Why Evolv Technologies Stock Tumbled by 13% Today
What happened
Security tech stock Evolv Technologies Holdings (NASDAQ: EVLV) was hardly looking like a secure investment on Thursday. The company's share price fell by more than 13% after management published a set of preliminary quarterly results. This, on a day when the S&P 500 index slumped by a relatively modest 0.6%.
So what
Evolv, which specializes in next-generation metal detectors for precision security screening, provided several estimates for its third quarter. The company anticipates it will book total revenue of $19.3 million to $19.8 million, with annual recurring revenue (ARR) landing at $65.5 million to $66 million as of the end of the period.
Those ranges are well above the third-quarter 2022 figures. For that frame, Evolv posted revenue of $16.5 million, while its quarter-end ARR was $28.7 million. It was well in the red on the bottom line, however, with an $18.6 million ($0.13 per share) net loss.
In its preliminary results for the third quarter of 2023, Evolv did not proffer a bottom-line forecast.
Now what
Evolv also raised its guidance for the entirety of 2023. It believes total revenue will come in at $75 million to $77 million; previously it was estimating $70 million to $75 million. End-period ARR is now anticipated to be $73 million to $75 million, against the prior guidance of $70 million to $72 million. It did not provide any forecast for net profit or loss.
What investors were likely concerned with is growth -- even at the top end of the bolstered revenue guidance, Evolv's top-line improvement would be 36% for the year. That'd represent quite a comedown from the more than doubling of revenue in 2022 compared to the previous year. 2021 revenue, meanwhile, was nearly five times that of 2020.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
