Company: EVLVW
Filing Date: 2025-04-28
Form Type: 10-Q
Source: 0001628280-25-020353
Chunk: 231

Company: Evolv Technologies Holdings, Inc.
Filing Date: 2025-04-28
Form: 10-Q
Item: Part I, Item 1
Chunk 231
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 sales under our distributor licensing model during the preceding twelve months. The decrease in product gross profit margin is further driven by $2.5 million of one-time expense related to an increase to our inventory reserve, $1.1 million of expense associated with adverse non-cancellable inventory purchase commitments, and $0.3 million increase in manufacturing expense, each of which relate primarily to the ongoing transition of our manufacturing operations to the next generation of Evolv Express systems and the determination that certain components within our legacy systems will not be used in the next generation systems.

Subscription Revenue

Nine Months EndedSeptember 30,20242023$ Change% Change(Restated)Subscription revenue$47,783 $23,733 $24,050 101 %Cost of subscription revenue$19,242 $9,776 $9,466 97 %Gross profit - Subscription revenue$28,541 $13,957 $14,584 104 %Gross profit margin - Subscription revenue60 %59 %N/A1 %

The increases in subscription revenue, cost of subscription revenue, and subscription gross profit are primarily due to continued growth in our customer base as of September 30, 2024 compared to the prior year, which was due to a transition to our pure subscription model and a higher number of active Evolv Express units deployed under our pure subscription contract model.

13

Service Revenue

Nine Months EndedSeptember 30,20242023$ Change% Change(Restated)Service revenue$16,903 $10,750 $6,153 57 %Cost of service revenue$3,923 $2,816 $1,107 39 %Gross profit - Service revenue$12,980 $7,934 $5,046 64 %Gross profit margin - Service revenue77 %74 %N/A3 %

The increases in service revenue, cost of service revenue, and service gross profit are primarily due to an increased number of active revenue-generating purchase subscription units, as well as active revenue-generating units purchased by customers directly from Columbia Tech under our distributor licensing model, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

License fee and other revenue

Nine Months EndedSeptember 30,20242023$ Change% Change(Restated)License fee and other revenue$5,290 $3,582 $1,