Evolv Technologies Holdings, Inc. ((EVLV)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Evolv Technologies Holdings, Inc. recently held its earnings call, revealing a generally positive sentiment driven by strong performance across key financial metrics. The company reported notable revenue growth, an increase in annual recurring revenue (ARR), and a third consecutive quarter of positive adjusted EBITDA. Despite a slight decline in gross margin due to strategic shifts, the overall outlook remains optimistic, buoyed by significant customer acquisition and resolution of legal issues.
Revenue Growth
Evolv Technologies reported a revenue of $32.5 million, marking a 2% sequential increase and a 29% year-over-year growth. This impressive growth was primarily driven by strong new customer growth and expanding deployments, highlighting the company’s successful market strategies.
Annual Recurring Revenue (ARR)
The company’s ARR reached $110.5 million as of June 30, 2025, reflecting a 27% increase year-over-year. This growth in recurring revenue underscores the company’s ability to maintain and expand its customer base, ensuring a steady stream of income.
Positive Adjusted EBITDA
Evolv Technologies achieved its third consecutive quarter of positive adjusted EBITDA, with a margin of 6% in Q2 ’25. This consistent performance indicates the company’s effective cost management and operational efficiency.
Increased Liquidity
The company’s financial stability was further strengthened with an increase in total cash, cash equivalents, and marketable securities by $2 million sequentially, reaching $37 million in Q2 ’25.
Customer Growth
Evolv Technologies welcomed over 60 new customers in the second quarter, expanding its global customer base to over 1,000. This growth reflects the company’s strong market presence and ability to attract diverse clientele.
Settlement of Legal Issues
The company resolved significant legal challenges, with the DOJ informing Evolv that it is no longer under investigation, and a settlement in principle was reached regarding a securities class action lawsuit.
Significant Wins in Key Markets
Evolv secured a $15 million contract with Gwinnett County Public Schools and several new contracts with healthcare and sports facilities, demonstrating its competitive edge in key sectors.
Raised Full-Year Guidance
Evolv Technologies raised its revenue growth expectations for 2025 to between 27% and 30%, up from the previous guidance of 20% to 25%. This adjustment reflects the company’s confidence in its growth trajectory and market opportunities.
Adjusted Gross Margin Decline
The company’s adjusted gross margin declined to 55% in Q2, compared to 59% in the same period last year. This decline was attributed to a noncash $1.8 million inventory reserve related to Express Gen1 parts.
Higher Near-Term Gross Margin Headwind
Evolv Technologies anticipates a gross margin of 54% to 56% for the remainder of the year due to a shift to more in-house purchase fulfillment and initial higher order volumes of eXpedite.
Forward-Looking Guidance
Looking ahead, Evolv Technologies provided robust guidance for fiscal year 2025. The company plans to phase out the disclosure of units shipped by January 2026, due to complexities with short-term subscription contracts and equipment upgrades. Evolv also expressed confidence in delivering positive full-year adjusted EBITDA and generating positive cash flow in the fourth quarter, reinforcing its optimistic outlook.
In summary, Evolv Technologies’ earnings call painted a positive picture, with strong financial performance and strategic advancements. Despite some challenges in gross margin, the company’s growth in revenue, customer base, and resolution of legal issues contribute to a favorable outlook for the future.