Evolv Technology Reports Third Quarter Financial Results

WALTHAM, Mass.--( BUSINESS WIRE)--Evolv Technologies Holdings, Inc (NASDAQ: EVLV), a leading security technology company pioneering AI-based solutions designed to help create safer experiences, today announced financial results for the quarter ended September 30, 2025.

“We made meaningful progress across many key measures of the business in the third quarter—including subscribers, revenue, and annual recurring revenue, as well as important indicators of profitability and liquidity,” said John Kedzierski, President and Chief Executive Officer of Evolv Technology. “Through strong new customer acquisition and expanding deployments with existing customers, we continue to deliver real-world impact at scale—screening millions of visitors every day across over 1,000 customers. Looking ahead, we’re encouraged by the growing demand for our solutions and are confident in our ability to close the year with momentum as we advance on our goal of building a high-growth, profitable, and cash-generative business.”

Results for the Third Quarter of 2025

Total revenue for the third quarter of 2025 was $42.9 million, an increase of 57% compared to $27.4 million for the third quarter of 2024. Revenue for the third quarter of 2025 was primarily driven by strong new customer additions and continued expansion of deployments across the existing customer base. Revenue for the period also reflected certain notable items that contributed approximately $7.5 million from the following: (i) approximately $3.0 million of revenue (primarily product revenue) associated with the largest customer order in the Company’s history; (ii) approximately $3.0 million attributable to IP license fees and other revenue associated with the Company’s distribution fulfillment model which is being phased out; and (iii) approximately $1.5 million from short-term rental agreements that concluded in the period. Annual Recurring Revenue (“ARR”) 1 was $117.2 million at the end of third quarter of 2025, an increase of 25% compared to $93.7 million at the end of the third quarter of 2024. Net loss for the third quarter of 2025 was $(1.8) million, or $(0.01) per basic and diluted share, compared to $(30.4) million, or $(0.19) per basic and diluted share, in the third quarter of 2024. Adjusted earnings (loss) 2 for the third quarter of 2025 was $(3.4) million, or $(0.02) per diluted share, compared to adjusted earnings (loss) 2 of $(6.9) million, or $(0.04) per diluted share (as restated), for the third quarter of 2024. Adjusted EBITDA 2 for the third quarter of 2025 was $5.1 million compared to $(3.0) million in the third quarter of 2024. As of September 30, 2025, the Company had cash, cash equivalents and marketable securities of $56.2 million.

Results for the First Nine Months of 2025

Total revenue for the nine months ended September 30, 2025 was $107.4 million, an increase of 44% compared to $74.8 million for the nine months ended September 30, 2024. Net loss for the nine months ended September 30, 2025 was $(44.0) million, or $(0.26) per basic and diluted share, compared to $(38.3) million, or $(0.25) per basic and diluted share, in the nine months ended September 30, 2024. Adjusted earnings (loss) 2 for the nine months ended September 30, 2025 was $(11.5) million, or $(0.07) per diluted share, compared to adjusted earnings (loss) 2 of $(30.8) million, or $(0.20) per diluted share, for the nine months ended September 30, 2024. Adjusted EBITDA 2 for the nine months ended September 30, 2025 was $9.3 million compared to $(21.3) million in the nine months ended September 30, 2024.

The following table summarizes the breakdown of recurring and non-recurring revenue 3 for each period presented:

Three Months Ended

September 30,

Nine Months Ended

September 30,

2025

2024

% Change

2025

2024

% Change

Recurring revenue

30,120

23,764

82,551

63,741

Non-recurring revenue

12,730

3,596

254

24,850

11,024

125

Total revenue

42,850

27,360

107,401

74,765

The following table summarizes operating cash flows for each period presented:

Nine Months Ended

September 30,

2025

2024

Net loss

(44,020

)

(38,297

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities

44,660

15,634

Changes in operating assets and liabilities

2,458

(11,394

)

Net cash provided by (used in) operating activities

3,098

(34,057

)

Company Comments on Outlook for 2025

The Company today commented on its business outlook for 2025. The Company's outlook is based on the current indications for its business, which may change at any time. The Company expects total revenues in 2025 to be between $142 to $145 million, reflecting growth of 37% to 40% compared to 2024. The Company believes that this revenue growth, coupled with a focus on operational efficiency, will drive improved profitability and cash flow. The Company expects to deliver positive full year Adjusted EBITDA 1 in 2025 with Adjusted EBITDA 1 margins in the high single digits. The Company expects to be cash flow positive in the fourth quarter of 2025.

Estimate

Issued August 14, 2025

Issued November 13, 2025

Total Revenue (Millions)

$132-$135

$142-$145

Total Revenue Growth Rate

27%-30%

37%-40%

Adjusted EBITDA Margin 2

Mid-Single Digits

High Single Digits

Company to Host Live Conference Call and Webcast

The Company’s management team plans to host a live conference call and webcast at 4:30 p.m. Eastern Time today to discuss the financial results as well as management’s outlook for the business for both 2025 and 2026. The conference call will be webcast live at http://ir.evolvtechnology.com.

About Evolv Technology

Evolv Technologies Holdings, Inc (NASDAQ: EVLV) is designed to transform human security to make a safer, faster, and better experience for the world’s most iconic venues and companies as well as schools, hospitals, and public spaces, using industry leading artificial intelligence (AI)-powered screening and analytics. Its mission is to transform security to create a safer world to live, work, learn, and play. Evolv has digitally transformed the gateways in many places where people gather by enabling seamless integration combined with powerful analytics and insights. Evolv’s advanced systems have scanned more than three billion people since 2019. Evolv has been awarded the U.S. Department of Homeland Security (DHS) SAFETY Act Designation as a Qualified Anti-Terrorism Technology (QATT) as well as the Security Industry Association (SIA) 2024 New Products and Solutions (NPS) Award in the Law Enforcement/Public Safety/Guarding Systems category, as well as Sport Business Journal’s (SBJ) 2024 awards for “Best In Fan Experience Technology” and “Best In Sports Technology”. Evolv®, Evolv Express®, Evolv Insights®, Evolv Visual Gun Detection™, Evolv eXpedite™, and Evolv Eva™ are registered trademarks or trademarks of Evolv Technologies, Inc. in the United States and other jurisdictions. For more information, visit evolv.com.

1 We define Annual Recurring Revenue, or 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.

2 Non-GAAP Financial Measures In this press release, the Company’s adjusted gross profit (loss), adjusted gross margin, adjusted operating expenses, adjusted operating income (loss), adjusted EBITDA, adjusted EBITDA margin, adjusted earnings (loss), and adjusted earnings per diluted share are not presented in accordance with generally accepted accounting principles (GAAP) and are not intended to be used in lieu of GAAP presentations of results of operations. Adjusted gross profit and adjusted gross margin exclude stock-based compensation expense, amortization of capitalized stock-based compensation, non-recurring employee restructuring and other separation costs, and non-recurring inventory charges, which management believes provides a more meaningful representation of contribution margin. Adjusted operating expenses is defined as operating expenses less stock-based compensation expense, loss on impairment of lease equipment, non-recurring employee restructuring and other separation costs, and other non-recurring legal and regulatory costs, which management believes provides a more meaningful representation of on-going operating expense levels. Other non-recurring legal and regulatory costs include non-recurring legal, accounting and professional fees related to the internal investigation, subsequent restatement, certain non-recurring regulatory, litigation and legal matters, as well as fees related to the resolution of the U.S. Federal Trade Commission investigation, net of estimated insurance recoveries. Adjusted operating income (loss), is defined as loss from operations, excluding stock-based compensation expense, amortization of capitalized stock-based compensation, loss on impairment 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. Adjusted EBITDA and Adjusted EBITDA margin 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 disposal of leased equipment, non-recurring employee restructuring and other separation costs, non-recurring inventory charges, and other non-recurring legal and regulatory costs. Adjusted earnings (loss) and Adjusted earnings (loss) per diluted share are defined as net income (loss) plus stock-based compensation, amortization of capitalized stock-based compensation, 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, non-recurring employee restructuring and other separation costs, non-recurring inventory charges, and other non-recurring legal and regulatory costs. Management presents non-GAAP financial measures because it considers them to be important supplemental measures of performance. Management uses non-GAAP financial measures for planning purposes, including analysis of the Company's performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management also believes non-GAAP financial measures provide additional insight for analysts and investors in evaluating the Company's financial and operating performance. However, non-GAAP financial measures have limitations as an analytical tool and are not intended to be an alternative to financial measures prepared in accordance with GAAP. We intend to provide non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of non-GAAP financial measures will provide consistency in our financial reporting. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures included in this press release. The Company is unable to provide a reconciliation of Adjusted EBITDA to Net Income (Loss) and Adjusted EBITDA Margin to Net Profit Margin, each measure's most directly comparable GAAP financial measure, on a forward-looking basis without unreasonable effort, because items that impact these GAAP financial measures are not within the Company’s control and/or cannot be reasonably predicted. These items may include, but are not limited to, predicting forward-looking share-based compensation, changes in the fair value of contingent earn out liabilities, changes in the fair value of contingently issuable common stock liabilities and changes in fair value of public warrant liabilities. Such information may have a significant, and potentially unpredictable, impact on the Company’s future financial results.

3 Recurring revenue includes the recurring portion of revenue associated with pure subscription contracts and hardware purchase subscription contracts. Non-recurring revenue includes revenue that is non-recurring in nature, such as product revenue, shipping revenue, and revenue from installation, training, and professional services.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release and related presentation materials other than statements of historical facts, including without limitation statements regarding our strategy, goals, demand for our products, market opportunities, and future financial and operational results. Words such as “believe” “may,” “will,” “expect,” “should,” “could,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “project,” “plan,” “target,” “forecast”, “is/are likely to” or the negative of these terms or other similar expressions are intended to identify forward-looking statements, though not all forward-looking statements use these words or expressions. The forward-looking statements in this press release and related presentation materials are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the amount of insurance reimbursements expected to be received for defense costs for counsel and consultants in connection with the securities litigation and related Securities and Exchange Commission (the “SEC”) and Department of Justice matters, and the following: our history of losses and ability to reach profitability; our reliance on reseller partners; expectations regarding the Company’s strategies and future financial performance, including its future business plans or objectives, prospective performance and opportunities and competitors, revenues, products and services, pricing, operating expenses, market trends, liquidity, cash flows and uses of cash, capital expenditures; the Company’s reliance on third party contract manufacturing and distribution, and a global supply chain; the Company recognizes a substantial portion of its revenue ratably over the term of its agreements, and, as a result, downturns or upturns in sales may not be immediately reflected in its operating results; the rate of innovation required to maintain competitiveness in the markets in which the Company competes; the competitiveness of the market in which the Company competes; the failure of our products to detect threats could result in injury or loss of life, which could harm our brand, reputation, and results of operations; the loss of designation of our Evolv Express® system as a Qualified Anti-Terrorism Technology under the Homeland Security SAFETY Act; risks related to our business model, which is predicated, in part, on building a customer base that will generate a recurring stream of revenues through the sale of our subscription contracts; the ability for the Company to obtain, maintain, protect and enforce the Company’s intellectual property rights and use of “open source” software; the concentration of the Company’s revenues on a single solution; the Company’s ability to timely design, produce and launch its solutions, the Company’s ability to invest in growth initiatives and pursue acquisition opportunities; the limited liquidity and trading of the Company’s securities; risks related to existing and changing tax laws; geopolitical risk and changes in applicable laws or regulations; the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; operational risk; risks related to material weaknesses in our internal control over financial reporting and our remediation plans; risks related to increasing attention to and evolving expectations for, environmental, social, and governance initiatives; the impact of fluctuating general economic and market conditions and reductions in spending; the need for additional capital to support business growth, which might not be available on acceptable terms, if at all; and litigation and regulatory enforcement risks, including the diversion of management time and attention and the additional costs and demands on resources. These and other important factors discussed in our most recent report on From 10-Q or 10-K filed with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. The forward-looking statements in this press release and related presentation materials are based upon information available to us as of the date hereof, and while we believe such information forms a reasonable basis for such statements, it may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should review this press release and the documents that we reference in this press release and related presentation materials with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this press release and related presentation materials, whether as a result of any new information, future events or otherwise.

EVOLV TECHNOLOGY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)

(Unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2025

2024

2025

2024

Revenue:

Product revenue

9,242

1,344

14,092

4,789

Subscription revenue

22,685

17,909

62,122

47,783

Service revenue

7,808

6,085

21,224

16,903

License fee and other revenue

3,115

2,022

9,963

5,290

Total revenue

42,850

27,360

107,401

74,765

Cost of revenue:

Cost of product revenue

7,960

2,616

16,495

8,569

Cost of subscription revenue

10,923

7,348

27,713

19,242

Cost of service revenue

2,338

1,404

5,753

3,749

Cost of license fee and other revenue

323

183

766

484

Total cost of revenue

21,544

11,551

50,727

32,044

Gross profit

21,306

15,809

56,674

42,721

Operating expenses:

Research and development

5,608

5,810

15,207

18,056

Sales and marketing

11,715

14,966

34,494

47,182

General and administrative

12,579

13,976

44,789

39,843

Restructuring costs

—

2,662

860

Loss from impairment of property and equipment

—

209

—

209

Total operating expenses

29,902

34,961

97,152

106,150

Loss from operations

(8,596

)

(19,152

)

(40,478

)

(63,429

)

Other (expense) income, net:

Interest expense

(713

)

—

(714

)

—

Interest income

436

628

1,049

2,394

Other income (expense), net

(44

)

117

(33

)

Change in fair value of contingent earn-out liability

7,521

(8,321

)

2,297

15,092

Change in fair value of contingently issuable/returnable common stock liability/asset

2,178

(2,056

)

(69

)

2,218

Change in fair value of public warrant liability

(2,578

)

(1,576

)

(6,160

)

5,461

Total other income (expense), net

6,800

(11,291

)

(3,480

)

25,132

Loss before income taxes

(1,796

)

(30,443

)

(43,958

)

(38,297

)

Provision for income taxes

—

Net loss

(1,796

)

(30,443

)

(44,020

)

(38,297

)

Net (loss) income attributable to common stockholders – basic and diluted

(1,796

)

(30,443

)

(44,020

)

(38,297

)

Weighted average common shares outstanding – basic and diluted

172,790,098

157,709,229

166,327,570

155,760,149

Net loss per share - basic and diluted

(0.01

)

(0.19

)

(0.26

)

(0.25

)

Net loss

(1,796

)

(30,443

)

(44,020

)

(38,297

)

Other comprehensive income (loss)

Cumulative translation adjustment

(86

)

(105

)

(75

)

Total other comprehensive income (loss)

(86

)

(105

)

(75

)

Total comprehensive loss

(1,770

)

(30,529

)

(44,125

)

(38,372

)

EVOLV TECHNOLOGY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)

September 30, 2025

December 31, 2024

Assets

Current assets:

Cash and cash equivalents

31,504

37,015

Marketable securities

24,723

14,927

Accounts receivable, net

48,883

28,392

Inventory

8,770

16,963

Current portion of contract assets

1,212

799

Current portion of commission asset

5,956

5,429

Prepaid expenses and other current assets

30,593

17,921

Total current assets

151,641

121,446

Contract assets, noncurrent

381

657

Commission asset, noncurrent

7,759

7,567

Property and equipment, net

126,919

123,661

Operating lease right-of-use assets

12,730

13,993

Other assets

4,859

735

Total assets

304,289

268,059

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

4,724

10,492

Accrued expenses and other current liabilities

33,954

19,508

Current portion of deferred revenue

77,904

64,506

Current portion of operating lease liabilities

2,765

2,203

Total current liabilities

119,347

96,709

Deferred revenue, noncurrent

18,464

20,266

Long-term debt, noncurrent

28,528

—

Operating lease liabilities, noncurrent

11,107

12,326

Contingent earn-out liability, noncurrent

10,512

12,809

Contingently issuable common stock liability, noncurrent

3,638

4,001

Public warrant liability, noncurrent

10,457

4,297

Total liabilities

202,053

150,408

Stockholders’ equity:

Preferred stock, $0.0001 par value; 100,000,000 authorized at September 30, 2025 and December 31, 2024; no shares issued and outstanding at September 30, 2025 and December 31, 2024

—

Common stock, $0.0001 par value; 1,100,000,000 shares authorized at September 30, 2025 and December 31, 2024; 173,803,265 and 159,602,069 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

Additional paid-in capital

501,040

472,331

Accumulated other comprehensive loss

(137

)

(32

)

Accumulated deficit

(398,684

)

(354,664

)

Stockholders’ equity

102,236

117,651

Total liabilities and stockholders’ equity

304,289

268,059

EVOLV TECHNOLOGY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Nine Months Ended

September 30,

2025

2024

Cash flows from operating activities:

Net loss

(44,020

)

(38,297

)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

17,859

11,933

Write-off of inventory and change in inventory reserve

2,016

3,151

Loss from impairment of property and equipment

—

209

Loss on disposal of property and equipment

3,503

—

Stock-based compensation

15,816

21,364

Non-cash interest expense

195

—

Amortization of premium on marketable securities, net of change in accrued interest

261

Non-cash lease expense

1,263

1,116

Change in allowance for expected credit losses

371

Change in fair value of earn-out liability

(2,297

)

(15,092

)

Change in fair value of contingently issuable common stock

(2,218

)

Change in fair value of public warrant liability

6,160

(5,461

)

Changes in operating assets and liabilities

Accounts receivable

(20,557

)

(13,679

)

Inventory

11,079

(8,327

)

Commission assets

(719

)

(1,005

)

Contract assets

(137

)

993

Other assets

437

333

Prepaid expenses and other current assets

(17,331

)

(4,093

)

Accounts payable

1,845

216

Deferred revenue

11,596

13,559

Accrued expenses and other current liabilities

16,902

1,655

Operating lease liability

(657

)

(1,046

)

Net cash provided by (used in) operating activities

3,098

(34,057

)

Cash flows from investing activities:

Development of internal-use software

(4,311

)

(4,773

)

Purchases of property and equipment

(29,109

)

(24,443

)

Purchases of marketable securities

(34,481

)

(14,567

)

Proceeds from maturities of marketable securities

24,675

55,635

Net cash (used in) provided by investing activities

(43,226

)

11,852

Cash flows from financing activities:

Proceeds from exercise of stock options

8,406

1,151

Proceeds from long-term debt

26,316

—

Net cash provided by financing activities

34,722

1,151

Effect of exchange rate changes on cash and cash equivalents

(105

)

(75

)

Net decrease in cash, cash equivalents and restricted cash

(5,511

)

(21,129

)

Cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

37,015

67,437

Cash, cash equivalents and restricted cash at end of period

31,504

46,308

EVOLV TECHNOLOGY

SUMMARY OF KEY OPERATING STATISTICS

(Unaudited)

Three Months Ended or as of,

($ in thousands)

March 31,

2024

June 30,

2024

September 30,

2024

December 31,

2024

March 31,

2025

June 30,

2025

September 30,

2025

New customers

Annual recurring revenue

79,192

87,011

93,676

99,351

105,990

110,516

117,200

Recurring revenue

18,961

21,016

23,764

23,678

25,753

26,678

30,120

EVOLV TECHNOLOGY

RECONCILIATION OF GAAP OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES

(In thousands)

(Unaudited)

Three Months Ended,

March 31,

2024

June 30,

2024

September 30,

2024

December 31,

2024

March 31,

2025

June 30,

2025

September 30,

2025

(Restated)

Operating expenses, GAAP

34,061

37,128

34,961

35,619

33,539

33,711

29,902

Stock-based compensation

(6,292

)

(7,254

)

(7,263

)

(3,159

)

(4,660

)

(5,265

)

(5,121

)

Loss on impairment of leased equipment

—

(209

)

(15

)

—

Non-recurring employee restructuring and other separation costs

—

(1,000

)

—

(2,060

)

(2,137

)

(827

)

Other non-recurring legal and regulatory costs

(476

)

(2,185

)

(2,339

)

(7,284

)

(3,561

)

(5,979

)

Adjusted operating expenses

27,293

26,689

25,150

23,101

23,181

21,640

24,811

EVOLV TECHNOLOGY

RECONCILIATION OF GAAP GROSS PROFIT TO ADJUSTED GROSS PROFIT, GAAP GROSS MARGIN TO ADJUSTED GROSS MARGIN AND GAAP INCOME (LOSS) FROM OPERATIONS TO ADJUSTED OPERATING INCOME (LOSS)

(In thousands)

(Unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2025

2024

2025

2024

Revenue

42,850

27,360

107,401

74,765

Cost of revenue

21,544

11,551

50,727

32,044

Gross profit, GAAP

21,306

15,809

56,674

42,721

Stock-based compensation

269

244

770

555

Amortization of capitalized stock-based compensation

114

324

Non-recurring employee restructuring and other separation costs

—

Non-recurring inventory charges

—

1,471

—

2,607

Adjusted gross profit*

21,689

17,547

57,774

45,935

Gross margin %

49.7

57.8

52.8

57.1

Adjusted gross margin %

50.6

64.1

53.8

61.4

*Beginning in the three month period ended September 30, 2025, and on a go-forward basis, management has determined that the loss on disposal of leased equipment should no longer be considered a non-recurring expense, and accordingly, loss on disposal of leased equipment is now reflected within non-GAAP gross margins and adjusted loss from operations.

Three Months Ended

September 30,

Nine Months Ended

September 30,

2025

2024

2025

2024

Loss from operations, GAAP

(8,596

)

(19,152

)

(40,478

)

(63,429

)

Stock-based compensation

5,390

7,507

15,816

21,364

Amortization of capitalized stock-based compensation

114

324

Loss on impairment of lease equipment

—

209

—

209

Non-recurring employee restructuring and other separation costs

—

2,976

1,000

Non-recurring inventory charges

—

1,471

—

2,607

Other non-recurring legal and regulatory costs

(36

)

2,339

9,504

5,000

Adjusted loss from operations*

(3,122

)

(7,603

)

(11,858

)

(33,197

)

*Beginning this quarter, and on a go-forward basis, management has determined that the loss on disposal of leased equipment should no longer be considered a non-recurring expense, and accordingly, loss on disposal of leased equipment is now reflected within non-GAAP gross margins and adjusted loss from operations.

EVOLV TECHNOLOGY

RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA AND NET PROFIT MARGIN TO ADJUSTED EBITDA MARGIN

(In thousands)

(Unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2025

2024

2025

2024

Net loss

(1,796

)

(30,443

)

(44,020

)

(38,297

)

Depreciation & amortization

6,541

4,575

17,859

11,933

Stock-based compensation

5,390

7,507

15,816

21,364

Interest expense (income)

277

(628

)

(335

)

(2,394

)

Provision for income taxes

—

Change in fair value of contingent earn-out liability

(7,521

)

8,321

(2,297

)

(15,092

)

Change in fair value of contingently issuable/returnable common stock liability/asset

(2,178

)

2,056

(2,218

)

Change in fair value of public warrant liability

2,578

1,576

6,160

(5,461

)

Loss on impairment of leased equipment

—

209

—

209

Loss on disposal of leased equipment

1,870

—

3,503

—

Non-recurring employee restructuring and other separation costs

—

2,976

1,000

Non-recurring inventory charges

—

1,471

—

2,607

Other non-recurring legal and regulatory costs

(36

)

2,339

9,504

5,000

Adjusted EBITDA

5,131

(3,017

)

9,297

(21,349

)

Net profit margin %

(4.2

(111.3

(41.0

(51.2

Impact of adjustments from Net loss to Adjusted EBITDA

16.2

100.3

49.6

22.6

Adjusted EBITDA margin %

12.0

(11.0

8.7

(28.6

EVOLV TECHNOLOGY

RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED EARNINGS (LOSS)

(In thousands, except share and per share data)

(Unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2025

2024

2025

2024

Net loss

(1,796

)

(30,443

)

(44,020

)

(38,297

)

Stock-based compensation

5,390

7,507

15,816

21,364

Amortization of capitalized stock-based compensation

114

324

Change in fair value of contingent earn-out liability

(7,521

)

8,321

(2,297

)

(15,092

)

Change in fair value of contingently issuable/returnable common stock liability/asset

(2,178

)

2,056

(2,218

)

Change in fair value of public warrant liability

2,578

1,576

6,160

(5,461

)

Loss on impairment of lease equipment

—

209

—

209

Non-recurring employee restructuring and other separation costs

—

2,976

1,000

Non-recurring inventory charges

—

1,471

—

2,607

Other non-recurring legal and regulatory costs

(36

)

2,339

9,504

5,000

Adjusted loss

(3,443

)

(6,941

)

(11,468

)

(30,836

)

Weighted average common shares outstanding – diluted

172,790,098

157,709,229

166,327,570

155,760,149

Adjusted loss per share – diluted

(0.02

)

(0.04

)

(0.07

)

(0.20

)

*Stock-based compensation, amortization of capitalized stock-based compensation, and non-recurring restructuring and other employee separation costs were recorded in the condensed consolidated statements of operations and comprehensive loss (income) as follows. Prior period amounts are being shown for comparative purposes:

Three Months Ended,

March 31,

2024

June 30,

2024

September 30,

2024

December 31,

2024

March 31,

2025

June 30,

2025

September 30,

2025

Stock-based compensation:

Cost of product revenue

—

Cost of subscription revenue

110

169

154

137

167

146

Cost of service revenue

Cost of license fee and other revenue

Research and development

902

1,222

1,243

1,153

1,115

1,154

1,227

Sales and marketing

2,959

2,724

2,516

2,747

1,048

1,710

1,480

General and administrative

2,431

3,308

3,504

(741

)

1,972

2,401

2,414

Restructuring costs

—

525

—

Total stock-based compensation

6,430

7,427

7,507

3,392

4,879

5,547

5,390

Amortization of capitalized stock-based compensation:

Cost of subscription revenue

Cost of service revenue

Total amortization of capitalized stock-based compensation

103

107

114

Non-recurring employee restructuring and other separation costs:

Cost of service revenue

—

Research and development

—

Sales and marketing

—

140

—

613

General and administrative

—

1,997

—

183

—

Restructuring costs

—

860

—

2,137

—

Total non-recurring employee restructuring and other separation costs

—

1,000

—

2,060

2,137

833