Evolv Technologies reported third‑quarter revenue of $42.9 million, a 57% year‑over‑year increase that also represents a 29% sequential rise from the $32.5 million earned in Q2 2025. The jump is driven by a 35% lift in subscription‑based recurring revenue, which grew to $117.2 million—up 25% from the same period last year—while one‑time product sales, largely from a large contract with Gwinnett County Public Schools, added $3 million in the quarter.
The company’s net loss narrowed to $1.8 million, a dramatic improvement from the $30.4 million loss reported in Q3 2024. Earnings per share of $-0.01 beat the consensus estimate of $-0.03, a $0.02 improvement that reflects disciplined cost management and the absence of the large one‑time charge that weighed on the prior year’s results.
Gross margin contracted to 51% from 64% in the same period last year, a 13‑percentage‑point decline attributed to the transition from a legacy distribution fulfillment model to a direct purchase fulfillment model. The new model creates a short‑term headwind because it requires higher upfront inventory and logistics costs, but management expects margin normalization as the direct model scales.
Adjusted EBITDA turned positive at $5.1 million, up from a $3.0 million loss in Q3 2024. The 12% adjusted EBITDA margin reflects both the revenue growth and the cost efficiencies gained from the direct fulfillment transition, offsetting the margin compression in gross profit.
Management raised its full‑year 2025 revenue guidance to $142–$145 million, up from the prior $132–$135 million range, and reiterated expectations of high single‑digit adjusted EBITDA margins and cash‑flow positivity in the fourth quarter. The upward revision signals confidence that the AI‑powered security platform will continue to capture market share and that the subscription model will deliver predictable recurring revenue.
CEO John Kedzierski said the quarter “demonstrated the strength of our subscription‑based business and the effectiveness of our direct‑sales strategy.” CFO Chris Kutsor noted that the company’s “gross‑margin headwind is a short‑term cost of scaling the direct model, but the positive EBITDA trend confirms that the strategy is working.” Analysts noted that while the stock’s after‑hours reaction was modest, the results reinforced the company’s trajectory toward profitability and a higher valuation multiple.
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