Evolv Technology Q2 2026 Earnings: Revenue Growth Supports a Higher Outlook

Evolv Technology (NASDAQ: EVLV) reported Q2 2026 revenue of $43.8 million, up 34% from $32.5 million a year earlier, while GAAP loss per basic and diluted share narrowed to $0.05 from $0.25. Net loss improved to $9.3 million from $40.5 million, and adjusted EBITDA rose to $4.4 million with a 10.1% margin. Ending annual recurring revenue, or ARR, reached $132.7 million, and the company raised its full-year revenue outlook.

Core financial results

Revenue growth translated into better gross profit and a smaller operating loss. Gross margin increased modestly to approximately 50.2%, while operating expenses declined to $32.5 million from $33.7 million despite higher research and development and sales and marketing spending.

The sharp improvement in GAAP net loss was partly operational and partly related to fair-value accounting. Evolv recorded $1.3 million of other income in Q2 2026, compared with $23.0 million of other expense a year earlier, when changes in contingent earn-out, common-stock and public-warrant liabilities weighed heavily on results.

Adjusted loss, adjusted diluted loss per share and adjusted EBITDA are non-GAAP measures that exclude items including stock-based compensation and certain legal, regulatory, restructuring and fair-value effects.

Business and revenue performance

Product revenue was the largest contributor to the quarter’s increase, rising approximately 260% to $9.1 million from $2.5 million. Subscription revenue, the company’s largest revenue category, increased approximately 23% to $24.8 million, while service revenue grew approximately 34% to $9.0 million. License fee and other revenue declined approximately 71% to $0.9 million, partially offsetting growth elsewhere.

Evolv added 70 new customers during the quarter. Management also cited faster adoption of Evolv eXpedite and improving renewal trends as operating drivers. Ending ARR rose 20% to $132.7 million, while remaining performance obligations increased by $13.6 million sequentially to $312.6 million.

A higher purchase-subscription mix shifts revenue forward but pressures gross margin

Evolv now expects approximately 60% of new units deployed in 2026 to use its purchase-subscription model, up from its previous estimate of 55%. Under this model, more revenue is recognized during the early years of a typical four-year customer contract, but related hardware costs are also recognized upfront.

That dynamic helps explain why product revenue increased much faster than total revenue while product costs remained elevated. Product gross loss improved to approximately $1.0 million from $2.8 million, but product cost of revenue still exceeded product revenue during the quarter. Management expects the higher purchase-subscription mix to create a modest near-term headwind to reported gross margin percentage.

Profitability, cash and the balance sheet

Total operating expenses declined approximately 4% to $32.5 million. General and administrative expense fell approximately 19% to $14.0 million, more than offsetting a 22% increase in research and development expense and an 8% increase in sales and marketing expense. This expense pattern contributed to the improvement in operating margin.

Investors should distinguish that operating progress from the larger change in GAAP net loss. Operating loss narrowed by $6.9 million, but total other income improved by $24.3 million year over year because the prior period included substantial unfavorable fair-value changes. The smaller improvement in adjusted loss—from $4.7 million to $3.1 million—provides a less volatile view of the underlying change.

Cash, cash equivalents, marketable securities and restricted cash totaled $63.4 million at June 30, up $2.3 million sequentially. That combined balance was nevertheless approximately $5.7 million below its December 31, 2025 level. Long-term debt was $28.7 million, while accounts receivable increased to $39.6 million from $30.8 million at year-end.

2026 guidance

Evolv raised both ends of its 2026 revenue range by $5 million and increased the lower end of its ending ARR range. It also introduced an adjusted EBITDA range while maintaining its high-single-digit adjusted EBITDA margin outlook.

The company did not provide a forward-looking GAAP reconciliation for adjusted EBITDA because certain fair-value, stock-compensation and related items cannot be reasonably predicted.

Recent insider transactions

The latest detailed transactions provided show Director Michael Ellenbogen exercising derivative securities and selling shares on both July 15 and June 15, 2026. All four transactions were reported as direct ownership, and the data do not state the purpose of the sales.

Risks investors should watch

• Gross-margin pressure from contract mix: A higher purchase-subscription share accelerates early revenue recognition but also brings hardware costs forward, creating a near-term margin headwind.
• ARR does not equal future reported revenue: Evolv states that revenue recognized over a 12-month period can differ significantly from beginning ARR. Its ARR definition can also include customers receiving service while renewals or upgrades are still under negotiation.
• Evolv remains GAAP-unprofitable: Q2 operating loss was $10.6 million and net loss was $9.3 million. Fair-value changes can also cause substantial volatility in reported net results.
• Liquidity requirements remain relevant: The combined cash and securities balance declined from year-end, and the company carries $28.7 million of long-term debt while continuing to report losses.
• Legal, regulatory and internal-control costs: Evolv’s non-GAAP measures exclude certain investigation, litigation, regulatory and remediation expenses, which can still affect GAAP earnings and company resources.

Summary

Evolv’s Q2 2026 results showed higher revenue across its main product, subscription and service categories, continued ARR growth and better operating leverage. A larger purchase-subscription mix is supporting near-term revenue recognition but remains a constraint on gross margin, while fair-value movements amplified the improvement in GAAP net loss. The main items to monitor are execution against the raised 2026 outlook, the profitability of product deployments, renewal trends and the conversion of recurring commitments into reported revenue.