Evolv Technologies (EVLV) - 2025 Q1 - Quarterly Report

Financial Performance - Evolv generated revenue of $32.0 million for the three months ended March 31, 2025, compared to$22.2 million for the same period in 2024, representing a year-over-year increase of 44%[158]. - The company reported a net loss of $1.7 million for the three months ended March 31, 2025, significantly improved from a net loss of$11.3 million in the same period of 2024[158]. - Total revenue for the three months ended March 31, 2025, was $32,007,000, representing a 44$22,181,000 in the same period of 2024[185]. - Subscription revenue increased by 35% to $19,237,000 in Q1 2025, up from$14,219,000 in Q1 2024[188]. - The net loss for the three months ended March 31, 2025, was $1,689,000, an 85$11,272,000 in the same period of 2024[185]. - Cash used in operating activities decreased from $16.2 million in Q1 2024 to$2.5 million in Q1 2025, indicating improved cash flow management[210]. - The company expects to continue generating losses for the foreseeable future, necessitating careful investment and potential additional capital[202]. Revenue Streams and Customer Growth - Evolv's solutions are primarily offered under a multi-year subscription model, which provides predictable revenue streams and is increasingly being adopted by customers[150]. - The company added 54 new customers during the three months ended March 31, 2025, contributing to revenue growth[186]. - License fee and other revenue surged by 205% to $3,718,000 in Q1 2025, compared to$1,219,000 in Q1 2024[190]. Cost Management and Expenses - Sales and marketing costs are anticipated to decrease for the year ending December 31, 2025, due to cost-cutting measures including a reduction in force implemented in January 2025[175]. - General and administrative expenses rose significantly due to legal and consulting fees, expected to continue through Q2 2025[176]. - Research and development expenses decreased by 24% to $4,862,000 in Q1 2025, down from$6,396,000 in Q1 2024[191]. - Sales and marketing expenses decreased by $4.8 million (30$15.9 million in Q1 2024 to $11.0 million in Q1 2025, primarily due to reductions in personnel-related costs and advertising expenses[193]. - General and administrative expenses increased by$3.2 million (27%) from $11.8 million in Q1 2024 to$15.0 million in Q1 2025, driven by a significant rise in non-recurring professional fees[194]. - The company incurred restructuring costs of $2.7 million in Q1 2025, primarily related to a reduction in force[195]. Product and Technology - Evolv's flagship product, Evolv Express, utilizes AI-powered software to enhance security screening and improve visitor experience, distinguishing between threats and harmless items[148]. - Evolv's innovative technology aims to address the growing demand for safer environments in venues such as sports, education, and healthcare facilities[146]. Market Dynamics and Future Outlook - The company expects fluctuations in revenue and operating results due to factors such as inflation, supply chain issues, and shifts towards touchless security screening[153][154]. - The company is focused on expanding its market presence in various verticals, particularly in the United States, while adapting pricing strategies to regional dynamics[156]. - The company anticipates a decrease in general and administrative expenses in the second half of 2025 as ongoing investigations conclude[176]. Financial Position and Cash Flow - As of March 31, 2025, the company had$35.0 million in cash, cash equivalents, and marketable securities, down from a net income of $11.3 million in Q1 2024 to a net loss of$1.7 million in Q1 2025[200]. - Cash provided by financing activities was less than $0.1 million in Q1 2025, indicating limited financing activity compared to$0.3 million used in Q1 2024[216]. - Total future minimum lease payments under noncancelable operating leases amount to $19.1 million as of March 31, 2025[208]. Accounting and Reporting - No material changes to critical accounting estimates during the three months ended March 31, 2025[218]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[219].