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Evolv Technologies Holdings, Inc.

EVLVW
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Business Summary

Evolv Technologies Holdings, Inc. (Evolv) is a security technology company that specializes in Artificial Intelligence (AI)-powered screening solutions to create safer environments while maintaining efficient visitor flow. The company serves various end markets including education, healthcare, sports, live entertainment, tourist attractions, houses of worship, and industrial workplaces. Evolv's core business model is Security-as-a-Service, integrating a proprietary sensor platform, AI-powered software, cloud connectivity, and ongoing services, offered through pure subscription and purchase subscription models. The company's mission is to make the world safer and more enjoyable, focusing on addressing gun violence, mass shootings, and terrorist attacks while ensuring a positive visitor experience.

Evolv generates revenue through a mix of recurring and transactional income. The primary customer segments include educational institutions, hospitals, professional sports and live entertainment venues, industrial warehouses, distribution facilities, large workplaces, arts and entertainment venues, government and corporate offices, hospitality facilities, and houses of worship. The company's platform incorporates both hardware and software components that are designed to operate together, distinguishing its approach from cloud-only software solutions. Key performance indicators include Annual Recurring Revenue (ARR) and Remaining Performance Obligation (RPO), reflecting the scale, durability, and growth of its Security-as-a-Service model.

Evolv offers two core solutions: Evolv Express and Evolv eXpedite. Evolv Express, commercially available since October 2019, is designed for quickly detecting firearms, improvised explosive devices, and large tactical knives in high-volume, unstructured people flows. Evolv eXpedite, launched in September 2024, is an autonomous AI-based weapons detection system for bags in high-clutter environments, designed with AI computer vision and not requiring a trained X-Ray operator. Both products can be deployed independently or together to provide a layered security approach.

In addition to screening capabilities, Evolv's subscription includes Evolv Insights, a cloud-based analytics solution. Evolv Insights provides customers with operational visibility into system performance, including throughput volumes, alarm statistics, detection settings, and system performance metrics, which can be used to inform security operations, staffing decisions, and checkpoint configuration. The subscription also includes full onsite support and repair services for the full term, allowing customers to focus on their primary missions.

For the fiscal year ended December 31, 2025, Evolv reported total revenue of $145.905 million , an increase of 40% from $103.865 million in 2024. Gross profit for 2025 was $75.302 million , up from $59.462 million in 2024, representing a gross profit margin of 51.6% compared to 57.2% in the prior year. The company incurred a net loss of $33.138 million in 2025, an improvement from a net loss of $54.017 million in 2024. Diluted EPS for 2025 was $(0.20) , compared to $(0.34) in 2024. As of December 31, 2025, cash and cash equivalents were $49.150 million , and marketable securities were $19.885 million . Total debt outstanding was $30.000 million , with net debt of $(39.035) million (calculated as total debt minus cash and cash equivalents and marketable securities). Adjusted EBITDA for 2025 was $11.114 million , a significant improvement from $(20.978) million in 2024.

Year-over-year, product revenue increased by 235% to $21.637 million in 2025 from $6.464 million in 2024, driven by increased utilization of the purchase subscription model. Subscription revenue grew by 29% to $83.839 million in 2025 from $65.046 million in 2024, due to customer base growth and increased deployments. Service revenue increased by 25% to $29.375 million in 2025 from $23.467 million in 2024, also reflecting growth in active purchase subscription units. License fee and other revenue increased by 24% to $11.054 million in 2025 from $8.888 million in 2024, primarily due to higher per-unit license fees for second-generation Evolv Express systems. Gross profit margin for product revenue improved from (66)% in 2024 to (12)% in 2025, while subscription revenue margin slightly decreased from 57% to 56% , and service revenue margin decreased from 78% to 71% . License fee and other revenue margin decreased from 93% to 89% .

During 2025, Evolv added nearly 250 new customers and expanded deployments for existing customers. The company launched Evolv eXpedite in September 2024. On November 5, 2025, Evolv entered into a non-exclusive contract manufacturing agreement with Plexus Corp. as part of a broader supply chain strategy to enhance scalability and diversification. The distribution licensing agreement with Columbia Tech expired on December 31, 2025 , with new quotes for hardware purchases now fulfilled through the purchase subscription model. On January 21, 2025, Evolv implemented a Board-approved reduction in force affecting 41 employees , incurring $2.7 million in restructuring costs. The company also in-sourced certain technical and field services support functions previously outsourced.

Business Outlook

Evolv expects its research and development costs to increase for the year ending December 31, 2026, compared to 2025, as the company continues to invest in product innovation . Sales and marketing costs are also expected to increase modestly for the year ending December 31, 2026, as Evolv expands its go-to-market efforts through both direct and channel investments . General and administrative expenses are projected to decrease for the year ending December 31, 2026, as expenses incurred in 2025 related to a previously disclosed investigation and restatement of prior period financial statements are believed to be substantially non-recurring .

Evolv's growth strategy includes developing initial customer successes in specific target metropolitan areas, leveraging these successes for referrals and expansion across vertical industries . The company aims to expand and activate its reseller strategy by adding geographic and vertical market coverage and sales capacity, cultivating field-level collaboration between direct sales and resellers . Evolv plans to concentrate sales and marketing efforts in specific target accounts within identified vertical industries, using brand awareness strategies, content marketing, lead generation, and sales development activities to create qualified sales opportunities . The company also intends to promote awareness by gathering and leveraging its customer community, seeking referrals, selling additional capacity, and introducing new add-on products and services to existing customers . Evolv believes there is an opportunity to introduce new applications and services that solve adjacent security challenges, which may be achieved through internal product development, third-party partnerships, or acquisitions .

Evolv anticipates that its gross margins will fluctuate over time due to factors such as the mix of sales between pure subscription and purchase subscription models, market conditions impacting pricing, product mix changes between established and new products, the cost structure for manufacturing operations, and the ability to maintain component costs . The company's shift to a non-exclusive contract manufacturing agreement with Plexus Corp. is part of a broader supply chain strategy aimed at enhancing scalability, geographic diversification, creating long-term cost-saving opportunities, and operational resiliency . While no material disruptions are anticipated during the onboarding of Plexus, Evolv continues to monitor potential risks associated with onboarding, logistics, and supplier performance, which may influence cost of revenue, inventory levels, and working capital in future periods . Evolv has made significant investments in its technology platforms, including a commitment to implement new systems related to quoting, commissions, and order processing in 2026, and plans to implement a new instance of its financial Enterprise Resource Planning Tool (ERP) during 2027 to further automate processes and reduce manual errors .

Evolv expects its cash, cash equivalents, and marketable securities of $69.0 million as of December 31, 2025, combined with cash generated from future operations and borrowing availability under its Senior Secured Credit Facilities, to be sufficient to fund operating expenses and capital expenditure requirements for at least twelve months from March 10, 2026 . The company's $75.0 million MidCap Credit Agreement provides for an initial $30.0 million term loan facility, a $30.0 million delayed draw facility, and a $15.0 million revolving line of credit, each with a maturity date of July 1, 2030 . As of December 31, 2025, the $30.0 million initial term loan was drawn and outstanding, while the $30.0 million delayed draw facility and $15.0 million revolving credit facility remained undrawn and available .

Risk Factors

Evolv faces several material risks, including material weaknesses in internal control over financial reporting that contributed to a prior restatement of financial statements, exposing the company to significant uncertainties . The company has a history of losses, with net losses of $33.1 million in 2025 and $54.0 million in 2024, and may not achieve or maintain profitability in the future . Operating results may fluctuate due to factors such as the timing of large volume customer sales, changes in sales and fulfillment models, supply chain disruptions, and macroeconomic conditions including inflation, high interest rates, and geopolitical conflicts . Failure to maintain successful relationships with reseller partners or their underperformance could limit market reach . Increases in component costs, long lead times, supply shortages, and tariffs could disrupt the supply chain . Defects or poor quality in products, or perceived failures to detect threats, could harm the business and reputation . The company risks losing recurring revenue if customers do not renew their typical four-year subscriptions or if renewal terms result in lower revenue . The loss of the Homeland Security SAFETY Act Designation for Evolv Express could have adverse reputational and financial consequences . The AI-based weapons detection market is new and evolving, and may not grow as expected . The use of AI and machine learning in products presents risks such as errors, bias, intellectual property infringement, and evolving regulatory frameworks, including the EU AI Act . Expansion into international markets exposes Evolv to additional operational, regulatory, and compliance risks, including local product certification, import/export controls, and foreign data protection laws . The company's growth potential outside the U.S. may be limited by differences in security threats, customer perceptions, and regulatory environments . Inability to anticipate market needs or develop new products in a timely manner could adversely affect revenue . Dependence on third-party technology and components, including sole suppliers, could harm the business if rights are not maintained or if supply is disrupted . Use of "open source" software could subject proprietary software to disclosure obligations or security risks . Disruptions to information technology systems could materially affect business operations . Collection and storage of personal data expose the company to privacy, cybersecurity, and regulatory risks . Failure to effectively expand, train, and retain qualified sales, marketing, and R&D personnel could hinder growth . The market price of Evolv's common stock and warrants has been and may continue to be highly volatile . Certain warrants, earn-out shares, and contingently issuable founder shares are accounted for as liabilities, and changes in their fair value could materially affect financial results .

Management Priorities

Management emphasizes Evolv's mission to make the world safer and more enjoyable by pioneering AI-powered screening solutions that create safer environments while maintaining efficient visitor flow and a positive visitor experience. The company's solutions are delivered through a Security-as-a-Service model, integrating proprietary sensor platforms, AI-powered software, cloud connectivity, and ongoing services. Management highlights the integrated approach, which reflects the full scope of their offering and aligns long-term interests with customers, as well as the continuous improvement delivered through software upgrades. The company's strategic priorities include continued investment in product innovation, with research and development costs expected to increase for the year ending December 31, 2026 . Management also plans to modestly increase sales and marketing costs for the year ending December 31, 2026, to expand go-to-market efforts through both direct and channel investments . Furthermore, general and administrative expenses are expected to decrease for the year ending December 31, 2026, as certain non-recurring expenses from 2025 are not anticipated to continue . Management expects cash, cash equivalents, and marketable securities of $69.0 million as of December 31, 2025, along with future operational cash generation and borrowing availability under the Senior Secured Credit Facilities, to be sufficient to fund operating expenses and capital expenditures for at least twelve months from March 10, 2026 .

View Source Annual Report on SEC.gov ↗

References

  1. [1] Consolidated Statements of Operations and Comprehensive Loss, Total revenue
  2. [2] Consolidated Statements of Operations and Comprehensive Loss, Total revenue
  3. [3] Consolidated Statements of Operations and Comprehensive Loss, Gross profit
  4. [4] Consolidated Statements of Operations and Comprehensive Loss, Gross profit
  5. [5] Consolidated Statements of Operations and Comprehensive Loss, Gross profit ($75,302 thousand) divided by Total revenue ($145,905 thousand)
  6. [6] Consolidated Statements of Operations and Comprehensive Loss, Gross profit ($59,462 thousand) divided by Total revenue ($103,865 thousand)
  7. [7] Consolidated Statements of Operations and Comprehensive Loss, Net loss
  8. [8] Consolidated Statements of Operations and Comprehensive Loss, Net loss
  9. [9] Consolidated Statements of Operations and Comprehensive Loss, Net loss per share - basic and diluted
  10. [10] Consolidated Statements of Operations and Comprehensive Loss, Net loss per share - basic and diluted
  11. [11] Consolidated Balance Sheets, Cash and cash equivalents
  12. [12] Consolidated Balance Sheets, Marketable securities
  13. [13] Consolidated Balance Sheets, Long-term debt (Term loans payable)
  14. [14] Consolidated Balance Sheets, Cash and cash equivalents ($49,150 thousand) + Marketable securities ($19,885 thousand) - Term loans payable ($30,000 thousand)
  15. [15] Item 7, MD&A — Adjusted EBITDA
  16. [16] Item 7, MD&A — Adjusted EBITDA
  17. [17] Consolidated Statements of Operations and Comprehensive Loss, Product revenue
  18. [18] Consolidated Statements of Operations and Comprehensive Loss, Product revenue
  19. [19] Consolidated Statements of Operations and Comprehensive Loss, Subscription revenue
  20. [20] Consolidated Statements of Operations and Comprehensive Loss, Subscription revenue
  21. [21] Consolidated Statements of Operations and Comprehensive Loss, Service revenue
  22. [22] Consolidated Statements of Operations and Comprehensive Loss, Service revenue
  23. [23] Consolidated Statements of Operations and Comprehensive Loss, License fee and other revenue
  24. [24] Consolidated Statements of Operations and Comprehensive Loss, License fee and other revenue
  25. [25] Consolidated Statements of Operations and Comprehensive Loss, Gross profit margin: Product revenue
  26. [26] Consolidated Statements of Operations and Comprehensive Loss, Gross profit margin: Product revenue
  27. [27] Consolidated Statements of Operations and Comprehensive Loss, Gross profit margin: Subscription revenue
  28. [28] Consolidated Statements of Operations and Comprehensive Loss, Gross profit margin: Subscription revenue
  29. [29] Consolidated Statements of Operations and Comprehensive Loss, Gross profit margin: Service revenue
  30. [30] Consolidated Statements of Operations and Comprehensive Loss, Gross profit margin: Service revenue
  31. [31] Consolidated Statements of Operations and Comprehensive Loss, Gross profit margin: License fee and other revenue
  32. [32] Consolidated Statements of Operations and Comprehensive Loss, Gross profit margin: License fee and other revenue
  33. [33] Item 7, MD&A — Revenue, Cost of Revenue and Gross Profit
  34. [34] Item 1, Business — Manufacturing and Suppliers
  35. [35] Item 7, MD&A — Sales Mix, Pricing, Product Cost and Margins
  36. [36] Item 1, Business — Human Capital
  37. [37] Item 7, MD&A — Restructuring Costs
  38. [38] Item 7, MD&A — Research and Development
  39. [39] Item 7, MD&A — Sales and Marketing
  40. [40] Item 7, MD&A — General and Administrative
  41. [41] Item 1, Business — Our Growth Strategy
  42. [42] Item 1, Business — Our Growth Strategy
  43. [43] Item 1, Business — Our Growth Strategy
  44. [44] Item 1, Business — Our Growth Strategy
  45. [45] Item 1, Business — Our Growth Strategy
  46. [46] Item 7, MD&A — Gross Profit and Gross Profit Margin
  47. [47] Item 7, MD&A — Supply Chain Strategy
  48. [48] Item 7, MD&A — Supply Chain Strategy
  49. [49] Item 9A, Controls and Procedures — Remediation Plan for the Remaining Material Weaknesses
  50. [50] Item 7, MD&A — Liquidity and Capital Resources
  51. [51] Item 7, MD&A — Liquidity and Capital Resources
  52. [52] Item 7, MD&A — Financing Arrangements
  53. [53] Item 7, MD&A — Financing Arrangements
  54. [54] Item 7, MD&A — Financing Arrangements
  55. [55] Item 7, MD&A — Financing Arrangements
  56. [56] Item 7, MD&A — Financing Arrangements
  57. [57] Item 7, MD&A — Financing Arrangements
  58. [58] Item 7, MD&A — Financing Arrangements
  59. [59] Item 7, MD&A — Financing Arrangements
  60. [60] Item 7, MD&A — Financing Arrangements
  61. [61] Item 1A, Risk Factors — Material weaknesses in our internal control over financial reporting, which contributed to the previously disclosed restatement of our prior period financial statements expose us to significant risks and uncertainties.
  62. [62] Item 7, MD&A — Liquidity and Capital Resources
  63. [63] Item 7, MD&A — Liquidity and Capital Resources
  64. [64] Item 1A, Risk Factors — We have not been profitable historically and may not achieve or maintain profitability in the future.
  65. [65] Item 1A, Risk Factors — Our operating results may fluctuate for a variety of reasons.
  66. [66] Item 1A, Risk Factors — If we fail to maintain successful relationships with our reseller partners, or if our partners fail to perform, our ability to market, sell and distribute our products will be limited.
  67. [67] Item 1A, Risk Factors — Increases in component costs, long lead times, supply shortages and changes, or volatility in tariffs could disrupt our supply chain.
  68. [68] Item 1A, Risk Factors — If our products fail or are perceived to fail to detect threats, or if our products contain undetected errors or defects, this could have an adverse effect on our business and results of operations.
  69. [69] Item 1A, Risk Factors — We face the risk of losing recurring revenue and forecasting certainty if customers choose not to renew their typical four-year subscriptions or if renewal terms result in lower revenue than expiring agreements, and significant losses if returned systems cannot be profitably redeployed.
  70. [70] Item 1A, Risk Factors — The loss of designation of our Evolv Express system as a Qualified Anti-Terrorism Technology under the Homeland Security SAFETY Act could result in adverse reputational and financial consequences.
  71. [71] Item 1A, Risk Factors — The AI-based weapons detection for security screening market is new and evolving and may not grow as expected or may develop more slowly or differently than we expect.
  72. [72] Item 1A, Risk Factors — We use AI and machine learning in our development process and in our AI-based weapon detection products.
  73. [73] Item 1A, Risk Factors — Our expansion into international markets exposes us to additional operational, regulatory, and compliance risks that could adversely affect our business.
  74. [74] Item 1A, Risk Factors — Our growth potential outside the U.S. may be limited or vary due to differences in security threats, customer perceptions, regulatory environments, and international market dynamics, as well as our own expansion and investment priorities.
  75. [75] Item 1A, Risk Factors — If we do not successfully anticipate market needs and enhance our existing products or develop new products that meet those needs on a timely basis, we may not be able to compete effectively and our ability to generate revenues will suffer.
  76. [76] Item 1A, Risk Factors — We incorporate technology and components from third parties into our products, and our inability to obtain or maintain rights to the technology could harm our business.
  77. [77] Item 1A, Risk Factors — Our use of “open source” software could subject our proprietary software to disclosure obligations, expose us to security risks, and negatively affect our ability to offer our products and subject us to possible litigation.
  78. [78] Item 1A, Risk Factors — Our business depends on the reliability, availability, and performance of our information technology systems, including key internal enterprise software solutions, and any failure or disruption of these systems could materially and adversely affect our business.
  79. [79] Item 1A, Risk Factors — Our products and operations collect and store personal data about individuals, which exposes us to privacy, cybersecurity, and regulatory risks.
  80. [80] Item 1A, Risk Factors — If we do not effectively expand, train, and retain qualified sales and marketing personnel, we may be unable to acquire new customers or sell additional products to successfully pursue our growth strategy.
  81. [81] Item 1A, Risk Factors — The market price of our common stock and warrants has been and may continue to be highly volatile, and you may lose some or all of your investment.
  82. [82] Item 1A, Risk Factors — Certain of our warrants, earn-out shares, and founder shares are accounted for as liabilities and the changes in value of such securities could have a material effect on our financial results.
  83. [83] Item 7, MD&A — Research and Development
  84. [84] Item 7, MD&A — Sales and Marketing
  85. [85] Item 7, MD&A — General and Administrative
  86. [86] Item 7, MD&A — Liquidity and Capital Resources
  87. [87] Item 7, MD&A — Liquidity and Capital Resources

Analysis on 5/21/2026