Security company shares Evolv Technologies Holdings (NASDAQ: EVLV) jumped as much as 26.1% in trading on Thursday after reporting third-quarter 2021 financial results. Shares closed the day up 17.9%.
Total revenue for the quarter increased 473% from a year ago to $8.4 million, and the total contract value of orders booked during the quarter was $16.9 million . Net income was $23.2 million in the quarter, or $0.15 per share, but that included $41.7 million in fair value gains on items.
Management also slightly increased its bookings and revenue guidance for the full year. The total contract value of bookings is now expected to be between $53 million and $57 million, up $2 million from the August forecast. Revenue forecasts were also $2 million at the high end, between $20 and $23 million.
There is strong momentum for Evolv’s products in this market. With security being a major concern for venues with large gatherings, the market is expected to grow. We’re also seeing the business make a quick comeback after a downturn during the pandemic.
What investors will want to see over the next few quarters is a move towards profitability. Gross profit is high at about 50% of revenue, but operating losses were double Evolv’s revenue in the third quarter, which is not sustainable in the long term. We need to see more growth and better operating margins for this to be a big winner for investors.
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