Evolv Technologies Holdings, Inc. (EVLV): Business Model Canvas [Dec-2025 Updated]

You're digging into Evolv Technologies Holdings, Inc.'s engine right after their strong Q3 results, and honestly, the story is the pivot to subscriptions. This isn't just about selling hardware anymore; it's about locking in that high-quality recurring revenue, which hit $117.2 million in Annual Recurring Revenue as of Q3 2025, backed by a $299 million Remaining Performance Obligation backlog. I've mapped out the entire structure-from their proprietary AI resource to their direct sales channel-so you can see exactly how this security-as-a-service model is built for scale. Keep reading to break down all nine blocks of the Business Model Canvas for Evolv Technologies Holdings, Inc. below. It's defintely the most important shift you need to track.

Evolv Technologies Holdings, Inc. (EVLV) - Canvas Business Model: Key Partnerships

You're looking at the backbone of Evolv Technologies Holdings, Inc.'s scaling strategy, which relies heavily on external relationships to manufacture, finance, and deploy its security systems. These aren't just vendor agreements; they are foundational to meeting the growing demand for their AI-powered screening technology.

Plexus as a strategic contract manufacturing partner

Evolv Technologies Holdings, Inc. announced a strategic contract manufacturing partnership with Plexus Corp. on November 6, 2025. This move is designed to scale production and enhance Evolv Technologies Holdings, Inc.'s global supply chain coordination to meet increasing demand for its AI-based security screening products. The collaboration pairs Evolv Technologies Holdings, Inc.'s product expertise with Plexus Corp.'s design, supply chain, and manufacturing capabilities to deliver production at scale. Plexus Corp. brings significant global resources to the table, operating with over 20,000 team members across 26 facilities worldwide. Evolv Technologies Holdings, Inc. stated that this partnership creates long-term cost-saving opportunities via Plexus Corp.'s global manufacturing scale and procurement efficiencies. Evolv Technologies Holdings, Inc. confirmed it maintains sufficient inventory and committed production capacity to meet growth targets while Plexus Corp. integrates into its operations.

• Key benefit: Provides a scalable platform to support global expansion through Plexus Corp.'s international production network.
• Key benefit: Facilitates new market opportunities through Plexus Corp.'s sustaining services solution.

MidCap Financial for the $75 million non-dilutive credit facility

To support the growing long-term demand for its subscription sales model, Evolv Technologies Holdings, Inc. secured a $75 million non-dilutive credit facility with MidCap Financial in July 2025. This capital is crucial for a business model where customers lease hardware and enter multi-year security-as-a-service subscriptions. As of June 30, 2025, before this facility closed, Evolv Technologies Holdings, Inc. held approximately $37 million in total cash, cash equivalents, and marketable securities, and its debt-to-equity ratio stood at 0.12. The facility structure provides immediate and future flexibility.

Here's the quick math on the facility terms:

What this estimate hides is the cost of capital, but the non-dilutive nature helps preserve equity value, especially as the company reported Q2 2025 revenue of $32.5 million, up 29% year-over-year.

Sports and entertainment venues like Major League Soccer teams

Evolv Technologies Holdings, Inc.'s partnerships in the sports and entertainment sector are a key validation point for its technology, showing adoption in high-throughput environments. The company screened over two million MLS fans in 2024 alone. By February 2025, the deployment at Sports Illustrated Stadium marked Evolv Technologies Holdings, Inc.'s twelfth in Major League Soccer. This sector continues to grow, as evidenced by the renewal of the agreement with Major League Soccer's Columbus Crew in August 2025. The company's traction in professional sports is broad, counting 11 professional football teams and 10 professional soccer teams as customers as of early 2024.

• Deployment expansion: Seattle Mariners (MLB) deployed Evolv Express® ballpark-wide for its 2025 Opening Day.
• Education sector expansion: Spartanburg District Five Schools expanded its partnership to cover all 14 schools in the district as of October 2025.
• Financial metric: Annual Recurring Revenue (ARR) reached $110.5 million at June 30, 2025, growing 27% year-over-year.

Strategic technology partners for system integration and data flow

Evolv Technologies Holdings, Inc. relies on strategic technology partners to ensure seamless integration of its systems and effective data flow from its deployed units. These relationships are vital for leveraging the AI and analytics capabilities of products like Evolv Insights®. For instance, the partnership with Plexus Corp. explicitly mentions facilitating new market opportunities through Plexus Corp.'s sustaining services solution, which implies integration support. The company's success in securing large-scale deployments, such as the ballpark-wide utilization at T-Mobile Park, home of the Seattle Mariners, suggests established integration protocols with venue operations technology.

Evolv Technologies Holdings, Inc. (EVLV) - Canvas Business Model: Key Activities

You're looking at the core engine driving Evolv Technologies Holdings, Inc.'s growth right now, which centers on scaling its AI platform while managing a significant shift in how it delivers and recognizes revenue. Here's the quick math on what they are actively doing as of late 2025, based on their Q3 results.

AI and software development for threat detection and analytics

The development focus remains on enhancing the core AI platform and rolling out new specialized solutions. This activity underpins the entire value proposition, moving beyond the flagship Evolv Express to new applications.

• Evolv eXpedite™, the automated bag screening solution, added 12 new customers in Q3 2025.
• By November 12, 2025, Evolv eXpedite™ surpassed screening over one million bags.
• The company is focused on advancing its technology roadmap, including Gen2 systems and eXpedite.

Manufacturing and fulfillment, shifting to a direct model

Evolv Technologies Holdings, Inc. is actively managing a strategic transition in its fulfillment strategy, moving away from distribution channels toward a direct purchase subscription model. This is a deliberate trade-off: accepting near-term margin pressure for better long-term economics.

The shift to in-house direct purchase fulfillment is intended to bring higher revenue, higher lifetime value (LTV), greater cash flow and most importantly, higher Annual Recurring Revenue (ARR) on a per unit basis compared to the old distribution model. However, this created near-term gross margin headwinds.

Here's how the margin compression looked in Q3 2025:

To support this, Evolv Technologies Holdings, Inc. announced a strategic partnership with Plexus to expand production capacity, global reach, and operational resiliency. The company also noted approximately $3 million of one-time costs related to inventory and service adjustments in Q3 2025, which further impacted margins.

Sales and marketing to expand the 1,000+ global customer base

Sales and marketing efforts are focused on acquiring new customers and expanding deployments within the existing base, which is showing strong stickiness. The company surpassed the 1,000-customer milestone globally as of Q2 2025. They are on track to reach at least 8,000 active subscriptions by the end of 2025, up from over 7,000 at the end of Q2 2025.

The results of these activities are clear in the top-line performance:

• Q3 2025 Total Revenue reached $42.9 million, a 57% increase year-over-year.
• Ending Annual Recurring Revenue (ARR) for Q3 2025 was $117.2 million, marking a 25% year-over-year increase.
• The company secured its largest customer contract to date at US$3 million.
• Management raised the full-year 2025 revenue outlook to $142-$145 million, representing 37%-40% growth.

The company also achieved its fourth consecutive quarter of positive Adjusted EBITDA, hitting $5.1 million, with a margin of 12% in Q3 2025. They remain committed to generating positive cash flow by Q4 2025.

This operational performance is what you look at when assessing the core business health. It's defintely a story of growth despite the fulfillment transition.

Ongoing R&D for new products like Evolv eXpedite™ bag screening

While specific R&D spending percentages aren't explicitly detailed for the period, the focus on new product traction, like eXpedite, demonstrates where development resources are being applied. Management noted that targeted headcount additions, including in R&D, are planned for the second half of the year, alongside investments for SOX (Sarbanes-Oxley Act compliance) and automation.

The success of new product adoption directly feeds back into the sales pipeline, as seen with the 12 new eXpedite customers in Q3 2025.

Finance: draft 13-week cash view by Friday.

Evolv Technologies Holdings, Inc. (EVLV) - Canvas Business Model: Key Resources

You're looking at the core assets Evolv Technologies Holdings, Inc. relies on to run the business as of late 2025. Honestly, the biggest resource is the technology itself, which is the foundation for everything else.

The proprietary AI-powered security technology, centered around the Evolv Express® system, is what sets the company apart. This isn't just hardware; it's the continuous improvement in the software that matters. For instance, the newer Evolv Expedite product showed real traction, adding 12 new customers in Q3 2025 and screening over 1 million bags since its launch. Management is focused on advancing this platform, having recently released versions like Evolv Express 9.0 and Evolv Expedite 1.2.

Here's a quick look at the hard numbers that back up the operational scale as of the third quarter ending September 30, 2025:

The intellectual property and patents in weapons detection form a critical barrier to entry. This portfolio secures the unique algorithms that power the AI screening, which is essential for maintaining the premium valuation investors currently assign to Evolv Technologies Holdings, Inc. The entire recurring revenue model is built on the defensibility of this core IP.

To be fair, these resources are being deployed aggressively, which you can see in the financial results:

• Proprietary AI-powered security technology (Evolv Express®) is actively screening millions of visitors daily.
• Annual Recurring Revenue (ARR) base stood at $117.2 million at the end of Q3 2025, marking a 25% year-over-year increase.
• Intellectual property and patents in weapons detection underpin the core value proposition.
• Cash, cash equivalents, and marketable securities totaled $56.2 million as of September 30, 2025.

Finance: draft 13-week cash view by Friday.

Evolv Technologies Holdings, Inc. (EVLV) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose Evolv Technologies Holdings, Inc. (EVLV) systems, which boil down to speed, intelligence, and operational visibility. The value proposition centers on moving people quickly while maintaining a high security posture.

High-volume, frictionless security screening for visitors

The system is built for throughput. You see this in the sheer volume of people the technology has processed to date. Evolv Technologies' advanced systems have scanned more than 3 billion people since 2019.

Historically, the Evolv Express system was designed to screen up to 3,600 people per hour, which is cited as 10 times faster than traditional screening methods.

The company's commercial momentum shows this value is being adopted:

• Ending Annual Recurring Revenue (ARR) as of September 30, 2025, was $117.2 million.
• Total revenue for the third quarter of 2025 reached $42.9 million.
• The company surpassed the 1,000-customer milestone globally as of Q2 2025.
• Evolv Technologies expects to close at least 8,000 subscriptions by the end of 2025.

AI-driven differentiation between threats and harmless items

The core technology uses artificial intelligence to distinguish between threats and benign items, which is key to reducing unnecessary stops and maintaining flow. This AI capability underpins the frictionless experience.

The focus on AI is driving adoption in high-stakes environments. For example, Evolv Technologies helped the FIFA Club World Cup 2025™ by deploying Evolv Express® for security screening at all 12 host stadiums.

Real-time data and analytics via Evolv Insights® for optimization

The value extends beyond the physical gate to the security office. Evolv Insights® provides the data you need to manage operations dynamically. This platform delivers real-time dashboards designed to help security teams make operational adjustments based on flow across multiple entrances.

The data provided includes:

• Fan ingress metrics.
• Alarm statistics.
• Threat type analysis.
• System performance insights.

Enhanced safety and improved visitor experience, reducing wait times

The result of high throughput and AI differentiation is a better experience for the visitor and enhanced safety for the venue operator. You see this reflected in customer expansion; 56% of booked Annual Recurring Revenue in Q2 2025 came from existing customers, showing continued trust and expansion within the current user base.

The company's success in securing marquee renewals and expansions, such as with Gillette Stadium, reinforces this value proposition.

Here are some key financial and operational metrics as of late 2025:

The company also reported that for the first nine months of 2025, total revenue increased by 44%, reaching $107.4 million.

Finance: draft 13-week cash view by Friday.

Evolv Technologies Holdings, Inc. (EVLV) - Canvas Business Model: Customer Relationships

You're looking at how Evolv Technologies Holdings, Inc. keeps its customers engaged and growing their spend, which is critical for a security-as-a-service model. The relationship is built on long-term commitments and demonstrated value.

Multi-year, security-as-a-service subscription contracts form the backbone of the revenue predictability you want to see. The Annual Recurring Revenue (ARR) as of June 30, 2025, stood at $110.5 million, marking a 27% year-over-year increase. This recurring component was significant, with 80% of Q1 2025 revenue being recurring revenue. The total active subscriptions surpassed 7,000 by the end of Q2 2025, with a target of at least 8,000 by year-end.

The scale of customer engagement is visible in the deployment numbers and contract values:

• Added approximately 470 new multi-year subscriptions in Q4 2024.
• Secured a $15 million contract with Gwinnett County Public Schools in Q2 2025.
• The new Evolv eXpedite bag screening solution reached 20 total customers since launch, adding 8 in Q2 2025.
• Serves over 1,000 customers globally as of Q2 2025.

The health of these relationships is quantified by retention metrics, which show existing customers are expanding their use of Evolv Technologies Holdings, Inc. solutions:

Dedicated customer success and technical support teams help drive this expansion. For example, following the resolution with the FTC, of the 65 eligible K-12 customers, 60 customers (92%) elected to retain their contracts, and four actually expanded their use by adding 10 additional units. This expansion activity is the engine behind the high retention figures.

Data-driven consulting to optimize security operations is implied by the continuous deployment and expansion across diverse verticals, including education, healthcare, and professional sports. The company serves over 450 hospital buildings and over 1,200 school buildings as of December 31, 2024.

Finance: draft 13-week cash view by Friday.

Evolv Technologies Holdings, Inc. (EVLV) - Canvas Business Model: Channels

You're looking at how Evolv Technologies Holdings, Inc. gets its AI screening solutions into the hands of customers as of late 2025. The core channel strategy has seen a significant internal shift, moving away from a reliance on distributors toward a more direct relationship for revenue capture.

Direct sales and fulfillment, which is the new strategic focus

Evolv Technologies Holdings, Inc. is actively pivoting its go-to-market model, specifically moving from distribution fulfillment to direct fulfillment for channel partner purchase subscription orders. This strategic change is designed to capture a larger share of the contract value over the life of the agreement. Under the previous distribution model, Evolv Technologies Holdings, Inc. captured approximately ~70% of the Total Contract Value (TCV) for a channel partner purchase subscription order, whereas the direct fulfillment model allows Evolv Technologies Holdings, Inc. to capture 100% of the TCV. This shift is expected to deliver higher revenue, gross profit, and cash flows over the subscription term, though it creates a Year 1 gross margin headwind. For context on the financial impact, the old distribution model captured only about ~48% of the Total Customer Order to Evolv Technologies Holdings, Inc. Annual Recurring Revenue (ARR). The focus on direct fulfillment is clearly driving top-line results, with Q3 2025 revenue hitting $42.9 million, a 57% increase year-over-year, and Annual Recurring Revenue (ARR) reaching $117.2 million, up 25% year-over-year as of that quarter. Management expects this trend to continue, with ARR growth projected to outpace total revenue growth in 2026, forecasting at least 20% ARR growth in 2026.

Here's a quick comparison of the channel revenue capture based on the shift:

The company raised its full-year 2025 revenue guidance to between $142 million and $145 million, representing 37% to 40% growth year-over-year.

Strategic distribution partners for certain market segments

While the strategic focus is direct fulfillment, the historical channel structure involved distribution partners. The current strategy is designed to simplify the buying process for these channel partners while ensuring Evolv Technologies Holdings, Inc. captures the full recurring revenue stream. The shift is explicitly noted as being significantly simpler for channel partners. The company also secured a $75 million credit facility in Q2 2025 to support subscription growth, which is key for managing the cash flow dynamics of this channel shift.

Direct-to-customer deployment and installation services

Deployment and installation are intrinsically linked to the direct sales focus, as direct fulfillment allows Evolv Technologies Holdings, Inc. to manage the entire customer lifecycle, which sets them up for higher renewal rates. As of December 31, 2024, Evolv Technologies Holdings, Inc. served over 1,200 school buildings and over 450 hospital buildings. By June 30, 2025, the company surpassed the 1,000-customer milestone globally, with over 7,000 active subscriptions, aiming for 8,000 to 8,100 by the end of 2025. The company also booked its first orders for Evolv eXpedite™, its new AI-based weapons detection solution for bags, in Q4 2024, and by mid-November 2025, Evolv eXpedite™ had screened over one million bags.

Key deployment and customer metrics as of mid-to-late 2025:

• Active Subscriptions expected by year-end 2025: 8,000 to 8,100.
• New customers added in Q3 2025: Over 60.
• New customers added in Q2 2025: 63.
• Expansion from existing customers accounted for 56% of booked ARR in Q2 2025.
• Total visitors screened by Evolv systems since 2019: More than 3 billion people.

Virtual and in-person product demonstrations and events

Customer acquisition is clearly supported by market presence, evidenced by the consistent addition of new customers across various verticals. The company added approximately 60 new customers across education, healthcare, professional sports, live entertainment, tourist attractions, and industrial workplaces in the quarter ending December 31, 2024. The Q3 2025 results showed strong new customer growth fueling the 57% revenue increase. The company secured its largest customer contract to date at US$3 million in the weeks leading up to its late 2025 guidance raise. The technology has been deployed at venues like the Inter Miami stadium and for the FIFA Club World Cup, demonstrating success in the sports/entertainment segment through in-person exposure.

Evolv Technologies Holdings, Inc. (EVLV) - Canvas Business Model: Customer Segments

You're looking at the core of Evolv Technologies Holdings, Inc.'s market penetration, which is heavily concentrated in high-traffic, security-sensitive environments. The company's strategy focuses on replacing legacy metal detectors with its AI-powered Evolv Express systems across several key verticals.

The customer base is segmented across four primary areas, with specific deployment metrics available for the education and healthcare sectors as of early to mid-2025.

K-12 and Higher Education Institutions

This segment represents a significant portion of Evolv Technologies Holdings, Inc.'s installed base. The company has seen strong retention rates even after a regulatory-related cancellation period.

The quantitative deployment data for this segment includes:

• Installed systems in over 1,300 school buildings as of Q1 2025.
• Screening 850,000+ students and visitors per day across these educational facilities in Q1 2025.
• Active presence in 20 of the 100 largest U.S. school districts.
• Achieved 92% Net Revenue Retention and 94% Net Unit Retention among a cohort of education customers eligible for contract cancellation as of March 31, 2025.

A concrete example of a major win in this segment is the $15 million contract with Gwinnett County Public Schools booked in Q2 2025.

Healthcare Facilities

Evolv Technologies Holdings, Inc. serves hospitals and healthcare systems looking to secure entrances without slowing down patient and visitor flow. By the start of 2025, the installed base in this sector reached a substantial number.

Key figures for healthcare deployments include:

The company secured deployments at facilities like Ohio State University Wexner Medical Center in Q2 2025.

Professional Sports and Live Entertainment Venues

This segment focuses on large-scale venues where fan experience is paramount. Evolv Technologies Holdings, Inc. has secured partnerships with professional sports franchises.

Deployment evidence points to:

• The Seattle Mariners' T-Mobile Park deployed Evolv Express systems ballpark-wide for the 2025 Opening Day.
• The Mariners joined a dozen pro baseball teams partnering with Evolv.
• The company has deployments at venues like Inter Miami CF's Miami Freedom Park as of Q2 2025.
• The Moda Center in Portland, OR, is another venue utilizing the technology.

Tourist Attractions and Industrial Workplaces

These sectors are grouped as they represent other high-volume environments where Evolv Technologies Holdings, Inc. saw new customer adoption in the fourth quarter of 2024. While specific unit counts for these two categories aren't broken out separately, they contribute to the overall customer base.

The total reach across all segments is significant; Evolv's advanced systems have scanned more than two billion people since 2019. By Q2 2025, the company served more than 1,000 customers globally.

Finance: draft 13-week cash view by Friday.

Evolv Technologies Holdings, Inc. (EVLV) - Canvas Business Model: Cost Structure

The Cost Structure for Evolv Technologies Holdings, Inc. centers on scaling its technology and driving market penetration, with management actively focused on improving operating leverage. You need to know where the cash is going to understand the path to sustained profitability.

High investment in Research & Development (R&D) and engineering

Evolv Technologies Holdings, Inc. historically commits significant resources to its core technology. While specific 2025 R&D figures are often bundled into broader operating expenses, the commitment to innovation is evident through product releases like Evolv Express 9.0 and Evolv eXpedite 1.2 in late 2025. For context on the scale of this investment, the Research & Development Expense for the full year 2024 was reported at $23 million. The company's Q2 2025 results indicated that higher operating expenses, including R&D investments, contributed to the net loss for that quarter, even as revenue grew.

Sales and marketing expenses to drive customer acquisition

Driving customer acquisition is a major cost driver, essential for growing both the installed base and Annual Recurring Revenue (ARR). In Q1 2025, Sales and Marketing Expenses were reported at $11.0 million. The shift in fulfillment strategy also impacts how these costs are realized; the direct purchase fulfillment model captures 100% of the Average Revenue Per Unit (ARPU) immediately, which influences the timing of revenue recognition versus subscription-based models. The company welcomed over 60 new customers in Q2 2025 and over 60 new customers in Q3 2025, demonstrating the ongoing spend required for this acquisition pace.

Cost of goods sold (COGS) for hardware, especially with the direct purchase mix

COGS is directly impacted by the evolving sales mix, particularly the pivot toward direct purchases over traditional distribution channels. The direct purchase mix accounted for 57% of unit activity in Q3 2025, a significant increase from 41% in the prior year. This mix shift results in higher immediate revenue but puts pressure on gross margins in the short term due to fulfillment changes and subscale manufacturing costs for newer products like Expedite. For the third quarter of 2025, the GAAP Gross Margin was 49.7%, and the Adjusted Gross Margin was 50.6%, down from 64.1% in Q3 2024. Based on Q3 2025 revenue of $42.9 million, the implied Cost of Goods Sold was approximately $21.21 million.

Here's a look at the margin dynamics:

Operating expenses, which management is focused on reducing for efficiency

Management has made clear its focus on reducing operating expenses to drive efficiency and achieve positive Adjusted EBITDA, which was achieved for the fourth consecutive quarter in Q3 2025. Adjusted Operating Expenses decreased year-over-year in Q2 2025 to $21.6 million from $26.7 million in Q2 2024, a 19% decline. For Q3 2025, the Adjusted Operating Expenses were $24.8 million, a slight decline from $25.2 million year-over-year, demonstrating cost control while scaling growth. The company is targeting positive cash flow in Q4 2025, which relies heavily on this expense discipline.

The components of operating expenses for Q3 2025 included:

• Sales and marketing: $2.724 million (based on one data point)
• General and administrative: $3.308 million (based on one data point)

The total Adjusted Operating Expenses for the nine months ended September 30, 2025, can be estimated by summing the reported quarterly figures, though only Q2 and Q3 total adjusted OpEx were explicitly provided as $21.6 million and $24.8 million, respectively. If you look at Q1 2025, the net loss reduction suggests OpEx control was already in effect.

Evolv Technologies Holdings, Inc. (EVLV) - Canvas Business Model: Revenue Streams

You're looking at how Evolv Technologies Holdings, Inc. brings in cash, which is shifting toward a more predictable, recurring model, though large upfront deals still play a part. Here's the quick math on the revenue components as of late 2025, based on the latest third-quarter filings.

The core of the revenue stream is built around subscriptions, which the company tracks closely with its Annual Recurring Revenue (ARR). This metric shows the value of the committed, ongoing service contracts.

The shift to a direct fulfillment strategy is intended to increase the lifetime value and the ARR generated per unit, meaning more of the total revenue should eventually fall into that recurring bucket. Still, upfront revenue from direct product purchases, especially large deals, provides significant near-term cash flow. For example, the third quarter of 2025 saw specific non-recurring revenue components contributing to the total:

• $3.0 million from a historic customer order.
• $3.0 million related to IP license fees from a distribution model being phased out.
• $1.5 million from concluded short-term rental agreements.

To be fair, these non-recurring items helped boost the Q3 2025 total revenue to $42.9 million, a 57% increase year-over-year. The company also secured a major contract, like the $15 million deal with Gwinnett County Public Schools, which contributes to both upfront recognition and future ARR.

The overall expectation for the full fiscal year 2025 revenue is now between $142 million and $145 million, reflecting a growth rate of 37% to 40% compared to 2024. Finance: draft 13-week cash view by Friday.