Company Overview - Evolv Technologies provides AI-based touchless security screening systems designed to detect firearms, improvised explosive devices, and tactical knives as visitors walk through at a normal pace [5][8] - The company generates revenue through the sale and subscription of hardware and software solutions for security screening, analytics, and visitor management, serving sectors such as entertainment, education, healthcare, and other public spaces [8] Financial Performance - As of November 20, 2025, Evolv Technologies had a market capitalization of $987.46 million, with a revenue of $136.50 million and a net income of -$59.74 million for the trailing twelve months (TTM) [4] - In the most recent quarter, sales grew by 57%, and annual recurring revenue increased by 25%, with management expecting to generate positive operating cash flows in the upcoming quarter [11] Investment Position - Mittelman Wealth Management initiated a new position in Evolv Technologies, acquiring 1,511,866 shares valued at $11.41 million, representing a 7.47% allocation of the fund's $152.74 million in reportable U.S. equity assets [2][3] - Evolv Technologies has become the sixth-largest position for Mittelman Wealth Management, indicating strong institutional interest in the stock [9] Market Performance - As of November 20, 2025, Evolv's shares were priced at $5.66, reflecting a 107.0% increase over the past year, significantly outperforming the S&P 500 by 97 percentage points [3] - The stock is trading at 7 times sales, which is comparatively lower than a peer like Axon Enterprise, which trades at 16 times sales, suggesting a potentially attractive investment opportunity [11]

Core Insights - Archer, a global leader in Governance, Risk, and Compliance (GRC), has announced new capabilities for its Archer Evolv platform, enhancing compliance assurance for organizations in near real time [1]. Company Developments - The introduction of new Compliance and Control Management (CCM) capabilities aims to help organizations better manage their compliance requirements [1].

Group 1 - Evolv Technologies Holdings, Inc. reported a quarterly loss of $0.01 per share, better than the Zacks Consensus Estimate of a loss of $0.07, and an improvement from a loss of $0.19 per share a year ago, resulting in an earnings surprise of +85.71% [1] - The company achieved revenues of $42.85 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 27.25%, compared to $27.36 million in the same quarter last year [2] - Evolv Technologies shares have increased approximately 70.1% year-to-date, significantly outperforming the S&P 500's gain of 16.5% [3] Group 2 - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The trend of estimate revisions for Evolv Technologies was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] - Current consensus EPS estimate for the next quarter is -$0.07 on revenues of $35.34 million, and for the current fiscal year, it is -$0.40 on revenues of $133.62 million [7] Group 3 - The Computers - IT Services industry, to which Evolv Technologies belongs, is currently ranked in the top 25% of over 250 Zacks industries, suggesting a favorable outlook for stocks in this sector [8]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $42.9 million, representing a 57% year-over-year increase, driven by strong new customer acquisition and expanded deployments [7][21] - Annual recurring revenue (ARR) reached $117.2 million, reflecting a 25% year-over-year growth [11][25] - Adjusted EBITDA was positive at $5.1 million, compared to a loss of $3 million in the same quarter last year, resulting in an adjusted EBITDA margin of 12% [28][29] - Adjusted gross margin was 51% in Q3, down from 64% in the same period last year [27][29] Business Line Data and Key Metrics Changes - The company welcomed over 60 new customers in Q3, raising the year-end estimate for active subscriptions to between 8,000 and 8,100 [12][21] - The deployment of the new autonomous AI-powered bag screening solution, Expedite, gained traction with 12 new customers added in Q3, primarily in schools [13][19] - The company reported a sequential 8% increase in remaining performance obligation (RPO), which stood just shy of $300 million at the end of Q3 [12][25] Market Data and Key Metrics Changes - The company noted strong demand across various sectors, including education, healthcare, and sports, with significant contracts signed in these markets [16][17] - The largest customer contract in the company's history, involving more than 250 units, contributed approximately $3 million in revenue in Q3 [25][30] Company Strategy and Development Direction - The company is transitioning to a direct distribution model, which is expected to enhance recurring revenue and cash flow over time [10][23] - The management emphasized the importance of ARR growth and plans to add more units in 2026 than in 2025, with expectations for ARR growth to outpace total revenue growth [22][35] - A new strategic partnership with Plexus aims to expand production capacity and operational resiliency [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's market position and the ongoing transition to a direct fulfillment model, which simplifies the buying process for channel partners [45][46] - The company raised its 2025 revenue growth outlook to 37%-40%, up from previous guidance of 27%-30% [21][29] - For 2026, the company anticipates revenue of $160 million to $165 million, with ARR expected to grow by at least 20% year-over-year [34][35] Other Important Information - The company has made significant product updates, including new software versions aimed at improving performance and user experience [19][20] - The company screened over 3 billion visitors since the launch of Evolv Express, demonstrating the impact of its technology on community safety [13][14] Q&A Session Summary Question: Can you help me understand the revenue recognition for the large contract? - Management explained that the legacy distribution model results in more upfront revenue, but they expect normalization in revenue recognition as they transition to direct fulfillment [40][41] Question: What impact do you expect from the new strategic contract manufacturer agreement? - Management anticipates cost synergies and larger scale manufacturing capabilities from the partnership with Plexus, which will eventually include all product lines [42] Question: What is the attachment rate for Expedite with Express machines? - Management reported that 11 out of 12 new Expedite customers also acquired Express, indicating strong cross-selling success [43] Question: What percentage of bookings came from existing customers? - Over 50% of bookings came from existing customers, with significant expansions noted [47] Question: Are there promising new verticals for growth? - The company sees opportunities in various sectors, including sports, entertainment, education, and healthcare, while maintaining a consistent vertical mix [48]

Revenue Performance - Revenue for the nine months ended September 30, 2025, was $107.4 million, compared to $74.8 million for the same period in 2024, representing a 43.6% increase[155]. - Total revenue for the three months ended September 30, 2025, was $42,850,000, a 57% increase from $27,360,000 in the same period of 2024[187]. - Total revenue for the nine months ended September 30, 2025, reached $107,401 million, a 44% increase from $74,765 million in the same period of 2024[204]. Net Loss - The company reported a net loss of $44.0 million for the nine months ended September 30, 2025, compared to a net loss of $38.3 million for the same period in 2024[155]. - The net loss for the three months ended September 30, 2025, was $1,796,000, a 94% improvement from a net loss of $30,443,000 in the same period of 2024[187]. - For the nine months ended September 30, 2025, the net loss increased to $44.0 million from $38.3 million for the same period in 2024[233]. Revenue Breakdown - Product revenue surged to $9,242,000, up 588% from $1,344,000 year-over-year, with a gross profit margin of 14% compared to a loss margin of 95% in the prior year[189]. - Subscription revenue increased by 27% to $22,685,000 from $17,909,000, with a gross profit margin of 52%, down from 59%[190]. - Service revenue for the three months ended September 30, 2025, was $7,808 million, a 28% increase from $6,085 million in the prior year[192]. - License fee and other revenue increased by 54% to $3,115 million for the three months ended September 30, 2025, compared to $2,022 million in 2024[193]. - Product revenue surged by 194% to $14,092 million for the nine months ended September 30, 2025, compared to $4,789 million in 2024[206]. - Subscription revenue increased to $62,122 million for the nine months ended September 30, 2025, up 30% from $47,783 million in 2024[207]. - Service revenue grew by 26% to $21,224 million for the nine months ended September 30, 2025, compared to $16,903 million in 2024[208]. - License fee and other revenue surged by 88% to $9,963 million for the nine months ended September 30, 2025, from $5,290 million in 2024[209]. Customer Growth - The company added 62 new customers during the three months ended September 30, 2025, contributing to revenue growth[188]. - The company added 179 new customers during the nine months ended September 30, 2025, contributing to increased adoption of its solutions[205]. Expenses and Cost Management - Research and development expenses are expected to decrease for the year ending December 31, 2025, due to cost-cutting measures including a reduction in force[171]. - Sales and marketing expenses are also projected to decline for the year ending December 31, 2025, as a result of similar cost-cutting initiatives[172]. - General and administrative expenses saw a significant increase in 2024 due to legal fees and consulting expenses, but are expected to remain lower in Q4 2025[174]. - Research and development expenses decreased by 16% to $15,207 million for the nine months ended September 30, 2025, down from $18,056 million in 2024[210]. - Sales and marketing expenses fell by 27% to $34,494 million for the nine months ended September 30, 2025, compared to $47,182 million in 2024[211]. - General and administrative expenses increased by 12% to $44,789 million for the nine months ended September 30, 2025, from $39,843 million in 2024[212]. Cash Flow and Liquidity - As of September 30, 2025, the company had $56.2 million in cash and cash equivalents, with outstanding debt of $28.5 million[219]. - The company had cash, cash equivalents, and marketable securities totaling $56.2 million as of September 30, 2025, which is expected to fund operating expenses and capital expenditures for at least twelve months[222][229]. - The company is required to maintain a minimum liquidity of $15.0 million, with actual liquidity reported at $71.1 million as of September 30, 2025[224][228]. - Cash used in investing activities for the nine months ended September 30, 2025, was $43.2 million, primarily for the purchase of property and equipment[236]. - Cash provided by financing activities for the nine months ended September 30, 2025, was $34.7 million, mainly from $30.0 million in proceeds from the Initial Term Loan[238]. Strategic Initiatives - The company entered into a non-exclusive contract manufacturing agreement with Plexus Corp. on November 5, 2025, aimed at enhancing scalability and operational resiliency[148]. - The company is focused on expanding its market presence internationally, with expectations of increased adoption of its products in foreign markets[154]. - The company has discontinued quoting under the Distribution and License Agreement, transitioning to a purchase subscription model for hardware sales[163]. - The company anticipates continued strategic investments to support growth in its emerging technology field[223]. Market Conditions - The company expects to continue experiencing fluctuations in revenue as venues shift towards touchless security screening solutions[151]. - The company anticipates fluctuations in gross margins based on customer demand and strategic management decisions affecting sales and fulfillment models[170]. - The company faces uncertainties related to trade restrictions and tariffs that could adversely affect its financial condition[225].

Financial Performance - Total revenue for Q3 2025 was $42.9 million, a 57% increase from $27.4 million in Q3 2024[3] - Annual Recurring Revenue (ARR) at the end of Q3 2025 was $117.2 million, up 25% from $93.7 million in Q3 2024[3] - Net loss for Q3 2025 was $(1.8) million, improving from $(30.4) million in Q3 2024[3] - Adjusted EBITDA for Q3 2025 was $5.1 million, compared to $(3.0) million in Q3 2024[4] - Total revenue for the first nine months of 2025 was $107.4 million, a 44% increase from $74.8 million in the same period of 2024[5] - The company expects total revenues in 2025 to be between $142 million and $145 million, reflecting growth of 37% to 40% compared to 2024[6] - The company anticipates delivering positive full-year Adjusted EBITDA in 2025 with margins in the high single digits[6] - Adjusted earnings (loss) for the first nine months of 2025 was $(11.5) million, an improvement from $(30.8) million in the same period of 2024[5] - Adjusted EBITDA for the nine months ended September 30, 2025, was $9,297,000, compared to an adjusted EBITDA loss of $21,349,000 for the same period in 2024, indicating a significant improvement[29] Cash and Assets - Cash, cash equivalents, and marketable securities as of September 30, 2025, totaled $56.2 million[3] - Cash and cash equivalents decreased to $31.50 million as of September 30, 2025, down from $37.02 million at the end of 2024[16] - Total assets increased to $304.29 million from $268.06 million at the end of 2024, indicating growth in the company's asset base[16] - The total cash, cash equivalents, and restricted cash at the end of the period was $31,504,000, down from $46,308,000 at the end of the same period in 2024[18] Customer Acquisition and Growth - The company screened millions of visitors daily across over 1,000 customers, indicating strong customer acquisition and deployment expansion[2] - The company added 62 new customers in the three months ended September 30, 2025, compared to 52 new customers in the same period of 2024[20] Expenses and Liabilities - Research and development expenses for Q3 2025 were $5.61 million, slightly down from $5.81 million in Q3 2024[14] - Current liabilities rose to $119.35 million, up from $96.71 million at the end of 2024, primarily due to increased deferred revenue[16] - The company reported a significant increase in accounts receivable, netting $48.88 million compared to $28.39 million at the end of 2024[16] - Stock-based compensation for the nine months ended September 30, 2025, was $15,816,000, a decrease from $21,364,000 in the same period of 2024[26] - Non-recurring employee restructuring and other separation costs amounted to $2,976,000 for the nine months ended September 30, 2025, compared to $1,000,000 in the same period of 2024[30] Shareholder Information - The weighted average common shares outstanding increased to 172.79 million from 157.71 million year-over-year, reflecting potential dilution[14] - The weighted average common shares outstanding – diluted for the three months ended September 30, 2025, was 172,790,098, compared to 157,709,229 for the same period in 2024[30] - Adjusted loss per share – diluted for the three months ended September 30, 2025, was $(0.02), an improvement from $(0.04) in the same period of 2024[30] Losses and Impairments - For the nine months ended September 30, 2025, the company reported a net loss of $44,020,000 compared to a net loss of $38,297,000 for the same period in 2024, representing an increase in losses of approximately 15.5%[18] - The company reported a loss from operations of $8,596,000 for the three months ended September 30, 2025, compared to a loss of $19,152,000 in the same period of 2024[26] - For the three months ended September 30, 2025, the net loss was $1,796,000 compared to a net loss of $30,443,000 for the same period in 2024[30] - The change in fair value of contingent earn-out liability resulted in a loss of $7,521,000 for the three months ended September 30, 2025, compared to a gain of $8,321,000 in the same period of 2024[30] - The company reported a loss on impairment of lease equipment of $209,000 for the three months ended September 30, 2024[30] Gains and Margins - Subscription revenue reached $22.69 million, up 26.5% from $17.91 million year-over-year[14] - Gross profit for Q3 2025 was $21.31 million, compared to $15.81 million in Q3 2024, reflecting a gross margin improvement[14] - The gross margin for the three months ended September 30, 2025, was 49.7%, down from 57.8% in the same period of 2024, while the adjusted gross margin was 50.6%, down from 64.1%[27] - The change in fair value of public warrant liability resulted in a gain of $2,578,000 for the three months ended September 30, 2025, compared to a gain of $1,576,000 in the same period of 2024[30]

Core Viewpoint - Halper Sadeh LLC is investigating potential breaches of fiduciary duties by certain officers and directors of Evolv Technologies Holdings, Inc. [1] Company Governance - Long-term shareholders of Evolv Technologies may seek corporate governance reforms as part of the investigation [1] - There is a possibility for the return of funds back to the company as a result of the investigation [1] Legal and Financial Implications - Shareholders may be eligible for a court-approved financial incentive award or other forms of relief and benefits [1]

Core Viewpoint - Bragar Eagel & Squire, P.C. is investigating potential claims against Evolv Technologies Holdings, Inc. due to a class action complaint related to alleged breaches of fiduciary duties by the company's board of directors [1][2]. Summary by Sections Company Overview - Evolv Technologies Holdings, Inc. (NASDAQ: EVLV) is facing legal scrutiny following a class action complaint filed on November 1, 2024, concerning its financial disclosures from August 19, 2022, to October 30, 2024 [1]. Financial Misstatements - The complaint alleges that Evolv's financial statements from Q2 2022 to Q2 2024 contain material misstatements affecting revenue recognition and other metrics. The company disclosed that certain sales were subject to undisclosed terms and that misconduct occurred among its personnel [2]. Stock Price Impact - Following the announcement of these issues on October 25, 2024, Evolv's stock price plummeted approximately 40%, dropping from $4.10 per share to $2.47 per share [2]. Next Steps for Investors - Long-term stockholders of Evolv are encouraged to contact Bragar Eagel & Squire for more information regarding their rights and potential claims related to the company's financial issues [3]. Law Firm Background - Bragar Eagel & Squire, P.C. is a recognized law firm specializing in representing investors in complex litigation across various courts in the United States [4].

Core Insights - Evolv Technologies (NASDAQ: EVLV) has experienced a significant increase in stock price since the last analysis, indicating strong market interest and potential growth opportunities [1] Company Overview - The company was previously rated as a hold due to its premium trading relative to its sector, suggesting that it may have been overvalued at that time [1] Analyst Background - The analyst has a self-taught background in equity analysis and runs a consultation firm in South Africa, focusing on estimating the value of construction projects [1] - The analyst has been involved in retail investing for the past five years, drawing inspiration from notable investors like Ben Graham and Joel Greenblatt, while also developing data analytics skills [1] Investment Style - The investment approach leans towards value investing, focusing on high-quality, long/short mid and small-cap companies, which may indicate a preference for companies with strong fundamentals and growth potential [1] Research Platform - Seeking Alpha is highlighted as a valuable platform for sharing research and analysis, allowing for interaction with fellow investors and analysts, which can enhance the quality of insights and feedback [1]

Group 1 - Evolv Technologies Holdings Inc. is recognized as a promising small-cap AI stock by hedge funds [1] - The company has renewed and expanded its partnership with Gillette Stadium, which includes an increase in the number of entry points utilizing its AI-based Evolv Express security screening systems [1][2] - The Evolv Express system is designed to detect concealed weapons while allowing visitors to pass through checkpoints at their natural walking pace, thereby minimizing congestion [3] Group 2 - Evolv Technologies provides AI-based weapons detection for security screening both in the US and internationally, with its flagship product being the Evolv Express [4]