Company: EVLVW
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001628280-25-026845
Chunk: 274

Company: Evolv Technologies Holdings, Inc.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 8
Chunk 274
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$ Change% Change(Restated)Product revenue$2,322 $1,491 $831 56 %Cost of product revenue$3,184 $3,114 $70 2 %Gross profit - Product revenue$(862)$(1,623)$761 47 %Gross profit margin - Product revenue(37)%(109)%N/A72 %

The increases in product revenue and gross profit are primarily due to an increase in product sales of Evolv Express and Evolv eXpedite units for the three months ended  March 31, 2025 compared to the prior year period. In addition, the change in cost of product revenue and improved product gross profit margin was impacted by a $0.7 million of expense related to an increase to our inventory reserve and $1.2 million of expense associated with adverse non-cancellable inventory purchase commitments during the three months ended March 31, 2024, both of which related primarily to the transition of our manufacturing operations to the next generation of Evolv Express systems. Product gross profit for the three months ended March 31, 2025 included the initial deployments of our Evolv eXpedite systems, which reflected a higher initial cost to produce than we expect on future production. 

Subscription Revenue

Three Months EndedMarch 31,20252024$ Change% Change(Restated)Subscription revenue$19,237 $14,219 $5,018 35 %Cost of subscription revenue$7,896 $5,585 $2,311 41 %Gross profit - Subscription revenue$11,341 $8,634 $2,707 31 %Gross profit margin - Subscription revenue59 %61 %N/A(2)%

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 March 31, 2025 compared to the prior year, which was due to a higher number of active Evolv Express units deployed under our pure subscription model. The decrease in gross profit margin is due to increased amortization of capitalized software costs during the three months ended March 31, 2025 of $0.4 million due to the release of Evolv eXpedite and our second generation of Evolv Express.

8

Service Revenue

Three Months EndedMarch 31,20252024$ Change% Change(Restated)Service revenue$6,