Evolv: Generating Shareholder Returns Through A Safer World

Evolv Technologies is redefining physical security with AI-driven, non-invasive screening that allows people to pass through at a natural walking pace. The global concealed weapons detection market is forecast to nearly double from $2.5 billion in 2025 to $4.8 billion by 2033 (8% CAGR), while the broader security screening market is expected to grow from $9.92 billion to $13.80 billion by 2030 (6.8% CAGR).

This places Evolv in the sweet spot of a $30+ billion global security market. With over 3 billion visitors already screened and more than 1,000 customers worldwide, the company has proven its technology works , and scales.

Evolv’s Security-as-a-Service model creates predictable revenue streams and keeps customers engaged long term. Annual Recurring Revenue reached $110.5 million in Q2 2025, up 27% year-over-year. Recurring subscriptions now represent over 70% of total revenue, providing high visibility into future performance. Strong retention is reflected in the fact that half of Q1 2025 business came from existing customers. While a move to more direct sales briefly pressured gross margins, it sets the stage for improved unit economics, a strategy that has driven strong profitability for comparable technology providers.

Adoption is accelerating across education, healthcare, sports, entertainment, and corporate environments. Notable deployments include FIFA Club World Cup 2025, 20 of the largest U.S. school districts, and over 500 hospitals. The technology meets a growing need for more effective, dignified security in high-traffic areas where traditional screening often falls short. Recent multi-million-dollar contracts and renewals, from sports franchises to major hospital groups, reinforce the market’s readiness to scale Evolv’s solution.

• FIFA Deployment: Installing over 100 units at 12 FIFA stadiums will spotlight Evolv’s ability to handle huge crowds and serve as a global reference for future events.

• Major Wins: New deals in education and healthcare, and big contract renewals, will show real demand and wider acceptance of Evolv’s tech.

• Cash Milestone: Reaching cash flow positivity and higher EBITDA margins by year-end will highlight business model strength and operational efficiency.

• Global Reach: Expanding internationally and launching new AI products will open up bigger markets and deepen relationships with customers.

• Market Lead: Strengthening its role as the top AI security provider could prompt major partnerships and boost Evolv’s premium status.

• Broader Play: Moving into new areas like perimeter security or analytics will unlock even more growth and increase overall customer value.

As Evolv shifts from third-party distribution to direct sales, profit margins are feeling the pressure, Q2 2025 adjusted gross margin dropped to 55% due to a $1.8 million inventory reserve. While management sees this as a path to higher gross profit in the long run, it means earnings may look weaker until the transition is fully executed, making clear investor communication especially important during this period.

Well-funded security giants and leading tech companies are closely watching the AI-powered security space. If established players like Motorola or new tech entrants launch competing products or buy up innovative startups, Evolv could face stiff competition and pricing pressure, so staying ahead with ongoing R&D and deepening customer relationships is critical.

Operating in a heavily regulated industry means Evolv is constantly under the microscope, recently resolving investigations by the DOJ and FTC but still facing ongoing scrutiny. Evolving privacy laws and stricter security standards could force expensive product updates or slow new deployments. Success in maintaining certifications and adapting to global compliance requirements will be crucial for protecting both growth opportunities and reputation.