Shares of security company Evolv Technologies Holdings (EVLV 2.25%) jumped as much as 26.1% in trading on Thursday after reporting third-quarter 2021 financial results. Shares closed the day up 17.9%.
Total revenue in the quarter was up 473% from a year ago to $8.4 million, and the total contract value of orders booked in the quarter was $16.9 million. Net income was $23.2 million in the quarter, or $0.15 per share, but that included $41.7 million of gains on the fair value of items.
Management also slightly increased guidance for bookings and revenue for the full year. The total contract value of bookings is now expected to be $53 million to $57 million, a $2 million higher top end than August's guidance. Revenue guidance was also $2 million on the high end at $20 million to $23 million.
There is strong momentum for Evolv's products in this market. With safety a key concern for places with large gatherings, the market should grow. We are also seeing the company make a quick comeback after a slowdown during the pandemic.
What investors will want to see over the next few quarters is a move toward profitability. Gross profit is high at around 50% of revenue, but operating losses were double Evolv's revenue in Q3, which isn't sustainable long term. We need to see more growth and better operating margins for this to be a big winner for investors.