Group 1 - Evolv Technology (EVLV) stock price surged by 15.5% in early trading on Friday [1] - The company raised its revenue growth forecast for 2025 to 27%-30% [1] - Evolv Technology continues to advance its direct sales strategy [1]

Company Performance - Evolv Technologies Holdings, Inc. reported a quarterly loss of $0.25 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.09, marking an earnings surprise of -177.78% [1] - The company posted revenues of $32.54 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 11.26%, compared to revenues of $25.54 million a year ago [2] - Over the last four quarters, Evolv Technologies has surpassed consensus EPS estimates only once [2] Stock Movement and Outlook - Evolv Technologies shares have increased approximately 89.6% since the beginning of the year, significantly outperforming the S&P 500's gain of 10% [3] - The future price movement of the stock will largely depend on management's commentary during the earnings call and the earnings outlook [3][4] - The current consensus EPS estimate for the upcoming quarter is -$0.07 on revenues of $31.99 million, and for the current fiscal year, it is -$0.23 on revenues of $126.22 million [7] Industry Context - The Computers - IT Services industry, to which Evolv Technologies belongs, is currently ranked in the bottom 39% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Evolv Technologies' performance [5][6]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $32,500,000, reflecting a 2% sequential increase and a 29% year-over-year growth, driven by strong new customer growth and expanding deployments [13][30] - Annual recurring revenue (ARR) as of June 30, 2025, was $110,500,000, representing a 27% year-over-year increase [13][32] - Adjusted EBITDA was positive at $2,000,000, compared to a loss of $8,000,000 in the same quarter last year, resulting in an adjusted EBITDA margin of 6% [34] - Total cash, cash equivalents, and marketable securities increased by $2,000,000 sequentially to $37,000,000, marking the first quarter of sequential cash increase [14][35] Business Line Data and Key Metrics Changes - The company welcomed over 60 new customers in Q2 2025, bringing the total to over 1,000 customers globally [14][92] - The company surpassed 7,000 active subscriptions, on track to meet the goal of at least 8,000 by year-end [15] - Approximately 54% of booked units and 56% of booked ARR in Q2 came from existing customers, indicating strong customer trust and value [16] Market Data and Key Metrics Changes - In the education market, the company expanded its presence by approximately 20 new school districts across the U.S., including a significant $15,000,000 contract with Gwinnett County Public Schools [19][20] - In healthcare, the company secured contracts with major institutions like Ohio State University Wexner Medical Center and Broward Health, reflecting growing demand for security solutions [21][22] - The sports and entertainment sector saw new wins with teams like Inner Miami CF and FC Cincinnati, along with significant upgrades from existing customers [24][25] Company Strategy and Development Direction - The company is shifting its go-to-market model to focus more on direct purchase subscriptions, which are expected to yield higher revenue and ARR compared to distribution fulfillment [26][27] - The company aims to build a durable, high-growth business with predictable results, focusing on operational efficiency and customer satisfaction [10][93] - The company is raising its revenue growth outlook for 2025 to 27-30%, up from the previous guidance of 20-25% [28][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver on 2025 goals, citing strong visibility into key business drivers and a growing backlog [28][38] - The company is focused on disciplined execution and improving operational efficiency, with a commitment to generating positive cash flow in Q4 2025 [29][40] - Management noted that the DOJ investigation is no longer a concern, allowing the company to focus on growth [9][93] Other Important Information - The company has secured a new $75,000,000 nondilutive credit facility to support its subscription-based sales model [36] - A settlement in principle was reached regarding a securities class action lawsuit, with expected direct financial exposure of no more than $1,000,000 [9][37] Q&A Session Summary Question: What is the expected mix of subscription deals versus purchase subscription deals going forward? - Management indicated a shift towards more subscription deals over time, with a balanced mix expected by 2026 [43][44] Question: What is the cost to refurbish Gen one Express machines for the new certified pre-owned program? - The program, named Evolve Flex, is new, and while refurbishment costs are being kept reasonable, traction is still early [45][46] Question: What is the hiring strategy for the remainder of the year? - Targeted hiring in R&D and services teams is expected, with a slight uptick in operational expenses [51][52] Question: What are the early signs regarding renewals and net revenue retention? - The company reported a net unit retention of over 100% for early renewals, with a focus on derisking renewals [62][63] Question: Where are the biggest opportunities in end markets? - Management highlighted the diversity across verticals, with strong opportunities in education, healthcare, and industrial workplaces [66][67] Question: Will the new credit line be drawn down sooner if business momentum continues? - The first $30,000,000 should suffice for a while, but the credit facility provides flexibility if needed [68][69]

[Part I Financial Information](index=5&type=section&id=Part%20I%20Financial%20Information) Presents the company's unaudited financial statements, management's analysis, and disclosures on market risk and internal controls [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements, highlighting a restatement of prior period financials due to an internal investigation [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $280.4 million, while a significant rise in liabilities led to a decrease in stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$280,422** | **$268,059** | | Cash and cash equivalents | $36,942 | $37,015 | | Accounts receivable, net | $41,802 | $28,392 | | Property and equipment, net | $125,478 | $123,661 | | **Total Liabilities** | **$187,772** | **$150,408** | | Accrued expenses and other current liabilities | $38,170 | $19,508 | | Total deferred revenue | $91,372 | $84,772 | | Contingent earn-out liability | $18,033 | $12,809 | | **Total Stockholders' Equity** | **$92,650** | **$117,651** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q2 revenue grew 29% YoY to $32.5 million, but a net loss of $40.5 million was reported due to non-cash expenses Q2 2025 vs. Q2 2024 (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 (Restated) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | $32,544 | $25,224 | +29.0% | | Gross Profit | $16,218 | $14,757 | +9.9% | | Loss from Operations | ($17,493) | ($22,371) | +21.8% | | Net (Loss) Income | ($40,535) | $3,418 | -1286% | | Net Loss Per Share (Diluted) | ($0.25) | $0.02 | -1350% | Six Months Ended June 30, 2025 vs. 2024 (in thousands, except per share data) | Metric | H1 2025 | H1 2024 (Restated) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | $64,551 | $47,405 | +36.2% | | Gross Profit | $35,368 | $26,912 | +31.4% | | Loss from Operations | ($31,882) | ($44,277) | +28.0% | | Net Loss | ($42,224) | ($7,854) | -437.6% | | Net Loss Per Share (Diluted) | ($0.26) | ($0.05) | -420.0% | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations improved to $0.4 million for H1 2025, with the company's cash position remaining stable Six Months Ended June 30 Cash Flow Summary (in thousands) | Cash Flow Category | 2025 | 2024 (Restated) | | :--- | :--- | :--- | | Net cash used in operating activities | ($426) | ($37,732) | | Net cash (used in) provided by investing activities | ($3,611) | $5,621 | | Net cash provided by financing activities | $4,095 | $636 | | **Net decrease in cash** | **($73)** | **($31,464)** | | **Cash at end of period** | **$36,942** | **$35,973** | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Discloses details on a financial restatement, legal contingencies, and a new $75 million credit facility secured post-quarter - The company designs and sells AI-powered security screening and analytics systems, including its new **Evolv eXpedite™** product for bags, to enhance security at venues like schools, hospitals, and stadiums[23](index=23&type=chunk)[24](index=24&type=chunk) - An internal investigation found that certain sales were subject to extra-contractual terms not shared with accounting personnel, leading to premature or incorrect revenue recognition, which resulted in the **resignation of the CFO**, termination of other employees, and a restatement of financial statements[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) - The company is involved in a class-action lawsuit alleging false statements about product effectiveness and revenue recognition, for which a **settlement in principle of $15.0 million** was reached, with $14.0 million expected to be covered by D&O insurance[123](index=123&type=chunk)[127](index=127&type=chunk) - Subsequent to the quarter end, on July 29, 2025, the company entered into a **$75.0 million credit agreement** to be used for general corporate purposes, including supporting its subscription sales model[29](index=29&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Discusses a 36% H1 revenue increase to $64.6 million, a widening net loss, and the impact of the financial restatement [Results of Operations](index=45&type=section&id=Results%20of%20Operations) H1 revenue grew 36% to $64.6 million, while a narrowed operating loss was offset by non-cash expenses, widening the net loss Revenue by Type - Six Months Ended June 30 (in thousands) | Revenue Type | 2025 | 2024 (Restated) | % Change | | :--- | :--- | :--- | :--- | | Product revenue | $4,850 | $3,445 | +41% | | Subscription revenue | $39,437 | $29,874 | +32% | | Service revenue | $13,416 | $10,818 | +24% | | License fee and other revenue | $6,848 | $3,268 | +110% | | **Total Revenue** | **$64,551** | **$47,405** | **+36%** | Operating Expenses - Six Months Ended June 30 (in thousands) | Expense Category | 2025 | 2024 (Restated) | % Change | | :--- | :--- | :--- | :--- | | Research and development | $9,599 | $12,246 | -22% | | Sales and marketing | $22,779 | $32,216 | -29% | | General and administrative | $32,210 | $25,867 | +25% | | Restructuring costs | $2,662 | $860 | +210% | | **Total Operating Expenses** | **$67,250** | **$71,189** | **-6%** | - The decrease in Sales & Marketing and R&D expenses was primarily due to **reductions in force** implemented in May 2024 and January 2025[218](index=218&type=chunk)[219](index=219&type=chunk) - The increase in General & Administrative expenses was driven by a **$11.5 million increase in consulting and legal fees** related to the internal investigation and restatement, partially offset by $5.6 million in insurance recoveries[220](index=220&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) The company held $36.9 million in cash and secured a new $75.0 million credit facility to ensure sufficient liquidity - The company entered into a new **$75.0 million credit agreement** with MidCap Financial Trust on July 29, 2025, receiving initial net proceeds of $26.6 million[228](index=228&type=chunk)[231](index=231&type=chunk) - Management expects that current cash reserves, along with cash from operations and the new credit facility, will be **sufficient to fund operating expenses** and capital requirements for at least the next twelve months[229](index=229&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=58&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exempt from this disclosure as a smaller reporting company - The company is **exempt from this disclosure requirement** due to its status as a smaller reporting company[250](index=250&type=chunk) [Item 4. Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective due to material weaknesses and has initiated a detailed remediation plan - Management concluded that disclosure controls and procedures were **not effective** as of June 30, 2025, due to material weaknesses in internal control over financial reporting[252](index=252&type=chunk) - Identified **material weaknesses** include an ineffective control environment, lack of sufficient accounting personnel, ineffective communication between departments, and ineffective IT general controls for financial systems[253](index=253&type=chunk)[256](index=256&type=chunk) - The company's remediation plan includes **hiring a new Chief Accounting Officer and Chief Revenue Officer**, implementing a new channel partner program, enhancing training, and engaging a national advisory firm to assist in designing controls[260](index=260&type=chunk)[261](index=261&type=chunk) [Part II Other Information](index=61&type=section&id=Part%20II%20Other%20Information) Covers legal proceedings, risk factors, equity sales, and other corporate disclosures [Item 1. Legal Proceedings](index=62&type=section&id=Item%201.%20Legal%20Proceedings) Details a $15.0 million class action settlement, an FTC settlement, and an ongoing SEC investigation - This section incorporates by reference the information from **Note 14** (Commitments and Contingencies) regarding legal matters[267](index=267&type=chunk) [Item 1A. Risk Factors](index=62&type=section&id=Item%201A.%20Risk%20Factors) Outlines risks from the financial restatement, material weaknesses, a history of losses, and regulatory scrutiny - The **financial restatement** has exposed the company to additional risks, including litigation, regulatory enforcement, and reputational harm[271](index=271&type=chunk)[272](index=272&type=chunk) - The company has identified **multiple material weaknesses** in its internal control over financial reporting, which could lead to future misstatements and adversely affect its reputation and stock price[273](index=273&type=chunk)[276](index=276&type=chunk) - The company has a **history of losses ($396.9 million accumulated deficit** as of June 30, 2025) and may not achieve or maintain profitability in the future[278](index=278&type=chunk) - The company is subject to **ongoing legal and regulatory matters**, including a settlement with the FTC and investigations by the SEC, which could result in monetary and injunctive relief[387](index=387&type=chunk)[388](index=388&type=chunk)[389](index=389&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=90&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred during the three months ended June 30, 2025 [Item 3. Defaults Upon Senior Securities](index=90&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period [Item 4. Mine Safety Disclosures](index=91&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This disclosure is not applicable to the company's operations [Item 5. Other Information](index=91&type=section&id=Item%205.%20Other%20Information) Discloses the adoption of Rule 10b5-1 trading plans by two company officers during the quarter - On June 12, 2025, **two executives adopted Rule 10b5-1 trading plans** for the sale of company common stock underlying stock options and restricted stock units[420](index=420&type=chunk) [Item 6. Exhibits](index=92&type=section&id=Item%206.%20Exhibits) Provides an index of exhibits filed with the report, including officer certifications and interactive data files

Financial Performance Highlights Evolv Technology's financial performance highlights, including Q2 2025 results, first six months of 2025, and updated 2025 outlook [Second Quarter 2025 Financial Results](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Results) Evolv Technology reported strong top-line growth in Q2 2025, with revenue up 29% to $32.5 million and ARR growing 27% to $110.5 million, alongside a significant net loss of $40.5 million, though Adjusted EBITDA turned positive to $2.0 million Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 (Restated) | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $32.5 million | $25.2 million | 29% | | Annual Recurring Revenue (ARR) | $110.5 million | $87.0 million | 27% | | Net (Loss) Income | $(40.5) million | $3.4 million | N/A | | Adjusted EBITDA | $2.0 million | $(8.0) million | N/A | | Cash Flow from Operations | $2.1 million | $(21.6) million | N/A | Q2 2025 Revenue Breakdown (vs. Q2 2024) | Revenue Type | Q2 2025 (in thousands) | Q2 2024 (Restated, in thousands) | % Change | | :--- | :--- | :--- | :--- | | Recurring revenue | $26,678 | $21,016 | 27% | | Non-recurring revenue | $5,866 | $4,208 | 39% | | **Total revenue** | **$32,544** | **$25,224** | **29%** | - The company surpassed **1,000 customers served** and has screened over **3 billion visitors** to date, reflecting growing market trust in its solutions[2](index=2&type=chunk) [First Six Months of 2025 Results](index=1&type=section&id=First%20Six%20Months%20of%202025%20Results) For the first six months of 2025, revenue grew 36% to $64.6 million, net loss widened to $42.2 million, but Adjusted EBITDA improved significantly to a positive $3.8 million, and operating cash outflow dramatically reduced First Six Months 2025 Financial Summary (vs. H1 2024) | Metric | H1 2025 | H1 2024 (Restated) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $64.6 million | $47.4 million | +36% | | Net Loss | $(42.2) million | $(7.9) million | Increased Loss | | Adjusted EBITDA | $3.8 million | $(18.3) million | Improved to Positive | First Six Months Operating Cash Flow (in thousands) | Period | H1 2025 | H1 2024 (Restated) | | :--- | :--- | :--- | | Net cash used in operating activities | $(426) | $(37,732) | [Company Outlook for 2025](index=2&type=section&id=Company%20Outlook%20for%202025) Evolv Technology raised its full-year 2025 revenue guidance to $132-$135 million, expecting 27-30% growth, positive mid-single-digit Adjusted EBITDA margins, and cash flow positivity in Q4 2025 Updated Full-Year 2025 Guidance | Estimate | Previous Guidance (May 20, 2025) | Current Guidance (August 14, 2025) | | :--- | :--- | :--- | | Total Revenue | $125 - $130 million | $132 - $135 million | | Revenue Growth Rate | 20% - 25% | 27% - 30% | | Adjusted EBITDA Margin | Low to Mid-Single Digits | Mid-Single Digits | - The company expects to be **cash flow positive** in the fourth quarter of 2025[7](index=7&type=chunk) Consolidated Financial Statements Overview of Evolv Technology's condensed consolidated statements, including operations, balance sheets, and cash flows for the reported periods [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 operations show $16.2 million gross profit on $32.5 million revenue, but $33.7 million operating expenses and a $23.0 million fair value charge led to a $40.5 million net loss, contrasting with Q2 2024's net income Q2 2025 Statement of Operations Highlights (in thousands) | Line Item | Q2 2025 | Q2 2024 (Restated) | | :--- | :--- | :--- | | Total Revenue | $32,544 | $25,224 | | Gross Profit | $16,218 | $14,757 | | Loss from Operations | $(17,493) | $(22,371) | | Total other (expense) income, net | $(23,043) | $25,789 | | Net (Loss) Income | $(40,535) | $3,418 | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Evolv Technology reported $280.4 million in total assets, $187.8 million in total liabilities, $36.9 million cash, no debt, and $92.7 million in stockholders' equity Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $36,942 | $37,015 | | Total current assets | $133,081 | $121,446 | | Total assets | $280,422 | $268,059 | | Total current liabilities | $142,887 | $96,709 | | Total liabilities | $187,772 | $150,408 | | Stockholders' equity | $92,650 | $117,651 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For H1 2025, net cash used in operating activities significantly improved to $0.4 million from $37.7 million, with investing activities using $3.6 million and financing providing $4.1 million, resulting in a $36.9 million ending cash balance Six Months Ended June 30 Cash Flow Summary (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(426) | $(37,732) | | Net cash (used in) provided by investing activities | $(3,611) | $5,621 | | Net cash provided by financing activities | $4,095 | $636 | | **Net decrease in cash** | **$(73)** | **$(31,464)** | Key Operating Metrics and Non-GAAP Reconciliations This section details Evolv Technology's key operating statistics and provides reconciliations of GAAP to non-GAAP financial measures for a clearer view of performance [Key Operating Statistics](index=10&type=section&id=Key%20Operating%20Statistics) Evolv Technology's Q2 2025 operating statistics show consistent growth, with 63 new customers added, ARR increasing to $110.5 million, and recurring revenue reaching $26.7 million Quarterly Operating Statistics | Metric ($ in thousands) | Q1 2025 | Q2 2025 | Change (QoQ) | | :--- | :--- | :--- | :--- | | New customers | 54 | 63 | +9 | | Annual recurring revenue | $105,990 | $110,516 | +$4,526 | | Recurring revenue | $25,753 | $26,678 | +$925 | [Reconciliation of Non-GAAP Financial Measures](index=10&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) Detailed reconciliations from GAAP to non-GAAP measures, adjusting for items like stock-based compensation and fair value changes, transformed a Q2 2025 GAAP net loss of $40.5 million into an adjusted loss of $3.4 million [Reconciliation of Gross Profit and Loss from Operations](index=11&type=section&id=Reconciliation%20of%20Gross%20Profit%20and%20Loss%20from%20Operations) This section reconciles GAAP gross profit and loss from operations to adjusted figures by excluding non-cash and non-recurring items Q2 2025 GAAP to Adjusted Loss from Operations (in thousands) | Description | Amount | | :--- | :--- | | Loss from operations, GAAP | $(17,493) | | Adjustments (Stock comp, restructuring, etc.) | $13,721 | | **Adjusted loss from operations** | **$(3,772)** | - Adjusted gross margin for Q2 2025 was **54.9%**, slightly lower than the **59.0%** in Q2 2024[28](index=28&type=chunk) [Reconciliation of Net Income (Loss) to Adjusted EBITDA](index=12&type=section&id=Reconciliation%20of%20Net%20Income%20(Loss)%20to%20Adjusted%20EBITDA) This section details the adjustments made to reconcile GAAP net income (loss) to Adjusted EBITDA, providing a clearer view of operational profitability Q2 2025 GAAP Net Loss to Adjusted EBITDA (in thousands) | Description | Amount | | :--- | :--- | | Net (loss) income, GAAP | $(40,535) | | Adjustments (D&A, stock comp, fair value changes, etc.) | $42,580 | | **Adjusted EBITDA** | **$2,045** | [Reconciliation of Net Income (Loss) to Adjusted Earnings (Loss)](index=12&type=section&id=Reconciliation%20of%20Net%20Income%20(Loss)%20to%20Adjusted%20Earnings%20(Loss)) This section outlines the adjustments from GAAP net income (loss) to arrive at adjusted earnings (loss), excluding specific non-operating or non-recurring items Q2 2025 GAAP Net Loss to Adjusted Loss (in thousands) | Description | Amount | | :--- | :--- | | Net (loss) income, GAAP | $(40,535) | | Adjustments (Stock comp, fair value changes, etc.) | $37,124 | | **Adjusted loss** | **$(3,411)** | - The adjusted loss per diluted share for Q2 2025 was **$(0.02)**, a significant improvement from **$(0.07)** in Q2 2024[31](index=31&type=chunk) [Reconciliation of Operating Expenses](index=10&type=section&id=Reconciliation%20of%20Operating%20Expenses) This section provides a reconciliation of GAAP operating expenses to adjusted operating expenses, removing the impact of non-cash and non-recurring items Q2 2025 GAAP to Adjusted Operating Expenses (in thousands) | Description | Amount | | :--- | :--- | | Operating expenses, GAAP | $33,711 | | Adjustments (Stock comp, restructuring, legal costs) | $(12,071) | | **Adjusted operating expenses** | **$21,640** | Supplementary Information This section provides additional context about Evolv Technology, definitions of key metrics, and important disclosures regarding forward-looking statements and associated risks [About Evolv Technology](index=2&type=section&id=About%20Evolv%20Technology) Evolv Technology is a security company leveraging AI-powered screening to enhance safety, having screened over three billion people since 2019 and earning a DHS SAFETY Act Designation - Evolv's mission is to transform security to create a safer world to live, work, learn, and play using **AI-powered screening and analytics**[9](index=9&type=chunk) - The company has been awarded the **DHS SAFETY Act Designation** as a Qualified Anti-Terrorism Technology (QATT) and won multiple industry awards in 2024[9](index=9&type=chunk) [Definitions of Key Metrics and Non-GAAP Measures](index=4&type=section&id=Definitions%20of%20Key%20Metrics%20and%20Non-GAAP%20Measures) This section defines key performance indicators like Annual Recurring Revenue (ARR) and explains the adjustments made for non-GAAP measures such as Adjusted EBITDA and Adjusted Earnings - Annual Recurring Revenue (ARR) is defined as subscription and recurring service revenue from the final month of the quarter, normalized to a **one-year period**[11](index=11&type=chunk) - Non-GAAP measures like Adjusted EBITDA are presented to supplement GAAP results by excluding items such as **stock-based compensation**, **non-recurring legal costs**, and **changes in fair value of certain liabilities**[11](index=11&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements subject to risks including a history of losses, reliance on third parties, supply chain issues, litigation, and internal control weaknesses - The press release includes forward-looking statements that are subject to a **safe harbor provision** and involve significant risks and uncertainties[12](index=12&type=chunk) - Key risk factors include a **history of losses**, **reliance on third parties** for manufacturing and sales, **litigation and regulatory risks**, and **material weaknesses in internal control over financial reporting**[13](index=13&type=chunk)

Core Insights - Evolv Technologies Holdings, a Massachusetts-based security technology company, has regained interest from the investment community due to a new management team in place [1] Company Overview - Evolv Technologies specializes in enhancing the effectiveness of human security processes through its products [1] Management Changes - The recent changes in the management team are a significant factor contributing to the renewed interest from investors [1] Market Sentiment - The investment community's constructive interest indicates a potential positive shift in market sentiment towards Evolv Technologies [1]

Core Viewpoint - Evolv Technologies Holdings, Inc. (EVLV) has received a Zacks Rank 1 (Strong Buy) upgrade due to an upward trend in earnings estimates, indicating a positive outlook for the company's stock price [1][4]. Earnings Estimates and Ratings - The Zacks rating system is primarily driven by changes in a company's earnings picture, with the Zacks Consensus Estimate reflecting EPS estimates from sell-side analysts [2][3]. - The recent upgrade for Evolv Technologies signifies an improvement in its earnings outlook, which is expected to lead to increased buying pressure and a rise in stock price [4][6]. Impact of Earnings Estimate Revisions - There is a strong correlation between earnings estimate revisions and near-term stock price movements, making it beneficial for investors to track these revisions [7]. - The Zacks Rank system effectively utilizes earnings estimate revisions to classify stocks, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. Specifics on Evolv Technologies - For the fiscal year ending December 2025, Evolv Technologies is projected to earn -$0.23 per share, with no year-over-year change expected [9]. - Over the past three months, the Zacks Consensus Estimate for Evolv Technologies has increased by 14.8%, indicating a positive trend in earnings estimates [9]. Zacks Rating System Overview - The Zacks rating system maintains a balanced distribution of "buy" and "sell" ratings across its universe of over 4,000 stocks, with only the top 5% receiving a "Strong Buy" rating [10][11]. - The upgrade of Evolv Technologies to a Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [11].

Core Insights - Verona Pharma and Evolv Technologies are highlighted as strong investment opportunities with high momentum characteristics and Zacks Rank 1 (Strong Buy) [1][2][3] Company Summaries Verona Pharma (VRNA) - Focuses on developing innovative therapeutics for chronic respiratory diseases with significant unmet medical needs [1] - Zacks Consensus Estimate for current year earnings increased by 37.5% over the last 60 days [1] - Shares gained 69% over the last three months, outperforming the S&P 500's gain of 26% [2] - Possesses a Momentum Score of A [2] Evolv Technologies (EVLV) - Offers AI touchless screening technologies for weapons detection, identity verification, and health-related threats through Evolv Cortex AI(TM) software platform [2] - Zacks Consensus Estimate for current year earnings increased by 23.3% over the last 60 days [2] - Shares gained 100.7% over the last three months, significantly outperforming the S&P 500's gain of 25.9% [3] - Possesses a Momentum Score of B [3]

Company Overview - Evolv Technologies Holdings, Inc. (EVLV) shares increased by 5.8% to $6.06 in the last trading session, with a higher-than-average trading volume [1] - The stock has shown a 0.4% gain over the past four weeks [1] - Evolv Technologies is experiencing strong customer expansions and increased adoption of subscription models, along with early traction of its new product, Evolv eXpedite [1] Financial Expectations - The company is projected to report a quarterly loss of $0.09 per share, reflecting a year-over-year change of -550% [2] - Expected revenues are $29.25 million, which is a 14.5% increase from the same quarter last year [2] - Trends in earnings estimate revisions are correlated with near-term stock price movements, indicating potential strength in the stock [2][3] Stock Performance and Rankings - The consensus EPS estimate for Evolv Technologies has remained unchanged over the last 30 days, suggesting that the stock's price movement may not sustain without earnings estimate revisions [3] - The stock currently holds a Zacks Rank of 2 (Buy) [3] - Evolv Technologies is part of the Zacks Computers - IT Services industry, which includes Stem, Inc. (STEM), another stock in the same sector that closed 1679.1% higher at $7.44 [3]

Core Viewpoint - Evolv Technologies Holdings, Inc. (EVLV) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Revisions - The Zacks rating system is primarily based on a company's changing earnings picture, tracking the Zacks Consensus Estimate for EPS from sell-side analysts [2]. - The recent upgrade reflects a positive outlook on Evolv Technologies' earnings, which could lead to increased buying pressure and a rise in stock price [4][6]. - Evolv Technologies is projected to earn -$0.23 per share for the fiscal year ending December 2025, indicating a year-over-year change of 32.4% [9]. - Over the past three months, the Zacks Consensus Estimate for Evolv Technologies has increased by 14.8% [9]. Impact of Institutional Investors - Changes in a company's future earnings potential, as shown by earnings estimate revisions, are strongly correlated with near-term stock price movements, largely due to institutional investors adjusting their valuations based on these estimates [5]. - Institutional investors' transactions, driven by changes in earnings estimates, can lead to significant price movements in the stock [5]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [8]. - The upgrade of Evolv Technologies to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [11].