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    EVLV
    Earnings call· Jun 2026(Q2 FY26)

    Evolv Technologies Holdings Q2 FY26 earnings call EVLV

    Aug 11, 2026 Source

    Executive summary

    Evolv Technology Q2 FY26 — Strong Revenue Growth and Expanded Profitability

    Evolv Technology delivered strong Q2 FY26 results, driven by robust new customer acquisition and expanded platform adoption, leading to significant revenue growth and improved profitability. The company raised its full-year outlook, confident in its long-term Rule of 50 objectives, despite facing near-term gross margin pressures from product mix shifts and elevated supply chain costs. Management highlighted the strength of its hardware-enabled subscription model and growing RPO.

    Highlights

    5

    • Revenue increased 34% year-over-year to $43.8 million in Q2 FY26.

    • Annual Recurring Revenue (ARR) grew 20% year-over-year to $132.7 million as of June 30, 2026.

    • Adjusted EBITDA margin expanded to 10.1% in Q2 FY26, up from 6.5% in Q2 FY25.

    • Added 70 new customers in Q2 FY26, marking the strongest quarter in 2 years for new customer additions.

    • Remaining Performance Obligation (RPO) increased 4.5% sequentially to $312.6 million.

    Concerns

    3

    • A higher mix of purchase subscriptions (60% of new full-year deployed units vs. 55% prior assumption) creates a gross margin headwind.

    • Gen2 upgrades create a temporary gross margin headwind of just under 1 point due to refurbishment and depreciation costs for returned Gen1 units.

    • Modestly higher component and supply chain costs are contributing approximately 0.5 point of gross margin headwind.

    Guidance & targets

    8
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $180 million to $185 million
    high materiality
    High
    Full-year 2026 Revenue Growth
    23% to 27% year-over-year
    high materiality
    High
    Full-year 2026 Deployed Units
    comfortably over 10,000 units
    medium materiality
    High
    Full-year 2026 Annual Recurring Revenue (ARR)
    approximately $148 million to $150 million
    high materiality
    High
    Full-year 2026 Adjusted EBITDA
    $15 million to $16 million
    high materiality
    High
    Full-year 2026 Adjusted EBITDA Margin
    high single digits
    high materiality
    High
    Long-term Revenue (by 2031)
    more than $500 million
    high materiality
    High
    Long-term Adjusted EBITDA Margin
    at least 25%
    high materiality
    High

    Operational metrics

    23
    Revenue
    $43.8 millionup 34% year-over-year
    Q2 FY26

    Primarily reflected strong underlying demand and the fully completed transition to a direct fulfillment model.

    Annual Recurring Revenue (ARR)
    $132.7 millionup 20% year-over-year
    as of June 30, 2026

    Driven by strong new customer acquisition, expanding deployments, and continued strength in renewal activity.

    Adjusted Gross Margin
    51%consistent with Q1
    Q2 FY26

    Reflects the gross margin for the quarter.

    Adjusted Operating Expenses
    $25 millionup 16% year-over-year
    Q2 FY26

    Excludes stock-based compensation, impairment loss, and other one-time expenses. Increase reflects investments in product innovation, go-to-market capacity, commissions, and IT systems.

    Adjusted EBITDA
    $4.4 millionup from $2.1 million year-over-year
    Q2 FY26

    Excludes stock-based compensation and other one-time items.

    Adjusted EBITDA Margin
    10.1%expanded 160 basis points sequentially and 360 basis points year-over-year
    Q2 FY26

    Demonstrates operating leverage despite continued investments.

    Remaining Performance Obligation (RPO)
    $312.6 millionup 4.5% sequentially
    end of Q2 FY26

    Reflects strong end market demand, multiproduct adoption, and strong renewal upgrades to Gen2 Express.

    RPO Gross Margin Profile
    approximately 66%
    estimated

    Well above current reported gross margin, reflecting the economics of the purchase subscription model.

    Cash, cash equivalents, marketable securities and restricted cash
    $63 millionincreased about $2 million sequentially
    end of Q2 FY26

    Positive cash flow in Q2 was a quarter ahead of expectations, driven by improved profitability and strong cash collections.

    New Customers Added
    70strongest quarter in 2 years
    Q2 FY26

    Highlights healthy new customer acquisition pace.

    Unit Bookings from Existing Customers
    approximately 60%
    Q2 FY26

    Highlights ability to deepen relationships with existing customers.

    People Screened Daily
    nearly 5 million
    daily

    Reflects the growing scale and global reach of the Evolv platform.

    Net Revenue Retention (NRR)
    comfortably above 100%
    Q2 FY26

    Reflects continued success renewing and expanding existing customer relationships.

    eXpedite Customers
    over 100up from 2% a year ago
    Q2 FY26

    eXpedite continues to gain traction.

    New Customers purchasing eXpedite also bought Evolv Express
    approximately 70%
    Q2 FY26

    Indicates strong attach rate for eXpedite with new Express customers.

    eXpedite Cross-sells
    more than 40
    Q2 FY26

    Existing Evolv Express customers who also adopted eXpedite.

    Bags Screened with eXpedite
    more than 20 million
    total

    Demonstrates significant usage and adoption of the eXpedite solution.

    Deployed Units
    approximately 9,200
    Q2 FY26

    Current penetration remains well below 5% of serviceable doorways.

    Fortune 500 Customers
    over 30
    Q2 FY26

    Evolv serves as a trusted weapon screening partner for these companies.

    Purchase Subscription Mix (new full year deployed units)
    60%up from 55% prior assumption
    FY26 forecast

    This higher mix contributes to a gross margin headwind due to immediate hardware cost recognition.

    Gross Margin Headwind from Gen2 Upgrades
    just under 1 point
    FY26

    Due to freight, refurbishment, and depreciation costs for returned Gen1 units between upgrade and redeployment.

    Gross Margin Headwind from Component and Supply Chain Costs
    approximately 0.5 point
    FY26

    Reflects modestly higher costs than originally anticipated across the tech industry.

    Adjusted EBITDA (H1 FY26)
    doubledcompared to H1 FY25
    H1 FY26

    Reflects significant profitability improvement.

    Industry KPIs

    8
    MetricValueDetails
    Orders book to bill$312.6 millionUSD
    Long term agreements4 yearsyears
    Design wins product cycle rampsGen2 Express upgrades
    Order visibility backlog policyRPO provides visibility
    Recurring software services mix$132.7 millionUSD
    Supply demand imbalance lead timessemiconductor supply constraints
    Capacity expansion internal sourcingPlexus partnership onboarded
    Operating margin incremental leverage10.1%%

    Orderbook & backlog

    1
    Remaining Performance Obligation (RPO)$312.6 millionend of Q2 FY26

    up 4.5% sequentially

    Exceeds 1.7x full year revenue outlook, providing visibility into future revenues and reinforcing the durability of the model.

    Product announcements

    1
    ProductTypeDetails
    eXpedite platformupdate

    Deals & partnerships

    5
    Alberta Health ServicesNew customer acquisition in healthcare sector

    Canada's largest integrated health care system, added as a new customer, ranging from community hospitals to regional health systems.

    Pro Football Hall of FameNew customer acquisition in sports and live entertainment

    Added as a new customer, investing in security solutions to enhance safety and fan experience.

    2026 FIFA World CupShort-term subscription deployment for a major international eventQ2 and Q3 FY26

    Supported the tournament with installations at match venues, fan festivals, and transportation hubs, including New York Penn Station.

    Northwestern University (New Ryan Field)New customer acquisition for a major college sports venue

    Selected by Ryan Sports Development to deliver the fan arrival experience at the new Ryan Field, a ~$870 million college football stadium.

    Fortune 500 companiesTwo additional new customer acquisitions in the workplace segment

    Includes a leading grocery retailer with one of the largest distribution networks and one of the country's largest off-price retail chains. Evolv now serves over 30 Fortune 500 companies.

    Capital programs

    1
    Plexus Global Contract Manufacturing Partnershipcompleted
    Start: late 2025

    Benefit: Scale production capacity, extend global reach, enhance operational resiliency, reduce bill of material costs through greater procurement leverage and manufacturing efficiencies.

    Evolv has onboarded Plexus and has now begun shipping product through their facilities, representing an important milestone in the manufacturing strategy.

    Risks & headwinds

    4
    Higher mix of purchase subscriptionsFY26

    60% of new full year deployed units via purchase subscription versus 55% assumed in prior guidance

    Mitigation: Management expects this to be offset by stronger renewal performance and higher net revenue retention, contributing to overall ARR growth.

    Temporary gross margin headwind from Gen2 upgradesFY26

    just under 1 point of gross margin headwind

    Mitigation: These costs are expected to convert to significant revenue and cash as refurbished Gen1 units are redeployed in the future.

    Higher component and supply chain costsFY26

    approximately 0.5 point of gross margin headwind

    Mitigation: Management is realizing manufacturing efficiencies through Plexus and has implemented pricing increases across product lines, which are expected to support gross margin expansion over time.

    Semiconductor supply constraintsongoing

    well-documented semiconductor supply constraints

    Mitigation: Company is actively managing through these constraints and remains confident in its ability to execute against full year deployment plans.

    What to watch in Q3 FY26

    5

    Plexus Manufacturing Ramp-up and Cost Efficiencies

    next quarter
    CurrentShipping product from Plexus facilities, transition on schedule
    TargetContinued scaling of production, realization of reduced bill of material costs and manufacturing efficiencies

    Why it matters

    Successful ramp-up and cost reduction from the Plexus partnership are key to improving gross margins and scaling production capacity.

    We continue to realize manufacturing efficiencies and scale benefits through our new contract manufacturing partner, and we have recently implemented pricing increases across our product lines of Express and eXpedite.

    Q&A highlights

    5

    Why is unit growth (30%) outpacing ARR growth (20-25%), and will ARR growth accelerate as prior changes are lapped?

    Chris Kutsor explained that the divergence is expected due to a broader product portfolio. Gen1 units, returned from customers upgrading to Gen2, are redeployed at a lower ARPU. Additionally, eXpedite was launched at a lower price point than Express, though recent price increases will align them more closely. He confirmed ARR growth is expected to accelerate.

    “The difference between ARR and unit growth is as we would have expected because we are selling Gen1 units at a lower ARPU and eXpedite has been lower, and that will be converging with Express.”

    asked by Jeremy Hamblin · answered by George Kutsor

    2 min read6 chapters

    Detailed Narrative

    01

    Market Penetration and Long-Term Growth Opportunity

    Evolv Technology estimates there are over 700,000 serviceable doorways across its current markets, with only about 9,200 units deployed, indicating a penetration rate well below 5%. This significant untapped market underpins the company's long-term revenue target of over $500 million by 2031, representing a 25% compound annual growth rate, and a path to achieving adjusted EBITDA margins of at least 25%.

    02

    Hardware-Enabled Subscription Business Model

    Evolv operates a hardware-enabled subscription model, built around physical security and AI-powered weapons detection. The platform integrates proprietary hardware, software, AI models, data, and services, delivered through multiyear subscription agreements, typically 4 years in duration. This model generates high-margin, long-term recurring revenue and provides significant visibility into future earnings, with over $300 million in remaining performance obligation (RPO).

    03

    Strong Customer Acquisition and Expansion

    The company reported its strongest quarter for new customer additions in two years, adding 70 new customers in Q2 FY26. Notably, approximately 60% of unit bookings during the quarter came from existing customers, demonstrating successful expansion within the installed base. Evolv now serves customers in all 50 U.S. states, Canada, and Mexico, with solutions screening nearly 5 million people daily.

    04

    eXpedite Product Adoption and Innovation

    Evolv's autonomous AI-powered bag screening solution, eXpedite, continues to gain traction, now serving over 100 customers, representing approximately 8% of the total customer base, up from 2% a year ago. Approximately 70% of new customers purchasing eXpedite also bought Evolv Express, and eXpedite has been cross-sold to over 40 existing Evolv Express customers. The platform has screened more than 20 million bags, averaging 90,000 bags daily, and has seen significant software enhancements to optimize security operations.

    05

    Manufacturing Strategy and Supply Chain Management

    Evolv has successfully onboarded Plexus, its new global contract manufacturing partner, and has begun shipping products from their facilities. This transition is expected to scale production capacity, extend global reach, enhance operational resiliency, and reduce bill of material costs over time⏳. The company continues to actively manage semiconductor supply constraints, confident in its ability to meet full-year deployment plans.

    06

    End-Market Performance and Policy Support

    Evolv saw strong demand across its core education market, adding 23 new customers and supporting 1,800 schools. In healthcare, 8 new customers were added, including Alberta Health Services. Momentum continued in sports and live entertainment, with new customers like the Pro Football Hall of Fame and Northwestern University's New Ryan Field, and support for the 2026 FIFA World Cup. The workplace segment also expanded with two new Fortune 500 clients, bringing the total to over 30.

    AI-generated summary of the company’s earnings call. Not investment advice.