Evolv Technologies Holdings, Inc.

Good afternoon and welcome to the Evolve second quarter 2021 conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. As a reminder, this conference is being recorded. I would like to now turn the conference over to our host, Vice President of Investor Relations of Evolve Technology, Mr. Brian Norris. Please go ahead.

Thank you and good afternoon, everyone, and welcome to the call. I'm joined here today by Peter George, our Chief Executive Officer, and Peter Faubert, our Chief Financial Officer. This afternoon, after the market closed, we issued a press release announcing our second quarter results and our business outlook for 2021. This release is available on all major news outlets as well as on the IR section of our website. During today's call, we will make forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the safe harbor provisions of the U.S. Private Security Litigation Reform Act of 1995 that relate to our current expectations and views of future events. All forward-looking statements are subject to material risks, uncertainties, and assumptions, some of which are beyond our control. Actual events or financial results may differ materially from those forward-looking statements as a result of a number of risks and uncertainties, including, without limitation, the risk factors included in our proxy statement and prospectus and updated in our Form 8-K, filed with the SEC on June 28, 2021, and July 22, 2021, respectively, as well as other periodic filings with the SEC. The forward-looking statements made today represent our views as of August 16, 2021. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee the future results, levels of activity, performance in events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by applicable law, we disclaim any obligation to update them to reflect future events or circumstances. A replay of today's call will be available for two weeks by dialing 1-866-207-1041 Or international callers can call 1-402-970-0847 and using access code 573-7477. Or by accessing the webcast replay on the company's investor relations website at http://ir.evolvetechnology.com. Before I hand the call over to Peter, I'd like to state that we plan to operate an active investor relations program. and look forward to engaging with the Wall Street community as a public company. We welcome the opportunity to attend conferences, non-deal roadshows, and other IR events, and we will use our earnings call each quarter as a platform to share the details of upcoming events, which we will also post on our IR website. To learn more about our IR outreach plans, please feel free to contact me at bnorris at evolvedtechnology.com. With that, I'll turn the call over to our CEO, Peter George. Peter? Peter George Thanks, Brian.

Good afternoon, everyone, and thank you for joining us today. I'm Peter George, CEO of Evolve Technology, the human security company. We are delighted to be here today, hosting our first earnings conference call as a public company following our launch into the public markets on July 19th. We appreciate the support from our existing shareholders and the confidence our new investors have expressed by joining us on what we believe will be a great journey ahead. We're pleased to be reporting strong second quarter results. Two of the KPIs that we consider to be key measures of our progress are revenue and TCV, or total contract value of orders booked. We delivered record results in both metrics in Q2 and are off to a strong start in Q3. Revenue was $4.5 million in the second quarter, up 590% year-over-year. TCV was $10.9 million in the second quarter, up 361% year-over-year. In a few moments, Peter Probert, our CFO, will share more information about our results and our outlook for 2021. Since this is our first earnings release conference call, I'm going to take a few moments to introduce Evolve Technology. The company was founded in 2013 by threat detection and analytics experts Mike Ellenbogen and Anil Chakara, who were motivated by the then-recent tragedies at Sandy Hook Elementary School and the Boston Marathon. In the wake of escalating gun violence, we recognize the need for a better way to ensure the physical security of large gatherings of people, whether it was at a ball game, a theme park, a concert, a school, a church, or even an office building. Historically, if these venues had any type of physical security device, it was an outdated metal detector which subjected visitors to a prison or airport-like security experience. we had a vision for a new and disruptive way to protect the public from mass casualty events while improving their visitor experience. A platform powered by advanced AI technology and sensors and delivered to customers via a subscription model. With a team of some of the industry's foremost experts in both physical and cybersecurity and the support and guidance of our investors like Bill Gates, Jeff Bishop Finback Investment Partners, DCVC, General Catalyst, Lux Capital, Motorola Solutions, SignWave Ventures, and Stanley Ventures, we invested tens of millions of dollars in R&D, and the result today is Evolve Express, the industry's leading AI-based weapons detection security screening platform. Our offering is now deployed to customers across all types and industries. Our flagship product, the Vault Express, is fundamentally different than any other solution in the market today. First of all, it's more than 10 times faster than traditional metal detectors and can screen 3,600 people per hour. Using AI and dozens and dozens of sensors, it can discriminate between a weapon, like a firearm, and a personal item, like a phone, in under 250 milliseconds, and that's incredibly hard to do. Our AI machine learning models are becoming more sophisticated every day. We believe our technology and big data mode is widening every day with every customer and every visitor screen. And again, because of software, we can add new threat detection features like elevated body temperature to detect COVID-19, and other updates to our platform in real time and deliver those enhancements to our customers through our multi-cloud environment. The real validation of our technology is, of course, in customer adoption, which continued to accelerate in the second quarter as the pandemic has forced venue operators to turn to innovative solutions to support the safe reopening of their facilities. We were already privileged to have many iconic customers like the Lincoln Center, Georgia Aquarium, the Space Needle, Six Flags, the Chicago Cubs, and Manchester City Football. We had a very strong new customer additions in the second quarter with key wins at Butler University, the Four Winds Casino, the Fox Theater, the Paramount Theater, the National World War II Museum, Major League Soccer's The Crew, and Brooklyn Bowl in Las Vegas. These are exciting wins, so why do they choose us? Time and time again, it's for one or more of three compelling reasons. First, we deliver dramatically improved security, which makes our customers' venues safer than ever, ever before. Second, we deliver a superior visitor experience, as our customers' customers can enter the venue without ever slowing down, without ever divesting of their personal items, and without forming a single file close contact line. In fact, they enter without breaking stride. And third, in our ability to deliver significant operational efficiencies that drives up to 70% cost savings for venue operators. we also reduced the physical footprint required by security operators, allowing our customers to reclaim space for visitor experiences and revenue-generating activities. The Columbus crew of Major League Soccer recently launched their new state-of-the-art stadium, Lower.com Field, and they're using Evolve to screen all of their entry points. The fan experience and safety were crucial elements to the design, of lower.com field, and the crew's goal was to provide a world-class experience for all fans to enter and move around the stadium safely. They were looking for the most technologically advanced partners to bring their vision for the stadium to life. Evolve was selected after running a competitive bake-off due to best-in-class technology and the speed with which fans can walk through screening. Not only is the stadium more secure and the experience friction-free for its fans, but the stadium is also driving more people to concessions faster, which in turn drives revenue-generating opportunities for the crew. Another example is the Paramount Theater in Oakland, California. Patron safety has always been the focus, but they struggle to identify systems or methods that could be access management processes effective and not slow or cumbersome. They are now deploying Evolve to help them achieve their goals of keeping unwanted risks out while making the ingress process smooth for patrons. When you consider the value that our customers are realizing, it's no surprise that the market opportunity for AI-based weapons detection screening is very large with a global TAM that we estimate to be $20 billion annually. This is a conservative, bottoms-up pan focused on 10 specific vertical markets, warehouse, distribution and manufacturing, performing arts and entertainment, tourist and cultural institutions, sporting, government, hospitality and casinos, hospitals, houses of worship, education, and finally, office buildings. These markets that we are in today where we have referenceable customers. And rather than include every venue in each of these verticals, we've limited our TAM estimate to only those venues having the optimal size to consider this type of technology in the near term. As a result, we've identified nearly 700,000 digital thresholds at over 400,000 prospect locations. We've assumed a $30,000 per year per site referring revenue opportunity at each of these thresholds, driving a $20 billion total available market. We're the leader in AI-based weapon screening market with 500 systems in service as of June 30, 2021. Yet we've identified about 700,000 digital threshold candidates. This represents a penetration rate today which would round to a zero in a market valued today at $20 billion. We are uniquely democratizing security in this market with an AI-based weapons detection platform delivered via a powerful SaaS model. Now you know why we're so looking forward to exploring this great opportunity ahead. We have a three-pronged growth to address this opportunity. The first, our Land and Expand initiative. It's focused on six key markets where we have presence today. Tourist sites, performing arts and entertainment, theme parks, industrial workplaces, municipal government, and finally, professional sports. We're going to build from these beachheads to capture what we believe today is 175 million annual reoccurring revenue opportunities. Second, we'll expand into adjacent vertical markets like education and hospitals and expand into core verticals and targeted international markets. We estimate these adjacent markets and international opportunities represent an incremental $300 million in annual reoccurring revenue potential. Third, we're going to focus on expanding to our channel partners. We are making good progress. In fact, today, we have 32 distributors in countries throughout Europe, Middle East, and Africa and Asia all authorized to sell our systems. We recently announced a strategic partnership with Motorola Solutions. This partnership is unique as Motorola will be reselling our Express platform with integrated value-added features under the Motorola Solutions logo. and offering a comprehensive premium security offering through their global sales force and their channel partners. We are encouraged by the promise of our combined solutions and look forward to the partnership's growth. We also plan to leverage the strength and reach of our other partners, such as Johnson Controls and Stanley Black & Decker, to fully capitalize on the international market expansion. We look forward to updating you on our progress on the channel and international front as we continue to explore those markets together. So, in summary, we are pleased with our strong start as a public company and the record results we delivered in Q2. We continue to see solid momentum in our key markets fueled by the growing recognition of the value we're able to deliver to our expanding roster of customers. We're encouraged by the strong start in Q3, which we believe positions us well to execute on our growth plans for 2021 and 2022. So, with that, let me turn it over to Peter Probert to review our financial results in more detail and our outlook for the balance of the year. Peter?