EVLV

MKT CAP $836.8MP/E —DIV YIELD —FCF YIELD —REV TTM $171.4M +41.7%NET INCOME −$5.2MNET CASH $24M52W 4.05 – 8.15SEC XBRL · TTM TO Invalid Date

How EVLV rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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For end-user customers that prefer to purchase our hardware outright, we offer customers the option of purchasing our hardware outright directly from us through our “purchase subscription” model that also includes a multi-year security and software-as-a-service subscription.
In addition to our two primary sales models, we have historically offered our “distributor licensing” model based on the Distribution and License Agreement we entered into with Columbia Tech in March of 2023.
During the three months ended September 30, 2025, we discontinued quoting on this basis, and the agreement with Columbia Tech expired on December 31, 2025.
While any outstanding quotes will be honored, all new quotes for end-user customers wishing to purchase the hardware equipment will be fulfilled through our purchase subscription model going forward.
Thus, license revenue from this agreement is expected to reduce to zero over time, replaced by increased product revenue, which will in turn provide an increase in gross profit over the duration of the contract.
Going forward, we expect our products to be adopted in a variety of vertical industry markets and geographic regions.
While adoption of our products has primarily been within the United States to date, we expect increased adoption of our products in foreign markets in the near future as we explore expansion into international markets.
As a result, our financial performance depends, in part, on the mix of sales and business in different markets during a given period.
In addition, we are subject to price competition, and our ability to compete in key markets will depend on the success of our investments in new technologies and cost improvements as well as our ability to efficiently and reliably introduce AI-powered security screening solutions to our customers.
We generated revenue of $145.9 million and $103.9 million for the years ended December 31, 2025 and 2024, respectively.
We generated a net loss of $33.1 million and $54.0 million for the years ended December 31, 2025 and 2024, respectively.
We expect to continue to incur operating losses as we focus on growing and establishing recurring commercial sales of our products, including growing our sales and marketing teams, scaling the use of third-party contract manufacturers, and continuing research and development efforts to develop new products and further enhance our existing products.
Certain Key Metrics and Non-GAAP Financial Measures ARR.
We believe annual recurring revenue (“ARR”) is a useful metric for investors because it provides visibility into the scale and sustainability of our recurring revenue base.
ARR reflects the annualized value of active subscription arrangements at a point in time and helps investors evaluate trends in customer and unit acquisition, retention, and expansion.
As our business continues to shift toward pure subscription and purchase subscription sales models (and away from our legacy distribution subscription model), we believe ARR more accurately captures the recurring nature of our revenue compared to period based revenue measures alone.
Management also uses ARR to assess operating performance, inform strategic decisions, and plan for future growth, because it is impacted by multiple dimensions of our business, including new customer and unit acquisition, customer pricing, renewal history, and renewal pricing.
We define ARR as subscription revenue and the recurring service revenue related to purchase subscriptions for the final month of the quarter normalized to a one-year period.
Our calculation of ARR is not adjusted for the impact of any known or projected future events (such as customer cancellations, upgrades or downgrades, or price increases or decreases) that may cause any such contract not to be renewed on its existing terms.
In addition, the amount of actual revenue that we recognize over any 12-month period is likely to differ from ARR at the beginning of that period, sometimes significantly.
This may occur due to new bookings, cancellations, upgrades, downgrades or other changes in pending renewals, as well as the effects of professional services revenue and acquisitions or divestitures.
As a result, ARR should be viewed independently of, and not as a substitute for or forecast of, revenue and deferred revenue.
Our calculation of ARR may differ from similarly titled metrics presented by other companies.
As of December 31, 2025, ARR was $120.5 million, compared to $99.4 million as of December 31, 2024, representing year over year growth of 21%.
This increase was driven by the addition of nearly 250 customers during 2025, expanded deployments by existing customers and increased demand for our pure subscription and purchase subscription sales models which generate a higher proportion of recurring revenue compared to our legacy distribution subscription sales model (see "Sales Models”).
We believe Remaining Performance Obligation ("RPO"), a measure of expected future revenue from active customers, to be a key indicator of our performance.
As disclosed in Note 5 to our financial statements, RPO at December 31, 2025 was $293.6 million, an increase of approximately 13% from December 31, 2024, driven by continued market demand.
We believe Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) is a useful metric for investors because it provides insight into the underlying operating performance of our business by excluding items that are not indicative of our core operating results or that may vary significantly from period to period.
Adjusted EBITDA facilitates period-to-period comparisons of our operating performance and enhances investors’ ability to evaluate trends in profitability and operating leverage.
In addition, Adjusted EBITDA helps investors better understand the impact of our cost structure and operating efficiency as we scale our business, independent of non‑cash expenses, financing decisions, tax structure, and certain non‑recurring or non‑operational items.
While Adjusted EBITDA should be considered in conjunction with our GAAP financial results, we believe it provides supplemental information that enhances investors’ understanding of the performance of our business.
Management uses Adjusted EBITDA internally to assess operating performance, monitor cost discipline, and evaluate the efficiency of our business as we scale.
Adjusted EBITDA is a key metric used by management to measure the profitability of our core operations and to assess the impact of operating decisions across the organization.
Management reviews Adjusted EBITDA trends to inform strategic decisions related to expense management, investment prioritization, and resource allocation.
Because Adjusted EBITDA excludes certain non‑cash and non‑recurring items, it allows management to better evaluate underlying operating performance and comparability across reporting periods.
By monitoring Adjusted EBITDA over time, management is able to assess progress toward profitability objectives and make informed decisions regarding long-term operational and financial planning.
Adjusted EBITDA is defined as net income (loss) plus depreciation and amortization, stock based compensation, interest expense (income), provision for income taxes, change in fair value of contingent earn out liability, change in fair value of contingently issuable common stock liability, change in fair value of public warrant liability, loss on impairment of leased equipment, loss on impairment of intangible asset, loss on disposal of leased equipment, non-recurring employee restructuring and other separation costs, non-recurring inventory charges, and other non-recurring legal and regulatory costs, which management believes provides a more meaningful representation of operating results.
The following table presents a reconciliation of net income, the most directly comparable GAAP financial measure, to Adjusted EBITDA for each of the periods indicated: December 31, 2025 2024 Net loss $ (33,138) $ (54,017) Depreciation and amortization 24,340 17,375 Stock-based compensation 21,096 24,756 Interest expense (income) 196 (2,942) Provision for income taxes 62 — Change in fair value of contingent earn-out liability (12,435) (16,310) Change in fair value of contingently issuable/returnable common stock liability/asset (2,614) (2,529) Change in fair value of public warrant liability (435) (6,592) Loss on impairment of leased equipment — 224 Loss on impairment of intangible asset — 983 Loss on disposal of leased equipment 3,787 — Non-recurring employee restructuring and other separation costs 2,976 3,060 Non-recurring inventory charges — 2,730 Other non-recurring legal and regulatory costs 7,279 12,284 Adjusted EBITDA $ 11,114 $ (20,978) For the year ended December 31, 2025, Adjusted EBITDA was $11.1 million, compared to negative Adjusted EBITDA of $(21.0) million for the year ended December 31, 2024, representing an improvement of $32.1 million year-over‑year.
This improvement was primarily driven by revenue growth, increased operating leverage, and continued discipline in managing operating expenses, partially offset by higher investments to support growth initiatives and customer deployments.
Until such time, if ever, as we can generate substantial revenue sufficient to achieve profitability, we expect to finance our operations through cash generated from operations and our Senior Secured Credit Facilities.

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For end-user customers that prefer to purchase our hardware outright, we offer our “distributor licensing” model based on the Distribution and License Agreement we entered into with Columbia Tech in March of 2023.
Columbia Tech, a wholly-owned subsidiary of Coghlin Companies, currently serves as our primary contract manufacturer.
Going forward, we expect our products to be adopted in a variety of vertical industry markets and geographic regions, primarily within the United States.
As a result, our financial performance depends, in part, on the mix of sales, bookings, and business in different markets during a given period.
In addition, we are subject to price competition, and our ability to compete in key markets will depend on the success of our investments in new technologies and cost improvements as well as our ability to efficiently and reliably introduce cost-effective touchless security screening products to our customers.
We generated revenue of $103.9 million and $79.6 million for the years ended December 31, 2024 and 2023, respectively.
We generated a net loss of $54.0 million and $108.0 million for the years ended December 31, 2024 and 2023, respectively.
We expect to continue to incur operating losses as we focus on growing and establishing recurring commercial sales of our products, including growing our sales and marketing teams, scaling our manufacturing operations, and continuing research and development efforts to develop new products and further enhance our existing products.
Until such time, if ever, as we can generate substantial revenue sufficient to achieve profitability, we expect to finance our operations through cash generated from operations, and if necessary, debt financings.
However, we may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all.
If we are unable to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back or discontinue the further development and commercialization efforts of one or more of our products, or may be forced to reduce or terminate our operations.
See “ Liquidity and Capital Resources ” for more information.
Additionally, as discussed in Note 20 (Commitments and Contingencies) to our consolidated financial statements for the year ended December 31, 2024, we are involved in certain legal proceedings, including government investigations.
Product Revenue We derive a portion of our revenue from the sale of our Evolv Express equipment and related add-on accessories to customers.
We anticipate future growth in product revenue to be driven by underlying demand for our solutions as well as by the distribution mix across our various sales and fulfillment models.
Subscription Revenue Subscription revenue consists of revenue derived from leasing Evolv Express units to our customers.
Because the equipment lease, SaaS, and maintenance components of a subscription arrangement are recognized as revenue over the same time period and in the same pattern, the equipment lease and SaaS/maintenance performance obligations are classified as a single category of subscription revenue in our consolidated statements of operations and comprehensive (loss) income.
Service Revenue Service revenue consists of subscription-based SaaS and maintenance revenue related to Evolv Express units sold to customers.
License Fee and Other Revenue License fee and other revenue includes license fee revenue from the Distribution and License Agreement, revenue from professional services, and revenue from other one-time services.
Revenue for professional services and other one-time service revenue, which had previously been included in service revenue, has been reclassified for prior periods to License fee and other revenue on the consolidated statements of operations and comprehensive (loss) income.
We anticipate changes in license fee and other revenue to be driven by underlying demand for our solutions as well as any changes in demand for our distributor licensing model.
Cost of Service Revenue Cost of services revenue consists of maintenance costs related to units purchased by customers and an allocated portion of internal-use software amortization expense.
Cost of License Fee and Other Revenue Cost of license fees and other revenue consists primarily of internal and third-party costs related to professional services, such as installation, training, and event support.
Gross Profit and Gross Margin Our gross profit is calculated based on the difference between our revenues and cost of revenues.
Gross margin is the percentage obtained by dividing gross profit by our revenue.
We expect our gross margins to fluctuate over time based on the following factors: • Mix of sales between our pure subscription, purchase subscription, and distributor licensing sales models; • Market conditions that may impact our pricing; • Product mix changes between established products and new products; • Our cost structure for manufacturing operations, including contract manufacturers, relative to volume, and our product support obligations; • Our ability to maintain our costs on the components that go into the manufacture of our products; and • Write-offs of inventory.
We expect our gross profit and gross margin in any given fiscal period to be influenced by customer demand for our various sales and fulfillment models, as well as any future strategic management decisions affecting our sales and fulfillment models that may result from such assessments.
We expect our research and development costs will remain relatively consistent for the year ending December 31, 2025 compared to the year ended December 31, 2024 as we look to leverage previous investments made in people and processes.
We expect our sales and marketing costs will decrease for the year ending December 31, 2025 compared to the year ended December 31, 2024 as a result of certain cost cutting measures we have taken, including the reduction in force implemented in January 2025.
General and Administrative General and administrative expenses consist primarily of personnel-related expenses associated with our executive, finance, investor relations, legal, information technology, and human resources functions, as well as professional fees for legal, audit, accounting and other consulting services, stock-based compensation, and insurance.
During the year ended 2024, we experienced a significant increase in general and administrative expenses, primarily for legal fee and consulting expenses, as a result of the Investigation and related actions, as described in the “Explanatory Note” preceding Item 1, Business.
We expect this increased level of expenses to continue through the second quarter of 2025.
As such actions become completed, we expect our general and administrative expenses to decrease in the second half of 2025 and to remain consistent at more normalized levels thereafter.
Loss From Impairment of Property and Equipment Loss from impairment of property and equipment relates to (i) leased Evolv Edge units and Evolv Express prototype units that are removed from service and retired as we transition our domestic customers to our most current Evolv Express units and (ii) damaged or destroyed leased units.
Interest Expense Interest expense includes cash interest paid on long-term debt and amortization of deferred financing fees and costs.
Interest Income Interest income relates to interest earned on money market funds and treasury bills, and interest earned on our lease receivables for our Evolv Express units recognized as sales-type leases.
Loss on Extinguishment of Debt In December 2022, the Company entered into a loan and security agreement (the "2022 SVB Credit Agreement") with Silicon Valley Bank ("SVB") in order to finance purchases of hardware to be leased to customers.
On March 10, 2023, SVB was closed by California state regulators and the FDIC was appointed as receiver.
Subsequently, the Company terminated the 2022 SVB Credit Agreement on March 31, 2023 .
As a result of the termination of the SVB Credit Agreement, the Company incurred a loss on extinguishment of debt.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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