Company: EVLVW
Filing Date: 2025-04-28
Form Type: 10-K
Source: 0001628280-25-020355
Chunk: 153

Company: Evolv Technologies Holdings, Inc.
Filing Date: 2025-04-28
Form: 10-K
Item: Item 7
Chunk 153
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 net:Interest expense(159)(3,263)3,104 95 Interest income491 — 491 *Loss on extinguishment of debt— (11,820)11,820 *Change in fair value of derivative liability— (795)795 *Change in fair value of contingent earn-out liability(569)— (569)*Change in fair value of contingently issuable common stock liability(24)— (24)*Change in fair value of public warrant liability(143)— (143)*Change in fair value of common stock warrant liability— (185)185 *Total other income (expense), net(404)(16,063)15,659 97 Net loss$(26,332)$(22,977)$(3,355)(15)%Gross profit margin:Product revenue(28) %16 %N/A(44) %Subscription revenue47 %30 %N/A16 %Service revenue40 %(80) %N/A120 %License fee and other revenue(256) %12 %N/A(267) %

*N/A – Not meaningful

98

Revenue, Cost of Revenue and Gross Profit

Product Revenue

The increases in product revenue and cost of product revenue are primarily due to the increase in sales of Evolv Express units, which include the significant increase in the adoption of Evolv Express units by schools, hotels and casinos, and professional sports arenas. We experienced strong demand across our education and healthcare customers for single lane configurations of Evolv Express due to limitations in the lobby size typical of customers in those markets. These configurations generate lower gross profit than our dual lane configurations of Evolv Express due to a lower average sale price. Further, a higher percentage of sales were made through our channel partners, which are generally at a lower average sale price, during the three months ended June 30, 2022 compared to the prior year period. Gross profit and gross profit margin were also adversely impacted by purchase price variances recorded on raw materials and the costs associated with the write-off of scrap inventory incurred without corresponding revenue.

Subscription Revenue

The increases in subscription revenue and cost of subscription revenue are primarily due to growth in our customer base and a higher number of active Evolv Express units deployed in the preceding twelve months. The increase in gross profit is primarily driven by our increased subscription revenue. The increase in gross profit margin was primarily driven by increased recurring revenue from increased active subscriptions and customer growth.

Service Revenue