Evolv Technologies Q4 Earnings Call Highlights

Key Points

• Evolv posted Q4 revenue of $38.5M (+32% YoY) and full-year revenue of $145.9M, ended 2025 with ARR $120.5M and five consecutive quarters of positive adjusted EBITDA, and raised 2026 revenue guidance to $172–178M with an ARR target of roughly $145–150M while expecting adjusted EBITDA in the high single digits and cash-flow positivity in H2 2026.
• The company’s shift to direct fulfillment of purchase-subscription orders drove a near-term gross margin headwind (adjusted gross margin down to 50% from 62% in Q4) and included a ~$1M one-time accrual, but management says the new model will generate higher lifetime gross profit, ARR, RPO and cash flow versus the legacy distribution approach.
• Evolv reported strong deployment and product traction—more than 8,000 systems deployed (screening over 4 million people per day), growing customer count (1,200+), early adoption of the eXpedite bag-screening product, a record backlog, and an expectation to exceed 10,000 units deployed by the end of 2026 as manufacturing ramps with Plexus.

Evolv Technologies NASDAQ: EVLV reported fourth-quarter and full-year 2025 results and raised its outlook for 2026, citing continued customer demand, expanding deployments, and progress in building what executives described as a scalable, hardware-enabled subscription model with increasing revenue visibility.

Fourth-quarter and full-year performance

Revenue in the fourth quarter totaled $38.5 million, up 32% year-over-year, while full-year revenue was $145.9 million, representing 40% growth. Management attributed growth to strong new customer acquisition, expansion within existing accounts, and an increase in product revenue in the second half tied to the company’s decision to directly fulfill purchase subscription transactions.

Annual recurring revenue (ARR) ended 2025 at $120.5 million, up 21% year-over-year. Remaining performance obligation (RPO) was $293.4 million at the end of the fourth quarter, a 13% year-over-year increase that management said was driven by Gen 2 Express upgrades—often accompanied by new four-year subscription terms—along with underlying end-market demand.

Evolv reported its fifth consecutive quarter of positive adjusted EBITDA. Adjusted EBITDA was $1.8 million in Q4, up from $0.4 million a year earlier, with a 4.7% adjusted EBITDA margin. For the full year, adjusted EBITDA was $11.1 million (7.6% margin), compared with a $21.0 million loss in 2024, which executives characterized as a $32 million year-over-year improvement.

Margins, operating leverage, and the shift to direct fulfillment

Adjusted gross margin was 50% in Q4, down from 62% in the year-ago period. The company said the decline reflected two main factors:

• A planned near-term gross margin headwind from shifting to direct fulfillment of purchase subscription orders. Management emphasized that while gross margin percentage is lower in the initial quarter of a new transaction, the direct model is expected to generate higher gross profit dollars over the life of the contract, as well as higher revenue, ARR, RPO, and cash flow compared to the legacy distribution approach.
• An accrual of approximately $1 million for a targeted parts upgrade and proactive field service work that management described as a one-time item.

Adjusted operating expenses in Q4 were $23.8 million, up 3% year-over-year, which management highlighted as evidence of operating leverage given 32% revenue growth in the quarter.

Looking ahead, the company said it expects gross margins in 2026 to be “in line or slightly better” than 2025, while noting that more gross profit dollars are being pushed into future periods via RPO due to recent business model changes.

Customer growth, deployments, and product updates

Executives said Evolv ended 2025 with 8,000 systems deployed, screening over 4 million people per day, and stated that since the launch of Evolv Express, its technology has screened more than 4 billion people worldwide. In Q4, the company added over 60 new customers and ended the year serving more than 1,200 customers globally.

Management described a consistent demand pattern in which new orders are split roughly evenly between new customer wins and expansions within existing customers, a mix it expects to continue in 2026.

The company highlighted traction for eXpedite, its autonomous AI-based bag screening product. After its first full year in market, Evolv said it had 65 eXpedite customers—about 5% of its customer base. In the fourth quarter, 16 brand-new Evolv customers purchased eXpedite, and 11 of those also purchased Express, which management said supports “multiproduct relationships from day one.”

Vertical momentum and partnerships

Management pointed to adoption across several end markets:

• Education: Evolv said it added 12 new school districts in Q4 and three universities (in New York, Massachusetts, and Texas). For the full year, the company added 65 new education customers and said it screened approximately 300 million students and visitors.
• Healthcare: The company cited new customer additions including William P. Clements Jr. University Hospital in Texas, the University of Oklahoma Medical Center, and Mosaic Life Care at St. Joseph in Missouri. Evolv also announced a partnership with the American Hospital Association (AHA), under which it has been designated a preferred provider. Management said the collaboration will include engagement across AHA events and industry forums.
• Sports and live entertainment: The company added more than a dozen customers in Q4, including seven professional football teams. Evolv said TD Garden upgraded to Gen 2 Express and added four eXpedite systems, while Crypto.com Arena upgraded to Gen 2 and added an additional eXpedite. Other renewals and upgrades mentioned included the Houston Astros, Houston Texans, St. Louis City SC, and the Philadelphia Eagles.
• Workplace: Evolv reported adding multiple new Fortune 500 companies in Q4, including “one of the 10 largest banks in the world,” a top 25 U.S. retailer, and other large enterprises. The company said it serves over 30 Fortune 500 customers.

2026 outlook raised; backlog and manufacturing transition

Evolv raised its 2026 revenue outlook to $172 million to $178 million, up from the $160 million to $165 million range it shared previously. The company expects ARR to reach approximately $145 million to $150 million by the end of 2026, representing 20% to 25% growth, and said it anticipates ARR growth accelerating through the year as pricing changes and its purchase subscription fulfillment approach flow through results.

Management said it expects adjusted EBITDA margins to expand modestly into the high single digits in 2026, including an estimated $1 million headwind from memory chip costs. The company also said its prior long-term adjusted EBITDA margin framework of 10% to 15% is “outdated,” with more detail to be provided at its Investor Day on June 9, 2026.

On deployment expectations, Evolv said it expects to end 2026 with “comfortably over 10,000 units deployed.” The company also noted it began 2026 with a record level of units in backlog, driven by a strong booked-to-deployed ratio.

On manufacturing, management said the company remains on schedule to reach a full ramp with contract manufacturing partner Plexus in the second half of 2026. Executives reiterated prior expectations that the transition should be a slight tailwind to gross margin over time and could also support working capital improvements.

On cash and cash flow, Evolv ended Q4 with $69 million in cash, cash equivalents, and marketable securities, up $12.8 million sequentially, driven by stronger collections and working capital discipline. While the company did not provide a detailed cash flow forecast for 2026, management said it expects to be cash flow positive in the second half of 2026 and noted the first half will be affected by incentive payments tied to the prior year.

About Evolv Technologies NASDAQ: EVLV

Evolv Technologies, Inc is a publicly traded American security technology company that develops and markets AI-driven weapons detection and screening solutions. The company’s proprietary platform combines advanced sensors, computer vision software and machine learning algorithms to identify potential threats—such as firearms and knives—while minimizing false positives and preserving high throughput. Evolv’s systems are designed to replace or supplement traditional metal detectors and manual bag checks in high-traffic venues.

The company’s flagship product, Evolv Express, integrates seamlessly into existing security checkpoints, allowing guests to pass through without stopping or emptying their pockets.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.