would transaction. -- we get

the XX% hit Tech QX QX, I middle, think somewhere in XX% anytime soon So somewhere about Columbia of XX% the XX% mark think from we'll of range ARR the coming and the being we'll in in our be number. subscription with of business transactions I pure -- to don't the those probably

So that's sort of headwind. built how in we've the

million about it's So bit little have and units probably about at talking guidance, to million. -- less look you a-third $X if a $X be our you'll of our

Brett Knoblauch

I if and education me, forgive And hospital are you. in Thank you buildings may that it. -- how Got now buildings guys many

Peter George

wasn't in but this and our approximately remarks, school That about point hospitals closing on buildings was were it in XXX at XXX prepared Bret.

Brett Knoblauch

And closer on more the the less is if I which year, do X,XXX maybe to you would the guess, said have in back the guys last what than back half of would you it, year. half in X,XXX units that's, you a added guess year. of call just you Perfect. end I the of But the I be know guide. at I one the math, little units

what quarter, guess, I a especially single I year-over-year what grown -- I have So like units, thinking mean you basis. we on every there? be feel guys should

or services to So continue half, just level building back deployment there cadence? some why that of is not I would the in guess

Peter George

Yes.

-- and I as to mean it's is through deployments, about we're I'd they can't QX, deals. think we ship of about city. to two want a shipping ways. we and right? install come think mostly things more in think the going book to booked QX about don't be We it's I a when that we got in exactly what's in. when out have say sure deals customer to then We're and -- XXX% QX, systems. shipping things we we happen going We it the

-- little don't a we backlog as if want they higher may be we'd could soon So like. as them

the to there bit. trying kind needle we're thread little of So a

Brett Knoblauch

and you Thank Understood. congrats again, guys.

Brian Norris

couple question, please Great. John, you. Got time next a more here. Thank for

Operator

Alex to from We're ahead, Go going Stifel. please. Sharp

Unidentified Analyst

is on Good Alec evening. Brad This Reback. [ph] for

here do there. while? want those little the on to assuming quarter units of up comments Following more capacity customers of to install what XXX been a kind to type you that's have for it? the Do the than level XXX per

Peter George

that ceiling -- this doing at We're there's -- -- supply of building point. parts We're only and great inventory we from capacity units not that job not so the building of a chain the think I amount constrained we have. in Yes. there's obviously -- perspective the exists and

an it we drive out at that time. this But extra but to there way. put capacity quite -- systems these have Let's it's

Unidentified Analyst

similar you second year, that, And this quarter strongest be do think? Great. customer at to half, looking season December to then -- outpace guys will the expect for last or you add do the summer

Peter George

Well, seasonality XH a we thing. looking and we've -- look, I don't -- XH at been think I as

right know hasn't -- this we-- don't in good in. going QX business QX about mature have in now. Our happening that have happen happen But time. we which specifics enough But to -- feel and is pipeline to are to things we what's what's any about we at good going on more our exactly month

Unidentified Analyst

Awesome. Thanks, guys.

Brian Norris

there Perfect. Thank any John, them get Alec. through you, questions are we all? other

Operator

callers no additional have We in queue.

Brian Norris

for remarks. some turn things closing George Peter to I'll over And back Okay.

Peter George

really and thank be Yes. feel for up. hit talked Thanks, and RPO. about taking are Brian. -- trends us record the a Those so today. Look going strong are ARPU We acquisition. QX We good to of park out had everyone, the good really had our with the of We just for The the revenue We size it results. great earnings We going all time much with about the now. deals ARR up. customer you company.

expansion. particularly good margin feel about the We gross

a feel business, we the Of the which reflect had health to of it’s lot with but course, to do starting that, the subscription great about.

We're productivity of as company, a salespeople of getting a than a We're before. from seeing lot of leverage lot more our leverage. in ever model, OpEx our

ARR feel paying to company. from it's and about dividends TCV continue our we've big pivot the to and doubling made this We ARR, for great

future to and I any fully then mentioned and cash Mark really feel knowing reiterated, we good being we capital. flow as breakeven capitalized finally, without And can get about

everybody's So feeling the we next business. in results. the to look earnings appreciate you very good and again support about everybody. We forward Thanks, to talking

Operator

for gentlemen, call event AT&T ladies you participation does And thank and using conferencing. and your conclude We for that today. for your conference

disconnect. now may You

Evolv Technologies (EVLV) 10 Aug 232023 Q2 Earnings call transcript