Company: EVLVW
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001805385-25-000017
Chunk: 390

Company: Evolv Technologies Holdings, Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 2
Chunk 390
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 Evolv eXpedite systems directly from us instead of through our distributor licensing model. The increase in product gross profit margin was due to an expense related to our inventory reserve of $1.5 million recognized in the three months ended September 30, 2024, which related primarily to the 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, partially offset by the initial deployments of our Evolv eXpedite systems, which as a new product offering reflect a higher initial cost to produce that we expect to gradually decline in the future. 

Subscription Revenue

Three Months EndedSeptember 30,20252024$ Change% ChangeSubscription revenue$22,685 $17,909 $4,776 27 %Cost of subscription revenue$10,923 $7,348 $3,575 49 %Gross profit - Subscription revenue$11,762 $10,561 $1,201 11 %Gross profit margin - Subscription revenue52 %59 %N/A(7)%

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, 2025 compared to the prior year, with a higher number of active Evolv Express systems deployed under our pure subscription model and an increase in short term rental subscription revenue during the three months ended September 30, 2025. The decrease in subscription gross profit margin was due to a $1.9 million loss on disposal of leased equipment and a $0.6 million estimated field services cost related to the replacement of certain Express system parts.

9

Service Revenue

Three Months EndedSeptember 30,20252024$ Change% ChangeService revenue$7,808 $6,085 $1,723 28 %Cost of service revenue$2,338 $1,404 $934 67 %Gross profit - Service revenue$5,470 $4,681 $789 17 %Gross profit margin - Service revenue70 %77 %N/A(7)%

The increases in service revenue, cost of service revenue, and service gross profit are primarily due to increased maintenance revenue associated with growth in 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