Key Highlights

  • Third-quarter Revenue reached a record USD 47.3 million, up 10% from USD 42.9 million, as subscription revenue rose 8% to USD 24.5 million and product revenue rose 33% to USD 12.3 million.
  • The net loss widened to USD 15.6 million from USD 1.8 million a year earlier, with general and administrative expenses up 48% to USD 18.7 million, including a USD 3.4 million higher accrual for a proposed SEC settlement.
  • Management said annual Recurring Revenue rose 20% to USD 141 million, remaining performance obligations reached USD 326 million, and adjusted EBITDA was USD 4.7 million, a 10% margin, against USD 5.1 million.
  • Management tightened 2026 revenue guidance to USD 182 million to USD 185 million from USD 180 million to USD 185 million, and cash, marketable securities and restricted cash were USD 66.9 million.

Record Revenue Masks a Wider GAAP Loss

Evolv Technologies (NASDAQ:EVLV) filed its Form 10-Q for the quarter ended September 30, 2026 on November 10, 2026 and held its call the same day. The company sells AI-powered weapons screening systems through a subscription model that bundles hardware, software and support. Total revenue was USD 47,345 thousand, up from USD 42,850 thousand, and Gross Profit rose 11% to USD 23,549 thousand. Operating expenses rose 27% to USD 37,951 thousand, so the loss from operations widened to USD 14,402 thousand from USD 8,596 thousand. Last year's quarter also included USD 7.5 million of income from a contingent earn-out Liability change that did not recur, which helps explain why the net loss jumped from USD 1,796 thousand to USD 15,564 thousand.

SEC Settlement Accrual and Legal Costs Lift Overhead

General and administrative expense reached USD 18,657 thousand from USD 12,579 thousand. Non-recurring professional fees and other expenses were USD 7,139 thousand versus USD 2,307 thousand, driven by the USD 3.4 million higher estimated accrual for the SEC proposed settlement and USD 1.8 million of added legal fees tied to ongoing legal and regulatory matters. The filing says an independent committee has investigated the company's sales practices since September 2024. On the product side, Margin fell to 9% from 14% because pricing changes mean less contract value is recognized upfront, and license fee revenue dropped 67% after a distribution agreement expired at the end of 2025.

Pricing Shift Moves Revenue Into Recurring Streams and Guidance

Management said that for customers who buy equipment it cut hardware prices and raised software and service prices by the same amount, so total contract value is unchanged but less is booked upfront. It estimates this is about a 3% headwind to 2026 revenue growth and that normalizing for it and a large prior-year contract would put third-quarter growth at about 18% to 19%. Subscription gross margin improved to 59.8% from 51.8%. Management reaffirmed year-end annual recurring revenue of about USD 148 million to USD 150 million and expects full-year adjusted EBITDA margins in the high single digits, and said it sees 2027 revenue growth of 20% or more.

Where Things Stand

The loss reflects costs and one-offs rather than falling demand. Evolv Technologies (NASDAQ:EVLV) grew revenue 10% to a record, but the net loss widened to USD 15.6 million because of the SEC settlement accrual, legal fees, higher overhead and the absence of last year's USD 7.5 million earn-out gain. Recurring revenue, a USD 326 million contracted Backlog and a tightened outlook support the operating story. Watch the final settlement terms, whether adjusted EBITDA margin holds in the high single digits and how fast the pricing shift lifts annual recurring revenue.