Evolv Technologies (EVLV) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached $32.0 million, up 44% year-over-year, with ARR at $106.0 million, up 34% year-over-year.

• Net loss narrowed to $1.7 million from $11.3 million in Q1 2024; adjusted EBITDA turned positive at $1.7 million versus a loss of $10.4 million last year.

• Company navigated significant leadership changes, including new CEO and CFO, and completed a revenue restatement due to recognition issues, resulting in management changes and ongoing legal and regulatory matters.

• Focus on subscription-based model with strong recurring revenue foundation and high customer retention rates, with total subscriptions surpassing 6,600.

• January 2025 restructuring reduced headcount by 41 employees, incurring $2.7 million in related costs.

Financial highlights

• Recurring revenue grew 36% year-over-year to $25.8 million; non-recurring revenue rose 94% to $6.3 million.

• Gross profit increased to $19.2 million, with adjusted gross margin at 60.8% versus 60.9% a year ago.

• Adjusted operating expenses declined 15% year over year to $23.2M.

• Cash, cash equivalents, and marketable securities totaled $35.0 million at quarter-end, with no debt.

• Net cash used in operating activities was $2.5 million, a significant improvement from $16.2 million in Q1 2024.

Outlook and guidance

• 2025 revenue expected between $125 million and $130 million, representing 20%–25% growth over 2024, with no material restatement revenue.

• Positive full-year adjusted EBITDA and positive free cash flow targeted by Q4 2025.

• CapEx expected at $20–$25 million to support full subscription business.

• Approximately $2 million in near-term investments planned for systems and process improvements, weighted toward the second half.

• Shift toward pure subscription model expected to create slight gross margin headwinds (200–300 bps) in 2025.