Evolv Technologies Holdings, Inc. (EVLV) Earnings Call Transcript & Summary

Ladies and gentlemen, please welcome Brian Norris, Senior Vice President, Finance and Investor Relations.

Good morning, everybody. Thanks for joining us. Really appreciate it. Welcome to Fenway Park, one of our many great customers, 600-plus customers. This is one of our most recent customers. Welcome to Fenway Park, home of the nine time World Series champions. I know we can't hold a candle to our friends from New York on that, but welcome. And I hope our New York friends are not getting a rash being here at Fenway Park, but welcome, welcome. We really appreciate you spending the time with us. This is a historic place. This is a great location, the oldest ballpark in the country, 113, 114 years old now. We appreciate you taking the trip. Not a lot of real-time or live analyst days occur, although they're starting to come back, and we really appreciate you spending the time with us. So welcome. On behalf of the executive team, the management team here at the company, we welcome you to Fenway Park. Thank you for joining us. My name is Brian Norris. I help out in the finance team for the company. A little bit about myself. I've been in Boston Technology for 20 -- almost 30 years now, I guess. So I know a lot of our paths have crossed before. There's a lot of familiar faces here. Maybe we ran into each other at Acme Packet, where I spent about 7 years. After that, I spent a little bit of time in a company called Fleetmatics, which was acquired by Verizon. A little bit of time at Lytx as FP&A in Treasury. And I've had the great, great pleasure of being here for two years. Evolv Technology is an incredibly special place. We are doing -- we think we're working on some really, really hard problems. We are trying to make the world safer. And we appreciate your shared vision and what we're trying to do here. Your support, your engagement, your willingness to want to learn more about our company. And so we've put together what we think is a really fantastic day, but -- and hopefully, it's informative. Couple of things that I'm going to go through. I'm just going to be here with you for a couple of minutes. I'm going to review our safe harbor language briefly. I'm going to introduce our speakers, which are all sitting over here at the left side of the -- or your right side of the room. Talk a little bit about the agenda and just have a couple of housekeeping things before we'll turn things over. So safe fiber language. I'm not going to read this slide. Here's what I will say, as I channel my inner General Counsel here who's in the room. We're going to use forward-looking -- we're going to discuss forward-looking information in today's call. We're also going to use non-GAAP language and non-GAAP results and forecast, which obviously do not conform with GAAP results. Luckily, we provide a lot of information on our website, which you'll find in our last earnings release, the reasons for the use of non-GAAP language and all of the risk factors associated with our business, which can be found in our 10-Ks and 10-Qs. On behalf of the management team, I would encourage you to review those risk factors to find out more. Okay. A little bit about today's presenters. We have a full lineup. First off, we're going to have Peter George, our President and CEO, will be here in just a few minutes. Mike Ellenbogen, our Chief Innovation Officer and Co-Founder of the business will be with us. Dr. Alec Rose is our Chief Scientist. He'll be up here speaking in just a few minutes. A.J. De Rosa, who is our Chief Revenue Officer, will be here, along with Betsy Fallon, who is our Vice President of Customer Success. Jill Lemond, who's our Director of Education, will be up here. And then we've also got Anil Chitkara, who is a Co-Founder of the business and Chief Growth Officer, is going to lead us through a customer panel discussion, which we're really excited about welcoming a couple of our customers will be. And then Mark Donohue, our Chief Financial Officer, will be up here in just a few -- just a little bit later after the lunch time. Briefly on the agenda. I think this agenda can be found in a QR code, which is available on your -- on the lose sides. You'll see a QR code that will lock your -- or unlock presentation material today. It will also unlock this agenda. We're going to spend just a few minutes wrapping up here. Peter George will lead us in a discussion of the next decade of growth. And then we've got -- Mike Ellenbogen is going to be talking about growing through innovation and why we think we're well positioned to do just that. Dr. Rose will be up after that to really unlock the technology, like how does it work? Why does it work? Why is it different? He'll lead us through that discussion. We'll take a brief break. Rick Abraham and the technical support team will lead us in coffee and demo stations over here. I'd really encourage you to take a peek at. We've got Evolv Express. We've got Evolv Insights. We've got a fairly significant setup over there. Then A.J. and Betsy will talk about how we're capturing the market opportunity. Encourage you to listen to kind of how we're attacking the -- we think is a very significant total addressable market. And more importantly, how we're helping our customers overcome their challenges. Then we're going to bring Jill Lemond up here, who's going to do a case study kickoff and she has an incredible story that I think you'll find incredibly compelling and really bring to life why we're doing what we're doing here. We're going to break briefly for lunch. It will be over here. Then I'd ask you to sit -- if you could return to your seats in those 15 minutes. We have a 12:00 customer panel that Anil is going to lead us in with, again, two of our customers are here. Then we're going to take a very brief break, and then Mark Donohue is going to lead us in a business model discussion. We'll end the day with an executive Q&A, so an opportunity for you to ask any questions that you may have at that time. So to that point, I would ask you to possibly, if you could, hold your questions during the presentations for each of the speakers who is going to hold those questions. You can send those to me at ir@evolvtechnology.com and we'll summarize those questions, and we'll lead a moderated panel discussion later in the afternoon. We'll also -- if questions come in from the Internet as well. A few housekeeping things before we get started here. If you haven't already noticed, there's power at every desk here at every table. There's an open wireless network here for your availability. So please use them. If you need a conference room, let us know. Restrooms are located on either side of the -- of this room over here and over there. Webcast, so we are live webcasting this event, as you'd expect that we would. I would say that if you have questions, again, if we'd ask you to hold those to the end, we will broadcast those questions. We'll have somebody with a microphone who will be making sure that we get those questions asked and simultaneously webcast. Lastly, presentation materials. As I mentioned, everything that we share today, you can have it. It is yours to keep. It will be available in a QR code. Keep me honest, Olivia, but we've got QR codes, I think at everybody's desk. That's your electronic key to get into a website. And as the presenters -- once the presenters have completed the presentation, their material, that material will then go live up on the Internet in that -- sorry, in that QR code, okay? I think I've covered everything. I think that's it. I think we're ready.

Ladies and gentlemen, please welcome Peter George, President -- sorry. [Presentation]

Ladies and gentlemen, please welcome Peter George, President and Chief Executive Officer.

So good morning, everybody. So happy that you're here in the special place. As Brian mentioned, this building has hollowed ground for everyone in Boston. And whether you love the team or not, you will have to love Fenway. And we're so happy you came to enjoy this place with us. As you know, there's going to be a tour later on today, so we want you to enjoy that. You just saw a really important video for the company, and it talks a lot about our history. Today is about looking to the future. And we want you to get to know our team, which is part of what today is about, but also our product strategy, our company strategy, what we think is possible for the future of the company. Just as you saw in the video, all the great things that happened in Boston, sometimes bad things happened, too. This happens to be ground zero for the Boston Marathon Bombing, which was the inspiration for our founders to build Evolv. So sometimes in good places, bad things happen, but always the human spirit can overcome that. We're the human security company, and we'd like to think we embody that in Boston and being Boston strong. So I'm going to spend 30 minutes, I promise no more, talking about our plans, my plans, our team's plans for building the most important company in the physical security industry in the next decade. Let me start by sharing with you a little bit of my background, and we're all going to get a chance to do this so that you get to know us a little bit. As you can see here, I have spent about 30 years in the network security and cybersecurity space. About 25 years ago, I had the great privilege of running Bay Networks and Nortel Networks in Europe, Middle East and Africa. My wife, Diane, and our 4 children lived in France for 7 years, phenomenal experience, and we were part of the transformation of the fiber optic world while we were over there. When I got back, I led Crossbeam Systems, a high-performance firewall company. We partnered with Check Point. And then I had the privilege of leading Fidelis cybersecurity. Fidelis was a -- was and is a malware protection company. We competed against FireEye in the cyber space. And in fact, when the DNC breach happened with the Hillary Clinton server, along with CrowdStrike and FireEye, Fidelis actually did the forensics work to discover that the Russians had compromised our server. So we were doing really, really good work in the cybersecurity world. And I got also a chance to see some very transformative companies when I was there. One of them is Palo Alto Networks. So does anyone follow or invest in Palo Alto Networks? Okay, a few people, right? Well, I was there in the early days of Palo Alto. When they came out with this crazy thing called the next-generation firewall. And Check Point had a Stateful inspection firewall. And the point is when they came, they were a hardware company with one product, they were an appliance company, and nobody think gave them a chance that they would transform cybersecurity. Twenty years later, they went from being a hardware appliance to a virtual appliance, to a cloud company and now a container company. They came from being a one-product company, 23 products in 13 categories recognized by Gartner. They are now a $56 billion market cap company with $8 billion of ARR. And they transformed the security space, and today are the largest purpose-built stand-alone cyber company in the industry. Absolutely amazing. They did that to cybersecurity. We think we can do that to physical security. So after 25 years of being in cybersecurity, if you're following cybersecurity, you've probably been to the RSA Security Conference in Moscone. I'm guessing you've been there. Well, I've been there for 20 years. My last year, there were 5,000 companies, all handwaving that they could stop the next SolarWinds breach. Overfunded area. And yes, cyber is really, really important. It's important to protect IP, intellectual property, from advanced adversaries, but there's nothing more important than saving lives. And I got a chance -- that got old for me, and I got a chance actually to meet Evolv, meet our co-founders, meet Dr. Rose. And when I learned about the lack of innovation in the physical security world, I was shocked. When I learned that to keep weapons out of places, that the only thing available was an 80-year-old metal detector, it became very, very clear to me that we could build a big enduring durable company for a long, long time. It was very obvious because this team, Mike, Anil, Dr. Rose and that founding technical team, used all those technologies I was used to using in cyber. Advanced sensors, artificial intelligence, machine learning models, big data and software to solve the problem. And we have to compete against a metal detector? I'm all in. Let's go do that. So I joined the company five years ago, and I've been on this journey with the executive team, taking the lessons that we learned in our history. And for me, it was cybersecurity, watching companies transform and disrupt markets and get this company positioned to do the same thing, with great technology, with a SaaS model, with a high volume go-to-market strategy, all the things that we saw work we're bringing here, and we're the only ones doing it. So we have a lot of confidence that we can have a decade of really, really good growth. And, b, the human security company that we were born to be. So it starts with a couple of things. And you probably, if you came last night or talked to any of us, starts with our mission, right, to make the world a safer place. And I can tell everybody here in the room that everybody that comes to the company and everybody that stays in the company, the #1 thing we care and think about is that, period, right? Really, really important part of who we are as a company. The other important thing other than our amazing people is we have amazing technology, right? Sensors and software and artificial intelligence are getting people to space, are allowing cars to drive autonomously. Why shouldn't we be able to use that to keep the world safer place? So as you can see in this diagram, early on, our technical team discovered that if we deploy a bunch of really great advanced sensors and sensor software and biometrics and computer vision, we added to a corpus of data, scans for us at 600 million. Nobody has those. We apply machine learning models so we can do things at scale and speed nobody else can do. And then we can put our system Express at the edge and make sure we can find weapons on people at the pace of life. That's how we do it. And you're going to hear a lot more about the technology as we go forward. Okay. Five key messages I hope everybody remembers from today. The first one is, we're a category maker and a world leader in AI weapons detection. We have a substantial lead right now in the industry. Our plan is to extend the lead. You can count on that from us. So AI weapons detection. Secondly, we have a really big market to go get, right? This is a $20 billion TAM, $2 billion of it is regulated, but the rest is underpenetrated. Think about all those places, those schools, those hospitals where people gather that always could get a metal detector, but guess what they did? Nothing, because who wants the prison-like experience in their performing arts venue. So that's the market that we're going after. We have a deep commitment to product innovation. It starts with our product and our team and our technology, but it doesn't stop there. Not only do we have a great sensor platform in Cortex AI, but we also have a lot of digital capability. And I wanted to make sure that we're going to extend our digital capability. So we just brought into the company a great digital executive. He's going to -- he is our Chief Digital Products Officer. We went fishing on the West Coast pond to find him. Background at Disney, background at StubHub, background at Google, and he was Head of Products -- Digital Products at Tesla. So Parag, I'm going to ask you to stand up in the back. Say hi to Parag Vaish, who just joined the company. How many weeks ago, Parag? Four weeks ago. And I can tell you he's already come in and made a really big difference by listening, right, to learning everything Evolv. So we really welcome him. And I think you can expect to see some of the digital products I talk about and probably a bunch of others, we don't know about yet to be part of our platform going forward. And then we're going to talk a lot about being -- creating customers for life, right? Winning customers. We have them for four years, guys. We have a SaaS subscription for four years, and it's an unbelievable time to help them keep their venues safe, keep their students safe. It's an unbelievable time to have them buy more products from us and capabilities. All of them want more from us. You can ask the two that are here today, but they all want us to do more because, guess what? They're walking through our sensors and cameras and AI already, do more for me. So we're going to try to do that and make sure that we expand our product portfolio and have a very, very high renewal rate for the company going forward. And then finally, and you're going to hear a lot of this from Mark at 1:00. So everyone ought to be in their seats at 1:00 because we have a really -- a lot to tell you about this. But we're going to show you our plans, our strategy and the financial plan for sustained long-term growth in the company, period. That's what we're focused on. And we've already announced to the market that we're going to get to cash flow breakeven in the next 24 months with $75 million to $100 million of cash still in the bank. And at 1:00, you may even hear that may get accelerated, we'll see. All right. Okay. So let me take you a little bit on the journey of where we're going in the future and just go along this ride with me, and I'm going to try to be crisp. But for us, a lot of this started during the COVID days. And you might imagine, we started selling our systems before COVID, but during COVID, everything got turned off. As we were talking to our customers during COVID, we were seeing the following trends emerge in the industry, right? How do people coming out of COVID gather again safely? Free from weapons and free from threats? How do we gather together in a healthy way, right? COVID weaponized people, but there's a lot of mental illness post-COVID in the world today. How do we create a frictionless and touchless experience when we get together? Nobody wanted to stand in any line anymore or have anyone touch their stuff. So there's a new proxy to gather, right, that make it friction, make it touchless and then know who I am. If data is the new oil, understand who I am and the data about me, so I can create a great experience for my VIP but also a different experience if you're a high threat or high-risk person. So those are the big trends that have been driving our growth. Okay. Let's start with safety because this is really important. You can see the stats here. You see it on TV every day. Two mass shootings in America every day. It's crazy. We have a gun violence epidemic in this country, right? This is cowboys and Indians, too many guns, more guns than people in this country. And then in 2022, gun violence surpassed car accidents as the #1 cause of death of people under 18. I mean guys, I have four kids, you have kids. We always worried about our kids getting behind the wheel of a car, right? Are they going to have an accident? Now we have to worry about them getting shot by a gun. It's crazy. And you can see the stats here, 321 million people a day shooting each other. And how many dying and how many of those are kids. So we have a real problem here that needs to be fixed. And technology can help. I mentioned the other epidemic. We have an anxiety epidemic in the country, right? This is -- we did a study with kids in school, and you can see the anxiety. Some of you know this because I've mentioned to you before in our calls. My daughter is a second grade teacher. She taught in San Jose, in San Francisco and now in Boston in some of the toughest schools in the cities, that's where she goes. And when she told me that on the second day of school, she's hiding under a desk with her 8-year olds, teaching them how to hide from a bad guy with a gun, you wonder why we have an epidemic of anxiety in the country. It starts at 8, right? Then you add cyber bullying and you see these kinds of threats where people are actually bringing weapons to school not because they want to hurt somebody because they don't feel safe, right? One out of every 18 teenagers carrying a weapon. That didn't happen when I grew up, and I know it was a long time, but it just didn't happen, right? So we have lots of epidemics here in the country that we can help with. And we're going to have a deep discussion about what it means for schools. So what things can we do to help? Technology can help. If the second amendment is not going to change and we don't see that happening anytime soon, technology is helping the most important things in the world. Right? Climate change and autonomous driving, let's keep our people safe, and we can do that. So here are the challenges that our customers tell us every day, and again, you'll hear this about what they're facing. Escalating threats, if you put that old analog technology in, long lines in a prison-like environment, nobody likes that. You can't find people to work because they don't feel safe. And nobody has visibility into what's happening into their venue anymore. These are the challenges that our customers have. I started by saying technology can help, and we think ours can. And it starts with our platform, our digital platform. We're disrupting the physical security world with a digital platform. And this is our system architecture. Mike and Dr. Rose are going to talk a lot about this. This is all about prevention. This is our secret sauce, the coupling of sensors and AI and threat classification to identify the needle in the haystack because guess what, most people aren't carrying weapons. And let's let those people come into the ballpark or the stadium, but let's use technology to find the people that do and just completely flip the model. So this is our architecture. You're going to hear more about this as we go, but it's central to who we are as a company. Okay. So quickly on our technology. Many of you know this, but with the sensor platform on the bottom, that's our sensor platform, we designed it. We have the patents for it. We can get 4,000 people an hour into a venue, nobody can do that. This replaces 10 to 15 metal detectors. That sensor platform is something we designed. We don't build it, but we design it. A lot of IP in that. But the secret sauce for the company is the Cortex AI software. The ability to quickly identify 1 million data points when somebody is walking through the system, and please walk through it during the breaks, that's why it's here. We can quickly identify metal objects, but the magic is in our threat classifier that quickly and instantaneously determines, is the object a threat or not? Is the object a phone or is it a firearm? And we can do that instantaneously. And that makes us different than any other company in the industry trying to solve this problem. And flips the model, right, where we assume that everybody doesn't have a weapon until we find it. And you know today, when you go into the airport or you have to come into stadiums like this, although the Red Sox are a customer, it's the opposite. We think you're a threat, and you have to prove you don't have a weapon just to get in to see the baseball game, right, or Taylor Swift or anything you want to go do. It's crazy. So we're using technology to flip the model. right, completely flip it. And it changes the security experience, the fan experience, the student experience in a really, really big way. Okay, two more things on technology. We did this from the ground up, and we use cloud to help us, right? Cloud is changing everything, right? We have the ability through cloud management software, we use AWS, to manage the fleet of 3,000 systems we have across North America from one single point to dial-in remotely and do remote diagnostics. We can do preventative maintenance on our systems while they're up or down and determine if a board may fail in a month and send somebody out to change the board. You wouldn't believe what our customers say when we're standing there and saying, we're switching the board to make sure your system doesn't go down. So really, really powerful capability in the cloud. And then finally, as part of our subscription, we do four software upgrades a year and we can do that instantaneously with the hit of a button. All 3,000 get the upgraded software. Guess what? Super important because it makes you more secure, efficacy goes up and we can keep them current on anyone that's trying to defeat them. And then finally, if data is the new oil, we have data about everybody that comes to the venue. When they come, what their arrival rates are, what they're bringing that are threats and we can send this kind of dashboard of data to our customers, particularly our sports customers love it that at the end of a game, let's say, at Mercedes-Benz stadium, all 82,000 people are in, and our security people can see what they came in with, where they came in. They just have situational awareness about what's happening in their stadium. So really, really important. Data is really important. Okay. A couple of other statistics that we think is important. So we have all this technology. We have 3,000 systems deployed. So guess what we're doing. We're getting lots more data. So we scanned 300 million people in 2022. We've scanned over a lifetime 600 million, and this year alone, we'll exit the year, we think, around 1 billion people. That scan data is really, really important because our systems get smarter over time, right? It's a huge competitive advantage. By the way, this is a really hard problem. And what I mean by that? On April 1 of this year, we screened 1.8 million people. It was a Saturday, right? We had theme parks and stadiums and lots of -- 1.8 million people. The TSA that day, they posted so we know, screened 2.2 million. So at some point, we're going to probably pass the TSA of the number of people that we screened. I say it's a hard problem because like in cybersecurity, and this is a world I lived in for 20 years, we have to stop the bad guy 1.8 million times. And guess what, they only have to defeat us once. It's an asymmetrical problem, and it's really, really hard. So we talk a lot about prevention. We found in 2022, 176,000 weapons we prevented from going into places in our country; 90,000 guns and 70,000-ish or 80,000 knives, large tactical knives. It's a lot of weapons. But we're not going to find everything because security isn't perfect. And prevention -- absolute prevention doesn't happen. It didn't in cyber and it doesn't in physical security, right? It's a really, really hard problem. But we can do a lot of good with technology, with layered security, with people process and technology to dramatically increase your chances of keeping weapons out knowing you're not going to keep everything out. And that's the world that we live in as a company. Okay. You saw the stand on the bottom. For me, that was the big one. 450 guns per day, people carry guns, particularly not in states like this one, but in other states, they carry guns. And sometimes, they don't need permits for it. So there's lots of guns out there. Okay. I'm going to pick up the pace a little bit. So when I talk about the digital threshold, think about our system in a doorway, protecting the untrusted and trusted side of the network, right? We call that the digital threshold. But best-in-class security means push the perimeter out and let's create that frictionless and informed experience for our fans. So that means what if we knew about you at the approach and we could create a really good experience in the venue. So today, we can do weapon screening, we can do analytics. And during COVID, we actually did elevated body temperature. Our customers asked us, "Could you find the people that have COVID?" And we added some cameras and software to our system, we had people not come in with COVID. People aren't using that much anymore. But they want us to do more. So think about, on our digital platform, the other friction point in the stadium besides screening is ticketing. They're on your phone now, right? But still you have to put it on the thing and oftentimes grandmas trying to find the five tickets for their kids. It takes a while, and it backs up. If that could be face as a ticket, use biometrics to identify who you are, and you can go from the street to your seat without stopping, touch down, everywhere, right? That's possible, on our platform or off our platform, and we're talking about what that could mean for our customers. But also other capabilities, as you can see here, threat intelligence, flow analytics, lots of things to make the experience really frictionless. Secondly, pushing the parameter around and understanding who you are when you get out of the car, is it a VIP and their family, bring them in here? Or is it somebody on a BOLO list that we ought to know about? Let's know about that in the parking lot, well before they get to the place they can harm somebody. So lots of technology that's available there. And then inside the venue, creating a frictionless experience. You don't need money to eat or to buy swag and you never have to stand in the line anywhere. Those are the things that are possible. Those capabilities may be great for a stadium, but there may be other ones for schools, right? Some of the mass shootings that have happened when -- if we could identify and we can do it through a connection to open carry video analytics, see somebody coming into a parking lot that shouldn't be here and get out with a long gun, which has happened in many places, boy, we can create 20 or 30 seconds between when that assailant gets to the school that can help a lot of people, right? So that kind of capability is really important at a school. Okay. That's all about venue security. Those are the things that we do today and plan on doing in the future, but you're going to hear today from the team, we have plans to repurpose our technology into potentially different form factors and participate even in bigger markets, open spaces and public markets, and we're going to talk about that. Okay. I'm going to talk about the TAM quickly. Big TAM, I mentioned $20 billion. You see the verticals we're focused in on. I think you know that 50% of our business is in schools, that's huge; 20% is in health care; 10% in professional sports, but there's a lot of slope to ski for us, right? We own 1% or 2% of these markets. These are big markets. The way we're going to go after them is in bite-sized chunks. There's a $6 billion or $8 billion opportunity in the states with the highest gun violence, in the schools with the biggest districts, in the health care and hospitals that need us the most. So we're going to go after those. So you can see the stats in each of the markets we operate in. Look at the number of -- there's 140,000 schools, everybody, to put our systems in. Why should kids in Charlotte and Mecklenburg, and Brian is going to talk about it, be safer than kids in other parts of the world, right? Why shouldn't this system be in every school if we want to keep our kids safe. There's technology now that can help. And we get why you didn't want a metal detector, but we don't get why you don't want a technology like ours. Same thing in all the other systems. Our 70% of workplace violence, it happens in health care. It's our doctors and nurses, right? All the mental illness there, we can help right? So that's a really big vertical for us. And you can see professional sports. Today, we're in 35 professional sporting teams and stadiums, and there's a lot to do still there to change the experience for fans. So a lot of open field and not a lot of competition to go take this down, and we have the recipe to do it. This is what our customers say about us when they want to purchase our system. I'm going to let A.J. take you through this in more detail. But it starts, everybody, with increasing their security posture, job number one, right? And then all the other things that really matter, again, I'll leave that for A.J. We are absolutely privileged to have over 600 customers in all the verticals I talked about. It is absolutely our privilege to partner with them. And we spend a lot of time making sure that they love our technology, but they love our company, and we wrap our people and our expertise around it because, guess what, they're paying a 48-month subscription. That means every single day and every single week and every single month, we have to earn their business, right? This isn't a set it and forget it, buy in and buy some maintenance. This is we have to keep them current, and we have to keep bad things from happening and we take it very, very seriously. That's what I mean by the mission. Our strategy. The next two slides are slides that I hope, along with all of Mark's slides, that you measure us by over the next couple of years, right? This shows the number of deployments or beaconing subscriptions that we deploy every single quarter. And for the last three quarters, and I know you're keeping track of this, we've been deploying north of 500 systems per quarter, right? We believe that we can continue to stay on track and potentially accelerate that over the course of the year. Really, really important. And as I mentioned to you, we built a high-performance high-velocity sales model, 40, 4-0, direct salespeople, high-touching customers, partnering with 70 channel partners to give us scale and leverage in the markets to really, really grow. And we're feeding that a lot this year in hiring new people. So really, really important, and it's translating into more schools, more hospitals, more professional sports and industrial warehouses that will be part of our portfolio of customers going forward. This is the other slide I hope you measure us by too. We used to talk about orders in TCV. As you all know now, that nomenclature is out the window. It's all about ARR, right? Because we're a SaaS company. We're a SaaS company. So measure us on ARR. And you can see the number of ARR beaconing subscriptions we deploy every single quarter. And the graph to the right, everybody, represent our 7-figure customers. These are customers that have made a really big investment with our company and to partner with us to make sure that their venues stay really, really safe. So keep measuring us on this. We think it's really, really important. You're going to hear more about this from Mark. Okay. A couple more things. When I lie awake at night, the things that I think about for this company and for all of us, these are the priorities that we, as an executive team, and I think about. Number one, execution on our land-and-expand strategy, right? There are so many places. In fact, there are 700,000 digital threshold opportunities for the company. In that $20 billion market, 700,000 doorways. When you go into a school, it starts with shrinking the attack surface, shutting some doors, but then you need a system in every one of those doors, right? The average number of systems in the last year has gone from 3 to 5. So we have 600 customers and 3,000 systems out. So think about the average or ASP, 5 systems per customer. Really, really important. So we have a lot to do to get our systems out to all the places that need us the most. So execution on land-and-expand super important. Also scaling the business, putting the processes in so we can build a frictionless and highly optimized company. We can get operational leverage in our model. I think we're showing that through our growth quarter-on-quarter. We're hiring a few people but growing faster than that, really important. And then talent. We have our HR executive in the room, right, hiring really good talent and making sure that every Evolver is super talented and super committed. And I will tell you, we're able to hire, both based on where we are here in Boston, whether it's MIT or Harvard, we have a really great education base. And I also learned my four kids are in their 20s now. Young people want to go get a job that has a purpose. I applaud them for that. And because of that, we're able to hire some of the smartest data scientists, the smartest software engineers, really, really smart young people that want to come here, right? They want to join a company and they can join lots of companies in Boston or anywhere in the country or world, but they come to us because of what we do. Really, really important. 93% of our offers get accepted. So we're able to get really, really good people, and that's going to be an important part of our strategy as a company going forward. Customer journey, right, making our customers, customers for life. Buying more, wanting more, partnering with them, making their venues safe, super important. We're going to continue to innovate and work on the hardest problems for our customers. These are hard problems to solve. One of the reasons we don't have that much competition is because this is a hard problem to solve. How do you find weapons on somebody -- concealed weapons when they're moving at the pace of life amongst their keys and yeti cups and iPhones. Super hard, right? Super hard to do. So we're going to continue to do that. We have to elevate our brand. I mean, one of the good things about our system, we build something that when you drop it, it makes a noise, it's a thing. So when people go through the thing, and in stadiums, 82,000 people in a football game, experience Evolv. That's giving us enormous brand awareness in the markets we land in sports. In fact, it's part of our strategy, and A.J. will talk about it. But go land in the major cities and the major stadiums and then have 82,000 people in a football game every Sunday and 42,000 people in a baseball game go through it. And the experience is so fundamentally different than standing in that stupid security line at the airport or the line they used to be in because it was metal detectors, they want to have Evolv because now you can. Now you can get really good security and maintain your fan, your student, your visitor experience and make it second to none. So really important we get that brand awareness, we have a great marketing team working on that. And then finally, supply chain. You guys asked us a lot last year about global supply chain, is it impacting us? And we were able to use our strong balance sheet to forward order, we built and delivered over 1,500 systems to the market in 2022, right? We want to double that this year. And we have a very good partnership with Columbia Tech, Mark will talk about this. They're based 30 miles from here, Massachusetts made and born fourth generation company that gives us lots of confidence that supply chain will actually be an asset for the company. And we're going to be able to build the systems with some headroom that we need. So these are the priorities for me and the executive team that we're executing on in the next couple of years and for the decade. Okay. A couple more things. The moat. I mentioned we have a moat. Starts with our technology, right, Express, all the capability in Express. The 50 people that came with Mike from his background that built it, right? So it's technology, but it's also people. Dr. Rose is going to talk about 100 patents that are part of this portfolio, right? This gives us a lot of confidence that we can continue to innovate on the technology side. I mentioned the high-performance SaaS go-to-market team and model. We're going to continue to feed that and capture the demand out there because there's a lot of demand, right? We have 450 schools using our systems. There's 135,000 and change more to go get, and we're going to go do that. So really, really important on go-to-market. I mentioned 4-year subscription. It gives us an opportunity for our customers to love us, right? We assign a customer success manager to every one of our customers to make sure that every day and when the bell goes off at school, our systems are working and kids are safe. Everybody has somebody in the company to make sure our systems are operating the way they want. And then we have 600 customers, but I also mentioned to you that we define one customer as a customer with lots of systems. So our largest customer has more than 160 systems. We count that as one customer, right? So think about the number of customers and number of systems that we can deploy going forward. Final thought. So when I think about this problem, when I think about safety because it's an inalienable right that we should be safe, right? If it's a right, you can carry a gun, that's fine. But shouldn't it be our right that we can be safe when we gather together? And now that there's technology for us to gather safely so we can create safe zones, I think about -- we think about security, like it's a utility, like it's light or water or electricity. It should always be there. When we come to a place and gather, whether we -- when we walk, it should be around us, and we should feel like we're safe. And there's technology now that -- so that's how I think about security. And when I think about us when I close my eyes over this decade, I think about ubiquity and our systems everywhere so people know that there can be safe. I want you to measure us by some of the transformational things that we saw in other industries like in cybersecurity. It starts with -- we have an Express product today, but during the course of this decade, we're going to have five more products that we're going to be able to offer our customers. They may be physical products, but they'll definitely be digital products, too. So we want to be able to report to you the number of customers that are using multiple products in the company. We see that. Secondly, today, we have 600 customers. At some point in this decade, we're going to have 5,000. And we're not going to have 3,000 beaconing subscriptions, we're going to have 100,000. And we're not going to have $70 million of revenue, we're going to have $1 billion. So that's what we think about in front of us for the next decade in terms of disrupting this market, being the best and most important physical security company in the industry. And in the next decade, being Evolv the human security company. Thank you, everybody.

Ladies and gentlemen, please welcome Mike Ellenbogen, Co-Founder and Chief Innovation Officer.

Good morning. It is an honor to be here today with you all with this team at this location as a Boston born and bred person, not only being here and having this meeting space, but knowing that Fenway Park is now protected by 18 Evolv Express systems, just like Gillette Stadium and just like another half a dozen entertainment venues that are within sort of spinning distance from here. It is an absolute honor. I'm going to talk a little bit about how we got here, our mission and a little bit about the team that really created what you're learning about today. It's -- I'm going to go a little bit deeper than you normally would in a bio because the journey that you see here from Vivid Technologies to Reveal Imaging to Evolv shares a lot about who we are and what we do and why we do it. In 1988, Pan Am Flight 103 blew up over Lockerbie, Scotland. So this was a flight that left Hamburg, Germany, through Heathrow, was about an hour delayed getting out of Heathrow. There was a bomb in a suitcase. It was about this much, C4 plastic explosive in a boom box, in a checked bag, in a suitcase in the belly of that plane. And because that flight was delayed, it blew up over Lockerbie and not over the middle of the Atlantic. It was heading to New York. Some of us remember, I was part of a team that started to look at technologies that might be available to address this because in Europe, the regulators decided because of this one event they would start to screen all of the baggage going into the belly of the aircraft, all the check baggage. And the only tools that were really available at the time were what we call conventional X-ray machines. Basically, what you've seen, bag goes through, we've got an operator staring at a screen, next, next. And the only way to deal with all the check baggage at a place like Heathrow was to fill up the lobby with conventional X-ray machines and people, labor and hassle and friction. So we worked very closely with BAA, British Airport Authority, the guys ran Heathrow and Gatwick and a bunch of other airports in the U.K. and developed a technology coming out of the medical industry that could automatically look for explosives in those suitcases. And we built it into the conveyor at the airport. So you check your bag in like normal, the bag would disappear behind the wall. It would then go through one of these machines, all automated. And only if it went through multiple stages would that bag have to be searched by a person. It was very efficient. It was very reliable. And what it really was, was instead of the airport reconfiguring itself to deal with security, we changed the security technology to work the way the airport wanted to. So Vivid was pretty successful in Europe. The Asia airports also adopted the same kind of approach to check baggage screening. And in the U.S., we used a different approach, it was called positive passenger bag match. And I know this is getting deep into the weeds, but I'll pull it back up, I promise. Positive passenger bag match, the theory was, as long as you get on the plane, your bag can be loaded into the plane and doesn't need to be screened because nobody in their right mind is going to blow themselves up. Let's fast-forward. 9/11 changed aviation security forever, obviously. We had taken Vivid public, we then sold the company to PerkinElmer. I stuck around with the buyer for a while and then 9/11 occurred. So we saw the creation of the Department of Homeland Security. We saw the creation of TSA. We saw a completely different legislative requirement, and one of those pieces was to start screening the checked baggage going into the belly of the aircraft because clearly, you can't rely on somebody not blowing themselves up. So we started Reveal because those of you who remember, post 9/11, the airport lobbies were full of these big million-dollar machines, which were CT scanners, like a medical CAT scanner and sniffers, which were those machines that you see at the checkpoint now where they take a little wipe and they wipe your bag and then they put it into the chemistry set. And you would check in, you would slip your bag over to the pile in front of the machine and TSA would be there running these through the machines. Anybody remember that? Bad memories? Okay. And the solution that TSA started looking at was take the systems and build them into the conveyors, just like the Europeans did with the Vivid machines. So we've seen this movie before. And by the way, American airports are built in a completely different way than European airports and Logan Airport alone spent $150 million to retrofit the conveyors and do construction on three terminals and then took about $60 million worth of equipment from TSA and put them into those conveyors. Obviously, now rebuilding every -- 450 airports across the U.S. was going to be hugely expensive. So Reveal, this group that came back together, we pulled that band together, that Vivid Group into Reveal, this team of people that knew how to solve these hard detection challenges, build systems that have to work in this environment all day, every day and deal with it, and we rethought this problem. And we said, if we can make a smaller, cheaper, lighter CT scanner, right? So a new geometry for a CT scanner that really shrunk it down, we could instead of like a mainframe approach where you're bringing everything to a few scanners, sprinkle a bunch of them around the airport and bring the bags to where the airports already want to bring the bags. And the reason this is important is it got rid of all that construction cost. Hundreds of millions -- billions of dollars that had to be spent to reconfigure airports and construct new conveyor systems. It's like putting a new septic system on your house, right? So Reveal was successful at developing that. But if you're seeing a theme here, which is, don't change the way everything operates, change the security technology to fit the way the customer already wants to operate. So we developed that system. We've got through the TSA certification process. And in the year we started shipping -- the year after we started shipping, we shipped more than our two competitors combined because of that, because of the way we rethought and took that approach of don't require everybody to change what they do, change the technology to fit the way people actually want to live at the pace of life. And our competitors at the time were GE and L3. What's interesting about aviation security is a single event can change the entire landscape, so 9/11 clearly was a significant single event. But unless you've got TSA pre-check, you're still taking your shoes off because Richard Reid, the shoe bomber, tried to blow a plane up with a shoe bomb. If -- again, unless you've got TSA pre-check, you're going to go through that body scanner, right, that millimeter wave body scanner because Abdul Mutallib tried to blow up Northwest Airlines flight that was coming into Detroit in December of 2009, with blow that up with an underwear bomb, right? A single event in 2010. Those body scanners were rolled out across U.S. airports. We can't carry liquids through the checkpoint because of a liquid bomb plot coming out of London in the mid-2000s. So the reason that the entire landscape can change and the security technology gets driven is because there are single bodies that regulate how the airports have to work and what they have to do. So you've got TSA as the 800-pound gorilla. They set the standard, they test the equipment to the standard, they purchase the equipment, they deploy it at the airports. Same in Europe with a group called ECAC and a similar one in Asia Pacific. So you have these governing bodies that are making these decisions, setting a bar and holding everybody to that bar. In February of this year, there was a bomb detected at Lehigh Valley Airport in Pennsylvania, a little airport in Pennsylvania. There's a bomb in the Rollaboard suitcase and probably didn't get much press. Those of us in the industry heard a lot about it. My friends at TSA let me know that this bomb was detected by a Reveal machine. So one, it's great to know that the system works. Two, it's -- we're proud of the fact that our technology worked. But this is the only event that I'm aware of that happened on U.S. soil since 9/11, single event, one. We've spent billions and inconvenienced hundreds of millions and billions of travelers. And I'm not saying it's not important to protect aviation security, but it's a single attack, a single event. Sorry, let me back up for just a second. So every happy -- well, most happy venture capital stories end in a sale of a company. So we sold Reveal to SAIC in 2010. Again, I stuck around for a little while, but then left. And when you have a successful exit, you get to hang out with the VCs. So we became -- I became an EIR with my partner, Anil Chitkara, who's sitting over here. Anil had recently sold his company. I had recently sold my company. And together, we decided to partner up and figure out what we want to do next. And that journey was looking at sensors and software -- cloud software that could disrupt an industry. And we looked at a broad swath of different industries to do that. So that was in 2011, 2012 and into '13. In December of 2012, the Sandy Hook shooting happened. This was another seminal event that drove a fundamental change in people's conception about what security needed to be or what the threat was, but didn't necessarily change the tools that the security professionals responsible for keeping places like this safe had available to them. About a mile from here, and Peter already mentioned it, we had the Boston Marathon bombing. This is another seminal event that shaped the way people think about security and one for me and Anil where we're thinking, okay, we've been looking for an opportunity to apply sensors. And as we say in Boston, wicked smart software to disrupt an industry. Well, if there was ever an industry that needed to be disrupted, it was the physical security screening. And it's a surprising amount of overlap between the needs to protect a school like Sandy Hook, and the needs to protect an event like the Boston Marathon bombing. You wouldn't assume that is, but there's a lot of similarities there. The focus for us was, can you create a solution that addresses the needs of this unserved market? There is no governing body that tells anybody, what are the requirements for protecting a public event? What are the requirements for protecting a school, a hospital, a workplace? There is no single unifying government body. So one event doesn't change the market, like it does in aviation security. There isn't a spec. There isn't a standard from TSA or the National Institute of Justice, right? The group that writes the specs for metal detectors for prisons and for courthouses. It doesn't exist. But clearly, there was a need. So once again, we pulled the band back together and started Evolv to address this need. This has been our focus ever since. How do we create a solution that can stop these kinds of events from happening. So I mentioned one event that I'm aware of in aviation security. This is -- you see -- Peter just showed you, right, almost two mass shootings. So four or more people killed or injured every day in the United States. That doesn't count the thousands of other shootings that occur at places of work, in the streets and elsewhere. This is top of mind for the security professionals we work with who are trying to protect their venue. This is the problem we set out to solve. Up until Evolv, if you wanted to provide real security and create a safe space, well, you really had to sacrifice visitor experience. And if you valued visitor experience, then you really couldn't do much in the way of security. You might hang a few cameras, you might have a guard, kind of imposing guard standing there, but you're really not going to be able to do much in terms of making sure people aren't carrying threats into that facility. We call this the protection paradox. So the tools that were available were the walk-through metal detectors, hand wanding, you've seen this all over the place, bag checks. And it creates any time people would try to do this at any place with flow, it creates a line that goes around the block. And it just wasn't acceptable. And we have a number of customers who tried to deploy metal detectors years ago, maybe there was an event that drove that. Maybe there was a headline level event. They went out, they got the metal detectors, they operated them for a week or a month, and they pushed them aside because they just couldn't deal with the friction that they were creating at the front door of their museum where people are coming to have an enjoyable day, they're not going to wait in line. You've got to go to the airport when you got to fly. You have to go to a courthouse when you got to go to a courthouse or a federal building. You don't have to go to a stadium. You don't have to go to a number of the types of venues that we now support. Our focus was, can we create a solution that provides a high level of security, but doesn't sacrifice visitor experience and operates at the pace of life? So we did, but it took us a while to get there. So I just want to share a little bit about this journey. The -- when we started the company, we licensed a technology called metamaterials out of Duke University, and the idea -- metamaterials, are kind of a cool way of steering waves. And the idea was we were going to make a millimeter wave scanner, just like the body scanner at the airport, but it was going to be like a flat screen and screen people just as you walk by. And we hired this very promising young man who -- the ink on his PhD hadn't dried yet. His name is Alec Rose, and he sits over there, he's our Chief Scientist. Came out of that lab at Duke. And within the first 6 months, said, yes, this isn't going to work. So we took a step back and millimeter wave can be managed like radar. So we developed a unique custom sparse radar array. And that's what you see on the far left there. All those individual panels like a LEGO system that we could configure in a bunch of different ways. And the first embodiment of it was the product that you heard about earlier, the Evolv Edge. So the Edge was good, but not good enough, meaning it eliminated the need to dump your pockets because the system could tell the difference between your phone and a firearm or it could find a person-borne IED, right, suicide vest or something like that. But because it's a line of sight imaging system, it needed to be one person at a time. If you were behind me, the system can't see you. So they got to go one person at a time. And again, we're looking for -- to eliminate friction, to maximize flow. So we got the Edge out. We've got some very forward-thinking customers to work with us, and we learned a lot through that deployment and we're forever thankful to those customers who worked with us, used the Edge. It got us into the market. It got us started, but it was very clear that it was not the solution that we needed to solve that protection paradox. So this 2018 phase, I call the boneyard of bad ideas. And we kept chiseling away at this and chipping away at it and trying different capabilities. I've got pictures of us doing data collection down at Gillette Stadium with some of the images that you see here, but it just wasn't working the way we needed it to work. And we probably -- we spent about a year doing that while we were selling the Edge. And then Alec came in, I remember it like it was yesterday, one Monday morning and said, "I think I've got it." And that was the insight that became the Express. So this system, which was inspired by loss prevention systems that you'd see if you're going into Best Buy or Target, right? It's two columns on either side. You walk through it, unless you're a geek like me, you're not paying any attention to it at all. You don't have to stop. You don't have to go one person at a time. You're just strolling through it with your spouse, with your children, it doesn't matter. That was the inspiration for what became Express. And I had a conversation last night with Raj. And he shared a story where you came through Express with your wife and your child in a stroller at one of the locations where we're operating today as a group as opposed to first dad goes through, then you send the toddler through, then you pass the stroller around, then mom goes through. So it warmed my heart to hear your story about going through Express. And the only reason you had to stop is because you wanted to point out that, that's that Evolv company you were looking at. So I appreciate that. But Express is really the first product that solves the protection paradox and has opened up this untapped large market opportunity that never had a governing body saying, thou shalt or here's the bar, and this is how high you got to jump, and has created this $18 billion greenfield opportunity for us because of that. As part of developing Express, we developed the digital platform that Peter was talking about. And I want to go into a little bit -- one more level deeper than Peter did as he discussed, what is in this platform. It all starts for us right now with detection. With detection -- for detection, you need sensors of some type. So we developed custom set of sensors that are in the Express for concealed weapons detection. So this top layer is our sensor layer. So we're now taking that concealed weapon detection that's embodied within Express and looking at new form factors that we'll talk a little bit about of how we can make this applicable to even more markets outside of just that front door of the venue. In addition, Peter mentioned brandished weapon detection. And if you think about a school and how we make a school a fundamentally harder target, there's three things we got to do. We need to minimize the number of entrants and keep the doors locked when they're not in use. You have to detect a concealed firearm because most school shootings are happening with somebody taking a gun into that school like in a backpack or in an -- otherwise concealed. And as we've seen recently, both in Uvalde and in the Covenant School shooting in Nashville, you want to know if somebody is openly carrying or brandishing a firearm as they're coming toward one of your entrances. If you can accomplish those three things, you've made that school a fundamentally harder target. And that same thing applies to hospitals, to workplaces and elsewhere. So we're adding brandished weapons detection that utilizes video and AI to automatically detect if somebody is carrying a firearm with intent. And then we have other kind of a suite of other solutions that we're working on, all of which are designed to minimize friction, maximize flow, reduce or eliminate nuisance alarms and really facilitate that flow at the front door. The next step is about providing detection in context. So I talked about openly carried firearms or brandished weapons. So there's a difference between a gun on somebody's hip and a holster and a gun in somebody's hand. And the ability to tell the difference is context that actually creates a tremendous amount of value because there are plenty of places in the U.S. where it's perfectly legal to carry a gun on your hip or you've got an SRO at a school -- a school resource officer at a school, who's walking around with a gun on their hip, or you can imagine the number of scenarios where you don't want to alarm on something on somebody's hips. So providing that context through AI is real value to the process because it's going to minimize your nuisance alarms and maximize the value of the information you're providing. When somebody goes through Express, you don't just get a red light or a green light. You get a red box on the object that's alerted. So if you think about the alarm resolution process, right, you've got a flow of people, you got 4,000 people an hour, that's one person a second, right, a little bit faster than one person a second coming at you at this stadium, at Gillette Stadium, at others -- doesn't come through quite that fast at other locations, but you've got this flow. And when somebody does alert, you want to take them out of that flow and resolve that alert as quickly as possible while everybody else continues to go. So giving that to the operator avoids the need to do that hand wanding from foot to the forehead and makes a very quick excuse me, can you show me what's on your right hip, makes the process really fast and facilitates flow and provides focus and avoids bias. So our machine learning, our sensor fusion, our data fusion is all about creating context. Alec is going to talk in a little bit more detail about what that means. Lastly, how do we convey that information? To whom do we convey that information? We've all heard about first responders. First responders usually aren't there when the event occurs. Typical police response is minutes after, and it could be 3 minutes or it could be 15 minutes after a shooting occurs. Well, the shooting is usually done within that amount of time. And we're looking at how do we prevent. Everything about Evolv Cortex AI platform and our mission is about prevention. How do we prevent a situation from becoming a catastrophe? One of the ways we do that is by giving that contextualized information to somebody who's actually in a position to do something about it. So if you imagine the operator at an Express at the front door is getting immediate information as people come through, what if we were to tie in the output of that video-based open carry detection or brandished weapon detection to that same tablet, to that same operator who's standing at the front door and is actually in a position to take action and prevent that situation from becoming a catastrophe? That action can be simple. Lock the door. Get those kids in, lock the door, and the goal here is to provide time and distance, right? If you can give 20 seconds of alert, you can actually do something to prevent loss of life. So conveying that to this concept of a first reactor as opposed to a first responder and then bringing other information as needed to that person who can take action and do the appropriate things at the appropriate time to make a difference is valuable. Lastly, tying into the rest of the security ecosystem. So what -- if you look over here, you'll have -- you'll be able to see -- we have business analytics running. We've got to tie in to a video management system that you can go see. Peter mentioned watch lists and VIPs, identity ticketing. These are all potential third parties that we can tie into, and we already have connections to many of them. Top to bottom, the digital platform really moves us further and further toward that completely frictionless experience. Our customers, you just heard the statistics, I don't have to repeat them, but screening close to 2 million people a day. We found over 100,000 weapons last year. They're keeping people safe. We've spent most of our effort to date focused on venues, focused on the front door of the venues. I just want to spend a minute talking about going beyond the venue to open spaces and public spaces. We have a very close working relationship with the City of Detroit and the Detroit Police Department. They are using Express, today to protect large public gatherings. The middle image is the annual Christmas tree lighting. They get hundreds of thousands of people that come to Campus Martius, which is their Times Square, through a perimeter protected by Evolv to witness the Christmas tree lighting. They're using it for the Detroit Auto Show for the 4th of July fireworks. And the headline after last year's 4th of July fireworks, the first ones where they used Evolv was no shootings at this year's 4th of July fireworks first time in five years that they haven't had a shooting at the fireworks. So they're taking the technology and applying it to big public events. They're also using it for areas like if anybody is familiar with the pedestrian area in Greektown, downtown Detroit, at the night clubs. They're using it for community events like block parties, high school football and basketball games. So you can see a breadth of different applications helping the city of Detroit significantly reduce and start chipping away at a core gun violence problem. We'll be taking that to new form factors that fit into the cityscape and beyond over the next couple of years. I'm going to speed up a little bit. Over the -- it's been 20 years. If you had to -- if you see something, say something at every bus terminal, at every train station. It's getting a little ratty, not sure how well it's doing in terms of helping or saving lives. In 2008, the Department of Homeland Security introduced the run, fight, hide tool that's going to help save lives. I'm not sure how much value that has created, but it's what we've got, right? Well, anybody children in the audience by show of hands, anybody's children go through active shooter training at schools? So I've got three, and they've been doing active shooter training since they were in elementary school. Peter talked about anxiety, talked about what we're currently doing to our kids. Jill Lemond, who's our Director of Education, will talk about what we're doing with schools and some of the impact this is having. But in my opinion, this is a symbol -- this is a sign that our industry has failed. And it's failed because for too long, we put the burden of security on the potential victim. And my personal north star, as I think about where we want to go at Evolv is to someday get to the point where the likelihood of a shooting in a school is so low that the school administrators kind of look at each other and say, do we really have to keep doing this? Maybe we can stop doing active shooter training for 8-year-olds in the classroom. It's crazy. It's necessary today, but we can do better. Our mission and vision is a safer world to people -- for people to live work, learn and play. And we believe we can accomplish that with the suite of integrated digital products and AI and enable a world where people don't have to adapt to the needs of security, security adapts to the needs of the people. We're the human security company. Thank you very, very much for being here today with us. Appreciate it.

Ladies and gentlemen, please welcome Dr. Alec Rose, Chief Scientist.

Thank you. Good morning. I'm Dr. Alec Rose, Chief Scientist at Evolv. So my training began at Duke University in -- under the tutelage of Dr. David Smith, in one of the top electromagnetic labs in the country, focused on metamaterials and one of the few academic labs with a long track record of commercially successful innovations. And I've been working on electromagnetic sensing and algorithms ever since. And it was at Duke in 2013 that I first met Mike and Anil. And they liked what we were working on. And they asked me how I would feel about coming up to Boston with them and working on some of the hard problems in physical security. And you probably have heard us say this a few times, they are hard problems. But it is a privilege and a little surreal to stand here 10 years later at Fenway Park and look at the fruits of that labor, protecting this alongside dozens of other stadiums. And it's a privilege to be here and get to share a little bit of that technical story with this accomplished group. And hopefully give you some insight into the core technologies, not just Express, but the core technologies we've developed at Evolv and how we are shaping them for the future of physical security. So Mike can really give the human aspect of the problem that we're trying to solve. In a picture, I wanted to show the technical problem we set out to solve. How do you protect people and crowds in a world where the available technology is so out of sync with the threat landscape and the consumer electronics that's sitting in everybody's pocket in 2023? Turned out cell phones didn't keep getting smaller, they started getting bigger. The answer was grabbing a fresh piece of paper, and in the process, as Mike said, we touched on to a lot of different technologies. We gathered expertise in some pretty esoteric fields, going into the metallurgy of firearms, material trends in consumer electronics, in PB IEDs, not to mention crowd flow dynamics, reaction times. It took a lot of pieces to come in together. Part of why we say this is such a hard problem is because there was no one lightning strike between where we were and where we needed to be. Fast forward 10 years and $100 million in R&D later and there's two particular pieces that we really have to show for our labors that I'm proudest of. One is the industry's preeminent technical team. And just like our management team, it's made of a combination of insiders and outsiders. We have folks who have been in the security industry, in baggage screening for decades, alongside physicists like myself, computer vision engineers, AI scientists, and you'll hear the term mission driven a lot today, and I want to add to that unselfish. This is a team that didn't care. We went out of the way to find folks who didn't care if they were working on the latest and greatest research paper out of MIT or if the right technology was a hamster in a wheel. We were going to ship hamsters in wheels. It was about solving the problem with whatever practical means were at our disposal. And along the way, we've come to boast the industry's strongest IP portfolio, and it touches on important areas in this field like biometrics, autonomous and human-assisted decision-making, radar imaging and real-time reconstruction, but there are two in particular that I'd like to dive a little bit deeper on because they epitomize what Evolv is about. And one is, no surprise, patents in threat discrimination. Like I said, there was no one lightning strike. It took -- and that's what this patent touches on. Particular sensors, a particular part of the RF spectrum that had been pretty much ignored for decades and paired with the right algorithms to really focus on today's problems, the threat landscape of gun violence contrasted with the consumer electronics in everybody's pockets. The second area I want to touch on is patents in the area of robust operation and interference suppression. It is a big deal being asked by customers to take part in the armor that they use to shield their patrons. It is a big deal. It is a big responsibility. And as Mike said, we need to build systems that work all day every day. And some of the biggest innovations that we've created at the company are ways for our systems, our sensors to actually fingerprint themselves to the environments that they operate in, because we don't always get to choose the environments. Gun violence can happen anywhere. And so our systems need to know where they are. They need to learn where they are. They need to do their job regardless of what's going on around them. That brings me to talking about the Evolv Express. So how does the Evolv Express work? So the system consists of over 80 individual sensors. They're constantly streaming images, RF data, millions of data points. But critically, we designed the Express from the beginning to be screening in motion. And that's not just a nice marketing -- it's literally how the physics of the systems work. It's not a one-shot system that takes a single frame. This is a system that continually aggregates information in motion over a 200 cubic foot volume. The best analogy I can come up with this is if you needed to look at, let's say, on your walk up here, you took a picture, and you showed it to somebody and asked them, could you tell me which stadium I'm in? Well, if you took a good picture and have to catch something that said Red Sox, maybe they'd figure it out. If you didn't, maybe you don't know, but if you took a video and gave that same video to somebody, they'd have a much easier job. There's more context, there's more information. They can stitch it together. Context is going to be a theme that keeps coming up. Our system works like video. Our system takes and aggregates information and that's how it generates context it needs and the confidence to make the decisions and discrimination that it does. Nevertheless, all of that data, when you're using video and aggregating data, you're dealing with that much more data and you still need to process it fast. We process it and render a decision in under 250 milliseconds. And if there's no threat detected, nothing happens. And that's the beauty of the system. We get to put this number up here that we're really proud of , 600 million visitors. The vast majority of those visitors going through our systems, going to the venue that they're excited and planned a day around, never had to break stride. That's a -- that was an inversion of traditional security, even if you don't alarm going through traditional security, you're still stopping, you're still moving at the pace of the slowest patron or guard in front of you. We parallelized it and it didn't take one innovation, it actually took several. But what I really want to talk about today is not so much the Evolv Express, but the core technologies that we developed along the way and how we're shaping them to meet future challenges and opportunities. And everything is going to start and end with artificial intelligence. I think everybody in the room is at least a little bit familiar with what's going on in AI in the medical industry. And we can take radiology as kind of the canonical example. It takes a lot to make a world-class radiologist. There's decades of training that go into this. My wife's in the medical community. It is amazing what they go through. The training, the experience, the late hours. And it means that you don't get to produce that many of them, and you have to figure out a way to scale that expertise as far and wide as possible. And they are capable of amazing things, reading hundreds of images, interpretations a day. AI promises to be a force multiplier in that world. It promises to scale that training and make it accessible in ways that were never before possible. It's a force multiplier on a scarce resource. How could we possibly watch that happen and think physical security is special or immune from that process? It might not occur to you, but when you look at the threat landscape of physical security, it's dotted with men and women who have been -- received decades of training, have priceless experience. They're capable of vision and intuition far beyond the general population. And just like the radiologist, they accomplish that by using subtle visual cues, by using context of what they see and hear and what's going on around them. Well, then just like the radiologist, the promise of AI is that we can take those same capabilities and we can make them more accessible, we can scale them, we can automate them, we can support them such that venues that never had access to that kind of security before suddenly can find that, suddenly can benefit from that training from that experience and from that level of security. It's within this context of AI that I want to discuss Evolv as the leader in transforming physical security with AI. And Express is not the endpoint, but it's one stop along that journey. So let me walk back to Mike's concept of prevention and the three required actions to accomplish prevention. I promise this is the only formula I'll talk about today. They made me take out all the other ones. Prevention equals detection plus contextualization plus conveyance. You need all three pieces. And to do those three actions, we have four core technologies at Evolv. Electromagnetic sensing, computer vision, IoT and artificial intelligence. And it's how these technologies, it's how we have approached these technologies and synthesize them together that lets us perform these actions. So let's start with the paramount thing that probably most people think about when they think about Evolv. We detect concealed weapons. And we do it through electromagnetic sensing. And I think the best way to get across what's different about Evolv is to start with what came before. So if we just talk about metal detection, well, and I rank a bunch of objects by total metal quantity, I get a messy line like this. And if I want to find knives, great, I'm going to find everything else to the right of it, too. And for about 50 years, when we talked about innovation in metal detection, you were mostly talking about moving further and further to the left of this line, finding a smaller and smaller razor blade. But we don't live in a society that is suffering an epidemic from razor blade violence. The driving motivation behind our choice of RF spectrum and sensors was to access additional dimensions of data to maximally separate these objects. And what I mean by that is shown here graphically by actually introducing new dimensions of data that we can extract out that make these different objects and different categories pop and can let a machine tell the difference automatically in a red light, green light fashion. A familiar analogy might be the difference between X-ray -- medical X-ray and CT technology. They might rely on similar principles, but by the time CT has computed all the extra data that it has available, put together all those dimensions, you have visualizations and diagnostics powers that are just not possible in X-ray. You can call X-ray and CT screening both X-ray technology, but they let you do fundamentally different things. And it's the same with what Evolv has done in electromagnetic sensing. And how we do this is through a sensor suite that we've built from the ground up. We had to pick the sensors a new, we had to pick the spectrum a new. We track -- we -- our fields are capable of sensing both ferrous and nonferrous metals and they're actually optimized to highlight the differences between metal types and metal shapes. And as I mentioned earlier, we exploit motion to track these objects and aggregate data over a 3D volume, pinpointing threats in real time with accuracies that we can measure in inches. At the same time, we're constantly expanding on our electromagnetic capabilities along at several fronts. Our training data sets, an AI company, you live and die by your data and our training data sets have been expanding exponentially over the last three years, owing to our growing customer base, and our investment in R&D. At the same time, we are continually revisiting the RF spectrum we use, looking at ways to expand it. We already have an industry-leading -- what I believe to be an industry-leading large relative bandwidth, and we're looking at expanding that, pulling out secondary, tertiary features to further reduce nuisance alarms. And lastly, what I want to talk about that we're doing in electromagnetic sensing is making the main components of our system flexible in a way that lets us explore new form factors that can fingerprint to the different use cases. It turns out security is not security, is not security. Every venue has perceived different threat profiles, different threat vectors, has different visitor experiences in their mind and has to solve a fundamentally different security problem. And they can do them with a lot of the same tools, but the more you can fingerprint those tools to their respective environments, the more you can solve this problem while keeping people moving at the speed of life. And it's particularly exciting because our path forward along here by reusing and repackaging our flexible algorithms and sensors, we actually can, for fairly marginal R&D investment, envision a catalog of products that can solve a variety of different security problems. The next core technology I want to discuss is our use of computer vision. So AI is often described as -- is often described in terms of replacing humans for certain tasks. And we may eventually get there for large swaths of tasks that we do, but the next decade is really going to be dominated by human AI tasks working in tandem. AI is going to help humans do what they do faster, do what they do broader, scale it. And what that means is the human machine interface is critical. Performance of any given system really depends on how well you design that human machine interface. And that's what we use computer vision for today. We actually had to take the task that traditional security had in one operator and split it. We took one and we gave it different roles, different operators, different interfaces and it gave them different information. And to one, we give positive identification of the alarming individual. And that allows them to pull that one individual out of the flow of traffic without disrupting the rest of the flow. That's what we mean by parallelizing security. To the second person, we give a directed search. Through data fusion, we're able to tell them exactly where on the person to search, reducing friction between them and the customer -- them and the visitor and speeding up the entire process. Both of these as much as the electromagnetic sensing was paramount in achieving high throughput unstructured screening, not just in a lab setting, but in a real world setting, where you might be at a baseball stadium, first pitch is minutes away, and you've got a crowd that is crushing to get in, and you need to do it with minimal labor force. You cannot do that with just blinking lights. Computer vision will continue and actually play an expanding role in the future that we see at Evolv. And as I said earlier, a lot of AI is -- a lot of what we want to do is take -- is use our systems to take tasks that humans are doing today, especially the tedious tasks, and automate them. And you can think of tasks like suspect tracking and brandished firearm detection, task that you could have a human do that we'd like to automate. To automate it, we need to give our systems the same capabilities humans have. That means we're looking into putting dedicated compute hardware at each of our cameras for flexible compute power. And it means recognizing that people don't see in two dimensions. We have the benefit of depth. We see in three dimensions. It is a key piece of context that we use in tasks that we do daily without even thinking about it. Autonomous vehicles have recognized this and invested heavily in 3D sensing technologies. We get to take advantage of the advances that we've been having and plan on capitalizing on these advances in our next generation of products. Now moving on a little bit from these detection focused technologies, I want to talk about Internet of Things or IoT. Express was developed from the very beginning to be a connected cloud system. And this was very purposeful. Number one, the advantage it gives us is centralized fleet management and monitoring. And this means we can have folks at Evolv that at their fingertips can see the status of the fleet, how things are going for customers. And it's not just for the benefit of efficiency, but as some of my colleagues will go into later today, it's actually a window into our customers' lives and use cases. It doesn't let us respond faster to them. It actually lets us understand our customers more intimately and develop tighter relationships with them. The second thing a cloud IoT infrastructure does for us is it is a natural launching point for third-party integrations and for open APIs, which already at Evolv includes some of the most popular -- integrations to some of the most popular VMS and access control system. And there's -- there will be a demo of the VMS system over there working later. Security is a layered approach like cyber security, physical security requires layers, requires people, process and technology. There are other things that already exist at venues. And for us to work, we not only need to let visitors keep moving the way that they were moving before our equipment came in. We need to let the entire security infrastructure keep working. And that's what our integrations and open APIs allow our system to do. Third, IoT lets us push benefits and features to the customers automatically on a regular cadence. This is part of the expectation of being a SaaS company, that we don't just drop off hardware, but we deliver more value and features over time. And this last point I'd like to elaborate on because we actually have a great track record that we can point to of high -- this is a high-level view, but a meaningful content that we've delivered for our customers over the last two years. And we're actually in the process of releasing our Version 6.0 software -- of the Express software that is going to have two very interesting and meaningful capabilities for customer. It's going to mean every customer has the ability to actually reconfigure physically the system. If they have tight spaces and the system needs to be and would ideally be a little bit smaller, they can actually pick up and move those towers and change the physical configuration of the system and the software will adapt to it. And as part of that, we'll also be offering a new higher sensitivity threat level. And this is just an example of the kind of content we're able to constantly push out to customers because of our IoT investment. Now the fourth core technology I want to discuss is Artificial Intelligence. It pervades -- it's almost not an independent technology here. It pervades and synthesizes the other three core technologies that I just talked about. Toolboxes and GPUs might be the cogs that make AI go, but the right sensors, the right contextual information an ever-growing data pipeline, those -- that's the fuel that supercharges AI growth. By being first mover in the AI-powered concealed weapons detection market and by investing heavily in IoT and cloud infrastructure from the get-go, we're in a position to capture and maintain data supremacy. And then the follow-up question is then, what are we going to do with that? And I want to bring us back to Evolv's AI north star that I discussed at the beginning. AI is going to be every bit as critical in the physical security industry as in the medical field, as in autonomous vehicles. It's going to take the resources and training that were typically limited to a few well-trained individuals and the handful of venues that could afford their security, and it's going to scale what they can do to venues that never dream that they could have it before. It's going to take the tedious tasks, whether it was tedium experienced by visitors coming into venues, or the tedium experienced by the security staff themselves, and it's going to make that yesterday's tedium. And it's a fast-moving world and a fast-moving ecosystem. We do not expect to be the only AI company in this physical security space. We seek out complementary technologies and companies. By leading and innovating in prevention through concealed weapons detection and owning that cog and also simultaneously pursuing strategic partnerships and integrations with the broader AI field, Evolv is set to maintain critical -- to be a critical cog in the AI revolution of the industry. Today, this means Express going to more and more stadiums, more and more venues, integrating more and more seamlessly. But venues are not where we want to stop. Even if you could turn every venue into Fort Knox, gun violence in this country goes on beyond venues. And the future of Evolv that we see, the investments that we're making are about not just Express but bringing prevention beyond the threshold, to the parts of society that often need it the most. Unfortunately, there are a number of places that still suffer from the protection paradox that Mike and Peter introduced earlier today. There are folks who are tasked with protecting citizens -- protecting their fellow citizens that don't have a viable product, to make security work in the way that it needs to in open spaces and on city streets, the investments that we're making in concealed -- new concealed weapons detection form factors, the 3D computer vision platform that we're creating, the way that these work together and work with AI, these are how we plan to span this final technological gap. This as much as security in venues is where we see the future of Evolv and where we want to take prevention of gun violence. And we -- it's how we try to best live up to our mission of making everywhere safer. And with that, I'd like to thank you all for your time, for being here and for letting me share some of our technological journey and where we're headed with you.

Okay, folks. Dr. Rose, thank you very much. So folks, we're going to take a 15-minute break here. Two quick things. Number one, if you're looking for the presentation material that we've been going through, you should be able to get to this QR code as PDFs being loaded up there as we speak. There's restrooms on either side, and we have the demo station that we're going to be going at. If you have questions, send them to ir@evolvtechnology.com, and we'll go through that during the Q&A. 15-minute break, we're going to start up at 11:10. Thank you. [Break]

Good morning, everybody. We're going to start back up in 2 minutes. If you could get a last cup of coffee and head to your seat, that would be great. Thank you. Terrific. Okay. I hope everyone had a chance to grab a cup of coffee or take a quick break. All right. We're going to get things back started here. We've got a special presentation here from A.J. De Rosa, who's our Chief Revenue Officer. He will be joined by Betsy Fallon, our Vice President of Customer Experience. So with no further ado, A.J. De Rosa.

All right. Hey, everybody. So everybody that's from New York, New Jersey, you actually have a representative here. I'm a Jersey kid and Yankee fan. And the reason why I bring that up is because I'm also a fan of Fenway. I believe this is the greatest stadium in the entire country. And to be here right now doing this on Analyst Day, is even meaningful for a Yankee fan. I have 4 kids. Each one of my kids have been here multiple times because I love it. And the last time I was actually in this room, I was talking to Mike Ellenbogen yesterday as we were walking home together, and he told me to tell the story, so I will. I was sitting right there. And it's about a year ago, I was with Anil Chitkara, which, by the way, is also a Yankee fan, he just doesn't like to admit it because he's from Long Island. We were sitting right in that corner over there. And it was me, it was Rick Abraham, who you probably met at the demo, who runs our TS&S group. And it was also Mike Martin, who's our Strategic Solutions Director. And we were here on a site survey looking at the venue to figure out how we would put our systems here and lo and behold the year later, here we are standing here at Analyst Day presenting to you all. So thanks for being here. My name is A. J. De Rosa, I am the Chief Revenue Officer here at Evolv. A brief history on me and then we'll get to the good stuff, about 28 years in disruptive technologies, 5 startups during those 28 years. And I was always in the go-to-market organizations within those. And not only were we disrupting technology, but we are also disrupting the SaaS model back in the '90s when there wasn't much subscription in SaaS, we were disrupting that in all those technologies that I was a part of. Of those 28 years, 20 years, I was in leadership roles, building out go-to-market operations. And then the last 8 years, I have been really focused on remote sensing and AI. The first 3 start-ups were in finance technology and the last 2, including Evolv, were in remote sensing and AI. So why am I here? You heard Peter talk a little bit earlier about a customer for life. So in order to build a customer for life, you have to create a go-to-market organization that can support the entire customer journey. And that customer journey consists of 3 things: the buyer journey, which I'll take a little bit of time today to talk about with all of you and also give you the overlay of the go-to-market strategy; the user journey and the loyalty journey. Betsy Fallon, my colleague is going to come up after me to talk about the user journey and the loyalty journey. And how did we organize that? So right now, within the revenue organization, a go-to-market organization, we have 5 distinct teams. The first team is global sales. Global sales is not just feet on the street. I heard Peter talk about having about 40 account execs by the end of this year on the street for us. It's also about a vertical overlay, and we'll take a little bit of time to talk about how we verticalize and what we -- how we paid attention to that. Channel Development. We have a channel program team that's focused on us scaling. We'll talk about how we're doing that with channel development and partners. Technical sales and support. These are our solutions engineers, our presales. These are the people that bridge the gap between our customer and engineering during the sales process. Customer experience, this is where that user journey and that loyalty journey really resides within Evolv. And as I said, Betsy Fallon will spend some time there, and that's where our customer success managers are, that's where our tech support is, that's where our field service engineering is, and that's also where some operations live. And then last but not least is the SDR team. This is our sales development representative team. They are the ones that are consistently doing outbound and inbound demand generation to make sure the top of funnel is there for us and the account execs in order for us to execute on. So key challenges. So when I think about challenges from a go-to-market approach, I think about pain points, I think about problem sets, right? And Peter went into this a little bit. One of the challenges we have for our customers' ever-increasing threat environment. We see it every day, we hear it every day. The other piece is customer experience. As that threat level goes up, more security happens, there's going to be -- customer experience is going to be a challenge. Costly security labor shortage. It's no secret that after COVID, it's been hard to find labor, which means that labor is going to be more costly. So as security rises, you need to put more people on these analog machines that people have been using in order to be able to cover. Challenging work retention. I want to spend just a second on this because I think this is critical, and we don't talk enough about it. And the reason why I say that is, in our schools, in our hospitals, the doctors, the nurses, the teachers, the administrators, they didn't do this because they wanted to be physical security professionals. They didn't do this because they wanted to be worried about their life and being threatened. They did it for humanitarian purposes. And what we're seeing now are droves of these teachers, administrators, nurses, doctors leaving the profession because they feel threatened, that can't happen. And then lack of visibility into the data that can be derived from the gateway or where people come in, the ingress, being able to capture that data can only be done through digitization. And right now, with datalog in the past, the way people have been doing it, there was no way to capture all that rich data in order to inform the business going forward. So you have the problem set, you have the pain points. So what's the solution? How do you solve for that? Mike Ellenbogen took a little bit of time to go through the protection paradox. I'm not going to spend a lot of time in here. What I want to point out here is, as this threat levels increased, people want more security, heightened security. But the ones that need customer experience doing nothing is no longer an option. So where do we find ourselves? We find ourselves in that place where Anil talked about when in the video is where is the balance? Where is the balance of heightened security with a customer experience. Now there is no perfect solution as we talked about. It's all about people, process and technology. It's all about a layered approach. But we have been able to build something and express with Alec, Mike and Anil, that allows us now to have that balance and provide a product that can be part of the overall layered solution for our customers. And that, to me, and to the go-to-market organization means product market fit. So now that we have product market fit, how do we go after the market? Well, we build a pipeline. We have a scalable pipeline development strategy. There are 3 pieces to this pipeline development. The first is campaigns. We have an SDR team, we have a marketing team, we're doing inbound and outbound approaches and campaigns for that to bring in top of funnel. We also have a very, very prescriptive ABM strategy, account-based marketing strategy. So we're targeting the rubrics in our verticals that we feel can get the most value from us, and we're targeting them very specifically. And lastly, and most powerfully are the referrals, right? The fact that our customers would actually be here with us today to talk about us and actually refer us to other customers and have conversations with our customers to provide our ability to have those conversations with them. And what that does, it arms our sales organization and our partners to be able to have brand awareness, to be able to create demand generation to capture, qualify and close those things within our pipeline. And then over time, as their customer for life, be able to renew them and capture that revenue ongoing. Now one thing we've figured out over the last 16 quarters is that we have a very prescriptive way of running our pipeline. We know now that we need 4x pipeline in the beginning of every quarter. We need 3x pipeline the following quarter and 2x pipeline in the quarter after that. If we're set up that way, we are very confident that we can hit our numbers and we can forecast appropriately because we've had lessons learned over those 16 quarters. So Peter talked a little bit about why customers choose Evolv Express. I'm not going to talk about that because you can see why they choose it. What I want to do is I want to take you through the day in the life of a customer conversation or a prospective customer conversation. The first conversation we have with a prospective customer is a qualification question. That qualification question is, have you decided within your organization or your facility or your school or your hospital to actually screen for weapons? Because if you haven't made that decision, talking about technology is a moot point. You've got to make the decision that you were going to do that. When we talk about Fenway and we talk about sports and entertainment, they've been screening forever. Their clientele and their patients have always been safe. We know they want to screen. When it comes to schools, hospitals, workplaces, they're still having a cultural shift and whether they want to screen or not. So we have that conversation first. Once we understand that, and that's a yes, we then move into a very vertically focused conversation with those prospective customers. If it's a school, we have a conversation in one way, Jill's actually going to talk about that a little bit and kind of what's the emotional context there? What type of empathy do you bring to the conversation. It's really about how you enter that conversation with that prospective customer that's so meaningful and impactful and what differentiates us as an organization because we can have those vertically focused conversations and informed conversation. We'll talk about how we do that in the verticals. So after we have that conversation and we understand that they do want to move forward, and they want to bring something like Evolv Express into their facility or their school. We then introduce them to our customers. We ask them if they'd like to visit a customer site and see it actually work in action. And more importantly, what we can do is as we bring them to a customer site, we can back up and we can have our customer talk about what we do and how we do it. It's really, really important because that customer can have an intimate conversation with them that we cannot have as an organization sometimes so they can have that conversation. In addition to that, they may actually choose to, in addition to that conversation to a proof of concept or a demo, where we'll actually work with our partners or ourselves and actually put a system on site, so they can see it work within their own venue and their facility. And as part of that, we bring our TS&S team in, our solutions engineers, and we focus on what the site survey will look like, where these things should go and really hold their hand on the concept of operations. We haven't talked about that at all today. Concept of operations is really, really important. It's the experience that we provide to our customers that comes from the concept of operations, how you build it, how you put it in, the way you walk through it is really, really important because it's going to be different and different configurations. So we take them through that. We document that, and we make sure they have the confidence in order to use that. And at that point, that customer is about to make a decision. And that decision is going to be based on 1, 2, 3 or 5 of these things. For example, Pro Sports. Pro Sports is making the decision based on unmatched security, superior visit experience and significant cost benefit because now instead of having 100 or 75 metal detectors, they only need 7 dual lane expresses. That means they can bring their labor costs down. They actually have a significant ROI, and you're not taking up as much space. If you're a school, unmatched security, of course, visitor experience for the students and for the teachers and the administrators, but the employee retention is critical. And then when you talk about healthcare, same thing as education is the operational insights. Healthcare loved the idea. They have data now. They understand who's -- when people are coming in, where they're coming and what time of day they're coming in. This is all really, really important information for these -- for our customers so that way they can make better decisions. So took you through a very high-level day in the life of a discussion with a customer. Now I want to take you through how we actually organize to capture the market opportunity. Let me go back there for a second. So the way we do this is we have -- and I'm going to go high to low for a reason. We have vertical understanding, we have geographic positioning, and we have partners for scaling. And we'll talk about all 3 of those now. So Peter talked about an unpenetrated market. We have so much opportunity right now and so much need out there to help our communities. It's really an incredible opportunity for us to get back to our communities. And the way we've decided to do that and what we've invested in for the last few years is this verticalization is vertical approach. And way we -- the way we've decided to do that is by going out and finding people from the verticals themselves. Jill is one of them. We have John Bayer in here who comes from the Brooklyn Nets. And we also have a VP of Healthcare, we just brought in from one of our customers from a large health system, right? That was the Executive Director of Security that is now with us to better inform us and make us more -- make us smarter really, about the verticals. What is it that we do that's special for them? Because yes, we find weapons right? But why is it important to them? What is it doing for them that differentiates them from that vertical? And education, Jill talk about that, right? So there's lots of different things that you look at. And when you take into these verticals and when you have a better understanding of these verticals, what then you can do is have better idea of the market dynamics behind the verticals. Each vertical buys differently, right, and partners differently. Some verticals take longer than others. Some verticals buy more than others, right? You have to talk to different audience. So there's different ways in which the market dynamics work. And as we become better informed because we brought the subject matter experts in, that makes us better at doing what we do. It also allows us to collaborate better with our customers. For innovation, Mike talked about innovation. Alec talked about innovation. Those ideas are coming from our customers. right? So because Jill is going to talk about education, I'm going to zero in on one vertical specifically sports. And the reason for that is because it's a bit unique. Most of our verticals were actually going through the channel and utilizing partners. With sports, we want to hold that a little closer. And the reason for that is because the exposure that you get through pro sports and stadiums and arenas, you can't match. There's 127 pro sports arenas in this country, of which we have 34 -- I thought it was 31, but it's changing every day, of which we have 34. And the reason why we take that direct is because we want to manage that experience for them directly, and we want to hold that dear. And the reason why we hold that dear, if you look at this map of the United States. You can see some of the pro sports venues that we currently have. Of those 34, we have 16 pro sports and entertainment, stadiums and arenas that call us their exclusive weapons screening partner. Now we talked a little bit before about pro sports and the fact they've been screening for weapons for decades, right? So you take that, you put that into a metro area, you are able to get that customer to do their due diligence on you, right, that have been doing this for a long time, and they are going to take on that technology, that's a huge vote of confidence for the communities around them. So I want to take you through a bit of sports brand affiliation and how this works. In June of '21, we brought on the Columbus Crew, majorly soccer. We were able to wrap some marketing around that over that time and then come August, Cleveland Browns. So now we have the Cleveland Browns, NFL team. [ Grab some ] marketing around that, brand affiliation in Ohio. Can we get some momentum and operational leverage from this relationship? Well, yes, why not? Not only did we get operational leverage, but we got 20,000 increase in actual leads -- 20,000% actual increase in leads. We brought on 11 new customers and $7 million in ARR, which isn't up there in 1 year. Take that and spread that across all the other professional sports venues we have, now we have something. We really get the message out to the communities that there's a technology out there that can help you. They can help you make the people in your facility safer. So we talked a little bit about the verticals. The second piece is the geographic positioning of our teams. Peter spoke a little bit about a high-velocity sales or go-to-market organization. That organization has actually made up over 100 revenue professionals. We talked about the organization earlier in the different roles and responsibilities. Those 100-plus professionals, they're allocated across 5 distinct regions within the U.S. We call them pods. And the reason why we took on the pod approach is because: one, I wanted every region to have every role and responsibility from demand generation to sales execution to onboarding. That way, they could be closer to the customer, they can make decisions and be empowered to make decisions faster so we can move faster, right? And also, from a go-to-market perspective, yes, we have an overall go-to-market strategy, which we've kind of talked about with all of you and you all understand. But in each region, they're different. Regions act differently. There's different values, there's different decision-making processes. There might be different verticals, not different verticals, but the same verticals, but they may be allocated differently. So how can these pause in this regional sales approach be more customer-centric and actually understand better how to provide what they need to provide. Across these pods, we now are going to have over 36 account executives by July 1. And by the end of this year, we'll have 40-plus account executives across all those pods as well to prepare us for what is coming in 2024. And then partners, how do we supercharge this geographic approach? We do that by creating a partner program. We started this in 2020. We had 10% of our deals we're going through partners come to today, 80% of all our deals are going through partners. And what that gives us is operational leverage. That allows us to sell more without having to service and support more because they can do that for us. We align our partners to our verticals. They help us increase awareness with their networks. They increase our scale because many of them are doing Level 1, Level 2 support installations and deployments. And now over the last 3 years, we can truly learn from the lessons that we've had over time. So now that we have this program, we can start to rinse repeat and then start talking about the international markets because when we go international fully, it will all be through the channel. Last point on this. As part of those pods, we have 1 to 2 channel account managers per pod. They're the ones that manage the partner relationships, enable and activate them in those regions and partner with those pods make sure we have the right partners for that region and for the verticals that we're focused on. With regards to the structure of how we structured a channel partner program, we have 3 different types of partners. One is an OEM, and we only have one of them. That's Motorola. Basically, Motorola takes Express and then integrates it with other options that they have on their side and repackaged it as concealed weapons detection, a differentiated product, we call it CWD and they sell that through their partner program. We also have VARs, value-added resellers. Value-added resellers for us are the ones that do Level 1, Level 2 installation and deployment for us, and they can do everything from soup to nuts sales all the way through service and support. And then last but not least, we have -- we have a reseller, which is really someone who is utilizing their paper, right? They have contracts in place already. They grease the wheels and they skids for us to be able to do these deals in a more efficient manner, and they allow us to get to market much faster through those relationships they have through their networks. So that's a lot of the buyer journey that I want to take you through. What I want to do now is I want to introduce Betsy Fallon so she can take you through the rest of the customer journey through the user and the loyalty journey. Thank you for taking the time.

Thanks, A.J. Good morning, everybody. You've heard my name, Betsy Fallon. I'm Vice President of Customer Experience here at Evolv. I don't really want to date myself too much, but I'm going to go ahead and tell you that I have many years of experience in marketing, customer relationship management and operational leadership roles, largely in software tech companies, primarily in the content management and linguistic technology spaces. I've worked in start-ups, I've worked for public companies. I've worked in companies that have scaled both organically and via acquisition. And I've had a lot of experience that I'm bringing to the table to Evolv now about 2 years in, where it's been a real honor and a privilege to learn a lot about the physical security space and also work alongside an incredible group of talent and colleagues that are so many. So as AJ said, he's brought you up to what we're doing in a go-to-market fashion and the buyer journey. And what I'm going to spend the balance of our time talking about is that user and loyalty portion of what we do. So once we acquire a customer, as Peter said, we're very focused on keeping a customer for life. And I'm in-charge of making sure that we do that through a variety of -- so first, what I do every single day when I get up is I put my customer hat on, and I work alongside the Evolv teams, my organization, but will cross Evolv broadly to make sure that our customers are successful with what they purchased in the first place, making sure that those business objectives that they had we're delivering to and we're partnering with them to make sure that they achieve them. So we take a pretty methodical and deliberate approach to how we build a strategy and execute against that, and it really is focused on 3 pillars. The first is making sure that we're delivering world-class service. And we're doing that both with Evolv FTEs as well as a third-party partnership that I'll talk about in just a second. And we make sure that we're leveraging this both remotely. So both the capabilities that Alec and Mike talked about that we have in the product itself to be able to leverage our data, leverage our analytics, leverage the cloud to be able to remotely diagnose and troubleshoot in the product itself. Second, we're very focused on proactively engaging with our clients throughout the lifetime journey that they have with us. We really, as I said, want to make sure that they're achieving the value that we've promised them. And the way that we do that is by really earning their respect as trusted advisers and partners and not just being vendors, and we've had great success there. And then finally, and ultimately, we obviously do want to monetize our clients. We want to renew them. We want them to be customers for life, but we want to be able to expand that share of wallet that we have with those customers by delivering all of the additive capabilities, both product and services that they might be able to continue to consume as they're working on their objectives. So I'm going to tell you a little bit about how the organization is structured. This is the customer experience organization. As AJ talked about, our sales executives, our vertical experts like Jill Lemond, who you're going to hear from shortly, our presales technical solutions teams, they take a highly consultative approach to the way that they work with our clients during the prospect cycle into becoming a customer. And they build what is the foundation of those intimate relationships that we carry forward with our customers. But we want them to go back to doing what they do best, which is actually to go out and acquire more customers for us. So really, what they do then is pass the baton over to our customer success organization. And that group of individuals become the conductors of what is a 4-year and beyond journey of working with these customers. So they partner very closely, not just with parts of my organization, but beyond. But really initially with our technical support and our field services teams to make sure that these customers are deployed, they're enabled, they're trained, that they continue to consume the capabilities that we deliver through our product management and R&D organizations every year. And so they're very focused on making sure that that's a long-term relationship in that way with those teams. And then as AJ also mentioned, we have our eyes on the operation. We are scaling rapidly as a company. We've got more than 3,000 units out in the field now. We will have tens of thousands of units out there. And so we want to make sure from an operational perspective that we're looking at how we can remain lean, make our teams incredibly productive, operate cost efficiently and effectively out in the field. So I'm going to spend a few more minutes just double-clicking on a few key areas that I think you'll want to hear about. And the first one is that customer success management team. We're really not doing anything that's incredibly unique in terms of a best-in-class SaaS company about applying a customer success motion to your operations. But what is unique and novel is we believe we're the only ones in the physical security space that are offering this capability and value add as part of the solutions that we're selling. Our competitors are not doing this. And this is a real differentiator from us, and I think you'll hear that from our customers that you hear from a little bit later. Where I do think we have some secret sauce is how we're hiring the people that are joining that team. So we've had great success bringing individuals in who have guest relations experience. We're drawing people out of the very venues that we are going in and selling to, performing arts venues, stadiums. We do, in fact, have a number of people on our team who have come to us as former Evolv customers, which I think is a huge testament to the passion that our customers have about both the value that the systems are providing but also what the company itself is doing that people want to come work with us. This team is about 18 months in. They're new. They're maturing, but we're seeing and we're hearing and we're feeling the value that they're providing. But I know where the real proof is going to be is as we come up to contract renewals, that's where we're really going to see the proof of that investment. I also mentioned and just wanted to talk briefly about a third-party relationship that we've embarked on. Again, as we look at the scale of the number of systems that we're going to have out in the market, both in North America and ultimately globally, we wanted to make sure that we have a way to very cost-effectively and very rapidly have boots on the ground to get to systems that might have need. And that's where Ricoh comes in. You may have heard of Ricoh, you might think of Ricoh more as a producer of office equipment. You might have a Ricoh photocopy machine in your office. That is the roots of what Ricoh does. But Ricoh is a global multinational, very diversified Fortune 500 company that has its roots in office equipment, but has built long-standing deep practices over the years around life cycle services, managed services that they extend out and offer to their customer base like Evolv. And what we're doing is tapping in to their infrastructure and the resources that they have around the country and around the world really to basically become an extension of Evolv. And one of the things that was very important to us, besides sort of the business capabilities that they have was finding a partner that we would work with who share the Evolv values. And our values, I think you've heard and hopefully have seen this morning and you'll hear later, we're incredibly customer-centric. We're incredibly purpose-driven. And with Ricoh acting as proxies have evolved when they're out in the field, we wanted to make sure that they carry that same banner with them and they do. So we are up to nearly 100 trained Ricoh engineers to date. And what you're seeing here is just a little visualization excuse me, of where those Ricoh engineers are. So the bigger the bubble, the bigger number of trained engineers that we have in those locations. And those locations map to highest concentration of where Evolv systems sit today in the country. And the model will continue to flow. They have many thousands of trained people around the country that are selling and servicing into, in many cases, our customer -- our existing and target customer base. And as we acquire those customers, trained Ricoh engineers will be put in place in those locations. I would say aspirationally, what we're really looking for is particularly in urban areas. If we can have Ricoh-trained engineers and parts available in ZIP code or adjacent ZIP code to where our clients are, that means we can rapidly deploy when we need to, to get in and to service our customers in those locations. So we're excited about that relationship. And then finally, this is my last slide, but I think it's a really important one. And hopefully, as I'm talking, you'll read just a little bit. So this is data from our voice of customer program. We take our voice of customer program very seriously. We utilize the Net Promoter Score methodology to gauge customer satisfaction and customer loyalty at Evolv and we consider that to be a real key and leading indicator to their likelihood to renew. But we don't just tackle it from a quantitative perspective just to get a score and then feel good about it. We actually really go out and interview and probe our clients, people like Otto and people like Brian, who you're going to hear from later, to have them tell us what we need to do better, how can we improve because we're partners with these customers, and we're on a lifetime journey. And then what you're seeing here is we also ask them, what are we doing well? What can we celebrate, -- what do we need to repeat? And so as you're absorbing a little bit of this, these are verbatim comments from clients across a broad spectrum of verticals, locations and roles. And I'll just summarize by saying it's not really one thing that makes us special and makes us sticky for these clients. It's the product itself. It's the ease of use of that product. It's the innovation that people like Mike and Alec and Owais in the R&D team are bringing to them and to the market itself. And then really, it's the people behind it. And we're finding that while we always have things that we can do and improve on, our customers do truly love us. They love our technology. It is making them sticky. So I'm going to end by letting you know that I feel incredibly confident. I think I share that with Peter and with Mark and the rest of the executive team that we are a best-in-class SaaS company that will have renewal rates that are well over 90%. So I want to thank you very much for my whistle-stop tour, and I think we're going to have Jill come up next.

Ladies and gentlemen, please welcome Betsy Fallon, Vice President, Customer Experience gentlemen -- sorry, ladies and gentlemen, please welcome Jill Lemond, Director of Education.

Good morning. I'm so excited to be here with all of you. I recognize that I am the only thing standing between you and lunch. So I'm cognizant of that. But I do want to take some of your time today and tell you a story that brought me to Evolv, but more importantly, it's all about the mission here and it's sort of our North Star, what we're thinking about in schools in particular. So my background is a little different than any of the others that you've seen today. I did come from the school side of the house. I was a classroom teacher to begin with. And then I was able to sort of climb through the ranks there and become a school administrator and eventually a district level administrator. So I was in district leadership in Oxford, Michigan. It's important to note that everything that we're doing here has this mission, it's completely embedded in it. And you've seen it in everyone's slides, you've seen it -- you've hopefully seen the passion from all of us, but I want you to know that I lived it, and that's why I'm here. So before I get into my story, if you can see there's actually a website that I don't know if you're familiar with, the K-12 shooting database that actually ranks school shootings. We have so many of these, but there's a system in place to rank them. You heard Mike talk about you have to have 4 deaths to be -- a mass casualty incident. You can see actually, my mass casualty incident didn't make the top of the worst list here. So there are so many of them that there are systems in place to determine how much money a school district may get from the federal government post incident. There's actually equations in place because this is such a common practice now. They know how many individuals to send to a community to support them post incident because these incidents are becoming so common. This is how common they're becoming. These are just in K-12. This is not looking at the college mass shootings like the one at Michigan State, my alma mater, just a few months ago. And then the number of victims, which is just really shocking, I think, to look at. So I want to tell you where I came from. Oxford, Michigan is -- and I'm a Michigander, so I'll just show you on my hand, right? It's about an hour north of Detroit, and it is every town USA. It is a place where people feel safe. It's a place where they have concerts in the park on Thursday nights, and it's a place where everybody goes to the high school for the big game on Fridays. And football Fridays are celebrated by grandparents and community members across town. And that's where I had the privilege of teaching and starting my teaching career and was able to be an administrator there for a total of 12 years. This was our security posture before a critical incident. So I want to make it very clear. This was not in response to, this was before tragedy hit Oxford. And I want you to take a moment, if you could, I'm not going to read them off to you, but this is not even an exhaustive list of the many, many things we had done to increase our security posture. This is not common, by the way. We were above most, I would say, in our approach and the way in which we were prioritizing safety in our school budget. It was something we're extremely proud of. But what you may notice up there is that many of those items are in response to tragedy, not all of them, but many of them. And I think Mike talked a little bit about the culture shift in schools and in education and kind of moving that culture from thinking about what do we do when to how do we make sure something doesn't happen? And how do we move our thought process really to prevention? And how do our budgets match that priority? On November 30, 2021, our high school was completely transformed into a crime scene. We had an estimated close to 500 first responders that showed up, and we ultimately lost 4 students and 7 others were injured that day. And I want to tell you what it was like to be there because I think it's important to note that everyone at this company, right, we say we're living it. When we're going out in the field, a lot of times too often, it's reactive. Customers are calling us because they need to do something because something horrible has already happened there, and they need to change their security posture quickly. Some of them are visionaries and some of these schools are being great and proactive, but many of them were going into or trauma-induced conversations. And so we talked about having to be very trauma informed in the way in which we approach these potential customers and the conversations that we have with them. So on November 30, I was in an administrative meeting, very boring, very boring day. We had a cabinet meeting. And we had had lunch brought in, which was unusual for us. It was sort of celebratory because my mentor, the superintendent was going to be retiring within a few weeks of that date. It was one of our last times to gather together. And it was fun. It was nicer than usual, and we had just gone back to our offices. And it wasn't 10 minutes later that I saw one of my colleagues walking by, and it was wintertime, there's snow on the ground still in -- in Michigan it had already started. And he had his big winter coat on. And I said, "I know your day. We all just discussed what's on our plate. I know you're here for the rest say, "where are you headed?" And you could tell the look on his face and you said, "I have to get to the high school, I have to get -- he couldn't explain to me why, I have to get to the high school." And as he was running down the hallway, his secretary mentioned, there's a cap gun that went off. There was a cap gun. People smell something like sulfur. So we're thinking that it's maybe a hose, right? Maybe it's like a senior prank or something, something is going on with that, but he's taking it very seriously because he has 2 of his own children in the high school. So he was gone. So I went -- we had 187 cameras at the largest single story high school in the state of Michigan, and again, had spent quite a bit of money on those. So we went to the system to view those and quickly remotely popped up our camera images. And the very first camera image was of our assistant principal on the ground, giving life-saving measures to a young man who ended up dying that day. And even still, I'll tell you, all of the training I've been through, all of the professional development we've done about active shooters and having the context, we talk a lot about context today of knowing that I heard a gun went off and I see someone on the ground, you still cannot connect those dots. It's almost like the denial is so strong. It's just -- it's so bizarre that you don't want to believe that this is happening. Of course, we knew something was happening, we still kind of convince yourself perhaps that student had a medical issue. And also, there's a senior prank with a gun -- with a cap gun. You still -- you don't let yourself go there. I prided myself on my beautiful emergency operation plan. That was something that I put together on an English major. It had no grammatical errors. It was beautiful. And you know what happened that day. Nobody looked at it. Nobody cared about what they were supposed to do because multiple people on my team of administrators had children in that building. And so the people who were supposed to stay back or the people who were supposed to be at the reunification site and all these well-placed humans all went to the high school. We all got in our vehicles. It was about a mile from our central office, and we just said we need to figure out what's going on. The high school, like I said, is a very large campus. There's south doors and there's North doors. I'm so grateful really every day that I went in the North doors and not the South doors because that's where the carnage was on the South side of the building. I didn't know that then. I went to the office, which is on the North side. I was able to get in. I was there just as first responders were also coming. And before the roads were all blocked. I was able to get in. And when I saw a friend of mine, a counselor, open up the night lock and allow me into the main office, I could tell by the look on his face that certainly something horrible had happened. Tears, everyone in the office went from being maybe this isn't real, I don't want to believe this to, oh my gosh, I'm in charge. Not only is something terrible happening, but everyone is looking at me to figure out what to do. I was handed the phone, and I was on speaker phone with 911, and I had to go and again, look at more videos a theme for me that day and watch as a shooter, I will never name and give any time on this stage, shot students over and over and over because we had to rewind it and watch it again and rewind it and watch it again and they said, "Please tell us something about this shooter so we can make sure we have the right person in custody." He had a mask on. He had a hoodie on. He looked like a kid and he was a kid. And how horrible is that, that I'm watching this student kill his fellow classmates. I do want to say when we talk about the response element, I want to make sure schools don't lose that priority because it is still very important. I would like them to see them do more preventative measures, but also on the response side, our kids knew what to do that day. I was very proud of that. Our teachers, our staff, our substitute teachers, the administrators, there were so many heroes in that building. But nothing could have prepared me for walking out in the hallway. I was in an area where I should not have been, but they needed someone to have the night lock removal tool because I don't know if you're familiar with night locks, but it's a locking device that was used on that day, very proud of that. And our shooter never tried to open a door. We're presuming because he knew we had these locks in place. There's a special tool that you have to use to actually get it out of the door jam, and I have that as the Head of Safety. So I walked out in the hallway and I saw a war zone. And then I spent the next several months trying to figure out how it could possibly get children. And actually, the kids were rather resilient, but adults, workers back into that building, not just the teachers, but also the food service workers who are in dry storage for over an hour unknowing without any speaker system to know if the shooter was done, if the shooter was caught, if they were all clear, how could I get them back in the building? How could I get kids to focus in class again? And what I really want to make sure you see today is that these were real people. I'm never going to talk about them without honoring them and showing you their faces. And while it's disgusting that they're not here anymore, I like to use every opportunity at this company and beyond to talk about this because it's real because it's not just a graph in numbers, and it's not just ones and zeros. These are 4 people that are not here anymore because of gun violence in school. Hana was my student, she's an English language learner when I was back in the classroom from Japan. That's unacceptable that we're losing children to a problem that we know how to prevent. We have solutions. Again, not a perfect solution. You've heard that as a theme. There is no perfect solution, but we are a really great start for a school, right? Schools as a use case is fantastic. Evolv came to me and it's really important for you to know how they came. So they came in a way that was different than every other vendor who got my phone number or my e-mail address post incident. I'm telling you, I was still in the building, talking -- giving Police, my statement and my Internet is -- my phone is blowing up as the vendors are finding out about what happened on CNN or wherever else it was broadcast and saying, hi, I know that some kids just died over there. Do you want to learn more about this fancy lock? Or have you ever thought about a camera system? Have you -- it was so tone deaf to what we were going through and it was disgusting. Evolv on the other hand, on the complete flip side came to me through a parent who suggested it and suggested that I have a conversation with them. And I will tell you there are some people in this room, Kevin is back there smiling at me. When they met me, I was not very nice because I was going through a laundry list of vendors, and I was sure that they were going to be just like everybody else, and I was annoyed that I had to take more time from all the really important social emotional learning post tragedy things I was doing to talk. I had my arms crossed and Peter asked about that. But when I found out that, that they had a charitable organization that gives systems each quarter to a school in need and that they were actually going to give me the system, and it wasn't going to cost me anything. My posture sort of changed and I kind of perked up a little. But what was most important was the way that they talked to me. I don't think I learned about the product and so the very last few moments of that conversation. What we really were talking about was my needs as a customer, as a potential customer. What do you need? We know you're going through something horrible. We have a network of security professionals across the country. How can we help you? Maybe it's not weapons detection, weapon detection was not even a hot topic, really. They were saying, what can we provide you? Is it access? We know you have a building to get back in order. Is it supply chain? Is there anything we can do to support you and your community right now? And no one had ever considered that I was a human in this process until I talked with Evolv. There wasn't another vendor that was coming to me that was treating me that way. And it really stuck out as different. And I fell in love with the mission and the people and really realized that everyone here has the same concept in mind that we want to make places safer. We want to make schools safer, and that's really close to my heart, obviously. So I came over to Evolv just about 8 months ago. And I've had some really great opportunities since being here, I'll talk about momentarily. But AJ talked about teacher retention and that we're losing teachers. This is not just a small problem. Even if you look at college programs and preparation for teachers, they're down by at least 1/3. That's a conservative estimate. So not only are people who are currently teaching and working in schools leaving, we've lost over 600,000 teachers since 2020. We had 10.6 million. We have fewer than 10 million now in America. So not only are they leaving, but they're also choosing not to go into the profession in the first place. And why? We did a third-party study, 40% of the educators who responded said they're anxious about gun violence at work, anxious about gun violence at work. Again, we have a preventable problem, not easy to solve, not perfect, but preventable. Some of the ways in which I'm honored to work towards that solution is working with some of my colleagues on Capitol Hill, talking with legislators, explaining to them that schools need to be able to fund our machines, and they need to have access. And that your tax base shouldn't determine how safe you are as a child in the street. So that's a hot topic for us when we're talking with them. There's also this ESSER funding. I don't know if you're familiar with that acronym. But ESSER funds were meant for safety, but with the concept of COVID safety in mind. And so that money has already been given out to states and the COVID emergency as of May 11 has been declared as over in our country. And so we're asking them to repurpose that funding to say, isn't there -- are there other safe ways that schools could be using this funding. And not just for our system, for all the different really great technologies and different processes that are out there that can help bolster a school security posture. So that's another way. And how are school is paying for us, not only that ESSER funding, which we are seeing, but there's also some different grants that are available. And then there's also capital projects budgets, which are a little bit different than the foundation allowance that schools get from their per pupil funding. It's a little different in each state, but capital projects are easier to use and a little more freed up funds within a school district. A lot of times, those are for -- all of these that I'm mentioning are for onetime purchases. So that's important when Mark talks more about how people are actually getting our products. I just -- I don't have anything else to share with you besides, thank you for being here. Thank you for learning with us. Thank you for trying to understand a really complex issue and a really game-changing solution that we have here at Evolv. Thank you.

Okay, folks. We're going to take a break here. We're all going to collect ourselves for a few minutes here. We're going to take a 15-minute break. What we'd ask you to do is to take a trip around outside, grab yourself, if you would, a lunch and return to your seat. We're going to start in 15 minutes with our customer panel. So lunch right over here, come around, come back, that would be great. 15 minutes, please. Thank you. [Break]

Ladies and gentlemen, welcome back. Please welcome Anil Chitkara, Co-Founder and Chief Growth Officer.

Thank you, and welcome, everybody. I want to reiterate the welcome and thanks for each of you being here. We really appreciate the opportunity to tell the story and more impact -- importantly, the impact we're trying to make out there. And we're very lucky to have 2 of our customers here today. You heard a lot about what we do and how we do it and how we think about our customers, and now we're going to hear directly from them. So I have to Otto Benedict from SoFi Stadium and Brian Schultz from Charlotte-Mecklenburg Schools. We'll talk a little bit about those venues, what they have been doing, what they're doing with the Evolv Express system and security in general and the impact it's had. Just as we get started, so I started the company with Mike Ellenbogen. He did a very nice job talking about the founding of the company and how we thought about what we wanted to do. Mike mentioned the Boston Marathon story. Part of the reason I started the company was on April 15, 2013, I was down there. I was a mile away. I had my kids who were 11, 9 and 7 at the time. My wife was running her eighth Boston Marathon. She came across the finish line a little before 2:00. We got in the car, we went home and the first device went off at about 2:49 and then a few minutes later, the next device. And we were very close to it, too close to it. And in fact, a close friend of mine, he wasn't so lucky. He stepped out of his office building. He ended up being a few feet away from the second device, and I went and saw him at Mass General Hospital. And this is a 6'4 rugby player, a big guy. And to see what that has done to him was just tragic. He has since recovered. He doesn't have hearing. He still had shrapnel in his neck. And as Mike and I thought about what we wanted to do, this was the problem we wanted to help try to solve. It wasn't acceptable that these 2 could go do what they did. And so that's the journey that we're on. So I want to take a few minutes now to talk about our customers and how they think about protecting their own venues. First, Otto Benedit at SoFi Stadium, he's the Senior Vice President of Operations there, responsible for security, for game day events, for changeover, for day-to-day operations, which is an important component in terms of how we think about what we're doing. And then Brian Schultz. Brian Schulz is the Chief Operating Officer of Charlotte-Mecklenburg Schools. Charlotte Mecklenburg is 1 of the top 20 schools in the country. In fact, they have the largest private -- public transportation system in the state. They transport about 140,000 kids into school. They cover 175 different countries, speaking over 200 languages. So a very, very diverse district that he's got there. So Brian, maybe you could just talk a little bit about the district and even more importantly, paint the picture when you came out of COVID, what was happening, what was the feeling? How are students and teachers and administrators coming back?

Sure. Yes. Thank you, and thanks for allowing me to be here to speak to everyone. Our district obviously it's very large. We serve about 142,000 students and a very complex in our operations and delivery of services to students. We have -- when we came back from COVID, so there's a lot of apprehension just in general with that and that was in the fall of 2021. We initially started seeing a lot more physical aggression among students. We had a proliferation of firearms in the first semester. In fact, by December, we had more -- we had confiscated more firearms on campus than we had in any previous full year. So it was unprecedented. And if you know anything about the national gun sales, over those 2 years after COVID, you know that students and their families had more access to firearms. So that was -- so we were seeing that come into the schools from the communities, from the homes as a result. So -- and it really got to the point where in December, we had an incident on one of our high school campuses where a student -- 2 students got in to a tussle over a backpack at dismissal, and one of the students pulled out a firearm and discharged it several times. And fortunately, no students or staff were injured in that case.

So an incredible story that is the story that played out a lot in many different schools around the country as they were coming back from COVID. So before we go deeper into Brian's story and how they thought about safety and security after that incident, let's hear a little bit from Otto. Otto, can you talk a little bit about Hollywood Park, about SoFi? It is a -- it's the most expensive, but grandest most technologically advanced stadium that's been built. But please share a little bit about that.

Yes. So Mr. Kroenke's vision was to build a global destination for sports and entertainment so [ hot ]. SoFi Stadium sits on 298 acres. We are currently under development. Of those 290 acres, we have a retail district, 500,000 square feet of retail. We have 500,000 square feet of commercial buildings, one office tower now, three more office towers in development. We have potential for hotels, a lot of different projects on that property. And as you look at the slide, right here, you're seeing a side view of SoFi Stadium on the left and then the -- as the roof starts to slope down, that's a 6,000-seat indoor live entertainment venue, which we call YouTube theater. And then that Lake, you're looking at, that's all public space. It's a public park. So when our campus is open and everything is complete on that 290 acres, we're going to have a whole lot of public moves around that space. SoFi Stadium, largest NFL stadium at 3.1 million square feet. We host well over 65 major events a year. We opened in '20. We went through an incredible season of nobody in the building. We have the tenants of the Rams and the Chargers. So it was a really awesome opportunity to watch football, all by myself in the stadium and sit in every one of these seats in every suite and test them out. So in '21 when we came out of COVID, it was May 2, '21, we had our first ever ticketed event. It was only 30,000 people. It was a benefit concert as we're starting to get everybody back in the economy and back across the country to go to events. And we were set up much like a lot of other venues. We had metal detectors. We had technology and processes that were in place in almost every single venue that were just a copy and paste from what we had done post 9/11 as we had our best practices from all the leagues being used. In that first year, which started with a concert of 30,000 people and we ended that year with Super Bowl 56 with well over 90,000 people in the building, we saw the opportunity that we were missing by utilizing the technology that was walk-through metal detectors by sitting there and seeing how that process is working through the ticket scanning. And realizing that, for us, on an NFL game, we're opening our doors about 2.5 hours before kickoff. Most of the people were not getting into the building until after kickoff because of the way they function: one, tailgating; but two, just the process of coming into a building that many people going through that process of walk-through metal detectors. And that's when it really started our process saying, hey, how can we make this better? We know that we've got 2.5 hours of captive audience time. That is where we're able to generate revenue. That is where we're able to make our biggest impact. And that is what got us started looking at the technology that is Evolv. And when you look at the slide here, just for a general understanding of those of you who have not been at SoFi Stadium, we're very unique. We're unlike any other stadium because we are built into the ground. The LAX flight path dictated that our building had to sit down on the ground. So we excavated over 6 million cubic yards of dirt to dig a hole into the ground. And so when you come under our building, you're on level 6 of 8 levels. So 2/3 of our building has to transit down into the lower levels to get to all of our premium. And we're also a first of its kind in just a technology standpoint. We're the only building that has a center-hung, true 4K end-to-end video screen, which we call the Infinity Screen at 70,000 square feet of technology viewable from any one of those seats. We have the closest suite product of any type of NFL stadium in our building. We're only 18 rows from the field. Amazing WiFi capabilities, amazing technology as it comes to point of sale, what we're doing for our food and concessions and beverages. And so to have that [indiscernible] access of walk-through metal detector just did not align with what we were trying to do as a strategy. And so that's where we started to jump in and say, okay, there's a better solution out there and got us go in researching on Evolv.

Really helpful, Otto. And how did you hear about Evolv? How do you hear about Express? Can you talk a little bit about how you evaluated it? You have had a lot of experience with metal detectors. And just talk a little bit about that experience and that evaluation and what you found?

Yes. Our security team had done some research on different systems. There are a couple out there, some that were being provided by existing walk-through metal detector providers. And so when we saw the Evolv system, the first thing we did was reach out and say, we need a list of who you're currently working with. We want to understand what you're doing there. And my first phone call was to Wrigley Field one of the most iconic baseball stadiums that's set up in the middle of the city, which we are ourselves as well. When our campus is fully done, we are 68 acres that sits right in the middle of 298. So I want to understand how they were functioning that process. As we talked to them, we really got amazing feedback on how they are able to process guests from their center field gate, which then has to be closed down because of the public right of way for transit. They have to do that very quickly and very efficiently. That started us digging in deeper and just going around and asking everybody that Evolv -- was a current customers of Evolv how that system is functioning. And it was consistency across the board. The system works. It's always -- it is a consistent indicator of what we need. We don't have failures. There's never a negative comment that came out of that. And for us, that was our first idea of like we've got to dig a little bit more on this. It sounds too good to be true. And as we talked to the team, your team over there, they really gave us the incredible feedback and insights and provided us all this information and research that have been done for us to understand that's the opportunity we want to take and the investment we want to make to be able to increase what we were doing for us. Our metrics, right, in our walk-through metal detector phase at best, we were doing right around 498 ticket scans a minute. And so that was where we wanted to make an improvement on that number. And if we can improve on that number, then we knew we'd have an impact to what do -- what we were doing with revenue-wise. And in our first year with Evolv, we actually doubled that number. And we were having almost 100% of our crowd in the building before kickoff. We had more than 75% of our crowd in the building in the first 1.5 hours, we were open. So a massive impact to what we did from a revenue standpoint.

Yes. Great. Thank you. Now let's go back to you, Brian. So you left us with the discharge of the firearm after the 2 kids had a scuffle. I'm sure that caused you to think about things a little more broadly or differently. Can you talk about what happened after that, how the district and maybe some of the schools thought about safety and security? And then consideration of different alternatives and ultimately your selection of Evolv Express?

Yes, absolutely. We had -- prior to that, we had pulled together a cross-functional team of teachers, principals, district administrators to really look at the -- solving these multiple issues that I mentioned earlier, including the firearms. And that was really the catalyst to say for the community and our industry leaders to say, yes, we need to spend some money and take care of this problem and do it effectively. So we actually had a previous experience at Bank of America Stadium where the Carolina Panthers play football and unknowingly had gone with some of the season tickets. And I walked through. What I expected to have bag searched, body searched, all of those things and it to be a really slow process as it was still -- we were still feeling the effects of COVID. And in quite the opposite fashion, it was the fastest that I'd ever gotten into the stadium. And so I asked the person that I went with and she said, yes, we already walked through security. And I didn't even see it. I didn't even know it was there. And so that kind of one thing led to another, I talk to our Chief of Police, Chief Mangum. And she knows the Head of Security at Bank of America Stadium. She said, oh, yes, it's better than it's ever been. And these things work great. I said well would they work in our schools? Because prior to this, we had no weapon detectors in our school. So I walked through the elevator down here on the first -- walked to the elevator on the first floor down here. And we all saw it. I mean there were stacks of old metal detectors. I don't know if you saw them pushed against the wall not being used. Well that happened similarly in our district because it would have taken our schools of 3,000, 3500, 3,700 students, the largest in the state, it would have taken them 2 hours to get students through those, and they would miss out on our core business. So that team worked together to then coordinate a visit with our Chief of Police to the Head of Security at Bank of America Stadium. I took our Board members, took our superintended, took some of the team members to see it in action. And everybody came back and said, yes, that will work and that will get our students in within those 30-minute -- that 30-minute time window that we have for arrival in the mornings at each one of our high schools. So that really led us to Evolv. We did look at some other products as well. But we felt like as far as the Evolv's technology is very unique, as Mr. George said earlier. And it is -- it was the only one of its kind on the market. And it was the only one that we thought would get our students in without a change in arrival in the morning. So that's where we landed on. We began the procurement process in January of '22.

Yes. Good. And it's been in place now for a little while. What's the reaction? What's the impact? How do you measure the success of the system and of your overall security at the schools?

Yes. I know probably a lot of data heads in the room. We all like to look at metrics. And interest me, those are all great, and I'll talk about those a little bit. But I think from a qualitative point of view, when I'm on the ground and in the schools and talking to people and hearing from students and staff members and administrators. And if any of you have ever worked in K-12 education, we -- it's challenging to move forward at the same pace and with the same consistency because you have, in our case, of implementing these weapon detection systems, 73 different chiefs, basically the owners of their schools running their schools. And they all think that they know how to run their school the best way, and many of them do. So moving forward with that was really important with consistency. So it really allowed us to evolve in the way we implemented really allowed us to do that. And again, talking to them and talking about the ease of it, talking about the support that we received from the customer success team was just overwhelmingly positive. And I'll never forget, I talked to a retired Colonel from the Air Force. He was -- his retirement job was teaching JROTC at one of our largest high schools. And he came up to me and the principal and just thanked us, and he was in tears. And thanked us for installing these because he said, my head is on a swivel all the time, and I'm in fear all of the time. This is a guy that's experienced combat, has led large groups of people, not the person that I would have -- not the 22-year-old that I would have expected straight out of college being in fear of his or her safety of school. This is a combat veteran. And so to hear that, it was just so powerful about how -- it's actually a recruiting and retention strategy for our staff in addition to obviously keeping our students and staff safe.

Yes. And one of the things that we've talked about before that I found fascinating as we think about detecting weapons and keeping them out of places where they shouldn't be, but you talked about the other side of that, which is the impact on training and curriculum days. Can you just talk a little bit about how you saw an impact on that?

Yes. And I'll just talk about our core business in schools. I mean, it's a lot of things or people think it's a lot of things. People think it's about the sports or the band concerts or the safety, but our core business is teaching and learning. And that gets lost in politics and all these other things that I mentioned, but our core business is teaching and learning. So as a former Chief Academic Officer, I always try to keep a focus on that. And so I'll give you some of the quantitative results. So we've had a reduction of 31 firearms found in schools last year to 6 this year. And 4 of those 6 were found in -- well, 2 of those 6 were found not during school hours. They were students who came on during spring break and posted themselves on Instagram with firearms in their hands. So we have to report those. And then 2 came in after hours because of -- as a result of some incidents that took place on campus and came in through entrances that they weren't supposed to come through that were not equipped with Evolv. And the 2 others we actually found in the -- through the Evolv web and detection systems. So we went from 31 last year to 6 this year. That's an 80% reduction. And we've also, in our non-firearm weapons, which we purchased these to address our problem of fire arms, right? That's the specialty. But in addition to that, we've seen a 60% decrease in our nonfirearm-related weapons, knives, tasers, blades anything that kids bring to school they're not supposed to bring to school. And the impact on teaching and learning is to the tune of we were able to recapture from the previous year over 6,000 days of suspension and almost 40,000 hours of instruction. And when we talk about what K-12 public education does for students, from the teaching and learning side, what that does for life outcomes for students, those are huge numbers. So we talk about safety, but this is really about teaching and learning.

Thank you, Brian. And incredible, right? With all the hard work the teachers and educators are trying to do to get the kids back in the class instead of being at home makes a huge difference. So Otto, let's go back to you. You talked a little bit about the impact, the valuation with the impact that it's had. One of the things that I've heard you talk about is it's a force multiplier, right? You can now think about security generally and your security team now that Express is in place a little bit differently. Can you talk about the impact it's had more broadly on your team and security in general?

Yes. For us, when we -- we're able to look at the metrics of how evolve and improve our staffing opportunities, we went from 170 metal detectors down to what is actually 14 Evolv units. We have total of 22 deployed across YouTube Theater in SoFi Stadium. So that gave us quite a significant reduction, right around 200 people that we could redeploy from that front metal detector walk-through process to other locations throughout the building, utilizing in other ways to help our customer service experience, which is greatly helpful, especially in the building of its size and really its complexity. We looked also just the customer experience that Evolv allows us to produce. Our greatest concern from a building operator standpoint is the amount of people at the gates, and you guys saw it in the slide earlier, everybody lined at that walk-through metal detector waiting to get in. That compaction of people is the greatest target for anybody that wants to cause harm. So the ability for us now to move people through in such a much faster format, creates a greater safety experience for us. What it also does is it's telling us how many people are coming through each individual gate. And when we do have something that alerts, we're actually getting detail out of it. The walk-through metal detector did exactly that, detects metal. That's all would tell us. It would give us a red or a green light in the general area that it was. We got nothing out of that. We couldn't use that for any preplanning or any after action planning that we would do. Now we're getting a report. We're getting a live report that's telling us where people are coming in, how many people coming in, what types of items, if anything, are coming through. We're able to use that when we do our after-action planning. Go through -- do our reports, break that down. It'll also gives us metrics back that we're able to share with other venues in the L.A. market as those different shows may be going on tour, we're able to share a lot of that back. It's also tracking for us where we have our staff. Very important for us on a game day, we have more than 4,000 staff that are coming in to operate the building. They are all going through an Evolv system. The NFL players, the concert artists. They are all going to the Evolv system and all of their staff. So we're getting a lot of data back from that, that allows us to really preplan and put the right things in place. So when those concerts are coming back, we're able to adjust our processes and our security posture to be even more impactful.

Yes. I think that's incredible. It's just such a great combination of value points that you have. So the detection is there, the fan experience is transformed, the ability to redeploy security staff around the ability to improve revenue on the inside because they're not waiting. And then all of the data and analytics that let you plan better for the next time incredible. And Brian, one of the things we were talking about is how you think about some of the benefits which you talked about, but cost. It comes up a lot with schools. It's public money, it's tax dollars. How do you think about cost? How do you think about the cost of security on a student basis?

Right. It's a really interesting thing for our district being so large, we're the 17th largest in the United States, approximately 142,000 students and close to 20,000 staff. So anything that you buy for everybody looks like an astronomical number to the public, right? The automatic response is that's a waste of taxpayer money. Well, multiply 142,000 times 10. We spend $10 a student, we're already spending $1.4 million, right? So it looks astronomical to our public. But we've spent close to between $19 million and $20 million on the Evolv. And that really translates into -- so we've implemented in our -- we have a K-8 configuration. We have K-5 schools as well, about 8 K-8 schools, middle school configurations and high school. So we've implemented 73 schools. That's approximately 72,000 students, and we have at least 5,000 staff members or more serving those. So if you do the math on that, it really comes out to about $265 an individual. And just to think that we can't stomach $265 per individual to keep them safe at school is really kind of a slap in the face that people want to criticize that. So it is worth it in my mind, and it's worth in a lot of people's minds now as they've seen the results.

Great. Thank you. I think it's fascinating to think about it in those terms. So Mike and Alec talked a little bit about where the technology is going. Some of it was a little clearer and a lot of it was vague. So these 2 gentlemen got a sneak peek yesterday. So we brought them in, they spent a couple of hours Alec, Mike and some of our technical teams would have showed them where we're going. So I don't want to talk specifically about where we're going. But as you think about what you're trying to do with your venues for security and beyond and then some of the things that you saw on the drawing board, what are your thoughts?

Yes. For us, just as a future proofing. I don't know if you have that slide of the campus. But for us, this is where the campus will be going in the next 5, 6, 7, 10 years and the number of events we have there. FIFA World Cup, 2026, the Olympics in 2028. So what we want to be able to produce and as you look at this, this is residential, this is retail, and this is the entertainment district. So a football game with 70,000 people, another few thousand in the residential retail district and then people that are actually living on our campus, we want to make sure we're creating an environment in which we know where there are threats, where there are weapons. Whether any one of those places is active in doing its own unique activity, we want to know what's happening there. Same thing with the office buildings and the commercial. So as we saw the technology, we see the opportunity and even what Evolv is now, there's an amazing opportunity that we want to be able to put that across our integrated campus so that we see everything that's happening. We're also book-ended by the Intuit Dome future home of the LA Clippers coming up here in July of '24. And then the Forum, an iconic concert venue on our North end. So we have a ton of traffic that's just transiting our campus in general, going to different venues, not even on our place. And so being able to understand what is moving across that campus. And if there's a threat there is just an awesome piece of technology that we really want to have as we integrate our what we call our city altogether.

Yes. Great. Thank you. Brian, as you think about schools, individual schools, overall the district, different campuses you've got, how do you think about some of those technologies we were talking about how they might fold into how you think about the vision for Charlotte-Mecklenburg?

You're making me nervous because I signed a nondisclosure agreement. So I don't -- no, as a -- so I was the student that was always in trouble. When I grew up, I think -- and it's really made me a better educator because of that. I was the student who was always trying to find a different way -- because you put a system in place, I was trying to find a way around it. And oftentimes, I did. And so we have students not -- and I wasn't mean. I was just curious and wanted to try to beat the system all the time. So we have a lot of students like that, all right? You tell them, no, they want to do, yes. And if you tell them right, they want to go left. And so students constantly evolve with systems, no pun intended, but they constantly evolve. And they want to sometimes figure out a way around the system. So what I've seen and what I experienced was that I see that there are systems in place that not only address how students are thinking and being, but also how criminals and people intend for evil are thinking and will -- and they will evolve as well. So I see some real solutions on the horizon for that, and that has me really excited.

Yes. Great. Thank you. I appreciate that and not disclosing everything. So we have just a few more minutes here, and I just wanted to sort of wrap it up, close it up. So as you think about getting started with Express, the impact it's had and what you're thinking about going forward and the value, can you just sort of summarize why you went with Express and the value you've seen? And then, Brian, I'll have you do the same.

Yes, for us, massive, massive impact to just operations, even operating costs. And then on the flip side, like I said, in our first hour, we're seeing greater than 30% increase in revenues, off food and beverage, merchandise those things in nature. And so we see what it's going to allow us to do. The NFL themselves, they are also starting to see the impact that this system has. The other leagues are coming around and seeing that. And more and more stadiums like ours, other arenas like around our Los Angeles market just across the country are doing that. It's really creating that opportunity that the customer is going to expect this type of security screening as the new norm and standard. They're going to -- the feeling of a walk-through metal detector is going to become feeling of our own safe environment. So that's where we're going to see a lot of people going and we want to be on the cutting edge of that. And for us, we are continuing to see the improvements to our own operation that the Evolv system alone has done for us, and that's just on the security function. So it's got a long-term impact for us across a couple of things we're doing.