Evolv Technologies Holdings, Inc. (EVLV): BCG Matrix [Dec-2025 Updated]

You're looking at Evolv Technologies Holdings, Inc. (EVLV) right now, trying to figure out where the real money is being made and where the next big risk lies, so let's cut straight to the Boston Consulting Group Matrix view for late 2025. Honestly, the Evolv Express platform is clearly the Star, dominating that high-growth AI screening space, while the existing subscription base acts as a dependable Cash Cow, printing reliable revenue from long-term contracts. The real strategic tension, though, sits with those international expansion efforts and new R&D-the Question Marks-which demand capital but could explode or fizzle, and we certainly need to ensure no legacy hardware is quietly becoming a Dog draining support resources. This map tells you exactly where to push investment and where to pull back, giving you a clear-eyed view for your near-term strategy.

Background of Evolv Technologies Holdings, Inc. (EVLV)

Evolv Technologies Holdings, Inc. (EVLV) is a security technology provider that focuses on pioneering artificial intelligence (AI)-based solutions for human security screening. The company's mission centers on creating a safer world by transforming security processes in high-traffic venues. Evolv Technologies Holdings, Inc. offers its solutions to a broad range of customers, including iconic venues, companies, schools, hospitals, and public spaces, using AI-powered screening and analytics.

The core of Evolv Technologies Holdings, Inc.'s offering is its AI-based screening technology, which has digitally transformed entryways by enabling seamless integration with powerful analytics. As of early 2025, Evolv's advanced systems had scanned more than two billion people since 2019. The company has received industry recognition, including the U.S. Department of Homeland Security (DHS) SAFETY Act Designation as a Qualified Anti-Terrorism Technology (QATT), and several awards in 2024 from the Security Industry Association (SIA) and the Sport Business Journal (SBJ).

Evolv Technologies Holdings, Inc. has adopted a Security-as-a-Service subscription model, which means they sell a comprehensive security solution that includes the technology, software updates, maintenance, and data analysis, rather than just selling hardware. This focus on subscriptions has been key to its financial strategy. For instance, by the end of Q1 2025, subscription revenue accounted for 82% of the total revenue, and Annual Recurring Revenue (ARR) was $106.0 million, marking a 34% year-over-year increase. By the end of Q2 2025, the ARR grew further to $110.5 million, up 27% compared to the same period the prior year.

Financially, Evolv Technologies Holdings, Inc. has shown strong top-line momentum, though it has historically operated at a net loss while investing heavily in growth. The company reported Q2 2025 revenue of $32.5 million, a 29% increase year-over-year, leading them to raise the full-year 2025 revenue growth guidance to 27-30%, up from the previous 20-25%. Management expressed the goal of achieving positive full-year Adjusted EBITDA in 2025 and becoming cash flow positive by Q4 2025. The company also reported positive Adjusted EBITDA of $2 million for Q2 2025. On the balance sheet side, Evolv Technologies Holdings, Inc. ended 2024 with approximately $52 million in cash and equivalents and no debt. You should note that the company dealt with past issues, including a restatement of financial statements related to revenue recognition and the resolution of a Department of Justice inquiry, though by mid-2025 these regulatory matters were settled.

In terms of market penetration as of early 2025, Evolv Technologies Holdings, Inc. served over 1,300 school buildings, with operations active in 20 of the 100 largest U.S. school districts. Customer retention in the education segment was exceptionally high, with 94% of early cancellation-eligible education customers renewing all or more of their systems, and a 92% net revenue retention rate. The company also introduced new products, such as Evolv eXpedite™, an AI-based weapons detection solution for bags, surpassing one million bags screened by November 2025.

Evolv Technologies Holdings, Inc. (EVLV) - BCG Matrix: Stars

You're looking at the segment of Evolv Technologies Holdings, Inc. (EVLV) that is clearly leading the charge in a high-growth security market. The Evolv Express platform is the core of this, positioned as a strong relative market share leader in the AI-powered screening space. Honestly, being first-to-market with a touchless AI screening system gives Evolv Technologies Holdings, Inc. a significant structural advantage in this emerging sector.

The momentum here is visible in the subscription metrics. Annual Recurring Revenue (ARR) growth, projected to be near 25% year-over-year as of the third quarter of 2025, is definitely driving future valuation expectations. This growth is supported by the overall business outlook, with Evolv Technologies Holdings, Inc. raising its full-year 2025 total revenue growth guidance to between 37% and 40%, forecasting total revenues of $142 million to $145 million.

The company's dominant position in high-volume venues is built on deployment scale. As of the second quarter of 2025, Evolv Technologies Holdings, Inc. served more than 1,000 customers globally, with over 7,000 active subscriptions, aiming for at least 8,000 by year-end. The deployed unit count itself showed growth of about 30% year-over-year in the third quarter of 2025, showing real-world adoption. This rapid, frictionless screening capability is what keeps the high-volume venues-think stadiums and theme parks-coming back.

To maintain this leadership, Evolv Technologies Holdings, Inc. is continuously pushing software improvements. They recently released the latest versions of their software, specifically Evolv Express 9.0 and Evolv eXpedite 1.2, which include enhancements aimed at supporting security teams. This focus on product superiority helps ensure high customer retention, which is critical for that high ARR growth you want to see.

Here's a quick look at the key financial performance indicators that define this Star quadrant as of the latest reported quarter:

You should note the operational leverage is improving, as seen by the Adjusted EBITDA margin moving from 6% in Q2 2025 to 12% in Q3 2025. The shift to direct fulfillment is key here, as management stated they now capture 100% of the average revenue per unit (ARPU).

• First to market with touchless AI screening.
• Q3 2025 Revenue: $42.9 million.
• Q3 2025 ARR growth: 25% year-over-year.
• Targeting cash flow positivity by Q4 2025.
• Software releases include Evolv Express 9.0.

Evolv Technologies Holdings, Inc. (EVLV) - BCG Matrix: Cash Cows

You're looking at the core stability of Evolv Technologies Holdings, Inc., the segment that generates more cash than it needs to maintain its position. These Cash Cows are characterized by a high market share in a mature segment, which, for Evolv Technologies, translates to a substantial and sticky installed base of Evolv Express units.

Existing customer base subscription revenue provides the bedrock of stable, high-margin cash flow. The shift to a Security-as-a-Service model is evident in the metrics; for instance, subscription revenue accounted for 82% of total revenue in the first quarter of 2025. This recurring revenue stream is the engine room, providing predictability even as the company pursues growth in newer areas.

Long-term contracts for the installed base create highly predictable revenue streams. Lease terms for equipment are typically structured over four years, locking in revenue recognition over that period. Customer stickiness is high; for example, 94% of early cancellation-eligible education customers retained all or more of their Evolv systems, and the net revenue retention was 92% as of Q1 2025. This level of commitment suggests the installed base is not easily swayed by competitors.

Maintenance and support services for the deployed hardware represent a necessary, low-growth, but reliable income source. This service component is bundled into the subscription revenue, ensuring that as long as the hardware is operational-and with over 7,000 active subscriptions as of Q2 2025-the income continues. The company is on track to reach at least 8,000 active subscriptions by the end of 2025, further solidifying this base.

High switching costs for customers lock in recurring revenue, which we estimate, based on the full-year 2025 revenue guidance of up to $145 million and the recurring revenue mix, to be around $118.9 million in Subscription Revenue for the full year 2025. The high-margin nature of this base is confirmed by the third quarter of 2025 results, where the company achieved a positive Adjusted EBITDA Margin of 12% on total revenue of $42.9 million, indicating strong operational leverage from the established base.

Here are the key metrics defining the recurring revenue base for Evolv Technologies Holdings, Inc. as of the latest reported periods in 2025:

The stability and cash-generating potential of this segment are underpinned by several factors:

• Subscription revenue comprised 82% of total revenue in Q1 2025.
• Net revenue retention rate was 92% in Q1 2025.
• The company expects to reach at least 8,000 active subscriptions by year-end 2025.
• Lease terms for the installed base are generally four years.
• Q3 2025 saw a Net Profit Margin of (4)%, showing progress toward profitability from this base.

Evolv Technologies Holdings, Inc. (EVLV) - BCG Matrix: Dogs

You're looking at the parts of Evolv Technologies Holdings, Inc. that aren't driving the high-growth, recurring revenue story, the units that tie up capital without delivering substantial, predictable returns. In the BCG framework, these are the Dogs-low market share in low-growth areas, which we generally want to minimize or divest.

For Evolv Technologies Holdings, Inc., the Dogs category likely centers on revenue streams or product lines that are not part of the core, expanding Security-as-a-Service subscription model. The management team is clearly signaling a strategic pivot; for instance, they are shifting purchase activity back to direct fulfillment because it brings "higher revenue, higher lifetime value, greater cash flow and most importantly, higher ARR on a per unit basis compared to distribution fulfillment." That emphasis on higher ARR per unit inherently de-emphasizes the lower-value, one-off transactions.

Here are the components most likely categorized as Dogs, based on the financial data that highlights the core growth engine (ARR):

• Legacy, non-AI integrated security screening hardware sales.
• Professional services or one-off consulting not tied to the core SaaS platform.
• Older, first-generation hardware units requiring costly support.
• Sales territories or verticals showing persistently low adoption rates.

We can quantify the non-core revenue streams using the Q1 2025 figures, as these represent the smaller, less sticky revenue components compared to the $19.2 million in Subscription Revenue reported that same quarter. The goal here is to see how much capital is still being allocated to these areas relative to the $110.5 million in Annual Recurring Revenue (ARR) achieved by the end of Q2 2025.

Here's a look at the non-subscription revenue components from Q1 2025, which represent the potential cash traps:

The $6.7 million in Service Revenue and $3.7 million in License Fee and Other Revenue for Q1 2025 are the clearest candidates for Dog status, as they don't contribute to the sticky ARR base that management is prioritizing. If these segments have low growth or require disproportionate support costs-especially for older hardware units-they become cash traps, draining resources that could fuel the high-growth subscription platform.

To be fair, the company is showing overall positive momentum, with Adjusted EBITDA reaching $2.0 million in Q2 2025 and liquidity improving sequentially to $37 million as of June 30, 2025. However, the strategic imperative remains to minimize exposure to anything that doesn't scale like the subscription model. The fact that the eXpedite solution only reached 20 total customers since launch, with 8 added in Q2, suggests that even newer hardware deployments might be slow to scale into high-value recurring streams, potentially keeping them in the Question Mark quadrant for now, but the legacy hardware is definitely a Dog candidate.

Finance: draft 13-week cash view by Friday.

Evolv Technologies Holdings, Inc. (EVLV) - BCG Matrix: Question Marks

You're looking at the areas of Evolv Technologies Holdings, Inc. (EVLV) that are in high-growth markets but haven't yet captured a dominant market share. These are the units consuming cash now, hoping to become tomorrow's Stars. Honestly, this is where the real strategic bets are placed.

International Expansion and New Market Adoption

The push into new global territories, even without specific EMEA or APAC market share figures readily available, is clearly a focus area. You see the commitment to scaling through operational partnerships, like the one announced with Plexus to expand production capacity and global reach. The company surpassed the 1,000-customer milestone globally during the second quarter of 2025, indicating that the market adoption outside the established base is happening, albeit slowly enough to keep it in this quadrant.

• Total customers surpassed 1,000 as of Q2 2025.
• The 2025 full-year revenue guidance is set between $142 million and $145 million.
• Nine months 2025 revenue reached $107.4 million.

Early Adoption of New Software Modules and Features

The development cycle is clearly active, meaning these newer features are in the early discovery phase with buyers. The latest software releases-Evolv Express 9.0, Evolv Expedite 1.2, MyEvolv Portal, and Evolv Insights 6.0-are the prime examples here. They require heavy marketing and customer education to drive adoption away from the established Evolv Express platform.

The Expedite bag screening solution shows concrete early traction. As of Q3 2025, it added 12 new customers, bringing its total customer count since launch to an unstated number higher than the 20 customers reported in Q2 2025. This product is definitely consuming resources to get to scale.

R&D Investments and Next-Generation Technology

Evolv Technologies Holdings, Inc. is definitely still investing heavily to maintain its technological edge, which is characteristic of a Question Mark needing a boost. The company is investing heavily in Capital Expenditures (CapEx) projected at $20-$25 million in FY2025. While R&D investment is noted as 'still the same' compared to prior periods, the overall investment posture is high, as evidenced by the accumulated deficit of $356.4 million as of Q1 2025. These funds are aimed at next-generation sensor technology and expanding vertical applications like hospitals and schools.

New Product Lines and Revenue Contribution

For products in the early adoption phase, their revenue contribution is typically small relative to the whole, which is why they are cash drains. In Q3 2025, the company noted approximately $7.5 million in revenue associated with notable items, which included the largest customer order in history at $3.0 million. If you look at that quarter's total revenue of $42.9 million, that $7.5 million represents about 17.5% of the revenue for that period, which is a good proxy for the current impact of these high-potential, low-share revenue streams.

Here's the quick math on that specific quarter's non-standard revenue:

The net loss for the nine months ending September 30, 2025, was $(44.0) million, showing the cash consumption required to fuel this high-growth, low-share segment.