Company: EVLVW
Filing Date: 2025-04-28
Form Type: 10-K
Source: 0001628280-25-020355
Chunk: 108

Company: Evolv Technologies Holdings, Inc.
Filing Date: 2025-04-28
Form: 10-K
Item: Item 7
Chunk 108
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 157 (157)*Total operating expenses36,954 31,007 5,947 19 Loss from operations(22,371)(24,091)1,720 7 Other income (expense), net:Interest income681 1,853 (1,172)(63)Other income (expense), net(39)(22)(17)(77)Change in fair value of contingent earn-out liability16,514 (28,113)44,627 159 Change in fair value of contingently issuable common stock liability3,747 (5,095)8,842 174 Change in fair value of public warrant liability4,886 (11,751)16,637 142 Total other income (expense), net25,789 (43,128)68,917 160 Net income (loss)$3,418 $(67,219)$70,637 105 %Gross profit margin:Product revenue(45) %(8) %N/A(37) %Subscription revenue60 %57 %N/A2 %Service revenue76 %72 %N/A4 %License fee and other revenue92 %62 %N/A30 %

*N/A – Not meaningful

63

Revenue, Cost of Revenue and Gross Profit

We believe there are several key trends that are continuing to drive increased adoption of our solutions and growth in our sales, including (i) escalating gun violence, which has created stronger demand for security screening solutions for customers and prospects in our key vertical markets, (ii) customer acquisition activities which led to the addition of 84 new customers during the three months ended June 30, 2024, (iii) the expansion of our existing customers' initial Evolv Express deployments to other venues and locations, and (iv) growing momentum with our channel partners which helps us extend our reach in certain geographies or vertical markets.

Product Revenue

The decreases in product revenue and cost of product revenue are primarily due to a transition to pure subscription sales and sales under our distributor licensing model during the preceding twelve months. The decrease in product gross profit margin for the three months ended June 30, 2024 compared to the prior year period is primarily attributable to $0.4 million of expense related to an increase to our inventory reserve and $0.3 million increase in manufacturing expenses.

Subscription Revenue

The increases in subscription revenue, cost of subscription revenue and subscription gross profit are primarily due