Evolv Technologies Holdings, Inc.

Good afternoon and welcome to the Evolve Technology first quarter earnings result conference call. All participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's call, Brian Norris, Senior Vice President of Finance and Investor Relations for Evolve Technology. Please go ahead, sir.

Thank you and good afternoon, everyone, and welcome to the call. I'm joined here today by John Kaczorski, our President and Chief Executive Officer, and Chris Cutzer, our Chief Financial Officer. This afternoon, after the market closed, we issued a press release announcing our first quarter 2025 results and our business outlook for the year. This press release has been furnished with the SEC and is also available on the IR section of our website. There, investors can also access the form 12B25 that we filed on May 15, 2025, which was a required SEC filing, explaining why we needed more time to finalize our Q125 financials due to the effort spent completing our 2024 filings. As required, that filing also included preliminary estimates for Q125 results, and those estimates are in line with the results we issued this evening. During today's call, we will make forward-looking statements within the meeting of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements relate to our current expectations and views of future events, including but not limited to statements regarding our future operations, growth, and financial results, our potential for growth and ability to gain new customers, demand for our products and offerings, and our ability to meet our business outlook. 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 these forward-looking statements, which because of a number of risks and uncertainties, including without limitation, the risk factors set forth under the caption risk factors in our annual report on Form 10-K for the year ended December 31, 2024, filed with the SEC on April 28, 2025. And our quarterly report on Form 10-Q for the three months ended March 31, 2025, filed with the SEC earlier today. The forward-looking statements made today represent our views as of May 20, 2025. Although we believe that the expectations reflected in these statements are reasonable, we cannot guarantee that future results, performance, or the events and circumstances reflected in our forward-looking statements will be achieved or will occur. Except as may be required by applicable law, we disclaim any obligation to update them to reflect future events or circumstances. Our commentary today will also include non-GAAP financial measures, which we believe provide additional insights for investors. These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP. These measures include adjusted gross profit, adjusted gross margin, adjusted operating expenses, adjusted operating income, adjusted EBITDA, adjusted EBITDA margin, adjusted earnings, and adjusted earnings per diluted share. Reconciliations between these non-GAAP measures and the most directly comparable GAAP measures can be found in our press release issued today. Please note that our definition of these measures may differ from similarly titled metrics presented by other companies. We will be discussing key metrics such as annual recurring revenue, or ARR, remaining performance obligation, or RPO, and total number of subscriptions, each of which we believe is helpful to investors in understanding the progress we are making as a business. Before I turn things over to John, I want to briefly share some details of our upcoming investor outreach plans. We plan to return to the conference circuit here in Q2 with three events during the quarter. The Craig Hallam Conference in Minneapolis and the Cowan Technology Conference, both being held later this month, and the Northland Capital Conference in June. We look forward to seeing investors at those events. With that, I'll like to turn the call over to John. John?

Thank you, Brian, and thanks everyone for joining us today. Before we get into our prepared remarks, since this marks our first call together as CEO and CFO, Chris and I are going to take a moment to introduce ourselves. As I speak with you today on my first earnings call, I do so with a deep sense of responsibility and optimism. In the brief time I've been with the company, I've been impressed by the commitment of our customers, partners, employees, and shareholders. Their passion for what we do drives us every day, and it's more important than ever as we enter a new phase of growth. I joined Evolve in December, bringing over 20 years of experience at Motorola Solutions, where I helped build a market-leading video security business in addition to leadership roles in engineering, sales, and services. That experience taught me valuable lessons about growing technology businesses and staying close to customer needs. I also served on Evolve's board from January 2022 to November 2023, which gave me a deeper understanding of the company's mission and the potential for our technology. I joined Evolve because I believe deeply in the mission, making the world a safer place. Gun violence, which continues to rage across the country, has dominated headlines on almost a daily basis over the past eight weeks. from a student union in Tallahassee to a food hall in downtown Oklahoma City, from a funeral service in Hartford, Connecticut, to a spring car show in New Mexico, to a school in Madison, Wisconsin. The headlines have been a sobering reminder of the ongoing toll of gun violence across America. Evolve has developed a technology that enables schools, hospitals, distribution warehouses, tourist attractions, and other facilities to implement weapons screening in places where it simply wasn't practical before. There are hundreds of thousands of entrances across the country that could benefit from AI-based weapons detection. And today, we're only in around 6,600 of them. We're still very much in the early innings of adoption, and the potential market opportunity is enormous. This is my first time speaking with many of you, so I want to take a moment to share how I think about the drivers of our business model. At its core, our business rests on the total number of subscriptions. The first step in modeling a business like ours is the starting annual recurring revenue base, which was approximately $100 million as of December 31, 2024. That reflected a subscription base of approximately 6,100 units at that time. As we walked into 2025, that recurring revenue base formed a solid foundation to about 78% of the revenue plan we're outlining for 2025. We expect the additional revenue to come from new customer acquisition and expanded deployments with existing customers, which will drive our volume of subscriptions incrementally higher. To that end, we expect new subscriber growth in 2025 to be at least in line with what we delivered in 2024 and potentially greater. So what does that mean for investors? Simply put, this should be a consistent and predictable business with a well-defined range of outcomes. That's the hallmark of a strong subscription model. We believe this gives us a clear path to building a highly valuable business, one capable of delivering strong growth, expanding adjusted EBITDA margins, and increasing free cash flow. In a few minutes, Chris will walk through some thoughts on our long-term operating model and explain why we believe there may be more leverage in the business than we've previously communicated. I'm focused on advancing our strategy and taking the company to the next stage of its maturity. Above all, I want to assure you that our commitment to integrity, transparency, and accountability will guide every decision we make. We remain dedicated to maintaining open and honest communication with all our stakeholders as we work to achieve our long-term goals. Let me pause there for a moment and ask Chris to share a little bit about himself.