Total Revenue

+47.7% YoY (from $21,668K to $32,007K)

The strong increase in total revenue is driven by robust growth across various revenue streams, notably an increase in product, subscription, service, and license fee revenues. This reflects the positive effects of expanding product offerings and a more scalable subscription model compared to the previous period, resulting in a significant overall revenue lift. " "

Product Revenue

+285% YoY (from $603K to $2,322K)

The dramatic surge in product revenue stems from higher sales volumes of new product lines such as Evolv Express and Evolv eXpedite systems. This marked improvement contrasts with the prior period’s low figures, indicating a successful ramp-up in new product deployments that overcame previous inventory and manufacturing challenges. " "

Subscription Revenue

+32.8% YoY (from $14,503K to $19,237K)

Increased subscription revenue reflects enhanced customer acquisition, greater deployment of active Evolv Express units, and the benefits of a renewed focus on a recurring revenue model. This steady growth builds on prior period trends where subscription-based sales began to dominate the revenue mix, leading to more predictable revenue streams. " "

Service Revenue

+25% YoY (from $5,384K to $6,730K)

The improvement in service revenue is attributed to increased active revenue-generating units and expanded service offerings such as installation, training, and ongoing support. These enhancements have led to better service uptake compared to the previous period, demonstrating the company’s ability to leverage its customer base to drive recurring support revenues. " "

License Fee and Other Revenue

+216% YoY (from $1,178K to $3,718K)

A significant boost in license fee and other revenue is largely due to the strong performance under the Columbia Tech Distribution and License Agreement. This factor, combined with improved gross margins (rising from 81% to 93% in license revenue streams), highlights how strategic licensing has dramatically increased revenue compared to the previous period. " "

Gross Profit

Approx. $19,150K with 60% margin

The increased gross profit primarily results from a more favorable revenue mix where higher-margin subscriptions and license fees significantly offset lower-margin product sales. This improvement builds on previous period adjustments where operational efficiencies and reduced cost pressures were already starting to enhance profitability. "

Operating Loss

Narrowed by 35.5% (from –$22,278K to –$14,389K)

The reduction in operating loss is driven by improved revenue generation combined with better cost management, including a lower sales and marketing outlay compared to the previous period. Enhanced gross profit margins and disciplined operating expenses have collectively contributed to a notable contraction in the operating loss. " "

Net Income (Loss)

Improved significantly (from –$11,644K to –$1,689K)

The substantial narrowing of the net loss is largely the result of robust revenue growth, improved gross margins, and reductions in both operating and non-operating expenses. Favorable adjustments in the fair value of contingent liabilities and other non-cash items further supported this dramatic improvement over the previous period’s performance. "

Healthcare dynamics

Q2 2024 saw Evolv adding about a dozen new healthcare customers across 400 hospital buildings and screening about 700,000 individuals daily. "

Q1 2025 reported nearly a dozen new healthcare customers, expanded installed base to 500 hospital buildings, and nearly doubled daily screenings to 900,000; additionally, a new California law was cited as a driver for healthcare safety measures. " "

Consistent focus with increased adoption and stronger regulatory tailwinds.

Regulatory environment shifts

Q2 2024 focused on proactive discussions with the FTC and addressing regulatory issues early in the sales cycle. "

Q1 2025 emphasized a new California law mandating security measures in hospitals, signaling a regulatory environment that could drive further adoption. " "

Shift from litigation-related discussions to leveraging regulatory initiatives for market opportunity.

Customer expansion and retention

Q2 2024 highlighted strong expansion with 84 new customers, robust growth in key verticals (education, healthcare, sports), and high renewal rates. " "

Q1 2025 noted that 50% of units and ARR came from existing customers, introduced the Certified Pre-Owned program, and launched the Evolv eXpedite solution, all supporting continued strong retention. " " "

Continued emphasis with added initiatives to further penetrate the existing customer base.

Recurring revenue model transformation

Q2 2024 marked a pivotal shift toward recurring revenue with 83% recurring revenue, driven by the pure and distribution subscription models, and improved margins. " "

Q1 2025 is pushing a further shift toward a pure subscription model with ARR growth, even though recurring revenue fell slightly from 85% to 80%. " " " "

Ongoing transformation with a refined focus on subscription, despite minor short‐term tradeoffs.

Revenue recognition challenges

Not explicitly discussed in Q2 2024.

Q1 2025 highlighted deferred revenue recognition under the pure subscription model and noted one-time revenue items, pointing to new short-term challenges. " "

New emerging challenge linked to the revenue model transformation.

Gross margin pressure

Q2 2024 discussions emphasized margin expansion (adjusted gross margin at 58% versus 38% in prior year) as a benefit of the recurring revenue shift. " "

Q1 2025 expressed concerns about expected headwinds of 200–300 basis points in gross margin due to the increased focus on pure subscription orders. "

A shift in sentiment from margin expansion to near-term margin pressure.

Increased investment and CapEx risks

No mention of CapEx risks during Q2 2024.

Q1 2025 discussed expectations of $20–25 million in CapEx and noted a $2 million near-term investment, highlighting potential risks tied to increased spending for the subscription model. " "

A new topic emerging from the need to support the strategic shift.

Industrial warehouse vertical opportunity

Q2 2024 saw positive early-stage comments: a dedicated team, rapid post-COVID expansion, and expectations to become materially important in 2025. "

Q1 2025 only mentioned an $800,000 revenue boost from a Q4 2024 order with no further emphasis on prospects in this vertical. "

A notable decline in focus, suggesting this vertical is being de‐prioritized.

Strategic partnerships

Q2 2024 featured active mentions of key strategic partnerships, notably with Motorola (with a 196% year-over-year increase) and others like Johnson Controls and ASM Global. "

Q1 2025 did not mention strategic partnerships such as with Motorola at all.

Disappearance from the narrative indicates reduced prominence or a shift in focus.

Competitive pressures in price-sensitive markets

Q2 2024 acknowledged strong competition in price-sensitive segments, especially in education, where legacy providers posed tough challenges. "

Q1 2025 addressed these pressures indirectly by introducing the Certified Pre-Owned program aimed at price-sensitive buyers. "

Continued issue now being actively tackled through innovative product programs.

Cash flow and inventory management risks

Q2 2024 reported cash levels around $57 million with concerns over extended receivables and inventory adjustments amid the Gen 1 to Gen 2 transition, with expectations to rebound later in the year. "

Q1 2025 reported a decline in cash from $52 million (end of Q4 2024) to $35 million, driven by one-time disbursements, while tariff exposure and inventory management were discussed as ongoing considerations. " " "

A consistent concern with tighter liquidity and heightened cash management challenges in the current period.