Evolv Technologies (EVLV) - 2025 Q2 - Quarterly Results

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 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] First Six Months of 2025 Results 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 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] 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 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 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 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 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 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 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] Reconciliation of Net Income (Loss) to Adjusted EBITDA 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) 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] Reconciliation of Operating Expenses 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 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] - 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] Definitions of Key Metrics and Non-GAAP Measures 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] - 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] Forward-Looking Statements 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] - 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]