Evolv Technologies Reports $54M Net Loss, 31% Revenue Growth in 2024

Evolv Technologies Holdings, Inc. reported a net loss of $54.0 million for the year ended December 31, 2024, compared to a restated net loss of $108.0 million for the prior year. Total revenue increased by 31% to $103.9 million, driven by a significant 80% surge in subscription revenue to $65.0 million. However, product revenue decreased by 72% to $6.5 million, reflecting a strategic shift towards subscription-based models. The company also saw increases in service revenue (50% to $23.5 million) and license fee and other revenue (78% to $8.9 million).

Significant changes compared to 2023 include a substantial improvement in gross profit, which rose by 86% to $59.3 million, primarily due to the increased subscription revenue. Operating expenses increased by 16% to $141.6 million, primarily driven by a 34% increase in general and administrative expenses, largely attributed to legal and consulting fees related to an internal investigation and subsequent restatement of prior-period financial statements. The company launched a new product line, Evolv eXpedite™, in September 2024, an autonomous AI-based weapons detection system for bags. The number of Evolv Express solutions deployed increased from approximately 4,500 to 6,100 during the year.

The company's growth strategy focuses on developing initial customer successes in specific metropolitan areas, expanding its reseller network, concentrating sales and marketing efforts on specific target accounts, promoting awareness through its customer community, and extending its value proposition with additional products and digital capabilities. The company identified material weaknesses in its internal control over financial reporting, leading to the restatement of previously issued financial statements for the fiscal years 2022 and 2023, and certain quarterly periods. These weaknesses stemmed from deficiencies in the control environment, including insufficient personnel and ineffective communication between departments.

As of December 31, 2024, Evolv employed 287 people. A reduction in force affecting 40 employees was implemented on January 21, 2025, as part of a cost-saving initiative. The company's products have screened over two billion visitors worldwide since their launch in 2019. The company operates under several sales models, including a pure subscription model, a purchase subscription model, and a distributor licensing model. One customer and two customers, all resellers, accounted for more than 10% of total revenue for 2024 and 2023, respectively.

The company acknowledges significant risks and uncertainties, including its history of losses, dependence on reseller partners, supply chain vulnerabilities, competition, and the evolving nature of the AI-based weapons detection market. The company does not anticipate paying cash dividends in the foreseeable future and notes the volatility of its common stock price. The company's outlook is contingent upon successful product development and commercialization, continued growth in the security screening market, and the successful remediation of its identified material weaknesses in internal controls.