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, welcome, and I hope our New York friends are not getting a rash being here at Fenway Park. 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, we really appreciate you spending the time with us.
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. You know, a little bit about myself. I've been in Boston technology for almost 30 years now, I guess. 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 seven years. After that, I spent a little bit of time at a company called Fleetmatics, which was acquired by Verizon. A little bit of time at Lytx as in FP&A and Treasury, and I've had the great pleasure of being here for two years.
Evolv Technology is an incredibly special place. We think we're working on some really, really hard problems. We are trying to make the world safer, 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. We've put together what we think is a really fantastic day, but hopefully, it's informative. A 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 on the left side of the or your right side of the room.
Talk a little bit about the agenda, and then just have a couple of housekeeping things before we'll turn things over. Safe harbor language. I am 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 information. 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 forecasts, 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, we'd 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's our Vice President of Customer Success. Jill Lemond, who's our Director of Education, will be up here.
Then, we've also got Anil Chitkara, who's 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. Then Mark Donohue, our Chief Financial Officer, will be up here in just a few, just a little bit later after the lunchtime. Briefly on the agenda, and I think this agenda, excuse me, can be found in a QR code, which is available on your on the loose sites. You'll see a QR code that will lock you or unlock presentation material today. It will also unlock this agenda. We're going to spend just a few minutes wrapping up here, though Peter George will lead us in a discussion of the next decade of growth.
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. 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. More importantly, how we're helping our customers overcome their challenges. We're going to bring Jill Lemond up here, who's going to do a case study kickoff. 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'll be over here. I'd ask you if you could return to your seats in those 15 minutes. We have a 12 o'clock customer panel that Anil is going to lead us in, with, again, two of our customers are here.
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 a executive Q&A, so an opportunity for you to ask any questions that you may have at that time. To that point, would ask you to possibly, if you could, hold your questions during the presentations for each of the speakers who's going to hold those questions. You can send those to me at ir@evolvtechnology.com. 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. 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. 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'll be available in a QR code. Keep me honest, Olivia, we've got QR codes, I think, at everybody's desk.
That's your electronic key to get into a website. Once the presenters have completed the presentation of their material, that material will then go, excuse me, live, up on the internet, and 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.
Inspiration is often a term used to describe the light bulb moment when an idea sparks in an entrepreneur's mind. For Evolv Technology, our inspiration was born following some of America's darkest moments in recent history. It came in the wake of the Sandy Hook tragedy in December 2012, the 52 mass shootings in the 122 days that followed, and culminated with the Boston Marathon bombing on April 15th, 2013. These horrific events, some right here in our own backyard of Boston, crystallized the bigger need for technology that could address this growing and evolving epidemic.
In 2011 and 2012, we were actively searching for new technology that could transform an industry. We started Evolv with a vision to develop products to prevent these catastrophic headlines. It was time to out-innovate the bad guys, to apply technology to help keep people safe in public spaces. Our founding principle was balance. Any successful solution had to balance the detection of weapons being used to carry out these incidents, while allowing people to continue to live at the pace of life without creating new checkpoints everywhere they went.
Instead of forcing people to adapt to the needs of security needed to adapt to the needs of people. Instead of rigid immobility, we needed mobile flexibility. Instead of alarming on keys or phones, we needed to only catch the gun. Instead of figuring out how to react when a shooter entered the building, we needed to prevent the gun from ever entering the venue. It took us six years to develop and deploy a technology that could meet this need. In 2017, our first product, the Evolv Edge, launched. While it dramatically reduced the need for invasive security screening, it wasn't good enough. It had to be faster for people to go through, easier for security operators to use, and better at detecting a growing list of threats.
It was a step in the right direction, but we still weren't satisfied, so we kept innovating, experimenting, learning, and adapting. In September 2019, we proudly launched Evolv Express. It uses the power of AI to instantly differentiate personal items from threats, making it easy for guards and frictionless for visitors. Since Express has been available, Evolv has screened hundreds of millions of people, helping to keep them safe in schools, workplaces, healthcare facilities, entertainment venues, houses of worship, and many other public places. Hundreds of customers have partnered with Evolv to create safer zones.
Sadly, the U.S. continues to see more mass shootings. Gun violence continues to rage. In the first 100 days this year, there have been 146 mass shootings, taking 202 lives. Over 5,200 additional lives were lost to gun violence. That's over 50 people a day. These staggering losses show our work is just getting started. 2023 marks our 10-year anniversary as a company. Our passion and our commitment have never been stronger. We at Evolv continue to drive forward, developing new products, building and deploying our technology, and spreading the word to help create safer zones for more people. We work tirelessly to keep students and educators, doctors and nurses, workers, sports fans, concert and museum goers, our neighbors, our friends, and loved ones safe and able to enjoy daily life without fear.
We proudly count Boston as our hometown and are especially honored to know we help protect venues right here in our own community. We are Boston Strong.
Evolv's mission has never been more important as we look to the future. A world free from the constant threat of violence is not only possible, it's our collective right as human beings. We need to be safer, to feel less anxious, and to go about our daily lives without the fear many feel. Changing the world is difficult. Changing the way we approach security isn't. It's time to make security actually work for people instead of making people work for their own security. We are Evolv, the human security company. Ladies and gentlemen, please welcome Peter George, President and Chief Executive Officer
Good morning, everybody. Happy that you're here in this special place. As Brian mentioned, this building has hallowed ground for everyone in Boston, and whether you love the team or not, you have to love Fenway. We're so happy you came to enjoy this place with us. As you know, there's gonna be a tour later on today. We want you to enjoy that. You just saw a really important video for the company. It talks a lot about our history. Today is about looking to the future. We want you to get to know our team, which is part of what today's 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 happen in Boston, sometimes bad things happen, too. This happens to be ground zero for the Boston Marathon bombing, which was the inspiration for our founders to build Evolv. 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. I'm gonna 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 gonna get a chance to do this so that you get to know us a little bit.
As you can see here, I 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 four children were lived in France for seven years. Phenomenal experience, 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. I had the privilege of leading Fidelis Cybersecurity. Fidelis was and is a malware protection company. We competed against FireEye in the cyberspace.
In fact, when the DNC breach happened with the Hillary Clinton server, along with CrowdStrike, FireEye, Fidelis actually did the forensics work to discover that the Russians had compromised our server. We were doing really, really good work in the cybersecurity world. I got also a chance to see some very transformative companies when I was there. One of them is Palo Alto Networks. 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, Check Point had a stateful inspection firewall. The point is, when they came, they were a hardware company with one product.
They were an appliance company, nobody gave them a chance that they would transform cybersecurity. 20 years later, they went from being a hardware appliance to a virtual appliance, to a cloud company, now a container company. They came from being a one-product company, 23 products in 13 categories recognized by Gartner. They're now a $56 billion market cap company with $8 billion of ARR, they transformed the security space, today are the largest purpose-built standalone cyber company in the industry. Absolutely amazing. They did that to cybersecurity. We think we can do that to physical security. After 25 years of being in cybersecurity, if you've following cybersecurity, you've probably been to the RSA Conference in Moscone. I'm guessing you've been there. I went there for 20 years.
My last year, there were 5,000 companies, all hand-waving that they could stop the next SolarWinds breach. Overfunded area, yes, cyber is really, really important. It's important to protect IP, intellectual property from advanced adversaries, there's nothing more important than saving lives. That got old for me, I got a chance, actually, to meet Evolv, meet our co-founders, meet Dr. Rose. 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, you know, it became very, very clear to me that we could build a big, enduring, durable company for a long, l ong 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. We have to compete against a metal detector? I'm all in. Let's go do that. 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.
We have a lot of confidence that we can have a decade of really, really good growth and be the human security company that we were born to be. It starts with a couple of things. 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. I can tell everybody here in the room that everybody that comes to the company and everybody that stays in the company, the number one 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? 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 add it 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. 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 gonna hear a lot more about the technology as we go forward. 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. AI weapons detection. Secondly, we have a really big market to go get, right? This is a $20 billion TAM, $2 billion of it's regulated, but the rest is under-penetrated. 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? 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 Evolv Cortex AI, but we also have a lot of digital capability, and I wanted to make sure that we're gonna extend our digital capability. We just brought into the company a great digital executive. 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. Parag, I'm gonna ask you to stand up in the back. Say hi to Parag Vaish. Just joined the company, how many weeks ago, Parag? Four weeks ago. I can tell you, he's already come in and made a really big difference, by listening, right, to learning everything Evolv.
We really welcome him, and I think you can expect to see some of the digital products I talk about, and probably a bunch others that we don't know about yet, to be part of our platform going forward. We're gonna talk a lot about 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, 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.
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. Finally, you're going to hear a lot of this from Mark Donohue at 1:00, so everyone ought to be in their seats at 1:00 because we have a lot to tell you about this. 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. 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-$100 million of cash still in the bank, and at 1:00, you may even hear that may get accelerated. We'll see. Guys, come on. Come sit down. No worries.
All right. Okay, let me take you a little bit on the journey of where we're going in the future. Just go along this ride with me. I'm gonna try to be crisp. For us, a lot of this started during the COVID days. You might imagine we started selling our systems before COVID. 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, 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. 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 a high-risk person. Those are the big trends that have been driving our growth. Okay, let's start with safety, 'cause 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.
In 2022, gun violence surpassed car accidents as the number 1 cause of death of people under 18. I mean, guys, you know, I have four kids. You have kids. We always worried about our kids getting behind the wheel of a car, right? Are they gonna have an accident? Now, we have to worry about them getting shot by a gun. It's crazy. You can see the stats here, 321 million people a day shooting each other. How many dying, and how many of those are kids? 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? 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, 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. When she told me that on the second day of school, she's hiding under a desk with her eight-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 eight, right? You add cyberbullying, 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? We have lots of epidemics here in the country that we can help with, and we're gonna have a deep discussion about what it means for schools. What things can we do to help? Technology can help. If the Second Amendment's not gonna change, and we don't see that happening anytime soon, technology's 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. 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 'cause they don't feel safe, 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, we think ours can, it starts with our platform, our digital platform. We're disrupting the physical security world with a digital platform, this is our system architecture. Mike and Dr. Rose are gonna 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 this, the needle in the haystack. Guess what? Most people aren't carrying weapons, let's let those people come into the ballpark or the stadium, let's use technology to find the people that do and just completely flip the model. This is our architecture.
You're gonna hear more about this as we go, but it's central to who we are as a company. Okay, quickly on our technology. Many of you know this, but 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. The secret sauce for the company is the Cortex AI software. The ability to quickly identify 1 million data points when somebody's walking through the system, 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? We can do that instantaneously. That makes us different than any other company in the industry trying to solve this problem. Flips the model, right, where we assume that everybody doesn't have a weapon until we find it. 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 wanna go do. It's crazy.
We're using technology to flip the model, right? Completely flip it. It changes the security experience, the fan experience, the student experience in a really, really big way. Two more things on technology. We did this from the ground up. We used 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 saying, "We're switching the board to make sure your system doesn't go down." Really, really powerful capability in the cloud. Finally, as part of our subscription, we do four software upgrades a year, and we can do that in instantaneously with the hit of a button. All 3,000 get the upgraded software. Guess what? Super important, 'cause it makes you more secure, efficacy goes up, and we can keep them current on anyone that's trying to defeat them. 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. Really, really important. Data is really important. Okay, a couple of other statistics that we think is important. We have all this technology. We have 3,000 systems deployed. Guess what we're doing? We're getting lots more data. We scanned 300 million people in 2022. We've scanned over a lifetime, 600 million, and this year alone will 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. What I mean by that, on April first 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 post it, so we know, screened 2.2. At some point, we're gonna probably pass the TSA of 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. Guess what? They only have to defeat us once. It's an asymmetrical problem, and it's really, really hard. 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. We're not gonna 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. 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 gonna keep everything out. That's the world that we live in as a company. Okay, you saw the stat 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. Sometimes they don't need permits for it, so, there's lots of guns out there. Okay. I'm gonna pick up the pace a little bit. 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. Best-in-class security means push the perimeter out, and let's create that frictionless and informed experience for our fans. That means, what if we knew about you at the approach, and we could create a really good experience in the venue? 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?" We added some cameras and software to our system. We had people not come in with COVID. People aren't using that much anymore. They want us to do more. Think about on our digital platform, the other friction point in the stadium, besides screening, is ticketing. They're on your phone now, right? Still you have to put it on the thing, and oftentimes grandma is trying to find the five tickets for their kids. It takes a while, and it backs up. If that could be faces a ticket, use biometrics to identify who you are, and you can go from the street to your seat without stopping, touchdown everywhere, right? That's possible on our platform or off our platform, and we're talking about what that could mean for our customers.
Also other capabilities, as you can see here, threat intelligence, flow analytics, lots of things to make the experience really frictionless. Secondly, pushing the perimeter out 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. Lots of technology that's available there. 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 a line anywhere. Those are the things that are possible. Those capabilities may be great for a stadium. There may be other ones for schools, right?
Some of the mass shootings that have happened, 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 sec between when that assailant gets to the school, that can help a lot of people, right? 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. You're gonna 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 gonna 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 healthcare, 10% in professional sports, 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 gonna 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 healthcare and hospitals that need us the most. We're gonna go after those. You can see the stats in each of the markets we operate in. Look at the numbers.
There's 140,000 schools, everybody, to put our systems in. Why should kids in Charlotte, Mecklenburg, and Brian's gonna 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 healthcare. It's our doctors and nurses, right? All the mental illness there. We can help, right? That's a really big vertical for us. 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. You know, 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 wanna purchase our system. I'm gonna let AJ take you through this in more detail, but it starts everybody with increasing their security posture. Job number 1, right? Then all the other things that really matter. Again, I'll leave that for AJ. 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.
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 it and buy some maintenance. This is we have to keep them current, and we have to keep bad things from happening. 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.
For the last three quarters, and I know you're keeping track of this, we've been deploying, you know, 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, as I mentioned to you, we built a high velocity sales model, 40 direct salespeople, high touching customers, partnering with 70 channel partners to give us scale and leverage in the markets to really, really grow. We're feeding that a lot this year and hiring new people. 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. Measure us on ARR. You can see the number of ARR beaconing subscriptions we deploy every single quarter. The graphs to the right, everybody, represent our seven-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. Keep measuring us on this. We think it's really, really important. You're gonna 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 1, 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 three to five. We have 600 customers and 3,000 systems out. Think about the average or ASP, five systems per customer. Really, really important.
We have a lot to do to get our systems out to all the places that need us the most. 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. 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. I will tell you know, we're able to hire both based on where we are here in Boston, whether it's MIT or Harvard, or we have a really great education base.
I also learned, my four kids are in their 20s now. Young people wanna go get a job that has a purpose. I applaud them for that. Because of that, we're able to hire some of the smartest data scientists, the smartest software engineers, really, really smart young people that wanna come here, right? They wanna 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 gonna be important part of our strategy as a company going forward. Customer journey, right? Making our customers for life, buying more, wanting more, partnering with them, making their venues safe, super important.
We're gonna 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. We're gonna 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 makes a noise. It's a thing. 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. 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. 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 wanna 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. Really important, we get that brand awareness. We have a great marketing team working on that. Finally, supply chain. You guys asked us a lot last year about global supply chain. Is it impacting us?
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 wanna double that this year, and we have a very good partnership with Columbia Tech. Mark will talk about this. They're based 30 mi 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 gonna be able to build the systems with some headroom that we need. 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? It's technology, but it's also people. Dr. Rose is gonna 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 gonna continue to feed that and capture the demand out there, 'cause 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 gonna go do that. Really important on go-to-market. I mentioned four-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 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. We have 600 customers, but I also mentioned to you that we define one customer as a customer with lots of systems. Our largest customer has more than 160 systems. We count that as one customer, right? Think about the number of customers and number of systems that we can deploy going forward. Final thought. 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? Now that there's technology for us to gather safely so we can create safe zones, 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 when we walk, it should be around us, and we should feel like we're safe. There's technology now that can. That's how I think about security. 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 Evolv Express product today, but during the course of this decade, we're gonna have five more products that we're gonna be able to offer our customers. They may be physical products, but they'll definitely be digital products, too. We wanna 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 gonna have 5,000, and we're not gonna have 3,000 beaconing subscriptions, we're gonna have 100,000. We're not gonna have $70 million of revenue, we're gonna have $1 billion.
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, you know, being Evolv, the human security company. Thank you, everybody.
Ladies and gentlemen, please welcome Mike Ellenbogen, Co-Founder and Chief Innovation Officer.
You want your coffee back? Oh, water. Water. 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 spitting distance from here. It is an absolute honor. I'm gonna 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 gonna 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. 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 boombox, in a checked bag, in a suitcase, in the belly of that plane, 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 checked baggage. The only tools that were really available at the time were what we call conventional X-ray machines. Basically, what you've seen with, you know, bag goes through, you've got an operator staring at a screen, next.
The only way to deal with all the checked baggage at a place like Heathrow was to fill up the lobby with conventional X-ray machines and people, labor, and hassle, and friction. We worked very closely with BAA, British Airports Authority, the guys who 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'd 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 instead of the airport reconfiguring itself to deal with security, we changed the security technology to work the way the airport wanted to. 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. 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 gonna blow themselves up. Let's fast forward. 9/11 changed aviation security forever, obviously. We had taken Vivid public.
We sold the company to PerkinElmer. I stuck around with the buyer for a while, 9/11 occurred. We saw the creation of the Department of Homeland Security. We saw the creation of TSA. We saw a completely different legislative requirement. 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. We started Reveal because for 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.
You would check in, you would schlep 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. 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. We'd seen this movie before. Oh, 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 3 terminals, and then took about $60 million worth of equipment from TSA and put them into those conveyors. Obviously, now, rebuilding every, you know, 450 airports across the U.S. was gonna be hugely expensive.
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 this. We rethought this problem. We said, if we could make a smaller, cheaper, lighter CT scanner, right? 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 wanna bring the bags. 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. All right? 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. We developed that system. We got through the TSA certification process.
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 wanna live at the pace of life." Our competitors at the time were GE and L3. What's interesting about aviation security is a single event can change the entire landscape. 9/11, clearly, was a significant single event. Unless you've got TSA PreCheck, you're still taking your shoes off because Richard Reid, the shoe bomber, tried to blow a plane up with a shoe bomb. If, unless you've got TSA PreCheck, you're gonna go through that body scanner, right?
That millimeter wave body scanner, because Abdulmutallab tried to blow up Northwest Airlines flight that was coming into Detroit in December 2009, 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. 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. 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. 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. One, it's great to know that the system works. Two, 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, 1.
We've spent billions and inconvenienced hundreds of millions and billions of travelers. I'm not saying it's not important to protect aviation security, but there's a single attack, a single event. Sorry, let me back up for just a second. Most happy venture capital stories end in a sale of a company. 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, you know, with the VCs. 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.
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. That was in 2011, 2012, and into 2013. 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 1 mi from here, 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. There'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. 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. Clearly, there was a need. 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? I mentioned one event that I'm aware of in aviation security.
This is, you've see-- Peter just showed you this, 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. If you valued visitor experience, you really couldn't do much in the way of security. You might hang a few cameras.
You might have a guard, you know, kind of an imposing guard standing there, but you're really not gonna be able to do much in terms of making sure people aren't carrying threats into that facility. We call this the Protection Paradox. The tools that were available were the walk-through metal detectors, hand wanding. You've seen this all over the place, bag checks. Anytime people, you know, 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. 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, you know, 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 gonna 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, you know, a number of the types of venues that we, 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?
We did, but it took us a while to get there. I just want to share a little bit about this journey. We, when we started the company, we licensed a technology called metamaterials out of Duke University. The idea, metamaterials are kind of a cool way of steering waves, and the idea was we were gonna make a millimeter wave scanner, just like the body scanner at the airport, but it was gonna be like a flat screen and screen people just as you walk by. We hired this very promising young man who had, like, the ink on his PhD hadn't dried yet. His name's Alec Rose, and he sits over there. He's our chief scientist.
Came out of that lab at Duke and within the first six months said, "Yeah, this isn't gonna work." We took a step back. Millimeter wave can be managed like radar. We developed a unique, custom, sparse radar array. 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. The first embodiment of it was the product that you heard about earlier, the Evolv Edge. The Edge was good but not good enough, meaning it eliminated the need to dump your pockets 'cause the system could tell the difference between your phone and a firearm, or it could find a person-borne IED or a suicide vest or something like that.
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 got to go one person at a time. Again, we're looking to eliminate friction, to maximize flow. We got the Evolv Edge out. We got some very forward-thinking customers to work with us, and we learned a lot through that deployment. We're forever thankful to those customers who worked with us, used the Evolv 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. 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 need it to work. We spent about a year doing that while we were selling the Evolv Edge. Alec came in, I remember it like it was yesterday, one Monday morning and said, "I think I've got it." That was the insight that became the Evolv Express. 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, doesn't matter. That was the inspiration for what became Evolv Express. I had a conversation last night with Raj, and he shared a story where you came through Evolv 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. It warmed my heart to hear your story about going through Evolv 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. I appreciate that.
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 shall," or, "Here's the bar, and this is how high you gotta jump," and has created this $18 billion greenfield opportunity for us because of that. As part of developing Express, we developed a digital platform that Peter was talking about, and I wanna go into a little bit, one more level deep, 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. We developed a custom set of sensors that are in the Express for concealed weapons detection. This top layer is our sensor layer.
We're now taking that concealed weapons 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. If you think about a school and how we make a school a fundamentally harder target. There's three things we gotta do. We need to minimize the number of entrances 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.
As we've seen recently, both in Uvalde and in the Covenant School shooting in Nashville, you wanna 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. We're adding brandished weapons detection that utilizes video and AI to automatically detect if somebody is carrying a firearm, ideal, you know, with intent. 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. I talked about openly carried firearms or brandished weapons.
There's a difference between a gun on somebody's hip in 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. 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. You know, you can imagine the number of scenarios where you don't want to alarm on something on somebody's hip. Providing that context through AI is real value to the process because it's gonna 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. 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. 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.
Giving that to the operator avoids the need to do that hand wanding from foot to 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. 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 three minutes, or it could be 15 minutes after a shooting occurs.
The shooting is usually done within that amount of time, and we're looking at how do we prevent. Everything about the 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. 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. The goal here is to provide time and distance, right? If you can give 20 sec of alert, you can actually do something to prevent loss of life. 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. If you look over here, you'll be able to see, we have business analytics running. We've got a 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. Just wanna spend 1 min 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 Fourth of July fireworks, and the headline after last year's Fourth of July fireworks, the first ones where they used Evolv, was "No shootings at this year's Fourth of July fireworks." First time in five years that they haven't had a shooting at the fireworks. They're taking the technology and applying it to big public events. They're also using it for areas like, if anybody's familiar, this pedestrian area in Greektown, downtown Detroit, at the nightclubs. They're using it for community events like block parties, high school football and basketball games.
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 gonna speed up a little bit. You know, it's been 20 years. If it's had the, "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 gonna help save lives. I'm not sure how much value that has created, but it's what we've got, right? Children in the audience by show of hands?
Anybody's children go through active shooter training at schools? I've got three, and they've been doing active shooter training since they were in elementary school. Peter talked about anxiety, talked about, you know, 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. In my opinion, this is a symbol. This is a sign that our industry has failed. It's failed because, you know, for too long, we've put the burden of security on the potential victim.
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 school, 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 eight-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 for people to live, work, learn, and play. We believe we can accomplish that with this 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. I 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. I'm Good morning. I'm Dr. Alec Rose, Chief Scientist at Evolv. My training began at Duke University in under the tutelage of Dr. David Smith in one of the top electromagnetics labs in the country. Focused on metamaterials and one of the few academic labs with a long track record of commercially successful innovations. I've been working on electromagnetic sensing and algorithms ever since. 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. You probably have heard us say this a few times, they are hard problems.
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, you know, dozens of other stadiums. Yeah, it's a privilege to be here and get to share a little bit of that technical story with this, with this accomplished group, and hopefully give you some insight into the core technologies. Not just Evolv, not just Express, but the core technologies we've developed at Evolv and how we are shaping them for the future of physical security. 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. In the process, as Mike said, we touched onto a lot of different technologies. We gathered expertise in some pretty esoteric fields, going into the metallurgy of firearms, material trends and consumer electronics, and PBIEDs, 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. 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 and baggage screening for decades, alongside physicists like myself, computer vision engineers, AI scientists. 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 gonna ship hamsters in wheels.
It was about solving the problem with whatever practical means were at our disposal. 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. 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 and threat discrimination. Like I said, there was no one lightning strike. It took. That's what this patent touches on. Particular sensors, a particular part of the RF spectrum that had been pretty much ignored for decades, 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. As Mike said, we need to build systems that work all day, every day. 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, 'cause we don't always get to choose the environments. Gun violence can happen anywhere. 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. How does the Evolv Express work? The system consists of over 80 individual sensors. They're constantly streaming images, RF data, millions of data points. Critically, we designed the Express from the beginning to be screening in motion. That's not just, you know, a nice marketing. It's literally how the physics of the systems works. 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 to, "Could you tell me which stadium I'm in?" Well, if you took a good picture and happened 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 gonna be a theme that keeps coming up. Our system works like a video. Our system takes and aggregates information, and that's how it generates the context it needs and the confidence to make the decisions and discrimination that it does.
Nevertheless, all that data, when you're using video and aggregating data, you're dealing with that much more data. You still need to process it fast. We process it and render a decision in under 250 ms. If there's no threat detected, nothing happens. 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 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. It didn't take one innovation, it actually took several. 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. Everything's 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, we could 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.
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. 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 received decades of training, have priceless experience. They're capable of vision and intuition far beyond the general population.
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. 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 benefit from that training, from that experience, and from that level of security. It's within this context of AI that I wanna 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.
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 is equals detection plus contextualization plus conveyance. You need all three pieces, to do those three actions, we have four core technologies at Evolv: electromagnetic sensing, computer vision, IoT, and artificial intelligence. It's how these technologies, it's how we have approached these technologies and synthesized them together that lets us perform these actions. Let's start with the paramount thing that probably most people think about when they think about Evolv. We detect concealed weapons, 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.
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 wanna find knives, great, I'm gonna find everything else to the right of it, too. 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. 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.
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's done in electromagnetic sensing. How we do this is through a sensor suite that we built from the ground up.
We had to pick the sensors anew. We had to pick the spectrum anew. Our fields are capable of sensing both ferrous and non-ferrous metals, and they're actually optimized to highlight the differences between metal types and metal shapes. 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 several fronts. Our training datasets, you know, an AI company, you live and die by your data, and our training datasets 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, we're looking at expanding that, pulling out secondary, tertiary features to further reduce nuisance alarms. Lastly, what I wanna 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 perceives different threat profiles, different threat vectors, has different visitor experiences in their mind, has to solve a fundamentally different security problem.
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 space of, at the speed of life. 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. AI is often described as.
[audio distortion] 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 gonna 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. 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. 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 then gave them different information.
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, or 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. As I said earlier, a lot of what we wanna do is use our systems to take tasks that humans are doing today, especially the tedious tasks, and automate them. You can think of tasks like suspect tracking and brandished firearm detection, tasks 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 have been having and plan on capitalizing on these advances in our next generation of products. Moving on a little bit from these detection-focused technologies, I wanna talk about Internet of Things or IoT. Evolv Express was developed from the very beginning to be a connected cloud system, this was very purposeful. Number 1, the advantage it gives us is centralized fleet management and monitoring.
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 systems. There'll be a demo of the VMS system over there working later.
Security is a layered approach, like cybersecurity. Physical security requires layers, requires people, process, and technology. 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.
This last point I'd like to elaborate on, 'cause we actually have a great track record that we can point to of, you know, this is a high-level view, but a meaningful content that we've delivered for our customers over the last two years. 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 gonna 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. As part of that, we'll also be offering a new higher sensitivity threat level. This is just an example of the kind of content we're able to constantly push out to customers because of our IoT investment. 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, 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 infrastructures from the get-go, we're in a position to capture and maintain data supremacy. Then the follow-up question is then, what are we gonna do with that? I wanna 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 dreamed that they could have it before. It's going to take the tedious tasks, whether it was the tedium experienced by visitors coming into venues or the tedium experienced by the security staff themselves, and it's gonna make that yesterday's tedium. 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. Venues are not where we wanna stop. Even if you could turn every venue into Fort Knox, gun violence in this country goes on beyond venues, 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 wanna take prevention of gun violence. It's how we try to best live up to our mission of making everywhere safer.
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. Folks, we're gonna take a 15-min 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. There's PDFs being loaded up there as we speak. There's restrooms on either side, and we have the demo station that we're gonna be going at. If you have questions, send them to ir@evolvtechnology.com, and we'll go through that during the Q&A. 15-min break. We're gonna start up at 11:10 A.M. 11:10 A.M. Thank you.
Folks, we're gonna start up in one minute. One minute, please. If you can take your seat, one minute, please. Folks, we're gonna go ahead and get started. If we could all take our seats, please.
Terrific. Okay, hope everyone had a chance to grab a cup of coffee or take a quick break. All right, we're gonna 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. With no further ado, A.J. De Rosa.
All right. Hey, everybody. Everybody that's from New York, New Jersey, you actually have a representative here. I'm a Jersey kid and Yankee fan. 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 four kids. Each one of my kids have been here multiple times because I love it. The last time I was actually in this room, I was talking to Mike Ellenbogen yesterday as we were walking home together, he told me to tell this story, I will. I was sitting right there, 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 'cause 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 TSNS group, and it was also Mike Martin, who's our strategic solutions director. We were here on a site survey, looking at the venue to figure out how we would put our systems here. Lo and behold, a year later, here we are, standing here at Analyst Day, presenting to you all. Thanks for being here. My name is A.J. De Rosa. I am the chief revenue officer here at Evolv. Brief history on me, and then we'll get to the good stuff. About 28 years in, disruptive technologies, five startups during those 28 years.
I was always in the go-to-market organizations within those. Not only were we disrupting technology, but we were 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, the last 8 years, I have been really focused on remote sensing and AI. The first three startups were in finance technology, the last two, including Evolv, were in remote sensing and AI. Why am I here? You heard Peter talk a little bit earlier about a customer for life. In order to build a customer for life, you have to create a go-to-market organization that can support the entire customer journey.
That customer journey consists of three 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 gonna come up after me to talk about the user journey and the loyalty journey. How did we organize that? Right now, within the revenue organization, the go-to-market organization, we have five distinct teams. The first team is global sales. Global sales is not just feet on the street. You 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 pre-sales. 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. 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. 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. Key challenges. When I think about challenges from a go-to-market approach, I think about pain points. I think about problem sets, right? 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 gonna be customer experience is gonna 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 gonna be more costly.
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. 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. What we're seeing now are droves of these teachers, administrators, nurses, doctors, leaving the profession because they feel threatened. That can't happen.
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. Right now, with analog, 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. You have the problem set, you have the pain points. 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 on here. What I want to point out here is, as this threat level is increased, people want more security, heightened security. The ones that need customer experience, doing nothing is no longer an option.
Where do we find ourselves? We find ourselves in that place where Anil talked about when in the video is: Where's the balance? Where's the balance of heightened security with a customer experience? There is no perfect solution, as we talked about. It's all about people, process, and technology. It's all about a layered approach. We have been able to build something in 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. That, to me, and to the go-to-market organization, means product-market fit. 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 three 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. 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. 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.
What that does is 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 they're a customer for life, be able to renew them and capture that revenue ongoing. 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 four times pipeline in the beginning of every quarter. We need three times pipeline that following quarter and two times pipeline 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.
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? If you haven't made that decision, talking about technology is a moot point. You've got to make the decision that you are going to do that. We talk about Fenway, and we talk about sports and entertainment, they've been screening forever. Their clientele and their patrons have always been safe.
We know they want to screen. When it comes to schools, hospitals, workplaces, they're still having a cultural shift in whether they want to screen or not. 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 our 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 conversations. We'll talk about how we do that in the verticals.
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. 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 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, do 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. 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 in different configurations.
We take them through that, we document that, and we make sure they have the confidence in order to use that. At that point, that customer is about to make a decision, and that decision is going to be based on one, two, three, or five of these things. For example, pro sports. Pro sports is making the decision based on unmatched security, superior visit experience, and significant cost benefit. Now, instead of having 100 or 75 metal detectors, they only need seven dual lane Evolv 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.
When you talk about healthcare, same thing as education, is the operational insights. Healthcare love the idea they have data now. They understand when people are coming in, where they're coming in, what time of day they're coming in. This is all really important information for these, for our customers, so that way they can make better decisions. 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. The way we do this is we have. I'm going to go high to low for a reason. We have vertical understanding, we have geographic positioning, and we have partnership partners for scaling.
We'll talk about all three of those now. 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 give back to our communities. The way we've decided to do that, and what we've invested in for the last few years, is this verticalization, this vertical approach. The way we've decided to do that is by going out and finding people from the verticals themselves. Jill's one of them. We have John Baier in here, who comes from the Brooklyn Nets.
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? Yes, we find weapons, right? Why is it important to them? What is it doing for them that differentiates them from that vertical? In education, Jill, talk about that, right? 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. There's different ways in which the market dynamics work, and as we become better informed because we brought these 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? Because Jill is going to talk about education, I'm going to zero in on one vertical, specifically sports. The reason for that is because it's a bit unique. Most of our verticals, we're 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. 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. The reason why we hold that dear is 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.
We talked a little bit before about pro sports and the fact they've been screening for weapons for decades, right? 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. I want to take you through a bit of sports brand affiliation and how this works. In June of 2021, we brought on the Columbus Crew, Major League Soccer. We were able to wrap some marketing around that over that time, and then come August, Cleveland Browns. Now we have the Cleveland Browns, NFL team. Wrap some marketing around that. Brand affiliation in Ohio.
Can we get some momentum and operational leverage from this relationship? Yeah, why not? Not only did we get operational leverage, 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 one year. Take that and spread that across all the other professional sports venues we have. We have something. We really get the message out to the communities that there's a technology out there that can help you, that can help you make the people in your facility safer. 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 is actually made up of over 100 revenue professionals.
We talked about the organization earlier and the different roles and responsibilities. Those 100-plus professionals, they're allocated across five distinct regions within the U.S. We call them pods. The reason why we took on the pod approach is because 1, 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? 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.
How can these pods and these 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 1st, 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. 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 were 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 one, level two support, installations, and deployments. Now, over the last three years, we can truly learn from the lessons that we've had over time. 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 one to two 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 to 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've structured a channel partner program, we have three different types of partners. One's 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 repackages it as concealed weapons detection, a differentiated pro-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 one, level two installation and deployment for us, and they can do everything from soup to nuts, sales, all the way through service and support. Last but not least, we have a reseller. 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 the 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. That's a lot of the buyer journey that I wanted 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.
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 startups, I've worked for public companies, I've worked in companies that have scaled both organically and via acquisition. I've had a lot of experience that I'm bringing to the table to Evolv now about two 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.
As A.J. said, he's brought you up to what we're doing in a go-to-market fashion and the buyer journey. What I'm going to spend the balance of our time talking about is that user and loyalty portion of what we do. 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... 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 across 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.
We take a pretty methodical and deliberate approach to how we build a strategy and execute against that. It really is focused on three 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. 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.
The way that we do that is by really earning their respect as trusted advisors and partners, and not just being vendors. We've had great success there. 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. I'm going to tell you a little bit about how the organization is structured. This is the Customer Experience Organization.
As A.J. talked about, our sales executives, our vertical experts, like Jill Lemond, who you're going to hear from shortly, our pre-sales 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. They build what is the foundation of those intimate relationships that we carry forward with our customers. We want them to go back to doing what they do best, which is actually to go out and acquire more customers for us. 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 four-year and beyond journey of working with these customers. 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. They're very focused on making sure that that's a long-term relationship in that way with those teams. As A.J. 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. 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.
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. 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. 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.
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. I know where the real proof is gonna be is as we come up to contract renewals, that's where we're really gonna 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 gonna 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. 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.
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 lifecycle services, managed services, that they extend out and offer to their customer base, like Evolv. What we're doing is tapping into their infrastructure and the resources that they have around the country, and around the world really, to basically become an extension of Evolv. One of the things that was very important to us, besides sort of the business capabilities that they had, was finding a partner that we would work with who share the Evolv values.
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 of Evolv when they're out in the field, we wanted to make sure that they carry that same banner with them, and they do. We are up to nearly 100 trained Ricoh engineers to date. What you're seeing here is just a little visualization, excuse me, of where those Ricoh engineers are. The bigger the bubble, the bigger number of trained engineers that we have in those locations. Those locations map to highest concentration of where Evolv systems sit today in the country. 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. 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 get in and to service our customers in those locations. We're excited about that relationship. 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. 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, we consider that to be a real key and leading indicator to their likelihood to renew. 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 gonna hear from later, to have them tell us what we need to do better, how can we improve? We're partners with these customers, and we're on a lifetime journey. 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?
As you're absorbing a little bit of this, these are verbatim comments from clients across a broad spectrum of verticals, locations, and roles. 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 and the R&D team are bringing to them and to the market itself, and then really, it's the people behind it. 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. I'm gonna 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%. I want to thank you very much for my whistle-stop tour, and I think we're gonna have Jill come up next. Thank you.
Ladies and gentlemen, please welcome Betsy Fallon, Vice President, Customer Experience.
That is not me.
Sorry. Ladies and gentlemen, please welcome Jill Lemond, Director of Education.
That is me. Hi. 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. I do want to take some of your time today and tell you a story that brought me to Evolv, but more importantly, is all about the mission here and is sort of our North Star, what we're thinking about in schools in particular. 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, you know, climb through the ranks there and become a school administrator and eventually a district-level administrator.
I was in district leadership in Oxford, Michigan. It's important to note that everything that we're doing here has this mission, you know, completely embedded in it, and you've seen it in everyone's slides. 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. 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 School Shooting Database, that actually ranks school shootings. We have so many of these that 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.
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. The number of victims, which is just really shocking, I think, to look at. I want to tell you where I came from. Oxford, Michigan, is... I'm a Michigander, so I'll just show you on my hand, right?
It's about one hour north of Detroit. It is Everytown USA. It is a place where, you know, people feel safe. It's a place where they have concerts in the park on Thursday nights. It's a place where everybody goes to the high school for the big game on Fridays. Football Fridays are celebrated by grandparents and community members across town. 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. I want to make it very clear this was not in response to, this was before tragedy hit Oxford. I want you to take a moment, if you could.
I'm not going to read them off to you, 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 were extremely proud of. 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. I think Mike talked a little bit about a 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?
How do we move our thought process, really, to prevention, and how do our budgets match that priority? On November 30th, 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 four students, and seven others were injured that day. 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, some of these schools are being great and proactive, but many of them we're going into are trauma-induced conversations. We talk 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. On November 30th, I was in an administrative meeting. Very boring. Very boring day. We had a cabinet meeting. 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. It was fun. It was nicer than usual. We had just gone back to our offices.
It wasn't 10 min later that I saw one of my colleagues walking by, and it was wintertime, right? There was snow on the ground still in Michigan. It had already started. 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 of the day. Where are you headed?" You could tell the look on his face, and he said, "I have to get to the high school." He couldn't explain to me why I had to get to the high school. 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, we're thinking that it's maybe a hoax, right? Maybe it's like a senior prank or something. Something's going on with that, he's taking it very seriously because he has two of his own children in the high school, he was gone. I went. We had 187 cameras at the largest single-story high school in the state of Michigan, again, had spent quite a bit of money on those. We went to the system to view those quickly, remotely popped up our camera images. 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.
Even still, I'll tell you, all of the training I'd been through, all of the professional development we'd 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 cap gun. You don't let yourself go there. I prided myself on my beautiful emergency operation plan. That was something that I put together. I'm an English major. It had no grammatical errors.
It was beautiful. Do you know what happened that day? Nobody looked at it. Nobody cared about what they were supposed to do, 'cause multiple people on my team of administrators had children in that building. The people who were supposed to stay back, or the people who were supposed to be at the reunification site and all these, you know, well-placed humans, all went to the high school. We all got in our vehicles. It was about 1 mi 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 was 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. 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's looking at me to figure out what to do. I was handed a phone, and I was on speaker phone with 9-1-1, and I had to go and again, look at more video.
It was a theme for me that day. Watch as a shooter I will never name and give any, you know, 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, you know, 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. How horrible is 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. 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. Nothing could have prepared me for walking out in the hallway. I was in an area where I should not have been. They needed someone to have the night lock removal tool. 'Cause it's I don't know if you're familiar with night locks. It's a locking device that was used on that day. Very proud of that. 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 had that as the head of safety. I walked out in the hallway, and I saw a war zone. Then I spent the next several months trying to figure out how I 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 were 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?
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. 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 and numbers, and it's not just, you know, ones and zeros. These are four people that are not here anymore because of gun violence in school. Hannah was my student. She was 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. We are a really great start for a school, right? Schools as a use case is fantastic. Evolv came to me. It's really important for you to know how they came. They came in a way that was different than every other vendor who got my phone number or my email address post-incident. I'm telling you, I was still in the building, talking, you know, giving police my statement, and my phone's blowing up as 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. I will tell you, there are some people in this room, Kevin's 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 gonna be just like everybody else. 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, you know, laughs about that.
When I found out 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 gonna cost me anything, my posture sort of changed, and I kind of perked up a little. What was most important was the way that they talked to me. I don't think I learned about the product until 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." Weapons 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? 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. I fell in love with the mission and the people, and really realized that everyone here has the same concept in mind, that we wanna make places safer, we wanna make schools safer, and that's really close to my heart, obviously. I came over to Evolv, just about eight months ago, and I've had some really great opportunities since being here. I'll talk about momentarily.
A.J. talked about teacher retention and that we're losing teachers. This is not just, you know, a small problem. Even if you look at college programs in preparation for teachers, they're down by at least a third. That's a conservative estimate. 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. Not only are they leaving, but they're also choosing not to go into the profession in the first place. 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, you know, 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 this country. That's a hot, you know, 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. That money's already been given out to states, and the COVID emergency, as of May 11, has been declared as over in our country.
We're asking them to repurpose that funding, to say: Aren't there other safe ways that schools could be using this funding? 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's security posture. That's another way. How are schools paying for us? Not only that ESSER funding, which we are seeing, but there's also some different grants that are available. 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 one-time purchases.
That's important when Mark talks more about how people are actually getting our product. 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 gonna take a break here. We're all gonna collect ourselves for a few minutes here. We're gonna take a 15-min break. What we'd ask you to do is to take a trip around outside, grab yourself a, if you would, a lunch, and return to your seat. We're gonna start in 15 min with our customer panel. Lunch right over here. Come around, come back. That would be great. 15 min, please. Thank you.
Ladies and gentlemen, can you please find your seats? The program will begin in two minutes. Thank you. 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 importantly, the impact we're trying to make out there. We're very lucky to have two 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. I have 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, 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 15th of 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 P.M. We got in the car, we went home. The first device went off at about 2:49 P.M. A few minutes later, the next device. We were very close to it, too close to it. In fact, a close friend of mine wasn't so lucky. He stepped out of his office building.
He ended up being a few feet away from the second device, I went and saw him at Mass General Hospital, this is a 6-foot-4 rugby player, big guy. To see what that had done to him was just tragic. He's since recovered. He doesn't have hearing. He still has shrapnel in his neck. 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 two could go do what they did, that's the journey that we're on. I want to take a few minutes now to talk about our customers and how they think about protecting their own venues. First, Otto Benedict 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 to have in terms of how we think about what we're doing. Brian Schultz. Brian Schultz is the Chief Operating Officer of Charlotte-Mecklenburg Schools. Charlotte-Mecklenburg Schools is one of the top 20 schools in the country. In fact, they have the largest 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. 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 were students and teachers and administrators coming back?
Sure. Yeah. Thank you. Thanks for allowing me to be here to speak to everyone. Our district, obviously, is very large. We serve about 142,000 students, very complex in our operations and delivery of services to students. We have. When we came back from COVID, obviously, there was 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 amongst students. We had a proliferation of firearms in the first semester. In fact, by December, we had confiscated more firearms on campus than we had in any previous full year.
It was unprecedented, and if you know anything about the national gun sales, over those two years after COVID, you know that students and their families had more access to firearms. That was. We were seeing that come into the schools from the communities, from the homes as a result. It really got to the point where in December, we had an incident on one of our high school campuses, where a student, two students got into a tussle over a backpack at dismissal, and one of the students pulled out a firearm and discharged it several times. Fortunately, no students or staff were injured in that case.
An incredible story. That is the story that played out a lot in many different schools around the country s they were coming back from COVID. 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's the most expensive but grandest, most technologically advanced stadium that's been built. Please share a little bit about that.
Mr. Kroenke's vision was to build a global destination for sports and entertainment. SoFi Stadium sits on 298 acres. We are currently under development. Of those 290 acres, we have a retail district, 500,000 sq ft of retail. We have 500,000 sq ft 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. As you look at this 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. That lake we're looking at, that's all public space. It's a public park.
When our campus is open and everything is complete on that 290 acres, we're gonna have a whole lot of public that moves around that space. SoFi Stadium, largest NFL stadium at 3.1 million sq ft. We host well over 65 major events a year. We opened in 2020 and 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 a stadium sit in every one of these seats and every suite and test them out. In 2021, when we came out of COVID, it was May 2nd of 2021, we had our first-ever ticketed event. It was only 30,000 people.
It was a benefit concert as we were starting to get everybody back in the economy and back across the country to go to events. 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, we ended that year with Super Bowl LVI, 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 was working through the ticket scanning, and realizing that for us, on an NFL game, we're opening our doors about 2 and a half hours before kickoff. Most of the people were not getting into the building until after kickoff.
Yeah.
-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. That's when it really started our process of saying: "Hey, how can we make this better?" We know that we've got two and a half 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 has Evolv. When you look at this slide here, just for general understanding, 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, we excavated over 6 million cu yd of dirt to dig a hole into the ground. When you come into our building, you're on level 6 of 8 levels. Two-thirds of our building has to transit down and into the lower levels to get to all of our premium. 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. That's 70,000 sq ft 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 Wi-Fi capabilities, amazing technology as it comes to point of sale, what we're doing for our food and concessions and beverages. To have that archaic system of a walk-through metal detector just did not align with what we were trying to do as a strategy. That's where we started to jump in and say, "Okay, there's a better solution out there," and got us going researching on Evolv.
Really helpful, Otto. How did you hear about Evolv? How did 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.
Yeah.
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. Pardon me. 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." My first phone call was to Wrigley Field, one of the, you know, most iconic baseball stadiums that's set up in a, in the middle of a 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. 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 transit. They have to do that very quickly, 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 was functioning. 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 gotta dig a little bit more into this. It sounds too good to be true.
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 had been done for us to understand that's the opportunity we want to take, and the investment we wanna 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, that was where we wanted to make an improvement on that number. If we can improve on that number, then we knew we'd have an impact to what we were doing with revenue-wise.
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 hour and a half we were open. A massive impact to what we did, from a revenue standpoint.
Yeah. Great. Thank you. Let's go back to you, Brian. You left us with the discharge of the firearm after the two 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, you know, consideration of different alternatives and ultimately your selection of Evolv Express?
Yeah, absolutely. We had Prior to that, we had pulled together a cross-functional team of teachers, principals, district administrators, to really look at the, you know, solving these multiple issues that I mentioned earlier, including the firearms.
That was really the catalyst to say, for the community and our district leaders to say: "Yeah, we need to spend some money and take care of this problem, and, and do it effectively." We actually, I'd had a previous experience at Bank of America Stadium, where the Carolina Panthers play football, and unknowingly had gone with somebody that had season tickets, and I walked through what I expected to have, you know, bag searched, you know, body searched, all of those things, and it to be a really slow process as we're still feeling the effects of COVID. In quite the opposite fashion, it was the fastest that I'd ever gotten into the stadium.
So I asked the person that I went with, and she said, "Yeah, we already walked through security." I didn't even see it. I didn't even know it was there.
That, that kind of one thing led to another. I talked to our chief of police, Lisa Mangum, and she knows the head of security at Bank of America Stadium. She said, "Oh, yeah, 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. I walked through the elevator down here on the first, or walked to the elevator on the first floor down here, and we all saw it. There were stacks of old metal detectors. I don't know if you saw them. They were pushed against the wall, not being used.
That happened similarly in our district because it would have taken our schools of 3,000, 3,500, 3,700 students, the largest in the state, it would have taken them two hours to get students through those, and they would miss out on our core business. That team worked together to then coordinate a visit with our chief of police to the head of security at Bank of America Stadium. Took our board members, took our superintendent, 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-min, that 30-min time window that we have for arrival in the mornings at each one of our high schools." 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. It was the only one that we thought would get our students in without a change in arrival in the morning. That's where we landed on, we began the procurement process in January of 2022.
Yeah. Good. 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?
Yeah, I know, probably a lot of data heads in the room. We all like to look at metrics, and trust me, those are all great, and I'll talk about those a little bit.
I think from a qualitative, you know, point of view, when, you know, I'm on the ground and in the schools and talking to people and hearing from students and staff members and, administrators and, you know, and any of that. If any of you have ever worked in K-12 education, you know, it is, it's challenging to move forward at the same pace and with the same consistency because you have, you know, in our case of implementing, these weapons 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.
It really allowed us to evolve in the way we implemented, really allowed us to do that. 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. You know, 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.
Thanked us for installing these because he said, "My head is on a swivel all the time, and I'm in fear all the time." This is a guy that's experienced combat, who has led large groups of people. Not the type, 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 at school. This is a combat veteran. To hear that, it was just so powerful about how, you know, it's actually a recruiting and retention strategy for our staff, in addition to obviously keeping our students and staff safe.
Yeah. One of the things that we've talked about before that I found fascinating is 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?
I'll just talk about, you know, our core business in schools. I mean, it's a lot of things, right? Or people think it's a lot of things. People think it's about the sports or the band concerts or the, you know, 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. As a former Chief Academic Officer, I always try to keep a focus on that. I'll give you some of the quantitative results. We've had a reduction of 31 firearms found in schools last year, up to six this year. Four of those six 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. We have to report those. Then, two came in after hours 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. The two others we actually found in the through the Evolv weapon detection systems. So we went from 31 last year to six this year. That's an 80% reduction. We've also, in our non-firearm weapons, which, you know, we purchased these to address our problem of firearms, right? That's the specialty.
In addition to that, we've seen a 60% decrease in our non-firearm related weapons, knives, tasers, blades, anything that kids bring to school that they're not supposed to bring to school. 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. When we talk about what K-12 public education does for students, on from the teaching and learning side, what that does for life outcomes for students, those are huge numbers. We, you know, we talk about safety, this is really about teaching and learning.
Thank you, Brian. Incredible, right? With all the hard work that teachers and educators are trying to do to get the kids back in the class instead of being at home, makes a huge difference.
Thanks.
Right. Otto, let's go back to you. You talked a little bit about the impact, the evaluation, but 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 it 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?
You know, for us, when we were able to look at the metrics of how Evolv would improve our staffing opportunities, you know, we went from 170 metal detectors down to what is actually 14 Evolv units. We have a total of 22 deployed across YouTube Theater and SoFi Stadium. 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 a building of its size and really, its complexity. You know, 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 out of gates.
You guys saw it in a slide earlier. Everybody lined up at that wet 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. 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 it 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 and couldn't use that for any pre-planning 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 are 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 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 Evolv system. The NFL players, the concert artists, they are all going through the Evolv system and all of their staff.
We're getting a lot of data back from that allows us to really pre-plan and put the right things in place so that when those concerts are coming back, we're able to adjust our processes and our security posture to be even more impactful.
Yeah. I think that's incredible. It's just such a great combination of value points that you have. The detection's there, the fan experience is transformed, the ability to redeploy security staff around, the ability to improve revenue on the inside 'cause they're not waiting, and then all of the data and analytics that let you plan better for the next time. Incredible. 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?
All 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. 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, you know, multiply 142,000 times 10. To spend $10 a student, we're already spending $1.4 million, right? It looks astronomical to our public. We've spent close to between $19 million and $20 million on the Evolv, and that really translates into... You know, we've implemented it. We have a K-8 configuration. We have K-5 schools as well.
We've got 8 K-8 schools, middle school configurations and high schools. We've implemented in 73 schools. That's approximately 72,000 students, and we have at least 5,000 staff members or more serving those. If you do the math on that, it really comes out to about $265 of an individual. 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 if people want to criticize that. It is worth it in my mind, and it's worth it in a lot of people's minds now that they've seen the results.
Great. Thank you. I think it's fascinating to think about it in those terms. Mike and Alec talked a little bit about where the technology's going. Some of it was a little clear and a lot of it was vague. Now, these two gentlemen got a sneak peek yesterday. We brought them in. They spent a couple hours, Alec, Mike, and some of our technical team, sort of showed them where we're going. I don't want to talk specifically about where we're going, but as you think about what you're trying to do at your venues for security and beyond, and then some of the things that you saw on the drawing board, what are your thoughts?
Yeah, you know, for us, just as a future-proofing, and I don't know if you have that slide of the campus, but, you know, for us, this is where the campus will be going in the next five, six, seven, 10 years, and the number of events we have there. FIFA World Cup 2026, the Olympics in 2028. What we want to be able to produce, and as you look at this is residential, this is retail, and this is the entertainment district. A football game with 70,000 people, you know, another few thousand in the residential district, retail district, and then people that are actually living on our campus.
We wanna 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 and doing its own unique activity. We wanna know what's happening there. Same thing with the office buildings and the commercial. 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 bookended by the Intuit Dome, future home of the LA Clippers, coming up here in July of 2024, and then the Forum, an iconic concert venue on our north end. We have a ton of traffic that's just transiting our campus in general, going to different venues, not even on our place.
Being able to understand what is moving across that campus and if there is a threat there, is just an awesome piece of technology that we really wanna have, as we integrate our, what we call our city altogether.
Yeah. 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 and how they might fold into, how you think about the vision for Charlotte-Mecklenburg?
You're making me nervous 'cause I signed a nondisclosure agreement yesterday. No, I was the student that was always in trouble. When I grew up, I think it was. 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. We have students. And I wasn't mean. I was just curious and wanted to try to beat the system all the time. We have a lot of students like that, right? You tell them no, they wanna do yes, and you tell them right, they wanna go left.
Students constantly evolve with systems, no pun intended, but they constantly evolve, and they wanna sometimes figure out a way around the system. What I've seen and what I've 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 intent for evil, are thinking and they will evolve as well. I see some real solutions on the horizon for that, and that has me really excited.
Yeah. Good. Thank you.
Yeah.
Appreciate that, not disclosing everything. We have just a few more minutes here, and I just wanna sort of wrap it up, close it up. As you think about getting started with Evolv Express, the impact it's having, had, and what you're thinking about going forward and the value, can you just sort of summarize why you went with Evolv Express and the value you've seen? Brian, I'll have you do the same.
Yeah. You know, for us, massive impact to just operations, even to operating costs. You know, on the flip side, like I said, in our first hour, we're seeing greater than a 30% increase in revenues off food, beverage, merchandise, those types of those things in nature. We see what it's gonna allow us to do. The, the NFL themselves, they're also starting to see the impact that this system has. The other leagues are coming around to seeing that, and more and more stadiums like ours, other arenas, like around our Los Angeles market, and just across the country are doing that. It's really creating that opportunity that the customers are going to expect...
Yeah.
this type of security screening as the new norm and standard. The feeling of a walk-through metal detector is gonna become the feeling of an unsafe environment. That's where we're gonna see a lot of people going, and we wanna be on the cutting edge of that. 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. It's got a long-term impact for us across the scope of everything we're doing.
Great. Thank you. Brian?
Yeah, very positive as well. I think as I look at the fact that we didn't finish implementation with our K and middle schools this year until December, and we have the results that we have this year, I know that the results are only going to be better this year. We also have a summer learning conference that we do with our administrators, so we'll have them in a room in June. You know, my philosophy is that you always have to hear from the person at the level where the decisions are made to make sure that there are improvements at the top. That, those are our principals.
We're gonna get them in the room, say, and talk about best practices that how principals in each individual schools have leveraged Evolv and found better ways of doing things than how we initially, you know, told them to do it. I'm looking forward to that. You know, we have some really, really brilliant principals. I think the combination of having a full year of implementation at all of our schools, learning from our best practices from each other and then also the response from the customer support, the customer success management team.
I mean, they will, they always rally and come to us with ideas of things they've seen across the country, and then, they're always willing to help us implement with those 73 schools.
Yeah.
because it's such a large lift.
Yeah. Good. Thank you. One final thing. Betsy Fallon talked about the customer success team she's built, the journey they're on, particularly after we deploy and all the work we did. One thing that struck me is you each met your customer success manager at Evolv. There's a closeness there, right? It was clearly a strong relationship. It wasn't transactional. I think one of the best indicators of that, certainly we do surveys, and we assess ourselves, but how many people you're talking to about our system. For each of you know, referrals, people that are coming in, demos you do we don't even know about. Could you spend a minute talking about that? 'Cause I always find that to be a fascinating window into how you view the technology and the company.
I mean, to the customer success point, you know, Laurie on the team came out and made sure that our system was up and running, and in a way that no other vendor of ours has invested themselves in our success. I mean, there was constant updates, always keeping us involved. Never once made us feel like, you know, something wasn't right. That entire team was so dedicated to making sure that everything we did was successful. It was just incredible and very reassuring. I will tell you right now, so many people walk through our system and see it and hear about it, that we get phone calls all the time. I tell them, "Come down, come see it if you want to. Let's walk through it. Let's talk about it."
When they do come down and see it, you know, we tell them. They say that. "How did it get done?" We tell them, "The customer success team put us in a place to be as successful as we are and have taught us so much and continue to engage with us every day. That's why we're staying on such an apex of where we are at.
Great. Thank you.
Yeah, very, very simply, I think when it comes to support, I've never been told no. That's just across the board, and that support has extended not just from the CSM team, but it's beyond that. When we, you know, implemented 73 schools, we need a lot of support, and we went live with, I think, the first phase of our middle school and K-8s, it was about 20 schools. We had people from the office here come out that weren't involved necessarily in that department, but it also just showed the dedication and success of the team members here and across all teams, making sure that we are successful. The fact that I've haven't asked for anything outlandish, you know, in terms of just...
I do expect, you know, great product and great service. Like I said, I've never... I've come up with some wild ideas, and I've never been, "No, we can't do that.
Yeah.
They'll say, "Well," I've always been told, "We will make that work.
Yeah. How many people are talking to you, asking about the system, coming and visiting from other districts, other counties?
I have probably upwards of 30, probably 10 of those just through Zoom chats that we've talked with other districts. On-site, I've probably provided about, you know, 20 different school districts from across the country have come to see our operations. That's, y ou know, it's one thing to talk about it, but it's one thing to say, at a high school, you never know what you're gonna see, and you never know how students and staff are gonna behave. I feel very confident in the systems that we put in place to bring people to any of our high school to see in action and to just ask their raw questions.
We had a chance to hear from Otto and Benedict, Otto and Brian today. I've been out with a lot of our customers. I've seen hundreds of our customers. I've talked to them. We could put any two customers here and have very similar conversations. That's really what we're trying to do as a business, as a company. That's what's helping them execute what they're trying to do. They're trying to have fans come in and enjoy a game. They're trying to have kids come in and focus on learning, not on their own security. Thank you to Otto, thank you to Brian, thank you to all of our customers for working with us and giving us a chance to truly make a difference and help advance our mission. Thank you.
Thank you.
We will be taking a short break. The meeting will resume at one o'clock. Thank you.
Ladies and gentlemen, can you please find your seats? The program will begin in one minute. Ladies and gentlemen, please welcome Mark Donohue, Chief Financial Officer.
Good afternoon, everybody. For those of you I haven't met, and it's not many of you, my name is Mark Donohue, and I'm the CFO here at Evolv. What you heard from my colleagues, and our customers, and thank you guys for coming today to speak, is really why our technology, this opportunity, and our mission really matter. Now it's time to put some numbers around it. Where's the clicker?
Yeah, I guess so. Thank you. Sorry about that. Just a little bit about me. I've got about a three-decade background, where I've worked in high tech the entire time. I started out in disk drives at a company called Quantum, moved on to a company called Teradyne, which is local here, for about eight years in the semiconductor space. I actually spent a little bit of time doing what a lot of you do. I was a sell-side analyst for three years at a boutique firm called Ferris, Baker Watts, that was acquired by the Royal Bank of Canada in 2009. I really wanted to be an operator at a company, so I joined a company called Starent Networks.
We were public for three years, and we were changing the mobility landscape, and that was a game-changing technology. It made the smartphones that we're all using today possible. Possible that Cisco just had to have it for $3 billion, and they paid... That's still one of their top 10 transactions out of the approximately 200 that they've done thus far. I spent the next six years there, kind of working through and making sure we were driving that business. I left 'cause I wanted to go to a smaller company, and I went to a company called Rapid7 here, locally in Boston. It wasn't always a Boston company. We had a slide up for a long time that showed the tragedy on 9/11.
Rapid7 was named for the Rapid7 train that used to go to the World Trade Center. The company moved to Boston, as much as it feels like a Boston company today, that isn't how it started. In fact, they're on the lapel of the Bruins. I can't believe they lost. The lapel of the Bruins, and most of the stadium. I went to Vestmark. I went to Vestmark for four years, that was a good experience at a private company. I really wanted to get back to the public thing. Over the last 10 years of my career, it's really been SaaS-focused. My last couple of years at Cisco, in particular, were about helping the company through virtualization and starting the subscription business there.
Believe it or not, in 2015, when I got to Rapid7, a cybersecurity company, they were selling perpetual licenses. In the front of the public eye, we took that company to a SaaS ARR business that they are today. They're, like, 95% SaaS today. Lastly, at Vestmark, I joined a company where the founders knew 20 years ago that recurring revenue mattered, but they also were doing gross revenue, not net revenue, so the metrics were all over the place. We helped repair that. I was excited to get the call from Peter to come and join Evolv. I talked to the board, I talked to the rest of the management team about a year ago, and it's been one of the best decisions I've made.
I get to lead 50 great people on this team: the accounting and FP&A side, the manufacturing and quality side, IT and sales operations. Two of the people that I work with the closest are in this room today, Nancy Milhous, our SVP, Chief Accounting Officer, and Brian Norris, who I think you guys have seen a few times today. I'm excited to take you guys all through a number of things today, and I'll go through them quickly because I think the agenda is important for what we want to cover. First, I want to go through our Q1 results, and if you haven't noticed, they were pretty well received in the market. I want to go over our 2023 business outlook, which we were also able to raise about two weeks ago, and we'll get into the details around that, too.
I want to look at our business model, and frankly, how that's transforming from what it was into what it will be, as we enter 2024. We get this question a lot: "What are the economics of your business?" I'm going to do an illustration of the subscription economics, the pure subscription, and we'll also talk about what happens when companies purchase our product. Our expanding relationship with Columbia Tech. We talked about that on the call. I'll get into some details. That's going very well. Now, two years after being public or going through the SPAC process, it's time to talk about our long-term operating model, because we have our financial ducks in a row at this point. I'll stop with maximizing shareholder value and, frankly, stakeholder value for that matter.
We had strong Q1 results, up and to the right on many, many factors. It was subscription, revenue, annual recurring revenue and RPO, Remaining Performance Obligation. RPO is becoming a fan favorite amongst many of you because it shows the power of our four-year contracts. Not many SaaS companies can boast that, and that number gives prediction, gives insights into what we're gonna do in the future. The number I'm most proud of on here is the gross margins of 27%. On any other day, I wouldn't tell you that 27% gross margins were all that great, but last year, we did 3%.
When I joined the company, I sat down with Peter, Mike Ellenbogen, and Anil, they said, "What do you think about our financials?" I said, "Everything looks great, but you have a gross margin problem." That day, we made a commitment to saying, "Well, we're gonna fix it," and it's become a priority at our company to do so. It wasn't something that was gonna happen overnight. I think what I'll talk through today will show you how that's kind of developed and where we're heading. Q1 was the first insight of that improving and getting to the place that we need to be long term. We're in the midst of a transition right now. We talked about TCV, historically, Total Contract Value. That's not what SaaS companies do. They talk about Annual Recurring Revenue, so we've changed that nomenclature in the business.
It's the way we talk to our board, our employees, our investors, any stakeholder. It's now ARR. It's how we pay on our bonuses. It's the only way, at this point, that we pay our sales force. In looking at this chart, it's a little bit of the 80/20 rule. About 20% of our customers represent about 80% of our revenue because we're doing pretty good-sized deals with them. We've got 70 customers as of Q1 2023, that we're doing over $100,000 in ARR, another 20 that are doing over $250,000, and 16 that are doing over $500,000, and some of those are over $1 million per year. We have a great balance of customers. It's okay if they buy one unit. It's okay if they buy 100.
They're all equally important to us, as Betsy mentioned in our service model and our customer. We have a strong balance sheet and cash position. I know 23 weeks ago, we announced we were doing a debt structure with Silicon Valley Bank. We did a $75 million line of credit. The main reason that we did that is because we thought we might have to be more subscription-bent than we probably think we do now. The banking industry's gone through a little bit of a hiccup. If you haven't noticed, SVB, Signature Bank, First Republic, I don't know who's next, but it's been in turmoil. We decided to pay down that debt structure and move on from it. We don't need it right now.
We may never need it, we wanted to make sure that we were letting the market settle and that we were focusing on getting our business to where we wanted it to be. The other thing we did recently is actually light up an investment committee. Most companies have three committees. We now have four, that investment committee was not set up to just do what's happening over the next three months or how are you investing your money? It's more strategic than that. We want to think 3-5 years out about the capital needs we're gonna have because all the things you heard from my colleagues today is that we're the human security company, not the Evolv Express company. There's a lot more for us to do. We want to have more products. We want to meet our customers' needs.
At some point, we'll need capital to do that. It's not today, and it's not what we need. We can get to profitability without it, but for us to really hit the mark over time, that may be a requirement. We've split the $182 million in cash that we exited Q1 with into three iconic banks, almost evenly, and that's all invested in government securities at this point. Right now, government securities are a good investment. They're the best investment for a company like us, and they're yielding about 5%. Let's talk about the business outlook. In Q4, we gave an outlook, and we kept it steady in Q1. In fact, we gave it sooner than most companies do.
We talked about exiting ARR of $65 million-$70 million, revenue of $55 million-$60 million, gross margin of 30%-35%, and adjusted EBITDA of $55 million-$60 million. On our last call, on May 10th, we were able to increase all of those numbers. The one that I think surprised the investors the most, from what we heard from the feedback perspective, is the ARR. Because now, as we're splitting our company into 50% subscription and 50% purchase, there's a bit of a headwind on ARR on those purchase transactions. We'll only get 60% ARR on those transactions going forward. The fact that we were able to still raise that number, I think shows the power of the pipeline and how we're thinking about the business going forward. Now, we have a highly visible and predictable model.
RPO is one of those things, these four-year, non-cancelable SaaS contracts are very important. We do a monthly subscription. We recognize that revenue monthly, we bill one year in advance. As A.J. pointed out, we have strong contributions from our channel partners. Why are we going through the channel? Because it reduces sales friction, because it helps us offset some of the costs, because they're part of our service. They're our extension of our sales force. They're bringing deals to us, we're bringing deals to them. It's a great partnership going forward, and what it's helping us do ultimately is compress our sales cycles. Let's talk a little bit about a deal, right? These are the illustrative subscription economics, and the parameters I'll set is that this is for a dual-lane system over a seven-year period. We capitalize our equipment over seven years.
That's the life we feel comfortable with. We continue to feel comfortable with that life. Our revenue on that subscription over that seven-year period is $210,000. That assumes we get a four-year contract and a three-year renewal. That's $30,000 in ARR per year. We also have $75,000 in costs, because on average, it's costing us about $15,000 in customer acquisition costs, or CAC, to go and win that customer. It's another $20,000 over that seven-year period to service that customer correctly. We have CRM, we have service, we are there for them because we don't just back up a truck and leave a system at the doorway. We actually help them through the installation, through the upgrades, through anything that they need over the course of using that system.
The device itself, with the dual lane, if it's an outdoor, can be as much as $40,000, including the installation costs. That's what we capitalize in our subscription business. The result, the $135,000, I'll call it contribution margin because I have sales in there. It's about 65% in contribution margin in this example. That's about 75% in gross margin. This is an example of a deal. We do about two-thirds of our deals with single lanes, one-third with dual lanes. The cost of a single lane, or the price we get for a single lane, is about 25% less, costs less to make. Costs about the same to win it. Costs about the same to service it. That's why we talk about 60% plus gross margins in our service business. That's where we're heading towards.
We've had two very different business models. Pure subscription, we rent the hardware, we rent the software. The hardware that we're renting is a fixed asset to the company. It's on our balance sheet. We own it. We're out there servicing it. No problems with gross margin there. It's okay. The purchase subscription method we've been using, or the legacy method, is running it through our books, and that wasn't working, and you'll see that in a couple of slides, just how much it wasn't working. That was the core reason why our gross margins were not at all matching the power of what the company was doing or even the deals we were doing. We were doing deals at 55%, 65%, 70% margin sometimes, but I can't print it with the way that works.
Another point, we are a hardware design company, and we are a software company. We are not a glue-the-product-together company. Allowing that to kind of sit in our books that way was not productive for us. We went to work, and we figured it out. We're introducing a new way forward, which is an extension of our relationship with Columbia Technology. Columbia Technology is the contract manufacturer that we've been using since the inception of the company. They have become the non-exclusive distributor of Evolv Express for any customers that want to purchase the asset. The best thing about this is that the way we've designed it, and it will go through our channel partners, there is no change to how the end customer is going to see this that's going through the channel, and I'll talk a bit more about that.
It'll change how the channel operates, but it won't change how the end customer sees things. This model will actually allow us to have higher gross margin, higher EBITDA, and lower cash usage. I'll say it today, we think we're going to achieve EBITDA breakeven in the first half of 2025, with about $75 million-$100 million in cash still in the bank. That's about 6-9 months earlier than anything we had said before. We're taking that in, and there's potential for upside there. It really depends on the mix of what we sell in terms of pure subscription and purchase subscription going forward. Who is Columbia Technology? Well, I think a picture is 1,000 words, so I want to put this up quick.
There, this is actually the team that builds our systems, and that's the 3,000th system that came off the line last quarter. It's a very professional organization. It's clean. They do our final assembly and our tests, and they've been a true partner to us since the inception of the company, like I mentioned. They're a fourth-generation company, like Peter mentioned earlier in the day. They have about 800,000 sq ft of space locally here, 1,000 employees, and work with some very large name customers: Amazon Robotics, Applied Materials, HP, Dell, Markforged, Haemonetics, Hologic, and Evolv. We're one of their top 10 customers. Last year, we were 8% of their business. This year, we'll be probably 12% of their business. It's well-diversified from that perspective.
This is a well-oiled, family-run machine. We have a lot of trust in them to do this. When we looked around at doing a hardware distribution model, we looked around hard. This is the best situation we could find. They wanted to go up the value chain to help us. By the way, they're also a sponsor out in left field there. The Coghlin Companies is next to Vineyard Vines. Let's talk a little bit about how the Columbia Tech situation is gonna work going forward, how our hardware distribution model is gonna actually be perceived. Let's take the end customer, Six Flags. Six Flags might want to buy the systems, they might want to rent the systems. They don't care. They're gonna talk to the channel partner, Securitas, Johnson Controls, perhaps Motorola.
They're gonna go there at an MSRP of $185 and actually negotiate with them. They might wanna buy it, they might wanna rent it. One of those channel partners actually has a discount off of MSRP, call it 30%, they end up paying us typically, or in the past, in history, it would be a $129,000 order, split between hardware and software. Going forward, they'll be actually bifurcating that order into 2 POs, a purchase order direct to Evolv for just the software portion, the $75,000. Approximately 60% of the order is actually software-driven and 40% is hardware-driven in this model. That $129 is a baseline.
What they end up doing, because we have another agreement with Columbia Tech to actually allow them to sell our product, and they set the pricing, they do everything there. They look for guidance, they're the ones who are actually setting what they need to do. We have actually entered into that with them, a very fixed license fee. That license fee, in this situation, is about $14,000. Between that $75,000 in software we're gonna get over four years, and the $14,000 that we're gonna get in a one-time license fee, we're looking at stuff that is a 100% product margin and about 80% gross margin. The combination of those two are very powerful to our business going forward.
We'll get $89,000 over the four-year life of the contract, based on this deal. Let's talk a little bit about Express 1.0 and 2.0. As I know, many of you have heard that we're actually doing a lot of engineering work around our second product. Our second product isn't a big change. We've added a few bells and whistles to it, but largely, the product is a reconfiguration of our old broad product. It's built for modularity, for quality, a lot of things that we've learned over the past couple of years, like weather and heat and water, all that stuff has been built into this system. It's gonna be easier to service, and actually easier to build in the end of it. The best part is 2.0 is gonna be cheaper.
With Express 1.0, that's the current situation I'm talking about, where there's $75,000, which turns into $19,000 ARR in a $14,000 license. We're getting about 70% of that total contract value. Again, this is why our ARR is slightly lower. We're getting about $0.60 on the dollar in ARR. In Express 2.0, assuming pricing stays the same, we have the opportunity to recruit a higher license, as much as $25,000 on this similar deal, if the costs come down like we're planning, and we are on track for that right now. The costs we would expect to see are 30%+. Let's talk about how gross margins are changing. The best way to do this is to look back at 2022 and forward to 2024, because 2023 is the transition year.
In 2022, I told you our gross margins were not what they needed to be. They're at 3%, it's because we had 58% of our revenue coming through the product line at -30% gross margin. Because we had to take all the costs up front, we had to pay for all the service, a lot of the revenue was done through a cost-plus methodology. There's our subscription business, which was only about a third of our business last year. In fact, we did more purchase deals than we did subscription, it prints out here at about 32% of our business. pricing's gone up over time. That 57% is reflective of three price changes last year. Our prices are higher than that now. That's why I'm talking about 60% plus in the subscription lines. Lastly, the service line.
Very confusing. There is installation in that line, shipping in that line, and all of the ARR or recurring revenue that was associated with the product sale. We were confusing just about everyone we talked to by going through it this way. It was really hard for people to understand how to kind of model out things other than just a high-level number. If you're trying to do it from the bottoms up, and you're trying to use this method, it just wasn't working. We heard you. We got it. We needed to fix it. We are fixing it, and next year, you're gonna see our revenue look more like this, product of about 5%.
We're still gonna sell demos from time to time, we still sell tablets, some piece parts, and occasionally, we'll sell a system if the customer absolutely needs it a certain way. That gross margin will still remain very low. Where the meat of our business will be is in the subscription line and the service line, because when we sell our product as a subscription, a pure subscription, we're renting the hardware and the software. That all goes in the subscription line. When we go through the CT deal, and we get a PO for the subscription portion of that deal, that goes in the subscription line. What will now go into the service line is the licensing revenue from hardware that we get and any legacy revenue that's sitting in our RPO related to any of the legacy sales.
That will meter out over the next 2-3 years. Most of what's in there is service. Lucky for us, we're moving from a 39% ARR business in 2022, you'll wonder why we talked about TCV more, to an 80% business in 2024. We expect 80% of our business to be annual recurring revenue and approximately 20%... 15%-20% to come from licensing going forward. A lot of SaaS companies have an ARR component and a service component, and that service component is oftentimes a 30% or 40% margin. Our margins on our license component are almost equivalent to what our subscription business is. I like to think we can look at most of our revenue on the same basis going forward. It just doesn't have to be an ARR metric.
I think all of our revenue has equal power because of that result. Ultimately, we feel comfortable saying that we think we'll be a 60%-70% margin company, because the pure subscription business will be 60% margins, and that purchase methodology will be closer to 80%. It'll just be the mix between the two, which we're now planning on about 50/50, but if it goes 60/40 one way, 40/60 other ways, it'll impact the mix. One way or the other, we think it's around 50/50 at this time. It's important for us now to introduce our target operating model. We're comfortable saying that over the next five years, we think our top-line growth rate is 30%-40%. All the modeling we've done, all the work we've done, give us the confidence to say that to you today.
We also are confident to say that we'll get to profitability in the first half of 2025, and we'll achieve that 10%-15% EBITDA profitability. You know what happens when those two numbers get added together? You're in the Rule of 40. Rule of 40 plus is the goal of our company. The more powerful part of the Rule of 40, obviously, is the top-line growth. We will invest and sacrifice. If we think we can grow more than 30%-40%, that 10%-15% might come down a bit to the benefit of that top line. Being Rule of 40 plus is going to be something we need to do.
I just saw an analyst report this morning with a headline for Palo Alto, was, "Rule of 40 plus is still there." People care about Rule of 40. The rest of this is about us achieving scale economies in our business. R&D. We think we can settle R&D out to 15%-20%. We may leak up to 25% if we think there's something really compelling to invest in, but I think it's a 15%-20% investment based on what we're seeing today. A lot of that has to do with the fact that today, 50% of our R&D spend is on reconfiguring our 2.0 system or redesigning it. That's spending that's gonna stop pretty soon.
We're gonna spend about $15 million over 18 months, ending this year, to redesign our system, which is why we want that higher license fee. You know why we did it? Our projections next year for units would say that with the cost down that we are getting, we're gonna get a $50 million savings in the product cost. That $15 million that we're spending has an ROI that gets there in about four months. In terms of sales and marketing, that is where we're putting chips right now. We're building out the channel. We're building out our AEs, the service model. We spent $100 million historically in R&D. We built this product. Now we gotta get it to market. That is where many chips are going.
We do think this potential through scale and working with the channel, that kind of tops out at the 25%-30% level within the five-year period that we're talking about. in G&A. We're public now. We have a lot of costs. We have insurance, accounting, legal, Nasdaq, SEC, and all the people it takes to be a public company at this stage. Best thing we ever did was a SPAC. We were able to raise that money at that time to help us get to the promised land that we want to get to. We had to be public sooner. Our spending in G&A looks high, it's a skin that we have to grow into, and we will do that.
I expect that by the time we grow into that skin, it'll be about 10%-12% of our business. Let's talk a little bit about maximizing shareholder value, because over the past year, and I know my colleagues have heard it for almost two years, there's a number of myths out there about who we are as a company. The first myth is that our market size, our ability to penetrate it, and our compound annual growth aren't real. I hope you heard today that there's a $20 billion TAM, and we're pointed right at $18 billion of it. We're not focused on airports, we're not focused on jails, we're focused on the rest of the $18 billion.
Right now, all of our G&A spending is pointed at about a third of that $18 billion through account-based marketing, through digital marketing, through the channel, and through AEs that are doing good old-fashioned cold calling. That's how we're attacking the market. It's not random. We're going after the parts of the market where the biggest gun violence problems exist. Second myth: We're a one-product company. We're the human security company for a reason. We're not the Evolv Express company. I think you've heard about the things that we're thinking about beyond this. Peter put up at the beginning of the day that we want to have a portfolio of 5-plus products. That's our next milestone. We have plenty of ideas in the back room.
We're not ready to talk about them all today, but we fully expect that what our customers are asking us, and our ability to harness data, and the digital, and the digital footprint that we're looking at will give us a way to get other things done. Let's not take away, Evolv Express is our flagship product right now. That's what we're focused on getting out there, but we're thinking about other things we can do for our customers, both inside and outside of the venues. Next myth: increasing competition. Look, we're not naive enough to think that if we're doing well, someone's not gonna come after us. We watch that hard.
What we've seen so far is old analog companies adding a few more bells and whistles and dropping off their product, and a couple of other products that actually look more like our original Evolv Edge product out there. No one has done what Alec, Dr. Alec Rose, and Mike Ellenbogen has shown you before. We have a healthy head start, and we're gonna take advantage of that. We will run into some competition. It's generally on pricing, but you get what you pay for. The next is constraints related to our target operating model.
This was a bigger problem when we were 3% margins, but I think the fact that we showed 27% in Q1, and we gave higher guidance, and I'll tell you that I expect our gross margin to go up each of the next three quarters this year. That we're outweighing this concern that our target operating model isn't gonna work. Lastly, we're a hardware company. Everyone runs into a piece of hardware, and they see Evolv on it. We are a software company and a hardware design company, right? Every SaaS company runs on hardware. They just pay AWS for it. We designed our own. Someone else builds it for us. They even deliver it for us. What I'd like to do is recap on some of the key messages you heard today.
We are creating a new category out there. There's no doubt about it. There's a greenfield market out there, and when you talk about using security as something that can help people, that's really where we're heading. It's unlocking what couldn't be done before. We're in a large and underpenetrated market. I'm not worried about the size of the market. I'm worried about the size of our sales and marketing budget, so we can go get the market. That's what we have to be, 'cause we have a finite amount that we can spend there, so we're trying to spend it as smart as possible. A commitment to product innovation. We just hired Parag Vaish. We have Mike Ellenbogen. We have Dr. Alec Rose. We have Owais Hassan. We have people thinking about this every day. Our commitment to product innovation is clear.
Creating customers for life. We want to make sure that our customers are happy. It's important to us. You just heard from two of our customers, and I think Anil made the point that if you put two other customers up there, it would be the same result. Betsy showed you how we approach a customer. That isn't what happens in the physical security industry. We're changing the game there. It's sustained long-term growth and profitability. We can do good things in the world and still run a profitable company, and that's what we're gonna do. I'm really proud to work at this company. I work with some of the most talented people out there.
I can say that after you've met with everyone here today and what you've seen, that we got this, and it's gonna be a fun ride to be on. Thank you. Thank you.
Glenn, am I live here? Glenn, am I live. Okay, perfect. We're gonna get some Q&A from the audience, and we have some questions coming in from online as well. I'm gonna pose a couple of questions here. Maybe, Peter, I'm gonna start with you. First question here. We've heard a lot today about the work that we've done in schools, and in sports, but maybe talk a little bit about the healthcare opportunity, if you could, and maybe some of the trends that are driving that growth in that market opportunity. That's the first question off the top, healthcare.
You know, I mentioned earlier today in my presentation the startling statistic that 70% of workplace violence is happening in healthcare with our doctors and our nurses, the mental illness, you know, pre- and post-COVID that's going on. That's a really important market for us. It's a big market. In North America, there are 2,300 hospitals, but owned and aggregated in 107 different healthcare systems. Mark mentioned that we have a very specific plan to reach them, and not just the hospitals directly, but go directly to the health systems, the 107 healthcare systems that own all the hospitals. We know who they are. They all have the same problem, and we can help them, and we wanna keep, you know, all the patients and all the doctors safe. We think it's a really big market.
We have some of the biggest healthcare systems already testing and using our system. We think it'll be a big, important market in the future. Today, it represents 20% of our business. Long term, it will either stay there or get bigger. We continue to see education as being a big market for us. It's at 50% today. It may stay there, but as I mentioned, there's lots of schools to go to. Finally, that industrial warehouse market. We announced a big win with a couple industrial warehouse opportunities last quarter. We have some in the pipeline. We think it could be really big in the next couple of years, so we're targeting our team. It'll probably be the next vertical that we do.
Perfect. Perfect. next question, and Mike, I might give the last one to you here. Can you expand on your integration capabilities with other digital products in the security ecosystem?
You know, security ecosystem, but at least the one that we tend to play in, includes some big players in the video management space. Virtually every venue has cameras, right? That's kind of table stakes these days. All those cameras go to a command center. Command center might be a PC in a closet someplace, and it might be a real command center like you'd find at a place like Fenway. There are a number of large video management system companies, with whom we already have announced integrations, like Milestone and Genetec. We have created an open API that will allow us to work, take some of the burden off our team and allow others to connect to us. That's happening now.
We have connections to access control. If the customer wants to initiate a lockdown or send a signal to lock a door, they can do that from the Evolv Express. There's connections to mass notification systems like Titan HST. We continue to expand on the number of other players in the ecosystem with whom we can share information. The next step for us is to start taking more input from different intelligence sources. We talked a little bit about identity. As we look at the future, you'll see more integrations to those kinds of sources as well.
It's perfect. Thank you. Any questions from the room here? Yeah.
Hi, Nick [Rosemark] from Craig-Hallum. Thanks for the day and taking the questions. It's been a great day, and I've learned a lot so far. The first question is for Peter. You talked about getting to five-plus products over the next decade. How should we think about maybe what you're looking to do with software versus hardware? Any information you can give us when we should think about product number 2? Mark, on top of this, is any additional products contemplated in the long-term revenue growth targets?
Sure. I'll start with the product one, and I welcome our Mike or Alec to weigh in as well. Look, you know, we have a unique capability to build sensor platforms that are tightly coupled to the software. You know, we potentially see more different kinds of form factors and sensor platforms that we'll design and not build. They may be overt, like Express is today, or they may be covert, meaning you'll walk by something, and we'll be able to detect a concealed weapon, but you won't know it's there. I see those form factors as changing.
Could you imagine a day, because doorways are all the same size, a lot of them, could you imagine a day that we design lots of different sensors, other people make them, people that are really good at making hardware, you know who those companies are, and then if they want to provision security in that doorway, they download Evolv from the AWS cloud, and instantaneously, that room, that building, that place is safer? We see a lot of work on our side, on the software side, to make that available. Talked about ubiquitous security. That's what ubiquitous security could look like.
As far as the revenue model and the long-term operating model, we don't have any top line really associated with any other products right now. What we have contemplated in the long-term model is that we will invest in things, but we're not at a point where we would actually put that up there. Everything we've done thus far from a revenue and gross margin perspective, at least on the top line, would be from a one-product situation, and other things would be upside over time.
Other questions from the room? Yes, we got Brett in the background here.
Hi, guys. Thanks for taking my question. Brett Knoblauch from Cantor Fitzgerald. We've got a lot of questions on maybe just manufacturing constraints with your partners. Can you maybe just elaborate on what constraints there are, if there are any, if demand should accelerate much faster than you anticipate? How many units can they produce in a given year? You know, what are the, I guess, issues that would not allow them to continuously meet this growing demand? Thank you.
You know, right now, we're not seeing a lot of constraints in the market in terms of delivery of product, but there are lead times. Right now, the lead times are still six months for some components and up to 12 months for others. We've provisioned for about 33% more than what our plan calls for right now. If we see upside in the model, we can meet it. If we continue to see that upside, we'll be more aggressive on it. You know, we're making a bet that, based on what we have to do with our suppliers, and how CT has to work with the suppliers, that we can, we can leave those orders out there, and cancel them, you know, within a reasonable amount of time if the demand isn't there.
We're also working hard in the transition from 1.0 to 2.0. We're carefully buying on the 1.0 product components in preparation for the 2.0 product components. As far as Columbia Technology's ability to scale, they've got a long way to go. There's a lot that they can do. They also have a partnership with Jabil, you know, that's another resource that we can use. In fact, it's an important point that I want to make, that if something happened in Columbia Tech or Fire or somebody else, that partnership with Jabil, it is a piece of protection for us. We like that. You know, we're probably more apt to start building our products overseas once we get them hardened and ready to do that.
That will probably be our next step over time. The component problems that we saw 12 and 18 months ago, they're not really as big of a problem anymore. Our purchase price variance has come down considerably, which means the prices you have to pay to get components that are really hard. We're seeing things come in. We're not seeing a problem with the components to build things. We're just watching demand like a hawk to see if we have to increase anything.
Perfect. Maybe just one additional... Am I still on?
I'm sorry. Quick. Yeah, go ahead, Brett.
Maybe just one additional question for Peter on international. I know you mentioned it a bit in your prepared remarks. Is any of that kind of contemplated in your guys' guidance over the next five years? When should we expect maybe you guys to increase your focus on markets outside the U.S.? Thank you.
Thank you. We have a small team, by the way, in the U.K. now. We're testing that market and following some of our global customers to EMEA and to Asia-Pac. Having said that, the opportunity is so big here in North America, that we decided this year that we're gonna stay maniacally focused here. You saw how big the TAM is, and we're gonna stay focused on that. We expect, though, in the next couple of years, to expand internationally, thoughtfully, in the places we can get great leverage from our global customers, 'cause they wanna have us support them globally, and also in the markets that they need us. We're also very, very mindful, everybody, that, the threat vector is different in other parts of the world, right?
In EMEA, and particularly the U.K., it's large tactical knives that are the biggest problem, and in Asia-Pac, it's bombs. In Singapore, they haven't found a gun in Singapore in seven years, but people strap suicide bombs on themselves and run into buildings. We wanna be really, really smart about where we go to make sure we're serving the markets that we're really, really good at. Today, the markets that we're really good at is stopping firearms and mass casualties, and we have the problem right here. I think there's upside in international expansion, but it's not gonna happen in earnest in the next year.
Perfect. Lloyd, did you have a question, or do you have any other questions? Okay.
Thanks. Two quick ones. First, thanks, Jill, for talking about your experience at the school, at the tragic event at your school. Could you talk about, as you speak to representatives from schools, what sort of % haven't heard about Evolv or are not considering sort of cutting-edge solutions? The second question is gonna be actually to Alec about the technology. Does the magnetic technology have the capability to detect other materials, or anomalies or changes in magnetic fields from other materials? Real quick, for Mike, that whole issue of governing organizations, do you think that'll ever change for schools?
That was a lot of questions. Okay, I'm gonna go first. Thank you. When it comes to a percentage, I don't know if I can give you an exact number, but what I can say is it's certainly growing, and what we're seeing a shift in is our inbound inquiries are actually changing from end users and consumers to community members. For example, we've had a grandmother say: "I would like this in my child, my granddaughter's school. I'll pay for it." You know, coming in from the internet. The way in which customers are coming to us is changing, I think. Also the communities that we're going into, that we're really trying to understand that particular community. We're serving all over the nation, not every community is the same. There's all these nuances and diversity within each community.
When it comes to our solution, what I wanted to mention, and I should have earlier, one of the main reasons why we don't want to put in metal detectors, and I'm talking about school employees as an overgeneralization, is because the research surrounding metal detection suggests that it actually has negative impacts for kids. That's what teachers and administrators and school employees are thinking of when they're thinking of screening. They're thinking of the only archaic, eighty-something-year-old option that's out there. The more that we're in their community, and they see how different we are, and they see how it feels, and they see how it does not introduce bias. I know we had an opportunity to speak last night about that.
If you think of a traditional metal detector in a school environment, we don't want to trade one security risk of a firearm getting in for a new security risk of having this long line out the door of students who are not in a secure environment. What's happening with metal detectors is that the individuals who are working them, the security professionals, are put in a very difficult position where they have to either change the way in which they're searching bags. Maybe there's some lack of integrity in that process. Maybe it's quicker just to get kids in quickly and into class, or they're having to discern which students they ignore. Because the metal detection is so high, the amount, the number percentage of students that actually alert, it wouldn't be realistic to search each of them quickly.
They're having to say, "Well, I know you. Come on in. I know you. Come on in. I don't know you," or, "You look different than me. I'm gonna search you." It introduces this inherent bias, and that's why so many school professionals are against metal detection, is because the research surrounding it says it has minimal impact on violent incidents and negative impact on student mental health, negative impact on perceptions of safety and this bias introduction. I think our charge is to go out there in those communities and explain how we are not that. We are everything but that. That image-aided alert, where I can say, "I stopped you because the technology saw something that was shaped like a weapon. It didn't see you. It didn't capture any demographics about you. It's not looking at people.
It's looking at things and shapes," and it's very easy to explain to the community. It's just getting that opportunity to interact with the communities and understand what their needs are and what their current understanding is of weapons detection.
Thank you. Mike and Alec, are there follow-ups to Hughes?
I'll take the other school question. You know, the question was: Is there a potential unifying body that could set a standard for schools? I would say that we're having a hard time as a country agreeing on what textbooks should be in schools, let alone security profile. I've heard inklings of suggestions that maybe, possibly, someday, the U.S. Department of Education might wanna commence to begin to consider taking on that role, but I think it's a long way off, if it ever happens at all.
Alec, the last piece of that question?
Okay. Right, I think how you started, what kinds of materials? Right, we put out the core electromagnetic sensing system puts out fields, detects anything from ferrous to non-ferrous, copper, aluminum, focused on those parts of mass casualty weapons, firearms, tactical knives, PBIEDs that are common across different categories and that are required to do large amounts of damage. The short answer is, yes, there's a wide variety of materials. The materials we're specifically targeting are those that are required to do a lot of damage. The next time, I think your question was about glass. You know, the next time there's a mass carnage event with glass would be the first time. And it's just not something that a question that we're getting from customers.
We're not having customers slam the table saying, "This is another thing that I need to find. This is an..." No, they're saying, "It's guns, it's knives, it's bombs. If you find that, you know, I'll worry about, you know, the kid wielding a ruler.
We have just another minute or two left here, and the management team, we are going to hang around if there's follow-up questions. Anil, might be here for you if we can get the microphone down. Anil, Evolv Insights, we heard a lot about it today. Maybe you could talk just a little bit about how that's grown over time, maybe how the utilization of Evolv Insights has changed over time from our customer base.
Evolv Insights is our analytics package. As people walk through the system, it counts the number of people. It says what time it is, did they alarm, did they not alarm? As the security team is operating the system, if they're finding weapons, they're tagging those weapons, and it's all getting pushed up into the cloud in an anonymized version or anonymized sense. What we're finding more and more is that in addition to detecting and preventing weapons from getting through, organizations wanna understand the operational impact of it and plan better. They are, for example, performing arts centers are doing nightly runs to see not only how many people came in, but which door did they come in, and when did they come in?
This door A, had people coming in 1 hour to 45 minutes beforehand, maybe because there was a parking lot near there, and door C had people coming in just beforehand. That's where the subway or the train let off. What they're able to do is plan their staffing accordingly. "Let me overstaff gate A to start with and move it to gate C." They're better utilizing their staff, reducing the overall costs, improving the overall satisfaction of their customers. We also see customers taking our data and putting it into a bigger data source. We certainly see this in some of the more sophisticated organizations, like some of the sports and entertainment organizations, where they have a lot of data. Otto talked a little bit about the impact on food and beverage.
They have a tremendous amount of data. If they can combine that with where they're coming in, when they're coming in, and then plan their food and bev, as an example, to those gates, that changes the overall revenue of the business. We're finding these customers now looking to impact either the revenue or other cost elements of their business.
That's terrific. Okay, we're out of the Q&A portion. I'm gonna turn it back over to Peter George, maybe for a couple of closing remarks in the last two minutes that we have.
Thank you. First of all, thank you so much for coming today. I think post-COVID, these meetings, analyst meetings are happening virtually. The truth is, just like we got back after COVID, and not seeing lots of people, this is the first time many of us have met for the first time. We've been talking to you for years over Zoom. Now, you've came here, and I think we'd all agree there's no substitute to meeting people in person, period. I hope one of the things that came out of today, was you got to meet our team, right? This is a very experienced team of subject matter experts that believe deeply in the mission, and we've done this before, and we know exactly what to do to go build a big, enduring company together. That's one.
Make sure you spend time meeting everybody after this, if you haven't met them already. Secondly, there's a lot of technology here in this company. I think it's pretty clear that we're a deep tech company and a data and AI company, and it takes that kind of technology to solve this really, really difficult problem that we have. The third thing is, we have a strategy to grow, and we wanna grow thoughtfully, but a lot of opportunity to build a big, durable and enduring company. We really appreciate you coming on this journey with us today, but hopefully, you'll be on this journey with us for a long time. We're excited about the future. We care deeply about the mission, and we're happy to be here to make the world just a little bit safer.
Thank you so much for coming today.
Folks, that's the end of the formal program today. A couple things. We're gonna have, for those that are baseball fans and Red Sox fans, specifically, we're gonna have a couple of the World Series trophies. They're gonna be here in just a couple minutes. There's also gonna be some, let's call it adult beverages over here for anyone that can participate in that. We're gonna have some private tours of Fenway. If anyone wants to stick around for that, you have an opportunity to see that. On behalf of the entire executive management team, we know how valuable your time is. We appreciate you spending that with us in a live environment. I think a lot of these events today are more virtual, you know what? Getting together is a really great thing.
We really appreciate you making your way to Boston and to Fenway Park. Thank you very much.