Evolv Technologies Q4 Earnings Call Highlights

Core Insights - Evolv Technologies reported its fifth consecutive quarter of positive adjusted EBITDA, with Q4 adjusted EBITDA at $1.8 million, up from $0.4 million year-over-year, and a full-year adjusted EBITDA of $11.1 million, marking a $32 million improvement from a $21 million loss in 2024 [1][6] Financial Performance - Q4 revenue reached $38.5 million, reflecting a 32% year-over-year increase, while full-year revenue totaled $145.9 million, representing 40% growth [3][6] - Annual recurring revenue (ARR) at the end of 2025 was $120.5 million, a 21% increase year-over-year, with remaining performance obligation (RPO) at $293.4 million, up 13% year-over-year [2][6] Operational Highlights - The company deployed over 8,000 systems, screening more than 4 million people daily, and expects to exceed 10,000 units deployed by the end of 2026 [4][10] - Evolv added over 60 new customers in Q4, ending the year with more than 1,200 customers globally [10] Product and Market Developments - The eXpedite bag-screening product gained traction, with 65 customers, and 16 new customers purchasing it in Q4 [12] - Evolv raised its 2026 revenue outlook to $172 million to $178 million, with an ARR target of approximately $145 million to $150 million, indicating 20% to 25% growth [13] Margin and Cost Management - Adjusted gross margin in Q4 was 50%, down from 62% year-over-year, attributed to a shift to direct fulfillment of purchase subscription orders and a one-time accrual of approximately $1 million [5][7][8] - Management expects gross margins in 2026 to be "in line or slightly better" than 2025, despite a projected $1 million headwind from memory chip costs [9][14] Cash Flow and Financial Position - Evolv ended Q4 with $69 million in cash and cash equivalents, an increase of $12.8 million sequentially, and anticipates being cash flow positive in the second half of 2026 [17]